2024
Huadong Medicine Co. Ltd.Environmental Social and Governance (ESG) ReportContents
04 About This Report
06 Message from the Chairman
08 About Us
12 2024 Milestones
14 2024 Major Honors
18 Sustainable Development
Governance01 Environmen0tal2 Product 03 Employees 04 Society 05
Forging Ahead with Our Green Development and Excellence in Gathering Talent and Boundless Love and
Original Aspiration Ecological Harmony Innovation Quality as Wisdom to Build a Warmth for Society
Safeguard Brighter Future Together
106 Looking Ahead
108 Annexes Corporate Governance 26 Environmental Management 36 R&D and Innovation 58 Employee Recruitment 86 Contributing to the Benefits of 98
Healthcare
108 Performance Data Robust Operation 30 Actions against Climate Change 41 Quality and Safety 66 Talent Development 88 Promoting Public Health 100
115 Shenzhen Stock Exchange Business Ethics 31 Emissions Management 49 Responsible Services Employee Care Guidelines No. 17 for Self- 76 91 Joint Community Engagement 102
Regulation of Listed Companies - Green Operations 53 Supply Chain Management 80 Health and Safety 93 Deepening Industry 104
Sustainability Reporting (Trial) Collaboration
116 GRI Standards Index
121 Feedback Form2024 | Environmental Social and Governance (ESG) Report About This Report
About This Report
Introduction Data Sources and Reliability Statement
This is the 2024 Environmental Social and Governance (ESG) Report issued by Huadong Medicine Co. Ltd. This report All information and data referenced in this report are sourced exclusively from official documents statistical reports and
is prepared to elaborate the Company's practices and performance in sustainable development social responsibility financial statements of Huadong Medicine as well as information related to sustainable development practices gathered
fulfillment and other aspects to respond to the expectations and demands of our stakeholders. This report intends to consolidated and audited across various functional departments and business units within the Company. The Board of
disclose the Company's key work and achievements in respect of environmental protection social responsibility fulfillment Directors of the Company hereby undertakes that this report contains no false records or misleading statements and takes
and corporate governance among others in an objective normative transparent and all-inclusive manner. responsibility for the truthfulness accuracy and completeness of its contents. In the meantime unless otherwise specified
all amounts in this report are expressed in RMB.Reporting Period
This report covers the period from January 1 2024 to December 31 2024. To improve the comparability and completeness
some sections of this report may extend beyond the reporting period. Preparation Basis
Reporting Scope This report is prepared in accordance with the Shenzhen Stock Exchange Guidelines for Self-discipline Regulation of Listed Companies No. 17 – Sustainable Development Report (Trial) . Meanwhile the report makes extensive reference to the
Sustainability Reporting Standards (GRI Standards) and also refers to and responds to the Sustainable Development Goals
The contents of this report relate to Huadong Medicine Co. Ltd. and its subsidiaries. Unless otherwise specified the scope of (SDGs) and the Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-ESG 5.0) issued by the
this report is consistent with that of the Company's Annual Report. China Social Responsibility 100 Forum (ESG Expert Committee) based on the results of the Company's materiality analysis.Appellation Description
To enhance clarity of this report the references "Huadong Medicine" "the Company" "We" or "the Joint-Stock Company" are Access
used instead of consistently using the formal "Huadong Medicine Co. Ltd.".This report includes both Chinese and English versions. It is available for download at the website of Shenzhen Stock
Shortened Form Full Name Exchange (http:// www.szse.cn) or the Company's official website (https://www.eastchinapharm.com/) where you can find
Huadong Medicine/the Company/We/ the Joint-Stock Company Huadong Medicine Co. Ltd. further insights about the Company.Zhongmei Huadong Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd.Jiangdong Company Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co. Ltd.Jiangsu Joyang Jiangsu Joyang Laboratories Co. Ltd. Feedback
Xi'an Bohua Huadong Medicine (Xi'an) Bohua Pharmaceutical Co. Ltd.Jiuzhou Pharmaceutical/ Shaanxi Jiuzhou Shaanxi Jiuzhou Pharmaceutical Co. Ltd. Email: ir@eastchinapharm.com
Doer Biologics Zhejiang Doer Biologics Co. Ltd.hz000963@126.com
Meihua Hi-Tech Anhui Meihua Hi-Tech Pharmaceutical Co. Ltd.Wuhu Huaren Wuhu Huaren Science and Technology Co. Ltd. Tel.: 0571-89903388 (Switchboard)
Yantai Huarui Yantai Huarui Pharmaceutical Co. Ltd.Magic Health Hubei Magic Health Technology Co. Ltd. 0571-89903300 (Investor Hotline)
Nanjing Nongda Animal Pharmaceutical Jiangsu Nanjing Nongda Animal Pharmaceutical Co. Ltd.Huida Biotech Zhejiang Huida Biotech Co. Ltd.Hibe Hibe Technology Co. Ltd.Peiyuantang Zhejiang Peiyuantang Traditional Chinese Medicine Pieces Co. Ltd.Bailing Health Bailing Health Science (Hangzhou) Co. Ltd.Sinclair Sinclair (Shanghai) Medical Treatment Technology Co. Ltd.Supply Chain Management (Wenzhou) Company Huadong Medicine Supply Chain Management (Wenzhou) Co. Ltd.Imunopharm Imunopharm Technology Co. Ltd.Qyuns Therapeutics Qyuns Therapeutics Co. Ltd.Traditional Chinese Medicine branch Huadong Pharmaceutical Co. LTD. Traditional Chinese Medicine Branch
04 052024 | Environmental Social and Governance (ESG) Report Message from the Chairman
Message from the Chairman
Huadong Medicine maintained steady business growth assessments throughout their lifecycle to strengthen our
and effectively enhanced its core competitiveness and supply chain's risk management and resilience ensuring a
industry influence. We made solid progress in innovation and secure and reliable medical product assurance system for
research and development (R&D) with a focus on key areas patients and fostering the sustainable development of the
such as endocrinology oncology and autoimmunity and industry ecosystem.successfully advanced the development and market launch of
multiple innovative drugs. With the launch of products such as With an inclusive and open mindset we continuously
Mirvetuximab Soravtansine Injection Elahere and Rilonacept for optimized our human resources management system and
Injection Arcalyst we further consolidate our market position and built a diversified talent development platform providing
achieved dual momentum from both innovation and business employees with broad career development opportunities. We
operations. In addition we accelerated the launch of aesthetic remained committed to safeguarding employees' rights and
medicine products and continued to tap into the growth potential interests dedicated to protecting their health and safety and
of the overseas aesthetic medicine market. consistently delivering humanistic care. By working hand in
hand with our employees we united efforts to steadily advance
Inspired by dedication and perseverance we laid a solid the Company's development.foundation for the high-quality development of the Company.We integrated social responsibility and the concept of With the pursuit of a benevolent heart and skillful hands
sustainable development into the core of our strategy and we upheld a patient-centered approach and continuously
continued to advance the construction of the ESG system fulfilling improved the accessibility and affordability of medications.our corporate social responsibility through concrete actions. By accelerating the market launch of innovative drugs and
We have established a three-tier ESG governance structure to supporting patient assistance programs we enabled more
ensure the top-down implementation of sustainability initiatives patients to access effective treatment and support. In addition
Lv Liang and promote sound interactions with all stakeholders. We have with a strong sense of responsibility and mission we actively continuously optimized our corporate governance structure participated in community public welfare activities promoted
improved the operational mechanisms of the Board of Directors public health education contributed to rural revitalization and
optimized our compliance management system and actively continuously created value for society.Chairman of Huadong fostered a corporate culture featuring integrity and transparency
Medicine Co. Ltd. thereby ensuring that the Company maintains efficient operations When the tide is calm and the wind is fair it is the right time to
and steady development in a complex and ever-changing market set sail and forge ahead. Looking ahead Huadong Medicine
environment. will fully implement the concept of sustainable development
actively fulfill its social responsibilities and promote the
With unwavering determination we steadfastly practiced Company's high-quality development. We will continue to
the concept of green development and built a sustainable increase R&D investment accelerate the R&D and market
development model featuring harmonious coexistence launch of more innovative drugs and further improve the
between the Company and nature. We optimized our energy accessibility and affordability of our products. Moreover we will
structure and promoted the use of clean energy actively advance green transformation and promote the harmonious
responding to the national "dual carbon" strategy. Moreover coexistence of the Company society and the environment.In 2024 Huadong Medicine Co. Ltd. continued to advance steadily amid the ongoing we attached great importance to biodiversity conservation With firm determination and concrete actions Huadong
to ensure that our production and operations coexist Medicine will continue to forge ahead on the path of high-transformation of the pharmaceutical industry constantly exploring and innovating. We remain harmoniously with the natural ecosystem. We have established quality development collaborating with like-minded partners
committed to our mission of "contributing to the well-being of the public" striving to become a standardized and efficient system for pollutant discharge to fulfill our corporate social responsibility and achieve
a global leader in the pharmaceutical industry. Guided by our core values of "benefit mankind management and resource utilization cultivating high-quality mutually beneficial growth.honesty persistence and pragmatism" and adhering to our corporate philosophy of "Scientific development momentum through green operation.Research-based and Patient Centered" we are firmly oriented toward our vision of "becoming With a craftsman's spirit of striving for excellence we prioritize
a globally renowned pharmaceutical powerhouse fueled by research and innovation." We are product quality and safety and enhance product quality
dedicated to providing high-quality medical solutions for patients worldwide and promoting through rigorous R&D processes and quality management
the advancement and development of the pharmaceutical industry. systems. Meanwhile we conducted comprehensive supplier
06 072024 | Environmental Social and Governance (ESG) Report About Us
About Us Corporate Culture
Company Profile Core Mission Values
Founded in 1993 and headquartered in Hangzhou Zhejiang Province Huadong Medicine Co. Ltd. (stock code: 000963) was listed
on Shenzhen Stock Exchange in December 1999. With its businesses covering the entire pharmaceutical industry chain thanks to Benefit
over 30 years of vigorous development the Company has now fostered four major business segments including pharmaceutical Contribute to Mankind
industry pharmaceutical business aesthetic medicine and industrial microbiology and has evolved into a large comprehensive listed the Well-being Honesty
pharmaceutical enterprise specialized in pharmaceutical R&D production and marketing. of the Public Persistence
To Become an Pragmatism
The Company has repeatedly been recognized with honors such as "Forbes Asia-Pacific's 50 Best Listed Companies" "Top 100 Most International Scientific
Valuable Main Board Listed Companies in China" and "Golden Bull Top 100 Listed Companies" and the Golden Bull Award (GBA) Top Pharmaceutical Research-based
100 Listed Companies. It has also been listed in the Fortune China 500 ranking selected by Fortune China for 14 consecutive years. Brand Driven by and Patient
Looking ahead the Company will continue to drive progress through scientific research and innovation promote the advancement of Scientific Research Centered
the pharmaceutical industry and provide high-quality healthcare products and services to patients worldwide. and Innovation
Vision Corporate
Business Layout Philosophy
Pharmaceutical Pharmaceutical Aesthetic Industrial
Industry Business Medicine Microbiology
Specialized in the R&D production and marketing of specialized medicines The Company's pharmaceutical businesses focus on three In terms of the aesthetic medicine segment the Company embraces The Company's industrial microbiology segment focuses on two
chronic therapeutics and specialized pharmaceuticals for years the Company major segments including medicines medical devices a strategy of "global operational layout and dual-cycle operation strategic directions: technological innovation in synthetic biology
has established a comprehensive and internationally oriented pharmaceutical and herbal medicines and ginseng & antler. It enhances development." With an international outlook and forward-looking and the upgrading of the biopharmaceutical industry. Its efforts
manufacturing system with a core product pipeline centered around areas its core competitiveness through innovative businesses planning it has crafted a comprehensive and distinct product are centered around four core business segments including xRNA
such as chronic kidney disease (CKD) immunology oncology endocrinology such as pharmaceutical logistics featuring "cold chain portfolio ranking at the forefront of the industry in both quantity raw materials specialized active pharmaceutical ingredients
the digestive system and the cardiovascular system. Several first- line clinical vaccines and specialty drugs" as well as proprietary and scope. With over 20 products already launched in China (APIs) & intermediates wellness & biomaterials and animal
medicines of the Company hold a strong market position domestically and pharmaceutical e-commerce brands. The Company and abroad and more than ten globally innovative products in healthcare. With a legacy of over four decades the Company has
several have obtained international registration and certification. Meanwhile continues to lead in both business scale and market share development the Company integrates diverse treatment methods established a robust R&D cluster centered around institutions
it strategically focuses on the R&D of innovative drugs in three core therapeutic within Zhejiang Province and has ranked among the top such as "non-invasive + minimally invasive" "facial + body" such as the Zhongmei Huadong Industrial Microbiology Research
fields of oncology endocrinology and autoimmunity through a blend of ten pharmaceutical wholesalers in China for consecutive "product + technology" and "injection + energy source equipment." and Development Institute Huadong Synthetic Biology Industrial
independent development external introduction and project cooperation. This years. It operates three proprietary pharmaceutical It has achieved full coverage of three major categories including Technology Research Institute as well as key entities such as
concerted effort has established a distinct innovative drug product pipeline logistics centers located in northern Zhejiang (Hangzhou) regenerative hyaluronic acid and botulinum toxin in injectable Huida Biotech Hizyme Biotech Perfect mRNA and Hibe. The
covering the full R&D cycle and a well-structured product portfolio. In addition central Zhejiang (Jinhua) and southern Zhejiang products establishing a differentiated pipeline. Its goal is to provide Company has full-chain microbial engineering technologies
the Company conducts R&D cooperation with various international innovators (Wenzhou) along with 13 logistics warehouses with a more professional safe efficient and comprehensive solution and a R&D and production system that spans the full lifecycle of
and has forged strategic product partnerships for the China market with multiple a total storage area exceeding 190000 square meters. for beauty seekers worldwide striving to become a premier global microbial pharmaceuticals supported by an interdisciplinary R&D
multinational pharmaceutical enterprises. In the pharmaceutical segment the Company enjoys provider of comprehensive medical aesthetic solutions. The platform and an industrialization resource network. In terms of
As of April 2025 the Company had a total of 133 pharmaceutical projects under comprehensive advantages across full product lines and Company's wholly-owned subsidiary—Sinclair is a global aesthetic industrial layout the Company operates seven industrialization
development including 94 innovative drug and biosimilar projects. In the all channels with synergy between in-hospital and out- medicine operation platform headquartered in UK that has several bases including Hangzhou Xiangfuqiao Base Qiantang New
oncology field the Company is committed to building a world-leading R&D of-hospital operations as well as coordinated distribution R&D centers and production bases worldwide. It markets and sells Area Base Jiangsu Joyang Magic Health Meihua Hi-Tech Wuhu
platform for innovative oncology drugs and has established a product pipeline and agency services. In the medical device segment it injectable long-acting microspheres hyaluronic acid and facial Huaren and Nanjing Nongda Animal Pharmaceutical. With the
covering targeted small-molecule chemical drugs antibody-drug conjugates leverages large-scale distribution to expand specialized thread lifting products. It also expands its presence in the global largest fermentation monomer workshop in Zhejiang Province and
(ADCs) antibodies and proteolysis-targeting chimeras (PROTACs) with more agency services. In the herbal medicines and ginseng market for energy-based aesthetic medical devices through its cutting-edge intelligent production systems in the industry the
than 30 innovative oncology drugs. In the endocrinology field the Company has & antler segment it covers the entire industry chain wholly-owned subsidiaries High Tech and Viora. Additionally Company has achieved full-process coverage from strain screening
developed a comprehensive and distinct GLP-1 product pipeline that integrates including base cultivation decoction piece processing the Company's aesthetic medicine segment includes Sinclair and process development to large-scale production forming a
long-acting and multi-target global innovative drugs with biosimilars spanning automated decoction and sales of proprietary functional (Shanghai) a wholly-owned subsidiary serving the Chinese market complete manufacturing ecosystem encompassing technology
oral and injectable dosage forms. In the autoimmune field the Company is products. Driven by service innovation the Company as well as R2 in the United States and Kylane in Switzerland two R&D pilot testing scale-up engineering transformation and
one of China's most comprehensive pharmaceutical companies in terms of has established new models of specialized services for overseas technical development joint ventures. quality control. It continues to maintain a leading position in
autoimmune disease coverage with over 20 biologics and small-molecule suppliers and hospital customers by integrating supplier fermentation scale and process capabilities within the industry.innovative products under development. At the same time the Company has collaboration CSO services SPD systems and industry-
established a specialized R&B platform for topical formulations and is steadily academia-research projects. These efforts enable
advancing the R&D and innovation in topical and complex formulations. precise alignment with the needs of upstream and
Currently it owns ten topical formulation products either under development or downstream customers creating a golden name card of a
progressing toward the market. "comprehensive pharmaceutical services provider."
08 092024 | Environmental Social and Governance (ESG) Report About Us
Performance in 2024
Economic Governance Social
Held a total of R&D investment (Excluding Number of R&D Proportion of master's Number of newly
Operating revenue Equity Investments) personnel and doctoral degree granted patents
3 holders exceeding 419.06 RMB 100 million 26.78 1864General Meetings of Shareholders
RMB 100 million 36.21 90%
Year-on-year growth rate of operating Disclosed a total of
Cumulative number 100 100 Over RMB of granted patents % %
revenue
3.16 179 825 of the Company's in-line coverage in testing 5.36 million% product lines had passed GMP of self-produced documents certification products on training investment
Cumulative employee training Public welfare investment Total hours of public/
Net profit attributable to shareholders of Number of participants in legal training participation volunteer activities
the listed company
35.1213636100
%1.05
RMB 100 million 71592 training coverage RMB 100 million 436 hours
person-times
Year-on-year growth rate of net profit Number of participants in training on anti-
attributable to shareholders of the A total of 46 approved core products and 16 strategic collaboration products of the monopoly and anti-unfair competition
listed company Company have been included in the national medical insurance
23.728195%
Net profit attributable to shareholders Environmental
of the parent company after deducting Signed integrity commitment letters
non-recurring gains and losses
33.52 230 8 Number of employees receiving RMB 100 million environmental training
subsidiaries have obtained ISO 14001 Environmental
Management System Certification 2365
Year-on-year growth rate of net profit Number of concluded lawsuits
attributable to shareholders of the involving corruption
parent company after deducting non-
recurring gains and losses 0 Purchased 15000 Green Built a 3.32 MWp PV plant Electricity Certificates (GECs) generating 3284295 kWh in 202422.48% equivalent to 15000 MWh of electricity
10 112024 | Environmental Social and Governance (ESG) Report 2024 Milestones
2024 Milestones
2024.052024.042024.032024.01
The NDA for Huadong The registration application The BCMA CAR-T co- The New Drug
Medicine's Category for the Class III medical device developed product Application (NDA) for
1 innovative drug MaiLi Extreme a cross-linked Zevor-cel secured Relmapirazin injection
Meftinib Tablets was sodium hyaluronate gel with regulatory approval for was accepted by the
accepted by the NMPA. lidocaine for injection was the market. NMPA.accepted (and subsequently
secured regulatory approval for
the market in January 2025).
2024.072024.072024.072024.072024.082024.082024.092024.09
The new aesthetic Huadong Medicine obtained The Company completed The Company The Company entered The Company The Company secured the The Company's
medicine filler KIO015 the exclusive license for the full acquisition entered into a R&D into a collaboration obtained the licenses commercialization rights for Intense Pulsed Light
was submitted for EU CE Auzone Biotech's TTYP01 of Guizhou Hengba co-development and with Imunopharm and for IMBiologics' Huisheng Biopharm's first- Radiofrequency Therapy
certification. Tablets (Edaravone tablets) Pharmaceutical Co. Ltd. marketing agreement obtained the exclusive autoimmunity innovative in-class innovative drug Device V20 (Renotion)
in the Greater China region. with Qyuns Therapeutics commercialization products IMB-101 and Ganagliflozin Proline Tablets in was approved for the
for QX005N injection. rights for CD19 CAR-T IMB-102 in 37 Asian Chinese mainland. market by the NMPA.IM19 injection in countries including China.Chinese mainland.
2024.122024.122024.122024.122024.112024.112024.11
The NDA for Claruvis The Company co- The autoimmunity The supplemental The Company's NDA The Company's ADC Ustekinumab
botulinum toxin developed the siRNA innovative drug application for for the exclusive innovative drug Elahere Injection Sailexin
product YY001 for candidate drug Arcalyst for the Ustekinumab Injection commercial product and autoimmunity was approved for
aesthetic medicine SNK-2726 targeting treatment of recurrent Sailexin for the IM19 CAR-T Cell innovative drug Arcalyst the market for the
indications was angiotensinogen pericarditis was treatment of pediatric Injection was accepted were approved for the first time in China.accepted. with SynerK for approved for the plaque psoriasis was by the NMPA. market in China on the
the treatment of market by the NMPA. accepted. same day.hypertension.
12 132024 | Environmental Social and Governance (ESG) Report 2024 Major Honors
2024 Major Honors
"Top 300 Most Popular Listed Companies" "Best Investor Relations Award" in the Top 500 Chinese Private Enterprises in 2024 Top 100 Main Board Chinese Listed
in the 2023 Hithink Royal Flush Annual 2023 Hithink Royal Flush Annual Listed Top 500 Chinese Private Manufacturing Companies by Value at the 18th Value Selection for Listed Companies Companies Ranking Enterprises in 2024 Selection of Chinese Listed Companies
2024.1 Hithink Royal Flush 2024.1 Hithink Royal Flush 2024.10 All-China Federation of 2024.10 Securities Times
Industry and Commerce (ACFIC)
"Outstanding Secretary of the Board Ranked among the Top 10 for 2024 Outstanding Practice Case of Listed
of Directors for Investor Relations consecutive years in the 2023 Top 100 Companies' Board of Directors Four-Star Headquarters Enterprise
Management of Chinese Listed Companies" Chinese Chemical and Pharmaceutical
at the 15th Tianma Awards Enterprises Ranking 2024.11 Hangzhou Municipal
Ranked Top 10 in the 2023 Innovation 2024.11 China Association for Public Development and Reform CommissionCompanies (CAPCO)
2024.6 Securities Times Capability Ranking of Chinese
BigPharma Enterprises
2024.6 Menet
2023 Outstanding Practice Case of Listed 2024 Best Practice Case of Listed
Top 100 Chinese Pharmaceutical Companies Companies' Annual Report Performance Companies' Board Office
by Pharmaceuticals R&D Spending in 2024 Briefing
Top 100 Chinese Pharmaceutical Companies 2024.12 China Association for Public 2024.12 China Association for
rd Public Companies (CAPCO)
by Chemicals R&D Spending in 2024 Fortune China Top500 (373 ) Companies (CAPCO)
Top 50 Chinese Pharmaceutical Companies
by Biologics R&D Spending in 2024 2024.7 Fortune China
The Fourth Golden Cane Awards:
2024.7 yaozh.com Top10 Innovative Pharmaceutical New Fortune Selection in 2024—
Enterprises in 2024 "Best Listed Company"
Top 100 Chinese Innovative 2024.11 China Times 2025.1 New Fortune
Pharmaceutical Enterprises in 2024
The Fifth p5w.net Investor Relations Golden Awards 2024.9 Healthcare Executive
Outstanding Investor Relations Company
Outstanding Investor Relations Chairman
Outstanding Investor Relations Team
Outstanding Institutional Communication Award Top 20 Competitive Chinese Listed
Exemplary Investor Relations Award Pharmaceutical Companies in 2024
2024.9 Healthcare Executive
2024.9 p5w.net
14 152024 | Environmental Social and Governance (ESG) Report Major Honors 2024
Awards and Honors in 2024 ESG Ratings
MSCI ESG Rating
Hangzhou
Municipal Civil Top 20 in the 2024 ESG Strategic Philanthropy Influence Ranking of
Affairs Bureau Hangzhou Listed Companies
2024.9 A
Three Associations
p5w.net Outstanding ESG Value 2023 Excellent Case of of Zhejiang
Communication Award Province Corporate Social Responsibility 2024.9
2024.11 Report in Zhejiang Province Wind ESG Rating SZSE CNI Index ESG
China Association for 2024 Outstanding A AA
Public Companies Practice Case of Listed New Fortune New Fortune "Best ESG
(CAPCO) Companies' Sustainable 2025.1 Practice" in 2024
2024.11 Development
China Securities Index (CSI)
A
SinoSec Index
A
The above statistics as of April 2025
16 17Sustainable
Development
Huadong Medicine regards sustainable development as the
cornerstone of its long-term growth and is committed to driving
long-term value creation through excellence in ESG governance.We conduct in-depth double materiality analysis to ensure that our
ESG development aligns with the Company's actual circumstances.Simultaneously we actively engage with stakeholders to build
transparent and trusted partnerships jointly advancing toward a
green and sustainable future.ESG Governance Double Materiality Analysis Stakeholders Engagement
Contributing to the UN SDGs:2024 | Environmental Social and Governance (ESG) Report Sustainable Development
ESG Governance Double Materiality Analysis
Huadong Medicine has embraced the concept of sustainable development seamlessly integrating the core principles of ESG into its Huadong Medicine recognizes the importance of assessing and identifying key factors that impact the Company's long-term
corporate strategy and day-to-day operations. Guided by a scientific approach to social responsibility the Company is committed development in enhancing financial performance strengthening social influence and improving corporate competitiveness. Through
to becoming a role model for fulfilling corporate social responsibility and drive sustained development in the pharmaceutical a systematic evaluation mechanism we deeply integrate sustainable development goals into the Company's long-term planning
industry's social responsibility initiatives. We have established a three-tier ESG governance structure comprising "Board of Directors- leveraging outcomes of dual materiality analysis to optimize resource allocation and drive sustainable development.Sustainability (ESG) Committee-Sustainability (ESG) Committee Working Group" to ensure rigorous implementation of sustainability
initiatives and to drive the Company's sound and steady operations. We conducted an in-depth analysis of the Company's business context and development realities benchmarking against the
disclosure requirements of the Shenzhen Stock Exchange and capital market rating indicators to identify and establish a material
To advance the achievement of sustainable development goals we have integrated ESG performance into the key performance topics list.indicators (KPIs) and pay of executive directors. The evaluations focus on the effectiveness of supervision in occupational safety
environmental incident management and product quality and safety thereby enhancing management's motivation and engagement
in ESG-related issues.Gain an in-depth understanding of the Company's operations and business
Understanding
Dynamics Assess potential impacts from external environments on the Company
Supervisory and Business
Level O versees the execution and implementation of ESG policies Background of Identify key stakeholders
E nsures compliance of ESG strategies principles and policies with national Company
policies laws and regulations
Board of
Directors
Decision F ormulates the Company's ESG strategies principles and policies and ensures
making the continuous implementation of ESG policies approved by the Board of Based on external regulations international standards and other stakeholder
Level Directors concerns combined with the actual development situation of Huadong Medicine
C onducts regular reviews of ESG goal fulfillment identify other key issues
Sustainability (ESG) I dentifies and addresses ESG-related risks Developing an
Committee Oversees compliance of ESG policies with national policies laws and regulations Issue List Analyze the potential impacts and opportunities issues may bring to the Company
forming an issue list
Executive
Level Provides essential insights for decision-making by the Sustainability (ESG)
Committee
Sustainability P repares for the smooth implementation of ESG policies
(ESG) Committee
Working E valuate the materiality based on industry requirements key issues of concern to
Group
The Three-Tier ESG Governance Structure peers and the Company's actual situationAssessing the
Materiality of Combine the results of identifying material issues integrating assessments of impact
Issues materiality and financial materiality
20 212024 | Environmental Social and Governance (ESG) Report Sustainable Development
Stakeholders Engagement
Building on this we have assessed the short- medium- and long-term impacts of each topic on the Company's business model Huadong Medicine is committed to establishing a regular and multi-channel stakeholder engagement mechanism. With an open
business operations financial status and cash flow as well as the extent to which the Company's performance on these topics affects and transparent approach we actively listen to and address the expectations and demands of all stakeholders. Through ongoing
the economy society and the environment. This systematic assessment determined the materiality of each topic. In total we have communications and exchanges we ensure timely feedback on stakeholder's thereby fostering the mutual trust and collaboration
identified 18 sustainable development topics among which the "Quality and Safety" holds financial materiality for the Company's between the Company and stakeholders and advancing the Company's sustainable development.operations and development.For the financially material topic we have established a systematic management framework in accordance with the Shenzhen Stock
Exchange's guidelines focusing on four key areas including governance strategy risk and opportunity management and metrics and
targets. A phased target-tracking mechanism was developed to effectively manage and control risks and continuously enhance the Stakeholder Topic Communication and Response
Company's management on sustainable development. For detailed information on the management of this financially material topic
please refer to Section "Quality and Safety" of this Report.Supply chain management platform
Going forward the Company will refine its dynamic topic management mechanism. In line with its business development the Responsible supply chain managementSupplier Procurement integrity agreements
Company will continuously track industry dynamics regulatory trends and stakeholder concerns to fully enhance the management Business ethics Supplier audits
effectiveness on key material topics. Concurrently we will strengthen the management of financially material topics by regularly
applying the materiality matrix to identify and assess topics. We will also provide comprehensive disclosures of management systems
for material topics in periodic reports thereby establishing a closed-loop management process of "monitoring–decision-making–
disclosure." Product quality and safety Customer satisfaction surveys
Customer Customer rights protection Customer visits and audits
Information security and privacy protection Customer privacy protection
Category Number Topic
1 Environmental management
2 Energy management Shareholders' meeting
Corporate governance Investor reception days
Environmental 3 Actions against climate change Business ethics Roadshows and reverse roadshows
Shareholder/Investor
Risk management Investment strategy briefings
4 Water resource utilization
R&D and innovation Performance briefings
5 Emission management Financial reports and periodic disclosures
6 Quality and safety
7 R&D and innovation
Exchanges and visits
8 Occupational health and safety
Social welfare Industry forums participationGovernment/Industry
9 Training and development Associations/Regulatory Environmental management
Information disclosure compliance
Agencies Emission management Enhanced routine communication and
10 Labor relations management reporting
Supervision and evaluation
Social
11 Protection of customers' rights and interests
12 Information security and privacy protection Employee training
13 Responsible supply chain
Labor relations management
Internal communication platform
management Employee Training and development Workers' Congress
14 Social welfare Occupational health and safety Executive roundtables
15 Product accessibility
16 Corporate governance
Regular community communication
Environmental management
Governance 17 Business ethics Joint community activities
Society/The Public Social welfare
Volunteer activities
18 Risk management Product accessibility
Philanthropic activities
2024 Huadong Medicine Materiality Analysis Results
22 2301 Forging Ahead with Our Original
Aspiration
Governance
Rooted in prudent operations Huadong Medicine continuously
promotes innovation-driven growth. The Company has been
optimizing its governance structure enhancing the operational
mechanism of the Board of Directors strengthening its compliance
management system and upholding ethical business standards.By fostering a corporate culture of integrity and transparency we
lay a solid foundation for building a new paradigm of high-quality
development.Corporate Governance Robust Operation Business Ethics
Contributing to the UN SDGs:2024 | Environmental Social and Governance (ESG) Report Governance: Forging Ahead with Our Original Aspiration
Corporate Governance The Board of Directors as the Company's executive body is accountable to the General Meeting of Shareholders and ensures the execution of its resolutions. The Company strictly convenes General Meetings of Shareholders and meetings of the Board of
Supervisors in accordance with relevant regulations to ensure the full exercise of shareholders' rights and the effective performance
of supervisory duties by the Board of Supervisors thereby safeguarding the transparency and standardization of the Company's
Huadong Medicine regards well-structured corporate governance as a cornerstone of its steady development. We continuously refine governance framework. During the reporting period the Company held a total of three General Meetings of Shareholders and nine
our governance structure clarify the responsibilities of the Board of Directors and its specialized committees and standardize the meetings of the Board of Supervisors.procedures for convening General Meetings of Shareholders and meetings of the Board of Supervisors. In addition we strengthen
information disclosure management and deepen investor relations management thereby continuously enhancing our corporate The Company adheres to the principle of diversity in evaluating and selecting members of the Board of Directors taking multiple
governance and laying a solid foundation for sustainable development. factors such as gender position age academic degree professional expertise and industry experience into comprehensive
consideration to ensure a well-balanced board composition thereby enhancing the quality of decision-making and the effectiveness
of governance. As of the end of the reporting period the Board of Directors comprised nine directors including three female directors.All board members were elected in strict compliance with applicable laws regulations and the Company's Articles of Association.Governance Framework Independent directors constituted one-third of the Board in compliance with regulatory requirements. Independent directors actively participated in major company decisions diligently performed their duties expressed independent and objective opinions and
effectively protected the legitimate rights and interests of minority shareholders and investors.Huadong Medicine strictly complies with the Company Law of the People's Republic of China the Securities Law of the People's
Republic of China the Code of Corporate Governance for Listed Companies the Stock Listing Rules of the Shenzhen Stock Exchange
and other applicable laws regulations and self-regulatory rules. The Company continuously improves its corporate governance Diversity of Board Members
framework to ensure standardized operations. We have established a corporate governance structure centered around the General
Meeting of Shareholders the Board of Directors the Board of Supervisors and the executive management and have set up various 9 60 years old and 1 Bachelor 1 Others 1
specialized committees including the Audit Committee the Strategy Committee the Remuneration and Assessment Committee the 8 Female 3 Independent 3 above
Nomination Committee and the Sustainability (ESG) Committee. 7 Directors Management 2
6 51-60 years old 5 Master 45 Finance 2
4
3 Male 6 Non-Independent 6
2 Directors 41-50 years old 2 Doctor 4 Pharmaceuticals 4
Huadong Medicine Co. Ltd. 1 31-40 years old
01
Gender Position Age Academic Professional Background
Degree & Industry Experience
General Meeting of
Shareholders
Under the Board of Directors five specialized committees have been established. Each committee is based on professional functions
Board of and jointly promotes the Company's strategic execution and compliance management. These committees focus respectively on
Supervisors key areas such as strategic planning audit and supervision candidate nomination remuneration and incentives and sustainable
Board of Directors development ensuring that the Company maintains efficient operations and steady growth in a complex and dynamic market
environment.Nomination Committee
Remuneration and Assessment
Executive Management Responsible for formulating selection Committee
Audit Committee criteria and procedures for directors and senior managers selecting and reviewing Responsible for establishing
Responsible for supervising and evaluating candidates and making recommendations performance assessment criteria and
internal audit work guiding the establishment to the Board of Directors. remuneration policies for directors
Operation Management Finance Risk Management and Administration Other functional
Department Headquarters Audit Department Department Departments and implementation of internal audit systems and senior managers and offering
coordinating internal and external audit suggestions on matters such as
relationships and ensuring the authenticity equity incentive plans and employee
and transparency of financial information. stock ownership plans.Investment Development Legal Affairs Human Resources Board of Directors
Department Department Headquarters Office
Sustainability (ESG) Committee
Strategy Committee
Responsible for formulating the
Pharmaceutical Business Pharmaceutical Industry Aesthetic Medicine Industrial Microbiology Responsible for deliberating the Company's ESG strategies and
Company's long-term development policies monitoring the achievement
strategy major investment and of ESG goals concerning ESG-
The Company's Governance Framework financing projects and capital related risks and proposing response
operation plans as well as
Responsibilities of strategies thereby ensuring the inspecting and evaluating their realization of the Company's
implementation. Specialized Committees sustainable development goals.
26 272024 | Environmental Social and Governance (ESG) Report Governance: Forging Ahead with Our Original Aspiration
Information Disclosure Management Performance Briefings & Investor Surveys
Huadong Medicine regards information disclosure as a key and strategic planning through regular reports and interim To fully showcase its core value and development prospects
component of its governance framework and is committed announcements. To facilitate understanding among overseas the Company actively organizes performance briefings
to providing investors regulatory authorities and the general investors the Company also publishes English versions and survey activities maintaining close interactions with
public with information that is truthful accurate complete of its regular reports further enhancing its international the investment community. In 2024 the Company held
and timely. The Company strictly adheres to internal communication capabilities. Moreover the Company continues five performance communication meetings (including one
regulations such as the Measures for the Administration to innovate in its disclosure formats by introducing visual performance briefing) conducted 104 online and on-site
of Information Disclosure and the Insider Information and tools such as "Quick Grasp" regular reports which present the investor surveys and participated in dozens of external investor
Insider Management System to ensure standardized and Company's operational performance and development plans strategy conferences. Senior management and business
orderly disclosure practices. To enhance the efficiency and in a more intuitive and accessible manner thereby improving teams engaged in in-depth exchanges with investors offering
transparency of information disclosure the Company has the practicality and readability of disclosed information. detailed insights into the Company's strategic roadmap
developed the Internal Reporting Procedures for Significant financial performance and business advancements. These
Information which clearly define the responsibilities of each In addition the Company regularly organizes specialized activities have effectively strengthened investor confidence in Online Performance Briefings for FY2023 and Q1 2024
department. The Company ensures efficient transmission and training sessions on information disclosure to reinforce the Company's future development and further enhanced its
timely disclosure of material information through coordinated compliance awareness across the organization thereby recognition in the capital market.channels such as email telephone and internal processes. providing robust support for high-quality execution disclosure
practices. In 2024 the Company disclosed a total of 179
The Company actively implements a proactive approach to documents including eight regular reports. During the Investor Reception Days
information disclosure by releasing updates on the latest reporting period no penalties were imposed on the Company
developments in business operations R&D innovation for information disclosure violations. To foster closer ties with investors the Company organized a special "Investor Reception Day" initiative to facilitate face-to-face
communication. In 2024 the event attracted nearly 200 institutional and individual investors. The Company's management team
provided detailed responses to investor inquiries on key topics such as business strategy financial status and R&D progress. This
Investor Relations Management initiative enabled investors to gain a comprehensive understanding of the Company's operations and development plans reinforcing their long-term confidence in the Company.Huadong Medicine regards investor relations management as a Through a variety of investor engagement activities the
vital component of its governance framework and is committed Company actively communicates its operational achievements
to establishing smooth and efficient communication channels and development strategies thereby safeguarding investors'
to continuously enhance the quality of its engagement with right to information and enhancing market recognition of the
the capital market. The Company has established internal Company's long-term value. The Company organizes investor
regulations such as the Investor Relations Management System Q&A sessions performance briefings investor seminars
the Publicity Management System and the Investor Reception investor reception days and other activities to provide in-depth
and Promotion System to ensure the orderly and standardized interpretations of its strategy and financial performance.implementation of its investor relations initiatives.Investor
Performance Q&A Investor
Sessions Reception
Investor Briefings Days irm.cninfo.Hotline com.cn
Company Investor
Email Seminars
2024 Huadong Medicine Investor Reception Day
I投nve资sto者r Co沟mm通un渠icat道ion New Media Channels for Investor RelationsChannels
The Company has established a comprehensive new media In 2024 the Company's Investor Relations WeChat Official Account
Investor Q&A Sessions communication matrix including WeChat official accounts and published a total of 67 posts accumulating over 120000 views
the official accounts of Chinese stock platforms Tonghuashun and 10178 subscribers. The Company's official Tonghuashun
The Company prioritizes providing timely responses and feedback to investor inquiries ensuring information transparency. In and Xueqiu. In 2024 the Company actively leveraged these account has garnered nearly 1.8 million followers serving as a
2024 the Company responded to 144 investor inquires through irm.cninfo.com.cn achieving a 100% response rate. Meanwhile new media tools to employ compact and innovative formats to vital channel for investor communication. Meanwhile the official
dedicated personnel are assigned to handle investor hotlines and respond promptly to inquiries received via the official and investor convey the latest business developments BD project outlines Xueqiu account has become another key platform for investor
relations email addresses ensuring smooth and uninterrupted communication channels. The Company has established an efficient research and development advancements awards and engagement since its establishment with nearly 6500 followers.communication mechanism to enhance investor satisfaction and strengthen market confidence in corporate governance and interpretations of regular reports to both the capital market
information transparency. and the broader investor community.
28 292024 | Environmental Social and Governance (ESG) Report Governance: Forging Ahead with Our Original Aspiration
Robust Operation Business Ethics
Robust operations serve as the fundamental pillar for sustainable corporate development. Huadong Medicine ensures operational Huadong Medicine strictly adheres to business ethics and abides by the Anti-Monopoly Law of the People's Republic of China the
continuity and stability through effective risk management and compliance governance. A systematic risk identification and control Anti-Unfair Competition Law of the People's Republic of China the Model Provisions on Protection against Unfair Competition
framework has been established to address external changes and challenges. Additionally the Company strictly adheres to relevant and other relevant laws and regulations. The Company has established and continuously improved internal management systems
laws and regulations strengthening its compliance practices and laying a solid foundation for long-term sustainability. including the Professional Integrity Regulations of Huadong Medicine Co. Ltd. (Trial) and the Ethical Audit Rules for Middle and Senior
Management of Huadong Medicine Co. Ltd to regulate employee conduct and ensure that all operations are conducted with integrity
and professionalism. We have established the Anti-Bribery and Anti-Corruption Policy to reinforce ethical conduct clarify roles and
Risk Management responsibilities and foster a clean and fair business environment in partnership with all stakeholders.Huadong Medicine has always regarded risk management as is responsible for refining risk assessment frameworks and
a vital safeguard for the Company's prudent operations and is standards and conducts regular risk analysis based on the Business Ethics Management Framework
committed to building a comprehensive and systematic risk Company's dynamic risk database. The Risk Management
management framework. The Company actively implements and Audit Department as the implementing body of risk Huadong Medicine has established a sound management framework that clearly defines the responsibilities of all levels in managing
internal systems and protocols such as the Risk Management management maintains the risk database and ensures timely business ethics ensuring efficient collaboration and effective oversight. Business ethics management has been incorporated under
System and the Risk Assessment Management Measures rectification tracking and review of risks identified in business the oversight of the Board of Directors and the Audit Committee and the Compliance Management Committee has been established.(Trial) . In 2024 it formulated the Measures for the Audit of operations. Functional departments serve as the primary entities By adopting a top-down mechanism we aim to foster a fair and ethical business environment and advance the development and
Departing Financial Personnel of Huadong Medicine Co. Ltd. in risk management tasked with formulating and implementing enhancement of business ethics and integrity systems.These new measures further strengthen risk control during effective and scientifically sound and effective risk mitigation
financial personnel transitions by establishing a systematic and measures.standardized departure audit process ensuring the security Lead and oversee the work related to business ethics
and compliance of financial management. According to the Risk Assessment Management Measures of Board Level Audit Regularly receive and provide guidance on reports regarding business ethics and
Huadong Medicine Co. Ltd. (Trial) risks are classified into compliance operations Committee
The Company has developed a multi-tiered comprehensive risk major medium and general risks. Through regular audits and Review and approve business ethics policies and management plans and
management framework with clearly defined responsibilities rectification tracking the Company ensures the effectiveness supervise the implementation of relevant policies and measures
across departments. The Company's risk management team and sustainability of risk management.Under the authorization of the Audit Committee the Compliance Management
Compliance Management Committee is responsible for the work related to business ethics including anti-bribery and anti-corruption
Compliance Management The Compliance Management Committee assigns relevant departments (or
Huadong Medicine strictly adheres to both national and local rectification recommendations proposed and implementation Committee working groups) to carry out specific tasks including but not limited to the
laws regulations and policies while consistently monitoring progress closely tracked. In 2024 the Company completed 13 formulation of internal business ethics policies and systems implementation of
regulatory developments in the pharmaceutical industry to internal audit and control inspection projects identified and management plans auditing and supervision and regularly reports to the Audit
ensure operational compliance. During the reporting period rectified multiple compliance issues through internal audit Committee under the Board of Directors
the Company issued the Compliance Assessment Plan and and significantly enhanced overall compliance management
the accompanying Implementation Guidelines incorporating capabilities.compliance performance into organizational performance Key Persons in Charge of the Serve as the primary persons responsible for business ethics and integrity
assessments. This mandates that all operational management The Company prioritizes fostering a compliance-oriented management and assume overall responsibility for business ethics management Company and its Subsidiaries
practices and employee conduct conform to national laws and culture. During the reporting period it conducted 63 legal
within their respective companies
regulations regulatory requirements industry standards and training sessions covering key topics such as transactional risks
the Company's Articles of Association. labor practices anti-monopoly and anti-unfair competition. Business Ethics Management Framework
The training spanned all four major business segments with a
The Company has established a sound compliance operation total of 13636 participant instances with a total duration of 87
governance framework focusing on identifying and managing hours. These efforts have substantially improved company-wide
compliance risks across departments subsidiaries and business compliance awareness and risk prevention capabilities laying a
operations. Any violations of legal regulatory or internal solid foundation for compliance operations.requirements are promptly reported to senior management with
In 2024 During the reporting period
The Company completed internal audit Conducted legal With a total of With a total duration of
and control inspection projects training sessions
13 63 13636 87hoursparticipant instances
30 312024 | Environmental Social and Governance (ESG) Report Governance: Forging Ahead with Our Original Aspiration
Business Ethics Audits Reporting Mechanisms and Whistleblowers Protection
Huadong Medicine continues to strengthen business ethics audits to uphold high standards of compliance operations and Huadong Medicine has formulated the Measures for Administration of
professional integrity. The Risk Management and Audit Department conducts objective reviews of facts and evidence carrying at least Complaints Reporting and Whistle-blowing of Huadong Medicine Co. During the reporting period
one to two audit projects each month. It provides independent assessments of the Company's governance risk management and Ltd. which sets out clear procedures for reporting and whistleblowers
control procedures ensuring that all business units are reviewed for compliance with business ethical standards every three years. protection ensuring that whistleblowers' rights and interests are fully
safeguarded. Multiple reporting channels have been established— The Company handled whistleblower reports
Audit Projects including hotlines emails the Company's official website and
intranet complaints reporting platform—to make it convenient for
In 2024 the Risk Management and Audit Department completed 42 projects including 13 internal audits and internal control inspections 11 special employees and external stakeholders to report concerns. During the 11
inspection audits and 13 ethics audits. Additionally the Department conducted departure audits supervisory reviews complaints reporting and reporting period the Company handled 11 whistleblower reports and
whistle-blowing investigations and other projects covering key aspects of the Company's daily management and business operations. conducted 2 supervisory investigations taking appropriate measures Conducted supervisory investigations
Audit Content based on the results.Focus on corporate governance risk management employee conduct supply chain management and transaction transparency with the goal The Company is committed to strict protection of whistleblowers. All 2
of optimizing the ethical risk control system. reports are kept confidential and handled by designated personnel to
ensure the confidentiality of information in place ensuring maximum
C orporate Governance and Risk Management: Conduct objective reviews of facts and evidence to independently assess corporate
governance risk management and control procedures. This includes assessing the completeness of management systems the robustness protection of the whistleblower's safety and privacy. The Company
of internal control mechanisms and procedures assessing integrity controls in key areas such as procurement sales and contract also encourages real-name reporting and offers rewards to those
management as well as due diligence on high-risk transactions and third-party engagements who provide key information thereby further promoting professional
Employee Conduct and Professional Ethics: Audit the implementation of codes of conduct assess the effectiveness of whistleblowing integrity and operation compliance.mechanisms and monitor the coverage of ethics and compliance training
Ethical Supply Chain Management: Review supplier compliance with ethical procurement standards with prioritized tracking of corrective
actions for high-risk suppliers
Business Partners and Transaction Transparency: Assess the credibility of business partners review contract performance and transactional Reporting Channels
compliance to prevent improper benefit transfer
Tel: 0571-89908818
Business Ethics Audit
Email: hdjc@eastchinapharm.com
To strengthen all employees' awareness of business ethics Huadong Medicine has implemented multi-tiered and diversified training
and publicity activities. These include regular "Integrity and Professionalism" thematic training and anti-corruption education O fficial Website link: Official Website of Huadong Medicine Co. Ltd. - Complaints
initiatives ensuring that every employee fully understands and adheres to the Company's business ethical standards. When signing Reporting Section
the Employee Handbook which includes an integrity agreement employees are informed and reminded to uphold the baseline I ntranet Complaints Reporting Platform: Online Office System - Internal Link -
requirements of professional integrity in daily work conduct. Complaints Reporting Platform
Promoting Ethical Standards Training Among Employees
Thematic Training: The Company organizes training and Publicity Activities: The Company launched a one-month Category Process Applicable Scenarios
publicity activities themed "Integrity and Professionalism" publicity and education activity on anti-corruption and Conduct preliminary assessment of facts and evidence
covering the Company's internal policies common legal integrity to foster a culture of ethical conduct. The activity upon receiving a report
and regulatory requirements and case studies on anti- featured poster displays the dissemination of anti-corruption Preliminary I nitiate formal investigation if substantiated evidence is R eports with unclear facts or insufficient evidence but
corruption involving 158 participants and 230 signed messages and the screening of educational videos. These Verification identified potential misconduct
integrity commitment letters. efforts targeted all employees creating a clean and upright T ransfer to archive if not supported by evidence
workplace environment.C onduct a comprehensive verification of reported matters Reports with clear facts and substantiated evidence
Formal
Investigation Gather supporting evidence
Substantiating evidence identified during preliminary
verification
Format findings and submit investigation reports Real-name reports
R ecord and archive report details R eport with unclear facts or insufficient evidence
Archiving for
Future Reference Determine whether to reopen the investigation based on Investigation timing is not yet opportune
subsequent developments Investigation is hindered by objective circumstances
D etermine whether the report falls within the Company's
Referral for scope of authority Complaints inquiries or reports outside the scope of
Handling Transfer to competent authorities if outside the Company's authority
jurisdiction
Organized training and publicity activities Launched publicity and education activities
themed "Integrity and Professionalism" on anti-corruption and integrity Whistleblower Report Handling Process and Categorized Disposal Guidelines
32 3302 Green Development and Ecological
Harmony
Environmental
Huadong Medicine remains firmly committed to the philosophy
of green development and is dedicated to building a sustainable
development model characterized by harmonious coexistence
between the Company and nature. The Company centers on
innovation-driven growth and green development continuously
advances environmentally friendly operational practices and
actively fulfills its corporate social responsibilities so as to
contribute to the achievement of the "dual carbon" goals.Environmental Actions against Emissions Green
Management Climate Change Management Operations
Contributing to the UN SDGs:2024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Environmental Management Environmental Management System Certification and Internal Audits
Environmental management is key for corporates to achieve green development. The Company enhances its environmental The Company continuously improves its environmental management system and conducts both internal and external audits to
management system systematically manages environmental risks and implements the concept of green operations. Additionally achieve full coverage and efficient coordination in environmental management. As of the end of the reporting period Zhongmei
upholding a strong sense of ecological responsibility the Company strives to maintain ecological balance throughout its production Huadong Jiangdong Company Xi'an Bohua Jiuzhou Pharmaceutical Jiangsu Joyang Magic Health Meihua Hi-Tech and Nanjing
and operations minimize damage to natural resources and build an ecologically sustainable environment. Nongda Animal Pharmaceutical had all passed ISO 14001 Environmental Management System Certification marking a further
enhancement in the Company's environmental management standardization.Environmental Management System兹证明杭州中美华东制药江东有限公司
Huadong Medicine regards environmental protection as a To ensure accountability under the EHS responsibility assessment 统一社会信用代码:913301000678586850其环境管理体系符合:GB/T 24001-2016/ ISO 14001:2015 标准该环境管理体系适用于:
百令(发酵冬虫夏草菌粉、胶囊、片剂、饮片)、阿卡波糖(片剂、咀嚼片)、莫匹罗星、莫匹
罗星钙、硫酸多粘菌素B等生产以及相关管理活动
vital pillar of sustainable development. The Company strictly mechanism the Company sets stringent environmental 固定场所范围:浙江省杭州市大江东产业集聚区梅林大道7278号(注册地址)浙江省杭州市大江东产业集聚区梅林大道7278号(审核地址)
邮编:311228
编号:1323E10366R2L
complies with laws and regulations such as the Environmental management targets and has formulated the EHS Monthly 颁证日期:2023年11月27日 有效期至:2026年11月26日
Protection Law of the People's Republic of China the Water Law Assessment Guidelines (2024 Revised Edition) with the
of the People's Republic of China and the Cleaner Production EHS supervision and management of subsidiaries as a Key
Promotion Law of the People's Republic of China and has Performance Indicator (KPI) for its chief executives. Through well-
established a robust environmental management system. defined assessment criteria and evaluation mechanisms the
Company effectively drives the implementation of environmental
The Company rigorously implements the EHS Responsibility management and further enhances environmental performance.Management System and has built an environmental management During the reporting period the Company achieved its 2024
framework centered around the EHS Committee with clearly annual environmental management targets and maintained
defined responsibilities across all levels to ensure the efficient operational compliance in pollutant discharge management with
progress. At the implementation level the EHS Department of no major administrative penalties or criminal liabilities arising
the parent company takes the lead in coordinating group-wide from environmental issues.environmental management while EHS departments across
business units work in close collaboration to continuously reduce
the environmental impact of business operations.Environmental Management Targets ISO 14001 Environmental Management System Certification
Wastewater discharge Waste gas discharge Solid waste disposal Noise emission To strengthen its overall environmental management capabilities the Company crafted internal and external audit schemes for
compliance rate compliance rate compliance rate compliance rate the EHS system and conducted specialized training for internal auditors to drive audit implementation and ensure the effective
functioning of the environmental management system.
100% 100% 100% 100% During the reporting period the Company conducted comprehensive internal audits covering all departments and workshops across
within its facilities. In response to the rectification items identified during the internal audits the Company required the relevant
departments to enhance regulatory compliance awareness and employee training further optimize the environmental management
system and ensure its ongoing improvement in terms of adequacy appropriateness and effectiveness.Improving Environmental Monitoring
To strengthen real-time monitoring of pollutant emissions the Company formulated the 2024 Self-Monitoring Plan for Pollution
Sources revising online monitoring indicators such as total phosphorus (TP) and total nitrogen (TN). Meanwhile the Company also
established environmental management inspection procedures mandating responsible departments to conduct regular rigorous
inspections based on inspection checklists for timely issue identification and resolution. Identified issues are tracked throughout the
rectification process to ensure full implementation of environmental management measures.Environmental Protection Training and Awareness Campaigns
The Company continues to carry out environmental protection training and awareness campaigns to comprehensively enhance
employees' environmental awareness and capabilities. During the reporting period the Company organized environment-related
training sessions with a total of 2365 participants. Systematic training has significantly improved employees' knowledge of
environmental protection thereby supporting the Company's occupational safety and environmental protection efforts.
36 372024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Environmental Risk Management and Emergency Response Drills
Implementation of Environmental Protection Training and Awareness Campaigns
To effectively respond to potential environmental risks the Company has established a comprehensive environmental risk
To comprehensively improve employees' environmental awareness and competencies Magic Health actively carried out management system implementing graded management based on different types and characteristics of risks.environmental protection training and awareness activities in 2024. These initiatives covered waste gas system operations
environmental awareness enhancement and World Environment Day activities aiming to improve employees' knowledge
about environmental protection and promote green and sustainable development. Risk Location Risk Material Accident Type Environmental Risk Environmental Risk Characteristics Accident Classification
Waste Gas System Training Raw material warehouses Combustible dried traditional Chinese Fire Air pollution water pollution soil Offsite plant-level production workshops medicinal materials pollution workshop-levelFocusing on key aspects of waste gas treatment during production Magic Health organized training sessions on waste gas
system operations. The training covered standard operating procedures maintenance protocols and emergency response
measures for emission control equipment to ensure employees' proficiency in system management and pollutant emission Wastewater treatment Treated wastewater Excessive facilities discharge Water pollution Workshop-level
reduction.Waste gas treatment Process waste gas Excessive facilities emission Air pollution Workshop-level
Environmental Awareness World Environment Day
Enhancement Training Training Activities Production equipment Electrical devices Fire Air pollution water pollution soil Offsite plant-level pollution workshop-level
To further strengthen employees' environmental awareness During World Environment Day Magic Health organized Liquid caustic soda
Magic Health conducted training sessions through case themed training events to motivate employees' engagement storage tanks and Sodium hydroxide Leakage Water pollution soil pollution Offsite plant-level
studies policy analyses and other interactive formats. These in environmental protection. These activities not only raised pipelines workshop-level
sessions educated employees on environmental protection employees' awareness of the importance of environmental
laws and regulations management systems and practical protection but also enhanced team collaboration through Hazardous solid waste Hazardous solid waste Spillage and Soil pollution Workshop-level
environment protection methods in daily operations interactive discussions and case sharing encouraging warehouse loss
fostering a green development mindset and integrating collective contributions to sustainable development. Wastewater pipelines Industrial wastewater Leakage Water pollution soil pollution Plant-level workshop-level
environmental consciousness into routine operations.The Company prioritizes its emergency response capability for sudden environmental accidents. In accordance with the Emergency
Response Plan for Environmental Accidents the Company has formulated the Measures for Administration of Response to
Environmental Accidents and established a sound emergency response mechanism for environmental incidents. The Company
also conducts regular emergency response drills for potential environmental incidents. By simulating high-risk scenarios such
as hazardous waste leakage and laboratory hazardous chemical spills the Company ensures an efficient and well-coordinated
emergency response.World Environment Day Training Activities
38 392024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Emergency Response Drills Actions against Climate Change
To strengthen emergency response capabilities for sudden environmental incidents Zhongmei Huadong conducted
targeted emergency response drills focusing on critical scenarios such as hazardous waste leakage and laboratory Huadong Medicine fully recognizes the profound impact of climate change on corporate development and integrates climate-
hazardous chemical spills aiming to validate the effectiveness of the emergency response plans and enhance employees' related issues into strategic planning and operations management. Guided by a systematic approach the Company has launched
emergency response capabilities. comprehensive climate action plans focused on optimizing governance upgrading strategy enhancing risk and opportunity
management and refining indicators and targets.Emergency Drill on Hazardous Waste Leakage
W e simulated a hazardous waste handler accidentally overturned a waste liquid drum during handling resulting in a leak.A total of 28 participants promptly executed emergency procedures per the plan effectively containing contamination and
completing site cleanup. Governance
W e simulated a leak during waste liquid transport by EHS personnel with the liquid flowing to the Xitang River walkway
beneath a bridge. The drill was carried out simultaneously on and under the bridge covering incident reporting The Company has established a governance framework comprising the Board of Directors the Sustainability (ESG) Committee and
emergency response environmental monitoring and site cleanup. 20 participants responded promptly and appropriately the Sustainability (ESG) Committee Working Group with clearly defined roles and responsibilities at each level to ensure effective
to the emergency controlling the risk in a timely manner and conducting real-time atmospheric and water environment management of climate-related matters.monitoring.Emergency Drill on Laboratory Hazardous Chemical Spill
W e simulated a QC inspector spilling acetonitrile while preparing a mobile phase causing organic solvent splatter. A total
of 36 participants responded promptly. The team leader directed on-site operations while responders wore appropriate Board of Directors
personal protective equipment (PPE) and evacuated non-essential personnel to safe zones. Approve climate-related strategies and oversee the overall
progress of climate governance efforts
E mergency teams operated with clearly defined roles and close collaboration swiftly resolving the incident.Through these drills the Company further enhanced employees' ability to respond to environmental accidents and
validated the feasibility and effectiveness of the emergency response plans. In 2024 Zhongmei Huadong conducted a total Responsible for formulating and overseeing the implementation
of 66 emergency drills covering safety fire protection and environmental domains with cumulative participation reaching Sustainability (ESG) of the Company's climate-related strategies targets and risk
2148 attendances significantly improving the overall EHS management level. Committee management ensuring that climate considerations are embedded
in decision-making processes enhancing governance capabilities
and establishing information access and supervisory mechanisms to
drive the Company's low-carbon transition
Sustainability (ESG) Execute climate governance measures and implement decisions of
Committee Working Group the Sustainability (ESG) Committee to ensure effective execution of
all kinds of works
Emergency Drill on Hazardous Emergency Drill on Laboratory Emergency Drill on
Waste Leakage Hazardous Chemical Spill Hazardous Waste Leakage
The Governance Framework against Climate Change
Biodiversity Protection
Huadong Medicine adheres to the principles of sustainable development and recognizes the critical value of biodiversity and its
intrinsic connection to sustainable development. The Company actively identifies and assesses biodiversity-related risks and Strategy
complies with applicable laws and regulations including the Environmental Protection Law of the People's Republic of China and
the Biosecurity Law of the People's Republic of China. The Company regards biodiversity protection as an integral component Huadong Medicine integrates climate change response as a core element of its sustainable development strategy. The Company
of environmental management and is committed to promoting harmonious development between ecological preservation and systematically identifies climate-related risks and opportunities and deeply integrates them into governance and operational
business growth through concrete actions. management. The Company conducts a comprehensive assessment of both physical and transition risks to formulate scientific
risk response strategies while actively leveraging development opportunities arising from policy incentives market demands and
In daily operations the Company prioritizes eco-friendly practices and integrates entire-lifecycle environmental management technological innovation to promote the green and low-carbon transition.systems with coordinated supply chain governance. The Company proactively avoids ecologically sensitive areas and seeks to align
production processes with natural ecosystems. The Company strictly complies with pertinent regulations governing environmental
impact assessments for new renovation and expansion projects to minimize negative impacts on ecosystems. Additionally the
Company continues to strengthen internal biodiversity education and training and actively promotes ecological conservation.
40 412024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Type of Risk/ Huadong Medicine strictly complies with the Energy Conservation the Company instituted the Energy Management System which
Opportunity Name Time Range Description of Impact Response Measures Law of the People's Republic of China regarding energy clarifies energy governance performance evaluation and
Physical Risks management and conservation and emission reduction as an incentive mechanisms.important lever for the Company's sustainable development. By
Extreme weather may Strengthen disaster resistance capacity of The Company's subsidiary Zhongmei Huadong has established a
Short-term damage production facilities
infrastructure and establish emergency formulating scientific energy management systems optimizing
Acute Risk Typhoons Floods and disrupt the supply response plans the energy management framework implementing efficient sound energy management framework forming a top-down tiered Mid-term chain affecting product O ptimize supply chain layout to ensure energy conservation measures and actively exploring clean management system to ensure organizational accountability for
manufacturing and delivery reserves of key materials energy applications the Company comprehensively advances energy conservation and emission reduction goals.Promote water recycling and utilizing the green and low-carbon transition. During the reporting period
technologies
Acute Risk Droughts Short-term
Water shortages may affect
Mid-term water supply for production Improve water use efficiencyand increase operating costs Establish emergency water supply
reserves 1 Primary Energy 2 Secondary Energy Tertiary Energy Management Network Management Network 3 Management NetworkLong-term temperature
rise may increase energy O ptimize energy mix
Chronic Risk Rising Average Mid-term Temperature Long-term demand and production costs Promote energy conservation affecting employee health and technologies Establish a dedicated Energy U nder the guidance of the A t the section and team levels
production efficiency Management Department led Company's Energy Conservation supervisors or technicians
Transition Risks by a qualified energy director Committee each department concurrently serve as energy
Increasingly stringent climate- with professional knowledge and establishes departmental-level coordinators responsible for Regularly assess changes in climate-
Legal and Compliance Short-term related regulations may extensive experience to oversee energy management positions supervising on-site energy related policies
Regulatory Risk Supervision Mid-term increase compliance costs and energy governance holistically use enhancing employees'
affect corporate operations P roactively plan for low-carbon transition Managers with energy energy conservation operation
The Production General Manager management capabilities serve as capabilities and awareness
Energy Conservation The R&D and application of I ncrease R&D investment serves as the senior executive departmental energy managers and ensuring effective
Technical Risk and Emission Reduction Mid-term low-carbon technologies may Cooperate with research institutions to of energy management responsible for supervising Equipment and Long-term face technical bottlenecks and explore green technological innovation implementation of energy responsible for supervising the their respective departments'
Technology Upgrades high-cost pressures management measures at the Reduce application costs of technology implementation and effectiveness energy consumption promptly grassroots level
Climate change may impact of energy management correcting unreasonable
the stability of raw material Enhance green brand image practices and conducting energy
Market Risk Supply Chains and Mid-term Market Demands Long-term supply and the market demand Strengthen supply chain resilience
The dedicated energy conservation education to ensure
for green pharmaceutical R einforce information disclosure management department is effective implementation of
technologies responsible for implementing energy management measures
Ineffective climate governance S trengthen ESG information disclosure national energy-related laws
may affect corporate and improve transparency and regulations systematically
Reputational Risk Stakeholder Concerns Mid-term Long-term reputation and weaken Actively participate in industry green
analyzing the main links of energy
investors and consumers' initiatives and establish a responsible management establishing an
confidence corporate image accountability system for energy
conservation assigning tasks at
Climate-related Opportunities different levels and ensuring the
O ptimize production processes to reduce effective achievement of energy
energy and material waste management goals
By optimizing resource use Promote energy conservation equipment
Resource Use Improved Resource Use Short-term reduce energy water and and technologies
Efficiency Efficiency Mid-term material consumption lower operating costs and support S trengthen water resource management Energy Management Framework
sustainable development and reduce water consumption
I mplement waste classification and
recycling and promote circular utilization Through systematic energy management measures Huadong Medicine thoroughly taps into energy conservation potential
Enhance competitiveness significantly reduces energy consumption and improves energy use efficiency. Based on the actual conditions of multi-regional Optimize supply chain management and
Products and Low-Carbon Products Mid-term by developing low-carbon select environmental-friendly suppliers operations the Company has established an industry-wide energy conservation and emission reduction (ECER) system implementing
Services and Service Innovation Long-term products and services and region-specific strategies to drive the integrated development of clean energy adoption energy efficiency optimization and demand-encourage customers to adopt Strengthen green warehousing and
environmental-friendly options logistics management
side management across all facilities.S trengthen green brand building and
Build a green and responsible enhance market competitiveness
Reputational brand image to promote Clean Energy Application
Opportunity Green Brand Building
Mid-term
Long-term coordinated development of
G radually build a sustainable
the economy society and the development strategy model to enhance
environment the Company's sustainable development Huadong Medicine actively responds to the national "dual carbon" goals by prioritizing clean energy application as one of the
potential and core competitiveness core approaches to energy conservation and emissions reduction. The Company has adopted a multi-pronged strategy to support
renewable energy development and promote a green and low-carbon transition. Efforts have been made including investments in
photovoltaic power generation clean energy substitution and promoting new energy vehicles thereby comprehensively optimizing
Risks and Opportunities List the energy mix and reducing carbon emissions.
42 432024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Application of Clean Energy Cooling Water System Optimization Air Compressor Upgrading Project
for Water Injection Machines
G reen Electricity Certificate (GEC) Purchase: Solar Panel Streetlights: The Company has installed 40 solar- To improve energy efficiency and reduce environmental To improve energy use efficiency and reduce
The Company purchased 15000 GECs equivalent powered streetlights across the plant saving approximately impact the Company optimized and upgraded the environmental impact the Company upgraded
to 15000 MWh of electricity supporting renewable 7200 kWh of electricity and about RMB 6264 in energy costs cooling water system of for water injection machine by air compressors by replacing legacy units with
energy development. annually significantly reducing lighting energy consumption. installing a softened water circulation unit replacing tap energy-efficient screw-type compressors. The
water with boiler-softened water as the cooling medium. new compressors reduce energy consumption by
This enables heat recovery and water recycling. 25% to 30% compared to previous models while
Photovoltaic Power Generation: The Company also lowering noise pollution during operation.has built a 3.32 MWp PV plant generating 3284295 This project saves approximately 30000 tons of tap
kWh in 2024. A new PV energy storage system is water and 820 tons of steam annually reducing energy
planned for 2025 to further enhance the utilization costs by about RMB 420000. It also significantly reduces
of photovoltaic energy. the risk of scale formation in cooling pipelines thereby
enhancing operational efficiency.C lean Energy Substitution: In the canteen Shaanxi
Jiuzhou has replaced traditional methanol-based Demand-Side Energy Management
fuel with induction cookers to eliminate harmful gas
emissions and improve both energy efficiency and Based on industry-specific production and energy utilization characteristics Huadong Medicine has pioneered refined demand-side
safety. energy management. By building an intelligent energy control platform the Company dynamically tracks energy consumption data
across every production scenario enabling deep coordination between production processes and energy consumption. Furthermore
the Company applies electricity storage technology to optimize power consumption patterns without compromising product quality
Promotion of New Energy Vehicles: The Company thereby systematically reducing overall energy consumption.encourages employees to use new energy vehicles
and has installed over 70 EV charging stations in
the plant. Additionally relevant forms such as
the EV Charging Card Application Form and New Energy Management and Digitalized Monitoring
Energy Access Point Application Form have been
launched on the OA system to further support green Solar Panel Streetlights Project Implement an energy management system monitor power systems digitally in real-time and optimize energy usage
commuting.Install remote digital meters track consumption patterns analyze abnormal data and refine energy management
Utilize centralized power metering oversee departmental usage in real-time and ensure reporting accuracy
Energy Efficiency Optimization and Upgrading
Huadong Medicine prioritizes refined energy consumption management and has developed a comprehensive system to enhance
operational efficiency throughout the entire lifecycle. The Company achieves system-level energy conservation by optimizing systems Introduction of Demand-Side Application of Electricity
and equipment and actively promoting the utilization of secondary energy thereby improving energy consumption patterns and Management Programs Storage Technology
emissions reduction performance without compromising productivity.By implementing demand-side management Peak-valley price differentials are utilized by
programs the Company optimizes electricity charging during low-rate periods and discharging
consumption strategies and reduces peak-hour during high-rate periods lowering peak procurement
consumption costs and grid stress. charging during off-peak hours
System and Equipment Optimization when electricity prices are low and discharging
I ce Storage System: Coolants are produced during peak hours when prices are high. This helps
Prioritize high-efficiency and energy-saving products in system construction and equipment selection during off-peak hours to reduce peak-time power effectively reduce power procurement costs during
consumption peak periods and ease grid loads.B ased on production needs chilled water supply is intermittently suspended to minimize idle energy consumption from
water pumps Chilled Water Storage Pool Project: A new chilled
water storage pool (approximately 1000 m3)
A ssess current cooling device and introduce efficient heat exchange and energy storage technologies to enhance the is planned to be installed to reduce the pool's
efficiency of the cooling system and reduce peak electricity demand temperature and store cooling capacity during
off-peak hours thereby reducing peak-hour
P lan to install temperature and humidity auto-control devices precisely regulate workshop climate via intelligent control power consumption
systems and enhance energy utilization efficiency
44 452024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Risk and Opportunity Management
Photocatalytic Oxidation Waste Gas Treatment Tower Upgrading Project
To optimize energy management the Company upgraded the photocatalytic oxidation waste gas treatment tower by Amid escalating global climate challenges the Company faces unprecedented climate-related risks and opportunities. To address
installing an automatic shut-off and restoration device enabling nighttime shutdown of the waste gas treatment system. these it has developed a comprehensive management system aligned with international frameworks such as the International
Before the system upgrading the waste gas tower operated 24/7; following the upgrading it operates for 12 hours during Financial Reporting Standards (IFRS S2) and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).the day while shutting down at night meeting environmental compliance requirements. This project is expected to save
326000 kWh of electricity annually reducing energy costs by around RMB 260000.
Low-Temperature Water Constant Pressure Control Project
Risk and Opportunity Identification
In response to the high energy consumption of low-temperature water systems in the workshops the Company installed Identify climate-related risks including physical risks (e.g. extreme weather events long-term climate
sensors and variable frequency drives (VFDs) to enable variable frequency drive operation. Daily electricity consumption changes) and transition risks (e.g. policy and regulatory changes technological advancements)
was reduced from 1080 kWh to 480 kWh. By adjusting pump speeds based on real-time pressure demands the Company
enhanced thermal exchange efficiency and significantly reduced the number of chiller unit startups thereby reducing Focus on opportunities such as low-carbon technologies and resource optimization to inject new
energy consumption at its source. This project achieved annual cost savings of RMB 270000 since its launch. momentum into sustainable development
At the same time the Company introduces the concept of lean management throughout its production and operation processes
emphasizing energy conservation awareness among all employees. Relying on production process innovation digital energy efficiency Risk and Opportunity Assessment
monitoring and full employee participation mechanisms the Company has made significant progress in energy mix transition and
efficiency utilization improvement creating a sustainable development model aligned with industry characteristics. Assess the likelihood time range (short- medium- and long-term) and potential impacts of climate-
related risks and opportunities analyze their effects on revenue costs resources and workforce and
clearly prioritize risk management accordingly
Energy Type Unit 2023 2024
Direct Energy Utilization
Risk Control and Opportunity Management
Natural Gas Cubic meter 6305100.00 6692675.00
Formulate targeted measures such as enhancing supply chain resilience optimizing energy mix and
Diesel Ton 187.76 238.88 investing in low-carbon technologies to mitigate risk impacts
Gasoline Ton 51.43 120.83 Establish monitoring mechanisms to regularly assess the effectiveness of these measures and integrate
climate risk control and opportunity management into the Company's strategic planning to ensure
Liquefied Petroleum Gas Ton / 1.70 alignment with sustainable development goals
Indirect Energy Utilization
Risk and Opportunity Management Process for Climate Change
Purchased Electricity MWh 216381.53 222003.69
Purchased Steam GJ 337018.81 375942.26
Purchased Green Electricity MWh / 15000.00
Total Energy Utilization
Indicators and Targets
Direct Energy Consumption tons of coal equivalent (tce) / 7890.72
Indirect Energy Consumption tce / 41969.94 Huadong Medicine actively responds to China's "Dual Carbon" goals (carbon peaking and neutrality) and regards green and low-
carbon development as the Company's long-term strategic priority. The Company is committed to reducing carbon emission
Total Energy Consumption tce 39755.59 49860.66 intensity through technological innovation optimization of the energy mix and transformation of business model thus promoting its
sustainable development. Moving forward the Company will pursue carbon neutrality actively explore the adoption of clean energy
Energy Consumption Intensity tce / RMB per million (revenue) 0.98 1.19 and continuously enhance its climate risk management capabilities contributing to global action against climate change.Energy Consumption of Huadong Medicine
46 472024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Emissions Management
We aim to significantly We plan to invest in or collaborate
increase the proportion of on the development of technologies
renewable energy in our Huadong Medicine fully implements the concept of green development and strictly complies with national and local laws and such as carbon capture and storage
energy mix through green regulations. The Company has established internal management systems to ensure the compliant disposal of wastewater waste (CCS) and direct air capture (DAC).electricity procurement gas and solid waste effectively reducing the environmental impact of our production and operations and promoting sustainable We will actively participate in the
and the development of corporate development and green transition across the industry.formulation of industry standards
photovoltaic power projects support green finance and policy
accelerating the green advocacy and promote the large-
transition of our energy mix scale application of negative Wastewater Management
and contributing to the carbon emission technologies
neutrality goal Huadong Medicine regards wastewater management as a critical The wastewater generated by the Company mainly includes
component of environmental governance. The Company strictly production wastewater (e.g. cleaning wastewater mycelium-
Clean Energy Exploration of Negative complies with the Water Pollution Prevention and Control Law of containing wastewater acidic and alkaline wastewater
Adoption Emission Technologies the People's Republic of China the Emission Limits of Water and pharmaceutical-laden wastewater and wastewater containing
Air Pollutants for Bio-pharmaceutical Industry (DB 32/ 3560-2019) chemical reagents) and domestic wastewater. A categorized
and other relevant laws and regulations. In addition the Company collection and tiered treatment approach is applied based on
fully implements the requirements for wastewater management wastewater type.based on the Wastewater Discharge Management System and
other internal systems.Cleaning wastewater and Mycelium-containing Highly acidic and alkaline Domestic wastewater from facilities
pharmaceutical-laden wastewater undergoes alkaline wastewaters undergo such as canteens and public
GHG Emissions Digital Climate-related wastewater are collected deactivation treatment and neutralization treatment restrooms undergoes preliminary
Reduction Empowerment Risks Management through dedicated equipment upon review and approval before being routed to treatment via septic tanks and is
and sent to the regulating tank by the EHS Department is the regulating tank at the then piped to the sewage pipeline
We are committed to We will monitor the energy We have integrated climate- at the sewage treatment plant conveyed to the regulating tank sewage treatment plant. leading to the dilution tank at the
ensuring that our carbon consumption data in real time through related risks into our long- for further treatment. at the sewage treatment plant. sewage treatment plant.emissions comply with the information system improve term strategic planning to
national standards and energy management efficiency align with the 1.5° C Paris
will continue to implement achieve refined energy conservation Agreement target and
Wastewater Treatment Methods
energy conservation and and emission reductions and promote enhance climate resilience
consumption-reduction comprehensive improvements in The Company has established a comprehensive wastewater discharge monitoring system and regularly monitored the operation
projects energy utilization efficiency to support of wastewater treatment facilities and the quality of treated water to ensure compliance with national and local standards. To
green and low-carbon development continuously improve wastewater treatment capacity the Company carried out a full-scale optimization and upgrading of its
wastewater treatment processes and facilities in 2024 further enhancing the treatment efficiency of both industrial and domestic
wastewater and ensuring compliant discharge.Greenhouse Gas Emission (GHG) Reduction Targets
MBR Membrane Ozone Generator Equipment Layout Facilities Anti-
Greenhouse Gas (GHG) Emissions Unit 2023 2024 Replacement Upgrading Optimization seepage Treatment
Scope 1 GHG emissions tCO2e 14288.85 15594.79 One set of MBR The ozone generator's The triple-effect evaporator Anti-seepage measures
membranes was treatment capacity was relocated from the were applied to the original
Scope 2 GHG emissions tCO2e 137814.60 171359.01 replaced and a new was increased from Active Pharmaceutical water tank (used to adjust
recovery cleaning tank 500 g/h to 1000 g/h Ingredients Workshop 1 wastewater pH to 3) and
Total GHG emissions (Scope 1 + Scope 2) tCO2e 152103.45 186953.80 was built significantly enhancing oxidation to the sewage treatment the neutralization tank
improving membrane effectiveness. plant for centralized by lining them with acid-
Greenhouse Gas Emission Intensity1 tCO2e / RMB per million (revenue) 3.74 4.46 efficiency and service management thus resistant ceramic tiles
life. improving operational improving the corrosion
Greenhouse Gas Emissions of Huadong Medicine efficiency. resistance and safety of the
facility.
1 I n 2023 greenhouse gas emission statistics covered Zhongmei Huadong Jiangdong Company Xi'an Bohua and the Industrial Microbiology
Subsidiary. In 2024 Huadong Medicine updated its data reporting scope to include all subsidiaries (excluding overseas subsidiaries). Wastewater Treatment Processes Upgrading and Equipment Renewal
48 492024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Huadong Medicine continues to promote innovation and upgrades in waste gas management technologies constantly optimizing
Indicator Unit 2023 2024 treatment facilities and processes to further enhance waste gas management efficiency and reduce environmental impact.Chemical Oxygen Demand (COD) Ton 273.40 268.74
Ammonia Nitrogen(NH3-N) Ton 3.47 5.07 Upgrading of Waste Gas Treatment System in the Active Pharmaceutical Ingredients Workshop
Total Nitrogen (N) Ton 48.24 11.65 To further improve the efficiency of waste gas management Xi'an Bohua has upgraded the waste gas treatment system in
Total Wastewater Discharges Ton 1989052.70 2213019.51 the Active Pharmaceutical Ingredients (APIs) workshop by adding a condenser to achieve classified collection and tiered
treatment of waste gas of varying concentrations. The condensed liquids from high-concentration waste gases are collected
Wastewater Discharge Intensity Ton / RMB per million (revenue) 48.96 52.81 and disposed of as hazardous waste while low-concentration waste gases are treated using a combined process of alkaline
solution spraying dry filtration UV photolysis and activated carbon adsorption to ensure full compliance with emission
Wastewater Discharges of Huadong Medicine standards. This initiative not only optimizes the waster gas treatment process but also significantly improves resource
utilization efficiency and further reduces the environmental impact of the production and operation.Waste Gas Management
Huadong Medicine prioritizes waste gas management. The The waste gas generated by the Company mainly originates Waste Gas Treatment Facilities Optimization
Company strictly complies with the Atmospheric Pollution from wastewater treatment production processes laboratory
Prevention and Control Law of the People's Republic of China activities canteen-generated oil fumes automotive exhaust In active response to national environmental protection policies and to further enhance the efficiency of waste gas
the Emission Standard of Air Pollutants for Pharmaceutical and uncontrolled emissions. The Company adopts targeted treatment Huadong Medicine has developed a specialized optimization plan tailored to the emission characteristics of its
Industry (DB33/310005-2021) and other relevant regulations. treatment measures according to the characteristics of each subsidiaries. For example Peiyuantang and the herbal medicines and ginseng & antler subsidiary implemented a series of
The Company has also drafted a comprehensive Waste Gas type of emission establishes a comprehensive waste gas optimization measures for waste gas treatment facilities including equipment upgrades new treatment units and process
Emission Management System based on its actual operations. monitoring system and implements rigorous monitoring to optimization. These initiatives have enabled a shift from uncontrolled to controllable emissions thereby improving the
Through scientific classification standardized collection ensure continuous compliance with discharge standards. efficiency of waste gas collection and treatment.and efficient treatment the Company ensures that the waste
gas emissions meet environmental standards and minimize By adopting a multi-process combination approach the Company ensures that waste gas emission indicators comply
potential harm to the environment and human health. with both national and local standards. The enhanced efficiency of activated carbon adsorption and the application of
condensation recovery technology has further improved resource utilization efficiency. Additionally the Company has
effectively controlled the emissions of oil fumes and volatile organic compounds significantly improved the working
environment and ambient air quality fostering a healthier living environment for employees and communities.Waste Gases
from Production Automotive Indicator Unit 2023 2024
and Testing Exhaust
Nitrogen Oxide (NO ) Ton 1.51 9.90
Waste Gases Canteen- xUncontrolled
from Wastewater generated Oil emissions
Treatment Fumes Sulfur Dioxide (SO2) Ton 0.20 0.65
Organic solvents and Regular automotive Volatile Organic Compounds (VOCs) Ton 9.40 13.81
waste gases containing exhaust emission
antibiotics are treated testing is conducted Waste Gas Emissions 10000 cubic meters 271800.40 412145.48
Use a combination through photocatalytic High-efficiency oil to ensure compliance Solvent evaporation
of "photocatalytic oxidation alkaline fume purification with national is reduced through Waste Gas Emission Intensity 10000 cubic meters / RMB 6.69 9.84
oxidation pretreatment solution absorption devices are installed standards improved equipment per million (revenue)
+ alkaline solution in spray towers and to ensure oil fumes sealing enclosures
activated carbon Waste Gas Emissions of Huadong Medicineabsorption in spray compliant emissions and process
towers + activated adsorption in waste along with ventilation optimization and
carbon adsorption gas treatment facilities. systems to improve employees are
processes" to effectively Waste gases generated air quality provided with Management of Wastes
remove harmful gases during fermentation appropriate protective
such as H S and refining are treated 2 equipment
using dedicated Huadong Medicine complies with the Law of the People's Republic of China on the Prevention and Control of Environment Pollution
treatment facilities by Solid Wastes the Standard for Pollution Control on Hazardous Waste Storage (GB 18597-2023) and other relevant laws and regulations. The Company has established internal systems such as the Solid Waste Management System and the Hazardous Waste
Temporary Storage Management System to standardize the entire process of classification storage utilization and disposal of solid
wastes. During the reporting period all waste was entrusted to accredited third-party entities for compliant disposal to ensure the
Waste Gas Emissions Treatment Methods compliant treatment of general solid waste and hazardous waste.
50 512024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
General Solid Waste Management Hazardous Waste Management Green Operations
The Company classifies and stores general solid The Company's hazardous waste mainly includes Huadong Medicine adheres to the philosophy of green development and integrates green operations into all aspects of its corporate
waste separately and promotes resource recycling. medical waste waste liquids (e.g. organic solvent development striving to achieve effective resource utilization and environmental- friendly operations. We actively carry out
Dedicated storage areas are designated for general waste liquids chemical waste liquids) and waste APIs. comprehensive and multi-level green operational practices which not only effectively reduce our environmental footprint but also set
solid waste and recyclable solid waste. General a benchmark for the sustainable development of the industry demonstrating the Company's social responsibility and environmental
solid waste mainly includes general industrial solid All hazardous waste is temporarily stored in commitment.waste domestic waste recyclable solid waste and specialized hazardous waste storage facilities
construction waste. equipped with windproof rainproof sunproof and
leakproof features. The facilities are also outfitted Water Resource Utilization
D omestic waste is collected and removed daily by a with tail gas purification devices combustible gas
professional property management company alarm devices and explosion-proof surveillance Huadong Medicine regards water resource management as a boiler plants cooling tower replenishment in refrigeration
cameras to ensure safe storage
G eneral industrial solid waste (e.g. waste liquid key component of its green operations. By optimizing water plants as well as water for production and daily life. Demand
bags sludge) is sent to accredited third-party entities All hazardous waste is entrusted to accredited third- use processes and promoting water-saving technologies the for daily potable water is met from purchased barreled purified
for incineration and disposal party entities for compliant disposal and treated in a Company has significantly improved water resource utilization water. The Company's subsidiary Zhongmei Huadong has
harmless and compliant manner efficiency and reduced water resource consumption. All tap been recognized as a "Provincial Water-Saving Enterprise"
R ecyclable solid waste (e.g. packaging waste water used in the Company's facilities is sourced from the in Zhejiang Province for consecutive years and continues to
spent activated carbon) is reused through resource municipal water supply network and is primarily used for water enhance its water management practices in accordance with
recycling production in water purification plants steam generation in relevant standards and implement water-saving measures.C onstruction waste is disposed in accordance with
relevant regulations
Purified Water Reclamation
Waste Management Measures The Company recycles discharge water from purified water stations including forward/reverse rinse
water pre-sampling drainage and post-disinfection drainage. By installing recovery equipment this
Huadong Medicine always practices the concept of green development and actively explores ways of utilizing waste resources striving external drainage water is treated to remove suspended particles and other impurities and then
to achieve both economic and environmental benefits. Looking ahead the Company will continue to explore new models for utilizing redirected to the pressurized tap water tank for reuse realizing circular utilization. In 2024 this project
waste resources to promote green and sustainable development. is expected to recover approximately 31600 tons of reclaimed water and save around RMB 232900 in
costs.Resource Utilization of Chinese herbal medicine Residue
The Company's decoction service center generates a large quantity of Chinese herbal medicine residue annually. If treated
as industrial solid waste disposal would incur high costs. To reduce disposal costs and achieve resource utilization the Reduction of Purified Water Reverse Osmosis (RO) Membrane Expenditure
Company has partnered with professional farms to use the Chinese herbal residue as feed for sheep thus achieving resource
utilization. The farms collect and remove the residue daily which not only reduces solid waste disposal expenses but also By optimizing the use cost of purified water RO membrane the Company has implemented secondary
generates additional economic benefits for the Company achieving efficient utilization of waste. This initiative represents cleaning of used membranes so as to restore its desalination rate to over 85% and the conductivity
an innovative practice in waste management and demonstrates the Company's environmental responsibility. of the produced water to below 10 μS/cm meeting operational requirements. Therefore a set of
sustainable cleaning and management system for RO membranes has been established.Indicator Unit 2023 2024
Quantity of General Waste Generated Ton 21188.53 19544.01 Sensor Faucet Installation for Water Conservation
General Waste Production Intensity Ton / RMB per million (revenue) 0.52 0.47 The Company has installed infrared sensor faucets in workshop washrooms equipment washing rooms
and changing rooms to prevent cross-contamination while reducing water consumption thereby
Quantity of General Waste Recycled Ton 3218.56 13695.41 further enhancing water resource utilization efficiency.Quantity of Hazardous Waste Generated Ton 4104.53 7378.62
Hazardous Waste Production Intensity Ton / RMB per million (revenue) 0.10 0.18 Water-Saving Measures
Waste Generation and Recycling of Huadong Medicine
52 532024 | Environmental Social and Governance (ESG) Report Environmental: Green Development and Ecological Harmony
Circular Economy Green Office
Upholding the concept of innovation-driven and sustainable the entire lifecycle of materials and standardizing the recycling and Huadong Medicine actively practices the philosophy of green development by integrating green office practices into all aspects
development Huadong Medicine is committed to unleashing the reuse of packaging barrels and solvents to ensure compliance and of its daily operations. The Company is committed to reducing resource consumption and carbon emissions thereby promoting
resource potential of every stage in its operations and promoting efficiency in resource circulation and utilization. sustainable corporate development. Through the promotion of digital workflows optimization of office procedures and the
a circular economy. The Company strictly adheres to its Material cultivation of environment conservation awareness the Company continues to enhance its green office and foster an eco-friendlier
Compliance Management to regulate the management of raw The Company actively promotes the recycling and utilization and more efficient working environment for employees.and auxiliary materials used in pharmaceutical production as of packaging materials and production solvents aiming to
well as packaging materials that come into direct contact with reduce resource waste lower production costs and advance the
pharmaceuticals. In addition the Company implements specialized development of a circular economy demonstrating its innovative Online Office and Approvals
procedures such as the Cylindrical Paper Drum Recycling Standard practices and a strong sense of responsibility in green production
Operating Procedure establishing process-based management for and sustainable development. OA online office platform: The Company has fully promoted online office platforms enabling digital approval of business
processes. This has significantly improved approval efficiency while reducing the use of paper documents.Recycling and Reuse of Cylindrical Paper Drums
Green Recruitment
To minimize resource waste and reduce production costs
the Company recycles the outer packaging cylindrical Digital materials in place of paper materials: During recruitment digital methods such as online resume submissions and In 2024
paper drums used for the fermented Cordyceps Sinensis digital brochures are used to reduce paper waste and resource consumption.powder (referred to as the powder). The powder is used Virtual information sessions and interviews: By conducting online information sessions and interviews the Company
in the production of Bailing Capsules and Bailing Tablets The recycling rate of cylindrical paper drums reached reduces business travel-related carbon emissions and mitigates environmental impact.upon it passes inspection. Used cylindrical paper drums
are transported to the warehouse for recycling. Those 96 Reusable promotional materials: Display items such as roll-up banners are reused to reduce unnecessary resource use.meeting the required standards are re-stocked for reuse %
in production forming a closed-loop recycling system. In
2024 the recycling rate of cylindrical paper drums reached Resulting in cost savings of approximately RMB Resource Conservation Education
96% resulting in cost savings of approximately RMB
2.26 million significantly improving resource utilization 2.26 million Resource conservation slogan display: Slogans promoting water paper and electricity conservation are prominently efficiency and promoting the development of circular displayed in workplaces to reinforce sustainable office practices and raise employee awareness.
economy.Green Office Practices
Recycling and Reuse of Solvents
The Company recycles and reuses solvents used in the production process such as ethanol acetone ethyl acetate and
isobutyl acetate. Ethanol is recycled using a supergravity rotating bed while acetone ethyl acetate and isobutyl acetate
are recycled through vacuum concentration. Once passed quality inspection these solvents can be reused significantly
reducing procurement volumes lowering production costs and decreasing hazardous waste generation embodying the
environment conservation philosophy of green production.Reuse of Iron Drums
The Company reuses 200 L iron drums previously used for materials such as glycerol acetone and n-heptane. These drums are
used to store waste solvents generated during the production reducing the disposal costs of empty hazardous waste drums
and the procurement costs of new drums. This approach achieves efficient resource utilization and optimized cost control.
54 5503 Excellence in Innovation
Quality as Safeguard
Product
Huadong Medicine adheres to innovation-driven development
and prioritizes product quality and safety. Through rigorous
R&D procedures and a robust quality management system
the Company ensures high product quality and safety.Focusing on customer needs the Company continuously
optimizes service experience to build a reliable brand image.Additionally the Company conducts full-lifecycle assessments
of its suppliers to enhance the risk response capabilities and
resilience of its supply chain striving to provide patients
with reliable medical solutions and promote the sustainable
development of the industry.R&D and Quality and Responsible Supply Chain
Innovation Safety Services Management
Contributing to the UN SDGs:2024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
R&D and Innovation R&D Innovation Achievements
Huadong Medicine regards the development of innovative drugs as the cornerstone of its corporate development strategy and During the reporting period adhering to the corporate philosophy of "scientific research-based and patient-centered" the Company
is committed to building a leading innovation-oriented R&D system. The Company continuously increases R&D investment and remained focused on the therapeutic areas of endocrinology autoimmune diseases and oncology. In addition to increasing its
strengthens intellectual property protection to maintain technological leadership. At the same time the Company strictly adheres R&D investment it further enriched its innovative drug R&D pipeline layout strengthened its innovation and R&D ecosystem and
to ethics in drug development pays attention to animal welfare protection and ensures the compliance and ethical integrity of R&D technology platforms and actively advanced clinical trial progress achieving multiple major milestone achievements. As of the
activities. The Company also continuously optimizes its R&D procedures to accelerate the transformation of innovative achievements release of this report the Company's pharmaceutical segment had a total of 133 R&D projects under development including 94
and inject momentum into the high-quality development of the industry. innovative drug and biosimilar projects.The Company's innovation and R&D are centered on the three major therapeutic areas of endocrinology autoimmune diseases and
Innovation and R&D System oncology. At present the number of its innovative drug pipeline has expanded to more than 80. With the continuous enrichment of
the product pipeline the scope of the Company's innovative drug has extended to include a wide range of modalities such as small-
molecule drugs targeted protein degraders peptide drugs antibody-drug conjugates (ADCs) bispecific or multi-specific antibodies
The Company has been deeply engaged in specialized medicines chronic therapeutics and specialized pharmaceuticals for years. and small nucleic acid drugs as well as the development of innovative therapies for diseases in the fields of endocrinology
It has built strong brand recognition and a solid market foundation in therapeutic areas such as CKD immunology endocrinology autoimmune disorders and oncology.oncology the digestive system and the cardiovascular system consistently maintaining a leading market share among domestic
peers. The Company has already launched first-in-class innovative drugs in each of its three core therapeutic areas: oncology
endocrinology and autoimmune diseases. It has also established three distinctive product clusters including antibody-drug
conjugates (ADCs) GLP-1 and topical formulations thereby creating distinctive competitive advantages.The Company places great emphasis on innovation and R&D. It has established a Global Innovative Drug R&D Center responsible
for formulating strategies for the development of proprietary innovative products pipeline planning and clinical research and
development. Upholding the philosophy of "scientific research-based and patient-centered" innovation the Company prioritizes
products with "clinical relevance pharmacoeconomic viability and commercial potential" and continues to maintain a high level of New Target
R&D investment. Through years of development it has built a relatively complete proprietary innovation system that spans from drug Discovery Drug Design and CADD/AIDD Synthesis Platform Platform
discovery pharmaceutical research and preclinical research to clinical development and industrialization. Platform
Focusing on the three core therapeutic areas of oncology endocrinology and autoimmune diseases the Company conducts Early-Stage
independent R&D external collaborations and product license-ins. It has developed a distinct innovative product pipeline PROTAC ADC R&D Platform Platform Formulation
covering the full R&D cycle ensuring a continuous clinical advancement and launch of new innovative products and providing Platform
new momentum for long-term growth. The Company's independent R&D capabilities continue to advance with the number of its
innovative drug pipeline now exceeding 80 ranking it among the top tier of the domestic pharmaceutical industry.R&D Team Development
Huadong Medicine prioritizes team building and the enhancement
As of the end of the reporting period of innovation and R&D capabilities. The Company not only focuses
Achievements in Innovation Platform Development
on top-level design in strategic layouts but also ensures solid talent
reserves to provide strong support for its long-term development. The
R&D personnel Company has established a Scientific Advisory Board (SAB) composed
of renowned experts and scholars from the medical and R&D fields
1864 both at home and abroad aiming to provide comprehensive and professional strategic guidance and advice and jointly overcome
challenges during innovative drug development. During the reporting
period the SAB played an important role in the application and
Including PhDs Master's preparation of the Zhejiang Provincial Key Laboratory for Metabolic
Diseases helping the laboratory define its research direction and
106 569 promote interdisciplinary cooperation thereby providing broad space for the laboratory's innovative R&D.
As of the end of the reporting period Huadong Medicine had 1864
With the proportion of master's and doctoral R&D personnel (including 106 PhDs 569 Master's) with the proportion
degree holders exceeding of master's and doctoral degree holders exceeding 36.21%. The team
covers end-to-end R&D functions from discovery to clinical translation
36.21% supporting multiple drug approvals and clinical-stage projects. The SAB's leadership and the team's efforts solidify Huadong Medicine's The Innovative Drug R&D Center
position as an R&D leader.
58 592024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Application of AI Technology in Drug R&D
November 22 2024
Since the formation of the AIDD2 team under the Innovative Drug Center in 2021 the Company has undergone a major October 2024
transformation in AI technology development from relying on external collaborations and exchanges to a pattern driven by January 2024 Industrial Park hosted the 4th First 1 2 Industrial Park was approved by independent development and supplemented by external collaborations. The Company has continued to increase its investment 3 General Meeting of Members of Industrial Park Officially Hangzhou Municipal Bureau of Hangzhou High-tech Enterprise
in AI. In response to the rapid advancement of large AI models such as Deepseek and the in-depth implementation of the Launched operations Economy and Informatization as Association and the "New Eagle"
Group's digital transformation strategy it has identified AIDD as a core development direction and achieved a series of significant a "Specialized Biopharmaceutical Policy Guidance and Advancement
Industrial Park of Hangzhou"
breakthroughs. The AIDD team has remained at the forefront of industry trends consistently enhancing its computing power Conference
and algorithm systems. The team has successfully established an AI-powered drug design platform. This platform features a
design cycle with computation and experimentation deeply integrated with each other enabling the continuous optimization of
predictive models for drug properties including key capabilities such as molecular affinity hERG and membrane permeability
prediction. In addition the team has successfully deployed biomacromolecule prediction large models such as AlphaFold3
Boltz and Chai-1 as well as AI-driven molecular generation software. These technological advances have been widely applied 2024 Annual Progress of the Life Sciences Industrial Park
across the Company's R&D pipelines. The deep integration of AIDD and CADD3 approaches has significantly improved the drug
R&D efficiency and accelerated the development of multiple innovative drug programs which fully demonstrates the immense
potential of AI in empowering drug R&D.The AI team has further classified application scenarios into five categories: data integration large language model applications
AI-powered drug design AI-assisted experimentation and intelligent office covering over 50 specific applications. These
innovative applications have already been incorporated into the Company's future platform development roadmap. Looking
ahead the team will continue to explore cutting-edge technologies expand the boundaries of AI applications in the R&D of
small molecules PROTACs ADCs protein antibodies peptides and small nucleic acid drugs. By doing so it will drive ongoing
breakthroughs in the Company's intelligent innovative drug R&D efforts.Life Sciences Industrial Park
Huadong Medicine continues to optimize and innovate its R&D platforms promoting the ecosystem development of the Life Sciences Life Sciences Industrial Park
Industrial Park. This initiative not only effectively accelerates the drug R&D process but also fosters the coordinated growth of the
biopharmaceutical industry.Under the overarching strategy of innovation-driven transformation R&D ecosystem development and industrial cluster cultivation The Company also established Hangzhou Zhongmei Huadong Synthetic Biology Proof-of-Concept Center which is rooted in
the Company has established the Huadong Medicine Life Sciences Industrial Park. This park integrates "research and development synthetic biology technology and adopts a full-industry-chain-empowered "proof-of-concept" model. The center provides technical
incubation accelerated transformation and industrialization implementation" focusing on life and health research and industrial support across the synthetic biology industrial chain incubates innovative tech SMEs and accelerates the identification and
conversion. It provides comprehensive resources including office facilities research funding technological innovation platforms transformation of scientific achievements. To date the center has admitted over 40 projects into its portfolio of which 20 have been
and investment and financial assistance. Leveraging Huadong Medicine's complete R&D industry chain and ecosystem the park also successfully validated and implemented. Additionally the center has incubated 6 companies and offers a range of services including
offers all-round support to its resident enterprises. The park officially commenced operations in January 2024 and by the end of the technical consulting lab/pilot testing CDMO and CMO validation. In December 2024 the Hangzhou Zhongmei Huadong Synthetic
Reporting Period 15 companies had already moved in. Biology Proof-of-Concept Center was recognized as one of the first six officially designated proof-of-concept centers in Hangzhou
acknowledging the Company's innovative leadership in synthetic biology.Innovative
Drug
Development
Synthetic
Biology
Core Fields for
Investment
Attraction
Medical
Devices
Aesthetic
Medical
Products
Core Fields for Investment Attraction in the Life Sciences Industrial Park
2 AIDD: Artificial Intelligence-Driven Drug Design which refers to the application of artificial intelligence (AI) technology in drug development. It uses AI
algorithms to analyze large-scale molecular structure data to help predict the interactions between molecules and their therapeutic effects on diseases.
3 C ADD: Computer-Aided Drug Design which is a drug design method based on computer technology.
60 612024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Intellectual Property Protection
Huadong Medicine regards intellectual property (IP) protection efforts as a key driver of innovation. During the reporting period
the Company formulated the Inventor Management Measures and updated the Patent Application Incentives to further clarify the Training on Intellectual Property Protection
rights and obligations of inventors. Additionally the Company also refined the incentive standards for patent applications increasing
rewards for core patents to encourage high-quality innovation. In addition the Company introduced a new patent classification
system based on the commercial value and protective strength of patents categorizing them into core patents peripheral patents Training on Intellectual Property
and general patents to ensure scientific and transparent patent management.Organized discussions among patent legal technical and legal counsel teams to analyze patent cases and propose
To ensure the effective implementation of the intellectual property system and the protection of inventors' legal rights the Company solutions.adjusted its organizational framework and resource allocation across business units. In the innovative drug segment a dedicated
intellectual property business partner position was established to coordinate related patent affairs. In other segments such as Provided on-site patent knowledge learning training for new employees and offered online course and related materials on
aesthetic medicine industrial microbiology business unit and the CMC division4 dedicated personnel were also assigned to intellectual property.coordinate patent-related matters ensuring efficient project tracking and patent works management. Furthermore the Company In accordance with patent portfolio requirements for specific products regularly communicated with multiple stakeholders
has developed a comprehensive patent management system covering all stages of patent application and enhanced information regarding key product patent applications and R&D trials.sharing and decision-making efficiency through both professional and internal proprietary databases thereby optimizing the patent
management process.Building on this foundation Huadong Medicine actively identifies and addresses potential IP risks to ensure steady progress in Patent Sharing and Forums
innovation and R&D. Through proactive patent strategies and competitor patent monitoring mechanisms the Company effectively
mitigates patent risks. Additionally in collaborative projects the Company strictly adheres to cooperation agreements and intellectual Held various patent communication and sharing sessions covering topics such as patent regulations and revision of
property management policies to implement IP communication facilitating smooth patent examination maintenance and licensing. examination guidelines.Participated in several patent forums including the 9th IP Forefront Pharma Forum and the Qiantang Forum on Rule of Law
in the Bioeconomy contributing to innovation and development within the industry.Patent Competitor Intellectual Property
Strategies Patent Management for Surveillance Collaborative Projects
During the reporting period
Monitor and track project progress Conduct regular patent surveillance Communicate with partners per
analyze R&D data and strategically and searches contractual agreements to manage
deploy core patent filings patent examination and maintenance Number of new authorized patents
Complete patent surveillance prior
Use strategies such as priority to patent initiation to support early- Implement IP-related clauses in
claims patent categorization pre- stage exploration preliminary cooperation agreements manage
grant examination and prioritized research and new-phase project PCT national phase entry patent 90
examination to protect innovation approvals registration examine progress etc.Ensure high-quality drafting of Regularly update IP progress
patent specificationsCompetitor participate in relevant meetings and
Patent Surveillance assess project dynamics As of the end of the reporting period
Cumulative number of granted patents
825
Intellectual Property Risks Management Measures
The Company prioritizes the patent team's development and capacity building and is committed to cultivating a highly qualified and
professional intellectual property team. By optimizing existing personnel allocation and practical training with live patent cases the
Company has significantly improved the team's patent prosecution competencies and application drafting quality. Concurrently the As of the end of the reporting period
Company actively disseminates patent culture across the organization. During the reporting period the Company successfully hosted
patent coordination meetings and patent training sessions further advancing intellectual property management and strengthening Cumulative number of Cumulative number of
employee competencies thereby providing solid intellectual property protection for the Company's innovation-driven development. software copyrights trademarks
16
4 C
654
MC: Refers to Chemistry Manufacturing and Controls Center a critical phase in drug R&D and production that includes drug production techniques
impurity research quality research stability studies process validation etc.
62 632024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Research Ethics Animal Welfare
Throughout the drug clinical development process the Company strictly adheres to the Helsinki Declaration the Drug Registration While pursuing innovation in R&D Huadong Medicine attaches great importance to the ethical treatment and compliant management
Verification Criteria and Principles the Guidelines for Ethical Review of Drug Clinical Trials and the ICH GCP as well as other of laboratory animals. The Company strictly complies with the Laboratory Animal - Requirements of Environment and Housing
international and domestic regulatory standards. The Company has developed standard operating procedures to ensure the scientific Facilities the Management of Experimental Animals and the Guidelines for Humane Treatment of Experimental Animals among
rigor and ethical compliance of the R&D processes. These procedures cover all stages from clinical trial design to data analysis other laws and regulations. Internally the Company has formulated the Guiding Principles for Ethical Review of Experimental
ensuring both scientific rigor and ethical compliance of drug development. Animal Welfare and the Charter of the Ethics Committee for Experimental Animal Welfare to ensure comprehensive oversight of the
management system operational standards animal care usage practices as well as the operation of facilities and equipment of the
Laboratory Animal Center in order to provide a solid institutional basis for safeguarding animal welfare.Ensuring Scientific The Company complies with the Good Clinical Practice standards and has established various functional The Company has established an Experimental Animal Management Committee and an Ethics Committee for Experimental Animal
Rigor in Drug departments including clinical medicine and clinical pharmacology to participate in all aspects Welfare to advance the implementation of animal welfare management. The former conducts rigorous reviews of all animal research
Development of clinical trials from protocol design and statistical analysis planning to data analysis and report projects to ensure scientific rigor and ethical compliance. In addition it provides professional training for relevant personnel to
preparation. Additionally the Company has also established the Medical Document Review Committee
(MDRC) and related management systems to enhance scientific accurate and timely decision-making. enhance their legal awareness and operational proficiency.To ensure the utmost respect and protection for laboratory animals and to guarantee the accuracy and reliability of experimental
data the Company has adopted a range of measures including optimizing the breeding environment standardizing procedures and
In accordance with the Good Clinical Practice requirements the Company has implemented multiple anesthesia management and establishing humane endpoints and euthanasia protocols.Ensuring Ethical
Compliance in SOPs covering ethical review governance of human genetic resources and clinical risk management.Drug Development The Company's clinical research protocols incorporate subject-centric safeguards including pregnancy risk management for women of childbearing potential and privacy protection processes for individual
safety case reporting. These practices regulate clinical research operations protect subject safety Breeding Environment Management Experimental Design Management
uphold data privacy and ensure ethical compliance and drug safety.Environmental Optimization: Provide housing facilities that meet Follow the 3Rs5 principle in experimental design to ensure both
national standards ensuring appropriate space ventilation basic animal welfare and scientific validity.temperature humidity and lighting to accommodate the animals'
Replacement: Use in vitro living systems (e.g. tissues cells) to
In addition the Company follows principles such as ethical review and informed consent to ensure the safety and rights of subjects. natural habits and needs. replace animal testing.These measures laid a solid foundation for R&D process prioritizing the well-being of participants while promoting scientific Feed and Water: Supply nutritionally balanced feed and sterile
advancement. drinking water and additional nutritional supplements are provided Reduction: Under the premise of ensuring the scientific rigor and
when necessary. validity of the data use as few experimental animals as possible; make
full use of the existing experimental data and do not do repetitive
Environmental Enrichment: Introduce enrichment items such experiments without scientific significance; in some cases the same
Informed Consent and Protection of Subject Rights as toys and nesting materials in animal rearing environments animal can be used to conduct multiple experiments.to meet their behavioral needs and reduce their stress-related
behaviors.Develop and manage the rule of drafting revising reviewing approving and archiving rules of informed consent forms to safeguard subjects' Refinement: Optimize experimental protocols by
rights to information voluntary participation and privacy. Veterinary Care: Appoint professional veterinarians adopting non-invasive or minimally invasive techniques
to provide expert care advice and measures to ensure to reduce animal harm.the health and comfort of the animals.Risk Management and Quality Control
Identify assess and control risks in clinical research to ensure quality and compliance of clinical trials. Experimental Procedures and Humane Endpoints and Euthanasia
Develop annual quality control plans co-monitoring and routine monitoring to identify and respond to risks during executions. Anesthesia Management
Trained Personnel: Ensure that all experiments are conducted Establish clear criteria for humane endpoints terminate
by professionals especially trained in breeding anesthesia experiments promptly when these are met and carry out
Privacy Protection and Data Security surgery and other technologies as well as animal welfare ethics. euthanasia as needed.Appropriate Anesthesia: Select suitable anesthetics and administration Use appropriate euthanasia methods to ensure animals pass
Properly protect subject privacy and personal information during clinical trial and data management. methods monitor anesthesia depth and ensure procedures are pain- painlessly and without fear.free.Minimize Trauma: Perform surgical procedures with minimal trauma
Training and Qualification Management control bleeding and reduce pain; apply anti-inflammatory and analgesic treatments postoperatively.Develop individual and departmental training plans that apply to all employees contractors and consultants involved in training and
qualification certification.Animal Welfare Protection Initiatives
Clinical Trial Management and Subject Protection Initiatives
5 T he 3Rs Principle: Refers to Reduction Replacement and Refinement.
64 652024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Quality and Safety Type of Risk/Opportunity Description of Risk/Opportunity Time Range Potential Impact on the Company Response Measures
Huadong Medicine regards product quality as the cornerstone of its development and has established a comprehensive quality May increase likelihood of customer complaints and returns damaging Strengthen supplier management and audits
control system covering the entire process from R&D and production to commercial operations. The Company ensures product Material The quality of products from some Short- the Company's reputation and market and establish long-term partnerships with suppliers may be volatile potentially medium- and competitiveness high-quality supplierssafety and efficacy through quality-by-design during the R&D phase rigorous quality supervision during production and robust recall Quality Risk damaging product performance. long-term C onduct regular assessments and audits of
mechanisms during operations. In addition the Company also actively engages in pharmacovigilance promotes its quality-oriented Possible production delays leading to higher costs suppliers
corporate culture and continually enhances quality management to reinforce its quality defense.D evelop maintenance plans and servicing
Q uality issues may fray customer programs for production equipment ensure that key inspection instruments have backup
Governance trust and damage the Company's brand image units to support product release in emergencies
Manufacturing Equipment failures and operational Short- Establish temporary emergency production
Risk errors during the production may medium- and
May lead to product recalls incurring
additional costs and legal liabilities plans for production lines and conduct regular
Huadong Medicine's wholly-owned subsidiary Zhongmei Huadong has structured its quality management around the Quality result in product quality issues. long-term emergency production drills M ay interrupt production affecting
Management Center which consists of the Quality Assurance (QA) Department the Quality Control (QC) Department and the delivery schedules and customer Provide regular training to operational personnel
satisfaction to improve their technical skills and quality Comprehensive Quality Management Center. A Vice President (Quality) assumes the role of quality steward and authorized figure tasked awareness thereby ensuring inspectors' cross-
with crafting overarching quality development strategies setting overall objectives defining strategic directives and implementing inspection performance
quality enhancement initiatives. To ensure the quality of the pharmaceutical products the Company operates under a quality veto M ay lead to product non-compliance C onduct comprehensive risk assessments
system empowering the QC managers with the authority to veto decisions pertaining to drug quality management. They are also with regulatory requirements for shared production lines based on
integral in pivotal quality determinations such as addressing quality complaints adverse reaction reports and product recalls. Cross- Shared production lines may pose resulting in supervisory punishmentcontamination risks of cross-contamination mix-ups Short- and product characteristics cross-contamination
Risk or errors medium-term M ay pose health and safety risks to prevention measures during production and
employees leading to litigation and whether the residue of the equipment after
compensation use and cleaning meets the requirements
Vice President (Quality) M ay add extra logistics costs and
Storage and Products may be damaged or
compensation expenses Strengthen temperature and humidity
deteriorated during storage and Short- and control cooperate with professional logistics Logistics Risk May lead to potential supply chain logistics. medium-term providers to ensure product quality and disruptions impacting product safety during transportation
Quality Management Center supply and sales
Emerging technologies such as I ncrease investment in cutting-edge
artificial intelligence (AI) big data and technologies such as biopharmaceuticals
the Internet of Things are bringing new A doption of new technologies can and gene therapy to support new drug R&D
possibilities to the pharmaceutical improve production efficiency and existing technology upgradesTechnological Medium- and
Comprehensive Quality Opportunity industry. AI application has already long-term reduce costs enhance product A pply AI and big data technology to optimize QA Department QC Department Management Center made notable progress in drug quality and strengthen the production processes and quality control,research and development such as Company's innovation capabilities boosting efficiency and quality.molecular screening and clinical data
Ensure that drug R&D production Conduct inspections prior to the Establish and manage a Collaborate with research institutes and analysis.and quality management activities release of materials and products pharmacovigilance system to universities to accelerate technology transfer.comply with quality standards and and ensure adequate facilities monitor drug safety after market In July 2024 the Chinese government
regulations. equipment and experienced entry handle adverse drug reaction released the Implementation Plan
personnel are in place. incidents and conduct risk for Full-Chain Support for the Favorable policies help the Company
Ensure a clear definition of assessments. Development of Innovative Drugs to develop and launch innovative S trengthen market research and customer
management responsibilities and Be responsible for sampling creating a more favorable environment pharmaceutical products enhance demand analysis and optimize product
correct procurement and use of inspecting and testing various Establish a drug recall system and for innovative drug's development and the technological content of the portfolio
raw and auxiliary materials and materials and products as well as handle quality-related complaints. Market providing the Company with access to
products and better meet the market
Medium- and demand A ctively participate in international
packaging materials. assessing product stability. Responsible for GMP training for Opportunity
markets long-term pharmaceutical exhibitions and technical
In addition continued global High-quality products help exchanges
Regularly assess the effectiveness of employees and managing the quality pharmaceutical market expansion enhance brand reputation
the quality assurance system. information system. and rising consumer demand for high- and competitiveness meeting
Establish strategic alliances with better-
consumers' higher expectations for performing partners
Conduct on-site audits of suppliers quality drugs are providing more
and participate in annual supplier opportunities for expanding domestic
safety and efficacy.and international market
assessments.On October 23 2023 the National
Medical Products Administration
issued the Announcement on U nder a more standardized
Strengthening the Supervision and regulatory environment the
Strategies Management of Commissioned Company strictly complies with Production by Marketing Authorization the announcement strengthens
Regulatory Holder for Medicines (No. 132 of 2023)
Optimize quality management processes and
which put forward clear requirements Medium- and
management of commissioned
Opportunity long-term production and ensures drug quality.standards continuously improve the quality
Based on its business layout operational status and strategic planning the Company has systematically identified key risks and on the management of licensing This enables broader cooperation
management system covering the entire
opportunities in areas such as production storage and logistics and conducted in-depth analyses of their potential impact on quality management and supervision with high-quality commissioned
lifecycle of commissioned drugs production
and inspection of commissioned manufacturers so as to expanding
business operations and financial performance. In response the Company has developed comprehensive strategies including production etc. and strictly regulated business and market and enhancing
the establishment of a robust quality management system and the enhancement of quality assurance measures. In addition the the commissioned production brand competitivenesspractices to ensure the prominent
Company is proactively advancing the optimization of its pharmacovigilance system and promoting quality-oriented corporate strengths of compliant enterprises
culture with the goal of achieving comprehensive risk management.
66 672024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Quality Management System Production Quality Management
Huadong Medicine has established a comprehensive quality By the end of the reporting period 100% of the Company's The Company has established a production quality management investigation and documentation of all non-conforming testing
management system to ensure that its products meet intended in-line product lines had passed GMP certification and GMP mechanism throughout the entire product lifecycle to reduce results.use and drug registration standards thereby safeguarding compliance inspections. Additionally it has also made quality risks. The Quality Control Department of Zhongmei
therapeutic efficacy and patient safety. The Company has significant progress in both domestic and international Huadong is responsible for testing all incoming materials To ensure production safety and drug quality the Company
compiled and continuously refined its Quality Manual in certifications demonstrating its commitment to high standards and finished products including raw and auxiliary materials organized multiproduct co-production line assessments in
accordance with the Medicinal Product Administration Law while standardizing quality management practices. packaging materials dosage forms and finished active accordance with the Guidelines for Quality Risk Management of
of the People's Republic of China the Good Manufacturing pharmaceutical ingredients. All testing and control standards Drug Co-production Lines issued by the National Medical Products
Practice for Medical Products (2010 Revision) and relevant ICH are approved by the Food and Drug Administration (FDA) of Administration. These assessments help identify potential risks
guidelines setting clear standards for the quality management the United States and national or provincial medical products and establish relevant measures to minimize multiproduct
system. administration authorities. Following a batch-by-batch testing co-production contamination and cross-contamination risks.principle the Company achieves 100% coverage in testing of self- Additionally we conducted Permitted Daily Exposure (PDE)
produced products to proactively prevent potential quality and assessments to provide scientific justification for co-production
lines.Domestic Multiple products of Zhongmei Huadong have passed on-site registration inspections
safety risks.Certifications conducted by the NMPA At the same time to ensure standard testing procedures the
Multiple production lines of Zhongmei Huadong have passed on-site GMP compliance Quality Control Department has developed management Coverage in testing of self-produced products
inspections regulations for sample handling sampling retention and
reference standards along with management protocols for
equipment instruments and reagents. For Out-of-Specification 100%
Jiangdong Company has passed one on-site inspection and certification by the U.S. (OOS) results and Out-of-Trend (OOT) observations the Company
International Food and Drug Administration (FDA)
has established clear investigation procedures requiring thorough
Certifications Jiangsu Joyang has passed one on-site inspections and certifications by Japan's
Pharmaceuticals and Medical Devices Agency (PMDA) and one by Germany's the
pharmaceuticals department of the Authority for Justice and Consumer Protection (BJV)
Internal Audits of Quality Management
Yantai Huarui has continued to strengthen production quality management by conducting at least 2 internal audits per
R&D Quality Management year. The internal audit process includes forming an audit team developing internal audit plans executing internal audits
and generating reports. In 2024 the Company conducted 3 internal audits and all identified issues during the process were
Huadong Medicine has established a rigorous system for R&D departmental self-inspections identifying and rectifying over rectified on schedule.quality management to ensure compliance with the highest 150 issues continuously refining management processes and
domestic and international standards from preclinical to effectively mitigating risks. During the reporting period Jiuzhou Pharmaceutical conducted 3 internal quality audits organized by the Quality
clinical stages. Management Department covering all GMP-related departments. Each internal audit was conducted by an audit team of QA
In the clinical development phase the Company adheres to the personnel within one to three days and the optimizations identified during the internal audit have been rectified.In the preclinical research phase the Company follows Good Clinical Practice ICH GCP E6 (R2) and other regulations
relevant quality management regulatory guidelines such as the and standards ensuring compliant and scientifically
Medicinal Product Administration Law of the People's Republic sound clinical trials. Additionally quality assurance data Xi'an Bohua has established GMP self-inspection management procedures and conducts 4 self-inspections annually led by
of China Good Laboratory Practice for Non-Clinical Laboratory management statistical analysis and other teams review and the Quality Management Department. In 2024 a total of 4 self-inspections were completed and all identified optimization
Studies Good Manufacturing Practice for Medical Products revise system documents based on industry standards to items have been rectified in accordance with requirements.and Quality management systems—Guidance for documented ensure completeness and effectiveness of such documents.information (GB/T 19023-2003; ISO/TR 10013) . These ensure The Company conducted 2 internal audits of the R&D quality
the scientific rigor of trial designs and regulatory compliance system during the reporting period helping to correct
throughout the trial process. During the reporting period the deficiencies within the system function and prevent potential
Company conducted 5 comprehensive internal audits and 10 risks.Internal Audits of Clinical Trials
To ensure the quality and compliance of clinical trials Huadong Medicine conducted random audits of 2 key ongoing clinical
trials evaluating their adherence to ICH-GCP China's GCP applicable regulations internal Standard Operating Procedures
(SOPs) and trial protocols. The objective was to assess the implementation of the clinical Quality Management System
(cQMS). The audit results showed that over half of the cQMS development tasks had been completed but there remains
room for improvement to achieve full optimization.
68 692024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Operational Quality Management Product Recall Mechanism
In the pharmaceutical and medical device operation sectors the Company has built a refined quality control system across the In accordance with regulations such as the Administrative Measures for Drug Recall and the Administrative Measures for Drug
entire industry chain to continuously strengthen quality and safety assurance capabilities. By integrating international standards Production Supervision and Management the Company has developed internal systems including the Documented Procedures
digital technologies and entire-chain collaborative management the Company has developed an integrated quality control system for Product Recall and the Reporting System for Major Drug Quality and Safety Incidents providing a clear institutional basis for
encompassing "prevention–control–tracing–improvement" thereby ensuring product safety and efficacy while maintaining an managing product recalls.efficient balance between risk minimization and compliant operations. Depending on the severity of the drug quality issue or potential safety risk recalls are categorized into three levels: Level I Level II and
Level III. The Company has established a comprehensive recall process to ensure the effectiveness of the recall system and safeguard
Safety Testing of New Product Launches the safety of patients' medication. During the reporting period the Company continued to strengthen risk control and improve recall
responsiveness through regular self-inspections and simulated recall drills.All pharmaceutical products from the Company are subjected on manufactured batches to track quality changes throughout
to safety testing prior to market launches in strict accordance the shelf life. The Quality Control Department laboratory
with regulatory plans and internal management policies. of Zhongmei Huadong accredited by the China National
Before the market launch the Company conducts quality Accreditation Service for Conformity Assessment (CNAS) is
and safety testing on 100% of the drugs through rigorous equipped with professional testing capabilities to perform Identification of potential recall-related issues
non-clinical and clinical trials to strengthen quality control 100% pre-market testing.throughout the entire process. After approval the Company
continues to monitor and assess the safety of the drugs to The Quality Control Department laboratory of Zhongmei
ensure their safety throughout their life cycle. Huadong also has a quality research team for post-marketing The Quality Management Department convenes the responsible personnel of other
drug changes to independently conduct relevant method relevant departments to investigate and assess drug quality issues or other safety hazards
Before the drugs are approved for marketing the Company validation and ensure capacity for post-approval quality
submits comprehensive documentation including clinical assessments. For post-marketing drug changes such as
trial data production qualifications and quality control changes in raw or auxiliary material suppliers or batch sizes For overseas recalls in
information to the National Medical Products Administration the Company has established a dedicated change control Decision to initiate a recall accordance with the relevant
demonstrating the product's safety efficacy and quality procedure and conducted quality research and stability laws and regulations of the
controllability. For products intended for international markets studies to support post-marketing drug safety assessments. importing country (region) and the provisions of the
the Company applies for market authorization based on each Furthermore the Company actively monitors and controls Issuance of recall procurement contract to
country's regulatory requirements. After receiving marketing drug quality during the distribution phase to effectively prevent information and notices organize the implementation
approval the Company continues to detect and supervise the quality and safety issues. of the recall
product quality and safety including annual stability studies Filing/reporting to
regulatory authorities
Implementation of the recall
Operation Process Management Optimization Timely assessment of
recall effectiveness
During day-to-day operations the Company's Quality Management Department conducts systematic and comprehensive annual
audits of the implementation of pharmaceutical and medical device quality management standards ensuring that quality Submission of recall
management practices meet regulatory requirements. For any non-conforming issues identified during audits corrective actions are conclusion report
supervised until the audited units pass review. Meanwhile the Company has implemented measures such as integrated multi-storage
operations and optimization of the national medical insurance traceability code to enhance quality management throughout the
operational process.Product Recall Process
During the reporting period the number of product recalls and regulator-mandated recalls of the pharmaceutical segment the
Revisions to Quality Integrated Multi-storage Optimization of the Scanning of
Management System Documents Operations the National Medical Insurance Company are as follows:
Traceability Code
The Company revises its quality B y consolidating self-operated The Company has reviewed
management system documents logistics resources the Company applicable national regulations During the reporting period
in accordance with laws and meets the requirements of on mandatory drug scanning
regulations and conducts training the quality supervision and requirements and configured
for relevant departments and management methods for mandatory scan reminders in Number of product recalls the pharmaceutical segment Number of regulator-mandated recalls
positions to ensure that quality the operation and use of its systems to ensure correct
management meets the latest drugs optimizing storage and scanning during logistics inbound
regulatory requirements and transportation resources and and outbound processes thereby
internal management standards. improving logistics efficiency and enhancing the compliance and 0 0
quality. accuracy of scanning.
70 712024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Pharmacovigilance
The Company strictly adheres to the Medicinal Product Administration Law of the People's Republic of China and the Good To raise employee awareness of pharmacovigilance and enhance comprehensive pharmacovigilance capabilities the Company
Pharmacovigilance Practices and the Provisions for Adverse Drug Reaction Reporting and Monitoring among other applicable laws arranges for pharmacovigilance officers and specialists to participate in specialized training sessions organized by the National
and regulations. A comprehensive pharmacovigilance system has been established and is continuously optimized. Moreover a Drug Medical Products Administration (NMPA) and other expert institutions. Meanwhile the Company also arranges for its employees
Safety Committee chaired by the Chairman of the Company has been established to lead major risk assessment management of to participate in in-house training conducted by the Pharmacovigilance Department to further strengthen their awareness of
significant or urgent drug safety incidents risk mitigation decision-making and other significant matters. In addition the Company pharmacovigilance.has set up a Pharmacovigilance Department responsible for overseeing all pharmacovigilance-initiatives and continuously optimizing
the system.Organizational Structure of Drug Safety Committee of Zhongmei Huadong
Pharmacovigilance Knowledge Training
Chairman
In 2024 the Pharmacovigilance Department of Zhongmei Huadong organized pharmacovigilance knowledge training
involving over 10000 employees. The training significantly improved employee awareness of pharmacovigilance and their
Chief Scientific Chief Medical Strategic Marketing Head of Pharmaceutical
Officer Officer Department Manager Service Corporation Production Manager Quality Manager ability to report safety information while enhancing their understanding of the Good Pharmacovigilance Practices.Pharmacovigilance Manager
Post-marketing Pharmacovigilance Manager Clinical Trial Pharmacovigilance Manager
Based on the comprehensive pharmacovigilance framework the Company continuously promotes its pharmacovigilance practices
through internal audits risk management and group-wide supervision to ensure the continuous improvement and perfection of the
pharmacovigilance system and continuously strengthen the risk management of drug safety.Pharmacovigilance Internal Audits
In accordance with the Good Pharmacovigilance Practices and with reference to the Pharmacovigilance Inspection Guidelines the
Company regularly conducts internal audits of pharmacovigilance operations. Issues and deficiencies identified during audits are
analyzed corrected and prevented thereby improving the quality of pharmacovigilance activities and ensuring the suitability adequacy
and effectiveness of the pharmacovigilance system
Quality Culture Development
Pharmacovigilance Risk Management Huadong Medicine implements a quality policy grounded in principles of "integrity efficiency quality global alignment and
innovation excellence" and continues to deepen the promotion and implementation of its quality-oriented corporate culture to
comprehensively improve the quality management.Conduct safety evaluations of traditional Chinese medicine varieties and revise and improve the safety information in the instructions
The Company continuously monitors the safety of marketed products and conducts regular signal detection and assessment. Annual To implement this quality policy and strengthen quality awareness among employees the Company has adopted a tiered
drug safety reports post-marketing risk management plans and periodic safety update reports are developed to comprehensively assess segmented and production-line-based management mechanism. Production quality-related stewards at each level are required
product risks and strengthen risk management to sign annual quality management target responsibility statements which are then included in annual performance assessments.Drug safety information is collected by the Company through multiple channels including spontaneous reports active collection Additionally GMP-related departments are assessed in alignment with quality management objectives with a focus on science and
contractual agreements and feedback from regulatory authorities. The Company also leverages a modern pharmacovigilance system for compliance to motivate employees to enhance their compliance awareness and work quality.data analysis and monitoring enabling the continuous identification of potential risks
The Company establishes the Emergency Response Plan for Serious Adverse Drug Reactions and Mass Adverse Events and organizes Each year the Company conducts various quality control and product safety training program and cultural promotion activities
emergency drills to further ensure drug quality promptly control major drug safety incidents and prevent drug-related risks with all employees 100% embracing the corporate quality culture and continuously raising their quality awareness. For example a
detailed annual GMP training plan is developed for all employees involved in pharmaceutical production and quality control. This
training is delivered through both lecture sessions and hands-on practice to provide quality-related training covering domestic and
Group-Wide Pharmacovigilance Supervision international regulations internal quality management system requirements etc. Assessments of participants are conducted through written exams and practical exercises.The Company establishes pharmacovigilance inspection procedures and conducts on-site inspections of subsidiaries In addition the Company holds monthly quality review meetings and weekly departmental meetings and requires the signing of
annual quality responsibility statements to raise quality awareness and improve operational standards among core quality-related
Efforts are made to improve pharmacovigilance systems of its secondary subsidiaries and their specialized capacities personnel. The Company also focuses on building a company-wide quality culture via internal communication platforms and regular
newsletters that interpret the latest industry regulatory updates and provide basic quality knowledge to all employees so as to
promote the Company's quality culture to them.Highlight Measures in Pharmacovigilance
72 732024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Quality Training for Management Personnel On this basis the Company implements its measures through
systematic risk management which includes four pivotal During the reporting period
In July 2024 the Quality Management Center of Zhongmei Huadong organized a training session for 57 senior production stages: risk assessment risk control risk communication
quality managers and workshop (department) managers. The training covered key regulations in pharmaceutical and risk review which runs through the entire lifecycle of risk
production quality management such as the Medicinal Product Administration Law of the People's Republic of China management and realizes systematic risk management and Conducted a total of
the Good Pharmacovigilance Practices the Measures for the Administration of Drug Registration ICH Q9 Quality Risk control. During the reporting period the Company conducted
Management and ICH Q10 Pharmaceutical Quality System. The training was assessed in the form of a written test to deepen a total of 279 product quality risk assessments. 279
managers' understanding of quality management regulations and to strengthen their quality management capabilities. product quality risk assessments
Quality Training for Employees in Production Workshops
During the reporting period the Company provided targeted training on microbiology GMP and pharmaceutical regulations
to employees in production workshops and quality-related departments. The training sessions involved 232 and 85 quality-
related employees respectively helping to strengthen their quality awareness and effectively enhance their professional Risk Review
competencies.Risk Communication
Risk and Opportunity Management
Huadong Medicine has established and improved a robust risk management mechanism and systematic management processes Risk Control
to identify assess and control potential quality-related risks and opportunities throughout all operational stages thereby ensuring
overall and effective risk management.By enhancing its quality risk management system clearly defining the scope of risk management and strengthening cross- Risk Assessment
departmental collaboration the Company has developed a quality risk management mechanism. This mechanism focuses on
assessing deviations in products or processes and the potential impact of product complaints on quality and regulatory compliance
with the aim of ensuring the reliability of the quality system.The Company has established a quality risk management system based on GMP Huadong Medicine's Quality Risk Management Process
requirements and ICH guideline principles and has formulated the basic principles
Institutional of quality risk management.Foundation Indicators and Targets
Huadong Medicine is committed to building a leading quality management system with "Compliance Scientific Rigor High Quality
Company leadership provides adequate resources and assumes leadership and Efficiency" as its core objectives. The Company aims to continuously optimize quality control processes and ensure that all stages
responsibilities for risk management ensuring that relevant personnel are of production from R&D to sales meet the highest standards.Collaborative equipped with appropriate expertise and skills. The Quality Department
Approach collaborates with departments such as Sales and Production to analyze all- During implementation process subsidiaries further refine their objectives by establishing quantifiable indicators such as material
known and foreseeable hazards collect production and post-production arrival compliance rates customer satisfaction and audit pass rates to ensure measurable and traceable quality management
information and promptly report to the Quality Management Department. outcomes. Through rigorous quality control and continuous improvement all subsidiaries have achieved high-quality management
goals ensuring that product release rates employee training coverage and customer complaint handling rates meet expected
standards.Scope of Risk By setting and regularly tracking quality and safety objectives Huadong Medicine effectively ensures high-quality products and
Management Risk management efforts cover all aspects of comprehensive quality management market competitiveness strengthens customer trust and lays a solid foundation for the achievement of overall strategic goals.including the R&D process plant equipment and facility systems management Looking ahead the Company will continue to promote a strong quality culture encourage full employee participation in quality
material management laboratory control and stability studies. management and steadily enhance product quality and operational efficiency to deliver safe and effective healthcare solutions to
customers.
74 752024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Responsible Services
Aesthetic Medicine Segment Launched Responsible Marketing Training
Huadong Medicine upholds a customer-centric philosophy and actively practices responsible marketing. The Company prioritizes
customer privacy protection and strictly complies with information security regulations. In addition Huadong Medicine implements The Company's aesthetic medicine segment has adopted a comprehensive training system combining online learning
standardized distributor management strategies striving to build an efficient transparent service system and a reliable brand image. and assessments with tiered on-site training to comprehensively enhance the compliance awareness and professional
competencies of the sales team. The training is reviewed and updated quarterly covering topics such as medical expertise
product information and compliant marketing skills. On-site training is conducted in stages with tailored content based on
Responsible Marketing different levels of skills and experience from new graduates to senior managers ensuring that the team can efficiently carry out compliant marketing activities within the framework of regulatory requirements. Specific training content includes:
Huadong Medicine strictly complies with applicable laws Audit items of responsible marketing include the establishment N ew Graduates: Introductory training for grasping basic industry knowledge compliant sales techniques and customer privacy
regulations and industry standards in its operational of internal control and management systems contract protection skills.jurisdictions and has established rigorous review procedures execution expense management and the supervision and Sales Specialists: Training in key customer management consultative selling techniques and compliant communication strategies.in accordance with compliance requirements. The Company management of marketing activities before during and after
has instituted the Internal Review Standards and Procedures their implementation by relevant departments. The Company Senior Specialists: Training in negotiation skills and risk prevention and control to better handle complex scenarios.for Company Promotional Materials which standardizes and urges the responsible units to promptly rectify the identified S ales Managers: Training in foundational management team building efficient leadership and compliant supervision to ensure
manages the entire process from creation to publication of issues during the audits and optimizes relevant management the team's business expansion under a compliant framework.promotional materials to ensure the accuracy and consistency systems accordingly. The Company will take disciplinary
of published content. actions based on the severity of violations to enhance the
standardization of marketing activities.The Company issued the Responsible Marketing Policy and
the Code of Ethical Business Conduct of Hangzhou Zhongmei During the reporting period the Company further standardized
Huadong Pharmaceutical Co. Ltd. (2024 Edition) clarifying the management process for promotional and non-promotional
the principles of responsible marketing in business promotion materials. This process covers all stages including creation review
activities such as medical interactive communication and management usage updating and destruction of promotional
commercial promotion of pharmaceuticals and medical materials. Additionally corresponding review checkpoints are
devices. In parallel the Company refined its commercial established based on the attributes of each promotion material to
conduct management system via granular management ensure its compliance with relevant regulatory requirements.requirements and procedures to ensure marketing compliance.To raise awareness and competency in responsible marketing
Adhering to the principle of compliant operations the Company the Company regularly conducts training programs about
prohibits any exaggerated deceptive or false advertising in all responsible marketing and has developed a comprehensive
promotional activities. We are committed to not engaging in in-depth and multi-level training system. These sessions
pharmaceutical services through commercial bribery or other aim to improve employees' responsible marketing capacities
illegal means and avoids false or misleading statements about and compliance awareness. Training topics include national
competitors' products or services. laws and regulations corporate compliant marketing policies
and knowledge product expertise pharmacovigilance etc. A
To further implement its responsible marketing principles combination of online and on-site lectures as well as general
we develop the systematic annual audit plan based on the and specialized sessions is provided to ensure 100% coverage
Company's needs and operational status regularly conducting across all employees.responsible marketing audits that cover all sales-related Industrial Microbiology Business Unit Launched Responsible Marketing Training
workflows to comprehensively assess the compliance of
marketing activities. The Industrial Microbiology Business Unit (BU) continuously strengthens the professional capabilities and compliance
awareness of its sales team through an integrated training system combining internal and external programs actively
practicing the principle of responsible marketing.In April 2024 the BU conducted internal marketing training covering business operations market data analysis compliant
Pharmaceutical Industry Segment Actively Built a Multi-Level Training System for Responsible Marketing marketing practices and anti-unfair competition policies. The training aimed to help frontline business personnel to
effectively respond to real-world business challenges enhance their awareness of responsible marketing and ensure
In 2024 Huadong Medicine's pharmaceutical industry segment accumulatively conducted over 1000 responsible marketing compliance in marketing activities. A closed-loop management system was established through courses exams surveys
training sessions with a total of 87980 participants. Training topics included compliant marketing practices management and improvement plans to ensure training effectiveness.skills development in-depth product knowledge compliance awareness education and risk prevention and control. In October 2024 the BU participated in a specialized external training program focused on compliant communication
Through systematic training the Company ensures that every employee thoroughly understands and strictly adheres to strategies with major customers and responsible marketing practices. The training helped enhance market insight and
compliant marketing requirements enhances their professional knowledge and service capabilities and facilitates the customer development capabilities. These efforts have significantly strengthened the team's professionalism and promoted
efficient execution of responsible marketing activities. the implementation of responsible marketing principles.
76 772024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Customer Service Information Security and Privacy Protection
Huadong Medicine remains committed to a patient-centered service philosophy striving for excellence in both products and services. The Company Firmly upholding the bottom line of information security privacy the overall security response capability. During the reporting period
continuously improves customer experience through concrete actions and fulfills its corporate social responsibility by implementing a series of service protection and legal compliance Huadong Medicine adopts diversified the Company conducted a cybersecurity emergency drill in response
management standards including the Control Procedures for Product and Service Specifications and the Product Return Management Procedures. measures to safeguard the information security of the Company and to a simulated website defacement incident. By simulating the impact
These standards help accurately identify and assess customer needs and provide clear guidance and operational guidelines for every sales process. customer privacy. The Company strictly adheres to national laws and of a real-time attack event initiated by hackers the Company tested the
By establishing and implementing a customer service mechanism the Company proactively gathers feedback and advice through regular customer regulations such as the Cybersecurity Law of the People's Republic system's security emergency response and protection capabilities and
satisfaction surveys and other channels to drive continuous service quality improvement. In 2024 Huadong Medicine Pharmaceutical Commerce of China Data Security Law of the People's Republic of China and assessed the effectiveness of the response plan to ensure an efficient
conducted customer satisfaction surveys collecting 1715 valid responses. The overall customer satisfaction score reached 4.86 out of 5 representing Personal Information Protection Law of the People's Republic of and prompt response in the event of an incident.an increase of 0.05 points compared to the previous year. Survey topics included sales procurement supply chain management and other aspects China. It has also formulated internal management systems including
with over 30 new questions added covering industry comparison and willingness to cooperate. Additionally the Company followed up with 100% of the Cybersecurity Management System and the Information System In terms of privacy protection in the middle of customer information
customers who had submitted feedback in the previous year ensuring that their concerns were effectively addressed. Operation Management System . All these regulations and systems collection the Company only collects information necessary for
provide a solid institutional foundation for its information security and business purposes without any personal privacy data involved. The
privacy protection efforts. Company strictly complies with relevant privacy protection laws and
regulations to ensure that all data collection use and storage processes
Additionally the Company has established an emergency response are legal and compliant. Customers' personal privacy information is
Regular Conduct regular telephone follow-ups with hospitals to understand their needs and concerns. Issues are compiled mechanism for information security incidents and has issued the treated with strict confidentiality refraining from leakage or misuse. The
Follow-Up reported addressed and re-assessed to heighten overall customer satisfaction Information Security Emergency Response Manual and the Emergency Company also actively promotes relevant knowledge of information
Mechanism Response Management System which clarify the division of labor and security and privacy protection through regular training sessions to
response process of the emergency response team and provide a ensure that employees stay informed of the latest requirements of
systematic basis for improving the efficiency of handling information information security and privacy protection. These measures help
security incidents. Building on this the Company further refined its safeguard Company assets and customer data. During the reporting
response plans and drill programs and carried out simulation drills to period no major information security or customer privacy incidents
Monthly
Customer Maintain regular communication with customer service personnel to continuously enhance their professionalism and
enhance employees' skills in handling security incidents and strengthen occurred.Service service capabilities ensuring efficient resolution of customer issues and providing better service to customers
Meetings
Internal Information Security Training for Employees
Customer Service Mechanism
In November 2024 the Company organized an internal employee
To ensure prompt and effective handling of customer complaints the Company has issued the Complaints and Adverse Events Handling and Reporting information security training program covering multiple
Management System which provides detailed regulations on the management process for dealing with adverse product reaction quality complaints and
feedback from customer inquiries and clarify the responsibilities of the relevant departments and personnel. Additionally a comprehensive complaint- departments including the Information Center the R&D Quality
handling process has been established to improve the efficiency and standardization of response efforts to customer complaints. During the reporting Management Department and the Pharmaceutical Service
period the Company received a total of 785 customer complaints achieving a resolution rate of 99.87%. Corporation. Training topics included information security systems
emergency response procedures and foundational knowledge on
infrastructure security. This training aimed to enhance employees'
understanding of information security management and strengthen
their ability to respond to emergencies thereby ensuring the
information security of the Company.Internal Information Security Training for Employees
Relevant departments
carry out investigations
Relevant departments and improvements
study customer documenting the
complaints and devise outcomes Pharmaceutical service Distributor Management
phased improvement Corporation conducts
strategies based on marketing explanation
Company strategy and and response Huadong Medicine is committed to fostering a healthy and stable the Company also enters into individual order contracts to clarify
customer needs win–win relationship with its distributors through systematic and specific performance obligations. A contract ledger is maintained to
3 standardized management. The Company has established management track business progress. The Company also conducts unscheduled
2 4 systems such as the Primary Distributor Management System and visits to distributors to verify their implementation of pharmaceutical the Distributor Assessment and Scoring Sheet to regulate distributor traceability codes and ensure regulatory compliance in drug circulation.
management processes and assess their performance. On this basis
The Quality Management The Quality Management
the Company systematically manages distributors through contract To promote integrity and clean cooperation the Company requires
Department analyzes and Department conducts execution invoice issuance monthly account reconciliation and semi-
all 293 primary distributors to sign Integrity Cooperation Agreement
reports the complaint tracking inspections and 1 5 annual financial settlement. alongside the annual cooperation agreement achieving a 100% signing generates closed-loop
archived records rate. In addition all employees in the Business Department are required Each year the Company signs annual sales agreements and quality to sign a compliance commitment letter with a signing rate of 100%.assurance agreements with its distributors. Based on business needs
Customer Complaint Handling Process
78 792024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Supply Chain Management Supplier Grading Management
In daily supplier management the Company conducts regular Based on assessment results we implement graded management
Huadong Medicine prioritizes the stability and sustainability of its supply chain and continuously improves its supplier management performance assessments and grading management in of suppliers and develops targeted supporting initiatives to ensure
system to ensure stable supply chain operations. The Company actively fulfills its social responsibilities and collaborates with its accordance with the Supplier Performance Evaluation and scientific and effective supplier oversight. Grade A suppliers may
partners to build a green efficient supply chain ecosystem that provides strong support for the Company's sustainable development. Grading Management System . The Company conducts a receive increased order volumes prioritized payments and forge
comprehensive quantitative assessment of suppliers in terms of strategic partnership with us. Grade B suppliers are maintained
quality production and use business affair after-sales service on- under current procurement strategies with expectations for
Supplier Management site audit and other assessment dimensions. These assessment continuous improvement. Grade B- suppliers face controlled or results serve as important judgment references for procurement reduced procurement volumes to encourage their performance
decisions and quality and price negotiations. Furthermore we improvement. Grade C suppliers are issued corrective action plans
Huadong Medicine regards supplier management as a key pillar in ensuring product quality and supply chain stability. The Company also monitor suppliers' own changes to their upstream supply with follow-up monitoring. Grade D suppliers are disqualified
strictly complies with relevant national laws and regulations and has established a comprehensive supplier management system chains regularly collecting data on delivery frequency quality from the qualified supplier list and all procurement is terminated.and management processes to ensure supplier quality and compliance from all aspects. These efforts safeguard the Company's and other information to assess their impact on the Company's
sustainable development and protect patients' health. product quality. This supports dynamic tracking and management
of the extended supply chain and effectively controls the quality
The Company has formulated internal systems such as the Supplier Management System Supplier Performance Evaluation and of supply at multiple levels.Grading Management System and the Raw and Packaging Material Procurement Management System. These policies support full-
process supplier management and provide clear guidelines to standardize supplier conduct enhance supply chain efficiency and
improve quality control. Supplier Audits
Supplier Qualification Management The Company conducts regular supplier audits spanning evaluations in terms of documentation completeness material
To ensure supply chain stability and product quality the Company implements rigorous screening and management for supplier quality levels production usage and other aspects. These quality production usage and the on-site audit performance.qualification. We also set strict qualification processes comprising four key steps: pre-selection preliminary review material trial use audits are conducted through a combination of on-site To strengthen oversight of primary (Tier 1) material suppliers
and formal approval. This process ensures that suppliers possess the necessary qualifications and capabilities and that meet material and remote methods to ensure supply chain integrity. For the Company has developed detailed regular audit plans.quality standards and business requirements. remote audits the Company has established the Remote
Audit Management System for Suppliers providing detailed The Company audits primary material suppliers of biologic
operational guidance and standards to ensure the quality and drugs annually and audits those involved in other finished
efficiency of the audit work. preparation products or APIs biennially. When issues are Pre-selection Preliminary Review Material Trial Use Formal Approval identified during supplier audits the Company takes prompt
For example the Quality Management Department of corrective and preventive actions such as halting procurement
S creen and shortlist potential Review qualification Purchase trial quantities of Assess the quality and trial
suppliers based on product documents and completed materials from pre-approved results and complete an Zhongmei Huadong Jiangdong Company collaborates with or conducting on-site audits to mitigate supply chain risks. By
specifications and quality questionnaires submitted by suppliers to verify quality approval form; the final departments such as Business Logistics and Quality Inspection implementing audit plans consistently the Company continues
requirements suppliers decision is made by the Assess trial materials and to conduct annual assessments of both primary (Tier 1) and to monitor suppliers' quality performance and improve the
quality management steward Distribute the Supplier Conduct a comprehensive complete an approval form general (Tier 2) material suppliers and make comprehensive stability and reliability of the supply chain.Questionnaire to candidates assessment of the supplier's to summarize the materials' Update the qualified supplier
to verify the validity of their credentials including quality impact on production and list based on the approval
qualifications standards test reports and product quality results. Official suppliers are
audit results and issue a then procured and used in
R equest samples for testing Quality Empowerment Across the Supply Chainpreliminary review opinion If issues are identified during accordance with Company
and suppliers whose samples the trial terminate the use
policiesfail to meet requirements Based on the review results immediately dispose of On the basis of the ever-improving supplier management the shortcomings identified in the audits the Company transmits
are disqualified from the determine whether lab or remaining materials and
selection process pilot testing of materials is products and record the Huadong Medicine continues to empower supply chain quality standards to suppliers every year to further strengthen
needed or if the supplier can handling process of trial quality assurance and enhancement. Every year the Company their awareness and competence in quality management. In daily
be directly included in the list materials and products
of qualified suppliers communicates quality requirements to suppliers throughout management the Company conducts dynamic supplier tracking
the qualification audit and routine engagement phases. A and management maintains communication with suppliers and
variety of communication methods are employed including regularly collects information on supplier updates and assesses
Supplier Qualification Process online and in-person training on-site visits and written the impact on product quality. These help to monitor suppliers to
notifications to ensure all suppliers 100% receive annual improve their quality management system.In accordance with the Standard Operating Procedure for the Approval of Material Suppliers suppliers are categorized as either
primary material6
quality security and relevant training.(Tier 1) or general material7 (Tier 2) suppliers with differentiated management strategies applied accordingly. To further enhance supply chain quality management
For primary material suppliers the Company adds on-site audits and production verification procedures to the standard process For example we have signed the Quality Assurance Agreement and supply stability the Company conducts semi-annual
to ensure the quality and supply continuity of critical materials. For general material suppliers the Company focuses on their basic with all suppliers emphasizes quality standard requirements material trend analyses to assess material quality and usage
qualification review and material trials to ensure fundamental requirements are met. Through rigorous qualification procedures and via verbal or writing form and implements the strengthening of provides timely feedback to suppliers and promotes quality
differentiated strategies the Company controls supplier quality at the source and safeguards the stability of the supply chain. suppliers' quality awareness since the early stage of cooperation. standards in order to monitor their continued supply quality.During audits in response to quality issues of non-compliance During material usage the Company strengthens dynamic
6 P rimary materials refer to those that may affect production performance or product quality. These include but are not limited to inner packaging identified during supplier audits the Company provides management via supplier feedback forms ensuring that quality
materials in direct contact with pharmaceuticals and materials that after risk assessment are considered likely to affect production or product targeted on-site training and quality improvement guidance and issues are promptly reported and resolved.quality such as raw materials directly affecting the biosynthesis of fermented pharmaceuticals raw materials affecting the fermentation unit of a supervises suppliers to complete corrective actions to finish the
pharmaceutical product etc. whole process. Based on the results of supplier assessment and
7 G eneral materials refer to all materials not classified as primary materials.
80 812024 | Environmental Social and Governance (ESG) Report Product: Excellence in Innovation Quality as Safeguard
Sustainable Supply Chain Suppliers Integrity Management
Huadong Medicine integrates the concept of sustainable development into every aspect of its supply chain management striving to Huadong Medicine is committed to building an integrity supply
build an efficient transparent and responsible supply chain system. The Company safeguards supply chain stability by strengthening chain. Through signing integrity cooperation agreements
risk management and promoting integrity in collaboration while continuously empowering its partners to enhance supply chain launching digital management platforms conducting regular
resilience. training and other measures the Company ensures that
supplier conduct aligns with ethical business standards.Supply Chain Risk Management The Company has formulated the Supplier Anti-Bribery
Codes of Conduct which clearly requires all suppliers to
To effectively mitigate supply chain risks the Company has established the Risk Management System for the Procurement of Raw and comply with relevant laws and regulations and prohibits any
Packaging Materials which clearly defines the procedures and responsibility assignment related to risk management in procurement. form of bribery or unfair competition in business activities.Additionally the Company reduces single-supply risks through supplier diversification maintaining safety stock levels and preparing Moreover the Company has signed the Integrity Cooperation
multi-source inventory for high-risk materials. The Company also conducts accurate forecasting to enhance inventory efficiency. Agreement and the Supplier Anti-Bribery Codes of Conduct
These measures have effectively reinforced supply chain resilience and production continuity enabling the Company to maintain with its suppliers while signing the business contract to further
stable growth amid complex environments. Procurement Members' Participating in Vigilance Educational Programs clarify the responsibilities of both parties and jointly create an
atmosphere of integrity cooperation.To promote transparency and fairness in procurement the
During the reporting period Company has launched an SRM supplier management system platform to strictly review supplier qualifications and enhance
Supplier Diversification the confidentiality and effectiveness across bidding pricing
Procurement for raw and auxiliary packaging materials order contract and other processes. Currently 100% of
The Company conducts supply analysis to ensure that each material has two to three qualified suppliers from different has been achieved online procurement for raw and auxiliary packaging materials has regions. By fostering competition among suppliers the Company selects the best supplier and reduces reliance on any
single supplier while ensuring stable production supply and enhancing supplier vitality. been achieved online. Besides regular integrity training and
100 educational programs are conducted for the procurement team % to foster a heightened awareness of integrity. Each member
Safety Stock Management of the procurement team is required to sign an Integrity
Commitment to ensure the impartiality and transparency of
the procurement process.The Company sets safety stock levels for both raw materials and finished products. Taking in-transit quantities and contract
fulfillment into consideration the Company calculates available supply cycles and initiates procurement early to ensure
adequate supply.High-Risk Material Management
For high-risk materials (such as imported materials) the Company maintains reserve inventories and actively seeks
domestic alternatives to reduce dependence on external uncertainties.Mitigation of Sole-Sourcing Risks
For materials with only one supplier the Company promotes multi-source procurement strategies by developing new suppliers
or negotiating with current suppliers to secure supply volumes thereby minimizing supply interruption risks.Accurate Forecasting and Planning
Each year the Company formulates material development plans based on the annual material budget and the number of
suppliers per material. By integrating annual materials usage forecasts and pre-bid materials calculations the Company
enhances the accuracy of order forecasting and optimizes inventory management.Flexible Contract Adjustments
In the event of materials supply instability the Company adjusts contract terms or implements emergency procurement
measures to ensure production uninterrupted.
82 8304 Gathering Talent and Wisdom to Build a
Brighter Future Together
Employees
Talent is the most valuable asset of an enterprise and
the core driver of innovation and development. Huadong
Medicine continuously improves its human resources
management system and actively builds a diverse talent
development platform to provide employees with broad
career development opportunities and to foster mutual
growth between the Company and its employees. The
Company remains committed to protecting employee
rights safeguarding their health and safety and cultivating
a people-centered culture that enhances employees' sense
of belonging and well-being.Employee Talent Employee Care Safety
Recruitment Development Health and
Contributing to the UN SDGs:2024 | Environmental Social and Governance (ESG) Report Employees: Gathering Talent and Wisdom to Build a Brighter Future Together
Employee Recruitment Gender Composition of Employees Age Composition of Employees
The Company prioritizes building a robust talent team by diversifying recruitment channels and optimizing management processes 709 526 709
thereby laying a solid human resources foundation for sustainable development. The Company strictly adheres to compliant
employment practices and is committed to fostering a diverse inclusive and equitable work environment that safeguards employee
rights.
5670
8965859111360
Talent Introduction
Huadong Medicine strictly abides by the Labor Law of the People's Republic of China the Labor Contract Law of the People's █ Under 30 years old█ Male █ Female █ Not disclosed
Republic of China and other relevant laws and regulations. The Company has also developed internal management policies such █ 30 to 50 years old
as the Employee Handbook Labor Contract Management Regulations and Recruitment Management System to ensure compliance █ Over 50 years old█ Not disclosed
throughout the hiring process. The Company upholds fairness and impartiality throughout the entire recruitment process prohibits
employment discrimination and child labor improves recruitment transparency and continuously optimizes the candidate Note: The "undisclosed" status above refers to employees at overseas subsidiaries who have not disclosed their information due to privacy
experience.protection policies.Protection of Employee Rights
Preventing Child Focusing on Candidate
Labor Satisfaction
Ensuring Fairness and Enhancing Recruitment Huadong Medicine embraces the concept of diversity and Huadong Medicine is committed to fostering a warm
Impartiality In the initial stage of Transparency The Company enhances inclusiveness and is committed to safeguarding the rights and collaborative and caring working environment where every
recruitment the Company candidate satisfaction by interests of its employees. The Company rigorously adheres employee feels accompanied and supported. The Company
Before job positions are identifies the age of the The Company maintains the streamlining recruitment
published the Company entire recruitment process to the Special Regulations on the Labor Protection of Female values the well-being of employees and their families with candidates through the processes providing
reviews all recruitment information registration form transparent which clearly
Employees clearly outlining provisions for paid marriage leave particular care for vulnerable groups. To institutionalize
timely feedback improving
materials to ensure they do filled by them. After selecting outlines job requirements communication transparency maternity leave prenatal care leave and breastfeeding breaks this commitment the Company established the "Learning
not contain discriminatory the candidates the Company and assessment criteria and offering personalized for female employees within the employment framework. from Lei Feng Love Fund" and developed a comprehensive
description. The Company rigorously verifies their valid to build trust and ensure engagement thereby Dedicated nursing rooms are available for female employees management mechanism to ensure its transparent efficient
avoids setting restrictive identity documents and age transparency for all strengthening the Company's
criteria based on gender candidates. during lactation to help them better balance work and family and fair use. In the event of emergencies affecting employees to avoid the accidental hiring good employer brand.region ethnicity age or of underage workers. responsibilities demonstrating the Company's care and or their immediate family members or injuries sustained
educational background. accountability toward its female workforce. In addition the during acts of bravery the Company offers financial assistance
Company enrolls female employees in local mutual medical based on the specific circumstances to help them overcome
assistance programs for serious illnesses to further protect their challenges. This initiative not only reflects the Company's
Recruitment Process Management health. genuine care for its employees but also exemplifies its social
responsibility and commitment as a corporate citizen.The Company has developed diverse recruitment channels
encompassing campus recruitment social recruitment Campus Recruitment Social Recruitment Internal Referral
and internal referrals enabling it to identify and attract
high-potential talents that suit the positions and build an Organize campus recruitment roadshows at various Post job openings on external job boards to attract E ncourage employees to actively participate in the
excellent talent team to support the Company's high-quality universities to directly engage with fresh graduates applicants and build a broad candidate pool so as internal referral program to select candidates that
development. and enhance employer branding. to enable efficient talent screening. match the Company's culture and job requirements
from the employees' point of view so as to accurately
L everage online publicity via multimedia platforms Participate in on-site job fairs to engage with candidates introduce talents that are highly suitable for the
to disseminate recruitment information efficiently to face-to-face gaining deeper insights into their professional Company's culture.students. backgrounds and skills ensuring targeted alignment with
JOIN role requirements.US Establish university-enterprise partnerships through
structured corporate visit programs and career Collaborate with headhunting agencies to tap into
expansion initiatives providing students with their professional networks and resources enabling
immersive opportunities to gain insights into the us to attract top-tier industry professionals to drive
Company and available job positions. innovation and strategic growth.Talent Recruitment Channels
86 872024 | Environmental Social and Governance (ESG) Report Employees: Gathering Talent and Wisdom to Build a Brighter Future Together
Talent Development During the reporting period the Company conducted training focused on management proficiency business competence and professional skills using various formats to fully enhance employee development and support employees in realizing their career development ambitions. Additionally the Company
continued to expand training resources by developing a digital training infrastructure offering over 600 courses across professional general and managerial
Huadong Medicine firmly believes that cultivating high-quality talent is the driving force for the Company's sustained and stable growth. The Company domains to all employees. This platform enables employees to conveniently and efficiently participate in training and strengthen their professional capacity
provides employees with well-defined career development paths and has established a comprehensive talent development framework to help enhance job competency and competitiveness. In 2024 the Company used the platform to deliver new employee induction training EHS safety education quality
their capabilities and unlock their potential. Underpinned by a robust performance and compensation framework the Company encourages employees regulation training and management training meeting the development needs of employees across different functions and roles.to achieve professional fulfilment stimulate organizational vitality and foster shared growth.Development and Training Management Proficiency Enhancement Training
Huadong Medicine continuously optimizes its employees career to ensure the effective operation of the talent development system. The Company implemented systematic management proficiency
development framework to offer them well-defined career The Company has continued to promote its talent cultivation strategy enhancement training programs tailored to management personnel
development opportunities. Based on individual characteristics and encompassing leadership and management talent development at junior middle and senior levels. These programs combine online
career aspirations the Company has established a dual-channel career induction trainings for new employees the "Voyage Program" for learning on-site coaching and empowerment internal knowledge
development path to support employees' options to specialize in certain fresh graduates development of key professional reserves and sharing and hands-on application delivery to strengthen their
field or to develop their managerial skills thus helping them to achieve comprehensive talent development all of which underpin the comprehensive competencies. In 2024 the program engaged
professional fulfilment. In 2024 the Company optimized its professional development and innovation of the Company's talent strategy. approximately 600 participants. Through systematic training
ranks grading system to provide employees with greater promotion and empowerment managers at all levels made significant
opportunities and to provide stronger endogenous momentum for the To build a diverse and multi-tiered talent system the Company has improvements in management philosophy methodological
Company's innovation and transformation. developed a scientific and well-structured training management application resource allocation and optimization and team
framework that covers all employees with tailored training programs efficiency improvement strongly supporting the Company's
The Company upholds the principle of self-cultivation and talent- for different talents. During the reporting period the Company invested business growth.first development and institutes internal policies such as the Training over RMB 5.36 million in training across 674 sessions involving a total of
Management Measures and In-house Trainer Management System 71592 participants and achieving 100% training coverage8 .For Management Level Sales and Marketing Team Competency Enhancement Training
Tiered management training system is conducted to enhance leadership capabilities across all levels prioritize key talent development
and cultivate a talent pipeline core managers and versatile leaders. This integrated approach strengthens organizational agility and To improve market competitiveness the Company offered blended
self-sustaining capabilities. online and on-site business competence training programs for all sales
personnel and marketing teams. In 2024 these programs engaged
For Position Function over 48000 participants helping teams master advanced sales
strategies techniques and market analysis skills and enhancing their
Priority is given to technical R&D marketing human resources and financial roles. Through standardized job roles ongoing training professionalism in customer service further reinforcing the Company's
systems and combining hands-on learning with performance assessments employees quickly gain job-specific skills optimize competitive edge in the marketplace.processes and improve working efficiency.For Business Type
For both traditional and emerging businesses the Company regularly conducts talent reviews training and practical assignments
to develop targeted business talents in R&D quality assurance sales and other domains so as to support the sustained growth and
global expansion.Skills Upgrading Training for Professional Positions
For New Employees
The Company offers specialized induction trainings to new employees with comprehensive probationary period management During the reporting period the Company designed multidimensional
ongoing assessment and feedbacks to help them quickly adapt to the Company's culture workflows and systems. professional skills training programs to enhance the expertise of
R&D personnel production technicians and safety and quality
teams. These programs combined internal expert-led sharing
For Fresh Graduates sessions with external industry lectures and encouraged employee
participation in continuing pharmaceutical education and key
professional certifications improving the professional capabilities
The "Voyage Program" helps graduates accelerate the school-to-work transition through values alignment career mapping and of the Company's R&D and technical teams and advancing drug
cultural immersion. Through selection intensive training job rotation assessments and on-the-job experience the program provides development and technological innovation. Additionally through
systematic coaching and guidance for fresh graduates and develops young talent for the Company. multiple forms such as project-based learning and hands-on training
the Company further strengthened employees' quality management
skills supporting improvements in product quality and production
efficiency. In 2024 skills upgrading series training for professional
Talent Training Management System positions reached over 60000 participants.
8 Employee training data does not include the Company's overseas subsidiary Sinclair.
88 892024 | Environmental Social and Governance (ESG) Report Employees: Gathering Talent and Wisdom to Build a Brighter Future Together
Remuneration and Performance Employee Care
The Company is committed to establishing a fair and incentive remuneration system to attract and retain outstanding talents. The Company's Huadong Medicine always regards humanistic care as a key element of its corporate culture. The Company is committed to offering warmth and
remuneration framework includes fixed base pay variable performance bonus and supplementary project-specific bonuses providing a comprehensive care through multiple dimensions by providing smooth communication channels a wide array of employee benefit programs and a rich variety of
assessment of the business value created by employees. Meanwhile to further stimulate employee innovation and enhance their engagement the recreational activities continuously enhancing employees' sense of belonging and happiness.Company has introduced an equity incentive plan to share the fruits of the Company's development with its employees and to reward the core personnel
who have made significant contributions to the Company's development.Communication and Support
Fixed Base Pay Variable Performance Bonus The Company is dedicated to fostering an equitable smooth and efficient communication environment that encourages employees to express their
views and contribute ideas to support the Company's long-term growth. The Company values every employee's voice actively collects their feedback on
Determined by job value employee capability and performance as Closely linked to individual performance assessments and team development and individual career progression and continuously optimizes internal management based on their feedbacks.well as market remuneration benchmarks comprehensively adjusted based on the Company's overall
business performance and departmental performance
Organizing Face-to-Face Dialogues Between Young Employees and Senior Executives
Project-specific Bonus Equity Incentives
To implement the Company's development requirements of "anchoring strategic goals and consolidating systemic capabilities" and realize the vision
Linked to the achievement of key milestones in designated projects Offered to core management and technical personnel aligned with of "strengthening team building and laying a solid foundation for development" the Company organized face-to-face dialogues between young
the Company's strategic business performance employees and senior executives. These sessions focused on in-depth discussions around the Company's strategic development and employees' career
planning and offered young employees a platform to engage in communication and provide suggestions in order to comprehensively understand their
expectations for the development of the Company and further enhance the Company's services for young talent.Remuneration Structure
The Company sustains market-aligned compensation competitiveness through periodic benchmarking and tiered framework adjustments. Incentive
schemes are strategically refined to prioritize value drivers: product pipeline development achievement of R&D milestones successful product
commercialization and cost optimization. These measures energize workforce participation in innovation cycles and operational excellence initiatives.Performance Management
The Company implements a structured and transparent performance In addition to ensure the fairness and transparency of the performance
management framework and upheld a value-creation-oriented results the Company implements a performance appeals system
philosophy ensuring that all employees' efforts and contributions providing employees with both online feedback and offline appeal
are recognized and assessed fairly. Based on the results of scientific channels to voice concerns and seek timely resolution when they have The Company offers a wide range of welfare protection covering holiday benefits health support etc. fully reflecting its care and concern for employees.and reasonable performance assessment the Company applies doubts about the performance results. In terms of leave benefits the Company strictly complies with all applicable laws and regulations to ensure employees can enjoy statutory holidays
differentiated talent incentive mechanisms to maximize employee marriage leave bereavement leave maternity and paternity leave sick leave and annual leave safeguarding their right to take normal leave.motivation so as to promote the continuous optimization of the overall
efficacy of the team. In terms of health care the Company regularly publishes health-related popularization articles via the official WeChat account and organizes themed
seminars and activities such as oral health education to enhance overall health awareness among employees. Furthermore the Company provides
employees with personalized and comprehensive health check-up packages annually and arranges one-on-one consultations with physicians for
detailed explanations of examination results. In addition the Company invites traditional Chinese medicine experts to its workplace to offer on-site
health consultations and medical services making healthcare more accessible to employees.Performance Performance Performance Feedback Performance
Goal Setting Assessment Meetings Improvement Guidance Health Seminars and Medical Benefits
Set scientific performance Combine the remarks of Managers in each For personnel who fail to In 2024 the Company partnered with the Hangzhou Occupational
goals based on employees departmental managers department conduct meet performance goals Disease Prevention and Treatment Hospital to host health seminars
past performance and and the daily performance performance feedback guide them to develop a for young female employees on knowledge such as cervical cancer
career development plans of employees to meetings to recognize the written improvement plan shingles and dog-bite prevention. The sessions aimed to raise female
comprehensively assess contribution of employees' and provide the necessary employees' awareness about cervical cancer its causes preventive
employee performance and performance in a timely coaching measures and the importance of HPV vaccination. Additionally to
make multi-dimensional manner and to discuss meet the health needs of employees and their families the Company
assessments ways to improve weak worked with the hospital to provide 100 priority vaccination slots
areas without lottery for the imported 9-valent HPV vaccine further
enhancing the employees' health protection.Performance Management Mechanism
90 912024 | Environmental Social and Governance (ESG) Report Employees: Gathering Talent and Wisdom to Build a Brighter Future Together
Work-Life Balance Health and Safety
Huadong Medicine advocates work-life balance and actively promotes a harmonious and caring corporate culture. The Company
has created dedicated leisure spaces for employees and regularly organizes a variety of cultural and sports activities to enrich their Huadong Medicine adheres to a prevention-oriented safety management philosophy with a strong commitment to safeguarding
personal lives and relieve work-related stress. The Company is committed to improving the work experience of its employees and employee health. Supported by a comprehensive safety responsibility system and an occupational health management system the
delivering warmth and care helping them achieve better balance and development in both work and life. Company implements work safety risk management and control and hazard inspection strengthens the building of safety culture
and extends safety accountability to contractor management striving to create a healthy and safe work environment.The Building of "Huadong Artopia" Employee Culture Center Work Safety
Upholding the principles of work safety Huadong Medicine To comprehensively identify and rectify weaknesses and
To enrich the cultural life of its employees the Company has built a 1000-square-meter employee culture center "Huadong strictly complies with the Work Safety Law of the People's potential hazards the Company continues to advance the
Artopia" at its headquarters. The center includes three major functional zones: a hobby and recreation area a food and logistics Republic of China the Measures for the Management of building of a dual-prevention mechanism for safety risk grading
area and a mini-market area. As a second living space outside of work "Huadong Artopia" not only fulfills employees' mental Emergency Plans for Production Safety Accidents and other and control and hazard identification and management. This
cultural and life needs but also provides them with a place to relax and help them obtain more cultural-ethical pursuit. applicable laws and regulations in its areas of operation. enables the Company to effectively manage and mitigate safety
The Company has established a mature safety management risks. In addition the Company has adopted a refined and
structure with the Environment Health and Safety (EHS) grid-based "building stewardship" safety management model
Committee as the highest authority on EHS matters. The to further enhance the frequency of hazard identification
EHS Department is responsible for overseeing specific work embedding safety inspection responsibilities into grassroots
safety initiatives. In order to fully implement the responsibility positions and ensuring comprehensive and effective safety
of work safety the Company in accordance with the EHS management.(environment occupational health safety and fire protection)
Responsibility Management System has developed a work
safety accountability system that clearly defines the division of
responsibilities and EHS responsibility assessment at all levels.Cuisine Experience Events Organized by the Canteen Logistics Team Safety Risk Grading and Control
C onduct hazard identification and classification assessments as well as job-specific risk assessments. Based on
In 2024 the Company's canteen logistics team organized a series the assessment results create four-color risk charts and display them prominently at work sites.of cuisine experience events that incorporated traditional festivals
and seasonal characteristics bringing employees a delightful dining E ducate employees at all levels to deeply understand the potential risks associated with their roles remind
experience. For example during traditional holidays the Company hosted them to stay vigilant and avoid them and formulate corresponding risk mitigation measures.activities such as distributing Tangyuan (glutinous rice balls) making
zongzi (sticky rice dumplings) and preparing mooncakes. According to
different seasons the Company held food events including the "Hunan Hazard Identification and Management
Cuisine Festival" and "Double Crab Festival." These experiences not only
elevated the dining experience of the employees but also added joy to Formulate annual hazard identification plans that include comprehensive inspections specific inspections
their daily lives further boosting their sense of happiness. departmental self-inspections and third-party inspections and carry out hazard identification and
management activities as scheduled.Detailedly record and archive of all identified issues assess departments with hazards identified based on
the EHS monthly assessment criteria and verify and review overall rectification to ensure that the problem
Employee Fun Sports Day rectification forms a closed-loop management.The Company advocates the philosophy of "happy work happy life" and encourages employees to participate in cultural and A Dual-prevention Mechanism
sports activities outside of work. During the reporting period the Company successfully held a Fun Sports Day which drew
enthusiastic participation from 35 teams and 1570 employees. The event fostered a joyful and relaxed atmosphere and enhanced
the employees' sense of collective honor and team cohesion. Moreover the event promoted communication between employees
and collaboration between different business segments further promoting the Company's corporate culture.
92 932024 | Environmental Social and Governance (ESG) Report Employees: Gathering Talent and Wisdom to Build a Brighter Future Together
In 2024 the Company conducted assessments on the current status fostering a strong cultural atmosphere of occupational health within the
Implementation of the Building Stewardship Safety Management System of occupational disease hazards monitoring of its hazardous factors Company.and specialized inspections on occupational health. Employees
in occupational health-related positions in all departments were As a result of the robust occupational health and safety management
To improve the grassroots safety management level Huadong Medicine scheduled for pre-employment on-the-job and pre-exit occupational ten subsidiaries including Zhongmei Huadong Jiangdong Company
has implemented the building stewardship safety management system health checks in accordance with regulatory requirements. To raise Xi'an Bohua Jiuzhou Pharmaceutical Jiangsu Joyang Nanjing Nongda
for several consecutive years. This system aims to raise employees' employee awareness of occupational health the Company continued Animal Pharmaceutical Meihua Hi-Tech and Supply Chain Management
EHS awareness and optimize management and control of special to deliver a wide range of occupational health education activities (Wenzhou) Company have been certified to ISO 45001 Occupational
work environments and resource allocation. Through meticulous including public health lectures on-site training and skills competitions Health and Safety Management System.and grid-based management the building stewardship system fully
leverages the coordination among building stewards floor stewards
and frontline employees to ensure facility-wide safety. In 2024 the
Company enhanced the building stewardship system by developing Personal Protective Equipment Selection Training
inspection checklists for building and floor stewards and clarifying
their responsibilities thereby improving overall safety awareness and
reducing accident risks. During the reporting period the Company organized personal
protective equipment (PPE) selection training covering the
correct selection usage and maintenance of personal protective
equipment. These sessions integrated occupational health
and safety laws and regulations with knowledge of common
occupational disease prevention helping employees fully recognize
To effectively respond to emergencies in work safety the Company personnel evacuation and emergency supply coordination etc. the critical role of PPE in safeguarding occupational health. The
has formulated and implemented the Emergency Response Plan for Besides the Company conducts regular simulation drills based on real- training further encouraged employees to proactively use PPE
Work safety Accidents. The Company formulates an annual emergency life scenarios to test the feasibility and effectiveness of the plans which thereby improving their occupational health awareness and risk
drill plan at the beginning of each year to strengthen emergency are then refined accordingly to enhance emergency response efficiency. prevention capabilities.preparedness and response capabilities. The Company sets up an
emergency response team composed of core personnel from various The Company continuously promotes work safety education through
departments and conducts regular professional training to ensure themed studies training for specific positions safety-related sessions
familiarity with all types of emergency protocols. for management personnel and case studies on behavioral safety
fostering a strong work safety awareness across the workforce. During
Additionally the Company has also continued to improve its emergency the reporting period the Company delivered work safety training to a
response system by developing detailed plans tailored to various types total of 18349 employees.of incidents. These plans cover emergency command on-site handling Team-Based Safety Emergency Skills Competition
To deepen employees' understanding of safety culture and
Themed Studies on Centralized Studies raise safety awareness across the Company Huadong Medicine
Hazard Identification Training for Specific for Management Case Studies on introduced an innovative safety education initiative in 2024 by
Standards Positions Personnel Behavioral Safety hosting the first Team-Based Safety Emergency Skills Competition.Combining theoretical exams and practical drills the competition
Interpreted national Cooperated with the Reinforced publicities on Analyzed past workplace comprehensively tested participants on various topics including
criteria for identifying Hangzhou Emergency supervision management injuries to provide training safety culture hazard identification and emergency response.hazards in major work Training Center to provide systems for core on workplace injuries The competition attracted over 30 teams and more than 90
safety accidents to raise customized training for management personnel accident prevention participants. Beyond assessing employees' emergency response
safety awareness and employees handling familiarized them with reinforce safe operating skills the competition served as a meaningful demonstration of the
enhance management hazardous chemicals and safety inspection routes procedures and self- Company's commitment to practicing safety culture and laid a solid
competence for assisted them in obtaining and safety priorities and protection awareness so foundation for a safe and healthy workplace environment.employees relevant certifications ensured they effectively as to improve their safety
fulfill supervisory awareness
responsibilities
Serious Trainings on Work safety Contractor Safety Management
In terms of contractor safety management Huadong Medicine has instituted regulations such as the Construction Site Safety Management
Occupational Health Implementation Plan and the Contractor Assessment Guidelines to ensure the fulfillment of contractors' safety management responsibilities. In addition the Company also holds regular contractor working meetings to convey and implement the safety management requirements of relevant parties in a
timely manner.Protecting the occupational health and safety of employees is one of Huadong Medicine's core priorities. The Company has formulated policies such
as the Occupational Disease Hazard Monitoring and Assessment Management System and the Occupational Disease Hazard Emergency Response To strengthen contractor safety awareness the Company requires contractors to provide mobilization education and training programs for their
and Management System and has updated the Personal Protective Equipment Management System to provide comprehensive protection for personnel upon mobilization and to sign the Safety Commitment. This initiative promotes contractors' full understanding and rigorous compliance with
employees' occupational health. In addition the Company has established a clear accident management mechanism in accordance with the Accident safety regulations. In addition the Company distributes Task Risk Analysis Cards to help contractors fully and conveniently identify the risks associated
Reporting and Investigation Management System which clearly outlines the procedures for accident reporting and emergency response measures with special operations thereby improving their risk control abilities during construction and ensuring operational safety and regulatory compliance.ensuring closed-loop management of accident investigation and handling.
94 9505 Boundless Love and Warmth for
Society
Society
Huadong Medicine remains steadfast in its mission to "contributing
to the well-being of the public" and places the enhancement of
people's well-being as its central purpose. The Company continues
to focus on public health education delivers the benefits of
medical services to broader groups and offer patients accessible
and affordable healthcare solutions. Moreover the Company
is deeply committed to social welfare initiatives collaborating
with stakeholders to deliver care and compassion. By sharing
cutting-edge technologies and collaborating with leading experts
and industry partners the Company contributes to injecting
momentum into industrial development and social advancement.Contributing to the Promoting Public Joint Community Deepening Industry
Benefits of Healthcare Health Engagement Collaboration
Contributing to the UN SDGs:2024 | Environmental Social and Governance (ESG) Report Society: Boundless Love and Warmth for Society
Zevorcabtagene Autoleucel Injection (Saikaize) Approved for Market Entry
Contributing to the Benefits of Healthcare In February 2024 Huadong Medicine partnered with CARsgen Therapeutics to secure the market approval in China for their
BCMA-targeted CAR-T cell therapy Zevorcabtagene Autoleucel Injection (Saikaize ) developed through collaborative efforts.Huadong Medicine holds exclusive commercialization rights for this product in Mainland China. The therapy is indicated for
Upholding its commitment to safeguarding public health the Company not only provides patients with high-quality products and the treatment of adult patients with relapsed or refractory multiple myeloma (RRMM) who have received at least three prior
treatment solutions but also actively promotes drug accessibility and affordability. The Company continuously explores multi-tiered lines of therapy including a proteasome inhibitor and an immunomodulatory agent.healthcare protection by accelerating the approval and market entry of various products securing their inclusion in the catalog of
medicines covered by national medical insurance and supporting patient assistance programs. These efforts enable more patients to
access effective treatment while alleviating their financial burden of drug use.Senaparib Capsules (Paxinor) Approved for Market Entry
Promoting Product Access In January 2025 Zhongmei Huadong and Impact Therapeutics jointly developed Senaparib Capsules (Paxinor) received
market approval. The product is indicated for maintenance treatment in adult patients with advanced epithelial ovarian
Huadong Medicine continues to promote the application of its scientific research advancing product launches across multiple fallopian tube or primary peritoneal cancer who have achieved complete or partial response after first-line platinum-based
diseases to benefit a wider patient population. The Company is committed to offering patients more ideal treatment options and chemotherapy. Zhongmei Huadong holds exclusive marketing rights for this therapy in Mainland China.improving their current treatment conditions striving to bring new hope to their health.In addition the Company strongly supports medical insurance policies that benefit the public helping to enhance drug accessibility
and affordability so that more patients can access quality medicines. Following the release of the List of drugs for national basic
medical insurance industrial injury insurance and maternity insurance (2024 Edition) a total of 46 approved core products and 16 Safeguarding Patient Health
strategic collaboration products of the Company have been included in the national medical insurance. Among them Ustekinumab
Injection a newly listed drug in 2024 was positioned within the "Negotiated Drugs during the Agreement Period" section of the "2024 Remaining committed to a patient-centric approach the Company focuses on the treatment needs of patients across different
National Reimbursement Drug List" and Tacrolimus Granules were positioned within the "Bidding Drugs" section. therapeutic areas and works proactively to promote their well-being. By launching and participating in a variety of patient care
initiatives the Company provides financial assistance to help more patients access timely treatment solutions thereby improving
their quality of life.Ustekinumab Injection (Sailexin) Approved for Market Entry
"Heartfelt Guardian" Patient Advocacy Program
In November 2024 Ustekinumab Injection (Sailexin) submitted by Zhongmei Huadong was approved by the National
Medical Products Administration to enter the market for the treatment of adults with moderate to severe plaque psoriasis. To better support patients with rheumatoid arthritis (RA) ankylosing spondylitis (AS) and psoriatic arthritis (PsA) and to
Sailexin is a biosimilar to the originator product Stelara (Ustekinumab Injection) and is the first approved Ustekinumab reduce the financial burden of treatment the Company partnered with MediTrust-Health to launch the "Heartfelt Guardian"
injection biosimilar in China. The marketing approval of Sailexin is expected to bring more treatment options for psoriasis patient advocacy program to provide financial assistance to patients. Since its launch the program has benefited more
patients in China. than 900 patients with over 400 insurance claims processed amounting to nearly RMB two million in reimbursement. The
"Heartfelt Guardian" program has played a positive role in easing the financial burden on patients and effectively reducing
the burden of patients' medication.Since its launch the program has
Mirvetuximab Soravtansine Injection (Elahere) Approved for Market Entry
Benefited more than With over Amounting to nearly RMB
Platinum-resistant ovarian cancer is characterized by poor response to platinum-based chemotherapy and a short survival
period representing a significant unmet medical need. In November 2024 Mirvetuximab Soravtansine Injection (Elahere)
submitted by Zhongmei Huadong was approved by the National Medical Products Administration for the treatment of 900 patients 400 insurance claims processed 2 million in reimbursement
folate receptor alpha-positive platinum-resistant ovarian cancer (PROC) in patients who have received one to three prior
lines of systemic therapy. This marks another critical milestone in the development of Elahere and is expected to provide a
new treatment option for PROC patients in China.Elahere for New Life - Ovarian Cancer Patient Care Program
On April 30 2024 Mirvetuximab Soravtansine Injection (Elahere) was approved for market entry by the Medical Products
Rilonacept for Injection (Arcalyst) Approved for Market Entry Administration of the Macao SAR. In September under the Guangdong-Hong Kong-Macao Greater Bay Area Drug and
Medical Device Regulatory Innovation Development Work Plan the product was successfully introduced to designated
During the reporting period rilonacept for injection (Arcalyst) submitted by Zhongmei Huadong was approved by the hospitals under the policy of drug and medical device transit in Guangdong Province making it accessible to the Greater
National Medical Products Administration for recurrent pericarditis and the treatment of adults and adolescents aged 12 Bay Area patients ahead of schedule and further improving drug accessibility.years and older with cryopyrin-associated periodic syndromes (CAPS) including familial cold autoinflammatory syndrome
(FCAS) and Muckle-Wells syndrome (MWS). The marketing approval of Arcalyst is expected to bring more treatment options This program is designed to provide partial financial assistance to Chinese citizens using Mirvetuximab Soravtansine Injection
for CAPS patients in China. (Elahere) in Mainland China while also enhancing scientific education for patients suffering from the disease. Through a series of
activities the Company aims to reduce the burden on patients and help them develop self-management abilities.
98 992024 | Environmental Social and Governance (ESG) Report Society: Boundless Love and Warmth for Society
Promoting Public Health
Implementation of Psychosomatic Health Popularization with the National Health Commission
Huadong Medicine has committed itself to promoting healthy living dedicating years of effort to advancing public health education.Leveraging its resource strengths and collaborating with industry experts and partners the Company actively engages in public health Huadong Medicine partnered with the National Health Commission to launch
promotion practices striving to disseminate professional medical knowledge to diverse groups and foster greater public health the "Psychosomatic Health Promotion and Sleep Disorder Standardized
awareness across society. Management Program." The initiative aims to standardize diagnosis and
treatment protocols for clinical insomnia and psychosomatic disorders
contributing to the Healthy China initiative. Through the establishment of a
dedicated popularization video platform the program invited leading experts
in psychosomatic medicine and mental health to record popularization videos
Upholding the Multi-Channel Popularization of Organ Transplantation and widely carry out public health education. As of now these videos have
been viewed tens of thousands of times significantly raising public awareness
To fortify doctor-patient discourse and advance health of psychosomatic health and sleep disorders.education Huadong Medicine launched Flower of
Life the first free public welfare literature in China
dedicated to organ transplant donors and recipients.Since its debut in 2003 72 issues have been published. Ongoing Operation of the Citizens' Health Lifestyle Hall
The Company also operates the "Flower of Life"
WeChat public account and "Flower of Life Broadcast"
video platform which use an "Internet + Health Huadong Medicine actively participates in the construction of healthy city and manages the Hangzhou Citizens' Health
Education" model to share content on post-operative Lifestyle Hall alongside large-scale public lectures to help the development of overall public health. In 2024 the hall
care lifestyle dietary habits etc. These measures built hosted over 30 public health popularization activities receiving more than 5000 visitors. As a mental health popularization
a reliable and comprehensive healthy life information platform for nearby schools communities and families it hosted 12 juvenile mental health popularization lectures and
exchange platform for tens of thousands of organ six community-based infectious disease prevention activities during the reporting period. The Hall also collaborated with
transplant donors and recipients across China helping regulatory authorities during events like "3·15" (World Consumer Rights Day) to carry out popularization and education
them improve their health management skills. campaigns on household medication medical devices and hepatitis prevention making a meaningful contribution to
improving public health literacy.Online Follow-up and Q&A for Organ Transplant Recipients
In 2024 Huadong Medicine partnered with the
China Medicine Education Association to launch the
"Flower of Life Scientific Follow-up Management Supporting Community Accessible Free Medical Consultations for Health
Program for Organ Transplantation." Relying on a
series of online seminars under the "Organ Transplant
Recipient Health" banner the program invited top Huadong Medicine's Hangzhou Xinglian Clinic collaborated
transplant experts and key clinicians in the field with Tianshui Subdistrict in Gongshu District Hangzhou
of organ transplantation in China to deliver online to carry out accessible health services for the community.popularization lectures and live Q&A sessions. The During the Double Ninth Festival the clinic provided free
goal was to provide professional guidance address medical consultations to residents of Yanzhi New Village
real-world challenges faced by transplant recipients addressing diverse healthcare needs of different groups.and improve their quality of life. By the end of 2024 Additionally the clinic organized AIDS diagnosis and
the program platform had hosted 696 Internet preventive knowledge promotion activities in Tianshuiqiao
health-related sessions with over 2.11 million total Community to enhance residents' health awareness. These
views promoting scientific follow-up and healthcare efforts not only provided convenient healthcare services for
education in organ transplantation. the residents but also raised public consciousness about health issues.
100 1012024 | Environmental Social and Governance (ESG) Report Society: Boundless Love and Warmth for Society
Joint Community Engagement
Community Volunteering Services Support Healthy Living
Huadong Medicine remains focused on the need for collaborative social development and fully supports China's rural revitalization.With a dedicated commitment to serving the public the Company implements diverse welfare programs and volunteer initiatives Huadong Medicine actively organizes Party member volunteer programs encouraging Party teams to give full play to their
to deliver practical assistance to community residents fully demonstrating the Company's positive action and responsibility in occupational capabilities or skills and enthusiastically serve the public. During the 2024 Party Member Service Week more
community care. than 30 Party member teams spontaneously engaged in neighboring community service activities including bone density
screenings hypertension prevention publicity oral health consultations and other physical health services as well as small
The Company actively responds to the Spring Breeze Action donation campaign initiated by the Hangzhou Municipal Government appliance repair free haircuts traffic safety publicity and other life services. Across these efforts Party member volunteers
donating RMB 500000 annually to the "Spring Breeze Action Special Account of Hangzhou Warmth Sending Project Foundation" to stayed true to their mission of "serving the people" contributing over 50 hours of volunteer service in total.support people in need. In 2024 the Company's total external donations amounted to RMB 105 million with employees contributing
436 hours of volunteer service during the year.
In 2024
The Company's total external donations With employees contributing
amounted to RMB 436 hours
105 million of volunteer service during the year
春风行动捐款证书
Spring Breeze Action Donation Certificate
Laba Festival Porridge Distribution – Spreading Warmth in the Community
Supporting the "Shared Prosperity Mushroom Farm" Project in Changshan County During the traditional Chinese Laba Festival the Company organized several employee volunteers to carry out the "Laba
Porridge Delivery" activity distributing free Laba porridge to the residents of neighboring streets the Disabled Persons'
Federation of the District the Political and Legal Committee the Traffic Police the Fire Department and other units and
Huadong Medicine is committed to actively supporting high-quality development and rural revitalization in mountainous staffs benefiting about 3000 people. The company's employee volunteers served enthusiastically sending holiday
island and rural counties. For years the Company has backed the "Shared Prosperity Mushroom Farm" project in greetings and blessings to the community residents and frontline staff. The porridge delivery activity conveyed the warmth
Changshan County Zhejiang Province to promote common prosperity in rural areas. The Company selected premium of traditional festivals demonstrated the Company's care for the community further strengthened the bond between the
camellia oil from Changshan as a regular employee welfare product purchased it for a long period of time and helped enterprise and the community and created a harmonious and friendly social atmosphere.promote its characteristics such as health benefits and quality. This initiative not only increases income for local farmers
in Changshan but also ensures food safety for the employees. This win-win collaboration between the Company and
local communities exemplifies mutual benefit and shared growth directly contributing to the achievement of common
prosperity goals. In 2024 Huadong Medicine donated RMB 200000 to the Zhejiang Changshan Zheshang Shared Prosperity
Fund specifically for the development of the mushroom farm.
102 1032024 | Environmental Social and Governance (ESG) Report Society: Boundless Love and Warmth for Society
Deepening Industry Collaboration
With the concept of openness and innovation Huadong Medicine with its leading innovations and rich experience in the industry
actively collaborates with the global academia and industry to promote the development of the industry. The Company proactively
engages in in-depth exchanges in the industry fosters consensus and synergy from all parties and works alongside leading experts to Amplifying Medical Aesthetics Impact: Global Exhibitions & Academic Synergy
promote interdisciplinary collaboration. Through close collaboration with industrial partners the Company injects new momentum
into the development of the industry and continues to enhance its industry influence and cooperation value.In 2024 Huadong Medicine participated in the Sinclair 2024 WEM Asia-Pacific Medical Subconference where it co-released
the ELLANSé Asia-Pacific Consensus with several experts. Apart from integrating 16 years of clinical application experience
of ELLANSé the consensus also comprehensively describes the five core advantages of ELLANSé from the perspective of the
Promoting Industry Breakthroughs and Innovation Leadership Through Academic Exchanges needs of Asia-Pacific beauty seekers providing industry practitioners with refined and scientific application guidelines for
different needs. At the event Huadong Medicine actively shared its industry experience and contributed its industry insights
to promote the standardized application of ELLANSé in the Asia-Pacific region.While accelerating innovative drug R&D Huadong Medicine actively shares its research progress and innovation outcomes
with the broader industry. Since 2024 the Company's innovation teams have published 22 journal articles or conference
papers in the fields of oncology endocrinology/metabolism and autoimmune diseases. Notably research results from
projects HDM1002 and HDM2006 were published in the prestigious Journal of Medicinal Chemistry. The preclinical research
results of HDM1005 a long-acting dual GLP-1/GIP receptor agonist were selected for an oral presentation at the 2024 EASD
Annual Meeting and its Phase I clinical research results were selected for an oral presentation at the 2025 ADA Annual
Meeting. In addition the Phase III clinical research results of Semaglutide injection and the Phase Ib clinical research results
of HDM1002 were selected as the POSTER at the 2025 ADA Annual Meeting. Research on a small-molecule STING inhibitor
was selected as the POSTER at the 2024 ECI Festival; research on a targeting HPK1 PROTAC was selected as the POSTER at
the 2024 AACR Annual Meeting; and the research on HDM2004 an oral small-molecule HPK1 inhibitor was selected as the
POSTER at the 2024 CIMT Annual Meeting. The positive results from the Phase III pivotal clinical research (HDHY-MHTN-
III-1907) of Mefatinib were selected as the POSTER at the 2024 ASCO Annual Meeting and the study of HDM2010 an oral
PTPN2 small-molecule inhibitor was included in the 2024 ASCO Annual Meeting abstract. The preclinical study of HDM2005
a targeting ROR1 antibody conjugate frug was selected as the POSTER at the 2024 World ADC Asia. Preclinical research
results of HDM2020 and HDM2012 were selected as the POSTER at the 2024 World ADC San Diego. Additionally preclinical
research results of HDM2006 HDM2022 HDM2012 HDM2017 and HDM2020 have all been selected as the POSTER at the
2025 AACR Annual Meeting. Preclinical research results of HDM2025 a pan-KRAS antitumor degrader has been selected as
the POSTER at the 2025 ASCO Annual Meeting. Furthermore DR10624 an Fc-fusion protein drug independently developed
by the Company's subsidiary Doer Biologics and the world's first-in-class triple agonist targeting GLP-1R GCGR and
FGFR1c/Klothoβ (FGF21R) had its clinical research results selected for the Late-Breaker at the 2025 EASL Congress while its
nonclinical research results were selected as the POSTER.Huadong Medicine's independently developed research results have been increasingly recognized by the international
academic community. Since 2022 a total of 31 innovative research results have been published in authoritative journals or
presented at academic conferences fully demonstrating the Company's continuous progress in independent innovation. It
also marks a systematic breakthrough in its innovation-driven transformation strategy.Supporting the Establishment of the Group Standard for Medical Polylactic Acid In 2024 Sinclair (Shanghai) established an academic collaboration with Harvard Medical School-Massachusetts General
Hospital on the "Asian Virtual Magic Wand" program. The project was successfully launched in March 2025 accompanied
Huadong Medicine actively contributes to the field of medical polylactic by an academic exchange event held at Harvard University. Serving as a bridge this project brings together world-leading
acid (PLA) materials helping the industry break through bottlenecks. scholars clinicians researchers and industry leaders from various countries. Apart from promoting international academic
In 2024 leveraging its extensive experience managing pharmaceutical exchange it also enhanced the global presence of Chinese doctors in the field of aesthetic medicine expanded access to
regulatory affairs its holding subsidiary Hibe deeply participated in safe and effective treatments and actively advanced the development of the global aesthetic medicine industry.the establishment of the group standard for High-Performance Medical The Company remains committed to a "medicine-first" approach in its aesthetic medicine business. In 2024 the Company
Polymer Materials Polylactic Acid and provided professional insights hosted hundreds of offline medical training and educational events reaching over 5000 doctors. Its online education platform
into the scientific rigor and practical applicability of the standard. The recorded more than 120000 visits from doctors during the year. A total of 13 academic journal articles were published including
standard is the first specialized group standard for medical-grade PLA eight SCI journals. As of the end of 2024 the number of officially partnered hospitals for Ellansé exceeded 1000 and more
in China which standardizes the synthesis and modification of PLA than 1000 doctors had received official training and certification. Through cross-sector brand engagement activities Ellansé
enhances its biological safety and promotes its widespread application continues to strengthen its brand image reinforce its premium market positioning and earn wide recognition among consumers.across a variety of sectors thus boosting the high-quality development The brand's influence and competitiveness within the industry are steadily increasing.and innovation of related industries.
104 1052024 | Environmental Social and Governance (ESG) Report Looking Ahead
Looking Ahead
Huadong Medicine will continue to prioritize sustainable development unwaveringly advance its Environmental In terms of employee care we remain committed to sincerely safeguarding our employees and conveying the care of
Social and Governance (ESG) agenda and be committed to pioneering green transformation and social responsibility the Company. We will increase our investment in training related to digitalization and innovation to help employees
in the pharmaceutical industry. We will promote the harmonious coexistence of the Company with society and the enhance their skills and adapt to future work requirements. Furthermore we will build a multi-dimensional talent
environment through technological innovation resource optimization and social contribution creating a better development system to stimulate employees' innovation vitality and sense of identity with the Company ensuring the
future for employees shareholders customers and society. long-term retention and development of core talent.In terms of environmental protection we will continue to adhere to the philosophy of "green development and In terms of social responsibility we will uphold our mission of "contributing to the well-being of the public"
ecological harmony" further optimize our environmental management system enhance resource utilization efficiency continue to promote public health support accessible medical care and improve the accessibility and affordability
and actively respond to the challenges posed by climate change. Going forward we will continue to promote the of medicines. Looking ahead we will promote the inclusion of more innovative drugs into the catalog of medicines
application of clean energy drive the green and low-carbon transformation and build an environmentally friendly covered by national medical insurance and enhance public health awareness through patient assistance programs
and resource-efficient enterprise to safeguard our green ecological homeland. and public health education. We will also continue to carry out charitable programs to provide patients with
comprehensive health management support and promote the equal distribution and deeper availability of healthcare
In terms of product responsibility we uphold the philosophy of innovation-driven development and quality-assured resources.service continuously increasing investment in innovation to drive the R&D and market launch of more innovative
drugs. Additionally we will strengthen intellectual property protection to ensure our leading position in technological With firm determination and concrete actions Huadong Medicine will fully implement the concept of sustainable
innovation. Moreover by collaborating with leading domestic and international enterprises we will build a global R&D development actively fulfill its social responsibilities and promote the high-quality development of the Company
ecosystem and promote the sustainable development of the pharmaceutical industry. striving to set a benchmark in green transformation and social responsibility in the pharmaceutical industry.
106 1072024 | Environmental Social and Governance (ESG) Report Annexes
Annexes
Annex I Performance Data
Indicator Unit 2024 Indicator Unit 2024
Economic Direct Scope 1 GHG emissions tCO2e 15594.79
Operating revenue RMB 100 million 419.06 Indirect Scope 2 GHG emissions tCO2e 171359.01
Year-on-year growth rate of operating revenue % 3.16 Energy Consumption
Net profit attributable to shareholders of the listed company RMB 100 million 35.12 Comprehensive energy consumption tce 49860.66
Year-on-year growth of net profit attributable to shareholders of the listed company % 23.72 Comprehensive energy consumption intensity tce / RMB per million 1.19
(revenue)
Net profit attributable to shareholders of the parent company after deducting non- RMB 100 million 33.52
recurring gains and losses Direct Energy Consumption
Year-on-year growth of net profit attributable to shareholders of the parent company % 22.48 Natural gas Cubic meter 6692675.00
after deducting non-recurring gains and losses
Diese9 Ton 238.88
Governance
Gasoline10 Ton 120.83
Number of the General Meetings of Shareholders / 3
Liquefied petroleum gas Ton 1.70
Number of the Board of Directors Person 9
Indirect Energy Consumption
Number of female directors Person 3
Purchased electricity MWh 222003.69
Number of legal training sessions conducted / 63
Purchased steam11 GJ 375942.26
Total hours of legal training Hour 87
Renewable Energy Consumption
Number of participants in legal training Person-times 13636
Purchased green power MWh 15000
Total attendance of legal personnel in legal training Person-times 187
Water Resource Consumption
Number of training sessions on anti-monopoly and anti-unfair competition / 44
Total water consumption Ton 70189302.05
Total hours of training on anti-monopoly and anti-unfair competition Hour 82
Water consumption rate Ton / RMB per million 1674.93
Number of participants in training on anti-monopoly and anti-unfair competition Person-times 8195 (revenue)
Number of lawsuits or major administrative penalties arising from unfair / 0 Circular Economycompetition
Packaging material consumption Ton 7969.22
Number of concluded lawsuits involving corruption / 0
Non-recyclable packaging material consumption Ton 7701.91
Environmental
Recyclable packaging material consumption Ton 267.31
Environmental governance investment RMB 10000 5936.09
Recycled packaging materials Ton 171.96
Number of employees receiving environmental training (internal/external) Person 2365
GHG Emission 9 T he statistical criteria for diesel data have been updated to encompass all subsidiaries (excluding overseas subsidiaries). Diesel consumption
increased due to a rise in the number of transportation trips and cargo volume. Meanwhile the Company optimized its statistical methods and
Total GHG emissions (Scope 1 + Scope 2) tCO2e 186953.80 revised the 2023 data accordingly.
10 I n 2023 the statistical scope for gasoline data covered Zhongmei Huadong and the Industrial Microbiology Subsidiary. In 2024 Huadong Medicine
Total GHG intensity (Scope 1 + Scope 2) tCO2e / RMB per million 4.46 updated its data reporting scope to include all subsidiaries (excluding overseas subsidiaries). Meanwhile the Company optimized its statistical
(revenue) methods and revised the 2023 data accordingly.
11 I n 2024 the total volume of purchased steam increased as several subsidiaries expanded production. Meanwhile the Company optimized its
statistical methods and revised the 2023 data accordingly.
108 1092024 | Environmental Social and Governance (ESG) Report Annexes
Indicator Unit 2024 Indicator Unit 2024
Wastewater Discharge12 Social
Total wastewater discharge Ton 2213019.51 R&D and Innovation
Wastewater discharge intensity Ton / RMB per million 52.81 R&D investment (Excluding Equity Investments) RMB 100 million 26.78
(revenue)
Number of R&D personnel Person 1864
Major Wastewater Pollutants
Proportion of R&D personnel % 12.44
Chemical oxygen demand (COD) Ton 268.74
Educational Background of R&D Personnel
Ammonia nitrogen Ton 5.07
Doctoral degree Person 106
Other key water pollutants (Total Nitrogen) Ton 11.65
Master's degree Person 569
Waste Gas Emission13
Bachelor's degree Person 898
Total waste gas emissions 10000 cubic meters 412145.48
Under bachelor's degree Person 291
Waste gas emission intensity 10000 cubic meters / 9.84
RMB per million (revenue) Age Structure of R&D Personnel
Major air pollutant-SO2 Ton 0.65 Under 30 (exclusive) Person 540
Major air pollutant-NOx Ton 9.90 30-40 (inclusive of 30 and 40) Person 1023
Major air pollutant-VOCs Ton 13.81 Above 40 (exclusive) Person 301
Waste Disposal14 Patent Grants
Quantity of general waste generated Ton 19544.01 Cumulative number of granted patents / 825
General waste production intensity Ton / RMB per million 0.47 Cumulative number of granted invention patents / 537
(revenue) Cumulative number of granted utility model patents / 246
Quantity of general waste recycled Ton 13695.41 Cumulative number of granted design patents / 42
Quantity of hazardous waste generated Ton 7378.62 Cumulative number of granted software copyrights / 16
Quantity of hazardous waste landfilled Ton 43.94 Number of newly granted patents / 90
Quantity of hazardous waste incinerated Ton 6460.52 Number of newly granted invention patents / 64
Quantity of hazardous waste recycled Ton 538.62 Number of newly granted utility model patents / 19
Quantity of hazardous waste other treatment Ton 286.76 Number of newly granted design patents / 7
Hazardous waste production intensity Ton / RMB per million 0.18
(revenue) Number of newly granted software copyrights / 2
Cumulative trademarks registered / 654
12 Number of recognized high-tech enterprises / 9 In 2023 the statistical scope for wastewater discharge data covered five key polluting entities: Zhongmei Huadong Jiangdong Company Xi'an
Bohua Jiangsu Joyang and Wuhu Huaren. In 2024 Huadong Medicine updated its data reporting scope to include all subsidiaries (excluding Quality and Safety
overseas subsidiaries).
13 In 2023 the statistical scope for waste gas emission data covered five key polluting entities: Zhongmei Huadong Jiangdong Company Xi'an Bohua Number of quality risk assessments conducted / 920
Jiangsu Joyang and Wuhu Huaren. In 2024 Huadong Medicine updated its data reporting scope to include all subsidiaries (excluding overseas
subsidiaries). Number of internal quality audits conducted within the year / 189
14 I n 2023 the statistical scope for Waste Disposal data covered five key polluting entities: Zhongmei Huadong Jiangdong Company Xi'an Bohua Jiangsu
Joyang and Wuhu Huaren. In 2024 Huadong Medicine updated its data reporting scope to include all subsidiaries (excluding overseas subsidiaries). Number of participants in quality and safety training Person-times 106494
110 1112024 | Environmental Social and Governance (ESG) Report Annexes
Indicator Unit 2024 Indicator Unit 2024
Total hours of quality and safety training Hour 10508 Bachelor's degree Person 8054
Number of product safety and quality incidents / 0 Vocational/technical diploma Person 7151
Data Security and Privacy Protection Under vocational/technical level Person 816
Number of information security training sessions for employees / 15 Unspecified Person 709
Number of employees participating in information security training Person 483 Gender Distribution of Employees
Customer Rights Protection Male Person 8591
Number of customer complaints / 316 Female Person 8965
Number of resolved complaints / 313 Unspecified Person 709
Complaint resolution rate % 99.05 Age Structure of Employees
Supply Chain Management Under 30 Person 5670
Number of suppliers / 8693 30-50 Person 11360
Number of domestic suppliers / 8482 Over 50 Person 526
Number of overseas suppliers / 211 Unspecified Person 709
Number of training sessions on supplier quality issues / 13 Employee Diversity
Number of suppliers certified with ISO 9001 / 197 Number of ethnic minority employees Person 888
Number of suppliers certified with ISO 14001 / 152 Number of employees with disabilities Person 77
Number of suppliers certified with ISO 45001 / 52 Employee Turnover
Employee Management Total number of turnover employees Person 3438
Number of employees by the end of reporting period Person 18265 Total employee turnover rate % 20.33
Number of new employees Person 4541 Employee Training and Development
Number of new male employees Person 2382 Employee training and development expenditure RMB 5367691
Number of new female employees Person 2159 Number of training sessions for career development and skill improvement / 674
Employee Composition Total training participants Person-times 71592
Production personnel Person 1592 Percentage of employees receiving training % 100
Sales personnel Person 11571 Total training hours Hour 375680
Technical personnel Person 2906 Average annual training hours per employee Hour 21
Financial personnel Person 329 Number of female trainees Person 8965
Administrative personnel Person 1471 Proportion of female trainees % 51.07
Unspecified Person 396 Number of male trainees Person 8591
Educational Background of Employees Proportion of male trainees % 48.93
Master's degree and above Person 1535 Total training hours for female employees Hour 197256
112 1132024 | Environmental Social and Governance (ESG) Report Annexes
Indicator Unit 2024 Annex II Shenzhen Stock Exchange Guidelines No. 17 for Self-
Average training hours for female employees Hour 22 Regulation of Listed Companies - Sustainability Reporting (Trial)
Total training hours for male employees Hour 178424
Average training hours for male employees Hour 21 Dimension Number Topic Chapters and Sections
Employee Rights Interests and Benefits 1 Climate change tackling Actions against Climate Change
Labor contract signing rate % 100 2 Pollutant emission Emissions Management
Social insurance coverage rate % 100 3 Waste disposal Emissions Management
Number of employees taking maternity leave Person 378 4 Ecological and biodiversity protection Environmental Management
Environmental
Return-to-work rate after maternity leave % 100 5 Environmental compliance management Environmental Management
Number of employees taking parental leave Person 426 6 Energy usage Actions against Climate Change
Return-to-work rate after parental leave % 100 7 Usage of water resources Green Operations
Occupational Health and Safety 8 Circular economy Green Operations
Coverage rate of occupational injury insurance for employees % 100 9 Rural revitalization Joint Community Engagement
Occupational injury insurance premiums15 RMB 11911649.75 Contributing to the Benefits of
Healthcare
Coverage rate of physical examinations for employees exposed to occupational % 100 10 Contributions to the society Promoting Public Health
disease hazard factors Joint Community Engagement
Coverage rate of physical examinations for employees % 94.91 Deepening Industry Collaboration
Total hours of employee safety training Hour 68008 11 Innovation-driven R&D and Innovation
Number of person-times of employee safety training Person-times 18349 12 Ethics of science and technology R&D and Innovation
Number of safety emergency drills / 234 13 Supply chain security Supply Chain Management
Social
Public Welfare 14 Equal treatment to small and medium-sized enterprises Supply Chain Management
Public welfare investment RMB 100 million 1.05
15 Safety and quality of products and
Quality and Safety
Number of participants in public/volunteer activities Person-times 189 services Responsible Services
Total hours of public/volunteer activities Hour 436
16 Data security and customer privacy protection Responsible Services
Employee Recruitment
Talent Development
17 Employees
Employee Care
Health and Safety
18 Due diligence Business Ethics
19 Communications with stakeholders Stakeholders Engagement
15?H uadong Medicine optimized the reporting methodology for occupational injury insurance expenditures in its 2024 ESG report adopting Sustainable
accounting standards fully aligned with its annual financial statements. Under the revised framework the 2023 occupational injury insurance Development Anti-commercial bribery and anti-
premiums amounted to RMB 7710513.57 (consistent with the audited figures in the Company's 2023 Annual Report). This adjustment solely Governance 20 corruption Business Ethics
enhances ESG disclosure granularity without modifying accounting policies or requiring historical data restatement.
21 Anti-unfair competition Business Ethics
114 1152024 | Environmental Social and Governance (ESG) Report Annexes
Annex III GRI Standards Index
GRI Standard Disclosure Location
Huadong Medicine has reported with reference to the GRI Standards from January 1 2024 to December 2-27 Compliance with laws and regulations All sectionsStatement of Use 31 2024.GRI 2: General 2-28 Membership associations All sections
GRI 1 Applied GRI 1: Foundation 2021 Disclosures 2021 2-29 Approach to stakeholder engagement Stakeholders Engagement
2-30 Collective bargaining agreements Communication and Support
GRI Standard Disclosure Location
3-1 Process to determine material topics Double Materiality Analysis
2-1 Organizational details About us
GRI 3: Material Topics
2-2 Entities included in the organization's sustainability 2021 3-2 List of material topics Double Materiality Analysis
reporting About This Report 3-3 Management of material topics Double Materiality Analysis
2-3 Reporting period frequency and contact point About This Report 201-1 Direct economic value generated and distributed Annex I Performance Data
2-4 Restatements of information No restatements of information during this reporting period 201-2 Financial implications and other risks and opportunities
due to climate change Strategy
GRI 201: Economic
2-5 External assurance Not conducted during this reporting period Performance 2016 201-3 Defined benefit plan obligations and other retirement
plans Communication and Support
2-6 Activities value chain and other business relationships Supplier management
201-4 Financial assistance received from government Not disclosed due to confidentiality 2-7 Employees Annex I Performance Data requirements
2-8 Workers who are not employees Annex I Performance Data 202-1 Ratios of standard entry level wage by gender compared Not disclosed due to confidentiality
GRI 202: Market to local minimum wage requirements2-9 Governance structure and composition Governance Framework Presence 2016 202-2 Proportion of senior management hired from the local
2-10 Nomination and selection of the highest governance body Governance Framework community Information not available
2-11 Chair of the highest governance body Governance Framework Contributing to the Benefits of
Healthcare
2-12 Role of the highest governance body in overseeing the
management of impacts Governance Framework 203-1 Infrastructure investments and services supported Promoting Public Health
GRI 2: General Joint Community Engagement
Disclosures 2021 2-13 Delegation of responsibility for managing impacts Governance Framework GRI 203: Indirect Deepening Industry Collaboration
Economic Impacts
2-14 Role of the highest governance body in sustainability ESG Governance 2016 Contributing to the Benefits of reporting Healthcare
2-15 Conflicts of interest Business Ethics 203-2 Significant indirect economic impacts Promoting Public Health
Joint Community Engagement
2-16 Communication of critical concerns Stakeholders Engagement Deepening Industry Collaboration
2-17 Collective knowledge of the highest governance body Governance Framework GRI 204: Procurement
Practices 2016 204-1 Proportion of spending on local suppliers Information not available
2-18 Evaluation of the performance of the highest governance
body ESG Governance 205-1 Operations assessed for risks related to corruption Risk Management
2-19 Remuneration policies Remuneration and Performance GRI 205: Anti- 205-2 Communication and training about anti-corruption
2-20 Process to determine remuneration Remuneration and Performance corruption 2016 policies and procedures
Business Ethics
2-21 Annual total compensation ratio Internal information is not disclosed 205-3 Confirmed incidents of corruption and actions taken Business Ethics
2-22 Statement on sustainable development strategy ESG Governance GRI 206: Anti-competitive Behavior 206-1 Legal actions for anti-competitive behavior anti-trust and monopoly practices No such legal actions
2-23 Policy commitments Protection of Employee Rights 2016
2-24 Embedding policy commitments Business Ethics 301-1 Materials used by weight or volume Annex I Performance Data
GRI 301: Materials
2-25 Processes to remediate negative impacts Business Ethics 2016 301-2 Recycled input materials used Circular Economy
2-26 Mechanisms for seeking advice and raising concerns Business Ethics 301-3 Reclaimed products and their packaging materials Circular Economy
116 1172024 | Environmental Social and Governance (ESG) Report Annexes
GRI Standard Disclosure Location GRI Standard Disclosure Location
302-1 Energy consumption within the organization Annex I Performance Data 401-1 New employee hires and employee turnover Annex I Performance Data
302-2 Energy consumption outside of the organization Annex I Performance Data GRI 401: Employment 401-2 Benefits provided to full-time employees that are not
2016 provided to temporary or part-time employees Communication and Support
GRI 302: Energy 2016 302-3 Energy intensity Annex I Performance Data
401-3 Parental leave Annex I Performance Data
302-4 Reduction of energy consumption Strategy
GRI 402: Labor/
302-5 Reductions in energy requirements of products and 402-1 Minimum notice periods regardingStrategy Management Uninvolvedservices Relations 2016 operational changes
Wastewater Management
303-1 Interactions with water as a shared resource 403-1 Occupational health and safety management system Occupational Health
Water Resource Utilization
403-2 Hazard identification risk assessment and incident
303-2 Management of water discharge-related impacts Wastewater management investigation Work Safety
GRI 303: Water and
Effluents 2018 303-3 Water withdrawal Water Resource Utilization 403-3 Occupational health services Occupational Health
303-4 Water discharge Wastewater management 403-4 Worker participation consultation and communication
Occupational Health
on occupational health and safety
303-5 Water consumption Water Resource Utilization
GRI 403: Occupational 403-5 Worker training on occupational health and safety Occupational Health304-1 Operational sites owned leased managed in or adjacent
to protected areas and areas of high biodiversity value outside No such operational sites Health and Safety
protected areas 2018 403-6 Promotion of worker health Occupational Health
304-2 Significant impacts of activitiesproducts and services on 403-7 Prevention and mitigation of occupational health Work SafetyGRI 304: biodiversity No significant impacts and safety impacts directly linked by business relationships Occupational HealthBiodiversity2016
304-3 Habitats protected or restored No such habitats 403-8 Workers covered by an occupational health and safety Work Safety
management system Occupational Health
304-4 IUCN Red List species and national conservation list
species with habitats in areas affectedby operations No such species 403-9 Work-related injuries Work Safety
305-1 Direct (Scope 1) GHG emissions Annex I Performance Data 403-10 Work-related ill health Occupational Health
305-2 Energy indirect (Scope 2) GHG emissions Annex I Performance Data 404-1 Average hours of training per year per employee Development and Training
305-3 Other indirect (Scope 3) GHG emissions Not collected
GRI 404: Training and 404-2 Programs for upgrading employee skills and transition Development and Training
GRI 305: Emissions 305-4 GHG emissions intensity Annex I Performance Data Education 2016 assistance programs
2016
305-5 Reduction of GHG emissions Not collected 404-3 Percentage of employees receiving regular performance and career development reviews Development and Training
305-6 Emissions of ozone-depleting substances (ODS) Not collected Governance Framework
GRI 405: Diversity and 405-1 Diversity of governance bodies and employees305-7 Nitrogen oxides (NOx) sulfur oxides (SOx) Protection of Employee RightsWaste Gas Management
and other significant air emissions Equal Opportunity 2016
405-2 Ratio of basic salary and remuneration of women to men Not disclosed due to confidentiality
306-1 Waste generation and significant waste-related impacts Management of Wastes requirements
306-2 Management of significant waste-related impacts Management of Wastes GRI 406: Non-discrimination 2016 406-1 Incidents of discrimination and corrective actions taken Protection of Employee Rights
GRI 306: Waste 2020 306-3 Waste generated Management of Wastes GRI 407: Freedom
306-4 Waste diverted from disposal Management of Wastes of Association and 407-1 Operations and suppliers in which the right to freedom of Collective Bargaining association and collective bargaining may be at risk Communication and Support
306-5 Waste directed to disposal Management of Wastes 2016
308-1 New suppliers that were screened using environmental GRI 408: Child Labor 408-1 Operations and suppliers at significant risk for incidents of
GRI 308: Supplier criteria Sustainable Supply Chain 2016 child labor
Talent Introduction
Environmental
Assessment 2016 308-2 Negative environmental impacts in the supply chain and GRI 409: Forced or Sustainable Supply Chain Compulsory Labor 409-1 Operations and suppliers at significant risk for incidents of actions taken 2016 forced or compulsory labor
Talent Introduction
118 1192024 | Environmental Social and Governance (ESG) Report Annexes
GRI Standard Disclosure Location Annex Ⅳ Feedback Form
Not disclosed due to the
413-1 Operations with local community engagement impact
assessments and development programs little relevance to the business
Dear readers
GRI 413: Local of our company and inapplicability
Thank you for your time to read this report. To enhance the value of ESG information for you and other stakeholders we kindly
Communities 2016 request your assistance in completing the feedback form. Your feedback will greatly aid us in further enhancing our ESG management Not disclosed due to the performance. Please use the details below to provide your feedback:
413-2 Operations with significant actual and potential negative
impacts on local communities little relevance to the business
of our company and inapplicability
Email: ir@eastchinapharm.com
GRI 414: Supplier 414-1 New suppliers that were screened using social criteria Sustainable Supply Chain Tel.: 0571-89903300
Social Assessment
2016 414-2 Negative social impacts in the supply chain and actions taken Sustainable Supply Chain Address: 866 Moganshan Road Hangzhou Zhejiang
416-1 Assessment of the health and safety impacts of product Strategy 1. Which type of stakeholders do you belong to:GRI 416: Customer and service categories
Health and Safety □ Shareholders or Investors □ Employee □ Client & Consumer □ Supplier □ Industry Association or Research Institution
2016 416-2 Incidents of non-compliance concerning the health and
safety impacts of products and services Strategy □ Public Welfare or Community Organization □ Media □ Government or Regulatory Agency □ Others
417-1 Requirements for product and service information and
labeling Responsible Marketing
2. Your overall assessment of this year's ESG report:
□ Excellent □ Good □ Neutral □ Poor □ Bad
GRI 417: Marketing 417-2 Incidents of non-compliance concerning product and
and Labeling 2016 service information and labeling Responsible Marketing 3. Your assessment on this report
417-3 Incidents of non-compliance concerning marketing ? Information Disclosure
communications Responsible Marketing
□ Excellent □ Good □ Neutral □ Poor □ Bad
GRI 418: Customer 418-1 Substantiated complaints concerning breaches of
Privacy 2016 customer privacy and losses of customer data No such complaints ? Layout Design
□ Excellent □ Good □ Neutral □ Poor □ Bad
? Readability
□ Excellent □ Good □ Neutral □ Poor □ Bad
4. Which topics are of most concern to you (Choose up to 3)
? Environmental Protection
□ Environmental Management □ Energy Management □ Response to Climate Change □ Materials Management
□ Water Resource Utilization □ Pollution Control
? Corporate Social Responsibility
□ Labor Relations Management □ Employee Training and Development □ Occupational Health and Safety □ R&D and Innovation
□ Product Responsibility □ Protection of Customers' Rights and Interests □ Information Security and Privacy Protection
□ Responsible Supply Chain □ Product Accessibility
? Corporate Governance
□ Protection of Shareholders' Rights and Interests □ Governance Strategy and Organizational Structure □ Business Ethics
□ Tax Governance □ Risk Management □ Quality of Information Disclosure □ ESG Governance
5. Does this ESG report provide any information that you are interested in:□ Yes □ No (What additional information would you like to see__________________________)
6. Do you have any other comments or suggestions regarding our ESG report ESG work or sustainable development management
120 121Scientific Research-based
Patient-centered
Contact Information
Address : 866 Moganshan Road Hangzhou Zhejiang
E m a i l : ir@eastchinapharm.com
hz000963@126.com
T e l . : 0571-89903388 (Switchboard)
0571-89903300 (Investor Hotline) Huadong Medicine Co. Ltd. Huadong Medicine Investor
Relations Management



