On April 20, Tonghua Dongbao Pharmaceutical Co., Ltd. (stock code: 600867, hereinafter referred to as "Tonghua Dongbao" or the "Company") released its 2022 Corporate Social Responsibility (CSR) Report. The Company has published CSR reports for ten consecutive years, starting from 2013. The report summarized the Company's practices and achievements over the past year in areas including environmental protection, R&D and innovation, drug accessibility, product quality, and corporate governance.

Improving access to medicines and strict quality control

Tonghua Dongbao is dedicated to meeting the unmet needs of patients with endocrine and metabolic diseases. We have created three new class I drugs for diabetes and two for gout/hyperuricemia. We are also researching and developing drugs for obesity, nonalcoholic steatohepatitis (NASH), and other conditions, aiming to benefit a wider range of patients.

In the volume-based procurement tender for insulin in 2021, our insulin products won the bid as Category B candidates. This has reduced medication costs for patients, improved drug accessibility, increased insulin usage, and facilitated the shift from imported drugs to domestic alternatives. We have intensified academic activities to improve the competence of primary care providers and raise public awareness about diabetes. We have also increased the number of after-sales service points and expanded the service scope. As a result, patients can access high-quality products at lower prices and receive thoughtful and comprehensive after-sales services.

Intellectual property protection is one of our top priorities. As of 2022, Tonghua Dongbao and its wholly owned subsidiary Dongbao Zixing (Hangzhou) Biopharmaceutical Co., Ltd. have filed 107 patent applications, including five PCT applications. These patents cover countries and regions such as Europe, the United States, Japan, Brazil, Mexico, and Indonesia. Currently, we have 47 issued patents, with 46 granted in China and one granted in another country.

Drug quality is the cornerstone of our business. We maintain strict control over all stages of drug production, implementing a comprehensive quality management system that covers material inspection, production control, drug release, and after-sales services. We ensure all employees have a strong awareness of quality risk management. Our marketed products have obtained GMP certification from the National Medical Products Administration. Additionally, we have established an independent department that is responsible for pharmacovigilance in compliance with relevant regulations to ensure drug safety for patients.

Sound governance

Good corporate governance is crucial for protecting shareholders' rights and ensuring sustainable, high-quality growth. We implement a modern enterprise system, forming a team of professional managers led by the chairman. This system involves the shareholders' meeting, the board of directors and its committees, the supervisory committee, and the management. We have clearly defined the authority and responsibilities, rules of procedure, and working procedures for these organizations. This system guarantees compliant operations and fosters the healthy growth of the Company.

We care about the rights and interests of our shareholders. To enhance information disclosure and investor relations management, we promptly update our shareholders on significant matters and address their concerns. Moreover, we have a long-standing practice of distributing cash dividends, with a total of more than RMB 4 billion having been paid since the Company went public. If approved by the shareholders' meeting, the annual profit distribution proposal in 2022 will result in a total of about RMB 1 billion of cash dividends. During the reporting period, we completed two rounds of share repurchases and cancellations, amounting to about RMB 400 million. These efforts further enhance the return on investment for shareholders.

Emissions reduction and environmental protection

Tonghua Dongbao adheres to the philosophy of "green development", integrating environmental protection into our business practices. We stay updated with local government policies, continuously enhance our environmental performance, and strive to become a green, clean, and eco-friendly enterprise.

In 2018, we started replacing coal-fired boilers with natural gas-fired ones. By 2022, all our boilers were transitioned from coal to natural gas. As a result, we expect an annual reduction of 60,000 tonnes in carbon dioxide emissions.

In 2022, our emissions of industrial gas, liquid, and solid wastes remained well below the permitted levels.

We value biodiversity conservation, ensuring that our production and operational activities have no negative impact on biodiversity. Furthermore, we have built a natural reserve to protect the source of our production water. We have allocated hundreds of thousands of yuan for forest protection within and outside the reserve every year over the past four decades.

Moving forward, we are committed to fulfilling our obligations towards all stakeholders. We aim to align our business operations with social responsibility, striving for sustainable, high-quality development in economic, social, and environmental dimensions.