Yunnan Baiyao: Yunnan Baiyao 2025 Board of Directors Work Report
Yunnan Baiyao Group Co., Ltd.
2025 Annual Board of Directors Work Report
2025 is the final year of the “14th Five-Year Plan”, the year of planning and layout of the “15th Five-Year Plan”, and the year of realizing Yunnan Province’s “3815” strategic development goal of “stepping up in three years”, which is of great milestone significance. In 2025, Yunnan Baiyao Group Co., Ltd. (hereinafter referred to as "Yunnan Baiyao" or the "Company") will achieve high-quality development as a whole, with various operating indicators reaching a new level, and achieving the set goals of "growth, efficiency improvement, and value-added". Looking back on the past year, in the face of multiple internal and external challenges, the company unified its thinking, stabilized its rhythm, and demonstrated resilience and determination. This is the ability that Yunnan Baiyao has accumulated in its development, and it is also an important foundation for the company to go through cycles and continue to improve in the future.
In 2025, under the guidance of party building, Yunnan Baiyao's corporate governance system will become more standardized and orderly. Through the "two committees" and the reelection of the board of directors, the governance structure will be further streamlined, and a clearer and more efficient collaborative relationship will be formed between the party committee, the board of directors, and the management. The company's board of directors closely focuses on the core functions of "setting strategies, making decisions, and preventing risks". In line with the attitude of being responsible to all shareholders, it operates in a standardized and efficient manner, and makes prudent and scientific decisions. All directors perform their duties faithfully and diligently, and conscientiously implement the resolutions of the shareholders' meeting. Under an operating system with clear boundaries of authority and responsibilities and an efficient decision-making mechanism, the company's management has the courage to take responsibility, take the initiative, seek development and implement implementation, and achieve effective growth in operating performance, which further enhances our confidence in continuing to promote transformation and upgrading and achieve higher-level development.
The annual work status and outlook report of the Board of Directors is now as follows:
Part One: Review of Main Work in 2025
1. Party building leads “strong governance” and ensures governance coordination
Under the strong leadership and caring guidance of the Yunnan Provincial Party Committee and the Provincial State-owned Assets Supervision and Administration Commission Party Committee, the company’s Party Committee elected a new leadership team of the Party Committee and the Discipline Inspection Commission. The company’s determination to govern the party has become stronger, and its confidence in promoting high-quality development has been further strengthened. At the same time, the "Party Building in the Constitution" was completed, clarifying the leadership role of the company's party committee, and actively promoting the "two-way entry and cross-appointment" of the company's leadership team members, ensuring that the party's leadership effectively runs through the entire process of corporate governance; the "three important and one" decision-making mechanism was improved, the boundaries of the rights and responsibilities of each governance subject were clarified, and the corporate governance mechanism and management system of "legalized rights and responsibilities, transparent rights and responsibilities, coordinated operation, and effective checks and balances" were further improved.
The company completed the reelection of the board of directors on time. The new board of directors introduced members with profound professional backgrounds and rich practical experience in the fields of innovative drug research and development, strategic management, financial auditing, etc., which significantly enhanced the board of directors' professional judgment and decision-making support. The board of directors has a more reasonable structure and a more comprehensive decision-making perspective, which effectively improves the decision-making quality of the board of directors and the operational efficiency of special committees. At the same time, in accordance with the latest provisions of laws and regulations such as the "Company Law" and "Guidelines on the Articles of Association of Listed Companies", the systematic revision of the "Articles of Association" and supporting corporate governance systems will be completed within 2025 to provide rigid institutional guarantees for the construction of the board of directors.
2. Steady course, “set strategy” and firm implementation of strategy
The board of directors earnestly fulfills its main responsibility for strategic decision-making, and uses a high degree of strategic determination and systematic thinking to promote the company steadily from the "strategic design stage" to the "strategic execution and capability realization" stage. During the reporting period, the first was to strengthen strategic guidance and improve the management system. Strictly follow the "Yunnan Baiyao Group 2024-2028 Strategic Plan" and continue to improve the strategic management system around strategic positioning, development goals, industrial portfolio, business strategies and implementation paths. The awareness of strategy leading business development and resource optimization allocation has been significantly enhanced, and the strategy has been promoted from blueprint to actual performance. The second is to deepen connotation development and improve operational quality and efficiency. Focusing on the main business, returning to the essence of manufacturing, and focusing on the entire industry chain, the entire value chain, and all production factors, we have promoted cost reduction and efficiency improvement in depth. The results have been remarkable in improving quality and efficiency. The weighted average return on net assets has reached a new high in recent years. The management expense rate has remained at a relatively good level, and the growth rate, operating quality, and development vitality have been simultaneously strengthened. The third is precise extension layout to enhance synergy. The board of directors decided to promote the merger and acquisition of Juyaotang, promote the extension development strategy around industrial synergy and capability enhancement, drive the efficiency improvement of the Chinese herbal medicine industry chain and national layout, lay the foundation for the expansion of the slices and formula granules business, and continue to improve strategic management capabilities.
3. Compliance and efficient “decision-making” to improve governance efficiency
(1) Standardize meeting operations and improve decision-making quality
The company's board of directors conscientiously performs its duties stipulated in relevant laws, regulations and the company's articles of association to ensure that the board of directors operates in a standardized and efficient manner and makes prudent and scientific decisions. In 2025, the company's 10th board of directors held 7 meetings and reviewed a total of 45 proposals; the 11th board of directors held 2 meetings and reviewed a total of 5 proposals. All meetings were convened and held in strict accordance with the regulations. The rules and regulations and important decisions reviewed were reviewed for legal compliance in advance. All proposals were voted and passed. The meeting records are true, accurate and complete. The company was rated as the "Best Practice Case for Boards of Directors of Listed Companies" by the China Association of Public Companies, and the governance level and operational efficiency of the board of directors have been highly recognized by the capital market.
(2) Convene shareholders’ meetings in accordance with the law to protect shareholders’ rights
During the reporting period, the company's board of directors convened a total of 3 shareholders' meetings and reviewed a total of 15 proposals. The shareholders' meetings provided two ways to participate, on-site and online voting, ensuring shareholders' rights to know, participate and make decisions. The board of directors strictly follows the resolutions and authorizations of the shareholders' meeting and implements the contents of various resolutions passed.
(3) Give full play to the role of special committees and strengthen professional support
During the reporting period, each special committee of the Board of Directors performed its duties in accordance with the terms of reference stipulated in its respective work procedures, conducted research on professional matters, and put forward opinions and suggestions for reference in the decision-making of the Board of Directors. In 2025, the Strategy Committee of the Board of Directors held a total of 6 meetings and reviewed 11 resolutions; the Audit Committee of the Board of Directors held a total of 10 meetings and reviewed 19 resolutions; the Nomination Committee of the Board of Directors held 3 meetings and reviewed 4 resolutions; the Remuneration and Appraisal Committee of the Board of Directors held 3 meetings and reviewed 6 resolutions.
(4) Independent directors perform their duties diligently and implement supervision and consultation
During the reporting period, the company held 2 special meetings of the 10th independent directors and 2 special meetings of the 11th independent directors. The independent directors, with a diligent and responsible attitude, give full play to their expertise in their respective professional fields, conduct independent and objective reviews focusing on related transactions, profit distribution and other matters, put forward rational suggestions, actively safeguard the overall interests of the company, and protect the legitimate rights and interests of small and medium-sized shareholders.
(5) Standardize the authorization management system and strengthen the closed loop of decision-making and execution
Under the institutional framework of the "Articles of Association", "Rules of Procedure of the Board of Directors" and "Rules of Procedure of the President's Office Meeting", the Board of Directors continues to improve the authorization decision-making mechanism and formulates the annual Board of Directors authorization decision-making plan, which effectively improves the efficiency of operating decision-making. In 2025, the board of directors will continue to monitor the use of authorized decision-making quotas for external investment, acquisition and sale of assets, establish and improve the tracking and implementation mechanism of board of directors resolutions, and urge the handling units to strictly implement the content of resolutions on schedule through monthly rolling follow-up, realizing a closed loop of the entire process of board of directors' authorized decision-making and resolution execution management.
4. Systematically promote “risk prevention” and secure the bottom line of development
(1) Strengthen strategic decision-making and risk control, and build a solid line of defense for operations and management
During the reporting period, the board of directors performed its core responsibilities of risk management in accordance with the law, deeply embedded "risk prevention" into the entire process of "setting strategies and making decisions", promoted the improvement of risk management from "single point control" to "system governance", and built a closed-loop management and control mechanism that matches the strategy to provide a solid guarantee for the company's steady development. The first is to optimize the audit supervision structure, revise the "Articles of Association" and allow the Audit Committee to take over the statutory powers of the Board of Supervisors, prudently change the annual report audit agency, and strengthen the quality of financial information disclosure and internal and external audit supervision. The second is to clarify strategic risk boundaries. The board of directors strictly defines risk boundaries such as investment decisions, financing guarantees, and related transactions, and implements strategies and manages risks through the construction of the group's management and control system. The third is to strengthen the rigid constraints of comprehensive budget management. The board of directors reviews and approves the annual financial budget plan, determines the overall budget goals and resource allocation principles, establishes differentiated assessment and evaluation indicators, supervises the implementation of major investment budgets, and ensures that resource allocation is well-founded and risks are controllable. The fourth is to enhance the risk awareness of all employees. Supervise the management to integrate risk concepts into daily operations, and form a business atmosphere in which "everyone is aware of risks and everything is risk-controlled" through regular training, system promotion and implementation.
(2) Strengthen compliance governance supervision and maintain the bottom line of honest work
The board of directors regards the construction of "Incorruptible Baiyao" as an important starting point to promote the "three non-corruptions" and integrates the requirements of "clean" and "incorruptible" throughout the entire process of corporate governance system design. The first is to improve the system prevention and control system. The company has clarified the supervisory and management powers for management personnel to work with integrity and perform their duties in compliance, supervise the management to systematically improve the business compliance system, incorporate integrity risks into the pre-review process for major decisions, ensure that compliance assessments and risk assessments for investments, mergers and acquisitions, bidding and procurement, fund use and other matters are carried out simultaneously, and achieve deep integration of risk prevention and control with business decision-making; second, build a closed loop The supervision mechanism strengthens the closed loop of audit rectification, supervises the independent performance of internal control audits, strengthens the closed loop of special audit supervision and rectification in key areas, promotes reform through review, promotes governance through review, and promotes the transformation of supervision results into governance effectiveness. The third is to cultivate a culture of integrity and compliance, supervise management to integrate the concept of integrity into the construction of corporate culture, promote compliance awareness and integrity awareness to be internalized in the heart and externalized in actions, and effectively guard the bottom line of the company's steady development.
5. Focus on the main business to “improve quality and efficiency” and promote high-quality development
(1) Operating performance has grown steadily, and development capabilities have reached a new level.
Overall, the company's various operating indicators have achieved growth against the trend, some core indicators have achieved substantial growth, and operating performance and management capabilities have reached a new level. First, continue to maintain steady growth. Achieved operating income of 41.187 billion yuan, a year-on-year increase of 2.88%; realized net profit attributable to the parent company of 5.153 billion yuan, a year-on-year increase of 8.51% from 4.749 billion yuan in the same period last year; net profit after non-attribution to the parent company was 4.865 billion yuan, a year-on-year increase of 7.55%; weighted average return on equity was 13.02%, a year-on-year increase of 1.03 percentage points; basic earnings per share 2.89 yuan/share, a year-on-year increase of 8.65%. Second, focusing on the main business has achieved remarkable results, and the business structure has continued to be optimized. Industrial revenue reached 16.016 billion yuan, a year-on-year increase of 10.7%, accounting for 38.89% of revenue. Third, management capabilities have been significantly enhanced, and quality and efficiency improvements have been remarkable. Administrative expenses decreased by 1.68% year-on-year; net operating cash flow was 4.60 billion yuan, an increase of 7.04% over the same period last year. Fourth, the "big single product" strategy has made breakthrough progress, and core advantages have continued to be consolidated. Baiyao aerosol still achieved rapid growth on the basis of a high base. In 2025, sales revenue exceeded 2.5 billion yuan, an increase of more than 22%. Sales revenue of Yunnan Baiyao ointment exceeded 1.2 billion yuan, an increase of more than 26%. The market leading position was further consolidated; the sales revenue of the "second curve" product Qixuekang oral liquid continued to maintain a rapid growth trend, with sales revenue increasing by approximately 68% year-on-year, and the formation of new growth poles accelerated. The resilience and explosive power of the large single product matrix have effectively stabilized the advantages of the core segment and provided solid support for the performance improvement. Fifth, employee salaries have increased steadily and high-quality development results have been shared. Promote the sharing of value creation results between the company and its employees, create an employee-centered incentive system that adapts to business growth, and insist on remuneration distribution favoring key technical positions, front-line and difficult positions, and high-level and highly skilled talents in urgent need, further increasing employee remuneration levels and fully stimulating organizational vitality. During the reporting period, the company's employee compensation overall achieved double-digit growth year-on-year.
(2) Strengthen innovation drive and empower transformation and upgrading with digital intelligence
The board of directors insists on innovation-led development, coordinates the promotion of R&D innovation and digital intelligence transformation, and creates new momentum for high-quality development. The first is to focus on R&D and build platforms to effectively promote the construction of R&D systems and R&D capabilities. During the reporting period, the company coordinated the development of the two cards of "traditional Chinese medicine" and "innovative medicine", and built a research and development system that "builds platforms, builds mechanisms, and gathers talents" to make research and development ideas clearer and more pragmatic. The company's R&D investment increased significantly by 21.51% compared with the same period last year. R&D investment accounted for 2.64% of industrial revenue, and its R&D capabilities continued to improve. R&D innovation focuses on key areas such as germplasm resources, innovative traditional Chinese medicines, secondary development of large varieties of traditional Chinese medicines, activation of "dormant varieties" and nuclear medicines, transdermal preparations, health products, and medical devices. There are currently 18 major varieties of traditional Chinese medicine under development involving secondary development, and 37 projects are in progress. Among them, two new Class 1 traditional Chinese medicines, Quan Sanqi Tablet and Fuqi Guben Ointment, have made important progress, and the research and development of innovative drugs using nuclear drugs as a breakthrough has made important breakthroughs. The second is to strengthen digital intelligence, promote integration, and advance smart transformation in depth. During the reporting period, the company continued to promote the in-depth integration of digital intelligence development and physical business, and the toothpaste smart factory was successfully selected as a global "lighthouse factory", becoming the first in Yunnan and the first in the field of traditional Chinese medicine and health products in the world. The independent research and development of "Marketing Business Operation Platform" and "Digital Intelligence Cloud Medicine Platform" drive the intelligent transformation of business and promote the traditional Chinese medicine industry to become high-end and intelligent.
(3) Strengthen market value management and continue to improve investment returns
During the reporting period, the board of directors attached great importance to the protection of investors' rights and interests, incorporated market value management into the important agenda of corporate governance, continued to improve the company's quality and investment value through system construction and practical actions, and actively gave back to investors. First, establish and improve the market value management system. In March 2025, the "Market Value Management System" was reviewed and approved to incorporate market value management into the corporate governance system, promote the matching of company value with intrinsic value, and effectively safeguard the legitimate rights and interests of investors. The second is to optimize the frequency of dividends and continue to reward shareholders. In 2025, the board of directors actively responded to the policy guidance of the new "National Nine Articles" on increasing the frequency of dividends and optimizing the pace of dividends. A special dividend was implemented in the second year, and a cash dividend of 1.818 billion yuan was implemented in September 2025. This time, a cash dividend of 2.824 billion yuan will be implemented in 2025 (subject to review by the shareholders' meeting). Combined with the special dividends implemented in 2025, the dividend amount is 4.643 billion yuan, accounting for 10% of the total. In 2025, the company's net profit attributable to shareholders of listed companies accounted for 90.09%. The company's cumulative cash dividends since its listing will exceed 33.3 billion. The company will reward investors with continued and stable cash dividends, effectively enhancing investors' sense of gain and enhancing the capital market's long-term confidence in the company's value. Third, the company continued to improve the quality of its disclosures and deepened its investor relations management. The company strictly fulfills its information disclosure obligations and received the Class A rating from the Shenzhen Stock Exchange's information disclosure assessment for the 18th time. It continues to enhance the importance, pertinence and transparency of information disclosure and promotes the company's investment value to reasonably reflect high-quality development results.
Part 2: Work Outlook for 2026
Looking forward to 2026, the Board of Directors, under the leadership of the Shareholders' Meeting, will unite and collaborate with the management sincerely, with a sense of urgency to seize the day and an enterprising spirit that dares to challenge, and will be results-oriented to do solid work and do it right.
1. Overall work ideas and goals
2026 In 2020, the company will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly study and implement the important instructions of the 20th National Congress of the Communist Party of China and General Secretary Xi Jinping’s important speech during his inspection of Yunnan, actively undertake the Yunnan Provincial Committee’s “3815” strategic development goals, and closely focus on “growth, efficiency improvement, and efficiency enhancement”. The main tone of coordinated advancement of "value", focusing on the development idea of "effectiveness, quality, and sustainability", strives to create a new era of New Baiyao with strong main business, leading innovation, efficient governance, and full of vitality, and build Yunnan Baiyao into a domestically leading and world-class modern pharmaceutical industry group worth hundreds of billions.
2. Key work measures
(1) Steady direction: high-quality party building leads to high-quality development and continuous improvement of modern corporate governance mechanisms
The company will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the party's leadership and strengthen party building into the entire process of company management, comprehensively enhance the leading role of party building in "promoting reform, improving governance, rallying people's hearts, and promoting development", promote the deep "integration and embedding" of party building into the entire process of strategic layout, corporate governance, operation management, and reform and development, and strive to create a new model of party building. At the same time, we should unify strengthening the party's leadership and improving corporate governance, adhere to the market-oriented direction, accelerate the improvement of modern corporate governance with Chinese characteristics and market-oriented operating mechanism enterprise systems, and continuously stimulate the vitality and innovation power of enterprises.
(2) Maintain focus: anchor strategic goals and effectively promote the efficient implementation of various tasks
The essence of strategy is the way to achieve sustained growth in corporate value. First, in terms of strategic direction, the company will regard "promoting the century-old Baiyao from 'excellence' to 'excellence' and becoming a domestically leading and world-class modern pharmaceutical industry group" as its unchanged direction and goal in the next five years. Based on the "2+3" strategic plan, it will iteratively upgrade to a "3+2" new strategy. It will not only continue the "excellent" Baiyao, but also actively seek change and development, always maintain an entrepreneurial attitude, and promote the company to "excellence." Second, in terms of strategic implementation, in 2026, the company will fully focus on the upgrading, decomposition and execution of the "3+2" strategy. Each business unit will always anchor the overall strategic direction of the group, deeply understand the strategic intent and core goals, scientifically dismantle and decompose them layer by layer, and transform them into clear and executable annual goals, key tasks and key measures. The goals will be in the same direction, the paths will be in the same frequency, and the responsibilities will be assigned to people, ensuring the accurate and efficient implementation of the strategy.
(3) Precise focus: optimize resource allocation and improve execution efficiency
In the current market environment, the real competitiveness is not "doing more" but "choosing correctly". First, strategic focus and continuous optimization of industrial portfolio. The company will build one, two, and three curves of customers, regions, and product life cycles for each business line, and further explore growth points around each curve to ensure that resource investment is more focused. The second is product focus, with large single products supporting the overall development. We will continue to promote the "big single product" strategy as a special task, and gradually build a product system with "head guidance, waist support, and stable chassis" through continuous investment, systematic management and long-term cultivation. The third is to focus resources and adhere to goal orientation to ensure efficient implementation. The company will adhere to goal orientation, promote the effective allocation of human resources, funds, budgets, incentives and other resources with strategic priorities, identify the core driving factors for business growth, dynamically adjust resource allocation through a scientific input-output evaluation system, and improve overall input efficiency.
(4) Seeking breakthroughs: cultivating the second curve and opening up room for growth
While stabilizing its business fundamentals, the company will accelerate the cultivation of a "second growth curve" that can sustainably expand through systematic capability improvements. The first is to deepen connotative development. The company will further comprehensively promote relevant work, continue to coordinate the coordinated advancement of cost reduction, quality improvement, and efficiency increase, and conduct systematic planning from a macro strategic perspective, especially based on the dimension of customer value creation; accurately identify and grasp the core value nodes in customers' real needs, and continue to create incremental value; at the same time, the company will continue to deepen the field of internal operation management, focusing on the optimization of production capacity structure, industrial layout adjustment, and logistics line optimization. We will deeply tap the potential in key areas such as chemical and warehousing resource synergy to continuously improve overall operational efficiency and resource allocation efficiency; secondly, to promote external expansion, the company will continue to adhere to the direction of strategic investment and mergers and acquisitions, continue to improve its professional research, judgment and screening capabilities for merger and acquisition targets, focus on selecting targets that are highly synergistic with Yunnan Baiyao's brand positioning, product matrix, channel network and core competitive advantages, concentrate its superior resources to promote strategic mergers and acquisitions breakthroughs, and effectively strengthen business development momentum. The third is to promote the creation of new growth points in existing industries. The company will continue to further promote the "large single product" strategic special work, build a clear product upgrade path around product echelons of different scales, and ensure clear goal settings, clear responsible entities, matching resource allocation, and assessment mechanisms in place. The pharmaceutical and health products sector quickly promotes the replication and promotion of the "large single product" model. The traditional Chinese medicine resources sector continues to fulfill the corporate responsibility of "chain owner" for the high-quality development of Yunnan medicine resources, promotes the quality and upgrading of the Chinese herbal medicine industry, and creates a "two-wheel drive of social benefits and economic benefits" by expanding the export market. It relies on Yunnan's resource advantages to support the construction of industrial advantages and product clusters, and at the same time uses industrial advantages to lead the value-added of resource advantages, forming a development trend of two-way synergy between resources and industry; the pharmaceutical business sector anchors "steady growth, control Risks, structure adjustment, and efficiency improvement are core goals and requirements, promote systemic management reform, and continue to strengthen lean operation and management capabilities; emerging business sectors such as nourishment, equipment, and skin beauty concentrate resources to create "big single products" in subdivided areas; international business is based on inheritance In line with the national and Yunnan provincial strategies, we will take advantage of the Mohan-Boten port hub, border economic cooperation policy support, and Hong Kong's open economy system and location advantages to deeply explore key markets and customers, and quickly drive the sales growth of the company's products in overseas markets.
(5) Strengthen empowerment: improve the management and control system and empower business competitiveness
A complete closed-loop management and control system and a strong management and control capability system are the prerequisites for enterprises to achieve strategic leadership and implementation. The company is committed to building a management and control system and organizational capabilities that match the strategy. The first is to strengthen the group's management and control system. The headquarters has established a "strategic + financial" management and control model to implement the four major functions of the group headquarters: "leadership, service, supervision, and capability." Under the guidance of the group's unified strategy, each business unit operates in accordance with the subsidiary model, strengthens professional and market-oriented operating capabilities, quickly improves the construction of sector functions, consolidates basic financial management, and truly implements the positioning of operating center and profit center. ; The second is to deepen comprehensive budget management, promote the consistent operation of "comprehensive budget-operation analysis-assessment and incentives", implement classified budgets, classified assessments, and classified accounting, strengthen rigid budget constraints and process corrections, enhance the depth of support of financial data for operating decisions, and ensure that major decisions have data, calculations, and basis; the third is to strengthen and consolidate the capabilities of the middle office and systematically promote the five cores around strategic goals. Construction of a core capability platform: Build a "big R&D" platform, establish an R&D system that is efficiently connected to the market and an innovative organizational model of "major projects + key teams + industrial transformation", improve the follow-up investment bundling mechanism of the R&D team, and coordinate the innovation frontier and market demand; build a "big manufacturing" platform to link production and sales, optimize production capacity layout, strengthen outsourcing management and brand protection; build a "big marketing" platform The platform coordinates online and offline operations, matches differentiated products, and strengthens the control of production ratio and the pace of resource investment; builds a "big supply chain" platform and uses strategic reserves, production and marketing coordination, warehousing and logistics optimization and other measures to prevent and control market risks and improve operational efficiency; improve the "big supervision" platform, connect discipline inspection, inspection, auditing, compliance, finance and other supervision resources, gather supervision and promote the implementation of key measures. The fourth is to improve the digital intelligence and brand empowerment effects, systematically implement the connotation and application scenarios of "use cases" such as "Lighthouse Factory", create high-quality IP, and better empower business development.
(6) Deepen sharing: share value creation results and build a win-win situation
Sharing is the basis for uniting people and stimulating vitality, and is also the cornerstone of sustainable development of enterprises. Internally, the board of directors will improve the market-based incentive mechanism to fully stimulate the vitality of the organization. Externally, it will allow shareholders to share investment returns with excellent performance and let society share corporate value with responsibility. The first is to improve the incentive and restraint mechanism to promote the common growth of employees and the company. Through contractual management, employees' short-term tasks are combined with the company's long-term strategic goals to create an agile incentive mechanism that adapts to business growth. The second is to strengthen market value management and continue to return shareholders and society. Market value management comes from value management, and value comes from strategic certainty, growth and sustainability. It is a comprehensive reflection of corporate governance level, management capabilities and development quality. The company actively responds to the regulatory agencies' requirements for market value management of listed companies, maintains strategic focus, strengthens business focus, seeks system breakthroughs, provides excellent operational management, and builds a win-win situation. It builds the company into a trend-leading, competitive, and high-return benchmark enterprise, continuously creates value for shareholders, and continuously returns to society.
2026 is a year of great significance in the development process of Yunnan Baiyao. It is not only the starting year of the second phase of the group's "2+3" strategy, but also the starting year of the group's new "3+2" strategy, and also the starting year of the "15th Five-Year Plan", which is of key significance for Baiyao to achieve a higher level of development. Yunnan Baiyao works with one heart and one mind, with a firm direction and consistent steps. At a new starting point, it will effectively promote the century-old Baiyao from "excellence" to "excellence".