Stock code
000963
2025 Environmental Social and Governance (ESG) Report
HUADONG MEDICINEContents
About This Report 02
Message from the Chairman 04
About Us 06
01 Governing for 03 Driving Innovation Upholding Goodness and Quality and Fulfilling Social Steady Progress Excellence 05 Responsibility
Corporate Governance 18 R&D and Innovation 52 Contributing to the Benefits of Healthcare 98
ESG Governance 22 Quality and Safety 61 Promoting Public Health 101
Robust Operations 26 Responsible Services 70 Joining Community Engagement 103
Business Ethics 28 Supply Chain Management 75
02 Cultivating 04 Nurturing Talents
Appendix
for Green and Empowering
Development Growth Appendix I Performance Data 106
Appendix II Shenzhen Stock Exchange 113
Environmental Compliance 32 Employee Recruitment 82 Guidelines Index
Addressing Climate Change 35 Talent Development 85 Appendix III GRI Standards Index 114
Emissions Management 41 Employee Care 89 Appendix Ⅳ Feedback Form 119
Green Operations 46 Health and Safety 922025｜Environmental Social and Governance (ESG) Report About This Report
About This Report
Introduction Data Sources and Reliability Statement
This is the 2025 Environmental Social and Governance (ESG) Report issued by Huadong Medicine Co. Ltd. This report is prepared All information and data referenced in this report are sourced exclusively from official documents statistical reports and financial
to elaborate the Company's practices and performance in sustainable development social responsibility fulfillment and other statements of Huadong Medicine as well as information related to sustainable development practices gathered consolidated and
aspects to respond to the expectations and demands of our stakeholders. This report intends to disclose the Company's key work audited across various functional departments and business units within the Company. The Board of Directors of the Company
and achievements in respect of environmental protection social responsibility fulfillment and corporate governance among hereby undertakes that this report contains no false records or misleading statements and takes responsibility for the truthfulness
others in an objective normative transparent and all-inclusive manner. accuracy and completeness of its contents. In the meantime unless otherwise specified all amounts in this report are expressed
in RMB.Reporting Period
Preparation Basis
This report covers the period from January 1 2025 to December 31 2025. To improve the comparability and completeness some
sections of this report may extend beyond the reporting period. This report is prepared in accordance with the Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For Trial Implementation) (hereinafter referred to as the "Shenzhen Stock Exchange Guidelines").Meanwhile the report refers the Sustainability Reporting Standards (GRI Standards) and also responds to the United Nations
Sustainable Development Goals (SDGs) the Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Stock Exchange—
Reporting Scope Preparation of Sustainability Report and the Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises
(CASS-ESG 5.0) issued by the China Social Responsibility 100 Forum (ESG Expert Committee) based on the results of the Company's
materiality analysis.The contents of this report relate to Huadong Medicine Co. Ltd. and its subsidiaries. Unless otherwise specified the scope of this
report is consistent with that of the Company's Annual Report.Access
Appellation Description
This report includes both Chinese and English versions. It is available for download at the website of Shenzhen Stock Exchange
(http:// www.szse.cn) or the Company's official website (https://www.eastchinapharm.com/) where you can find further insights
To enhance clarity of this report the references "Huadong Medicine" "the Company" or "We" are used instead of consistently using about the Company.the formal "Huadong Medicine Co. Ltd.".Shortened Form Full Name Shortened Form Full Name Feedback
Huadong Medicine/the
Company/We Huadong Medicine Co. Ltd. Wuhu Huaren
Wuhu Huaren Science and Technology
Co. Ltd. Email: ir@eastchinapharm.com
Zhongmei Huadong Hangzhou Zhongmei Huadong
Magic Health Hubei Magic Health Technology Co. Ltd.Pharmaceutical Co. Ltd. Huadong Medicine (Guizhou) Tel: 0 571-89903388 (Switchboard) Huadong Guizhou Pharmaceutical Co. Ltd.Jiangdong Company Hangzhou Zhongmei Huadong 0571-89903300 (Investor Hotline)Pharmaceutical Jiangdong Co. Ltd. Nanjing Nongda Animal Jiangsu Nanjing Nongda Animal
Jiangsu Joyang Jiangsu Joyang Laboratories Co. Ltd. Pharmaceutical Pharmaceutical Co. Ltd.Huadong Medicine (Xi'an) Bodyguard Huida Biotech Zhejiang Huida Biotech Co. Ltd.Xi'an Bodyguard Pharmaceutical Co. Ltd.Bailing Health Bailing Health Science (Hangzhou) Co.Jiuzhou Pharmaceutical/ Shaanxi Jiuzhou Pharmaceutical Co. Ltd.Shaanxi Jiuzhou Ltd.Sinclair Sinclair (Shanghai) Medical Treatment
Doer Biologics Zhejiang Doer Biologics Co. Ltd. Technology Co. Ltd.Meihua Hi-Tech Anhui Meihua Hi-Tech Pharmaceutical
Supply Chain Management Huadong Medicine Supply Chain
Co. Ltd. (Hangzhou) Company Management (Hangzhou) Co. Ltd.
02 032025｜Environmental Social and Governance (ESG) Report Message from the Chairman
Message from the Chairman
In 2025 facing the accelerated iteration of the global pharmaceutical industry Huadong Medicine Co.Ltd. anchored the main line of high-quality development and forged ahead in the fierce market tide. We
adhere to the noble mission of "serving public health" and internalize and externalize the core values
of "benefiting mankind integrity persistence and pragmatism". The Company continues to implement
the corporate philosophy of "Scientific Research-Based and Patient Centered" striding forward
Lv Liang towards the vision of "becoming a globally renowned pharmaceutical powerhouse driven by scientific
research and innovation". Guided by forward-looking strategic layout we lead the steady growth of the
Chairman of Huadong Medicine Co. Ltd. enterprise and continuously inject solid strength into the global cause of life and health.Forge ahead with determination and strengthen core advantages. The Company demonstrated steady performance across all of pharmacovigilance and fulfill the safety commitment to patients with strict quality control standards. In addition we continuously
four of its business segments—pharmaceutical industry pharmaceutical business aesthetic medicine and industrial microbiology— upgrade the supplier full-life-cycle management and supply chain risk control mechanism and work with partners in the industrial
driving continuous enhancement of its core competitiveness. Particularly in innovative drug R&D leveraging a diversified innovation chain to build a stable transparent and resilient sustainable supply chain ecosystem.system the Company has deepened its efforts in three core therapeutic areas—oncology endocrinology and autoimmunity—
achieving remarkable breakthroughs. Innovative drugs such as Mifanertinib Maleate Tablets and Relmapirazin Injection have been Practice mutual assistance and activate the talent engine. The Company actively practices the concept of equal diverse and
successively approved for market launch further enriching the differentiated innovative product portfolio. Meanwhile we actively inclusive employment and continuously improves the dual-channel career development path and precise talent training system. We
embrace cutting-edge technology promote the deep integration of artificial intelligence technology with R&D processes and fully upgrade employee care systems deepen the "Learning from Lei Feng Love Fund" special assistance mechanism improve female-
successfully obtained approval for the construction of a provincial key laboratory marking a new level of the Company's technological specific health and welfare support and accelerate the digital transformation of safety management and the construction of a dual
innovation and industrial transformation capabilities in the field of metabolic diseases. prevention mechanism. We carefully care for the physical and mental health and career dreams of every employee gathering strength
to promote the enterprise forward.Uphold pragmatism and consolidate the foundation for development. The Company fully integrates the concept of sustainable
development into strategic decision-making and daily operations relying on a sound three-tier ESG governance structure to ensure Have a broad mind to benefit the world and improve people's well-being. The Company takes multiple measures to improve
the efficient implementation of various work and respond to stakeholder concerns. We continuously optimize corporate governance the accessibility and affordability of high-quality medical resources establishes a special love fund and carries out a number of patient
efficiency upgrade the comprehensive risk and compliance management system and regularly carry out business ethics audits and rights and interests projects to provide practical assistance to groups of patients in urgent need of help. We rely on diversified popular
integrity culture construction to safeguard the enterprise's strong operational resilience in a complex and changing environment. science platforms and people's livelihood pharmaceutical service stations to actively promote the sinking of health education into
communities. In addition we continue to respond to local charitable actions deepen targeted assistance and other rural revitalization
Respect the natural ecology and practice green and low-carbon development. To actively address the challenges of climate projects repay society with sincere hearts and spread the warm light of public welfare to the vast land.change we coordinate the promotion of energy conservation and emission reduction and the green transformation of energy structure
continuously deploy distributed photovoltaic projects and strive to improve energy efficiency through technological transformation All beneficial paths go hand in hand with the times. Looking ahead Huadong Medicine will continue to adhere to the strategic direction
and process optimization. Meanwhile we strictly implement the whole-process refined control of three wastes (wastewater waste of high-quality and sustainable development and keep forging ahead in the broad field driven by innovation. We will continue to
gas and solid waste) continuously improve water resource recycling and waste resource utilization and are committed to depicting a tackle the frontiers of medicine accelerate the clinical transformation of scientific research achievements and make more high-quality
beautiful picture of harmonious coexistence between the enterprise and the ecological environment with a greener operation model. and affordable innovative drugs benefit the public. Meanwhile we will deepen the core of ESG governance unswervingly implement
green and low-carbon operations and bravely assume the social responsibility of corporate citizens. Huadong Medicine is willing to
Adhere to rigor and pursuit of excellence and defend the quality bottom line. The Company has built a full-life-cycle quality work hand in hand with global industrial partners investors and all sectors of society to create more outstanding shared value and
control network covering preclinical R&D to marketing and circulation and empowers quality monitoring and early warning through draw a new grand blueprint for sustainable development in the great journey of serving public health.a digital platform. We follow authoritative domestic and international quality system standards deepen the systematic management
04 052025｜Environmental Social and Governance (ESG) Report About Us
About Us
Company Profile Corporate Culture
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
over 30 years of vigorous development the Company has now fostered four major business segments including pharmaceutical Vision Corporate Philosophy
industry pharmaceutical business aesthetic medicine and industrial microbiology and has evolved into a large comprehensive listed To Become an International Pharmaceutical Brand Scientific Research-based and Patient Centered
pharmaceutical enterprise specialized in pharmaceutical R&D production and marketing. Driven by Scientific Research and Innovation
The Company has repeatedly been recognized with honors such as "Forbes Asia-Pacific's 50 Best Listed Companies" "Top 100 Most
Valuable Main Board Listed Companies in China" and "Golden Bull Top 100 Listed Companies". It has also been listed in the Fortune
China 500 ranking selected by Fortune China for 16 consecutive years. Looking ahead the Company will continue to drive progress Mission Core Values
through scientific research and innovation promote the advancement of the pharmaceutical industry and provide high-quality Contribute to the Well-being of the Public Benefit Mankind Honesty Persistence Pragmatism
healthcare products and services to patients worldwide.Business Layout
Pharmaceutical Industry Pharmaceutical Business Aesthetic Medicine Industrial Microbiology
Specialized in the R&D production and marketing The Company's pharmaceutical business segment has long In terms of aesthetic medicine the Company has created The Company's industrial microbiology segment is stra-
of specialized medicines chronic therapeutics and focused on three core businesses—medicines medical devices a comprehensive and differentiated product matrix by fol- tegically focused on the application of synthetic biology
specialized pharmaceuticals for years the Company has and herbal pieces—while expanding into project services lowing the strategy of "global operation layout and dual-cir- technology and innovation in the bio-pharmaceutical sector
established a comprehensive and internationally oriented channel services government affairs services and compliance culation operation & development" with an international prioritizing the development of four core business seg-
pharmaceutical manufacturing system with a core product services. Leveraging a highly specialized and large-scale vision through forward-looking layout and now ranks at ments: xRNA raw materials featured active pharmaceutical
pipeline centered around areas such as chronic kidney logistics system for cold chain vaccines and special medicines the forefront of the industry in terms of product quantity ingredients (APIs) & intermediates health & biomaterials
disease (CKD) immunology oncology endocrinology the as well as proprietary e-commerce platforms the Company and coverage. Specifically over 30 products have been and animal health. Leveraging four decades of expertise
digestive system and the cardiovascular system. Several continuously extends its omni-channel marketing capabilities launched in China and abroad and nearly 20 innovative the Company has established a centralized R&D cluster
first-line clinical medicines of the Company hold a strong and enhances its market competitiveness. It has been ranked global products are in development. Fostering differenti- anchored by its synthetic biology R&D platform industrial
market position domestically and several have obtained among "China's Top 10 Pharmaceutical Wholesale Enterprises" ated product lines that cover three major categories of re- microbiology R&D platform and synthetic chemistry R&D
international registration and certification. Meanwhile for many consecutive years. In Zhejiang Province the Company generation products hyaluronic acids and botulinum toxin platform. This framework integrates full-chain technological
it strategically focuses on the R&D of innovative drugs in operates three supply chain subsidiaries located in Hangzhou the Company is committed to becoming a global leading capabilities in microbial engineering maintaining an R&D
three core therapeutic fields of oncology endocrinology and Jinhua and Wenzhou supported by 13 regional warehouses aesthetic medicine comprehensive solution provider by and production system that spans the entire life cycle of
autoimmunity through a blend of independent development with a total storage area exceeding 190000 square meters offering patients with more professional efficient compre- microbial-derived medicines alongside interdisciplinary
external introduction and project cooperation. This concerted forming a province-wide integrated multi-warehouse logistics hensive and safer integrated solutions through diversified R&D platforms and industrial resource networks. As for its
effort has established a distinct innovative drug product network. In the medicines segment the Company possesses combined therapy techniques that combine " noninvasive industrial layout the Company operates seven coordinated
pipeline covering the full R&D cycle and a well-structured full-category and full-channel service capabilities achieving and micro-invasive" "facial and body filling" "products + industrial bases in Hangzhou Xiangfuqiao Qiantang New
product portfolio. Moreover the Company has established integrated hospital and out-of-hospital coordination as well technologies" and "injection + energy-based device". The Area Jiangsu Joyang Laboratories Magic Health Anhui
strategic partnership with numerous multinational innovative as unified distribution and agency operations. In medical Company operates multiple R&D centers and production Meihua Wuhu Huaren and Nanjing Nongda Animal Phar-
medicine R&D companies and pharmaceutical companies on devices building on its large-scale distribution foundation the bases globally promoting and marketing injectable regen- maceutical. Moreover the Company has set up the largest
products in Chinese market. Company continues to expand professional agency and supply erative fillers hyaluronic acid facial thread lifting and other fermentation monomer plants in Zhejiang Province and
chain services. The herbal pieces business covers the entire products and researches develops and expands its busi- formed the industry-leading intelligent production system
industrial chain from cultivation processing and automated nesses of energy-based devices in the global market. that covers all stages from strain screening and process
decoction to sales of proprietary products ensuring end-to-end development to scale production. With a complete manu-
coverage from source to end-user. Driven by service innovation facturing ecological chain that encompasses technological
the Company integrates supplier partnerships CSO (Contract R&D pilot-scale amplification engineering conversion and
Sales Organization) services SPD (Supply-Process-Distribution) quality control the Company sustains its industry leader-
operations and industry-university-institute collaborations to ship in fermentation capacity and process sophistication.refine precise services for upstream and downstream clients
striving to become a trusted "integrated pharmaceutical service
provider" for the whole society.
06 072025｜Environmental Social and Governance (ESG) Report About Us
Performance in 2025
Governance Social
Operating revenue Year-on-year growth rate of Held a total of R&D investment in the pharmaceutical Number of newly granted patents Cumulative number of granted
operating revenue industry segment (excluding equity patents
investments)
436.12 4.07% 3 29.82 RMB 100 million 81 906
RMB 100 million Shareholders' Meetings
Disclosed a total of Number of participants in Number of participants in training on anti- 100% 100%
legal training monopoly and anti-unfair competition
of the Company's in-line product lines had passed GMP coverage in testing of self-
182 13752 11311 certification produced productsdocuments
Training training investment over Cumulative employee training
Number of concluded lawsuits involving corruption participation 100%
0 RMB 4.64 million 90543person-times Training coverage
A total of 55 approved core products and 15 strategic collaboration products of the
Environmental
Company have been included in the national medical insurance
Number of employees receiving Environmental governance Green electricity expected to be generated
environmental training investment by newly built PV plants
Public welfare investment Total hours of public/volunteer activities
2300 RMB77.12million 4836000kWh
RMB115million 1110hours
9
Subsidiaries have obtained ISO 14001 Environmental
Management System Certification
08 092025｜Environmental Social and Governance (ESG) Report About Us
2025 Milestones
2025.12025.22025.32025.62025.72025.8
The new high-end hyaluronic acid The Company's first domestically The Company's first domestically produced Selected for the Pharmaceutical Huadong Medicine was included in Huadong Medicine entered into an
product MaiLi Extreme secured National produced Ustekinumab Injection for Ustekinumab Injection (SAILEXIN) for Executive magazine's "Top 50 Global the Fortune China 500 for the 16th exclusive strategic cooperation with
Medical Products Administration (NMPA) the Crohn's disease indication received pediatric plaque psoriasis indication secured Pharma Companies of 2025" list． consecutive year. Jiangsu Vcare for the commercialization
approval for the market. NMPA's acceptance of the marketing approval for the market. rights of VC005 tablets a second-
application. generation highly selective JAK1
inhibitor in mainland China.The marketing application for Ellansé The innovative medical device The optical radiofrequency therapeutic The marketing authorization application
M Type injectable polycaprolactone transdermal glomerular filtration device device V30's registration application in for edaravone tablets was accepted by
microspheres facial filler was accepted secured NMPA approval for the market. China was accepted by the NMPA. the NMPA.by the NMPA.The self-developed ADC new drug The marketing application of
HDM2005 Injection received Orphan Semaglutide Injection for hypoglycemic
Drug Designation from the U.S. Food indication was accepted by the NMPA.and Drug Administration (FDA).
2025.10
Huadong Medicine partnered with The Class 1 innovative drug Mifanertinib
Chance Pharmaceuticals for the Maleate Tablets received marketing
commercialization of CXG87 a modified approval from the NMPA. 2025.11 2025.12
respiratory system drug. The phase 2 clinical results of DR10624 Huadong Medicine entered into an exclusive
from the subsidiary Doer Biologics were commercialization agreement with Sinorda
The medical device registration The marketing authorization application presented at AHA 2025. Pharmaceutical for Linaprazan Glurate Capsules a
application in China for the high-end for 0.3% roflumilast topical foam digestive system Class 1.1 new drug.hyaluronic acid MaiLi Precise was (ZORYVE) an innovative topical
accepted by the NMPA. dermatological formulation was The marketing authorization application The self-developed ADC innovative drug HDM2012
accepted by the NMPA. for 0.15% roflumilast topical foam Injection received Orphan Drug Designation from
(ZORYVE) an innovative topical the U.S. FDA for two indications: gastric cancer and
The Class 1 new drug Relmapirazin dermatological formulation was gastroesophageal junction cancer and pancreatic
Injection was approved for marketing accepted by the NMPA. cancer.marking the successful launch of
the world's first bedside assessment The supplementary application for the The innovative GLP-1/GIP dual-target long-acting
innovation for renal function in China. conversion from conditional approval to agonist HDM7006 Injection a Class 1 new veterinary
regular approval for ADC innovative drug drug had its marketing application accepted by the
Elahere was approved by the NMPA. Ministry of Agriculture and Rural Affairs.
10 112025｜Environmental Social and Governance (ESG) Report About Us
2025 Major Honors
Hithink Royal Flush Securities Times Healthcare Executive
Best Investor Relations Award Top 300 Most Investor Relations Management
Popular Secretary to the Board 2025 Top 100 Innovative Chinese Pharmaceutical Enterprises (First Tier)Award at the 16th Tianma
Awards
The 19th China Listed Companies
Value Selection – Top 100 Most
Securities Times Zhejiang University Academy Valuable Main Board
of Financial Research China Securities JournalListed Companies
Z hejiang Listed Companies Most Favored by 2 7th Golden Bull Award for Listed Companies: Most Valuable Investment Award
Institutional Investors (A-Shares) Top 10 List
Panorama Network
Pharmaceutical Executive Easy Board China Association for Public Companies
Panorama Best O utstanding IR Value 100 2025 Best Practices in Listed
Investor Award Team 2025 Pharm Exec Top 50 Companies Companies Board Governance
2025 AI Frontier Innovation Award
Outstanding IR A ward for 2 025 Best Practices in Listed
Company Outstanding 2025 Best Practice in Digital Innovation of Companies Board Office
Institutional Board Office Award
O utstanding IR Attention 2025 Board Secretary
Chairman Fortune China 2025 Outstanding IR Construction Performance Evaluation
Award for Listed Companies
Outstanding Board Fortune China 500 (348th) (Rated 5A)
Secretary
All-China Federation of Industry and Commerce PHARMCUBE
Top 500 Private Enterprises by R&D Investment (Rank 152) and Top 500 Private I nnovative Chinese Pharmaceuticals in the Decade Honor: Industry-leading
Enterprises by Invention Patents (Rank 176) Pharmaceutical Enterprise
12 132025｜Environmental Social and Governance (ESG) Report About Us
ESG Awards and Honors in 2025 ESG Ratings
New Fortune Healthcare Executive
B est Listed Companies Evaluation - 2025 Top 20 ESG Competitive
vESG Best Practices Chinese Pharmaceutical Listed
Companies (Large-Cap Stocks)
2025 Healthcare Sustainable
Value Leadership Award
China Association for Public Companies
2025 Outstanding Practice Case of Listed
Companies' Sustainable Development
Zhejiang Provincial Federation of Industrial Economy Zhejiang Provincial Enterprise Confederation
Zhejiang Provincial Association of Entrepreneurs Zhejiang Provincial State Asset Management
Association Zhejiang Provincial Chief Accountants Association
2025 Outstanding Case of Social Responsibility Report among Enterprises in Zhejiang
Panorama Network Hangzhou Civil Affairs Bureau
Outstanding ESG Value Top 20 in the 2025 ESG Strategic
Communication Award Philanthropy Influence Ranking of
Hangzhou Listed Companies (Top 1)
141501
Governing for Steady
Progress
Robust governance is the fundamental safeguard
for an enterprise's long-term prosperity. Huadong
Medicine has always regarded compliant operations
as the lifeline of its development. By continuously
optimizing its governance structure and strengthening
comprehensive risk management the Company
enhances organizational efficiency and resilience. At
the same time we deeply integrate ESG principles
into every aspect of daily business decision-making
providing strong support for strategic execution and
sustained value growth.Corporate Governance 18
ESG Governance 22
Robust Operations 26
Business Ethics 28
Contributing to the UN SDGs:2025｜Environmental Social and Governance (ESG) Report Governing for Steady Progress
The Board of Directors serves as the Company's decision-making center is accountable to the shareholders' meeting and implements
Corporate Governance its resolutions. In strict compliance with corporate governance requirements the Company regularly convenes shareholders' meetings and meetings of the specialized committees effectively safeguarding shareholders' rights giving full play to the oversight and
strategic support functions of the committees and continuously enhancing governance transparency. During the reporting period the
Huadong Medicine has always regarded sound corporate governance as the Company convened three shareholders' meetings and eight Audit Committee meetings.cornerstone of its steady development and continues to optimize its governance The Company places great importance on the diversity and professionalism of the Board of Directors and is committed to enhancing the
structure while enhancing the quality of decision-making and the effectiveness quality of decision-making and governance effectiveness. In the selection and appointment of directors the Company takes into account
of execution. At the same time we continue to strengthen information professional background industry experience and management capabilities to build a decision-making team with both strategic vision
disclosure and investor relations management building a transparent and and professional depth. Independent directors actively perform their duties and provide independent and objective opinions on major
credible communication mechanism to lay a solid foundation for the Company's decisions effectively safeguarding the legitimate rights and interests of minority shareholders and investors. As of the end of the reporting
standardized operations and sustainable development. period the Board of Directors consisted of 11 members including four independent directors and four female directors.The Board of Directors has established five specialized committees: the Audit Committee the Remuneration and Appraisal Committee
the Sustainability (ESG) Committee the Nomination Committee and the Strategy Committee. Each committee performs its duties
within its respective area of expertise collectively supporting the Board's sound decision-making and effective oversight and ensuring
Company Law of the People's Republic the efficient operation of the Company's governance system.Governance Huadong Medicine strictly complies with theof China the Securities Law of the People's Republic of China the Code of Corporate
Framework Governance for Listed Companies the Stock Listing Rules of the Shenzhen Stock
Exchange and other applicable laws regulations and self-regulatory rules and Responsibilities of Specialized Committees
continuously improves its corporate governance framework to ensure standardized
operations. In 2025 in accordance with the latest requirements of the Company Law of
the People's Republic of China and the Guidelines on the Bylaws of Listed Companies the Strategy Committee
Company completed revisions to the Articles of Association and optimized its governance
structure. It has established a three-tier governance system consisting of the Meeting of
Shareholders the Board of Directors and the executive management and has set up Responsible for studying the Company's long-term development strategy evaluating major investment financing
the Strategy Committee the Nomination Committee the Remuneration and Appraisal and capital operation projects and providing strategic recommendations to the Board of Directors.Committee the Audit Committee and the Sustainability (ESG) Committee. Among them
the Audit Committee has assumed the former functions of the Board of Supervisors Audit Committee
effectively strengthening the effectiveness of oversight and execution.Responsible for matters related to financial oversight internal control evaluation and compliance management
with a primary focus on supervising and evaluating external audit work coordinating internal audit activities
Huadong Medicine Co. Ltd. reviewing financial information disclosure and overseeing the effective operation of the internal control system.At the same time the Committee undertakes and exercises the relevant statutory powers of the Board of
Supervisors in accordance with the law and continuously oversees the Company's compliance management and
Meeting of Shareholders implementation of business ethics standards.Nomination Committee
Board of Directors
Responsible for the selection nomination and qualification review of directors and senior management and for
making relevant recommendations on appointments and removals to the Board of Directors.Executive Management
Remuneration and Assessment Committee
Strategic Operation Finance Risk Management and Policy and Administration Other functional Responsible for formulating remuneration policies and performance appraisal standards for directors and
Department Headquarters Audit Department Department Departments senior management administering long-term incentive schemes such as equity incentives and making relevant
recommendations to the Board of Directors.Investment Development Legal Affairs Human Resources Board of Sustainability (ESG) Committee
Department Department Headquarters Directors Office
Responsible for formulating and overseeing the implementation of the Company's ESG strategy with a focus on
ESG policy system development the review and tracking of sustainable development targets ESG-related risk
management and ensuring that relevant practices align with regulatory requirements and development trends.Pharmaceutical Business Pharmaceutical Industry Aesthetic Medicine Industrial Microbiology
The Company's Governance Framework
18 192025｜Environmental Social and Governance (ESG) Report Governing for Steady Progress
Information Huadong Medicine regards information disclosure as a key component of its governance framework and is committed to providing all investors with accurate access to Company Case
Disclosure information through a standardized transparent and efficient disclosure system. The Company Performance Briefings & Roadshow Activities
has established an information disclosure management system centered on the Measures for
Management the Administration of Information Disclosure the Insider Information and Insider Management
System and the Internal Reporting Procedures for Significant Information . During the We organized a variety of engagement activities including performance briefings investor research meetings and roadshows to
reporting period the Company formulated the Management System for Deferred Disclosure
and Exemption of Information Disclosure maintain frequent and effective communication with the capital market. In 2025 we held a total of five performance briefings and and revised the Measures for the Administration of
Information Disclosure and the Insider Information and Insider Management System further exchange meetings and participated in 41 external strategy conferences representing a significant increase from the previous year.refining disclosure standards strengthening insider information management and providing Throughout the year we also organized or participated in 116 online and offline investor research meetings covering investors
stronger institutional support for compliant information disclosure. and analysts. The Company's management and business teams engaged in in-depth discussions with investors on financial
performance and strategic businesses such as innovative drugs medical aesthetics and industrial microbiology effectively
We have consistently fulfilled our information disclosure obligations to a high standard and communicating the Company's long-term growth potential. In recognition of its professional performance in information
actively expanded disclosure channels including email telephone inquiries and internal disclosure and investor communication the Company's 2024 performance briefing was selected by the China Association for
process systems to ensure the timeliness and reach of information delivery. At the same time Public Companies as an "Outstanding Practice Case" highlighting the professionalism of its investor relations work.we continued to innovate disclosure formats to improve the accessibility and readability of
information. During the reporting period the Company disclosed a total of 182 documents
including regular reports and interim announcements. We also continued to publish English
versions of regular reports and produced visual materials such as "Quick Grasp" reports
effectively enhancing transparency and the efficiency of investor communication and helping
domestic and overseas investors better understand the Company's operations and development.In 2025 the Company was not subject to any penalties for information disclosure violations.We also place great importance on strengthening the professional capabilities and compliance
awareness of personnel involved in information disclosure. In 2025 to ensure the quality of Case Investor Day Activities
information disclosure the Board Office organized relevant personnel to participate in various
professional training programs held by the Shenzhen Stock Exchange the Zhejiang Securities
Regulatory Bureau the Zhejiang Association of Listed Companies and other institutions
including annual report disclosure training specialized training on performance briefings We continued to innovate the ways we engage with investors and remained committed to hosting dedicated "Investor Day"
and training on mergers and acquisitions and asset restructurings of listed companies. These activities. During these events investors exchanged views with management on the Company's strategic planning business
programs covered senior management and personnel involved in information disclosure layout and development prospects. These activities not only strengthened mutual trust between the Company and the capital
ensuring that employees in key positions stayed up to date with regulatory developments market but also provided a valuable channel for gathering market feedback and optimizing business decisions enabling two-
continuously improved the level of compliant operations and jointly upheld the Company's way value creation. In 2025 a total of 221 institutional and individual investors participated in the Investor Day activities.strong image in the capital market.Investor Relations Huadong Medicine regards investor relations management as a vital component of its governance framework and is committed to building a transparent efficient and trust-
Management based two-way communication mechanism with the capital market to effectively convey the Company's value and strengthen market recognition. Under internal systems such as the
Investor Relations Management System we continue to optimize communication channels and
approaches to effectively safeguard investors' right to information and participation.We have established a multi-level investor communication system covering both online and
offline channels including the Shenzhen Stock Exchange's investor interaction platform1
investor hotline official email and investor relations email to respond promptly to investor
concerns. The investor hotline and email accounts are managed by designated personnel to
ensure smooth communication and effectively prevent potential public opinion risks. In 2025 we
responded to 167 investor inquiries on the irm.cninfo.com.cn achieving a 100% response rate.Company
Investor Investor
Seminars Hotline
Investor
Communication
Investor
Interaction Channels Performance
Platform Briefings Investor Day
Investor Investor
Days Q&A Sessions
20 1 S henzhen Stock Exchange's investor interaction platform: https://irm.cninfo.com.cn/ 212025｜Environmental Social and Governance (ESG) Report Governing for Steady Progress
Double Materiality To scientifically identify and manage sustainability-related risks and opportunities Huadong Medicine follows the principle of double materiality and applies a systematic process to
ESG Governance Analysis identify assess and prioritize ESG topics ensuring that resources are prioritized toward areas with a substantive impact on the Company's sustainable development.Huadong Medicine fully integrates ESG principles into its corporate strategy and We conducted an in-depth analysis of the Company's business context and development
has established a multi-level governance structure to ensure the effective top-down realities benchmarked against the disclosure requirements of the Shenzhen Stock Exchange
implementation of ESG management. Through a double materiality analysis the and capital market rating indicators and identified and established a list of material topics.Company systematically identified and determined its material ESG topics providing
a clear basis for topic management. At the same time we have established regular
stakeholder engagement channels to continuously gather feedback from all parties and
inform the identification and refinement of material topics.Understanding Dynamics and Business Background of Company
Gain an in-depth understanding of the Company's operations and business
Assess potential impacts from external environments on the Company
ESG Governance We have established a three-tier governance structure comprising the "Board of Directors –
Identify key stakeholders
Sustainability (ESG) Committee-Sustainability (ESG) Committee Working Group" and
Structure formulated the Sustainability Management System and the Rules of Procedure for the Board
of Directors Sustainability (ESG) Committee providing a solid institutional foundation for
the overall planning step-by-step implementation and continuous improvement of ESG
work. To further strengthen accountability we integrate ESG performance into the key Developing an Issue List
performance indicators (KPIs) and pay of executive directors with a focus on their fulfillment
of responsibilities in areas such as workplace safety environmental protection product Based on external regulations international standards and other stakeholder concerns combined with the actual
quality and product safety thereby enhancing management accountability and execution on development situation of Huadong Medicine identify other key issues
sustainable development. Analyze the potential impacts and opportunities issues may bring to the Company forming an issue list
Assessing the Materiality of Issues
O versees the execution and implementation of ESG
policies Evaluate the materiality based on industry requirements key issues of concern to peers and the Company's actual
E nsures compliance of ESG strategies principles and situation
policies with national policies laws and regulations Combine the results of identifying material issues integrating assessments of impact materiality and financial
Supervisory materiality
Level
Board of Directors F ormulates the Company's ESG strategies principles and
policies and ensures the continuous implementation of Building on this we have assessed the short- medium- and long-term impacts of each topic on the Company's business model
ESG policies approved by the Board of Directors
Decision-making business operations financial status and cash flow as well as the extent to which the Company's performance on these topics affects
Level Conducts regular reviews of ESG goal fulfillment the economy society and the environment. This systematic assessment determined the materiality of each topic. In total we have
Sustainability (ESG) Identifies and addresses ESG-related risks identified 18 sustainable development topics among which the "Quality and Safety" holds financial materiality for the Company's
Committee O versees compliance of ESG policies with national operations and development.policies laws and regulations For the financial 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
Executive Level targets. A phased target-tracking mechanism was developed to effectively manage and control risks and continuously enhance the
Sustainability (ESG) Provides essential insights for decision-making by the Company's management on sustainable development. For detailed information on the management of this financially material topic
Committee Working Group Sustainability (ESG) Committee please refer to Section "Quality and Safety" of this Report. P repares for the smooth implementation of ESG policies
Going forward the Company will refine its dynamic topic management mechanism. In line with its business development the
Company will continuously track industry dynamics regulatory trends and stakeholder concerns to fully enhance the management
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."
22 232025｜Environmental Social and Governance (ESG) Report Governing for Steady Progress
Stakeholder We place great importance on engagement and communication with stakeholders and have Materiality Analysis Results established and maintained open transparent and trust-based communication channels.Engagement We actively respond to stakeholders' expectations and concerns promoting constructive
Category Number Topic interaction enhancing trust and collaboration and laying the foundation for sustainable value
creation. We have also established regular engagement mechanisms to continuously collect
and analyze stakeholder feedback and incorporate reasonable suggestions into the Company's
1 Environmental management strategic decision-making and day-to-day operational improvements.
2 Energy management
Stakeholder Topic Communication and Response
3 Addressing climate change Supply chain management platform Responsible supply chain management
Supplier Procurement integrity agreements Business ethics
4 Water resource utilization Supplier audits
Environmental
5 Emission management Product quality and safety C ustomer satisfaction surveys
Customer Customer rights protection Customer visits and audits
6 Quality and safety Information security and privacy protection Customer privacy protection
7 R&D and innovation Shareholders' meeting
Corporate governance Investor days
8 Occupational health and safety Business ethics Roadshows and reverse roadshows
Shareholder/Investor Risk management I nvestment strategy briefings
9 Training and development R&D and innovation Performance briefings
Financial reports and periodic
10 Labor relations management disclosures
Exchanges and visits
11 Protection of customers' rights and interests
Social welfare Industry forums participation
Government/
Social Industry Associations/ Environmental management Information disclosure compliance 12 Information security and privacy protection
Regulatory Agencies Emission management E nhanced routine communication and reporting
13 Responsible supply chain management Supervision and evaluation
14 Social welfare Employee training
Labor relations management Internal communication platform
Employee
15 Product accessibility Training and development Occupational
health and safety W orkers' Congress
E xecutive roundtables
16 Corporate governance
Regular community communication Environmental management
17 Business ethics
Joint community activities Society/The Public Social welfare
Volunteer activities P roduct accessibility
Governance 18 Risk management
P hilanthropic activities
24 252025｜Environmental Social and Governance (ESG) Report Governing for Steady Progress
Compliance We deeply integrate compliance requirements into management systems and business processes to ensure that all business activities operate steadily within the framework of
Robust Operations Management laws and internal policies. During the reporting period the Company issued the Compliance Assessment Plan and the Accompanying Implementation Guidelines and incorporated
Huadong Medicine has established a risk and compliance management system that covers compliance performance into the performance assessment system for departments and
all business segments and runs through the entire operational process. We consistently employees further clarifying compliance responsibilities and guiding and regulating
conduct our business activities in accordance with applicable laws regulations and employees' professional conduct through institutional mechanisms.internal policies and continuously integrate compliance requirements into every aspect We have also established a regular internal and external audit oversight mechanism to assess
of operations and management through ongoing risk identification assessment and compliance risks and the effectiveness of internal controls from an independent and objective
response thereby providing strong support for the Company's stable operations and long- perspective. In 2025 we completed 17 internal audit and internal control review projects
term development. covering internal control risk management and key business processes. A total of 147 audit
issues were identified and more than 150 audit recommendations were put forward. The audit
department carried out projects on a monthly basis clearly identifying issues responsibilities
and improvement recommendations in audit reports and subsequently tracked the
Risk We have established a comprehensive risk management system covering the entire process implementation of corrective actions on a quarterly basis forming a closed-loop management of decision-making execution oversight and feedback. Supported by a series of internal mechanism of "issue identification – recommendation – rectification – follow-up review."
Management policies including the Risk Management System the Risk Assessment Management Measures
(Trial) and the Measures for the Audit of Departing Financial Personnel of Huadong Medicine
Co. Ltd. this system clearly defines responsibilities workflows and implementation standards
at each stage.We have established a multi-tiered comprehensive risk management framework that clearly
defines risk management responsibilities at all levels ensuring clear accountability and
efficient coordination. Within this framework the Risk Management and Audit Department as
the dedicated execution and oversight unit is responsible for tracking reviewing and closing
the loop on the rectification progress of identified risk items. The business and functional
departments as the primary accountable units for risk management are responsible for
developing and implementing specific risk mitigation measures.In accordance with the Risk Assessment Management Measures of Huadong Medicine Co. Ltd. (Trial)
we regularly identify and assess risks across all aspects of operations and management with a focus
on key areas such as project management bidding and procurement financial management and
sales management. Based on the assessment results risks are classified into three levels—
major medium and general—and addressed through differentiated control strategies.For identified risks the Company adopts systematic response strategies across multiple
dimensions including the optimization of policies and procedures the strengthening of targeted
controls the empowerment of technical tools and training and cultural communication
effectively enhancing employees' compliance awareness and risk prevention capabilities.Optimization of policies Revise relevant management systems and operating procedures to clarify authority and
and procedures responsibilities.Implement targeted control procedures in high-risk areas such as project management
Strengthening of bidding and procurement financial management and sales management including
targeted controls improving whole-process audits optimizing the supplier management system and
strengthening credit assessment and accounts receivable control.Empowerment of
technical tools Explore the use of digital systems to enhance risk monitoring and early warning capabilities.Continue to conduct training on risk awareness and compliance culture. In 2025 we organized
Training and cultural 12 legal and compliance training sessions themed around "integrity and dedication" with a
communication total of 265 participants effectively enhancing employees' compliance awareness and risk
prevention capabilities.Risk Management Measures
26 272025｜Environmental Social and Governance (ESG) Report Governing for Steady Progress
Anti-Corruption and For all full-time employees part-time personnel and contractors we continued to expand the coverage of integrity
Business Ethics Integrity Promotion for education through activities such as organizing visits to integrity education bases and conducting dedicated All Personnel awareness campaigns fostering a culture that values integrity and probity.Adherence to business ethics is a fundamental principle of corporate operations. We have Course and Policy For all full-time employees we launched dedicated courses such as the Professional Integrity Regulations on the
established a sound business ethics and anti-corruption management system. Through Learning internal learning platform and together with the distribution and communication of the Employee Handbook
robust institutional safeguards a clearly defined governance structure accessible integrated integrity requirements into day-to-day learning and workplace standards.reporting channels and rigorous oversight and enforcement we ensure that the
Company and all employees uphold fair and transparent standards of business conduct Throughout the year we organized a total of 12 offline training sessions under the theme of "Integrity and
Thematic Training Professional Dedication" reaching 265 participant attendances and arranged for 276 relevant personnel to sign and continue to foster a healthy and well-regulated business environment. the integrity commitment letters. further strengthening the integrity awareness and accountability of employees
in key positions.Professional Capability We continued to enhance the professionalism of the integrity management team. In 2025 we supported 29
Building disciplinary inspection personnel in obtaining professional qualifications such as Senior Corporate Compliance Officer and Senior HR Legal Specialist further strengthening oversight and discipline enforcement capabilities.Business Ethics We strictly comply with the Anti-Monopoly Law of the People's Republic of China the Anti-Unfair Competition Law of the People's Republic of China and other applicable laws and regulations.Framework Anti-Corruption and Integrity TrainingThe Company has established a policy framework centered on the Ethical Audit Rules for Middle
and Senior Management of Huadong Medicine Co. Ltd. the Anti-Corruption and Anti-Fraud Huadong Medicine has formulated the Measures for Administration of Complaints Reporting
Policy and the Professional Integrity Regulations of Huadong Medicine Co. Ltd. clearly defining Whistleblowers and Whistle-blowing of Huadong Medicine Co. Ltd. and the Anti-Corruption and Anti-Fraud
standards of conduct and accountability requirements. Protection Policy which clarify the scope of report acceptance and handling procedures and emphasize
We have established a clear business ethics governance structure under which the Board of strict confidentiality and protection for whistleblowers with any form of retaliation expressly prohibited. During the reporting period we updated the Measures for Administration of
Directors and the Audit Committee provide oversight the Compliance Management Committee Complaints Reporting and Whistle-blowing of Huadong Medicine Co. Ltd. to further refine
coordinates implementation and the principal persons in charge of the Company and its the handling procedures and introduce a review mechanism with the aim of enhancing the
subsidiaries are responsible for execution ensuring that business ethics management is standardization transparency and fairness of complaint handling and improving internal
embedded throughout the entire process of oversight decision-making and execution. oversight and correction mechanisms.We have established multiple convenient and confidential reporting channels including
Lead and oversee the work related to business ethics dedicated reporting hotlines email addresses reporting links on the Company's official website
and internal online platforms to ensure that reports can be received promptly and securely.Board Level Audit Committee Receive and provide guidance on reports regarding business ethics and compliance operations Review and approve business ethics policies and management plans and supervise the implementation
of relevant policies and measures Reporting Channels All reports received by the Company are handled
with due seriousness and prudence in accordance
Under the authorization of the Audit Committee the Compliance Management Committee is responsible Tel: 0571-89908818 with established procedures ensuring that
for the work related to business ethics including anti-bribery and anti-corruption Email: hdjc@eastchinapharm.com
Compliance Management every stage—from receipt and verification to The Compliance Management Committee assigns relevant departments (or working groups) to carry
Committee Official Website link: Official Website of Huadong Medicine Co. Ltd. - investigation and resolution—is governed by clear out specific tasks including but not limited to the formulation of internal business ethics policies and
systems implementation of management plans auditing and supervision and reports to the Audit Complaints Reporting Section rules and subject to closed-loop management so
Committee under the Board of Directors Intranet Complaints Reporting Platform: Online Office System - that all reported matters are addressed in a fair
Internal Link - Complaints Reporting Platform and effective manner.Key Persons in Charge of the Serve as the primary persons responsible for business ethics and integrity management and assume
Company and its Subsidiaries overall responsibility for business ethics management within their respective companies Preliminary Conduct a preliminary assessment of the facts and evidence upon receiving a report. If substantiated evidence
Verification is identified initiate a formal investigation; if no clear evidence is found archive the case for future reference.Business Ethics Management Framework
We have established a regular ethics audit mechanism. Audit work is conducted independently under the leadership of the Board of
Directors and the Audit Committee following the principle of "periodic full coverage combined with dynamic risk focus" to ensure that Formal For matters with clear facts conclusive evidence or real-name reports conduct a comprehensive investigation
all business segments and subsidiaries are subject to full ethical audit coverage at least once every three years. In 2025 we completed Investigation gather supporting evidence and form investigation conclusions.a total of 76 audit projects of various types including 34 special ethical audit projects. These audits focused on the effectiveness of the
implementation of anti-bribery and anti-corruption policies such as the Professional Integrity Regulations with particular attention
to key areas including third-party cooperation and sales promotion. Audit procedures included policy and process reviews business Categorized Based on the investigation results handle confirmed violations in accordance with applicable rules and
testing data analysis interviews and questionnaires. All audit findings were formally documented in audit reports with rectification Handling procedures; for matters falling outside the scope of acceptance transfer them to the competent department.recommendations followed by regular tracking to form a closed-loop management process.Whistleblower Report Handling Process
The Company places great importance on strengthening awareness of business ethics and promoting standards of conduct ensuring
that relevant training fully covers full-time employees part-time personnel and outsourced personnel. Through a range of measures Throughout the entire complaint and whistleblowing handling process we strictly adhere to the principle of confidentiality and take
including expanding the reach of integrity promotion advancing policy-based and platform-based learning conducting dedicated rigorous measures to protect whistleblowers' identities and the content of their reports. Designated personnel are assigned to receive
thematic training sessions and strengthening the professional capabilities of relevant teams we continued to foster a clean and and follow up on reports ensuring that confidentiality requirements are effectively implemented and that whistleblowers' safety and
upright organizational culture. During the reporting period our series of anti-corruption and integrity training programs have covered privacy are protected to the greatest extent possible. At the same time we are committed to providing full protection to whistleblowers
all full-time employees part-time personnel and contractors. and ensuring that no one suffers any unfair treatment or retaliation for making a truthful report. In addition we encourage real-name reporting and where appropriate reward whistleblowers who provide important leads thereby reinforcing a culture of integrity and
transparency.
282902
Cultivating for Green
Development
Pursuing green and sustainable operations and
development is essential for Huadong Medicine
to achieve high-quality growth. In response to
climate change and environmental challenges we
integrate green development into every aspect
of our operations continue to advance our green
transformation and keep exploring effective
environmental responsibility practices to contribute
to the sustainable development of both the Company
and society.Environmental Compliance 32
Addressing Climate Change 35
Emissions Management 41
Green Operations 46
Contributing to the UN SDGs:2025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Environmental Compliance
Environmental compliance is the foundation for companies to fulfill their social The Company continued to strengthen environmental capability building and foster a strong
responsibilities and achieve sustainable development. We continue to improve our Environmental Training culture of safety by developing an annual EHS training plan covering all employees and
environmental management system comprehensively manage environmental risks delivering targeted training tailored to different roles and organizational levels.and provide solid support for the Company's green development.Mid- to senior-level Focused on strengthening safety awareness and enhancing understanding
managers of relevant laws regulations and policies with an emphasis on leadership responsibilities and effective fulfillment of duties.Environmental We strictly comply with laws and regulations such as the Environmental Protection Law of the People's Republic of China the Water Law of the People's Republic of China and the Cleaner
Management Production Promotion Law of the People's Republic of China while continuously improving
System our internal management policies and steadily strengthening our environmental management EHS leaders and Focused on improving professional capabilities and deepening capabilities.professionals management skills while addressing capability gaps through comprehensive assessments and targeted training.Based on the EHS Responsibility Management System we continued to improve our
management system. During the reporting period the Company issued the Huadong Medicine
EHS Management System Optimization Plan (Trial Version) which clarified the Company's EHS
management optimization goals and set out specific improvement requirements for key areas Frontline employees In addition to completing legally required certification training such as for such as organizational structure and risk control providing guidance for further optimizing the and personnel in special operations focused on job-specific risk identification operating
EHS management system. At the same time the Company further strengthened environmental special positions procedures and emergency response skills.performance assessments by further integrating EHS oversight and management into
the performance evaluation system for the principal persons in charge of each unit and Tiered EHS Training Program
dynamically updating the EHS Monthly Assessment Guidelines to enhance the rigor and
direction of assessments.The Company has established an environmental management structure centered on the EHS
Committee and coordinated by the EHS Department of the parent company. With clearly In addition we regularly conducted environmental training programs tailored to practical management needs to further reinforce
defined roles and responsibilities this structure ensures that environmental strategies and employees' environmental awareness and management capabilities. For example during the reporting period Zhongmei Huadong
major matters receive senior management support while enabling the efficient execution of organized three specialized training sessions on solid waste management including general training for all employees and targeted
daily management and oversight. EHS departments across business segments work closely training for environmental management personnel. Through a two-tier implementation approach combining centralized training for
together to implement environmental management requirements throughout operations. designated managers with follow-up training within individual departments these programs effectively promoted knowledge sharing
and supported the broad communication and effective implementation of solid waste management requirements.During the reporting period the Company achieved its 2025 annual environmental
management targets with no major administrative penalties or criminal liabilities arising from
environmental issues.Certification and Audit Huadong Medicine places great importance on the standardization and internationalization
of environmental management and continues to advance environmental management
system certification. As of the end of the reporting period Zhongmei Huadong Jiuzhou
Pharmaceutical Jiangdong Company Xi'an Bodyguard Wuhu Huaren Magic Health Jiangsu
Joyang Nanjing Nongda Animal Pharmaceutical and Meihua Hi-Tech had all passed ISO
14001 Environmental Management System Certification.
To ensure the ongoing compliance and effectiveness of the environmental management
system we established a routine EHS audit mechanism and provided dedicated training for
internal auditors to support the effective implementation of audits and drive continuous
improvement. During the reporting period we carried out company-wide internal audits
of the EHS management system. All findings were consolidated and brought under closed-
loop tracking with designated personnel responsible for completing corrective actions on
schedule. Rectification outcomes were also linked to performance evaluations forming a
closed-loop management approach that integrates audit rectification and assessment and
effectively supporting the continuous enhancement of the management system.
32 332025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Environmental To prevent and respond to environmental risks arising from operations Huadong Medicine has established an environmental risk management system covering risk identification risk
Risk Management assessment and risk response. For different risk points such as raw material warehouses Addressing Climate Change
production workshops and wastewater treatment facilities we apply a three-tier classification
and management mechanism at the offsite plant-level and workshop-level based on the types of Addressing climate change has become a global consensus and a key business
potential incident types and the characteristics of the environmental risks they may pose enabling priority. Huadong Medicine integrates climate-related issues into its daily
systematic and differentiated risk control. operations and management and is committed to advancing low-carbon
To effectively control environmental risks the Company developed self-monitoring plans transformation and development. The Company continues to advance its
for pollution sources specifying monitoring indicators and frequency. At the same time we climate governance practices through a systematic approach focused on
established environmental management inspection procedures requiring responsible departments governance optimization strategic enhancement risks and opportunities as
to conduct regular inspections against established checklists and follow up on identified issues well as metrics and targets.with corrective actions to ensure that all environmental management measures are properly
implemented.The Company prioritizes its emergency response capability for sudden environmental accidents
and continues to improve its emergency response system in accordance with the Measures for Huadong Medicine has integrated climate-related issues into its ESG governance structure
Administration of Response to Environmental Accidents and the Emergency Response Plan for Governance with the Board of Directors the Sustainability (ESG) Committee and the Sustainability (ESG)
Environmental Accidents. In 2025 we further strengthened its on-site response mechanisms by Committee Working Group jointly overseeing climate governance across the full process of
formulating the EHS Department On-site Response Plan for Rainstorm Weather and the EHS decision-making supervision and execution.Department On-site Response Plan for Wastewater Pipe Bursts establishing faster response
procedures for specific high-frequency risk scenarios. The Company also regularly conducts
specialized emergency drills to continuously strengthen its response capability for environmental
incidents.Case Comprehensive Emergency Drill for Hazardous Waste Leakage and Fire
Board of R eviews and approves climate-related strategies and targets monitors progress toward
Directors climate-related targets and oversees the overall climate governance work.During the reporting period Zhongmei Huadong conducted a comprehensive emergency drill for hazardous waste leakage and
fire. The drill simulated a leakage incident and a secondary fire scenario to test the operability of the emergency response plan
and on-site response procedures with a focus on evaluating coordination across emergency command on-site response and
environmental monitoring. This hands-on drill further strengthened employees' ability to prevent and respond to risks at an early R esponsible for formulating the Company's climate-related strategies and policies
stage and enhanced the Company's overall capability to handle environmental emergencies. overseeing the implementation of climate-related policies reviewing progress toward
Sustainability (ESG) targets and continuously monitoring climate-related risks and proposing response
Committee strategies.R esponsible for implementing climate governance measures reporting to the
Sustainability (ESG) Committee on climate-related work progress assessing
Sustainability (ESG) Committee climate-related impacts risks and opportunities and carrying out governance
Working Group control measures and procedures including the implementation of climate-
related strategies and targets.Governance Structure for Addressing Climate Change
Strategy To strengthen its ability to address climate-related risks Huadong Medicine systematically identified and assessed the potential impacts of climate-related risks and opportunities.Based on the assessment results we developed corresponding management measures
and response plans to enhance operational resilience safeguard supply chain stability and
capture development opportunities arising from green transformation and innovation.
34 352025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Risks and Opportunities List
Energy Management Huadong Medicine strictly complies with the Energy Conservation Law of the People's Republic
Type of Risk/ of China and regards energy management and energy conservation as an important lever for
Opportunity Name Time Range Description of Impacts Response Measures sustainable development and a key pathway for addressing climate change. The Company has
instituted the Energy Management System and established a three-tier energy management
Physical Risks framework forming a top-down and systematic management network to ensure the effective
Strengthen disaster resistance capacity of implementation of energy management strategies and measures.Extreme weather may damage production infrastructure and establish emergency
Acute Risk Typhoons Short-term facilities and disrupt the supply chain response plansFloods Mid-term affecting product manufacturing and Primary Energy A dedicated Energy Management Department is responsible for overall coordination and management
delivery Optimize supply chain layout to ensure Management implementing national energy-related laws and regulations and establishing an accountability system for energy reserves of key materials
Network conservation. The Production General Manager serves as the senior executive of energy management and is
Promote water recycling and utilization responsible for supervising implementation and effectiveness.Short-term Water shortages may affect water supply technologiesAcute Risk Droughts Mid-term for production and increase operating costs Improve water use efficiency Secondary Energy Under the guidance of the Company's Energy Conservation Committee each department establishes departmental-
Management level energy management positions. Managers with energy management capabilities serve as departmental energy Establish emergency water supply reserves
Network managers responsible for supervising departmental energy consumption correcting unreasonable energy use and
Long-term temperature rise may increase conducting energy conservation education.Rising Average Mid-term energy demand and production costs Optimize energy mixChronic Risk Temperature Long-term affecting employee health and production Promote energy conservation technologies Tertiary Energy At the section and team levels within energy-consuming departments section heads team leaders or technicians
efficiency Management concurrently serve as energy coordinators responsible for supervising on-site energy use and enhancing employees'
Network energy conservation practices and awareness.Transition Risks
Energy Management Framework
Legal and Increasingly stringent climate-related Regularly assess changes in climate-related
Regulatory Compliance Short-term policies
Risk Supervision Mid-term
regulations may increase compliance costs
and affect corporate operations Proactively plan for low-carbon transition Guided by the energy management approach of "expanding energy sources reducing consumption and improving efficiency" we
continued to advance clean energy applications reduce energy intensity and improve energy efficiency. Through lean management
Energy and technological upgrades we are committed to building a cleaner more efficient and more resilient energy system.Conservation Increase R&D investment
Technical and Emission Mid-term The R&D and application of low- C ooperate with research institutions to explore Case
Risk Reduction carbon technologies may face technical Expanding Energy Sources: Clean Sources ApplicationEquipment and Long-term bottlenecks and high-cost pressures green technological innovation
Technology Reduce application costs of technology
Upgrades We actively advanced the green transition of our energy mix by deploying distributed photovoltaic systems purchasing green
certificates and building EV charging infrastructure thereby continuously increasing the proportion of clean sources used.Supply Chains Climate change may impact the stability Enhance green brand image
Market Risk and Market Mid-term of raw material supply and the market Long-term demand for green pharmaceutical Strengthen supply chain resilienceDemands Rooftop Photovoltaic and Energy Storage Projectstechnologies Reinforce information disclosure
To continuously optimize the energy mix and increase the proportion of clean energy utilization the Company began to steadily
Strengthen ESG information disclosure and
Ineffective climate governance may affect advance the construction of distributed photovoltaic (PV) projects in 2025. Among these the rooftop PV project at Zhongmei Reputational Stakeholder Mid-term improve transparencycorporate reputation and weaken investors' Huadong's Xiangfuqiao plant is scheduled for equipment installation completion in the first half of 2026 with a PV installed Risk Concerns Long-term and consumers' confidence A ctively participate in industry green initiatives capacity of 0.84 MW. Concurrently the rooftop PV and energy storage project at Huadong Medicine's Biological Innovation
and establish a responsible corporate image and Intelligent Manufacturing Center has entered the commissioning phase featuring a PV installed capacity of 4.26 MW and a
Opportunities supporting energy storage scale of 2 MW / 4 MWh.Optimize production processes to reduce Once put into operation these projects are expected to provide approximately 4.836 million kWh of green electricity annually
energy and material waste effectively reducing the proportion of purchased electricity and enhancing the resilience of energy supply at production sites.By optimizing resource use reduce energy Promote energy conservation equipment and These projects represent an important part of the Company's clean sources deployment and low-carbon transition.Resource Use Improved Resource Use Short-term water and material consumption lower
technologies
Efficiency Efficiency Mid-term operating costs and support sustainable Strengthen water resource management and Green Electricity Procurement and Green Electricity EV Charging Infrastructuredevelopment reduce water consumption Certificates
Implement waste classification and recycling To increase the proportion of clean sources used and support low-carbon In response to the growing trend toward green
and promote circular utilization operations the Company purchased green electricity certificates through mobility and to promote emissions reduction
Deploy distributed photovoltaic power market-based channels during the reporting period to match the carbon in transportation we continued to support
Increased Use By expanding the use of clean energy generation systems at eligible production sites emissions associated with electricity consumed in daily operations and the construction of EV charging facilities at Energy of Renewable Mid-term reduce reliance on traditional fossil fuels Source Energy Long-term and enhance the resilience of the energy
Consider purchasing green electricity promote a greener electricity consumption mix. Among them Jiangdong our production sites. Jiangdong Company has
structure to increase the proportion of renewable Company has cumulatively purchased 53700 green certificates installed more than 70 charging piles which not
electricity used corresponding to approximately 53.70 million kWh of green electricity only facilitate employees' travel but also further
Optimize supply chain management and consumption and was recognized as an Outstanding Member Unit for expand clean sources application scenarios at Low-Carbon Enhance competitiveness by developing
Products and Products Mid-term low-carbon products and services select environmentally friendly suppliers 2025 by the Qiantang District Low-Carbon Industry Promotion Association. production sites and support the build-out of
Services and Service Long-term and encourage customers to adopt Strengthen green warehousing and logistics related infrastructure.Innovation environmentally friendly options management
36 372025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Reducing Product To systematically identify carbon emissions across the product life cycle and promote
Carbon Footprint collaborative emissions reduction along the value chain we actively carried out carbon Case Reducing Consumption: Energy Saving footprint assessments for key products. During the reporting period we completed a life cycle
carbon footprint study of Mupirocin active pharmaceutical ingredient. The results showed
that the carbon footprint of producing 1 kg of the product was 107.45 kg CO2e of which the
We improved energy efficiency and reduced energy consumption through targeted equipment upgrades and optimization of key extraction and fermentation processes contributed more than 74% making them the key
process parameters at both the equipment and operational levels. stages for emissions reduction. The assessment also identified electricity consumption steam
use key raw materials and waste solvent treatment as the main drivers providing a scientific
Equipment Upgrades Optimization of Key Processes basis for targeted emissions reduction for the product going forward.Lighting system upgrades: Lighting fixtures in a general area of a Energy-saving control of fermentation tanks: By opti-
factory workshop were replaced with infrared sensor lights saving mi zing the process and operations during the air Risk and To address the challenges and opportunities arising from climate change we established approximately 13000 kWh of electricity annually. In another area cultivation stage of fermentation tanks and adjusting a climate-related risk and opportunity management process with reference to mainstream
300W high-pressure sodium lamps were replaced with 200W solar relevant parameters the Company saved approximately Opportunity international frameworks including the International Financial Reporting Standard S2 —
lamps saving approximately 10200 kWh of electricity annually. 10000 kWh of electricity annually. Management Climate-related Disclosures (IFRS S2) and the recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD).Refrigeration system upgrades: In response to the national policy Optimization of granulation line cleaning procedures:
on phasing out outdated equipment the Company completed The cleaning procedure was adjusted to a tiered strategy
the replacement of four cooling water pumps at the refrigeration of "major cleaning + minor cleaning." Through process
station achieving China Energy Efficiency Grade 2 improving optimization the frequency of inter-batch cleaning was
energy efficiency by 5% and saving approximately 144500 kWh reduced saving approximately 3200 kWh of electricity
of electricity annually. and 58 cubic meters of natural gas annually. Risk and Opportunity Identification
Identify climate-related risks including physical risks (e.g. extreme weather events and rising average temperatures) and
transition risks (e.g. policy and regulatory changes and technological transition)
F ocus on opportunities such as low-carbon technologies and resource optimization to inject new momentum into
sustainable development
Case Improving Efficiency: Management Enhancement Risk and Opportunity Assessment
We are committed to improving efficiency through management by continuously enhancing energy management performance Assess the likelihood time range (short- medium- and long-term) and degree of impact of climate-related risks and
and cost control through lean operations and off-peak regulation. opportunities analyze their effects on revenue costs resources and employees and clarify priorities for risk management
Optimized Production Scheduling Lean Management of Equipment Operations
Risk Control and Opportunity Management
We addressed energy use at the source by reasonably For major energy-consuming equipment such as air-
arranging production schedules and centrally allocating conditioning and compressed air systems we implemented
resources to reduce mismatched energy demand. refined operating strategies and dynamic regulation to fully F ormulate targeted measures such as enhancing supply chain resilience optimizing the energy mix and investing in low-
unlock energy-saving potential. carbon technologies to mitigate risk impacts
E nergy use optimization for high-pressure steam sterilizers: E stablish monitoring mechanisms to regularly assess the effectiveness of these measures and integrate climate risk control
Through better scheduling and centralized sterilization Air-conditioning system operation management: Through and opportunity management into the Company's strategy to ensure alignment with sustainable development goals
management equipment idling was reduced saving management measures such as turning off temperature
approximately 6300 kWh of electricity annually. control during non-production periods adjusting
parameters during nighttime production and carrying out
Risk and Opportunity Management Process for Climate ChangeProduction scheduling and power-saving regulation in regular maintenance the Company saved approximately
formulation workshops: Plans were made for certain 2400 kWh of electricity annually.formulation workshops to carry out centralized production
during off-peak periods in the hot season which is expected Compressed air system integration and regulation:
to reduce refrigeration power load by approximately 300 kW Based on the production energy-use characteristics of
and production and clean air-conditioning power load by each department we flexibly adjusted system operating
approximately 200 kW achieving annual electricity savings parameters reducing unit power consumption compared
of approximately 438000 kWh. with the same period last year and saving approximately
693700 kWh of electricity in 2025.
38 392025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Indicators and To drive the green and low-carbon transition Huadong Medicine actively responds to China's "Dual Carbon" goals and integrates green and low-carbon development into the Company's
Targets long-term planning. We are committed to continuously reducing carbon emission intensity Emissions Management
through technological innovation optimization of the energy mix and improvements in
operational efficiency thereby promoting sustainable development. Moving forward the
Company will continue to explore clean sources application around its carbon neutrality Huadong Medicine has always regarded the effective management of
vision systematically enhance climate risk management capabilities and contribute to operational emissions and the reduction of environmental impacts as
addressing climate change. an important responsibility. Through technological innovation refined
management and recycling and reuse the Company continues to optimize
the management of wastewater exhaust gas and waste emissions striving
to achieve harmony between corporate development and environmental
protection.Greenhouse Gas (GHG) Emission Reduction Targets
GHG Emissions Reduction:We are committed to continuously implementing energy-saving and consumption-reduction projects ensuring
that carbon emissions comply with national requirements and supporting the country's carbon neutrality goals. Wastewater Huadong Medicine strictly complies with the Water Pollution Prevention and Control Law of the People's Republic of China the Emission Limits of Water and Air Pollutants for Bio-
Clean Sources Application:We are committed to increasing the proportion of renewable energy used through green electricity procurement Management pharmaceutical Industry and other applicable laws and regulations. In accordance with
and the development of photovoltaic power generation projects accelerating the green transition of the energy mix and contributing to the the Wastewater Discharge Management System we implement strict classified collection
carbon neutrality goal. tiered pretreatment and centralized treatment for all types of wastewater generated during
operations ensuring that all wastewater is discharged only after meeting applicable standards.Digital Empowerment:We will monitor energy consumption data in real time through information systems improve energy management The wastewater generated during the Company's operations mainly includes production
efficiency achieve refined energy conservation and emission reduction and promote comprehensive improvements in energy use efficiency
to support green and low-carbon development. wastewater and domestic wastewater. For wastewater of different types we adopt
differentiated treatment pathways including pretreatment classified collection and scientific
treatment to ensure compliant discharge.Energy Consumption and GHG Emissions2
Production wastewater Domestic wastewater
Indicator Unit 2024 2025
Production wastewater containing specific substances such as mycelium- Domestic wastewater generated from canteens
containing wastewater and wastewater containing chemical reagents is restrooms and other facilities is preliminarily
Direct energy consumption3 tonnes of coal equivalent (tce) 9846.49 9838.63 pretreated at the point of generation or in dedicated equipment through treated through septic tanks and other
processes such as deactivation neutralization and oxidation. After review pretreatment facilities before being discharged
Indirect energy consumption tce 44516.81 51083.63 and confirmation it is pumped to the regulating tank at the plant's sewage into the wastewater treatment system.treatment station for subsequent centralized biochemical treatment.Total energy consumption tce 54363.30 60922.26
Wastewater Treatment Methods
Energy consumption intensity tce / RMB per million (revenue) 1.30 1.40 We continued to strengthen whole-process monitoring and management of wastewater discharge by routinely tracking the operating
status of treatment facilities and the quality of discharged water to ensure that all indicators consistently met environmental standards.Scope 1 GHG emissions4 tCO2e 18720.96 18686.02 To further improve system performance and operational reliability in 2025 we continued to advance maintenance optimization and
adaptive upgrades of treatment facilities. Through process adjustments and equipment upgrades we further enhanced the treatment
Scope 2 GHG emissions5 tCO2e 171600.84 202037.55 capacity for both industrial and domestic wastewater and ensured long-term stable compliant discharge.Total GHG emissions (Scope 1 + Scope 2) tCO2e 190321.80 220723.57
Maintenance of Preventive maintenance and upgrades were carried out on key equipment at the wastewater treatment GHG emission intensity tCO2e / RMB per million (revenue) 4.54 5.06
wastewater treatment station including sending the bar screen machine back to the manufacturer for servicing and repair and
equipment replacing one blower with a total investment of approximately RMB 19300. These measures effectively ensured stable system operation and treatment performance.
2 B eginning in 2024 the Company updated the accounting scope for GHG emissions and energy-related data to cover all subsidiaries excluding overseas subsidiaries and further To address wastewater treatment needs arising from the introduction of new products the Company added
refined the accounting scope in 2025. At the same time the Company optimized its accounting methodology and updated the 2024 data accordingly. Adaptive process two dedicated wastewater collection tanks to collect specific process wastewater and conduct preliminary
3 Direct energy consumption and indirect energy consumption in this table are calculated in accordance with the General Rules for Calculation of the Comprehensive Energy
Consumption (GB/T 2589-2020). upgrades oxidative pretreatment after which the wastewater was safely connected to the existing treatment system to
4 ensure compliant and effective treatment of the newly generated wastewater. Scope 1 GHG emissions arise from natural gas diesel gasoline liquefied petroleum gas and other fuels and are calculated in accordance with the Guidelines for Accounting
Methods and Reporting of Greenhouse Gas Emissions of Industrial Enterprises in Other Industries (Trial) issued by the National Development and Reform Commission of China.
5 Scope 2 GHG emissions arise from purchased steam and purchased electricity. The GHG emission factor for purchased steam is calculated at 0.11 tCO2/GJ while GHG emissions
from purchased electricity in 2025 are calculated with reference to the 2023 national average carbon dioxide emission factor for electricity released by the Ministry of Ecology and
Environment of the People's Republic of China. Wastewater Treatment Processes Upgrading and Equipment Renewal
40 412025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Wastewater Discharge
Indicator Unit 2024 2025 We continued to invest in and optimize waste gas treatment facilities and technologies to reduce emissions of volatile organic
compounds (VOCs) and other characteristic pollutants generated during production and operations. During the reporting period by
implementing a series of key measures in end-of-pipe treatment and production process optimization we effectively improved the
Chemical Oxygen Demand (COD) Ton 268.74 308.70 efficiency and reliability of waste gas treatment and further reduced environmental impacts.Ammonia Nitrogen (NH3-N) Ton 5.07 4.36
Total Nitrogen (N) Ton 11.65 7.94 Optimization of technical pathways
We optimized 11 existing photocatalytic oxidation waste gas treatment systems by upgrading them to oxidation spray
Total Wastewater Discharges Ton 2213019.51 2491934.58 systems improving both treatment efficiency and operational stability.Wastewater Discharge Intensity Ton / RMB per million (revenue) 52.81 57.14
Optimization and upgrading of emission systems
We carried out a comprehensive upgrade of the formulation workshop by consolidating 22 scattered waste gas emission
Waste Gas Huadong Medicine prioritizes waste gas management. The Company strictly complies with outlets into three main outlets and installing secondary activated carbon adsorption units for centralized treatment the Atmospheric Pollution Prevention and Control Law of the People's Republic of China the effectively improving waste gas collection efficiency and treatment performance.Management Emission Standard of Air Pollutants for Pharmaceutical Industry and other relevant regulations.In accordance with the Waste Gas Emission Management System the Company implements
classified collection effective treatment and rigorous monitoring of all types of waste gas Supporting facilities for new projects
generated during production and operations ensuring stable compliance with emission To support newly built workshop projects we simultaneously constructed three waste gas treatment systems. For waste gas
standards and continuously improving regional air quality. containing dichloromethane we innovatively adopted macroporous resin adsorption technology enhancing the treatment
capacity for low-boiling-point organic waste gas.The waste gas generated by the Company mainly originates from wastewater treatment
production processes laboratory activities canteen-generated oil fumes automotive exhaust
and uncontrolled emissions. The Company adopts targeted treatment measures according to Upgrades to Waste Gas Treatment Facilities and Technologies
the characteristics of each type of emission establishes a comprehensive waste gas monitoring
system and implements rigorous routine monitoring to ensure continuous compliance with
environmental standards.Waste Gas Emissions
Waste Gases from Production and Testing
Indicator Unit 2024 2025
Organic solvent waste gas antibiotic-containing waste gas and other waste gas generated during production and laboratory activities are treated
through combined processes including spray absorption and activated carbon adsorption.Nitrogen Oxide (NOx) Ton 9.90 6.81
Waste Gases from Wastewater Treatment
Sulfur Dioxide (SO2) Ton 0.65 2.17
Odorous gases containing hydrogen sulfide and other substances generated from the wastewater treatment station are purified through a combined
process of "photo-oxidation pretreatment + spray absorption + activated carbon adsorption."
Volatile Organic Compounds (VOCs) Ton 13.81 12.68
Uncontrolled Emissions
Waste Gas Emissions 10000 cubic meters 412145.48 408943.06
By strengthening equipment sealing enclosing relevant facilities and optimizing production procedures the Company reduces solvent volatilization
and fugitive emissions at the source.Waste Gas Emission Intensity 10000 cubic meters / RMB per million (revenue) 9.84 9.38
Canteen generated Oil Fumes
High-efficiency oil fume purification equipment is installed in canteen kitchens to ensure that oil fume emissions comply with national and local
standards with supporting ventilation systems in place to improve indoor air quality.Motor vehicle Exhaust
Regular exhaust testing is conducted on vehicles within the plant to ensure compliance with national motor vehicle emission standards and to control
pollutant emissions from mobile sources.Waste Gas Emissions Treatment Methods
42 432025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Waste Huadong Medicine complies with the Law of the People's Republic of China on the Prevention and Control of Environment Pollution by Solid Wastes the Standard for Pollution Control Case Sludge Reduction
Management on Hazardous Waste Storage and other relevant laws and regulations. In accordance with
the Solid Waste Management System the Company standardizes the entire process of
classification storage utilization and disposal of solid waste. During the reporting period all Through process optimization including the introduction of a plate-and-frame filter press system Jiangdong Company achieved
waste was entrusted to accredited third-party entities for compliant disposal ensuring the a significant reduction in sludge generation despite a year-on-year increase in wastewater treatment volume. Compared with the
compliant treatment of all waste. base year sludge generation decreased by more than 44% effectively reducing subsequent disposal pressure and costs.General Solid Waste Management
The Company follows the principles of classification reduction and resource utilization with dedicated storage areas established for
the separate storage of recyclable and non-recyclable waste.Domestic waste: Collected and removed daily by an accredited property management company.General industrial solid waste: Transferred to qualified third parties for incineration and disposal. Case Resource Utilization of Chinese Herbal Residue
R ecyclable solid waste: Promoted resource utilization to achieve value regeneration.Construction waste: Generated during construction or renovation projects is centrally collected and disposed of in accordance with
relevant regulations. We continued to expand channels for resource utilization of waste. During the reporting period we developed a new partner for
the comprehensive utilization of herbal residue and entrusted qualified manufacturers with the medicinal residue generated by
our extraction workshops for the production of organic fuel or organic fertilizer. In 2025 178 tonnes of herbal residue were utilized
through this channel.Hazardous Waste Management In addition we utilized a portion of the qualified herbal medicine residues generated after decoction for resource recovery as
livestock feed. This not only reduced the environmental burden associated with traditional disposal methods but also enabled the
The Company's hazardous waste mainly includes medical waste waste liquids and waste APIs. circular utilization and value enhancement of the waste significantly improving the comprehensive waste utilization rate.All hazardous waste is temporarily stored in specialized hazardous waste storage facilities equipped with windproof rainproof
sunproof and leakproof features. The facilities are also outfitted with tail gas purification devices combustible gas alarm devices and
video surveillance systems to ensure safe storage.All hazardous waste is entrusted to accredited third-party entities for compliant transport disposal and harmless treatment.Waste Management Measures Waste Generation and Recycling
In addition we continued to advance refined and resource-oriented waste management. During the reporting period a range of Indicator Unit 2024 2025
innovative measures were implemented to reduce waste generation and promote resource conversion further enhancing overall waste
management performance.Quantity of General Waste Generated Ton 19544.01 21460.15
Case Ton / RMB per million Shared Hazardous Waste Warehouse Project General Waste Production Intensity (revenue) 0.47 0.49
Quantity of General Waste Recycled Ton 13695.41 13813.52
To enhance the standardization and intelligence of waste management we actively advanced the development of a digital
platform for hazardous waste management. As part of this initiative Zhongmei Huadong invested approximately RMB 800000
to launch the "Shared Hazardous Waste Warehouse" project. The project aims to establish a management system for hazardous Quantity of Hazardous Waste Generated Ton 7378.62 9333.46
waste featuring online reservation informationalized data tracking and early warning capabilities supported by dedicated
transfer vehicles in order to address the inefficiencies and inaccurate data statistics associated with traditional management Ton / RMB per million
models. Upon completion the project will enable digitalized visualized and highly efficient management of hazardous waste Hazardous Waste Production Intensity (revenue) 0.18 0.21
across the entire process improving compliance and management efficiency.
44 452025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Case Water Conservation in Cooling Water Systems
Green Operations
Guided by the principles of sustainable development Huadong Medicine Smart temperature control retrofit project
integrates efficient resource utilization and green office practices into
every aspect of its daily operations. By continuously optimizing resource Temperature controllers and relays were installed in the air-conditioning or fan systems of areas such as the hazardous materials
management mechanisms and innovating approaches to resource warehouse and the palletizing area of the formulation workshop enabling automatic interlocked control of equipment operation
conservation and utilization we are committed to driving our operating model and temperature and avoiding ineffective circulation and waste of chilled water. These two retrofit projects together reduced
toward a greener and leaner direction and providing a practical example of chilled water consumption by nearly 98500 tonnes.environmentally friendly corporate development.Centralized cooling water optimization project
Through pipeline modifications the production area of a plant can directly receive centrally supplied chilled water from the plant
allowing its original tap-water-boosted cooling unit to be taken out of service and reducing cooling water consumption at the
Water Resource Huadong Medicine continues to advance water conservation management as a key source. After the retrofit approximately 4524 tonnes of tap water can be saved annually effectively improving overall water use component of green operations. Water is used across purified water preparation steam efficiency.Management generation cooling and refrigeration system replenishment production processes and
daily logistics. By optimizing water use processes implementing water-saving technological
upgrades and strengthening daily management we continuously improve water efficiency
and steadily advance water-saving operations.To achieve efficient water management and recycling we have implemented a series of
targeted water-saving measures focusing on key water-consuming areas such as process Case
water cooling water and steam systems supported by integrated management and technical Water Conservation in Steam Systems
upgrades thereby promoting refined water management and improving water use efficiency.Equipment and process upgrades
The heating method of the hot water system was upgraded to improve heat exchange efficiency saving approximately 280 tonnes
Case of steam and high-efficiency steam traps were installed on steam pipelines to improve steam utilization efficiency.Water Conservation in Process Water Use
Optimization of steam system operation management
Water system optimization project By optimizing steam system operation steam supply to non-essential air-conditioning units was shut off during the non-heating
season and electric valves and timer switches were added to the steam system to enable timed steam supply and reduce steam
The backwashing mode of the pretreatment unit at the purified water station was optimized by standardizing the cycle and losses from nighttime pipeline insulation. This measure saved approximately 210 tonnes of tap water annually and improved
dynamically adjusting backwashing frequency and flow rate based on the pressure differential between inlet and outlet water resource use efficiency.thereby reducing unnecessary backwashing while ensuring water quality. This project saved approximately 19500 tonnes of tap
water annually significantly reducing both water consumption and operating energy use.Reclaimed water reuse retrofit project
A reclaimed water reuse project was at the purified water station to collect and treat wastewater generated during water
production for reuse in cooling tower makeup water and other processes. Approximately 51000 tonnes of wastewater were
recycled and reused throughout the year enabling closed-loop utilization of water resources. Case Integrated Water Conservation Management
Timed control retrofit for solenoid valves
Timer switches were installed on solenoid valves at certain water use points to enable timed and quantified drainage control
effectively reducing unplanned water use. This project saved approximately 2400 tonnes of tap water annually and improved the
refinement of water use management.
46 472025｜Environmental Social and Governance (ESG) Report Cultivating for Green Development
Circular Economy Upholding the concept of innovation-driven and sustainable development Huadong Medicine Huadong Medicine fully integrates green principles into its operational management. Through is committed to promoting the efficient circulation of resources and integrating the principles Green Office management optimization and cultural advocacy we encourage all employees to practice
of the circular economy into daily material management. The Company strictly adheres to the green office principles and work to reduce resource consumption and environmental footprint
Material Compliance Management and specialized procedures such as the Cylindrical Paper in daily operations.Drum Recycling Standard Operating Procedure implementing systematic recycling and reuse of
recyclable materials generated during production to significantly reduce resource consumption
and environmental impact.To standardize and enhance the recovery and reuse of specific waste solvents we actively Digital transformation
participated in the development of industry standards to advance technological progress.During the reporting period we took part in formulating two group standards: the Recovery of P romote electronic approvals online document circulation and paperless archiving of meeting minutes to reduce paper use.Acetonitrile from Waste Biopharmaceutical Solvents Technical Specification—Ultra Gravity Crude Promote online recruitment processes including electronic resume submission distribution of electronic brochures online presentations
Coupled Distillation and the Recycled Acetonitrile from Waste Biopharmaceutical Solvents. and video interviews effectively reducing travel demand and carbon emissions for both candidates and recruiters.These standards define the technical requirements methods and product specifications
for recovering and regenerating acetonitrile from waste biopharmaceutical solvents through
advanced processes such as high-gravity prefractionation coupled with rectification extraction Intelligent energy-saving upgrades
and membrane separation providing a technical basis for the standardized recovery and reuse Implement intelligent upgrades to elevator machine room air-conditioning systems using IoT technology to enable on-demand operation
of waste solvents across the industry. and achieve more precise energy savings.We have established dedicated recycling and reuse systems for different categories of packaging
and production materials creating multiple internal resource circulation loops. These efforts Resource recycling and reuse
have significantly improved resource utilization efficiency and supported the Company's
continued advancement of green and low-carbon operations. E stablish a recycling mechanism for office consumables with centralized collection of commonly used items such as ink cartridges toner
cartridges and batteries which are then handed over to professional institutions for compliant disposal to avoid environmental pollution.P romote the reuse of materials such as promotional roll-up banners to reduce the use of disposable publicity materials.Green procurement
Cylindrical paper drum recycling Iron drum reuse Solvent recycling and reuse
G ive priority to green office consumables such as recycled paper and environmentally friendly ink to reduce the environmental footprint of
To reduce resource waste and The Company reuses iron drums The Company recovers and reuses office operations at the source.lower production costs the Com- originally used for raw materials commonly used solvents such as
pany recycles the cylindrical paper such as glycerin and acetone as ethanol acetone and ethyl acetate.drums used as outer packaging storage containers for hazardous Ethanol is recovered through a Cultural advocacy
for fermented Cordyceps Sinensis waste such as waste solvents gen- high-gravity bed process while ace-
powder. After cleaning and inspec- erated during production enabling tone and ethyl acetate are recovered Display resource conservation messages in office areas and reinforce employees' awareness of conservation through daily communication
tion qualified drums are reused cascading use of packaging con- through vacuum concentration. After and promotion.for production packaging forming tainers. This practice reduces both passing inspection these solvents
an internal closed-loop material new drum procurement and the are returned to the production line Green Office Practices
circulation system that significant- disposal cost of empty drums as for reuse. This system significantly
ly reduces solid waste generation hazardous waste. reduces the purchase of fresh sol-
while lowering packaging costs. vents cuts hazardous waste gen-
eration at the source and delivers Biodiversity Huadong Medicine adheres to the principles of sustainable development and recognizes that both economic and environmental biodiversity is a vital foundation of the Earth's life-support system closely linked to human
benefits. Protection health and well-being as well as the Company's sustainable development. The Company
strictly complies with the Environmental Protection Law of the People's Republic of China the
Biosecurity Law of the People's Republic of China and other applicable laws and regulations.Packaging and Production Material Recycling Practices Guided by the principle of "respecting adapting to and protecting nature" we are committed
to avoiding and reducing the potential negative impacts of our operations on ecosystems and
wildlife habitats and to contributing to the protection of our shared planet.Huadong Medicine actively integrates biodiversity considerations into its operations and
supply chain management. During project planning and site selection we prioritize assessing
potential impacts on ecosystems proactively avoid ecologically sensitive areas and strictly
implement environmental impact assessments to reduce disturbance to natural habitats
at the source. In daily operations we continue to advance cleaner production and resource
circulation striving to reduce pollutant emissions and ease pressure on the surrounding
environment. At the same time we continue to strengthen internal communication and training
on biodiversity protection enhance employees' awareness advocate eco-friendly principles
in business decisions and production practices and explore pathways for coordinated
development between business growth and ecological conservation.
484903
Driving Innovation and
Quality Excellence
Huadong Medicine adheres to innovation-driven
development and prioritizes product quality and
safety. By establishing a comprehensive R&D
process and quality management system we
are committed to ensuring the high quality and
safety of our products throughout their entire
lifecycle. Maintaining a customer-centric approach
we constantly optimize our service to cultivate
a trustworthy brand image. We implement full-
cycle evaluation and management of suppliers
and attach importance to improving supply chain
resilience contributing to healthy and sustainable
development of the pharmaceutical industry.R&D and Innovation 52
Quality and Safety 61
Responsible Services 70
Supply Chain Management 75
Contributing to the UN SDGs:2025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Case
Establishment of Zhejiang Key Laboratory of New Drug Intelligent Innovation for Metabolic Diseases
R&D and Innovation
Huadong Medicine prioritizes innovative drug R&D as a core strategy actively The Zhejiang Key Laboratory of New Drug Intelligent Innovation for Metabolic Diseases
building a robust R&D framework. We continuously increase R&D investment was established based on Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. and
and strengthen intellectual property (IP) protection to enhance technological jointly established with the School of Pharmacy of Zhejiang University. The laboratory
competitiveness. Our R&D processes strictly follow ethical standards with was approved for establishment by the Zhejiang Provincial Department of Science and
dedicated animal welfare safeguards ensuring compliance with both regulatory Technology and completed its listing ceremony in July 2025.and ethical requirements. Through continuous process refinement we accelerate
innovation commercialization to drive industry advancement. Directed by Dr. Liu Dongzhou Chief Scientific Officer of Huadong Medicine the
laboratory focuses on metabolic disease prevention and treatment leveraging AI
for drug design and synthesis. Targeting multi-target high-compliance low-side-
effect therapies with comprehensive benefits it aims to establish Zhejiang Province
as a research hub for metabolic diseases while driving innovation and industrial
Innovation and We have established significant brand influence and solid market foundation in therapeutic transformation. The laboratory accelerates commercialization of breakthroughs fields such as CKD immunology endocrinology oncology the digestive system and the cultivates next-generation biopharma capabilities and advances the Healthy China
R&D System cardiovascular system and our products' market share has long been among the top of similar 2030 agenda through life sciences innovation.products in China. We have successfully launched multiple first-in-class innovative drugs in
the three core therapeutic fields of oncology endocrinology and autoimmune diseases and
formed a matrix of three distinctive products represented by antibody-drug conjugates (ADCs)
GLP-1 and topical formulations.We adhere to the innovation-driven development strategy continuously increase R&D
investment and build an independent innovation system that covers the entire drug
research and development cycle. We have established the Global Innovative Drug R&D R&D Innovation During the reporting period the Company upheld its corporate philosophy of being "Science-
Center to coordinate the strategic planning pipeline layout and clinical research and Achievements based and Patient Centered." It continued to strengthen its presence in therapeutic areas
development of proprietary innovative products. We focus on products with clinical including endocrinology autoimmune disorders and oncology while steadily increasing R&D
relevance pharmacoeconomic viability and commercial potential. Through a combination investment expanding and diversifying its innovative drug pipeline enhancing its innovation
of independent R&D external collaborations and product license-ins we have created ecosystem and technology platforms and actively advancing the progress of clinical trials.a differentiated innovative product pipeline to ensure the continuous transformation of These efforts resulted in several major milestone achievements. As of the date of this report
innovation achievements. At the same time we actively carry out global strategic cooperation the Company's Innovative Drug R&D Center is advancing 96 innovative drug pipeline projects.and build an open and collaborative R&D and innovation ecosystem injecting momentum into Over the past five years the Company has filed more than 150 innovative drug patent
the Company's medium and long-term high-quality development. applications in total 29 of which have been granted.R&D Team Development The Company prioritizes team building and R&D and innovation capabilities as foundational
pillars. We've built a comprehensive team spanning the entire drug development pipeline -
from discovery and efficacy evaluation to clinical development operation and registration.Our Scientific Advisory Board (SAB) comprising global experts in medicine and R&D provides Target Specialty
professional guidance to address key technical challenges in innovative drug development. Discovery and Future PROTAC
During the reporting period the SAB's expertise was instrumental in securing approval for the Platform Medicine R&D Platform
Zhejiang Key Laboratory of New Drug Intelligent Innovation for Metabolic Diseases. Guided Platform
by the SAB the laboratory established research priorities and fostered interdisciplinary
collaboration throughout its application and setup phases. Going forward the laboratory will
focus on metabolic diseases with unmet clinical needs developing safer and more effective
therapeutic solutions for patients. Drug Design ADC R&D AIDD6 Advanced and Synthesis Platform Platform Formulation Platform R&D Platform
Innovation and R&D Technology Platform
6 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.
52 532025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Case
Application of AI Technology in Drug R&D In addition we established the Hangzhou Zhongmei Huadong Synthetic Biology Proof-of-Concept Center aiming to verify the
technical feasibility of early scientific research achievements and combine them with market demand to explore and verify the
commercial potential of scientific research achievements. In 2025 the center was selected for the second batch of proof-of-concept
We accelerate AI integration in innovative drug R&D embedding AIDD technology across development workflows. Through center construction layout list by the Zhejiang Provincial Department of Science and Technology. Since its establishment at the end
our upgraded AI drug design platform we've established five core application scenarios within our digital R&D roadmap. of 2022 the center has incubated 8 companies completed over 80 inbound projects and provided more than 50 services such as
Leveraging large language models for target validation and project decisions we generated over 100 evaluation reports technical consulting lab/pilot testing CDMO and CMO validation to relevant enterprises continuously empowering technology and
annually reducing early-stage R&D uncertainty. Optimizing molecular design through AI-driven structural screening and industrial development.prediction we achieved 30% higher efficiency across small molecules peptides and biologics. This AI integration marks our
transition to intelligent drug discovery.From the beginning of 2025 to the date of disclosure of this report our products have obtained a total of 6 marketing approvals 12
marketing applications accepted 26 investigational new drug (IND) application approvals 6 orphan drug designations in the United
States and 1 breakthrough therapy designation in China.Life Sciences Huadong Medicine continues to improve the construction of innovative R&D platforms
Industrial Park actively promotes the ecological construction of the Life Sciences Industrial Park effectively
improving the efficiency of drug R&D and further promoting the collaborative development
and value chain integration of the biopharmaceutical industry.Driven by innovation transformation ecosystem development and industrial clustering the
Life Sciences Industrial Park commenced operations in January 2024. Integrating "research and
development incubation accelerated transformation and industrialization implementation" Hangzhou Zhongmei Huadong Synthetic Biology Proof-of-Concept Center
the park focuses on advancing life science research and translating breakthroughs into real-
world applications. Offering comprehensive resources including lab spaces funding support
tech platforms and financial services the park leverages Huadong Medicine's full-cycle R&D Intellectual We always regard IP protection as the core driving force for promoting technological innovation ecosystem to deliver systematic support for resident enterprises. This strategic initiative and high-quality development. To continuously improve the IP management system we have
accelerates industry ecosystem development through sustainable innovation. As of April 2026 Property formulated and implemented the Patent Inventor Management Measures and the Patent
the park has nurtured 21 startups with 3 receiving grants from Hangzhou Gongshu District's Protection Application Incentives to further clarify the rights and responsibilities of inventors. During the Dayun Talent Program. reporting period we issued the Notice on Strengthening the Company's Patent Management
optimizing and refining the patent reward mechanism and patent rating management system.During the reporting period the Life Sciences Industrial Park held over 50 exchange activities
and hosted the "AI + Life Health" innovation and entrepreneurship competition actively The Company continuously improves its patent management system around five key
promoting industrial development. At the same time Huadong Medicine established the directions: patent layout patent breakthrough patent protection intelligent construction
Huadong Medicine Special Industry Fund with professional investment institutions with a and drug patent lifecycle management. In terms of personnel allocation the aesthetic
fund size of RMB 2 billion focusing on investment in innovative drugs aesthetic medicine and medicine segment has added dedicated patent personnel and other segments have also
big health. set up dedicated personnel to coordinate R&D progress. In addition to meet the needs
of strategic transformation and business development we have started recruiting patent
personnel with international IP management experience. In terms of data management we
continuously improve the performance and adaptability of our patent management system
by utilizing patent databases. In terms of process optimization we have formed a cross-
departmental working group to properly respond to major patent cases and ensure that risks
are controllable. In terms of indicator assessment we develop patent assessment indicators
for each segment every year and conduct assessments.We continue to strengthen the identification and management of IP risks actively respond to
potential challenges and ensure the steady progress of innovative R&D. We effectively prevent
and control IP related risks through systematic patent strategies and competitor patent
surveillance. In various cooperation projects we strictly follow the cooperation agreement and
patent management system standardize the communication process of IP information ensure
the orderly implementation of patent examination maintenance and licensing and assist in
Life Sciences Industrial Park the compliant transformation of R&D results.
54 552025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Monitor and track project progress analyze R&D data and strategically deploy core patent During the reporting period As of the end of the reporting period
Patent Strategies filings
Use strategies such as priority claims patent classification pre-grant examination and Number of new Cumulative number of Cumulative number
prioritized examination to protect innovation authorized patents granted patents of trademarks
E nsure high-quality drafting of patent specifications
Set up a patent liaison to provide comprehensive IP support for innovative projects 81 906 698
Competitor Patent
Surveillance
C onduct regular patent surveillance and searches
C omplete patent surveillance prior to patent initiation to support early-stage exploration Research Ethics In the clinical R&D stage of drugs the Company strictly adheres to domestic and
preliminary research and new-phase project approvals international regulatory standards such as the Helsinki Declaration the Drug Registration Verification Criteria and Principles the Guidelines for Ethical Review of Drug Clinical Trials
and the Good Clinical Practice (GCP) Guideline published by the International Council for
Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). The
Company has developed standard operating procedures (SOPs) to ensure scientific rigor
and ethical compliance of the R&D processes. We have established SOPs covering clinical
IP Management for trial design implementation data management and statistical analysis ensuring the
Collaborative Projects C ommunicate with partners per contractual agreements to manage patent examination scientific and ethical nature of drug development.and maintenance
Implement IP-related clauses in cooperation agreements manage PCT national phase
entry patent registration examine progress etc.Regularly update IP progress participate in relevant meetings and assess project dynamics
We follow the Good Clinical Practice standards and involve multiple functional
departments such as clinical medicine and clinical pharmacology in various
IP Risks Management Measures stages of clinical trials covering the entire process of trial protocol design
Ensuring Scientific statistical analysis plan formulation data analysis and report writing. We have
Rigor in Drug established the Medical Document Review Committee (MDRC) and develop
The Company actively promotes the construction of IP culture and strengthens the awareness of IP among all employees. During Development supporting management systems. In addition we have added two new SOPs
the reporting period we organized multiple cross-departmental patent meetings and patent training and sharing activities to further – the Process for Writing Reviewing and Approving Clinical Trial Reports and
deepen the construction of the IP management system enhance employees' professional abilities and provide solid support and the Formulation and Revision of Plans to further enhance the scientific rigor of
guarantee for the Company's continuous innovation. clinical research.In accordance with the Good Clinical Practice requirements we have developed
Training on IP Patent Knowledge Sharing SOPs covering multiple key aspects such as ethical review governance of human
genetic resources and clinical risk management to ensure the standardization
Ensuring Ethical and compliance of the entire clinical research process. In the process of clinical
Organized discussions among patent legal C onducted specialized sharing among patent Compliance in Drug research implementation we attach great importance to the rights and security
technical and legal counsel teams to analyze patent personnel covering drug patent term patent Development protection of subjects fully consider the risk factors of specific populations such
cases and propose solutions labeling and revision of examination guidelines as the safety guarantee for women with reproductive potential and strictly follow
Provided on-site patent knowledge learning training Convened an annual conference on patent work the principle of privacy protection in the processing of individual security reports
for new employees and offered online course and with the theme of "Patent Protection of Chinese to ensure the confidentiality of personal information of subjects.related materials on IP Patent Medicine: Limitations on Components
Extracts and Active Ingredients"
I n accordance with patent portfolio requirements
for specific products regularly communicated with Organized a group-level patent lecture that
multiple stakeholders regarding key product patent covered the sharing of patent issues related to drug We adhere to the basic principles of ethical review and informed consent to comprehensively safeguard the safety and legitimate rights
applications and R&D trials impurities analysis of authorization requirements and interests of clinical trial subjects. Clinical trial management and subject protection measures jointly build the ethical cornerstone
for parameter claims and introduction of antitrust of the Company's R&D system promoting scientific innovation and pharmaceutical progress while effectively maintaining the health
guidelines in the pharmaceutical field and well-being of participants.Training on IP Protection
56 572025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Breeding Environment Management
Informed Consent and Risk Management and Environmental Optimization: Provide breeding facilities that comply with national standards
Protection of Subject Rights Quality Control to ensure that the breeding environment meets the living habits and needs of animals;
replace and clean the cage frame in a timely manner to reduce the risk of microbial cross
D evelop and manage the rule Identify assess and control risks in contamination.of drafting revising reviewing clinical research to ensure quality Environmental Enrichment: Introduce enrichment items such as toys and nesting materials
approving and archiving rules and compliance of clinical trials in animal rearing environments to meet their behavioral needs and reduce their stress-related
of informed consent forms behaviors.to safeguard subjects' rights Develop annual quality control F eed and Water: Supply nutritionally balanced feed and sterile drinking water and additional
to information voluntary plans co-monitoring and routine nutritional supplements are provided when necessary.participation and privacy monitoring to identify and Status Observation: When animals experience physical weakness or poor health take measures
respond to risks during executions such as single cage feeding and adding nutritional support foods to improve their health status.Veterinary Care: Appoint professional veterinarians to provide expert care advice and measures
Privacy Protection and Data Training and Qualification to ensure the health and comfort of the animals.Security Management
Experimental Design Management
Properly protect subject privacy D evelop individual and
and personal information departmental training plans that Follow the 3R7 principle in experimental design to ensure both basic animal welfare and
during clinical trial and data apply to all employees contractors scientific validity.management and consultants involved in training Reduction: Minimize the use of experimental animals while ensuring the scientific and effective
and qualification certification nature of data; make full use of existing experimental data and avoid conducting repetitive
experiments without scientific significance.Replacement: Use in vitro living systems (e.g. tissues cells) to replace animal testing.Clinical Trial Management and Subject Protection Initiatives Refinement: Optimize experimental protocols by adopting non-invasive or minimally invasive
techniques to reduce animal harm.Experimental Procedures and Anesthesia Management
Animal Welfare In the process of promoting research and innovation Huadong Medicine attaches great importance to the ethical well-being and standardized management of laboratory animals. Trained Personnel: Ensure that all experiments are conducted by professionals especially
We strictly adhere to regulations and policy requirements such as the Laboratory Animal trained in breeding anesthesia surgery and other technologies as well as animal welfare ethics.- Requirements of Environment and Housing Facilities the Management of Experimental
Animals and the Guidelines for Humane Treatment of Experimental Animals and based Minimize Trauma: Perform surgical procedures with minimal trauma control bleeding and reduce pain; apply anti-inflammatory and analgesic treatments postoperatively.on this we have formulated internal management systems such as the Guiding Principles
for Ethical Review of Experimental Animal Welfare the Charter of the Ethics Committee for Appropriate Anesthesia: Select suitable anesthetics and administration methods monitor
Experimental Animal Welfare and the Rules for the Management of Experimental Animals. anesthesia depth and ensure procedures are pain-free.These policies cover the management system operating procedures animal use and
management as well as the operation and maintenance of facilities and equipment in the
Laboratory Animal Center providing a solid institutional guarantee for improving the welfare Humane Endpoints and Euthanasia
level of laboratory animals. In addition the Laboratory Animal Center has obtained the
Laboratory Animal Use License and conducts annual inspections. Establish clear criteria for humane endpoints terminate experiments promptly when these are met and carry out euthanasia as needed.We have established the Experimental Animal Management Committee and the Ethics Use appropriate euthanasia methods to ensure animals pass painlessly and without fear.Committee for Experimental Animal Welfare to coordinate and promote the standardized
and institutionalized animal welfare management. Among them the Ethics Committee Animal Welfare Protection Initiatives
for Experimental Animal Welfare is responsible for conducting a comprehensive review of
scientific rigor and ethical compliance for all research projects involving animals ensuring that Achievements in Adhering to the concept of open integration and continuous innovation and relying on leading experimental activities are carried out under the premise of compliance safety and ethics. scientific research achievements and profound industry accumulation Huadong Medicine
During the reporting period we updated the SOPs related to animal welfare covering the Innovation actively cooperates with global academic and industrial partners to jointly promote high-
procurement transportation and acceptance of experimental animals to further improve the quality development in the field of medicine and health. We deeply participate in industry
level of animal welfare. exchanges gather wisdom and consensus from multiple parties collaborate with top experts
in interdisciplinary cooperation and closely cooperate with industry partners to continuously
To maximize respect and protection for the welfare of experimental animals while ensuring inject new momentum into industry progress comprehensively enhancing the Company's
the accuracy and reliability of experimental data the Company has implemented a series industry influence and ecological synergy value.of standardized management measures to improve the controllability of the welfare level of
experimental animals and the research quality. 7 The 3Rs Principle: Refers to Reduction Replacement and Refinement.
58 592025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Case Outstanding Innovation Capabilities in the R&D of Metabolic and Cardiovascular Diseases
Quality and Safety
Huadong Medicine's subsidiary Doer Biologics focuses on the R&D of innovative
biopharmaceuticals for metabolic diseases and cancer. In 2025 its independently Huadong Medicine always regards product quality as the core competitiveness of
developed first-in-class long-acting tri-specific agonist - DR10624 was used in a phase its sustainable development. We have established a quality control system that runs
2 clinical study to treat severe hypertriglyceridemia. This was selected for the latest through the entire process of R&D production and operation comprehensively
breakthrough research at the 2025 American Heart Association Scientific Sessions ensuring the quality and safety of our products. At the same time we continue to
and presented as a groundbreaking clinical trial for heart metabolic disease drugs in strengthen pharmacovigilance deepen the construction of quality culture optimize
the opening report of the main venue reflecting the industry's high recognition of the the quality management system and effectively reinforce our quality defense.scientific value and clinical prospects of DR10624.Governance Huadong Medicine's wholly-owned subsidiary Zhongmei Huadong has structured its quality management around the Quality Management Center which consists of the Quality Assurance
(QA) Department the Quality Control (QC) Department and the Comprehensive Quality
Case Management Center. A Vice President (Quality) assumes the role of quality steward and Strategic Layout in the Field of Autoimmunity for Win-win Cooperation in the Industry authorized figure tasked with crafting overarching quality development strategies setting
overall objectives defining strategic directives and implementing quality enhancement
initiatives. To ensure the quality of the pharmaceutical products we operate under a quality
In 2025 Huadong Medicine announced an exclusive strategic cooperation with Jiangsu Vcare PharmaTech Co. Ltd. regarding veto system empowering the QC managers with the authority to veto decisions pertaining to
the commercialization rights of its innovative product - VC005 tablets in mainland China. VC005 tablets are a new powerful drug quality management. They are also integral in pivotal quality determinations such as
and highly selective second-generation JAK1 inhibitor targeting multiple autoimmune diseases such as moderate to severe addressing quality complaints major product safety issues and product recalls.atopic dermatitis and ankylosing spondylitis.Autoimmunity is one of the important strategic layout areas of Huadong Medicine and Vice President (Quality)
VC005 tablets have the potential to treat various autoimmune diseases. This strategic
cooperation further enriches the Company's own immune pipeline and will strengthen Quality Management Center
Huadong Medicine's leading position in the domestic immune market. With the
comprehensive market layout of Huadong Medicine in autoimmunity in China VC005
tablets will achieve a wider and deeper market coverage in the future serving more QA Department QC Department Comprehensive Quality Management Center
patients with autoimmune diseases.Ensure that drug R&D production Conduct inspections prior to the E stablish and manage a pharmacovigilance
and quality management activities release of materials and products system to monitor drug safety after market
comply with quality standards and and ensure adequate facilities entry handle and evaluate adverse drug inci-
regulations equipment and experienced per- dents and conduct safety risk assessments
sonnel are in place
Ensure a clear definition of Establish a drug recall system and handle quali-
Case management responsibilities and Be responsible for sampling ty-related complaintsAcademic Exchanges in Aesthetic Medicine to Promote Technological Innovation and Global correct procurement and use of inspecting and testing various
Cooperation raw and auxiliary materials and materials and products as well as Responsible for GMP training for employees
packaging materials assessing product stability and managing the quality information system
In 2025 Sinclair continued to deepen academic exchanges and technical cooperation in aesthetic medicine and actively Regularly assess the effectiveness Conduct on-site audits of suppliers and partici-pate in annual supplier assessments
participated in and hosted multiple international and regional industry activities covering various cutting-edge directions of the quality assurance system
such as injection medicine application of recycled materials and cryotherapy for whitening. Through activities such as SEEDs
Ellansé Asia Pacific Exchange Conference Asia Pacific Magic Stick Program and MAILI EXTREME TTT MaiLi Shuoying Mentor Quality Management Structure
Seminar Sinclair collaborated with domestic and international experts to promote standardization of clinical technology and
innovation of concepts for Ellansé MaiLi and other products.Based on the Company's business layout operational status and strategic planning we
Sinclair also conducted expert meetings and operation training around new products such as Renotion and Reaction helping Strategy conducted a systematic evaluation of key areas such as production and manufacturing
to standardize the application of products. The series of activities not only strengthened the technical capabilities of aesthetic warehousing and logistics identified the key risks and opportunities and conducted in-depth
medicine practitioners but also promoted cross regional academic exchanges enhancing the Company's professional analyses of their potential impact on business operations and financial conditions. We have
influence and sustainable cooperation value in the global aesthetic medicine segment. formulated comprehensive measures to address these risks and opportunities including
improving the quality management system and further strengthening the quality assurance
mechanism. At the same time we continue to promote the optimization and upgrading of
the pharmacovigilance system and strengthen the promotion and implementation of quality
culture striving to achieve effective control of various risks.
60 612025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Type of Risk/ Description of Risk/ Time Range Potential Impact on the Response Measures Type of Risk/ Description of Risk/Opportunity Opportunity Company Opportunity Opportunity Time Range
Potential Impact on the
Company Response Measures
May increase likelihood In July 2024 the Chinese
of customer complaints Strengthen supplier management government released the
Favorable policies help
The quality of products from Short- and returns damaging the and audits and establish long-term Implementation Plan for Full-Chain the Company to develop
Material Quality some suppliers may be volatile medium- Company's reputation and partnerships with high-quality suppliers Support for the Development and launch innovative
Risk potentially damaging product and long- Strengthen market research and market competitiveness Conduct regular assessments and audits of Innovative Drugs creating a
pharmaceutical products
performance. term enhance the technological customer demand analysis and
Possible production delays of suppliers
more favorable environment for content of the products optimize product portfolio
leading to higher costs innovative drug's development and Market providing the Company with access Medium- and and better meet the market A ctively participate in international demand
D evelop maintenance plans and
Opportunity to markets. long-term pharmaceutical exhibitions and
servicing programs for production High-quality products help technical exchangesIn addition continued global
Quality issues may fray equipment ensure that key inspection pharmaceutical market expansion
enhance brand reputation Establish strategic alliances with better-
customer trust and damage instruments have backup units to and rising consumer demand for
and competitiveness performing partners
support product release in emergencies high-quality drugs are providing meeting consumers' higher the Company's brand image
more opportunities for expanding expectations for safety and Equipment failures and Short- Establish temporary emergency efficacy
Manufacturing operational errors during the medium- May lead to product recalls production plans for production domestic and international market.Risk production may result in product and long- incurring additional costs and legal liabilities lines and conduct regular emergency quality issues. term production drills On October 23 2023 the National
M ay interrupt production Medical Products Administration
affecting delivery schedules Provide regular training to operational issued the Announcement on Under a more standardized
and customer satisfaction personnel to improve their technical Strengthening the Supervision and regulatory environment the skills and quality awareness thereby Management of Commissioned Company strictly complies
ensuring inspectors' cross-inspection Production by Marketing with the announcement
performance Authorization Holder for Medicines strengthens management of Optimize quality management
M ay lead to product non- Conduct comprehensive risk Regulatory
(No. 132 of 2023) which put Medium- and commissioned production processes and standards continuously
compliance with regulatory assessments for shared production lines Opportunity
forward clear requirements on the long-term and ensures drug quality. improve the quality management management of licensing quality This enables broader system covering the entire lifecycle of
Cross- Shared production lines may pose Short- and requirements resulting in based on product characteristics cross- management and supervision cooperation with high-quality commissioned drugs production
contamination risks of cross-contamination mix- medium- supervisory punishment contamination prevention measures and inspection of commissioned commissioned manufacturers
Risk ups or errors term May pose health and safety during production and whether the production etc. and strictly so as to expanding business
risks to employees leading to residue of the equipment after use and regulated the commissioned and market and enhancing
litigation and compensation cleaning meets the requirements production practices to ensure the brand competitiveness
prominent strengths of compliant
May add extra logistics costs Strengthen storage temperature and enterprises.Storage and Products may be damaged or Short- and
and compensation expenses humidity control cooperate with
Logistics Risk deteriorated during storage and medium- May lead to potential supply professional logistics providers to logistics. term chain disruptions impacting ensure product quality and safety during R&D Quality Management Huadong Medicine strictly adheres to the highest international and domestic standards in all aspects
product supply and sales transportation from preclinical research to clinical trials achieving drug development goals without affecting the
timeliness of R&D. We have established over 500 procedural documents which cover key aspects
May lead to GMP non- of quality management effectively ensuring the efficient and stable operation of various technical
compliance or product failure Conduct a comprehensive data integrity
Data in computerized systems Short- risk assessment for computerized platforms.to market
Data Integrity may be tampered with lost medium- systems used in production and
May lead to the release of In the preclinical research phase we follow regulations and guidelines such as the Medicinal Product Risk mistakenly deleted or unable to and long- inspection processes to ensure that
unqualified intermediates or Administration Law of the People's Republic of China the Good Laboratory Practice for Non-Clinical verify authenticity. term all types of electronic data meet the
finished products affecting Laboratory Studies and the Quality management systems—Guidance for documented information principle of data integrity (ALCOA+)
product quality (GB/T 19023-2003; ISO/TR 10013) to ensure the scientific rationality of experimental design and the
compliance of experimental operations.Increase investment in cutting-
Emerging technologies such edge technologies such as
In the clinical development phase we comply with regulations and standards such as the Good
biopharmaceuticals and gene therapy Clinical Practice and ICH GCP E6 (R2) to ensure the compliance and scientific rationality of clinical as artificial intelligence (AI) big
to support new drug R&D and existing trials. At the same time multiple professional teams related to quality assurance data management data and the Internet of Things A doption of new technologies and statistical analysis continuously supplement and update system documents based on industry
are bringing new possibilities to can improve production technology upgrades standards to ensure their completeness and validity.Technological the pharmaceutical industry. AI Medium- and efficiency reduce costs Apply AI and big data technology to
Opportunity application has already made long-term enhance product quality and optimize production processes and We have established a comprehensive R&D risk management mechanism developed and
notable progress in drug research strengthen the Company's quality control， boosting efficiency and implemented SOPs for risk management and systematically identified evaluated and controlledand development such as innovation capabilities quality risks in all phases of clinical research. For each project we have established a risk management plan
molecular screening and clinical
C ollaborate with research institutes and with cross-functional teams evaluating potential risks at the system and experimental levels and data analysis. universities to accelerate technology developing response measures. Clinical quality assurance personnel participate in guidance enhance
transfer execution and supervision based on audit plans report major issues in accordance with regulations
and conduct root cause analyses and corrective action and preventive action (CAPA) management to
ensure controllable risks. During the reporting period we conducted two internal audits of the R&D
quality system to evaluate the effectiveness of the current clinical trial quality management system
prevent potential risks and lay the foundation for continuous improvement in the future.
62 632025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Product Quality Huadong Medicine has established a sound product quality management system to ensure
Management that products meet the intended use and drug registration standards and guarantee the Quality Audit
efficacy of drugs and patients' medication safety. The Company continuously improves the
Quality Manual in accordance with the Medicinal Product Administration Law of the People's We have developed quality audit plans that cover all major departments and subsidiaries ensuring that all business activities comply
Republic of China the Good Manufacturing Practice for Medical Products and relevant ICH with laws regulations and industry norms. We pay high attention to the issues identified during the audit process and take all
guidelines clarifying various standards and requirements of the quality management system. necessary corrective and preventive actions to continuously improve our quality system and ensure product quality.For specific business areas each segment continues to revise and update quality
management system documents to ensure that the system documents are consistent with
the latest regulations industry standards and the Company's development needs. In the During the reporting period the subsidiary
pharmaceutical industry segment Jiangdong Company benchmarked with regulations During the reporting period
Jiangdong Company and Huadong Sinclair in the aesthetic medicine segment and standards for major global drug regulatory regions to improve quality management conducted two internal audits in accordance
requirements. Yantai Huarui updated its SOPs based on the 2025 edition of the Pharmacopoeia Guizhou in the pharmaceutical
of the People's Republic of China. In the aesthetic medicine segment subsidiaries drafted industry segment completed multiple
with regulations and standards such as Good
Distribution Practices for Medical Devices and
and approved GMP standards for the production quality of injectable medical devices. In self-inspections as planned and all Good Manufacturing Practice for Cosmetics
other segments Bailing Health developed medical device management systems and medical deficiencies identified were of general covering the entire system process. No non-
device procedure documents. We use the above quality management systems to standardize nature and were rectified. Yantai
Huarui completed two internal audits conformities were found during the audit business processes enhance regulatory adaptability and ensure product quality and safety.and all issues identified were rectified. and one suggested item was identified and
As of the end of the reporting period 71% of companies under Huadong Medicine that are rectification was completed.involved in production have obtained ISO 9001 quality management system certification.In addition all in-line product lines of the Company have passed GMP certification or GMP
compliance inspection with a certification coverage of 100%. We have made positive progress
in quality system certification both domestically and internationally not only standardizing the Operational Quality We continue to strengthen the refined management of the entire industry chain and improve
quality management process but also demonstrating our firm commitment to continuously Management the level of quality and safety assurance in the process of pharmaceutical and medical device
improving quality standards. operation. We have created an integrated quality control system of "prevention–control–
tracing–improvement" which ensures product safety and effectiveness while achieving an
efficient balance between risk management and compliant operations.Domestic Certifications International Certifications
Nine subsidiaries including Zhongmei Huadong Two production lines of Jiangdong Company has
Xi'an Bodyguard and Jiuzhou Pharmaceutical Zhongmei Huadong have newly obtained the Safety Testing of New Product Launches
have obtained ISO 9001 quality management passed on-site
system certification GMP certificate All pharmaceutical products from the Company are subjected to safety testing prior to market launches in strict accordance with
GMP compliance
ISO 9001 quality management from the Brazilian National regulatory plans and internal management policies. We conduct strict non-clinical and clinical trials conduct quality and safety inspections
system certification Health Supervision Agency assessments on all drugs and strengthen quality control throughout the entire lifecycle. After a drug is approved for marketing we conduct safety monitoring and evaluation to ensure its safety and quality controllability throughout the entire use process.Domestic and International Certifications of Quality Management System Before the drugs are approved for marketing we submit clinical trial production qualification and quality control materials to the
national drug regulatory department to prove their safety effectiveness and quality controllability. For drugs intended for international
Quality Process Control markets we apply for market authorization based on each country's regulatory requirements. After receiving marketing approval we
continue to carry out safety monitoring and quality tracking and conduct annual drug stability inspections to ensure quality stability
We have established testing and equipment management procedures to standardize the investigation processes for Out-of- within the validity period. In addition the Quality Control Department laboratory of Zhongmei Huadong accredited by the China
Specification (OOS) results and Out-of-Trend (OOT) observations. At the same time we have conducted a risk assessment for co- National Accreditation Service for Conformity Assessment (CNAS) is equipped with professional testing capabilities to perform quality
production lines in accordance with the Guidelines for Quality Risk Management of Drug Co-production Lines issued by the National testing before products are launched.Medical Products Administration and implemented Permitted Daily Exposure (PDE) assessments to effectively prevent and control
contamination and cross-contamination risks ensuring production safety and drug quality. The Quality Control Department laboratory of Zhongmei Huadong also has a quality research team for post-marketing drug changes to
independently conduct method validation and drug quality research. We have developed a comprehensive change control procedure
For example Jiangdong Company has built a digital platform for quality management covering production and manufacturing quality for various changes after a drug is launched such as adjustments to raw and auxiliary material suppliers and batch changes and
testing and other processes to achieve visual monitoring of quality data and intelligent analysis and warning. Huadong Guizhou conducted corresponding quality research and stability assessments to provide scientific basis for drug safety assessment. During the
has conducted research on product quality improvement optimizing the spray production process from aspects such as materials market circulation phase of pharmaceuticals we continue to strengthen quality monitoring and management effectively preventing
processes operations and equipment to reduce the product leakage rate and improve product stability. Yantai Huarui has added potential quality and safety risks.ultraviolet lights in the dressing room of the solid preparation clean workshop to reduce the level of microorganisms in the space and
ensure a clean and safe production environment for products.Operation Process Management Optimization
Internal Quality Testing
During day-to-day operations the Company's Quality Management Department conducts a comprehensive annual audit of the
We conduct comprehensive testing on all incoming materials and finished products including raw and auxiliary materials packaging implementation of pharmaceutical and medical device quality management standards to ensure that all operations comply with
materials dosage forms and finished active pharmaceutical ingredients. All testing standards are approved by national or provincial regulatory requirements. For any non-conforming issues identified during audits corrective actions are supervised until the audited
medical products administration authorities and the FDA of the United States. We strictly adhere to the principle of batch-by-batch units pass reviews. At the same time we promote measures such as integrated multi-storage operations and optimization of the
inspection to ensure 100% coverage for self-produced products and effectively prevent potential quality and safety risks. national medical insurance traceability code to enhance quality management throughout the operational process.
64 652025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Revisions to Quality Integrated Multi-storage Optimization of the Scanning of
Regular Training New Employee Training On-the-job Training
Management System
Documents Operations
the National Medical Insurance
Traceability Code
T he Company's knowledge We require new F or employees in quality R&D
The Company revises its quality By consolidating self-operated logistics The Company has reviewed applicable management platform has employees to production and other related
management system documents in resources the Company meets the national regulations on mandatory launched 54 quality training complete 4 quality positions we continue to provide
accordance with laws and regulations requirements of the quality supervision drug scanning requirements and courses covering topics such as training courses and systematic quality training on drug
and conducts training for relevant and management methods for the configured mandatory scan reminders pharmaceutical regulations and pass assessments GMP job skills product processes and
departments and positions to ensure operation and use of drugs optimizing in its systems to ensure correct scanning quality management system to establish a solid operational technical specifications.that quality management meets the storage and transportation resources during logistics inbound and outbound improvement which are available foundation of quality
latest regulatory requirements and and improving logistics efficiency and processes thereby enhancing the to all employees. compliance from the We continuously strengthen the
internal management standards. quality. compliance and accuracy of scanning. source. quality awareness and operational
We regularly carry out quality norms of key personnel through
Highlights Measures in Operation Process Management culture project reviews known as various forms such as monthly
"Quality Month Activity" targeting production quality meetings
Product Recall Mechanism all employees to promote their weekly departmental meetings and
familiarity with the Company's annual quality target responsibility
In accordance with regulations such as the Administrative Measures for Drug Recall and the Administrative Measures for Drug quality culture. statements.Production Supervision and Management we have developed internal management systems including the Documented Procedures
for Product Recall and the Reporting System for Major Drug Quality and Safety Incidents providing clear institutional guidance for
managing product recalls.Content of Quality Themed Training
We have established a comprehensive product recall mechanism with graded recalls based on the severity of quality issues or
safety hazards. Clear operational standards are established for each component of the recall process to ensure efficient and orderly
recalls timely control of risks and maintenance of patients' medication safety and health rights. Meanwhile we conduct annual self-
inspections and perform simulated recall drills every three years to continuously evaluate and ensure the effectiveness of the recall Pharmacovigilance
system. During the reporting period there were no product recalls or regulator-mandated recalls in the pharmaceutical segment of the
Company. The Company strictly adheres to the Medicinal
Product Administration Law of the People's Re- Chairman
public of China the Good Pharmacovigilance
Investigation Decision to Issuance Implemen- Submission Practices and the Provisions for Adverse Drug Issue and initiate a of recall tation of the of recall Reaction Reporting and Monitoring among other identification assessment recall information recall conclusion applicable laws and regulations to continuously report improve the pharmacovigilance system. We have
established a Drug Safety Committee chaired
Product Recall Process by the Chairman of the Company to lead major
risk assessment management of significant or
urgent drug safety incidents risk mitigation de-
Quality Culture Huadong Medicine implements a quality policy grounded in principles of "integrity cision-making and other significant matters. In
Development efficiency quality global alignment and innovation excellence" continuously promotes addition the Company has a Pharmacovigilance
the in-depth practice of quality culture and improves the quality management. Department responsible for overseeing all phar-
To implement the quality policy and enhance employees' quality awareness we have macovigilance initiatives and continuously opti-
adopted a tiered segmented and production-line-based management mechanism. mizing the system. Pharmacovigilance Manager
During the reporting period Production quality-related stewards at each level are required to sign annual quality During the reporting period we continuously
a total of management target responsibility statements which are then included in annual improved the pharmacovigilance system by in-
performance assessments. GMP-related departments are assessed in alignment with
136000 quality management targets with a focus on science and compliance to motivate troducing the Exported Drug Pharmacovigilance
Clinical Trial Post-marketing
Pharmacovigilance Manager Pharmacovigilance Manager
participants employees to enhance their work quality and compliance awareness. Management Procedures and the Pharmacovig-ilance Corrective Action and Preventive Action
attended the quality and safety Every year we conduct various forms of quality training and cultural promotion activities Management System and by revising and up-
themed training to enable all employees to embrace the Company's quality culture receive annual grading several pharmacovigilance system docu- Structure of Drug Safety Committee
quality training and continuously improve quality awareness. At the same time we ments including the Pharmacovigilance System
with a total training duration conduct assessments after each course to ensure the effectiveness of quality training. Master File and the Adverse Drug Reaction Re-
exceeding We focus on the construction of quality culture throughout the Company utilize internal porting and Monitoring Management System.
27000 learning platforms and regularly organize monthly quality review meetings and other hours activities to convey the latest industry regulations and standards and popularize basic Based on a well-established pharmacovigilance framework we continue to deepen our pharmacovigilance practices. Through meas-product quality knowledge integrating the Company's quality philosophy into the daily ures such as conducting internal audits of pharmacovigilance strengthening risk management and promoting group-wide supervi-
work of every employee and ensuring that quality-related training covers all employees. sion we continuously improve the operational efficiency of the system and further enhance our ability to control drug safety risks.
6667
Quality Manager
Production Manager
Head of Pharmaceutical
Service Corporation
Chief Medical Officer
Chief Scientific Officer2025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Pharmacovigilance Internal Audits Group-Wide Pharmacovigilance Supervision Risk and Huadong Medicine has established and improved a robust risk management mechanism and management processes to identify assess and control potential quality-related risks
In accordance with the Good We refine the pharmacovigilance inspection procedures conduct on-site Opportunity and opportunities throughout all operational stages including R&D production and sales
Pharmacovigilance Practices and inspections of subsidiaries and supervise the rectification of defects and the Management thereby ensuring overall and effective risk management.the Pharmacovigilance Inspection development of preventive measures. By enhancing our quality risk management system clearly defining the scope of risk
Guidelines we regularly conduct W e deliver specialized pharmacovigilance training to second-tier subsidiaries management and strengthening cross-departmental collaboration we have developed
internal audits of pharmacovigilance and facilitated business communication and exchanges. a scientific quality risk management mechanism. This mechanism focuses on assessing
operations. Issues and deficiencies deviations in products or processes and the potential impact of product complaints on
identified during audits are We complete the phased evaluation of group-wide pharmacovigilance quality and regulatory compliance with the aim of ensuring the reliability of the quality
analyzed corrected and prevented management and develop the next phase of group-wide pharmacovigilance system.thereby improving the quality management plan.of pharmacovigilance activities W e support the safety evaluation of key products in subsidiaries and the
and ensuring the suitability revision of safety information in product labelling. Institutional Foundation
adequacy and effectiveness of the
pharmacovigilance system. We support the launch of the pharmacovigilance system in subsidiaries. T he Company has established a quality risk management system based on GMP requirements
and ICH guideline principles and has formulated the basic principles of quality risk management.Pharmacovigilance Risk Management
Collaborative Approach
W e continuously monitor the safety of marketed products and conduct regular signal detection and assessment. Annual drug safety Company leadership provides adequate resources and assumes leadership responsibilities for
reports post-marketing risk management plans and periodic safety update reports are developed to comprehensively assess risk management ensuring that relevant personnel are equipped with appropriate expertise and
product risks and strengthen risk management. skills. The Quality Department collaborates with departments such as Sales and Production to
We collect drug safety information through multiple channels including spontaneous reports active collection contractual analyze all-known and foreseeable hazards collect production and post-production information
agreements and feedback from regulatory authorities. We also leverage a modern pharmacovigilance system that meets and promptly report to the Quality Management Department.international standards for data analysis and monitoring enabling the continuous identification of potential risks.We establish the Emergency Response Plan for Serious Adverse Drug Reactions and Mass Adverse Events and organize emergency Scope of Risk Management
drills to further ensure drug quality promptly control major drug safety incidents and prevent drug-related risks. R isk management efforts cover all aspects of comprehensive quality management including
We establish standardized pharmacovigilance agreement templates review and revise project agreements and cooperate in the R&D process plant equipment and facility systems management material management
providing safety information required for overseas registration to ensure the pharmacovigilance compliance and risk management of laboratory control and stability studies.exported drugs.Highlights Measures in Pharmacovigilance Quality Risk Management Mechanism
To raise employees' awareness of pharmacovigilance and enhance their pharmacovigilance capabilities we arrange relevant officers
and specialists to participate in pharmacovigilance training organized by authoritative institutions such as the National Medical On this basis we implement risk control measures through systematic risk management which includes four pivotal stages: risk
Products Administration. In addition the Pharmacovigilance Department regularly conducts internal training to further strengthen assessment risk control risk communication and risk review achieving comprehensive and dynamic management of risks. During the
employees' awareness and practical skills. reporting period we conducted a total of 1827 product quality risk assessments.Indicators Huadong Medicine is committed to building a leading quality management system with
Pharmacovigilance Knowledge Training "Compliance Scientific Rigor High Quality and Efficiency" as its core objectives. The Company and Targets aims to continuously optimize quality control processes and ensure that all stages of production
We conducted the 2025 pharmacovigilance special training significantly improving the pharmacovigilance from R&D to sales meet the highest standards.awareness and adverse reaction reporting ability of frontline sales personnel effectively meeting regulatory During implementation process subsidiaries further refine their objectives. Subsidiaries in the
requirements and ensuring the safety information management of imported agency products. pharmaceutical industry segment develop quantitative indicators such as product qualification
W e conducted professional knowledge training on pharmacovigilance. All members of the Pharmacovigilance rate pass rate of testing reports coverage of quality training and customer satisfaction and attach
Department participated and passed assessments. This activity effectively standardized our work processes importance to inspection and certification by domestic and international official institutions
enhanced the professional abilities of dedicated personnel and further ensured the efficient and compliant continuously improving quality standards. Subsidiaries in the aesthetic medicine segment develop
pharmacovigilance. quantitative indicators such as regulatory review pass rate and number of recall incidents to ensure
that quality management achievements are measurable and traceable. Through strict quality
W e arranged pharmacovigilance specialists to participate in the "2025 Pharmacovigilance Risk Management" control and continuous improvement all subsidiaries have completed high-quality management
training organized by relevant regulators and the pharmacovigilance training course organized by the targets and achieved the expected standards for product qualification rate in sampling inspections
Zhejiang Provincial Medical Products Administration to ensure that personnel in the pharmacovigilance by relevant medical products administration quality training coverage and customer complaint
system have professional qualifications and the latest knowledge. handling rate.By setting and regularly tracking quality and safety objectives we ensure high-quality products and
market competitiveness strengthen customer trust and lay a solid foundation for the achievement
Consistent with the Company's strategic development plan we continuously assume pharmacovigilance responsibilities related to of overall strategic goals. Looking ahead we will promote a strong quality culture encourage full
product imports and overseas exports thereby facilitating the growth of our import and export business and ensuring pharmacovigilance employee participation in quality management and enhance product quality and operational
compliance and risk management for imported and exported products. efficiency to deliver safe and reliable healthcare solutions to customers.
68 692025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Responsible Marketing Audits
Responsible Services
During the reporting period the Company's Compliance Department Legal Department and Finance Department jointly
Huadong Medicine upholds a customer-centric philosophy and actively practices formed an audit working group to conduct internal audits covering marketing business of the headquarters and subsidiaries
responsible marketing. We implement a standardized distributor management in each province and municipality. We reviewed the standardization of the promotion and use of materials including whether
strategy strive to create an efficient and transparent service mechanism and there are any indications of excessive promotion exaggerated or false advertising and violations of the Advertising Law of
continuously enhance brand reputation and customer trust. At the same time the People's Republic of China. The audit results show that the Company's marketing activities are legal and compliant. In
we attach great importance to customer privacy protection and strictly adhere to addition we hired an external professional team to conduct compliance audits on various marketing businesses covering the
information security regulations. entire marketing process and no major issues were found.Responsible Huadong Medicine strictly complies with applicable laws regulations and industry standards in its operational jurisdictions and has established rigorous review procedures in accordance with
Marketing To raise awareness and competency in responsible marketing we regularly conduct training programs about compliant and compliance requirements. We have instituted policies and management systems such as the responsible marketing and have developed a comprehensive multi-level and in-depth training system and require all employees
Responsible Marketing Policy the Operating Procedures for the Management of Promotional and to complete relevant training. Training topics include national laws and regulations corporate compliant marketing policies and
Non-Promotional Materials and the Code of Ethical Business Conduct of Hangzhou Zhongmei knowledge product expertise pharmacovigilance etc. A combination of online and on-site lectures is provided for general and
Huadong Pharmaceutical Co. Ltd. (2024 Edition) which standardize the process of publishing specialized sessions across all employees. During the reporting period the coverage of our responsible marketing training reached
promotional materials clarify compliance requirements for drug and medical device promotional 100% with over 1900 related training sessions and over 2000 hours of training conducted in the business segments.activities and strictly prohibit commercial bribery and other marketing behaviors that violate
business ethics.We always adhere to the concept of compliant operations and prohibit any exaggerated
deceptive or false advertising in all promotional activities. We are committed to not engaging in
pharmaceutical services through commercial bribery or other illegal means and avoiding false
or misleading statements about competitors' products or services ensuring that our marketing
behaviors are legal fair and transparent. During the reporting period all members of the Pharmaceutical Industry Segment Pharmaceutical Business Segment
pharmaceutical service team signed the Compliance Commitment Letter further strengthening
compliance awareness through contractual management. We conduct specialized compliance training We require new employees to participate in
for all levels positions and employees; the specialized compliance training after joining the
Promotional Material Management training content closely follows the core points Company and they can only become regular after
of industry compliance covering key modules passing corresponding exams. This ensures that
We unify the management of promotional and non-promotional materials covering the creation such as relevant national laws and regulations they fully understand the Company's responsible
review usage updating and destruction of promotional materials. We have also established a corporate compliance management standards marketing requirements and compliance culture.comprehensive material approval process and set corresponding review checkpoints based on the product expertise system and core requirements
attributes of promotional materials to ensure that the materials comply with relevant regulatory for pharmacovigilance.requirements.W e have set up a "scenario-based prohibition prompt word" mechanism in the promotional material
review process in which the activity management system automatically matches the prohibition
prompt opinions preset in the system based on the scenario category selected by business personnel. Aesthetic Medicine Segment Other Segments
This mechanism aims to provide early risk warnings and promote compliance self-inspection.We have a training system that combines online Bailing Health conducts quarterly new employee
Marketing Content Management learning and assessment with on-site tiered training training that covers marketing compliance
to comprehensively enhance the compliance awareness courses and provides unified training
B ailing Health has established an e-commerce content quality communication group which includes officers awareness and professional ability of the sales team; to relevant business personnel before the launch of
from the Administration for Market Regulation to control the quality and content of marketing materials we tailor training content for different competency new products and new packaging design.in real time. It also conducts a monthly meeting to analyze advertising compliance and product complaint levels from fresh graduates to sales managers to
details adjust marketing direction in a timely manner and avoid non-compliant marketing content. enhance the team's sense of responsible marketing
in a step-by-step manner. In addition courses are
Highlights Measures in Responsible Marketing updated quarterly covering medical knowledge
product information and compliance marketing
To further implement our responsible marketing principles we develop annual audit plans based on the Company's needs and skills.operational status. The audit working group regularly conducts responsible marketing audits that cover all sales-related workflows
to comprehensively strengthen the breadth and depth of audits and strictly prevent various types of compliance risks. Audit items
of responsible marketing include market operation management sales business behavior and expense management personnel
management and supervision and management of marketing activities before during and after their implementation by relevant
departments. We urge the audited units to promptly provide and rectify the identified issues during the audits promoting the healthy Responsible Marketing Training in Different Segments
development of business.
70 712025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Customer Service Huadong Medicine remains committed to a patient-centered service philosophy striving for Huadong Medicine is committed to fostering honest trustworthy healthy and stable win-win
excellence in both products and services and improves customer experience through concrete Distributor partnerships with its distributors. In accordance with the Company's Commercial Management
actions. We have developed the Control Procedures for Product and Service Specifications Management Regulations we have established a comprehensive distributor management system. Based
and the Product Return Management Procedures to accurately identify and assess customer on this system we achieve end-to-end closed-loop management of distributors through
needs and provide clear guidance and operational guidelines for every sales process. measures such as the execution of annual sales agreements the administration of individual
purchase orders invoice management and account reconciliation.By establishing and implementing a customer service mechanism we proactively gather
feedback and advice through annual customer satisfaction surveys to drive continuous service Each year we sign annual sales agreements and quality assurance agreements with
quality improvement. In 2025 the pharmaceutical business segment conducted customer distributors. Based on business needs we enter into individual order contracts to clarify
satisfaction surveys collecting 1673 valid responses. The overall customer satisfaction score performance obligations of both parties. A contract ledger is maintained to dynamically
reached 4.85 out of 5. We followed up on the areas for improvement identified in previous track business progress. We also require distributors to scan pharmaceutical traceability
years' surveys and followed up with 100% of customers who had submitted feedback in codes in accordance with relevant national regulations and conduct periodic on-site visits to
the previous year effectively implementing customer satisfaction improvement work. For distributors to verify their implementation to ensure compliance and traceability throughout
service items with low customer satisfaction we conducted a cause analysis determined the entire pharmaceutical supply chain. In addition we evaluate distributor cooperation every
improvement directions based on customer feedback and formed a report. We promptly six months and dynamically adjust distributor credit and cooperation direction based on the
transmitted the survey results to relevant departments of the Company to promote continuous evaluation results.service improvement.To promote integrity and clean cooperation we sign the Integrity Cooperation Agreement with
primary distributors alongside the annual cooperation agreement In addition all employees
定Re期gu回la访r F机ol制low-Up Mechanism in the Business Department sign a compliance commitment letter with a signing rate of 100%.定Co期nd对u医ct 院re客gu户lar进 te行le电ph话o回ne访 fo，ll了ow解-u客ps户 w需it求h h和o存sp在ita的ls问 to题 u，nd并er对st问an题d 进th行eir汇 n总ee、ds上 a报nd、 c解on决ce、rn再s. 回Iss访u，esa有re效 c提om升p客ile户d满 re意po度rted addressed and followed up to heighten overall customer satisfaction Information Firmly upholding the bottom line of information security privacy protection and legal compliance Huadong Medicine adopts diversified measures to safeguard the information
Security and security of the Company and customer privacy. We adhere to laws and regulations such as
Monthly Customer Service Meetings Privacy Protection the Cybersecurity Law of the People's Republic of China the Data Security Law of the People's Republic of China and the Personal Information Protection Law of the People's Republic of
Maintain regular communication with customer service personnel to continuously enhance their China . We have also formulated internal management systems including the Cybersecurity
professionalism and service capabilities ensuring efficient resolution of customer issues and providing Management System and the Information System Operation Management System . All these
better service to customers regulations and systems provide a solid institutional foundation for our information security
and privacy protection efforts.Customer Service Mechanism
We have established an emergency response mechanism for information security incidents
and have issued the Information Security Emergency Response Manual and the Emergency
We receive inquiries and complaints from medical institutions pharmacies patients customers and others regarding the quality of Response Management System and refined the Network Security Incident Emergency
our products and services through diverse communication channels. To efficiently respond to and properly handle customer com- Response Manual to clarify the division of labor and response process of the emergency
plaints we have developed the complaints and adverse events handling and reporting management process which provides detailed response team. We implement information security management from four aspects: terminal
regulations on the management process for dealing with adverse product reaction quality complaints and feedback from customer security server security network security and application security. At the same time we
inquiries and clarifies the responsibilities of the relevant departments and personnel. We have established a comprehensive com- continuously improve emergency plans and drill programs enhance employees' practical
plaint-handling process. During the reporting period we refined the requirements for quality complaint classification quality com- ability to respond to security incidents and strengthen the overall information security
plaint investigation time limit and result response time limit further improving the efficiency and standardization of complaint han- response capability through simulated drills.dling.In terms of privacy protection we only collect information necessary for business purposes
without any personal privacy data involved. We strictly comply with relevant privacy protection
1 The Quality Management Department analyzes and reports the complaint laws and regulations to ensure that all data collection use and storage processes are legal
and compliant. Customers' personal privacy information is treated with strict confidentiality
refraining from leakage or misuse. We also actively promote knowledge of information security
2 Relevant departments study customer complaints and devise phased improvement strategies based on Company strategy and customer needs and privacy protection through regular training sessions to ensure that employees stay
informed of the latest requirements. These measures help safeguard the Company's assets
and customer data. During the reporting period no major information security or customer
3 Relevant departments carry out investigations and improvements documenting the outcomes privacy incidents occurred.
4 Pharmaceutical Service Corporation conducts marketing explanation and response
5 The Quality Management Department conducts tracking inspections and generates closed-loop archived records
Customer Complaint Handling Process
72 732025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Case
Information Security Training at the Headquarters
Supply Chain Management
During the reporting period the headquarters conducted two
specialized training sessions on safety construction and operation Huadong Medicine continues to optimize its full-process supplier management
covering all safety management personnel. The training focused on mechanism and is committed to building a stable and resilient supply chain system.explaining network security protection data security management We work together with our partners to promote the construction of a green efficient
and compliant operating standards. Combining typical industry supply chain ecosystem laying a solid foundation for the Company's sustainable
cases it strengthened employees' information security awareness development.and risk prevention capabilities further solidified the foundation of
information security and helped the Company build a safe stable
and compliant operating environment.Supplier Huadong Medicine regards supplier management as a key pillar in ensuring product quality and supply chain stability. We have followed relevant national laws and regulations and
Management established a systematic supplier management system and processes comprehensively
ensuring the performance of suppliers in terms of quality and compliance and safeguarding
the Company's sustainable development and patients' health.The Company has formulated internal systems such as the Supplier Management System
the Supplier Performance Evaluation and Grading Management System and the Raw and
Packaging Material Procurement Management System . These policies support full-process
Case
Information Security Training in the Pharmaceutical Business Segment supplier management. During the reporting period we updated the Annual Supplier
Development Plan and Implementation Operation Process and issued the Management
Measures for the Procurement of Traditional Chinese Medicine (Herbal Medicine Slices) and
During the reporting period subsidiaries in the pharmaceutical the Procedures for the Establishment and Issuance of Joint Bidding further improving the
business segment conducted four information security training standardization and efficiency of supplier management and providing strong support for
sessions covering topics such as secure development awareness business development.enhancement of office network security data security and personal
information protection and risk identification and security Supplier Qualification To ensure supply chain stability and product quality we implement rigorous screening and
prevention for large artificial intelligence models. In addition the management for supplier qualification. We develop sound qualification processes comprising
subsidiaries conducted three information security training sessions Management four key steps: pre-selection preliminary review material trial use and formal approval. We
for new employees laying a solid foundation for information security comprehensively evaluate the qualifications and capabilities of suppliers to ensure that they
from the source. meet material quality standards and business requirements. We have established a systematic
supplier qualification review mechanism which evaluates suppliers' environmental social
and compliance qualifications in the qualification phase through multi-channel information
verification institutional document review and negative list investigation to ensure
compliance with our ESG management requirements.Pre- Preliminary Material Formal
Case selection Review Trial Use Approval
Information Security Training in the Aesthetic Medicine Segment
Subsidiaries in the aesthetic medicine segment provided systematic information security and privacy protection training Select potential suppliers Review the qualification Conduct small-scale trials Consider the quality assess-
for IT personnel covering relevant laws and regulations technical protection and emergency response. The training also based on product spec- documents and ques- of pre-qualified suppliers' ment trial results and audit
emphasized sensitive data management and compliance requirements based on the characteristics of the aesthetic medicine ifications and quality re- tionnaires submitted by materials evaluate their information comprehensively
industry. A specialized skills training session is conducted every quarter for personnel in key positions. By combining online quirements and evaluate suppliers form preliminary impact on the production and update the list of qualified
and on-site teaching modes we ensure that the popularization rate of information security awareness is over 95% and the their qualifications and review opinions based process and product qual- suppliers upon approval of the
incidence of security incidents is reduced by more than 20%. capabilities through the on quality standards and ity and record relevant quality management manager
Supplier Questionnaire inspection reports and results and responses to ensure that procurement
and sample inspection decide whether a supplier activities comply with the
will enter the trial stage Company's policies
Supplier Qualification Process
74 752025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
We categorize suppliers as either primary material8 or general material suppliers9 with differentiated management strategies applied Quality Empowerment On the basis of the ever-improving supplier management we continue to empower supply
accordingly to strictly control supplier quality from the source and effectively safeguard the stability of the supply chain. For primary Across the Supply Chain chain quality assurance and enhancement. Every year we communicate quality requirements
material suppliers we add on-site audits and production verification procedures to the standard process to ensure the quality and to suppliers throughout the qualification audit and routine engagement phases. A variety of
supply continuity of critical materials. For general material suppliers we focus on their basic qualification review and material trials communication methods are employed including online and in-person training on-site visits
to ensure fundamental requirements are met. Through rigorous qualification procedures and differentiated strategies the Company and written notifications to ensure all suppliers receive annual quality security and relevant
controls supplier quality at the source and safeguards the stability of the supply chain. training every year and comprehensively improve the overall quality awareness of the supply
We attach great importance to and strengthen the management of indirect suppliers clarifying that direct suppliers should be chain.responsible for ensuring the quality and safety of products and services indirectly provided to the Company by indirect suppliers and
regularly conducting quality audits to ensure that the products and services provided by indirect suppliers meet our quality and safety In the qualification phase we sign quality assurance agreements with key material suppliers
requirements. We conduct quarterly inquiries on changes and issues with indirect suppliers evaluate the impact of their supply quality and clarify quality standards in written or oral form. We promote suppliers to establish a sense
on the quality of the Company's products and conduct change evaluation audits on direct suppliers. The direct supplier has a support of quality responsibility as the cooperation initiates. During the audit we organize targeted on-
obligation for the change evaluation. If the evaluation results do not comply with the Company's quality management system control site training and quality improvement guidance to address quality issues identified and urge
principles we will promptly propose improvement suggestions and continue to track the evaluation. If necessary their supplier suppliers to implement corrective measures to ensure closed-loop management of issues. At
qualification will be suspended or cancelled. In addition we have signed a quality assurance agreement with the supplier which the same time based on the supplier evaluation results and the weaknesses identified in the
stipulates that in case of any changes to the suppliers (including direct and indirect suppliers) they must promptly notify the Company audit we communicate quality requirements to suppliers every year to further enhance their
to ensure that the materials provided by them meet relevant requirements. quality management awareness and capability. During the reporting period we conducted
20 targeted supplier quality training and guidance sessions. Additionally we carried out 13
on-site supervision sessions in collaboration with 9 suppliers focusing on homogenized key
Supplier Grading In daily supplier management we adopt a grading supplier management strategy to improve the materials across certain subsidiaries.Management overall efficiency of supply chain management.For material procurement we conduct regular performance evaluations of suppliers in accordance
with the Supplier Performance Evaluation and Grading Management System covering key indicators Sustainable We integrate risk management into every aspect of the supply chain aiming to strengthen such as quality production and usage business after-sales service and on-site audit. The evaluation the stability of the supply chain. At the same time we actively promote supplier integrity
results will serve as an important basis for procurement resource allocation and quality comparison Supply Chain cooperation and ensure the transparency and standardization of supply chain management. and price negotiation. For engineering equipment and service procurement we classify suppliers We empower suppliers through multiple dimensions and enhance their sense of responsibility
based on their performance evaluation results. For suppliers who have won multiple bids and
performed well we sign an annual cooperation agreement through bidding or negotiation. and management capabilities to continuously enhance supply chain resilience.In addition we update the performance evaluation content every year. In 2025 we refined some
evaluation dimensions covering quality stability production and usage delivery accuracy and Supply Chain Risk To strengthen supply chain risk management the Company has developed the Risk
transportation service to further strengthen supply chain management. Management Management System for the Procurement of Raw and Packaging Materials which clarifies
the risk control process and responsibility division in the procurement process. We have
established a systematic and comprehensive supply chain risk mitigation system which
Supplier Audits We regularly conduct audits of suppliers using a combination of on-site and remote audits strengthens the dual procurement strategy for high-risk materials and diversified supplier
to effectively ensure the stable quality and efficient operation of the supply chain. For remote layout through dynamic risk identification multi-dimensional evaluation and classification
audits we have developed the Remote Audit Management System for Suppliers to provide management. We ensure effective implementation of risk response measures through
clear guidance and standards for related operations. Supplier audits are led by the Quality cross-departmental collaborative mechanisms and continuously improve supply chain risk
Department which customizes annual audit plans based on the material situation and management through project review and experience summary.classification and issues audit reports. We audit primary material suppliers of biologic drugs
annually and audit those involved in other finished preparation products or APIs biennially.The audit results serve as the basis for supplier performance grading evaluation. For suppliers
whose audit results do not meet the requirements we require them to rectify or add them to Risk Scope Definition Risk Data Collection and Evaluation Risk Point Identificationthe blacklist.The quality department conducts quality evaluations of all suppliers of production materials
collaborates with relevant departments to conduct on-site quality audits of the quality Based on factors such as Utilize internal Identify potential supply
systems of primary material suppliers and exercises veto power over suppliers whose quality procurement amount procurement data chain interruptions with
evaluations do not meet the requirements. The quality department regularly organizes product criticality supplier tracking records characteristics such as a
relevant departments to conduct annual evaluations of primary and general material and supply market and market research single source of goods
suppliers comprehensively considering their data integrity material quality production and concentration determine results to conduct international risks and
usage on-site audit results and other aspects. the material categories and multidimensional price fluctuations and
supplier scope that require evaluations of suppliers devise targeted response
In response to the audit findings the Company has established a full-process rectification and
control mechanism consisting of "defect feedback - rectification plan - tracking rectification - in-depth risk assessment within the selected range measures
defect feedback summary - closed-loop archiving" to ensure that all issues are rectified and a
closed-loop is formed. During the reporting period we conducted supplier quality audits as
planned and supervised the implementation of supplier audit defect rectification. All defects
found during the audit have been rectified.
8 Primary materials refer to those that may affect production performance or product quality. These include but are not limited to inner packaging materials in direct contact with
pharmaceuticals and materials that after risk assessment are considered likely to affect production or product quality such as raw materials directly affecting the biosynthesis of
fermented pharmaceuticals raw materials affecting the fermentation unit of a pharmaceutical product etc. Supply Chain Risk Identification and Analysis Process
9 General materials refer to all materials not classified as primary materials.
76 772025｜Environmental Social and Governance (ESG) Report Driving Innovation and Quality Excellence
Supply Chain Stability Through multi-source supplier selection early procurement planning safety stock Suppliers Integrity We actively promote the construction of a clean supply chain. By signing integrity cooperation
Management management and production line risk dispersion we effectively reduce the potential risks Management agreements with suppliers deploying information management systems and regularly
brought by single-source supply enhance the resilience of the supply chain and production organizing training we effectively regulate supplier behaviors and jointly create an upright
continuity and help the Company achieve stable development in a complex and ever- business environment.changing market environment. We have equipped supply chain stability management
solutions for all raw materials and arranged continuous production plans based on product We have formulated the Supplier Anti-Bribery Codes of Conduct which clearly requires
layout planning. suppliers to strictly comply with relevant laws and regulations when conducting business
activities. We resolutely prohibit any form of bribery and unfair competition to ensure the
compliance and integrity of operations in the supply chain.We require suppliers to sign the Integrity Cooperation Agreement and the Supplier Anti-Bribery
Codes of Conduct to create an atmosphere of integrity cooperation together. In addition
we have built an SRM and NC system to achieve supplier qualification review bidding and
quotation order and contract management strengthen the confidentiality and effectiveness of
inquiries and quotations and improve procurement efficiency. Currently 100% of procurement
Implement a dual sourcing strategy to maintain 2-3 qualified Calculate the availability period based on the in-transit for raw auxiliary and packaging materials and procurement for engineering equipment and
suppliers for each material (including raw materials auxiliary volume and contract execution status initiate material service have been achieved online.materials and packaging materials) in support of stable procurement in advance and ensure sufficient supply
supply throughout the entire production cycle We strengthen integrity control from the source by providing integrity training and education
Advance the procurement plan to all members of the procurement team and regularly promoting the Company's integrity
Sort out primary material suppliers and set the order time based on management system and integrity-related employment regulations. During the reporting
eliminate those with unstable supply material type supplier distance period all procurement personnel signed integrity commitment letters.and quality and develop suppliers with and production cycle
advantages
E
arly
Establish a regular lier n Pro
supplier change collection p atio Pc la
cu
mechanism to prevent ifi n
changes from affecting the
normal supply of materials
Track production plans Establish a full-cycle
and material stock multi-level production
and consider material e
procurement and a ty act
plan management
g f system and plan
inspection cycles to em se Ma
nu i
sk D production capacity for dynamically manage nt Ri products that have been
material stock launched new products
and R&D pipeline
Set the safety stock for materials monitor material products
stock and complete material purchase and stock
capacity arrangement in a timely manner Realize the mutual collaboration of multiple production
S et differentiated safety stock levels for different lines for key products flexibly configure the planning
categories of materials and appropriately increase stock requirements of various products and disperse the
benchmarks for primary materials to avoid market risks of a single production line by establishing backup
fluctuations affecting supply manufacturing lines
S et up storage space for finished products in the Optimize product allocation across backup
warehouse based on safety stock to ensure sufficient manufacturing sites for strategic products in response to
supply of finished products market dynamics and resource allocation
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Nurturing Talents and
Empowering Growth
Huadong Medicine regards talents as an important
foundation for promoting the high-qual i ty
development of the enterprise and continuously
improves the systems of employee recruitment and
rights protection talent development and training
employee care and occupational health and safety
management. Centering on the whole-life-cycle
management of employees we strive to create a
fair diverse inclusive and safe working environment
through improving system construction optimizing
management mechanisms and implementing specific
measures providing strong talent support for the
sustainable development of the enterprise.Employee Recruitment 82
Talent Development 85
Employee Care 89
Health and Safety 92
Contributing to the UN SDGs:2025｜Environmental Social and Governance (ESG) Report Nurturing Talents and Empowering Growth
We have built a diversified recruitment channel matrix and through campus recruitment social recruitment internal referrals and
other diversified channels we tap and attract outstanding talents suitable for the positions promoting the implementation of the
Employee Recruitment company's innovation-driven and internationalization strategies.We adhere to the concept of compliant fair and diverse employment continuously
expand talent introduction channels improve the recruitment management system
and ensure the fairness standardization and transparency of the talent absorption
process. Meanwhile we fully implement employee rights and interests protection
measures and are committed to creating an equal inclusive and sense of belonging
working environment. Campus Recruitment Social Recruitment Internal Referral
Organize campus lectures and Cooperate with external recruitment Implement an internal referral
carry out university-enterprise platforms to post positions and screen program encourage employees
cooperation to expand jobs outstanding talents participate in to recommend candidates
extensively reach student groups various industry and regional on-site highly consistent with the
Talent Huadong Medicine strictly complies with the Labor Law of the People's Republic of China through online multimedia job fairs communicate face-to-face company's culture and job
the Labor Contract Law of the People's Republic of China and other relevant laws and platforms build a bridge between with job seekers to understand their requirements and improve the
Introduction regulations. The Company has also developed policies such as the Employee Handbook universities and enterprises situations and promote corporate accuracy of talent introduction
the Recruitment Management System and the Labor Contract Management Regulations to interact directly with fresh culture. Cooperate with professional through employees' in-depth
clarify the full-process management requirements for recruitment employment and contract graduates strengthen employer headhunting companies for key and understanding of the enterprise.signing. In 2025 we revised the Recruitment Management System focusing on optimizing the brand building continuously senior positions and accurately introduce
requirements related to job avoidance and strengthening the standardization of recruitment introduce outstanding fresh top industry talents with the help of their
work at the system level. graduates and reserve new forces resources and networks to support the
for enterprise development. development of core businesses.Talent Recruitment Channels
Ensuring Strictly review information before job posting to avoid setting non-business-related restrictive
Fairness and requirements such as gender region ethnicity age and educational background ensuring all
Impartiality job seekers have equal employment opportunities.Protection Huadong Medicine adheres to the concept of diverse and inclusive employment comprehensively protects the legitimate rights and interests of employees and creates a fair friendly and mutually
Prevent the risk of child labor through "two-link verification": initially verify age through of Employee respectful working environment. We adhere to international standards such as the Universal
Preventing the Applicant Information Registration Form and require valid identity documents and
Child Labor educational certificates for secondary verification to eliminate the possibility of accidental Rights Declaration of Human Rights and International Labor Organization Conventions as well as applicable labor and employment laws and regulations in our operating locations to effectively
recruitment of underage workers in the process. safeguard employees' freedom of association and collective bargaining rights. We strictly prohibit
any form of forced labor and child labor. Furthermore we eliminate all forms of employment
discrimination based on gender region ethnicity or other factors throughout the entire process of
Enhancing Publicize the recruitment process and post evaluation criteria to improve recruitment talent recruitment and development ensuring fair and compliant employment practices.Recruitment
Transparency transparency and enhance candidate trust. We have enrolled all employees in the Hangzhou On-the-job Employees Medical Mutual Assistance
Program and all female employees in the Female Employees Special Diseases Subsidy Mutual
Assistance Program. Meanwhile we have equipped independent mother-and-baby rooms for lactating
Focusing on Improve satisfaction and establish a good employer brand image by optimizing the female employees to comprehensively strengthen the protection of their rights and interests. During the
Candidate recruitment process providing timely feedback on progress enhancing communication reporting period we continued to build and open new mother-and-baby rooms in subsidiaries including
Satisfaction transparency and candidate experience. Zhongmei Huadong Jiangdong Company and Supply Chain Management (Hangzhou) Company
providing convenient and comfortable exclusive spaces for lactating female employees.During the reporting period we further deepened the care measures for female employees
Strengthening Revised the Recruitment Management System optimized the requirements for job avoidance from three aspects. At the health care level we improved female-specific health services
Job Avoidance further strengthened the rigor of recruitment avoided potential risks of relatives holding and strengthened disease prevention and medical mutual assistance support. At the facility positions in sensitive posts at the system level and ensured fair and impartial recruitment. guarantee level we upgraded supporting service facilities and optimized the work adaptation
mechanism. At the workplace empowerment level we built a diversified development
platform improved training plans and career development paths and helped female
Recruitment Process Management employees achieve personal growth and self-worth.
82 832025｜Environmental Social and Governance (ESG) Report Nurturing Talents and Empowering Growth
For vulnerable employee groups we have established and deepened the "Learning from Lei Feng Love Fund" special assistance
mechanism upgrading and building a multi-dimensional guarantee system featuring "precision efficiency and characteristics":
Talent Development
Expansion of Assistance Optimization of Service Innovation of Assistance
Scope Processes Models Huadong Medicine regards continuous talent development as the core engine of
enterprise innovation and sustainable development. We have built a systematic talent
The scope of funding has been Optimize and simplify the Combined with the business training mechanism clear career development channels and a competitive incentive
further extended from the application and approval characteristics of pharmaceutical system aiming to fully stimulate employees' potential and achieve the coordinated
original major illnesses and procedures build a more enterprises we explore and progress of personal value and enterprise goals.injuries of employees themselves convenient and efficient add special health assistance
to scenarios such as major feedback channel simplify support provide targeted health
changes and special difficulties procedures and improve care and resource connection
encountered by employees' response efficiency on the for needy employees and
families strengthening the premise of ensuring compliance gradually improve the long- Training and Adhering to the concept of independent talent training and talent-first development we have precise assistance to employees' and transparency and enhance term care mechanism by linking built a diversified talent training system covering all levels and types of employees with the
family units. the accessibility and timeliness internal volunteer forces Empowerment Training Management Measures and the In-house Trainer Management System as the core
of assistance measures. creating an organizational providing solid talent support for the company's innovative transformation.atmosphere of mutual
assistance love and warmth In the construction of the career development system we continue to deepen the dual-channel
and further consolidating the development path of management and profession supporting employees to independently choose
foundation for protecting the to deepen their professional fields or switch to management positions according to their personal
rights and interests of vulnerable interests and career plans. In 2025 we optimized career development options adding a combined
employees. development model of skill identification professional title evaluation and rank promotion to achieve
the optimal matching of people and positions. In terms of the precise construction of professional
sequences we split the original professional sequences into multiple sub-sequences each with
an independent rank system and ability requirements evaluating employees' value from multiple
dimensions such as performance and innovation. Meanwhile we added assessment indicators such
as the application of innovative technologies cost reduction and efficiency improvement results and
team collaboration capabilities building a more accurate value evaluation system."Learning from Lei Feng Love Fund" Special Assistance Mechanism
To meet the differentiated development needs of different groups we rely on a mature training
management system to build a layered and classified precise training strategy. Combined with
To promote the effective implementation of the concept of diversity equality and inclusion we regularly monitor the performance the company's development strategy and the competency requirements of each position we
of relevant key performance indicators. As of the end of the reporting period the employment situation of Huadong Medicine's
10 optimize and expand training projects for different groups such as management personnel employees is as follows : special talents and new employees to achieve precise empowerment.
Gender Composition of Employees Age Composition of Employees For Management Level For Position Function For Business Type
Tiered management training system Priority is given to technical R&D For both traditional and emerging
512 535 512 is conducted to enhance leadership marketing human resources and financial businesses the Company regularly
capabilities across all levels prioritize roles. Through standardized job roles conducts talent reviews training and
key talent development and cultivate ongoing training systems and combining practical assignments to develop
8979 a talent pipeline core managers hands-on learning with performance targeted business talents in R&D quality
6888 and versatile leaders. This integrated assessments employees quickly gain job- assurance sales and other domains so
approach strengthens organizational specific skills optimize processes and as to support the sustained growth and
agility and self-sustaining capabilities. improve working efficiency. global expansion.
960411160
For New Employees For Fresh Graduates
30 years old and 30 to 50 yearsold The Company offers specialized induction trainings to The "Voyage Program" helps graduates accelerate the
below(excluding 30) (including 30 and 50) new employees with comprehensive probationary period school-to-work transition through career mapping. Through
Male Female Not disclosed
5 0 years old and Not disclosed management ongoing assessment and feedbacks to help selection intensive training job rotation assessments and
above (excluding 50) them quickly adapt to the Company's culture workflows and on-the-job experience the program provides systematic
systems. coaching and guidance for fresh graduates and develops
young talent for the Company.
10 T he "Not disclosed" status refers to employees at overseas subsidiaries who have not disclosed their information due to privacy protection policies.
Talent Training Management System
84 852025｜Environmental Social and Governance (ESG) Report Nurturing Talents and Empowering Growth
Huadong Medicine places high strategic importance on leadership development making it a key priority in our talent cultivation In 2025 based on the existing training system we strengthened skill upgrading and talent echelon construction and advanced the
strategy. We have established a comprehensive leadership training system covering employees at all levels—from junior staff to middle reform of the industrial worker team (hereinafter referred to as "industrial reform").and senior management—ensuring that personnels at every stage receive precisely targeted support for capability enhancement.Development Program Program Introduction Deepening Practice of Industrial Worker Team Construction Reform
T raining Content: Focuses on building core management capabilities covering courses such as market insight In 2025 the Company made remarkable progress in the reform of industrial worker team
key account management strategic formulation and decomposition lean production fundamentals of financial construction was listed as one of the 100 key industrial reform promotion enterprises by the All-
management entrepreneurial spirit shaping and high-performance team building.Senior Management China Federation of Trade Unions and was selected as a provincial case of industrial reform by the
Development Program T raining Methods: External study tours offline coaching internal sharing sessions and practical application delivery. Zhejiang Federation of Trade Unions. We took this as a key priority of annual talent training and
through measures such as carrying out skill competitions promoting independent evaluation of
E valuation Method: Dynamically track the operation of market dynamics insight mechanisms among senior skill levels increasing innovation training efforts establishing model worker and craftsman models
managers of various subsidiaries. deepening the integration of production and education and embracing the new ecology of AI digital
T raining Content: Centers on enhancing leadership effectiveness and talent selection capabilities mainly covering learning we promoted 633 industrial workers to complete skill level certification realizing the close
skills such as team management goal achievement and recruitment interviews. connection between career development and skill levels. Meanwhile we cultivated several craftsmen
Middle Management
Development Program T raining Methods: Online learning offline coaching and internal sharing sessions. and innovation studios effectively improving the quality and effectiveness of industrial reform in non-
public enterprises and injecting strong momentum into enterprise innovation practices.E valuation Method: Combines assessment with result reporting.T raining Content: Covers three core modules: compliance and essential basic knowledge (e.g. safety regulations
quality awareness) general professional skills (e.g. business writing business etiquette) and corporate culture.Frontline Employee
Development Program T raining Methods: Online learning offline coaching etc. Remuneration To attract motivate and retain outstanding talents Huadong Medicine is committed to
building and continuously optimizing a comprehensive incentive system with distinct value
E valuation Method: Combines assessment with result reporting. and Incentives orientation internal fairness and external competitiveness. Our remuneration system includes
Leadership Development Program basic salary variable performance bonus and other project-based bonuses to comprehensively
measure the commercial value created by employees. Total remuneration for all employees
Beyond offering diverse training programs we facilitate employees' academic advancement and continuous growth through comprises fixed salary and performance-based pay with the latter being directly tied to
substantial learning support mechanisms. For eligible full-time employees participating in degree advancement programs the personal performance metrics and overall corporate performance. Meanwhile to stimulate
Company reimburses a portion of tuition fees upon the successful attainment of nationally recognized degree qualifications. employees' innovation vitality and sense of identity with the company we have established
Additionally to encourage the refinement of professional skills we also cover registration and examination fees for full-time employees an equity incentive plan aiming to share the company's development achievements with
who participate in job-related continuing education programs or obtain relevant professional titles and qualification certificates. employees and reward core personnel who have made important contributions to the company's development.During the reporting period we continued to carry out key training focusing on management capabilities business capabilities and
professional capabilities and combined various training forms to comprehensively strengthen employees' development capabilities
and help them meet their career development needs. In addition we continuously expand training resources optimize the digital Fixed Base Pay Variable Performance Bonus
training platform provide rich online courses for all employees and support employees to improve their professional capabilities and
job competencies conveniently and efficiently. Determined by job value employee capability and Closely linked to individual performance assessments
performance as well as market remuneration benchmarks and comprehensively adjusted based on the Company's
overall business performance and departmental
performance
Management Proficiency Skills Upgrading Training for Sales and Marketing Team
Enhancement Training Professional Positions Competency Enhancement Training
Project-specific Bonus Equity Incentive
In 2025 we innovatively We formulate capacity In 2025 online courses on
launched the "1+X" mixed improvement plans for product knowledge and sales Linked to the achievement of key milestones in Offered to core management and technical personnel
training model targeting professional and technical teams skills were provided through the designated projects aligned with the Company's strategic business
new and reserve grass- such as R&D production quality digital platform combined with performance
roots managers based on and EHS. In 2025 we launched a offline sand table simulations
core management general two-year "EHS Manager Special and seminars for practical Remuneration Structure
knowledge and supplemented Training Program" cultivating training covering more than
by customized content of management backbones through 50000 participants throughout To ensure the fairness and market competitiveness of our compensation system we conduct annual comprehensive reviews and
business lines. It covered about standardized inspections and the year. It aims to unify optimizations of our incentive mechanisms. By integrating job value promotion frameworks performance evaluation results and
600 participants throughout job rotation practices and service standards and strategic market salary levels we have established a variable compensation mechanism that covers all employees. This approach effectively
the year accelerating the role supporting the professional language and strengthen the stimulates employee motivation and creativity supporting the mutual growth of the organization and its people.transformation and leadership improvement of technical practical capabilities of the We regularly conduct salary market benchmarking analysis to review and dynamically adjust the salary structure and level to ensure
improvement of managers. personnel through internal team. its competitiveness. In 2025 we further improved the special incentive mechanism focusing on key achievements of strategic value to
sharing and external lectures. the company such as product R&D breakthroughs key market development and major cost reduction and efficiency improvement
Talent Special Training Projects and Implementation and providing precise and timely rewards thereby more effectively guiding employee behavior to align with the company's strategic
priorities.
86 872025｜Environmental Social and Governance (ESG) Report Nurturing Talents and Empowering Growth
Performance We have established a standardized and clear performance management process adhering
Management to the concept of value creation orientation comprehensively measuring and affirming the Employee Care
efforts and contributions of each employee. To meet the needs of the company's new strategic
stage and strengthen the alignment of organizational and personal goals we completed the Huadong Medicine has always adhered to the core value of "people-oriented" and is
systematic revision of the Huadong Medicine Employee Performance Management System in committed to building a warm working environment that fosters a sense of belonging.
2025 promoting the practice of a high-performance culture oriented by value creation. In 2025 the Company further deepened the employee care system carrying out
We promote the common growth of the organization and individuals by strengthening the systematic and humanized practical activities around communication and care health
closed-loop management of performance feedback coaching and improvement. We clarify support welfare protection and work-life balance effectively enhancing employees'
the primary responsibility of managers in performance coaching and development requiring sense of gain happiness and belonging.them to conduct performance feedback interviews with employees affirming employees'
contributions while discussing methods to improve weaknesses ensuring that each
evaluation can be effectively transformed into support for employees' ability improvement
and performance enhancement. Based on scientific and reasonable performance evaluation
results we implement a precise and differentiated talent incentive mechanism to fully Communication We attach great importance to continuous communication and two-way interaction with stimulate employees' enthusiasm thereby promoting the continuous optimization of the employees and are committed to building an open transparent and efficient communication
company's overall efficiency. and Support mechanism. Through the construction of diversified communication channels regular
research and suggestion collection we timely listen to employees' voices effectively respond
In addition to ensure the fairness and transparency of performance results we have to reasonable demands and gather consensus on development.established a performance appeal mechanism providing employees with dual channels of
online feedback and offline appeal so that employees can timely express their opinions and We continue to improve the communication system combining online and offline. On the
obtain proper solutions when they have doubts about the performance results. one hand we build a regular communication bridge between management and employees
promoting in-depth connection and efficient communication between management and
employees through fixed and standardized communication channels. On the other hand
we establish a mechanism for collecting employees' voices and rational suggestions
Performance Goal Performance Performance Feedback Application of comprehensively listen to employees' true feelings encourage employees to actively
Setting Assessment Coaching and Improvement Performance Results contribute ideas and suggestions for the company's development and integrate employees'
demands and suggestions into the whole process of management optimization effectively
Set scientific Comprehensively Department managers conduct Apply the evaluation reflecting respect and care for employees.performance goals evaluate employees' performance feedback interviews and improvement
aligned with the performance and output to affirm contributions and results to talent
company's strategy assessment results by discuss improvement plans. incentives development
based on employees' integrating department For employees who need and training and Key Communication Channels with Management
past performance and managers' evaluations improvement they must guide subsequent goal setting
career development employees' daily them to formulate written to promote continuous
plans performance and multi- improvement plans and provide improvement Face-to-Face Seminars with Senior Executives Management Open Day
dimensional feedback necessary counseling and training Organize face-to-face exchanges between young employees and Set a fixed open day every month where heads of various
support to form closed-loop senior executives every quarter conducting in-depth discussions departments receive employees' consultations on site answer
management on topics such as career development planning and company questions and collect suggestions. A total of more than 300
management optimization. During the reporting period a total of 4 employees were received throughout the year.sessions were held covering more than 200 participants.Performance Management Mechanism
Key Channels for Collecting Employees' Voices and Suggestions
Systematic Employee Satisfaction Survey Regular Collection of Rational Suggestions
We conduct an annual organization-wide employee satisfaction Organize the "Strengthen Safeguards Promote Harmony and
survey to assess the employee experience across dimensions such Pursue Development" employees rational suggestion activities
as compensation & benefits career development and the work encourage employees to contribute wisdom to the Company's
environment. In 2025 overall satisfaction remained at a high level. operation management culture and other aspects and commend
Based on these insights we identify areas for improvement and and implement excellent suggestions. A total of 3377 valid
formulate targeted action plans—including service optimization and questionnaires were collected in 2025.system refinement—to ensure the closed-loop resolution of issues.
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Employee We have built a complete guarantee system covering statutory benefits and diversified non-
statutory benefits and continue to optimize and expand non-statutory benefits. Adhering
Benefits The Company's canteen carries out a series of characteristic activities in accordance to the core of employee needs the Company provides solid support for employees' work with traditional festivals launching heartwarming glutinous rice balls hand-made
and life through multi-dimensional and humanized welfare guarantee measures creates a
warm workplace atmosphere and effectively enhances employees' happiness and sense of Warm Festival
zongzi freshly made mooncakes and other seasonal foods during the Spring Festival
Care Dragon Boat Festival Mid-Autumn Festival and other festivals and providing health-belonging. preserving hot drinks and tonic soups according to seasonal changes. During the New
Year's Day and Spring Festival we presented fruits and yogurt to employees dining in
Huadong Medicine strictly complies with national laws and regulations fully implements the canteen conveying festival warmth through detailed care.statutory welfare guarantees and improves employee welfare experience through policy
optimization and process simplification.Established 15 employee interest clubs which carried out more than 200 activities
L eave Benefits: Statutory holidays marriage leave funeral leave maternity leave parental leave companion leave Cultural and throughout 2025 with the participation of more than 3000 participants. At the same
sick leave and annual leave. In 2025 in response to the latest spirit of the Regulations on Marriage Leave in Zhejiang Sports Events time a large-scale employee fun sports meeting is held every three years and various
Province the Company extended the marriage leave to 13 days supporting employees to take leave in segments. cultural and sports events are carried out regularly to create a positive and united
During the leave period wages bonuses and other welfare benefits are paid normally. cultural atmosphere and further enrich employees' spare-time cultural life.F ive Insurances and One Fund: Basic endowment insurance medical insurance unemployment insurance work-
related injury insurance maternity insurance and housing provident fund.Allowances: Since May 2025 the Company has promoted the direct payment of maternity allowances to employees' Actively built a multi-dimensional cultural position network and created the
personal accounts simplifying the application process. "Employee Cultural Home Alliance". Combined with the actual operation of each
Construction subsidiary we linked internal employee interest clubs to promote the construction and
of Cultural implementation of the "Employee Home" position continuously meeting the spiritual
Statutory Benefits Homeland and cultural needs of employees. Various cultural positions have covered more than
2000 employees in total.
The Company is committed to helping employees achieve a better work-life balance. Taking parental leave as an example while fully
implementing national statutory policies we provide more supportive and flexible childcare arrangements for all full-time employees.Specifically employees are entitled to 10 days of fully paid parental leave annually before their child reaches the age of three. Festival Care and Cultural Benefits
Respecting the diverse needs of families we allow staff to utilize this leave flexibly in segments based on actual family arrangements
rather than requiring consecutive days. This policy applies equally to all employees regardless of gender position or rank.Huadong Medicine provides all employees with extensive non-statutory welfare guarantees to meet their diverse needs in health
protection career development and work-life balance.Physical Health Security Mental Health Support
Innovatively launched the "1 public + 1 private" combined Established mental strength workshops to
physical examination model adding one private physical provide employees with emotional counseling
examination institution on the basis of the original public and psychological support through diversified
physical examination hospitals to meet the diverse needs of forms such as reading clubs special lectures
employees. and painting therapy.C ustomized personalized physical examination packages Held 8 workshops attracting a total of nearly
based on gender and position and invited experts from 200 participants of participation helping
physical examination institutions to carry out special activities employees relieve work pressure and enhance
of physical examination follow-up and health consultation. their psychological adjustment ability.P articipated in the medical mutual assistance guarantee for R egularly pushed professional health popular
on-the-job employees in Hangzhou on behalf of employees science articles through the Company's
building a "second health defense line" beyond the basic WeChat official account platform to strengthen
medical insurance. the health awareness of all employees.Health Support Benefits
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Health and Safety Implementing the Refined On-site Control Model
We have always placed employees' health and safety at the core adhered to the To implement grass-roots safety responsibilities we implemented the "Building Director System" in multiple production
management policy of "prevention first combination of prevention and treatment" bases where designated persons in charge conduct comprehensive and refined control over the safety of specific
and built a guarantee system covering work safety and occupational health. By buildings.improving the institutional framework strengthening risk control and deepening
cultural construction we continuously consolidate the foundation of health and safety F ormulate an EHS inspection mechanism and an inspection route map clarifying and quantifying the inspection routes
management creating a safe and healthy working environment for all employees. and inspection contents of each area. In addition we actively explore intelligent security and pilot the introduction of
intelligent inspection robots in Jiangdong Company to improve the efficiency and coverage of inspections in high-risk
areas.Work Safety Huadong Medicine strictly complies with the Work Safety Law of the People's Republic of China
the Measures for the Administration of Contingency Plans for Work Safety Accidents and other Strengthening Emergency Management and Accident Accountability
laws and regulations and has built a safety management system with the EHS Responsibility
Management System as the core. Each subsidiary further formulates adaptive special systems in
combination with its own production and operation reality and refines the implementation of D uring the reporting period we newly formulated the Measures for the Investigation and Handling of Production Safety
relevant requirements such as the Full-staff Work Safety Responsibility Management System. We Accidents of Huadong Medicine improving the full-process closed-loop management mechanism from emergency response
have established a mature safety management structure among which the EHS Committee is rescue to post-event investigation review and rectification and enhancing the ability to respond to emergencies and the
the highest management body for EHS affairs with an EHS Department under it responsible for standardization of accountability.managing specific work safety matters.We focus work safety management on risk prevention and process control and continuously
promote the in-depth transformation of the management focus to pre-event prevention Emergency Response To effectively respond to production safety emergencies we continuously update and
strengthen the dynamic update of risk identification assessment and control measures and build implement emergency plans for production safety accidents and organize multi-scenario
a solid safety defense line through the following key measures. emergency drills every year to improve emergency prevention and disposal capabilities
requiring each subsidiary to convey implement and refine specific requirements. For example
Jiangdong Company updated the Emergency Plan for Sudden Environmental Events and
Work Safety Control Mechanism completed the filing clarifying key links such as emergency command on-site disposal and
personnel evacuation. Huadong Guizhou carried out special drills such as ethanol leakage
and hazardous chemical leakage and Jiangdong Company organized emergency drills for
hazardous waste leakage to improve the emergency response capability of all employees.Deepening the Construction of the Dual Prevention Mechanism
Safety Training We strictly implement the main responsibility for safety training carry out targeted training by
Safety Risk Grading and Control Hazard Identification and Management layers and categories through the annual EHS training plan and at the same time deepen the cultivation of safety awareness of all employees through the safety culture month activities.Conduct hazard identification and Formulate annual hazard identification plans that include We carry out differentiated EHS training for the main persons in charge of subsidiaries EHS
classification assessments as well as job- comprehensive inspections specific inspections departmental persons in charge special post personnel and front-line employees. Each subsidiary attaches
specific risk assessments. Based on the self-inspections and third-party inspections and carry out hazard great importance to the practical effect of safety training actively responds to the Group's EHS
assessment results create four-color risk identification and management activities as scheduled. management deployment and promotes EHS training in combination with its own production
charts and display them prominently at and operation characteristics. For example Jiangdong Company established a monthly special
work sites. D etailedly record and archive of all identified issues assess departments training mechanism for full-time and part-time safety managers and implemented a two-
with hazards identified based on the EHS monthly assessment criteria level training transmission model of "company-level centralized training - department-level
E ducate employees at all levels to deeply and verify and review overall rectification to ensure that the problem diffusion and publicity". Huadong Guizhou organized special training for hazardous chemical-
understand the potential risks associated rectification forms a closed-loop management. related personnel to obtain certificates external training and certification for safety managers
with their roles remind them to stay and organized leading cadres to learn EHS-related laws regulations and company systems.vigilant and avoid them and formulate Encourage all employees to participate in hidden danger investigation
corresponding risk mitigation measures. and reward effective reports. Through this channel many potential risks During the reporting period we continued to carry out safety month cultural activities and
were identified and rectified throughout the year. continuously created a safety culture atmosphere with full participation by popularizing safety
knowledge and strengthening emergency skills. With solid safety management practices and a
sound safety culture system Zhongmei Huadong was rated as a "National Model Enterprise for
Safety Culture Construction" fully demonstrating its benchmarking and exemplary role in the
field of safety culture construction.
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Intelligent On the basis of continuously strengthening the safety culture construction of the whole Group
Management of we accelerate the intelligent transformation of safety management to further enhance the
Health Knowledge Competition Special Lectures Publicity Week
effectiveness of work safety control. Taking Jiangdong Company as an example it carries out pilot
Work Safety work of intelligent inspection robots in combination with its own production scenarios actively
explores intelligent safety inspection methods and provides practical reference for intelligent work Huadong Guizhou held an occupational Jiangdong Company Xi'an Bodyguard together
safety control. health knowledge competition carrying out organized a special lecture with the Health Supervision
an occupational disease prevention and on "Healthy Life Starts from Institute of Huayin Municipal
control knowledge competition through the Heart" adopting the Health Bureau carried out a
an online answering applet strengthening form of online and offline publicity campaign for Law of
Case employees' mastery of occupational coverage to effectively the People's Republic of China Application of Intelligent Inspection Robots in Jiangdong Company disease prevention and control knowledge improve the health on the Prevention and Control
in the form of "promoting learning through protection awareness of all of Occupational Diseases
competition and promoting prevention employees. Awareness Week further
In 2025 Jiangdong Company actively explored the intelligent through learning". expanding the coverage and
upgrading of safety management and carried out pilot work of impact of occupational health
intelligent inspection robots in conjunction with relevant suppliers. awareness efforts.The intelligent quadruped wheeled robot adopted in this pilot is
equipped with multiple functions such as pointer counting image Occupational Health Publicity Activities
analysis environmental gas monitoring and infrared monitoring
which can realize uninterrupted intelligent inspection of key Based on the improved occupational health and safety management as of the end of the reporting period 11 subsidiaries including
equipment key places and key links in the tank area accumulating Zhongmei Huadong and Jiangdong Company have obtained the ISO 45001 Occupational Health and Safety Management System
practical experience for the transformation of the Company's safety Certification.management towards intelligence and informatization.Contractor Safety In terms of contractor safety management the Company has formulated and implemented
Management systems such as the Implementation Plan for On-site Construction Safety Management and
the Contractor Assessment Rules clarifying the safety responsibilities and codes of conduct of
contractors to ensure that their operation risks are controllable compliant and orderly. At the
same time we regularly organize contractor work meetings to timely convey and implement
the safety management requirements of relevant parties.Occupational Health In the access and process control stage we strengthen system implementation and site access
source management. In 2025 we revised the Contractor Assessment Rules further refining the
violation scenarios and disposal requirements of operation scenarios. At the same time we
optimized the site access management process clarified the qualification review standards
Occupational Health We strictly follow the Law of the People's Republic of China on the Prevention and Control and training requirements ensuring that all employees hold certificates to take up their
Management of Occupational Diseases and are committed to eliminating and controlling the source posts and that safety education covers all aspects. In daily management we not only strictly
of occupational disease hazards and protecting employees' occupational health rights implement incoming qualification review and site access training but also take the initiative
and interests. The Company has established systems such as the Management System for to empower contractors to carry out independent identification and control of operation risks
Monitoring and Evaluation of Occupational Disease Hazards and the Management System by providing tools such as task risk analysis cards promoting the transformation of their safety
for Emergency Rescue and Management of Occupational Disease Hazards and updated the management from passive acceptance of supervision to active participation in prevention and
Management System for Labor Protection Articles to provide comprehensive occupational control.health protection for employees. At the same time we have established a clear accident
management mechanism to ensure the closed-loop management of accident investigation At the level of event management and continuous improvement we adhere to unified
and handling. standards and closed-loop learning and clearly require that contractor accidents be included
in the internal unified accident management process to ensure their timely reporting
During the reporting period Zhongmei Huadong carried out comprehensive detection of standardized investigation and transparent handling. Based on event root cause analysis and
occupational disease hazards in more than 20 workplaces; Jiangdong Company completed experience feedback we continuously optimize contractor management requirements and
the "three simultaneities" detection and acceptance of new projects and took control training content promote the extension of contractor management from post-event disposal
measures such as equipment isolation shift work and provision of professional protective to pre-event prevention and in-event control and continuously improve the systematicness
equipment for positions with excessive noise. We continuously improve and standardize the and effectiveness of safety management of relevant parties.occupational health physical examination process provide pre-employment on-the-job and
post-employment physical examinations for employees exposed to occupational disease
hazards and establish a "one person one file" health record.To comprehensively improve employees' occupational health awareness and strengthen
the publicity of occupational health we popularize occupational health knowledge through
various forms such as posters electronic screens and offline training during the Occupational
Health Week. Each subsidiary actively responds to the Group's occupational health publicity
deployment and carries out diversified health publicity activities according to local conditions
in combination with its own production and operation characteristics promoting the accurate
transmission of occupational health knowledge.
949505
Upholding Goodness
and Fulfilling Social
Responsibility
Adhering to the corporate mission of "serving public
health" and taking improving people's well-being as
the core goal Huadong Medicine has deeply linked
industrial chain partners and forces from all sectors of
society continuously deepening its efforts in medical
benefit for the people universal health promotion
and community co-construction. Through innovative
medical solutions popularization of health knowledge
and participation in public welfare practices we are
committed to building a sustainable development
ecosystem of "inclusive health and community
integration" injecting strength into promoting the
construction of Healthy China and social harmony and
development.Contributing to the Benefits of Healthcare 98
Promoting Public Health 101
Joining Community Engagement 103
Contributing to the UN SDGs:2025｜Environmental Social and Governance (ESG) Report Upholding Goodness and Fulfilling Social Responsibility
Case
Contributing to the Benefits of Healthcare Class 1 New Drug Relmapirazin Injection Approved for Marketing
With "improving drug accessibility and reducing patients' burden" as the core we In October 2025 the Class 1 new drug Relmapirazin Injection declared by Zhongmei Huadong was approved for marketing by
have built a multi-level medical security support system by accelerating the launch the NMPA. Zhongmei Huadong holds the exclusive commercial rights of this product in 25 Asian countries or regions. When
of innovative products promoting the access of medical insurance and commercial used in conjunction with the transdermal glomerular filtration rate (TGFR) measurement device approved for marketing in
insurance and carrying out patient assistance projects so that high-quality medical February 2025 this product forms MediBeaconTGFR which is the world's first bedside product approved for renal function
resources can benefit a wider range of people and effectively respond to the clinical assessment in patients with normal or impaired renal function providing an effective new measurement option for clinical renal
needs of patients. function assessment.Promoting We continue to promote the industrialization of scientific research achievements accelerate
the launch of new products in multiple disease areas and benefit more patients. In response to
Product Casethe call of the national multi-level medical security system construction to effectively reduce Senaparib Capsules (Paishuning) Approved for Marketing
Accessibility the drug burden of patients and improve the accessibility and affordability of the Company's products the Company takes "synergistic empowerment of Huimin Insurance and building a
defense line for affordable drugs" as the core goal striving to achieve a win-win situation for In January 2025 Senaparib Capsules (Paishuning) a cooperative product between Zhongmei Huadong and InnoPharma was
patients enterprises and the medical insurance system. approved for marketing by the NMPA for the maintenance treatment of adult patients with advanced epithelial ovarian cancer
As of the report date the Company had a total of 55 core products approved for launching and fallopian tube cancer or primary peritoneal cancer who have achieved complete remission or partial remission after first-line
15 strategic cooperation products included into the National Medical Insurance Drug List for platinum-containing chemotherapy. The approval of Senaparib Capsules in China will bring a new treatment option for ovarian
Basic Medical Insurance Maternity Insurance and Work-related Injury Insurance (2025). Among cancer patients.these the strategic cooperation product Zevorcabtagene Autoleucel Injection (Saikaize) has
been included in the Commercial Insurance Innovative Drug List (2025) . Throughout 2025
Saikaize completed accreditation and filing procedures at medical institutions spanning over
20 provinces and municipalities nationwide. As of the report date more than 100 insurance
and inclusive healthcare schemes have incorporated Saikaize into their reimbursement
coverage effectively alleviating the financial burden on patients.Case Class 1 Innovative Drug Mifanertinib Maleate Tablets Approved for Marketing
In October 2025 Mifanertinib Maleate Tablets (trade name: Mairuidong) a Class 1 innovative drug independently developed by
Zhongmei Huadong was approved for marketing by the NMPA. It is indicated for the first-line treatment of adult patients with
locally advanced or metastatic non-small cell lung cancer (NSCLC) harboring epidermal growth factor receptor (EGFR) exon 21
(L858R) substitution mutation. The product inhibits tumor growth by covalently binding to the kinase domain of targets. Phase
III clinical trials showed that it is significantly superior to traditional drugs in the target population providing a new treatment
option for clinical needs and promising to become a safe tolerable and efficient first-line treatment regimen in the future.
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Guarding Adhering to the patient-centered approach we focus on the treatment needs of patients
in different fields and actively seek the well-being of patients' health. By initiating and
Patients' Health participating in a series of patient care projects we provide economic assistance to patients Promoting Public Health
helping more patients obtain treatment plans as soon as possible thereby improving their
quality of life. Huadong Medicine regards the popularization of healthy living as its responsibility
and continuously deepens its efforts in the field of national health education.We collaborate with authoritative medical experts and various stakeholders to
transform clinical experience into accessible popular science content facilitating the
widespread dissemination of health knowledge. Relying on the community service
Case network we integrate convenient services such as medication guidance and disease Zhongmei Huadong Charity Special Fund screening into daily life promoting the sinking of health services. We are committed
to promoting the transformation of health concepts from professionalism to public
accessibility in an approachable and perceptible manner responding to diverse
To reduce the economic burden of recipients of living relative organ transplantation and help their long-term post-operative needs and helping improve national health literacy.recovery in 2025 Huadong Medicine continued to cooperate with Hainan Medical Assistance Foundation to advance the
Zhongmei Huadong Charity Special Fund public welfare project. This fund focuses on providing charitable drug donations
to this special group directly reducing their immunosuppressive treatment costs. During the reporting period the fund
successfully donated to 235 recipients of living relative organ transplantation with a total donation amount of 389000 yuan
extending the public welfare care of "Flower of Life" from popular science education to practical economic assistance bringing Case
warmth and hope to transplant families. Construction of the "Flower of Life" Diversified Popular Science Platform
We focus on the health needs of organ transplant donors and recipients building the "Flower of Life" diversified popular science
platform integrating "paper publications + online new media" to carry out targeted health education services. We founded
China's first public welfare popular science publication dedicated to organ transplant donors and recipients—Flower of Life
which collects contributions from transplant recipients across the country.By the end of 2025 a total of 73 issues have been published since
Case its founding in 2003 gaining wide recognition from doctors and "Enjoy a Silver-Free Life" Patient Rights Project patients in the transplant field. We have simultaneously built
the "Flower of Life" WeChat official account and "Flower of Life
Broadcast" video account to promote Internet + health education
In the field of moderate to severe plaque psoriasis treatment to reduce the economic pressure of patients' long-term treatment services. As of the end of the reporting period the platform has
and improve medication adherence and self-management ability Huadong Medicine launched the "Enjoy a Silver-Free Life" released more than 2000 popular science articles and over 1000
Patient Rights Project in November 2024 which was fully deepened in 2025. Through setting gradient medication benefits popular science short videos covering post-operative care dietary
providing online health management tools and professional patient education content this project builds a comprehensive guidance and other content building an interactive platform for
support system for patients with moderate to severe plaque psoriasis. In 2025 16000 patients successfully enrolled in the nearly 50000 organ transplant donors and recipients.project effectively helping a large number of patients adhere to standardized treatment and improve their quality of life.Case Regular Implementation of Online Health Lectures
Case Elahere Greater Bay Area Patient Care Project
We collaborate with authoritative institutions to deepen popular science
empowerment in the field of organ transplantation. In 2025 we launched the
Before the official launch and sale of Mirvetuximab Soravtansine Injection (Elahere) in Chinese mainland the Company "Scientific Follow-up Management Program for Organ Transplantation" in cooperation
launched the Elahere Greater Bay Area Patient Care Project in advance through the "Drug and Device Access" policy in the with the China Medicine Education Association. We invite top experts and young
Guangdong-Hong Kong-Macao Greater Bay Area and the pilot policy of Boao Lecheng International Medical Tourism Pilot Zone. and middle-aged backbone doctors in China's organ transplantation field to
This project enables eligible patients with advanced platinum-resistant ovarian cancer to use innovative drugs in advance at an carry out online popular science lectures and Q&A services through the Internet
affordable price supplemented by professional medication guidance and disease education. In 2025 the project successfully platform aiming to break geographical barriers of medical resources enrich medical
benefited 149 patients not only timely meeting the urgent clinical needs but also accumulating valuable experience for patient consultation channels for transplant recipients provide targeted and regular
services after the official launch of the product demonstrating the Company's commitment of "patients first". professional guidance and help improve patients' post-operative quality of life. As
of the end of 2025 the platform has held a total of 940 online health lectures with a
cumulative viewership of nearly 2.13 million person-times.
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Case Convenient Practice of "Pharmaceutical Services Entering Communities" Joining Community Engagement
Relying on 10 people's livelihood pharmaceutical service stations and Hangzhou Citizens' Health Lifestyle Hall we
further promote the "Pharmaceutical Services Entering Communities" activity providing comprehensive and convenient We have long focused on the fields of community coordinated development and
pharmaceutical services for customers and community residents. To improve the public's experience and trust in purchasing rural revitalization collaborating with various forces to carry out diversified public
and using drugs as well as their awareness of drug safety we disclose the list of people's livelihood pharmaceutical service welfare practices such as voluntary services and convenient assistance effectively
items operating specifications and management systems provide public welfare services such as free blood pressure repaying society and serving the masses. Continuing the tradition of public welfare
measurement medication and medical device guidance and expired drug recycling and carry out drug safety popularization donations in 2025 we responded to the Spring Breeze Action initiated by the
through multiple channels. In 2025 the pharmaceutical services covered a total of more than 10000 person-times including 21 Hangzhou Municipal People's Government and donated 500000 yuan to help needy
times of free blood pressure measurement and medication guidance services and 26 pharmaceutical knowledge and health groups.lectures. We fully participate in community construction by promoting the implementation
of people's livelihood projects supporting rural revitalization and common
prosperity and strengthening Party building-led voluntary services demonstrating
corporate responsibility and accountability through practical actions. In 2025 the
Company's total public welfare and charitable investment reached RMB 115 million
and employees accumulated 1110 hours of voluntary services.Case Provincial People's Livelihood Project – Construction and Operation of "Love Station"
We have set up "Love Stations" in some pharmacies improved
various service facilities to provide warm and convenient
services for various groups and promoted their inclusion in
Zhejiang Provincial People's Livelihood Projects. We equip the
"Love Stations" with basic facilities such as microwave ovens
and AEDs and provide free blood pressure measurement
Case Health Literacy Improvement Initiative of "Health Popular Science Entering Communities" professional pharmacist consultation and seasonal convenient
measures (such as summer water supply three-volt medicinal
patches and winter tonic decoction). During the reporting
period the "Love Stations" served a total of about 3000
Taking Hangzhou Citizens' Health Lifestyle Hall as a public welfare platform we carry out the "Health Popular Science Entering person-times focusing on outdoor workers and surrounding
Communities" activity in conjunction with relevant units focusing on groups such as employees of enterprises and institutions communities conveying corporate warmth through professional
and the middle-aged and elderly to popularize scientific health knowledge. We invite clinical physicians from well-known and practical services and fulfilling the responsibility of people's
medical institutions and first-aid instructors from the Red Cross to carry out popular science activities such as fatty liver livelihood services.prevention and control on "World Hepatitis Day" nutritional health themed "Scientific Nutrition Enjoy a Happy Silver Age"
skin disease prevention and control and emergency first-aid training helping residents master first-aid skills strengthen health
management awareness solve daily health puzzles and assist in improving the overall health literacy of community residents.
102 1032025｜Environmental Social and Governance (ESG) Report Upholding Goodness and Fulfilling Social Responsibility
Case Shared Prosperity Mushroom Farm Project – Supporting Rural Revitalization Case Party Building Leadership – Party Member Voluntary Service Practice
We have long supported the "Shared Prosperity Mushroom Farm" project in Changshan County Zhejiang Province. As one of the Guided by Party building we deepen Party member voluntary service work gather the strength of Party members give play
first donating enterprises to initiate the project we continue to help the project improve quality upgrade and advance steadily. to their professional expertise and earnestly practice the purpose of "serving the people". In 2025 we organized the Party
Since 2024 we have participated in the construction of Phase I and Phase II of the project with a total donation of RMB200000. Member Service Week activity. 22 branches under the Company's Party Committee actively initiated various voluntary service
In 2025 the "Shared Prosperity Mushroom Farm" project received RMB50 million of special funds from the Zhejiang Provincial projects with a total service duration exceeding 50 hours. All branches under the Party Committee continue to carry out
Government and the development of Phase III is being steadily advanced. At the same time we purchase poverty alleviation voluntary services in hospitals communities and other scenarios including providing guidance and consultation for hospital
agricultural products through the Company's trade union further broadening the assistance path continuously supporting the patients assisting the sick and other services further narrowing the distance between the enterprise and the masses and fully
high-quality development of mountainous island and rural counties realizing the positive interaction between the enterprise's demonstrating the enterprise's responsibility and accountability under the leadership of Party building.performance of social responsibility and local development and earnestly practicing the concept of common prosperity.Case Factory-Community Co-construction – Supporting Community Construction with Love
To continuously strengthen the communication bond with streets communities and residents and carefully create a
harmonious factory-community atmosphere during the reporting period the Company carefully planned and implemented
5 "Factory-Community Co-construction" series activities including high-temperature condolences to streets and fire brigades
warm Laba porridge entering communities presenting New Year calendars to surrounding residents and sponsoring
community Dragon Boat Festival characteristic activities laying a solid foundation for factory-community integration through
various warm measures.
104 1052025｜Environmental Social and Governance (ESG) Report Appendix
Appendix
Appendix I Performance Data
Indicator Unit 2025 Indicator Unit 2025
Economic Direct Energy Consumption
Operating revenue RMB 100 million 436.12 Natural gas Cubic meter 7173677.00
Year-on-year growth rate of operating revenue % 4.07 Diesel Ton 756.80
Governance Gasoline Ton 91.37
Number of the Board of Directors Person 11
Liquefied petroleum gas Ton 175.01
Number of female directors Person 4
Self-consumed clean energy – solar power MWh 3339.24
Number of legal training sessions conducted / 71
Indirect Energy Consumption
Total hours of legal training Hour 70
Purchased electricity MWh 278402.26
Number of participants in legal training Person-times 13752
Purchased steam GJ 493793.77
Total attendance of legal personnel in legal training Person-times 122
Purchased green power MWh 0
Number of participants in training on anti-monopoly and
anti-unfair competition Person-times 11311 Water Resource Consumption
Number of lawsuits or major administrative penalties arising / 0 Total water consumption Ton 103313239.38from unfair competition
Number of concluded lawsuits involving corruption / 0 Water consumption intensity Ton / RMB per million (revenue) 2368.92
Environmental Circular Economy
Environmental governance investment RMB 10000 7711.54 Packaging material consumption Ton 10278.86
Number of employees receiving environmental training Non-recyclable packaging material consumption Ton 8910.28
(internal/external) Person 2300
Recyclable packaging material consumption Ton 1368.58
GHG Emission11
Recycled packaging materials Ton 391.91
Total GHG emissions (Scope 1 + Scope 2) tCO2e 220723.57
Wastewater Discharge12
Total GHG intensity (Scope 1 + Scope 2) tCO2e / RMB per million (revenue) 5.06
Total wastewater discharge Ton 2491934.58
Direct Scope 1 GHG emissions tCO2e 18686.02
Indirect Scope 2 GHG emissions tCO e 202037.55 Wastewater discharge intensity Ton / RMB per million (revenue) 57.142
Energy Consumption Chemical oxygen demand (COD) Ton 308.70
Comprehensive energy consumption tce 60922.26 Ammonia nitrogen Ton 4.36
Comprehensive energy consumption intensity tce / RMB per million (revenue) 1.40 Other key water pollutants (Total Nitrogen) Ton 7.94
11 Since 2024 the Company has updated the statistical methodology for GHG emissions and energy-related data covering all subsidiaries (excluding overseas subsidiaries) with 12 Since 2024 the Company has updated its statistical methodology for wastewater waste gas and waste covering all subsidiaries excluding overseas ones.
further refinements made in 2025. For detailed calculation methods please refer to the section of "Addressing Climate Change – Indicators and Targets."
106 1072025｜Environmental Social and Governance (ESG) Report Appendix
Indicator Unit 2025 Indicator Unit 2025
Waste Gas Emission Age Structure of R&D Personnel
Total waste gas emissions 10000 cubic meters 408943.06 Under 30 (exclusive) Person 559
Waste gas emission intensity 10000 cubic meters / RMB per million 9.38 30-40 (inclusive of 30 and 40) Person 1059 (revenue)
Above 40 (exclusive) Person 323
Major air pollutant-SO2 Ton 2.17
Patent Grants
Major air pollutant-NOx Ton 6.81
Major air pollutant-VOCs Ton 12.68 Cumulative number of granted patents / 906
Waste Disposal Cumulative number of granted invention patents / 587
Total general waste generated Ton 21460.15 Cumulative number of granted utility model patents / 273
Ton / RMB per million Cumulative number of granted design patents / 46
General waste production intensity 0.49
(revenue) Cumulative trademarks registered / 698
Total general waste disposal Ton 21456.49 Number of newly granted patents / 81
General waste landfilled Ton 246.93 Number of newly granted invention patents / 50
General waste incinerated Ton 7396.04
Number of newly granted utility model patents / 27
General waste recycled Ton 13813.52
Number of newly granted design patents / 4
Total hazardous waste generated Ton 9333.46
Number of recognized high-tech enterprises / 11
Ton / RMB per million
Hazardous waste production intensity 0.21 Quality and Safety
(revenue)
Number of quality risk assessments conducted / 1827
Total hazardous waste disposal Ton 9388.25
Hazardous waste landfilled Ton 16.70 Number of internal quality audits conducted within the year / 214
Hazardous waste incinerated Ton 8510.62 Number of participants in quality and safety training Person-times 136282
Hazardous waste recycled Ton 506.13 Total hours of quality and safety training Hour 27302.80
Other disposal methods for hazardous waste Ton 354.80 Number of product safety and quality incidents / 0
Social Data Security and Privacy Protection
R&D and Innovation Number of information security training sessions for
employees / 120
R&D investment in the pharmaceutical industry segment
(excluding equity investments) RMB 100 million 29.82 Number of employees participating in information security
training Person 777
Number of R&D personnel Person 1941
Customer Rights Protection
Proportion of R&D personnel % 12.16
Number of customer complaints / 291
Educational Background of R&D Personnel
Doctoral degree Person 107 Number of resolved complaints / 291
Master's degree Person 619 Complaint resolution rate % 100
Bachelor's degree Person 897 Supply Chain Management
Under bachelor's degree Person 318 Number of suppliers / 14439
108 1092025｜Environmental Social and Governance (ESG) Report Appendix
Indicator Unit 2025 Indicator Unit 2025
Number of domestic suppliers / 10284 30-50 Person 11160
Number of overseas suppliers / 4155 Over 50 Person 535
Number of training sessions on supplier quality issues / 20 Unspecified Person 512
Number of suppliers certified with ISO 9001 / 328 Employee Diversity
Number of suppliers certified with ISO 14001 / 190 Number of ethnic minority employees Person 1005
Number of suppliers certified with ISO 45001 / 122 Number of employees with disabilities Person 105
Employee Management Employee Turnover
Number of employees by the end of reporting period Person 19095 Total number of turnover employees Person 3339
Number of new employees Person 4169 Total employee turnover rate % 18.48
13
Number of new male employees Person 2065 Employee Training and Development
Number of new female employees Person 2104 Employee training and development expenditure RMB 4645600
Employee Composition Number of training sessions for career development and skill
improvement / 730
Production personnel Person 1411
Total training participants Person-times 90543
Sales personnel Person 12479
Percentage of employees receiving training % 100
Technical personnel Person 3162 Total training hours Hour 437097.30
Financial personnel Person 226 Average annual training hours per employee Hour 22.89
Administrative personnel Person 1425 Number of female trainees Person 9604
Unspecified Person 392 Proportion of female trainees % 51.68
Educational Background of Employees Number of male trainees Person 8979
Master's degree and above Person 1839 Proportion of male trainees % 48.32
Bachelor's degree Person 9663 Total training hours for female employees Hour 235745.18
Vocational/technical diploma Person 6352 Average training hours for female employees Hour 24.55
Under vocational/technical level Person 729 Total training hours for male employees Hour 201352.12
Unspecified Person 512 Average training hours for male employees Hour 22.42
Gender Distribution of Employees Employee Rights Interests and Benefits
Male Person 8979 Labor contract signing rate % 100
Female Person 9604 Collective contract signing coverage rate % 100
Unspecified Person 512 Social insurance coverage rate % 100
Age Structure of Employees Number of employees taking maternity leave Person 415
Under 30 Person 6888 Return-to-work rate after maternity leave % 100
13 Employee training data does not include the Company's overseas subsidiary Sinclair.
110 1112025｜Environmental Social and Governance (ESG) Report Appendix
Appendix II Shenzhen Stock Exchange Guidelines Index
Indicator Unit 2025 Dimension Number Topic Location
Number of employees taking parental leave Person 492 1 Climate change tackling Addressing Climate Change
Return-to-work rate after parental leave % 100 2 Pollutant emission Emissions Management
Occupational Health and Safety 3 Waste disposal Emissions Management
Coverage rate of occupational injury insurance for employees % 100 4 Ecological and biodiversity protection Green Operations
Occupational injury insurance premiums RMB 10000 1585.92 Environmental
5 Environmental compliance management Environmental Compliance
Coverage rate of physical examinations for employees
exposed to occupational disease hazard factors % 100 6 Energy usage Addressing Climate Change
Total hours of employee safety training Hour 147693.00 7 Usage of water resources Green Operations
Number of person-times of employee safety training Person-times 75873 8 Circular economy Green Operations
Number of safety emergency drills / 203 9 Rural revitalization Joining Community Engagement
Public Welfare Contributing to the Benefits of Healthcare
Public welfare investment RMB 100 million 1.15 10 Contributions to the society Promoting Public Health
Joining Community Engagement
Number of participants in public/volunteer activities Person-times 344
11 Innovation-driven R&D and Innovation
Total hours of public/volunteer activities Hour 1110
12 Ethics of science and technology R&D and Innovation
13 Supply chain security Supply Chain Management
Social
14 Equal treatment to small and medium-sized enterprises Supply Chain Management
Quality and Safety
15 Safety and quality of products and services
Responsible Services
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
Sustainable 19 Communications with stakeholders ESG Governance
Development
Governance 20 Anti-commercial bribery and anti-corruption Business Ethics
21 Anti-unfair competition Business Ethics
112 1132025｜Environmental Social and Governance (ESG) Report Appendix
Appendix III GRI Standards Index
GRI Standard Disclosure Location
Statement of Use Huadong Medicine has reported with reference to the GRI Standards from January 1 2025 to December 31 2025.
2-24 Embedding policy commitments Business Ethics Framework
GRI 1 Applied GRI 1: Foundation 2021
2-25 Processes to remediate negative impacts Whistleblowers Protection
2-26 Mechanisms for seeking advice and raising concerns Whistleblowers Protection
GRI 2: General 2-27 Compliance with laws and regulations All sections
Disclosures 2021
GRI Standard Disclosure Location 2-28 Membership associations All sections
2-1 Organizational details About Us 2-29 Approach to stakeholder engagement Stakeholder Engagement
2-2 Entities included in the organization's sustainability reporting About This Report 2-30 Collective bargaining agreements Communication and Support
2-3 Reporting period frequency and contact point About This Report 3-1 Process to determine material topics Double Materiality Analysis
No restatements of GRI 3: Material Topics
2021 3-2 List of material topics Double Materiality Analysis2-4 Restatements of information information during this
reporting period 3-3 Management of material topics Double Materiality Analysis
2-5 External assurance Not conducted during this reporting period 201-1 Direct economic value generated and distributed
Appendix I Performance
Data
2-6 Activities value chain and other business relationships Supplier Management 201-2 Financial implications and other risks and opportunities due to climate change Addressing Climate Change - Strategies
2-7 Employees Appendix I Performance GRI 201: Economic Data Performance 2016 201-3 Defined benefit plan obligations and other retirement plans Communication and Support
2-8 Workers who are not employees Appendix I Performance Data Not disclosed due
201-4 Financial assistance received from government to confidentiality
Governance Framework requirements
2-9 Governance structure and composition
ESG Governance Structure Not disclosed due
2-10 Nomination and selection of the highest governance body Governance Framework GRI 202: Market 202-1 Ratios of standard entry level wage by gender compared to local minimum wage to confidentiality
Presence 2016 requirements
GRI 2: General 2-11 Chair of the highest governance body Governance Framework 202-2 Proportion of senior management hired from the local community Information not available
Disclosures 2021 2-12 Role of the highest governance body in overseeing the management of impacts ESG Governance Structure Contributing to the Benefits
2-13 Delegation of responsibility for managing impacts ESG Governance Structure of Healthcare
2-14 Role of the highest governance body in sustainability reporting ESG Governance Structure 203-1 Infrastructure investments and services supported Promoting Public Health
2-15 Conflicts of interest Business Ethics Framework Joining Community
GRI 203: Indirect Engagement
2-16 Communication of critical concerns Stakeholders Engagement Economic Impacts 2016Structure Contributing to the Benefits of Healthcare
2-17 Collective knowledge of the highest governance body ESG Governance Structure 203-2 Significant indirect economic impacts Promoting Public Health
2-18 Evaluation of the performance of the highest governance body ESG Governance Structure Joining Community
2-19 Remuneration policies Remuneration and
Engagement
Incentives GRI 204: Procurement
Practices 2016 204-1 Proportion of spending on local suppliers Information not available
2-20 Process to determine remuneration Remuneration and Incentives 205-1 Operations assessed for risks related to corruption Risk Management
2-21 Annual total compensation ratio Internal information is not
GRI 205: Anti-corruption
2016 205-2 Communication and training about anti-corruption policies and procedures Business Ethics Frameworkdisclosed
205-3 Confirmed incidents of corruption and actions taken Business Ethics Framework
2-22 Statement on sustainable development strategy ESG Governance
GRI 206: Anti-
2-23 Policy commitments Protection of Employee competitive Behavior 206-1 Legal actions for anti-competitive behavior anti-trust and monopoly practices No such legal actionsRights 2016
114 1152025｜Environmental Social and Governance (ESG) Report Appendix
GRI Standard Disclosure Location GRI Standard Disclosure Location
301-1 Materials used by weight or volume Appendix I Performance 306-4 Waste diverted from disposal Waste ManagementData GRI 306: Waste 2020
GRI 301: Materials 2016 306-5 Waste directed to disposal Waste Management301-2 Recycled input materials used Circular Economy
GRI 308: Supplier 308-1 New suppliers that were screened using environmental criteria Sustainable Supply Chain
301-3 Reclaimed products and their packaging materials Circular Economy Environmental
Assessment 2016 308-2 Negative environmental impacts in the supply chain and actions taken Sustainable Supply Chain
302-1 Energy consumption within the organization Appendix I Performance Data
401-1 New employee hires and employee turnover Appendix I Performance Data
302-2 Energy consumption outside of the organization Appendix I Performance Data GRI 401: Employment 401-2 Benefits provided to full-time employees that are not provided to temporary or part- Communication and
2016 time employees Support
GRI 302: Energy 2016 302-3 Energy intensity Appendix I Performance Data
401-3 Parental leave Appendix I Performance Data
302-4 Reduction of energy consumption Addressing Climate Change - Strategies GRI 402: Labor/
Addressing Climate Change Management Relations 402-1 Minimum notice periods regardingoperational changes Uninvolved302-5 Reductions in energy requirements of products and services - Strategies 2016
Wastewater Management Work Safety
403-1 Occupational health and safety management system
303-1 Interactions with water as a shared resource Water Resource Occupational Health
Management 403-2 Hazard identification risk assessment and incident investigation Work Safety
303-2 Management of water discharge-related impacts Wastewater Management
GRI 303: Water and 403-3 Occupational health services Occupational Health
Effluents 2018 303-3 Water withdrawal Water Resource Management 403-4 Worker participation consultation and communication on occupational health and Work Safety
safety
303-4 Water discharge Wastewater Management Occupational Health
Water Resource GRI 403: Occupational 403-5 Worker training on occupational health and safety Occupational Health303-5 Water consumption Management Health and Safety 2018 403-6 Promotion of worker health Occupational Health
304-1 Operational sites owned leased managed in or adjacent to protected areas and
areas of high biodiversity value outside protected areas No such operational sites 403-7 Prevention and mitigation of occupational health and safety impacts directly linked
Work Safety
by business relationships Occupational Health
GRI 304: Biodiversity 304-2 Significant impacts of activitiesproducts and services on biodiversity No significant impacts
2016 Work Safety304-3 Habitats protected or restored No such habitats 403-8 Workers covered by an occupational health and safety management system
Occupational Health
304-4 IUCN Red List species and nationalconservation list species with habitats in areas
affected by operations No such species 403-9 Work-related injuries Work Safety
403-10 Work-related ill health Occupational Health
305-1 Direct (Scope 1) GHG emissions Appendix I Performance Data
Appendix I Performance 404-1 Average hours of training per year per employee
Appendix I Performance
305-2 Energy indirect (Scope 2) GHG emissions DataData
GRI 404: Training and Training and
305-3 Other indirect (Scope 3) GHG emissions Not collected Education 2016 404-2 Programs for upgrading employee skills and transition assistance programs Empowerment
GRI 305: Emissions 2016 305-4 GHG emissions intensity Appendix I Performance 404-3 Percentage of employees receiving regular performance and career development Training and Data reviews Empowerment
305-5 Reduction of GHG emissions Not collected Governance Framework
305-6 Emissions of ozone-depleting substances (ODS) Not collected 405-1 Diversity of governance bodies and employees Protection of Employee
GRI 405: Diversity and Rights
305-7 Nitrogen oxides (NOx) sulfur oxides (SOx) and other significant air emissions
Appendix I Performance
Data Equal Opportunity 2016 Not disclosed due
306-1 Waste generation and significant waste-related impacts Waste Management 405-2 Ratio of basic salary and remuneration of women to men to confidentiality requirements
GRI 306: Waste 2020 306-2 Management of significant waste-related impacts Waste Management
GRI 406: Non-
discrimination 2016 406-1 Incidents of discrimination and corrective actions taken
Protection of Employee
306-3 Waste generated Waste Management Rights
116 1172025｜Environmental Social and Governance (ESG) Report Appendix
GRI Standard Disclosure Location Appendix Ⅳ Feedback Form
GRI 407: Freedom
of Association and 407-1 Operations and suppliers in which the right to freedom of association and collective Communication and
Collective Bargaining bargaining may be at risk Support Dear readers:
2016 Thank you for your time to read this report. To enhance the value of ESG information for you and other stakeholders we
GRI 408: Child Labor kindly request your assistance in completing the feedback form. Your feedback will greatly aid us in further enhancing our ESG
2016 408-1 Operations and suppliers at significant risk for incidents of child labor Talent Introduction management performance. Please use the details below to provide your feedback:
GRI 409: Forced or 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory Email: ir@eastchinapharm.com
Compulsory Labor 2016 labor Talent Introduction
Tel.: 0571-89903300
Not disclosed due to the
413-1 Operations with local community engagement impact assessments and little relevance to the Address: 866 Moganshan Road Hangzhou Zhejiang
development programs business of our company
and inapplicability 1. Which type of stakeholders do you belong to:GRI 413: Local
Communities 2016 Not disclosed due to the □ Shareholders or Investors??□ Employee??□ Client & Consumer??□ Supplier
413-2 Operations with significant actual and potential negative impacts on local little relevance to the □ Industry Association or Research Institution??□ Public Welfare or Community Organization??□ Media
communities business of our company □ Government or Regulatory Agency??□ Others
and inapplicability
2. Your overall assessment of this year's ESG report:
GRI 414: Supplier Social 414-1 New suppliers that were screened using social criteria Sustainable Supply Chain □ Excellent??□ Good??□ Neutral??□ Poor??□ Bad
Assessment 2016 414-2 Negative social impacts in the supply chain and actions taken Sustainable Supply Chain 3. Your assessment on this report
416-1 Assessment of the health and safety impacts of product and service categories Quality and Safety - ? Information Disclosure
GRI 416: Customer Strategies □ Excellent??□ Good??□ Neutral??□ Poor??□ Bad
Health and Safety 2016 416-2 Incidents of non-compliance concerning the health and safety impacts of products Quality and Safety - ? Layout Design
and services Strategies □ Excellent??□ Good??□ Neutral??□ Poor??□ Bad
417-1 Requirements for product and service information and labeling Responsible Marketing ? Readability
□ Excellent??□ Good??□ Neutral??□ Poor??□ Bad
GRI 417: Marketing and 417-2 Incidents of non-compliance concerning product and service information and
Labeling 2016 labeling Responsible Marketing 4. Which topics are of most concern to you (Choose up to 3)
417-3 Incidents of non-compliance concerning marketing communications Responsible Marketing ?Environmental Protection
□ Environmental Management??□ Energy Management??□ Response to Climate Change
GRI 418: Customer 418-1 Substantiated complaints concerning breaches of customer privacy and losses of No such complaints □ Water Resource Utilization??□ Pollution ControlPrivacy 2016 customer data
?Corporate Social Responsibility
□ Labor Relations Management??□ Employee Training and Development??□ Occupational Health and Safety
□ R&D and Innovation??□ Quality and Safety??□ Protection of Customers' Rights and Interests
□ Information Security and Privacy Protection??□ Responsible Supply Chain??□ Product Accessibility
?Corporate Governance
□ Business Ethics??□ Risk Management??□ Corporate 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
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