Group 1: Report General Information - The research object is Guizhou Bailing, belonging to the traditional Chinese medicine industry. The reception time was July 4, 2025, and the company's reception staff included the chairman, general manager, deputy general manager, financial director, and securities affairs representative [16] - The institutions participating in the research included Wang Lingyi, Pan Potao, Song Shijie, etc [2] Group 2: Company Business Analysis Marketing Reform - Since 2022, the company has launched a direct - sales system reform pilot in 9 provinces, and the reform has achieved remarkable results with steady growth in sales profits in reform areas. Currently, the direct - sales system reform has been completed in 15 provinces, which will positively impact the company's future sales efficiency and profitability [24] - The marketing model reform has changed the previous way of simply assessing growth rate, introducing assessment items such as per - capita efficiency and per - store efficiency, and reasonably formulating assessment indicators to mobilize the enthusiasm of sales staff. The company also plans to promote equity incentive plans in due course [24] - The company adheres to the profit - first orientation, optimizes the variety structure and price system, promotes the cultivation of large - scale varieties, and focuses on key national customers (NKA), regional large - scale chains (LKA), and the medical treatment sector to drive sales and profit growth [24] Sales Expense Optimization - The company's optimization of the sales expense ratio is a long - term task. It will continue to deepen the marketing system reform, gradually expand the coverage from the large - package model to the direct - sales model, and use the sales expense ratio in each region as a performance assessment indicator [24] - The company has established a market supervision department to vertically supervise the business activities and finances of branches and offices, and deeply participate in cost control and business negotiations [25] - Through optimizing and improving management, sales, and reward mechanisms, the company sets new assessment requirements for sales staff, strengthens budget assessment for direct - sales branches, and implements channel optimization policies for some varieties to reduce sales expenses. It also plans to promote equity incentive plans [25] Product R & D Progress - The Phase III clinical research of Tangning Tongluo is progressing normally according to the clinical protocol, and patients are being enrolled successively. The company will disclose information in a timely manner after achieving phased progress in R & D projects [26] Solvency - The company maintains long - term and stable cooperative relationships with multiple banks. After being removed from the risk warning list, the credit rating of the company by financial institutions will be upgraded. Considering factors such as the company's operating conditions, asset - liability structure, and asset utilization efficiency, the company does not have a solvency problem and will continue to optimize its asset - liability structure [26] Share Pledge - As of now, Chairman Jiang Wei holds 245,346,284 shares, accounting for 17.55% of the company's total shares, and 100% of his shares are pledged. The purpose of the share - pledged financing is for the investment and operation of non - listed company industries and the repayment of his stock - pledged repurchase transaction liabilities. The pledged shares do not bear performance compensation obligations [27] - Jiang Wei's total liabilities have been significantly reduced, and his credit status is good. The pledge risk is controllable, and there is currently no risk of forced liquidation. If such a risk occurs in the future, he will take measures such as early repurchase and additional pledges [27][28] R & D Expense Capitalization - The company manages R & D expenses in strict accordance with relevant accounting standards, and the annual report data has been audited by an accounting firm [29]

Group 1: Marketing Reform and Sales Efficiency - The company initiated a direct sales reform pilot in 9 provinces starting in 2022, achieving significant results with steady profit growth in these areas. The reform has now been completed in 15 provinces, positively impacting sales efficiency and profitability [1] - The marketing reform introduced new performance metrics such as per capita efficiency and store efficiency, moving away from solely focusing on growth rates. This aims to motivate sales personnel and align their income with company performance through potential stock incentive plans [1] - The company is focusing on optimizing product structure and pricing systems while nurturing major product lines and deepening relationships with key national customers [2] Group 2: Sales Expense Management - The company is continuously working on optimizing sales expense ratios through various strategies, including deepening marketing system reforms and transitioning from a large package model to a direct sales model [2] - A market supervision department has been established to oversee business activities and financial management across subsidiaries, enhancing expense control and commercial negotiations [2] - New performance requirements for sales personnel have been introduced, and budget assessments for direct subsidiaries are being strengthened to reduce sales expenses [2] Group 3: Clinical Research and Financial Stability - The clinical research for the product "Tangning Tongluo" is progressing as planned, with patient enrollment ongoing. The company will fulfill its information disclosure obligations upon achieving significant progress [2] - The company maintains stable long-term relationships with multiple banks, and its credit rating is expected to improve post-listing. There are no short-term solvency issues, and the company plans to continue optimizing its asset-liability structure [2] - The chairman holds 245,346,284 shares, representing 17.55% of the total share capital, all of which are pledged. The purpose of the pledge is for investment in non-listed companies and debt repayment, not for operational needs [3]

Group 1: Marketing Reform and Sales Strategy - The company is implementing a marketing model reform aimed at optimizing sales models, increasing profit contribution rates, and reducing sales expense ratios. Since 2022, the reform has been piloted in 9 provinces, resulting in steady sales profit growth in these regions. The reform has now been completed in 15 provinces, positively impacting future sales efficiency and profitability [1]. - The new marketing model shifts from solely assessing growth rates to incorporating metrics like per capita efficiency and store efficiency, motivating sales personnel. Future plans include introducing equity incentive programs to align employee benefits with company growth, transitioning personal income from property-based to asset-based income [1]. Group 2: Product Development and Clinical Trials - The Huanglian Jiedu Wan project, China's first "general" syndrome-type traditional Chinese medicine new drug, has completed Phase II and III clinical trials involving 840 cases. The trials focus on validating the drug's effectiveness and safety for treating specific Western medical diseases, providing a basis for future market approval [2]. - The company is progressing with the clinical research of Tang Ning Tong Luo, with patient enrollment ongoing. Updates will be disclosed as the project achieves milestones [2]. Group 3: Competitive Strategy and Market Positioning - The company has defined its new strategic positioning around four platforms: a large-scale manufacturing platform, an industry chain integration platform, an all-channel sales platform, and a large product R&D platform. The manufacturing capacity is expected to increase from 25,000 tons to 60,000 tons annually, enhancing future sales capabilities [3]. - The integration platform aims to strengthen product lines through licensing and branding strategies, while the all-channel sales platform focuses on comprehensive market coverage, including online and offline channels [3]. - The company aims to become a leader in the traditional Chinese medicine sector by leveraging its advantages in production capacity, sales, and R&D to effectively compete in the market [3]. Group 4: Financial Performance and Future Outlook - In Q1 2025, the company experienced a decline in performance due to last year's rapid growth and insufficient market demand. The company plans to focus on its core business and seek new growth points while enhancing its core capabilities and adapting to market changes [4]. - The company emphasizes improving operational quality, cash flow, profitability, and asset return rates through optimized management, sales models, and incentive mechanisms to achieve its annual business goals [4].