2025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Yunnan Baiyao Group Co. Ltd.Annual Report 2025
March 20262025 Annual Report of Yunnan Baiyao Group Co. Ltd.
2025 Annual Report
Section I Important Notes Contents and Definitions
The Board of Directors (the “Board”) the directors and senior management of the Company
confirm the truthfulness accuracy and completeness of the contents of this Annual Report and there
are no misrepresentations misleading statements or material omissions from this Annual Report and
they accept joint and several responsibilities for the truthfulness accuracy and completeness of the
contents herein.Mr. Zhang Wenxue the person in charge of the Company Mr. Ma Jia the accounting officer and
Ms. Xu Jing the head of accounting center (accounting supervisor) hereby declare that they warrant
the truthfulness accuracy and completeness of the financial statements in this Annual Report.All directors of the Company attended the Board meeting in respect of considering and approving
this Annual Report.The Company kindly requests investors to read through this Annual Report and pay special
attention to “XI. Outlook of the Company” in the “Section III Management Discussion and Analysis.”
This part does not constitute our substantial commitments to investors. Investors are advised to pay
attention to investment risks.The cash dividend to be implemented this time will be combined with the special dividend already
distributed in 2025. The total accumulated cash dividends for 2025 represent 90.09% of the net profit
attributable to shareholders of the listed company for 2025 with the total accumulated cash dividends
amounting to RMB 4642651293.01 (tax inclusive). The Company completed the distribution of the
2025 special dividend profits in September 2025 distributing cash of RMB 10.19 per 10 shares (tax
inclusive) with total cash dividends amounting to RMB 1818163592.46 (tax inclusive).The Company’s 2025 annual profit distribution plan is as follows: Based on the total share capital
of the Company of 1784262603 shares as at the end of 2025 the Company proposes to distribute cash
dividends of RMB 15.83 per 10 shares (tax inclusive) to all shareholders with no bonus shares issued
and no capital reserve to increase the share capital.This report has been prepared in Chinese and translated into English. Should there be any
discrepancies or misunderstandings between the two versions the Chinese version shall prevail.
12025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Contents
Section I Important Notes Contents and Definitions... 1
Section II Company Profile and Key Financial Indic... 5
Section III Management Discussion and Analysis ..... 10
Section IV Corporate Governance Environmental and Social Responsibility .. 66
Section V Significant Events ...................... 108
Section VI Changes in Shareholdings and Particulars about Shareholders ..... 135
Section VII Bonds ................................. 145
Section VIII Financial Statements ................. 146
22025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Documents Available for Inspection
(I) Financial statements affixed with the signatures and stamps of the person in
charge of the Company the accounting officer and the general manager of Financial
Management Department;
(II) Originals of the audit report containing the stamps of the external accounting
firm and the signatures and stamps of the registered accountants;
(III) Originals of all the Company’s documents and announcements publicly
disclosed on the Securities Times Shanghai Securities News China Securities Journal
and http://www.cninfo.com.cn during the reporting period;
(IV) Other related materials.
32025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Definitions
Term Definitions
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited
State-owned Assets Supervision and Administration Commission of Yunnan
SASAC of Yunnan Province
Provincial People’s Government
The Company or Yunnan Baiyao Yunnan Baiyao Group Co. Ltd.New Huadu New Huadu Industrial Group Co. Ltd.State-owned Equity Management Company Yunnan State-owned Equity Operation Management Co. Ltd.Yunnan Hehe Yunnan Hehe (Group) Co. Ltd.Baiyao Holdings Yunnan Baiyao Holdings Co. Ltd.YNBY International YNBY International Limited
Shanghai Pharma Shanghai Pharmaceuticals Holding Co. Ltd.A transaction that Yunan Baiyao merged with Baiyao Holdings by issuing shares
Merger and overall listing to all shareholders of Baiyao Holdings including SASAC of Yunnan Province
New Huadu and Jiangsu Yuyue Science & Technology Development Co. Ltd.Health Products Company Yunnan Baiyao Group Health Products Co. Ltd.TCM Resources Company Yunnan Baiyao Group TCM Resources Co. Ltd.Yunnan Pharma Yunnan Pharmaceutical Co. Ltd.Yunhe Pharmaceutical Yunhe Pharmaceutical (Tianjin) Co. Ltd.Zhengwu Technology Yunbaiyao Zhengwu Technology (Shanghai) Co. Ltd.Juyaotang Anguo Juyaotang Pharmaceutical Co. Ltd.Reporting period The period from January 1 2025 to December 31 2025
Expressed in the Chinese currency of Renminbi expressed in tens of thousands
RMB RMB’0000 RMB’00000000 of Renminbi expressed in hundreds of millions of Renminbi
42025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section II Company Profile and Key Financial Indicators
I. Company Profile
Stock Abbreviation Yunnan Baiyao Stock Code 000538
Stock Abbreviation before Change
None
(if any)
Stock Exchange Shenzhen Stock Exchange
Company Name in Chinese 云南白药集团股份有限公司
Company Abbreviation in Chinese 云南白药
Company Name in English (if any) YUNNAN BAIYAO GROUP CO. LTD.Company Abbreviation in English
YUNNAN BAIYAO
(if any)
Legal Representative of the
Zhang Wenxue
Company
Registered Address No. 3686 Yunnan Baiyao Street Chenggong District Kunming City Yunnan Province
Postal Code of the Registered
650500
Address
No. 51 Xiba Road Kunming City Yunnan Province National High-tech Industrial Development
Historical Changes in the Zone Kunming City Yunnan Province (registered address of the Group); No. 222 Second Ring
Company’s Registered Address West Road Kunming City Yunnan Province (registered address of the parent company of the
Group); No. 3686 Yunnan Baiyao Street Chenggong District Kunming City Yunnan Province
Office Address No. 3686 Yunnan Baiyao Street Chenggong District Kunming City Yunnan Province
Postal Code of the Office Address 650500
Company Website https://www.yunnanbaiyao.com.cn
Email Address 000538@ynby.cn
II. Contact Person and Contact Information
Secretary of the Board of Directors Representative of Securities Affairs
Name Qian Yinghui Li Mengjue
No. 3686 Yunnan Baiyao Street Chenggong District No. 3686 Yunnan Baiyao Street Chenggong
Contact Address
Kunming City Yunnan Province District Kunming City Yunnan Province
Tel 0871-66226106 0871-66226106
Fax 0871-66203531 0871-66203531
E-mail 000538dm@ynby.cn 000538@ynby.cn
III. Information Disclosure and Location
Website of the stock exchange where the Company
http://www.cninfo.com.cn
discloses its Annual Report
Name and website of the media where the Company
Securities Times Shanghai Securities News China Securities Journal
discloses its Annual Report
Location where the Company prepares and places
Company Archives Room
its Annual Report
52025 Annual Report of Yunnan Baiyao Group Co. Ltd.
IV. Changes in Registration
Unified Social Credit Code 9153000021652214XX
Changes in the principal businesses of the Company
None
since it was listed (if any)
1997: Yunnan Pharmaceutical Corporation
1999: Yunnan Pharmaceutical Group Co. Ltd.
2003: Yunnan Yunyao Co. Ltd.
2010: Yunnan Baiyao Holdings Co. Ltd (“Baiyao Holdings”)
Changes in the Company’s controlling shareholders
In 2017 Baiyao Holdings was the controlling shareholder but the
(if any)
Company had no de facto controller.In 2019 after the cancellation of the Company’s shares held by
Baiyao Holdings the Company had no controlling shareholders
and no de facto controller.V. Other Information
The accounting firm engaged by the Company
Name of the accounting firm Pan-China Certified Public Accountants LLP (SGP)
No. 128 Xixi Road Lingyin Subdistrict Xihu District Hangzhou City
Office address of the accounting firm
Zhejiang Province
Name of signing accountants Huang Yuanxi Zhao Li
The sponsor engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable R Not applicable
The financial advisor engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable R Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company needs retroactive adjustment or restatement of accounting data in prior years or not
□Yes R No
Increase/decrease
2025 2024 compared to the 2023
previous year
Operating revenue (RMB) 41186999090.31 40033300814.72 2.88% 39111292156.00
Net profit attributable to shareholders of 5153486838.91 4749415499.55 8.51% 4093782074.02
the listed company (RMB)
Net profit attributable to shareholders of
the listed company after deducting non- 4864568403.16 4523057538.23 7.55% 3763605361.07
recurring profits and losses (RMB)
Net cash flows from operating activities
4599693880.444297003142.277.04%3502742348.02
(RMB)
Basic earnings per share (RMB/share) 2.89 2.66 8.65% 2.29
Diluted earnings per share (RMB/share) 2.89 2.66 8.65% 2.29
Weighted average ROE 13.02% 11.99% Up 1.03 percentage points 10.51%
62025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Increase/decrease
End of 2025 End of 2024 compared to the end of End of 2023
the previous year
Total assets (RMB) 54268581131.82 52914181333.05 2.56% 53784293183.93
Net assets attributable to shareholders of 40044058844.44 38831946424.51 3.12% 39879122031.51
the listed company (RMB)
The lower of the Company’s net profits before and after deducting non-recurring profits and losses in the latest three accounting years
are all negative and the Company’s audit report for the previous year shows uncertainties in the Company’s ability to continue as a
going concern
□Yes R No
During the reporting period the lower of the Company’s audited total profit net profit and net profit after deducting non-recurring
gains and losses was negative
□Yes R No
Total share capital of the Company as of the trading day prior to the disclosure:
Total share capital of the Company as of the trading day prior to the
1784262603.00
disclosure (shares)
Fully diluted earnings per share calculated based on the latest share capital:
Preferred share dividend paid 0.00
Perpetual bond interest paid (RMB) 0.00
Fully diluted earnings per share calculated based on the latest share
2.8883
capital (RMB/share)
VII. Differences in Accounting Data under Chinese Accounting Standards (CAS) and Overseas
Accounting Standards
1. Differences in the net profits and net assets in financial statements disclosed respectively under
International Financial Reporting Standards (IFRS) and CAS
□Applicable RNot applicable
During the reporting period there was no difference in net profits and net assets in financial statements disclosed respectively under
IFRS and CAS.
2. Differences in the net profit and net assets in financial statements disclosed respectively under overseas
accounting standards and CAS
□Applicable RNot applicable
During the reporting period there was no difference in the net profits and assets in financial statements disclosed respectively under
overseas accounting standards and CAS.
72025 Annual Report of Yunnan Baiyao Group Co. Ltd.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 10841237721.29 10415865174.73 9397111312.99 10532784881.30
Net profit attributable to shareholders of
1934639584.601698271718.521144208354.35376367181.44
the listed company
Net profit attributable to shareholders of
the listed company after deducting non- 1887406845.46 1573508604.02 1089023837.43 314629116.25
recurring profits and losses
Net cash flows from operating activities 713597559.65 3247589643.12 494782308.77 143724368.90
Whether there is any significant difference between any of the above-mentioned financial indicator or their total number and those
disclosed in the Company’s any quarterly statements or interim statements
□ Yes RNo
IX. Non-recurring Profits and Losses and their Amounts
RApplicable □Not applicable
Unit: RMB
Item Amount in 2025 Amount in 2024 Amount in 2023 Remarks
Profits and losses from disposal of non-current assets
(including the write-offs for the accrued impairment of 7198923.23 2527905.42 110477911.97
assets)
Government subsidies included in the current profits and
losses (excluding the government subsidies closely related
to regular businesses of the Company in line with national 96333463.99 84203749.10 75375220.16
policies and received by a determined standard with a
continuous impact on the Company’s profits and losses)
Profits and losses from changes in fair value of financial
assets and liabilities held for trading by non-financial
enterprises and from disposal of such financial assets 189486904.27 150994732.81 199779795.08
and liabilities except for effective hedging operations
related to regular businesses of the Company
Profits and losses arising from entrusted investment or
19212454.116589832.783146335.87
asset management
Reversal of impairment provision of accounts receivable
1738612.00
subject to individual impairment test
Non-operating revenue and expenses other than the above 4570455.96 -28939412.06 -1919286.26
Other profits and losses satisfying the definition of non-
17162242.5647186324.0141588740.24
recurring profits and losses
Less: Amount affected by the income tax 44955132.44 37938914.49 69955013.92
Amount affected by minority interests (after tax) 90875.93 4868.25 28316990.19
Total 288918435.75 226357961.32 330176712.95 --
Other profits and losses satisfying the definition of non-recurring profits and losses:
RApplicable □Not applicable
Other non-recurring profits and losses that meet the definition of non-recurring profits and losses mainly include other non-recurring profits
and losses such as interest on fixed deposits and value added tax credit.
82025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Note for the definition of non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profits and losses
□Applicable RNot applicable
The Company does not define any non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profits and losses.
92025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section III Management Discussion and Analysis
I. Principal business of the Company during the Reporting Period
(I) Industry landscape and development trends
1. Growing demand in the healthcare industry
In recent years the aging population evolving health awareness and changing lifestyles have been the primary
drivers of sustained growth in demand within the healthcare industry. On the one hand the proportion of the
population aged 60 and above rose from 22% in 2024 to 23% in 2025 representing a slightly higher increase than
in the same period of the previous year (Source: National Bureau of Statistics). As a result demand among the
elderly for chronic disease management and health maintenance is showing rigid growth. On the other hand
activities such as running hiking and working out have become mainstream lifestyle choices driving increased
demand for related medical and health products including those for sports injury recovery nutritional supplements
and functional health maintenance. The combination of these factors has created significant market growth
opportunities providing fertile ground for the pharmaceutical industry particularly the traditional Chinese medicine
(“TCM”) sector to leverage its strengths.
2. Acceleration of policy-driven transformation and upgrading in the TCM industry
In 2025 driven by government policies the TCM industry exhibited core development trends toward
innovation large-scale and standardization as the sector continued to deepen its transition toward high-quality
development. The Proposal of the Central Committee of the Communist Party of China on Formulating the 15th
Five-Year Plan for National Economic and Social Development includes the biopharmaceutical industry among its
12 strategic tasks establishing a policy support system for the industry’s development across R&D regulatory
approval and production. The Opinions on Improving the Quality of TCM and Promoting the High-Quality
Development of the TCM Industry centers on quality improvement and establishes a development framework across
four key dimensions: resource conservation industrial upgrading technological innovation and strengthened
regulation. This framework aims to address the industry’s challenges of being “small fragmented and weak” as
well as inconsistent quality. It encourages enterprises to establish traceability systems covering the entire industrial
chain promotes the digital and intelligent transformation of the TCM industry supports the redevelopment of major
TCM varieties and the market launch of compound preparations based on ancient classic formulas strengthens
clinical value assessment and creates a favorable environment for leading enterprises to integrate resources. The
102025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Implementation Plan for High-Quality Development of the TCM Industry (2026–2030) serving as a roadmap for
the industry over the next five years proposes the establishment of 60 high-standard production bases for TCM raw
materials 5 centers for inheritance and innovation and 20 smart factories and the cultivation of 10 major Chinese
patent medicines and 10 green factories thereby directing industry resources toward high-quality production
capacity innovative products and green manufacturing. In terms of industrial chain collaboration leading
enterprises are encouraged to establish a full-chain presence to drive integrated development across upstream and
downstream sectors. Regarding product innovation efforts will be made to facilitate the transition of hospital-
prepared formulations into innovative drugs focusing on major chronic and intractable diseases. And in terms of
internationalization support will be provided for the international registration and market expansion of Chinese
patent medicines to help promote the “global outreach” of TCM. These policies work in concert ranging from short-
term regulations to long-term planning to form a comprehensive policy framework that supports the high-quality
development of the TCM industry. At the same time health insurance policies continue to be refined significantly
improving access to medications. As centralized procurement policies continue to be implemented on a regular basis
the 10th round of centralized procurement covers 62 varieties putting pressure on the prices of some products and
accelerating industry consolidation. Companies with strengths in cost control and quality will gain significant
competitive edge. The implementation of regulatory policies for online pharmaceutical sales has driven the
standardized development of online channels and opened up new opportunities for the retail sale of TCM.It should also be noted that the TCM industry as a whole is currently still undergoing a period of adjustment
marked by multiple intertwined pressures. Due to factors such as centralized drug procurement healthcare cost
containment frequent fluctuations in the prices of upstream TCM materials rising production costs and declining
foot traffic at pharmacies the industry is facing increasing pressure regarding revenue growth and profit realization
resulting in a slowdown in overall growth and heightened polarization. According to the 2025 Economic
Performance of the Pharmaceutical Industry report released by the China Pharmaceutical Enterprises Association
the revenue and profit growth rates of the Chinese patent medicine industry were -6% and -2.9% respectively in
2025.
3. The health products industry facing both challenges and opportunities
In the consumer goods market driven by consumption recovery growing health awareness and policy support
the total retail sales of consumer goods exceeded RMB 50 trillion for the first time in 2025 representing a year-on-
year increase of 3.7%. The consumption contributed 52% to economic growth up 5 percentage points from the
previous year. (Source: 2026 State Council Government Work Report)
112025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Although the consumer goods sector as a whole continued to grow the oral health industry experienced a
structural slowdown in growth due to persistently high costs associated with online channels. In 2025 the toothpaste
sector exhibited the following characteristics: First growth in omnichannel sales slowed down with online and
offline trends diverging. Online sales accounted for over 45% of total sales (Source: Nielsen IQ) with the market
expanding rapidly; and live-streaming e-commerce and social media-driven growth became key strategies for
emerging brands to gain a foothold in the market. The sales structure of offline channels changed. Traditional
channels such as hypermarkets and convenience stores saw their market share contract while emerging channels
including warehouse membership stores snack specialty chains and discount stores defied the downward trend to
become new growth drivers for the offline sector. Second consumer demand shifted toward more targeted needs
with a growing emphasis on functional benefits such as skin whitening gum care and sensitivity relief. Segments
focused on efficacy high-end products and children’s products have become key drivers of growth.(II) Industry position
The Central Committee of the Communist Party of China (“CPC”) and the State Council attach great
importance to the development of TCM. The 2026 Government Work Report of the State Council explicitly statesthat we must “advance the inheritance and innovation of TCM and strengthen the integration of Chinese and Westernmedical practices.” It places the revitalization and development of TCM at the forefront of the healthcare sector’s
development aiming to continuously strengthen top-level design policy support and resource allocation. This will
accelerate the modernization and industrialization of TCM by preserving its essence and upholding its inheritance
and innovation enabling it to better integrate into the coordinated governance of medical care health insurance
and pharmaceuticals and better serve the construction of a Healthy China and the health needs of the people.Yunnan Baiyao has always been committed to the inheritance and innovation of TCM continuously exploring
the intrinsic potential of traditional medicinal products and promoting the integration of TCM into modern life. The
Company continuously injects new vitality into its brand and products forming a product portfolio with 40
categories and 416 varieties. In the pharmaceutical products domain Yunnan Baiyao holds 567 drug approval
numbers and 316 product varieties including 222 types of Chinese patent medicines 43 of which are exclusive
varieties. The Company started with the century-old Yunnan Baiyao powder as its foundation and has gradually
created a series of core pharmaceutical products in the field of musculoskeletal and minor wound care covering all
kinds of product forms such as aerosols plasters tinctures and woundplast and has formed a competitive matrix of
branded TCM in the areas of cold and anti-inflammatory gastrointestinal digestion cardiovascular medicines and
gynecological and pediatric medicines. In the field of health products combining traditional Yunnan Baiyao
122025 Annual Report of Yunnan Baiyao Group Co. Ltd.
products with oral care products we have successfully created a group of oral care products with the flagship
product of Yunnan Baiyao Toothpaste and continued to develop and launch other functional oral care products
such as those for whitening and sensitivity relief. Based on the pharmaceutical science and technology and drawing
on the essence of natural plants we have successfully created the scalp health care brand “Yangyuanqing.”
Leveraging its successful development in pharmaceutical and health product sectors the Company has expanded
its business footprint into various domains including natural medicine TCM decoction pieces special medicines
medical devices personal care products and healthcare food. This move enables the Company’s evolution from a
TCM manufacturing enterprise to a modern holistic wellness-oriented entity.Yunnan Baiyao’s full-industry-chain strategy strengths in authentic medicinal herbs investment in
technological innovation and established brand reputation are highly aligned with the market trends driven by
current policy guidance in the pharmaceutical and healthcare industry. First market demand aligns closely with the
Company’s product portfolio: the demand for chronic disease treatment and rehabilitation driven by an aging
population as well as the rapidly growing demand in the sports and wellness sector directly correspond to Yunnan
Baiyao’s core pharmaceuticals branded TCMs and health-tonic products. Meanwhile the demand for injury
recovery and functional health supplements spurred by the growth in sports participation is highly compatible with
the Company’s Baiyao aerosols and sports protection product lines. Second we will advance our full-industry-chain
strategy by expanding upstream into high-quality TCM materials implementing a “flagship product” strategy in the
midstream to deepen our focus on the pharmaceutical and health products industries and expanding downstreaminto retail pharmacies and online sales channels. This will enable us to build an integrated “raw materials–production–sales” system and further enhance the core competitiveness of our principal businesses. Third we will
strengthen scientific and technological innovation promote the redevelopment of traditional products and
scientifically formulate short- medium- and long-term innovation and R&D plans to ensure the sustainable
commercialization of innovative achievements. At the same time we will continuously explore innovations in
distribution channels business models and application scenarios to better meet the health management needs of
various demographics and expand our market reach.In 2025 Yunnan Baiyao maintained its market-leading position across multiple business sectors. The
Company’s flagship product Yunnan Baiyao Aerosol ranked first in retail market share among Chinese patent
medicine aerosols for the topical treatment of joint and muscle pain in the musculoskeletal system. Yunnan Baiyao
Woundplast ranked first in retail market share for topical hemostatic products. Yunnan Baiyao (Powder) ranked first
in retail market share the full-body Chinese patent medicine for bone injuries in the musculoskeletal system (Source:
132025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Sinohealth CHIS). In 2025 Yunnan Baiyao Toothpaste continues to maintain the No.1 market share in the Chinese
full-channel market (Source: Nielsen Retail Data). In 2025 Yunnan Baiyao was listed on the Fortune China 500
List published by Fortune China for the 16th consecutive year ranking 357th; and ranked 33rd in the List of Top 50
Global Pharmaceutical Companies by Pharmaceutical Executive in US.II. Industry status during the Reporting Period
(I) Product and business
The Company has four business groups namely Pharmaceutical Business Group Health Products Business
Group TCM Resources Business Group and Yunnan Pharmaceutical Co. Ltd (“Yunnan Pharma”). These business
groups serve as the foundation for the Company’s production and operations.Pharmaceutical Business Group embodying the Company’s strategic positioning as the “leading brand of painmanagement in the field of traumatology” focused on the Yunnan Baiyao product line which includes hemostatic
analgesic anti-inflammatory and bruise-dissolving products such as Yunnan Baiyao Aerosol Yunnan Baiyao
Ointment Yunnan Baiyao Woundplast as its core. At the same time it prioritized the development of branded TCMs
in areas such as cardiovascular and cerebrovascular respiratory digestive urological and gynecological systems
while also building long-term reserves and incubating related pharmaceuticals in the fields of oncology and
autoimmune diseases.Health Products Business Group embodying the Company’s strategic positioning at “the leading tier of high-quality health lifestyle products” leveraged the brand infrastructure including people products and consumer
scenarios to drive marketing initiatives with oral health as its core business. Embracing a user-centric approach to
explore new consumption scenarios the BG not only solidified its market position in oral health but also expanded
into multi-domain solutions such as scalp care and body care thereby becoming the benchmark of the new concept
of Chinese healthy lifestyle.Embodying the Company’s strategic positioning as the “chain leader with high-quality development of YunanTCM resources” TCM Resources Business Group makes full use of the province’s distinctive medicinal plant
resources to ensure a high-quality efficient and low-cost supply of TCM raw materials. The BG has also built a
digitalized industrial chain ecosystem for TCM materials with the model of “1+1+N” which consists of “1 TCMproduction research and marketing integrated digital intelligence platform + 1 new specialized market for TCM
142025 Annual Report of Yunnan Baiyao Group Co. Ltd.materials at the origin + multi-dimensional synergies” so as to support “excellent TCM products” by “excellentYunnan TCM resources.”Yunnan Pharma embodying the Company’s the strategic positioning as the “leading enterprise inpharmaceutical distribution and innovative services” remained steadfast in pursuit of maintaining its leading market
share among pharmaceutical distribution companies in Yunnan Province. It has achieved full coverage in all 16
prefectures and cities of Yunnan Province extending its reach to all types of medical facilities from tertiary hospitals
to community and township clinics and all types of retail outlets ranging from retail chains to independent
pharmacies. It also assists governments and medical institutions in building better management and service systems
providing high-quality and modern pharmaceutical supply chain service solutions for upstream and downstream
customers.(II) Business model
1. Transformation from a Chinese leading TCM enterprise to a “Chinese leading world-class” modern
pharmaceutical industry group
As a “chain leader” the Company is committed to promoting coordinated development across the industrial
chain refining its focus on core areas expanding the leadership of advantageous products and accelerating theconstruction of the industrial system. Centered on the principles of “strengthening principal businesses stabilizinggrowth and ensuring sustainability” we aim to create a comprehensive industrial chain for Yunnan-branded TCM
materials. We will focus on expanding the long-term potential of pharmaceuticals health products TCM resources
and commercial logistics thus achieving self-driven leapfrog development. In addition based on the development
strategy the Company will scientifically validate and rapidly promote the Group’s internationalization strategy and
fully leverage the synergistic and promotional effects of “two markets” and “two resources” at home and abroad
focusing on expanding the reach of TCM products abroad creating new growth opportunities for health products
and integrating international resources for the development of innovative medicines so as to drive our sustained
high-quality development through internationalization and support the transformation of Yunnan Baiyao from a
Chinese leading TCM enterprise to a “Chinese leading world-class” modern pharmaceutical industry group.
2. Transformation of the development model from “endogenous growth” to “intensive and extensive growth”
The Company adopts a two-pronged growth strategy as the main growth model that combines internal
efficiency improvement (“intensive growth”) with external market expansion (“extensive growth”). “Intensivegrowth” focuses on tapping potential and increasing efficiency to stabilize the fundamental base. It concentrates on
the development foundations of the pharmaceutical health and distribution industries. Following the approach of
152025 Annual Report of Yunnan Baiyao Group Co. Ltd.
maximizing overall benefits it aims for systematic improvement and optimization across the industrial chain value
chain and production factors continuously promoting the high-quality development of the Company’s principal
businesses. “Extensive growth” emphasizes foresight and insight. Based on the overall strategic requirements and
orientation we actively explore strategic mergers and acquisitions strategic cooperation and other models to
complement and strengthen the existing industrial segments and quickly break through the existing growth
bottlenecks. This dual approach enables the Company to build a healthy and sustainable industrial portfolio system
and achieve high-quality and sustainable development.
3. Transformation from training internal talents to the model of “training internal talents + introducing externaltalents”
The Company believes in the pivotal role of talent in driving its development. It has established a systematic
and scientific training system that offers diverse career development pathways fostering both specialized
knowledge and comprehensive skills with the mutual development of talents and the Company as the objective.The Company concentrates its superior resources and actively introduces high-level professionals from multiple
fields including drug R&D digital construction and strategic investment. It continues to enhance its business
capabilities in multiple dimensions such as innovative R&D lean operations and investment and mergers &
acquisitions. By nurturing internal talents actively recruiting external experts and fully utilizing its organizational
environment for talent development and market resources the Company strives to build a high-quality talent pool
aligned with its future growth requirements.
4. Transformation from a traditional manufacturing enterprise to a smart enterprise based on digital operations
The Company is committed to building a digital driving force and actively seeking transformation to digital
operations with a strong customer-centric approach to enhance customer value and experience. By leveraging
cutting-edge digital technologies such as cloud computing big data AI 5G and the Internet of Things the Company
drives innovation and development. The Company also seeks for transformation from a function-oriented process
to a process that connects customer scenarios to drive the Company’s management change and organizational
development. Also the Company is moving beyond a unified “data base” and governance strategy to build a data-
driven intelligent decision-making system “based on facts.”
III. Analysis on Core Competitiveness
(I) Full-industry-chain advantage
162025 Annual Report of Yunnan Baiyao Group Co. Ltd.
In terms of TCM resources we will fully uphold our responsibilities as a chain leader based on the strategic
positioning of “the ‘chain leader’ with high-quality development of Yunnan TCM resources.” Relying on the
authentic medicinal resources and location advantages of Yunnan Province we will leverage Yunnan Baiyao’s
strength and influence in production technology channel and brand as well as the demonstration leading and
driving role of the leading enterprise in industrial development. We have built a digitalized industrial chain
ecosystem for TCM materials with the model of “1+1+N” which consists of “1 TCM production research andmarketing integrated digital intelligence platform + 1 new specialized market for TCM materials at the origin +multi-dimensional synergies” to promote the standardization scaling branding and digitalization of the TCM
industry and transform resource advantages into industrial competitive advantages and long-term sustainable
development advantages so as to support “excellent TCM products” by “excellent Yunnan TCM resources.”
Driven by its long-term and continuous investment in key strategic varieties of TCM materials the Company
has achieved a complete and closed-loop industrial chain from seed selection and cultivation to production and
processing. This has established a robust supply system for strategic medicinal materials effectively ensuring the
quality stability of TCM raw materials and controlling the price fluctuations of strategic TCM raw materials. This
system has laid the groundwork for the long-term and sustainable development of Yunnan Baiyao.(II) Continuous innovation capability
Yunnan Baiyao consistently meets the rapidly evolving and upgrading consumer demand through continuous
innovation and is committed to integrating TCM into modern life. We have evolved from a single hemostatic
product to a vast Yunnan Baiyao industrial group covering various sectors of the health industry and created classic
examples of innovation and the integration of TCM products into daily life such as “Yunnan Baiyao Woundplast”
and “Yunnan Baiyao Toothpaste.”
Looking ahead the Company is dedicated to integrating cross-regional resources to build a modern R&D
system driving the inheritance and innovation of TCM alongside advancements in biopharmaceutical technology
and leveraging digital and intelligent transformation to continuously enhance our innovation efficiency. Currently
the Group’s Central Research Institute has established 5 major R&D centers and more than 10 national and
provincial-level research platforms building a cross-regional R&D capability that spans TCM and ethnic medicine
innovative radiopharmaceuticals biopharmaceuticals transdermal formulations medical devices and skin care.Through collaboration with numerous leading domestic research institutions and universities the Company has
integrated industry-academia-research resources and attracted top-tier R&D talents. Leveraging a dual-track
mechanism of “external recruitment and internal development” we have established a high-caliber talent team led
172025 Annual Report of Yunnan Baiyao Group Co. Ltd.
by members of the Chinese Academy of Engineering recipients of the National “Ten Thousand Talents Program”
and recipients of the National Science Fund for Distinguished Young Scholars with over 60% of the team holdingmaster’s or doctoral degrees. Leveraging the strengths of its R&D system which focuses on “building platformsestablishing mechanisms and attracting talent” the Company adheres to a market-driven approach to R&D and
innovation. We deeply explore the clinical value of existing products and are fully committed to promoting the
synergistic development of the industrial and innovation chains thereby achieving the effective commercialization
of research outcomes cross-disciplinary integration and innovative breakthroughs. In addition the Company has
identified “AI+Medicine” as the core focus of its strategic transformation deeply integrating technologies such as
artificial intelligence big data and cloud computing to empower drug discovery and clinical research thereby
continuously improving R&D efficiency.(III) Channel advantages
In terms of pharmaceuticals the Company has built a marketing network covering medical institutions and
retail pharmacies across various provinces regions counties and towns in China and simultaneously expanded its
presence in the online market. We have developed the “Yunding Jingwei” ecosystem cooperation model
establishing a streamlined flat-structured data- and intelligence-driven direct-supply model from primary
distributors. This enables point-to-point delivery of products from manufacturers to pharmacies facilitates a more
effective “brand + channel + service” integrated ecosystem management model and continuously strengthens
traceability management and sales performance monitoring thereby setting a new industry benchmark for channel
management in the pharmaceutical sector. In the advantageous over-the-counter (“OTC”) channels we have
nationwide coverage serving 5000 top-tier chains and reaching over 400000 retail stores. In terms of healthcare
facilities our network covers more than 12000 hospitals nationwide (including primary care facilities). In the online
marketplace we have precisely targeted the “immediacy” trend in O2O channels establishing a comprehensive
“on-site + off-site” collaborative matrix and engaging in extensive partnerships with major e-commerce platforms
to effectively reach modern consumers through customized digital marketing.Regarding health products Yunnan Baiyao has established a comprehensive nationwide sales team dedicated
to holistic wellness products covering all terminals. Yunnan Baiyao Toothpaste continues to maintain a leading
market share in China with a high brand penetration in the oral product category. Through ongoing optimization of
its full chain channels the Company has not only strengthened its position in traditional offline channels but also
experienced significant growth in emerging business models such as on-demand retail community group purchases
and interest-based e-commerce. This demonstrates the Company’s willingness to experiment and adapt taking
182025 Annual Report of Yunnan Baiyao Group Co. Ltd.
measured steps forward and learning from any mistakes along the way all of which enhance its ability to quickly
respond to evolving business trends. Such channel advantages have driven significantly enhancement to Yunnan
Baiyao’s market competitiveness laying the foundation for the Company to continuously commercialize new
products.(IV) Talent team strengths
The Company continues to strengthen the development of a specialized workforce aligned with the Group’s
strategic development while collaboratively advancing the development of talent pipelines across all fields. First
we have established a long-term mechanism for talent development opening up career pathways across
management technical and professional tracks and implement targeted recruitment based on specific needs
promoting the recruitment of highly skilled highly technical and high-level talent in core professional fields
essential for our development. Second to advance the development of our talent pool in the new era we have
established a career grading system and training mechanisms and implemented a lifelong vocational skills training
system leveraging the “mentorship and guidance” provided by professionals in various fields to build a high-quality
specialized workforce. Third we keep refining our incentive mechanisms using a variety of approaches to stimulate
the creativity of all types of talent. We have further aligned our compensation system with areas such as industrial
transformation and upgrading technological innovation reform and development value creation new product
development and the development of flagship products prioritizing those working in frontline positions that are
arduous dirty dangerous or physically demanding. This ensures employees genuinely feel the benefits of the
Company’s growth helps to maximize the enthusiasm and creativity of cadres and employees promote the
Company towards high-quality development and lay a strong foundation for achieving win-win cooperation among
all stakeholders.(V) Brand strength
Yunnan Baiyao is a well-established Chinese heritage brand with a history of over 124 years. Centered around
the Yunnan Baiyao brand the Company has expanded from a pharmaceutical brand into a multi-brand ecosystem
covering personal healthcare products crude drugs and holistic wellness products. We have built a diverse portfolio
of brands and continuously expanded our reach to target audiences enhancing our brand value over the long term.The Company has been consistently listed in the brand value rankings of internationally authoritative organizations.During the reporting period it ranked 33rd in the List of Top 50 Global Pharmaceutical Companies by
Pharmaceutical Executive in US again and was included in the List of China’s Best Brands published by Interbrand
and the Kantar BrandZ Top 100 Most Valuable Chinese Brands list.
192025 Annual Report of Yunnan Baiyao Group Co. Ltd.
IV. Analysis on Principal Businesses
1. Overview
(I) Overview of business data
In 2025 the Company remained firmly committed to its strategic plan continued to refine its principal
businesses and leveraged its ever-improving operational management capabilities to navigate external market
uncertainties. As a result its operating performance grew against the trend achieving the established goals of
“growth efficiency enhancement and value creation.”
During the reporting period the Company achieved an operating revenue of RMB 41.187 billion a 2.88%
increase compared to the same period last year; net profit attributable to the parent company was RMB 5.153 billion
an 8.51% year-on-year increase from RMB 4.749 billion; and net profit attributable to the parent company after
deducting non-recurring profits and losses was RMB 4.865 billion a 7.55% increase compared to RMB 4.523 billion
last year setting a new historical high. Basic earnings per share were RMB 2.89 an increase of 8.65% year-on-year.The Company’s business structure continued to optimize. The industrial revenue amounted to RMB 16.016 billion
accounting for 38.89% of the total operating revenue up 2.75 percentage points year-on-year with the growth rate
of industrial revenue reaching 10.7%. Since 2023 the proportion of industrial revenue to total operating revenue
has achieved consecutive growth.In terms of growth quality the Company’s net operating cash flow for the reporting period was RMB 4.60
billion representing a year-on-year increase of 7.04%; the weighted average return on equity was 13.02% up 1.03
percentage points year-on-year marking the highest level in the past five years; and administrative expenses
decreased by 1.68%. The Company invested RMB 423 million in R&D representing a significant year-on-year
increase of 21.51%. R&D expenditure accounted for 2.64% of industrial revenue and the Company’s R&D
capabilities continued to improve.The Company continued to maintain a healthy asset structure. At the end of the reporting period the Company
had total assets of RMB 54.269 billion net assets attributable to the shareholders of the listed company amounted
to RMB 40.044 billion the asset-liability ratio was 26.02% and the cash and bank balance stood at RMB 9.108
billion.While pursuing high-quality development we promoted the co-creation and sharing of value between the
Company and its employees and established an employee-centered incentive system that aligns with business
growth. In terms of compensation distribution we prioritized core technical and key positions frontline and
202025 Annual Report of Yunnan Baiyao Group Co. Ltd.
challenging roles as well as high-level and highly skilled talent in critical and in-demand fields thereby further
raising employee compensations and fully stimulating organizational vitality. During the reporting period the
overall compensation for the Company’s entry-level employees increased by double digits year-on-year.Changes in proportion of industrial sales revenue and ROE over the past three years
50.00%
38.89%
40.00%35.13%36.14%
30.00%
20.00%
10.51%11.99%
13.02%
10.00%
0.00%
202320242025
Proportion of industrial sales
工rev业enu销e 售收入占比 ROE
(II) Review of the main work and prospects
1. Party building as the driving force behind high-quality development
Under the leadership of the Yunnan Provincial Party Committee of CPC and Provincial Government as well
as the Party Committee of the Provincial State-owned Assets Supervision and Administration Commission the
Company has earnestly studied and implemented the spirit of the 20th National Congress of the Communist Party
of China and its subsequent plenary sessions as well as the spirit of the 11th Provincial Party Congress of Yunnan.We have proactively embraced Yunnan’s “3815” strategic development goals striving to transform our political and
organizational strengths into competitive advantages that drive the Company’s high-quality development. We have
persistently worked to strengthen grassroots Party organizations and promoted the deep integration of Party buildingwith production and operations. During the reporting period the Communist Party of China Committee (“PartyCommittee”) of Yunnan Baiyao Group elected a new leadership team for both the Party Committee and the
Discipline Inspection Commission. Party-building efforts continued to deepen and gain momentum further
strengthening confidence in driving high-quality development.
2. Efficient and coordinated governance system
During the reporting period the Company incorporated Party building into its Articles of Association ensuring
that the Party’s leadership is effectively integrated throughout the entire corporate governance process. The Board
of Directors successfully completed its leadership transition on schedule. With members possessing diverse
professional backgrounds and strong complementary skills the quality of decision-making and the operational
efficiency of the specialized committees have been further enhanced providing robust support for the
212025 Annual Report of Yunnan Baiyao Group Co. Ltd.implementation of the Company’s strategy. We refined the decision-making mechanism for “major decisions keypersonnel appointments/dismissals major project arrangements and large-sum fund utilization” clarified the
boundaries of authority and responsibility among various governance bodies and further improved corporategovernance mechanisms. This will enable the Party Committee to “set the direction oversee the overall situationand ensure implementation” the Board of Directors to “formulate strategies make decisions and mitigate risks”
and the executive management to “plan operations ensure implementation and strengthen management” thereby
fostering a clearer and more efficient collaborative relationship among the three.
3. Effective implementation of strategic plans
During the reporting period the Company transitioned from the “strategic design phase” to the “strategicexecution and capability realization phase.” In terms of endogenous growth the Company focused on managing the
entire industrial chain value chain and all production factors while continuously advancing specialized programs
to reduce costs and improve efficiency thereby steadily enhancing the effectiveness of its management system.Through a series of initiatives including strategic procurement ensuring a stable supply of TCM materials
warehousing and logistics lean manufacturing and production-sales coordination the Company achieved sustained
cost reductions and efficiency gains throughout the year with labor productivity per employee significantly
exceeding the industry average. External mergers and acquisitions have also opened up new opportunities. The
Company’s acquisition of Anguo Juyaotang Pharmaceutical Co. Ltd (“Juyaotang”) has boosted synergies and
efficiency across the TCM materials supply chain driving resource integration within the province and expanding
its national footprint. This has laid a solid foundation for the expansion of its sliced herbal medicine and granulated
herbal formula businesses. The Company is now executing its extensive growth strategy anchoring on deeper
industrial synergy and targeted capability enhancement.
4. Significant progress achieved in focusing on principal businesses with business structure continuing
to improve
(1) Pharmaceutical Business Group
During the reporting period the Pharmaceutical Business Group achieved an operating revenue of RMB 8.318
billion representing a year-on-year growth of 12.53%. There were 10 products with sales exceeding RMB 100
million including 2 products with sales exceeding RMB 1 billion. Total sales revenue for the core product line
exceeded RMB 5.5 billion representing an increase of more than 18% compared to the same period last year. In
particular sales revenue for Yunnan Baiyao Aerosol exceeded RMB 2.5 billion representing a growth of over 22%;
sales revenue for Yunnan Baiyao Plaster exceeded RMB 1.2 billion representing a growth of over 26%; and Yunnan
222025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Baiyao Capsule Yunnan Baiyao (Powder) and Yunnan Baiyao Woundplast all achieved significant growth in sales
revenue compared to the previous year. Sales revenue for Qixuekang Oral Liquid a plant-based tonic product
continued to grow rapidly increasing by approximately 68% year-on-year. Other TCM products from various brands
posted impressive growth with products such as Ginseng and Tuckahoe Spleen and Stomach Strengthening Granule
Pudilan Anti-inflammatory Tablets and Xuesaitong Capsule generating over RMB 100 million in sales revenue.Among these sales revenue for Ginseng and Tuckahoe Spleen and Stomach Strengthening Granule rose by more
than 53% year-on-year.In 2025 guided by its strategies the Pharmaceutical Business Group leveraged its brand strengths and clinical
research capabilities with a focus on developing flagship products as a key breakthrough. By fully tapping into
channel potential the BG maintained substantial growth for its core product series in the orthopedic pain
management sector even from a high baseline while continuously expanding its product pipelines in high-potential
segments such as cardiovascular respiratory gastrointestinal and urological diseases. Additionally it continued to
build a pipeline of second-tier flagship products. First guided by clinical value and driven by clinical research the
Company accelerated the redevelopment and post-marketing re-evaluation of key products. Evidence-based
research on key products such as Yunnan Baiyao Capsule Yunnan Baiyao Aerosol Yunnan Baiyao Ointment
Qixuekang Oral Liquid Gongxuening Capsule and Tong Shu Capsule progressed steadily opening up broader
application scenarios for these products and driving significant growth in the Company’s core pharmaceutical
portfolio. Second we developed the “Yunding Jingwei” ecosystem cooperation model establishing a streamlined
flat-structured data- and intelligence-driven direct-supply model from primary distributors. This enables point-to-
point delivery of products from manufacturers to pharmacies facilitates a more effective “brand + channel + service”
integrated ecosystem management model continuously strengthens traceability management and sales performance
monitoring and advances the “flagship product” strategy thereby setting a new industry benchmark for channel
management in the pharmaceutical sector. Third we actively expanded our online market presence precisely
targeting the “immediacy” trend in O2O channels and building a comprehensive “on-platform + off-platform”
collaborative matrix to strengthen Yunnan Baiyao’s brand recognition and market competitiveness in immediate
health consumption scenarios. During the 2025 “618” shopping festival Yunnan Baiyao’s line of over-the-counter
medicines saw a significant rise in rankings. During the reporting period the brand’s GMV on pharmaceutical e-
commerce platforms reached RMB 500 million representing a year-on-year increase of 139%. Fourth with the
implementation of a large-scale systematic “mass campaign” strategy the Pharmaceutical Business Group pooled
its personnel and resources to launch province-wide promotional campaigns under a unified policy with a total of
232025 Annual Report of Yunnan Baiyao Group Co. Ltd.
27 chain stores participating which directly drove sales growth. Fifth we implemented a scenario-based specialized
and youth-oriented content marketing system. Focusing on scenarios such as “orthopedic pain” “sports partners”
“nourishing the spleen during the long summer” “Qi blood voice life and vitality” and “essential householdmedicines” we leveraged various platforms to conduct omnichannel integrated marketing that deeply integrates
brand building effectiveness and sales thereby effectively driving sales growth.Looking ahead the Pharmaceutical Business Group will follow the “1+4+N” industrial portfolio and
development strategy. Focusing on the “1” core area pain management we will continuously strengthen our leading
position in the hospital market through professional management of our product pipeline drive steady growth in
the non-hospital market through specialized brand management and identify high-potential high-quality and high-
value pain management products to expand and refine our product portfolio. Focusing on “4” key areas:
cardiovascular respiratory digestive and urological systems we will target promising products leverage our
strengths in the industrial chain and distribution channels and consolidate and cultivate flagship TCM products. We
will also continue to incubate and monitor multiple (“N”) promising sectors including oncology autoimmune
diseases and gynecology. In terms of development path we will leverage the “Yunding Jingwei” model to further
deepen our “flagship product” strategy driving growth across multiple channels including clinical OTC and O2O
and promoting sustainable business development through a dual-engine approach of endogenous and extensive
growth.
(2) Health Products Business Group
During the reporting period the Health Products Business Group generated revenue of RMB 6.745 billion. In
the oral care sector Yunnan Baiyao toothpaste maintained its position as the top-ranked brand in terms of omni-
channel market share in China in 2025 (Source: Nielsen Retail Data). At the same time the Company actively
expanded into new areas of oral care and made rapid progress. In the hair loss prevention and care sector backed
by a special cosmetic license for hair growth products and a national invention patent for hair loss prevention and
hair growth Yangyuanqing hair care products generated sales revenue of RMB 460 million representing a year-on-
year increase of nearly 10%. During the 2025 “618” shopping festival Yangyuanqing retained its position as the
top domestic anti-hair loss shampoo brand on Tmall (Source: shangzhizhen.com). While maintaining its competitive
edge in offline channels the Company has expanded its reach across all channels including traditional e-commerce
on-demand retail and content-driven e-commerce. Through scenario-based marketing educational content
promoting product benefits and integrated short-video and live-streaming campaigns the Company drove a
significant 27% year-on-year increase in online sales for its health products segment.
242025 Annual Report of Yunnan Baiyao Group Co. Ltd.
In 2025 the Health Products Business Group consolidated its foothold in the offline market while
simultaneously advancing the expansion of online channels and the promotion of new products achieving
significant progress. In terms of category development we focused on deepening our presence in functional
segments in the oral care sector; maintained a stable foundation in the gum care segment as a core functional
category while achieving rapid growth in segments such as sensitivity relief and whitening. Niche functional
segments such as children’s oral care have seen steady growth and Yangyuanqing has achieved sustained growth
driven by digital retail. The Company continued to strengthen its brand-building efforts and enhance its brand
influence through marketing campaigns at key milestones. In terms of R&D the Company actively explored
collaborative R&D and innovation models with academic institutions. We partnered with Peking University School
of Stomatology to establish the “Peking University Stomatology–Yunnan Baiyao Joint Laboratory for Oral Health.”
Through this platform both parties are focusing on common oral health issues affecting the public such as
periodontal disease tooth sensitivity and dental caries. By integrating cutting-edge research capabilities with
strengths in industrial application we are committed to bridging the “last mile” between scientific discovery and
addressing public health challenges thereby enhancing the technological sophistication and professional efficacyof domestic oral care products. In 2025 Yunnan Baiyao’s Smart Factory was successfully selected for the “GlobalManufacturing Lighthouse Factories” list becoming the first such facility in Yunnan Province and the first in the
global TCM health products sector. This achievement signifies international recognition of the Company’s digital
and intelligent manufacturing capabilities laying the foundation for the transformation and upgrading of the TCM
health products manufacturing industry and for domestic brands to compete on the global stage.Looking ahead the Health Products Business Group will continue to expand its existing customer base and
strengthen its product categories to establish a sustainable growth model. To expand the existing customer base we
will fully tap into the potential of our current products and users using scenario-based operations and product
reinvention to boost repeat purchases and customer loyalty. To develop new product categories we will focus on
anti-allergy skin-brightening children’s and hair and body care products to build a technology-driven second
growth curve. The Health Products Business Group will focus on its core development priorities continuously refine
its development strategies fully tap into the potential of its products and markets foster sustainable growth
momentum and drive high-quality development across the category.
(3) TCM Resources Business Group
During the reporting period the TCM Resources Business Group achieved export revenue of RMB 1.750
billion. The TCM Resources Business Group earnestly fulfilled its responsibilities as the “chain leader.” It
252025 Annual Report of Yunnan Baiyao Group Co. Ltd.
comprehensively implemented the “Six Unifications” operational model—unified planting planning unified seed
source R&D and supply unified cultivation standards unified origin processing unified procurement and sales and
unified management—to build a TCM material industry cluster and drive coordinated development across the entire
supply chain. We have established the Yunyao Enterprise Alliance and the “Digital Intelligence of Yunnan TCM”
Platform Testing Alliance successfully exploring and forming a distinctive Yunnan-style “one product one chain”
development path for the TCM material industry. The TCM Resources Business Group has stabilized its core
revenue streams and through the integrated “Large-Scale Procurement” management platform has significantly
reduced procurement and production costs.In 2025 the business units within the TCM Resources Business Group worked in concert to achieve significant
results. First developing the seed industry from a high starting point: We implemented a targeted R&D and
commercialization model of “1 variety + 1 expert team + 3–5 cooperative bases” appointed the first batch of 15
experts in seed sources for the “Top Ten Yunnan TCMs” and designated 14 seed source bases achieving full
coverage of the Top Ten Yunnan TCMs and expanding the area under high-quality varieties to over 11000 mu. We
launched the “Yunyao Seed Valley” strategy to establish a modern seed industry system including germplasm
evaluation elite variety selection standardized propagation and quality traceability. Second promoting high-
standard crop cultivation: We drove the transition of cultivation management from “experience-based judgment” to
“data-driven decision-making” with the newly added area under GAP-certified cultivation exceeding 14600 mu.This measure serves as a model to drive the overall upgrading of the provincial TCM material cultivation sector
thereby reinforcing the quality and stable supply of “Yunnan’s premium TCM materials.” Third advancing high-
level processing: We continued to advance the “One Product One Chain” model establishing seven standardized
origin warehouses in major medicinal material production areas to achieve significant improvements in productstandardization and quality consistency. We leveraged the integration of data from the “Digital Intelligence ofYunnan TCM” platform and the warehouse management system to enhance inventory turnover and order fulfillment
speed and reduced overall operating costs through energy-efficient equipment control of processing losses and the
development of a collaborative processing network. Fourth developing high-end markets: We established the
Digital Intelligence of Yunnan TCM a “1+1+N” one-stop platform for direct sourcing of TCM materials from their
places of origin achieving both “optimal sourcing costs” and “consistent high quality.” We also created the nation’s
first tax-exempt compliance system for agricultural product procurement specifically tailored to the TCM materials
industry offering the “Yunnan Solution” for standardizing tax practices within the sector. The platform’s total
transaction volume for the year exceeded RMB 2.1 billion benefiting more than 410000 farming households and
262025 Annual Report of Yunnan Baiyao Group Co. Ltd.
attracting over 23000 farmers to register online. Fifth building the brand from a strategic perspective: We
established the “Rapid Testing Stations” and built the “Yunjian Bencao” brand; developed 26 corporate standards
two of which were ranked first on the provincial “Leaders” list; led the revision of pharmacopoeia standards; set up
two provincial-level key laboratories; and increased shipment volumes by 31% year-on-year despite market
challenges while continuing to build a quality assurance system and enhance brand credibility. In addition we havemade significant strides in cross-border business pioneering an innovative “initial processing overseas + furtherprocessing domestically” model which has led to a comprehensive enhancement of our brand influence. Sixth
making steady progress in other business areas: The natural plant extracts business accelerated its transformation;
projects such as flavor and fragrance ingredients and co-branded products achieved breakthroughs; the market
competitiveness of our core product andrographolide significantly improved; and sales of our flavor and fragrance
product series increased by 234% year-on-year. In terms of pharmaceutical services we operate Yunnan’s largest
decoction center serving more than 20 medical institutions during the reporting period and preparing over 9 million
bags of decoctions. In terms of internal order fulfillment by optimizing production lines to boost efficiency annual
production of Qixuekang reached 260 million units effectively meeting market demand.Looking to the future the TCM Resources Business Group will continue to undertake the strategic positioning
and responsibility of Yunnan Baiyao Group as the “chain leader” for the high-quality development of the TCM
industry in Yunnan Province and tap into the province’s inherent advantages in TCM resources. In terms of branded
herbal medicines we will leverage Yunnan TCM resources to strengthen the foundation of the Yunnan TCM supply
chain. Regarding Digital Intelligence of Yunnan TCM we will create new business models and build new service
platforms. In the natural plant extracts sector we will adjust our business operations to fully empower our products
through a combination of technology and branding. In terms of pharmaceutical services we will deepen ourengagement with the provincial healthcare system establishing a three-tier service model that integrates “productsmedical institutions and services” and building the Yunnan Baiyao TCM Clinic brand. Through the coordinated
advancement of these businesses we will help transform Yunnan’s natural endowment of TCM materials into a
competitive industrial advantage thereby achieving the strategic goal of supporting “excellent TCM products” by
“excellent Yunnan TCM resources” contributing to the industry’s in-depth development.
(4) Yunnan Pharmaceutical Co. Ltd.
During the reporting period Yunnan Pharma realized revenue of RMB 23.804 billion. In terms of products
non-pharmaceutical businesses such as medical devices cosmeceuticals and specialized medical foods have begun
to yield results with sales growing 11.7% year-on-year. Under the hospital-adjacent store model specialized
272025 Annual Report of Yunnan Baiyao Group Co. Ltd.
pharmacies actively capturing prescription outflow from hospitals have seen significant growth in new specialty
drug business with sales increasing 38.5% year-on-year.In 2025 Yunnan Pharma fully demonstrated the leading role of Party building. It adhered to a development
strategy that balances “risk management” with “growth promotion” consolidating its existing market share and
expanding innovative business lines in its operations while implementing measures to reduce costs and improve
efficiency in its management. First our principal businesses maintained a solid foundation and our efforts to drive
growth yielded results. Yunnan Pharma continued to strengthen its two principal businesses hospital pharmaceutical
distribution and commercial distribution while focusing on developing growth areas such as medical device
distribution and specialty pharmacies. Sales on the “Yun Zhaoyao” platform have seen significant year-on-year
growth. Second we continued to optimize the closed-loop management system for controlled substances thereby
enhancing both supply chain resilience and operational efficiency. Third digital transformation was accelerated.Using pharmaceutical traceability codes and the Unique Device Identification (UDI) system as data links weestablished a traceability system characterized by “end-to-end coverage multi-stakeholder collaboration andintelligent monitoring and control.” This empowered downstream medical institutions and enhanced the quality and
efficiency of supply chain management. Fourth risk management capabilities improved significantly. Through a
comprehensive approach that includes strict credit controls data-driven and intelligent monitoring and
collaborative debt collection we achieved sound management of accounts receivable.Looking ahead Yunnan Pharma will adhere to the overall strategy of “consolidating and improving existingoperations while innovating to drive new growth.” Leveraging our accumulated strengths in digital and intelligent
operations and AI tools we will consolidate our pharmaceutical sales and chain distribution businesses in the tiered
healthcare market. Building on our SPD projects we will expand our medical device distribution operations and
stimulate the growth of our subsidiaries in primary care settings and third-party retail outlets. We aim to achieve
steady revenue growth improve the composition of accounts receivable and enhance profitability through lean
management across the entire value chain.
(5) Central Research Institute
The Company focuses on TCM and innovative drugs. On the one hand we uphold inheritance and innovation
and develop the TCM business. We solidified the development of germplasm resources by establishing a seed
industry company. Through a combined model of independent and collaborative R&D we aim to quickly build a
“breeding propagation and promotion integration” system for seed source development focusing on breeding
research for local medicinal materials such as Panax notoginseng and Paris polyphylla. We strengthened the
282025 Annual Report of Yunnan Baiyao Group Co. Ltd.
innovation of TCM and conducted research on ethnic medicine achieving significant progress in TCM R&D. On
the other hand we strive to make differentiated deployment in innovative drugs. Based on the criteria of technology
frontier clinical demand and resource endowment we seize the initiative to integrate into the national and local
biomedical strategies and deploy and develop innovative drugs with more competitiveness and market prospects.During the reporting period upholding the innovation-driven strategy the Company has promoted the
transformation of results continuously improved the development momentum and promoted scientific planning of
short- medium- and long-term projects in an orderly manner.For short-term projects we will dedicate our efforts to the innovative redevelopment of marketed varieties
and the development of drugs and medical devices. Eighteen major TCM varieties involving redevelopment
are currently under research and 37 projects are in progress. The progress of several key projects during the
reporting period is as follows:
Project Therapeutic
Project Name Progress Overview
Cycle Area
The evidence-based medical research project on the use of Yunnan Baiyao
Aerosol for the treatment of pain associated with closed rib fractures has had
its pilot study and received the statistical analysis report completed; an expert
Orthopedics
workshop on the formal trial protocol has been held; and the selection of a
contract research organization (CRO) and the confirmation of the list of sub-
centers have been finalized.The multi-center clinical trial on Yunnan Baiyao Capsules for treating limb
Redevelopment Orthopedics
swelling in patients with ankle fractures has had 36 subjects enrolled.Project for
Baiyao Series The Yunnan Baiyao Ointment project or specifically the new rubber patch
Products project has had the validation of the finished product quality analysis methods
pre-validation of the manufacturing process and safety evaluations regarding
skin irritation and allergic reactions completed. The evidence-based medical
Orthopedics
research project on the treatment of joint pain caused by rheumatoid arthritis
Rheumatology
has had the selection of a contract research organization (CRO) the
preparation of investigational drugs and the blinding process completed and
has obtained more than 10 ethics approvals from the lead hospital and sub-
centers.Short-
term A clinical research paper titled Effectiveness and Safety of Qixuekang Oral
Liquid on Vascular Health has been published in the Journal of Translational
Internal Medicine.Qixuekang
Cardiovascular
project The redevelopment and research project for Qixuekang Oral Liquid under the
major TCM varieties has been successfully approved as a major provincial
science and technology program by the Yunnan Provincial Department of
Science and Technology.A paper on post-abortion bleeding has been published in a core journal; a
clinical trial summary report on the treatment of abnormal uterine bleeding has
Redevelopment
been completed; a clinical trial summary report on reducing vaginal bleeding
project of Gynecology
after medical abortion has been completed; a pharmacoeconomic study on
Gongxuening
post-abortion bleeding has been completed; and a network pharmacology trial
has been completed.Post-marketing
Evaluation of
Urology The clinical trial summary report has been received.Shulie’an
Capsules
292025 Annual Report of Yunnan Baiyao Group Co. Ltd.
For medium-term projects we have made every effort to promote the development of innovative TCMs
and continued to build star products of Yunnan Baiyao transdermal preparations. The progress of several key
projects during the reporting period is as follows:
Project Therapeutic
Project Name Progress Overview
Cycle Area
Pan-Panax Data collection for 704 cases in the Phase II clinical trial has been
notoginseng Cardiovascular completed generating a summary report. Pharmaceutical-related research
Tablet project has been completed with the production process finalized.Fuqi Guben
Phase III clinical trials have been initiated at 17 research centers with 486
Ointment Urology
participants enrolled.project
Production validation for Qingxin Lotus Seed Granules has been
Ancient
Urology completed; pre-NDA communication materials have been submitted and
classical famous
respirology feedback received and the NDA dossier is currently being drafted; process
prescription
gastroenterology research for commercial-scale production of Ophiopogon Decoction
Medium- project Granules is currently underway.term
The process validation for the Flurbiprofen Cataplasms project has been
completed and PK-BE studies are currently underway.The Loxoprofen Sodium Cataplasms project has obtained approval for
clinical trials and process validation is currently underway.Plaster project Orthopedics The Yunnan Baiyao Gel Plaster project has had the preparation of pilot-
scale samples and the quality evaluation of small-scale samples with
different formulations completed.The Yunnan Baiyao Hot Melt Adhesive Plaster project has had small-scale
studies completed.For the long-term projects especially the innovative drug projects we will center on
radiopharmaceuticals development aligning social needs with technological advancement to advance a
pipeline of innovative drugs that will fuel the Company’s sustainable growth. The progress of several key
projects during the reporting period is as follows:
Project
Project Name Progress Overview
Cycle
INR101 diagnostic
Phase III clinical trials have been initiated at 29 of the 32 designated research centers with 239
radiopharmaceuticals
subjects enrolled.project
INR102 therapy Three subjects in the low-dose group and one subject in the medium-dose group have been
Long- radiopharmaceutical enrolled and dosed in the Phase I/IIa clinical trial and two subjects have completed screening
term project for INR101.INB301 monoclonal Preclinical studies in pharmacology toxicology and pharmacokinetics have been completed
antibody project for the the Investigational New Drug (IND) application has now been officially accepted by the Center
treatment of cancer for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) and has
cachexia been included in the fast-track review and approval process for innovative drugs.In 2026 the Company will focus on establishing a collaborative open and efficient innovation system
and promote the formation of a dual-helix synergistic mechanism between the industrial chain and the
innovation chain. First we will strengthen the development of innovation platforms enhance our capacity for
scientific and technological innovation and focus on achieving breakthroughs in core technologies related to
the strategic industrial layout. Second we will enhance our capacity for innovative development establish a
302025 Annual Report of Yunnan Baiyao Group Co. Ltd.
proactive business portfolio management system and promote effective synergy between our principal
businesses and emerging growth businesses. Third we will accelerate the development of new-quality
productive forces actively coordinate the planning of key industries and infrastructure projects fully leverage
the benchmarking advantages of our “Lighthouse Factories” and promote the expansion and enhancement of
digital and intelligent manufacturing. Fourth we will strategically target high-potential sectors and accelerate
the development of new sectors new pathways and new business models that align with our operational and
developmental needs. Fifth we will actively foster a positive environment that encourages innovation firmlyestablish the mindset of “revitalizing the enterprise through technology and strengthening the enterprisethrough talent” and effectively build a team of scientific and technological innovation talent so that a culture
of “wanting to innovate daring to innovate and being able to innovate” becomes the norm within the enterprise.
2. Revenue and cost
(1) Operating revenue structure
Unit: RMB
20252024
Year-on-year
Proportion in Proportion in increase/decrease
Amount Amount
operating revenue operating revenue
Total operating
41186999090.31100%40033300814.72100%2.88%
revenue
By industries
Industry sales
16016322668.7738.89%14468250214.3836.14%10.70%
income
Commercial sales
25083383908.9060.90%25472886013.9463.63%-1.53%
income
Technical services 23610417.29 0.06% 26297797.46 0.07% -10.22%
Hospitality industry 12992942.53 0.03% 14108732.07 0.04% -7.91%
Income from
14368.260.00%2393337.400.01%-99.40%
plantation sales
Income from other
50674784.560.12%49364719.470.12%2.65%
businesses
By products
Industrial products
16016322668.7738.89%14468250214.3836.14%10.70%
(Self-made)
Wholesale and retail 25083383908.90 60.90% 25472886013.94 63.63% -1.53%
Agricultural
14368.260.00%2393337.400.01%-99.40%
products
Other services 36603359.82 0.09% 40406529.53 0.10% -9.41%
312025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Others 50674784.56 0.12% 49364719.47 0.12% 2.65%
By region
Domestic 41077877616.54 99.74% 39674627530.94 99.10% 3.54%
Overseas 109121473.77 0.26% 358673283.78 0.90% -69.58%
By sales model
Industrial model 16016322668.77 38.89% 14468250214.38 36.14% 10.70%
Commercial model 25083383908.90 60.90% 25472886013.94 63.63% -1.53%
Others 87292512.64 0.21% 92164586.40 0.23% -5.29%
(2) The industries products or regions that account for more than 10% of the Company’s operating revenue or operating
profit
RApplicable □Not applicable
Unit: RMB
Increase/Decrease
Increase/Decrease Increase/Decrease
in operating
in operating cost in gross margin as
Gross revenue as
Operating revenue Operating cost as compared with compared with the
margin compared with the
the same period of same period of the
same period of the
the previous year previous year
previous year
By industries
Industry sales
16016322668.775574744305.5165.19%10.70%13.09%-0.74%
income
Commercial sales
25083383908.9023406298006.606.69%-1.53%-2.03%0.48%
income
By products
Industrial products
16016322668.775574744305.5165.19%10.70%13.09%-0.74%
(Self-made)
Wholesale and retail 25083383908.90 23406298006.60 6.69% -1.53% -2.03% 0.48%
By region
Domestic 41077877616.54 28937520351.50 29.55% 3.54% 1.42% 1.47%
By sales model
Industrial model 16016322668.77 5574744305.51 65.19% 10.70% 13.09% -0.74%
Commercial model 25083383908.90 23406298006.60 6.69% -1.53% -2.03% 0.48%
When the statistical caliber of the Company’s principal business data is adjusted in the reporting period the Company’s principal
business data should be subject to the one after the statistical caliber at the end of the reporting period is adjusted in the latest year
□Applicable RNot applicable
(3) Whether the Company’s revenue from in-kind sales is greater than its revenue from labor services
RYes □No
Year-on-year
Industry Classification Item Unit 2025 2024
increase/decrease
322025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Industry sales income Sales RMB 16016322668.77 14468250214.38 10.70%
Commercial sales income Sales RMB 25083383908.90 25472886013.94 -1.53%
(4) Fulfillment of significant sales contracts and significant purchase contracts entered into by the Company as of the reporting
period
□Applicable RNot applicable
(5) Operating cost structure
Industry Classification
Unit: RMB
20252024
Industry Year-on-year
Item
Classification Percentage in Percentage in Amount Amount increase/decrease
operating cost operating cost
Industry sales Direct materials 4736697896.70 16.31% 4173980104.81 14.46% 13.48%
Industry sales Direct salary 265396298.02 0.91% 202255370.65 0.70% 31.22%
Other direct
Industry sales 74896.36 0.00% 35793.11 0.00% 109.25%
expenses
Manufacturing
Industry sales 572575214.43 1.97% 553067302.27 1.92% 3.53%
costs
Commercial
Purchase cost 23406298006.60 80.62% 23891275361.45 82.77% -2.03%
sales
Technical Technology
22293927.420.08%20496861.160.07%8.77%
services development
Planting Planting cost 16817.30 0.00% 1150809.47 0.00% -98.54%
Others Others 29570138.99 0.10% 22504602.18 0.08% 31.40%
Explanations: None.
(6) Whether there was any change in the scope of consolidation during the reporting period
RYes □No
For details please refer to “IX. Changes in the Consolidation Scope” under Section X.
(7) Significant change or adjustment of the business product or service of the Company during the reporting period
□Applicable RNot applicable
(8) Major customers and major suppliers
Major customers
Total sales amount of top 5 customers (RMB) 8518935149.94
Percentage of total sales amount of top 5 customers in annual
20.68%
total sales amount
Among the sales amount of top 5 customers percentage of the
0.00%
sales to the related parties in the annual sales amount
Information of top 5 customers
332025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Percentage in annual total
No. Customer name Sales amount (RMB)
sales amount
1 Customer A 3723323240.67 9.04%
2 Customer B 1727751080.65 4.19%
3 Customer C 1414814072.72 3.44%
4 Customer D 954326542.07 2.32%
5 Customer E 698720213.83 1.70%
Total — 8518935149.94 20.68%
Other information of the major customers
□Applicable RNot applicable
Major suppliers
Total purchase amount of top 5 Suppliers (RMB) 2124275850.16
Percentage of total purchase amount of top 5 Suppliers in annual
7.20%
total purchase amount
Among the purchase amount of top 5 suppliers percentage of
the purchase from the related parties in the annual purchase 2.28%
amount
Information of top 5 suppliers
Percentage in annual total
No. Supplier name Purchase amount (RMB)
purchase amount
1 Supplier A 673226493.06 2.28%
2 Supplier B 447351330.25 1.52%
3 Supplier C 359249313.75 1.22%
4 Supplier D 322607069.59 1.09%
5 Supplier E 321841643.51 1.09%
Total — 2124275850.16 7.20%
Other information of major suppliers
□Applicable RNot applicable
Top five suppliers with whom the trade business accounted for more than 10% of total revenue
□Applicable RNot applicable
3. Expenses
Unit: RMB
Year-on-year
2025 2024 Explanations on significant changes
increase/decrease
Primarily due to an increase in online sales
Sales expenses 5619465376.89 4879502036.91 15.16% expenses and a rise in the proportion of
revenue generated online.During this period the Company continued
Administrative to implement cost-cutting and efficiency-
1020080152.221037553483.87-1.68%
expenses enhancing measures resulting in a decrease
in administrative expenses.
342025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Primarily due to a decrease in interest income
Financial
-46890322.70 -155555109.85 69.86% for the current period compared to the same
expenses
period last year.R&D investment increased during this
R&D expenses 350545386.25 337413301.03 3.89%
period.
352025 Annual Report of Yunnan Baiyao Group Co. Ltd.
4. R&D investment
RApplicable □Not applicable
Expected impact on the future
R&D project name Objective of the project Project progress Goals to be achieved
development of the Company
Currently 18 major TCM varieties are undergoing redevelopment.Key projects include: Qixuekang: A clinical research paper titled
Taking the three projects as
To conduct in-depth research on Effectiveness and Safety of Qixuekang Oral Liquid on Vascular
examples: We plan to investigate
existing major products in areas such Health which examines the effects of Qixuekang Oral Liquid on
the therapeutic effects of Qixuekang To expand or refine the clinical
as pharmacology preclinical studies improving heart and vascular health has been published in the
Oral Liquid in cardiovascular applications of a product within a
clinical trials and economics to refine Journal of Translational Internal Medicine; Gongxuening
diseases; further elucidate the safety specific disease area provide guidance
Redevelopment the evaluation systems for efficacy Redevelopment Project: A paper on post-abortion bleeding has
and efficacy of Gongxuening on clinical use identify growth
Projects for Major and safety expand and clarify product been published in a core journal; a clinical trial summary report on
Capsule for gynecological opportunities and facilitate the
TCM Varieties indications and target patient the treatment of abnormal uterine bleeding has been completed; a
hemostasis and extensively collect inclusion of the product in clinical
populations guide clinical prescribing clinical trial summary report on reducing vaginal bleeding after
clinical evidence; and investigate guidelines treatment pathways and
practices and introduce new medical abortion has been completed; a pharmacoeconomic study
the safety and efficacy of Shulie’an consensus documents.technologies to improve existing on post-abortion bleeding has been completed; and a network
Capsules in the treatment of
products. pharmacology trial has been completed; Shulie’an: The clinical
prostate conditions.trial summary report for the Prostatitis Treatment with Shulie’an
Capsules has been received.This project is the first innovative
diagnostic radiopharmaceutical product
of the Company. This project will add a
brand-new innovative
To develop innovative To receive marketing approval from
Phase III clinical trials have been initiated at 29 of the 32 radiopharmaceutical product to the
INR101 Project radiopharmaceuticals for the the National Medical Products
designated research centers with 239 subjects enrolled. Company’s portfolio open up new
diagnosis of prostate cancer. Administration.markets drive the growth of the
Company’s innovative drug segment
and strengthen the Company’s strategic
footprint in cutting-edge technologies.
362025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Expected impact on the future
R&D project name Objective of the project Project progress Goals to be achieved
development of the Company
This project is the first innovative
radiopharmaceutical product of the
Company with the indication of
prostate cancer. This project will add a
Three subjects in the low-dose group and one subject in the
To develop innovative To receive marketing approval from brand-new innovative
medium-dose group have been enrolled and dosed in the Phase
INR102 Project radiopharmaceuticals for the the National Medical Products radiopharmaceutical product to the
I/IIa clinical trial and two subjects have completed screening for
treatment of prostate cancer. Administration. Company’s portfolio open up new
INR101.markets drive the growth of the
Company’s innovative drug segment
and strengthen the Company’s strategic
footprint in cutting-edge technologies.This project is the first innovative
biologic drug of the Company with the
indication of cancer cachexia. Through
Preclinical studies in pharmacology toxicology and
INB301 this project the Company has
pharmacokinetics have been completed the Investigational New
Monoclonal To develop monoclonal antibody To receive marketing approval from established a biopharmaceutical R&D
Drug (IND) application has now been officially accepted by the
Antibody Project products for the treatment of cancer the National Medical Products team and accumulated extensive
Center for Drug Evaluation (CDE) of the National Medical
for the Treatment of cachexia Administration. technical and project experience which
Products Administration (NMPA) and has been included in the
Cancer Cachexia will help the Company explore new
fast-track review and approval process for innovative drugs.growth opportunities in the field of
innovative drugs and enhance its
market competitiveness.To explore and validate the clinical This project is the first new TCM of the
research methodology and marketing evidence-based class approved for
To complete Phase III clinical study
registration pathway for the clinical use in China and this R&D
on Fuqi Guben Ointment clarify its
development of a new TCM for project is a strong proof of the
clinical therapeutic characteristics
warming the kidneys and Company’s ability to develop and
diagnostic criteria for treatment of
Fuqi Guben consolidating the fundamentals Phase III clinical trials have been initiated at 17 research centers industrialize innovative drugs of the
disease effective dosage for
Ointment which is designed to treat the with 486 participants enrolled. TCM of evidence-based class. In the
treatment drug administration
symptoms of frequent nocturnal future it is expected to add a new TCM
program and course of treatment
urination in middle-aged and elderly drug of evidence-based class in line
and register and market it as new
people due to kidney Yang deficiency with the overall healing characteristics
TCM of Category 1.1.and improve the quality of life of of TCM and enrich the Company’s
middle-aged and elderly people. TCM innovative drug product matrix.
372025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Expected impact on the future
R&D project name Objective of the project Project progress Goals to be achieved
development of the Company
To tap into the characteristics of This product is the first innovative drug
Panax notoginseng in disease To comprehensively utilize the R&D project for cardiovascularprevention and treatment and resources of the whole Panax diseases under the Company’s “holisticdevelop Category 1 innovative TCM notoginseng plant and further wellness” strategy which is conducive
Data collection for 704 cases in the Phase II clinical trial has been
Panax notoginseng for the prevention and treatment of explore the synergistic mechanism to the treatment of symptoms related to
completed generating a summary report. Pharmaceutical-related
Tablets (PSQ chest tightness heart pain palpitation of saponins flavonoids cardiovascular stasis. In the future it is
research has been completed with the production process
project) and dizziness in middle-aged and polysaccharides and other expected to add a new TCM drug of
finalized.elderly people due to the evidence of components and market the evidence class in line with the overall
stasis in the heart veins and reducing product as innovative TCM of healing characteristics of TCM and
the incidence of cardiovascular Category 1.1. enrich the Company’s TCM innovative
events. drug product matrix.The process validation for the Flurbiprofen Cataplasms project
To expand the clinical choice of plaster
To expand the clinical choice of plaster has been completed and PK-BE studies are currently underway;
products maintain Yunnan Baiyao’s
products. It is planned to develop 2 the Loxoprofen Sodium Cataplasms project has obtained
industry advantage in the field of
new improved TCM (Yunnan Baiyao approval for clinical trials and process validation is currently
Development of To obtain the drug registration topical preparations through
Gel Plaster and Yunnan Baiyao Hot underway; the Yunnan Baiyao Gel Plaster project has had the
four plasters certificate. formulation deployment new product
Melt Adhesive Plaster) and 2 generic preparation of pilot-scale samples and the exploration of in vitro
selection and dosage form
plasters (Flurbiprofen Cataplasms release behavior and preliminary evaluation of stability
improvement and help the Company
Loxoprofen Sodium Cataplasms). completed; and the Yunnan Baiyao Hot Melt Adhesive Plaster
explore new growth drivers.project has had small-scale studies completed.This will practice the Company’s
strategy of deep cultivation in the field
of TCM contribute to maintaining
integrity and promoting innovation in
To develop and market two classic
Development of two Production validation for Qingxin Lotus Seed Granules has been the field of TCM enrich the Company’s
famous prescriptions (PZ-018 and
Chinese medicinal completed; pre-NDA communication materials have been TCM product echelon and help the
PZ-019) with clinical value and To be marketed according to the
preparations with submitted and feedback received and the NDA dossier is Company explore new growth drivers
market prospect through regulated registration approval requirements
classic prescriptions currently being drafted; and process research for commercial- and enhance market competitiveness. In
and standardized research with the for new TCMs of Category 3.1.(PZ-018 and PZ- scale production of Ophiopogon Decoction Granules is currently addition it will accumulate technology
help of modern science and
019) underway. and project management experience for
technology.the development of new TCMs for the
Company and continuously improve
the core competitiveness of TCM in
Yunnan Province.
382025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Expected impact on the future
R&D project name Objective of the project Project progress Goals to be achieved
development of the Company
To conduct in-depth analyses of the
To conduct systematic basic and
anti-aging mechanisms of Panax By conducting in-depth systematic
applied research on plants such as
notoginseng and the genomics and research on distinctive plants such as
Panax notoginseng and Paris
immune regulatory mechanisms of Panax notoginseng and Paris
polyphylla; conduct in-depth analyses
Paris polyphylla submit multiple polyphylla the Company will establish
of various natural plants with anti- Three SCI papers have been submitted including one conference
SCI papers and secure a series of a core knowledge barrier and a patent
aging properties identify their active paper that has been accepted.patents. In terms of product moat in the field of natural bioactive
Development of ingredients clarify their mechanisms The drafting of four patent applications has been completed
development we will drive the compounds thereby significantly
Caizhiji’s botanical of action and safety profiles and which have passed the preliminary examination.formulation development stability enhancing its technological
active ingredients optimize their processing steps to The development of three anti-aging products has been
testing and successful market competitiveness. The successful
and their application ensure the effective application of completed: Bitter Notoginseng Toner Triple Extract Formula
registration of at least three anti- translation of these achievements into
in skincare products these natural ingredients in the and Luxury Nourishing Mask.aging skincare products containing cosmetic ingredients and end products
cosmetics industry; decipher the The development of four products related to Paris Fargesii has
Panax notoginseng. We will has laid a solid technological and brand
“genetic-physiological” code of Paris been completed.complete the commercial foundation for the Company to expand
Fargesii explore new mechanisms of
registration of Paris polyphylla its footprint in the health and wellness
action for Paris Fargesii and develop
extract as a cosmetic ingredient and industry and achieve sustainable
skincare products containing Paris
the market registration of related development.Fargesii.products.We can expand the Company’s product
portfolio by introducing new anti-aging
and skin barrier repair products
Research on the To develop a world-class AI-driven
To establish the first AI-driven featuring Panax notoginseng and Paris
Anti-Aging drug screening system; identify two
smart drug prediction system that polyphylla as key active ingredients
Components and major active compounds each from The “Yunbai Zhiyao-X” system has been successfully
does not require target information; thereby further enriching the
Mechanisms of Panax notoginseng and Paris established. The anti-aging active components of Panax
complete research reports on the Company’s skincare and health
Panax notoginseng polyphylla and conduct preliminary notoginseng and their anti-aging effects have been identified and
anti-aging properties of the active supplement offerings. In addition a
and Paris studies on their mechanisms of action the relevant anti-aging mechanisms have been preliminarily
ingredients in Panax notoginseng drug R&D platform powered by
polyphylla and the to explore their anti-aging potential elucidated. The anti-aging effects of the active components in
and Paris polyphylla publish high- artificial intelligence will significantly
Development of the thereby supporting drug development Paris polyphylla have been preliminarily identified.impact academic papers and file reduce R&D costs improve R&D
“Yunbai Zhiyao X” and the formulation of skincare
relevant patents. efficiency and shorten time-to-market
System ingredients.providing robust technical support for
the Company’s future drug research and
innovation.
392025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Expected impact on the future
R&D project name Objective of the project Project progress Goals to be achieved
development of the Company
To complete the registration of a In line with the Company’s strategic
nutritional formula for special objectives this project is an effective
To develop 1 medical nutritional
medical purposes and obtain the complement to the echelon of Holistic
Nutritional Formula support supplement for people with The Company has passed the on-site inspection conducted by the
production permit. To construct a wellness products. It can greatly enrich
for Special Medical limited eating digestive and State Administration for Market Regulation and the registration
knowledge and technology system the Company’s product groups and
Purposes absorption disorders and metabolic certificate is now in the review and approval stage.and industrial platform for R&D help the Company explore new growth
disorders (over 10 years of age).and registration of special medical drivers and enhance market
food. competitiveness.
1. This will practice the Company’s
strategy of focusing on the field of
TCM promote inheritance and
innovation in the field of TCM
development and further stabilize and
enhance our competitiveness in the
To carry out product power
Productivity To complete the declaration of target product market. 2. It will help to
enhancement studies on the The approval for the supplemental applications of Xiao Chaihu
Improvement supplemental registration of drugs explore the market of sugar-free
Company’s marketed varieties to Granules (sugar-free) and Xiangsha Pingwei Granules (sugar-
Project (Technology and obtain the approval of granules provide a new direction to
improve the quality and qualification free) have been granted by the NMPA.Reform Project) supplemental application. solve the medication limitations of
of the existing varieties.diabetes and other patients with
prohibited sugar medication expand the
scope of application of the product to
meet the health needs of more patient
populations and enhance the quality
and competitiveness of the product.Focusing on the innovation of wound
hemostatic materials will enrich the
The Company’s domestically developed single-use sterile
To develop a series of emergency Company’s medical device product line
New wound hemostatic clamp has received a Notice of Acceptance for Class
medical device products for the and meet the demand for efficient
hemostatic material II Medical Devices. In late November 2025 the project To obtain the medical device
temporary control of bleeding aimed hemostatic solutions in medical
and arterial successfully passed the on-site verification and performance registration certificate.at achieving rapid hemostasis wound institutions and emergency settings.hemostatic gel evaluation of the results of each sub-project conducted by the
dressing and care. This aims to establish a leading
project team.platform in China for trauma
emergency care in medical devices.
402025 Annual Report of Yunnan Baiyao Group Co. Ltd.
R&D team member profile
2025 2024 Change rate
Number of R&D team
70461913.73%
members (persons)
Percentage of R&D team
7.58%6.67%0.91%
members in total head counts
Educational background structure of R&D team members
Below Bachelor 41 44 -6.82%
Bachelor 325 322 0.93%
Master 290 220 31.82%
Above Master 48 33 45.45%
Age structure of R&D team members
Aged below 30 153 139 10.07%
Aged 30-40 395 354 11.58%
Aged 40 and above 156 126 23.81%
R&D Investment
2025 2024 Change rate
R&D investment amount (RMB) 423334144.68 348383287.59 21.51%
Percentage of R&D investment in
1.03%0.87%0.16%
operating revenue
Capitalized R&D investment amount
72788758.4310969986.56563.53%
(RMB)
Percentage of capitalized R&D
17.19%3.15%14.04%
investment in total R&D investment
Note: In 2025 the Company’s R&D expenditure accounted for 2.64% of its industrial sales revenue.Reason for the significant change in the composition of R&D team and its impact
□Applicable RNot applicable
Reason for significant change in percentage of R&D investment in operating revenue as compared with the previous year
□Applicable RNot applicable
Reason for significant change in capitalization rate of R&D investment and its rationality
RApplicable □Not applicable
Capitalized projects continued to receive investment during the reporting period. The “Fuqi Guben Ointment” project a key R&D
project for new TCMs and the “INR101 Project” an innovative radiopharmaceutical R&D project have entered Phase III clinical
trials providing strategic momentum for the Company’s long-term sustainable development.
5. Cash flow
Unit: RMB
Year-on-year
Item 2025 2024
increase/decrease
Subtotal of cash inflows from
46289764400.5843880006829.375.49%
operating activities
Subtotal of cash outflows from
41690070520.1439583003687.105.32%
operating activities
412025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Net cash flows from operating
4599693880.444297003142.277.04%
activities
Subtotal of cash inflows from
7941923117.948019213440.17-0.96%
investing activities
Subtotal of cash outflows from
9927260178.749218214486.647.69%
investing activities
Net cash flows from investing
-1985337060.80-1199001046.47-65.58%
activities
Sub-total of cash inflows from
335611144.991962072461.45-82.90%
financing activities
Subtotal of cash outflows from
4684602943.598939807625.33-47.60%
financing activities
Net cash flow from financing
-4348991798.60-6977735163.8837.67%
activities
Net increase in cash and cash
-1743296887.95-3876235893.1555.03%
equivalents
Explanations on main factors of influence of significant year-on-year changes in related data
RApplicable □Not applicable
1. Net cash flow from operating activities increased by 7.04% year-on-year representing an increase of RMB
303 million. This was primarily due to a year-on-year increase of RMB 2.201 billion in cash received from sales of
goods and provision of services; a year-on-year increase of RMB 515 million in taxes paid; and a year-on-year
increase of RMB 1.321 billion in other cash payments related to operating activities.
2. Net cash flow from investing activities decreased by 65.58% year-on-year with a net decrease of RMB 786
million. This was primarily due to a RMB 4.72 billion increase in cash paid for investments compared to the same
period last year. This increase was mainly attributable to cash paid for the purchase of relatively safe and liquid
bank wealth management products and securities firm wealth management products with the aim of enhancing
returns and capital utilization efficiency while ensuring the continuity of daily operations and capital security. Net
cash received from subsidiaries and other business units during the current period increased by RMB 500 million
compared with the same period last year; cash paid out for other investing activities during the current period
decreased by RMB 4.316 billion compared with the same period last year primarily due to cash paid for time
deposits.
3. Net cash flow from financing activities increased by 37.67% year-on-year with the net amount rising by
RMB 2.629 billion. This was primarily due to a decrease of RMB 1.706 billion in cash received from borrowings
compared to the same period last year; a decrease of RMB 2.401 billion in cash paid for debt repayment compared
to the same period last year; and a decrease of RMB 1.909 billion in cash paid for dividends profits or interest
compared to the same period last year.Explanation on the main factors behind the material difference between the net cash flow from operating activities of the Company
during the reporting period and the net profit for the current year
□Applicable RNot applicable
V. Analysis of Non-principal Businesses
RApplicable □Not applicable
422025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Percentage in
Amount Reasons Sustainable or not
total profit
It consisted mainly of the gains on investment in
Shanghai Pharmaceuticals Holding Co. Ltd
Investment income 1042986305.52 17.26% (“Shanghai Pharma”) and the investment income No
from the disposal of financial assets held for trading
and other non-current financial assets.It consisted mainly of changes in the net value of
Gains (losses) from
110489468.71 1.83% financial assets held for trading and other non-current No
changes in fair value
financial assets held by the Company.It consisted mainly of provisions for inventory
Asset impairment -258372158.02 -4.28% No
impairment.It consisted mainly of the income unrelated to the
Non-operating revenue 24951555.82 0.41% No
Company’s day-to-day operating activities.It consisted mainly of the expenses unrelated to the
Non-operating expenses 20576232.96 0.34% No
Company’s day-to-day operating activities.It consisted mainly of the provision for bad debt
Credit impairment losses
58066387.77 0.96% related to accounts receivable in the commercial No
(loss is indicated with “-”)
sector.Plus: Other income 100782693.13 1.67% It consisted mainly of government subsidies. No
Gains from disposal of It consisted mainly of gains from the disposal of non-
assets (loss is indicated 8167595.81 0.14% current assets and gains from the disposal of rights to No
with “-”) use assets.Note: Investment income from Shanghai Pharma amounted to RMB 989 million. This investment is part of a
strategic partnership between the two parties which helps leverage their industrial synergies; therefore this investment
income is sustainable.VI. Analysis on Assets and Liabilities
1. Significant changes in assets composition
Unit: RMB
End of 2025 Beginning of 2025
Proportion Increase/decrease Explanations on
Proportion in
Amount Amount in total in proportion significant changes
total assets
assets
During the reporting
period the Company
distributed its 2024
Cash and bank annual dividend and
9107829167.9816.78%10887983161.3020.58%-3.80%
balance 2025 special dividend
with a total cash
dividend payout of
RMB 3.933 billion.Accounts
10160059223.29 18.72% 9923361104.39 18.75% -0.03% No significant changes.
receivable
432025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Improved inventory
management efficiency
Inventories 6231383826.69 11.48% 6294368316.30 11.90% -0.42%
and faster inventory
turnover.Investment
50366578.65 0.09% 49884012.15 0.09% 0.00% No significant changes.
property
Long-term Shanghai Pharma
equity 13227578051.91 24.37% 12561276081.35 23.74% 0.63% continued to generate
investments investment income.Fixed assets 3274340152.34 6.03% 3012878828.09 5.69% 0.34% No significant changes.Construction in
807592848.36 1.49% 703439112.24 1.33% 0.16% No significant changes.
progress
Right-of-use
248003380.85 0.46% 291177021.52 0.55% -0.09% No significant changes.
assets
Short-term Decrease in credit loans
182775753.210.34%423380272.640.80%-0.46%
borrowings during this period.Contractual Decrease in advances
1505826938.182.77%1916123387.163.62%-0.85%
liabilities from customers
Long-term Increase in mortgage
86569400.830.16%2100000.000.00%0.16%
borrowings loans of Juyaotang.Lease liabilities 141830379.18 0.26% 190656990.23 0.36% -0.10% No significant changes.The Company has
exited all secondary
market equity
investments. To enhance
returns and improve
capital efficiency while
ensuring the safety of
daily operations and
funds the Company
Financial assets
4192113408.43 7.72% 2547113523.40 4.81% 2.91% utilized idle proprietary
held for trading
funds during the current
period to make wealth
management
investments purchasing
bank and brokerage
wealth management
products that offer
relatively high safety
and liquidity.Decrease in domestic
letters of credit and
Notes
585366210.93 1.08% 929651911.37 1.76% -0.68% banker’s acceptance
receivable
bills held at the end of
the period.Increase in advances to
Advances to
434442949.73 0.80% 303563844.07 0.57% 0.23% suppliers at the end of
suppliers
the period.Changes in other
Other
406517244.11 0.75% 108427198.33 0.20% 0.55% receivables and
receivables
payables.Non-current
Decrease in time
assets due 0.00% 480295722.22 0.91% -0.91%
deposits.within one year
442025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Increase in time
Other current
1234895158.04 2.28% 788108579.54 1.49% 0.79% deposits and funds
assets
awaiting conversion.Other non- Disposal of investments
current financial 210855260.47 0.39% 387688897.11 0.73% -0.34% held at the beginning of
assets the period.During the reporting
Development
98211219.56 0.18% 25422461.13 0.05% 0.13% period there were new
expenses
capitalized projects.Goodwill recognized in
this period as a result of
Goodwill 300805632.99 0.55% 96963241.17 0.18% 0.37%
a business combination
has increased.Increase in prepayments
for the purchase of
Other non-
161560224.80 0.30% 116374395.93 0.22% 0.08% fixed assets and other
current assets
items at the end of the
period.Advance rent
Advances from
190841.21 0.00% 446673.78 0.00% 0.00% receivables decreased at
customers
the end of this period.Decrease in income
Taxes and duties
278051492.11 0.51% 466603767.14 0.88% -0.37% taxes payable at the end
payable
of the period.Increase in accrued
Long-term long-term employee
1718946.330.00%1296365.440.00%0.00%
payroll payable compensation at the end
of the period.The provision for
returns payable
Provisions 22513696.41 0.04% 12726280.09 0.02% 0.02%
recognized in this
period has increased.Increase in deferred
Deferred income tax liabilities
income tax 148417516.74 0.27% 93867331.53 0.18% 0.09% resulting from changes
liabilities in the income tax rates
of subsidiaries.The non-wholly-owned
subsidiary placed shares
with minority
Minority
103441983.91 0.19% 34138137.76 0.06% 0.13% shareholders and the
interests
non-wholly-owned
subsidiary generated a
profit.The proportion of overseas assets is relatively high
□Applicable RNot applicable
2. Assets and liabilities at fair value
RApplicable □Not applicable
Unit: RMB
Profits or losses Cumulative Impairment
Purchase amount Sales amount
on changes in changes in accrued Other
Item Opening balance during the during the Closing balance
fair value fair value during the changes
reporting period reporting period
during the included in reporting
452025 Annual Report of Yunnan Baiyao Group Co. Ltd.
reporting period equity period
Financial assets
1. Financial
assets held for
trading
2547113523.4063620485.1810070200000.008488820600.154192113408.43
(derivative
financial assets
excluded)
2. Other equity
instrument 71745000.00 71745000.00
investments
3. Other non-
current financial 387688897.11 46868983.53 217787880.00 -5914740.17 210855260.47
assets
Subtotal of
3006547420.51110489468.7110070200000.008706608480.15-5914740.174474713668.90
financial assets
Total 3006547420.51 110489468.71 10070200000.00 8706608480.15 -5914740.17 4474713668.90
Financial
0.000.00
liabilities
Other variations: None
Whether the Company had significant changes in measurement attributes of main assets during the reporting period
□ Yes RNo
3. Restrictions on asset rights as of the end of the reporting period
Item Closing book value Reason of restriction
Cash and bank balance 14353427.82 Guarantee deposits banker’s acceptance deposit performance bond etc.Preservative measures. Currently the plaintiff has withdrawn the
Cash and bank balance 1489443.87 lawsuit and the court has ruled to lift the preservative measures. The
lifting will be immediately executed as of the date of the ruling.Specifically designated for the maintenance of housing related to
Cash and bank balance 2650040.09
housing reform
Assets of the restructured Assets of the restructured special account specifically used to cover the
557103568.81
special account costs of identity conversion for employees of state-owned enterprises
Accounts receivable factoring for Anguo Juyaotang Pharmaceutical Co.Accounts receivable 11914174.65
Ltd.Mortgage loan secured by real estate and buildings of Anguo Juyaotang
Fixed assets 140829049.75
Pharmaceutical Co. Ltd.Land use right mortgage loan for Anguo Juyaotang Pharmaceutical Co.Intangible assets 45520086.38
Ltd.Total 773859791.37 --
VII. Investment Analysis
1. Overview
RApplicable □Not applicable
462025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Investment during the reporting period Investment during the same period of the
Percentage of change
(RMB) previous year (RMB)
9927260178.749218214486.647.69%
2. Significant equity investments made during the reporting period
□Applicable RNot applicable
472025 Annual Report of Yunnan Baiyao Group Co. Ltd.
3. Significant non-equity investments in progress during the reporting period
RApplicable □Not applicable
Unit: RMB
Cumulative
Reasons
gains
Investment Amount Total actual for unmet
Involved industry realized as Disclosure
Investment in fixed invested during investment as of Source of Progress of Estimated progress
Project Name in investment of the end date (if Disclosure index (if any)
method assets or the reporting the end of the funding project income and
projects of the any)
not period reporting period estimated
reporting
income
period
http://www.cninfo.com.cn/ne
w/disclosure/detailstockCod
Yunnan Baiyao Pharmaceuticals
Self- Self- June 9 e=000538&announcementId
Shanghai Yes daily chemical 116323320.33 993502153.44 95.00% N/A
established funded 2021 =1210206330&orgId=gssz00
International Center products
00538&announcementTime=
2021-06-09
Yunnan Baiyao R&D
Platform - Kunming Self- Self-
Yes Pharmaceuticals 18597610.39 307072252.54 56.00% N/A
Center Construction established funded
Project
Total -- -- -- 134920930.72 1300574405.98 -- -- 0.00 0.00 -- -- --
4. Financial assets investment
(1) Securities investment
RApplicable □Not applicable
Unit: RMB
Profits or Purchase
losses on Cumulative amount
Accounting Sales amount Profits and losses
Type of Stock Initial Opening book changes in fair changes in fair during Closing book Accounting Source of
Stock code measurement during the during the
securities Abbreviation investment cost value value during value included the value item funding
model reporting period reporting period
the reporting in equity reporting
period period
Domestic Other non-
and Jacobson current Self-
HK.02633 238699200.00 Fair value 190764240.00 27023640.00 217787880.00 56125669.45 0
overseas Pharma financial funded
stocks assets
Domestic
Financial
and JBM Self-
HK.02161 25039800.00 Fair value 133544228.40 -8167621.77 125376606.63 5325060.94 0 assets held for
overseas (Healthcare) funded
trading
stocks
482025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Domestic
Financial
and SinoMab Self-
HK.03681 354119828.19 Fair value 45702769.70 15620237.06 61323006.76 52022960.46 0 assets held for
overseas BioScience funded
trading
stocks
Total 617858828.19 -- 370011238.10 34476255.29 0.00 0.00 404487493.39 113473690.85 0 -- --
Note: During the reporting period the Company fully divested its investments in Jacobson Pharma JBM (Healthcare) and SinoMab BioScience and their carrying
amounts were zero as of the end of the reporting period.
(2) Investment in derivatives
□Applicable RNot applicable
The Company had no investments in derivatives during the reporting period.VIII. Significant Assets and Equity Sales
1. Significant assets sales
□Applicable RNot applicable
The Company had no significant assets sales during the reporting period.
2. Significant equity sales
□Applicable RNot applicable
IX. Analysis on the Major Holding Companies and Joint-stock Companies
RApplicable □Not applicable
Major subsidiaries and joint-stock companies with a net profit impact of over 10%
Unit: RMB
Company Registered
Company name Principal Business Total assets Net assets Operating revenue Operating profit Net Profit
type capital
Yunnan
Pharmaceutical Subsidiary Wholesale and retail of pharmaceuticals 1000000000.00 15616377584.89 7242239130.04 24201786136.36 1023650998.87 766554792.53
Co. Ltd.
492025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Company Registered
Company name Principal Business Total assets Net assets Operating revenue Operating profit Net Profit
type capital
Yunnan Baiyao
Group Health Subsidiary Production and sales of oral hygiene products 84500000.00 7656363534.04 5216027227.67 6745018316.35 1359605093.46 1129670915.51
Products Co. Ltd.YNBY
Specialized in trade of finished cooking oil
International Subsidiary 534377595.28 323331680.67 1013333023.65 8399946.82 4151212.72
sugar personal care products and cosmetics.Limited
R&D manufacturing and sales of API
pharmaceutical products (including but not
limited to chemical Active Pharmaceutical
Ingredients (APIs) chemical preparations TCM
materials Chinese patent medicines TCM
decoction pieces biochemical drugs biological
products narcotics psychotropic drugs and toxic
drugs for medical use [Adapted to the scope of
business] vaccines) of various dosage forms
(including but not limited to tablets capsules
Shanghai Joint- aerosols immune preparations granules plasters
Pharmaceuticals stock pills oral liquids inhalants injections liniments 3696414318.00 233148766767.21 89787293723.60 283579600562.98 9942085632.77 6973717681.49
Holding Co. Ltd. company tinctures suppositories) health products medical
devices and related products manufacturing and
sales of pharmaceutical equipment engineering
installation and maintenance warehousing and
logistics sea land and air freight forwarding
business industrial investment asset
management provision of international economic
and trade information and consulting services
self-owned house leasing import and export
business of various self-operated and agent drugs
and related goods and technologies.Note: In accordance with the Company’s relevant policies the Yunnan Baiyao Group Health Products Co. Ltd (“Health Products Company”) has recognized brand usage fees payable to the
Group’s parent company totaling RMB 1.131 billion for the use of the “Yunnan Baiyao” master brand trademark; excluding these brand usage fees the Health Products Company’s profit for 2025
would be RMB 2.091 billion.Acquisition and disposal of subsidiaries during the reporting period
RApplicable □Not applicable
502025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Method of acquiring and disposing of subsidiaries during the
Company name Impact on overall operations and performance
Reporting Period
Anguo Juyaotang Pharmaceutical Co. Ltd. Acquisition No material impact.Beijing Juyaotang Technology Co. Ltd. Acquisition No material impact.Time Travel (Guangzhou) Intelligent Technology Co. Ltd. Acquisition No material impact.Shanghai Yunzhen Outpatient Department Sale No material impact.Yunnan Baiyao Group Shuzhi Technology Co. Ltd. Establishment No material impact.PT YNBY Healthcare Indonesia Establishment No material impact.Yunnan Baiyao Group TCM Development (Weishan) Co. Ltd. Establishment No material impact.CICC Targeted Asset Management-GF-CICC Qirui No. 1 Liquidation No material impact.Lieder Industrial Investment Co. Ltd. Liquidation No material impact.Explanation on companies subject to control or share participation of the Company: None
X. Structured Entities Controlled by the Company
RApplicable □Not applicable
For details please refer to “X. Interest in Other Entities” under Section VIII.
512025 Annual Report of Yunnan Baiyao Group Co. Ltd.
XI. Outlook of the Company
In 2026 taking Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guiding
principle the Company will thoroughly study and implement the spirit of the 20th National Congress of the
Communist Party of China and the important speeches and instructions made by General Secretary Xi Jinping during
his inspection tour of Yunnan and actively align with the Yunnan Provincial Party Committee’s “3815” strategicdevelopment goals. Closely centering on the overarching theme of synergistically advancing “growth efficiencyenhancement and value creation” and focusing on a development approach that is “profitable high-quality andsustainable” we will strive to build a New Baiyao for the new era which boasts a strong and competitive core
business leading innovation efficient governance and vibrant vitality and develop Yunnan Baiyao into a leading
domestic and world-class modern pharmaceutical industrial group with revenue exceeding RMB 100 billion.(I) Key Work Plan for 2026
1. Keeping to the right direction: Driving high-quality development through high-quality Party building
continuously improving modern corporate governance mechanisms
The Company will take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its
guiding principle integrate the Party’s leadership and strengthen Party building throughout the entire corporatemanagement process comprehensively enhance the leading role of Party building in “driving reform improvinggovernance uniting the workforce and promoting development” and advance the deep integration of Party building
into the strategic planning corporate governance operational management and reform and development processes
striving to establish a new model of Party building. At the same time we will integrate the strengthening of the
Party’s leadership with the improvement of corporate governance adhere to a market-oriented approach accelerate
the development of modern corporate governance with Chinese characteristics and market-oriented business
mechanisms and continuously stimulate the vitality and innovative drive of the Company.
2. Remain steadfast: Keeping strategic goals firmly in mind to effectively drive the efficient implementation
of all tasks
The essence of strategy lies in the methods used to achieve sustained growth in corporate value. First in terms
of strategic direction the Company will uphold the goal of promote the Centennial Baiyao to elevate from
“outstanding” to “excellence” and establishing it as a leading domestic and world-class modern pharmaceutical
industrial group as its unwavering direction and objective for the next five years. Building upon the “2+3” strategic
plan we will evolve it into a new “3+2” strategy. We will not only preserve Baiyao’s legacy of “outstanding” but
also proactively seek change and pursue development maintaining an entrepreneurial mindset at all times to propel
the Company toward “excellence.” Second regarding strategic implementation in 2026 the Company will fully
522025 Annual Report of Yunnan Baiyao Group Co. Ltd.
focus on upgrading breaking down and executing the “3+2” strategy. Each business unit will remain firmly aligned
with the Group’s overall strategic direction deeply understand the strategic intent and core objectives and
systematically break down and decompose these into clear actionable annual goals priority tasks and key
initiatives. This will ensure that goals are aligned approaches are synchronized and responsibilities are assigned to
specific individuals thereby guaranteeing the precise and efficient implementation of the strategy.
3. Precise focus: Optimizing resource allocation and enhancing operational efficiency
In today’s market competitive advantage comes not from “doing more” but from “choosing better.” First we
shall focus on our strategic priorities and continuously optimize our industrial portfolio. The Company will establish
first- second- and third-curve models for customers regions and product lifecycles across all business lines and
will further identify growth opportunities around each curve to ensure a more focused allocation of resources.Second we shall focus on products and drive overall growth with flagship products. We will continue to advance
the “flagship product” strategy as a dedicated project and through sustained investment systematic managementand long-term commitment gradually build a product portfolio characterized by “leading flagship products strongmid-tier support and a solid foundation.” Third we shall focus on resources and maintain a goal-oriented approach
to ensure effective implementation. The Company will maintain a goal-oriented approach to ensure that resources
including human capital funds budgets and incentives are effectively aligned with strategic priorities. We will
identify the core drivers of business growth and through a scientific input-output evaluation system dynamically
adjust resource allocation to enhance overall investment efficiency.
4. Seeking breakthroughs: Cultivating a second curve to unlock growth potential
While maintaining a stable core business the Company will accelerate the development of a sustainable
“second growth curve” through systematic capacity building. First to deepen organic growth the Company will
further advance relevant businesses across the board continuing to coordinate the synergistic advancement of cost
reduction quality improvement and efficiency enhancement. We will conduct systematic planning from a broader
strategic perspective particularly with a focus on creating customer value; precisely identify and capitalize on the
core value points within customers’ genuine needs to continuously generate incremental value. At the same time
the Company will continue to focus on internal operational management tapping into the potential of key areas
such as optimizing production capacity structures adjusting industrial layouts streamlining logistics routes and
coordinating warehouse resources with the aim of continuously improving overall operational efficiency and the
effectiveness of resource allocation. Second to advance external expansion the Company will continue to pursue
strategic investments and mergers and acquisitions continuously enhancing its ability to professionally evaluate
532025 Annual Report of Yunnan Baiyao Group Co. Ltd.
and screen potential targets. We will prioritize targets that are highly synergistic with Yunnan Baiyao’s brand
positioning product portfolio distribution network and core competitive advantages and concentrate our resources
to drive breakthroughs in strategic M&A thereby effectively bolstering the momentum of our business development.Third to foster new growth drivers within existing industries the Company will continue to vigorously advance its
“flagship product” strategy. By focusing on product portfolios at various scale levels we will establish clear product
advancement pathways to ensure well-defined objectives clear responsibilities appropriate resource allocation and
effective performance evaluation mechanisms. The Pharmaceuticals and Health Products segment is rapidly driving
the replication and promotion of the “flagship product” model while the TCM Resources segment continues to
fulfill its responsibilities as a “chain leader” in the high-quality development of Yunnan’s TCM resources. This will
drive the quality improvement and upgrading of the TCM material industry. By expanding export markets the
segment is creating a “dual-engine model driven by both social and economic benefits.” Leveraging Yunnan’s
resource advantages it supports the development of industrial strengths and product clusters while simultaneously
using these industrial strengths to drive the appreciation of resource value thereby forming a development pattern
characterized by two-way synergy between resources and industry. The pharmaceutical commercial segment is
focused on the core objectives of “stabilizing growth managing risks restructuring and improving efficiency”
driving systemic management reforms and continuously strengthening lean operational management capabilities.Emerging business segments such as health supplements medical devices and skincare are concentrating resources
to develop “flagship products” in their respective niche markets. Our international business is grounded in
effectively implementing national and Yunnan provincial strategies. By leveraging the strategic advantages of the
Mohan-Moding border hub and policies supporting cross-border economic cooperation as well as Hong Kong’s
open economic system and geographical advantages we are deepening our engagement with key markets and clients
to rapidly drive growth in overseas sales of our products.
5. Strengthening empowerment: Improving the management and control system to enhance business
competitiveness
A robust closed-loop management and control system and a strong set of management and control capabilities
are prerequisites for a company to achieve strategic leadership and implement its strategies. The Company is
committed to building a management and control system and organizational capabilities that align with its strategic
objectives. First we will strengthen the Group’s management and control system. The headquarters will establish a
“strategy + finance” management model to solidify its four core functions: “leadership service oversight andcapability.” Under the Group’s unified strategic guidance each business unit will operate as a subsidiary enhancing
542025 Annual Report of Yunnan Baiyao Group Co. Ltd.
its professional and market-oriented operational capabilities rapidly improving the development of sector-specific
functions strengthening foundational financial management and truly fulfilling its role as an operational and profit
center. Second we will deepen comprehensive budget management promote the seamless integration of
“comprehensive budgeting—business analysis—performance evaluation and incentives” implement categorized
budgeting performance evaluation and accounting strengthen the rigidity of budget constraints and process
corrections and enhance the depth of financial data support for business decision-making in order to ensure that
major decisions are backed by data projections and sound rationale. Third we will strengthen and solidify our
central platform capabilities. Focusing on our strategic objectives we will systematically advance the development
of five core capability platforms: Building a “comprehensive R&D” platform establishing an R&D system thatefficiently aligns with market needs and an innovation organizational model centered on “major projects + keyteams + industrial transformation” refining the co-investment and incentive mechanisms for R&D teams and
effectively integrating cutting-edge innovation with market demands; Building a “comprehensive manufacturing”
platform to integrate production and sales optimize production capacity allocation and strengthen outsourcing
management and brand protection; Establishing a “comprehensive marketing” platform to coordinate online and
offline channels align differentiated products and enhance control over the investment-to-output ratio and the
timing of resource allocation; Building a “comprehensive supply chain” platform to implement measures such as
strategic stockpiling production-sales coordination and optimization of warehousing and logistics thereby
mitigating market risks and improving operational efficiency; Enhancing the “comprehensive oversight” platform
by integrating oversight resources from disciplinary inspection inspection tours auditing compliance and finance
pooling oversight efforts to ensure the implementation of key measures. Fourth we will enhance the impact of
digital and intelligent transformation and brand building and systematically implement connotations and
application scenarios of “use cases” such as the “Lighthouse Factory” program creating high-quality intellectual
property to better drive business growth.
6. Deepening sharing: Co-creating value and sharing the results to build a win-win framework
Sharing is the key to uniting people and fostering vitality and it is also the cornerstone of a company’s
sustainable development. Internally the Company will establish sound market-oriented incentive mechanisms to
fully energize the organization; externally it will enable shareholders to share in investment returns through
outstanding performance and allow society to share in the Company’s value through a sense of responsibility. First
we will improve incentive and accountability mechanisms to foster mutual growth between employees and the
Company. Through contract-based management we will align employees’ short-term tasks with the Company’s
552025 Annual Report of Yunnan Baiyao Group Co. Ltd.
long-term strategic goals to create an agile incentive system that supports business growth. Second we will
strengthen our Market Value Management and continue to deliver returns to shareholders and society. Market Value
Management stems from value management; value in turn derives from the certainty growth potential and
sustainability of a company’s strategy and serves as a comprehensive reflection of its corporate governance
standards management capabilities and quality of development. The Company will actively respond to regulatory
requirements regarding Market Value Management for listed companies. We will maintain strategic willpower
strengthen our business focus pursue systemic breakthroughs and excel in operational management to foster a win-
win environment. Our goal is to build the Company into a benchmark enterprise that leads industry trends possesses
strong competitiveness and delivers high returns continuously creating value for shareholders and contributing to
society.The year 2026 marks a watershed moment for Yunnan Baiyao. It marks the launch of Phase II of the Group’s
“2+3” strategy the inauguration of its new “3+2” strategy and the commencement of the 15th Five-Year Plan a
convergence of milestones that elevates this year to critical importance in Baiyao’s ascent to the next tier of
development. United in purpose clear in vision and resolute in commitment Yunnan Baiyao stands ready to propel
this century-old enterprise from “outstanding” to “excellence” as it opens this new chapter.(II) Risks and Countermeasures
1. Risk of policy changes
In recent years the government has continuously introduced supportive policies for the pharmaceutical industry
providing pharmaceutical companies with excellent opportunities for growth. At the same time medical insurance
reforms will be further deepened with regular centralized volume-based procurement covering a wider range of
drugs and laws and regulations governing drug supervision will be comprehensively revised and updated placing
higher demands on the healthy development of the pharmaceutical industry. The Company will closely monitor
national pharmaceutical policy trends strengthen its tracking analysis and interpretation of key industry
developments and remain steadfast in upholding pharmaceutical compliance standards. Guided by clinical value
we will drive the establishment and optimization of our innovation and R&D system as well as our efficacy
evaluation system thereby fostering the Company’s sustained and stable growth.
2. Market uncertainty risk
Due to factors such as fluctuations in raw material prices price controls on pharmaceutical products and
intensifying competition at the retail level the pharmaceutical industry is facing significant operational pressures.Meanwhile the health sector is grappling with challenges such as wavering consumer confidence which is posing
562025 Annual Report of Yunnan Baiyao Group Co. Ltd.
obstacles to business growth. As we navigate these challenging times the Company will continue to build upon its
competitive strengths across the entire industrial chain and leverage innovation as a driving force. By continuously
strengthening our supply chain infrastructure improving operational efficiency and implementing more refined
management of our distribution channels and retail outlets we will further solidify our advantages in innovation
cost efficiency and distribution channels. This will enable the Company to weather economic cycles and achieve
sustainable high-quality growth in the face of market competition.
3. Risks related to transformation of innovative R&D outcomes
To build a technological edge and enhance its core competitiveness the Company has been steadily increasing
its investment in drug R&D in recent years. New drug development is generally characterized by high capital
investment long development cycles lower-than-expected commercialization rates and market uncertainty
following future commercialization. Should relevant policies or market demand change this could affect the
commercial value of new products under development. Once R&D is completed the ability to successfully
commercialize the new drug is also a key factor affecting the return on R&D investment. The Company will
carefully evaluate new drug R&D projects in line with its strategic objectives concentrate resources on key projects
enhance risk management capabilities throughout the R&D process strengthen collaboration between industry
academia and research institutions improve the ability to commercialize research outcomes and reduce uncertainty
in R&D investments.
4. Risks associated with extensive growth
The Company is actively advancing toward its strategic goals by pursuing an industrial development strategy
that combines both endogenous and extensive growth striving to inject new momentum into its sustainable
development. As the Company pursues its strategy of extensive growth a key challenge it faces is how to leverage
investment and innovation to introduce new variables build a new Baiyao platform integrate more external
resources and establish a comprehensive industrial chain and ultimately secure a foothold in a highly competitive
and rapidly evolving market. The Company will remain strategy-driven and customer-centric continuously
enhancing its market insights to build a healthy and sustainable portfolio of businesses.XII. Survey communication interviews and other activities received during the reporting
period
RApplicable □Not applicable
572025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Discussions and
Time of Place of Mode of Type of
Guests information Basic information index of the survey
reception reception reception guests
provided
To understand the
https://www.cninfo.com.cn/new/disclos
Office building business situation
January 7 Telephone 2 persons ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication from FSSA cementId=1222284924&orgId=gssz000
headquarters and other related
0538&announcementTime=2025-01-09
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 3 persons business situation
January 8 Telephone ure/detailstockCode=000538&announ
at the Institution from China of the Company
2025 communication cementId=1222284922&orgId=gssz000
headquarters Securities etc. and other related
0538&announcementTime=2025-01-09
issues.
2 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from ABC-CA business situation
January Telephone ure/detailstockCode=000538&announ
at the Institution Fund of the Company
10 2025 communication cementId=1222320877&orgId=gssz000
headquarters Management and other related
0538&announcementTime=2025-01-13
etc. issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 2 persons business situation
January ure/detailstockCode=000538&announ
at the Field research Institution from CICC of the Company
13 2025 cementId=1222342453&orgId=gssz000
headquarters etc. and other related
0538&announcementTime=2025-01-15
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 6 persons business situation
January ure/detailstockCode=000538&announ
at the Field research Institution from Dacheng of the Company
14 2025 cementId=1222342451&orgId=gssz000
headquarters Fund and other related
0538&announcementTime=2025-01-15
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 17 persons business situation
January ure/detailstockCode=000538&announ
at the Field research Institution from Pacific of the Company
23 2025 cementId=1222430012&orgId=gssz000
headquarters Securities etc. and other related
0538&announcementTime=2025-01-24
issues.
146 persons
including To understand the
https://www.cninfo.com.cn/new/disclos
Office building those from business situation
April 1 Telephone ure/detailstockCode=000538&announ
at the Others institutional of the Company
2025 communication cementId=1223004263&orgId=gssz000
headquarters investors and and other related
0538&announcementTime=2025-04-03
individual issues.investors
3 persons
To understand the
from Orient https://www.cninfo.com.cn/new/disclos
Office building business situation
April 3 Telephone Securities ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Asset cementId=1223019906&orgId=gssz000
headquarters and other related
Management 0538&announcementTime=2025-04-07
issues.etc.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 2 persons business situation
April 7 Telephone ure/detailstockCode=000538&announ
at the Institution from E-Fund of the Company
2025 communication cementId=1223042367&orgId=gssz000
headquarters Fund etc. and other related
0538&announcementTime=2025-04-09
issues.
3 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from Taiping business situation
April 7 Telephone ure/detailstockCode=000538&announ
at the Institution Asset of the Company
2025 communication cementId=1223042374&orgId=gssz000
headquarters Management and other related
0538&announcementTime=2025-04-09
etc. issues.
582025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Discussions and
Time of Place of Mode of Type of
Guests information Basic information index of the survey
reception reception reception guests
provided
To understand the
https://www.cninfo.com.cn/new/disclos
Office building 4 persons business situation
April 8 Telephone ure/detailstockCode=000538&announ
at the Institution from Penghua of the Company
2025 communication cementId=1223042376&orgId=gssz000
headquarters Fund etc. and other related
0538&announcementTime=2025-04-09
issues.To understand the
5 persons https://www.cninfo.com.cn/new/disclos
Office building business situation
April 8 Telephone from China ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Merchants cementId=1223042378&orgId=gssz000
headquarters and other related
Fund etc. 0538&announcementTime=2025-04-09
issues.To understand the
4 persons https://www.cninfo.com.cn/new/disclos
Office building business situation
April 9 Telephone from BOCOM ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Schroders cementId=1223068757&orgId=gssz000
headquarters and other related
etc. 0538&announcementTime=2025-04-11
issues.
2 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from Caitong business situation
April 10 Telephone ure/detailstockCode=000538&announ
at the Institution Fund of the Company
2025 communication cementId=1223068762&orgId=gssz000
headquarters Management and other related
0538&announcementTime=2025-04-11
etc. issues.
5 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from China business situation
April 10 Telephone ure/detailstockCode=000538&announ
at the Institution Life Asset of the Company
2025 communication cementId=1223068767&orgId=gssz000
headquarters Management and other related
0538&announcementTime=2025-04-11
etc. issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 6 persons business situation
April 11 Telephone ure/detailstockCode=000538&announ
at the Institution from Huaxia of the Company
2025 communication cementId=1223098755&orgId=gssz000
headquarters Fund etc. and other related
0538&announcementTime=2025-04-15
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 3 persons business situation
April 11 Telephone ure/detailstockCode=000538&announ
at the Institution from PICC of the Company
2025 communication cementId=1223098757&orgId=gssz000
headquarters Pension etc. and other related
0538&announcementTime=2025-04-15
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 6 persons business situation
April 14 ure/detailstockCode=000538&announ
at the Field research Institution from CLSA of the Company
2025 cementId=1223098789&orgId=gssz000
headquarters etc. and other related
0538&announcementTime=2025-04-15
issues.To understand the
2 persons https://www.cninfo.com.cn/new/disclos
Office building business situation
April 16 Telephone from China ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Post Fund cementId=1223146070&orgId=gssz000
headquarters and other related
etc. 0538&announcementTime=2025-04-18
issues.
5 persons
To understand the
from https://www.cninfo.com.cn/new/disclos
Office building business situation
April 17 Telephone Changsheng ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Fund cementId=1223146095&orgId=gssz000
headquarters and other related
Management 0538&announcementTime=2025-04-18
issues.etc.
592025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Discussions and
Time of Place of Mode of Type of
Guests information Basic information index of the survey
reception reception reception guests
provided
To understand the
https://www.cninfo.com.cn/new/disclos
Office building 15 persons business situation
April 21 ure/detailstockCode=000538&announ
at the Field research Institution from CITIC of the Company
2025 cementId=1223236234&orgId=gssz000
headquarters Securities etc. and other related
0538&announcementTime=2025-04-23
issues.To understand the
1 person from https://www.cninfo.com.cn/new/disclos
Office building business situation
May 15 Telephone Allianz ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Global cementId=1223587747&orgId=gssz000
headquarters and other related
Investors 0538&announcementTime=2025-05-19
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 6 persons business situation
May 15 Telephone ure/detailstockCode=000538&announ
at the Institution from KS of the Company
2025 communication cementId=1223587795&orgId=gssz000
headquarters Fund etc. and other related
0538&announcementTime=2025-05-19
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building business situation
May 15 Telephone 1 person from ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Citi PWM cementId=1223587827&orgId=gssz000
headquarters and other related
0538&announcementTime=2025-05-19
issues.Panorama
Network To understand the
Online https://www.cninfo.com.cn/new/disclos
hosted an business situation
May 16 Panorama communication ure/detailstockCode=000538&announ
Others online of the Company
2025 Network on network cementId=1223587829&orgId=gssz000
earnings and other related
platform 0538&announcementTime=2025-05-19
conference issues.call
1 person from
To understand the
Matthews https://www.cninfo.com.cn/new/disclos
Office building business situation
May 19 Telephone International ure/detailstockCode=000538&announ
at the Institution of the Company
2025 communication Capital cementId=1223626004&orgId=gssz000
headquarters and other related
Management 0538&announcementTime=2025-05-21
issues.LLC
2 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from Orient business situation
May 19 Telephone ure/detailstockCode=000538&announ
at the Institution Securities of the Company
2025 communication cementId=1223626008&orgId=gssz000
headquarters Company and other related
0538&announcementTime=2025-05-21
Limited issues.To understand the
3 persons https://www.cninfo.com.cn/new/disclos
Office building business situation
June 4 from ure/detailstockCode=000538&announ
at the Field research Institution of the Company
2025 Soochow cementId=1223802881&orgId=gssz000
headquarters and other related
Securities etc. 0538&announcementTime=2025-06-06
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 7 persons business situation
June 5 ure/detailstockCode=000538&announ
at the Field research Institution from Zhongtai of the Company
2025 cementId=1223802982&orgId=gssz000
headquarters Securities etc. and other related
0538&announcementTime=2025-06-06
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 5 persons business situation
June 19 ure/detailstockCode=000538&announ
at the Field research Institution from CITIC of the Company
2025 cementId=1223955911&orgId=gssz000
headquarters Securities etc. and other related
0538&announcementTime=2025-06-23
issues.
602025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Discussions and
Time of Place of Mode of Type of
Guests information Basic information index of the survey
reception reception reception guests
provided
To understand the
8 persons https://www.cninfo.com.cn/new/disclos
business situation
June 20 Tianjin Yunhe from ure/detailstockCode=000538&announ
Field research Institution of the Company
2025 Pharmaceutical Changjiang cementId=1223973328&orgId=gssz000
and other related
Securities etc. 0538&announcementTime=2025-06-24
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building 3 persons business situation
July 8 ure/detailstockCode=000538&announ
at the Field research Institution from Huaxia of the Company
2025 cementId=1224130077&orgId=gssz000
headquarters Fund etc. and other related
0538&announcementTime=2025-07-10
issues.
4 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from Ping An business situation
July 9 ure/detailstockCode=000538&announ
at the Field research Institution Fund of the Company
2025 cementId=1224130086&orgId=gssz000
headquarters Management and other related
0538&announcementTime=2025-07-10
etc. issues.
125 persons
including To understand the
https://www.cninfo.com.cn/new/disclos
Office building those from business situation
September Telephone ure/detailstockCode=000538&announ
at the Others institutional of the Company
1 2025 communication cementId=1224636174&orgId=gssz000
headquarters investors and and other related
0538&announcementTime=2025-09-03
individual issues.investors
10 persons
To understand the
from https://www.cninfo.com.cn/new/disclos
Office building business situation
September Shenzhen ure/detailstockCode=000538&announ
at the Field research Institution of the Company
19 2025 Caifeng cementId=1224676694&orgId=gssz000
headquarters and other related
Investment 0538&announcementTime=2025-09-23
issues.Co. Ltd etc.To understand the
4 persons https://www.cninfo.com.cn/new/disclos
Office building business situation
November from CITIC- ure/detailstockCode=000538&announ
at the Field research Institution of the Company
21 2025 Prudential cementId=1224822924&orgId=gssz000
headquarters and other related
etc. 0538&announcementTime=2025-11-24
issues.To understand the
https://www.cninfo.com.cn/new/disclos
Office building business situation
December 5 individual ure/detailstockCode=000538&announ
at the Field research Individual of the Company
10 2025 investors cementId=1224874220&orgId=gssz000
headquarters and other related
0538&announcementTime=2025-12-12
issues.
10 persons
To understand the
from Black https://www.cninfo.com.cn/new/disclos
Office building business situation
December Tiger ure/detailstockCode=000538&announ
at the Field research Institution of the Company
10 2025 Investment cementId=1224874291&orgId=gssz000
headquarters and other related
Management 0538&announcementTime=2025-12-12
issues.etc.
15 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from Jiangxi business situation
December ure/detailstockCode=000538&announ
at the Field research Institution Zhifeng of the Company
11 2025 cementId=1224874322&orgId=gssz000
headquarters Consulting and other related
0538&announcementTime=2025-12-12
etc. issues.
13 persons To understand the
https://www.cninfo.com.cn/new/disclos
Office building from business situation
December ure/detailstockCode=000538&announ
at the Field research Institution Shenzhen of the Company
12 2025 cementId=1224879060&orgId=gssz000
headquarters Super and other related
0538&announcementTime=2025-12-15
Quantum etc. issues.
612025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Discussions and
Time of Place of Mode of Type of
Guests information Basic information index of the survey
reception reception reception guests
provided
32 persons
To understand the
from https://www.cninfo.com.cn/new/disclos
Office building business situation
December Hongsike ure/detailstockCode=000538&announ
at the Field research Institution of the Company
12 2025 Asset cementId=1224879078&orgId=gssz000
headquarters and other related
Management 0538&announcementTime=2025-12-15
issues.etc.XIII. Development and implementation of market value management system and valuation
enhancement plan
Whether the Company has a market value management system in place.RYes □No
Whether the Company has disclosed plans for valuation enhancement.□ Yes RNo
In response to the State Council’s Opinions on Strengthening Supervision and Risk Prevention and Promoting
High-Quality Development of the Capital Market which encourage listed companies to establish a market value
management system we held the first session of the Tenth Board of Directors for 2025 on March 31 2025 to
consider and approve the Market Value Management System of Yunnan Baiyao Group in a bid to effectively enhance
the Company’s investment value standardize market value management behaviors ensure the compliance
scientific rigor and effectiveness of the Company’s market value management activities and maximize the
Company’s value and shareholders’ interests. For details please refer to the system disclosed by the Company at
www.cninfo.com.cn on the same day.XIV. Implementation of the “Enhancement of Quality and Returns” Initiative
Whether the Company disclosed the “Enhancement of Quality and Returns” Initiative
RYes □No
The Company disclosed the Announcement on “Enhancement of Quality and Returns” Initiative on March 9
2024 (Announcement No.: 2024-12).
With established awareness of returning value to shareholders focusing on its principal businesses and
ensuring prudent operations the Company continues to drive high-quality development while enhancing
shareholder returns. In April 2025 in active response to the call in the State Council’s Several Opinions on
Strengthening Supervision Preventing Risks and Promoting High-Quality Development of the Capital Market to
encourage listed companies to establish Market Value Management systems the Company formulated the Market
Value Management System of Yunnan Baiyao Group in accordance with the Company Law of the People’s Republic
622025 Annual Report of Yunnan Baiyao Group Co. Ltd.
of China the Securities Law of the People’s Republic of China the Listing Rules of Shenzhen Stock Exchange the
Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standardized Operation of
Listed Companies on the Main Board the Guideline No. 10 on Supervision of Listed Companies - Market Value
Management and the Articles of Association of Yunnan Baiyao Group Co. Ltd.(I) Constantly improving the quality and efficiency of production and operation
In 2025 the Company remained firmly committed to its strategic plan continued to refine its core business
and leveraged its ever-improving operational management capabilities to navigate external market uncertainties. Asa result its operating performance grew against the trend achieving the established goals of “growth efficiencyenhancement and value creation.”
During the reporting period the Company achieved an operating revenue of RMB 41.187 billion a 2.88%
increase compared to the same period last year; net profit attributable to the parent company was RMB 5.153 billion
an 8.51% year-on-year increase from RMB 4.749 billion; and net profit attributable to the parent company after
deducting non-recurring profits and losses was RMB 4.865 billion a 7.55% increase compared to RMB 4.523 billion
last year setting a new historical high. Basic earnings per share were RMB 2.89 an increase of 8.65% year-on-year.The Company’s business structure continued to optimize. The industrial revenue amounted to RMB 16.016 billion
accounting for 38.89% of the total operating revenue up 2.75 percentage points year-on-year with the growth rate
of industrial revenue reaching 10.7%. Since 2023 the proportion of industrial revenue to total operating revenue
has achieved consecutive growth.In terms of growth quality the Company’s net operating cash flow for the reporting period was RMB 4.60
billion representing a year-on-year increase of 7.04%; the weighted average return on equity was 13.02% up 1.03
percentage points year-on-year marking the highest level in the past five years; and administrative expenses
decreased by 1.68%. The Company invested RMB 423 million in R&D representing a significant year-on-year
increase of 21.51%. R&D expenditure accounted for 2.64% of industrial revenue and the Company’s R&D
capabilities continued to improve.The Company continued to maintain a healthy asset structure. At the end of the reporting period the Company
had total assets of RMB 54.269 billion net assets attributable to the shareholders of the listed company amounted
to RMB 40.044 billion the asset-liability ratio was 26.02% and the cash and bank balance stood at RMB 9.108
billion.While pursuing high-quality development we promoted the co-creation and sharing of value between the
Company and its employees and established an employee-centered incentive system that aligns with business
632025 Annual Report of Yunnan Baiyao Group Co. Ltd.
growth. In terms of compensation distribution we prioritized core technical and key positions frontline and
challenging roles as well as high-level and highly skilled talent in critical and in-demand fields thereby further
raising employee compensations and fully stimulating organizational vitality. During the reporting period the
overall compensation for the Company’s entry-level employees increased by double digits year-on-year.(II) Enhancing shareholder returns in multiple dimensions
The Company takes a multi-pronged approach to enhance shareholder satisfaction including cash dividends
and increasing the frequency of dividend payments.During the reporting period the Company completed the distribution of its 2025 special dividend in September
2025 paying a cash dividend of RMB 10.19 (tax inclusive) per 10 shares for a total cash dividend amount of RMB
1818163592.46 (tax inclusive). On March 31 2026 the Company’s second session of the 11th Board of Directors
considered and approved the 2025 dividend plan. Based on the Company’s total issued share capital of
1784262603 shares as of the end of 2025 the plan proposed to distribute a cash dividend of RMB 15.84 (tax
inclusive) per 10 shares to all shareholders with no bonus shares (tax inclusive). The total amount of this cash
dividend would be RMB 2826271963.15 (tax inclusive). When combined with the special dividend already
distributed in 2025 the proposed cash dividend will be calculated based on the Company’s total issued share capital
of 1784262603 shares as of the end of 2025 resulting in a cumulative cash distribution of RMB 26.02 (tax
inclusive) per 10 shares for 2025. The total cumulative cash dividend amounts to RMB 4642651293.01 (tax
inclusive) representing 90.09% of the Company’s net profit attributable to shareholders of the listed company for
2025.
(III) Continuously improving the information disclosure quality
The Company consistently adheres to the principles of truthfulness accuracy completeness timeliness and
fairness in information disclosure strictly following applicable laws regulations and corporate policies. Actively
engaging with investors the Company carefully considers their needs and suggestions regarding periodic reports.The Company discloses annual report data across multiple dimensions including segments and channels ensuring
compliance while offering a comprehensive view of its operations and development. Meanwhile the Company
practically engages in voluntary information disclosure proactively sharing information that aids investors in value
assessment and decision-making thereby enhancing the relevance and transparency of disclosures. In addition the
Company employs various methods to present and interpret periodic reports including graphics videos and
PowerPoint presentations to communicate information in a clear engaging and easy-to-understand manner. As of
the end of the reporting period Yunnan Baiyao has been awarded the Class A rating in the information disclosure
assessment by the Shenzhen Stock Exchange (“SZSE”) for the 18th time.
642025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(IV) Fully protecting the rights and interests of investors and ensuring smooth communication channels
The Company has established smooth investor communication channels to effectively safeguard the rights and
interests of investors and continuously improves the effectiveness of positive interaction with investors. During the
reporting period the Company held a total of two performance briefings setting a record high in investor
participation. We received investors for a total of 41 times (online and offline) involving more than 200
organizations and more than 500 investors and survey records were released in a timely manner in accordance with
information disclosure requirements. We responded to 105 inquiries at irm.cninfo.com.cn. Specialized personnel
were assigned to answer investor relations hotline calls in earnest ensuring the effective operation of the investor
relations hotline. In addition the Company has scientifically built a professional financial media matrix through
text video and other forms and actively engages in multi-channel information dissemination thus building and
maintaining the Company’s multi-dimensional value in the capital market.(V) Exploring and practicing the path of high-quality development
The Company has a clear strategic plan. For intensive growth we will focus on the foundational development
of the three key segments that is pharmaceutical health and distribution and systematically explore potential and
enhance efficiency across the industrial chain value chain and production factors. For extensive growth we will
in line with the overall strategic requirements and orientation actively explore ways to complement and strengthen
existing industrial segments through strategic mergers and acquisitions strategic partnerships and other approaches
enabling us to rapidly overcome current growth bottlenecks and achieve sustained growth. During the 15th Five-
Year Plan period the Company will upgrade its “2+3” strategy to a new “3+2” strategy which will drive the century-
old Baiyao toward becoming a Chinese leading and world-class modern pharmaceutical industry group achieving
synergistic growth in scale quality and structure.Creating value managing value and realizing value are essential steps in the value enhancement journey for
listed companies. The Company will strictly remain committed to fulfilling its responsibilities and obligations as a
listed company. Through focusing on our principal businesses continuous innovation and operational
improvements to enhance our intrinsic value we aim to promote the healthy and sustainable development of the
Company by continuously exploring and practicing the methodology of high-quality development. We will adhere
to the “investor-oriented” principle striving to safeguard investors’ rights and interests through various means
enhance investment returns and bolster investors’ sense of achievement. By effectively implementing the
“Enhancement of Quality and Returns” initiative we seek to boost market confidence and contribute to the positive
and healthy development of the capital market.
652025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section IV Corporate Governance Environmental and Social
Responsibility
I. Basic Information of Corporate Governance
In strict accordance with the requirements of the Company Law the Securities Law the Code of Governance
for Listed Companies the Rules Governing the Listing of Shares on Shenzhen Stock Exchange the Self-Regulatory
Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standardized Operation of Listed Companies
on the Main Board and other laws and regulations as well as internal rules and regulations such as the Articles of
Association the Company keeps improving corporate governance and strengthening the awareness of compliant
operation and optimizing internal control. By constantly strengthening the learning of the relevant laws and
regulations of listed companies by all directors senior management and relevant responsible personnel and
continuously improving their ability to perform their duties we have continuously improved our governance
capacity management efficiency and standardized operation and promoted the high-quality and sustainable
development of the Company. The basic information of the Company’s corporate governance during the reporting
period is as follows:
1. Shareholders and Shareholders’ Meetings
The Company protects the rights of shareholders in accordance with the law paying special attention to
protecting the legitimate rights and interests of minority shareholders and protects the rights of shareholders to
know and participate in decision-making and supervision of significant events of the Company. The Company held
its 2024 Annual General Meeting on April 21 2025 its First Extraordinary General Meeting for 2025 on September
15 2025 and its Second Extraordinary General Meeting for 2025 on November 10 2025. The convening of the
meetings the convening procedures the qualifications of the participants the qualifications of the convenor the
voting procedures and the voting results of the meetings complied with the provisions of laws and regulations and
the Articles of Association of the Company and all the motions were voted on and approved.
2. Directors and Board of Directors
On November 10 2025 the Company convened its second extraordinary general meeting for 2025 to consider
and approve resolutions regarding the election of the new Board of Directors. The following members were elected
to the Company’s 11th Board of Directors: Non-independent Directors: Mr. Zhang Wenxue Mr. Dong Ming Mr.Guo Xin Mr. You Guanghui Mr. Xie Yunshan Mr. Shangguan Changchuan and Mr. Li Ke; Independent Directors:
662025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Mr. Liu Guo’en Mr. Na Chaohong Mr. Hu Mingxing and Mr. Cao Yangfeng. Following consideration and approval
by the Company’s Fifth Session of the Fifth Employee Representative Assembly Ms. Yang Fan was elected as an
employee director of the Company’s Board of Directors.The number and composition of the Board of Directors of the Company are in compliance with the
requirements of laws and regulations the professional structure is reasonable and the directors are fully equipped
with the necessary time and energy knowledge reserves professional skills and comprehensive qualities to perform
their duties. The directors abide by the relevant laws and regulations and the Articles of Association and perform
their duties faithfully diligently and prudently. The independent directors independently perform their duties
according to laws fully understand the Company’s operation and the contents of Board meetings and safeguard the
interests of the Company and all shareholders paying particular attention to the protection of the legitimate rights
and interests of minority shareholders.The Board of Directors earnestly performs the duties prescribed by the relevant laws and regulations and the
Articles of Association and operates in strict accordance with the Rules of Procedure for the Board of Directors to
ensure the standardized and efficient operation of the Board and prudent and scientific decision-making. The Board
of Directors consists of four special committees on audit strategy nomination remuneration and appraisal which
are responsible to the Board of Directors and perform their duties in accordance with the Articles of Association and
the working rules of the special committees. During the reporting period the tenth Board of Directors of the
Company held a total of 7 sessions the eleventh Board of Directors held 2 sessions and all the motions were voted
on and approved. All the sessions were convened and held in strict accordance with the Rules of Procedure for the
Board of Directors all the directors were notified in advance as required and sufficient meeting materials were
provided. The meeting minutes were true accurate and complete.
3. Senior management and operation team
On February 10 2026 the Company convened the first session of the 11th Board of Directors in 2026. At this
session the 11th Board of Directors appointed Mr. Dong Ming as President and Mr. Li Hongshen Mr. Li Shengli
Mr. He Tao and Mr. Shen Shi as Senior Vice Presidents; Mr. Ma Jia as Chief Financial Officer; and Mr. Qian
Yinghui as Board Secretary. The Company appointed senior management in strict accordance with the relevant laws
and regulations and the Articles of Association performed legal procedures and made timely disclosure.The management team has clear responsibilities and strictly implements the resolutions of the general meeting
of shareholders resolutions of the Board of Directors and other relevant resolutions. The senior management
672025 Annual Report of Yunnan Baiyao Group Co. Ltd.
members abide by the relevant laws and regulations and the Articles of Association and perform their duties
faithfully diligently and prudently.
4. Revision of corporate governance related systems
During the reporting period in accordance with the latest provisions of the Securities Law of the People’s
Republic of China the Measures for the Administration of Independent Directors of Listed Companies the Rules
Governing the Listing of Shares on Shenzhen Stock Exchange the Self-Regulatory Guidelines No. 1 for Companies
Listed on Shenzhen Stock Exchange - Standardized Operation of Listed Companies on the Main Board the
Guidelines on Investor Relations Management for Listed Companies the Rules on the Management of the Shares
Held by Directors and Senior Management of Listed Companies and Their Changes and other laws and regulations
and normative documents and based on the actual situations of the Company the Company systematically revised
the Articles of Association the Rules of Procedure for Shareholders’ Meetings the Rules of Procedure for Board of
Directors Meetings the Rules of Procedure for Executive Committee Meetings the Operating Procedures for the
Strategy Committee the Operating Procedures for the Nomination Committee the Operating Procedures for the
Remuneration and Appraisal Committee and the Operating Procedures for the Audit Committee to further improve
the governance structure of the Board of Directors of the Company. The Company also established the Market Value
Management System further enhancing its corporate governance standards.
5. Largest shareholder and listed companyAs of the end of the reporting period Yunnan State-owned Equity Operation Management Co. Ltd (“State-owned Equity Management Company”) was the single largest shareholder of the Company and the Company has
no de facto controller and no controlling shareholders. The above-mentioned largest shareholder shall exercise its
rights as shareholders in accordance with law fulfill its obligations as shareholders and earnestly fulfill its
commitments. The largest shareholder of the Company is independent from the Company in terms of personnel
assets and finance and has independent institutions and businesses. There are no cases in which the Company’s
funds have been appropriated by the largest shareholder and its subsidiaries or through other means or the Company
has provided guarantees for the largest shareholder and its subsidiaries in violation of the law. During the reporting
period the decision-making procedures and information disclosure obligations were strictly fulfilled for the related
party transactions between the Company and the related parties in accordance with relevant regulations and the
related party transactions had commercial substance and fair pricing.
6. Information disclosure and transparency
682025 Annual Report of Yunnan Baiyao Group Co. Ltd.
During the reporting period the Company and other information disclosure obligators disclosed information
in a true accurate complete timely and fair manner in strict accordance with laws and regulations self-regulatory
rules and the Articles of Association of the Company and the disclosures were concise clear and easy to understand.The Company’s designated information disclosure media are China Securities Journal Shanghai Securities News
Securities Times and http://www.cninfo.com.cn so that users can quickly and conveniently obtain information of
the Company. Attaching importance to the management of insider information the Company strictly controls the
scope of persons with knowledge of insider information registers the information of persons with knowledge of
insider information truthfully accurately and completely and reports to the Exchange in a timely manner.
7. Internal control and regulation system
The Company has established a sound internal control system. With the form and content in line with the
requirements of the Basic Standard for Enterprise Internal Control its supplementary guidelines and other relevant
laws regulations and normative documents the internal control self-evaluation can truly and accurately reflect the
implementation status of the Company’s internal controls.The Company has according to the actual situation and management needs established and improved internal
control to reasonably ensure the legal compliance of operation and management asset safety the truth and integrity
of financial reports and related information improve the operation efficiency and effect promote the realization of
development strategies and meet the objectives of internal control. The Company has established a series of internal
control systems for the business and matters included in the scope of internal control evaluation which have been
implemented in the operation and management activities effectively preventing and controlling the Company’s
internal business risks in major aspects and ensuring the safety and integrity of the Company’s assets and the orderly
development of operation and management activities. The internal control systems are reasonable complete and
effective and conducive to achieving the strategic objectives of operation and development of the Company. The
Company will constantly improve the internal control system and standardize the implementation of the internal
control system according to the changes of internal and external environment and management requirements and
based on the guidelines of comprehensive risk management. Through the operation analysis and evaluation of the
internal control system we will provide guarantee for the Company’s legal and compliant operation and asset safety
effectively prevent risks in operation and management and promote the steady implementation of the Company’s
strategy.
8. Stakeholders and social responsibilities
692025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The Company fully respects and safeguards the legitimate rights and interests of stakeholders with an aim to
realize the coordination and balance of the interests of society shareholders the Company employees and other
parties. Yunnan Baiyao actively fulfills its social responsibilities in terms of environmental protection disaster relief
and relief assistance and public welfare while maintaining the Company’s sustainable development improving its
operating results and protecting the interests of its shareholders. In 2025 Yunnan Baiyao was again awarded an A
rating in the MSCI-ESG rating for the 5th consecutive year. Based on the corporate attributes of inheritance and
innovation excellent quality technology empowerment co-construction and sharing social responsibility and
sustainable development the Company will continue to optimize the governance system and governance level
constantly upgrade the industrial deployment adhere to the environmentally friendly development path and create
long-term sustainable value for the society the environment and various stakeholders.We firmly believe that good corporate governance is the cornerstone and guarantee for the sustainable and
healthy development of enterprises and standardized operation is the basic requirement for the sustainable and
healthy development of the Company. Insisting on standardized operation in accordance with laws and regulations
and the requirements of the corporate governance system the Company has continuously improved its governance
capacity and management effectiveness. Thanks to scientific decision-making and sound operation we effectively
safeguard the interests of the Company and the general investors and achieve the Company’s high-quality and
sustainable development.Whether there were any significant differences between the Company’s actual governance status and laws
administrative regulations and the rules issued by China Securities Regulatory Commission (“CSRC”) on listed
company governance
□ Yes RNo
There was no significant difference between the Company’s actual governance status and laws administrative
regulations and the rules issued by CSRC on listed company governance.II. Details Regarding the Company’s Separation from the Controlling Shareholder and De
Facto Controller across Assets Personnel Finance Institutions and Business Operations
State-owned Equity Management Company is the largest shareholder of the Company and the Company has
no de facto controller and no controlling shareholders. In strict accordance with the requirements of the Company
Law the Articles of Association and other laws regulations and rules the Company and its foregoing largest
702025 Annual Report of Yunnan Baiyao Group Co. Ltd.
shareholder are completely separated in terms of business personnel assets institutions finance and other aspects.The Company has an independent and complete business system and the ability to operate independently in the
market. The Company will continue to ensure the separation between the Company and the aforesaid largest
shareholder in terms of personnel assets finance institutions and business operations according to the requirements
of the relevant laws and regulations.
1. In terms of personnel: The Company operates completely independently in terms of labor personnel and
wage management system and has developed an independent management system. The directors and senior
management of the Company are lawfully selected and employed in accordance with the Company Law the Articles
of Association and other relevant laws regulations and provisions. All senior executives of the Company work in
the Company and receive remuneration. There is no situation in which senior executives hold dual positions in the
Company and the companies of the aforesaid largest shareholder. There is no situation in which finance staff has
cross appointments in related organizations.
2. In terms of assets: The Company has a clear division of property rights with its largest shareholder has the
ability to operate independently in the market and has full control over the production system supporting facilities
land use rights and other assets and there is no situation where the aforesaid largest shareholder occupies or
dominates the assets.
3. In terms of finance: The Company has established an independent complete and standardized financial
accounting system and financial management system as well as the corresponding internal control system and
internal audit system to independently make financial decisions in accordance with the requirements of the
Accounting Standards for Business Enterprises.
4. In terms of institutions: The Board of Directors and other internal organs of the Company have sound
structure operate independently make scientific decisions and the internal organizations operate independently
from the aforesaid largest shareholder. All the institutions of the Company are set according to the requirements of
listed companies’ norms and the Company’s actual business needs and characteristics. The Company and its largest
shareholder have independent office addresses and there is no mixed operation and co-office. The aforesaid largest
shareholder exercises its rights and undertakes corresponding obligations according to law.
5. In terms of business: The Company maintains fully independent business operations deployment
capabilities and market-oriented autonomous management. It possesses independent procurement production and
sales systems does not rely on the largest shareholder for profit generation and has no competitive conflicts of
interest with the majority shareholder or its subsidiaries.
712025 Annual Report of Yunnan Baiyao Group Co. Ltd.
III. Horizontal Competition
□Applicable RNot applicable
722025 Annual Report of Yunnan Baiyao Group Co. Ltd.
IV. Directors and Senior Management
1. Basic information
Number
Increase in Decrease in Number
of shares
number of number of of shares
Date of held at the Other Reasons for
Service Date of end of shares held in shares held in held at the
Name Gender Age Title commencement beginning changes changes in
status service term the current the current end of the
of service term of the (shares) shares
period period period
period
(shares) (shares) (shares)
(shares)
Secretary of the
Zhang February 23
Male 63 Company’s Party Incumbent November 10 2028 0 0 0 0 0 N/A
Wenxue 2024
Committee Chairman
Deputy Secretary of
the Company’s Party
Dong Ming Male 50 Committee Vice Incumbent March 3 2021 November 10 2028 13280 0 0 0 13280 N/A
Chairman and
President
Guo Xin Male 55 Director Incumbent June 11 2024 November 10 2028 0 0 0 0 0 N/A
You
Male 55 Director Incumbent June 11 2024 November 10 2028 0 0 0 0 0 N/A
Guanghui
November 7
Xie Yunshan Male 51 Director Incumbent November 10 2028 0 0 0 0 0 N/A
2022
Shangguan
Male 59 Director Incumbent June 11 2024 November 10 2028 0 0 0 0 0 N/A
Changchuan
November 10
Li Ke Male 32 Director Incumbent November 10 2028 0 0 0 0 0 N/A
2025
Liu Guo’en Male 69 Independent director Incumbent May 25 2021 May 25 2027 0 0 0 0 0 N/A
Na November 10
Male 48 Independent director Incumbent November 10 2028 0 0 0 0 0 N/A
Chaohong 2025
Hu November 10
Male 50 Independent director Incumbent November 10 2028 0 0 0 0 0 N/A
Mingxing 2025
732025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Number
Increase in Decrease in Number
of shares
number of number of of shares
Date of held at the Other Reasons for
Service Date of end of shares held in shares held in held at the
Name Gender Age Title commencement beginning changes changes in
status service term the current the current end of the
of service term of the (shares) shares
period period period
period
(shares) (shares) (shares)
(shares)
Cao November 10
Male 52 Independent director Incumbent November 10 2028 0 0 0 0 0 N/A
Yangfeng 2025
November 10
Yang Fan Female 50 Employee director Incumbent November 10 2028 11000 0 0 0 11000 N/A
2025
Li February 10
Male 47 Senior vice president Incumbent November 10 2028 0 0 0 0 0 N/A
Hongshen 2026
October 11
Li Shengli Male 53 Senior vice president Incumbent November 10 2028 0 0 0 0 0 N/A
2024
He Tao Male 50 Senior vice president Incumbent August 26 2024 November 10 2028 0 0 0 0 0 N/A
Shen Shi Male 45 Senior vice president Incumbent August 26 2024 November 10 2028 0 0 0 0 0 N/A
Ma Jia Male 49 CFO Incumbent June 1 2022 November 10 2028 0 0 0 0 0 N/A
Qian
Male 42 Board Secretary Incumbent January 17 2022 November 10 2028 0 0 0 0 0 N/A
Yinghui
November 7
Li Hongshen Male 47 Former director Resigned November 10 2025 0 0 0 0 0 N/A
2022
Former Independent
Dai Yang Male 57 Resigned August 21 2019 November 10 2025 0 0 0 0 0 N/A
Director
Zhang Former Independent
Male 58 Resigned August 21 2019 November 10 2025 0 0 0 0 0 N/A
Yongliang Director
Former Independent November 7
He Yong Male 56 Resigned November 10 2025 0 0 0 0 0 N/A
Director 2022
Zhu TCM Strategic
Female 72 Resigned August 21 2019 February 10 2026 56000 0 0 0 56000 N/A
Zhaoyun Scientist
Zhang Ning Male 55 Chief Scientist Resigned January 24 2022 February 10 2026 0 0 0 0 0 N/A
Former Chief
Qin Wanmin Male 62 Resigned August 21 2019 January 26 2025 504000 0 0 0 504000 N/A
Innovation Officer
742025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Number
Increase in Decrease in Number
of shares
number of number of of shares
Date of held at the Other Reasons for
Service Date of end of shares held in shares held in held at the
Name Gender Age Title commencement beginning changes changes in
status service term the current the current end of the
of service term of the (shares) shares
period period period
period
(shares) (shares) (shares)
(shares)
Senior Vice President
President of Health
Products BG
Former Chief
Compliance Officer
Yang Yong Male 62 Senior Vice President Resigned August 21 2019 January 26 2025 101024 0 0 0 101024 N/A
Executive Director of
Yunnan Pharma
Former Secretary of
the Commission for
Li Jin Male 61 Discipline Inspection Resigned August 21 2019 February 10 2026 56000 0 0 0 56000 N/A
and Chief Quality and
Process Officer
Total -- -- -- -- -- -- 741304 0 0 0 741304 --
Note: On November 10 2025 Mr. Li Hongshen stepped down as a director of the Company following the renewal of the Board of Directors. On February 10 2026 the Company convened the
first session of the 11th Board of Directors in 2026 at which the Proposal on the Appointment of Senior Management was considered and approved. The Board of Directors appointed Mr. Li
Hongshen as Senior Vice President of the Company.
752025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Whether there was any departure of directors and senior management during the term of office during the reporting period
RYes □No
On January 28 2025 the Company disclosed the Announcement Regarding the Retirement of Senior
Management Due to Reaching Retirement Age (Announcement No. 2025-06). Mr. Qin Wanmin the Company’s
Chief Innovation Officer and Senior Vice President resigned from his positions as Chief Innovation Officer and
Senior Vice President as well as from all other positions within the Company and its controlled subsidiaries as he
reached the statutory retirement age. Mr. Yang Yong the Company’s Chief Compliance Officer and Senior Vice
President applied to resign from his positions as Chief Compliance Officer and Senior Vice President as well as
from all other positions held at the Company and its controlled subsidiaries as he reached the statutory retirement
age.On November 10 2025 the Company convened its second extraordinary general meeting for 2025 at which
resolutions regarding the election of new board members were considered and approved. Mr. Li Hongshen a
director of the Company and independent directors Mr. Dai Yang Mr. Zhang Yongliang and Mr. He Yong stepped
down upon the expiration of their terms.On February 10 2026 the Company convened the first session of the 11th Board of Directors in 2026 at which
the Proposal on the Appointment of Senior Management of the Company was considered and approved. Mr. Li Jin
having reached the statutory retirement age no longer served as a member of the Company’s senior management
or held any position within the Company or its controlled subsidiaries. On the same day to accelerate the
development of the Company’s modern R&D system and capabilities effectively leverage both “TCM” and
“innovative drugs” promote the deep integration of TCM with modern technology and inject strategic momentum
into the Company’s long-term sustainable development the Company’s Executive Committee considered and
approved the appointment of Ms. Zhu Zhaoyun as TCM Strategic Scientist and Mr. Zhang Ning as Chief Scientist.Changes of directors and senior management of the Company
RApplicable □Not applicable
Name Position held Type Date Reason
Change
Li Ke Director Elected November 10 2025 the term of
office
Change
Na Chaohong Independent director Elected November 10 2025 the term of
office
Change
Hu Mingxing Independent director Elected November 10 2025 the term of
office
Change
Cao Yangfeng Independent director Elected November 10 2025
the term of
762025 Annual Report of Yunnan Baiyao Group Co. Ltd.
office
Change
Yang Fan Employee director Elected November 10 2025 the term of
office
Change
Li Hongshen Senior vice president Appointed February 10 2026 the term of
office
Stepped
Change
down upon
Dai Yang Former Independent Director November 10 2025 the term of
completion
office
of term
Stepped
Change
Zhang down upon
Former Independent Director November 10 2025 the term of
Yongliang completion
office
of term
Stepped
Change
down upon
He Yong Former Independent Director November 10 2025 the term of
completion
office
of term
Stepped
Change
down upon
Li Hongshen Former director November 10 2025 the term of
completion
office
of term
Stepped
down upon Job
Zhu Zhaoyun TCM Strategic Scientist February 10 2026
completion transfer
of term
Stepped
down upon Job
Zhang Ning Chief Scientist February 10 2026
completion transfer
of term
Former Chief Innovation Officer Senior Vice President
Qin Wanmin Resigned January 26 2025 Retired
President of Health Products BG
Former Chief Compliance Officer Senior Vice President
Yang Yong Resigned January 26 2025 Retired
Executive Director of Yunnan Pharma
Stepped
Former Secretary of the Commission for Discipline down upon
Li Jin February 10 2026 Retired
Inspection and Chief Quality and Process Officer completion
of term
2. Appointment
Professional background main working experience and main duties in the Company of current directors supervisors and senior
management of the Company
Resume of Members of the Board of Directors:
Zhang Wenxue male Han nationality born in June 1963 a native of Shiping Yunnan a member of the
Communist Party of China holding an on-the-job master’s degree is a Senior Economist. He was a member of the
Tenth Yunnan Provincial Committee of the Communist Party of China and then a member of the 12th Yunnan
Provincial Committee of the Chinese People’s Political Consultative Conference. He has been recognized as a
Model Worker of Yunnan Province (19th Session) and an Outstanding Professional and Technical Talent with
772025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Significant Contributions in Yunnan Province. He is a recipient of the Second Prize of the State Scientific andTechnological Progress Award recipient of the “70th Anniversary of the Founding of the People’s Republic ofChina” Commemorative Medal and other awards and honorary titles and was named one of the “OutstandingEntrepreneurs in China (2021–2022).” In 2024 he was selected for the “Manufacturing Talent Support Program –Innovative Entrepreneur List by the Ministry of Industry and Information Technology.” He started to work in July
1984 and served as Deputy General Manager of Yunnan Phosphorus Chemical Industry (Group) Corporation
General Manager and Deputy Secretary of the Party Committee of Yunnan Phosphate Chemical Group Co. Ltd
Secretary of the Party Committee and General Manager of Yunnan Phosphate Chemical Group Co. Ltd Director
Deputy General Manager and Standing Committee Member of Party Committee of Yuntianhua Group Co. Ltd
General Manager Deputy Secretary of the Party Committee and Vice Chairman of Yuntianhua Group Co. Ltd
Chairman of Chongqing Polycomp International Corporation Secretary of the Party Committee and Chairman of
Yuntianhua Group Co. Ltd. He is currently Secretary of the Party Committee and Chairman of Yunnan Baiyao.Dong Ming male Han nationality born in October 1976 is a member of the Communist Party of China and
Ph.D. in Management. He served as Vice President of the CIS Regional Department Director of VIP System
Department General Manager of Beijing Branch Director of Mobile System Department and Vice President for
China of Huawei Technologies Co. Ltd. He is currently Deputy Secretary of the Party Committee Vice Chairman
President of Yunnan Baiyao.Guo Xin male Han nationality born in September 1970 is a member of the Communist Party of China
holding a bachelor’s degree and an on-the-job master’s degree and a professional technical position as an associate
researcher. He served as Manager of Business Development Department of Kunming Zhenhua Pharmaceutical
Factory Co. Ltd Manager of Human Resources Department of Yunnan Pharmaceutical Industry Co. Ltd Assistant
General Manager and Manager of Business Development Department of Kunming Zhenhua Pharmaceutical
Factory Co. Ltd Manager of Investment Development Department Assistant General Manager Manager of
Investment Operation Department and Director of Administration Department of Yunnan Pharmaceutical Industry
Co. Ltd Member of Party Committee Deputy General Manager Secretary of the Comprehensive Party Branch
and Dean of the Research Institute of Yunnan Plant Pharmaceutical Co. Ltd General Manager of Biomedical
Department of Yunnan Industrial Investment Holding Group Co. Ltd General Manager of Yunnan Gongtou TCM
Materials and Decoction Pieces Industry Development Co. Ltd Secretary of the Party Committee and Chairman of
Yunnan Bohao Biotechnology Group Co. Ltd Secretary of the Party Branch and Chairman of Yunnan Ruibao
782025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Biotechnology Co. Ltd. He is currently Full-time Equity Representative of State-owned Equity Management
Company and Director of Yunnan Baiyao.You Guanghui male Han nationality born in December 1971 holding a bachelor’s degree is a Certified
Management Accountant (CMA) Senior Corporate Culture Manager and Senior Corporate Compliance Manager.He was Chief Accountant of Fujian Industrial Bank Wuyishan Sub-branch Chief Accountant and Head of the
Finance Section of Fujian New Huadu Engineering Co. Ltd Supervisor Deputy Manager and Manager of the
Planning and Finance Department of Fujian Wuyishan Travel Development Co. Ltd Supervisor of Xinjiang Kanas
Tourism Development Co. Ltd Director and Chief Financial Officer of Fujian Wuyishan Travel Development Co.Ltd Chief Financial Officer of Baiyao Holdings and Chairman of the Supervisory Committee of Yunnan Baiyao.He is currently Vice President of New Huadu Industrial Group Co. Ltd and Director of Yunnan Baiyao.Xie Yunshan male Han nationality born in September 1975 is a member of the Communist Party of China
a doctor of economics postdoctoral and Certified Public Accountant. He once worked at the Southwest Management
Headquarters of Xiangcai Securities the First Secretary of the General Office of the Yunnan Provincial Government
the Investment Research Institute of Yunnan University of Finance and Economics the Finance Research Institute
of the People’s Bank of China Zhonghe Zhengxin Accounting Firm the Investment Banking Department of Hongta
Securities Co. Ltd the Investment Banking Department of Dongguan Securities Co. Ltd and the Investment
Banking Headquarters of Pacific Securities Co. Ltd. He is currently Full-time Equity Representative of State-owned
Equity Management Company and Director of Yunnan Baiyao.Shangguan Changchuan male Han nationality born in September 1966 holding an EMBA degree. He
taught in Xianghua School District Anxi County and served as HR Manager Purchasing Manager and General
Manager of New Huadu Department Store General Manager of Quanzhou New Huadu Supercenter Co. Ltd
Director and Executive Deputy General Manager of New Huadu Supercenter Co. Ltd and Chairman and General
Manager of New Huadu Supercenter Co. Ltd. He is currently Vice President of New Huadu Industrial Group Co.Ltd and Director of Yunnan Baiyao.Li Ke male Han nationality born in November 1993 a member of the Communist Party of China holds a
master’s degree in accounting from the School of Economics at Yunnan University and is a Certified Public
Accountant and Senior Auditor. He served as an Audit Specialist and a Financial Responsibility Audit Specialist in
the Audit Department of Yunnan Hehe (Group) Co. Ltd and as Chairman of the Supervisory Committee of Zhuhai
Hongta Renheng Packaging Co. Ltd. He is currently Director of Yunnan Baiyao Group and Deputy Director of the
Legal Affairs Department at Yunnan Hehe (Group) Co. Ltd. He also serves as a supervisor at Yuxi Tongbo Real
792025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Estate Development Co. Ltd FAW-HONGTA Yunnan Automobile Co. Ltd and Yunnan Yuxi Technology Color-
printing Co. Ltd as well as a director at Zhuhai S.E.Z. Chengcheng Printing Co. Ltd.Liu Guo’en male Qiang nationality born in October 1957 a doctor of economics is a Special Professor of
Economics Changjiang Scholar of Ministry of Education. He used to teach at the University of Southern California
and the University of North Carolina and served as President of the “Chinese Economist Society” and President of
the “Asia-Pacific Federation of International Society for Pharmacoeconomics and Outcomes Research.” He is
currently a Distinguished Professor of Liberal Arts of Peking University Dean of Global Health Development
Institute of Peking University Member of Faculty of Chinese Academy of Medical Sciences Chair of the Academic
Committee in the Institute of Education Economics of Peking University Chinese Convener of China-US Track II
Dialogue on Health Chairman of Pharmacoeconomics Professional Committee of Chinese Pharmaceutical
Association Independent Director of MicroPort Scientific Corporation and Independent Director of Yunnan Baiyao.Na Chaohong male Hui nationality born in May 1977 holds an Executive Master of Business Administration
(EMBA). He is the Dean of the Graduate School at Yunnan University of Finance and Economics a professor a
doctoral advisor and a National Accounting Leading Talent. He previously served as Deputy Director of the MBA
Center Assistant to the Dean of the School of Business Director of the Institute of Financial Management and
Associate Dean of the School of Accounting at Yunnan University of Finance and Economics. He was an adjunct
researcher at the China Europe International Business School and as a visiting scholar at Aarhus University in
Denmark The Chinese University of Hong Kong and the University of Massachusetts; and he held positions as a
broker and investment analyst at a securities firm general manager of a consulting firm and served as an external
director expert for provincial-level enterprises in Yunnan Province. He currently serves as a member of the
Management Accounting Professional Committee of the Accounting Society of China as well as an independent
director of Yunnan Energy Investment Co. Ltd and Yunnan Baiyao Group.Hu Mingxing male Han nationality born in November 1975 holds a Ph.D. and an Entrepreneurial MBA
from London Business School. He previously oversaw the healthcare partnerships of University College London
(UCL) with China served as a healthcare advisor to the Development Research Center of the State Council of China
and acted as a senior advisor to the UK Foreign and Commonwealth Office and the Department of Health and Social
Care. He currently serves as Deputy Dean of the School of Bioengineering at UCL Head of Academic Partnerships
(Healthcare) for UCL in China Co-founder and Head of Southeast Asia and Greater China at Academic Health
Solutions a leading UK healthcare consultancy as well as an international medical expert at the Shenzhen Hospital
802025 Annual Report of Yunnan Baiyao Group Co. Ltd.
of the Cancer Hospital of the Chinese Academy of Medical Sciences an international medical expert at CGN
Medical Technology Co. Ltd and an independent director of Yunnan Baiyao Group.Cao Yangfeng male Han nationality born in May 1973 holds a Ph.D. from Copenhagen Business School
and a Ph.D. from Renmin University of China. He completed a postdoctoral fellowship in Business Administration
at the Guanghua School of Management Peking University; and served as a visiting scholar at Stanford University.He previously served as an independent director of Kingdee International Software Group Co. Ltd and an
independent director and chairman of the Remuneration Committee of Wens Food Group Co. Ltd. He currently
serves as Professor of Management Practice at the Guanghua School of Management Peking University; Dean of
the Hong Kong Institute of Business Model Innovation; Distinguished Professor at the School of Business City
University of Hong Kong; Director Chair of the Strategy and Sustainable Development Committee of JA Solar
Technology Co. Ltd; and Independent Director of Yunnan Baiyao Group.Yang Fan female born in March 1975 a member of the Communist Party of China graduated with a Master
of Business Administration (MBA) from the Department of Business Administration at Shanghai University of
Finance and Economics and began her career in September 1999. She currently serves as an employee director a
member of the Discipline Inspection Commission and the Director of the Administrative Office at Yunnan Baiyao
Group.Senior management:
Li Hongshen male Han nationality born in August 1978 a native of Kunming Yunnan a member of the
Communist Party of China a doctor of economics and an engineer. He was a delegate to the 12th Yunnan Provincial
People’s Congress and served as Foreign Exchange Trader at Kunming Branch; Assistant Branch Manager at
Renmin Middle Road Branch Vice President (presiding over work) of Chuncheng Road Sub-branch and General
Manager of International Business Department of Kunming Branch of China Merchants Bank Factory Director
Assistant Deputy Factory Director Member of the Party Committee Deputy Secretary of the Party Committee and
Factory Director of Qujing Cigarette Factory Vice President Member of the Party Committee and Deputy General
Manager of Hongyun Honghe Tobacco (Group) Co. Ltd Member of the Party Committee Deputy Secretary of the
Party Committee and Factory Director of Kunming Cigarette Factory Director of Hongta Securities Co. Ltd
Director of Yunnan Baiyao Group Vice Chairman of KPC Pharmaceuticals Inc Director of Yunnan Hongta Bank
Co. Ltd Member of the Party Committee Deputy Secretary of the Party Committee Director and General Manager
of Yunnan Hehe (Group) Co. Ltd and Director of Zhongwei Capital Holdings Co. Ltd. He is currently Senior Vice
President of Yunnan Baiyao.
812025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Li Shengli male Han nationality born in January 1973 holding a master’s degree. He served as District
Manager Regional Manager Sales Director General Manager Vice President Senior Vice President and Co-CEO
of Fosun Wanbang (Jiangsu) Pharmaceutical Group Co. Ltd (formerly Jiangsu Wanbang Biochemical
Pharmaceutical Co. Ltd) General Manager of Biochemical Oncology Division President CEO and Chairman of
Fosun Wanbang (Jiangsu) Health Development Co. Ltd (formerly Jiangsu Wanbang Pharmaceutical Marketing Co.Ltd) Vice President and General Manager of Chinese Marketing Headquarters Senior Vice President of Shanghai
Fosun Pharmaceutical Industry Development Co. Ltd Co-President President and Chairman of Fosun Yaohong
(Jiangsu) Pharmaceutical Technology Co. Ltd (formerly Jiangsu Fosun Pharmaceutical Sales Co. Ltd) Assistant
President Vice President Senior Vice President Executive President and Chief Development Officer of Shanghai
Fosun Pharmaceutical (Group) Co. Ltd and President CEO and Co-Chairman of Shanghai Fosun Health
Technology (Group) Co. Ltd. He is currently Senior Vice President of Yunnan Baiyao.He Tao male Han nationality born in December 1975 holding a master’s degree is a Member of the
Communist Party of China Senior Accountant Certified Management Accountant (CMA) expert awarded Yunnan
Provincial Government Special Allowance Member of Yunnan Provincial Senior (Deputy Senior) Accountant
Professional Title Review Committee expert in Research-Based Audit Think Tank of Yunnan Provincial Audit
Office Executive Director of the 6th Council of China Federation of Logistics and Purchasing and Member of the
Expert Committee of the Modern Supply Chain Research Institute of China Federation of Logistics and Purchasing.He served as Deputy General Manager of Finance Department (presiding over the work) and General Manager of
Marketing Department of China Telecom Group Yunnan Branch Secretary of the Party Committee and General
Manager of China Telecom Group Yuxi Branch Director and Deputy General Manager of Yunnan Yuntianhua Co.Ltd and Secretary of the Party Committee and General Manager of Yunnan Yuntianhua United Business Co. Ltd.He is currently a Member of the Party Committee and Senior Vice President of Yunnan Baiyao.Shen Shi male Han nationality born in December 1980 holding a master’s degree. He served as an
automation engineer of Liaoyang Spring Factory a subsidiary of China’s FAW Group Co. Ltd R&D Engineer and
Capacity Expansion Project Manager of Midea Group Co. Ltd Consulting Manager of Guangzhou Kaipule
Enterprise Management Consulting Co. Ltd Consulting Director of Beijing Zhenglue Junce Consulting Group Co.Ltd Consulting Manager of Mercer Consulting Director of Aon Hewitt Consulting Co. Ltd Human Resources
Expert of Huawei Technologies Co. Ltd Head of Organizational Development at Midea Group Co. Ltd and
Director of Management Department at Servotronix Motion Control Company a subsidiary of Midea Group Co.Ltd. He is currently Senior Vice President of Yunnan Baiyao.
822025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Ma Jia male Han nationality born in March 1977 holding a master’s degree a member of the Communist
Party of China. He served as Director of Financial Management Department of Beijing Panasonic Lighting Co. Ltd
Financial Director of CIS Regional subsidiary of Huawei Technologies IFS Transformation Project Manager
(China) CFO of Shandong Representative Office CFO of China Operator BG CFO of China Region responsible
for Huawei’s ICT operation management risk control sales and financing taxation subsidiaries and other financial
businesses as well as financial organization construction in China. He is currently CFO of Yunnan Baiyao.Qian Yinghui male Han nationality born in September 1983 is a master of law and a member of the
Communist Party of China. He served as Project Manager of the Strategy Committee Office of Yunnan Baiyao and
Project Director of the Strategy Development Center of Yunnan Baiyao Director of the Board Office and General
Manager of the Board and Administrative Office at Yunnan Baiyao Group. He is currently Secretary of the Board
of Directors of Yunnan Baiyao.Cases where the controlling shareholder and actual controller simultaneously serve as the chairman and general manager of the listed
company
□Applicable RNot applicable
Engagement in shareholding companies
RApplicable □Not applicable
Whether to
Date of receive
Position held in Date of
end of remuneration and
Name of person Name of shareholding company shareholding commencement of
service allowances from
company service term
term the shareholding
company
Yunnan State-owned Equity Full-time Equity
Guo Xin Yes
Operation Management Co. Ltd. Representative
Yunnan State-owned Equity Full-time Equity
Xie Yunshan Yes
Operation Management Co. Ltd. Representative
New Huadu Industrial Group Co.You Guanghui Vice President October 20 2025 Yes
Ltd.Shangguan New Huadu Industrial Group Co.Vice President October 1 2019 Yes
Changchuan Ltd.Deputy Director of
Li Ke Yunnan Hehe (Group) Co. Ltd. the Legal Affairs February 1 2024 Yes
Department
Position at other entities
RApplicable □Not applicable
Whether to
Date of receive
Name of Position held in other Date of end of
Name of other entity commencement of remuneration and
person entity service term
service term allowances from
the other entity
Zhang Shanghai Pharmaceuticals
Non-executive Director June 28 2024 No
Wenxue Holding Co. Ltd.Dong Shanghai Pharmaceuticals
Executive Director June 29 2023 No
Ming Holding Co. Ltd.Liu
Peking University Professor January 1 2006 Yes
Guo’en
Liu MicroPort Scientific
Independent Director September 3 2010 Yes
Guo’en Corporation
832025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Na Yunnan University of Finance
Dean July 1 2009 Yes
Chaohong and Economics
Na Yunnan Energy Investment
Independent Director December 15 2020 Yes
Chaohong Co. Ltd.Deputy Dean of the
School of
Bioengineering at UCL
Hu University College London
Head of Academic December 1 2012 Yes
Mingxing (UCL)
Partnerships
(Healthcare) for UCL in
China
Co-founder and Head of
Hu Academic Health Solutions
Southeast Asia and June 1 2016 Yes
Mingxing (AHS)
Greater China
Shenzhen Hospital of the
Hu Cancer Hospital of the International medical
August 1 2018 Yes
Mingxing Chinese Academy of Medical expert
Sciences
Hu CGN Medical Technology International medical
October 1 2020 Yes
Mingxing Co. Ltd. expert
Cao Hong Kong Institute of
Dean January 1 2024 Yes
Yangfeng Business Model Innovation
Director Chair of the
Strategy and
Cao
JA Solar Technology Co. Ltd Sustainable December 5 2019 Yes
Yangfeng
Development
Committee
Shanghai Pharmaceuticals
Ma Jia Supervisor June 29 2023 December 9 2025 No
Holding Co. Ltd.Explanation on positions at other entities None.Penalties to the current directors and senior management of the Company and those leaving office during the reporting period by
securities regulatory agencies in the latest three years
□Applicable RNot applicable
3. Remuneration of Directors and Senior Management
Decision-making procedures determination basis and actual payment of remuneration for directors and senior management
The Remuneration Management Committee shall submit the proposal to the
Decision-making procedures of remuneration of
board of directors and shareholders’ meeting for consideration and approval
directors and senior management
prior to implementation.Basis for determination of the remuneration of directors Remuneration shall be determined based on operating conditions industry
and senior management standard responsibilities assumed and other relevant factors.Actual payment of remuneration of directors and senior Allowances for directors will be paid monthly while those for senior
management management will be paid based on established assessment standards.The remuneration received by directors and senior management of the
Composition of remuneration of directors and senior
Company in 2025 includes a basic salary performance bonus allowances
management
and other cash income.Remuneration for directors and senior management during the reporting period
Unit: RMB0’000
Whether
Total pre-tax remuneration
Service remunerations was received
Name Gender Age Title
status received from from related
the Company parties of the
Company
842025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Zhang Secretary of the Company’s Party
Male 63 Incumbent 0 Yes
Wenxue Committee Chairman
Dong Deputy Secretary of the Company’s Party
Male 50 Incumbent 425.34 No
Ming Committee Vice Chairman and President
Guo Xin Male 55 Director Incumbent 3.52 Yes
You
Male 55 Director Incumbent 116.34 Yes
Guanghui
Xie
Male 51 Director Incumbent 3.52 Yes
Yunshan
Shangguan
Changchu Male 59 Director Incumbent 113.34 Yes
an
Li Ke Male 32 Director Incumbent 0 Yes
Yang Fan Female 50 Employee director Incumbent 18.49 No
Liu
Male 69 Independent director Incumbent 25.71 No
Guo’en
Na
Male 48 Independent director Incumbent 4.29 No
Chaohong
Hu
Male 50 Independent director Incumbent 4.29 No
Mingxing
Cao
Male 52 Independent director Incumbent 4.29 No
Yangfeng
Li Shengli Male 53 Senior vice president Incumbent 364 No
He Tao Male 50 Senior vice president Incumbent 184 No
Shen Shi Male 45 Senior vice president Incumbent 184 No
Ma Jia Male 49 CFO Incumbent 184 No
Qian
Male 42 Board Secretary Incumbent 112.09 No
Yinghui
Dai Yang Male 57 Former Independent Director Resigned 21.43 No
Zhang
Male 58 Former Independent Director Resigned 21.43 No
Yongliang
He Yong Male 56 Former Independent Director Resigned 21.43 No
Li
Male 47 Former director Resigned 0 Yes
Hongshen
Zhu
Female 72 TCM Strategic Scientist Resigned 180.97 No
Zhaoyun
Zhang
Male 55 Chief Scientist Resigned 360.91 No
Ning
Former Chief Innovation Officer Senior
Qin
Male 62 Vice President President of Health Resigned 0 No
Wanmin
Products BG
Former Chief Compliance Officer Former
Yang Yong Male 62 Resigned 30.31 No
Senior Vice President
Li Jin Male 61 Chief Quality and Process Officer Resigned 113.69 No
Total -- -- -- -- 2497.39 --
Note: In accordance with the Shenzhen Stock Exchange’s guidelines for preparing annual reports the disclosure of annual
compensation amounts refers to the annual cash compensation attributable to the current reporting period on an accrual basis. During
the reporting period the total pre-tax compensation received by directors and senior management from the Company consisted of base
852025 Annual Report of Yunnan Baiyao Group Co. Ltd.
pay for fiscal year 2025 including base salary position allowances and other subsidies. In accordance with the Company’s relevant
policies the 2025 short-term incentive allocation plan will be implemented after the annual report is disclosed the annual performance
evaluation is completed and the necessary procedures are fulfilled.In accordance with the relevant provisions of the Management Measures for the
Compensation and Performance Evaluation of Key Personnel Including Directors and
Basis for evaluating the actual
Supervisors the Management Measures for the Allowances of Independent Directors of
compensation received by all
Yunnan Baiyao Group Co. Ltd and the Management Measures for the Compensation and
directors and senior management at
Performance Evaluation of Senior Management short-term incentives are directly linked to
the end of the reporting period
annual operating performance and the achievement of individual annual target responsibility
agreements.Status of performance evaluation for
all directors and senior management In accordance with the Company’s performance evaluation policies and taking into account
regarding actual compensation its operating conditions the annual performance evaluation will be completed in accordance
received as at the end of the with the annual evaluation plan following the disclosure of the annual report.reporting period
In accordance with the Compensation Management System for Directors and Senior
Deferred payment arrangements for
Management of Yunnan Baiyao Group Co. Ltd the Company has established a deferred
the actual compensation received by
compensation mechanism for performance-based pay. The specific deferral percentage and
all directors and senior management
period are determined by the Board’s Remuneration and Appraisal Committee and
at the end of the reporting period
implemented after approval by the relevant decision-making bodies.Status of the suspension and
recourse for actual compensation In accordance with the provisions of Chapter 5 of the Compensation Management System
received by all directors and senior for Directors and Senior Management of Yunnan Baiyao Group Co. Ltd the Company has
management as at the end of the established a mechanism for the suspension and recourse of compensation.reporting period
Other explanations
□Applicable RNot applicable
V. Duty Performance of Directors during the Reporting Period
1. Directors’ Attendance at Board Meetings and Shareholders’ Meetings
Directors’ Attendance at Board Meetings and Shareholders’ Meetings
Number of
Board
Number of Number of
meetings that Number of Number Number of
Board Board Failed to attend two
Name of should be Board meetings of Board shareholders’
meetings meetings consecutive Board
director attended attended via meetings meetings
attended on attended by meetings in person
during the teleconference missed attended
site proxy
Reporting
Period
Zhang
9 4 5 0 0 No 3
Wenxue
Dong Ming 9 4 5 0 0 No 3
Guo Xin 9 4 5 0 0 No 3
You
9 4 5 0 0 No 3
Guanghui
Xie
9 4 5 0 0 No 3
Yunshan
Shangguan
9 4 5 0 0 No 3
Changchuan
Li Ke 2 1 1 0 0 No 1
862025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Liu Guo’en 9 3 6 0 0 No 3
Na
2 1 1 0 0 No 1
Chaohong
Hu
2 1 1 0 0 No 1
Mingxing
Cao
2 1 1 0 0 No 1
Yangfeng
Yang Fan 1 0 1 0 0 No 1
Li
7 2 5 0 0 No 2
Hongshen
Dai Yang 7 2 5 0 0 No 2
Zhang
7 1 6 0 0 No 2
Yongliang
He Yong 7 2 5 0 0 No 2
Explanation on two consecutive absences from Board meetings: Not applicable.
2. Objections raised by directors to relevant matters of the Company
Did directors object to relevant matters of the Company
□ Yes RNo
During the reporting period the directors raised no objections to any matters concerning the Company.
3. Other circumstances in the performance of duties by directors
Was advice to the Company from directors adopted
RYes □No
Explanation on whether advice to the Company from directors was adopted or not
During the reporting period in strict accordance with the Company Law the Securities Law the Code of
Corporate Governance for Listed Companies the Several Provisions on Strengthening the Protection of the Rights
and Interests of Shareholders of Public Shares and other laws regulations and normative documents as well as the
Articles of Association the Rules of Procedure for the Board of Directors and other relevant requirements all the
members of the 10th Board of Directors of the Company honoring the principles of integrity faithfulness and
diligence and abiding by the code of conduct for the performance of duties as a director attended the Board
meetings and the general meetings of shareholders in earnest actively understanding the operation of the Company
and fully expressing our opinions and carefully independently and objectively considering 45 motions including
the revision of the Company’s corporate governance documents organizational structure related party transactions
and misappropriation of funds. They carefully understood the contents for consideration during the Board meetings
and expressed corresponding opinions and suggestions which have played a positive role in promoting the Board
of Directors to make strategic decisions that are more in line with the development of the Company and more
scientific and reasonable and have effectively safeguarded the legitimate rights and interests of the Company and
all the shareholders in particular the minority shareholders. All members of the 11th Board of Directors conducted
872025 Annual Report of Yunnan Baiyao Group Co. Ltd.
a thorough independent and objective review of five resolutions including the election of the Company’s Chairman
and Vice Chairman the election of members to specialized committees related-party transactions and investment
and wealth management. During the Board meeting they carefully examined the matters under review and offered
corresponding opinions and recommendations. Their efforts played a positive role in enabling the Board of Directors
to make strategic decisions that are more aligned with the Company’s development and more scientifically sound
and reasonable thereby effectively safeguarding the legitimate rights and interests of the Company and all
shareholders particularly minority shareholders.
882025 Annual Report of Yunnan Baiyao Group Co. Ltd.
VI. Performance of Special Committees under the Board of Directors during the Reporting Period
Important Other Particulars
Name of Number of Date of opinions and circumstances in of
Members Agenda of meeting
Committee Meetings convention recommendations the performance objections
proposed of duties (if any)
Zhang
(I) The first meeting of Strategy Committee of the Tenth Board of Directors for 2025
Wenxue
1. Proposal on the Authorized Decision-Making Plan of the Board in 2025
Dong Ming
Strategy 2. Proposal on Formulation of Market Value Management System of Yunnan Baiyao
Guo Xin You 6 March 28 2025 None None None
Committee 3. Proposal on Establishing a Wholly-Owned Subsidiary
Guanghui Li
4. Proposal on the TCM Industrial and Cultural Park Project of Yunnan Baiyao
Hongshen
Result: 6 voted in favor 0 voted against 0 abstained
Liu Guo’en
Zhang (II) The second meeting of Strategy Committee of the Tenth Board of Directors for
Wenxue 2025
Dong Ming 1. Proposal on the Construction Project for the Decoction Pieces Production Center in
Strategy
Guo Xin You 6 June 25 2025 the Qidian Industrial Zone None None None
Committee
Guanghui Li 2. Proposal on Adjusting the Product Mix Within the Investment and Wealth
Hongshen Management Budget of the Company for 2025
Liu Guo’en Result: 6 voted in favor 0 voted against 0 abstained
Zhang (III) The third meeting of Strategy Committee of the Tenth Board of Directors for
Wenxue 2025
Dong Ming 1. Proposal on Capital Increases for Pu’er Liangbao Biotechnology Co. Ltd and
Strategy
Guo Xin You 6 August 15 2025 Pu’er Liangpin Yikang Pharmaceutical Co. Ltd. None None None
Committee
Guanghui Li 2. Proposal on the Wholly-Owned Acquisition of Anguo Juyaotang Pharmaceutical
Hongshen Co. Ltd.Liu Guo’en Result: 6 voted in favor 0 voted against 0 abstained
Zhang
(IV) The fourth meeting of Strategy Committee of the Tenth Board of Directors for
Wenxue
2025
Dong Ming
Strategy 1. Proposal on the Second Phase of the Public-Private Partnership Project at the
Guo Xin You 6 August 27 2025 None None None
Committee Lijiang Eco-Technology Industrial Park (Phase II) and the Supporting Project for the
Guanghui Li
Relocation of Lijiang Company’s Food and Health Products Operations
Hongshen
Result: 6 voted in favor 0 voted against 0 abstained
Liu Guo’en
892025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Important Other Particulars
Name of Number of Date of opinions and circumstances in of
Members Agenda of meeting
Committee Meetings convention recommendations the performance objections
proposed of duties (if any)
Zhang
Wenxue (V) The first meeting of Strategy Committee of the Eleventh Board of Directors for
Dong Ming 2025
Strategy November 10
Guo Xin You 6 1. Proposal on the Election of the Chairperson of the Strategy Committee of the None None None
Committee 2025
Guanghui Li eleventh Board of Directors
Ke Hu Result: 6 voted in favor 0 voted against 0 abstained
Mingxing
Zhang
Wenxue (VI) The second meeting of Strategy Committee of the Eleventh Board of Directors
Dong Ming for 2025
Strategy December 29
Guo Xin You 6 1. Proposal on Utilizing Self-owned Idle Funds for Investment and Wealth None None None
Committee 2025
Guanghui Li Management in 2026
Ke Hu Result: 6 voted in favor 0 voted against 0 abstained
Mingxing
(I) The first meeting of Nomination Committee of the Tenth Board of Directors for
Dai Yang 2025
Zhang 1. Proposal on the Election of Non-Independent Directors to the Eleventh Board of
Nomination October 23
Wenxue 3 Directors None None None
Committee 2025
Zhang 2. Proposal on the Election of Independent Directors to the Eleventh Board of
Yongliang Directors
Result: 3 voted in favor 0 voted against 0 abstained
Liu Guoen
(II) The first meeting of Nomination Committee of the Eleventh Board of Directors
Zhang
for 2025
Nomination Wenxue Xie November 10
3 1. Proposal on the Election of the Chairperson of the Nomination Committee of the None None None
Committee Yunsan Na 2025
eleventh Board of Directors
Chaohong Hu
Result: 5 voted in favor 0 voted against 0 abstained
Mingxing
Liu Guoen
Zhang (II) The second meeting of Nomination Committee of the Eleventh Board of
Nomination Wenxue Xie December 26 Directors for 2025
3 None None None
Committee Yunsan Na 2025 1. Proposal on Appointment of Senior Management
Chaohong Hu Result: 5 voted in favor 0 voted against 0 abstained
Mingxing
902025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Important Other Particulars
Name of Number of Date of opinions and circumstances in of
Members Agenda of meeting
Committee Meetings convention recommendations the performance objections
proposed of duties (if any)
(I) The first meeting of Remuneration and Appraisal Committee of the Tenth Board
of Directors for 2025
Zhang
Remunerati 1. Proposals on 2024 Short-term Incentive and Provision for Incentive Fund
Yongliang
on and 2. Proposal on Confirming the 2024 Compensation Packages for Directors and
Dai Yang 3 March 28 2025 None None None
Appraisal Supervisors of Yunnan Baiyao Group Co. Ltd.Shangguan
Committee 3. Proposal on Confirming the 2024 Compensation Packages for Senior Management
Changchuan
of Yunnan Baiyao Group Co. Ltd.Result: 3 voted in favor 0 voted against 0 abstained
(II) The second meeting of Remuneration and Appraisal Committee of the Tenth
Zhang Board of Directors for 2025
Remunerati
Yongliang 1. Proposal on the Implementation of Short-Term Incentive Distribution for
on and
Dai Yang 3 July 25 2025 Directors Supervisors in 2024 None None None
Appraisal
Shangguan 2. Proposal on the Implementation of Short-Term Incentive Distribution for Senior
Committee
Changchuan Management in 2024
Result: 3 voted in favor 0 voted against 0 abstained
Cao
Yangfeng (III) The first meeting of Remuneration and Appraisal Committee of the Eleventh
Remunerati
Guo Xin Board of Directors for 2025
on and November 10
Shangguan 3 1. Proposal on the Election of the Chairperson of the Remuneration and Appraisal None None None
Appraisal 2025
Changchuan Committee of the Eleventh Board of Directors
Committee
Liu Guoen Result: 5 voted in favor 0 voted against 0 abstained
Hu Mingxing
(I) The first meeting of Audit Committee of the Tenth Board of Directors for 2025
He Yong Xie 1. Summary of the 2024 Internal Audit Work and 2025 Internal Audit Work Plan of
Audit Yunshan the Company
10 March 14 2025 None None None
Committee Zhang 2. Preliminary audit opinion on the 2024 annual report issued by a certified public
Yongliang accountant
Result: 3 voted in favor 0 voted against 0 abstained
912025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Important Other Particulars
Name of Number of Date of opinions and circumstances in of
Members Agenda of meeting
Committee Meetings convention recommendations the performance objections
proposed of duties (if any)
(II) The second meeting of Audit Committee of the Tenth Board of Directors for 2025
1. Proposal on 2024 Annual Report and its summary
2. Proposal on Annual Final Account Report for 2024
3. Proposal on the special audit report of the accounting firm on the summary of the
non-operational funds occupied by the related parties and the transactions of other
He Yong Xie
related funds
Audit Yunshan
10 March 28 2025 4. Proposal on 2024 Profit Distribution Plan None None None
Committee Zhang
5. Proposal on Estimation of the Daily Related Party Transactions in 2025
Yongliang
6. Proposal on Report on the Company’s Financial Budget for 2025
7. Proposal on Self-Evaluation Report on the Company’s Internal Control for 2024
8. Proposal on paying the audit fees (including internal control audit) of Mazars
Certified Public Accountants LLP in 2024
Result: 3 voted in favor 0 voted against 0 abstained
He Yong Xie
(III) The third meeting of Audit Committee of the Tenth Board of Directors for 2025
Audit Yunshan
10 April 25 2025 1. Proposal on the Report of the First Quarter in 2025 None None None
Committee Zhang
Result: 3 voted in favor 0 voted against 0 abstained
Yongliang
He Yong Xie (IV) The fourth meeting of Audit Committee of the Tenth Board of Directors for 2025
Audit Yunshan 1. Implementation Plan for the Selection of an Audit Firm for the Annual Report of
10 July 11 2025 None None None
Committee Zhang Yunnan Baiyao Group Co. Ltd.Yongliang Result: 3 voted in favor 0 voted against 0 abstained
He Yong Xie (V) The fifth meeting of Audit Committee of the Tenth Board of Directors for 2025
Audit Yunshan 1. Proposal on Changing the Company’s Audit Firm for Fiscal Year 2025 (Including
10 August 8 2025 None None None
Committee Zhang Internal Control Audit)
Yongliang Result: 3 voted in favor 0 voted against 0 abstained
He Yong Xie (VI) The sixth meeting of Audit Committee of the Tenth Board of Directors for 2025
Audit Yunshan August 26 1. Proposal on 2025 Interim Report and its summary
10 None None None
Committee Zhang 2025 2. Proposal on the 2025 Special Dividend Plan
Yongliang Result: 3 voted in favor 0 voted against 0 abstained
He Yong Xie (VII) The seventh meeting of Audit Committee of the Tenth Board of Directors for
Audit Yunshan October 29 2025
10 None None None
Committee Zhang 2025 1. Proposal on the Report of the Third Quarter in 2025
Yongliang Result: 3 voted in favor 0 voted against 0 abstained
922025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Important Other Particulars
Name of Number of Date of opinions and circumstances in of
Members Agenda of meeting
Committee Meetings convention recommendations the performance objections
proposed of duties (if any)
Na Chaohong
(VIII) The first meeting of Audit Committee of the Eleventh Board of Directors for
You
2025
Audit Guanghui Xie November 10
10 1. Proposal on the Election of the Chairperson of the Audit Committee of the None None None
Committee Yunsan Liu 2025
Eleventh Board of Directors
Guo’en Cao
Result: 5 voted in favor 0 voted against 0 abstained
Yangfeng
Na Chaohong
You (IX) The second meeting of Audit Committee of the Eleventh Board of Directors for
Audit Guanghui Xie November 24 2025
10 None None None
Committee Yunsan Liu 2025 1. Proposal on the 2025 Annual Report Audit Plan
Guo’en Cao Result: 5 voted in favor 0 voted against 0 abstained
Yangfeng
Na Chaohong
You (X) The third meeting of Audit Committee of the Eleventh Board of Directors for
Audit Guanghui Xie December 29 2025
10 None None None
Committee Yunsan Liu 2025 1. Proposal on Estimation of the Daily Related Party Transactions in 2026
Guo’en Cao Result: 5 voted in favor 0 voted against 0 abstained
Yangfeng
VII. Work of the Audit Committee
Whether the Audit Committee identified any risks to the Company in its supervisory activities during the reporting period
□ Yes RNo
The Audit Committee had no objections to the supervisory matters during the reporting period.
932025 Annual Report of Yunnan Baiyao Group Co. Ltd.
VIII. Employees of the Company
1. Number of employees professional composition and education
Number of in-service employees of the parent company at the
4306
end of the reporting period (person)
Number of in-service employees of major subsidiaries at the
4980
end of the reporting period (person)
Total number of in-service employees at the end of the
9286
reporting period (person)
Total number of salaried employees in the current period
9286
(person)
Number of retired pensioners whose expenses shall be borne by
1979
the parent company and its main subsidiaries (person)
Professional Composition
Category of Professional Composition Number of Professional Composition (Person)
Production staff 1640
Sales staff 5467
Technical staff 1351
Financial staff 271
Administrative staff 557
Total 9286
Education
Category of Education Number (person)
Doctor 60
Master 706
Undergraduate 4647
College 2906
Technical secondary school and below 967
Total 9286
2. Remuneration policy
During the reporting period in line with its overall development strategy the Company continued to deepen
its management philosophy of positive incentives and shared creation and benefits. It continuously refined its
incentive system which combines value-oriented medium- and long-term incentives with short-term incentives to
promote shared interests shared risk-bearing and aligned development goals among employees and the Company.This effectively consolidated the collective momentum for development continuously enhanced organizational
942025 Annual Report of Yunnan Baiyao Group Co. Ltd.
effectiveness and strengthened the stability and innovative vitality of the core talent pool thereby providing a solid
talent foundation and endogenous driving force for the Company’s business innovation and high-quality sustainable
development.In terms of HR management the Company adhered to the principle of maximizing the value of human capital
strengthened the management and control of labor cost efficiency continuously optimized human resources
budgeting and staffing mechanisms and promoted the targeted allocation of human capital to core businesses key
technologies and high-value areas thereby comprehensively enhancing the efficiency of human resources
allocation and the return on investment. Focusing on improving quality and enhancing efficiency the Company
refined a compensation system that links performance to value contribution encouraged employees to actively
participate in sharing in the Company’s success and strengthened cross-departmental collaboration and team
execution in order to achieve mutual empowerment through both the Company’s sustainable development and
employees’ personal growth.The Company strictly complied with all relevant labor laws and regulations placing equal emphasis on legal
compliance and employee welfare and continuously improving its system for protecting employee rights and
providing benefits. During the reporting period the Company strictly complied with relevant national and local
regulations by making full contributions on behalf of all employees for basic pension insurance medical insurance
unemployment insurance work-related injury insurance maternity insurance and housing provident fund. It also
continued to implement its corporate pension plan in a standardized manner thereby effectively safeguarding the
legitimate rights and interests of its employees. At the same time the Company continued to optimize employee
benefits further expanding the coverage of supplemental commercial insurance to enhance employees’ ability to
mitigate accident risks and improve their health protection. These efforts aim to strengthen employees’ sense of job
security and belonging actively fulfill corporate social responsibilities and demonstrate the Company’s
commitment to caring for its employees and taking on social responsibilities.
3. Training program
Yunnan Baiyao adheres to the concept of “People-first Talent-integrated” and mainly keeps training talents
internally and introduces external talents as a supplement committed to building a diverse knowledge system and
a team of multidisciplinary professionals. During the reporting period the Company closely adhered to its “2+3”
952025 Annual Report of Yunnan Baiyao Group Co. Ltd.
two-step development strategy and the “1346” overall approach to Party building. Guided by the goal of establishing
a strategic HR management system the Company continued to upgrade its talent development framework and
enhance organizational capabilities thereby providing a solid talent foundation for the implementation of itsstrategies. First in terms of system design the Company adhered to a dual-drive approach of “political guidanceand professional empowerment.” Taking Yunnan Baiyao Party School as its core platform to strengthen political
education and the Baiyao Academy as its practical platform to focus on professional development the Company
integrated training programs across leadership professional and skills series. By developing a scientifically
designed talent strategy and establishing a comprehensive talent development system we conducted dynamic
assessments based on competency models job qualifications and talent evaluations focusing on identifying and
developing key talent to build a team of ambitious and capable managers and a well-structured talent pipeline.Second in terms of project implementation the Company focused on “people” and “expertise” aligning efforts
across all levels of the organization from top to bottom side to side and short-term to long-term to provide
customized training programs. For management personnel we continued to deepen tiered leadership development
programs and leverage high-level platforms to enhance strategic vision and transformational leadership; for
technical professionals we implemented targeted training tailored to specific professional groups such as R&D
manufacturing supply chain marketing and finance to help them refine their professional skills; and for skilled
workers we launched specialized training camps and modern apprenticeship programs to strengthen their
foundational skills on the front lines. At the same time the Company closely integrated classroom learning with
hands-on project experience using major breakthrough programs and real-world projects as platforms to shift
training from “knowledge acquisition” to “competency certification” thereby enhancing managers’ ability to tackle
complex issues and drive organizational change. Third regarding the development of talent pipelines the Company
based on the criteria for exemplary cadres integrity competence diligence performance and probity established
a closed-loop management system for reserve cadres that includes selection cultivation management and
deployment. We implemented talent development and assessment programs for reserve cadres fostering a deep and
robust talent pool through strict admission and exit standards thereby accelerating the growth of young cadres. By
intensifying job rotation and exchange programs we fostered the growth of outstanding young cadres through
challenging and critical assignments continuously optimized the structure of our workforce and enhance its quality
and built a reserve of key talent to support the Group’s high-quality development. Fourth regarding the
962025 Annual Report of Yunnan Baiyao Group Co. Ltd.establishment of long-term mechanisms the Company adhered to the principle of “putting hardworking individualsfirst” building a scientific standardized and effective talent development system. We reinforced a management
approach characterized by “ambitious goals strong incentives and strict accountability” and established a clear
personnel selection philosophy that prioritizes “integrity performance responsibility and public consensus”
thereby fostering a thriving ecosystem for entrepreneurship and innovation. Through a comprehensive and targeted
talent support system and the cultivation of a strong corporate culture we aimed to energize our internal workforce
strengthen our confidence in growth and foster a mutually beneficial relationship between employees and the
Company.
4. Labor outsourcing
RApplicable □Not applicable
Total man-hours of outsourced labor (hour) 2462144
Total compensation paid for labor outsourcing (RMB) 59614635.32
Note: This outsourcing involves staffing rather than business operations; and the outsourced workforce is relatively stable with 1241
employees on the payroll as at the end of 2025.IX. Profit Distribution and Conversion of Capital Reserve into Share Capital of the Company
Formulation implementation or adjustment of profit distribution policies especially cash dividend policies during the reporting period
RApplicable □Not applicable
The Company’s ongoing commitment revolves around creating value and ensuring reasonable returns for
investors. The Company extensively gathers and incorporates shareholders’ perspectives regarding profit
distribution. It follows sustainable stable compliant and transparent distribution policies that prioritize the
protection of minority shareholders’ legitimate rights and interests. The standards and ratios for dividend distribution
are clearly defined. The profit distribution plan of the Company is submitted to the general meeting of shareholders
for consideration and the decision-making and implementation of profit distribution comply with the relevant
provisions of the Articles of Association and the requirements of the resolutions of the general meeting of
shareholders.The Company’s annual equity distribution plan for 2024 is as follows: Based on the total share capital of the
Company of 1784262603 shares as at the end of 2024 a cash dividend of RMB 11.85 (tax inclusive) for every 10
shares would be paid to all shareholders 0 bonus shares (tax inclusive) would be distributed and no share capital
972025 Annual Report of Yunnan Baiyao Group Co. Ltd.
would be converted from capital reserve. The Company completed the distribution of its 2024 special dividend in
November 2024 paying a cash dividend of RMB 12.13 (tax inclusive) per 10 shares for a total cash dividend
amount of RMB 2164310537.44 (tax inclusive). When combined with the special dividend already distributed in
2024 the proposed cash dividend will be calculated based on the Company’s total issued share capital of
1784262603 shares as at the end of 2024 resulting in a cumulative cash distribution of RMB 23.98 (tax inclusive)
per 10 shares for 2024. The total cumulative cash dividend amounts to RMB 4278661722.00 (tax inclusive)
representing 90.09% of the Company’s net profit attributable to shareholders of the listed company for 2024.The Company’s special dividend plan for 2025 is as follows: Based on a total of 1784262603 shares a cash
dividend of RMB 10.19 (tax inclusive) for every 10 shares will be paid to all shareholders 0 bonus shares (tax
inclusive) will be distributed and no share capital will be converted from capital reserve. In accordance with the
distribution proportion of this plan the total amount of distribution was finally determined based on the number of
shares entitled to profit distribution on the equity registration date when the distribution plan was implemented in
the future. The remaining undistributed profits were reserved for distribution in subsequent years. On September
24 2025 the Company completed the implementation of special dividend distribution for 2025 with a total cash
dividend of RMB 1818163592.46 distributed.Special Description of Cash Dividend Policy
Whether it complies with the provisions of the Articles of Association or the requirements of resolutions of
Yes
shareholders’ meeting:
Whether the standards and ratios for dividend distribution are clearly defined: Yes
Whether relevant decision-making procedures and mechanisms are complete: Yes
Whether the independent directors perform their duties and play their due role: Yes
If the Company does not pay cash dividends it shall disclose the specific reasons and the next steps to be
Yes
taken to enhance the return of investors:
Whether minority shareholders have sufficient opportunities to express their opinions and demands and
Yes
whether their legitimate rights and interests are fully protected:
Whether the conditions and procedures for adjusting or changing the cash dividend policies are compliant
Yes
and transparent:
The Company made profits during the reporting period and the profit available for distribution to shareholders of the parent company
was positive but no cash dividend distribution plan was proposed
□Applicable RNot applicable
Distribution of profits and capital reserve converted into share capital during the reporting period
RApplicable □Not applicable
Number of bonus shares for every 10 shares (share) 0
982025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Amount of dividend for every 10 shares (RMB) dividend
plan for 2025 is as follows: Based on a total of 1784262603 15.83
shares a cash dividend of (tax inclusive)
Base of share capital of the distribution plan (share) 1784262603
Cash dividend amount (RMB) dividend plan for 2025 is as
follows: Based on a total of 1784262603 shares a cash 2824487700.55
dividend of (tax inclusive)
Cash dividend amount in other ways (such as repurchase of
0.00
shares) (RMB)
Total cash dividend (including other methods) (RMB) 2824487700.55
Distributable profits (RMB) 3154933345.92
Proportion of total cash dividends (including other methods)
100%
to total profit distribution
This Cash Dividend
If the Company is in the mature phase and there is no significant capital expenditure arrangement the cash dividend shall account for at
least 80% of the profit distribution when profit distribution is made.Details of Plan on Profit Distribution and Conversion of Capital Reserve into Share Capital
The profit distribution plan of the Company considered and approved by the Board of Directors is as follows: Based on the total share
capital of the Company of 1784262603 shares as at the end of 2025 the Company proposes to distribute cash dividends of RMB 15.83
per 10 shares (tax inclusive) to all shareholders with no bonus shares issued and no capital reserve to increase the share capital. At the same
time the Company completed the distribution of the 2025 special dividend profits in September 2025 distributing cash of RMB 10.19 per
10 shares (tax inclusive) with total cash dividends amounting to RMB 1818163592.46 (tax inclusive).When combined with the special
dividend already distributed in 2025 the proposed cash dividend will be calculated based on the Company’s total issued share capital of
1784262603 shares as at the end of 2025 resulting in a cumulative cash distribution of RMB 26.02 (tax inclusive) per 10 shares for 2025.
The total cumulative cash dividend amounts to RMB 4642651293.01 (tax inclusive) representing 90.09% of the Company’s net profit
attributable to shareholders of the listed company for 2025.X. Implementation of the Company’s Equity Incentive Plan Employee Stock Ownership Plan
(ESOP) or Other Employee Incentive Measures
□Applicable RNot applicable
During the reporting period the Company implemented no equity incentive plan employee stock ownership plan or other employee
incentive measures.XI. Establishment and Implementation of Internal Control System during the Reporting
Period
1. Establishment and implementation of internal control
The Company in accordance with the Company Law the Basic Standard for Enterprise Internal Control and
its related guidelines and other related laws and regulations and by reference to the industry characteristics and the
992025 Annual Report of Yunnan Baiyao Group Co. Ltd.
practice of the Company has continuously improved its internal control system and promoted risk management of
key business areas to improve its overall risk defense capability.In 2025 the Company had an improved internal control system which had been effectively implemented and
helped the Company disclose information timely and accurately and prepare financial reports truly and reliably
ensuring the legal and compliant operation of the Company and the safety and integrity of assets achieving the
expected objectives of internal control and safeguarding the interests of the Company and all shareholders.
2. Details of significant internal control defects discovered during the reporting period
□ Yes RNo
XII. Management Control of Subsidiaries during the Reporting Period
Problems Follow-up
Company Integration Solutions Solution
Integration plan encountered resolution
name progress taken progress
in integration plan
Yunnan Baiyao’s wholly-owned subsidiary Yunnan The change inBaiyao Group TCM Resources Co. Ltd (“TCM ownership ofAnguoResources Company”) will acquire 100% of the Juyaotang has
Juyaotang
equity in Juyaotang through a cash transaction. The been completed
Pharmace None None None None
total consideration for the equity transfer is RMB and it has become
utical Co.
660 million. Upon completion of the transaction a wholly-owned
Ltd.TCM Resources Company will hold 100% of the subsidiary of
equity in Juyaotang. Yunnan Baiyao.Abnormalities in management and control of subsidiaries
□ Yes RNo
XIII. Internal Control Evaluation Report or Internal Control Audit Report
1. Internal Control Evaluation Report
Full-text disclosure date of
Internal Control Evaluation April 1 2026
Report
Full-text disclosure index
of Internal Control http://www.cninfo.com.cn/new/index
Evaluation Report
Total assets of units
included in the evaluation
scope as a percentage of
97.71%
total assets of the
Company’s consolidated
financial statements
Operating income of units
included in the scope of 98.88%
evaluation as a percentage
1002025 Annual Report of Yunnan Baiyao Group Co. Ltd.
of operating income of the
Company’s consolidated
financial statements
Defect Identification Criteria
Category Financial Report Non-Financial Report
1. Major defects: Frauds among directors
supervisors and senior managers of the Company
are discovered; Significant internal control
1. Major defects: Those defects that have been
deficiencies identified and reported to
formally disclosed and have a negative impact
management are not corrected after a reasonable
on the Company’s periodic reporting
time; Control environment is ineffective; The
disclosure; and have violated national laws and
oversight of internal controls by Audit Committee
regulations causing heavy losses to the
and internal audit bodies is ineffective; There are
Company.defects affecting earnings trends; Material
2. Important defects: Those defects that are
misstatements detected by external audit are not
Qualitative Criteria punished by national government authorities
first detected by the Company; The Company
but have not had a negative impact on the
corrects published financial statements.Company’s periodic report disclosures.
2. Important defects: Accounting policies fail to be
3. General defects: Those defects are punished
selected and applied by GAAP;
by provincial (including provincial) and below
Controls or compensatory measures for non-
government departments but do not have a
conventional or special transaction accounting
negative impact on the disclosure of the
treatment fail to be established or implemented.Company’s periodic reports.
3. General defects: Defects other than major
defects and important defects are classified as
general defects.By reference to the identification criteria for
internal control defects in financial reports
Internal control defects with financial
internal control defects that may cause direct
misstatement amount less than 3% of total profit
property losses with an absolute amount less
shall be identified as general defects; Internal
than 3% of total profits are identified as general
control defects with an absolute amount greater
defects; Internal control defects with an
Quantitative Criteria than or equal to 3% but less than 5% of total profit
absolute amount greater than or equal to 3% but
shall be identified as important defects; Internal
less than 5% of total profit shall be identified as
control defects with an absolute amount greater
important defects; Internal control defects with
than or equal to 5% of total profit shall be
an absolute amount greater than or equal to 5%
identified as major defects.of total profit shall be identified as major
defects.Number of Major Defects
0
in Financial Reports (Item)
Number of Major Defects
in Non-Financial Reports 0
(Item)
Number of Important
Defects in Financial 0
Reports (Item)
Number of Important
Defects in Non-Financial 0
Reports (Item)
2. Internal Control Audit Report
RApplicable □Not applicable
Considerations about Internal Control Audit Report
1012025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The Company has maintained effective internal controls over financial reporting in all material respects in accordance with the
requirements of the internal control framework and relevant regulations.Disclosure of Internal Control Audit Report Disclosed
Full-text disclosure date of Internal Control Audit Report April 1 2026
Full-text disclosure index of Internal Control Audit Report http://www.cninfo.com.cn/new/index
Opinion type of Internal Control Audit Report Unqualified opinion
Whether there are major defects in non-financial reports No
Did the accounting firm issue internal control audit reports with qualified opinion
□ Yes RNo
Whether the internal control audit report issued by the accounting firm was consistent with the self-evaluation report of the Board of
Directors
RYes □No
Was a non-standard audit opinion on internal controls issued for the reporting period or the prior year
□ Yes RNo
XIV. Rectification of Self-inspection Issues in Special Actions for Governance of Listed
Companies
Not applicable.XV. Environmental Information Disclosure
Are the listed company and its major subsidiaries included in the list of companies required to disclose environmental information in
accordance with the law
RYes □No
Number of companies included in the list of
enterprises required to disclose
4
environmental information in accordance
with the law (number of companies)
Index for Querying Reports on the Disclosure of Environmental Information in Accordance with
No. Enterprise name
the Law
http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enterpriseInfoXTXH=a0f410dc-
1 Yunnan Baiyao Group Co. Ltd.
2d86-4b05-bcb2-6c087ea96410&XH=1676796182864043921408&year=2025
Yunnan Baiyao Group TCM http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enterpriseInfoXTXH=b18de973-
2
Resources Co. Ltd. 4492-4d18-9e83-69981a37ac71&XH=1676796185788043921408&year=2025
Yunnan Baiyao Group Wenshan http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enterpriseInfoXTXH=4b16aa84-
3
Qihua Co. Ltd. 7e69-418f-a8b9-8ce6e4d8bf56&XH=1676796204034043921408&year=2025
Yunnan Baiyao Group Dali http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enterpriseInfoXTXH=31de9536-
4
Pharmaceutical Co. Ltd. 0920-46ec-9d52-1dfbae1dde08&XH=1682673698668045334528&year=2025
XVI. Social Responsibility
For details please refer to the 2025 Sustainability Report disclosed by the Company on the same day at
www.cninfo.com.cn.
1022025 Annual Report of Yunnan Baiyao Group Co. Ltd.
XVII. Consolidated and Expanded Achievements in Poverty Alleviation and Rural
Revitalization
In 2025 guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era Yunnan
Baiyao Group thoroughly implemented the spirit of the Opinions of the Central Committee of the Communist Party
of China and the State Council on Further Deepening Rural Reform and Steadily Advancing Comprehensive Rural
Revitalization as well as the policy decisions and arrangements of the Central Committee the State Council the
Provincial Party Committee and the Provincial Government regarding rural revitalization. The Group earnestly
carried out the requirements outlined in the Key Points for Targeted Assistance Work in Yunnan Province in 2025
and by combining the resource endowments of the assisted villages with the Group’s strengths adhered to a ruralrevitalization model featuring “organizational leadership + integration of Party building + technical guidance +leading the way to prosperity + talent cultivation + consumption-based assistance.” The Group continued to
intensify its support for Chazhiluo Village and Xinle Village in Pantiange Township Weixi County Diqing
Prefecture while constantly exploring and innovating measures and focusing efforts precisely resulting in positive
progress across all areas of work.First we strengthened organizational leadership. In 2025 the Party Committee of Yunnan Baiyao Group
attached great importance to this work continuously strengthening organizational leadership. We treated designated
assistance as a major political task and social responsibility with utmost priority. We coordinated the planning of
targeted poverty alleviation efforts focused on strengthening the village-based work teams improved management
mechanisms ensured adequate resource allocation and advanced the assistance work with precision. During the
year the Party Committee of the Group held two meetings to discuss and deploy rural revitalization efforts hear
reports on the progress of these initiatives stay abreast of developments and identify challenges and explore
solutions. This year Zhang Wenxue the Party Secretary and Chairman of the Group and the Deputy Party Secretary
led separate delegations to Weixi County to conduct research and provide guidance on targeted poverty alleviation
efforts. They inspected the construction of the GAP-certified base as well as the harvesting and processing of fresh
woody clove in Chazhiluo Village and Xinle Village. They also made arrangements for the assistance work and
outlined the direction and requirements for the next phase of efforts. A delegation led by the head of the Procurement
Department of the Group’s TCM Resources Business Group and comprising senior technical and procurement
experts traveled to Weixi County to hold discussions with the county’s top leaders and key officials from the Rural
1032025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Revitalization Bureau. The delegation conducted an on-site inspection of the Weixi County TCM Industrial Park
and the interplanting of Aucklandiae Radix trees at the cultivation bases in the two assisted villages and coordinated
with farmers in those villages regarding the procurement of Aucklandiae Radix.Second we reinforced organizational support. We continued to ensure precise selection and strengthen the
teams stationed in villages. We selected and deployed a core group of personnel with strong political integrity and
expertise in relevant fields (pharmacy Party affairs and crop cultivation and processing) to serve in the villages on
a rotational basis. A total of six village-based work team members have been assigned including two who serve as
First Secretaries. This approach aligns the “needs of the village” with the “capabilities of the enterprise” and
implements a “3-3 system” team configuration with three work team members assigned to each village. We aim to
combine strict management with genuine care. On the one hand leveraging the Company’s OA management systemwe have implemented a management mechanism for village-based assistance work that involves “planning at thebeginning of the month evaluation at the end of the month and monthly summary reports.” We link evaluation
results to performance-based compensation awards and career development while ensuring that the spirit of the
Central Committee’s Eight-Point Decision is upheld throughout the process. By establishing mechanisms such as
family members’ support for integrity and public oversight we have strengthened our integrity defense and created
a closed-loop management system. On the other hand in strict accordance with the Detailed Rules for the
Management of Expenditures for the Rural Revitalization Work Team of Yunnan Baiyao Group Stationed in Weixi
County a full allocation of RMB 120000 was made for the team’s operational expenses to ensure adequate
compensation for team members. The labor union organized care and welfare activities for the team to encourage
them to devote themselves fully to their work on the front lines. In 2025 the village-based work team fulfilled its
duties conscientiously and carried out its work in strict accordance with relevant policy requirements and company
regulations. Neither the team nor its members received any public censure or disciplinary action from the state
prefecture or county authorities for dereliction of duty.Third we continuously consolidated and expanded the achievements in poverty alleviation. We treated
the consolidation and expansion of poverty alleviation achievements as a major political task strictly implemented
the “four no-removal” requirements and vigorously advanced dynamic monitoring and assistance efforts to prevent
relapse into poverty. We have helped six households comprising 24 individuals to permanently eliminate poverty
risks identified six households with 22 individuals at risk of relapsing into poverty due to illness education
1042025 Annual Report of Yunnan Baiyao Group Co. Ltd.
expenses or accidents and promptly included them in monitoring and assistance programs thereby resolutely
upholding the bottom line of preventing large-scale relapse into poverty. We vigorously promoted development-
oriented assistance focused on strengthening the local industry and actively promoted the intercropping of corn
and Aucklandiae Radix in the designated assistance villages. We established an industrial development fund and
provided incentives to farmers thereby encouraging 96 households that had previously been living in poverty and
were under monitoring as well as 44 general households to participate in the Aquilaria cultivation industry. We
organized a procurement delegation to travel deep into Weixi to conduct contract-based purchasing buying and
selling local specialty agricultural products and helping local medicinal herbs make the transition from the “fields”
to the market. In collaboration with Weixi County we drafted the Three-Year Action Plan for the High-Quality
Development of Traditional Chinese Medicinal Materials in Weixi County (2025–2027) and promoted
demonstration techniques for intercropping “grain and medicinal materials” in multiple villages that had recently
been lifted out of poverty driving a steady expansion of the county’s medicinal materials cultivation area to 107000
mu with an estimated output value of RMB 660 million and providing solid support for the sustainable
development of Weixi County’s industries.Fourth we are committed to revitalizing talent resources fortifying the cornerstone of sustainable ruralgrowth. Yunnan Baiyao has always upheld the belief that “rural revitalization depends on talent and to foster talenteducation must come first.” The Company continued its “Golden Autumn Scholarship” program this year in
Pantiange Township Weixi County allocating RMB 164000 in scholarships to support 92 students from across the
township who were admitted to undergraduate and vocational programs. From 2015 to 2025 a total of
approximately RMB 810000 was invested in educational assistance funds helping 528 students from across the
township successfully enroll in college and providing a talent pool to support the long-term development of
Pantiange Township. At the same time the Company revised and improved the Specialized Technical Solution of
Yunnan Baiyao for the Cultivation of Aucklandia costus and dispatched senior TCM materials experts to the village
to provide technical training and guidance. A total of 10 training sessions were conducted reaching 182 participants
to help farmers improve their cultivation skills. With such measures we developed and nurtured 10 leading figures
to help local farmers increase their income with a commitment to cultivating talent for the village’s industrial
development.
1052025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Fifth we promoted the development of distinctive industries that enrich the people strengthening
endogenous growth momentum. Building on Weixi’s unique resources Yunnan Baiyao Group has actively
promoted the “grain-medicine” intercropping model with the support of its village-based work teams. Following
the pilot planting in 2024 Yunnan Baiyao Group allocated RMB 101500 in special funds to Chazhiluo Village and
Xinle Village in Pantiange Township in 2025. We provided subsidies to farmers in both villages who practiced
intercropping corn with Aucklandiae Radix successfully expanding the “Corn-Aucklandiae Radix intercropping”
base to 507 mu. It is currently the harvesting season for Aucklandia costus and the two villages are expected to
generate a total output value of RMB 1.05 million through Aucklandia costus. Among them Li Xiangrong a leading
figure in local economic development has increased his household income by RMB 80000 through this model
demonstrating a significant driving effect. At the same time the demonstration planting of Bletilla striata isprogressing steadily. With an investment of RMB 16000 in seedlings and adopting an approach of “Party-buildingleadership combined with industrial practice” 10 demonstration plots totaling 4 mu have been established laying
the groundwork for future expansion and promotion. In 2025 the Group’s TCM Materials Procurement Department
took the initiative to go to the front lines visiting designated assistance villages to investigate the harvesting and
processing quality of fresh Aucklandiae Radix plan procurement strategies and pledge to purchase all Aucklandiae
Radix produced by farmers in the assisted villages. In addition we actively collaborated with village-level collective
enterprises and cooperatives to help farmers establish market sales channels. This practice has attracted attention
from numerous media outlets including Yunnan SASAC Diqing News Shangri-La News xuexi.cn and Diqing
Learning Platform and has been covered in depth in an article titled Cazhiluo Village Overcame Challenges and
Boosted Income Through the “Three Ones” Initiative.Sixth we innovated industrial assistance models to broaden income-generating channels for the masses.The Company actively participated in the “Golden Autumn Campaign for Consumption-Based Poverty Alleviation”
and the “Spring Festival Campaign for Consumption-Based Poverty Alleviation.” Through the “832 Platform” we
purchased a total of 8862 units of agricultural and sideline products from Weixi County amounting to RMB 886200
thereby helping farmers increase their income and contributing to rural revitalization. In addition Yunnan Baiyao
Group fully leveraged its industrial strengths to procure a total of 16935 kilograms of medicinal herbs including
Gentiana macrophylla and Angelica sinensis through Shangri-La Hezheng Tibetan Medicine Co. Ltd and Diqing
Development Zone Sanjiang Bio-Development Co. Ltd at a total cost of RMB 1.1512 million. This move has
1062025 Annual Report of Yunnan Baiyao Group Co. Ltd.
effectively addressed the difficulties local farmers faced in selling their medicinal herbs and opened up new avenues
for them to increase their income and improve their livelihoods.Seventh we promoted cultural revitalization in villages and fostered new trends of rural civilization.Building on the RMB 300000 investment made in 2024 an additional RMB 150000 was allocated in 2025 to
design and renovate the exhibition hall at the Peacock Dance Heritage Site in Chazhiluo Village produce a
promotional video for the Lisu Peacock Dance preserve and commemorate the ancient well install informational
bulletin boards throughout the village in order to improve the village’s appearance preserve and promote intangible
cultural heritage and the unique local ethnic culture and build a “Beautiful Rural Village” imbued with ethnic
cultural characteristics. To mark the 104th anniversary of the founding of the Communist Party of China through
events such as “Celebrating July 1st Grateful to the Party Welcoming the National Day and Writing a New Chapter”as well as activities promoting filial piety and respect for the elderly under the theme “Warmth in the Golden AutumnLove on the Double Ninth Festival” we organized cultural performances and recreational sports for villagers and
held a “Fulfilling the Dream of Visiting the Capital” photography event for seniors aged 60 and above presenting
them with commemorative prints to enrich rural spiritual and cultural life. An investment of RMB 10000 was made
in Xinle Village to implement a “points-based system” for management with the aim of encouraging villagers to
voluntarily comply with village regulations and actively participate in public affairs thereby promoting a civilized
village atmosphere and fostering harmony and stability.Eighth we put health concepts into practice enhancing people’s sense of health and well-being.Leveraging the strengths of Baiyao we organized and implemented the “Healthy Villages Tour” volunteer activity
distributing daily care products such as toothpaste and shampoo to households that have been lifted out of poverty
while also promoting health education to help villagers develop a greater awareness of health and wellness. In 2025
we organized three “Healthy Village Tour” events serving more than 100 people and providing health and daily
necessities worth over RMB 80000. We purchased long-term medications for villagers to address practical issues
such as difficulty in obtaining medicine and transportation costs exceeding the cost of the medicine itself. We also
distributed and applied pain-relieving plasters to elderly residents suffering from rheumatism and joint pain
bringing care directly to their doorsteps.
1072025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section V Significant Events
I. Performance of Commitments
1. Commitments of the Company’s De Facto Controller Shareholders Related Parties and Acquirers as well as the Company Itself and Other Related
Entities Fulfilled during the Reporting Period or Ongoing at the Period-End
RApplicable □Not applicable
Commitment Commitment Commitment Performance
Commitments Commitment Party Contents
Type Time Period Status
1. Our company is not engaged in any business or activity that
is the same as similar to or resembling and constitutes or may
constitute directly or indirectly a competition in any aspect
with the listed company’s any existing business nor will we
actively provide in any way any assistance in finance
business management etc. or any trade secrets such as
technical information business operations sales channels to
any enterprises agencies or other economic organizations that
compete with the listed company in any of its existing
Remain
Commitments business. 2. As of the date of issuance of this commitment
Commitments effective during
made in the letter our company will legally take necessary and possible
Yunnan Investment regarding December 10 the period of
acquisition measures to avoid and urge any other enterprises under our In progress
Group horizontal 2021 holding indirect
report or equity actual control to avoid any businesses or activities that may in
competition stake in Yunnan
change report any way substantially or potentially constitute a horizontal
Baiyao
competition or a conflict of interest with the principal
businesses of the listed company. If in the future a material
conflict of interest arising from substantial or potential
horizontal competition between our company and any
enterprises under our control and the listed company our
company and such enterprises under our actual control will
give up that business opportunity that may result in a material
horizontal competition and thus lead to a substantial conflict
of interest or take appropriate measures permitted by other
1082025 Annual Report of Yunnan Baiyao Group Co. Ltd.
laws and regulations to eliminate the potential impact of
material horizontal competition. 3. Our company will not by
virtue of any information learned or known from the listed
company assist our company itself or any third party in
engaging in any business activities that may in any way
substantially or potentially constitute a horizontal competition
with the principal businesses of the listed company.To protect the legitimate rights and interest of any and all of
the shareholders of the listed company our company
undertakes to warrant: 1. The personnel independence of the
listed company that is: (1) The general manager deputy
general manager CFO secretary of the Board of Directors
and other senior management personnel of the listed company
will work full-time and receive compensation in the listed
company with holding no positions other than directors or
supervisors or receiving no compensation in any other
enterprises under the control of our company for continuously
maintaining the independence of personnel of the listed
company; (2) The listed company has a complete and
independent labor personnel and salary management system Remain
Commitments Commitments to
which is fully independent from our company and any other effective during
made in the maintain the
Yunnan Investment enterprises under our control; (3) The directors supervisors December 10 the period of
acquisition independence of In progress
Group and senior management personnel of the listed company are 2021 holding indirect
report or equity the listed
elected or appointed in accordance with legal procedures and stake in Yunnan
change report company
our company will not interfere with the personnel appointment Baiyao
and removal decisions already made by the Board of Directors
and the general meeting of the listed company. 2. The asset
independence of the listed company that is:
(1) The listed
company has independent and complete assets all of which
are under the control of the listed company and are
independently owned and operated by the listed company; (2)
Our company and any other enterprises under our control do
not and will not in any way occupy the funds assets and other
resources of the listed company in violation of laws and
regulations; (3) Our company and any other enterprises under
our control will not use the assets of the listed company as
guarantee for our and their debts in violation of regulations. 3.
1092025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The financial independence of the listed company that is: (1)
The listed company continues to maintain its independent
financial department and independent financial accounting
system; (2) The listed company opens an independent bank
account and does not share a bank account with our company
or any other enterprises under our control; (3) The listed
company is able to make independent financial decisions
without our company’s illegal interference with its asset
utilization scheduling; (4) The independence of the listed
company’s financial personnel who will not work part-time or
receive remuneration in any other enterprises under our
control; (5) The listed company legally pays taxes
independently. 4. The institutional independence of the listed
company that is: (1) The listed company continues to maintain
a sound corporate governance structure and has an
independent and complete organizational structure; (2) The
general meeting Board of Directors independent directors
Supervisory Committee general manager etc. of the listed
company independently exercise their powers in accordance
with laws regulations and the listed company’s articles of
association; (3) The listed company has an independent and
complete organizational structure without institutional
confusion with any other enterprises under our control. 5. The
business independence of the listed company that is: (1) The
listed company has the assets personnel qualifications and
capabilities to independently carry out business activities and
also has the capabilities to independently and continuously
operate in the market; (2) The listed company has minimized
related party transactions between our company and any other
enterprises under our control and the listed company as much
as possible and fairly carry out necessary and inevitable
related party transactions at fair prices in accordance with
market-oriented principles with transaction procedures and
information disclosure obligations fulfilled in accordance with
relevant laws regulations and normative documents. 6. The
listed company maintains independence from our company
and any other enterprises under our control in any other
1102025 Annual Report of Yunnan Baiyao Group Co. Ltd.
aspects.
1. After the completion of this equity transfer our company
will consciously safeguard the interest of the listed company
and any and all of its shareholders and minimize and avoid
related party transactions with the listed company. We will
not by virtue of our indirect stake in the listed company seek
for improper benefits or harm any interest of the listed
company and any and all of its shareholders in related party
transactions. 2. Our company does not and will not by virtue
of our indirect stake in the listed company and its own
controlling influence seek from the listed company for better
commercial terms for business cooperation than that given to
the third parties in the market for itself or for any other
enterprises under our control. 3. Our company does not and
will not by virtue of our indirect stake in the listed company
and its own controlling influence seek for privileges for itself
or any other enterprises under our control to enter into Remain
Commitments
transactions with the listed company. 4. After completing this effective during
made in the Commitments
Yunnan Investment equity transfer our company will strictly adhere to the December 10 the period of
acquisition regarding related In progress
Group provisions of the Company Law of the People’s Republic of 2021 holding indirect
report or equity party transactions
China the Articles of Association of Yunnan Baiyao Group stake in Yunnan
change report
the Rules of Procedure for the General Meetings and the Baiyao
Decision System for Related Party Transactions of the Listed
Company when engaging in inevitable related party
transactions with the listed company. We are committed to
conducting these transactions in a transparent fair and
equitable manner. This involves adhering to commercial
principles such as “fairness impartiality and voluntariness.”
We will enter into fair and reasonable transaction contracts
with the listed company ensuring that pricing policies are
developed based on market fairness impartiality and
openness. This approach guarantees the fairness of transaction
prices. 5. After the completion of this equity transfer our
company and any other enterprises under our control will not
illegally occupy the funds and assets of the listed company
and under no circumstances will the listed company be
required to provide any form of guarantees to our company or
1112025 Annual Report of Yunnan Baiyao Group Co. Ltd.
any other enterprises under our control.State-owned Assets
Supervision and Remain
In the future when the time is ripe SASAC of Yunnan
Administration effective during
Commitments Province and New Huadu shall urge Baiyao Holdings to
Commission of Yunnan Commitments the period of
made in the gradually inject the high-quality assets related to Yunnan
Provincial People’s regarding holding the
acquisition Baiyao’s existing business and future development areas into March 23 2017 In progressGovernment (“SASAC horizontal shares ofreport or equity Yunnan Baiyao Group. Both SASAC of Yunnan Province andof Yunnan Province”) competition Yunnan Baiyao
change report New Huadu will also strictly comply with the regulations to
New Huadu Industrial (directly and
avoid horizontal competition.Group Co. Ltd (“New indirectly)Huadu”)
1. New Huadu and any other enterprises under our control will
try the best to avoid related party transactions with Yunnan
Baiyao. For inevitable related party transactions or those
occurring for reasonable reasons New Huadu will undertake
to conduct such transactions on an equal and voluntary basis
in the principles of fairness impartiality and compensation for
equal value with the transaction prices to be determined based
on the reasonable prices recognized in the market. 2. New
Remain
Huadu and any other enterprises under our control will strictly
effective during
Commitments comply with the avoidance provisions on related party
the period of
made in the Commitments transactions set out in Yunnan Baiyao’s articles of association
holding the
acquisition New Huadu regarding related and in other relevant regulations. All related party transactions March 23 2017 In progress
shares of
report or equity party transactions involved will be carried out in accordance with the decision-
Yunnan Baiyao
change report making procedures for related party transactions for Yunnan
(directly and
Baiyao and legal procedures will be followed to ensure not to
indirectly)
harm any legitimate rights and interest of Yunnan Baiyao and
any other shareholders through related party transactions. 3. If
New Huadu and any other enterprises under our control violate
any of the above statements and commitments leading to any
damages to any rights and interest of Yunnan Baiyao New
Huadu agrees to bear any and all of the corresponding
compensation liabilities for such damages so caused to
Yunnan Baiyao.Commitments State-owned Equity Commitments 1. State-owned Equity Management Company has undertaken Remain
made during Management Company regarding related the previous commitments of SASAC of Yunnan Province: October 31 2018 effective during In progress
asset New Huadu and its party transactions After the completion of this significant asset restructuring the period of
1122025 Annual Report of Yunnan Baiyao Group Co. Ltd.
restructuring acting-in-concert parties SASAC of Yunnan Province will try its best to avoid related holding the
party transactions with the listed company. For inevitable shares of
related party transactions or those occurring for reasonable Yunnan Baiyao
reasons SASAC of Yunnan Province will undertake to (directly and
conduct such transactions on an equal and voluntary basis in indirectly)
the principles of fairness impartiality and compensation for
equal value with the transaction prices to be determined based
on the reasonable prices recognized in the market. SASAC of
Yunnan Province will strictly comply with the provisions of
relevant laws regulations normative documents and the
articles of association of the listed company perform the
decision-making procedures and information disclosure
obligations for related party transactions and warrant not to
harm any legitimate rights and interest of the listed company
and any other shareholders through related party transactions.This commitment letter shall come into effect and be
irrevocable as of the date of official signature by SASAC of
Yunnan Province. SASAC of Yunnan Province warrants the
effective fulfillment of these commitments and the listed
company has the right to supervise its fulfillment of this
commitment letter. If SASAC of Yunnan Province fails to
effectively fulfill this commitment letter leading to any actual
losses to the listed company SASAC of Yunnan Province will
compensate for any and all of such direct or indirect losses so
caused to the listed company.
2. New Huadu and its acting-in-concert parties undertake that:
after the completion of this merger and overall listing our
company/I and any enterprises under our/my control will try
the best to avoid related party transactions with the listed
company. For inevitable related party transactions or those
occurring for reasonable reasons our company/I undertake (s)
to conduct such transactions on an equal and voluntary basis
in the principles of fairness impartiality and compensation for
equal value with the transaction prices to be determined based
on the reasonable prices recognized in the market. Our
company/I and any other enterprises under our/my control will
strictly comply with the provisions of relevant laws
1132025 Annual Report of Yunnan Baiyao Group Co. Ltd.
regulations normative documents and the articles of
association of the listed company perform the decision-
making procedures and information disclosure obligations for
related party transactions and warrant not to harm any
legitimate rights and interest of the listed company and any
other shareholders through related party transactions. This
commitment letter shall come into effect and be irrevocable as
of the date of official signature by our company/me. Our
company/I warrant(s) the effective fulfillment of these
commitments and the listed company has the right to
supervise the fulfillment of this commitment letter. If our
company/I fail(s) to effectively fulfill this commitment letter
leading to any actual losses to the listed company our
company/I will compensate for any and all of such direct or
indirect losses so caused to the listed company.After the completion of this merger and overall listing our
company/institution will maintain independence from the
listed company in terms of personnel assets business
institutions and finance in accordance with relevant laws
regulations and normative documents. We will not by virtue
of the identity as a related party of the listed company engage
in the acts that affect the independence of the listed company’s
Remain
personnel assets business institutions and finances or harm
effective during
Commitments to any rights and interest of the listed company and any other
Commitments the period of
State-owned Equity maintain the shareholders. Instead we will effectively ensure the
made during holding the
Management Company independence of independence of the listed company in terms of personnel October 31 2018 In progress
asset shares of
New Huadu the listed assets business institutions finance etc. This commitment
restructuring Yunnan Baiyao
company letter shall come into effect and be irrevocable as of the date
(directly and
of official signature by our company/institution. Our
indirectly)
company/institution warrants the effective fulfillment of these
commitments and the listed company has the right to
supervise the fulfillment of this commitment letter. If our
company/institution fails to effectively fulfill this commitment
letter leading to any actual losses to the listed company our
company/institution will compensate for any and all of such
direct or indirect losses so caused to the listed company.Commitments Baiyao Holdings State- Commitments If Yunnan Baiyao and its subsidiaries within the scope of its December 11 Remain In progress
1142025 Annual Report of Yunnan Baiyao Group Co. Ltd.
made during owned Equity regarding real consolidated financial statements and Baiyao Holdings and 2018 effective during
asset Management Company estate business its subsidiaries within the scope of its consolidated financial the period of
restructuring New Huadu statements engaged in any illegal activities in the domestic real holding the
estate development business during the reporting period such shares of
as undisclosed land vacancy speculation of land property Yunnan Baiyao
hoarding and price gouging which have caused any losses to (directly and
Yunnan Baiyao and investors our company/institution will indirectly)
bear any and all of corresponding compensation liabilities for
such losses as required by relevant laws regulations and
securities regulatory authorities.If Yunnan Baiyao and its subsidiaries within the scope of its
consolidated financial statements and Baiyao Holdings and
its subsidiaries within the scope of its consolidated financial
statements engaged in any illegal activities in the domestic real
Commitments
Directors and senior Commitments estate development business during the reporting period such
made during December 11 Remain
management of the regarding real as undisclosed land vacancy speculation of land property In progress
asset 2018 effective
listed company estate business hoarding and price gouging which have caused any losses to
restructuring
Yunnan Baiyao and investors I will bear any and all of the
corresponding compensation liabilities for such losses as
required by relevant laws regulations and securities regulatory
authorities.
1. Our company/institution will not interfere with any
operation and management activities of the listed company
beyond authority nor will it encroach on any interest of the
listed company.
2. After the date of issuance of this commitment letter if the Remain
Commitments securities regulatory authorities make other regulatory effective during
Commitments Baiyao Holdings State- regarding requirements regarding compensatory measures and related the period of
made during owned Equity compensatory commitments and the above commitments fail to meet such December 11 holding the
In progress
asset Management Company measures after new regulatory regulations of the securities regulatory 2018 shares of
restructuring New Huadu dilution of authorities our company/institution will undertake to issue Yunnan Baiyao
immediate returns supplementary commitments in accordance with their then (directly and
latest relevant regulations. indirectly)
3. Our company/institution undertakes to effectively fulfill the
relevant compensatory measures formulated by the listed
company and the relevant commitments made by our
company/institution. If our company/institution violates these
1152025 Annual Report of Yunnan Baiyao Group Co. Ltd.
commitments and causes any losses to the listed company or
investors our company/institution is willing to legally bear
any and all of the corresponding compensation liabilities for
such losses.
1. I undertake not to transfer benefits to any other units or
individuals without compensations or under unfair conditions
nor to harm any interest of the listed company in any other
way. 2. I undertake to restrain my official consumption. 3. I
undertake not to use the assets of the listed company to engage
in investment or consumption activities unrelated to my duties.
4. I undertake that the compensation system to be formulated
by the Board of Directors or Remuneration Committee in the
future will be linked to the implementation of compensatory
measures taken by the listed company. 5. I undertake that the
Commitments
exercise conditions of the listed company’s equity incentives
Commitments regarding
Directors supervisors to be announced in the future will be linked to the
made during compensatory December 11 Remain
and senior management implementation of the compensatory measures taken by the In progress
asset measures after 2018 effective
of the listed company listed company. 6. I undertake to effectively fulfill the relevant
restructuring dilution of
compensatory measures formulated by the listed company and
immediate returns
any commitments made by myself regarding compensatory
measures. If I violate or refuse to fulfill any of the above
commitments leading to any losses to the listed company or
any and all of its shareholders I’m willing to legally bear any
and all of the corresponding compensation liabilities. This
commitment letter shall come into effect as of the date of my
signature and shall constitute a binding legal document on me
upon its effectiveness. If I violate this commitment letter I’m
willing to bear any and all of the corresponding legal
liabilities.
1. State-owned Equity Management Company has undertaken Remain
the previous commitments of SASAC of Yunnan Province: In effective during
Commitments Commitments order to avoid horizontal competition with the listed company the period of
State-owned Equity
made during regarding and safeguard the legitimate rights and interest of the listed holding the
Management Company October 31 2018 In progress
asset horizontal company and other shareholders State-owned Equity shares of
New Huadu
restructuring competition Management Company solemnly makes the following Yunnan Baiyao
statements and commitments: After the completion of this (directly and
transaction State-owned Equity Management Company will indirectly)
1162025 Annual Report of Yunnan Baiyao Group Co. Ltd.
not directly engage in any businesses that are the same as or
similar to and constitute a competition with the principal
businesses of the listed company.
2. New Huadu undertakes that: As of the issuance date of this
commitment letter our company and any enterprises under our
control have not invested in any company enterprise or other
operating entity engaged in any business the same as or
similar to the principal businesses of the listed company or co-
operating or co-engaged with others in business the same as
or similar to the principal businesses of the listed company.After the completion of this transaction our company and any
enterprises under our control will not directly or indirectly
engage in any form (including but not limited to investment
M&A affiliation joint ventures cooperation partnership
contracting or leasing operations and equity participation) in
businesses that are the same as or similar to and constitute a
competition with the principal businesses of the listed
company nor will we directly or indirectly own any absolute
or relative control over any other companies enterprises or
operating entities that engage in businesses that are the same
as or similar to and constitute a competition with the principal
businesses of the listed company.During the commitment period mentioned above if the listed
company actually further expands its existing principal
businesses and our company and any enterprises under our
control have not yet engaged in production or operation of
such new businesses our company and any enterprises under
our control will not engage in such new businesses that
compete with the principal businesses of the listed company
unless the listed company notifies us in writing that it would
no longer engage in such new businesses.During the aforementioned commitment period if our
company and any enterprises under our control obtain from
any third party any business opportunity that competes or may
compete with the principal businesses of the listed company
we shall immediately notify the listed company. If the listed
company provides a positive response that it is willing to take
1172025 Annual Report of Yunnan Baiyao Group Co. Ltd.
advantage of that business opportunity within the reasonable
period specified in the notice our company and any enterprises
under our control will abandon that business opportunity.If our company and any enterprises under our control violate
any of the above statements and commitments leading to any
damages to any rights and interest of the listed company our
company agrees to bear any and all of the corresponding
compensation liabilities for such damages so caused to the
listed company.Our company/I has/have provided necessary authentic
accurate complete and effective documents materials or oral
statements and explanations for this transaction at this stage
without any concealments false records or significant
omissions. The provided copy materials or photocopies are
consistent and aligned with the original materials or originals.The signatures and seals on the provided documents and
materials are authentic with necessary legal procedures for
such signatures and seals having been fulfilled and legal
Commitments
authorizations having been obtained. All statements and
regarding the
Commitments explanations of facts are consistent with the facts that
Directors supervisors authenticity
made during occurred. According to the progress of this transaction our Remain
and senior management accuracy and June 10 2021 In progress
asset company/I will provide relevant information and documents in effective
of the listed company completeness of
restructuring a timely manner in accordance with relevant laws regulations
the information
rules and relevant provisions of the CSRC and the stock
provided
exchange and ensure that the information and documents to
be constantly provided still meet the requirements of
authenticity accuracy completeness and effectiveness. Our
company/I undertake (s) and warrant (s) the information
provided or disclosed in this transaction is authentic accurate
complete and effective without false records misleading
statements or material omissions and is/am willing to bear
any and all of the corresponding individual and joint legal
liabilities for that.Commitments Commitments As of the date of the issuance of this commitment our
made during State-owned Equity regarding the company has provided necessary authentic accurate Remain
June 10 2021 In progress
asset Management Company authenticity complete and effective documents materials or oral effective
restructuring accuracy and statements and explanations for this transaction at this stage
1182025 Annual Report of Yunnan Baiyao Group Co. Ltd.
completeness of without any concealments false records or significant
the information omissions. The provided copy materials or photocopies are
provided consistent and aligned with the original materials or originals.The signatures and seals on the provided documents and
materials are authentic with necessary legal procedures for
such signatures and seals having been fulfilled and legal
authorizations having been obtained. All statements and
explanations of facts are consistent with the facts that
occurred. According to the progress of this transaction our
company will provide relevant information and documents in
a timely manner in accordance with relevant laws regulations
rules and relevant provisions of the CSRC and the stock
exchange and ensure that the information and documents to
be constantly provided still meet the requirements of
authenticity accuracy completeness and effectiveness. Our
company undertakes and warrants the information provided or
disclosed in this transaction is authentic accurate complete
and effective without false records misleading statements or
material omissions and is willing to bear any and all of the
corresponding individual and joint legal liabilities for that.Our company and our acting-in-concert parties have provided
necessary authentic accurate complete and effective
documents materials or oral statements and explanations for
this transaction at this stage without any concealments false
records or significant omissions. The provided copy materials
Commitments or photocopies are consistent and aligned with the original
regarding the materials or originals. The signatures and seals on the provided
Commitments
New Huadu and its authenticity documents and materials are authentic with necessary legal
made during Remain
acting-in-concert parties accuracy and procedures for such signatures and seals having been fulfilled June 10 2021 In progress
asset effective
completeness of and legal authorizations having been obtained. All statements
restructuring
the information and explanations of facts are consistent with the facts that
provided occurred. According to the progress of this transaction our
company and our acting-in-concert parties will provide
relevant information and documents in a timely manner in
accordance with relevant laws regulations rules and relevant
provisions of the CSRC and the stock exchange and ensure
that the information and documents to be constantly provided
1192025 Annual Report of Yunnan Baiyao Group Co. Ltd.
still meet the requirements of authenticity accuracy
completeness and effectiveness. Our company and our acting-
in-concert parties undertake and warrant the information
provided or disclosed in this significant asset restructuring is
authentic accurate complete and effective without false
records misleading statements or material omissions and are
willing to bear any and all of the corresponding individual and
joint legal liabilities for that.
1. I undertake not to transfer benefits to any other units or
individuals without compensations or under unfair conditions
nor to harm any interest of the listed company in any other
way. 2. I undertake to restrain my official consumption. 3. I
undertake not to use the assets of the listed company to engage
in investment or consumption activities unrelated to my duties.
4. I undertake that the compensation system to be formulated
by the Board of Directors or Remuneration Committee in the
future will be linked to the implementation of compensatory
Commitments measures taken by the listed company. 5. If the listed company
regarding subsequently introduces equity incentive policies I undertake
Commitments compensatory that the exercise conditions of the listed company’s equity
Directors supervisors
made during measures after incentives to be announced in the future will be linked to the Remain
and senior management June 10 2021 In progress
asset diluting implementation of the compensatory measures taken by the effective
of the listed company
restructuring immediate returns listed company. 6. If during the period after the date of
by this issuance of this commitment letter and before the completion
restructuring of this transaction by the listed company the CSRC makes
other regulatory requirements regarding compensatory
measures and related commitments and the above
commitments fail to meet such new regulatory regulations of
the CSRC I undertake to issue supplementary commitments
in accordance with the then latest CSRC regulations. 7. If I
violate any of the above commitments leading to any losses to
the listed company or investors I’m willing to legally bear any
and all of the corresponding compensation liabilities for such
losses so caused to the listed company or investors.Commitments Commitments to 1. On October 31 2018 SASAC of Yunnan Province as a
State-owned Equity Remain
made during maintain the shareholder of the listed company issued the Commitment June 10 2021 In progress
Management Company effective
asset independence of Letter of SASAC of Yunnan Province on Maintaining the
1202025 Annual Report of Yunnan Baiyao Group Co. Ltd.
restructuring the listed Independence of the Listed Company Commitment Letter of
company reduce SASAC of Yunnan Province on Reducing and Regulating
and regulate Related Party Transactions and Commitment Letter of SASAC
related party of Yunnan Province on Avoiding Horizontal Competition. On
transactions and April 7 2020 our company issued the Commitment Letter of
avoid horizontal State-owned Equity Management Company on Its
competition Undertaking of the Relevant Commitments Made in the
Process of Yunnan Baiyao’s Merger Transaction by SASAC ofYunnan Province (hereinafter referred to as the “CommitmentLetter on Undertaking”) committing to fully undertake as of
the date of completion of this equity transfer (calculated from
the date of registration of the underlying equity in the name of
our company) the responsibilities and obligations specified in
the commitment documents previously made by SASAC of
Yunnan Province and continuously effective at the time of this
equity transfer as set out in the following list. The list includes
the foregoing three commitment letters issued by SASAC of
Yunnan Province. 2. As of the date of signing this commitment
letter our company has always strictly fulfilled the
commitments to maintain the independence of the listed
company reduce and regulate related party transactions and
avoid horizontal competition in accordance with the
requirements of the Commitment Letter on Undertaking and
has not violated any of the commitments made. After the
completion of this transaction our company will continue to
strictly fulfill the Commitment Letter on Undertaking to
safeguard the interest of the listed company and any and all of
its shareholders.Commitments to 1. As of the date of signing this commitment letter our
maintain the company has always strictly fulfilled the Commitment Letter
independence of on Maintaining the Independence of the Listed Company
Commitments
the listed Commitment Letter on Reducing and Regulating Related Party
made during New Huadu and its Remain
company reduce Transactions and Commitment Letter on Avoiding Horizontal June 10 2021 In progress
asset acting-in-concert parties effective
and regulate Competition all issued on October 31 2018. Our company’s
restructuring
related party acting-in-concert parties have always strictly fulfilled the
transactions and Commitment Letter on Reducing and Regulating Related Party
avoid horizontal Transactions issued on October 31 2018 and have not
1212025 Annual Report of Yunnan Baiyao Group Co. Ltd.
competition violated any of the commitments made. After the completion
of this transaction our company and our acting-in-concert
parties will continue to strictly fulfill this commitment letter to
safeguard the interest of the listed company and any and all of
its shareholders.
2. After the completion of this transaction our company’s
acting-in-concert parties will maintain independence from the
listed company in terms of personnel assets business
institutions and finance in accordance with relevant laws
regulations and normative documents and will not by virtue
of the identity as a shareholder and a related party of the listed
company engage in the acts that affect the independence of
the listed company’s personnel assets business institutions
and finances or harm any rights and interest of the listed
company and other shareholders. Instead they will effectively
ensure the independence of the listed company in terms of
personnel assets business institutions finance etc.
3. As of the date of signing this commitment letter our
company’s acting-in-concert parties and any other companies
or enterprises under their control have not engaged in any
business that constitute a horizontal competition with the
principal businesses of the listed company and any other
companies or enterprises under its control. In order to avoid
horizontal competition with the listed company and safeguard
the legitimate rights and interest of the listed company and
other shareholders after the completion of this transaction our
company’s acting-in-concert parties and any other companies
or enterprises under their control will not directly engage in
businesses that are the same as or similar to and constitute a
competition with the principal businesses of the listed
company.
4. This commitment letter shall come into effect and be
irrevocable as of the date of official signature by our company
and our acting-in-concert parties. Our company and our
acting-in-concert parties warrant the effective fulfillment of
these commitments and the listed company has the right to
supervise their fulfillment of this commitment letter. If our
1222025 Annual Report of Yunnan Baiyao Group Co. Ltd.
company and our acting-in-concert parties fail to effectively
fulfill this commitment letter leading to any actual losses to
the listed company our company and our acting-in-concert
parties will compensate for any and all of such direct or
indirect losses so caused to the listed company.During the period when our company is a related party of
Shanghai Pharma our company and any other companies or
enterprises under our control will try the best to avoid and
reduce related party transactions with Shanghai Pharma and its
subsidiaries. For inevitable related party transactions or those
occurring for reasonable reasons our company undertakes to
conduct such transactions on an equal and voluntary basis in
the principles of fairness impartiality and compensation for
equal value with the transaction prices to be determined based
on the reasonable prices recognized in the market. Our
company will strictly comply with the provisions of relevant
Commitments Commitments to laws regulations normative documents and the Articles of
made during reduce and Association of Shanghai Pharma perform the decision- Remain
Listed company June 10 2021 In progress
asset regulate related making procedures and information disclosure obligations for effective
restructuring party transactions related party transactions and warrant not to harm any
legitimate rights and interest of Shanghai Pharma and any
other shareholders through related party transactions. This
commitment letter shall come into effect and be irrevocable as
of the date of official signature by our company. Our company
warrants the effective fulfillment of these commitments and
Shanghai Pharma has the right to supervise the fulfillment of
this commitment letter. If our company fails to effectively
fulfill this commitment letter leading to any actual losses to
Shanghai Pharma our company will compensate for any and
all of such direct or indirect losses so caused to Shanghai
Pharma.Shanghai Pharma’s shares subscribed by our company through Thirty-six
Commitments this transaction shall not be transferred within 36 months from months from the
Commitments
made during the end of the issuance of these shares. After the expiration of end of the
Listed company regarding lock-up May 11 2021 Completed
asset the aforementioned lockup period the transfer and trading of issuance of new
shares
restructuring such shares shall be handled in accordance with the then shares by
effective laws and regulations as well as the regulations and Shanghai
1232025 Annual Report of Yunnan Baiyao Group Co. Ltd.
rules of the CSRC SZSE and SHSE. After the completion of Pharma
this transaction our company will also arrange a lockup period
as described above for our any increased stake in Shanghai
Pharma after it issues bonus shares or convert public reserve
funds into share capital.Whether the
commitments
Yes
are fulfilled as
scheduled
If any commitment is not fully fulfilled as scheduled specific cause and action plan should be provided in detail Not applicable
2. Statement of the Company that the assets or projects have met the original profit forecast and the reasons for that if there is a profit forecast for the
Company’s assets or projects and the reporting period is still in the profit forecast period
□Applicable RNot applicable
3. Performance commitments that the Company is involved in
RApplicable □Not applicable
Amount of Percentage of
Actual amount
Background Made by Period Metric commitment completion
(RMB’0000)
(RMB’0000) (%)
Full acquisition of Anguo Ma Xinhong Ma
Operating
Juyaotang Pharmaceutical Zhanjiang Zhang Shuang 2025 62400 65472.44 104.92%
revenue
Co. Ltd. Shi Yuexin and Shi Guang
Full acquisition of Anguo Ma Xinhong Ma
Net
Juyaotang Pharmaceutical Zhanjiang Zhang Shuang 2025 6600 7987.76 121.03%
income
Co. Ltd. Shi Yuexin and Shi Guang
Changes in the performance commitments
□Applicable RNot applicable
Commitments made by the Company’s shareholders and counterparties regarding operating performance in the reporting year
RApplicable □Not applicable
1242025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Period for the performance commitments
The former shareholders of Juyaotang (Ma Xinhong Ma Zhanjiang Zhang Shuang Shi Yuexin and Shi Guang)
agreed to make commitments regarding the audited net income and operating revenue that Juyaotang will earn during the
period from January 1 2025 to December 31 2027 (“Period for the Performance Commitments”) and compensate TCM
Resources Company if Juyaotang fails to achieve the targeted net income and operating revenue amounts. Juyaotang shall
cooperate with TCM Resources Company to make sure that the financial audit of Juyaotang can be completed by April
30 each year and determine whether the performance commitments are delivered according to the audit results.
The “net income” refers to the one given in the consolidated financial statements of Juyaotang which excludes the
non-recurring gains and losses as well as the provision for credit and impairment losses and corresponding income tax
expenses as confirmed by an accounting firm designated or approved by TCM Resources Company. It may however
include government subsidies that don’t exceed RMB 5 million.
(2) Performance targets
The targeted net income and operating revenue amounts of Juyaotang during the period are as follows:
Year 2025 2026 2027 Total
Targeted net income RMB 66 M RMB 59.7 M RMB 63.9 M RMB 189.6 M
Targeted operating revenue RMB 624 M RMB 616 M RMB 666 M RMB 1.906 B
Juyaotang shall issue an audit report before April 30 each year to facilitate both parties in determining whether the
performance targets are met. If Juyaotang fails to meet the performance targets its current shareholders shall compensate
TCM Resources Company as agreed in the Equity Transfer Agreement within the deadline set out by the latter. At the
end of the period for the performance commitments if TCM Resources Company confirms that Juyaotang has fulfilled
the performance commitments outlined in the Equity Transfer Agreement it shall pay the remaining 20% to Juyaotang
within ten work days after issuance of the annual audit report for 2027 (no later than April 30 2028). If compensation is
needed the current shareholders of Juyaotang shall make the payment in accordance with the relevant stipulations of the
Equity Transfer Agreement.
(3) Special arrangement regarding dividends
The current shareholders of Juyaotang agree to waive their right to get dividends regarding its accumulated
undistributed profits as of the base date and the closing date and confirm that they no longer have any dividend rights for
any profits of Juyaotang.Fulfillment of the performance commitments and its impact on goodwill impairment test
In 2025 Juyaotang achieved a net income of RMB 79.8776 million after applying the adjustment mechanism with
an operating revenue of RMB 654.7244 million. It fulfilled the above-mentioned performance commitments for the
current period thus leaving no impact on goodwill impairment test.II. Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□Applicable RNot applicable
During the reporting period there was no occupation of the Company’s capital by the controlling shareholder or any of its
related parties for non-operating purposes.III. Non-compliant Provision of External Guarantees
□Applicable RNot applicable
There was no non-compliant provision of external guarantees during the reporting period.
1252025 Annual Report of Yunnan Baiyao Group Co. Ltd.
IV. Explanation of the Board on the “Modified Audit Report” for the Latest Period
□Applicable RNot applicable
V. Explanations Given by the Board of Directors and Independent Directors (if any)
Regarding the Auditor’s “Modified Audit Report” on the Financial Statements of the
Reporting Period
□Applicable RNot applicable
VI. Explanation on Changes in Accounting Policies and Accounting Estimates or Rectification
on Significant Accounting Errors as Compared with the Financial Report for the Previous
Year
□Applicable RNot applicable
There was no change in the accounting policies and accounting estimates or rectification on significant accounting errors
during the reporting period.VII. Explanation on the Change in Consolidation Scope as Compared with the Financial Report
for the Previous Year
RApplicable □Not applicable
For details please refer to “IX. Changes in the Consolidation Scope” under Section VIII.VIII. Appointment and Removal of Accounting Firm
Currently engaged accounting firm
Name of domestic accounting firm Pan-China Certified Public Accountants LLP (SGP)
Remuneration for domestic accounting firm (RMB 0’000) 248.80
Number of consecutive years of audit services of the domestic
accounting firm
Names of certified public accountants of the domestic
Huang Yuanxi and Zhao Li
accounting firm
Number of consecutive years of audit services of certified
1
public accountants of the domestic accounting firm
Whether to change the accounting firm in the current period
RYes □No
Was the accounting firm changed during the audit period
□Yes RNo
Was the approval procedure followed to change the accounting firm
RYes □No
Details about the appointment and change of accounting firm
On August 15 2025 the Company convened the fourth session of the Tenth Board of Directors for 2025 and on September 15
2025 it held the first extraordinary general meeting of the same year at which the Proposal on Change of the Company’s Auditor for
2025 (Including Internal Control Audit) was considered and approved. In view of the fact that Mazars Certified Public Accountants
(SGP) (hereinafter referred to as “Mazars”) had served the Company for nine years the Company through an invitation-based bidding
process changed its accounting firm for 2025 and appointed Pan-China Certified Public Accountants LLP (SGP) (hereinafter referred
to as “Pan-China”) as its auditor for 2025 (including internal control audit) in accordance with the relevant provisions of the
1262025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Administrative Measures for the Selection and Engagement of Accounting Firms by State-owned Enterprises and Listed Companies
(Cai Kuai (2023) No. 4) issued by the Ministry of Finance the State-owned Assets Supervision and Administration Commission of the
State Council and the China Securities Regulatory Commission and after comprehensive consideration of its development and
management needs.The Company communicated with Mazars regarding the change of the accounting firm and Mazars raised no objection to it.Engagement of internal control audit accounting firms financial advisers or sponsors
RApplicable □Not applicable
This year the Company appointed Pan-China Certified Public Accountants LLP (SGP) as its internal control auditor for 2025 in
accordance with the relevant provisions of the Administrative Measures for the Selection and Engagement of Accounting Firms by
State-owned Enterprises and Listed Companies (Cai Kuai (2023) No. 4) issued by the Ministry of Finance the State-owned Assets
Supervision and Administration Commission of the State Council and the China Securities Regulatory Commission and after
comprehensive consideration of its development and management needs and paid a total of RMB 600000 for internal control audit
during the period.IX. Delisting after Disclosure of Annual Report
□Applicable RNot applicable
X. Bankruptcy and Reorganization
□Applicable RNot applicable
There was no bankruptcy or restructuring related events during the reporting period.XI. Legal Matters
RApplicable □Not applicable
Any
Basic Information of Estimated Litigation
Amount Involved Litigation (Arbitration) Trial Enforcement of Litigation Disclosure Disclosure
Litigation Liability (Arbitration)
(RMB’0000) Results and Impacts (Arbitration) Judgments Date Index
(Arbitration) Caused or Progress
Not
The first-instance
trial has commenced;
during the court
proceedings the
Litigation case of plaintiff Shanghai
contract dispute Yuanye Industrial
between Shanghai Co. Ltd applied to
Interim
Yuanye Industrial the court for August 30
157531.78 No Not available Not available Report for
Co. Ltd and others withdrawal of the 2025
2025
v. Yunnan Baiyao lawsuit on March 25
Holding Investment 2026 and the court
Co. Ltd and others issued a Civil Ruling
Paper on March 26
2026 granting the
withdrawal of the
lawsuit by the
1272025 Annual Report of Yunnan Baiyao Group Co. Ltd.
plaintiff Shanghai
Yuanye Industrial
Co. Ltd.Some cases have
Summary of events
been filed to be tried;
not meeting the
some are being Some are in the process of
disclosure standards
under trials to be Summary of litigation events has no being fulfilled or are being
for being 40021.06 No
adjudicated; some significant impact on the Company enforced against the opposing
included in
have been party in litigation
significant litigation
adjudicated; some
(arbitration)
have been closed.XII. Punishments and Rectifications
□Applicable RNot applicable
There was no punishment or rectification involving the Company during the reporting period.XIII. Credit Quality of the Company as well as its Controlling Shareholder and De Facto
Controller
□Applicable RNot applicable
XIV. Significant Related Party Transactions
1. Connected transactions in relation to daily operations
□Applicable RNot applicable
There were no related party transactions related to daily operations during the reporting period.
2. Related party transactions arising from acquisition or sale of assets or equity
□Applicable RNot applicable
There were no related party transactions arising from acquisition or sale of assets or equity during the reporting period.
3. Related party transactions regarding joint investments in third parties
□Applicable RNot applicable
There were no related party transactions regarding joint investments in third parties during the reporting period.
4. Amounts due to and from related parties
□Applicable RNot applicable
There were no amounts due to and from related parties during the reporting period.
5. Transactions with related finance companies
□Applicable RNot applicable
There were no deposit loan credit or other financial business occurring between the Company and its related finance
companies/related parties.
1282025 Annual Report of Yunnan Baiyao Group Co. Ltd.
6. Transactions with related parties by finance company controlled by the Company
□Applicable RNot applicable
There were no deposit loan credit or other financial business occurred between any finance companies under the control of the
Company and related parties.
7. Other significant related party transactions
RApplicable □Not applicable
The Company has made reasonable estimates on various other related party transactions including purchases
and sales of goods related to its daily operations based on the needs of its daily operations in 2025. It is expected
that the aggregate total amount of daily related party transactions between the Company and Shanghai Pharma and
Tibet Jiushi Zhihe Marketing Co. Ltd in 2025 will be RMB 2250000000 accounting for 5.79% of the Company’s
audited net assets of RMB 38831946400 as at the end of 2024 which need to be reported to the 2024 shareholders’
meeting for consideration.The matter has been considered and approved at the first session of the Tenth Board of Directors of the
Company in 2025 and the Shareholders’ Meeting for 2024 details of which are set out in the Announcement on the
Estimation of Daily Related Party Transactions for 2025 (Announcement No. 2025-12) the Announcement on
Resolutions of the First Session of the Tenth Board of Directors of the Company for 2025 (Announcement No. 2025-
08) and the Announcement on Resolutions of the Annual General Meeting for 2024 (Announcement No. 2025-15).
Enquiries on the online disclosure of interim announcement of significant related party transactions
Date of disclosure of Website on which interim announcement is
Name of interim announcement
interim announcement disclosed
Announcement on the Estimation of Daily Related
April 1 2025 http://www.cninfo.com.cn
Party Transactions for 2025
Announcement on Resolutions of the First Session
of the Tenth Board of Directors of the Company April 1 2025 http://www.cninfo.com.cn
for 2025
Announcement on Resolutions of the Annual
April 21 2025 http://www.cninfo.com.cn
General Meeting for 2024
XV. Major Contracts and Their Performance
1. Entrustment contracting and leases
(1) Entrustment
□Applicable RNot applicable
There were no entrustment events of the Company during the reporting period.
(2) Contracting
□Applicable RNot applicable
There were no contracting events of the Company during the reporting period.
(3) Leases
□Applicable RNot applicable
1292025 Annual Report of Yunnan Baiyao Group Co. Ltd.
There were no leases of the Company during the reporting period.
2. Major guarantees
□Applicable ?Not applicable
There were no leases of the Company during the reporting period.
3. Cash entrusted for wealth management
(1) Entrusted wealth management
RApplicable □Not applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB’0000
Balance of entrusted financial
Overdue amount
Product category Risk characteristics management during the reporting
unrecovered
period
Bank financial products Self-owned capital 192000 0
Brokerage financial
Self-owned capital 225000 0
products
Specific situations where the Company as a single principal entrusts a financial institution to conduct asset management
or invest in high-risk entrusted wealth management products with low security and poor liquidity
RApplicable □Not applicable
Unit: RMB’0000
Actual
Name of Type of profit and
Overview of the matter
entrusted entrusted Risk Product End Fund loss amount Actual recovery of profit and loss
Amount Start date and relevant query index
institution (or institution characteristics category date investment during the during the reporting period
(if any)
trustee) (or trustee) reporting
period
On February 27 2026 YNBY
International Limited allotted and
issued 1937984496 shares of
YNBY International to Shanghai
https://www.cninfo.com.c
International Trust Corp. Ltd the
Shanghai n/new/disclosure/detailst
Fixed- designated trustee of Yunnan
International October Credit ockCode=000538&announ
Trust -- income HKD50000.00 -- -978.45 Baiyao at a conversion price of
Trust Corp. 28 2020 assets cementId=1224988569&o
fund trust HKD0.258 per share. After the
Ltd. rgId=gssz0000538&annou
conversion the Company will
ncementTime=2026-02-28
implement the subsequent matters
related to the trust products in
accordance with the determined
plan and operational procedures.Total HKD50000.00 -- -- -- -978.45 -- --
(2) Entrusted loan
□Applicable RNot applicable
The Company did not have any entrusted loan during the reporting period.
4. Other Significant Contracts
□Applicable RNot applicable
There were no other significant contracts of the Company during the reporting period.XVI. Use of Raised Funds
1302025 Annual Report of Yunnan Baiyao Group Co. Ltd.
□Applicable RNot applicable
There was no use of raised funds of the Company during the reporting period.XVII. Explanation for Other Significant Events
RApplicable □Not applicable
1. Progress on the establishment of a fund through joint investment with a professional investment
institution
On January 7 2025 the Company signed the Supplementary Agreement to the Agreement of Yunnan
TCM Big Health Innovation Equity Investment Fund Partnership (Limited Partnership) with BOC International
Capital Limited which made corresponding supplementary provisions to the previously signed Agreement of
Yunnan TCM Big Health Innovation Equity Investment Fund Partnership (Limited Partnership). According to the
notification from the fund manager the partnership has completed its business registration and has gone through
the private equity fund filing procedures with the Asset Management Association of China. Details can be found in
the Announcement on the Progress of Joint Investment with a Professional Investment Institution to
Establish a Fund (Announcement No. 2025-01) disclosed by the Company at http://www.cninfo.com.cn on January
9 2025. Currently the initial paid-in capital contribution (10% of the total subscribed capital contribution) for the
partnership has been fully made.
2. Expiration and completion of the shareholding increase plan
On February 7 2025 the Company disclosed the Announcement on Expiration and Completion of the
Shareholding Increase Plan (Announcement No. 202507). From August 6 2024 to February 5 2025 Yunnan State-
owned Equity Operation Management Co. Ltd increased its shareholding in the Company by 17807463 shares
through the trading system of the Shenzhen Stock Exchange by way of centralized bidding transactions the number
of shares increased accounted for 0.9980% of the total share capital of the Company and the cumulative amount of
the increase in shareholding amounted to RMB 950379399.02. As of the date of disclosure of the Announcement
the term of the Shareholding Increase Plan expired and the Shareholding Increase Plan was completed.
3. Progress of R&D projects
On April 9 2025 the Company disclosed the Announcement on the Approval of INR102 Injection forDrug Clinical Trial (Announcement No. 2025-14) and Yunhe Pharmaceutical (Tianjin) Co. Ltd (“YunhePharmaceutical”) a wholly-owned subsidiary of the Company received the Notification of Approval for Drug
Clinical Trial (Notification No. 2025LP01012) issued by the National Medical Products Administration (“NMPA”)
which stated that according to examination the clinical trial application of INR102 Injection of Yunhe
1312025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Pharmaceutical complied with the relevant requirements for drug registration and that it was approved for clinical
trials in patients with prostate cancer. On June 18 2025 the Company disclosed the Announcement on Approval of
JZ-14 Capsule for Drug Clinical Trial (Announcement No. 2025-20) and Yunbaiyao Zhengwu Technology
(Shanghai) Co. Ltd a controlled subsidiary of the Company recently received the Notification of Approval for
Drug Clinical Trial (Notification No. 2025LP01506 2025LP01507) issued by the NMPA which stated that
according to examination the clinical trial application of JZ-14 Capsule of Zhengwu Technology complied with the
relevant requirements for drug registration and that it was approved for clinical trials for ulcerative colitis.
4. Progress of external investments
(1) Full acquisition of Juyaotang
On August 16 2025 the Company disclosed the Announcement on Full Acquisition of Anguo Juyaotang
Pharmaceutical Co. Ltd (Announcement No. 2025-25). In response to the call of Yunnan Provincial People’s
Government for high-quality development of the TCM materials industry in the province and in alignment with its
own strategic development goals the Company aims to better promote the sales of TCM materials within Yunnan
accelerate the nationwide expansion of Yunnan Baiyao-related businesses increase the size of operations and
enhance the collaborative efficiency of the TCM material industry chain. In fact TCM Resources Company a
wholly-owned subsidiary of the Company has acquired 100% equity of Juyaotang in cash. The equity transfer
consideration is RMB 660 million. Upon completion of the transaction TCM Resources Company will hold
Juyaotang 100%.So far the equity change registration of Juyaotang has been completed making Juyaotang a wholly-owned
subsidiary of TCM Resources Company and part of Yunnan Baiyao as well. Yunnan Baiyao has assigned executive
director financial controller and other officers to engage with the various business lines of Juyaotang for full
integration and exertion of their respective strengths.
(2) Termination of the capital increase in Pu’er Liangbao and Liangpin Yikang
On August 16 2025 the Company disclosed the Announcement of the Resolutions of the Fourth Session of the
Tenth Board of Directors in 2025 (Announcement No. 2025-23) according to which the Board of Directors agreed
that the Company’s wholly-owned subsidiary TCM Resources Company should increase its capital contributions to
Pu’er Liangbao Biotechnology Co. Ltd (hereinafter referred to as “Pu’er Liangbao”) and Pu’er Liangpin Yikang
Pharmaceutical Co. Ltd (hereinafter referred to as “Liangpin Yikang”) in cash by RMB 56.2044 million and RMB
19.2865 million respectively. After the capital increase TCM Resources Company would hold 51% of the equity
in Pu’er Liangbao and 51% of the equity in Liangpin Yikang. To efficiently drive these transactions and make sure
1322025 Annual Report of Yunnan Baiyao Group Co. Ltd.
that they would be implemented in accordance with applicable laws and regulations and in an orderly manner the
Board of Directors authorized the Group Office Meetings to handle matters related to these transactions within the
scope of the applicable laws and regulations and within the framework of the transaction agreement.Whereas Pu’er Liangbao and Liangpin Yikang failed to fulfill the prerequisites for this capital increase as per
the signed transaction agreement and to meet the equity delivery requirements Yunnan Baiyao decided to terminate
its capital increase in Pu’er Liangbao and Liangpin Yikang. Additionally TCM Resources Company signed an
agreement with Pu’er Liangbao Liangpin Yikang and other relevant parties to terminate the Capital Increase
Agreement and the Valuation Adjustment Mechanism Agreement.
5. Completion of non-public issuance of exchangeable corporate bonds by shareholders
On October 24 2025 the Company disclosed the Announcement on Completion of the Non-public Issuance of
Exchangeable Corporate Bonds by Shareholders Holding More Than 5% of the Shares (Announcement No. 2025-
35). New Huadu a shareholder holding more than 5% of the Company’s shares issued non-public exchangeable
corporate bonds (hereinafter referred to as “the exchangeable bonds”) with part of its A-shares as the underlying
and obtained the Letter of No Objection Regarding the Compliance of New Huadu Industrial Group Co. Ltd’s Non-
public Issuance of Exchangeable Corporate Bonds with the Listing Conditions of the Shenzhen Stock Exchange
(SSE Letter [2025] No. 881) from the Shenzhen Stock Exchange allowing for an issuance size of no more thanRMB 2 billion. New Huadu transferred its 56000000 unrestricted tradable shares of Yunnan Baiyao to the “NewHuadu Group - Guosen Securities - 25 New Huadu EB01 Guarantee and Trust Property Special Account” opened
at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited with the current bond
trustee Guosen Securities Co. Ltd (hereinafter referred to as “Guosen Securities”) serving as the nominal holderand with “New Huadu Group - Guosen Securities - 25 New Huadu EB01 Guarantee and Trust Property SpecialAccount” being registered as the securities holder on the Company’s securities holder roster providing guarantees
for the exchange of shares and the repayment of principal and interest of the current exchangeable corporate bonds
held by the bondholders. The Company received a written notice from New Huadu on October 23 2025 which
stated that the current exchangeable bonds were issued on October 22 2025 featuring an issuance size of RMB 2
billion a coupon rate of 0.1% an initial conversion price of RMB 71.66 per share and a bond term of 3 years.
6. Implementation of special dividend and equity distribution for 2025
On September 17 2025 the Company disclosed the Announcement on the Implementation of Special Dividend
and Equity Distribution for 2025 (Announcement No. 2025-32). Its specific plan for the special dividend and equity
distribution for 2025 which had been considered and approved at the shareholders’ meeting was as follows: Based
1332025 Annual Report of Yunnan Baiyao Group Co. Ltd.
on the total share capital of the Company of 1784262603 shares the Company proposes to distribute cash
dividends of RMB 10.19 per 10 shares (tax inclusive) to all shareholders with no bonus shares issued and no capital
reserve to increase the share capital. The total amount of cash dividend was RMB 1818163592.46. With the
distribution ratio of this plan the total amount of dividend distribution would be determined based on the number
of shares entitled to profit distribution on the equity registration date when the distribution plan is implemented in
the future. The remaining undistributed profits will be retained for distribution in future years. The equity
registration date for the dividend distribution was September 23 2025 and the ex-dividend date was September 24
2025.
XVIII. Significant Events of the Company’s Subsidiaries
RApplicable □Not applicable
1. YNBY International completed share placement
Under the general mandate YNBY International was authorized to place up to 1359982832 new shares. As
the conditions for the new share placement agreement were met the placement agent successfully placed a total of
800000000 placement shares at a new placement price of HKD0.1161 per placement share to no fewer than six
placees in accordance with the terms and conditions of the placement agreement. The placement was completed on
May 22 2025.
2. YNBY International exercised convertible bonds
On February 27 2026 YNBY International allotted and issued 1937984496 shares of YNBY International
to Shanghai International Trust Corp. Ltd (hereinafter referred to as “Shanghai Trust” subscribing for and holding
convertible bonds on behalf of Yunnan Baiyao) the designated trustee of Yunnan Baiyao at a conversion price of
HKD0.258 per share. This represents approximately 25.50% of the total number of YNBY International shares
before the conversion which stands at 7599914160 shares and approximately 20.32% of the total number of
YNBY International shares after the conversion which amounts to 9537898656 shares. For details please refer
to the Announcement on the Progress of Subscribing for Convertible Bonds of YNBY International Limited
(Announcement No. 2026-06) disclosed by the Company on February 27 2026.
1342025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section VI Changes in Shareholdings and Particulars about
Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before this change Increase/decrease (+ -) After this change
Capital reserve New Bonds
Quantity Proportion converted into Others Subtotal Quantity Proportion
shares Shares
share capital
I. Shares subject
to trading 11567358 0.65% -238125 -238125 11329233 0.63%
moratorium
1. State-
owned shares
2. Shares
held by state-
owned legal
persons
3. Shares
held by other
115673580.65%-238125-238125113292330.63%
domestic
shareholders
Of which:
shares held by
domestic legal
persons
Shares
held by
115673580.65%-238125-238125113292330.63%
domestic
natural persons
4. Foreign-
invested shares
Of which:
shares held by
overseas legal
persons
Shares
held by
overseas natural
persons
II. Shares not
subject to
177269524599.35%238125238125177293337099.37%
trading
moratorium
1. RMB-
denominated 1772695245 99.35% 238125 238125 1772933370 99.37%
ordinary shares
2. Domestic-
1352025 Annual Report of Yunnan Baiyao Group Co. Ltd.
listed foreign
shares
3. Overseas-
listed foreign
shares
4. Others
III. Total
number of 1784262603 100.00% 0 0 1784262603 100.00%
shares
Reasons for changes in shareholdings
□Applicable RNot applicable
Approval of changes in shareholdings
□Applicable RNot applicable
Transfers for changes in shareholdings
□Applicable RNot applicable
The impact of changes in shareholdings on financial indicators such as basic and diluted earnings per share net assets per share
attributable to the Company’s ordinary shareholders for the latest year and period
□Applicable RNot applicable
Other disclosures the Company deems necessary or required by securities regulators
□Applicable RNot applicable
2. Changes in shares subject to trading moratorium
RApplicable □Not applicable
Unit: share
Number of shares
Number of shares Increase in shares Number of shares
released from Date of shares
subject to trading subject to trading subject to trading Reason for
Name of trading released from
moratorium at the moratorium moratorium at the moratorium
shareholder moratorium trading
beginning of the during the end of the
during the moratorium
reporting period reporting period reporting period
reporting period
Implemented in
Locked-up shares
accordance with
Yu Juan 105000 5625 0 110625 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Yin Pinyao 252000 0 63000 189000 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Yang Yong 75768 0 0 75768 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Yang Fan 0 8250 0 8250 held by senior
regulatory
management
requirements
Locked-up shares Implemented in
Wang Minghui 756000 0 189000 567000 held by senior accordance with
management regulatory
1362025 Annual Report of Yunnan Baiyao Group Co. Ltd.
requirements
Implemented in
Locked-up shares
accordance with
Wang Jin 378000 0 0 378000 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Qin Wanmin 378000 0 0 378000 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Li Jin 42000 0 0 42000 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Chen Yanhui 133009 0 0 133009 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Chen Fashu 9395621 0 0 9395621 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Dong Ming 9960 0 0 9960 held by senior
regulatory
management
requirements
Implemented in
Locked-up shares
accordance with
Zhu Zhaoyun 42000 0 0 42000 held by senior
regulatory
management
requirements
Total 11567358 13875 252000 11329233 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (preferred shares excluded) during the reporting period
□Applicable RNot applicable
2. Changes in the Company’s total number of shares structure of shareholders and structure of assets and
liabilities
□Applicable RNot applicable
3. Existing staff shares
□Applicable RNot applicable
III. Particulars about shareholders and de facto controller
1. Number of shareholders of the Company and their shareholdings
Unit: share
Total number of ordinary 186046 The total number of ordinary 170974 Total number of 0 The total number of 0
1372025 Annual Report of Yunnan Baiyao Group Co. Ltd.
shareholders at the end of shareholders at the end of the preferred shareholders preferred shareholders with
the reporting period preceding month prior to the with resumed voting resumed voting rights at the
disclosure date of the annual rights at the end of the end of the preceding month
report reporting period (if prior to the disclosure date of
any) the annual report (if any)
Shareholdings of shareholders holding more than 5% of the shares or the top 10 shareholders (excluding share lending via securities financing)
Number of Pledged marked or frozen
Number of Number of
shares held
shares shares not
Nature of at the end Change during the
Name of shareholder Shareholding ratio subject to subject to
shareholder of the reporting period Status Quantity
trading trading
reporting
moratorium moratorium
period
State-
Yunnan State-owned
owned
Equity Operation 26.20% 467431774 321600 0 467431774 Pledged 115500000
legal
Management Co. Ltd.person
Domestic
New Huadu Industrial non state-
Group Co. Ltd. owned 21.28% 379742244 -56000000 0 379742244 Pledged 92500000
legal
person
State-
Yunnan Hehe (Group) Co. owned Not
8.19%146185851001461858510
Ltd. legal applicable
person
New Huadu Group - Domestic
Guosen Securities - 25 non state-
Not
New Huadu EB01 owned 3.14% 56000000 56000000 0 56000000 0
applicable
Guarantee and Trust legal
Property Special Account person
Hong Kong Securities Overseas
Not
Clearing Company legal 2.75% 49148066 -16064663 0 49148066 0
applicable
Limited person
Domestic
non state-
China Securities Finance Not
owned 2.09% 37373108 0 0 37373108 0
Corporation Limited applicable
legal
person
China Life Insurance
Company Limited -
Not
Traditional - General Others 1.41% 25169249 18411474 0 25169249 0
applicable
Insurance Products - 005L
- CT001 Shanghai
State-
Central Huijin Asset owned Not
0.93%1661744000166174400
Management Ltd. legal applicable
person
ICBC - Huatai PineBridge
CSI 300 Open-ended Not
Others 0.82% 14668126 -651658 0 14668126 0
Index Securities applicable
Investment Fund
Domestic
Not
Chen Fashu natural 0.70% 12527495 0 9395621 3131874 0
applicable
person
Strategic investors or general legal
Not applicable
persons who become the top 10
1382025 Annual Report of Yunnan Baiyao Group Co. Ltd.
shareholders due to rights issue (if any)
Chen Fashu is the de facto controller of New Huadu Industrial Group Co. Ltd It is unclear whether there are any related relationships
Related or acting-in-concert parties
among other shareholders or whether there is any concerted action as defined by the Administrative Measures for Acquisition of Listed
among the shareholders above
Companies.Above shareholders involved in
entrusting/being entrusted with voting Not applicable
rights and giving up voting rights
Special account for share repurchases (if
any) among the top 10 shareholders (if Not applicable
any)
Shareholdings of the top 10 shareholders not subject to trading moratorium (excluding share lending via securities financing and lock-up shares for senior management)
Type of shares
Name of shareholder Number of shares not subject to trading moratorium held at the end of the reporting period
Type Quantity
RMB-
Yunnan State-owned Equity Operation denominated
467431774467431774
Management Co. Ltd. ordinary
shares
RMB-
denominated
New Huadu Industrial Group Co. Ltd. 379742244 379742244
ordinary
shares
RMB-
denominated
Yunnan Hehe (Group) Co. Ltd. 146185851 146185851
ordinary
shares
RMB-
New Huadu Group - Guosen Securities -
denominated
25 New Huadu EB01 Guarantee and Trust 56000000 56000000
ordinary
Property Special Account
shares
RMB-
Hong Kong Securities Clearing Company denominated
4914806649148066
Limited ordinary
shares
RMB-
China Securities Finance Corporation denominated
3737310837373108
Limited ordinary
shares
RMB-
China Life Insurance Company Limited -
denominated
Traditional - General Insurance Products - 25169249 25169249
ordinary
005L - CT001 Shanghai
shares
RMB-
denominated
Central Huijin Asset Management Ltd. 16617440 16617440
ordinary
shares
RMB-
ICBC - Huatai PineBridge CSI 300 Open- denominated
1466812614668126
ended Index Securities Investment Fund ordinary
shares
RMB-
China Construction Bank - E Fund CSI
denominated
300 Health & Medicine Traded Open- 11914346 11914346
ordinary
ended Index Securities Investment Fund
shares
Related or acting-in-concert parties It is unclear whether there are any related relationships among the above-mentioned shareholders or whether there is any concerted action
among the top 10 circulating shareholders as defined by the Administrative Measures for Information Disclosure of Changes in Shareholdings of Shareholders of Listed Companies.
1392025 Annual Report of Yunnan Baiyao Group Co. Ltd.
not subject to trading moratorium and
between the top 10 circulating
shareholders not subject to trading
moratorium and the top 10 shareholders
Top 10 ordinary shareholders
involved in securities margin trading (if
Not applicable
any)
Note: On October 22 2025 New Huadu completed the issuance of exchangeable bonds of RMB 2 billion. On September 29
2025 New Huadu transferred its 56000000 unrestricted tradable shares of Yunnan Baiyao to the “New Huadu Group - GuosenSecurities - 25 New Huadu EB01 Guarantee and Trust Property Special Account” opened at the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited with the current bond trustee Guosen Securities Co. Ltd. serving as the nominal holder
for the purpose of providing guarantees for the exchange of shares and the repayment of principal and interest of the current
exchangeable corporate bonds held by the bondholders. The shares involved in the guarantee and trust registration (including the
dividends generated during the share trust registration period) will be registered on the Company’s securities holder roster with thecurrent bond trustee Guosen Securities serving as the nominal holder and with “New Huadu Group - Guosen Securities - 25 NewHuadu EB01 Guarantee and Trust Property Special Account” serving as the securities holder. When exercising the voting rights of the
shares involved in the guarantee and trust registration Guosen Securities will seek the opinions of New Huadu in advance and handle
them accordingly but without prejudice to the interests of the current bondholders.Shareholders holding more than 5% of the shares top 10 shareholders and top 10 circulating shareholders not subject to trading
moratorium involved in lending of shares through refinancing
□Applicable RNot applicable
Change in top 10 shareholders and top 10 circulating shareholders not subject to trading moratorium from the previous period
resulting from lending/return of shares through refinancing
□Applicable RNot applicable
Whether the top 10 ordinary shareholders and the top 10 ordinary shareholders not subject to trading moratorium of the Company
conducted any agreed repurchase transactions during the reporting period
□ Yes RNo
The top 10 ordinary shareholders and the top 10 ordinary shareholders not subject to trading moratorium of the Company did not
conduct any agreed repurchase transactions during the reporting period.
2. Details about the controlling shareholder
Nature of controlling shareholder: No controlling entity
Type of controlling shareholder: Does not exist
Description of no controlling shareholders of the Company
On July 3 2019 the Company purchased 668430196 new shares from Baiyao Holdings its controlling
shareholder and issued these shares in the public market of which 321160222 shares were issued to the SASAC
of Yunnan Province 275901036 shares to New Huadu and 71368938 shares to Jiangsu Yuyue. Meanwhile the
shares held by Baiyao Holdings in the listed company were cancelled. After this issuance the SASAC of Yunnan
Province New Huadu and its acting-in-concert parties both hold 25.14% of the Company’s shares resulting in no
shareholders having control over the Company actually or via shareholdings and the Company becoming an
enterprise with no de facto controllers and controlling shareholders.On August 7 2024 the Company disclosed the Announcement on the Shareholding Increase by Shareholders
1402025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Holding More Than 5% of the Company’s Shares and Subsequent Shareholding Increase Plan (Announcement No.
2024-40). On August 6 2024 the State-owned Equity Management Company increased its holdings of the
Company’s shares by 788660 shares through the Shenzhen Stock Exchange’s trading system via a centralized
bidding transaction representing approximately 0.0442% of the total share capital with an investment amount of
RMB 40.0168 million. The State-owned Equity Management Company plans to continue increasing its
shareholding within six months from the initial increase date (August 6 2024) with a total investment amount
(including the already disclosed increase) not less than RMB 500 million and not exceeding RMB 1000 million.On February 7 2025 the Company disclosed the Announcement on Expiration and Completion of the Shareholder’s
Shareholding Increase Plan (Announcement No. 2025-07). From August 6 2024 to February 5 2025 the State-
owned Equity Management Company increased its holdings of the Company’s shares by 17807463 shares through
the Shenzhen Stock Exchange’s trading system via a centralized bidding transaction representing 0.9980% of the
total share capital with a cumulative investment amount of RMB 950379399.02. As of the date of this
announcement the shareholding increase plan has been completed within the stipulated period. This shareholding
increase does not result in the Company’s shareholding distribution failing to meet the listing conditions nor does
it change the Company’s situation of having no controlling shareholder or de facto controller and it will not have a
significant impact on the Company’s corporate governance structure.After the merger and overall listing completed in July 2019 Baiyao Holdings no longer had any personnel and
has not conducted any actual operations only retaining its business registration status. Due to objective reasons
such as certain land and property not being included in the merger scope and awaiting government designation for
the receiving party Baiyao Holdings had not yet canceled its corporate status by the end of 2024. According to the
Reply on Proposed Transfer of Three Assets for Entrusted Management by Yunnan Baiyao Holdings Co. Ltd issued
by the State-owned Assets Supervision and Administration Commission of Kunming Municipal Government
Yunnan Baiyao Holdings Co. Ltd has transferred the three assets with ownership defects involved in the merger
process to Kunming State-owned Assets Management Co. Ltd which was designated by the government for
takeover. In the future all rights obligations benefits and risks related to these properties will be owned and borne
by the receiving party Kunming State-owned Assets Management Co. Ltd. On March 5 2025 the Yunnan
Administration for Market Regulation issued the Registration Notice ((Yun) Deng Zi [2025] No. 120) regarding the
cancellation registration of Baiyao Holdings. As of the date of this report the cancellation registration procedures
for Baiyao Holdings have been completed and the shareholder change registration for the 66.67% equity in
Shanghai Xinhou Asset Management Co. Ltd and the 100% equity in Shenzhen Jurong Commercial Factoring Co.Ltd which were spun off from Baiyao Holdings’ wholly-owned subsidiary Yunnan Baiyao Holdings Investment
Co. Ltd before the merger and overall listing has also been completed.Changes in controlling shareholders during the reporting period
□Applicable RNot applicable
There was no change in the controlling shareholders of the Company during the reporting period.
3. The Company’s de facto controllers and their respective acting-in-concert parties
Nature of de facto controllers: No de facto controllers
1412025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Type of de facto controllers: Does not exist.Description of no de facto controllers of the Company
On July 3 2019 the Company purchased 668430196 new shares from Baiyao Holdings its controlling
shareholder and issued these shares in the public market of which 321160222 shares were issued to the SASAC
of Yunnan Province 275901036 shares to New Huadu and 71368938 shares to Jiangsu Yuyue. Meanwhile the
shares held by Baiyao Holdings in the listed company were cancelled. After this issuance the SASAC of Yunnan
Province New Huadu and its acting-in-concert parties both hold 25.14% of the Company’s shares resulting in no
shareholders having control over the Company actually or via shareholdings and the Company becoming an
enterprise with no de facto controllers and controlling shareholders.Whether the Company has any shareholders at the ultimate control level with a shareholding of more than 10%
□ Yes RNo
□Shareholders at the ultimate control level with a shareholding of more than 5% R Shareholders at the ultimate control level
with a shareholding of less than 5%
The Company has no de facto controllers.Change of de facto controllers during the reporting period
□Applicable RNot applicable
There was no change in the de facto controllers of the Company during the reporting period.Diagram of property rights and control relationship between the Company and the de facto controller
The de facto controllers of the Company control the Company via trust or other asset management methods
□Applicable RNot applicable
1422025 Annual Report of Yunnan Baiyao Group Co. Ltd.
4. The cumulative number of pledged shares held by the controlling shareholder or the largest shareholder
of the Company and their acting-in-concert parties accounts for up to 80% of the total number of shares held
by them in the Company
□Applicable RNot applicable
5. Other legal-person shareholders holding more than 10% of the shares
RApplicable □Not applicable
Legal
Name of corporate Main business operations
representative/Head of Date of establishment Registered capital
shareholder or management activities
the organization
Holding and managing
state-owned equity; Equity
(including listed company
equity) investment
operation and transfer;
Fundraising; Research and
consulting services on the
Yunnan State-owned
RMB structural layout of state-
Equity Operation Wang Hongxin June 21 2019
20977469085.95 owned capital and
Management Co. Ltd.industrial development
(Business activities that
require approval according
to the law may be
conducted only after
obtaining approval from
the relevant departments.)
Wholesale and retail of
pre-packaged and bulk
food products; Investment
management and
consulting services in the
retail industry interior and
exterior decoration hotel
industry mining industry
hydropower engineering
New Huadu Industrial
Chen Fashu May 4 1996 RMB 139800000.00 road and bridge
Group Co. Ltd.engineering projects real
estate industry and
industrial sector (Business
activities that require
approval according to the
law may be conducted only
after obtaining approval
from the relevant
departments.)
6. Restricted reduction of shares held by controlling shareholders de facto controllers restructuring parties
and other committed entities
□Applicable RNot applicable
1432025 Annual Report of Yunnan Baiyao Group Co. Ltd.
IV. Detailed implementation of share repurchase during the reporting period
Implementation of share repurchase
□Applicable RNot applicable
Implementation of reduction in repurchased shares via centralized bidding
□Applicable RNot applicable
V. Preference Shares
□ Applicable ? Not applicable
There were no preference shares in the Company during the reporting period.
1442025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section VII Bonds
□Applicable RNot applicable
1452025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Section VIII Financial Statements
I. Audit Report
Type of Audit Opinion Unqualified opinion
Signature Date of Audit Report March 31 2026
Name of Audit Body Pan-China Certified Public Accountants LLP (SGP)
Document No. of Audit Report TJS (2026) No. 4168
Name of Certified Public Accountant Huang Yuanxi Zhao Li
Body Text of Audit Report
To All shareholders of Yunnan Baiyao Group Co. Ltd:
I. Audit Opinions
We have audited the financial statements of Yunnan Baiyao Group Co. Ltd (“Yunnan Baiyao”) which
comprise the consolidated and parent company balance sheets as of December 31 2025 as well as the consolidated
and parent company income statements the consolidated and parent company cash flow statements the consolidated
and parent company statements of changes in owners’ equity for 2025 and notes to the financial statements.In our opinion the attached financial statements have been prepared in accordance with the provisions of the
Accounting Standards for Business Enterprises in all major aspects and present fairly the consolidated and parent
company financial position of Yunnan Baiyao as of December 31 2025 and the consolidated and parent company
results and cash flows in 2025.II. Basis for the Audit Opinion
We conduct our audit in accordance with the PRC Standards on Auditing for Certified Public Accountants.Our responsibilities under these standards are further described in the section on “the Certified Public Accountants’Responsibilities for the Audit of the Financial Statements” of our audit report. We are independent of Yunnan
Baiyao in accordance with the Chinese Standard on Independence for Certified Public Accountants No. 1 -
Requirements for Independence in Financial Statement Audits and Review Engagements and the PRC Code of
Ethics for Certified Public Accountants and have fulfilled our other ethical responsibilities. We have complied with
the independence requirements for audits of public interest entities in our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinion.III. Key Audit Matters
Key audit matters are those in our professional judgment of most significance in our audit of the financial
statements of the current period. The treatment of these matters is based on an audit of the financial statements as a
whole and audit opinions therefrom and we do not express an opinion on these matters separately.(I) Revenue recognition
1. Matter description
1462025 Annual Report of Yunnan Baiyao Group Co. Ltd.
For relevant information disclosure please refer to Notes III (XXVI) and V (II) 1 to the financial statements.The operating revenue of Yunnan Baiyao is primarily derived from multiple business segments including
pharmaceutical sales health and personal care products TCM resources and pharmaceutical distribution. In 2025
the operating revenue of Yunnan Baiyao amounted to RMB 41.187 billion.As operating revenue is one of the key performance indicators for Yunnan Baiyao’s operations and
performance assessment there is an inherent risk that the Yunnan Baiyao’s management (hereinafter referred to as
"Management") may recognize revenue inappropriately to achieve specific targets or expectations. Additionally
revenue recognition involves significant management judgment. Therefore we have identified revenue recognition
as a key audit matter.
2. Audit procedures performed
For revenue recognition the audit procedures we performed mainly include:
(1) Understanding the key internal controls related to revenue recognition evaluating the design of these
controls determining whether they have been implemented and testing the operating effectiveness of relevant
internal controls;
(2) Reviewing sales contracts understanding key contract terms or conditions and evaluating whether the
revenue recognition methods are appropriate;
(3) Performing analytical procedures on operating revenue and gross profit margin by month product and
customer to identify any significant or unusual fluctuations and find out the reasons;
(4) Selecting items to examine relevant supporting documents including sales contracts orders sales invoices
outbound delivery orders shipping orders transportation documents customer acceptance receipts etc.; for service-
based businesses reviewing service contracts etc.;
(5) Selecting items to confirm sales amounts in conjunction with accounts receivable confirmations;
(6) Performing cut-off tests to verify whether revenue was recognized in the appropriate periods;
(7) Obtaining sales return records after the balance sheet date to check whether there were circumstances where
revenue recognition conditions were not met as of the balance sheet date;
(8) Verifying whether information related to operating revenue has been properly presented in the financial
statements.(II) Provision for bad debts of accounts receivable
1. Matter description
For relevant information disclosure please refer to Notes III (XII) and V (II) 4 to the financial statements.
1472025 Annual Report of Yunnan Baiyao Group Co. Ltd.
As of December 31 2025 the carrying amount of Yunnan Baiyao’s accounts receivable was RMB 11.115
billion with allowance for bad debts of RMB 955 million and carrying value of RMB 10.160 billion.Yunnan Baiyao’s management measures loss provisions based on the credit risk characteristics of individual
receivables or portfolios measured at amounts equivalent to expected credit losses over the duration. Due to the
significant amount of accounts receivable and the significant management judgment involved in impairment testing
of accounts receivable we have identified accounts receivable impairment as a key audit matter.
2.Audit procedures performed
For impairment provision of accounts receivable the audit procedures we performed mainly include:
(1) Understanding the key internal controls related to accounts receivable impairment evaluating the design
of these controls determining whether they have been implemented and testing the operating effectiveness of
relevant internal controls;
(2) Reviewing the results of management’s prior-year estimates of bad debt provisions or management’s
subsequent re-estimates thereof;
(3) Reviewing management’s relevant considerations and objective evidence for credit risk assessment of
accounts receivable and evaluating whether management has appropriately identified the credit risk characteristics
of individual accounts receivable;
(4) For accounts receivable measured for expected credit losses on an individual basis reviewing
management’s forecasts of expected cash flows to be collected and evaluating the appropriateness of significant
assumptions used in the forecasts as well as the appropriateness relevance and reliability of data;
(5) For accounts receivable measured for expected credit losses on a portfolio basis evaluating the
reasonableness of management’s grouping by credit risk characteristics; evaluating the reasonableness of the
expected credit loss rates determined by management for accounts receivable including the appropriateness of
significant assumptions used and the appropriateness relevance and reliability of data; testing the accuracy of
management’s calculation of bad debt provisions;
(6) Evaluating the reasonableness of bad debt provisions made by management in conjunction with accounts
receivable confirmations and subsequent collection status;
(7) Verifying whether information related to accounts receivable impairment has been properly presented in
the financial statements.IV. Other Information
The management is responsible for the other information which includes the information covered in the annual
1482025 Annual Report of Yunnan Baiyao Group Co. Ltd.
report but does not include the financial statements and our audit report.Our audit opinion on the financial statements does not cover the other information and we do not express any
form of verification conclusion thereon.Given our audit of financial statements our responsibility is to review other information and in such process
to judge whether other information is significantly inconsistent with the financial statements or what we learned in
the audit process or that information seems to be significantly misstated.Where we identify that there is a material misstatement of other information based on the work we have performed
we will report that fact but have nothing to report in this regard.V. The Management and the Governance’s Responsibilities for the Financial Statements
The management is responsible for the preparation of financial statements according to Accounting Standards
for Business Enterprises in a fair view and for designing implementing and maintaining necessary internal control
to be absent from material misstatement in the financial statements whether due to fraud or error.In preparing the financial statements the management is responsible for assessing Yunnan Baiyao’s ability to
continue as a going concern disclosing matters related to going concern (as applicable) and applying the going-
concern assumption unless it plans to liquidate terminate operations or has no other realistic alternative.The governance team is responsible for overseeing the financial reporting of Yunnan Baiyao.VI. Responsibilities of Certified Public Accountants for the Audit of Financial Statements
Our purpose is to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement due to fraud or error and to issue an audit report that includes an audit opinion. Our
reasonable assurance is of high level but is not a guarantee that an audit conducted in accordance with auditing
standards will always detect a material misstatement. Misstatements can result from fraud or error and are generally
considered material if individually or in the aggregate they could reasonably be expected to influence the economic
decisions of users made based on these financial statements.We exercise professional judgment and maintain professional skepticism in performing the audit in accordance
with auditing standards. At the same time we also conduct the following work:
(I) To identify and assess the risks of material misstatement of the financial statements due to fraud or error
design and implement audit procedures to address these risks and obtain sufficient and appropriate audit evidence
as the basis for expressing audit opinions. The risk of failing to detect a material misstatement due to fraud is higher
than the risk of failing to detect a material misstatement due to an error as fraud may involve collusion forgery
intentional omissions misrepresentation or overriding internal controls.(II) To understand the internal control related to audit to design appropriate audit procedures.(III) To evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting
estimates and related disclosures made by the management.(IV) A conclusion is made on the appropriateness of the going-concern assumption adopted by the
Management. At the same time based on the audit evidence obtained a conclusion is reached on whether there is
material uncertainty as to the matters or circumstances that may give rise to significant doubt about Yunnan Baiyao’s
ability to continue as a going concern. Where we conclude that a material uncertainty exists auditing standards
require us to draw the attention of statement users to the related disclosures therein; where the disclosures are
1492025 Annual Report of Yunnan Baiyao Group Co. Ltd.
inadequate no unqualified opinion shall be issued. Our conclusion is based on the information available as of the
date of the audit report. However future events or circumstances may cause Yunnan Baiyao to be unable to continue
as a going concern.(V) To evaluate the overall presentation structure and content of the financial statements and whether the
financial statements present fairly the underlying transactions and events.(VI) To obtain sufficient and appropriate audit evidence on the financial information of entities or business
activities in Yunnan Baiyao to express audit opinions on the financial statements. We are responsible for the
direction supervision and execution of the Group audits and we take full responsibility for the audit opinion.We communicate with the governance team on matters such as planned audit scope timing and significant
audit findings including communicating internal control deficiencies of concern identified in our audit.We also provide a statement to the governance team that we have complied with the ethical requirements
related to independence and communicate with the governance team all relationships and other matters that may
reasonably be perceived to affect our independence as well as related precautions (if applicable).We determine the matters that are most significant to the audit of the current financial statements in the matters
communicated to the governance team and therefore such matters constitute key audit matters. We disclose these
matters in our audit report except where public disclosure of the matters is prohibited by law or regulation or in
rare instances we determine that a matter shall not be disclosed in the audit report if it is reasonably expected that
the negative consequences of disclosure of the matter in the report will outweigh the benefits to the public interest.Pan-China Certified Public Accountants LLP (SGP) Chinese Certified Public Accountants: Huang
Yuanxi
(Project Partner)
Hangzhou China Chinese Certified Public Accountants: Zhao Li
March 31 2026
1502025 Annual Report of Yunnan Baiyao Group Co. Ltd.
II. Financial Statement
The units in the Notes to the Financial Statements are presented in RMB.
1. Consolidated balance sheet
Prepared by Yunnan Baiyao Group Co. Ltd.December 31 2025
Unit: RMB
Item Closing balance Opening balance
Current assets:
Cash and bank balance 9107829167.98 10887983161.30
Provision of settlement fund
Placements with banks and other
financial institutions
Financial assets held for trading 4192113408.43 2547113523.40
Derivative financial assets
Notes receivable 585366210.93 929651911.37
Accounts receivable 10160059223.29 9923361104.39
Accounts receivable financing 1681985583.93 1887789780.16
Prepayment 434442949.73 303563844.07
Premium receivable
Reinsurance premium receivable
Reserves for reinsurance contract
receivable
Other receivables 406517244.11 108427198.33
Including: Interest receivable
Dividends receivable 79875215.52 10348033.98
Financial assets held under resale
agreements
Inventory 6231383826.69 6294368316.30
Including: Data resources
Contractual assets
Held-for-sales assets
Non-current assets due within one year 480295722.22
Other current assets 1234895158.04 788108579.54
Total current assets 34034592773.13 34150663141.08
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investment
1512025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Long-term receivables
Long-term equity investments 13227578051.91 12561276081.35
Investment in other equity instruments 71745000.00 71745000.00
Other non-current financial assets 210855260.47 387688897.11
Investment properties 50366578.65 49884012.15
Fixed assets 3274340152.34 3012878828.09
Construction in progress 807592848.36 703439112.24
Productive biological assets 644624.85 816524.85
Oil and gas assets
Right-of-use assets 248003380.85 291177021.52
Intangible assets 699193405.35 561795787.78
Including: Data resources
Development expenses 98211219.56 25422461.13
Including: Data resources
Goodwill 300805632.99 96963241.17
Long-term deferred expenses 108871585.00 127081811.91
Deferred income tax assets 974220393.56 756975016.74
Other non-current assets 161560224.80 116374395.93
Total non-current assets 20233988358.69 18763518191.97
Total assets 54268581131.82 52914181333.05
Current liabilities:
Short-term loans 182775753.21 423380272.64
Borrowings from the central bank
Placements from banks and other
financial institutions
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 1846714475.61 1913702684.41
Accounts payable 5523021856.86 4758352403.87
Receipts in advance 190841.21 446673.78
Contractual liabilities 1505826938.18 1916123387.16
Financial assets sold under repurchase
agreements
Deposits from customers and
interbank
Customer brokerage deposits
Acting underwriting of securities
Payroll payable 1482601305.72 1283950828.82
Taxes and duties payable 278051492.11 466603767.14
Other payables 1461459334.99 1386632676.75
1522025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Including: Interest payable
Dividends payable 1317388.73 86490742.04
Fees and commissions payable
Reinsurance amounts payable
Held-for-sales liabilities
Non-current liabilities due within one
76443711.5388436075.74
year
Other current liabilities 533163346.13 620862624.93
Total current liabilities 12890249055.55 12858491395.24
Non-current liabilities:
Reserves for insurance contract
Long-term loans 86569400.83 2100000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 141830379.18 190656990.23
Long-term payables 556079941.48 591533288.57
Long-term payroll payable 1718946.33 1296365.44
Estimated liabilities 22513696.41 12726280.09
Deferred income 271769812.59 295493565.32
Deferred income tax liabilities 148417516.74 93867331.53
Other non-current liabilities 1931554.36 1931554.36
Total non-current liabilities 1230831247.92 1189605375.54
Total liabilities 14121080303.47 14048096770.78
Owners’ equity
Share capital 1784262603.00 1784262603.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 17632117190.85 17637148823.48
Less: Treasury stock
Other comprehensive income -105091380.51 -101263356.31
Special reserves
Surplus reserves 2530458968.58 2530458968.58
Provision for general risk
Undistributed profit 18202311462.52 16981339385.76
Total owners’ equity attributable to
40044058844.4438831946424.51
parent company
Minority interests 103441983.91 34138137.76
Total owners’ equity 40147500828.35 38866084562.27
1532025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Total liabilities and owners’ equity 54268581131.82 52914181333.05
Legal representative: Zhang Wenxue Accounting officer: Ma Jia Head of accounting center: Xu Jing
2. Balance sheet of parent company
Unit: RMB
Item Closing balance Opening balance
Current assets:
Cash and bank balance 7898899516.62 8385552777.48
Financial assets held for trading 4187513408.43 2496810753.70
Derivative financial assets
Notes receivable 407360145.42 675593542.66
Accounts receivable 1959868853.22 1940715863.84
Accounts receivable financing 437824968.41 591699974.35
Prepayment 1321672589.52 1351285270.04
Other receivables 6632088211.74 6501863512.27
Including: Interest receivable
Dividends receivable 79875215.52 10348033.98
Inventory 915778341.49 1160234826.84
Including: Data resources
Contractual assets
Held-for-sales assets
Non-current assets due within one year 480295722.22
Other current assets 526360546.17 443410111.63
Total current assets 24287366581.02 24027462355.03
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 15606066432.75 14927341039.68
Investment in other equity instruments
Other non-current financial assets 210355260.47 387188897.11
Investment properties 486768216.63 350771014.59
Fixed assets 1542652814.35 1657360463.22
Construction in progress 25493467.64 63945254.57
Productive biological assets
Oil and gas assets
Right-of-use assets 110808820.06 195572313.66
Intangible assets 249740403.29 232180054.34
Including: Data resources
Development expenses 116497399.09 25422461.13
1542025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Including: Data resources
Goodwill
Long-term deferred expenses 27248415.57 40087609.94
Deferred income tax assets 378492475.32 387502971.84
Other non-current assets 407180610.18 404946229.16
Total non-current assets 19161304315.35 18672318309.24
Total assets 43448670896.37 42699780664.27
Current liabilities:
Short-term loans 150010000.00 400133333.33
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payable 4801338529.81 4018681496.23
Receipts in advance 83822.40 355324.62
Contractual liabilities 1034888677.35 1534629073.69
Payroll payable 1098078735.81 940019555.32
Taxes and duties payable 46701616.03 207921216.70
Other payables 10214340163.01 10071969063.28
Including: Interest payable
Dividends payable 86490742.04
Held-for-sales liabilities
Non-current liabilities due within one
4725069.5315543095.75
year
Other current liabilities 25640252.72 102375999.95
Total current liabilities 17375806866.66 17291628158.87
Non-current liabilities:
Long-term loans 1100000.00 1100000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 107226300.59 184260902.19
Long-term payables 554689731.33 591533288.57
Long-term payroll payable
Estimated liabilities
Deferred income 166140712.09 198493435.95
Deferred income tax liabilities 37035887.84 51548686.57
Other non-current liabilities 1931554.36 1931554.36
Total non-current liabilities 868124186.21 1028867867.64
Total liabilities 18243931052.87 18320496026.51
Owners’ equity:
1552025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Share capital 1784262603.00 1784262603.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 17797498647.03 17839540148.42
Less: Treasury stock
Other comprehensive income -61252370.53 -61502389.01
Special reserves
Surplus reserves 2529297618.08 2529297618.08
Undisturbed profits 3154933345.92 2287686657.27
Total owners’ equity 25204739843.50 24379284637.76
Total liabilities and owners’ equity 43448670896.37 42699780664.27
3. Consolidated income statement
Unit: RMB
Item 2025 2024
I. Total operating revenue 41186999090.31 40033300814.72
Including: Operating revenue 41186999090.31 40033300814.72
Interest income
Premiums earned
Fee and commission income
II. Total operating cost 36210224002.36 35206797286.50
Including: Operating cost 29032923195.82 28864766205.10
Interest expenses
Fee and commission expenses
Surrender value
Net payments for insurance claims
Net provision for insurance liability
Bond insurance expenses
Reinsurance expenses
Taxes and surcharges 234100213.88 243117369.44
Selling expenses 5619465376.89 4879502036.91
Administrative expenses 1020080152.22 1037553483.87
R&D expenses 350545386.25 337413301.03
Financial expenses -46890322.70 -155555109.85
Including: Interest expenses 24049890.09 63177001.07
Interest income 90467001.34 221210259.84
Plus: other income 100782693.13 102009773.65
Investment income (loss is indicated with “-”) 1042986305.52 776937495.06
1562025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Including: Income from investment in associates and
989141635.98774279535.69
joint ventures
Investment income from derecognition of
financial assets at amortized cost
Exchange gains (loss is indicated with “-”)
Net exposure hedging income (loss is indicated with “-”)
Income from change in fair value (loss is indicated with “-”) 110489468.71 136837009.94
Credit impairment losses (loss is indicated with “-”) 58066387.77 -39925926.62
Asset impairment losses (loss is indicated with “-”) -258372158.02 -91230709.62
Gains from asset disposal (loss is indicated with “-”) 8167595.81 490651.65
III. Operating profit (loss is indicated with “-”) 6038895380.87 5711621822.28
Plus: Non-operating revenue 24951555.82 15483338.73
Less: Non-operating expenses 20576232.96 42385497.02
IV. Total profit (total loss is indicated with “-”) 6043270703.73 5684719663.99
Less: Income tax expenses 853329846.75 917647303.71
V. Net profit (net loss is indicated with “-”) 5189940856.98 4767072360.28
(I) Classification by operation continuity
1. Net profit from continuing operations (net loss is indicated
5189940856.984767072360.28
with “-”)
2. Net profit from discontinued operations (net loss is indicated
with “-”)
(II) Classification by ownership
1. Net profits attributable to the shareholders of the parent
5153486838.914749415499.55
company (net loss to be listed with “-”)
2. Minority interests (net loss to be listed with “-”) 36454018.07 17656860.73
VI. Other comprehensive income net of tax -6013856.89 -13441329.34
Other comprehensive income attributable to owners of parent
-3828024.20-11725184.18
company net of tax
(I) Other comprehensive income that cannot be reclassified into
-2017048.84-2067513.33
profits or losses
1. Changes arising from re-measurement of the defined benefit
plan
2. Other comprehensive income that cannot be reclassified into
-2017048.84-2067513.33
profits or losses under the equity method
3. Changes in fair value of other equity instrument investments
4. Changes in fair value of the enterprise’s credit risk
5. Others
(II) Other comprehensive income that will be reclassified into
-1810975.36-9657670.85
profits or losses
1. Other comprehensive income that can be reclassified into
2267067.32-4787910.02
profits or losses under the equity method
2. Changes in fair value of other debt investments
3. Amount of the financial asset reclassified into other
comprehensive income
4. Provision for credit impairment of other debt investments
5. Cash flow hedging reserves
1572025 Annual Report of Yunnan Baiyao Group Co. Ltd.
6. Exchange differences from translation of statements
-4078042.68-4869760.83
denominated in foreign currencies
7. Others
Other comprehensive income attributable to minority interests net
-2185832.69-1716145.16
of tax
VII. Total comprehensive income 5183927000.09 4753631030.94
Total comprehensive income attributable to owners of parent
5149658814.714737690315.37
company
Total comprehensive income attributable to minority interests 34268185.38 15940715.57
VIII. Earnings per share
(I) Basic earnings per share 2.89 2.66
(II) Diluted earnings per share 2.89 2.66
Net profit realized by the combined party in business combination under common control before the business combination in the current
period was RMB 0.00 and net profit realized by the combined party in the previous period was RMB 0.00.Legal representative: Zhang Wenxue Accounting officer: Ma Jia Head of accounting center: Xu Jing
4. Income statement of parent company
Unit: RMB
Item 2025 2024
I. Operating revenue 9778836364.70 8867834592.37
Less: Operating cost 3464526798.29 3390069517.10
Taxes and surcharges 118270410.96 108199807.24
Selling expenses 2884116087.45 2539960910.51
Administrative expenses 609195490.98 565692698.02
R&D expenses 271893226.82 306956428.26
Financial expenses -63406226.57 -189731558.54
Including: Interest expenses 1747387.90 22136071.12
Interest income 77437600.76 210518129.74
Plus: Other income 46212716.68 33206855.90
Investment income (loss is indicated with “-”) 2618339748.91 2695886407.92
Including: Income from investment in associates and
983423862.34772732477.51
joint ventures
Derecognized financial assets measured
by amortized cost (loss is indicated with “-”)
Net exposure hedging income (loss is indicated with
“-”)
Income from changes in fair value (loss is indicated
94869231.65141271168.28
with “-”)
Credit impairment losses (loss is indicated with “-”) -911713.20 1435538.26
Asset impairment losses (loss is indicated with “-”) -63471045.24 -93877728.93
Gains from asset disposal (loss is indicated with “-”) 5838067.78 -771908.75
II. Operating profit (loss is indicated with “-”) 5195117583.35 4923837122.46
Plus: Non-operating revenue 13193633.03 4333688.14
1582025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Less: Non-operating expenses 9131886.91 29013380.31
III. Total profit (total loss is indicated with “-”) 5199179329.47 4899157430.29
Less: Income tax expenses 399417878.67 491752405.59
IV. Net profit (net loss is indicated with “-”) 4799761450.80 4407405024.70
(I) Net profit from continuing operations (net loss is
4799761450.804407405024.70
indicated with “-”)
(II) Net profit from discontinued operations (net loss is
indicated with “-”)
V. Other comprehensive income net of tax 250018.48 -6855667.55
(I) Other comprehensive income that cannot be
-2017048.84-2067513.33
reclassified into profits or losses
1. Changes arising from re-measurement of the defined
benefit plan
2. Other comprehensive income that cannot be
-2017048.84-2067513.33
reclassified into profits or losses under the equity method
3. Changes in fair value of other equity instrument
investments
4. Changes in fair value of the enterprise’s credit risk
5. Others
(II) Other comprehensive income that will be reclassified
2267067.32-4788154.22
into profits or losses
1. Other comprehensive income that can be reclassified
2267067.32-4788154.22
into profits or losses under the equity method
2. Changes in fair value of other debt investments
3. Amount of the financial asset reclassified into other
comprehensive income
4. Provision for credit impairment of other debt
investments
5. Cash flow hedging reserves
6. Exchange differences from translation of statements
denominated in foreign currencies
7. Others
VI. Total comprehensive income 4800011469.28 4400549357.15
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2025 2024
I. Cash flows from operating activities:
Cash received from sales of goods or rendering of services 45455037215.16 43254436486.53
Net increase in customer deposits and placements from
financial institutions
Net increase in borrowings from central bank
Net increase in placements from other financial institutions
1592025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Cash received from premiums of original insurance contracts
Net cash received from reinsurance business
Net increase in deposits of the insured and investment
Cash received from interest fees and commissions
Net increase in placements from banks and other financial
institutions
Net increase in repurchase business funds
Net cash received from acting trading of securities
Receipts from tax refunds 11120849.57 13465000.80
Other cash receipts related to operating activities 823606335.85 612105342.04
Subtotal of cash inflows from operating activities 46289764400.58 43880006829.37
Cash paid for goods purchased and services received 31295057710.69 31321052292.37
Net increase in loans and advances to customers
Net increase in deposits with central bank and other financial
institutions
Cash paid for claim settlements on original insurance contract
Net increase in placements to banks and other financial
institutions
Cash paid for interest fees and commissions
Cash paid for policy dividends
Cash paid to and on behalf of employees 3084089638.03 2787102422.47
Payments of all types of taxes 3005176969.94 2490279928.72
Other cash paid relating to operating activities 4305746201.48 2984569043.54
Subtotal of cash outflows from operating activities 41690070520.14 39583003687.10
Net cash flows from operating activities 4599693880.44 4297003142.27
II. Cash flows from investment activities:
Cash received from disposal of investments 6651743736.65 553145988.51
Cash received from returns on investments 321151517.75 420227984.66
Net cash received from disposal of fixed assets intangible
1153813.562832967.00
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
1680000.00
business units
Other cash received relating to investment activities 966194049.98 7043006500.00
Subtotal of cash inflows from investment activities 7941923117.94 8019213440.17
Cash paid for acquisition of fixed assets intangible assets and
479661609.93675074486.64
other long-term assets
Cash paid for acquisition of investments 8120040000.00 3400000000.00
Net increase in pledged loans
Net cash paid for acquisition of subsidiaries and other business
500320758.81
units
Other cash paid relating to investment activities 827237810.00 5143140000.00
Subtotal of cash outflows from investment activities 9927260178.74 9218214486.64
Net cash flows from investment activities -1985337060.80 -1199001046.47
1602025 Annual Report of Yunnan Baiyao Group Co. Ltd.
III. Cash flows from financing activities:
Cash received from absorption of investments 84483323.35
Including: Cash received from subsidiaries’ absorbing
84483323.35
minority shareholder investment
Cash received from borrowings 180394185.38 1886779951.02
Other cash received relating to financing activities 70733636.26 75292510.43
Subtotal of cash inflows from financing activities 335611144.99 1962072461.45
Cash payments for settlement of debts 432074541.69 2833409772.47
Cash payments for distribution of dividends and profits or
4042319473.775951560088.74
repayment of interest
Including: Dividends and profits paid to minority shareholders
10838079.038040928.52
by subsidiaries
Other cash payments relating to financing activities 210208928.13 154837764.12
Subtotal of cash outflows from financing activities 4684602943.59 8939807625.33
Net cash flow from financing activities -4348991798.60 -6977735163.88
IV. Effect of foreign exchange rate changes on cash and cash
-8661908.993497174.93
equivalents
V. Net increase in cash and cash equivalents -1743296887.95 -3876235893.15
Plus: Opening balance of cash and cash equivalents 10275529575.34 14151765468.49
VI. Closing balance of cash and cash equivalents 8532232687.39 10275529575.34
6. Cash flow statement of parent company
Unit: RMB
Item 2025 2024
I. Cash flows from operating activities:
Cash received from sales of goods or rendering of services 10236342793.57 8301980471.69
Receipts from tax refunds
Other cash receipts related to operating activities 14573927386.68 5802561355.53
Subtotal of cash inflows from operating activities 24810270180.25 14104541827.22
Cash paid for goods purchased and services received 2368000845.50 2068505819.43
Cash paid to and on behalf of employees 1486787999.25 1289767253.56
Payments of all types of taxes 1468913003.99 1021449917.67
Other cash paid relating to operating activities 14400408558.71 7147859678.29
Subtotal of cash outflows from operating activities 19724110407.45 11527582668.95
Net cash flows from operating activities 5086159772.80 2576959158.27
II. Cash flows from investment activities:
Cash received from disposal of investments 6505266311.15 560000000.00
Cash received from returns on investments 309834174.10 420217009.66
Net cash received from disposal of fixed assets intangible assets
2745268.39
and other long-term assets
1612025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Net cash received from disposal of subsidiaries and other business
units
Other cash received relating to investment activities 701476049.98 7042506500.00
Subtotal of cash inflows from investment activities 7516576535.23 8025468778.05
Cash paid for acquisition of fixed assets intangible assets and
178715758.64272704559.21
other long-term assets
Cash paid for acquisition of investments 8130000000.00 3420000000.00
Net cash paid for acquisition of subsidiaries and other business
units
Other cash paid relating to investment activities 444269110.00 5142640000.00
Subtotal of cash outflows from investment activities 8752984868.64 8835344559.21
Net cash flows from investment activities -1236408333.41 -809875781.16
III. Cash flows from financing activities:
Cash received from absorption of investments
Cash received from borrowings 150000000.00 1647553068.31
Other cash received relating to financing activities 70733636.26 75292510.43
Subtotal of cash inflows from financing activities 220733636.26 1722845578.74
Cash payments for settlement of debts 400000000.00 1267153068.31
Cash payments for distribution of dividends and profits or
4012523754.775891507647.80
repayment of interest
Other cash payments relating to financing activities 105639142.30 77774307.15
Subtotal of cash outflows from financing activities 4518162897.07 7236435023.26
Net cash flow from financing activities -4297429260.81 -5513589444.52
IV. Effect of foreign exchange rate changes on cash and cash
-1933237.22286219.52
equivalents
V. Net increase in cash and cash equivalents -449611058.64 -3746219847.89
Plus: Opening balance of cash and cash equivalents 7795079954.83 11541299802.72
VI. Closing balance of cash and cash equivalents 7345468896.19 7795079954.83
1622025 Annual Report of Yunnan Baiyao Group Co. Ltd.
7. Consolidated statement of changes in owners’ equity
Amount for the current period
Unit: RMB
2025
Owner’s equity attributable to parent company
Item
Minority
Other equity instruments Other Provision Total owners’ equity
Less: Treasury Special interests
Share capital Capital reserves comprehensive Surplus reserves for general Undisturbed profits Others Subtotal
Preferred Perpetual stock reserves
Others income risk
shares bonds
I. Closing balance of the
1784262603.0017637148823.48-101263356.312530458968.5816981339385.7638831946424.5134138137.7638866084562.27
previous year
Plus: Changes in
accounting policies
Correction of
errors in the prior period
Others
II. Opening balance of the
1784262603.0017637148823.48-101263356.312530458968.5816981339385.7638831946424.5134138137.7638866084562.27
current period
III. Increase/decrease for
the period (decrease is -5031632.63 -3828024.20 1220972076.76 1212112419.93 69303846.15 1281416266.08
indicated with “-”)
(I) Total comprehensive
-3828024.205153486838.915149658814.7134268185.385183927000.09
income
(II) Contribution and
withdrawal of capital by 37009868.76 37009868.76 47191128.53 84200997.29
owners
1. Ordinary shares
84200997.2984200997.29
invested by owners
2. Capital invested by
holders of other equity
instruments
3. Amount of share
payment credited to
owners’ equity
4. Others 37009868.76 37009868.76 -37009868.76
(III) Profit distribution -3932514762.15 -3932514762.15 -12155467.76 -3944670229.91
1. Withdrawal of surplus
reserves
1632025 Annual Report of Yunnan Baiyao Group Co. Ltd.
2. Withdrawal of general
risk provision
3. Distribution to owners
-3932514762.15-3932514762.15-12155467.76-3944670229.91
(or shareholders)
4. Others
(IV) Internal carry-over of
owner’s equity
1. Transfer of capital
reserves to capital (or
share capital)
2. Transfer of surplus
reserves to capital (or
share capital)
3. Covering loss with
surplus reserves
4. Change of defined
benefit plan carried
forward to retained
earnings
5. Other comprehensive
income carried forward to
retained earnings
6. Others
(V) Special reserves
1. Provision for the period
2. Utilization for the
period
(VI) Others -42041501.39 -42041501.39 -42041501.39
IV. Closing balance for
1784262603.0017632117190.85-105091380.512530458968.5818202311462.5240044058844.44103441983.9140147500828.35
the period
1642025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Amount for the previous year
Unit: RMB
2024
Owner’s equity attributable to parent company
Item Other equity instruments Other Provision Minority Total owners’
Less: Treasury Special Surplus Undisturbed
Share capital interests equity Preferred Perpetual Capital reserves comprehensive for general Others Subtotal
Others stock reserves reserves profits
shares bonds income risk
I. Closing balance of
1796862549.0018246619742.09707428892.15-89538172.132530458968.5818102147836.1239879122031.5126238350.7139905360382.22
the previous year
Plus: Changes
in accounting
policies
Correction
of errors in the prior
period
Others
II. Opening balance
1796862549.0018246619742.09707428892.15-89538172.132530458968.5818102147836.1239879122031.5126238350.7139905360382.22
of the current period
III.Increase/decrease for
-12599946.00-609470918.61-707428892.15-11725184.18-1120808450.36-1047175607.007899787.05-1039275819.95
the period (decrease
is indicated with “-”)
(I) Total
comprehensive - -11725184.18 4749415499.55 4737690315.37 15940715.57 4753631030.94
income
(II) Contribution and
withdrawal of capital -12599946.00 -694828946.15 -707428892.15
by owners
1. Ordinary shares
invested by owners
2. Capital invested
by holders of other
equity instruments
3. Amount of share
payment credited to
owners’ equity
4. Others -12599946.00 -694828946.15 -707428892.15
(III) Profit
-5870223949.91-5870223949.91-8040928.52-5878264878.43
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provision
3. Distribution to
owners (or -5870223949.91 -5870223949.91 -8040928.52 -5878264878.43
shareholders)
1652025 Annual Report of Yunnan Baiyao Group Co. Ltd.
4. Others
(IV) Internal carry-
over of owner’s
equity
1. Transfer of capital
reserves to capital
(or share capital)
2. Transfer of
surplus reserves to
capital (or share
capital)
3. Covering loss
with surplus reserves
4. Change of defined
benefit plan carried
forward to retained
earnings
5. Other
comprehensive
income carried
forward to retained
earnings
6. Others
(V) Special reserves
1. Provision for the
period
2. Utilization for the
period
(VI) Others 85358027.54 85358027.54 85358027.54
IV. Closing balance
1784262603.0017637148823.48-101263356.312530458968.5816981339385.7638831946424.5134138137.7638866084562.27
for the period
1662025 Annual Report of Yunnan Baiyao Group Co. Ltd.
8. Statement of changes in owners’ equity of parent company
Amount for the current period
Unit: RMB
2025
Item Other equity instruments Other
Less: Treasury Special Undisturbed
Share capital Capital reserves comprehensive Surplus reserves Others Total owners’ equity
Preferred Perpetual stock reserves profits
Others income
shares bonds
I. Closing balance of the previous
year 1784262603.00
17839540148.42-61502389.012529297618.082287686657.2724379284637.76
Plus: Changes in accounting
policies
Correction of errors in
the prior period
Others
II. Opening balance of the current
period 1784262603.00
17839540148.42-61502389.012529297618.082287686657.2724379284637.76
III. Increase/decrease for the
period (decrease is indicated with -42041501.39 250018.48 867246688.65 825455205.74
“-”)
(I) Total comprehensive income 250018.48 4799761450.80 4800011469.28
(II) Contribution and withdrawal
of capital by owners
1. Ordinary shares invested by
owners
2. Capital invested by holders of
other equity instruments
3. Amount of share payment
credited to owners’ equity
4. Others
(III) Profit distribution -3932514762.15 -3932514762.15
1. Withdrawal of surplus reserves
2. Distribution to owners (or
shareholders) -3932514762.15 -3932514762.15
3. Others
1672025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(IV) Internal carry-over of
owner’s equity
1. Transfer of capital reserves to
capital (or share capital)
2. Transfer of surplus reserves to
capital (or share capital)
3. Covering loss with surplus
reserves
4. Change of defined benefit plan
carried forward to retained
earnings
5. Other comprehensive income
carried forward to retained
earnings
6. Others
(V) Special reserves
1. Provision for the period
2. Utilization for the period
(VI) Others -42041501.39 -42041501.39
IV. Closing balance for the period 1784262603.00 17797498647.03 -61252370.53 2529297618.08 3154933345.92 25204739843.50
1682025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Amount for the previous year
Unit: RMB
2024
Other equity instruments
Item Other Less: Treasury Special Total owners’
Share capital Preferred Perpetual Capital reserves comprehensive Surplus reserves Undisturbed profits Others
Others stock reserves equity
shares bonds income
I. Closing balance of
the previous year 1796862549.00
18449011067.03707428892.15-54646721.462529297618.083750505582.4825763601202.98
Plus: Changes in
accounting policies
Correction of
errors in the prior
period
Others
II. Opening balance of
the current period 1796862549.00 18449011067.03 707428892.15 -54646721.46
2529297618.083750505582.4825763601202.98
III. Increase/decrease
for the period (decrease -12599946.00 -609470918.61 -707428892.15 -6855667.55 -1462818925.21 -1384316565.22
is indicated with “-”)
(I) Total comprehensive
income
-6855667.554407405024.704400549357.15
(II) Contribution and
withdrawal of capital -12599946.00 -694828946.15 -707428892.15
by owners
1. Ordinary shares
invested by owners
2. Capital invested by
holders of other equity
instruments
3. Amount of share
payment credited to
owners’ equity
4. Others -12599946.00 -694828946.15 -707428892.15
(III) Profit distribution -5870223949.91 -5870223949.91
1. Withdrawal of
surplus reserves
2. Distribution to
owners (or -5870223949.91 -5870223949.91
shareholders)
3. Others
(IV) Internal carry-over
of owner’s equity
1692025 Annual Report of Yunnan Baiyao Group Co. Ltd.
1. Transfer of capital
reserves to capital (or
share capital)
2. Transfer of surplus
reserves to capital (or
share capital)
3. Covering loss with
surplus reserves
4. Change of defined
benefit plan carried
forward to retained
earnings
5. Other comprehensive
income carried forward
to retained earnings
6. Others
(V) Special reserves
1. Provision for the
period
2. Utilization for the
period
(VI) Others 85358027.54 85358027.54
IV. Closing balance for
the period 1784262603.00 17839540148.42 -61502389.01 2529297618.08 2287686657.27
24379284637.76
1702025 Annual Report of Yunnan Baiyao Group Co. Ltd.
III. Basic Information of the Company
1. Place of registration form of organization and address of headquarters of the Company
The registered address of Yunnan Baiyao Group Co. Ltd is No.3686 Yunnan Baiyao Street Chenggong
District Kunming Yunnan Province. The Company is established as a joint-stock limited company with its head
office located at No.3686 Yunnan Baiyao Street Chenggong District Kunming Yunnan Province.
2. History of the Company
The Company was formerly known as Yunnan Baiyao Factory which was established in June 1971. On May
3 1993 Yunnan Provincial System Reform Committee approved the establishment of Yunnan Baiyao Industrial
Co. Ltd in the Document Yun Ti Gai [1993] No.48. The Company’s sponsors were Yunnan Baiyao Factory
Yunnan Fudian Trust and Investment Company and Lianjiang International Trade Co. Ltd. On June 18 1993
the Economic System Reform Commission and the Planning Commission of Yunnan Province jointly issued the
Document Yun Ti Gai [1993] No.74 to approve the Company’s public offering of RMB 20 million of individual
shares (in the par value of the shares). On June 24 1993 the Administration of State-owned Assets of Yunnan
Province issued the Document Yun Guo Zi Zi (1993) No.37 to confirm the appraisal results of Yunnan Baiyao
Factory and decided to set up RMB 40 million of national capital stock amounting to 40 million shares. Yunnan
Baiyao Industrial Co. Ltd was approved by CSRC under the Document Zheng Jian Fa Shen Zi (1993) No.55 to
issue 20 million RMB-denominated ordinary shares to the public. Yunnan Baiyao issued 20 million shares to the
public in November 1993 of which 18 million shares were issued to the public individuals and 2 million shares
to the Company’s internal employees.On November 30 1993 the Company was registered as a joint-stock limited company with the
Administration for Industry and Commerce of Yunnan Province and on December 15 1993 the public shares
issued by the Company were listed on the Shenzhen Stock Exchange with a total share capital of 80 million
shares and a stock code of “000538.”
In accordance with the resolutions passed at the third Extraordinary General Meeting of the fifth Board of
Directors of the Company in 2008 on August 11 2008 and at the first Extraordinary General Meeting of the
Company in 2008 on August 27 2008 and the approval by the CSRC on the Document (2008) No.1411 Reply on
Approving the Private Issuance of Shares of Yunnan Baiyao Group Co. Ltd the Company issued 50000000 new
shares to Ping An Life Insurance Company of China Limited in a private offering raising funds of RMB
1393500000.00 (including issuance expenses) all of which were subscribed in cash. The share capital of the
Company increased from 484051138 shares to 534051138 shares after the implementation of the above
private offerings.In accordance with the 2009 Annual Equity Distribution Plan approved at the General Meeting of the Company
in May 2010 3 shares were issued to all shareholders from the capital reserve as a bonus for every 10 shares held.The Company’s share capital amounted to 534051138 shares prior to the distribution and the total share capital
increased to 694266479 shares after the distribution.The 2013 Annual General Meeting was held on May 8 2014 and in accordance with the resolution of the
meeting and the amended articles of association the shareholders of the Company increased the registered capital
by RMB 347133239.00. The newly registered capital would be increased by the distribution of 5 bonus shares for
1712025 Annual Report of Yunnan Baiyao Group Co. Ltd.
every 10 shares to all shareholders based on the Company’s existing total share capital of 694266479 shares. After
the change the share capital of the Company increased from 694266479 shares to 1041399718 shares.The Company underwent a merger and overall listing with Baiyao Holdings by issuing shares to three
shareholders of Baiyao Holdings: SASAC of Yunnan Province New Huadu and Jiangsu Yuyue. This merger and
overall listing were successfully completed on June 1 2019 with the Company as the existing entity. As a result
the Company acquired all the assets liabilities businesses contracts and other rights and obligations of Baiyao
Holdings. Following the completion of the transaction the 432426597 shares of the listed company previously
held by Baiyao Holdings were canceled. The merger and overall listing brought in a newly registered capital of
RMB 236003599.00 and the Company’s total share capital amounted to RMB 1277403317.00 after this change.A total of 236003599 newly issued shares subject to trading moratorium were issued with a listing date of July 3
2019 and the shares were listed on the Shenzhen Stock Exchange. Upon completion of this transaction SASAC
of Yunnan Province and New Huadu with its acting-in-concert parties were equally the largest shareholder of the
Company and neither of them obtained control over the Company.On May 22 2020 SASAC of Yunnan Province transferred its 321160222 shares of the Company to State-
owned Equity Management Company at nil consideration. Upon completion of this transfer State-owned Equity
Management Company and New Huadu with its acting-in-concert parties were equally the largest shareholder of
the Company and there was no change in the Company’s situation of not having a de facto controller or controlling
shareholder.On December 8 2021 SASAC of Yunnan Province transferred 100% of its shares of State-owned Equity
Management Company into Yunnan Investment Group. After the equity transfer Yunnan Investment Group held
321160222 shares of the Company through the State-owned Equity Management Company accounting for 25.04%
of the total share capital of the Company. State-owned Equity Management Company and New Huadu with its acting-
in-concert parties were equally the largest shareholder of the Company and there was no change in the Company’s
situation of not having a de facto controller or controlling shareholder.On April 20 2022 the Company’s 2021 Annual Equity Distribution Plan had been considered and approved
at the Company’s 2021 Annual General Meeting and the details of 2021 Annual Equity Distribution Plan were as
follows: Based on the total share capital on the equity registration date when the distribution plan was implemented
in the future a cash dividend of RMB 16.00 (including tax) for every 10 shares and 4.00 bonus shares (including
tax) for every 10 shares would be distributed to all shareholders and there would be no conversion of share capital
from the capital reserve. On April 21 2020 the fourth session of the ninth Board of Directors of the Company in
2020 and the third session of the ninth Supervisory Committee of the Company in 2020 respectively considered
and approved the Proposal on Granting Stock Options (Initially Granted Part) to Incentive Participants of the 2020
Equity Incentive Plan. As of December 31 2022 the Company had completed distributing dividends of
513206278 shares and stock exercises of 941029 shares increasing its share capital to 1796862549 shares.
On April 23 2024 the Company disclosed the Announcement on Completion of Cancellation of the Repurchased
Shares and Changes in Shares (Announcement No. 2024-21). The Company completed the cancellation of the
aforesaid 12599946 repurchased shares at the Shenzhen Branch of China Securities Depository and Clearing
Corporation Limited on April 19 2024. Upon completion of the cancellation of the shares repurchased the total
number of shares of the Company was 1784262603.00. The shares repurchased for cancellation will not have a
1722025 Annual Report of Yunnan Baiyao Group Co. Ltd.
material impact on the Company’s financial condition and operating results.As of December 31 2025 the Company has a total capital of 1784262603 shares with 0 shares in treasury.The situation that the Company has no de facto controller and no controlling shareholder remain unchanged.
3. Business nature and principal businesses of the Company
The business nature and operating activities of the Company and its subsidiaries (collectively referred to as
the “Group”) mainly include: R&D manufacturing and sales of chemical APIs chemical preparations Chinese
patent medicines TCM materials biological products medical devices healthcare food food beverages special
labor protection products non-household textile products daily chemical products cosmetics outdoor products;
Sales of rubber pastes plasters disinfectant products electronic and digital products; Information technology
science and technology and economic and technological consulting services; Import and export of goods; Property
operation and management (carrying out business activities with qualification certificates) wholesale and retail of
drugs logistics and distribution etc (For items that require approval according to law business activities of these
projects can only be carried out after approval by relevant departments).
4. These financial statements were approved for reporting by a resolution of the Board of Directors of
the Company dated March 31 2026.As of December 31 2025 there were 114 subsidiaries and structured entities included in the scope of the
Group’s consolidated financial statements. For details please refer to Note X “Interest in Other Entities.” The
Group had 6 new entities included in its consolidated financial statements compared to the end of the previous
year while 3 entity were excluded.IV. Basis for Preparation of Financial Statements
1. Basis for preparation
The financial statements of the Group are prepared on the basis of going concern assumptions based on actual
transactions and events that occur and in accordance with the Accounting Standards for Business Enterprises - Basic
Standards issued by the Ministry of Finance (issued by Decree No. 33 of the Ministry of Finance revised by Decree
No. 76 of the Ministry of Finance) 40 specific accounting standards Guidelines for the Application of Accounting
Standards for Business Enterprises interpretations of Accounting Standards for Business Enterprises and otherrelevant provisions promulgated and revised on and after February 15 2006 (collectively “Accounting Standardsfor Business Enterprises” or “ASBEs”) as well the disclosure provisions of the Rules No.15 for Governing the
Disclosure of Information by Companies Issuing Public Securities - General Provisions for Financial Reporting
(Revised in 2023) issued by CSRC.In accordance with the relevant provisions of the Accounting Standards for Business Enterprises the Group’s
accounting is based on the accrual basis. Except for certain financial instruments these financial statements are
prepared at historical cost. In case of asset impairment provision for impairment would be made according to the
relevant regulations.
2. Going concern basis
The Company and the Group evaluated their abilities to continue as a going concern for the 12 months from
the end of the reporting period and there are no material matters affecting their abilities to continue as a going
concern.
1732025 Annual Report of Yunnan Baiyao Group Co. Ltd.
V．Significant Accounting Policies and Accounting Estimates
Notes on specific accounting policies and accounting estimates:
Based on the actual production and operation characteristics and in accordance with the provisions of relevant
accounting standards for enterprises the Group has formulated a number of specific accounting policies and
accounting estimates for transactions and matters such as revenue recognition and R&D expenses. For details see
the descriptions under Section 31 “Revenue” under this Note V. For the descriptions of significant accountingjudgments and estimates made by the management please refer to Section 36 “Other Significant AccountingPolicies and Accounting Estimates” under this Note V.
1. Statement of compliance with the ASBEs
The financial statements prepared by the Company are in compliance with the requirements of the Accounting
Standards for Business Enterprises (ASBEs) and have reflected truly and completely such relevant information as
the financial positions of the Company and the Group as of December 31 2025 as well as the business results and
cash flows of the Company and the Group for 2025. In addition all significant aspects of the financial statements
of the Company and the Group also comply with the disclosure requirements about the financial statements and
their notes in the Rules No.15 for Governing the Disclosure of Information by Companies Issuing Public Securities
- General Provisions for Financial Reporting as amended by the CSRC in 2023.
2. Accounting period
The Group’s accounting periods are divided into annual and interim periods. An interim period refers to a
reporting period less than a full accounting year. The accounting year of the Group is the calendar year that starts
from January 1 and ends on December 31.
3. Operating cycle
The normal operating cycle refers to the period from purchasing the assets for processing to realizing the cash
or cash equivalents. The operating cycle of the Group consists of 12 months which is the standard of the
classification for the liquidity of the assets and liabilities.
4. Reporting currency
RMB is the currency used in the major economic environment where the Company and its domestic
subsidiaries operate. The reporting currency of the Company and its domestic subsidiaries is RMB. The Company’s
foreign subsidiaries select HKD as their reporting currencies based on the currency of the primary economic
environment in which they operate. The currency used by the Group in preparing the financial statements is RMB.
5. Determination method and selection basis of materiality standards
RApplicable □Not applicable
Item Materiality standards
The single provision amount accounts for more than 10% of the
Significant accounts receivable bad debt provisions to be
total amount of bad debt provision for various types of receivables
recovered or reversed
and the amount is greater than RMB 5 million.Actual write-off of significant receivables The value of a single item is greater than RMB 5 million
Projects with budgets exceeding RMB 50 million or deemed to be
Significant construction in progress
of significance.
1742025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The amount of a single advance receipt with an age of more than 1
Significant advance receipts
year is greater than RMB 5 million
A single contractual liability with an age of more than 1 year
Significant contract liabilities accounts for more than 10% of the total contractual liabilities and
the amount is greater than RMB 100 million
The amount of a single account payable is greater than RMB 5
Significant accounts payable aged over one year or overdue
million
Significant other payables aged over one year or overdue The amount of a single item is greater than RMB 5 million
Significant dividends payable outstanding for over one year The amount of a single item is greater than RMB 100 million
Receipts and payments of significant cash related to investment
The amount of a single item is greater than RMB 100 million
activities
Significant offshore operating entity The net assets of the economic entity exceed RMB 100 million
Significant structured entity The net assets of the structured entity exceed RMB 2 million
Significant non-wholly-owned subsidiaries The net assets of the subsidiary exceed RMB 100 million
R&D projects with individual investment exceeding 2% of net
Significant capitalized R&D projects
assets and other key R&D projects identified by the Company
R&D projects with individual investment exceeding 2% of net
Significant outsourced project under research
assets and other key R&D projects identified by the Company
A single investment activity accounts for more than 10% of the
Significant investment activities total cash inflow or outflow related to the investment activities and
the amount is greater than RMB 1 billion
The book value of long-term equity investment in a single investee
accounts for more than 5% of the Group’s net assets and the
Significant joint ventures or associates amount is greater than RMB 1 billion or the investment profit and
loss under the long-term equity investment equity method accounts
for more than 10% of the Group’s consolidated net profit
The net assets of the subsidiary account for more than 10% of the
Group’s net assets or the net profits of subsidiary account for more
Significant subsidiaries
than 10% of the Group’s consolidated profits and the subsidiaries
with significant strategic position
6. Accounting treatment for business combination under common control and not under common control
A business combination refers to the transaction or matter in which one reporting subject formed due to the
combination of two or above separate entities. A business combination can be classified as the combination under
common control and not under common control.
(1) Business combination under common control
A business combination under common control is a business combination in which all of the combining entities
are ultimately controlled by the same party or parties both before and after the combination and that control is not
transitory. For a business combination under common control the party that obtains the control of the other parties
on the combination date is the acquirer and other parties involving in the business combination are the acquirees.The combination date is the date on which the acquirer effectively obtains the control of the acquirees.Assets and liabilities that are obtained by the acquirer in a business combination shall be measured at their book
value at the combination date as recorded by the acquirees. The difference between the book value of the net assets
obtained and the book value of the consideration paid by the acquirer for the combination (or the aggregate par value
of the issued shares) shall be adjusted to share premium under capital reserve (or capital premium). If the share
premium under capital reserve (or capital premium) is not sufficient to absorb the difference any excess shall be
adjusted against retained earnings.Expenses that are directly attributable to the business combination by the acquirer are charged to the current
1752025 Annual Report of Yunnan Baiyao Group Co. Ltd.
profits and losses in which they are incurred.
(2) Business combination not under common control
A business combination not under common control is a business combination in which all of the combining
entities are not ultimately controlled by the same party or parties both before and after the combination. For a
business combination not under common control the party that obtains the control of the other parties on the
acquisition date is the acquirer; other parties involving in the business combination are the acquirees. The acquisition
date is the date on which the acquirer effectively obtains control of the acquirees.For a business combination not under common control the cost of business combination is the fair value of
assets paid liabilities incurred or undertaken and equity securities issued by the acquirer for obtaining the control
of the acquirees at the acquisition date. Expenses that are attributable to the business combination such as audit fees
legal services fees consultancy fees and other administration expenses incurred by the Company as acquirer are
expensed in the current profits and losses in which they are incurred. Transaction fees of equity securities or debt
securities issued by the acquirer as consideration for a business combination are included in the initially recognized
amount of equity securities or debt securities. Contingent consideration involved is recorded as the combination cost
at its fair value on the acquisition date. Should any new or further evidence in relation to the circumstances existing
on the acquisition date arise within 12 months after the acquisition date making it necessary to adjust the contingent
consideration the goodwill arising from the business combination shall be adjusted accordingly. The cost of
combination incurred and identifiable net assets obtained by the acquirer in a business combination are measured at
fair value on the acquisition date. Where the cost of the combination exceeds the acquirer’s interest in the fair value
of the acquiree’s identifiable net assets on the acquisition date the difference is recognized as goodwill; Where the
cost of combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets on
the acquisition date the difference is recognized in current profits and losses after a review of measurement for the
fair value of identifiable assets liabilities and contingent liabilities of the acquiree and the combination cost.In relation to the deductible temporary difference acquired from the acquiree which was not recognized as
deferred tax assets due to non-fulfillment of the recognition criteria at the date of the acquisition if new or further
information that is obtained within 12 months after the acquisition date indicates that related conditions at the
acquisition date already existed and that the realization of the economic benefits brought by the deductible
temporary difference of the acquiree on the acquisition date can be expected the relevant deferred tax assets shall
be recognized and goodwill shall be deducted accordingly. When the amount of goodwill is less than the deferred
tax assets that shall be recognized the difference shall be recognized in the current profits and losses. Except for the
above circumstances deferred tax assets in relation to business combination are recognized in the current profits
and losses.For a business combination involving entities not under common control that is achieved in stages the
Company shall determine whether the business combination shall be treated as “a bundle of transactions” in
accordance with the determination standards as contained in the Circular on the Publishment of Interpretation No.5
on Accounting Standards for Business Enterprises Issued by the Ministry of Finance (Finance and Taxation (2012)
No. 19) and Section 51 of Accounting Standards for Business Enterprises No.33 - Consolidated Financial
Statements (See Item (2) of Section 6 “Preparation of the consolidated financial statements” under this Note V).
1762025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Where the business combination is treated as “a bundle of transactions” the business combination shall be accounted
for in accordance with the previous paragraphs and Section 17 “Long-term equity investments” of this Note V;
where the business combination does not fall within “a bundle of transactions” the business combination in the
Company’s and the consolidated financial statements shall be accounted for as follows:
In the Company’s financial statements the initial cost of the investment shall be the sum of the book value of
equity investment held in the acquiree prior to the acquisition date and the amount of additional investment made to
the acquiree at the acquisition date. Other comprehensive income relating to the equity interest held in the acquiree
prior to the acquisition date shall be upon disposal of the investment accounted for in accordance with the same
basis as that the acquiree adopts in directly disposing of relevant assets or liabilities.In the consolidated financial statements the equity interest held in the acquiree prior to the acquisition date is
re-measured according to its fair value at the acquisition date; the difference between the fair value and the book
value is recognized as investment income for the current period. Other comprehensive income relating to the equity
interest held in the acquiree prior to the acquisition date shall be accounted for in accordance with the same basis as
that the acquiree adopts in directly disposing of relevant assets or liabilities.
7. Judgement criteria of control and preparation of consolidated financial statements
(1) Criteria for the recognition of scope of consolidated financial statements
The scope of consolidation shall be determined based on the concept of control. Control means that the Group
has power over the investee enjoys variable returns through its participation in the investee’s related activities and
has the ability to use its power over the investee to influence the amount of its returns. The consolidated financial
statements comprise the financial statements of the Company and all of its subsidiaries which are defined as those
entities controlled by the Group.Once any change in the facts and circumstances arises which leads to a change in the elements involved in the
definition of control the Group will conduct an assessment.
(2) Preparation of consolidated financial statements
Subsidiaries are consolidated from the date on which the Group obtains their net assets and actual control over
their operating decisions and are deconsolidated from the date when such control ceases. For subsidiaries being
disposed of the business results and cash flows prior to the date of disposal are duly included in the consolidated
income statement and consolidated cash flow statement; for subsidiaries disposed of during the period the opening
balances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business
combination not under common control their operating results and cash flows subsequent to the acquisition date are
included in the consolidated income statement and consolidated cash flow statement and the opening balances and
comparative figures in the consolidated financial statements would not be restated. For subsidiaries acquired from
a business combination under common control and acquirees from a merger by absorption their operating results
and cash flows from the date of commencement of the period in which the combination occurred to the date of
combination are included in the consolidated income statement and consolidated cash flow statement and the
comparative figures in the consolidated financial statements would be restated.In preparing the consolidated financial statements where the accounting policies or the accounting periods are
1772025 Annual Report of Yunnan Baiyao Group Co. Ltd.
inconsistent between the Company and subsidiaries the financial statements of subsidiaries are adjusted in
accordance with the accounting policies and accounting period of the Company. For subsidiaries acquired from a
business combination involving enterprises not under common control the financial statements of the subsidiaries
are adjusted based on the fair value of the identifiable net assets at the acquisition date.All significant intra-group balances transactions and unrealized profits are offset in preparing the consolidated
financial statements.The portion of a subsidiary’s equity and the portion of a subsidiary’s net profits and losses for the period not
attributable to the Company are recognized as minority interests and profits and losses attributable to minority
interests respectively which are presented under shareholders’ equity and net profit separately in the consolidated
financial statement. A subsidiary’s net current profits and losses attributable to minority interests is recognized as
“share of profits and losses of minority interests” under net profit in the consolidated income statement. When the
amount of a subsidiary’s loss attributable to the minority shareholders exceeds the minority shareholders’ share of
the opening balance of shareholders’ equity of the subsidiary the excess is deducted from the minority interests.In event of loss of control over a former subsidiary due to disposal of certain equity investments or other reasons
any retained equity is re-measured at its fair value on the date when the control is lost. The surplus of the aggregate
considerations received upon disposal of equity plus the fair value of any retained equity less the share of net assets
in the former subsidiary calculated cumulatively from the acquisition date based on the original shareholding
percentage is included in the investment income for the period when the control is lost. Other comprehensive income
related to the equity investment in the former subsidiary shall be accounted for on the same basis at the time of loss
of control as the subsidiary directly disposed of the related asset or liability. Then the remaining equity shall be
measured subsequently in accordance with the Accounting Standards for Business Enterprises No. 2 - Long-term
Equity Investments or Accounting Standards for Business Enterprises No. 22 - The Recognition and Measurement
of Financial Instruments and other regulations. For details please see Section 17 “Long-term equity investments”
or Section 11 “Financial instruments” under this Note V.For disposal of the Group’s equity investments in a subsidiary in phases through multiple transactions until
loss of control it is determined based on whether such transactions should be regarded as a bundle of transactions.If the terms conditions and economic effects of all transactions are conducted for the purpose of disposing of the
equity investments in a subsidiary and meet the following one or more criteria it is usually shown that such multiple
transactions are deemed as a bundle of transactions for accounting treatment: * These transactions were entered
into at the same time or upon the consideration of the effects therebetween; * These transactions can only generate
one complete business result when conducted all together; * The occurrence of one transaction depends on the
occurrence of at least one other transaction; and * One transaction alone is not economical but is economical when
considered with other transactions. When the transactions do not constitute a bundle of transactions each transactionthereof shall be accounted in accordance with principles applicable to the “disposal of part of long-term equityinvestments in a subsidiary that does not result in the loss of control” (please see Item (2) * of Section 17 “Long-term equity investments” under this Note V for details) and “loss of control over a former subsidiary due to disposalof certain equity investments or other reasons” (please see the preceding paragraph for details). If such transactions
fall under a bundle of transactions those transactions are accounted for as one deal under which the subsidiary is
1782025 Annual Report of Yunnan Baiyao Group Co. Ltd.
disposed of and control is lost. However before the control over the subsidiary is lost the surplus between
consideration received for each disposal and the value of corresponding share of net assets in the subsidiary entitled
by the investment underlying the disposal shall be recognized as other comprehensive income in the consolidated
financial statements and when control is lost converted into investment income or loss for the period in which
control is lost.
8. Classification of joint venture arrangements and accounting treatment method for joint operations
Joint venture arrangement means an arrangement under the common control of two or more parties. The Group
classifies the joint venture arrangement into joint operations and joint ventures based on the rights and obligations
it enjoys and assumes in the joint venture arrangement. Joint operation means a joint venture arrangement in which
the Group owns the assets and assumes the liabilities associated with the arrangement. Joint venture means a joint
venture arrangement in which the Group only has rights to the net assets of the arrangement.The Group’s investments in joint ventures are accounted for using the equity method and are treated inaccordance with the accounting policies described in Item (2) * “Long-term equity investments accounted forusing the equity method” in Section 17 “Long-term equity investments” under this Note V.For the joint operations the Group as a joint venture party recognizes the assets and liabilities separately held
by the Group as well as the assets and liabilities jointly held by the Group in accordance with the Group’s share;
recognizes the income arising from the disposal of the Group’s share of joint operation output; recognizes the income
from the sale of outputs from joint operations based on the Group’s share; and recognizes the expenses incurred by
the Group alone and the expenses incurred based on the Group’s share in the joint operation.When the Group as a joint venture party invests in or sells assets to the joint venture (which do not constitute
a business the same below) or purchases assets from the joint operation the Group recognizes only those portions
of the profits and losses arising from the transaction that are attributable to other participants in the joint operation
prior to the sale of such assets to a third party. In the event that such assets incur asset impairment losses in
accordance with the provisions of Accounting Standard for Enterprises No. 8 - Asset Impairment the Group will
fully recognize such losses if the assets are invested or sold by the Group to the joint operation; In the case of assets
purchased by the Group from the joint operation the Group will recognize such losses on the basis of its share of
commitment.
9. Determination standards for cash and cash equivalents
Cash and cash equivalents of the Group include the cash on hand deposits that can be used for payment at any
time the investments that are held for a short period of time (generally maturing within three months from the date
of purchase) which are highly liquid easily convertible to known amounts of cash and having minimal risk of
changes in value.
10. Foreign currency business and foreign currency statement translation
The method for determining the conversion exchange rate in foreign currency transactions
Upon initial recognition the foreign currency transactions of the Group are converted into the amount of
reporting currency according to the spot exchange rate of the trading day (usually referring to the median price of
the foreign exchange rate of the day published by the People’s Bank of China the same below).
1792025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Translation of foreign currency monetary items and foreign currency non-monetary items
On the balance sheet date if the foreign currency monetary items are translated at the spot rate of the balance
sheet date the resulting exchange difference except for * Exchange differences arising from special loans in
foreign currencies related to the acquisition and construction of assets eligible for capitalization which shall be
treated in accordance with the principle of capitalization of borrowing costs; * Exchange differences of hedging
instruments used to operate effective hedging of net investment abroad (this difference is included in other
comprehensive income and is not recognized as current profits and losses until the net investment is disposed of)
and * foreign currency monetary items classified as measured at fair value through other comprehensive income
shall be recorded into current profits and losses provided that exchange differences resulting from changes in other
book balances other than amortized costs (including impairment) shall be recorded in other comprehensive income.The non-monetary foreign currency items measured at historical cost shall be measured at the amount of
reporting currency that is translated into based on the spot rate on the transaction date. For non-monetary foreign
currency items measured at fair value the exchange rate prevailing at the date when the fair value is determined is
used for translation and the difference between the translated amount of the reporting currency and the original
amount of the reporting currency shall be treated as the change in fair value (including change of exchange rate) and
recorded in current profits and losses or recognized as other comprehensive income.
(2) Translation of foreign currency financial statement
Foreign currency financial statements of overseas operations are translated into RMB statements in the
following ways: The items of assets and liabilities in the balance sheet were translated at the spot exchange rate on
the balance sheet date. The shareholders’ equity items are translated at the spot rate at the time of occurrence except
for the “undistributed profit” items. The income and expense items in the income statement are converted using the
average exchange rate of the current period on the date of occurrence of the transaction. The undistributed profit at
the beginning of the year is the undistributed profit at the end of the year after the conversion of the previous year;
The undistributed profit at the end of the period is calculated and shown on the basis of each item of profit
distribution after translation; The difference between the total amount of asset items and liability items and
shareholders’ equity items after translation is treated as the difference in the translation of foreign currency
statements and recognized as other comprehensive income. Upon disposal of an overseas operation and loss of
control the conversion difference of the foreign currency statement related to the overseas operation as shown
under the shareholders’ equity item in the balance sheet shall be transferred to the profits and losses of the disposal
of the current period in full or in proportion to the disposal of the overseas operation.Foreign currency cash flow and cash flow of overseas subsidiaries shall be translated at the spot exchange rate
in the period when the cash flow is generated. The effect of exchange rate changes on cash is presented separately
in the cash flow statement as an adjustment item.The figures for the beginning of the year and the actual figures for the previous year are presented in accordance
with the amounts of the financial statements of the previous year after translation.Upon the disposal of all the owners’ equity of the Group’s overseas operations or the loss of control over
overseas operations due to the disposal of part of the equity investment or other reasons the translation difference
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of the foreign currency statement related to the owners’ equity of the overseas operations attributable to the parent
company as shown under the shareholders’ equity item in the balance sheet shall be fully transferred to the profits
and losses of the disposal period.When part of the equity investment is disposed of or the proportion of overseas operating interest is reduced
for other reasons but the control of overseas operations is not lost the difference in the translation of foreign currency
statements related to the disposal part of the overseas operation will be attributed to the minority shareholders’
equity and will not be transferred to the current profits and losses. Upon disposal of part of the equity of the overseas
operation as an associate or joint venture the translation difference of the foreign currency statement related to the
overseas operation shall be transferred to the profits and losses of the disposal period in proportion to the disposal
of the overseas operation.If there are foreign currency monetary items that substantially constitute net investments in overseas operations
the exchange difference resulting from changes in exchange rates shall be recognized as other comprehensive
income in the consolidated financial statements as “translation difference in foreign currency statements;” Upon
disposal of the overseas operations it shall be included in the profits and losses of the disposal period.
11. Financial instruments
When the Group becomes a party to a financial instrument contract it shall recognize a financial asset or
financial liability.
(1) Classification recognition and measurement of financial assets
The Group has classified the financial assets as financial assets at amortized cost; financial assets at fair value
through other comprehensive income and financial assets at fair value through profits and losses based on the
business model for managing financial assets and the contractual cash flow characteristics of the financial assets.Financial assets are measured at fair value on initial recognition. For financial assets at fair value through profits
and losses the related transaction costs are recognized directly in profits and losses; and for other categories of
financial assets the related transaction costs are recognized in initial recognition amounts. For the accounts
receivable or notes receivable arising from the sale of products or the provision of services that do not contain or
take into account a significant financing component the amount of consideration to which the Group is expected to
be entitled shall be taken as the initial recognition amount.* Financial assets at amortized cost
The Group’s business model of managing financial assets at amortized cost is aimed at the collection of
contractual cash flows and the contractual cash flow characteristics of such financial assets are consistent with the
basic borrowing arrangement that is the cash flows generated on a specific date are only payments of principal and
interest based on the outstanding principal amount. For such financial assets the effective interest rate method is
used for subsequent measurement at amortized cost and any profits or losses arising from amortization or
impairment is included in the current profits and losses.* Financial assets at fair value through other comprehensive income
The Group’s business model of managing such financial assets is aimed at the collection and disposal of
1812025 Annual Report of Yunnan Baiyao Group Co. Ltd.
contractual cash flows and the contractual cash flow characteristics of such financial assets are consistent with the
basic borrowing arrangement. The Group measures such financial assets at fair value and their changes are
recognized in other comprehensive income but impairment losses or gains exchange profits and losses and interest
income calculated under the effective interest rate method are recognized in current profits and losses.In addition the Group has designated certain non-trading equity instrument investments as financial assets at
fair value through other comprehensive income. The Group recognizes the relevant dividend income of such
financial assets in current profits and losses and the fair value changes in other comprehensive income. Upon the
derecognition of the financial assets the accumulated profits and losses previously recognized in other
comprehensive income are transferred from other comprehensive income to retained earnings and are not recognized
in the current profits and losses.* Financial assets at fair value through profits and losses
The Group’s financial assets other than those at amortized cost and those at fair value through other
comprehensive income as described above are classified as financial assets at fair value through profits and losses.In addition at the time of initial recognition in order to eliminate or significantly reduce accounting misalignments
the Group designated certain financial assets as financial assets at fair value through profits and losses. Such
financial assets are subsequently measured at fair value with changes in fair value recognized in the current profits
and losses.
(2) Classification recognition and measurement of financial liabilities
Financial liabilities are classified as financial liabilities at fair value through profits and losses and other
financial liabilities at the time of initial recognition. For financial liabilities at fair value through profits and losses
the related transaction costs are recognized directly in profits or losses and for other financial liabilities the related
transaction costs are recognized in their initial recognition amounts.* Financial liabilities at fair value through profits and losses
The financial liabilities at fair value through profits and losses include financial liabilities held for trading
(including derivatives that are financial liabilities) and those designated as financial liabilities at fair value through
profits and losses at the initial recognition.Financial liabilities held for trading (including derivatives that are financial liabilities) are subsequently
measured at fair value with changes in fair value recognized in current profits and losses except for those related
to hedge accounting.For those designated as financial liabilities at fair value through profits and losses the change in fair value of
such liabilities caused by changes in the Group’s own credit risk is included in other comprehensive income and
the cumulative change in its fair value caused by changes in its own credit risk included in other comprehensive
income is transferred to retained earnings when such liabilities are derecognized. Other changes in fair value are
included in current profits and losses. If the treatment of the effect of the change in the credit risk of the financial
liabilities in the manner described above would cause or widen the accounting mismatch in profits and losses the
Group would recognize the full profits or losses of the financial liabilities (including the amount affected by the
change in the credit risk of the enterprise) in the current profits and losses.
1822025 Annual Report of Yunnan Baiyao Group Co. Ltd.
* Other financial liabilities
Financial liabilities other than those resulting from the transfer of financial assets that does not meet the
conditions for derecognition or continues to be involved in the transfer of financial assets and other financial
liabilities excluding financial guarantee contracts are classified as financial liabilities at amortized cost which are
subsequently measured at amortized cost and the profits and losses resulting from the derecognition or amortization
are included in current profits and losses.
(3) Recognition basis and measurement method for transfer of financial assets
A financial asset is derecognized if it meets any of the following conditions: * The contractual right to receive
the cash flow of the financial asset is terminated; * The financial asset has been transferred and substantially all
the risks and returns of ownership of the financial asset have been transferred to the transferee; * The financial
asset has been transferred substantially all the risks and returns of ownership of the financial asset have neither been
transferred nor retained but the control over the financial asset has been relinquished.If neither substantially all the risks and returns of ownership of a financial asset are transferred nor retained
and the control over the financial asset is not relinquished the underlying financial asset shall be recognized to the
extent of its continuing involvement in the transferred financial asset and the related liability shall be recognized
accordingly. The extent of continued involvement in the transferred financial asset is the level of risk to which the
enterprise is exposed as a result of changes in the value of that financial asset.If the overall transfer of financial assets meets the conditions for derecognition the difference between the
book value of the transferred financial assets and the consideration received as a result of the transfer and the
cumulative change in the fair value originally included in other comprehensive income is included in the current
profits and losses.If the partial transfer of financial assets meets the conditions for derecognition the book value of the transferred
financial assets shall be apportioned between the portion derecognized and the portion not for derecognition
according to their relative fair value. The difference between the sum of the consideration received as a result of the
transfer and the cumulative changes in fair value originally included in other comprehensive income that should be
apportioned to the portion derecognized and the above-mentioned book value apportioned are recognized in current
profits and losses.If the Group sells the financial assets by recourse or makes endorsement transfer of the financial assets it holds
it is necessary to determine whether virtually all risks and returns in the ownership of the financial asset have been
transferred. If the Group has transferred substantially all the risks and returns related to the ownership of a financial
asset to the transferee the Group shall derecognize the financial asset. If substantially all the risks and returns related
to the ownership of a financial asset are retained the financial assets shall not be derecognized. If substantially all
the risks and returns related to the ownership of the financial asset are neither transferred nor retained whether the
enterprise retains control of the asset shall be determined and accounting treatment shall be made in accordance with
the principles described in the preceding paragraphs.
(4) Derecognition of financial liabilities
A financial liability (or a portion thereof) is derecognized when the present obligation is discharged. If an
1832025 Annual Report of Yunnan Baiyao Group Co. Ltd.
agreement is entered into between the Group (the borrower) and the lender to replace the original financial liability
by assuming a new financial liability and the contractual terms of the new financial liability are materially different
from those of the original financial liability the original financial liability is derecognized and the new financial
liability is recognized at the same time. If the Group materially modifies the contractual terms of the original
financial liability (or part thereof) it shall derecognize the original financial liability and recognize a new financial
liability in accordance with the modified terms.If a financial liability is derecognized in whole or in part the difference between the book value of the
derecognized portion and the consideration paid (including non-cash assets transferred or liabilities assumed) is
recognized in current profits and losses.
(5) Offsetting of financial assets and financial liabilities
When the Group has the legal rights to offset the financial assets and financial liabilities whose amounts have
been recognized the legal rights are currently exercisable and the Group plans to settle with net amount or realize
the financial asset and repay the financial liability simultaneously the financial assets and financial liabilities can
be presented in the balance sheet with the net amount after they are mutually offset. Apart from this financial assets
and financial liabilities shall be presented separately in the balance sheet and not be offset against each other.
(6) Methods for determining the fair value of financial assets and financial liabilities
Fair value is the price that a market participant would receive to sell an asset or pay to transfer a liability in an
orderly transaction occurring on the measurement date. Regarding the financial instruments for which there is an
active market the Group uses quoted prices in an active market to determine their fair values. A quoted price in an
active market is a price that is readily available on a regular basis from an exchange broker trade association
pricing service agency etc. and represents the price of a market transaction that actually takes place in a fair trade.If there is no active market for the financial instrument the Group uses valuation techniques to determine its fair
value. The valuation techniques include reference to prices used in recent market transactions by the parties who are
familiar with the situation and willing to deal reference to the current fair value of other substantially identical
financial instruments the discounted cash flow method and option pricing models. In the valuation the Group will
adopt the valuation techniques applicable in the current situation and supported by sufficiently available data and
other information select the input values that are consistent with the characteristics of the asset or liability
considered by market participants in the transaction of the relevant asset or liability and give priority to the relevant
observable input values when possible. The non-observable input values will be used only when the relevant
observable input values are unavailable or not practicable to obtain.
(7) Equity instruments
Equity instruments are contracts that demonstrate ownership of the remaining interest in the Group’s assets
after deducting all liabilities. The Group’s issuance (including refinancing) repurchase sale or cancellation of equity
instruments is treated as changes in equity and the transaction expenses related to equity transactions are deducted
from equity. The Group does not recognize the changes in fair value of equity instruments.Dividends (including “interest” on instruments classified as equity instruments) distributed during the existence
of the Group’s equity instruments are treated as profit distributions.
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(8) Impairment of financial assets
The financial assets for which the Group needs to recognize impairment losses are financial assets at amortized
cost debt instruments at fair value through other comprehensive income lease receivables which mainly include
notes receivable accounts receivable receivables financing other receivables debt investments other debt
investments long-term receivables etc. In addition for contractual assets and certain financial guarantee contracts
impairment provisions are made and credit impairment losses are recognized in accordance with the accounting
policies described in this section.* Recognition of provision for impairment losses
On the basis of expected credit losses the Group makes an impairment provision and recognizes credit
impairment losses for each of the above items in accordance with its applicable expected credit losses measurement
method (general method or simplified method).Credit losses represent the difference between all contractual cash flows receivable under the contract and all
cash flows expected to be received by the Group discounted at the original effective interest rate i.e. the present
value of all cash shortfalls. Financial assets purchased or originated by the Group that are credit impaired shall be
discounted at the credit-adjusted effective interest rate of the financial assets.The general method of measurement of expected credit losses means that the Group assesses at each balance
sheet date whether the credit risk of financial assets (including contractual assets and other applicable items the
same below) has increased significantly since the initial recognition. If the credit risk has increased significantly
since the initial recognition the Group measures the loss provision at an amount equivalent to the expected credit
losses over the entire duration; If credit risk does not increase significantly since the initial recognition the Group
measures the loss provision at an amount equivalent to expected credit losses over the next 12 months. The Group
will consider all the reasonable and evidence-based information including forward-looking information when
assessing expected credit losses.For financial instruments with low credit risk on the balance sheet date the Group assumes that their credit risk
has not increased significantly since initial recognition and measures the provision for losses based on expected
credit losses over the next 12 months.* Criteria for determining whether credit risk has increased significantly since the initial recognition
If the probability of default of a financial asset during the estimated duration determined on the balance sheet
date is significantly higher than the probability of default during the estimated duration determined at the time of
initial recognition it indicates that the credit risk of the financial asset has significantly increased. Except in
exceptional circumstances the Group uses the change in default risk occurring over the next 12 months as a
reasonable estimate of the change in default risk occurring over the duration to determine whether credit risk has
increased significantly since the initial recognition.* The portfolio-based approach to assessing expected credit risk
The Group assesses credit risk individually for financial assets with significantly different credit risks such as
receivables that are in dispute with other parties or involved in litigation or arbitration; or where there are clear
1852025 Annual Report of Yunnan Baiyao Group Co. Ltd.
indications that the debtor is likely to be unable to meet its repayment obligations.Apart from financial assets that are individually assessed for credit risk the Group classifies financial assets
into different groups based on common risk characteristics and assesses credit risk on a portfolio basis.* Accounting treatment of impairment of financial assets
At the end of the period the Group will calculate the estimated credit losses of various financial assets and if
the estimated credit losses are greater than the book value of its current impairment provision the difference is
recognized as an impairment loss; If it is less than the book value of the current impairment provision the difference
is recognized as an impairment gain.* Determination of credit losses of various financial assets
a. Notes receivable
The Group measures the loss provision for notes receivable at the amount equivalent to expected credit losses
in the entire duration. Based on the credit risk characteristics of notes receivable they are divided into different
portfolios:
Item Basis for determining the portfolio
Banker’s acceptance bill Banks with less credit risk in relation to acceptors
Commercial acceptance bill Divided according to the acceptor’s credit risk
b. Accounts receivable and contractual assets
For the accounts receivable and contractual assets that do not have a significant financing component the
Group measures the loss provision at the amount equivalent to expected credit losses in the entire duration.For the accounts receivable contractual assets and lease receivables that have a significant financing
component the Group chooses to always measure the loss provision at an amount equivalent to expected credit
losses over the duration.Apart from the accounts receivable for single assessment of credit risk they are divided into different portfolios
based on their credit risk characteristics:
Item Basis for determining the portfolio
Related party within the consolidation This portfolio represents amounts receivable of the Company within the scope of
scope consolidation.Account age portfolio The portfolio takes the age of receivables as the credit risk characteristics.Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the aging
years of accounts receivable based on the principle of First Occurrence First Recovery.Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separate
impairment tests on accounts receivable with significantly different credit risk characteristics such as significantly
deteriorating credit status of the debtor low possibility of future repayment and credit impairment that has occurred.c. Accounts receivable financing
Notes and accounts receivable measured at fair value through other comprehensive income are presented as
1862025 Annual Report of Yunnan Baiyao Group Co. Ltd.
accounts receivable financing if their maturities are within one year (including one year) from the initial recognition
date. The Group measures the loss provision at the amount equivalent to expected credit losses in the entire duration.Apart from the accounts receivable financing for single assessment of credit risk they are divided into different
portfolios based on their credit risk characteristics:
Item Basis for determining the portfolio
Related party within the consolidation This portfolio represents amounts receivable of the Company within the scope of
scope consolidation.Account age portfolio The portfolio takes the age of receivables as the credit risk characteristics.Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the
aging years of accounts receivable based on the principle of First Occurrence First Recovery.Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separate
impairment tests on accounts receivable with significantly different credit risk characteristics such as significantly
deteriorating credit status of the debtor low possibility of future repayment and credit impairment that has occurred.d. Other receivables
Based on whether the credit risk of other receivables has increased significantly since initial recognition the
Group measures the loss provision at the amount equivalent to expected credit losses in the next 12 months or the
entire duration. Apart from the other receivable for single assessment of credit risk they are divided into different
portfolios based on their credit risk characteristics:
Item Basis for determining the portfolio
Related party within the consolidation This portfolio represents amounts receivable of the Company within the scope of
scope consolidation.Account age portfolio The portfolio takes the age of receivables as the credit risk characteristics.Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the
aging years of accounts receivable based on the principle of First Occurrence First Recovery.Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separate
impairment tests on accounts receivable with significantly different credit risk characteristics such as significantly
deteriorating credit status of the debtor low possibility of future repayment and credit impairment that has occurred.
12. Notes receivable
Please refer to “11. Financial instruments.”
13. Accounts receivable
Please refer to “11. Financial instruments.”
14. Accounts receivable financing
Notes and accounts receivable at fair value through other comprehensive income are presented as accounts
receivable financing if their maturities are within one year (including one year) from the initial recognition date.The Notes and accounts receivable with the maturity of more than 1 year since the initial recognition date are
1872025 Annual Report of Yunnan Baiyao Group Co. Ltd.
presented as other debt investments. For the relevant accounting policies please refer to “11. Financial instruments”
under this Note.
15. Other receivables
Method of determining expected credit losses on other receivables and the accounting treatment
For the method of determining expected credit losses on other receivables and the accounting treatment please
refer to “11. Financial instruments.”
16. Inventories
(1) Categories of inventories
Inventories mainly include raw materials packaging and low-value consumable goods products in process
goods in stock consumable biological assets development costs development products etc.
(2) Pricing of inventories
Inventories are initially measured at actual cost. The cost of inventories includes procurement cost processing
cost and other costs. Inventories are measured by the weighted average method upon delivery.
(3) Determination of net realizable value of inventories and method of making provision for
inventory impairment
The net realizable value of inventories refers to the estimated selling price deducted by estimated costs until
they are made into finished goods estimated selling expense and relevant taxes in daily activities. The determination
of the net realizable value of inventories is based on conclusive evidence obtained taking into account the purpose
for which the inventories are held and the effect of events after the balance sheet date.Inventories are measured at the lower of cost or net realizable value at the balance sheet date and provision
for their impairment shall be made when the net realizable value is below the cost of inventories. Provision for
inventory impairment is made on the basis of the difference whereby the cost of one single inventory item exceeds
its net realizable value. For inventories with large quantities and low unit prices provision for inventory impairment
shall be made according to inventory categories. Inventories that are related to product series produced and sold in
the same region and have the same or similar end use or purpose and are difficult to be documented separately from
other items that shall be combined for making provision for inventory impairment.After provision for inventory impairment is made if the factors that once resulted in the impairment disappear
leading to the net realizable value of inventories higher than their book value the provision of inventory impairment
shall be reversed to the extent of provision previously made and the reversed amount shall be recognized in current
profits and losses.
(4) The inventory system shall be the perpetual inventory system.
(5) Amortization of low-value consumables and packaging materials
The low-value consumables and packaging materials are amortized using a one-off amortization method.
17. Long-term equity investments
Long-term equity investments in this section refers to any equity investment by which the Group has control
common control or significant influence over the investee. Long-term equity investments by which the Group does
1882025 Annual Report of Yunnan Baiyao Group Co. Ltd.
not have control common control or significant influence over the investee are accounted for as financial assets at
fair value through profits or losses. If they are non-trading the Group may elect to designate them as financial assets
at fair value through other comprehensive income at the time of initial recognition. For the accounting policies
please refer to “11. Financial instruments” under Note IV.Common control is the Group’s contractually agreed sharing of control over an arrangement and the activities
under which must be decided by unanimous agreement from parties who share the control. Significant influence is
the power of the Group to participate in the decision-making for financial and operating policies of an investee but
not to control or common control the formulation of such policies together with other parties.
(1) Determination of investment cost
For long-term equity investments acquired relating to business combination under common control the initial
investment cost is determined on the date of consolidation according to the percentage of shareholders/owners’
equity from the combined party as a part of the book value of total shareholders/owners’ equity set forth in the
consolidated financial statements of the ultimate controlling party. The difference between the said initial
investment cost and the sum of cash being paid non-cash assets being transferred and book value of liabilities being
assumed shall be adjusted against the capital reserve; or in case of insufficient capital reserve to cover the difference
against the retained earnings accordingly. In case that the consideration of the business combination is satisfied by
issuing equity securities the initial investment cost of the long-term equity investments is determined on the date
of consolidation according to the percentage of shareholders’ equity from the combined party as a part of the book
value of total shareholders’ equity set forth in the consolidated financial statements of the ultimate controlling party.With the sum of par values of shares being issued as the share capital the difference between the said initial
investment cost and the sum of par values of shares being issued shall be adjusted against the capital reserve; or in
case of insufficient capital reserve to cover the difference against the retained earnings accordingly. Where a
business combination under common control is achieved by acquiring the equity of a combined party under common
control in phases through multiple transactions following policies shall apply depending on whether those
transactions are “a bundle of transactions”: if so the Company shall account for all transactions together as the one
deal to obtain the control; if not the initial investment cost of the long-term equity investments shall be determined
on the date of consolidation according to the percentage of shareholders/owners’ equity from the combined party as
a part of the book value of total shareholders’ equity set forth in the consolidated financial statements of the ultimate
controlling party while the difference between the initial investment cost and the sum of book value of long-term
equity investments before the consolidation and that of consideration newly paid to acquire additional equities on
the date of consolidation shall be adjusted against the capital reserve or in case of insufficient capital reserve to
cover the difference against retained earnings accordingly. Accounting treatment is currently not required for other
comprehensive income that has been recognized due to the adoption of equity method in accounting or the
classification as financial assets at fair value through other comprehensive income in respect of equity investments
held before the date of consolidation.For the long-term equity investments acquired relating to business combination not under common control the
initial investment cost is the cost of combination on the date of acquisition which equals to the aggregate fair value
of assets transferred liabilities incurred or assumed and equity securities issued by the acquirer. Where a business
1892025 Annual Report of Yunnan Baiyao Group Co. Ltd.
combination not under common control is achieved by acquiring the equity of a combined party under common
control in phases through multiple transactions following policies shall apply depending on whether those
transactions are “a bundle of transactions”: if so the Group shall account for all transactions together as the one
deal to obtain the control; if not the initial investment cost of the long-term equity investments that is re-accounted
for using the cost method shall be the sum of book value of long-term equity investments previously held by the
acquirer in the acquiree and new investment cost. Accounting treatment is currently not required for other
comprehensive income in respect of equity investments that have been accounted for using the equity method.The intermediary expenses on items such as audit legal service and valuation advisory for business
combination and other related administrative expenses incurred by the combining party or acquirer are recognized
in current profits and losses upon their occurrence.Long-term equity investments other than those formed by business combination is initially measured at cost
which varies depending on the different ways of acquiring the long-term equity investments and is determined by
considering the amount of actual cash paid by the Group the fair value of the equity securities issued by the Group
the conventional value stipulated in the investment contract or agreement the fair value or original book value of
the assets surrendered in the non-cash and bank balance swap transaction the fair value of the long-term equity
investments itself and etc. The expenses taxes and other necessary expenses directly related to the acquisition of
the long-term equity investments are also included in the investment cost. For additional long-term equity
investments that entitles the Company with significant influence or common control but not control over the investee
its cost of investment is the sum of fair value of equity investments that have been held plus new cost of investment
pursuant to the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
Instrument.
(2) Subsequent measurement and recognition method of profits and losses
A long-term equity investment with common control (excluding that constituting a joint venture) over or
significant influence on the investee is accounted for by using the equity method and a long-term equity investment
with control over the investee is accounted for in the Company’s financial statements by using the cost method.* Long-term equity investment accounted for with cost method
When a long-term equity investment is accounted for with cost method its price is measured at initial
investment cost and when the long-term equity investment is added or disposed its cost is adjusted accordingly.The cash dividend or profit declared by the investee except for the cash dividend or profit declared but not yet
granted that is included in the price or consideration actually paid upon the acquisition of the investment shall be
recognized as investment income for the period.* Long-term equity investment accounted for with equity method
When a long-term equity investment is accounted for with equity method and its initial investment cost is
higher than the proportion of fair value of the investee’s identifiable net assets attributable to the investor because
of the investment its initial cost shall not be adjusted; if lower the difference shall be recognized in the current
profits and losses and its cost shall be adjusted accordingly.When a long-term equity investment is accounted for with equity method the investment income and other
1902025 Annual Report of Yunnan Baiyao Group Co. Ltd.
comprehensive income arising therefrom are recognized in accordance with the proportion of net profits and losses
and other comprehensive income of the investee attributable to the investor and the book value of long-term equity
investments is adjusted accordingly; if any profit or cash dividend is declared by the investee the book value of
long-term equity investments shall be reduced according to the part of profit or dividends attributable to the investor;
if there is any other changes in shareholders’ equity other than net profits and losses other comprehensive income
and profit distribution such change shall be adjusted against the book value of long-term equity investments and
recognized in the capital reserve. The Group recognizes its share of the investee’s net profits and losses based on
fair value of the investee’s identifiable assets at the time of acquisition after making appropriate adjustments to net
profits thereto. In case of any inconsistency between the accounting policies and accounting periods adopted by the
investee and by the Group the financial statements of the investee shall be adjusted in accordance with the
accounting policies and accounting periods of the Group and the gain on investment and other comprehensive
income shall be recognized accordingly. In respect of the transactions between the Group and its associates and joint
ventures in which the assets invested or disposed of are not part of the business the share of unrealized profits and
losses arising from inter-group transactions shall be offset by the portion attributable to the Group and the profits
and losses on investment shall be recognized accordingly. However any unrealized loss arising from inter-group
transactions between the Group and an investee is not offset to the extent that the loss is impairment loss of the
assets transferred. Where the Group invests to its joint ventures or associates an asset forming part of a business
giving rise to the acquisition of a long-term equity investment by the investor without obtaining control the initial
investment cost of the additional long-term equity investments shall be recognized at fair value of the business
invested. The difference between initial investment cost and book value of the business invested will be fully
included in current profits and losses. Where the Group disposes of an asset forming part of a business to its
associates or joint ventures the difference between the consideration received and the book value of the business
shall be fully included in current profits and losses. Where the Group acquires from its associates or joint ventures
an asset forming part of a business the profits or losses related to the transaction shall be accounted for and
recognized in accordance with the Accounting Standards for Business Enterprises No. 20 - Business Combination.The Group’s share of net loss of the investee shall be recognized to the extent that the book value of the long-
term equity investment and any long-term equity that substantially forms part of the investor’s net investment in the
investee are written down to zero. If the Group has to assume additional obligations to the loss of the investee the
estimated liabilities shall be recognized for the estimated obligation assumed and charged to investment loss for the
period. Where the investee makes profits in subsequent periods the Group shall re-recognize its share of the profits
after setting off against the share of unrecognized losses.* Acquisition of minority interests
When preparing the consolidated financial statements the Company adjusts the capital reserve and if the
capital reserve is insufficient adjusts the retained earnings based on the difference between the additional long-term
equity investments arising on acquisition of minority interests and the Company’s share in the net assets of the
subsidiary accrued from the acquisition date (or consolidation date) in proportion to the additional shareholdings.* Disposal of long-term equity investments
1912025 Annual Report of Yunnan Baiyao Group Co. Ltd.
In the consolidated financial statements if the parent company disposes part of the long-term equity investment
in the subsidiary without losing its control the difference between the disposal price and the Company’s share in
the net assets of the subsidiary attributable to the disposal of the long-term equity investment is recognized in the
shareholders’ equity; if the parent company disposes part of the long-term equity investment in the subsidiary
resulting in the loss of its control over the subsidiary the accounting treatment shall be in accordance with thepolicies as set out in Item (2) of Section 6 “Accounting treatment for business combination under common controland not under common control” under this Note V.In other cases upon the disposal of a long-term equity investment the difference between the book value of
the investment and the price received is recognized in the current profits and losses.For a long-term equity investment that is accounted for using the equity method where the remaining equity
after disposal continues to be accounted for using the equity method the portion of other comprehensive income
previously included in shareholder’s equity shall be treated in accordance with the same basis as the investee directly
disposes of relevant asset or liability on pro rata basis at the time of disposal. The owners’ equity recognized for the
change in owners’ equity of the investee other than net profits and losses other comprehensive income and profit
distribution shall be transferred to current profits and losses on pro rata basis.For a long-term equity investment accounted for using the cost method where the remaining equity after
disposal continues to be accounted for using cost method other comprehensive income recognized using the equity
method or in accordance with the standard for recognition and measurement of financial instruments prior to the
acquisition of control over the investee shall be treated in accordance with the same basis as the investee directly
disposes of relevant asset or liability and transferred to current profits and losses on pro rata basis. The change in
owners’ equity recognized in net assets of the investee by using the equity method other than net profits and losses
other comprehensive income and profit distribution shall be transferred to current profits and losses on pro rata basis.In preparing separate financial statements if control is lost over the investee upon partial disposal of equity
investment the remaining equity with common control or an ability to impose a significant influence over the
investee after disposal shall be accounted for using the equity method and shall be adjusted as if it has been
accounted for using the equity method since it was acquired. The remaining equity without common control or an
ability to impose a significant influence over the investee after disposal shall be accounted for based on the standard
for recognition and measurement of financial instruments and the difference between its fair value and book value
on the date of loss of control shall be included in current profits and losses. In respect of other comprehensive income
recognized using the equity method or in accordance with the standard for recognition and measurement of financial
instruments prior to the acquisition of control over the investee it shall be accounted for in accordance with the
same basis as the investee directly disposes of relevant asset or liability when the control is lost. The change in
owners’ equity recognized in net assets of the investee by using the equity method other than net profits and losses
other comprehensive income and profit distribution shall be transferred to current profits and losses at the time when
the control over investee is lost. Where the remaining equity after disposal is accounted for using the equity method
other comprehensive income and other owners’ equity shall be carried forward on pro rata basis. Where the
remaining equity after disposal is accounted for in accordance with the standard for recognition and measurement
of financial instruments other comprehensive income and other owners’ equity shall be fully carried forward.
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If the common control or significant influence of the Group over the investee is lost upon partial disposal of
equity investment the remaining equity after disposal shall be accounted for in accordance with the standard for
recognition and measurement of financial instruments. The difference between its fair value and book value on the
date of loss of common control or significant influence shall be included in current profits and losses. For other
comprehensive income recognized previously for the equity investment using equity method it shall be accounted
for in accordance with the same basis as the investee directly disposes of relevant asset or liability at the time when
the equity method is ceased to be used. The owners’ equity recognized arising from the change in owners’ equity of
the investee other than net profits and losses other comprehensive income and profit distribution shall be transferred
to current profits and losses at the time when the equity method is ceased to be used.Where the Group disposes of its equity investment in a subsidiary in a series of transactions until the control is
lost and such transactions form “a bundle of transactions” each transaction shall be accounted for as a disposal of
equity investment of the subsidiary resulting in a loss of control. The difference between the consideration for each
transaction and the book value of the long-term equity investment attributable to the equity interests disposed prior
to loss of control shall be initially recognized as other comprehensive income and upon loss of control transferred
to current profits and losses when the loss of control takes place.
18. Investment properties
Measurement model for investment property
Cost model
Depreciation or amortization method
Investment properties are real estate held for rental income or capital appreciation or both including land use
rights that have been leased land use rights that are held and intended to be transferred after appreciation and
buildings that have been leased. In addition vacant buildings held by the Group for operating leases are reported as
investment properties if the Board of Directors (or similar organization) makes a written resolution that they will be
used for operating leases and the intention to hold them will not change in the near future.Investment properties shall be initially measured at cost. The subsequent expenses related to investment
properties shall be recognized as cost of the investment properties only if it is probable that economic benefits
associated with the assets will flow to the Group and the cost of the assets can be measured reliably. Other subsequent
expenses shall be recognized in the current profits and losses when incurred.The Group uses the cost model for subsequent measurement of investment properties and depreciates or
amortizes them according to the policies consistent with that for buildings or land use rights.For the method of impairment test and provision for impairment loss of investment properties please refer to
Section 25 “Impairment of long-term assets” under Note V.When the purpose of an investment property changes to self-use from the date of the change the investment
property shall be reclassified as a fixed asset or intangible asset. When the purpose of a self-use property changes
to earning rental income or capital appreciation from the date of the change the fixed asset or intangible asset shall
be reclassified as an investment property. Upon reclassification for investment properties measured using the cost
model the carrying value before reclassification is recognized as the carrying value after reclassification. For
1932025 Annual Report of Yunnan Baiyao Group Co. Ltd.
investment properties measured using the fair value model the fair value on the date of reclassification is recognized
as the carrying value after reclassification.An investment property is derecognized upon disposal or when it is permanently withdrawn from use and no
future economic benefits are expected from its disposal. The net proceeds from sale transfer retirement or damage
of an investment property after its book value and related taxes and expenses are recognized in the current profits
and losses.
19. Fixed assets
(1) Recognition criteria
Fixed assets refer to the tangible assets held by the Company for producing goods rendering services renting
or operation and administration purposes with useful life of over one accounting year. The fixed assets are
recognized only when the economic interests related thereto are likely to flow into the Group and its cost can be
measured reliably. The fixed assets are initially measured at cost with consideration of the impact of estimated
disposal costs.
(2) Depreciation method
Depreciation Depreciation life Rate of residual Annual depreciation
Category
method (year) value (%) rate (%)
Building for production Straight-line method 39 5 2.44
Machine and equipment
Straight-line method 10 5 9.5
for production
Transportation
Straight-line method 10 5 9.5
equipment
Electronic device
5519
and management tools Straight-line method
Machine and
equipment for non- Straight-line method 10 5 9.5
production purpose
Building for non-
Straight-line method 45 5 2.11
production purpose
Others Straight-line method 5 5 19
The expected residual value refers to the anticipated condition of the fixed asset at the end of its estimated
useful life. It represents the estimated amount that the Group would receive from the disposal of the asset net of
any expected disposal costs incurred.
(3) Impairment test method and provision for impairment of fixed assets
The impairment testing method and provision for impairment of fixed assets can be found in Section 25 of
Note V “Impairment of Long-term Assets.”
(4) Other Information
Subsequent expenditures related to fixed assets that are expected to generate economic benefits and can be
reliably measured are capitalized as part of the fixed asset’s cost and the carrying value of the replaced portion is
1942025 Annual Report of Yunnan Baiyao Group Co. Ltd.
derecognized. Other subsequent expenditures are recognized in the current period’s income statement upon
occurrence.When a fixed asset is classified as held for disposal or is expected to no longer generate economic benefits
through use or disposal it is derecognized. Proceeds from the sale transfer scrapping or destruction of fixed assets
net of their carrying value and related taxes are recognized in the current period’s income statement.The Group reviews the useful lives estimated residual values and depreciation methods of fixed assets at least
annually. Changes in these estimates are treated as changes in accounting estimates.
20. Construction in progress
The cost of construction in progress is measured according to the actual expense for the construction in progress
including all the necessary expenses incurred in the process of construction borrowing costs to be capitalized before
the project is ready for its intended use and other related costs.The construction in progress is transferred to fixed assets after it is ready for its intended use.For the method of impairment test and provision for impairment loss of construction in progress please refer
to Section 25 “Impairment of long-term assets” under Note V.
21. Borrowing costs
Borrowing costs include interest on borrowings amortization of discounts or premiums ancillary costs and
exchange differences arising from foreign currency borrowings. Where the borrowing costs can be directly
attributable to the acquisition and construction or production activities of assets eligible for capitalization it shall
be capitalized on the basis that the expense for the asset has already been incurred the borrowing costs have been
incurred and the acquisition and construction or production activities necessary to prepare the asset for its intended
use or for sale have already commenced; after the acquired or produced asset eligible for capitalization is available
for its intended use or for sale the capitalization shall be stopped. Other borrowing costs shall be recognized as
expenses at the time when they are incurred.The actual interest cost incurred in the period of specific-purpose borrowing net of any interest income from
the borrowed funds not used and deposited in bank or any investment income from the temporary investment of
those funds shall be capitalized; the amount of interest of general-purpose borrowings to be capitalized is determined
by multiplying the weighted average of the amounts of cumulative expenses on the asset over and above the amounts
of specific-purpose borrowings by the capitalization rate of the corresponding general-purpose borrowings.Capitalization rate is calculated and determined based on the weighted average rate of general-purpose borrowings.During the capitalization period exchange differences related to specific-purpose borrowings denominated in
foreign currencies are fully capitalized; exchange differences related to general-purpose borrowings denominated
in foreign currencies are recognized in the current profits and losses.Assets eligible for capitalization refer to the fixed assets investment properties inventories and other assets
that require a substantially long period of time of acquisition and construction or production activities for intended
use or for sale.Where the acquisition and construction or production activities of an asset eligible for capitalization is
1952025 Annual Report of Yunnan Baiyao Group Co. Ltd.
interrupted abnormally and the interruption period lasts for more than 3 months the capitalization of the borrowing
costs shall be suspended until the acquisition and construction or production of the asset is resumed.
22. Biological assets
(1) Consumptive biological assets
Consumptive biological assets are the biological assets held for sale or harvested for agricultural products in
the future including growing field crops vegetables timber stands and livestock stored for sale. Consumptive
biological assets shall be initially measured at cost. The cost of a consumptive biological asset that is cultivated
constructed propagated or farmed by the Company is the necessary expense incurred before the asset is
harvested/closed/sold/sold or placed in storage that is directly attributable to the asset including borrowing costs
that are eligible for capitalization. Subsequent expenses such as management and feeding costs incurred after
harvesting/closing/storage of consumptive biological assets are included in current profits and losses.Consumptive biological assets are carried forward at book value using the weighted average method when
harvested or sold.On the balance sheet date consumptive biological assets are measured at the lower of cost or net realizable
value and the provision for impairment of consumptive biological assets shall be calculated and recognized based
on the methods consistent with those for the recognition of the provision for inventory impairment. Where the
impairment factors disappear the amount written down shall be restored and reversed from the original provision
for depreciation with the amount reversed recognized in the current profits and losses.
(2) Productive biological assets
Productive biological assets refer to the biological assets held for the purpose of producing agricultural products
providing services or leasing including economic forests firewood forests production animals and draft animals.Productive biological assets shall be initially measured at cost. The cost of a self-created or propagated productive
biological asset is the necessary expense incurred before the asset achieves the intended purpose of production and
operation that can be directly attributable to the asset including borrowing costs that meet the capitalization
conditions.The Group reviews the useful life and estimated net residual value of a productive biological asset and the
depreciation method applied at least at each year-end. Any change shall be accounted for as a change in accounting
estimate.The difference between the disposal proceeds from the sale liquidation death or destruction of productive
biological assets less their book value and related taxes and charges is included in the current profits and losses.The Group determines whether a productive biological asset has any signs of impairment on each balance sheet
date. If the asset shows signs of impairment the recoverable amount is estimated. The recoverable amount is
estimated on a single asset basis. If it is difficult to estimate the recoverable amount of a single asset the recoverable
amount of the asset group to which the asset belongs shall be determined. If the recoverable amount of an asset is
lower than its book value the provision for asset impairment shall be made according to the difference and recorded
in the current profits and losses.Once the above asset impairment loss is recognized it shall not be reversed in subsequent accounting periods.
1962025 Annual Report of Yunnan Baiyao Group Co. Ltd.
If a productive biological asset changes its use and becomes a consumptive biological asset the cost of the
change of use is determined at the book value at the time of the change of use. If the productive biological asset
changes its use and becomes a public welfare biological asset whether there is any impairment is determined in
accordance with the provisions of Accounting Standard for Business Enterprises No. 8 - Asset Impairment. When
an impairment occurs an impairment provision shall be first made and then determined on the basis of the book
value after such provision is made.
23. Intangible assets
(1) Useful life and its basis for determination estimate amortization method or review procedure
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by
the Group.An intangible asset shall be initially measured at cost. The expenses incurred on an intangible asset shall be
recognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset will
flow to the Group and the cost of the asset can be measured reliably. Other expenses shall be recognized in the
current profits and losses when incurred.Land use right acquired shall normally be recognized as an intangible asset. For self-constructed buildings (e.g.plants) the expenses on the land use right and cost of the buildings shall be separately accounted for as an intangible
asset and fixed asset. For buildings and structures purchased the purchase consideration shall be allocated among
the land use right and the buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation
the consideration shall be recognized in full as a fixed asset.An intangible asset with a definite useful life is amortized on average and by stages using the straight line
method by deducting the estimated net residual value and accrued provision for impairment loss from the original
value over the estimated useful life from the time when it is available for use. An intangible asset with an indefinite
useful life is not amortized.During the end of the period the Company shall check the useful life and the amortization method of intangible
assets with limited useful life and carry out accounting estimate change in case that a change happens. In addition
the Company shall check the useful life of intangible assets with indefinite useful life. If there are evidences showing
that the intangible assets can bring economic benefit for the Company within the foreseeable period the Company
shall estimate the useful life and carry out amortization according to the amortization policy for intangible assets
with finite useful life.The Group’s intangible assets include land use rights software franchise rights patent technology non-patent
technology and trademarks. The amortization periods and conditions for the main intangible assets are as follows:
* Land use rights are amortized over the remaining useful life specified in the land use right certificate with
an average annual amortization period of 30-50 years. When the purchase price of land and buildings cannot be
reasonably allocated between land use rights and buildings the entire amount is treated as fixed assets.* Software patent technology and non-patent technology are amortized over the estimated useful life of 10
years with an average annual amortization period.
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* Franchise rights are amortized over the estimated useful life of 30 years with an average annual
amortization period.
(2) Scope of R&D expenses and related accounting treatment
The scope of our Company’s R&D expenses is primarily determined based on the Company’s R&D projects.It includes R&D personnel salaries direct input costs depreciation and amortization expenses design and testing
expenses outsourced R&D expenses and other expenses.The Group classifies the expense on an internal R&D project into expense at the research phase and expense
at the development phase.Research refers to the original and planned investigation undertaken to acquire and understand new scientific
or technical knowledge. Expenditures incurred during the research phase are recognized in profit or loss when
incurred.Development refers to the application of research findings or other knowledge to a plan or design for the production
of new or substantially improved materials devices products etc. prior to the commencement of commercial production
or use. Expenditures incurred during the development phase are capitalized if all of the following conditions are satisfied
simultaneously; development expenditures that do not meet these conditions are recognized in profit or loss:
* It is technically feasible to complete the intangible asset so that it will be available for use or sale;
* It is intended to complete and to use or sell the intangible asset;
* It can be demonstrated how the intangible asset will generate economic benefits including demonstrating
that there is an existing market for products produced by the intangible asset or for the intangible asset itself and
that it can be proven to be useful if the intangible asset is to be used internally;
* There are adequate technical financial and other resources to complete the development and the ability to
use or sell the intangible assets;
* The expense attributable to the intangible asset at its development phase can be reliably measured.All the expenses on R&D which cannot be distinguished between the research phase and development phase
are recognized in the profits and losses when incurred.
(3) The impairment testing method and provision for impairment of intangible assets
For the impairment testing method and provision for impairment of intangible assets please refer to Section
24 of “Impairment of long-term assets” under Note V.
24. Impairment of long-term assets
For non-current non-financial assets such as fixed assets construction in progress right of use assets intangible
assets with limited useful life investment real estate measured at cost and long-term equity investments in
subsidiaries joint ventures and associates the Group determines whether there are signs of impairment on the
balance sheet date. If the asset shows signs of impairment the recoverable amount is estimated and impairment test
is conducted. Goodwill intangible assets with indefinite useful lives and intangible assets that have not yet ready
for use are tested annually for impairment regardless of whether there is an indication of impairment.If the impairment test results show that the recoverable amount of an asset is lower than its carrying value the
1982025 Annual Report of Yunnan Baiyao Group Co. Ltd.
impairment provision shall be made and the impairment loss shall be recorded according to the difference. The
recoverable amount is the higher between the net value of the fair value of the asset less the disposal expense and
the present value of the estimated future cash flow of the asset. The fair value of the asset is determined based on
the sales agreement price in fair transactions. Where there is no sales agreement but there is an active market for the
asset the fair value shall be determined according to the buyer’s bid for the asset. Where there is neither sales
agreement nor active market for the asset the fair value of the asset is estimated based on the best information
available. Disposal costs include legal costs associated with the disposal of the asset related taxes removal costs
and direct costs incurred to bring the asset to marketable status. The present value of the expected future cash flow
of the asset shall be determined according to the discounted amount of the expected future cash flow generated by
the asset in the process of continuous use and final disposal which is converted according to the appropriate discount
rate. The asset impairment provision is calculated and recognized on a single asset basis. If it is difficult to estimate
the recoverable amount of a single asset the recoverable amount of the asset group to which the asset belongs shall
be determined. An asset group is the smallest portfolio of assets that can independently generate cash inflows.For the goodwill presented separately in the financial statements when tested for impairment the book value
of goodwill will be apportioned to the asset group or combination of asset groups expected to benefit from the
synergies of the business combination. Where the test results indicate that the recoverable amount of an asset group
or combination of asset groups containing the apportioned goodwill is less than its book value the corresponding
impairment loss is recognized. The impairment loss amount is first set off against the book value of the goodwill
apportioned to the asset group or combination of asset groups and then set off against the book value of other assets
based on the proportion of the book value of each asset other than goodwill in the asset group or combination of
asset groups.Once the above asset impairment loss is recognized it shall not be reversed in subsequent accounting periods
for the part whose value is restored.
25. Long-term deferred expenses
Long-term unamortized expenses are the expenses that have been incurred but shall be borne in the reporting
period and subsequent periods for a period of assessment of more than one year. The Group’s long-term deferred
expenses mainly consist of building renovations and project improvements. These long-term deferred expenses are
amortized using the straight-line method over the estimated period of benefit.
26. Contractual liabilities
The contractual liabilities refer to the obligation of the Group to transfer goods to customers for consideration
received or receivable. If the customer has paid the contractual consideration or the Group has obtained an
unconditional right of collection prior to the transfer of goods by the Group to the customer the Group presents the
amount received or receivable as a contractual liability on the date when the actual payment is made by the customer
or the payment due date whichever is earlier. Contractual assets and contractual liabilities under the same contract
are presented on a net basis and contractual assets and contractual liabilities under different contracts are not offset.
27. Employee compensation
(1) Accounting treatment for short-term employee compensation
1992025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The employee compensation of the Group includes short-term compensation post-employment benefits
termination benefits and other long-term employee benefits. Where:
Short-term compensation mainly includes wages bonuses allowances and subsidies employee welfare
expenses medical insurance premiums maternity insurance premiums work-related injury insurance premiums
housing provident funds union funds and employee education funds non-monetary benefits etc. The Group
recognizes short-term employee compensation actually incurred during the accounting period in which employees
provide services to the Group as a liability and includes it in current profits and losses or related asset cost. Non-
monetary benefits are measured at fair value.
(2) Accounting treatment for post-employment benefits
Post-employment benefits mainly include basic pension insurance unemployment insurance and annuity. The
post-employment benefits plan includes the establishment of a defined contribution plan and the establishment of a
defined benefit plan. If a defined contribution plan is adopted the corresponding amount due is included in the
relevant asset cost or current profits and losses at the time of occurrence.If the employment relationship with the employee is terminated before the expiration of the employee’s
employment contract or a compensation proposal is made to encourage the employee to voluntarily accept the
reduction the employee compensation liabilities arising from termination benefits shall be recognized and included
in current profits and losses when the Group cannot unilaterally withdraw the termination benefits provided as a
result of the termination plan or the reduction proposal or the Group recognizes the costs associated with the
reorganization involving the payment of termination benefits whichever is earlier. However if the termination
benefits cannot be fully paid within 12 months after the end of the annual reporting period they shall be treated as
other long-term employee compensations.
(3) Accounting treatment for termination benefits
Internal employee retirement plans are treated in the same way as the termination benefits mentioned above.The Group will recognize the salary of internal retirees and social insurance premiums to be paid during the period
from the date the employee ceases to provide service to the normal retirement date in the current profits and losses
(termination benefits) when the conditions for recognition of the estimated liabilities are met.
(4) Accounting treatment for other long-term employee benefits
Other long-term employee benefits provided by the Group to employees that meet the defined contribution plan
are accounted for in accordance with the defined contribution plan. Other benefits shall be accounted for in
accordance with the defined benefit plan.
28. Estimated liabilities
An obligation relating to a contingency is recognized as an estimated liability when the following conditions
are met: (1) The obligation is a current obligation undertaken by the Group; (2) The performance of the obligation
is likely to result in the outflow of economic benefits; (3) The amount of the obligation can be measured reliably.On the balance sheet date estimated liabilities are measured according to the best estimate of expenses required
to meet the relevant current obligations taking into account factors such as risks uncertainties and the time value
of money associated with contingencies.
2002025 Annual Report of Yunnan Baiyao Group Co. Ltd.
If all or part of the expenses required to pay off the estimated liabilities are expected to be compensated by a
third party the compensation amount shall be recognized separately as an asset when it is basically determined that
it can be received and the recognized compensation amount shall not exceed the book value of the estimated
liabilities.
(1) Loss-making contract
A loss-making contract is a contract in which the cost of fulfilling the contractual obligation inevitably exceeds
the expected economic benefit. If the contract to be executed becomes a loss-making contract and the obligations
arising from the loss-making contract meet the conditions for recognition of the above-mentioned estimated
liabilities the portion of the estimated loss of the contract exceeding the recognized impairment loss (if any) of the
underlying asset of the contract is recognized as an estimated liability.
(2) Reorganization obligation
For a detailed formal reorganization plan that has been announced to the public the estimated liability amount
is determined on the basis of direct expenses related to the reorganization subject to meeting the conditions for
recognition of the estimated liabilities described above.
29. Share-based payments
(1) Accounting treatment for share-based payment
Share-based payments are transactions in which equity instruments are granted or liabilities are assumed on the
basis of equity instruments in exchange for services rendered by employees or other parties. The share-based
payments are divided into equity-settled share-based payment and cash-settled share-based payment.* Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees shall be measured at days
the fair value of the equity instruments granted to employees. For the equity-settled share-based payment that can
only be vested after services during a waiting period are provided or required performance conditions are met the
amount of such fair value is calculated on a straight-line basis based on the best estimate of the number of equity
instruments that can be vested during the waiting period and is included in the relevant costs or expenses or if
available immediately after grant included in the relevant costs or expenses on the grant date increasing capital
reserves accordingly.On each balance sheet date during the waiting period the Group makes the best estimate based on the latest
follow-up information such as changes in the number of employees that satisfy vesting conditions and revises the
number of equity instruments expected to be vested. The impact of the above estimates is included in the relevant
costs or expenses for the period and capital reserves are adjusted accordingly.The equity-settled share-based payments in exchange for services rendered by other parties shall be measured
at the fair value of the services on the acquisition date if the fair value of services rendered by other parties can be
reliably measured. However if the fair value of services rendered by other parties cannot be reliably measured but
the fair value of the equity instruments can be reliably measured the equity-settled share-based payments shall be
measured at the fair value of the equity instruments on the acquisition date of the services and included in the
relevant costs or expenses increasing shareholders’ equity correspondingly.
2012025 Annual Report of Yunnan Baiyao Group Co. Ltd.
When the fair value of equity instruments granted cannot be reliably measured the intrinsic value of the equity
instruments is used to measure their value on the grant date subsequent balance sheet dates and settlement dates.Changes in the intrinsic value are recognized in the current period’s income statement.* Cash-settled share-based payments
A cash-settled share-based payment shall be measured in accordance with the fair value of liability determined
based on the shares or other equity instruments undertaken by the Group. If the cash-settled share-based payment
can be vested immediately after granting it shall be included in the relevant costs or expenses on the grant date
increasing the liabilities correspondingly. For the cash-settled share-based payment that can only be vested after
services during a waiting period are provided or required performance conditions are met on each balance sheet
date during the waiting period the services obtained during the current period are included in the cost or expense
at the fair value of the liabilities assumed by the Group based on the best estimate of the situation of vesting
increasing the corresponding liabilities correspondingly.The Group shall on each balance sheet date and each account date prior to the settlement of the relevant
liabilities re-measure the fair values of the liabilities and include the changes in the current profits and losses.
(2) Accounting treatment for modification and termination of share-based payment plan
When the Group makes a modification to the share-based payment plan if the modification increases the fair
value of the equity instrument granted the increase in services obtained is recognized in accordance with the increase
in the fair value of the equity instrument. The increase in the fair value of equity instruments refers to the difference
between fair values of the equity instruments before and after the modification on the date of modification. If a
modification reduces the total fair value of share-based payments or is otherwise unfavorable to the employees the
acquired services continue to be accounted for as if the change never occurs unless the Group cancels some or all
of the equity instruments granted.If a grant of equity instruments is canceled during the waiting period the Group treats the cancellation of the
granted equity instruments as accelerated exercise of right and includes the amount to be recognized over the
remaining waiting period in the current profits and losses immediately and recognizes the capital reserve at the
same time. If employees or other parties can choose to meet the non-vesting conditions but have not met the
conditions within the waiting period the Group treats it as cancellation of equity instruments granted.
(3) Accounting treatment for share-based payment transactions involving the shareholders or de facto
controllers of the Group and Company
Transactions involving share payments between the shareholders or de facto controllers of the Group and
Company are accounted for in the Group’s consolidated financial statements in accordance with the following
provisions if either one of the settlement enterprises and receiving enterprises is within the Group while the other
one is outside the Group:
* If the settlement enterprise settles by its own equity instruments the share-based payment transaction shall
be treated as the equity-settled share-based payment; otherwise they shall be treated as the cash-settled share-based
payment.If the settlement enterprise is an investor of the enterprise receiving the services it shall be recognized as a
2022025 Annual Report of Yunnan Baiyao Group Co. Ltd.
long-term equity investment in the enterprise receiving the services according to the fair value of the equity
instrument on the grant date or the fair value of the liability assumed and the capital reserve (other capital reserve)
or liability shall be recognized at the same time.* If the enterprise receiving the services has no settlement obligation or the equity instrument granted to its
employees is its own equity instrument the share-based payment transaction shall be treated as the equity-settled
share-based payment. If the enterprise receiving the services has settlement obligation and the equity instrument
granted to its employees is not its own equity instrument the share-based payment transaction shall be treated as
the cash-settled share-based payment.For the share-based payment transaction occurring among the enterprises within the Group where the
enterprise receiving the services and the settlement enterprise are not the same enterprise the recognition and
measurement of the share-based payment transaction in the individual financial statements of the enterprise
receiving the services and the settlement enterprise shall be processed in accordance with the above principles.
30. Revenue
Disclose the accounting policies for revenue recognition and measurement by business type
Revenue is the total inflow of economic benefits arising from the Group’s ordinary activities that would result
in an increase in shareholders’ equity and are unrelated to capital contributions by shareholders. When the contract
between the Group and the customer meets the following conditions revenue is recognized when the customer
obtains control of the relevant goods (including services the same below) : The parties to the contract have approved
the contract and undertake to perform their obligations; The contract specifies the rights and obligations of the parties
to the contract in relation to the goods transferred or the provision of services; The contract has clear payment terms
related to the transferred goods; The contract is commercial in nature i.e. the performance of the contract will change
the risk timing or amount of the Group’s future cash flows; The consideration to which the Group is entitled as a
result of the transfer of goods to customers is likely to be recovered. Gaining control of the relevant goods means
being able to dominate the use of that goods and derive almost all of the economic benefits from it.On the commencement date of the contract the Group identifies the individual performance obligation existing
in the contract and allocates the transaction price to each individual performance obligation in proportion to the
individual selling price of the goods promised by each individual performance obligation. Factors such as variable
consideration significant financing elements in the contract non-cash consideration and consideration payable to
customers are considered in determining the transaction price.For each individual performance obligation in the contract the Group will recognize the transaction price
allocated to the individual performance obligation in accordance with the performance progress during the relevant
performance period as revenue if one of the following conditions is met: The customer acquires and consumes the
economic benefits arising from the Group’s performance at the same time as the Group fulfills its obligations; The
customer can control the goods under construction in the course of the Group’s performance; The goods produced
in the course of the Group’s performance have irreplaceable uses and the Group is entitled to receive payment
throughout the contract period for the cumulative part of the performance completed to date. The performance
progress is determined by the input or output method depending on the nature of the goods transferred. When the
2032025 Annual Report of Yunnan Baiyao Group Co. Ltd.
performance progress cannot be reasonably determined and the costs incurred by the Group are expected to be
compensated revenue is recognized at the amount of the costs incurred until the progress of performance can be
reasonably determined.If one of the above conditions is not met the Group recognizes revenue at the point at which the customer
obtains control of the relevant goods at the transaction price apportioned to the individual performance obligation.In determining whether a customer has acquired control of the goods the Group considers the following indications:
The enterprise has the current right of collection in respect of the goods that is the customer has the current payment
obligation in respect of the goods; The enterprise has transferred the legal ownership of the goods to the customer
that is the customer has the legal ownership of the goods; The enterprise has physically transferred the goods to the
customer that is the customer has physically possessed the goods; The enterprise has transferred the main risks and
returns in the ownership of the goods to the customer that is the customer has obtained the main risks and returns
in the ownership of the goods; The customer has accepted the goods; Other indications that the customer has taken
control of the goods.Revenue recognition principles for specific scenarios are as follows:
(1) Domestic sales:
Revenue is recognized when control is transferred to the customer upon delivering the products to the
customer’s specified location and obtaining customer acknowledgement through a signed confirmation as stipulated
in the sales contract or order.Revenue is recognized when control is transferred to the customer upon delivering the products to the
customer’s specified location and completing the customer’s inspection based on relevant standards as stipulated
in the sales contract or order.Revenue is recognized when the services have been provided and the right to collect service fees is obtained.
(2) International sales:
Revenue is recognized when control is transferred to the customer upon the products being dispatched and
customs clearance procedures being completed as stipulated in the sales contract or order.Situations where similar businesses adopt different operation models involving different revenue recognition
methods and measurement methods: Not applicable.
31. Contract cost
Incremental cost incurred by the Group to acquire contract that is expected to be recovered is taken as the
contract acquisition cost and recognized as an asset. However if the amortization period of the asset does not exceed
one year it is included in the current profits and losses when it occurs.The cost incurred for the performance of the contract is recognized as an asset if it does not fall within the
scope of Accounting Standard for Business Enterprises No. 14 - Revenue (Revised in 2017) and meets the following
conditions: * The cost is directly related to a current or anticipated contract including direct labor direct materials
manufacturing expenses (or similar expenses) cost expressly borne by the customer and other costs incurred solely
as a result of the contract; * This cost increases the Group’s future resources to meet its performance obligations;
2042025 Annual Report of Yunnan Baiyao Group Co. Ltd.
* This cost is expected to be recovered.Assets related to contract costs are amortized on the same basis as for the recognition of the commodity revenue
associated with the assets and are recognized in current profits and losses.When the carrying amount of an asset related to contract costs exceeds the difference between the following
two amounts an impairment provision is recognized for the excess amount and an asset impairment loss is
recognized: (1) The expected remaining consideration to be obtained from transferring the goods related to that asset.
(2) The estimated costs necessary to complete the transfer of the related goods. If there is a change in the factors
that led to impairment in previous periods resulting in the difference between (1) minus (2) exceeding the carrying
amount of the asset the previously recognized impairment provision is reversed and recognized in the current
period’s income statement. However the carrying amount of the asset after the reversal should not exceed the
carrying amount of the asset on the date of the reversal assuming no impairment provision had been recognized.
32. Government subsidy
Government subsidy refers to the cash and bank balance and non-cash and bank balance that the Group obtains
from the government free of charge excluding the capital invested by the government as an investor with the
corresponding owners’ equity. Government subsidies are divided into asset-related government subsidies and
income-related government subsidies. The Group defines government subsidies obtained for the acquisition or
otherwise formation of long-term assets as asset-related government subsidies. Other government subsidies are
defined as income-related government subsidies. If the government document does not specify the recipients of the
subsidies the subsidies divided into asset-related government subsidies and income-related government subsidies
in the following way: (1) If the government documents specify the specific project for which the subsidy is targeted
the division shall be made according to the relative proportion of the disbursement amount forming assets and the
disbursement amount included in the expenses in the budget of the specific project and the division proportion shall
be reviewed on each balance sheet date and changed if necessary; (2) Where the government document only has a
general description of the purpose and no specific project is specified it shall be regarded as an income-related
government subsidy. For a government subsidy in the form of transfer of cash and bank balance the subsidy is
measured at the amount received or receivable. For a government subsidy in the form of transfer of non-cash and
bank balance it is measured at fair value; if the fair value cannot be reliably determinable the subsidy is measured
at nominal amount. Government subsidies measured at nominal amounts are directly included in current profits and
losses.The Group usually recognizes and measures government subsidies in accordance with the amount actually
received when they are actually received. However government subsidies are recognized at the amount receivable
if there is evidence that the Group can meet the relevant conditions specified in the financial support policy at the
end of the period and the Group is expected to receive the financial support funds. Government subsidies measured
at the amounts receivable shall also meet the following conditions: (1) The amount of the receivable subsidies has
been confirmed by the competent government department in writing or can be reasonably calculated according to
the relevant provisions of the officially issued measures for the management of financial funds and there is no
significant uncertainty in the estimated amount; (2) It is based on the financial support projects and financial fund
management measures officially issued by the local financial department and actively disclosed in accordance with
2052025 Annual Report of Yunnan Baiyao Group Co. Ltd.
the provisions of the Regulations on the Disclosure of Government Information and the management measures
should be inclusive (that is any enterprise that meets the prescribed conditions can apply) rather than specifically
formulated for specific enterprises; (3) The relevant grant approval has clearly promised the disbursement period
and the disbursement of the amount is guaranteed by the corresponding financial budget so it can be reasonably
guaranteed that it can be received within the specified period; (4) Other relevant conditions that should be met based
on the specific circumstances of the Group and the grant in question (if any).Asset-related government subsidies are recognized as deferred income and included in the current profits and
losses over the useful life of the related assets in accordance with a reasonable and systematic method. Income-
related government subsidies that compensate the future costs expenses or losses are recorded as deferred income
and recognized in current profits and losses in the period in which the related costs expenses or losses are recognized;
Income-related government subsidies that compensate the incurred expenses or losses are included directly in the
current profits and losses.For government subsidies that contain both parts related to assets and parts related to income accounting
treatments shall be made separately for different parts. If it is difficult to distinguish it shall be classified as the
income-related government subsidy.Government subsidies related to ordinary activities are recorded in other income in accordance the substance
of economic operations. Government subsidies unrelated to daily activities are included in non-operating revenue
and expense.When confirmed government subsidies need to be returned and there is a related balance of deferred income
the related deferred income balance is offset. Any excess amount is recognized in the current period’s income
statement or adjusted against the carrying value of the asset (for government subsidies that were initially offset
against the carrying value of the asset); in other cases it is recognized directly in the current profits and losses.
33. Deferred income tax assets/deferred income tax liabilities
(1) Current income tax
The current income tax liabilities (or assets) generated in the current period and previous periods are measured
on the balance sheet date in accordance with the expected payable (or refunded) income tax amount calculated
according to the tax law. The taxable income amount on which the current income tax expense is calculated is based
on the corresponding adjustment of the pre-tax accounting profit of the reporting period in accordance with the
relevant provisions of the tax law.
(2) Deferred income tax assets and deferred income tax liabilities
The deferred income tax assets and deferred income tax liabilities can be determined with the balance sheet
liability method based on the difference between the book value of certain assets and liabilities and the tax basis
as well as the temporary difference between the tax basis and the book value of the items not recognized as assets
and liabilities but whose tax basis can be determined according to the tax law.For taxable temporary differences relating to the initial recognition of goodwill and the initial recognition of
assets or liabilities arising from transactions that are neither a business combination nor affect accounting profit and
taxable income (or deductible losses) at the time of occurrence the relevant deferred tax liabilities are not recognized
2062025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(except for individual transactions in which the initial recognition of assets and liabilities results in equal amounts
of taxable temporary differences and deductible temporary differences). In addition for taxable temporary
differences related to investments in subsidiaries associates and joint ventures deferred tax liabilities are not
recognized if the Group is able to control the timing of the reversal of the temporary difference and it is likely that
the temporary difference will not be reversed in the foreseeable future. Subject to the above exceptions the Group
recognizes all other deferred tax liabilities arising from taxable temporary differences.For deductible temporary differences relating to the initial recognition of assets or liabilities arising from
transactions that are neither a business combination nor affect accounting profit and taxable income (or deductible
losses) at the time of occurrence the relevant deferred tax assets are not recognized (except for individual
transactions in which the initial recognition of assets and liabilities results in equal amounts of taxable temporary
differences and deductible temporary differences). For deductible temporary differences associated with
investments in subsidiaries associates and joint ventures the relevant deferred tax asset is not recognized if it is not
likely that the temporary differences will reverse in the foreseeable future and it is not likely that taxable income
will be available against which the deductible temporary differences can be utilized in the future. Subject to the
above exceptions the Group recognizes other deferred income tax assets arising from deductible temporary
differences to the extent that it is probable that taxable income will be available against which deductible temporary
differences can be utilized.For the deductible losses and tax credits that can be carried forward to future years the Group recognizes the
corresponding deferred tax assets to the extent that it is probable that future taxable income will be available against
which the deductible losses and tax credits can be utilized.On the balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the
tax rates that are expected to apply in the period in which the asset is recovered or the liability is settled according
to the tax law.On the balance sheet date the Group reviews the book value of deferred income tax assets. If no sufficient
taxable income is probably obtained in the future to offset the benefits of deferred income tax assets the book value
of the deferred income tax assets shall be written down. When it is probable to obtain sufficient taxable income
taxes such write-off amount shall be reversed.
(3) Income tax expense
Income tax expenses include current income tax expenses and deferred income tax expenses.Except for current income tax and deferred income tax related to transactions and events recognized as other
comprehensive income or directly included in shareholders’ equity and the book value of deferred income tax
adjusted goodwill resulting from business combination the remaining current income tax and deferred income tax
expenses or gains are included in current profits and losses.
(4) Offsetting of income tax
If the Group has the legal right to settle on a net basis and intends to settle on a net basis or acquire assets and
settle liabilities simultaneously the current income tax assets and current income tax liabilities are presented on a
net basis after offsetting.
2072025 Annual Report of Yunnan Baiyao Group Co. Ltd.
If the Group has a legally enforceable right to settle current income tax assets and liabilities on a net basis，and the deferred income tax assets and liabilities are related to the income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities which intend either to settle current income tax assets
and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously in each future period in
which significant amounts of deferred income tax assets and liabilities are expected to be reversed the deferred
income tax assets and liabilities can be offset and presented on a net basis.
34. Leases
(1) Accounting treatment as the lessee
Leasing refers to contracts in which the Group conveys or acquires the right to control the use of one or more
identified assets for a specified period in exchange for consideration. At the commencement date of a contract the
Group assesses whether the contract is a lease or contains a lease component.The Group’s lease assets are mainly housing and buildings.* Initial measurement
On the date of commencement of the lease term the Group recognizes the right to use the lease asset during
the lease term as a right of use asset and recognizes the present value of the outstanding lease payments as a lease
liability except for short-term leases and low value asset leases. When calculating the present value of lease
payments the interest rate implicit in the lease is used as the discount rate. If the interest rate implicit in the lease
cannot be determined the lessor’s incremental borrowing rate is used as the discount rate.* Subsequent measurement
The Group shall depreciate the right of use assets in accordance with the relevant depreciation provisions of
Accounting Standard for Business Enterprises No. 4 - Fixed Assets (see Section 19 “Fixed assets” under Note
V for details). If the ownership of the leased asset can be reasonably determined at the end of the lease term the
Group shall depreciate the leased asset during the remaining useful life. Where it is unable to reasonably determine
the ownership of the leased asset at the end of the lease term the Group shall make depreciation provision over the
lease term or the remaining useful life of the leased asset whichever is shorter.The Group calculates the interest expense on lease liabilities for each period of the lease term at a fixed periodic
rate which is included in the current profits and losses or the relevant asset costs. Variable lease payments that are
not included in the measurement of the lease liability are recognized in current profits and losses or the relevant
asset costs when they are actually incurred.After the commencement date of the lease term when there is a change in the substantive fixed payment amount
a change in the amount expected to be payable for the guaranteed residual value a change in the index or rate used
to determine the lease payment amount or a change in the evaluation result or actual exercise of the purchase option
renewal option or termination option the Group remeasures the lease liability at the present value of the changed
lease payment amount and adjusts the carrying value of the right-of-use asset accordingly. If the book value of the
right-of-use asset has been reduced to zero but the lease liability is subject to further reduction the Group recognizes
the remaining amount in current profits and losses.
2082025 Annual Report of Yunnan Baiyao Group Co. Ltd.
* Short-term leases and leases of low-value assets
For short-term leases (leases with a lease term of not more than 12 months since the commencement date of
the lease) and low-value asset leases (the value of a single lease asset which is a brand-new asset is lower than
either RMB 40000 or USD 5000) the Group adopts a simplified approach whereby the right of use assets and lease
liabilities are not recognized and the lease payments are recognized in the relevant asset cost or current profits and
losses in accordance with the straight-line method or other systematic and reasonable methods during the various
periods of the lease term.
(2) Accounting treatment as the lessor
On the inception date of the lease the Group classifies the lease as a finance lease and an operating lease based
on the substance of transaction. A finance lease is a lease that transfers substantially all the risks and returns
associated with ownership of the leased asset. An operating lease is a lease other than a finance lease.* Operating lease
Lease receipts under operating leases are recognized as rental income on a straight-line basis over the respective
periods of the lease term. Variable lease payments acquired in connection with operating leases that are not included
in the lease receipts are recognized in current profits and losses when they are actually incurred.* Finance lease
The Group recognizes finance lease receivables and derecognizes finance lease assets on the commencement
date of the lease term. Finance lease receivables are initially measured at the net lease investment (the sum of the
unsecured balance and the unreceived lease proceeds on the commencement date of the lease term at the present
value discounted with the intrinsic interest rate of the lease) and interest income is recognized during the lease term
at a fixed periodic interest rate. Variable lease payments obtained by the Group which are not included in the net
lease investment measurement are recognized in current profits and losses when they are actually incurred.
35. Other significant accounting policies and accounting estimates
Share repurchase
Consideration and transaction costs paid in share repurchases reduce shareholders’ equity and no profits or
losses is recognized when shares of the Company are repurchased transferred or cancelled.For the transfer of treasury shares the difference between the amount actually received and the book value of
treasury shares shall be included in the capital reserve. If the capital reserve is insufficient for deduction the surplus
reserve and undistributed profits shall be deducted. For the cancellation of treasury shares the share capital shall be
reduced according to the par value of the shares and the number of shares cancelled and the difference between the
book balance and the par value of treasury shares shall be charged to the capital reserve. If the capital reserve is
insufficient for deduction the surplus reserve and undistributed profits shall be deducted.
36. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
□ Applicable ? Not applicable
(2) Changes in significant accounting estimates
2092025 Annual Report of Yunnan Baiyao Group Co. Ltd.
□ Applicable ? Not applicable
(3) First-time implementation of the new accounting standard in 2025 to adjust relevant items in the
financial statements at the beginning of the year of first-time implementation
□ Applicable ? Not applicable
37. Others: None.
VI. Taxation
1. Main tax types and tax rates
Tax type Taxation basis Tax rate
General Taxation Method: the
balance of output VAT for the current
period after deducting input VAT for
Value-added tax the current period. Simplified 13% 9% 6% 5% 3% 0%
Taxation Method: sales amount for
the current period multiplied by the
levy rate.Price-based collection and compound Price-based collection: 15% 10%. Compound
Consumption tax
levy levy: 20% plus RMB 0.5 per 500g (or 500ml)
Urban maintenance and
Amount of turnover tax payables 7% 5% 1%
construction tax
Enterprise income tax Taxable income 25% 20% 16.5% 15% 8.25%
Education surcharge Amount of turnover tax payables 3%
Local education surcharge Amount of turnover tax payables 2%
If there are taxable entities with different corporate income tax rates disclose the description of the situation
Taxpayer Income tax rate
Yunnan Baiyao Group Co. Ltd. 15.00%
Yunnan Digital Intelligence TCM Development Co. Ltd. 15.00%
Yunnan Baiyao Group Health Products Co. Ltd. 15.00%
Yunnan Baiyao Group Lijiang Pharmaceutical Co. Ltd. 15.00%
Yunnan Baiyao Group Wenshan Qihua Co. Ltd. 15.00%
Yunnan Baiyao Pharmacy Co. Ltd. 15.00%
Yunnan Baiyao Teayield Co. Ltd. 15.00%
Yunnan Baiyao Group Dali Pharmaceutical Co. Ltd. 15.00%
Yunnan Tianzheng Testing Co. Ltd. 15.00%
Yunnan Institute of Materia Medica 15.00%
Yunbaiyao Zhengwu Technology (Shanghai) Co. Ltd. 20.00%
Yunnan Pharmaceutical Xihui Co. Ltd. 20.00%
Beijing Rui’er Testing Technology Co. Ltd. 20.00%
Yunnan Pharmaceutical Jiayuan Co. Ltd. 20.00%
Yunnan Pharmaceutical Tianfu Dahua Co. Ltd. 20.00%
Yunnan Pharmaceutical Diqing Development Co. Ltd. 20.00%
Yunnan Pharmaceutical Pu’er Co. Ltd. 20.00%
2102025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Yunnan Pharmaceutical Zhaotong Co. Ltd. 20.00%
Lijiang Yunquan Biological Development Co. Ltd. 20.00%
Yunnan Baiyao Tiancui Business Management Co. Ltd. 20.00%
Beijing Yunzhi Health Management Co. Ltd. 20.00%
Shanghai Wenshu Health Management Co. Ltd. 20.00%
Kunming Yunzhen Medical Technology Co. Ltd. 20.00%
Shanghai Yunyi Medical Technology Co. Ltd. 20.00%
Shanghai Yunpu Medical Technology Co. Ltd. 20.00%
Beijing Yunzhen Medical Aesthetic Clinic Co. Ltd. 20.00%
Shanghai Hanshi Health Consulting Co. Ltd. 20.00%
Shanghai Yunzhenni Medical Aesthetic Outpatient Department Co. Ltd. 20.00%
Yunnan Baiyao Yunzhen International Trade Co. Ltd. 20.00%
Shanghai Yunyao Oral Medical Technology Co. Ltd. 20.00%
Yunnan Fengqing Tea Plant Co. Ltd. 20.00%
Yunnan Baiyao Tianyi Chayuan Lincang Manor Co. Ltd. 20.00%
Tianjin Yunshuda Comprehensive Clinic Co. Ltd. 20.00%
Xingzhong Digital Intelligence TCM Service Co. Ltd of Yunnan Baiyao Group 20.00%
Yunnan Yunyao Nuxiang Co. Ltd. 20.00%
Hangzhou Shanqi Health Industry Co. Ltd. 20.00%
Yunnan Baiyao Group Seed Industry Technology Co. Ltd. 20.00%
Yunnan Baiyao Group (Hainan) Import & Export Trading Co. Ltd. 20.00%
Shaanxi Zhiyun Wenshu Health Services Co. Ltd. 20.00%
Yunnan Baiyao Group Shanghai Co. Ltd. 20.00%
Shanghai Yunzhen Outpatient Department Co. Ltd. 20.00%
Yunnan Pharmaceutical Xiongyi Co. Ltd. 20.00%
Yunnan Baiyao Group Shanghai Technology Co. Ltd. 20.00%
Yunnan Baiyao Group TCM Development (Weishan) Co. Ltd. 20.00%
Yunnan Baiyao Group Digital Intelligence Technology Co. Ltd. 20.00%
YNBY Healthcare (Shenzhen) Limited 20.00%
YNBY Healthcare Technology (Yunnan) Co. Ltd. 20.00%
YNBY International Limited 16.50%
Wan Long Xing Ye Commercial Trading (Hong Kong) Limited 16.50%
BL Healthcare (Hong Kong) Limited 16.50%
Yunbai Coffee Limited 16.50%
2112025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Yunbai Health Limited 16.50%
Yunbai Pharmaceutical Limited 16.50%
Yunbai Group Limited 16.50%
Yunbai Beauty Limited 8.25%
2. Preferential tax treatment
(1) A total of 9 companies including Yunnan Baiyao Group Co. Ltd Yunnan Digital Intelligence TCM
Development Co. Ltd Yunnan Baiyao Group Health Products Co. Ltd Yunnan Baiyao Group Lijiang
Pharmaceutical Co. Ltd Yunnan Baiyao Group Wenshan Qihua Co. Ltd Yunnan Baiyao Pharmacy Co. Ltd
Yunnan Baiyao Teayield Co. Ltd Yunnan Baiyao Group Dali Pharmaceutical Co. Ltd and Yunnan Tianzheng Testing
Co. Ltd enjoy the preferential tax treatment for the Western Development and pay the enterprise income tax at the
tax rate of 15%.
(2) Yunnan Institute of Materia Medica enjoy the preferential tax treatment for high-tech enterprises and pay
the enterprise income tax at the tax rate of 15%.
(3) For Yunnan Baiyao Group Sanqi Industry Co. Ltd Yunnan Baiyao Group Tai’an Biotechnology Industry
Co. Ltd and Anguo Juyaotang Pharmaceutical Co. Ltd the primary processing of agricultural products is exempt
from enterprise income tax and the income other than that is taxed at 25%.For Lijiang Yunquan Biological Development Co. Ltd the primary processing of agricultural products is
exempt from enterprise income tax and the income other than that shall be subject to enterprise income tax for small
and micro enterprises.
(4) The Hong Kong-based company is subject to the “two-tiered tax rate” policy. This means that for annual
taxable profits not exceeding HKD 2 million a tax rate of 8.25% applies; for profits exceeding HKD 2 million a
tax rate of 16.5% applies.
(5) According to the Announcement of the General Administration of Taxation of the Ministry of Finance on
the Further Implementation of the Preferential Income Tax Policy for Small and Micro Enterprises (AnnouncementNo. 13 [2022] of the Ministry of Finance and the State Taxation Administration) “the part of the annual taxableincome of small and micro profit enterprises exceeding RMB 1 million but not exceeding RMB 3 million shall be
included in the taxable income at a reduced rate of 25% and the enterprise income tax shall be paid at a tax rate of
20%. The period of implementation of this announcement is from January 1 2022 to December 31 2024” the
Announcement of the General Administration of Taxation of the Ministry of Finance on Preferential Income Tax
Policies for Small and Micro Enterprises and Individual Industrial and Commercial Households (AnnouncementNo. 6 [2023] of the Ministry of Finance and the State Taxation Administration) “the part of the annual taxableincome of small and micro profit enterprises that does not exceed RMB 1 million shall be included in the taxable
income at a reduced rate of 25% and the enterprise income tax shall be paid at a tax rate of 20%. The period ofenforcement of this Announcement is from January 1 2023 to December 31 2024” and the Announcement of the
General Administration of Taxation of the Ministry of Finance on Tax Policies for Further Supporting the
Development of Small and Micro Enterprises and Individual Industrial and Commercial Enterprises
(Announcement No. 12 [2023] of the Ministry of Finance and the State Taxation Administration) “For small low-
2122025 Annual Report of Yunnan Baiyao Group Co. Ltd.
profit enterprises the taxable income amount shall be calculated at a reduced rate of 25% and the enterprise incometax shall be paid at a tax rate of 20%. The policy shall be continued until December 31 2027.” Thirty-seven
companies including Yunnan Fengqing Tea Plant Co. Ltd and Beijing Rui’er Testing Technology Co. Ltd pay
enterprise income tax at a tax rate of 20% according to this policy.
3. Others: None.
VII. Notes to Items in Consolidated Financial Statements
1. Cash and bank balance
Unit: RMB
Item Closing balance Opening balance
Cash on hand 125243.29 124469.53
Bank deposit 9042351401.06 10835027632.02
Other cash and bank balance 65352523.63 52831059.75
Total 9107829167.98 10887983161.30
Including: Total amount of money
deposited overseas 112994332.70 172825681.17
Other explanations: None.
2. Financial assets held for trading
Unit: RMB
Item Closing balance Opening balance
Financial assets at fair value through
4192113408.432547113523.40
profits or losses
Including:
Investments in debt instruments
Investments in equity instruments 179246998.10
Others 4192113408.43 2367866525.30
Including:
Total 4192113408.43 2547113523.40
Other explanations: The Company adheres to the principle of prudent investment utilizing idle proprietary funds for wealth
management and investment activities while ensuring daily operations and capital security thereby enhancing corporate returns and
capital utilization efficiency.
3. Notes receivable
(1) Notes receivable by type
Unit: RMB
Item Closing balance Opening balance
Banker’s acceptance bill 239281210.93 302751911.37
Commercial acceptance bill 85000.00
Domestic letter of credit 346000000.00 626900000.00
Total 585366210.93 929651911.37
(2) Disclosure by provision for bad debts
2132025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Provision Book value Provision Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Including:
Bills receivable with provision for bad debts by 585366210.93 100.00% 585366210.93 929651911.37 100.00% 929651911.37
portfolio
Including:
Banker’s acceptance bill 239281210.93 40.88% 239281210.93 302751911.37 32.57% 302751911.37
Commercial acceptance bill 85000.00 0.01% 85000.00 0.00%
Domestic letter of credit 346000000.00 59.11% 346000000.00 626900000.00 67.43% 626900000.00
Total 585366210.93 100.00% 585366210.93 929651911.37 100.00% 929651911.37
Provision for bad debts by portfolio:
Unit: RMB
Closing balance
Item
Book balance Provision for bad debts Provision proportion
Banker’s acceptance bill 239281210.93
Commercial acceptance bill 85000.00
Domestic letter of credit 346000000.00
Total 585366210.93
2142025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The explanation for determining the basis of this combination: None.If provision was made for bad debts of notes receivable in accordance with the general expected credit loss model:
□ Applicable ? Not applicable
(3) Provision for bad debts accrued recovered or reversed during the reporting period
Provision for bad debts accrued during the period: None.Provision for bad debts recovered or reversed during the period:
□ Applicable ? Not applicable
(4) Notes receivable pledged by the Company at the end of the reporting period: None.
(5) Notes receivable endorsed or discounted by the Company which were not yet due on the balance
sheet date as at the end of the reporting period
Unit: RMB
Amount derecognized at the end of the Amount not derecognized at the end of the
Item
period period
Banker’s acceptance bill 1159164.16
Domestic letter of credit 368000000.00
Total 369159164.16
(6) Actual write-off of notes receivable for the period
4. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (inclusive of 1 year) 9956655013.57 9713443216.42
1 to 2 years 865042333.71 947991418.33
2 to 3 years 211881274.53 92799887.41
Above 3 years 81486165.98 49403790.60
Total 11115064787.79 10803638312.76
2152025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(2) Disclosure by provision for bad debts
Unit: RMB
Closing balance Opening balance
Category Book balance Provision for bad debts
Book balance Provision for bad debts
Provision Book value Provision Book value
Amount Proportion Amount proportion Amount Proportion Amount proportion
Accounts receivable with provision
for bad debts on individual basis 5666188.00 0.05% 5666188.00 100.00% 0.00 5666188.00 0.05% 5666188.00 100.00% 0.00
Including:
Accounts receivable with
provision for bad debts 5666188.00 0.05% 5666188.00 100.00% 0.00 5666188.00 0.05% 5666188.00 100.00% 0.00
on individual basis
Accounts receivable with
provision for bad debts on 11109398599.79 99.95% 949339376.50 8.55% 10160059223.29 10797972124.76 99.95% 874611020.37 8.10% 9923361104.39
portfolio basis
Including:
Age-based portfolio 11109398599.79 99.95% 949339376.50 8.55% 10160059223.29 10797972124.76 99.95% 874611020.37 8.10% 9923361104.39
Total 11115064787.79 100.00% 955005564.50 8.59% 10160059223.29 10803638312.76 100.00% 880277208.37 8.15% 9923361104.39
2162025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Provision for bad debts made on an individual basis:1
Unit: RMB
Opening balance Closing balance
Name Provision for Provision for Provision Reason for
Book balance Book balance
bad debts bad debts proportion provision
Ningbo
Qingbing Little chance of
5666188.005666188.005666188.005666188.00100.00%
Biotechnology recovery
Co. Ltd.Total 5666188.00 5666188.00 5666188.00 5666188.00
Provision for bad debts made on a portfolio basis:1
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Provision proportion
Age-based portfolio 11109398599.79 949339376.50 8.55%
Total 11109398599.79 949339376.50
Explanation on the basis for determining the portfolio: None.If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□ Applicable ? Not applicable
(3) Provision for bad debts accrued recovered or reversed during the reporting period
Provision for bad debts during the period:
Unit: RMB
Changes during the period
Category Opening balance Closing balance
Recovery or
Provision Write-off Others
reversal
Single account
receivable with
5666188.000.000.000.000.005666188.00
provision for bad
debts
Age-based
874611020.3773293557.990.0085482.851520280.99949339376.50
portfolio
Total 880277208.37 73293557.99 0.00 85482.85 1520280.99 955005564.50
Note: The “Others” amount during the period represents the bad debt provision for accounts receivable of Anguo Juyaotang
Pharmaceutical Co. Ltd as of the merger date.Significant provision for bad debts recovered or reversed during the period: None.
(4) Actual write-off of accounts receivable for the period:
Unit: RMB
Item Amount of write-off
Actual write-off of accounts receivable 85482.85
Significant write-off of accounts receivable: None.Explanation on write-off of accounts receivable: None.
2172025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(5) Top five customers in closing balance of accounts receivable and contractual assets summarized
by debtor
Unit: RMB
Percentage of total Closing balance of
Closing balance of
of closing balance provision for bad debts of
Closing balance of Closing balance of accounts
Entity name of accounts account receivable and
accounts receivable contractual assets receivable and
receivable and provision for impairment
contractual assets
contractual assets of contractual assets
Customer A 574289753.02 574289753.02 5.17% 125950855.88
Customer B 378661103.55 378661103.55 3.41% 20197170.79
Customer C 350874960.50 350874960.50 3.16% 32842342.94
Customer D 307071158.55 307071158.55 2.76% 15353557.93
Customer E 275727883.17 275727883.17 2.48% 58403048.79
Total 1886624858.79 1886624858.79 16.98% 252746976.33
5. Accounts receivable financing
(1) Accounts receivable financing by type
Unit: RMB
Item Closing balance Opening balance
Banker’s acceptance bill 1230423455.01 1887789780.16
Domestic letter of credit 451562128.92
Total 1681985583.93 1887789780.16
(2) Classified disclosure according to the method of bad debt provision
Not applicable.
(3) The bad debt provisions accrued recovered or reversed during the period
Not applicable.
(4) Financing of receivable pledged by the Company at the end of the reporting period
Not applicable.
(5) Financing of receivable endorsed or discounted by the Company which was not yet due on the balance
sheet date as at the end of the reporting period:
Unit: RMB
Amount derecognized at the end of the Amount not derecognized at the end of
Item
period the period
Banker’s acceptance bill 5736173619.99
Domestic letter of credit 324457006.84
2182025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Total 6060630626.83
(6) Financing of receivable pledged by the Company at the end of the period: None.
(7) Increase/decrease in the financing of accounts receivable and in their fair values during their financing
period: None.
(8) Other explanations: None.
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Dividends receivable 79875215.52 10348033.98
Other receivables 326642028.59 98079164.35
Total 406517244.11 108427198.33
(1) Interests receivable
1) Dividends receivable by type: None.
2) Major overdue interests: None.
3) Disclosure by provision for bad debts
□Applicable ?Not applicable
4) Withdrawal recovery and reversal of provision for bad debts during the period: None.
5) Actual write-off of dividend receivable during the period: None.
(2) Dividends receivable
1) Dividends receivable by type
Unit: RMB
Project (or investee) Closing balance Opening balance
Shanghai Pharmaceuticals Holding Co. Ltd. 79875215.52
Jacobson Pharma Co. Ltd. 6482280.00
JBM (Healthcare) Co. Ltd. 3865753.98
Total 79875215.52 10348033.98
2) Major dividends receivable aged over one year: None.
3) Disclosure by provision for bad debts
□Applicable ?Not applicable
2192025 Annual Report of Yunnan Baiyao Group Co. Ltd.
4) Withdrawal recovery and reversal of provision for bad debts during the period: None.
5) Actual write-off of dividend receivable during the period: None.
(3) Other receivables
1) Other receivables by nature
Unit: RMB
Nature Closing balance Opening balance
Deposits and guarantees 261910279.76 282011383.75
Borrowings 2677211.78 4877211.78
Current account and petty cash 106645507.97 4284813.75
Others 316089936.01 298950367.29
Total 687322935.52 590123776.57
2) Disclosure by aging
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (inclusive of 1 year) 336848203.09 91464527.37
1 to 2 years 17700710.11 11521428.46
2 to 3 years 6347352.58 10192068.99
Above 3 years 326426669.74 476945751.75
Total 687322935.52 590123776.57
3) Disclosure by provision for bad debts
? Applicable □ Not applicable
Provision was made for bad debts in accordance with the general expected credit loss model:
Unit: RMB
Phase I Phase II Phase III
Provision for bad debts Total
Expected credit losses Lifetime ECL (not credit- Lifetime ECL (credit-
for the next 12 months impaired) impaired)
Balance as of January 1 2025 220783937.68 271260674.54 492044612.22
Balance as of January 1 2025
in the current period
——Transferred to Phase 2 0.00
——Transferred to Phase 3 0.00
——Transferred back to
0.00
Phase 2
2202025 Annual Report of Yunnan Baiyao Group Co. Ltd.
——Transferred back to
0.00
Phase 1
Current provision 0.00
Current reversal 131363705.29 131363705.29
Current transfer 0.00
Current write-off 0.00
Other changes 0.00
Balance as of December 31
89420232.39271260674.54360680906.93
2025
Division base for each phase and proportion of provision for bad debts
Not applicable
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable ? Not applicable
4) Provision for bad debts accrued recovered or reversed during the current period
Provision for bad debts during the reporting period:
Unit: RMB
Changes in this period
Category Opening balance Recovery or Transfer or Closing balance
Provision Others
reversal write-off
Other accounts
receivable with
provision for bad
492044612.22131363705.29360680906.93
debts by credit risk
characteristics
portfolio
Total 492044612.22 131363705.29 360680906.93
Recovery or reversal of provision for bad debts with significant amount during the reporting period: None.
5) Actual write-off of other receivables for the period: None.
6) Top five customers in closing balance of other receivables summarized by debtor
Unit: RMB
Percentage of
Closing balance of total of closing
Entity name Nature of payment Closing balance Aging provision for bad balance of other
debt
receivables
Entity A Security deposit 100000000.00 Within 1 year 14.55% 5000000.00
Entity B Security deposit 37799431.74 Within 1 year 5.50% 1889971.59
Entity C Security deposit 16700000.00 Within 1 year 2.43% 11950000.00
2212025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Above 3 years
Entity D Security deposit 16500000.00 Within 1 year 2.40% 825000.00
Entity E Security deposit 12000000.00 Above 3 years 1.75% 12000000.00
Total 182999431.74 26.62% 31664971.59
7) Presentation under other receivables due to centralized fund management: None.
7. Prepayments
(1) Prepayments by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 425475454.48 97.94% 292483526.83 96.35%
1 to 2 years 4135029.82 0.95% 3670061.07 1.21%
2 to 3 years 2124307.70 0.49% 5838379.65 1.92%
Above 3 years 2708157.73 0.62% 1571876.52 0.52%
Total 434442949.73 303563844.07
Explanation on why prepayments with aging of more than 1 year and an important amount not settled in time: None.
(2) Top five suppliers in closing balance of prepayment summarized by payee
Series Percentage of prepayments
Company name Book balance
No. (%)
1 Supplier A 83177021.66 19.15%
2 Supplier B 41865167.48 9.64%
3 Supplier C 30179393.40 6.95%
4 Supplier D 17202373.12 3.96%
5 Supplier E 15157354.57 3.49%
Total 187581310.23 43.18%
Other explanations: None.
8. Inventories
Did the Company need to comply with the disclosure requirements of the real estate industry: No
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
decline in value of inventory
inventories or impairment or Item
Book balance Book value Book balance
provision for provision for
Book value
impairment of impairment of
contract fulfillment contract
costs performance costs
2222025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Raw materials 1515887407.03 139864005.50 1376023401.53 1592465699.05 56078142.82 1536387556.23
Work in
246090458.236824914.85239265543.38285385346.893184218.03282201128.86
process
Finished
4664617530.93145683078.794518934452.144424372412.3352518059.874371854352.46
goods
Consumptive
biological 36331281.28 36331281.28 42544762.19 42544762.19
assets
Materials
outsourced for 193030.54 193030.54
processing
Packaging
materials and
61727408.47898260.1160829148.3661945999.53758513.5161187486.02
low value
consumables
Total 6524654085.94 293270259.25 6231383826.69 6406907250.53 112538934.23 6294368316.30
(2) Data resources confirmed as inventory: None.
(3) Provision for inventory impairment or provision for impairment of contract performance costs
Unit: RMB
Increase in the current period Decrease in the current period
Item Opening balance Reversal or Closing balance
Provision Others Others
reselling
Raw materials 56078142.82 93898897.76 1092311.50 11205346.58 139864005.50
Unfinished 3184218.03 3640696.82 6824914.85
products
Stocks 52518059.87 157149457.10 2092855.86 66077294.04 145683078.79
Packaging
materials
and low 758513.51 166694.83 26948.23 898260.11
value
consumables
Total 112538934.23 254855746.51 3185167.36 77309588.85 293270259.25
Provision for inventory impairment by portfolio: None.
(4) Explanation on closing balance of inventories involving capitalized amount of borrowing costs
None.
(5) Explanation on the current amortization amount of contract performance costs
None.
9. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Certificate of deposit and interest 480295722.22
Total 480295722.22
2232025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Debt investments due within one year
□ Applicable ? Not applicable
(2) Other debt investments due within one year
□ Applicable ? Not applicable
10. Other current assets
Unit: RMB
Item Closing balance Opening balance
Time deposits and other wealth
373132815.85109329028.37
management products
Input tax to be deducted and certified 364066091.69 472854544.60
Cost of returned goods receivable 161604003.07 156086620.09
Prepaid taxes and fees 101041664.39 11082804.32
Others 235050583.04 38755582.16
Total 1234895158.04 788108579.54
Other explanations: None.
2242025 Annual Report of Yunnan Baiyao Group Co. Ltd.
11. Other equity instrument investments
Unit: RMB
Dividend
Gains included in Loss included in Accumulated gains Accumulated loss Reason for designating
income
Closing Opening other comprehensive other comprehensive included in other included in other measurement at fair
Item name recognized in
balance balance income during the income during the comprehensive income comprehensive income value through other
the current
period period at the end of the period at the end of the period comprehensive income
period
The investment is
ImmuneSensor
strategic and is a non-
Therapeutics 71745000.00 71745000.00
trading equity
Inc.instrument investment
Total 71745000.00 71745000.00
Derecognition during the period: None.Itemized disclosure of investment in non-trading equity instruments for the period: None.Other explanations: None.
12. Long-term equity investments
Unit: RMB
Increase and decrease in the current period
Opening Closing
Profits and
Opening balance balance of
Investee losses on Adjustment of
Closing balance (book balance of
Cash dividends or Provision
(book value) impairment Additional Decreased investments other Change in other value) impairment profit declared to for Others
provision investment investment confirmed under comprehensive equities provision
the equity income be issued impairment
method
I. Joint ventures
II. Associates
Shanghai
Pharmaceuticals 12061376588.76 981076423.38 250018.48 -42041501.39 272906986.36 12727754542.87
Holding Co. Ltd.Yunnan TCM Big
Health Innovation
Equity Investment 499889683.05 -66174.01 499823509.04
Fund Partnership
(Limited
2272025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Partnership)
Ban Loong
Jacobson JBM 9809.54 9809.54 0.00
Pharma Limited
Lijiang
Changgengming 40000.00 -40000.00 0.00
Trading Co. Ltd.Subtotal 12561276081.35 0.00 40000.00 9809.54 980970249.37 250018.48 -42041501.39 272906986.36 0.00 0.00 13227578051.91 0.00
Total 12561276081.35 0.00 40000.00 9809.54 980970249.37 250018.48 -42041501.39 272906986.36 0.00 0.00 13227578051.91 0.00
The recoverable amount is determined based on fair value less the disposal expense
□ Applicable ? Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows
□ Applicable ? Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous years or external information: None.Reasons for significant differences between the information used in the Company’s impairment tests in previous years and the actual situation in the corresponding year: None.Other explanations: None.
2282025 Annual Report of Yunnan Baiyao Group Co. Ltd.
13. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Financial assets at fair value through
210855260.47387688897.11
profits or losses
Total 210855260.47 387688897.11
Other explanations: None.
14. Investment properties
(1) Adoption of the cost measurement model for investment properties
?Applicable □Not applicable
Unit: RMB
Construction in
Item Buildings and structures Land use rights Total
progress
I. Original book value
1. Opening balance 63823600.25 35986907.73 99810507.98
2. Increase in the current period 15033408.77 608518.16 15641926.93
(1) Outsourcing 0.00
(2) Transfer from
inventory\fixed assets\ construction 15033408.77 608518.16 15641926.93
in progress
(3) Increase in business
0.00
combination
3. Decrease in the current period 13270545.22 0.00 13270545.22
(1) Disposal 0.00
(2) Other transfer out 13270545.22 13270545.22
4. Closing balance 65586463.80 36595425.89 102181889.69
II. Accumulated depreciation and
0.00
accumulated amortization
1. Opening balance 41440204.15 6048232.33 47488436.48
2. Increase in the current period 4953074.46 915661.66 5868736.12
(1) Provision or amortization 2679471.83 467571.60 3147043.43
(2) Transfer from
inventory\fixed assets\ construction 2273602.63 448090.06 2721692.69
in progress
3. Decrease in the current period 4317363.76 0.00 4317363.76
(1) Disposal 0.00
(2) Other transfer out 4317363.76 4317363.76
4. Closing balance 42075914.85 6963893.99 49039808.84
III. Provision for impairment 0.00
2292025 Annual Report of Yunnan Baiyao Group Co. Ltd.
1. Opening balance 2438059.35 2438059.35
2. Increase in the current period 337442.85 0.00 337442.85
(1) Provision 0.00
(2) Transfer from
inventory\fixed assets\ construction in 337442.85 337442.85
progress
3. Decrease in the current period 0.00
(1) Disposal 0.00
(2) Other transfer out 0.00
4. Closing balance 2775502.20 2775502.20
IV. Book value 0.00
1. Closing book value 20735046.75 29631531.90 50366578.65
2. Opening book value 19945336.75 29938675.40 49884012.15
The recoverable amount is determined based on fair value less the disposal expense.□Applicable ?Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.□Applicable ?Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous
years or external information: None.Reasons for significant differences between the information used in the Company's impairment tests in previous years and the
actual situation in the corresponding year: None.Other explanations: None.
(2) Adoption of the fair value measurement model for investment properties
□Applicable ?Not applicable
(3) Conversion to investment properties and adoption of fair value measurement: None.
(4) Investment properties for which the title certificate has not been obtained: None.
15. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 3273782844.91 3012529818.52
Liquidation of fixed assets 557307.43 349009.57
Total 3274340152.34 3012878828.09
2302025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Fixed assets
Unit: RMB
Houses and Machinery and Transportation Electronic
Item Others Total
buildings equipment vehicles equipment
I. Original book value:
1. Opening balance 2967355392.37 1720259929.58 66771532.55 179243085.40 1381365.41 4935011305.31
2. Increase in the current
312088970.28252882699.843101298.2637189046.669925971.50615187986.54
period
(1) Purchase 71828374.99 1003829.95 22449359.53 3476718.59 98758283.06
(2) Transfer from
60898153.2691971076.179169324.55162038553.98
construction in progress
(3) Increase in business
237920271.8089083248.682097468.315570362.586449252.91341120604.28
combination
(4) Other transfer-in 13270545.22 13270545.22
3. Decrease in the
51223567.6210127038.8324900.003620772.45-64996278.90
current period
(1) Disposal or
938699.8910127038.8324900.003620772.4514711411.17
scrapping
(2) Other transfer-out 50284867.73 50284867.73
4. Closing balance 3228220795.03 1963015590.59 69847930.81 212811359.61 11307336.91 5485203012.95
II. Accumulated depreciation 0.00
1. Opening balance 610989865.93 1063060001.96 37399404.38 120302270.06 1101181.72 1832852724.05
2. Increase in the
143484201.15152406250.924900785.5530361296.982523321.98333675856.58
current period
(1) Provision 75498326.30 105792339.97 3703745.56 26689953.85 243526.50 211927892.18
(2) Increase in
63707147.8046613910.951197039.993671343.132279795.48117469237.35
business combination
(3) Other transfer-in 4278727.05 4278727.05
3. Decrease in the
17220690.475758236.5023655.003335861.51-26338443.48
current period
(1) Disposal or
441407.685758236.5023655.003335861.519559160.69
scrapping
(2) Other transfer-out 16779282.79 16779282.79
4. Closing balance 737253376.61 1209708016.38 42276534.93 147327705.53 3624503.70 2140190137.15
III. Provision for impairment 0.00
1. Opening balance 62473662.35 26103930.64 1051169.75 89628762.74
2. Increase in the current
0.002973977.330.002206000.210.005179977.54
period
(1) Provision 2973977.33 2206000.21 5179977.54
3. Decrease in the
19979307.603599401.790.000.000.0023578709.39
current period
(1) Disposal or
329214.273599401.793928616.06
scrapping
(2) Other transfer-
19650093.3319650093.33
out
4. Closing balance 42494354.75 25478506.18 0.00 3257169.96 0.00 71230030.89
IV. Book value 0.00
2312025 Annual Report of Yunnan Baiyao Group Co. Ltd.
1. Closing book value 2448473063.67 727829068.03 27571395.88 62226484.12 7682833.21 3273782844.91
2. Opening book value 2293891864.09 631095996.98 29372128.17 57889645.59 280183.69 3012529818.52
(2) Temporarily idle fixed assets
Unit: RMB
Accumulated Impairment
Item Original book value depreciation provision Book value Remarks
Houses and
6372682.143462850.082909832.06
buildings
Machinery and
41798600.6014294305.0117640660.429863635.17
equipment
Transportation
117682.3037775.310.0079906.99
vehicles
Electronic
6850397.466224953.0216931.17608513.27
equipment
Others 81435.29 79881.97 0.00 1553.32
(3) Fixed assets leased through operating lease: None.
(4) Fixed assets for which the title certificate has not been obtained
Unit: RMB
Item Book value Reasons for not obtaining the title certificate
No.51 Xiba Road (general workshop) 256800.64 Historical legacy currently in process
Acquired through judicial auction with land use
Yunjian Assets 1908792.13
certificate but no property certificate
The property rights of the resettlement housing to
Commercial properties in Xiaguan Dali 1435288.03
be processed
Buildings in planting base of Yunquan 1068365.72 The land is a leased land
Overall relocation project of Wenshan Partial ownership has been secured and the
15499479.36
Qihua remaining is in process
Drug Division of Dali Pharmaceutical
31816578.90 In process
Economic Development Zone
No. 1 Building of Shanghai Center 105404693.86 In process
Kunming Center 270168951.56 In process
Other explanations: None.
(5) Impairment test of fixed assets
? Applicable □ Not applicable
The recoverable amount is determined based on fair value less the disposal expense
? Applicable □ Not applicable
Unit: RMB
Determination of
Book Recoverable Impairment Basis for determining
Item fair value and Key parameters
balance amount amount key parameters
disposal costs
Machinery and Residual value
3688753.50 714776.17 2973977.33 Market price
equipment rate 5% tax rate
2322025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Residual value
Electronic equipment 3472945.64 1266945.43 2206000.21 Market price
rate 5% tax rate
Total 7161699.14 1981721.60 5179977.54
The recoverable amount is determined based on the present value of the estimated future cash flows
□ Applicable ? Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous years
or external information: None.Reasons for significant differences between the information used in the Company’s impairment tests in previous years and the actual
situation in the corresponding year: None.Other explanations: None.
(6) Liquidation of fixed assets
Unit: RMB
Item Closing balance Opening balance
Machinery and equipment 495495.35 302720.41
Electronic equipment 61812.08 46289.16
Total 557307.43 349009.57
Other explanations: None.
16. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 807592848.36 703439112.24
Total 807592848.36 703439112.24
(1) Construction in progress
Unit: RMB
Closing balance Opening balance
Item
Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Project of Yunnan
Baiyao Shanghai 730931829.62 730931829.62 614608509.29 614608509.29
International Center
Yunnan Baiyao Group
TCM Pharmaceutical
45024278.9345024278.93
Services Kunming
Center Project
Radiopharmaceutical
R&D Center (Tianjin) 18464159.31 18464159.31
Project
Yunnan Baiyao R&D
Platform - Kunming
1250981.881250981.8815417106.2615417106.26
Center Construction
Project
Yunnan Baiyao
Wenshan Sanqi Smart
1873096.241873096.24
Technology Park
Project
2332025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Government-
Enterprise
Cooperation Project of
Yunnan Baiyao Group
38967429.3338967429.3399600.0099600.00
in Lijiang Ecological
Science and
Technology Industrial
Park (Phase II)
Yunnan Baiyao TCM
Industry Culture Park 22041089.96 22041089.96 131702.21 131702.21
Project
Others 14401517.57 14401517.57 7820660.00 7820660.00
Total 807592848.36 0.00 807592848.36 703439112.24 0.00 703439112.24
(2) Changes in important projects of construction in progress for the period
2342025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Including:
Proportion of Accumulated Amount of Capitalization
Transfer to fixed Other decrease
Increase in the total project Engineering amount of interest rate of Source
Item name Budget amount Opening balance assets in the in the current Closing balance
current period investment in progress interest capitalized interest for of funds
current period period
budget capitalized for the the period
period
Project of Yunnan
Baiyao Shanghai 1389170500.00 614608509.29 116323320.33 730931829.62 71.26% 95.00% Self-funded
International Center
Yunnan Baiyao Group
TCM Pharmaceutical
68096000.00 45024278.93 13047301.40 58070252.90 1327.43 -0.00 96.54% 100.00% Self-funded
Services Kunming
Center Project
Radiopharmaceutical
R&D Center (Tianjin) 101750000.00 18464159.31 8615910.02 25971681.41 1108387.92 -0.00 82.82% 95.00% Self-funded
Project
Yunnan Baiyao R&D
Platform - Kunming
921670000.00 15417106.26 18597610.39 29774079.73 2989655.04 1250981.88 32.58% 56.00% Self-funded
Center Construction
Project
Government-Enterprise
Cooperation Project of
Yunnan Baiyao Group in
146650000.00 99600.00 79648604.88 25387159.31 15393616.24 38967429.33 54.38% 63.75% Self-funded
Lijiang Ecological
Science and Technology
Industrial Park (Phase II)
Yunnan Baiyao TCM
Industry Culture Park 183000000.00 131702.21 21909387.75 22041089.96 27.10% 40.00% Self-funded
Project
Total 2810336500.00 693745356.00 258142134.77 139203173.35 19492986.63 793191330.79
2352025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(3) Provision for impairment of construction in progress for the period: None.
Other explanations: None.
(4) Impairment test of construction in progress
□ Applicable ? Not applicable
(5) Project materials: None.
17. Productive biological assets
(1) Adoption of the cost measurement model for productive biological assets
? Applicable □ Not applicable
Unit: RMB
Item Planting Total
Tea plant
I. Original book value:
1. Opening balance 2578500.00 2578500.00
2. Increase in the current
period
(1) Outsourcing
(2) Self-cultivation
3. Decrease in the current
period
(1) Disposal
(2) Others
4. Closing balance 2578500.00 2578500.00
II. Accumulated depreciation
1. Opening balance 1761975.15 1761975.15
2. Increase in the current
171900.00171900.00
period
(1) Provision 171900.00 171900.00
3. Decrease in the current
period
(1) Disposal
(2) Others
4. Closing balance 1933875.15 1933875.15
III. Provision for impairment
1. Opening balance
2. Increase in the current
period
(1) Provision
2362025 Annual Report of Yunnan Baiyao Group Co. Ltd.
3. Decrease in the current
period
(1) Disposal
(2) Others
4. Closing balance
IV. Book value
1. Closing book value 644624.85 644624.85
2. Opening book value 816524.85 816524.85
(2) Impairment test of productive biological assets measured at cost
□ Applicable ? Not applicable
(3) Adoption of the fair value measurement model for productive biological assets
□ Applicable ? Not applicable
18. Right-of-use assets
(1) Right-of-use assets
Unit: RMB
Machinery and
Item Houses and buildings Land use rights Total
equipment
I. Original book value
1. Opening balance 478008535.30 4535659.59 3637250.13 486181445.02
2. Increase in the current period 120457220.39 55581.78 11144689.27 131657491.44
(1) Lease 119478980.44 1062784.04 120541764.48
(2) Others 978239.95 55581.78 10081905.23 11115726.96
3. Decrease in the current period 181606069.84 0.00 0.00 181606069.84
(1) Lease expiration 64250590.30 64250590.30
(2) Disposal 101527288.75 101527288.75
(3) Others 15828190.79 15828190.79
4. Closing balance 416859685.85 4591241.37 14781939.40 436232866.62
II. Accumulated depreciation 0.00
1. Opening balance 194356417.39 420677.98 227328.13 195004423.50
2. Increase in the current period 111135848.98 829284.48 4201459.95 116166593.41
(1) Provision 111077035.22 829284.48 1236193.95 113142513.65
(2) Others 58813.76 2965266.00 3024079.76
3. Decrease in the current period 122941531.14 0.00 0.00 122941531.14
(1) Disposal 55725674.81 55725674.81
(2) Lease expiration 64250590.30 64250590.30
(3) Others 2965266.03 2965266.03
4. Closing balance 182550735.23 1249962.46 4428788.08 188229485.77
III. Provision for impairment
1. Opening balance
2. Increase in the current period
2372025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Closing balance
IV. Book value
1. Closing book value 234308950.62 3341278.91 10353151.32 248003380.85
2. Opening book value 283652117.91 4114981.61 3409922.00 291177021.52
(2) Impairment test of right-of-use assets:
□ Applicable ? Not applicable
Other explanations: None.
19. Intangible assets
(1) Intangible assets
Unit: RMB
Land use Non-patent Tradem Franchise
Item Patent Right Software Others Total
rights technology ark rights
I. Original book value
1. Opening balance 685685538.34 34492676.60 2150381.86 82481936.55 20000.00 154081682.57 958912215.92
2. Increase in the current
58892508.470.0079281996.0249241689.4147297.170.00218474.55187681965.62
period
(1) Purchase 49241689.41 47297.17 49288986.58
(2) Internal R&D 0.00
(3) Increase in
58892508.4779281996.02218474.55138392979.04
business combination
3. Decrease in the
608518.160.000.00188406.650.000.000.00796924.81
current period
(1) Disposal 188406.65 188406.65
(2) Other transfer-
608518.16608518.16
out
4. Closing balance 743969528.65 34492676.60 81432377.88 131535219.31 67297.17 154081682.57 218474.55 1145797256.73
II. Accumulated
0.00
amortization
1. Opening balance 171214442.85 29660574.56 2150381.86 33289390.91 5369.99 17664216.34 253984376.51
2. Increase in the
27128864.812230611.837935657.5412587487.375258.100.00154006.6550041886.30
current period
(1) Provision 15553142.56 2230611.83 3212057.54 12587487.37 5258.10 10744.65 33599302.05
(2) Increase in
11575722.254723600.00143262.0016442584.25
business combinations
3. Decrease in the
448090.060.000.00188406.650.000.000.00636496.71
current period
(1) Disposal 188406.65 188406.65
(2) Other transfer-
448090.06448090.06
out
4. Closing balance 197895217.60 31891186.39 10086039.40 45688471.63 10628.09 17664216.34 154006.65 303389766.10
2382025 Annual Report of Yunnan Baiyao Group Co. Ltd.
III. Provision for
0.00
impairment
1. Opening balance 6382453.60 332131.80 136417466.23 143132051.63
2. Increase in
82033.6582033.65
the current period
(1) Provision 82033.65 82033.65
3. Decrease in
0.00
the current period
(1) Disposal 0.00
4. Closing balance 6382453.60 414165.45 136417466.23 143214085.28
IV. Book value 0.00
1. Closing book value 539691857.45 2601490.21 71346338.48 85432582.23 56669.08 64467.90 699193405.35
2. Opening book
508088641.894832102.040.0048860413.8414630.010.000.00561795787.78
value
The proportion of intangible assets formed through the Company’s internal R&D at the end of the period is 0.00% of the total
intangible assets balance.
(2) Data resources confirmed as intangible assets
□Applicable ?Not applicable
(3) Land use rights for which the title certificate has not been obtained: None.
(4) Impairment test of intangible assets
?Applicable □Not applicable
The recoverable amount is determined based on fair value less the disposal expense
□Applicable ?Not applicable
Unit: RMB
Determination Basis for
Recoverable Impairment
Item Book value of fair value and Key parameters determining the
amount amount
disposal costs key parameters
The expected Can no longer
Software 82033.65 82033.65 Income method
fair value is 0 be used
Total 82033.65 82033.65
The recoverable amount is determined based on the present value of the estimated future cash flows
□Applicable ?Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous
years or external information: None
Reasons for significant differences between the information used in the Company’s impairment tests in previous years and the
actual situation in the corresponding year: None
20. Goodwill
(1) Original book value of goodwill
2392025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Increase in the current Decrease in the
period current period
Name of the investee or items forming
Opening balance Closing balance
goodwill
Formed by business
Disposal
combination
YNBY International Limited 645635327.81 645635327.81
Anguo Juyaotang Pharmaceutical Co. Ltd. 203842391.82 203842391.82
Yunnan Baiyao Group Medical
26904931.6426904931.64
Technology Hefei Co. Ltd.Shanghai Hanshi Health Consulting
23247992.0823247992.08
Co. Ltd.Yunnan Baiyao Group Wuxi
12843661.6212843661.62
Pharmaceutical Co. Ltd.Lijiang Yunquan Biological Development
721770.39721770.39
Co. Ltd.Total 709353683.54 203842391.82 0.00 913196075.36
(2) Provision for impairment of goodwill
Unit: RMB
Increase in the Decrease in the
current period current period
Name of the investee or items forming goodwill Opening balance Closing balance
Provision Disposal
YNBY International Limited 561515748.26 561515748.26
Yunnan Baiyao Group Medical Technology
26904931.6426904931.64
Hefei Co. Ltd.Shanghai Hanshi Health Consulting Co. Ltd. 23247992.08 23247992.08
Lijiang Yunquan Biological Development
721770.39721770.39
Co. Ltd.Total 612390442.37 612390442.37
(3) Related information on asset group or combination of asset groups containing goodwill
Whether
Business
Composition and basis of the asset group or portfolio to consistent
Name segments and
which it belongs with the
basis
previous years
TheThe asset group consists of “working capital fixed assetsmanagement’s
right-of-use assets long-term deferred expenses and
approach toYNBY International Limited goodwill” which is the smallest portfolio of assets or the Yes
managing and
smallest portfolio of asset groups that can generate major
monitoring
cash inflows independently
business activities
TheThe asset group consists of “fixed assets intangible assets management’sYunnan Baiyao Group Wuxi right-of-use assets and goodwill” which is the smallest approach to
Yes
Pharmaceutical Co. Ltd. portfolio of assets or the smallest portfolio of asset groups managing and
that can generate major cash inflows independently monitoring
business activitiesThe asset group consists of “fixed assets intangible assets TheAnguo Juyaotang Pharmaceutical long-term deferred expenses and goodwill” which is the management’s
Co. Ltd. smallest portfolio of assets or the smallest portfolio of asset approach to
groups that can generate major cash inflows independently managing and
2402025 Annual Report of Yunnan Baiyao Group Co. Ltd.
monitoring
business activities
Changes in asset group or combination of asset groups: None.Other explanations: None.
(4) Determination of recoverable amount
The recoverable amount is determined based on fair value less the disposal expense
□Applicable ?Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows
?Applicable □Not applicable
Unit: RMB
Key Key
Basis for
Forecast parameters parameters
Recoverable Impairment determining the key
Item Book value period for the for the
amount amount parameters for the
(years) forecast stable
stable period
period period
The income growth
The revenue rate for the stable
growth rate The growth period is 0% the
ranges from rate is profit margin and
0.28% to 0.00% the discount rate are for
1.90% profit the last year of the
YNBY (followed
profit margin is forecast period and
International 284355273.55 358578300.00 by the
margin from 2.76% and the discount rate is a
Limited stable
1.56% to the pre-tax pre-tax discount rate
period)
2.76% and discount that reflects the risks
the pre-tax rate is specific to the
discount rate 9.43% relevant asset group
is 9.43% or portfolio of asset
groups.The income growth
rate for the stable
The revenue
The growth period is 0% the
growth rate
rate is profit margin and
ranges from
0.00% the discount rate are for
2026-2030 -0.05% to
Yunnan Baiyao profit the last year of the
(followed 0% profit
Group Wuxi margin is forecast period and
36055062.21 68000000.00 by the margin from
Pharmaceutical 5.39% and the discount rate is a
stable 5.23% to
Co. Ltd. the pre-tax pre-tax discount rate
period) 5.41% and
discount that reflects the risks
the pre-tax
rate is specific to the
discount rate
13.40% relevant asset group
is 13.40%
or portfolio of asset
groups.The revenue Based on a
growth rate The growth comprehensive
ranges from rate is assessment of the
0.85% to 1.00% the macroeconomic
Anguo 4.20% profit environment
(followed
Juyaotang profit margin is industry
540533861.41 558000000.00 by the
Pharmaceutical margin from 6.82% and development trends
stable
Co. Ltd. 6.07% to the pre-tax and the Company’s
period)
6.63% and discount own operating
the pre-tax rate is conditions the
discount rate 13.25% stable operating
is 13.25% period growth rate is
2412025 Annual Report of Yunnan Baiyao Group Co. Ltd.
prudently set at 1%.Total 860944197.17 984578300.00
Reasons for significant differences between the foregoing information and information used for impairment testing
in previous years or external information: None.Reasons for significant differences between the information used in the Company’s impairment tests in previous
years and the actual situation in the corresponding year: None.
(5) Fulfillment of undertakings and goodwill impairment
Performance commitments existed at the time goodwill was formed and the reporting period or the previous period
of the reporting period was within the performance commitment period
? Applicable □Not applicableOther explanations: See “Section V 1. Performance of Commitments 3. Performance Commitments Involved bythe Company” for details.
21. Long-term deferred expenses
Unit: RMB
Increase in the Amortization in
Item Opening balance Other decrease Closing balance
current period the current period
Building
decoration and
119989582.6842721969.4652640601.502865887.39107205063.25
project
renovation
Nanping Street
renovation project 2954145.20 2954145.20 0.00
of Yunnan Baiyao
Others 4138084.03 783159.82 692821.43 2561900.67 1666521.75
Total 127081811.91 43505129.28 56287568.13 5427788.06 108871585.00
Other explanations: None.
22. Deferred income tax assets/deferred income tax liabilities
(1) Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
differences assets differences tax assets
Contractual liabilities 1108022102.46 174861064.03 1241244032.89 188564063.04
Provision for credit
1007784161.87246778896.601074991838.10165210239.51
impairment
Provision for asset
256615532.8849817175.5398058482.7719885869.32
impairment
Payroll payable and
long-term employee benefits 876439754.41 138521511.70 634896697.76 95426303.19
payable
2422025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Other payables 574640684.63 91924056.78 577259909.29 88284205.86
Unrealised profits of intra-
381194243.8258116998.22264588567.6742769190.08
group transactions
Lease liabilities 232212961.75 49716850.19 268875960.32 39373198.50
Deferred income 249515197.31 38583222.00 236345643.60 36433668.40
Losses that can be offset 206673510.27 47304724.31 153826415.38 35665838.14
Estimated revenue from
193306921.1048198621.99177591180.6826655057.25
returns
Expenses beyond overall
planning for employee
status conversion expenses
35561860.545334279.0820779234.953116885.24
of state-owned enterprises
and social security
expenses of retirees
Others 114628658.17 25062993.13 89083123.75 15590498.21
Total 5236595589.21 974220393.56 4837541087.16 756975016.74
(2) Deferred tax liabilities before offset
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
differences tax liabilities differences tax liabilities
Right-of-use assets 239818175.63 51042693.07 281580952.55 41832184.12
Changes in fair value 125288066.60 18793209.99 106362930.07 15954439.51
Fixed assets subject to one-time pre-tax
5932346.781483086.7021032160.783182909.00
deduction
Appreciation of asset
117186331.2929296582.813305149.96826287.49
valuation
Investment income from business
combination not under common 2282373.90 570593.48 2282373.90 570593.48
control achieved in stages
Cost of returned goods receivable 182911787.55 45609995.85 168184195.95 25242517.92
Others 10809032.18 1621354.84 41722666.75 6258400.01
Total 684228113.93 148417516.74 624470429.96 93867331.53
(3) Deferred income tax assets or liabilities after offset net
Unit: RMB
Offsetting amount of
Offsetting amount of
deferred income tax Closing balance of deferred income tax Opening balance of
assets and deferred deferred income tax assets and deferred deferred income tax
Item income tax liabilities assets or liabilities income tax liabilities assets or liabilities
at the end of the after offset at the beginning of the after offset
reporting
reporting period
period
Deferred income
974220393.56756975016.74
tax assets
2432025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Deferred income
148417516.7493867331.53
tax liabilities
(4) Details of unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Provision for asset impairment 561351160.73 555344587.39
Deferred income 22254615.28 59147921.72
Deductible losses 1013209963.03 808060703.41
Others 6532431.38 9908046.96
Total 1603348170.42 1432461259.48
(5) Deductible losses for which deferred income tax assets were unrecognized will expire in the following years
Unit: RMB
Year Closing balance Opening balance Remarks
202511001342.99
2026125496431.94114735981.68
2027191835644.06176920446.70
2028244229846.52269325659.53
2029230918592.53213417423.15
2030210522367.974028298.39
20312135102.7912861719.12
20321599912.281599912.28
2033355122.11355122.11
20342006985.933814797.46
20354109956.90
Total 1013209963.03 808060703.41
Other explanations: None.
23. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Time deposit and 0.00 485794233.38 485794233.38
interest
Stocks of special
42004661.4042004661.4042000723.8042000723.80
materials
Value-added tax
52259747.6752259747.6735013974.7935013974.79
credit refund
Advance payment
for the purchase 45988031.25 45988031.25 21763610.34 21763610.34
of fixed assets etc.
2442025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Cost of returned
21307784.4821307784.4812097575.8412097575.84
goods receivable
Less: the part due
0.00-480295722.22-480295722.22
within 1 year
Total 161560224.80 161560224.80 116374395.93 116374395.93
Other explanations: None.
24. Assets with restricted ownership or use rights
Unit: RMB
At the end of the period At the beginning of the period
Item Type of Type of
Book balance Book value Restriction Book balance Book value Restriction
restriction restriction
Mortgage loans
secured by buildings
Mortgage and structures of
Fixed assets 165119200.00 140829049.75
loan Anguo Juyaotang
Pharmaceutical Co.Ltd.Mortgage loans
secured by land use
Intangible Mortgage rights of Anguo
57000237.7545520086.38
assets loan Juyaotang
Pharmaceutical Co.Ltd.Guarantee
deposits
Guarantee deposits
banker’s
Cash and banker’s acceptance
Security Security acceptance
bank 14353427.82 14353427.82 bill deposits 21699196.16 21699196.16
deposit deposit bill deposits
balance performance bond
performance
deposits etc.bond
deposits etc.Litigation
preservation. As of the
date of issuance of
these financial
statements the
Cash and
Property plaintiff has
bank 1489443.87 1489443.87
preservation withdrawn the lawsuit
balance
and the court has ruled
to lift the litigation
preservation effective
immediately from the
date of the ruling.Special
fund for the
Special fund for the
Cash and maintenance
maintenance of
bank 2650040.09 2650040.09 Special use 2648389.00 2648389.00 Special use of housing in
housing in the housing
balance the housing
reform housing
reform
housing
Various All assets of the Special
assets of the special account for fund for
restructured 557103568.81 557103568.81 Special use restructuring the 588106000.80 588106000.80 Special use paying the
special special fund for cost of
account paying the cost of employee
2452025 Annual Report of Yunnan Baiyao Group Co. Ltd.
employee status status
conversion in state- conversion
owned enterprises in state-
owned
enterprises
Shares shall
not be
transferred
within 36
Long-term Within the
months from
equity 12061376588.76 12061376588.76 restricted
the
investments period
completion
of the
private
placement
Accounts receivable
Accounts factoring of Anguo
Accounts
12541236.47 11914174.65 receivable Juyaotang
receivable
factoring Pharmaceutical Co.Ltd.Total 810257154.81 773859791.37 12673830174.72 12673830174.72
Other explanations: None.
25. Short-term loans
(1) Classification of short-term loans
Unit: RMB
Item Closing balance Opening balance
Pledged borrowings 12541236.47
Loan in credit 150010000.00 402133333.39
Discounted internal bills 20224516.74 21246939.25
Total 182775753.21 423380272.64
Explanation on classification of short-term loans: The increase in pledged borrowings for the current period is attributable to the
business combination under non-common control of Anguo Juyaotang Pharmaceutical Co. Ltd in October 2025.
(2) Overdue and outstanding short-term loans: None.
26. Notes payable
Unit: RMB
Type Closing balance Opening balance
Banker’s acceptance bill 1846714475.61 1913702684.41
Total 1846714475.61 1913702684.41
Total notes payable due and unpaid at the end of the period were RMB 0.00.
27. Accounts payable
(1) Accounts payable
Unit: RMB
Item Closing balance Opening balance
Payment for goods 5242447200.83 4504527943.71
Payment for engineering equipment and
280574656.03253824460.16
others
2462025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Total 5523021856.86 4758352403.87
(2) Major accounts payable aged over one year: None.
(3) Whether there are any overdue payments to small and medium-sized enterprises that remain unpaid
Whether it qualifies as a large enterprise
? Yes ? No
Whether there are any overdue payments to small and medium-sized enterprises that remain unpaid
? Yes ? No
28. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividend payable 1317388.73 86490742.04
Other payables 1460141946.26 1300141934.71
Total 1461459334.99 1386632676.75
(1) Interests payable: None.
(2) Dividend payable
Unit: RMB
Item Closing balance Opening balance
Chuxiong Yunzhu Trading Co. Ltd. 743156.77
Kunming Nuo’an Enterprise
574231.96
Management Co. Ltd.State-owned Assets Supervision and
Administration Commission of the
People’s Government of Yunnan
86490742.04
Province New Huadu Industrial Group
Co. Ltd Jiangsu Yuyue Science &
Technology Development Co. Ltd.Total 1317388.73 86490742.04
Other explanations including material dividends payable outstanding for more than one year with disclosure of reasons for non-
payment: None.
(3) Other payables
1) Other payables by nature of payment
Unit: RMB
Item Closing balance Opening balance
Market maintenance fee 625164703.25 673934303.55
Deposits and guarantees 377010766.64 298287462.43
Other current accounts 128759561.20 103612259.40
Collection and payment 98268582.83 140402907.16
Hospital management fee payable 52353461.90 51844605.65
Equity transfer payment 132000000.00
Others 46584870.44 32060396.52
2472025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Total 1460141946.26 1300141934.71
2) Other important payables aged over 1 year or overdue: None.
29. Receipts in advance
(1) Receipts in advance
Unit: RMB
Item Closing balance Opening balance
Receipts in advance - lease 190841.21 446673.78
Total 190841.21 446673.78
(2) Major receipts in advance aged over one year: None.
30. Contractual liabilities
Unit: RMB
Item Closing balance Opening balance
Contract receipts in advance 1504554209.16 1914556130.56
Others 1272729.02 1567256.60
Total 1505826938.18 1916123387.16
Significant contractual liabilities with aging more than 1 year: None.The amount and reasons for significant changes in the book value during the reporting period: None.
31. Payroll payable
(1) Payroll payable
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
I. Short-term
1212565480.982899210620.422701360200.501410415900.90
compensation
II. Welfare after
demission -
63375884.85299279488.87291737553.9270917819.80
defined
contribution plan
III. Dismissal welfare 8009462.99 7855521.39 14597399.36 1267585.02
Total 1283950828.82 3206345630.68 3007695153.78 1482601305.72
(2) Short-term compensation
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Salary bonus
545205297.022180979173.572112535423.47613649047.12
allowance and subsidy
2. Staff welfare 23757984.38 102153148.17 101308595.98 24602536.57
2482025 Annual Report of Yunnan Baiyao Group Co. Ltd.
3. Social insurance
1109615.16131307714.18123933915.958483413.39
contribution
Of which: Medical
1022522.87114625805.44107368220.088280108.23
insurance premiums
Industrial injury
46137.708343412.198321109.5868440.31
insurance premiums
Maternity
40954.598338496.558244586.29134864.85
insurance premiums
4. Housing provident fund 1342383.35 148639004.96 147992255.28 1989133.03
5. Union dues and staff
40977853.8947504891.8945400388.0143082357.77
training fees
6. Short-term paid
0.00
absence
7. Short-term profit-
582623599.84151952528.4734211700.00700364428.31
sharing plan
8. Other short-term
17548747.34136674159.18135977921.8118244984.71
compensation
Total 1212565480.98 2899210620.42 2701360200.50 1410415900.90
(3) Defined contribution plans
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Basic endowment
1892951.88218726287.34217962892.942656346.28
insurance
2. Unemployment
71770.379607259.469580249.1298780.71
insurance premiums
3. Corporate pension
61411162.6070945942.0764194411.8668162692.81
payment
Total 63375884.85 299279488.87 291737553.92 70917819.80
Other explanations: None.
32. Tax payables
Unit: RMB
Item Closing balance Opening balance
Enterprise Income Tax 127452678.42 312428903.46
Individual income tax 5223796.68 22714512.22
Value added tax 90500172.56 63461639.78
Property tax 12877107.87 13699166.25
Land use tax 5382781.43 5538344.78
Stamp duty 5448846.28 7385564.48
Consumption tax 0.00 2202350.70
Resource tax 1804.00 3000.00
2492025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Education surcharge 3345171.01 3014717.15
Urban maintenance and construction
9360180.438407433.24
tax
Local education surcharge 3439910.43 2005874.44
Environmental protection tax 4316.61 3629.23
Water conservancy fund 28387.12 56737.77
Vehicle and vessel usage tax 2850.00
Collected and remitted taxes and fees 14983489.27 25681893.64
Total 278051492.11 466603767.14
Other explanations: None.
33. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term borrowings due within one 400330.00
year
Lease liabilities due within one year 76043381.53 88436075.74
Total 76443711.53 88436075.74
Other explanations: None.
34. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Transfer to output tax 360570121.44 454197724.34
Returns payable 170793224.69 164864900.59Special financial support funds of “transferring loanto subsidy” for the use of intelligent voice cluster
1800000.001800000.00
development base in the R&D project of intelligent
medical devices based on medical big data
Total 533163346.13 620862624.93
Changes in short-term bonds payable: None.Other explanations: None.
35. Long-term loans
(1) Long-term loans by type
Unit: RMB
Item Closing balance Opening balance
Pledged borrowings 84469400.83
Loan in credit 2100000.00 2100000.00
Total 86569400.83 2100000.00
2502025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Explanation on classification of long-term loans: The increase in pledged borrowings for the current period is attributable to the business
combination under non-common control of Anguo Juyaotang Pharmaceutical Co. Ltd in October 2025.Other explanations including the range of interest rate: None.
36. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Buildings and structures 205042296.11 272449967.85
Machinery and equipment 965984.38 2982837.50
Right of land use 11865480.22 3660260.62
Less: Non-current liabilities reclassified to
-76043381.53-88436075.74
liabilities due within one year
Total 141830379.18 190656990.23
Other explanations: None.
37. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 551241357.32 586694704.41
Special payables 4838584.16 4838584.16
Total 556079941.48 591533288.57
(1) Long-term payables by nature of payment
Unit: RMB
Item Closing balance Opening balance
Expenses beyond overall planning for
employee status conversion expenses
549851147.17586694704.41
of state-owned enterprises and social
security expenses of retirees
Boiler room investment boiler and
supporting equipment transfer and 1390210.15
operation contract
Other explanations: None.
(2) Special payables
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance Reasons
current period current period
Preliminary funds
for major Transfer from
technological 888468.00 888468.00 Baiyao Holdings due
transformation to merger by
projects absorption
Transfer from
Fulintang chain Baiyao Holdings
500000.00500000.00
operating funds due to merger by
absorption
2512025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Transfer from
Funds for
Baiyao
Kunming 500000.00 500000.00 Holdings due to
medicine merger by
distribution center absorption
Transfer from
Yunnan Sanqi Baiyao
brand 164272.00 164272.00 Holdings due to
registration merger by
project absorption
Group Transfer from
company Baiyao
management 250978.00 250978.00 Holdings due to
information merger by
system project absorption
Group company Transfer from
technology Baiyao
center 231265.00 231265.00 Holdings due to
construction merger by
expenses absorption
Transfer from
Nefuramide Baiyao
oxalate 85426.00 85426.00 Holdings due to
project merger by
funding absorption
Transfer from
Yunnan Natural
Baiyao
Medicine
998506.00 998506.00 Holdings due to
Engineering
merger by
Center project
absorption
Transfer from
New drug
Baiyao
research project
472062.56 472062.56 Holdings due to
for treatment of
merger by
back pulp injury
absorption
Transfer from
Material Baiyao
purchase project 489575.00 489575.00 Holdings due to
research expense merger by
absorption
R&D of new
Transfer from
drugs for treating
Baiyao
cardiovascular
258031.60 258031.60 Holdings due to
and
cerebrovascular merger by
diseases (TCM) absorption
Total 4838584.16 4838584.16
Other explanations: None.
38. Long-term payroll payable
(1) Details of long-term payroll payable
Unit: RMB
Item Closing balance Opening balance
II. Termination benefits 825601.53 417539.44
2522025 Annual Report of Yunnan Baiyao Group Co. Ltd.
III. Other long-term benefits 893344.80 878826.00
Total 1718946.33 1296365.44
(2) Change of defined benefit plan: None.
39. Estimated liabilities
Unit: RMB
Item Closing balance Opening balance Reasons
Returns payable not settled within one
Returns payable 22513696.41 12726280.09
year
Total 22513696.41 12726280.09
Other explanations including important assumptions and estimates related to significant estimated liabilities: None.
40. Deferred income
Unit: RMB
Increase in Decrease in
Item Opening Closing Reasons
the current the current
balance balance
period period
Government subsidies 295493565.32 59054600.00 82778352.73 271769812.59
Including: Government subsidies
133786181.2054284600.0068556964.40119513816.80
related to income
Government subsidies
161707384.124770000.0014221388.33152255995.79
related to assets
Total 295493565.32 59054600.00 82778352.73 271769812.59 --
Other explanations: None.
41. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Housing reform sale proceeds from
1931554.361931554.36
employees
Total 1931554.36 1931554.36
Other explanations: None.
42. Share capital
Unit: RMB
Increase or decrease (＋ －)
Capitalization
Opening balance Issuance of Closing balance
Share dividend of capital Others Subtotal
new shares reserve into
share capital
Total
number of 1784262603.00 1784262603.00
shares
Other explanations: None.
43. Capital reserves
2532025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium (equity
17480187335.1117480187335.11
premium)
Other capital reserves 156961488.37 37009868.76 42041501.39 151929855.74
Total 17637148823.48 37009868.76 42041501.39 17632117190.85
Other explanations including changes and reasons thereof for the period:
(1) On May 22 2025 YNBY International placed 800000000 shares increasing its total number of issued
shares from 6799914160 to 7599914160. The Company holds 5009936360 shares in YNBY International
accounting for 65.92% of its all issued shares. This transaction which involves a change in the owner’s equity share
of a subsidiary while still maintaining control over it is considered an equity transaction resulting in an increase of
capital reserves by RMB 37009868.76.
(2) In the current year other changes in equity in associates and passive dilution of shares due to the exercise
of rights to issue new shares were recognized and a decrease of RMB 42041501.39 in capital surplus - other capital
surplus was recognized in accordance with the proportion of shares held.
2542025 Annual Report of Yunnan Baiyao Group Co. Ltd.
44. Other comprehensive income
Unit: RMB
Amount for the current period
Less: Amount previously
Amount before That
Opening included in other Less: Amount previously included in That attributable
Item income tax in Less: income attributable to Closing balance
balance comprehensive income other comprehensive income but to minority
the current but transferred to profits transferred to retained earnings in the tax expenses the Company interests after tax
period after tax
and losses in the current period
current period
I. Other comprehensive
incomes that will not be
-1616965.82-2017048.84-2017048.84-3634014.66
reclassified into profits or
losses
Other comprehensive
income that cannot be
transferred to profits or -1616965.82 -2017048.84 -2017048.84 -3634014.66
losses under equity
method
II. Other comprehensive
incomes to be
-99646390.49-3996808.050.000.000.00-1810975.36-2185832.69-101457365.85
reclassified into profits
and losses
Including: Other
comprehensive income
that can be transferred to -61216791.66 2267067.32 2267067.32 -58949724.34
profits or losses under
equity method
Other fair value
changes in debt 0.00
investments
Amount of financial
assets reclassified to other 0.00
comprehensive income
2552025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Other credit
impairment provisions for 0.00
debt investments
Cash flow hedge
0.00
reserve
Exchange differences
from translation of
financial statements -38429598.83 -6263875.37 -4078042.68 -2185832.69 -42507641.51
denominated in foreign
currencies
Total other comprehensive
-101263356.31-6013856.89-3828024.20-2185832.69-105091380.51
income
Other explanations including adjustments to the effective portion of the cash flow hedge profits or losses transferred to the amount initially recognized for the hedged item: None.
2562025 Annual Report of Yunnan Baiyao Group Co. Ltd.
45. Surplus Reserves
Unit: RMB
Increase in the current Decrease in the
Item Opening balance
period current period Closing balance
Statutory
surplus 2530458968.58 2530458968.58
reserves
Total 2530458968.58 2530458968.58
Explanations on surplus reserves including changes and reasons thereof for the period: None.
46. Undistributed profit
Unit: RMB
Item Current period Previous period
Undistributed profit at the end of the
16981339385.7618102147836.12
previous period before adjustment
Undistributed profit at the beginning of the
16981339385.7618102147836.12
period after adjustment
Plus: Net profits attributable to equity
owners the Company’s owners in the 5153486838.91 4749415499.55
current period
Ordinary share dividends payable 3932514762.15 5870223949.91
Undistributed profit at the end of the
18202311462.5216981339385.76
period
Details on adjustment of undistributed profits at the beginning of the period:
1) Due to retrospective adjustments in accordance with Accounting Standards for Business Enterprises and relevant new provisions the
undistributed profits at the beginning of the period were affected by RMB 0.00.
2) Due to changes in accounting policies the undistributed profits at the beginning of the period were affected by RMB 0.00.
3) Due to correction of material accounting errors the undistributed profits at the beginning of the period were affected by RMB 0.00.
4) Due to changes in the consolidation scope under common control the undistributed profits at the beginning of the period were affected
by RMB 0.00.
5) Due to other adjustments the undistributed profits at the beginning of the period were affected by RMB 0.00.
Details about use of capital reserves to cover losses: None.
47. Operating revenue and operating cost
Unit: RMB
Amount for the current period Amount for the previous period
Item
Revenue Cost Revenue Cost
Principal businesses 41136324305.75 29010509127.15 39983936095.25 28851334965.90
Other businesses 50674784.56 22414068.67 49364719.47 13431239.20
Total 41186999090.31 29032923195.82 40033300814.72 28864766205.10
The audited total profit net profit or net profit after deducting non-recurring gains and losses of the Company during the reporting period
whichever is the lowest is negative
□ Yes ?No
2572025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Breakdown information of operating revenue and operating cost:
Unit: RMB
Drug sales Health and daily chemical TCM resources Pharmaceutical distribution Others Total
Type of contract
Operating Operating Operating Operating Operating Operating
Operating cost Operating cost Operating cost Operating cost Operating cost Operating cost
revenue revenue revenue revenue revenue revenue
Business type 8152695248.96 2528736489.82 6820194325.71 2171837485.03 2203656020.79 1885314372.48 22948312735.31 21533955902.23 1062140759.54 913078946.26 41186999090.31 29032923195.82
Including:
Industry sales
8152695248.962528736489.826820194325.712171837485.03994610950.93838164517.4948822143.1736005813.1716016322668.775574744305.51
income
Commercial
1204333454.321042720625.3322948312735.3121533955902.23930737719.27829621479.0425083383908.9023406298006.60
sales income
Technical
4697247.284412412.3618913170.0117881515.0623610417.2922293927.42
services
Hotel catering
-12992942.537156070.3212992942.537156070.32
industry
Planting sales
14368.2616817.300014368.2616817.30
income
Others 50674784.56 22414068.67 50674784.56 22414068.67
By operating
8152695248.962528736489.826820194325.712171837485.032203656020.791885314372.4822948312735.3121533955902.231062140759.54913078946.2641186999090.3129032923195.82
areas
Including:
In Yunnan
1265947864.6359750830.17239328862.14135374012.301319301784.571064710546.4422715865382.3721336630115.98297834846.67174670750.7925838278740.3822771136255.68
province
Outside Yunnan
province
6874046023.612465526873.886579405771.732035299159.20790852428.81730959150.81232447352.94197325786.25762847299.07737273125.6815239598876.166166384095.82
(excluding
overseas)
Overseas 12701360.72 3458785.77 1459691.84 1164313.53 93501807.41 89644675.23 1458613.80 1135069.79 109121473.77 95402844.32
2582025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Other explanations: The Company and its subsidiaries are mainly engaged in sale of drugs medicinal materials health and
daily chemical products etc. and recognize the realization of revenue upon delivery of products to customers and confirmatio n
by customers that they have obtained control over the products. No contracts are for the purpose of significant financing. But
some contracts may include some discount and concession clauses. Usually no contracts contain expected refunds to customers
or other similar obligations assumed by the Company.Information related to the transaction price allocated to remaining performance obligations: As of the end of this reporting
period the income corresponding to the performance obligations that have been contracted but not yet fulfilled or completed is
RMB 0.00.Information about variable consideration in the contract: None.Significant contract changes or significant adjustments to the transaction price: None.Other explanations: None.
48. Taxes and surcharges
Unit: RMB
Item Amount for the current period Amount for the previous period
Consumption tax -162255.15 2559522.81
Urban maintenance and construction tax 100624649.46 102075935.22
Education surcharge 43248660.13 43871752.93
Resource tax 3000.00
Property tax 28123265.73 25986330.94
Land use tax 10941460.35 11067873.16
Vehicle and vessel use tax 96701.32 68462.25
Stamp duty 20951517.29 28025938.39
Local education surcharge 30037839.86 29246835.29
Others 238374.89 211718.45
Total 234100213.88 243117369.44
Other explanations: None.
49. Administrative expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Employee compensation 670879724.55 677420256.86
Depreciation and amortization 119860764.07 100161064.67
Technical service fee 22489782.54 45839677.23
Office expenses 32668028.71 34922096.07
Agency service fee 27587087.14 34600043.93
Advertising and promotion expenses 20894751.39 2656177.04
Travel expenses 17643928.96 19239105.28
Utilities and property management fee 9492082.88 9266666.24
Security and cleaning fee 5733245.06 7385287.50
Business entertainment fee 8578202.57 9996603.25
Afforestation and pollution discharge
3549638.843624510.35
fee
Lease cost 4927963.62 3314864.30
Others 75774951.89 89127131.15
Total 1020080152.22 1037553483.87
Other explanations: None.
2592025 Annual Report of Yunnan Baiyao Group Co. Ltd.
50. Selling expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Employee compensation 1654736306.88 1492204675.60
Display expenses 912510547.06 555834987.51
Business promotion expenses 729760631.46 831157288.16
Advertising expenses 666804077.82 460234304.23
Marketing service fees 390347939.16 294098539.30
Promotional staff expenses 209974585.69 204548340.61
Conference fee 199638196.29 59814571.90
Travel expenses 148885327.10 148652306.95
Promotion fees 98998405.71 113293440.09
Others 607809359.72 719663582.56
Total 5619465376.89 4879502036.91
Other explanations: Primarily the increase in online sales expenses drove the rise in the proportion of online revenue.
51. R&D expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Employee compensation 148267652.32 176064710.71
Materials consumption and
79459172.9658512136.24
inspection fee
Commissioned R&D cost 43002098.56 44437281.25
New product design fee 24194911.30 18717947.75
Depreciation and amortisation 27309510.77 12431179.87
Test out-sourcing expenses 6482555.30 2971133.28
Others 21829485.04 24278911.93
Total 350545386.25 337413301.03
Other explanations: The proportion of R&D personnel engaged in capitalization projects increased in this period.
52. Financial expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Interest expenses 24049890.09 63177001.07
Less: interest income -90467001.34 -221210259.84
Net loss on foreign exchange 13320306.04 -7646886.55
Bank charges 6175346.00 10749449.67
Others 31136.51 -624414.20
Total -46890322.70 -155555109.85
Other explanations: None.
53. Other income
Unit: RMB
Other sources of income Amount for the current period Amount for the previous period
2602025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Government subsidies directly included
in current profit and loss during the 36891811.26 42056174.39
period
Amortization of government subsidies
12478832.2312768533.54
related to assets
Amortization of government subsidies
46962820.5029379041.17
related to income
Return of individual income tax
3802493.929533408.94
service charge
Others 646735.22 8272615.61
Total 100782693.13 102009773.65
54. Gains on changes in fair value
Unit: RMB
Sources of gains on changes in fair Amount for the current period Amount for the previous period
value
Financial assets held for trading 63620485.18 73822492.46
Other non-current financial assets 46868983.53 63014517.48
Total 110489468.71 136837009.94
Other explanations: None.
55. Investment income
Unit: RMB
Item Amount for the current period Amount for the previous
period
Gain on long-term equity investments subject to
989141635.98774279535.69
accounting with equity method
Investment income from disposal of long-term equity
-773539.48
investment
Investment income on financial assets held for trading
6671289.70
during holding period
Investment income from disposal of financial assets held
69107860.22-12988016.22
for trading
Investment income earned during the holding period of
20474449.39
other non-current financial assets
Gain or loss on disposal of other non-current financial
29102029.45
assets
Others -43591680.65 -11499763.50
Total 1042986305.52 776937495.06
Other explanations: None.
56. Credit impairment losses
Unit: RMB
Item Amount for the current period Amount for the previous period
Bad debt losses on accounts receivable -73297317.52 -46675411.57
Bad debt losses on other receivables 131363705.29 6749484.95
Total 58066387.77 -39925926.62
Other explanations: None.
2612025 Annual Report of Yunnan Baiyao Group Co. Ltd.
57. Asset impairment losses
Unit: RMB
Item Amount for the current period Amount for the previous period
I. Inventory impairment losses and
contract performance cost impairment -251970176.51 -49327607.34
losses
II. Impairment loss of fixed assets
-5179977.54-26077160.26
III. Impairment loss of intangible assets
-82033.65-332131.80
IV. Goodwill impairment loss -7158530.50
X. Others -1139970.32 -8335279.72
Total -258372158.02 -91230709.62
Other explanations: None.
58. Gains on disposal of assets
Unit: RMB
Source of gains on disposal of assets Amount for the current period Amount for the previous period
Profit from disposal of non-current
1068989.10-435663.65
assets
Profit from disposal of right-of-use
7098606.71926315.30
assets
Total 8167595.81 490651.65
59. Non-operating revenue
Unit: RMB
Amount for the previous Amount of non-recurring
Item Amount for the current period
period profits or losses included
in the current period
Profits from destruction
and scrapping of non- 780.57 2313930.54 780.57
current assets
Others 24950775.25 13169408.19 24950775.25
Total 24951555.82 15483338.73 24951555.82
Other explanations: None.
60. Non-operating expenses
Unit: RMB
Amount for the previous Amount of non-recurring
Item Amount for the current period
period profits or losses included in
the current period
External donations 3559921.32 4588957.23 3559921.32
Losses from destruction
and scrapping of non- 195913.67 276676.77 195913.67
current assets
2622025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Others 16820397.97 37519863.02 16820397.97
Total 20576232.96 42385497.02 20576232.96
Other explanations: None.
61. Income tax expense
(1) Table of income tax expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Current income tax expenses 1040808385.05 964657851.50
Deferred income tax expenses -187478538.30 -47010547.79
Total 853329846.75 917647303.71
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Amount for the current period
Total profit 6043270703.73
Income tax expense calculated at statutory/applicable tax
906490605.56
rate
Effect of different tax rates applied to subsidiaries 116809018.51
Effect of adjusting income tax for prior periods 113356741.92
Effect of non-taxable income -232849226.22
Effect of non-deductible costs expenses and losses 55943100.27
Effect of deductible losses on the use of deferred tax assets
-22799899.62
not recognized in prior periods
Effect of deductible temporary differences or deductible
losses on deferred income tax assets not recognized in the 47800169.79
current period
Change in the balance of deferred income tax
assets/liabilities at the beginning of the year due to tax rate -102953967.48
adjustments
Extra tax deductions for R&D costs -39115667.95
Others 10648971.97
Income tax expenses 853329846.75
Other explanations: None.
62. Other comprehensive income
For details please refer to Note 44.
2632025 Annual Report of Yunnan Baiyao Group Co. Ltd.
63. Cash flow statement
(1) Cash relating to operating activities
Cash received relating to other operating activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Interest income 90466408.88 219472052.00
Deposits and guarantees 281202587.55 146845057.57
Government subsidy 95946411.26 151879874.90
Current account and petty cash 194101167.67 39444457.98
Others 161889760.49 54463899.59
Total 823606335.85 612105342.04
Explanations on cash received relating to other operating activities: None.Cash payments relating to other operating activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Expenses of cost nature 3693169338.71 2795371889.92
Deposits and guarantees 308304828.84 166961729.93
Current account and petty cash 268527909.03 14551758.72
Others 35744124.90 7683664.97
Total 4305746201.48 2984569043.54
Explanations on cash payments relating to other operating activities: None.
(2) Cash relating to investment activities
Cash received relating to other investment activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Principal and interest of time deposits
910784049.987043006500.00
and other financial products redeemed
Other fund lending 55410000.00
Total 966194049.98 7043006500.00
Important cash received relating to investment activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Redeeming the principal of financial products
6651743736.65553145988.51
and more
Redeeming the principal and interest of fixed
910784049.987043006500.00
deposits and more
Collecting financial management income and
321151517.75420227984.66
dividends
Total 7883679304.38 8016380473.17
Explanations on cash received relating to other investing activities: None.
2642025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Cash payments relating to other investment activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Time deposits and other banking
827237810.005143140000.00
products
Total 827237810.00 5143140000.00
Important cash paid relating to investment activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Cash paid to acquire fixed assets intangible assets and
479661609.93675074486.64
other long-term assets
Purchasing banking products and other wealth
8120000000.002900000000.00
management products
Net cash paid to acquire subsidiaries 500320758.81
Deposit products such as fixed deposits 827237810.00 5143140000.00
Equity investment funds 500000000.00
Total 9927220178.74 9218214486.64
Explanations on cash payments relating to other investing activities: None.
(3) Cash received relating to financing activities
Cash received relating to other financing activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Withholding and remittance of individual income tax
68733636.2673292510.43
on dividend distribution
Refund of dividend distribution guarantee deposit 2000000.00 2000000.00
Total 70733636.26 75292510.43
Explanations on cash received relating to other financing activities: None.Cash paid relating to other financing activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Payment of lease costs 127682444.58 90383082.47
Handling fee for financing activities 785482.55 2381635.77
Withholding and remittance of
individual income tax on dividend 79741001.00 60073045.88
distribution
Dividend distribution guarantee deposit 2000000.00 2000000.00
Total 210208928.13 154837764.12
Explanations on cash paid relating to other financing activities: None.Change of liabilities resulting from financing activities
RApplicable □Not applicable
2652025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Increase in the current period Decrease in the current period
Item Opening balance Non-cash Closing balance
Cash change Non-cash change Cash change
change
Short-term
423380272.64180394185.3812631236.47432087875.081542066.20182775753.21
borrowings
Long-term
borrowings
(including long-
2100000.0085069730.83200000.0086969730.83
term borrowings
due within one
year)
Lease liabilities
(Lease liabilities
279093065.97204950752.2891241306.17174928751.37217873760.71
due within one
year)
Dividend payable 86490742.04 3944670229.91 4029843583.22 1317388.73
Total 791064080.65 180394185.38 4247321949.49 4553372764.47 176470817.57 488936633.48
(4) Explanation on presentation of cash flow in net amount: None.
(5) Significant activities and financial effects that do not involve current cash receipts and
disbursements but affect the enterprise’s financial position or may affect the enterprise’s cash flows in
the future
None.
64. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: RMB
Supplementary information Amount for the current period Amount for the previous period
1. Reconciliation of net profit to cash flows from
operating activities
Net profit 5189940856.98 4767072360.28
Plus: Impairment provision for assets 200305770.25 131156636.24
Depreciation of fixed assets depreciation of oil
and gas assets depreciation of productive 214601515.25 203119678.85
biological assets
Depreciation of right-of-use assets 113142513.65 83364568.49
Amortization of intangible assets 30458268.65 25012034.21
Amortization of long-term deferred expenses 56277022.29 38404127.20
Losses on disposal of fixed assets intangible
assets and other long-term assets (gain is indicated -8167595.81 435663.65
with “-”)
Losses on scrapping of fixed assets (gain
195133.10-2037253.77
is indicated with “-”)
Losses on changes in fair value (gain is
-110489468.71-136837009.94
indicated with “-”)
2662025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Financial expenses (income is indicated with “-”) 32955118.48 62336462.09
Investment losses (gain is indicated with “-”) -1103650478.73 -842061414.65
Decrease of deferred income tax assets
-208859943.48-66105807.62
(increase is indicated with “-”)
Increase of deferred income tax
54550185.2119095259.83
liabilities (decrease is indicated with “-”)
Decrease in inventories (increase is indicated
with -72254087.27 113232804.84
“-”)
Decrease in operating receivable items
349815291.54-758018810.16
(increase is indicated with “-”)
Increase in operating payable items (decrease
-139126220.96585907421.72
is indicated with “-”)
Others 72926421.01
Net cash flows from operating activities 4599693880.44 4297003142.27
2. Major investment and financing activities
irrelevant to cash income and expense:
Conversion of debts into capital
Convertible corporate bonds due within one year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents:
Closing balance of cash 8532232687.39 10275529575.34
Less: Opening balance of cash 10275529575.34 14151765468.49
Plus: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -1743296887.95 -3876235893.15
(2) Net cash paid for acquisitions of subsidiaries for the period
Unit: RMB
Amount
Cash or cash equivalents paid for business mergers that occurred during the
528000000.00
period
Including:
Anguo Juyaotang Pharmaceutical Co. Ltd. 528000000.00
Less: Cash and cash equivalents held by the subsidiaries on acquisition dates 27679241.19
Including:
Anguo Juyaotang Pharmaceutical Co. Ltd. 27679241.19
Including:
Net cash paid to acquire the subsidiaries 500320758.81
Other explanations: None.
(3) Net cash received from disposal of subsidiaries for the period: None.
Unit: RMB
Amount
2672025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Cash or cash equivalents received from disposal of subsidiaries during the period 1680000.00
Including:
Shanghai Yunzhen Outpatient Department 1680000.00
Including:
Including:
Net cash received from disposal of subsidiaries 1680000.00
Other explanations: None.
(4) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 8532232687.39 10275529575.34
Including: Cash on hand 125243.29 124469.53
Bank deposit available
8482597792.1610222574046.06
for payment at any time
Other cash and bank
balance available for payment at 49509651.94 52831059.75
any time
III. Cash and cash equivalents at the
8532232687.3910275529575.34
end of the reporting period
(5) Presentation of items with restricted use but still belonging to cash and cash equivalents: None.
(6) Cash and bank balance which are not cash and cash equivalents
Unit: RMB
Amount in the Amount in the Reasons for not belonging to cash and cash
Item
reporting period previous period equivalents
Guarantee deposit
banker’s acceptance bill
14353427.82 21699196.16 Cannot be withdrawn at any time
deposit performance
deposit etc
Cannot be withdrawn at any time; litigation
preservation: as of the date of issuance of the financial
Fund for litigation statement the plaintiff has withdrawn the lawsuit and
1489443.870
preservation the court has ruled to lift the litigation preservation
which shall be immediately executed from the date of
the ruling
Cost specially used for
housing reform and 2650040.09 2648389.00 Cannot be withdrawn at any time
maintenance
Cost specially used for
identity conversion for
557103568.81 588106000.80 Cannot be withdrawn at any time
employees in state-
owned enterprises
Total 575596480.59 612453585.96
Other explanations: None.
2682025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(7) Explanations on other significant activities: None.
65. Notes to statement of changes in equity
Explanation on “Others” adjusted for closing balance of the previous year and adjusted amount thereof: None.
66. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
Unit: RMB
Closing balance of foreign Closing balance converted
Item Exchange rate
currency into RMB
Cash and bank balance
Including: HKD 158516938.22 0.903220 143175668.94
USD 20545481.87 7.028800 144410082.98
Euro 1834498.46 8.235500 15108012.07
Japanese yen 650841.00 0.044797 29155.72
South Korean won 21324422.00 0.004860 103642.39
THB 1994317.25 4.494000 8962461.72
CAD 1647.83 5.114200 8427.33
CHF 20353.13 8.851000 180145.54
SGD 39335.98 5.458600 214719.38
MYR 120855.32 0.577390 69780.65
Accounts receivable
Including: HKD 293619698.28 0.903220 265203183.88
SGD 272.50 5.458600 1487.47
Other receivables
Including: HKD 2274145.21 0.903220 2054053.44
THB 20500.00 4.494000 92127.00
Other current assets
Including: HKD 260000000.00 0.903220 234837200.00
Accounts payable
Including: HKD 135755000.44 0.903220 122616631.50
Other payables
Including: HKD 4702086.55 0.903220 4247018.62
Japanese yen 860094.00 0.044797 38529.63
THB 53830.00 4.494000 241912.02
CAD 2000.00 5.114200 10228.40
SGD 5500.00 5.458600 30022.30
Non-current liabilities due
within one year
Including: HKD 3448354.52 0.903220 3114622.77
Other explanations: None.
(2) Description of overseas business entities; for material overseas business entities disclose their major
business places overseas functional currency and the selection criterion thereof; should there be any
change in the functional currency disclose the reason for such change.□ Applicable RNot applicable
67. Lease
2692025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) The Company as the lessee
R Applicable □ Not applicable
Variable lease payments not included in the measurement of lease liabilities
R Applicable □ Not applicable
Item Current period Same period last year
Variable lease payments
included in current profit
and loss but not included 4379127.32 1853203.38
in the measurement of
lease liabilities
Simplified handling of payments of short-term leasing or leasing of low value assets
R Applicable □ Not applicable
Item Current period Same period last year
Short-term leasing fee 28895132.74 21297315.26
Total 28895132.74 21297315.26
After-sales leaseback transactions: None.
(2) The Company as the lessor
Operating lease where the Company is the lessor
R Applicable □ Not applicable
Unit: RMB
Including: Receipts related to variable lease payments not
Item Receipts from lease
included in lease receipts
Lease revenue 17142377.55
Total 17142377.55
Finance lease where the Company is the lessor
□ Applicable ? Not applicable
Undiscounted lease receipts for each of the next five years
□ Applicable ? Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases: None.
(3) Recognition of profits and losses on sales under finance leases as a manufacturer or distributor
□ Applicable ? Not applicable
68. Others
None.VIII. R&D Expenditure
Unit: RMB
2702025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Item Amount for the current period Amount for the previous period
Employee benefits 168561877.38 176428120.44
Materials consumption and inspection
82192372.1958715281.92
fees
Commissioned R&D cost 56168562.33 12553292.71
New product design fee 24313864.14 13008621.76
Depreciation and amortization 31913397.11 44437281.25
Test outsourcing fee 35896061.76 18717995.73
Others 24288009.77 24522693.78
Total 423334144.68 348383287.59
Including: Expensed R&D expenditure 350545386.25 337413301.03
Capitalized R&D expenditure 72788758.43 10969986.56
1. R&D projects meeting capitalization conditions
Unit: RMB
Increase in the current
Decrease in the current period
period
Opening Closing
Item
balance Internal Transfer to Recognized as balance
development Others current profits
intangible assets
costs or losses
P137 Project R&D (IND) 25422461.13 513053.16 25935514.29
Fuqi Guben Ointment 15711255.23 15711255.23
INR101 Project 56564450.04 56564450.04
Total 25422461.13 72788758.43 0.00 0.00 98211219.56
Important capitalized R&D projects: None.Impairment provision for R&D expenditure: None.
2. Important outsourced project under study: None.
IX. Changes in the Consolidation Scope
1. Business combination not under common control
(1) Business combination not under common control in the period
Unit: RMB
Net profit of
Revenue of the Cash flow of the
Basis for the acquiree
Ratio of Way of acquiree from acquiree from
Name of the Time point of Cost of equity Acquisition determining from the
equity equity the acquisition the acquisition
acquiree equity acquisition acquisition date the acquisition acquisition
acquisition acquisition date to the end of date to the end of
date date to the end
the period the period
of the period
Anguo Juyaotang Gaining
October 1
Pharmaceutical October 1 2025 660000000.00 100.00% Cash substantial 226033987.82 11663167.02 122764476.83
2025
Co. Ltd. control.
2712025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Other explanations: None.
(2) Combination cost and goodwill
Unit: RMB
Combination cost
--Cash 660000000.00
--Fair value of non-cash assets
--Fair value of debts issued or assumed
--Fair value of equity securities issued
--Fair value of contingent consideration
--Fair value of the equity held prior to the acquisition date on the
acquisition date
--Others
Total combination cost 660000000.00
Less: Fair value share of identifiable net assets acquired 456157608.18
Amount that the goodwill/combination cost is less than the fair value
203842391.82
share of the identifiable net assets obtained
Method for determining the fair value of the combination cost: The fair value of the combination cost is
determined based on the Asset Evaluation Report on the Fair Value of Identifiable Assets and Liabilities
Involved in the Merger Consideration Allocation of Yunnan Baiyao Group Co. Ltd to Anguo Juyaotang
Pharmaceutical Co. Ltd (PCA [2025] No. 2203) issued by Pan-China Appraisal Co. Ltd.Explanation of contingent consideration and its changes: None.Main reason for the formation of significant goodwill is that the acquiree possesses a promising market
outlook and strong profitability with its market value exceeding the fair value of its identifiable net assets.Other explanations: None.
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB
Anguo Juyaotang Pharmaceutical Co. Ltd.Fair value on acquisition date Book value on acquisition date
Assets:
Monetary funds
Accounts receivable 281634658.93 281634658.93
Inventory 144567379.52 116731599.63
2722025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Fixed assets 223651366.93 190109492.43
Intangible assets 121950394.79 47390999.75
Total assets 812636270.08 680020833.95
Liabilities:
Borrowings
Accounts payable 238261261.20 238261261.20
Total liabilities 356478661.90 326634426.96
Deferred tax liabilities
Net assets 456157608.18 353386406.99
Less: Minority shareholders’ equity
Net assets acquired 456157608.18 353386406.99
Method for determining the fair value of identifiable assets and liabilities: The fair value of identifiable assets and liabi lities
of Anguo Juyaotang Pharmaceutical Co. Ltd is determined based on the assessed value.Contingent liabilities assumed from the acquiree in the business combination: None.Other explanations: None.
(4) Gains or losses arising from the remeasurement of equity held prior to the acquisition date at fair value
Is there any transaction that achieves business combination step by step through multiple transactions and allows for control
during the reporting period
□Yes RNo
(5) Relevant explanations for the inability to reasonably determine the merger consideration or the fair value of the
identifiable assets and liabilities of the acquiree on the acquisition date or at the end of the period
None.
(6) Other explanations
None.
2. Business combination under common control
2732025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Business combinations under common control that occurred in the period: None.
(2) Combination cost: None
(3) Book value of assets and liabilities of the acquiree on the combination date: None.
3. Reverse purchase: None.
4. Disposal of subsidiaries
Whether there were any transactions or events during the period in which control of subsidiaries was lost
RYes □No
Unit: RMB
Difference Method and
between the main
Fair value
disposal price Book value assumptions
of the Amount of other
and the share of the Gains or for
remaining comprehensive
of the Proportion remaining losses determining
equity at income related to
Disposal Disposal Disposal Basis for subsidiary’s of equity on arising the fair value
Time point the equity
price at the proportion method at determining net assets remaining the from the of the
Name of when consolidate investments in
time of at the time the time of the point of corresponding equity on consolidate remeasure remaining
subsidiary control is d financial subsidiaries
losing of losing losing losing to the disposal the date of d financial ment of the equity at the
lost statement transferred to
control control control control investment as losing statements remaining consolidated
level on the investment profit
presented on control at the date equity at financial
date of and loss or
the of losing fair value statement
losing retained earnings
consolidated control level on the
control
financial date of losing
statements control
Shanghai
Yunzhen
2100000.0 Transfer by November
Outpatient 100.00% -773539.48
0 agreement 30 2025
Department
Co. Ltd.Other explanations: None.Whether there was a loss of control in the current period under a progressive disposal of investments in subsidiaries
through multiple transactions
□Yes RNo
5. Changes in the consolidation scope due to other reasons
Describe the change in scope of consolidation for other reasons (e.g. Establishing new subsidiaries liquidating
subsidiaries etc.) and its details:
Establishment of new subsidiaries
(1) Yunnan Baiyao Group invested in the establishment of Yunnan Baiyao Group Digital and Intelligent
Technology Co. Ltd with a registered capital of RMB 11152469.81 and a 100% ownership. Yunnan
Baiyao included Yunnan Baiyao Group Digital and Intelligent Technology Co. Ltd into its consolidation
scope from May 2025.
(2) YNBY International Limited (“YNBY International”) invested in the establishment of PT YNBY
Healthcare Indonesia with a total of 10000 shares issued each with a par value of 1 million Indonesian
rupiah totaling 10 billion Indonesian rupiah (out of which YNBY International holds 9900 shares and
2742025 Annual Report of Yunnan Baiyao Group Co. Ltd.
BL Healthcare (Overseas) Limited holds 100 shares (1% equity)). Yunnan Baiyao included PT YNBY
Healthcare Indonesia in its consolidation scope from January 2025.
(3) Yunnan Baiyao Group TCM Resources Co. Ltd invested in the establishment of Yunnan Baiyao
Group TCM Materials Development (Weishan) Co. Ltd with a registered capital of RMB 20000000
and a 100% ownership. Yunnan Baiyao included Yunnan Baiyao Group TCM Materials Development
(Weishan) Co. Ltd into its consolidation scope from May 2025.Deregistration:
(1) CICC Directional Asset Management - GF-CICC Qirui No. 1 was deregistered in December 2025.
(2) Lieder Industrial Investment Co. Ltd was deregistered in September 2025.
Acquisitions:
Yunnan Baiyao Group TCM Resources Co. Ltd acquired Anguo Juyaotang Pharmaceutical Co. Ltd in
2025 and included it into its consolidation scope. Beijing Juyaotang Technology Co. Ltd and Time Travel
(Guangzhou) Intelligent Technology Co. Ltd are wholly-owned subsidiaries of Anguo Juyaotang
Pharmaceutical Co. Ltd so Yunnan Baiyao included Beijing Juyaotang Technology Co. Ltd and Time Travel
(Guangzhou) Intelligent Technology Co. Ltd into its consolidation scope in October 2025.
6. Others: None.
X. Interest in Other Entities
1. Interest in subsidiaries
(1) Composition of the Group
Unit: RMB
Main Shareholding
Name of Registered Place of Acquisition
business Business nature proportion
subsidiary capital registration method
location Direct Indirect
Yunnan Baiyao
Group TCM Set-up or
16400000.00 Kunming Kunming Pharmaceutical 100.00% 0.00%
Resources Co. investment
Ltd.Yunnan Digital
and Intelligent Wholesale and
Set-up or
TCM Material 30000000.00 Kunming Kunming retail of daily 100.00% 0.00%
investment
Development Co. necessities
Ltd.Yunnan Baiyao
Group Wuxi Set-up or
25000000.00 Wuxi Wuxi Pharmaceutical 100.00% 0.00%
Pharmaceutical investment
Co. Ltd.
2752025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Yunnan Baiyao
Group Dali Set-up or
15515000.00 Dali Dali Pharmaceutical 100.00% 0.00%
Pharmaceutical investment
Co. Ltd.Production and
Yunnan Baiyao
sales of health Set-up or
Group Health 84500000.00 Kunming Kunming 100.00% 0.00%
and daily investment
Products Co. Ltd.chemicals
Yunnan Pharmaceutical
Set-up or
Pharmaceutical 1000000000.00 Kunming Kunming wholesale and 100.00% 0.00%
investment
Co. Ltd. retail
Business
Yunnan Institute combination
of Materia 54080000.00 Kunming Kunming New Drug R&D 100.00% 0.00% under
Medica common
control
Business
Yunnan Baiyao
combination
Holding
100000000.00 Kunming Kunming Investment 100.00% 0.00% under
Investment Co.common
Ltd.control
Business
combination
Yunnan Baiyao
20000000.00 Kunming Kunming Tea 100.00% 0.00% under
Teayield Co. Ltd.common
control
Import and
Yunnan Baiyao
export agency Set-up or
Group (Hainan) 15000000.00 Hainan Danya 100.00% 0.00%
technical investment
Co. Ltd.services etc.Yunnan Baiyao
Technical Set-up or
Group Shanghai 15000000.00 Shanghai Shanghai 100.00% 0.00%
services investment
Co. Ltd.Yunnan Baiyao Business
Medical Device
Group Medical combination
25970800.00 Hefei Hefei Production and 100.00% 0.00%
Technology Hefei not under the
Sales
Co. Ltd. same control
Shanghai
Technical
Yunzhen Medical Set-up or
900000.00 Shanghai Shanghai development and 100.00% 0.00%
Technology Co. investment
service
Ltd.Business
YNBY
Hong combination
International Hong Kong Trade 25.11% 40.81%
Kong not under the
Limited
same control
Yunnan Baiyao
Tiancui Business Set-up or
3000000.00 Kunming Kunming Catering 100.00% 0.00%
Management Co. investment
Ltd.Yunnan Baiyao Technology
Set-up or
Group Beijing 50000000.00 Beijing Beijing promotion 100.00% 0.00%
investment
Co. Ltd. service
Yunhe Research and
Set-up or
Pharmaceutical 20000000.00 Tianjin Tianjin experimental 100.00% 0.00%
investment
(Tianjin) Co. Ltd development
Yunnan Baiyao Business
5000000.00 Kunming Kunming Health 100.00% 0.00%
Group Health combination
2762025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Pharmacy Co. under the
Ltd. same control
Yunnan Baiyao
Group Digital and
Software and IT Set-up or
Intelligent 11152470.00 Kunming Kunming 100.00% 0.00%
services investment
Technology Co.Ltd.Explanation of the inconsistency of the percentage of shares in subsidiaries with the proportion of voting rights: None.Basis for holding half or less of the voting rights but still controlling investees and holding more than half of the voting
rights but not controlling investees: None.Basis for controlling major structured entities consolidated into the financial statements:
The structured entities included in the scope of consolidation of the Group include Shanghai Trust Platinum Series Hong
Kong Market Investment Single Fund Trust. Because the Group has power over such structured entities enjoys variable returns
by participating in related activities and is able to use its power over the investee to influence its variable returns the Group
has control over such structured entities.Basis for determining whether the Company is an agent or an entrustor: None.Other explanations: None.
(2) Key non-wholly owned subsidiaries
Unit: RMB
Profit and loss Dividends declared to Balance of minority
Percentage of shares
attributable to non- non-controlling shareholders’ equity
Name of subsidiary held by minority
controlling interests interests in the current at the end of the
interests
in the current period period period
YNBY International
34.08%1627714.89-8878289.63
Limited
Explanation on the inconsistency of the percentage of shares held by minority shareholders in subsidiaries with the
proportion of voting rights: None.Other explanations: On May 22 2025 YNBY International Limited placed 800000000 shares increasing the shareholding
ratio of minority shareholders from 26.02% to 34.08%.
2772025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(3) Main financial information of key non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of
subsidiary Non-current Current Non-current Non-current Current Non-current Current assets Total assets Total liabilities Current assets Total assets Total liabilities
assets liabilities liabilities assets liabilities liabilities
YNBY
International 523888159.10 10489436.18 534377595.28 207416955.49 3628959.12 211045914.61 328272842.86 12491866.59 340764709.45 94092251.84 5957177.35 100049429.19
Limited
Unit: RMB
Amount for the current period Amount for the previous period
Name of subsidiary Operating Total comprehensive Cash flows from Total comprehensive Cash flows from
Net Profit Operating revenue Net Profit
revenue income operating activities income operating activities
YNBY
International 1013333023.65 4151212.72 -1584596.88 -93951609.72 689091622.71 16683866.18 20363500.62 33115847.31
Limited
Other explanations: None.
2782025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(4) Major restrictions on the use of assets and settlement of debts of the corporate group
None.
(5) Financial support or other support provided for structured entity included in the scope of consolidation for the
consolidated financial statements
None.Other explanations: None.
2. Transaction in which the share of owners’ equity in the subsidiary changes while control over the
subsidiary remains unchanged
(1) Explanations on changes in the share of owners’ equity in the subsidiary
Shareholding ratio before Shareholding ratio after
Name of subsidiary Time of change
change change
YNBY International Limited May 2025 73.68% 65.92%
(2) Impact of the transaction on the minority shareholders’ equity and the owners’ equity attributable to the parent company
Unit: RMB
Acquisition cost/disposal consideration
--Cash
--Fair value of non-cash assets
Total of acquisition cost/disposal consideration
Less: Share of net assets of subsidiaries calculated based on the
-37009868.76
proportion of equity acquired/disposed
Balance 37009868.76
Including: Adjustment of capital reserves 37009868.76
Adjustment of surplus reserve
Adjustment of undistributed profits
Other explanations: None.
3. Interest in joint ventures or associates
(1) Important joint ventures or associates
Shareholding proportion The accounting
Name of joint Main method for
venture or business Place of registration Business nature investments in
associate location Direct Indirect joint ventures
or associates
Equity
No. 92
Shanghai method for
Zhangjiang Road China
Pharmaceuticals
Shanghai
long-term
(Shanghai) Pilot Free Pharmaceuticals 17.95%
Holding Co. Ltd. equity
Trade Zone
investments
2792025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Explanation of the inconsistency of the percentage of shares in joint ventures or associates with the proportion of voting rights:
None.Basis for holding 20% or less voting rights but having important influence or holding 20% or more voting rights but not having
important influence: None.
(2) Main financial information of important joint ventures: None.
(3) Main financial information of important associates
Unit: RMB
Closing balance/Amount for the current Opening balance/Amount for the previous
period period
Current assets 180463695237.78 171823107421.97
Non-current assets 52685071529.43 49386322726.20
Total assets 233148766767.21 221209430148.17
Current liabilities 135198106270.50 126038386279.10
Non-current liabilities 8163366773.11 11428680148.00
Total liabilities 143361473043.61 137467066427.10
Minority interests 13895965899.43 12066743749.10
Equity attributable to shareholders of the
75891327824.1771675619971.97
parent company
Share of net assets based on percentage
13622000050.8112866662562.66
of shareholding
Adjustment
- Goodwill 934312752.73 934411132.40
- Unrealized profit on internal
-7314646.14-7831910.38
transactions
- Others -1821243614.53 -1731865195.92
Book value of equity investment in
12727754542.8712061376588.76
associates
Fair value of equity investments in
associates for which publicly quoted 11888094576.56 13978162716.00
prices exist
Operating revenue 283579600562.98 275250934889.66
Net profits 6973717681.49 5870011314.88
Net profits from discontinued operations
Other comprehensive income 7600140.48 -62617948.59
Total comprehensive income 6981317821.97 5807393366.29
Dividends received from associates
193031770.84326157130.04
during the year
Other explanations: None.
(4) Combined financial information of insignificant joint ventures and associates
Unit: RMB
Closing balance/Amount for the current Opening balance/Amount for the
period previous period
2802025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Associates:
Total book value of investments 499823509.04 499899492.59
Total of the followings based on the
percentage of shareholdings
- Net profit -106174.01 -318336.97
- Other comprehensive income 244.20
- Total comprehensive income -318092.77
Other explanations: None.
(5) Explanation on significant restrictions on the ability of joint ventures or associates to transfer funds to
the Company
None.
(6) Excess loss generated from joint ventures or associates: None.
(7) Unrecognized commitment related to investments in joint ventures: None.
(8) Contingent liabilities related to investments in joint ventures or associates: None.
4. Significant joint operation
Explanations on the proportion of shareholding or entitlement differing from voting rights in joint operations: None.Basis for classification as a joint operation where the joint operation is a separate entity: None.Other explanations: None.
5. Interest in structured entities not included in the scope of consolidated financial statements
Relevant explanation on structured entities not included in the consolidated financial statements: None.
6. Others: None.
XI. Government Grants
1. Government grants recognized at the end of the reporting period based on amounts receivable
□Applicable RNot applicable
Reasons for not receiving the estimated amount of government grants at the expected time point
□Applicable RNot applicable
2. Liabilities involving government grants
?Applicable □Not applicable
Unit: RMB
Amount
included Amount
Amount of
in non- transferred to Other changes
Accounting Opening new subsidies Closing Related to
operating other income in the current
item balance in the current balance assets/income
revenue in the current period
period
during the period
period
2812025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Deferred Related to
133786181.2054284600.0046962820.5021594143.90119513816.80
income income
Deferred Related to
161707384.124770000.0012478832.231742556.10152255995.79
income assets
3. Government grants included in profit or loss for the current period
?Applicable □Not applicable
Unit: RMB
Accounting item Amount for the current period Amount for the previous period
Other income 96333463.99 84203749.10
Other explanations: None.XII. Risks Associated with Financial Instruments
(I) Risks incurred by financial instruments
The risk management objective of the Company is to get a balance between risk and return minimize the
negative impact of risk on business results of the Company and maximize the interest of shareholders and other
equity investors. Based on this risk management objective the basic risk management strategy of the Company is
to identify and analyze various risks faced by the Company establish an appropriate risk tolerance bottom line and
conduct risk management and supervise various risks in a timely and reliable manner to control risks within a
limited range.The Company faces various risks related to financial instruments in its daily activities primarily including
credit risk liquidity risk and market risk. The management has reviewed and approved policies for managing these
risks which are summarized as follows.(i) Credit risk
Credit risk refers to the risk that one party to a financial instrument fails to fulfill its obligations resulting in
financial losses to the other party.
1. Credit risk management practices
(1) Evaluation of credit risk
The Company assesses whether the credit risk of relevant financial instruments has significantly increased
since initial recognition on each balance sheet date. In whether the credit risk has significantly increased since initial
recognition the Company considers obtaining reasonable and well-founded information without incurring
unnecessary additional costs or efforts including qualitative and quantitative analysis based on historical data
external credit risk ratings and forward-looking information. The Company compares the risk of default on financial
instruments on the balance sheet date with the risk of default on the initial recognition date based on individual
financial instruments or portfolios of financial instruments with similar credit risk characteristics to determine the
changes in default risk over the expected life of the financial instruments.When one or more of the following quantitative and qualitative criteria are triggered the Company deems that
the credit risk of financial instruments has significantly increased:
2822025 Annual Report of Yunnan Baiyao Group Co. Ltd.
1) The primary quantitative criterion is that the probability of default during the remaining duration as of the
balance sheet date has increased by more than a certain percentage compared to the initial recognition;
2) The qualitative criteria primarily include significant adverse changes in the debtor’s operational or financial
status as well as existing or anticipated shifts in the technological market economic or legal environment that are
expected to have a material adverse impact on the debtor’s repayment capacity to the Company.
(2) Definition of default and credit impaired assets
When a financial instrument meets one or more of the following conditions the Company defines the financial
asset as having defaulted and its criteria are consistent with the definition of credit impairment:
1) The debtor encounters significant financial difficulties;
2) The debtor violates the restrictive clauses imposed on the debtor in the contract;
3) The debtor is likely to go bankrupt or undergo other financial restructuring; and
4) The creditor due to economic or contractual considerations related to the debtor’s financial difficulties
grants concessions that the debtor would not otherwise make.
2. Measurement of expected credit losses
The key parameters for measuring expected credit losses include probability of default loss given default and
exposure at default. The Company takes into account quantitative analysis of historical statistical data (such as
counterparty ratings types of guarantees and collateral repayment methods etc.) and forward-looking information
to establish models for probability of default loss given default and exposure at default.
3. For the detailed reconciliation statement of the beginning and ending balances of provisions for losses onfinancial instruments please refer to “Section VIII Financial Statements VII. Notes to Consolidated FinancialStatement Items 3. Bills Receivable; 4. Accounts Receivable; 5. Receivables Financing; 6. Other Receivables; 9.Non-current Assets Due Within One Year; 10. Other Current Assets; 23. Other Non-current Assets.”
4. Credit risk exposure and credit risk concentration
The credit risk of the Company primarily arises from monetary funds and receivables. To mitigate the
aforementioned risks we have implemented the following measures.
(1) Monetary funds
The Company deposits its bank deposits and other monetary funds with financial institutions of high credit
ratings thus its credit risk is relatively low.
(2) Accounts receivable and contract assets
The Company continuously conducts credit assessments on customers who engage in transactions using credit
methods. Based on the results of these assessments the Company chooses to conduct transactions with approved
customers who have good credit and monitor their accounts receivable balances to make sure that it does not face
significant bad debt risks.Due to the distribution of the Company’s accounts receivable risk points across multiple partners and customers
as of December 31 2025 16.98% (December 31 2024: 21.17%) of its accounts receivable originated from the top
five customers by balance. The Company does not have significant credit concentration risk.The maximum credit risk exposure borne by the Company is the carrying amount of each financial asset in the
balance sheet.
2832025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will run short of funds to meet its obligations settled by delivering
cash or other financial assets. Liquidity risk may arise from the inability to sell financial assets at fair value as soon
as possible; or from the counterparty’s inability to repay its contractual debts; or from early maturity of debts; or
from the inability to generate expected cash flows.To control this risk the Company comprehensively utilizes various financing methods such as bill settlement
and bank loans and adopts a method of appropriately combining long-term and short-term financing to optimize
the financing structure maintaining a balance between financing continuity and flexibility. The Company has
obtained bank credit lines from multiple commercial banks to meet its working capital needs and capital
expenditures.
2842025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Financial liabilities classified by their remaining maturity
Closing balance Closing balance of the previous year
Items
Undiscounted Undiscounted
Book value Within one year 1-3 years More than 3 years Book value Within one year 1-3 years More than 3 years
contract amount contract amount
Short-term
182775753.21186182419.88186182419.88423380272.64423460272.64423460272.64
borrowings
Notes payable 1846714475.61 1846714475.61 1846714475.61 1913702684.41 1913702684.41 1913702684.41
Accounts
5523021856.865523021856.865523021856.864758352403.874758352403.874758352403.87
payable
Other payables 1461459334.99 1461459334.99 1461459334.99 1386632676.75 1386632676.75 1386632676.75
Lease liabilities
(including those
217873760.71217873760.7176043381.53103824679.1838005700.00279093065.97279093065.9788436075.74112651290.2378005700.00
maturing within
one year)
Long-term
borrowings
(including those 86969730.83 91623211.37 3849534.79 803945.75 86969730.83 2100000.00 2100000.00 2100000.00
maturing within
one year)
Subtotal 9318814912.21 9326875059.42 9097271003.66 104628624.93 124975430.83 8763261103.64 8763341103.64 8570584113.41 112651290.23 80105700.00
2852025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(iii) Market risk
Market risk refers to the risk that the fair value of a financial instrument or future cash flows fluctuate
due to changes in market prices. Market risk primarily includes interest rate risk and foreign exchange risk.
1. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value of financial instruments or future cash
flows due to changes in market interest rates. Fixed-rate interest-bearing financial instruments expose the
Company to fair value interest rate risk while floating-rate interest-bearing financial instruments expose the
Company to cash flow interest rate risk. The Company determines the proportion of fixed-rate and floating-
rate financial instruments based on market conditions and maintains an appropriate portfolio of financial
instruments through regular review and monitoring. The cash flow interest rate risk faced by the Company is
primarily related to the Company’s bank loans with floating interest rates.As of December 31 2025 the Company’s bank loans with floating interest rates amounted to RMB
234800000.00 (as of December 31 2024: RMB 404233333.39). Assuming that other variables remain
unchanged a 50 basis point change in interest rates would not have a significant impact on the Company’s
total profit and shareholders’ equity.
2. Foreign exchange risk
Foreign exchange risk refers to the risk of fluctuations in the fair value of financial instruments or future
cash flows due to changes in foreign exchange rates. The Company’s exposure to exchange rate fluctuations
is primarily related to its foreign currency monetary assets and liabilities. The Company primarily operates in
mainland China and its main activities are denominated in Renminbi. Therefore the Company’s exposure to
market risk from foreign exchange fluctuations is not significant.For details of the Company’s foreign currency monetary assets and liabilities at the end of the periodplease refer to “Section VIII Financial Statements VII. Notes to Consolidated Financial Statements 66.Foreign Currency Monetary Items.”
(II) Hedging
(1) The Company carried out hedging business for risk management
□Applicable RNot applicable
(2) The Company conducted eligible hedging business and applied hedging accounting: None.
(3) The Company carried out hedging business for risk management which is expected to achieve risk
management target but did not apply hedging accounting
□Applicable RNot applicable
3. Financial assets
(1) Classification by type of transfer
RApplicable □Not applicable
2862025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Nature of transferred Amount of transferred Derecognized or Basis for determining
Transfer method
financial assets financial assets not derecognition
Bill Bills receivable/receivables All its risks and rewards have
6429789790.99 Derecognized
discount/endorsement financing been transferred
Accounts receivable All its risks and rewards have
Accounts receivable 458903513.09 Derecognized
factoring been transferred
Accounts receivable Not All its risks and rewards
Accounts receivable 12541236.47
factoring derecognized remain
Total 6901234540.55
(2) Derecognition of financial assets due to transfer
RApplicable □Not applicable
Unit: RMB
Way of transferring Amount of financial assets Gains or losses related to
Items
financial assets derecognized derecognition
Receivables financing Endorsement/discount 6060630626.83 -17215991.15
Notes receivable Endorsement/discount 369159164.16 -2771706.78
Accounts receivable Factoring 458903513.09 -3805049.32
Total 6888693304.08 -23792747.25
(3) Financial assets involved in continued assets transfer
RApplicable □Not applicable
Unit: RMB
Amount of liabilities formed
Amount of assets formed through
Items Asset transfer method through continued
continued involvement
involvement
Accounts receivable Factoring 12541236.47
Short-term borrowings Factoring 12541236.47
Total 12541236.47 12541236.47
Other explanations: None.XIII. Disclosure of Fair Value
1. Final fair value of assets and liabilities measured at fair value
Unit: RMB
Closing fair value
Item Level I fair value Level II fair value Level III fair value
Total
measurement measurement measurement
I. Continuous fair
--------
value measurement
(I) Financial assets
4187513408.434600000.004192113408.43
held for trading
1. Financial assets
4187513408.434600000.004192113408.43
measured at fair value
2872025 Annual Report of Yunnan Baiyao Group Co. Ltd.
with changes
recognized in current
profit and loss
(1) Others 4187513408.43 4600000.00 4192113408.43
(II) Accounts
1230423455.011230423455.01
receivable financing
(1) Notes receivable 1230423455.01 1230423455.01
(III) Investment in
other equity 71745000.00 71745000.00
instruments
(IV) Other non-
210855260.47210855260.47
current financial assets
(V) Investment in
210855260.47210855260.47
equity instruments
(VI) Total assets at
continuous fair value 4187513408.43 1517623715.48 5705137123.91
measurement
2. Determination basis of the market price of the item measured using level I fair value measurement
continuously and non-continuously
The trading financial assets held by the Company that are measured at fair value at the first level are stocks
traded in the active market. The Company determines their fair value based on the closing price of the open market
on the balance sheet date.
3. Valuation techniques and qualitative and quantitative information on important parameters adopted for
items subject to level II continuous and noncontinuous fair value measurement
The trading financial assets held by the Company which are measured at fair value at the second level consist
of bank and brokerage financial products. The Company determines their fair value based on the net value of each
financial product at the end of the period.
4. Valuation techniques and qualitative and quantitative information on important parameters adopted for
items subject to level III continuous and noncontinuous fair value measurement
The other non-current financial assets held by the Company that are measured at fair value at the third are
equity investments in unlisted companies. The Company obtains the annual audit reports of the invested enterprises
considers their operating environment operational status and financial condition and determines the fair value at
the end of the period based on the Company’s net assets at the end of the period.
5. The reconciliation information between opening and closing book values and unobservable parameter
sensitivity analysis for the items subject to level III continuous fair value measurement
None.
6. For the items subject to continuous fair value measurement if there is a conversion between all levels in
the current period the reason for the conversion and the policy for determining the time point of the
conversion
None.
7. Changes in the valuation technology and the reason for the changes in the current period
None.
8. Fair value of financial assets and financial liabilities that are not measured at fair value
2882025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The financial assets and financial liabilities of the Company that are not measured at fair value mainly include:
monetary funds notes receivable accounts receivable other receivables short-term borrowings accounts payable
other payables long-term borrowings lease liabilities long-term payables etc. The difference between their book
value and fair value is relatively small.
9. Others
None.XIV. Related Parties and Related Party Transactions
1. Information about the parent company of the Company
Explanations on the parent company of the Company: None.Ultimate controller of the Company: None.Other explanations:
The proposal of merger and overall listing of Yunnan Baiyao Group and Baiyao Holdings by issuing shares
had been considered and approved at the First Extraordinary General Meeting of Yunnan Baiyao for 2019. On April
24 2019 CSRC issued the Approval on the Proposal of Merger and Overall Listing of Yunnan Baiyao Group Co.
Ltd and Yunnan Baiyao Holdings Co. Ltd (Zheng Jian Xu Ke [2019] No. 770). Prior to the completion of the above-
mentioned merger and overall listing the controlling shareholder of the Company was Baiyao Holdings and there
was no de facto controller. After the completion of the transaction SASAC of Yunnan Province and New Huadu
with its acting-in-concert parties were equally the largest shareholder of the Company and neither of them obtained
the control over the listed company. SASAC of Yunnan Province along with New Huadu and its acting-in-concert
parties had made long-term share lock-up commitments. Therefore the listed company did not have de facto
controller before and after the transaction.On May 22 2020 SASAC of Yunnan Province transferred 321160222 shares of the Company held by it to
its wholly-owned subsidiary State-owned Equity Management Company at nil consideration. After the completion of
the transfer State-owned Equity Operation and Management Company and New Huadu with its acting-in-concert
parties were equally the largest shareholder of the Company and there was no change in the Company’s situation
of not having a de facto controller or controlling shareholder.On December 8 2021 SASAC of Yunnan Province transferred 100% of the shares held by State-owned Equity
Operation and Management Company to Yunnan Investment Group Co. Ltd. After the equity transfer Yunnan
Investment Group Co. Ltd would hold 321160222 shares of the Company through State-owned Equity Operation
and Management Company accounting for 25.04% of the total share capital of the Company. State-owned Equity
Operation and Management Company and New Huadu with its acting-in-concert parties were equally the largest
shareholder of the Company and the situation that the Company has no de facto controller and no controlling
shareholder remain unchanged.On August 8 2024 the Company disclosed the Announcement on Increase in Shareholdings of the Company
by Shareholders of 5% or More and the Subsequent Shareholding Increase Plan. The Company’s largest
2892025 Annual Report of Yunnan Baiyao Group Co. Ltd.
shareholder the State-owned Equity Management Company increased its holdings of the Company by 17485863
shares through the Shenzhen Stock Exchange’s centralized bidding system on August 6 2024. As of December 31
2024 the State-owned Equity Management Company held 467110174 shares of the Company accounting for
26.18% of the Company’s total shares. The State-owned Equity Management Company remains the largest
shareholder and the Company continues to have no de facto controller and no controlling shareholder.
2. Information about subsidiaries of the Company
For details of subsidiaries of the Company please refer to Section 1 “Interest in Subsidiaries” under Note X.
3. Information about joint ventures and associates of the Company
For details of important joint ventures or associates of the Company please refer to Note X3 (1) Important Joint Ventures or
Associates.Details of joint ventures or associates with related party transactions for the period and balances resulting from related party
transactions in the previous period are as follows:
Name of joint ventures or associates Relationship with the Company
Shanghai Pharmaceuticals Holding Co. Ltd. Associate
Lijiang Changgengming Trading Co. Ltd. Associate
Other explanations: None.
4. Information about other related parties
Name of other related parties Relationship between other related parties and the Company
Yunnan State-owned Equity Operation Management Co.Substantial shareholder of the Company
Ltd.New Huadu Industrial Group Co. Ltd. Substantial shareholder of the Company
Yunnan Hehe (Group) Co. Ltd. Substantial shareholder of the Company
State-owned Assets Supervision and Administration
Commission of Yunnan Provincial People’s Government Former substantial shareholder of the Company
Jiangsu Yuyue Science & Technology Development Co. Ltd
Former substantial shareholder of the Company
and its subsidiaries
Yunnan Gongtou TCM Materials and Decoction Pieces Companies where the Company’s directors served during the
Industry Development Co. Ltd. [Note 1] past twelve months
MB Packaging Limited [Note 2] Sub-subsidiary of former substantial shareholder
Kunming Yusi Pharmaceutical Co. Ltd. [Note 3] Sub-subsidiary of former substantial shareholder
Equity investment company of the subsidiary of the
Shanghai Skynet Brand Management Crop. Ltd. substantial shareholder
Investee company of a minority shareholder of the sub-
Yunnan Drug Technology Development Operation Co. Ltd.subsidiary
YEIG Property Services Co. Ltd. Sub-subsidiary of the substantial shareholder
Teh-Ho Canned Food Company and its subsidiaries Subsidiary of the substantial shareholder
Yunnan Salt Wenshan Co. Ltd. Sub-subsidiary of the substantial shareholder
Tibet Juliang E-commerce Co. Ltd. Sub-subsidiary of the substantial shareholder
Sino-Platinum Functional Materials (Yunnan) Co. Ltd. Sub-subsidiary of the substantial shareholder
Yunnan Salt Rixin Co. Ltd. Sub-subsidiary of the substantial shareholder
Yunnan Energy-Saving Technology Development and Sub-subsidiary of the substantial shareholder
2902025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Operation Co. Ltd.Yunnan Salt Industry Dianzhong Co. Ltd. Sub-subsidiary of the substantial shareholder
Tibet Jiushi Zhihe Marketing Co. Ltd. Subsidiary of the substantial shareholder
Yunnan Salt Industry Dianxibei Co. Ltd. Sub-subsidiary of the substantial shareholder
Tibet Jiujia E-Commerce Co. Ltd. Subsidiary of the substantial shareholder
Yunnan Medical Investment Management Group Kunming
Sub-subsidiary of the substantial shareholder
Technology Co. Ltd.Sino-Platinum Chemical Materials (Yunnan) Co. Ltd. Sub-subsidiary of the substantial shareholder
Jiuai Zhihe (Beijing) Technology Co. Ltd. Subsidiary of the substantial shareholder
Yunnan Labor Force Center Market Co. Ltd. Sub-subsidiary of the substantial shareholder
Sino-Platinum Metals New Materials Holding Group Co. Ltd.Subsidiary of the substantial shareholder
[Note 4]
Yunnan Hongta Bank Co. Ltd. Subsidiary of the substantial shareholder
Kunming Sino-Platinum New Materials Technology Co. Ltd. Sub-subsidiary of the substantial shareholder
YEIG Power Assembly Park Development Co. Ltd. Sub-subsidiary of the substantial shareholder
Yunnan Kunhua Hospital Investment Management Co. Ltd. Sub-subsidiary of the substantial shareholder
Minority shareholder that has significant influence on the
Yunnan Jingxing Pharmaceutical Group Co. Ltd.subsidiary
Minority shareholder that has significant influence on the
Yunnan Jianshui County Xingda Medicine Co. Ltd.subsidiary
Minority shareholder that has significant influence on the
Yunnan Tianma Pharmaceutical Co. Ltd.subsidiary
Minority shareholder that has significant influence on the
Kaiyuan Sanfa Pharmaceutical Trade Co. Ltd.subsidiary
Minority shareholder that has significant influence on the
Qiubei County Wanhe Pharmaceutical Co. Ltd.subsidiary
Former minority shareholder that has significant influence on
Yunnan Baoshan Medicine Co. Ltd. [Note 5]
the subsidiary
Ma Xinhong Senior management of the sub-subsidiary
Ma Zhanjiang Senior management of the sub-subsidiary
Shi Guang Senior management of the sub-subsidiary
Other explanations:
[Note 1] No longer a company where the Company’s director served as of June 2024.[Note 2] Its former controlling shareholder Yunnan Energy Research Institute Co. Ltd (a subsidiary of Yunnan Investment Holdings
Co. Ltd) was reduced to the third largest shareholder on February 14 2025 and no longer has control over it.[Note 3] Formerly a wholly-owned subsidiary of Yunnan Ran’er Chemical Co. Ltd. (a subsidiary of Yunnan Investment Holdings
Group Co. Ltd) and ceased to be a subsidiary of Yunnan Ran’er Chemical Co. Ltd as of October 18 2024.[Note 4] Formerly known as Guiyan Platinum Industry Co. Ltd renamed to Sino-Platinum Metals New Materials Holding Group Co.Ltd in December 2023.[Note 5] No longer a minority shareholder with significant influence over the subsidiary as of July 2024.
5. Related party transactions
(1) Related party transactions on purchase and sales of goods and rendering and receiving of services
Information of commodities purchased/labor services accepted
Unit: RMB
Amount for Amount for
Contents of related Approved Whether
Related Party the current
party transaction transaction limit exceeding the
the previous
period transaction limit period
2912025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Shanghai Pharmaceuticals
Holding Co. Ltd and its Purchase of goods 673226493.06 1200000000.00 728349788.25
subsidiaries and services
Jiangsu Yuyue Science &
Technology Development
Co. Ltd and its Purchase of goods
23819450.91
subsidiaries
Yunnan Gongtou TCM
Materials and Decoction
Pieces Industry Development Purchase of goods 9125038.53 4004620.45
Co. Ltd.Yunnan State-owned Equity
Operation Management Co. Purchase of services 6493230.45 1469355.33
Ltd.MB Packaging Limited Purchase of goods 4159034.19 4544493.47
Yunnan Jingxing
Pharmaceutical Group Co. Purchase of goods 2423517.26 1098494.12
Ltd.Kunming Yusi
Pharmaceutical Co. Ltd. Purchase of goods 1727331.60 545939.23
Shanghai Skynet Brand
Management Crop. Ltd. Purchase of goods 1091131.50 498819.05
Yunnan Drug Technology
Development Operation Purchase of goods 797947.56 200352.21
Co. Ltd.YEIG Property Services Co.Ltd. Purchase of services 733427.10 1049364.96
Teh-Ho Canned Food Purchase of goods and
205190.98578624.26
Company and its subsidiaries services
Yunnan Salt Wenshan Co. Ltd. Purchase of goods 73805.31 27079.65
Tibet Juliang E-Commerce Co.Purchase of goods 68632.56
Ltd.Sino-Platinum Functional
Purchase of goods 52223.10
Materials (Yunnan) Co. Ltd.Yunnan Salt Rixin Co. Ltd. Purchase of goods 47509.43 -29996.79
Yunnan Energy-Saving
Technology Development and Purchase of services 45283.02
Operation Co. Ltd.Yunnan Salt Industry
Purchase of goods 21000.00
Dianzhong Co. Ltd.Tibet Jiushi Zhihe Marketing
Co. Ltd. Purchase of goods 1716.10
Yunnan Salt Industry Dianxibei
Purchase of goods 1345.13
Co. Ltd.Tibet Jiujia E-Commerce Co.Purchase of goods 1164.60
Ltd.Information of commodities sold/labor services provided
Unit: RMB
Contents of related Amount for the current Amount for the previous
Related Party
party transaction period period
Shanghai Pharmaceuticals Holding Co. Ltd and its
Sale of goods 490334797.05 474122601.09
subsidiaries
Tibet Jiushi Zhihe Marketing Co. Ltd. Sale of goods 289280779.63 267190270.17
Yunnan Provincial Pharmaceutical Technology
Sale of goods 14700193.68 12013360.11
Development and Operation Co. Ltd.Yunnan Jingxing Pharmaceutical Group Co. Ltd. Sale of goods 4779772.58 16068315.55
2922025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Yunnan Gongtou TCM Materials and Decoction Pieces
Sale of goods 935779.82
Industry Development Co. Ltd.Yunnan Baoshan Medicine Co. Ltd. Sale of goods 717987.08 582396.79
Rendering of
Sino-Platinum Chemical Materials (Yunnan) Co. Ltd. 471698.11 4300.00
services
Tibet Juliang E-Commerce Co. Ltd.Sale of goods 194490.79 104934.51
Yunnan Salt Rixin Co. Ltd. Sale of goods 73585.15 52762.79
Jiuai Zhihe (Beijing) Technology Co. Ltd.Sale of goods 32526.55 70894.16
Yunnan Labor Force Center Market Co. Ltd. Sale of goods 7978.76
YEIG Power Assembly Park Development Co. Ltd. Sale of goods 242.74
Sino-Platinum Metals New Materials Holding Group Co.Sale of goods 236.02
Ltd.Yunnan Hongta Bank Co. Ltd. Sale of goods 5852.48
Lijiang Changgengming Trading Co. Ltd.Sale of goods 257609.51
Kunming Sino-Platinum New Materials Technology Rendering of
6000.00
Co. Ltd. services
Jiangsu Yuyue Science & Technology Development
Co. Ltd and its Sale of goods 23805.00
subsidiaries
Explanations on related party transactions on purchase and sales of goods and rendering and receiving of services: None.
(2) Trusteeship/contracting and entrusted management/outsourcing: None.
(3) Leasing between related parties
The Company as the lessor: None.
2932025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The Company as the lessee:
Unit: RMB
Variable lease
Rental costs for short-
payments that are not
term leases and leases of
included in the Interest expense on lease
low-value assets that are Rent paid Increased right-to-use assets
measurement of the liabilities assumed
streamlined (if
Types of leased lease liability (if
Name of lessor applicable)
assets applicable)
Amount Amount Amount
Amount for Amount for Amount for
for the for the for the Amount for the Amount for the Amount for the Amount for the
the previous the current the previous
current current previous current period previous period current period previous period
period period period
period period period
YEIG Power
Assembly Park House 1518229.50 1364087.62 124379.33 178898.07 7545479.15
Development Co. Ltd.Yunnan Jianshui
County Xingda House 1711216.50 1629730.00 195042.53 176599.56
Medicine Co. Ltd.House
Yunnan Baoshan
equipment 3758075.00 33292.27 73844.23 1776596.76
Medicine Co. Ltd.vehicle
Yunnan Tianma
Pharmaceutical Co. House 1587691.20 1841918.53 50017.40 36476.85 2869398.04 2857171.88
Ltd.Yunnan Jingxing
Pharmaceutical Group 21069.80 3447933.32
Co. Ltd.Kaiyuan Sanfa
Equipment and
Pharmaceutical Trade 496991.15
vehicle
Co. Ltd.Explanations on leasing between related parties: None.
2942025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(4) Related party guarantees: None.
(5) Borrowings with related parties
Related Party Borrowing amount Commencement date Due date Description
Loans
Ma Zhanjiang 42410000.00 January 4 2025 October 30 2025 Repaid
Shi Guang 10000000.00 January 22 2025 October 9 2025 Repaid
Note: The amounts lent out for the current period increased due to business combinations under non-common control in October 2025.
(6) Asset transfer and debt restructuring of related parties: None.
(7) Remuneration to key management personnel
Unit: RMB
Item Amount for the current period Amount for the previous period
Remuneration to key management
24973671.4333776976.72
personnel
(8) Other related party transactions: None.
6. Amounts receivable from and payable to related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item name Related Party Provision for Provision for
Book balance Book balance
bad debt bad debt
Accounts Shanghai Pharmaceuticals Holding
15165860.65758293.0318347243.79915508.67
receivable Co. Ltd and its subsidiaries
Accounts Lijiang Changgengming Trading Co.
2849942.432302794.522849942.431291749.42
receivable Ltd.Accounts Yunnan Jingxing Pharmaceutical
384707.8918877.754827582.65241379.13
receivable Group Co. Ltd.Accounts Yunnan Drug Technology
100454.555022.733456930.86172846.54
receivable Development Operation Co. Ltd.Accounts
MB Packaging Limited 4050.00 1215.00
receivable
Accounts
Yunnan Baoshan Medicine Co. Ltd. 8331.65 416.58
receivable
Shanghai Pharmaceuticals Holding
Notes receivable 8377326.34
Co. Ltd and its subsidiaries
Accounts
Tibet Jiushi Zhihe Marketing Co.receivable 8102835.34
Ltd.financing
Dividends Shanghai Pharmaceuticals Holding
79875215.52
receivable Co. Ltd.Accounts Shanghai Pharmaceuticals Holding
17046.509757.13
receivable Co. Ltd and its subsidiaries
Yunnan Medical Investment
Accounts
Management Group Kunming 28871.00 4145.40
receivable
Technology Co. Ltd.Accounts Qiubei County Wanhe
72206.4172206.41
receivable Pharmaceutical Co. Ltd.
2952025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Accounts Yunnan Salt Industry Dianzhong Co.
3500.00
receivable Ltd.Jiangsu Yuyue Science & Technology
Accounts
Development Co. Ltd and its 117455.24
receivable
subsidiaries
Other Yunnan Kunhua Hospital Investment
200000.0060000.00200000.00100000.00
receivables Management Co. Ltd.
(2) Payables
Unit: RMB
Book balance at the end Book balance at the
Item name Related Party
of the period beginning of the period
Shanghai Pharmaceuticals Holding Co. Ltd and its
Accounts payable 71609299.66 86515415.13
subsidiaries
Accounts payable MB Packaging Limited 862711.03 1731652.43
Jiangsu Yuyue Science & Technology Development
Accounts payable 530062.48
Co. Ltd and its subsidiaries
Accounts payable Kunming Yusi Pharmaceutical Co. Ltd. 195914.10
Yunnan Drug Technology Development Operation
Accounts payable 92915.38 216491.97
Co. Ltd.Accounts payable Yunnan Salt Industry Wenshan Co. Ltd. 23362.83
Accounts payable Yunnan Salt Rixin Co. Ltd. 8403.60 8403.60
Accounts payable Yunnan Jingxing Pharmaceutical Group Co. Ltd. 7152.62 43245.62
Accounts payable Teh-Ho Canned Food Company 5655.00 46990.36
Accounts payable Shanghai Skynet Brand Management Crop. Ltd. 3300.00 39911.51
Shanghai Pharmaceuticals Holding Co. Ltd and its
Notes payable 1101228.80 1050654.60
subsidiaries
Jiangsu Yuyue Science & Technology Development
Notes payable 8977012.28
Co. Ltd and its subsidiaries
Contractual liabilities Tibet Jiushi Zhihe Marketing Co. Ltd. 17545544.65 2172816.79
Shanghai Pharmaceuticals Holding Co. Ltd and its
Contractual liabilities 11316812.74 27079192.76
subsidiaries
Contractual liabilities Yunnan Tianma Pharmaceutical Co. Ltd. 13125.96
Contractual liabilities Yunnan Baoshan Medicine Co. Ltd. 548382.19
Other payables Yunnan Labor Force Center Market Co. Ltd. 94981.90
Shanghai Pharmaceuticals Holding Co. Ltd and its
Other payables 317419.54
subsidiaries
Other payables Yunnan Salt Rixin Co. Ltd. 5000.00
Yunnan Medical Investment Management Group
Other payables 4229.99 4229.99
Kunming Technology Co. Ltd.Other payables Kunming Yusi Pharmaceutical Co. Ltd. 2353.18
Other payables Ma Xinhong 46200000.00
Other payables Ma Zhanjiang 26400000.00
Other payables Shi Guang 18480000.00
2962025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Lease liabilities Yunnan Jianshui County Xingda Medicine Co. Ltd. 3165586.27 4657661.24
Lease liabilities YEIG Power Assembly Park Development Co. Ltd. 1382344.99
Lease liabilities Yunnan Jingxing Pharmaceutical Group Co. Ltd. 1148722.02
Non-current liabilities due
Yunnan Baoshan Medicine Co. Ltd. 3679384.19 1869495.16
within one year
Non-current liabilities due
Yunnan Jingxing Pharmaceutical Group Co. Ltd. 1652355.08
within one year
Non-current liabilities due
Yunnan Jianshui County Xingda Medicine Co. Ltd. 1492074.97 1434687.47
within one year
Non-current liabilities due
Yunnan Tianma Pharmaceutical Co. Ltd. 1428311.30
within one year
Non-current liabilities due
YEIG Power Assembly Park Development Co. Ltd. 1382344.99 1321553.56
within one year
State-owned Assets Supervision and Administration
Commission of Yunnan Provincial People’s
Government New Huadu Industrial Group Co. Ltd
Dividends payable 86490742.04
and Jiangsu Yuyue Science & Technology
Development Co. Ltd.
7. Related party commitments: None.
8. Others: None.
XV. Share-based Payment
1. General information about share-based payment
□Applicable ?Not applicable
2. Equity-settled share-based payment
□Applicable ?Not applicable
3. Cash-settled share-based payment
□Applicable ?Not applicable
4. Share payments during the period
□Applicable ?Not applicable
5. Amendment and termination of share-based payment: None.
6. Others: None.
XVI. Commitment and Contingencies
1. Significant commitments
Significant contingencies on the balance sheet date: None.
2. Contingencies
(1) Significant contingencies on the balance sheet date
Contract dispute case filed by Shanghai Yuanye Industrial Co. Ltd against Yunnan Baiyao Holdings Investment Co. Ltd et al.with a case amount of RMB 1575317800. As of the date of issuance of this financial report the court has ruled to permit the plaintiff
2972025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Shanghai Yuanye Industrial Co. Ltd to withdraw the lawsuit. Meanwhile the court has also ruled to lift the preservation measures
taken in connection with the case and to enforce such ruling immediately.
(2) Where the Company had no significant contingencies to disclose explanation is also required
The Company had no significant contingencies to disclose.
3. Others: None.
XVII. Events Subsequent to the Balance Sheet Date
1. Important non-adjusting events: None.
2. Profit distribution: None.
3. Sales return: None.
4. Explanation on other events subsequent to the balance sheet date
On February 27 2026 YNBY International allotted and issued 1937984496 shares to Shanghai International Trust Co. Ltd
(acting as trustee for Yunnan Baiyao to subscribe for and hold convertible bonds) the designated trustee of Yunnan Baiyao at the
conversion price of HKD0.258 per share. Following the conversion the Company’s shareholding in YNBY International increased
from 65.92% to 72.84%. Upon completion of this exercise and conversion the Company will implement the relevant matters
concerning the trust product in accordance with the determined plan and operational procedures.XVIII. Other Significant Events
1. Correction of previous accounting errors: None.
2. Debt restructuring: None.
3. Assets exchange: None.
4. Annuity plan
(1) In accordance with the Trial Measures for Enterprise Annuity and Trial Measures for Enterprise Annuity
Fund Management of the Ministry of Labor and Social Security as well as the Letter Yun Lao She Han [2006] No.
267 of Department of Labor and Social Security of Yunnan Province the Company was approved to establish an
enterprise annuity. The investment manager of the enterprise annuity fund is Fullgoal Fund Management Co. Ltd
and the trustee of the enterprise annuity fund is China Merchants Bank Co. Ltd. The enterprise contribution shall
be paid annually at 5% of the total salary of the employees of the Company in the previous year and the individual
contribution of the employees shall be paid at 10% of the unit contribution. The individual contribution shall be
collected and paid by the Company from the employee’s salary.
(2) According to the replies of Yunnan Provincial Department of Human Resources and Social Security (Yun
Ren She Letter [2009] No.79) and Kunming Municipal Labor and Social Security Bureau (Kun Lao She Han [2008]
No.204) on the Enterprise Annuity Implementation Plan of Yunnan Pharma Yunnan Pharma a subsidiary of the
Company was approved to establish an enterprise annuity. The investment manager of the enterprise annuity fund
is Ping An Annuity Insurance Company of China Ltd and the trustee of the enterprise annuity fund is China
Merchants Bank Co. Ltd. According to the plan the enterprise contribution shall be paid annually at no more than
2982025 Annual Report of Yunnan Baiyao Group Co. Ltd.
8.33% of the total salary of the employees of Yunnan Pharma in the previous year and the individual contribution
of the employees shall be paid at 10% of the unit contribution.
(3) According to the replies of Yunnan Provincial Department of Human Resources and Social Security (Yun
Ren She Letter [2009] No.79) and Kunming Municipal Labor and Social Security Bureau (Kun Ren She Han [2016]
No.21) on the Enterprise Annuity Implementation Plan of Yunnan Institute of Materia Medica Yunnan Institute of
Materia Medica a subsidiary of the Company was approved to establish an enterprise annuity. According to the
reply from the Kunming Municipal Bureau of Human Resources and Social Security (Kun Ren She Han [2024] No.
105) to the Letter from Yunnan Institute of Materia Medica Regarding Adjustment of the Corporate Pension Plan
the adjustment of the corporate pension plan for Yunnan Institute of Materia Medica has been approved. The
investment manager of the enterprise annuity fund is Ping An Annuity Insurance Company of China Ltd and the
trustee of the enterprise annuity fund is China Construction Bank Corporation. According to the plan the enterprise
contribution shall be paid annually at no more than 5% of the total salary of the employees of Yunnan Institute of
Materia Medica in the previous year and the individual contribution of the employees shall be paid at 10% of the
unit contribution.
(4) In accordance with the Measures on Enterprise Annuity (Decree No. 36 of Ministry of Human Resources
and Social Security) Measures on the Management of Enterprise Annuity Fund (Decree No. 11 of Ministry of
Human Resources and Social Security) and other relevant provisions as well as the Reply on Filing of Enterprise
Annuity Plan of Yunnan Baiyao Group Wuxi Pharmaceutical Co. Ltd issued by Wuxi Human Resources and Social
Security Bureau (Xi Ren She Fu [2025] No.14) Yunnan Baiyao Group Wuxi Pharmaceutical Co. Ltd a subsidiary
of the Company was approved to amend an enterprise annuity. The investment manager of the enterprise annuity
fund is Ping An Annuity Insurance Company of China Ltd and the trustee of the enterprise annuity fund is China
Construction Bank Corporation. According to the plan the enterprise contribution shall be paid annually at no more
than 5% of the total salary of the employees of Yunnan Baiyao Group Wuxi Pharmaceutical Co. Ltd in the previous
year and the individual contribution of the employees shall be paid at 10% of the unit contribution.
5. Discontinuation of operation: None.
6. Segment information
(1) Determination basis and accounting policy of reporting segments: None.
(2) Financial information of reporting segments: None.
(3) If the Company has no reporting segment or the total assets and total liabilities of the reporting segments
cannot be disclosed please explain the reason: None.
(4) Other explanations: None.
7. Other significant transactions and matters that have an impact on investors’ decision-making: None.
8. Others: None.
XIX. Notes to Major Items of Financial Statements of the Parent Company
2992025 Annual Report of Yunnan Baiyao Group Co. Ltd.
1. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (inclusive of 1 year) 1244764619.52 1227895866.19
1 to 2 years 8224921.66 3872165.80
2 to 3 years 1685144.62 79324328.73
Above 3 years 726736143.29 650617364.49
Total 1981410829.09 1961709725.21
(2) Disclosure by provision for bad debts
3002025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Closing balance Opening balance
Category Book balance Provision for bad debt Book balance Provision for bad debt Book value
Provision Book value Provision
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Including:
Account
receivables with
provision for bad 1981410829.09 100.00% 21541975.87 1.09% 1959868853.22 1961709725.21 100.00% 20993861.37 1.07% 1940715863.84
debt on portfolio
basis
Including:
Age-based
98593016.204.98%21541975.8721.85%77051040.3367854948.563.46%20993861.3730.94%46861087.19
portfolio
Related party
1882817812.8995.02%0.00%1882817812.891893854776.6596.54%0.00%1893854776.65
portfolio
Total 1981410829.09 100.00% 21541975.87 1.09% 1959868853.22 1961709725.21 100.00% 20993861.37 1.07% 1940715863.84
3012025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Provision for bad debts made on a portfolio basis:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Provision proportion
Age-based portfolio 98593016.20 21541975.87 21.85%
Related party portfolio 1882817812.89
Total 1981410829.09 21541975.87
Explanation on the basis for determining the portfolio: None.If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□Applicable RNot applicable
(3) Provision for bad debts accrued recovered or reversed during the period: None.
(4) Actual write-off of accounts receivable for the period: None.
(5) Top five customers in closing balance of accounts receivable and contractual assets summarized by
debtor
Unit: RMB
Closing balance
Percentage of of provision for
Closing total of closing bad debts of
Closing balance of
Closing balance of balance of balance of accounts
Customer name accounts receivable
accounts receivable contractual accounts receivable and
and contractual assets
assets receivable and provision for
contractual assets impairment of
contractual assets
Customer A 836658958.62 836658958.62 42.23%
Customer B 609940399.20 609940399.20 30.78%
Customer C 241037751.21 241037751.21 12.16%
Customer D 140065678.83 140065678.83 7.07%
Customer E 24714231.13 24714231.13 1.25%
Total 1852417018.99 1852417018.99 93.49%
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Dividends receivable 79875215.52 10348033.98
Other receivables 6552212996.22 6491515478.29
Total 6632088211.74 6501863512.27
3022025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(1) Interest receivable
1) Category of interest receivable: None.
2) Significant overdue interest: None.
3) Disclosure by provision for bad debts
□Applicable RNot applicable
4) Provision for bad debts accrued recovered or reversed during the period: None.
5) Actual write-off of dividends receivable during this reporting period: None.
(2) Dividends receivable
1) Category of dividends receivable
Unit: RMB
Item (or investee) Closing balance Opening balance
Shanghai Pharmaceuticals Holding Co. Ltd. 79875215.52
Jacobson Pharma Co. Ltd. 6482280.00
JBM (Healthcare) Co. Ltd. 3865753.98
Total 79875215.52 10348033.98
2) Significant dividends receivable aged above 1 year: None.
3) Disclosure by provision for bad debts
□Applicable RNot applicable
4) Provision for bad debts accrued recovered or reversed during the period: None.
5) Actual write-off of dividends receivable during this reporting period: None.
(3) Other receivables
1) Other receivables by nature
Unit: RMB
Book balance at the end of the reporting Book balance at the beginning of the
Nature
period reporting period
Amounts from related parties within the
6686598659.886622159259.62
scope of consolidation
Deposits and guarantees 4639663.00 7874816.28
3032025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Petty cash and others 12713170.32 12856300.67
Total 6703951493.20 6642890376.57
2) Disclosure by aging
Unit: RMB
Aging Book balance at the end of the period Opening balance at the end of the period
Within 1 year (inclusive of 1 year) 2754961521.16 2829671131.53
1 to 2 years 801370373.68 1704148058.85
2 to 3 years 1596345756.81 841712325.56
Above 3 years 1551273841.55 1267358860.63
Total 6703951493.20 6642890376.57
3) Disclosure by provision for bad debts
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Book value Book value
Provision Provision
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Including:
Provision for bad
6703951493.20100.00%151738496.982.26%6552212996.226642890376.57100.00%151374898.282.28%6491515478.29
debts by portfolio
Including:
Age-based
17352833.320.26%5763827.4433.22%11589005.8820731116.950.31%5400228.7426.05%15330888.21
portfolio
Related party
6686598659.8899.74%145974669.542.18%6540623990.346622159259.6299.69%145974669.542.20%6476184590.08
portfolio
Total 6703951493.20 100.00% 151738496.98 2.26% 6552212996.22 6642890376.57 100.00% 151374898.28 2.28% 6491515478.29
Provision for bad debts made on a portfolio basis:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Provision proportion
Related party portfolio 17352833.32 5763827.44 33.22%
Age-based portfolio 6686598659.88 145974669.54 2.18%
Total 6703951493.20 151738496.98
Explanation on the basis for determining the portfolio: None.Provision for bad debts in accordance with the general expected credit loss model:
Unit: RMB
Phase I Phase II Phase III
Provision for bad debts Expected credit losses Lifetime ECL (not credit- Lifetime ECL (credit- Total
for the next 12
impaired) impaired)
months
3042025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Balance as of January 1 2025 151374898.28 151374898.28
Balance as of January 1 2025 in
the current period
Current provision 363598.70 363598.70
Balance as of December 31
151738496.98151738496.98
2025
Division base for each phase and proportion of provision for bad debts: None.Changes in book balance with significant changes in loss reserves in the current period
□Applicable RNot applicable
4) Provision for bad debts accrued recovered or reversed during the period
Provision for bad debts during the period:
Unit: RMB
Change in the current period
Opening
Category
balance Recovery or Transfer or
Closing balance
Provision Other changes
reversal write-off
Age-based
5400228.74363598.705763827.44
portfolio
Related party
145974669.54145974669.54
portfolio
Total 151374898.28 363598.70 151738496.98
Provision for bad debt with important amount of recovery or reversal during the period: None.
5) Actual write-off of other receivables during this reporting period: None.
6) Top five customers in closing balance of other receivables summarized by debtor
Unit: RMB
Percentage of
Closing balance
total of closing
Entity name Nature Closing balance Aging of provision for
balance of other
bad debts
receivables
Current
accounts of
Within 1 year 1 to 2
related parties
Entity A 1877311464.00 years 2 to 3 years above 28.00%
within the
3 years
scope of
consolidation
Current
accounts of
Within 1 year 1 to 2
related parties
Entity B 969585683.33 years 2 to 3 years above 14.46%
within the
3 years
scope of
consolidation
Current
accounts of
related parties Within 1 year 1 to 2
Entity C 896890920.63 13.38%
within the years
scope of
consolidation
Current 1 to 2 years 2 to 3 years
Entity D 823745699.09 12.29%
accounts of above 3 years
3052025 Annual Report of Yunnan Baiyao Group Co. Ltd.
related parties
within the
scope of
consolidation
Current
accounts of
Within 1 year 1 to 2
related parties
Entity E 480074188.78 years 2 to 3 years above 7.16%
within the
3 years
scope of
consolidation
Total 5047607955.83 75.29%
7) Reported as other receivables due to centralized fund management: None.
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item
Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investments
in 2603195450.92 244474941.95 2358720508.97 2593195450.92 244474941.95 2348720508.97
subsidiaries
Investments
in associates
13247345923.7813247345923.7812578620530.7112578620530.71
and joint
ventures
Total 15850541374.70 244474941.95 15606066432.75 15171815981.63 244474941.95 14927341039.68
(1) Investments in subsidiaries
3062025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Increase and decrease in the current period Closing
Opening Closing balance
Closing balance balance of
Investee balance (book of impairment Provision Additional Decreased (book value) impairment
value) provision for Others investment investment
impairment provision
Yunnan
Pharmaceutical 765533647.30 765533647.30
Co. Ltd.Yunnan Baiyao
Group Health
168297661.03168297661.03
Products Co.Ltd.Yunnan Baiyao
Group TCM
130894518.14130894518.14
Resources Co.Ltd.Yunnan Baiyao
Group Wuxi
39627253.2539627253.25
Pharmaceutical
Co. Ltd.Yunnan Baiyao
Group Dali
16489200.0016489200.00
Pharmaceutical
Co. Ltd.Yunnan Baiyao
Group (Hainan) 457198438.74 457198438.74
Co. Ltd.Yunnan Baiyao
Group Shanghai 11350000.00 11350000.00
Co. Ltd.Yunnan Digital-
Intelligent TCM
Materials 56059850.00 56059850.00
Development Co.Ltd.Yunnan Baiyao
3701960.0020000000.003701960.0020000000.00
Teayield Co. Ltd.
3072025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Shanghai Yunzhen
Medical
200572858.37200572858.37
Technology Co.Ltd.Yunnan Baiyao
Holding
193992837.67193992837.67
Investment Co.Ltd.Yunnan Institute
101075329.94101075329.94
of Materia Medica
Yunnan Baiyao
Group Medical
85700000.0085700000.00
Technology Hefei
Co. Ltd.YNBY
International 98226954.53 224474941.95 98226954.53 224474941.95
Limited
Yunhe
Pharmaceutical
20000000.0020000000.00
(Tianjin) Co.Ltd.Yunnan Baiyao
Group Digital-
Intelligent 10000000.00 10000000.00
Technology Co.Ltd.Total 2348720508.97 244474941.95 10000000.00 0.00 0.00 0.00 2358720508.97 244474941.95
3082025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(2) Investments in associates and joint ventures
Unit: RMB
Increase and decrease in the current period
Closing Profit and loss
Adjustment of
Opening balance balance of on investments Cash dividends or Closing balance Closing balance of
Investee Additional Decreased other Change in other Provision for
(book value) impairment recognized profit declared to Others (book value) impairment provision
investment investment comprehensive equities impairment
provision under the equity be issued
income
method
I. Joint ventures
II. Associates
Shanghai
Pharmaceuticals 12062250480.82 981515716.67 250018.48 -42041501.39 272906986.36 12729067728.22
Holding Co. Ltd.Yunnan TCM Big
Health Innovation
Equity Investment
499889683.05-66174.01499823509.04
Fund Partnership
(Limited
Partnership)
Yunnan Tianzheng
16480366.841974319.6818454686.52
Testing Co. Ltd.Subtotal 12578620530.71 - - - 983423862.34 250018.48 -42041501.39 272906986.36 - - 13247345923.78
Total 12578620530.71 - - - 983423862.34 250018.48 -42041501.39 272906986.36 - - 13247345923.78
3092025 Annual Report of Yunnan Baiyao Group Co. Ltd.
The recoverable amount is determined based on fair value less the disposal expense.□Applicable RNot applicable
The recoverable amount is determined based on the present value of estimated future cash flows.□Applicable RNot applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous
years or external information: None.Reasons for significant differences between the information used in the Company’s impairment tests in previous years and
the actual situation in the corresponding year: None.
(3) Other explanations: None.
4. Operating revenue and operating cost
3102025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Unit: RMB
Amount for the current period Amount for the previous period
Item
Income Cost Income Cost
Main business 8483895232.32 3345012597.22 7594049549.16 3288033537.43
Other business 1294941132.38 119514201.07 1273785043.21 102035979.67
Total 9778836364.70 3464526798.29 8867834592.37 3390069517.10
Breakdown information of operating revenue and operating cost:
Unit: RMB
Drug sales TCM resources Others Total
Contract classification
Operating revenue Operating cost Operating revenue Operating cost Operating revenue Operating cost Operating revenue Operating cost
Business type 8283954138.31 3182255343.90 199688874.41 162565334.16 1295193351.98 119706120.23 9778836364.70 3464526798.29
Including:
Industry sales income 8283954138.31 3182255343.90 8283954138.31 3182255343.90
Commercial sales income 199688874.41 162565334.16 199688874.41 162565334.16
Technical services income 252219.60 191919.16 252219.60 191919.16
Others 1294941132.38 119514201.07 1294941132.38 119514201.07
By operating areas 8283954138.31 3182255343.90 199688874.41 162565334.16 1295193351.98 119706120.23 9778836364.70 3464526798.29
Including:
In Yunnan province 964856008.56 314091262.40 199688874.41 162565334.16 1295193351.98 119706120.23 2459738234.95 596362716.79
Outside Yunnan province
7319098129.752868164081.507319098129.752868164081.50
(excluding overseas)
Overseas
3112025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Information about performance obligations: None.Other explanations: None.Information related to the transaction price allocated to the remaining performance obligations:
At the end of this reporting period the Company recorded an amount of revenue of RMB 0.00 from its performance of obligations set
out in the signed contracts to be fulfilled or fully fulfilled.Significant contractual changes or significant transaction price adjustments: None.Other explanations: None.
5. Investment income
Unit: RMB
Amount for the previous
Item Amount for the current period
period
Long-term equity investment incomes accounted by the cost
1800000000.001900000000.00
method
Long-term equity investment incomes accounted by the equity
983423862.34772732477.51
method
Investment income on financial assets held for trading during
6671289.70
holding period
Investment income from disposal of financial assets held for
32705136.82
trading
Investment income from other non-current financial assets
20474449.39
during the holding period
Profits or losses from disposal of other non-current financial
29102029.45
assets
Others -226891279.70 -3991808.68
Total 2618339748.91 2695886407.92
6. Others: None.
XX. Supplementary Information
1. Breakdown of non-recurring profits and losses for the current period
?Applicable □Not applicable
Unit: RMB
Item Amount Description
Profits and losses from disposal of non-current assets 7198923.23
Government subsidies included in the current profits and losses (excluding the government
subsidies closely related to regular businesses of the Company in line with national
96333463.99
policies and received by a determined standard with a continuous impact on the
Company’s profits and losses)
Profits and losses from changes in fair value of financial assets and liabilities held for
trading by non-financial enterprises and from disposal of such financial assets and
189486904.27
liabilities except for effective hedging operations related to regular businesses of the
Company
3122025 Annual Report of Yunnan Baiyao Group Co. Ltd.
Profits and losses from entrusted investment or asset management 19212454.11
Non-operating revenue and expenses other than the above 4570455.96
Other profits and losses satisfying the definition of non-recurring profits and losses 17162242.56
Less: Amount affected by the income tax 44955132.44
Amount affected by minority interests (after tax) 90875.93
Total 288918435.75 --
Other profits and losses satisfying the definition of non-recurring profits and losses:
?Applicable □Not applicable
Other profit and loss items that meet the definition of non-recurring profit and loss mainly include other non-recurring profit and
loss such as interest on time deposits and return of individual income tax fees.Note for the definition of non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profits and losses
□Applicable RNot applicable
2. Return on equity and earnings per share
Earnings per share
Profits during the reporting Weighted average return on
period equity Basic earnings per share Diluted earnings per share
(RMB/share) (RMB/share)
Net profits attributable to
ordinary shareholders of 13.02% 2.89 2.89
the Company
Net profits attributable to
ordinary shareholders of
the Company after
12.29%2.732.73
deducting non-recurring
profits and
losses
3. Differences in Accounting Data under Chinese Accounting Standards (CAS) and Overseas Accounting
Standards
(1) Differences in the net profits and net assets in financial statements disclosed respectively under
International Financial Reporting Standards (IFRS) and CAS
□Applicable RNot applicable
(2) Differences in the net profits and net assets in financial statements disclosed respectively under overseas
accounting standards and CAS
□Applicable RNot applicable
3132025 Annual Report of Yunnan Baiyao Group Co. Ltd.
(3) Explanations of the causes to differences in accounting data under CAS and overseas accounting
standards; if adjustment is made for data audited by an overseas audit institution the name of the
institution shall be provided
4. Others: None.
Yunnan Baiyao Group Co. Ltd.Board of Directors
March 31 2026
314
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