Adhering to the procurement concept of "professional integrity, integrity and win-win, and building a healthy supply chain", we adhere to the procurement principles of "fairness, justice, green and transparent", with the purpose of win-win, operate with integrity, and establish a cooperative relationship of mutual trust and mutual benefit between upstream and downstream, Achieve sustained, stable, low-cost, and low-risk operations of the entire supply chain.

Supplier Management System
In 2023, the centralized procurement center will use the Group’s electronic procurement platform (SRM) to carry out full life cycle management of suppliers from the aspects of supplier admission, classification, auditing, evaluation, elimination and quality management, and promote green and low-cost Based on the carbon procurement concept, we give priority to suppliers that have passed system certifications such as environmental management, occupational health management, and social responsibility standards, and conduct dynamic management of suppliers to continuously adjust and optimize the supplier structure.
(1) Supplier access management
conducts comprehensive assessments and reviews when selecting suppliers, including considerations of supplier qualifications, product quality, supply capabilities, social responsibility, etc., and encourages and advocates suppliers to obtain environmental management system certification ( ISO14001) and health and safety management system certification (ISO45001), and the acquisition of system certification is one of the priority selection conditions in the supplier screening process.
(2) Classification of qualified suppliers
The Group’s centralized procurement center divides suppliers into strategic suppliers, bottleneck suppliers, leveraged suppliers and general suppliers based on the type of purchased materials, purchase amount and supply guarantee risks, and Carry out classification management. Through signing long-term or annual cooperation agreements with suppliers and annual bidding, the centralized procurement center reduces the risk of stockouts, enhances supply guarantee capabilities, and ensures stable production, stable quality, and controllable costs of the Group's products.
(3) The supplier audit
team will appoint a supplier audit team composed of cross-professional and high-level personnel. During the supplier audit process, they will conduct on-site communication with suppliers based on the problems discovered and put forward targeted suggestions for improvement. We will also invite suppliers to our company for on-site visits and exchanges, share the company's advanced production experience and management experience, help suppliers in chemical industry, agricultural sidelines, packaging materials and other fields to understand pharmaceutical quality management specifications and quality system construction requirements, and help suppliers specialize It is for small and medium-sized suppliers to improve their comprehensive management level and provide guarantee for the sustainable, stable, low-cost and low-risk operation of the supply chain.
(4) Supplier evaluation
The quality management department of each subsidiary, together with the user department and the centralized procurement center, conducts annual evaluations of suppliers. The evaluation involves dimensions such as supplier supply quality, price, delivery time, and EHS system construction. The centralized procurement center eliminates substandard suppliers based on the evaluation results, coordinates adjustments and optimization of suppliers, promotes continuous improvement of suppliers, and reduces procurement risks.

In accordance with the "Good Manufacturing Practice for Pharmaceutical Products", we conduct quality management on suppliers according to different material classifications, and promote suppliers to continuously improve product quality and quality through signing quality assurance agreements, conducting quality training for suppliers, implementing quality audits, strengthening quality inspection and other measures. The supply guarantee capability ensures the continued stability of the supply chain and provides the Group with high-quality products and stable supply guarantee.

During the reporting period, the quality departments of each subsidiary conducted quality assurance training or interviews with suppliers 7 times.