Jointown Pharmaceutical Group Co., Ltd. (hereinafter referred to as "Jointown" or "the company") is a technology-driven comprehensive service provider for the whole chain pharmaceutical industry. The company is based on the big health industries such as pharmaceutical circulation, logistics services, and medical health. Its main business consists of the following six parts, namely digital pharmaceutical distribution and supply chain services, general agency brand promotion services, pharmaceutical industry and OEM business, digital retail, intelligent logistics and supply chain solutions, and medical health and technology value-added services.

Since the company was listed on the Shanghai Stock Exchange on 2 November 2010 (stock abbreviation: Jointown, code: 600998), it has achieved sustained and stable high-quality development, ranking fourth among Chinese pharmaceutical commercial enterprises for many years in a row, leading the Chinese private pharmaceutical commercial enterprises, ranking 93rd among the Fortune 500 companies (Chinese version) in 2021 and 65th among China's top 500 private enterprises.

In 2021, the annual operating revenue of Jointown hit a new record and reached RMB 122.407 billion, growing 10.42% year-on-year. Due to the impact of abnormal events, the net profit attributable to the parent company dropped year-on-year for the first time, with a decrease of 20.38%, still reaching RMB 2.448 billion. The net profit attributable to the parent company after deduction was RMB1.403 billion, with a year-on-year decrease of 24.80%. The net cash flow from operating activities of the company was RMB 3.459 billion, which remained in good condition during the reporting period. In 2022, the development of Jointown keeps the momentum. In the first quarter, the company's operating performance showed a restorative growth over the same period of the previous year, with a revenue of RMB 35.15 billion and a year-on-year increase of 7.73%. The net profit attributable to the shareholders of the listed company after deducting non-recurring profit and loss was RMB 477 million, with a year-on-year increase of 13.52%.

2021 is the starting year of the new ten-year journey after Jointown has stepped into the capital market for ten years. The company has completed the layout of all channels, all categories, and all scenes of services, and transformed and developed to digitization, Internet, and platform.

At present, the number of product specifications of the company has increased to 510,000, including 99,400 for Chinese and Western patent medicines, 273,200 for devices, 73,000 for traditional Chinese medicine, and 64,300 for health products and cosmetics, better meeting the "one-stop" procurement needs of customers from different downstream channels. The scale of the company's B-end customers has increased to 397,000, including 12,000 customers in urban and county-level public hospitals, 175,000 customers in the chain and single pharmacies (covering more than 300,000 retail pharmacies), 190,000 customers in grassroots and private medical institutions, realizing the full coverage of the first, second, third and fourth tier terminal channels, so as to ensure that the OTC products and prescription drug varieties of upstream enterprises can quickly and smoothly enter the terminals of various channels; Meanwhile, the number of online and offline C-end customers has exceeded 26 million.

In terms of platform and the Internet, the operating facilities of our pharmaceutical supply chain service platform have increased to 141 warehouses, with a total construction area of 4.1 million square meters. Among them, the area of warehouse facilities meeting GSP standards has increased to 2.57 million square meters, including 519 cold storages (with an area of 45,000 square meters and a volume of 105,000 cubic meters). Using the Internet and digital tools, we have built a supply chain service platform to serve upstream enterprises (F-end), downstream B-end customers (including medical institutions, pharmacies, clinics, FMCG stores, government procurement groups, etc.) and C-end users, and established a B2B / B2C / O2O integrated service system with complementary advantages, high efficiency and coordination according to the FBBC model. At present, our empowered B-end customers have increased to more than 200,000, and the sales scale of the B2B e-commerce proprietary trading platform has reached RMB 14.47 billion in the whole year, ahead of all kinds of Chinese proprietary pharmaceutical B2B e-commerce platforms.

While consolidating the transformation outcomes, we actively cultivated new drivers and new business models.

The Ten-Thousand Store Alliance Plan has opened 6,138 self-operated and franchised pharmacies, covering 28 provinces and cities across China. The number of pharmacies is expected to exceed 10,000 by the end of 2022. We strive to develop more than 30,000 alliance pharmacies in the next three years, and serve more than 100 million C-end members.

The "Me Health" service platform for C-end customers has been put into operation. Jointown has obtained the first internet hospital license and released "Me Health" V1.0 version app (including for-client and for-doctor). The service capacity of the for-client is growing rapidly, and the average daily prescription exceeds 120,000.

The pilot of the Bb/BC warehouse distribution integrated supply chain service system has been successful. The company has put into operation four BC integrated warehouses, namely the warehouse of Guangdong, Shanghai, Jiangsu, and Hubei, with a daily turnover of over 99%, which has greatly improved the service efficiency of the supply chain. In December 2021, Jointown cooperated with Ali Health, providing professional medicine logistics operation and BC warehouse distribution integration service for it. At present, the warehouse has been put into trial operation.

The commercialization of logistics technology output and third-party and fourth-party logistics supply chain solution has speeded up. In 2021, third-party logistics business operation revenue has reached RMB 531 million, with a year-on-year increase of 74.31%. In January 2021, the company obtained a vaccine distribution order from Sinovac. Up to now, the company has delivered some 1.266 billion doses of vaccine, covering 26 provinces and cities and driving 6,586,900 kilometers. Order completion rate achieved 100%. Logistics service has been expanded to non-pharmaceutical fields. In November 2021, through public bidding, JPG Logistics was awarded the sub-project of building "Maotai Digital Marketing Platform" and designed a logistics management platform integrating warehouse, transportation, and distribution with full link, visualization, and traceability in the whole process. At present, the front-end application of Maotai Digital Marketing Platform, "i-Maotai", has been officially launched and achieved great success.

2021 is the first year of China’s national 14th five-year plan. It is also the first year after the Board of Directors transition and a crucial year for the digital transformation of the company. Jointown consistently strives to be the leader of digitalization in the pharmaceutical sector, actively uses new technologies to reshape traditional management models and business models, and achieves gratifying results. "Financial Sharing Cloud Platform Project" was selected as a typical case of digital transformation of listed companies in 2021, and "5G Based Chronic Disease Management Platform Construction Project for Key Populations" was selected as a 5G+ medical and health application pilot project of the Ministry of Industry and Information Technology. Rongzhi Technology (Wuhan) Co., Ltd., Hubei Jointown Cloud Warehouse Technology Development Co., Ltd., and Jointown Traditional Chinese Medicinal Materials e-Commerce Co., Ltd., under the company, were selected and included into the Hubei provincial "Gazelle" sci-tech innovation enterprise list as innovative information technology enterprises.

While focusing on its own development, Jointown strongly advocates the ESG development principle and fulfills corporate social responsibilities. When rainstorms caused floods in Henan, Shanxi, Suzhou of Hubei, and other places, we organized rescue work immediately and dispatched drugs and materials to support the disaster areas; when the pandemic spread in many places, we gave full play to our pharmaceutical supply chain service capacity which is scarce in the industry and actively participated in the pandemic control and supply guarantee work; we courageously assumed social responsibility, donated money and materials to many underdeveloped areas, implemented industrial assistance, and strengthened the "hematopoietic" function. In 2021, we donated more than RMB 200 million in cash and materials. We are awarded "fraternity enterprise" and "advanced party organization in the province" by Hubei provincial government.

A new development cycle of the pharmaceutical industry is coming. Under the superimposed influence of the continuous national promotion of medical insurance payment reform and internet medical policy of China, the development of science and technology will continue to boost innovation of the new model of the medical and health industry, accelerating the reshuffle of the industry. We will continue to be a pioneer in the digitalization of pharmaceutical enterprises. Based on pharmaceutical circulation, logistics services, medical health, and other rising big health industries, we will unswervingly make use of the Internet and big data, do a better job in providing upstream and downstream customers with services in all channels, all varieties, and all scenarios, creating greater value for customers and growing together with them.