爱上海419论坛|上海夜生活论坛|上海后花园论坛|上海品茶网论坛

　　Cctv news(Reporter Xiong Yunyun) On the afternoon of March 4th, Jiangxi Xinyu Public Security Bureau held the launching ceremony of the "quick reaction system" service mechanism of Xinyu Public Security Bureau in the square in front of Jiyang Police Workstation in order to further promote the pilot work of building a peaceful Xinyu and modernizing the social governance in the city.

　　"Quick-reaction system" refers to the rapid reaction circle that takes the construction of command system as the "brain", the construction of prevention and control system as the support, the integration of police and species as the starting point, and the construction of team and equipment as the guarantee. It is a rapid reaction system with Xinyu public security characteristics, which covers the whole core city, is on standby 24 hours a day and arrives in "1, 3 and 5" minutes.

　　After the service mechanism of "quick reaction system" is completed and put into use, it will form a rapid response pattern of combining point, line and plane and linking special groups, further improve the rate of seeing police and handling affairs, become an outpost for serving the masses, preventing public security, resolving disputes and dealing with emergencies, effectively improve the efficiency of police work and the ability to control public security, and make new and greater contributions to the construction of a peaceful Xinyu.

　　Xia Deyong, deputy mayor of Xinyu City, secretary of the Party Committee and director of the Municipal Public Security Bureau, said that the launch of the "quick reaction system" service mechanism of the public security organs in Xinyu City marked a new breakthrough in the policing mode based on street policing workstations, new progress in the prevention and control system led by smart policing, and new achievements in the convenience measures aimed at serving the masses, which is of great significance in the history of public security development in Xinyu City.

　　Next, the public security organs in Xinyu will use innovative ideas to "solve problems", reform methods to "solve problems" and take the initiative to "answer questions", comprehensively promote the implementation of the "quick reaction system" service mechanism in Xinyu, and create a new modern policing model with "intensive police force, diversified functions, flat command, efficient service, standardized law enforcement and convenient service".

Video:Deng Chao played bad and listened to the children’s song Baby was scared silly, and the roar of the ghost lion broke Li Chen’s eardrum

Zhejiang Satellite TV’s "Running Brothers" broadcast the eleventh program "Three Schools Tournament" at 21:10 pm on December 19 (Friday). In the program, the "Running Group" and guests Lin Junjie and "Ghost" Wu Yingjie all returned to school to transform into "straight-A student". The youthful and pressing costumes made people’s eyes shine. Many viewers marveled that the "Running Group" was really getting younger and younger. As a high-end variety show with the goal of creating joy, "Running Brothers" not only brings joy to everyone, but also always spreads various positive energy life concepts. For this reason, it has also been praised by the authoritative media "People’s Daily". In the second round of the game "Hundred Runners Race" in this episode, the "Running Group" once again showed the power of "running" with practical actions. In the game, the three competing teams were still a little tense before the start of the run, and when the run officially started, they were all infected by the positive atmosphere brought by the run and couldn’t help but cheer for each other. Moreover, it was raining heavily on the day of the recording of the show, and the appearance of hundreds of people running together in the rain was full of touching inspirational breath. After watching the show, many viewers said: "The part of running in the rain is just too loving. Everyone is so serious and hard-working. I can’t help but want to run in the rain with them."

And this issue of the "brand-name war" was equally exciting. Because of the "Three Schools Tournament", the newly formulated offensive and defensive rotation rules once again gave the game a new lease of life, and all kinds of amazing hilarious scenes followed. Wang Zulan, who had been "bullied" in the previous brand-name game because of his weak size and had never torn anyone else, finally completed his brand-name-tearing first kill; Angelababy actually became the heroine of Lin Junjie’s new song MV because of protecting his teammate Zheng Kai and his brand; Chen He, who had always loved to stick to "Nanny" Li Chen, also dared to directly provoke the other party this time. All kinds of unexpected situations made the audience enjoy watching, and said one after another: "This is probably the most reversed brand-tearing war, it’s simply wonderful!"

"Run, Brothers" Hundreds of people run in the rain "Love warms hearts"

As a "positive energy variety show" once praised by the People’s Daily, "Run Brothers" has unique communication skills in spreading joy, touching, and inspirational elements. The secret lies in the natural advantage of "running". In this episode, three teams will lead their respective 100 students in an 800-meter medium-distance race. This distance is neither long nor short. It is no pressure for strong boys, but it is not a small challenge for weak girls. Before the run began, the three teams were still unconvinced to provoke each other, fighting dances and shouting slogans. The scene was not lively. But after starting to run, when I saw that the neat team was distancing themselves due to differences in personal physical fitness, and some students were obviously losing their physical strength and gradually falling behind, the other two teams, who were competitors one second ago, became cheerleaders cheering in unison, cheering for the team that was running hard. The scene was very touching.

In the last episode of the show, Wang Zulan accidentally sprained his ankle, so this time because of the injury and inconvenience, the speed was obviously not able to keep up with the big army. The boys in the same team immediately took turns running with him, fully demonstrating the good character of mutual help. After watching the show, the user @Youdar sighed: "At first, I heard that I was worried about Lan Lan’s foot injury, but I didn’t expect him to enjoy the treatment of the’eight-lift palanquin ‘because of this. The performance of the classmates is really warm."; Lin Junjie’s yellow team had a loyal female fan who helped them complete the task of eating biscuits in the previous game, but the girl was obviously not able to adapt when she started running, and it didn’t take long to be left far behind. Li Chen and Lin Junjie, who were running in front of the team, immediately turned to her side to encourage her, one left and one right to accompany her to run the whole distance. Although the final result dropped, Lin Junjie didn’t care and kept comforting the guilty girl: "The most important thing is that everyone completes the task together." After reading this paragraph, many viewers said: "This kind of group game can best show everyone’s spirit of helping each other. The performance of the’running team ‘was very good. At the end, the moment all the members reached the finish line, they were moved to tears, okay? I also want to run with them."

The famous brand war and reversal frequency are fascinating, and netizens are hooked

If the "Hundred Runners Race" is full of love and warmth, then the finale "Tear Brand War" brings infinite joy. This issue of "Tear Brand War" also has new rules without suspense: the attacker turns into an invincible "Bell Man", and the defender can only run away and defend but not counterattack. Because of this interesting rule like BUG, there are many unprecedented exciting situations in this episode. Because of his weak physical fitness, Wang Zulan has been complained by his teammates since the first episode of the show. When playing the game of "Tear Brand", he became the only member of the "Running Team" who did not successfully tear other people’s brand. And Wang Zulan was also full of deep obsession with tearing up the famous brand. In the last episode, he kept begging Angelababy to let him fulfill his wish, but in the end not only failed but also sprained his ankle. In this episode, because of the invincible status of the "bell man", Wang Zulan finally had the best chance to realize his wish. Although he was the only one left in the blue team in the end, he still relied on excellent "diplomatic" means to join Angelababy and Chen He to KO the "ghost" Wu Yingjie. However, after successfully completing the first kill, Wang Zulan obediently obediently obeyed the agreement and let Li Chen KO himself. Many viewers were completely amused by Wang Zulan’s obsession after watching this paragraph, and they all said: "Wang Zulan went from having hope of getting the first kill to having his teammates eliminated, and then joined the yellow team to complete the first kill, and in the blink of an eye was KO by’Chen Ma ‘.

Wang Zulan "worked hard and tried hard" in order to fulfill his wish, and Angelababy "sacrificed his life" without hesitation in order to protect himself and his teammates. In the program, Angelababy came forward to negotiate despite the danger in order to save Zheng Kai, who was caught by Lin Junjie. In the face of the pleas of his friends, Lin Junjie was also a little embarrassed to start, and he was ready to release a new album. He had an idea and said, "Angelababy, if you help me shoot the MV for my new album, I will let you go." The baby who was trapped in the tiger’s den was immediately so excited that he said three times in a row: "I will shoot." Some attentive netizens checked after watching the show and found that Angelababy had indeed become the heroine of Lin Junjie’s new song "It’s a pity there are no ifs". Many netizens were shocked by Lin Junjie’s efficiency and said: "JJ, are all your MV heroines’abducted ‘like this? No wonder you still had to pull the hook at that time, it was too witty."

Author | Cao Shuangtao

Editor | Yang Bocheng

Title map | IC Photo

According to relevant media reports, Baichuan Intelligent, founded by Wang Xiaochuan, the former CEO of sogou Company, is carrying out a new round of financing with hundreds of millions of dollars, which may become one of the largest financing in the domestic AI field in 2024.

Although Baichuan Intelligent did not respond to this financing rumor, some investors revealed that the financing has not yet been finalized, and the specific valuation is different from the market rumor of $1.8 billion.

In addition to the valuation of Baichuan Intelligent exceeding 10 billion yuan, the current valuation of the dark side of the moon and MiniMax exceeds 2.3 billion US dollars and 2.5 billion US dollars respectively, and the valuation of Zhipu AI exceeds 10 billion yuan. With the help of capital, these four AI startups are becoming the "four new AI dragons" in the era of generative AI. Take Zhipu AI as an example. In the third quarter of 2023, Zhipu AI directly completed the B5 round of financing.

Source: Tianyancha

Behind the capital bet on the "new AI Four Little Dragons", or the epitome of the high enthusiasm of the global capital market for the AI ​ ​ big model in 2023.

According to public data, in 2023, the number of investment and financing in AI field in China was about 232, and the total amount of financing was about $2 billion. According to CBInsights data, in 2023, generative AI startups received about $20.4 billion in global financing, more than five times that of $3.6 billion in 2022.

In 2024, the capital market is gradually changing from hot to cold for the big AI model. In the primary market, IT orange data shows that in 2024, the amount of financing for AI production and AI industry applications in Q1 was 12.389 billion yuan and 7.401 billion yuan respectively, and the corresponding number of investment events was 36 and 65 respectively.

If we consider that the "New AI Four Little Dragons" have won a large amount of financing in the industry, other AI start-ups are facing the problem of financing difficulties and less financing, and AI applications have also become a new direction of capital concern.

Overseas markets are similar to those in China. Meritech Capital, which invested in Facebook and Salesforc, as well as TCV, General Atlantic, Blackstone and other institutions have suspended their attention to generative AI. Gartner analyst John-David Lovelock said that the investment of billions of dollars in big models has slowed down and almost ended, and hot money has flocked to AI applications.

Source: The Information Database

In the secondary market, the AI big model has been difficult to drive the stock price of enterprises to rise. On April 17th, for example, the share prices of Baidu, 360, Iflytek, Jinshan Office and many other enterprises all dropped significantly compared with the highest point in 2023, and some enterprises even fell by over 60%.

Source: Based on public information collation

Behind this is that the big model has driven the company’s performance lower than market expectations. Based on the financial reports of many listed companies in 2023, AI has made limited contributions to the performance of other listed companies, except for Baidu and Meitu, which achieved substantial profit growth through AI. In 2023, the net profit of Bailian shares and Perfect World dropped sharply.

Source: Financial reports of major companies

The essence of the primary and secondary markets reveals that with the rapid progress of AI big model technology, how can enterprises hedge the high training cost and research and development cost of big models? How can AI make money, so as to drive the continuous growth of the performance of AI start-ups and quickly complete the IPO to achieve listing?

When commercialization becomes the new direction of AI big model competition in 2024, AI start-ups with doubtful business models and weak revenue growth will accelerate their liquidation, and the industry will usher in a real reshuffle stage.

First, the subscription mode and intelligent hardware at the TOC end need to be accumulated for several years.

Since the development of the big model in 2023, one of the big models on the TOC side has been commercialized as the Internet subscription model. For example, the price of continuous monthly subscription and annual membership in ERNIE Bot is 49.9 yuan and 588.8 yuan respectively. Zhipu AI charges according to tokens used by users during their visit to official website.

Source: official website, ERNIE Bot

The other is to build AI capability and put it on intelligent hardware. In addition to common AI mobile phones, AI learning machines, AI PC, and AI TVs, Humane, an American startup AI company, has also launched an AI Pin with the size of a badge and no screen. The device is connected to the mobile phone software service in Cosm OS mode, and the information is projected on the user’s palm, and the interaction is carried out in voice control mode.

Source: Amazon

However, from the perspective of AI intelligent hardware, whether it is Huawei Mate60, which sold well last year, or Samsung Galaxy S24, which went global, it won 6.53 million units by the end of February this year, all of which are the flagship models of manufacturers. And the profit earned by millions or tens of millions of shipments is almost negligible before the manufacturer’s high R&D investment.

At the same time, changes in overseas consumer markets are forcing manufacturers to decentralize the prices of intelligent hardware products equipped with AI functions.

According to sources in the supply chain, inflation in many overseas countries is still at a high level, and Samsung and Apple have lowered their shipment expectations in 2024. Relevant research institutions have also lowered the growth rate of smartphones from the original 5%-10% to around 5% or lower in 2024. Based on this, mobile phone SoC and brand manufacturers have accelerated the decentralization of AI functions to low-end models in overseas markets, hoping to improve the penetration rate of AI phones.

The same situation also appears in the AI PC market. At this stage, consumers may increase their willingness to buy because of the AI function carried by PCs, but they will not pay higher prices. AI has no obvious value-added effect on PC manufacturers for the time being. If PC manufacturers want to hedge R&D costs, they can only decentralize the price of AI PC.

If the price decentralization drives the growth of shipments and usage, manufacturers must invest more large-scale model computing power to ensure the user experience, which in turn raises the operating costs of manufacturers. Moreover, with the prolonged period for consumers to buy smart hardware such as smart phones and PCs, hardware products such as computing chips and peripheral chips also need to be prepared 3-5 years in advance to ensure that the upgraded services are not micro-upgraded.

Intelligent hardware manufacturers also need to continue to differentiate AI scene services. Otherwise, under the condition that e-commerce platforms can buy large model members of Internet vendors at low prices, high-priced AI hardware products will make consumers feel that the price ratio is insufficient and discourage consumers.

At a deeper level, AI intelligent hardware products are upgraded or innovated on the basis of existing products, and the consumption logic of intelligent hardware market has not changed. This means that large-scale profit can be achieved by driving sales growth through AI equipment, and the time period may be longer.

Considering that the global intelligent hardware market segment is basically mastered by the head manufacturers, and most of these enterprises are mainly self-developed AI models, leaving limited opportunities for AI startups.

Domestic AI start-ups that are aware of this problem are mostly based on Internet subscription, and the scenes are mostly concentrated in the fields of chat bots and derived AI virtual companionship. For example, Star Field of MiniMax has grasped the market demand with domestic female game users as the core, and brought value-added charging points for products on the basis of chat and dialogue.

If you want to run through the Internet subscription mode, the core needs to solve key problems such as user growth, user experience and user retention. Especially when the domestic TOC users are not aware of the payment, it is necessary to ensure the continuous growth of the big model APP DAU.

In terms of user growth, based on the advantages of traffic, brand and user accumulation, the growth rate and cost of obtaining users will be lower than that of AI start-ups. However, if we refer to the development of ChatGPT, Miaoya camera and kimi, if AI start-ups can create a large explosion model, it can save a lot of promotion costs and achieve exponential growth.

For example, in March this year, the most visited AI products in China were Baidu Translation, Baidu Wenxin and Kimi, with 57.44 million, 14.79 million and 12.19 million visitors respectively. Among them, the number of visits by kimi has tripled compared with the same period of last month.

Source: Similar

However, at present, the retention of users of large model apps is worrying. Quest mobile data shows that in January 2024, the proportion of active users of TOP10 domestic model apps was less than 20%, the three-day retention rate was less than 50%, and the unloading rate of 10,000 volumes of AI reached 94.3%.

Under the 100-mode war in 2024, various AI scene APPlications emerge in an endless stream, which makes users more critical. At the same time, it is more difficult for various enterprises to build explosive model apps. The cost of AI startups to gain user growth through information flow, app stores and app stores will continue to rise. How to continuously innovate the scene and ensure the retention of users has become a difficult problem for AI startups.

Source: Quest mobile

The instability of user retention will directly affect the operating costs of AI enterprises. For example, when the number of user visits increases sharply, AI enterprises need to expand the computing power of large models. However, when the number of visits plummeted, the problem of idle computing power of large models appeared again.

Considering the current high cost of large-scale model computing power, how to share the cost to reduce the computational burden and how to "cut the peak and fill the valley" of large-scale model computing power is another difficult problem faced by AI company.

Second, TOB end: AI big model is developing along the path of SaaS.

Different from the commercialization of TOC-end big model, which needs long-term accumulation of users to get through the profit mode, the commercialization of TOB-end big model may achieve faster results. All kinds of software, such as AI big model, SaaS and cloud, are valuable only if they bring real cost reduction and efficiency improvement to enterprises, and only then will business owners be willing to pay the bill.

At present, the value of cost reduction and efficiency improvement brought by AI big model to enterprises is being reflected. After the Sore explosion at the beginning of this year, many Hollywood companies in the United States started to lay off employees.

According to a report released by Adecco Group, a human resources provider, due to the rapid progress of AI big model technology, after investigating the senior executives of 2,000 large companies around the world, it was found that about 41% of senior managers expected that the number of employees would decrease. Overseas giants such as Google and Microsoft have started a wave of layoffs since the beginning of this year.

However, the willingness of domestic business owners to buy software is low, which can be seen from the difference in software GDP between China and the United States and the valuation of domestic SaaS vendors generally lower than that of the United States. More importantly, at present, the value brought by the TOB-end big model to enterprises is still in a fragmented state.

Source: wind

According to the love analysis report, in 2023, the domestic large model market scale was only 5 billion yuan, and in 2024, it only increased to 12 billion yuan. Although Kingdee and UFIDA released large-scale model products one after another in 2023, they also held a large number of TOB-side enterprise resources. However, the financial reports of the two companies in 2023 were not good-looking. Although Kingdee’s net profit growth rate turned from negative to positive, its revenue growth rate almost stagnated, and UFIDA’s net profit growth rate plummeted by more than 500%.

Source: Enterprise Alert

How to make domestic TOB-side business owners truly realize the value of the big model, especially compared with traditional SaaS services. It has become a problem that AI enterprises urgently need to solve in order to develop the TOB-end big model market.

Further, the commercial customization service of TOB-side large model will face two thorny problems in the future.

On the one hand, price power is the key for SaaS enterprises and cloud enterprises to remain competitive. In February this year, after Alibaba Cloud started to reduce prices in the domestic market, the prices of many products supporting offshore data centers continued to decrease in April, with some products dropping by as much as 59%.

On the other hand, the price war of new energy vehicles from 2023 to now has completely entered a white-hot stage. And the OEM also realized that the price war will not stop in the short term, and they are looking for upstream autopilot manufacturers to make profits.

As a strong party, OEM has absolute right to speak. Autopilot solution manufacturers increase brand awareness based on winning more orders from OEMs, and OEMs generally require enterprises to have complete project experience in the bidding stage, so they can only reduce prices continuously.

With the increasing number of AI companies currently deploying the TOB-side commercialization model, it is difficult to guarantee that the story that happened to the autopilot solution provider will not appear in AI companies in the future. Price wars among peers and downstream customers demand price cuts. Will AI companies increase their income but not increase their profits like autonomous driving companies in the future?

On the other hand, customizing a large model for the TOB side is not only a cliche about data security, deployment cost, specialization, and a high understanding of customer needs. AI enterprises also face similar problems with SaaS enterprises and cloud service enterprises. For example, customized services have low reproducibility and repeatability, high enterprise investment, and long customer tracking time. In particular, the payment cycle of large enterprises is relatively long, and the cash flow requirements for AI start-ups are extremely high.

Third, the AI ​ ​ new creation knockout started, and the industry ushered in accelerated integration

At present, in overseas markets, the AI ​ ​ new creation knockout tournament has started, and some AI start-ups with wrong business strategies are being harvested by big factories. For example, companies such as Banana, Togo, and RunPod in the United States provide GPU server rental services to AI startups that cannot afford cloud services from large manufacturers at low prices. In 2023, when AI was hot and GPU was out of stock, these companies also won a lot of financing.

However, when AI Xinchuang gets a lot of financing, it will buy services from GPU server manufacturers instead of looking for "Banana" lease. And compared with the large model with a wide range of applications, many enterprises hope to adopt a small model that is more correct in the professional field and lower in cost. This has caused a serious decline in the demand of "Banana", and Banana also announced the termination of the service in March this year.

According to Bloomberg News, in March this year, Microsoft acquired Mustafa Suleyman, founder of Influence AI, and 70 employees, and invested $650 million to obtain AI software authorization.

GavinBaker, a senior executive of Atreides Management, an investment institution, said that the basic model will become the fastest depreciated asset in history if proprietary and real-time data cannot be obtained and there is not enough deployment pipeline.

Bloomberg columnist Olson said that although these AI startups supported by venture capital have technical capabilities, it is not easy to build computing power enough to support text and image-generated AI, which will cost tens of millions of dollars. In the future, AI start-ups such as Anthropic, Character Ai and Perplexity will encounter similar problems as Inflection AI, that is, they cannot find a feasible business model.

Large-scale technology companies such as Google, Amazon, Meta, etc. are continuing to wait and see for start-up AI companies, and will acquire a large number of talents and technologies from these AI start-ups without touching on antitrust.

This scene that is being staged in overseas markets will also be accelerated in the domestic market in the future. On the one hand, the commercialization of domestic large models is different from that of Europe and America. If you want to drive the performance growth of AI startups by going out to sea, you need to face strict regulatory supervision and data compliance challenges.

The report "The AI Index Report 2024" issued by the AI Research Institute of Stanford University pointed out that the US AI regulatory regulations have increased significantly in the past five years, especially in 2023, there were 25 sets of AI-related regulations, compared with only one set in 2016.

Overseas technology companies such as Microsoft, Google and OpenAI have been robbing the world’s top AI talents through higher R&D investment. For example, Demis Hassabis, CEO of Deep Mind, Google’s AI department, predicts that the company’s spending on artificial intelligence technology may exceed $100 billion.

On the other hand, the pursuit of maximizing the return on investment is the goal of constant capital, but the IPO of AI startups in the global market is not smooth at present. For example, Reddit in the United States said in the IPO that AI will become a new growth area for the company.

However, according to the report of JPMorgan Chase, by Q4 of 2023, the basic users of Reddit were 73 million. Even if DAU can increase to 109 million in 2026, there are still big differences compared with social apps such as Meta, Facebook and X. Based on this, Goldman Sachs and JPMorgan Chase gave a "neutral" rating and a target price of $40 and $47 respectively.

Source: Reuters

If domestic AI start-ups fail to meet capital expectations in terms of user and revenue growth. In the current cold winter of the capital market, how much patience does capital have? How do AI start-ups that can’t get a new round of financing face the rising prices in the upstream of AI? Samsung, TSMC, Qualcomm, Micron and other AI upstream enterprises, the Q1 revenue and profit growth rate in 2024 exceeded expectations.

Undoubtedly, the future AI big model will definitely produce greater economic value. Only when the commercialization of the domestic AI model is still unclear, how many companies will fall in the night before dawn?

　　In order to thoroughly study and implement the Supreme Leader’s Socialism with Chinese characteristics Thought in the new era, especially the Supreme Leader’s Ecological Civilization Thought, the Central Propaganda Department and the Ministry of Ecology and Environment have organized the compilation of the book "Learning Outline of the Supreme Leader’s Ecological Civilization Thought", which has been jointly published by Learning Publishing House and People’s Publishing House and will be distributed nationwide from now on.

　　Since the 18th National Congress of the Communist Party of China, the CPC Central Committee with the Supreme Leader as the core has profoundly grasped the important position and strategic significance of ecological civilization construction in the cause of Socialism with Chinese characteristics in the new era from the perspective of the sustainable development of the Chinese nation, vigorously promoted theoretical innovation, practical innovation and institutional innovation of ecological civilization, creatively put forward a series of new ideas, new ideas and new strategies, and formed the Supreme Leader’s ecological civilization thought. The Supreme Leader’s ecological civilization thought is an important part of the Supreme Leader’s Socialism with Chinese characteristics Thought in the new era. It is a great achievement of combining the basic principles of Marxism with the practice of ecological civilization construction in China and the excellent traditional ecological culture in China. It is a concentrated expression of the practical innovation and theoretical innovation of the Party Central Committee with the Supreme Leader as the core in the field of ecological civilization construction, and it is a fundamental follow-up and action guide for China’s ecological civilization construction in the new era.

　　The Outline consists of 10 chapters, 31 orders, 87 articles and 51,000 words. The book systematically explains the core essence, spiritual essence, rich connotation and practical requirements of the Supreme Leader’s ecological civilization thought, and comprehensively reflects the original contribution of the Supreme Leader’s Socialism with Chinese characteristics Thought in the field of ecological civilization construction in the new era. The Outline is comprehensive in system, rigorous in structure, rich in content, faithful to the original text and vivid and simple in style. It is an authoritative auxiliary reading for the broad masses of cadres and people to thoroughly study and understand the supreme leader’s ecological civilization thought.

　　The Propaganda Department of the Central Committee issued a notice requesting party committees (party groups) at all levels to incorporate the Outline into their study plans, comprehensively study systematically, follow up studies in time, think deeply and integrate with practical studies, persistently arm their minds, guide practice and promote their work with Socialism with Chinese characteristics Thought of the Supreme Leader in the new era, consciously be firm believers and loyal practitioners of the Supreme Leader’s ecological civilization thought, and constantly open up a new situation in ecological civilization construction in the new era, so as to build a socialist modern country in an all-round way and win great victories in Socialism with Chinese characteristics in the new era.

　　BEIJING, May 25 (Reporter Li Jinlei) On the 24th, the State Council issued three plans to further deepen the reform and opening up of Guangdong, Tianjin and Fujian Pilot Free Trade Zones. What do the three schemes have in common? What are the characteristics and emphases of each scheme? What is the significance to the overall situation of China’s reform and opening up? Zhongxin. com interprets it for you.

　　Sun 2.0 Reform Plan of Three Free Trade Zones

　　Recently, the State Council issued the Plan for Further Deepening the Reform and Opening-up of China (Guangdong) Pilot Free Trade Zone, the Plan for Further Deepening the Reform and Opening-up of China (Tianjin) Pilot Free Trade Zone and the Plan for Further Deepening the Reform and Opening-up of China (Fujian) Pilot Free Trade Zone.

　　The reporter learned that China has successively approved three batches of free trade zones, and the number of free trade zones has reached 11, forming a "1+3+7" pilot pattern. Among them, the first is the Shanghai Free Trade Zone, the second batch includes three free trade zones in Guangdong, Tianjin and Fujian, and the third batch includes seven free trade zones in Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan and Shaanxi.

　　The three places that introduced the plan belong to the second batch of free trade zones. Bai Ming, deputy director of the International Market Research Institute of the Research Institute of the Ministry of Commerce, told the reporter of Zhongxin. com that the introduction of the plan marked that the reform and opening up of the Guangdong, Tianjin and Fujian Pilot Free Trade Zones entered the 2.0 stage. Experiments that have no foundation or conditions in the early stage have the conditions for implementation as time matures, which also means that the future development of the three free trade zones will reach a new level and will export more experiences that can be popularized and replicated.

　　Data Map: On April 21, 2015, the China (Guangdong) Pilot Free Trade Zone held a listing ceremony in Nansha District, Guangzhou. Chen Qiren photo

　　Free trade zones will have greater autonomy in reform.

　　In the plans of the three places, "giving the Pilot Free Trade Zone greater autonomy in reform" is a common sentence.

　　In terms of specific related measures, Guangdong’s plan proposes to decentralize the provincial management authority delegated to prefecture-level and above cities to the Pilot Free Trade Zone according to law.

　　Tianjin’s plan proposes to delegate the examination and approval of international express business (agency) to Tianjin Postal Administration. Pilot implementation of the filing management of imported non-special purpose cosmetics, and the management authority was delegated to Tianjin.

　　Fujian’s plan proposes to adjust and improve the decentralization method of provincial management authority, and promote the cancellation, decentralization or entrustment of the whole chain of related and similar categories of examination and approval matters.

　　Each of the three schemes has its own characteristics and emphasis.

　　It can be seen from the combing plan that the three places have formulated pilot tasks with their own characteristics and emphasis according to their own characteristics.

　　The characteristic goal of Guangdong Free Trade Zone is to build "two zones and one hub", that is, to build a pioneer zone of new open economic system, a high-level gateway hub for opening to the outside world and a Guangdong-Hong Kong-Macao Greater Bay Area cooperation demonstration zone.

　　"Guangdong, Hong Kong and Macao" is a key word that frequently appears in Guangdong programs. Guangdong’s plan puts forward 18 specific measures to further promote the liberalization of service trade between Guangdong, Hong Kong and Macao. Such as:

　　— — When conditions are ripe, the customs clearance mode of "cooperative inspection, one-time release" and "entry inspection and exit monitoring" will be implemented at Zhuhai-Macao port.

　　— — Vigorously promote the development of cruise tourism and implement the 15-day visa-free policy for international cruise inbound foreign tour groups on a pilot basis. Further promote the free travel of yachts in Guangdong, Hong Kong and Macao, and further improve the level of yacht customs clearance facilitation.

　　Data Map: Tianjin Free Trade Zone Comprehensive Service Hall. Zhongxin. com reporter Li Jinlei

　　The goal of Tianjin Free Trade Zone is to strive to build the Pilot Free Trade Zone into a high-level opening-up platform serving the construction of the Belt and Road and the coordinated development of Beijing, Tianjin and Hebei.

　　The plan puts forward 16 specific measures, such as innovating the market allocation mechanism of factors, promoting the incubation of cutting-edge emerging technologies and improving the mechanism of coordinated development of services, among which there are many heavy measures, such as:

　　— — Under the condition of legal compliance, foreign-funded financial institutions are allowed to set up foreign-funded banks in the Pilot Free Trade Zone, and private capital and foreign-funded financial institutions are allowed to jointly set up Sino-foreign joint venture banks in the Pilot Free Trade Zone.

　　— — Support the establishment of wholly foreign-owned or holding enterprises in the Pilot Free Trade Zone to carry out branch line and general aircraft maintenance business, and allow the establishment of wholly foreign-owned performance brokerage institutions in the Pilot Free Trade Zone to provide services to the Beijing-Tianjin-Hebei region.

　　Data Map: Fuzhou District Management Committee of China (Fujian) Pilot Free Trade Zone is located in Mawei District, Fuzhou City. Photo by Long Min

　　The goal of Fujian Free Trade Zone is to build a comprehensive reform pilot zone integrating openness and innovation, deepen a demonstration zone for cross-strait economic cooperation and open a new highland for countries and regions along the Maritime Silk Road in the 21st century.

　　The plan puts forward 21 specific measures, such as creating a high-standard international business environment, promoting the standardization and transparency of government services and strengthening financial cooperation between Fujian and Taiwan, such as:

　　— — Taiwan compatriots who support employment and living in the Pilot Free Trade Zone enjoy the same treatment as mainland residents in terms of medical care, financing, house purchase and accommodation, and Taiwan Province enterprises enjoy the same treatment as mainland enterprises in terms of research funding applications.

　　— — Promote Fuzhou and countries and regions along the 21st Century Maritime Silk Road to expand air traffic rights arrangements, improve the flight support capacity of Fuzhou Airport, and attract airlines from countries and regions along the route to open routes that stop in Fuzhou. Attract consulates or visa centers from countries and regions along the 21st Century Maritime Silk Road to Fuzhou.

　　Aerial photo of Nansha Port Han Jianquan

　　Interpretation: It will promote the overall situation of China’s reform and opening up

　　What is the significance of further deepening the reform and opening-up plan in the three places?

　　In Bai Ming’s view, with the implementation of the plan, there are more and more experimental contents, which are more and more universal. The free trade zone will better play the role of "experimental field", create more valuable experience, and obtain more institutional innovations that can be replicated and popularized, which will help to improve the level of reform and opening up in China.

　　The plan also emphasizes that Guangdong, Tianjin and Fujian should grasp the basic orientation, strengthen organization and implementation, strengthen mission responsibility, improve working mechanism, give full play to the enthusiasm of local and departmental departments, and systematically promote the implementation of reform pilot tasks. It is necessary to summarize and evaluate the implementation effect of the pilot tasks in a timely manner, strengthen the integration of reform systems, and strive to achieve more institutional innovations that can be replicated and promoted to better serve the overall situation of reform and opening up in the country. (End)

() The operating comments of the Board of Directors in 2023 are as follows:

　　I. Discussion and analysis of business conditions

　　(a) business overview:

　　The year 2023 is a crucial year for the implementation of the 14th Five-Year Plan. The state has actively regulated and stimulated the market vitality, and all walks of life have made unremitting efforts to promote China’s economic stabilization and recovery. 2023 is also a year of product innovation competition for global biomedical enterprises. Various new drugs are constantly introduced and the research and development process is accelerating. In 2023, the company also followed the market closely, not only the sales performance at home and abroad was gratifying, but also the clinical progress of several R&D products was very smooth. During the reporting period, the company achieved an operating income of 2.608 billion yuan, a year-on-year increase of 52.31%, and a net profit of 340 million yuan, turning losses into profits compared with the previous year.

　　Turning losses into profits is an important embodiment of the company’s continuous optimization of its strategy, improvement of its operating efficiency and profitability, and effective grasp of development opportunities. With the implementation of the first round of insulin centralized purchase in 2022, with the help of the price advantage of centralized purchase and the opportunity of nearly 10,000 new hospitals, and the advantages of the original market brand effect and its own professional academic promotion team, the company rapidly expanded its team and accelerated its market coverage. In 2023, the company adopted a marketing strategy combining differentiation and collaboration, supplemented by multi-form and multi-level marketing activities, which further increased the penetration rate of the grassroots market while ensuring the stable growth of the original market. In 2023, the sales volume of the company’s products increased rapidly, the market share continued to increase, and the market share at the grassroots level continued to rise, completing the company’s strategic goal in the first round of insulin collection. In 2023, the company’s domestic sales revenue reached 2,182,057,000 yuan, an increase of 51.93% over the same period of last year. The sales volume of domestic preparation products increased by 66.36% year-on-year, among which the sales volume of basic (long-acting) insulin products increased by 32.47% year-on-year, and the sales volume of instant (quick-acting) and premixed insulin products increased by 112.38% year-on-year.

　　In 2023, despite the complicated international situation, the company continued to deepen its sales cooperation with new and old customers with its solid customer base and good brand effect, and achieved rapid market breakthroughs in countries along the Belt and Road Initiative. During the reporting period, the company’s international sales revenue was 326,606,200 yuan, an increase of 131.78% over the same period of last year.

　　R&D innovation is the basic guarantee for the company’s sustainable development. During the reporting period, the new pre-mixed insulin compound preparation GZR101 injection independently developed by the company also completed the first administration to subjects in phase Ib clinical trials, and the first administration to subjects in phase IIb clinical trials was also completed for the long-acting (GLP-1RA) product under research for type 2 diabetes and obesity/overweight indications. In addition, the clinical trial of the innovative therapeutic biological product GZR18 oral tablet was accepted by National Medical Products Administration in November of the same year. In 2023, the company continuously improved its R&D pipeline and laid out R&D work in other fields. In July 2023, it obtained the Notice of Approval for Clinical Trials of GLR1023 Injection from National Medical Products Administration. This is the first approved monoclonal antibody bio-similar drug for the treatment of adult moderate to severe plaque psoriasis that meets the indications of systemic therapy or phototherapy. The approval of this new product will further enrich the company’s product line and provide new kinetic energy for the company’s sustainable development.

　　At present, the company has successfully developed six core insulin products, five of which are mainstream insulin analogues in the global insulin market. In the first half of 2023, the company’s application for the listing of three biologically similar drugs, Ganjing, Laifu and Insulin Aspartate Injection, has been officially accepted by the US FDA. In the second half of 2023, the company welcomed the pre-approval inspection of the US Food and Drug Administration (FDA) for three bio-similar drugs: Glargine, Laifu and Insulin Aspartate Injection. At present, the company has received the initial feedback from the FDA, and the company still needs to improve related matters. The company will complete the rectification as soon as possible according to the opinions of the FDA. These three insulin injections are the first Chinese-made insulin declared in the United States, and they are also important milestones in the internationalization of Ganli. In the second half of 2023, the application for marketing license of insulin glargine injection, insulin lispro injection and insulin aspart injection submitted by the company to EMA in Europe was also formally accepted by EMA. In the first quarter of 2024, the company welcomed the pre-approval inspection by the European Food and Drug Administration (EMA) for three bio-similar drugs, namely glargine, lispro and insulin aspart injection. At present, the company has received the initial feedback from EMA, and is in the process of preparing for the reply. The company will actively reply to these technical questions and meet the requirements of EMA. The company will continue to build overseas brands, broaden the sales channels in overseas markets, and promote the overseas sales coverage of the company’s products, so that more diabetics around the world can enjoy more effective and affordable insulin products.

　　(II) During the reporting period, the company mainly completed and focused on the following work:

　　1. Quickly promote clinical research and development projects.

　　In 2023, the company invested 581,565,600 yuan in R&D projects, accounting for 22.30% of sales revenue. Among them, the expenditure on R&D is 501,022,400 yuan, accounting for 19.21% of the sales revenue; Capitalized R&D investment is 80,543,200 yuan, accounting for 13.85% of the total R&D investment.

　　R&D and innovation have always been the foundation of Ganli Pharmaceutical, and the company has never stopped advancing and exploring on the road of product development and technological innovation. The company insists on independent innovation and research and development, with endogenous development as the main driving force. At the same time, it has made breakthrough progress in the field of diabetes treatment, actively invested in drug research and development in other fields, and also laid out research and development pipelines in the field of autoimmune drug research and development. Up to the disclosure date of the report, the research and development projects in the clinical stage include GZR18 injection, GZR18 tablets, GZR4 injection and GZR101 injection. In addition, GLR1023 injection has received the Notice of Approval for Drug Clinical Trial approved and issued by National Medical Products Administration (NMPA), and is accelerating the phase I clinical trial.

　　(1) long-acting GLP-1RA (glucagon-like peptide -1 receptor agonist): GZR18 injection.

　　GZR18 injection, a new drug under research in our company, is a long-acting GLP-1RA (glucagon-like peptide -1 receptor agonist), and its homology with human endogenous GLP-1 (glucagon-like peptide -1) is as high as 94%. The indications of this drug are type 2 diabetes and obesity/overweight. In May, 2023, the company carried out a phase Ic clinical study of GZR18 injection with obesity/overweight indications in China. In June of the same year, the company completed the first subject administration in the phase IIb clinical trial of this indication, and further explored the application of this drug in the direction of weight loss indications. In August, 2023, the company completed the head-to-head phase IIb clinical trial of GZR18 injection with the indication of type 2 diabetes, and the first subject administration.

　　Globally, the market scale of GLP-1RA is growing rapidly, and it is expected to reach $145.4 billion in 2030 (data source IQVIA database). In China, the proportion of GLP-1RA in the domestic diabetes drug market is still low compared with the global market, which shows that the GLP-1RA market in China has great development potential. The company’s adoption of the research and development strategy of dual clinical promotion between China and the United States will also help the company to expand its sales space in the international and domestic markets in the future.

　　At present, a large number of domestic pharmaceutical companies have entered the GLP-1RA track, but if they really want to occupy a higher market share in the future, apart from the current R&D speed competition, the key point still depends on the commercialization ability of each company’s products. The commercialization of products is influenced by product efficacy, company capacity and commercial sales team. The company has obvious advantages in these aspects: first, on the basis of ensuring the effectiveness of drugs, the company actively seeks product differentiation and superiority to cope with fierce market competition. At present, the company is the first company to choose domestic single-target GLP-1RA to evaluate the drug effectiveness head-to-head with Smeglipeptide injection, and the company’s GZR18 injection is a weekly preparation product, and its indications include obesity/overweight besides diabetes. At present, the research of GLP-1RA in obesity/overweight indications by various companies is still in the initial stage of the global market, and no related weekly preparation product has been approved for marketing in China. The company’s layout in advance has obvious product differentiation advantages. Second, the company has sufficient production capacity and strong product supply guarantee ability. The company has sufficient land and plant reserves, leading the large-scale production capacity, and continuously increasing the production capacity, which can meet the potential supply demand of the rapidly growing market in China and even the world in the future. Third, the company has been deeply involved in the field of diabetes treatment for many years, with leading and rich commercialization experience and a professional academic promotion team of more than 2,000 people. The sales channels are mature and the brand advantages are obvious, which is conducive to the rapid commercialization of the company’s products after listing.

　　(2) innovative oral GLP-1ra: gzr18 tablets.

　　The GLP-1RA preparation (GZR18 tablets) under study by the company adopts a new oral absorption-promoting technology, which combines drug molecules with absorption enhancers through preparation technology to improve the bioavailability of drug molecules, thus realizing the oral administration of GZR18 molecules. GZR18 tablet is a new type of hypoglycemic agent in the treatment of type 2 diabetes mellitus, which can significantly improve some key pathophysiological defects of type 2 diabetes mellitus patients, and this drug enriches the research and development pipeline of the company’s new oral hypoglycemic drugs, and at the same time brings more treatment options for diabetic patients.

　　In November, 2023, National Medical Products Administration (NMPA) approved GZR18 tablets, an innovative therapeutic biological product declared by its subsidiary Gan Lishong, and the approved indication was type 2 diabetes. In April, 2024, GZR18 tablets were administered to the first subjects in a phase I clinical study in China with the indication of type 2 diabetes.

　　At present, there is only one oral GLP-1RA on the market worldwide. The clinical trial of GZR18 tablets developed by the company was approved in China. This important progress not only reflects the company’s continuous innovation in the field of drug research and development, but also marks a solid step in the research and development of new oral hypoglycemic drugs.

　　(3) the fourth generation insulin analogue: GZR4 injection.

　　GZR4 injection is a kind of innovative therapeutic biological product under research by our company, which belongs to the fourth generation of insulin analogues. It is expected to be administered subcutaneously once a week in human body to achieve stable control of basal blood sugar. GZR4 injection is expected to significantly reduce the frequency of insulin injection in patients. Compared with daily preparations, insulin weekly preparation is expected to reduce insulin injection by more than 300 times a year, greatly reducing the injection frequency, helping to overcome the injection obstacles of patients, reducing the treatment burden, and is expected to improve the overall compliance and quality of life of patients. At present, no insulin weekly preparation products have been approved for marketing in the world, and the company’s GZR4 injection is expected to provide a new treatment option for patients.

　　In April, 2023, the company completed the first subject administration in the China Ib phase clinical trial of GZR4 injection in patients with type 2 diabetes. In September of the same year, GZR4 injection was administered to the first subject in China Phase II clinical trial. In addition, the company is actively promoting the American clinical trial of GZR4 injection.

　　Diabetes is a chronic disease that requires long-term medication. Insulin is an indispensable treatment and final drug in the field of diabetes treatment, and basic insulin is the cornerstone of insulin treatment. At present, the basic insulin products are mainly Japanese preparations, accounting for a high proportion of the insulin market. However, with the iterative upgrading of products and the continuous upgrading of patients’ demand for insulin products, insulin weekly preparation products will be another heavy product to change the current sales pattern of insulin market. The company has always been a domestic leading enterprise in the three generations of basic insulin sales market. The layout of insulin weekly preparation products is not only the strategic choice of the company, but also the embodiment of the company’s corporate purpose of providing better treatment options for diabetic patients.

　　(4) The fourth generation of new premixed insulin compound preparation: GZR101 injection.

　　GZR101 injection is the fourth-generation premixed insulin compound preparation independently developed by our company, which is made by mixing long-acting basic insulin GZR33 and quick-acting insulin aspart, and is intended to be used for treating diabetes. It is expected that GZR101 injection can simulate the biphasic mode of physiological insulin secretion once a day, give consideration to fasting and postprandial blood sugar control, steadily reduce blood sugar, improve the standard rate of blood sugar control, simplify treatment, improve patient compliance and reduce treatment burden, optimize long-term management of diabetes, and help reduce or delay the occurrence of complications. In December, 2023, GZR101 injection was administered to the first subjects in the head-to-head phase II clinical trial with Degumen Asparagi insulin injection.

　　China’s insulin market is mainly premixed market, and the proportion of second-generation insulin is still higher than that of developed countries in Europe and America. With the further implementation of centralized purchasing policy in China, the price of three-generation premixed insulin products has decreased, the accessibility of patients has improved, and the trend of three-generation insulin replacing the second-generation insulin has accelerated. With the advantage of centralized purchasing, the company achieved rapid market access and accelerated grass-roots coverage, and the premixed insulin products Suxiulin 25 and Ruixiulin 30 were quickly released. On this basis, the company continues to lay out the fourth-generation pre-mixed insulin compound preparation product GZR101 injection, which will also continuously improve patients’ compliance and enrich patients’ medication choices.

　　(5) Monoclonal antibody biological analogue: GLR1023 injection.

　　Based on the long-term strategic development, with the help of the company’s rich R&D and GMP production experience in large-scale fermentation process amplification of insulin, chromatographic purification of recombinant protein and formulation process development, the company has entered the field of monoclonal antibody drugs, focusing on the development of large-scale animal cell culture technology. The production process of anti-drugs is similar to that of insulin, and it also needs to go through cell expansion culture, fermentation culture, multi-step purification, preparation filling and other steps. For example, the production of antibody drugs on the market will help improve the utilization efficiency of the company’s future production line.

　　GLR1023 injection, as a biological analogue of Secukinumab independently developed by our company, is a fully humanized recombinant monoclonal IgG1κ antibody. The antigen binding site of its Fab segment can specifically bind to human interleukin-17a, inhibiting its interaction with IL-17A receptor, and it is used to treat adult moderate to severe plaque psoriasis that meets the indications of systemic therapy or phototherapy.

　　In July 2023, the company received the Notice of Approval for Clinical Trials of GLR1023 Injection issued by National Medical Products Administration, and the approved indication was to treat adult moderate to severe plaque psoriasis that met the indications of systematic therapy or phototherapy. GLR1023 injection is the first clinically approved monoclonal antibody biological similar drug in the company. The company will speed up the product development of the biosimilar drug (GLR1023 injection) of Scochizumab, and strive to provide an inclusive, adequate, safe and equivalent drug treatment scheme for psoriasis patients as soon as possible, so as to benefit more patients.

　　As of the end of the reporting period, only Skochizumab injection produced by Novartis, the original research manufacturer, was approved for listing in China. According to the data of the NationaPsoriasisFoundation of the United States, there are about 125 million patients with psoriasis in the world, and the global prevalence rate can reach 2-3%. Both men and women are likely to get sick at all ages. In 2023, the global sales of Scochiyou monoclonal antibody injection was US$ 4.98 billion (data source: Novartis 2023 financial report). In April, 2019, National Medical Products Administration approved Scochizumab for the treatment of psoriasis. The drug market is growing rapidly, with sales of about 500 million yuan and 1.5 billion yuan in China in 2020 and 2021 respectively. However, based on the annual treatment cost of 40,400 yuan, in 2021, only about 30,000 patients will be treated with skunk izumab. The market penetration rate of Scochizumab is still less than 1% (data source is open). At present, there has not been any generic drug of Scochizumab injection approved for listing in China. GLR1023 injection has a good market prospect and broad market space. If approved for listing, it will enrich the company’s product pipeline and is expected to enhance the company’s core competitiveness.

　　(6) oral hypoglycemic agent SGLT-2 (sodium-glucose co-transporter -2) inhibitor: englejing tablet.

　　As a small oral hypoglycemic agent developed by the company, Engelje Tablet is an inhibitor of SGLT-2 (sodium-glucose co-transporter -2). By inhibiting SGLT-2, it can reduce the reabsorption of glucose by kidney, lower the renal glucose threshold, and increase the excretion of glucose in urine, thus playing a role in lowering blood sugar.

　　In July, 2023, the company’s listing application for Engelje tablets was accepted by National Medical Products Administration. Englijing tablet is the first SGLT-2 inhibitor that the company applied for listing, and it is expected to be approved in 2025. After listing, it will provide a new choice for the majority of diabetic patients with inclusive, safe and equivalent hypoglycemic effects, so as to benefit more patients.

　　At present, the original research products and 15 generic drugs of Boehringer Ingelheim Company in Germany have been approved for listing in China. According to IQVIA database, in 2022, Engler’s net global sales were $14 billion, and in 2030, it is estimated that global sales will reach $37.2 billion. According to the data of Rong Yun, the sales of Engelje tablets in domestic hospitals in 2022 was 348 million yuan, up 42% year-on-year, and the market grew rapidly. Engelje tablets have a good market prospect and broad market space. If approved for listing, it will expand the company’s hypoglycemic product line, which is conducive to enhancing the company’s comprehensive market competitiveness in the field of diabetes medication and consolidating the company’s market leading position in the domestic diabetes treatment field.

　　2. Strengthen the refined management of marketing.

　　In 2023, the company strengthened the implementation of refined market management, based on the principle of "reducing costs and increasing efficiency", formulated grassroots academic activities according to local conditions, and improved the coverage of grassroots markets. In the specific implementation process, in order to improve the academic level of primary doctors and solve the after-sales problems of patients, and to increase the accessibility of patients’ insulin products as the final result, the company promotes doctors to improve their understanding and cognition of insulin products, improve their diagnosis and treatment level, help patients popularize their knowledge of diseases and treatment, and do a good job in the management of chronic diseases by carrying out inclusive activities such as academic exchanges and after-sales guidance.

　　In terms of academic promotion, the company organized and participated in nearly 20 national large-scale academic conferences, including the 25th National Academic Conference of Diabetes Branch of Chinese Medical Association (CDS) and the 20th National Academic Conference of Endocrinology (CSE). By participating in large-scale national academic conferences, the company not only strengthened the cooperation and exchange between the company and the national endocrinology circle, but also enhanced the awareness of grassroots doctors on the company’s products, and further consolidated and strengthened the brand image of Gan Li. In addition, all regions continue to strengthen the academic promotion activities in the grassroots market, improve the disease awareness rate, diagnosis rate and control rate of grassroots diabetic patients, reduce the drug cost of grassroots patients, and improve the quality of life of patients.

　　In terms of patient care, in 2023, the company published 848 popular articles and videos on diabetes in the public account and video number platform, and carried out 78 live broadcasts, benefiting more than 450,000 people with diabetes. The company has started a 24-hour after-sales function in Ganli Guan ‘ai applet to help patients solve the problem of product use efficiently and quickly, and to help patients control sugar scientifically. The company continues to adhere to the patient-centered concept, continue to fulfill its mission and social responsibility, and is committed to providing affordable insulin products for more diabetic patients.

　　By the end of the reporting period, the sales volume of domestic preparation products increased by 66.36% year-on-year, among which the sales volume of basic (long-acting) insulin products increased by 32.47% year-on-year, and the sales volume of instant (quick-acting) and premixed insulin products increased by 112.38% year-on-year. With the continuous growth of domestic preparation sales and income, the company’s sales expense ratio also decreased from 63.46% in the same period in 2022 to 36.27% in 2023.

　　3. Steadily promote international market development.

　　Compared with the imported original drugs, the insulin biological similar drugs of our company are safe, effective and cheap, which can bring more choices to patients while ensuring the quality of the drugs. In international cooperation, the company aims to meet the treatment needs of patients and improve the treatment status of more patients, and combines its own R&D innovation resources to introduce its insulin products and production technologies into emerging markets and apply them to overseas localized production, breaking the situation that the original research drugs monopolize the market and patients’ choices are limited.

　　Even though the current international political situation is complicated and changeable, the company still shows a steady strategic pace and continues to promote the development of the international market. We know that a stable and efficient international market layout is very important for the long-term development of the company. To this end, we constantly expand our international sales team, maintain close communication and negotiation with overseas customers, and deepen cooperation with large international pharmaceutical companies to jointly meet market challenges. These cooperations not only enhanced the company’s international influence, but also brought more technical and market resources to the company. At the same time, we constantly improve our local production capacity to ensure that we can launch more high-quality products that meet the needs of the international market.

　　In the Asia-Pacific region, India, as one of the company’s key target markets, has a huge population base and a high incidence of diabetes, which makes the diabetes drug market have huge room for growth.

　　According to the data of the 10th IDF Global Diabetes Map, by 2021, about 74.2 million adults aged 20 to 79 in India have diabetes, ranking second in the world with an incidence rate of 8.3%. It is estimated that by 2045, this number will increase to 125 million; In addition, 39.4 million patients in India have not been diagnosed with diabetes, and the undiagnosed rate is as high as 53.1%. It can be predicted that the diabetes market still has great growth space and potential. In May, 2023, the pre-filled insulin glargine injection pen registered by the company in cooperation with Indian customers was approved for listing in India, which marked that the company officially obtained the commercial license to sell related products to India. In the future, the company will continue to deepen cooperation with Indian customers and jointly explore localized production opportunities in more fields.

　　Apart from India, Indonesia also has significant population advantages and future market potential, with a population of about 276 million (2022), making it the fourth most populous country in the world, with a per capita GDP of 4,332.7 US dollars (2021) (data source: World Bank database).

　　According to the data of the 10th IDF Global Diabetes Map, about 19.5 million adults aged between 20 and 79 in Indonesia were diagnosed with diabetes, with an incidence rate of 10.8%, while the undiagnosed rate was as high as 73.3%, ranking first in the world. The company has successfully cooperated with large pharmaceutical companies in Indonesia, and has made remarkable achievements in the local filling and production of insulin glargine injection pre-filled pens and insulin aspart injection pre-filled pens. In January 2023, these two products stood out in the tender of the Indonesian government and successfully won the order. This achievement is a full affirmation of the company’s product quality and Indonesia’s localized production capacity, and also a strong proof of the depth and breadth of cooperation between the company and large Indonesian pharmaceutical companies.

　　In addition, in October, 2023, the company’s insulin aspart injection and reusable pen insulin syringe won the bid in the bidding procurement project of drugs and medical devices of Kazakhstan government. According to the bidding results, the winning bid will meet the demand of Kazakh market in the coming year and provide stable and high-quality treatment options for local diabetic patients. Winning the bid will not only meet the urgent needs of the Kazakhstan market, but also be expected to further promote the company’s business expansion in countries along the "Belt and Road", which is also an important milestone of the company’s internationalization strategy.

　　In Latin America, according to the data of the 10th IDF Global Diabetes Map, by 2021, about 33 million adults (aged 20-79) in Latin America have diabetes, of which Brazil has about 15.7 million (aged 20-79), accounting for 47.5% of the total number of diabetic patients in Latin America, ranking first. In the first quarter of 2023, due to the lack of production capacity of foreign insulin manufacturers, the supply of insulin in Brazil was in short supply, and millions of quick-acting insulin products were urgently needed. This matter caused widespread concern in all walks of life and the pharmaceutical industry in Brazil. Regarding the drug risks faced by patients in Brazil, the company responded quickly, attached great importance to this bidding activity, actively contacted relevant departments in Brazil, and conducted several rounds of in-depth communication to ensure accurate understanding and meet local actual needs. After strict bidding procedures and official product technical review, the company’s insulin aspart injection and reusable pen insulin syringe won the bid in April 2023 with their excellent quality. In July 2023, the company has successfully shipped and delivered the first batch of products, which not only eased the pressure of insulin supply in Brazil, but also provided timely and effective treatment options for local diabetic patients. This achievement of the company has been widely reported and praised by the Brazilian media, thus enhancing the company’s reputation and influence in the international market. This not only attracts more countries in Latin America to actively seek cooperation with the company,It also laid a solid foundation for the company to expand a broader market in the region.

　　During the reporting period, the company obtained 6 new drug registration approvals for its insulin preparation products in emerging markets. Among them, in April 2023, the company’s insulin glargine injection was approved in Bolivia, which marked that the company officially obtained the commercial license to sell insulin glargine injection to Bolivia, and it was also the first time that the company was approved as a drug marketing license holder (MAH) in Latin America. In addition, the acceptance by FDA and EMA of the European and American marketing applications of the company’s insulin glargine injection, insulin lispro injection and insulin aspart injection is an important step in the internationalization process of the company, and it is also another milestone progress in the process of China’s insulin entering the European and American markets. In the future, the company is expected to seize the European and American markets through excellent product quality and cost advantages with years of experience in research, development, production and sales in the domestic diabetes drug field.

　　During the reporting period, the reusable pen-type insulin syringes and disposable insulin pen needles successfully passed the product certification under the new EU regulations, and successfully obtained the CE(ConformityEurope) logo. CE certification is a kind of product safety certification, which aims to ensure that the products put into the European market meet European safety and health requirements, and it is also a compulsory certification for products to enter the European Union. The company has become one of the first medical device manufacturers in China to obtain MDR certification of the new European medical device regulations, which is a strong proof that the company’s products have been recognized by the European Union, and has also played a positive role in promoting the vision of "laying out the global market".

　　For a long time, the company has been actively participating in various forms of exchange activities to improve brand awareness and influence, including government foreign exchange meetings, academic conferences in the field of diabetes and business exhibitions in the pharmaceutical industry. In June 2023, our company participated in the 83rd annual scientific meeting of American Diabetes Association (ADA), and displayed the global brand image of our company on the largest academic stage in the world. In addition, the company has participated in CPHIChina for many years in a row, displaying the international brand image of the company by setting up a booth to attract international business partners; In July of the same year, the company participated in the local diabetes symposium with its partners in the number one public hospital in Thailand to promote the listing of the company’s insulin glargine products in Thailand, and participated in the local promotion meeting for supporting Thai customers.

　　During the reporting period, the Company obtained the advanced certification of AEO(AuthorizedEconomicOperator). Advanced customs AEO certification is the highest credit rating in the customs credit management system. It can enjoy 22 preferential measures in five categories and 49 joint incentive measures for keeping promises implemented by relevant state departments, and also enjoy customs clearance convenience measures in 52 countries or regions where AEO is mutually recognized, which has a positive role in promoting enterprises’ international export credibility, strengthening the safety of overseas supply chains and expanding the overseas competitiveness of products. This not only reflects the advantages of commercial competitiveness of Gan Li, but also fully recognizes the excellent management of the company in the field of international trade.

　　The company will continue to make efforts to build overseas brands, broaden the sales channels in overseas markets, and promote the overseas sales coverage of the company’s products, so that more diabetics in the world can enjoy more effective and affordable insulin products.

　　4. The projects under construction were accelerated.

　　In order to meet the company’s future development strategy, improve the company’s product technology competitiveness and comprehensive R&D and production capacity, during the reporting period, the company accelerated the construction of various projects under construction, so as to enhance the development potential of the company and meet the market growth demand.

　　With the continuous expansion of domestic and international product markets, in order to meet the company’s growing demand for orders and help the company expand overseas markets, the preparation workshop expanded by Beijing headquarters passed GMP compliance inspection in January 2023 and reached the state of being put into production.

　　According to the sound product standards, process standards and quality standards, the company plans to build a high-standard production base, and strives to become the largest production base of hypoglycemic drugs in China with the most complete product range and the most concentrated innovative products. The first phase project of Shandong Linyi production base includes biopharmaceutical workshop, chemical workshop, medical equipment workshop and other supporting facilities. During the reporting period, Ganli Shandong completed the finishing work of related supporting facilities construction and the equipment installation, debugging and verification of each production line, and actively promoted the process verification and product registration and declaration of each production line as planned.

　　5. Strengthen production quality management

　　"Quality first and innovation forever" is the company’s corporate purpose. The company adheres to the scientific corporate culture and is always committed to providing higher quality drugs and better services for diabetic patients. During the reporting period, the Company always adhered to quality as the lifeline, established a relatively comprehensive quality management system, continuously strengthened quality supervision, ensured that every production link strictly followed the requirements of the National good manufacturing practice (GMP), guaranteed the quality and safety of the Company’s products, and provided high-quality and reliable drugs for the majority of patients.

　　(1) Strengthen the construction of integrated production management system of the whole group.

　　With the continuous production of some production lines of its subsidiary Ganli Shandong, the company attaches great importance to the construction of its production management system and product quality assurance. In order to ensure that the production process of Ganli Shandong meets the requirements of high standards and high quality, during the reporting period, the company conducted a comprehensive audit of Ganli Shandong to evaluate the compliance and effectiveness of its production management. On this basis, the headquarters of Gan Li cooperated with Gan Li Shandong to draft the operation rules related to production, which covered all aspects such as raw material procurement, production process control and quality inspection, and provided clear guidance and basis for the increasing production activities of Gan Li Shandong. At the same time, it also laid a solid foundation for the overall development of the company and the maintenance of brand image. In the future, the company will continue to strengthen the management and support of Gan Li Shandong and other subsidiaries, strengthen the construction of the whole group’s integrated production management system, actively promote the standardization of the whole group’s production process and the controllability of the whole production process, create quality advantages and ensure the consistency and stability of the company’s product quality.

　　(2) Strengthen staff training and quality culture construction.

　　In addition to improving the quality management system, the company has also made remarkable efforts in the construction of quality culture. During the reporting period, the company held a variety of quality culture construction activities, aiming at improving employees’ understanding of GMP concept and promoting the inheritance and renewal of knowledge and experience related to production quality within the company. Through online and offline activities, the company has improved employees’ sense of participation and realized an entertaining learning atmosphere. These activities not only enhanced the employees’ understanding and application ability of GMP knowledge, but also implemented the GMP concept throughout the company, ensuring that employees can combine theoretical knowledge with practical work, which provided a strong guarantee for the improvement of the company’s product quality.

　　(3) Strengthen quality risk control.

　　In order to strengthen the ability of quality risk management and control, the company regularly carries out quality risk assessment and inspection, identifies potential quality risks in the production process, and formulates emergency systems and response plans to improve the institutional framework to ensure that product quality is always under control, realize quality assurance in the whole production process, and escort the production of high-quality products.

　　6. Strict and strict safety in production, and build a dam for the company’s safety in production.

　　Ganli Pharmaceutical always takes "safety first, prevention first, comprehensive management" as the overall policy of safety work and adheres to the safety management concept of "people-oriented, safe development". Adhere to high standards and strict requirements, continuously improve the safety management system, do a good job in safety production, and actively fulfill social responsibilities.

　　(1) constantly improve the standardization system.

　　During the reporting period, Beijing Headquarters organized and improved the safety working mechanism, revised and updated more than ten safety management systems in accordance with relevant national and local laws and regulations, standardization of safety production and requirements of ISO45001 occupational health and safety management system, and cooperated with its subsidiary Gan Lishan to compile and implement various safety production management systems and safety production operation procedures for various posts, so as to promote the standardization of the safety management system within the Group.

　　(2) Ensure the implementation of safety responsibilities.

　　During the reporting period, in order to ensure the implementation of safety responsibilities, the company formulated the EHS safety management manual for all departments of the company in accordance with the system documents, specification requirements, management regulations and other relevant rules and regulations of safety production combined with the actual situation of the post, clarifying the main responsibilities of personnel at all levels and the standards for work implementation, providing strong support for the gradual development of safety work, prompting employees to form a "safety systematization" behavior consciousness and further strengthening the implementation of safety responsibilities of personnel at all levels.

　　(3) Strengthen the construction of safety culture

　　The safety awareness of employees is the foundation of safe production. During the reporting period, the company vigorously carried out the construction of safety culture, strictly trained personnel, improved the management level of safety management personnel, warned employees to improve their safety awareness, and abided by safety production operation standards and norms. Through the combination of network platform and offline practice, a three-level safety education system covering all employees was built, and several special drills such as fire evacuation drills, electric shock and limited space were carried out to improve the emergency response ability of all employees. During the reporting period, the company also won the honorary title of "Beijing Safety Culture Construction Demonstration Enterprise".

　　(4) Deepen the "full closed loop" rectification of hidden dangers.

　　During the reporting period, the company continued to carry out the construction of double prevention mechanism, covering the whole plant area for risk identification and hierarchical control, and relying on the risk cloud platform of government departments to monitor the risk sources. The company takes the "major investigation and rectification of potential safety hazards" as the main line, covering all levels of personnel, all posts and all job sites, and takes self-examination and mutual inspection as the main forms to find and control potential safety hazards in time, eliminate safety weaknesses and ensure that safety risks can be found and solved in time. In addition, combined with the national safety production situation, the company carried out special inspections on hazardous chemicals, electricity, fire and gas, and took closed-loop rectification and review measures for safety risks to ensure that all production met the Group’s safety standards. During the reporting period, the company conducted more than hundreds of daily inspections, special inspections and comprehensive inspections for dozens of times, so as to nip in the bud, continuously promote the investigation of potential safety hazards, and take responsibility for the smooth progress of production and operation and the safety of employees.

　　7. Talent development promotes strategic landing

　　In the increasingly competitive business environment, the company practices the core talent values of "results-oriented, creating value" around the R&D strategy and internationalization strategy, and makes the talent-driven enterprise development strategy land by upgrading the talent management and training system.

　　The company is constantly exploring innovative practice ways of talent development. By formulating a number of assessment and incentive policies, we will retain key talents, constantly stimulate the motivation of talents, encourage talents in all business fields to take on challenges and strive to become a high-performance team. In terms of incentives, the company issued two equity incentive plans in succession in 2021 and 2022, covering 742 person-times of core talents in various business fields, in order to encourage talents to maximize and support the company to achieve its strategic goals, so that talents can truly become the owners of the company. The company issued the third incentive plan in February 2024, injecting a boost into the construction of the core team. Adhering to the strategy of talent echelon construction, we will further optimize the "successor project", increase the training of middle and senior managers of the company, enhance their strategic thinking, global vision, corporate governance and influence, and establish a middle and senior talent team that can promote the company’s development and organizational goals, and help the company’s international development. Customized courses are set up in the successor project to cultivate the ability of middle and senior managers to give practical solutions when dealing with complex business, and help talents to improve their three abilities of propaganda vision, strategic influence and business sensitivity and related knowledge and experience. In addition, by adding a company-level live sharing meeting, managers of various departments are invited to share their management practice experience, industry information and strategic goals to promote progress, etc., to further help "successors" know the current operating situation and strategic direction of the company and enhance their strategic thinking and overall concept.

　　The company continues to pay attention to attracting ambitious and high-potential talents. By accurately benchmarking colleges and universities, we will actively organize and carry out diversified school-enterprise interaction to promote the deep integration of Industry-University-Research. The core lies in exporting corporate brands, attracting the attention of universities, and establishing long-term strategic cooperation with universities through teaching probation, course interaction, co-construction of off-campus practice bases, joint training of specialists and masters, open days and other modes to realize resource sharing and complementary advantages, and jointly cultivate talents needed for industry development. At the same time, the company focuses on cultivating core talents, and continues to tap high-potential talents with excellent professional knowledge and global vision in universities around the world through the "Future Leaders Program" project, and cultivate them into leaders who can lead the company’s international development.

　　The company attaches great importance to and actively participates in the construction of corporate culture, and is committed to shaping and promoting the corporate culture that conforms to the company’s strategic goals and values. Through a series of well-planned cultural activities, such as training, value propaganda, honor recognition and professional quality training, the company’s cultural values are spread in a multi-dimensional, all-round and multi-angle way, and the corporate culture is further strengthened to ensure that the corporate culture is deeply rooted in people’s hearts, enhance employees’ sense of identity and belonging to the corporate culture, and enhance the cohesion and cooperation spirit among employees. At the same time, according to the feedback from employees and the real-time changes in the market, we will flexibly adjust and continuously adjust and optimize corporate culture strategies in various forms such as cultural co-creation, and strive to create a positive, healthy, harmonious and dynamic corporate culture environment to provide strong spiritual motivation and support for realizing the company’s long-term goals.

　　Ii. the industry in which the company is located during the reporting period.

　　1. Changes in industry policies

　　Under the policy background of the "Tenth Five-Year Plan", in 2023, all kinds of policies in the pharmaceutical industry frequently occur, and opportunities and challenges coexist.

　　(1) National centralized procurement with quantity

　　By December, 2023, nine batches of drugs and four batches of high-value consumables have been organized at the national level, and the centralized procurement of national pharmaceutical consumables has gradually entered a normal state. Under the policy of "integrating recruitment and procurement, linking quantity and price", the rules of centralized procurement have been gradually improved, especially in meeting the actual clinical needs, ensuring supply, deepening the credit evaluation mechanism of recruitment and procurement, and so on.

　　Among them, the sixth batch of insulin special procurement that the company participated in bidding was the first batch of centralized procurement of biological products organized by the state. In June, 2023, the National Health Insurance Bureau issued the Notice on Further Doing a Good Job in the Implementation of the Agreed Quantity of Centralized Procurement of Drugs (Insulin Special) Organized by the State. The "Notice" stipulates that "in principle, the agreement will be renewed based on the agreed purchase volume of this medical institution in the previous year, and the purchase volume of selected products in Class A will not be reduced". The state will continue to support the selected enterprises with low prices in centralized procurement and implement the spirit of centralized procurement contract; At the same time, the "Notice" clearly stated that "medical institutions should strictly implement the agreed volume of centralized procurement and strengthen the assessment of the implementation of the agreed volume of medical institutions".

　　In February, 2024, the Office of Joint Procurement of Drugs organized by the State issued the Notice on Submitting Purchase Data Related to the Range of Continuous Procurement of Insulin after the Expiration of the Centralized Procurement Agreement. The range of data submitted by this successive procurement is still six procurement groups, which is the same as the first round of centralized procurement (the sixth batch of centralized procurement of drugs organized by the state). This data reporting is conducted by online direct reporting, and the reporting volume of medical institutions at all levels should be compared with the historical purchasing volume in 2023. In principle, the total reporting volume of each medical institution should not be less than 80% of the purchasing volume of the previous year, and the reporting volume of Class A human insulin products selected in the first round of centralized purchasing should not be less than 40% of the purchasing volume of this product in the previous year; For class A insulin analogue products selected in the first round of centralized purchase, the reported amount shall not be less than 60% of the purchase amount of this product in the previous year. When the reported amount of medical institutions is less than 80% of their historical purchases, medical institutions are required to explain, and medical institutions that have historical purchases but do not participate in the reporting need to pay special attention. In the policy of continuous procurement, the state gives an appropriate tilt to the products selected in the first round of centralized procurement of Class A products, and in the draft of continuous procurement opinions, it clearly puts forward the procurement rules that are beneficial to the enterprises selected in the first round of centralized procurement with low prices, such as increasing the price of pre-filled products with lower prices on the basis of the first round of centralized procurement.

　　On March 29th, 2024, the Office of Joint Procurement of Drugs organized by the State issued the National Centralized Drug Procurement Document (insulin special connection), which stipulated that all enterprises should complete the submission of application materials before 10am on April 23rd, 2024, and publicly declare the information on the same day. This procurement cycle starts from the execution date of the successful selection result to December 31, 2027.

　　A. Rules for bid selection in this centralized procurement:

　　The product price lines of the selected categories in each purchasing group are clearly defined in this insulin purchasing document, and the predictability of the selection rules is significantly improved, which is helpful for enterprises to formulate rational quotation strategies according to strategic planning. The price difference of all kinds of selected products is smaller than that of the first centralized purchase, which promotes orderly competition in the market.

　　As can be seen from the price line of Class A products, the price line of the second-generation insulin is consistent with the price line of the third-generation meal and premixed insulin analogues. This rule will further promote the process of replacing the second-generation insulin with the third-generation insulin, help improve the accessibility of medication for diabetic patients in China, and continuously enhance their sense of acquisition and happiness. Compared with the guiding price line of this centralized purchasing document, the bidding price of five products in our company is lower than this A price line.

　　C. Analysis of purchasing demand data in the first year

　　In the first year of continuous centralized purchasing, the total purchase demand was 242 million pieces, which was 28 million pieces higher than that of the last centralized purchasing, with a growth rate of 13%. The implementation of the national special centralized purchase of insulin has reduced the price of insulin products in China, greatly reduced the burden of patients’ medication, promoted the awareness rate, treatment rate, control rate and diagnosis rate of diabetes in China, made more patients willing and able to choose and use insulin products in time, and further expanded the insulin market in China. Our company’s purchasing demand in the first year accounts for 17% of the total demand, and its share is second only to Novo Nordisk. Our company’s purchasing demand increased by 9% compared with the last year. Among them, our company accounted for 24% of the purchasing demand of the third-generation insulin in the first year, which was 10% higher than that in the last first year.

　　Among the purchasing demand in the first year of this centralized purchase, the purchasing demand of third-generation insulin was 168 million, accounting for 70% of the total demand, which was 36% higher than that in the first year of the last centralized purchase. The demand for second-generation insulin in the first year accounted for 30%, a decrease of 12% compared with the previous one. It can be seen that after the implementation of the first special insulin collection policy, the market share of the third-generation insulin has been rapidly improved, the intergenerational upgrade of insulin has been accelerated, and domestic enterprises are also seizing the opportunity to seize more market share.

　　As the leading enterprise of domestic insulin, especially the leader of the third-generation insulin, Ganli Pharmaceutical actively responded to the national policy, and many products won the bid as Class A in the first round of insulin collection, which reduced the burden of patients’ medication, and also kept sinking the academic promotion of the third-generation insulin market in the market, effectively seeking benefits for patients.

　　The purchase demand of our company in the first year of this centralized purchase is 41.77 million pieces, which is 25.13 million pieces more than that in the first year of the last centralized purchase, with a growth rate of 151%. Among them, the third-generation insulin products accounted for 24% of the first-year purchasing demand of the whole third-generation insulin, which was 10% higher than the last first-year purchasing demand, and the number of all products has reached the second place in the industry, second only to Novo Nordisk.

　　In the last centralized procurement, the company won the bid for all products, and many products were selected in Class A, and nearly 10,000 medical institutions were admitted. The company seized the opportunity, rapidly expanded the academic promotion team, deepened and refined the management of the grass-roots market, and constantly improved the market recognition of the company’s brand. The sales volume of various products increased rapidly and the market share continued to expand, which laid a solid foundation for this collection. In this first year’s purchasing demand, all products of the company have achieved high growth, among which the growth of meal time and premixed products is even more impressive, with the growth rates of 381% and 564% respectively.

　　The company has always followed the pace of national policies, actively participated in the continuous procurement of insulin, and solidly promoted all the work to ensure the efficient implementation of the collection results, provide more comprehensive, professional and meticulous services for more patients, and continuously improve the quality of life of patients.

　　(2) Adjustment of national medical insurance catalogue

　　On December 13th, 2023, the National Medical Insurance Bureau issued the National Drug List of Basic Medical Insurance, Work Injury Insurance and Maternity Insurance (2023). The total number of drugs in the new medical insurance drug list reached 3088, including 1698 kinds of western medicine and 1390 kinds of Chinese patent medicine; There are still 892 kinds of Chinese herbal pieces. Compared with the 2022 edition, the total number of drugs in this edition has increased by 126. 143 drugs out of the catalogue participated in the negotiation or bidding, of which 121 drugs were successful, with a negotiation success rate of 84.6% and an average price reduction of 61.7%. The success rate and price reduction were basically the same as in 2022. The new catalogue was officially implemented on January 1, 2024. Adjusting the national medical insurance drug list is related to every insured person and is a major event related to the national economy and people’s livelihood. It is the core concept of medical insurance work to let drugs return to the essence of saving lives, so that patients can use and afford them, and ensure that every penny is spent more, which is also the initial intention and goal of the adjustment of the national medical insurance drug list. From the perspective of maintaining the fairness of patients’ medication, improving the relationship between doctors and patients and facilitating reasonable clinical treatment, the national medical insurance drug list is dynamically adjusted every year. At the same time, the functional orientation of "ensuring basics" is firmly grasped, and the affordability of medical insurance funds is regarded as the "bottom line" that must be adhered to, and efforts are made to meet the basic drug needs of the majority of insured people. The inclusion of 126 new drugs in medical insurance means that more patients will enjoy the benefits brought by medical insurance.

　　(3) outpatient co-ordination policy

　　In 2023, the National Health Insurance Bureau issued the Notice on Further Improving the Integration of Designated Retail Pharmacies into the Overall Management of Outpatients, which included retail pharmacies in the scope of overall fund payment. In accordance with the principle of "steady progress and gradual expansion", encouraging qualified township hospitals, street health service centers, community health service stations, village health clinics and non-public medical institutions to participate in the outpatient service of designated retail pharmacies is conducive to improving the convenience and accessibility of the insured. With the policies of chronic and special diseases in outpatient service, "dual channels" and outpatient co-ordination, the market opportunities of retail pharmacies are gradually highlighted. The academic promotion team of the company assists retail pharmacies to carry out policy-based academic promotion and publicity work, so that patients can fully understand that retail pharmacies can provide medical insurance co-ordination services, and deeply introduce and analyze the professionalism and advantages of pharmacies in medical insurance settlement, so as to enhance customers’ trust and recognition of retail pharmacies and further enhance the market share of the company’s products.

　　(4) Medical and health services

　　In May 2023, the National Health and Wellness Commission and the State Administration of Traditional Chinese Medicine issued the Notice on Carrying out the Action of Comprehensively Improving Medical Quality (2023-2025). The goal of this action is to further establish the awareness of quality and safety in the whole industry in three years, improve the quality and safety management system and management mechanism, and further improve the multi-governance mechanism of medical quality and safety management with government supervision, institutional autonomy, industry participation and social supervision. Further consolidate the quality and safety management of basic medical care, improve the refinement, scientificity and standardization of medical quality and safety management, further optimize the allocation of medical resources and the balance of services, improve the ability of diagnosis and treatment of major diseases and the level of medical quality and safety, and continuously improve people’s satisfaction with medical services. To meet the people’s growing needs for a better life as the fundamental purpose, to promote the high-quality development of medical and health services as the theme, to improve the quality of supply as the main direction, pay equal attention to Chinese and Western medicine, strengthen total quality and safety management, promote the expansion of high-quality medical resources and regional balanced layout, and continuously enhance the people’s sense of acquisition, happiness and security.

　　In December 2023, the state issued the Guiding Opinions on Comprehensively Promoting the Construction of Close County Medical and Health Communities. The construction of a compact county medical community is to form a community of responsibility, management, service and interests by establishing a certain management and operation mechanism for county-level medical institutions and grassroots township hospitals in the county, and to form a ladder of assistance and promotion. From the development of a single institution to pay more attention to the coordinated development of all member units in the medical community, better optimize the integration and sinking of resources, and let the people get a higher level of medical and health services. The construction of compact county medical community is a systematic reconstruction of county medical and health system, and the issuance of guiding opinions provides guidance and guidance for comprehensively promoting this work. According to the guidance, by the end of 2025, more than 90% of counties and cities will basically build a compact county medical community; By the end of 2027, the compact county medical community will basically achieve full coverage.

　　With the management of chronic diseases gradually sinking to primary medical institutions, the company pays close attention to the development trend of relevant policies in the primary market, continuously strengthens the investment in academic promotion in rural areas, primary health medical institutions, retail pharmacies and other markets, and continuously improves the quality of service for primary diabetic patients and the market recognition of the company’s products by enhancing the professional ability of academic promotion and the refined management ability of the market.

　　2. The industry status of the company.

　　With the continuous listing of new drugs in the diabetes market in recent years, the structure of the diabetes market is constantly changing. Although the current patient penetration rate of new hypoglycemic agents is low, they occupy a high market share and will have a large profit margin in the future. DPP-4 inhibitors, SGLT-2 inhibitors and GLP-1 receptor agonists in China entered the market late, and are currently in a high-speed development stage with great market potential.

　　In recent years, the global sales of GLP-1RA products have increased rapidly, and more and more pharmaceutical companies have begun to lay out this product. The company also participated in the layout of this product earlier, and is now trying to seek product differentiation and superior efficiency to cope with the fierce market competition. And the company is the first company to select domestic single-target GLP-1RA for head-to-head evaluation of drug effectiveness with Smegliptide injection. In addition, the innovative drug GZR18 injection (indications are type 2 diabetes and obesity/overweight respectively) is a weekly GLP-1RA preparation product, which is more competitive than other single indication or daily preparation products under research. At present, although there are many pharmaceutical companies researching this product, there are few pharmaceutical companies with sufficient commercialization capacity and mature commercialization team. The company not only has sufficient production capacity of insulin products, but also has rich production capacity of supporting equipment. Not only that, the company’s professional academic promotion team of more than 2,000 people around the world will also be a powerful guarantee for the company to rapidly promote the sales of new products in the future. At present, the company has also deployed oral hypoglycemic agents, such as DPP-4i, SGLT-2i, oral GLP-1RA, etc. The company’s DPP-4i sitagliptin phosphate tablet is the first oral hypoglycemic drug independently developed by the company, which was approved for listing in China in June 2022. As of the disclosure date of the report, oral GLP-1RA product GZR18 tablets have completed the first administration to subjects in phase I clinical trials. The continuous listing of oral hypoglycemic drugs will further consolidate the company’s position in the field of diabetes treatment.

　　Diabetes is a chronic disease, which needs intensive treatment over time. Insulin is an irreplaceable end product for treating diabetes. Although the proportion of insulin in the market structure has decreased, it still accounts for the largest proportion, and the total amount is still increasing, and the future market is considerable.

　　From the European and American markets, as the world’s largest insulin sales market, 90% of its insulin products are sold in third-generation insulin products. Three main products of the company, insulin glargine injection, insulin lispro injection and insulin aspart injection, have been officially accepted by FDA and EMA as marketing applications for treating diabetes. According to the commercial and supply agreement signed between the company and Sandoz in 2018, after the approval of the company’s three insulin products, Ganjing, Laifu and Mendong, Sandoz will carry out the commercial operation of drugs in the United States, Europe and other specific regions, and Ganli Pharmaceutical will be responsible for drug development (including clinical research) and supply. If the products are successfully approved by FDA and EMA, the US and European markets are expected to bring considerable profit increment space to the company, which is expected to drive the company to usher in a new round of rapid growth.

　　With the development of emerging market economy and the improvement of consumption power, emerging markets are gradually becoming an important source of global insulin market demand. However, in recent years, the supply problems of foreign insulin manufacturers have occurred from time to time, while our company has stable production capacity supply, excellent quality standards and obvious price advantages, and overseas customers actively seek cooperation with our company. The company also seized the opportunity, accelerated the expansion of customers, expanded overseas orders, and continuously improved the company’s international revenue growth.

　　With the implementation of the special centralized purchase of insulin in China in 2022, it not only promoted the increase of the total insulin market in China, but also accelerated the process of replacing the third generation with the second generation of insulin and replacing the import with domestic products. As a national enterprise that mainly produces three generations of insulin products, our company won the bid for all products in this centralized procurement, and many products were selected as Class A, and nearly 10,000 new medical institutions were obtained. By virtue of the advantages of Class A products, the company seized most of the foreign-funded enterprises with high market share, which greatly increased the market share of the company’s third-generation insulin. The company also seized the opportunity, expanded the academic promotion team, accelerated the grass-roots coverage, and realized the rapid volume of products after centralized collection. With the deepening of centralized purchasing and the effective implementation of the company’s sales strategy, in 2023, the company’s sales of basic (long-acting) insulin products increased significantly, reaching 32.47%; Meal-time (quick-acting) and premixed insulin products grew more rapidly, with a growth rate of 112.38%. Compared with before centralized purchase, the sales volume of the company’s products doubled, and the market share of the products increased greatly. The company basically achieved the strategic goal of centralized purchase of insulin in the first round.

　　In 2024, the state clearly showed its policy support for the original A-class selected enterprises in the insulin continuous procurement policy. The company will also continue to actively respond to the national policies, seize the opportunity and actively participate in the national procurement of insulin, so that more diabetic patients in China can use the third-generation insulin products of Ganli.

　　The continuous growth of the company’s product sales also benefits from the company’s rich product line. In the insulin market, the company is a comprehensive company with three generations of products in the current insulin sales enterprises. The company’s approved oral hypoglycemic product, sitagliptin, is expected to go on sale this year, which will form a joint force with the company’s insulin preparation product sales and help the company’s product sales growth. The company is researching GZR18 injection, GZR4 injection and GZR101 injection. After going on the market, it will continuously enrich the drug selection of diabetic patients and enhance the brand influence and market share of the company. The GLP-1RA weekly preparation products that the company is developing for overweight or obesity will also open up more market space for the company and create new profit growth points. In addition to the rich layout in the field of diabetes, the company’s R&D products also involve research fields such as eukaryotic and prokaryotic protein engineering, tumor, cardiovascular and metabolic diseases, etc. In recent years, the company’s R&D investment ratio is at a high level in the industry.

　　At present, the company is also one of the few companies that produce diabetes supporting devices by themselves. The products listed by the company include reusable pen insulin syringes, non-reusable pen syringes, disposable injection pen needles and disposable insulin pen needles. In addition to supporting the use of the company’s insulin products, related products are also actively exploring business development and cooperative business to help the company create more profit growth points.

　　Iii. Business of the Company during the reporting period

　　(1) Main business of the company

　　The company is a high-tech enterprise mainly engaged in the research, development, production and sales of insulin analogues and injections, with a complete insulin research and development pipeline. As a leading high-tech biopharmaceutical enterprise in China, our company has successfully independently developed a number of China’s first three-generation insulin analogues, making China one of the few countries in the world that can industrially produce insulin analogues. The company’s main products include insulin glargine injection (Chang Xiulin), insulin lispro injection (Su Xiulin), refined protein zinc recombinant insulin lispro mixed injection (25R) (Su Xiulin 25), insulin aspart injection (Rui Xiulin), insulin aspart 30 injection (Rui Xiulin 30) and insulin protamine mixed injection (30R) (Pu Xiulin 30). At the same time, the company’s products cover related medical devices, including reusable pen insulin syringes, non-reusable pen syringes, disposable injection pen needles and disposable insulin pen needles, which are convenient for patients to use.

　　In the future, the company expects to achieve comprehensive coverage of the product line in the field of diabetes diagnosis and treatment. At the same time, the company will also actively invest in the research fields of chemical drugs, eukaryotic and prokaryotic protein engineering, tumor, cardiovascular and metabolic diseases, and strive to provide more high-quality drug treatment programs for patients.

　　(2) The company’s business model

　　1. Purchasing mode

　　According to the requirements of the company’s procurement system, the purchasing department is responsible for the external procurement, organizes the formulation of the company’s annual procurement plan, and guides the completion of procurement tasks according to the monthly demand; And carry out access, evaluation and maintenance management of suppliers, dig deep into high-quality suppliers and continuously optimize the supplier system; At the same time, in order to ensure production safety and stable supply of raw materials, the quality management department will audit and manage the qualifications of raw materials suppliers, and the quality management department will conduct strict quality warehousing inspection when raw materials are put into storage. For engineering and equipment goods, according to the company’s procurement management system and national regulations, the final supplier is determined by bargaining or bidding.

　　2. Production mode

　　The company’s commercial production plan, process management, production scheduling and organization are managed by the production management department. According to the production and marketing plan formulated by the supply chain management department, combined with the procurement of raw materials and product inventory, the production management department formulates the rolling production plan of the production workshop, and adopts the production mode combining Make-to-Order and Make-to-Stock to meet the needs of many customers, and at the same time strictly manages the whole production process of products. In the production process, the quality management department conducts quality supervision over the whole production process, and carries out whole-process inspection and monitoring on the quality of raw and auxiliary materials, intermediate products, products to be packaged and finished products.

　　3. Sales model

　　(1) Domestic sales model

　　The company mainly adopts the sales mode of combining commercial companies with specialized academic promotion. The company’s domestic product sales mainly adopt the distribution mode, that is, the drug is sold and distributed to hospitals through pharmaceutical commercial companies. Commercial companies do not undertake market development and promotion functions, but only issue demand orders to the company according to the drug demand of hospitals or pharmacies in their distribution areas. The company sells drugs to cooperative pharmaceutical commercial companies according to the annual Distribution Agreement and specific orders, and the regional commercial companies complete the drug sales and logistics distribution to hospitals and retail terminals.

　　According to the high technical barriers of insulin analogues, the domestic market is mainly promoted and publicized by the marketing system through independent professional academic promotion mode, in which the promotion information includes: product-related information (drug indications, use methods, safety and related academic theories and latest clinical research results), company brand information, etc.

　　(2) overseas sales model

　　According to the policies and market characteristics of overseas countries, the company’s international sales products include insulin raw materials, insulin preparations, pen components and other medical devices. The sales model is divided into authorized distribution of insulin preparations and cooperation with local enterprises in importing countries in filling raw material drugs. Under the authorized distribution mode, the company’s preparation products are sold to overseas markets by international distributors authorized by the company. Under the cooperative sales mode of filling, the company mostly cooperates with local enterprises with strong filling capacity, complete assembly line and biopharmaceutical production qualification. The company exports raw materials and pen components, and the importing partners carry out local preparation filling production, pre-filled injection pen assembly and sales.

　　(III) Main performance drivers

　　In the domestic market, with the in-depth implementation of the first round of centralized insulin purchase policy, the process of replacing the third generation with the second generation of insulin in China and replacing the import with domestic products is accelerating. The company continued to carry out intensive cultivation of the market, accelerated the sinking of the grass-roots market, and maximized the ability of the company’s professional academic promotion team. The sales volume of the company’s products increased rapidly. In the international market, customers now pay more attention to the stability of product supply and the safety of product quality. With the stable product supply, excellent product quality and years of brand influence, the company has rapidly improved customer trust and further strengthened its willingness to cooperate. The order volume of its products in overseas emerging markets has increased, and its international sales revenue has doubled compared with the same period of last year. Under the strategic guidance of cost leadership, the company deepened the management of increasing efficiency and reducing costs, dug deep into the work potential and improved work efficiency.

　　In the future, the company will continue to implement the development strategy, actively participate in national procurement, and better and more comprehensively serve domestic insulin patients. Adhere to the international development strategy, continue to explore overseas markets, closely follow the national "Belt and Road" policy, and bring high-quality and stable products of Ganli to more emerging countries. Continue to carry out the management of increasing efficiency and reducing costs within the company, and thoroughly practice the cost leadership strategy. Continue to adhere to the R&D innovation strategy, accelerate the work of R&D projects, continuously enrich the R&D pipeline, optimize the product structure, broaden the cooperation mode, carry out investment and commercial development business, and promote the sustainable and high-quality development of the company.

　　Iv. analysis of core competitiveness during the reporting period

　　(A) technological innovation and R&D advantages

　　As the first company in China to master the technology of industrialized production of insulin analogues, Ganli Pharmaceutical has been adhering to the business philosophy of "quality first and innovation forever" since its establishment, and has successfully developed a number of third-generation insulin analogues, covering three functional market segments of insulin: long-acting, quick-acting and premixed. While constantly impacting the ceiling of diabetes treatment, the company shoulders the mission of "providing higher quality drugs and services for human beings" and actively participates in the research and development of drugs for endocrine and metabolic diseases related to diabetes, such as obesity/overweight and lipid lowering, aiming at bringing more and better treatment options to diabetic patients. The company adheres to the principle of combining imitation with wound, and not only continues to deepen the research and development of new drugs for diabetes and related indications, but also carries out drug research and development for other indications. At the same time, the R&D process of innovative drugs and generic drugs was rapidly promoted, and the R&D pipelines of chemical drugs, eukaryotic and prokaryotic protein projects, tumors and cardiovascular and metabolic diseases were continuously expanded, which injected new vitality into the company’s sustained and long-term development. Moreover, by integrating diverse resources, we actively carry out exchanges and cooperation at home and abroad, further improve the company’s R&D strength, and inject more vitality into the company’s long-term sustainable development.

　　The company regards R&D as the "lifeline of sustainable development", and continuously strengthens the R&D investment and capacity building of the drug research and development team. By setting up Post-Doctoral Research Center, the company will jointly train postdoctoral researchers with postdoctoral mobile stations in national key universities such as Peking University and Tsinghua University, so as to enhance the academic level of the company in the field of drug research. At the same time, creative R&D incubation platforms have been established, such as insulin platform, antibody platform, pharmacological toxicology platform and analysis platform. After years of development, the company has established a perfect R&D management system, covering the whole process of drug development from target research, preclinical research, translational medicine research, clinical trials and so on, so as to ensure the project to achieve the expected goals.

　　The company’s clinical team has led and supported a number of R&D projects from clinical trial design, operation, registration, pharmacovigilance and other dimensions, and successfully promoted a number of projects to the clinical stage at home and abroad. Taking GZR18 injection, a research drug with indications for type 2 diabetes and obesity/overweight, as an example, the project successfully entered the Ib/IIa clinical trial stage and the II clinical trial stage in only 8 months and 12 months respectively. The company promotes the remarkable progress of the project with high efficiency. As of the disclosure date of the report, GZR101, GZR4, GZR18 injection and GZR18 tablets are all in the clinical trial stage, and are progressing normally and orderly; GLR1023 injection project has received the Notice of Approval for Drug Clinical Trials approved and issued by National Medical Products Administration (NMPA), and is accelerating the phase I clinical trials.

　　In the first half of 2023, the application for listing of insulin glargine injection, insulin lispro injection and insulin aspart injection independently developed by the company was formally accepted by the US FDA. In the second half of 2023, the company welcomed the pre-approval inspection of the US Food and Drug Administration (FDA) for three bio-similar drugs: Glargine, Laifu and Insulin Aspartate Injection. At present, the company has received the initial feedback from the FDA, and the company still needs to improve related matters. The company will complete the rectification as soon as possible according to the opinions of the FDA. Previously, the results of clinical comparative studies completed by the company in Europe and America showed that these three biologically similar drugs showed comparable pharmacokinetic and pharmacodynamic (PK/PD) characteristics with their original reference drugs, and their safety was comparable. Through this declaration in the United States, the company will further bring the gospel to more diabetic patients around the world and improve the accessibility of drugs. In addition, the marketing license applications of insulin glargine injection, insulin lispro injection and insulin aspart injection submitted by the company to EMA in Europe have also been formally accepted by EMA. In the first quarter of 2024, the company welcomed the pre-approval inspection by the European Food and Drug Administration (EMA) for three bio-similar drugs, namely glargine, lispro and insulin aspart injection. At present, the company has received the initial feedback from EMA, and is in the process of preparing for the reply. The company will actively reply to these technical questions and meet the requirements of EMA.

　　With the professional R&D team and strong independent innovation R&D capability, since 2011, the Company has successively obtained the Certificate of High-tech Enterprise. Since the establishment of the company, it has continuously improved its innovation ability and been widely recognized by many authoritative organizations and experts, among which many honorary certifications were obtained during the reporting period: In January 2023, the company won the China Pharmaceutical Bio-industry Track Award for its outstanding performance in market share and R&D investment in vertical tracks; In February 2023, it won the honor of "National Intellectual Property Demonstration Enterprise"; In March 2023, it was awarded the title of "the sixth governing unit of Beijing Pharmaceutical Industry Association"; In April 2023, it won the title of "Tongzhou District Medical and Industrial Collaborative Innovation Base"; In April 2023, the company was listed on the list of "2022 Zhongguancun listed company Kechuang 100"; In June, 2023, with continuous and dedicated investment and persistence in the field of pharmaceutical R&D, the company won the ranking of "Top 50 Biopharmaceutical R&D Strength in China in 2023" and "Top 100 Comprehensive Pharmaceutical R&D Strength in China in 2023"; In August 2023, the company won the "2023 China Pharmaceutical Industry Comprehensive Competitiveness Index"; In August 2023, the company won the title of "Best Innovative Practice Employer of 2023 Forbes China"; In October 2023, the company was selected into the list of "Top 100 Scientific and Technological Innovations of Private Enterprises in Beijing" and "Top 100 Social Responsibility of Private Enterprises in Beijing" in 2023; In December 2023, the company won again.The qualification of "national high-tech enterprise" marks one of the best practical proofs of the "scientific extreme" culture that the company adheres to; In December, 2023, the company won the title of "the most valuable investment enterprise of the year" for its pioneering activities in the international market with unshakable faith. In December 2023, the company won four consecutive "Pharmaceutical Industry Award".

　　(B) the advantages of the whole product line layout

　　As a leading China enterprise mastering recombinant insulin technology, our company has a complete insulin R&D pipeline, five insulin analogue products and one human insulin product, covering three functional insulin market segments: long-acting, quick-acting and premixed, and is the most comprehensive company in the third-generation insulin market at present.

　　The company’s main hypoglycemic product line is fully and steadily developed. In addition to the second and third generations of insulin that have been listed and mature in the market, it is actively deploying and promoting the fourth generation of insulin and more cutting-edge drugs and therapies related to diabetes treatment. At present, the research and development projects in clinical stage include GZR18 injection, GZR4 injection and GZR101 injection.

　　In addition to the above-mentioned main insulin products, the company also arranges oral hypoglycemic drugs, such as DPP-4i, SGLT-2i, oral GLP-1RA, etc. The company’s DPP-4i sitagliptin phosphate tablet is the first oral hypoglycemic drug independently developed by the company, which was approved for listing in China in June 2022. As of the disclosure date of the report, oral GLP-1RA product GZR18 tablets have completed the first administration to subjects in phase I clinical trials.

　　The company has a rich pipeline of insulin-supporting instruments and products, including reusable pen insulin syringes, non-reusable pen syringes, disposable injection pen needles and disposable insulin pen needles, which not only effectively guarantees the company’s insulin preparation product supply and service, but also provides a new profit growth point for the company.

　　In order to face the growing market demand, the company is also actively promoting capacity building. At present, the company’s capacity expansion project is progressing synchronously and orderly. It is expected that after all the projects are put into production, it will provide a strong guarantee for the commercial production of the company’s products and help the company’s entire product line layout in the field of diabetes treatment.

　　(C) Cost leadership

　　The company has experienced R&D and industrialization team, which is conducive to the rapid industrialization of laboratory results. With many years of R&D and production experience, the company has built a production factory with advanced technology and scientific process, and continuously optimized the process to ensure the quality and safety of the company’s products and control the product cost, and constantly practiced the company’s cost leadership strategy. While providing more affordable drugs for diabetic patients around the world, the company constantly promotes the process of domestic industry and technology substitution, so as to improve the quality and competitiveness of domestic products, replace imported products, achieve the goal of localization development, ensure the drug demand of domestic diabetic patients at reasonable prices, and reduce the drug burden.

　　The company adopts the strategy of whole process control, and integrates cost control into all aspects of the company’s business activities, and has carried out comprehensive and effective cost control from product research and development, material procurement, product manufacturing to product sales and after-sales service. At the same time, continuously improve the lean management and control system of the whole chain, enhance the stickiness between the chains, and help the company achieve the purpose of reducing costs and increasing efficiency.

　　After the implementation of quantity procurement, the company continuously increased product sales by virtue of the advantages of this quantity procurement, thereby enhancing the capacity utilization rate, exerting the scale effect, diluting the production cost, and further maintaining and enhancing the cost leading edge. At the same time, the company has taken effective measures such as expanding production scale, strengthening production management and optimizing resource allocation to further ensure drug quality, improve production efficiency, and ensure the supply of centralized production in many ways. In addition, with the increase of output, the fixed cost of the company’s unit product will decrease, and the scale effect will be further highlighted. The company will support the company’s continuous investment in the market and research and development by virtue of its cost advantage and scale advantage, so as to better guarantee the company’s sustainable development.

　　(D) International strategic advantages

　　During the reporting period, while maintaining stable business cooperation with many international pharmaceutical companies, the company actively expanded international team building, conducted market investment and local distribution in different regions and countries, explored international diversified markets, and actively promoted the localization process. At present, the company’s overseas approved products include all kinds of insulin raw materials, cassette injection, pre-filled injection, reusable insulin injection pen and disposable injection pen needle. In the future, the company will continue to deploy a full range of products for diabetes treatment on a global scale, and it is expected to bring more high-quality products and services to patients around the world through diversified cooperation.

　　Internationalization strategy is an important focus for the company to realize its vision of "laying out the global market". Since 2005, the Company has promoted the layout of internationalization strategy. At this stage, the Company’s internationalization strategy is:

　　1. Occupy the highland of registration standards

　　Based on the advantages of research and development of biological agents, the company has accelerated the progress of research and development projects. The company is committed to promoting domestic high-quality drugs to the global market, aiming at improving the global accessibility and affordability of insulin products, so as to stand out from the international competition and further consolidate and enhance the company’s market position.

　　In December, 2021, the company’s long-acting (GLP-1RA)GZR18 injection, which is expected to be injected once a week, was approved to carry out a phase I clinical trial in the United States with the indication of type 2 diabetes, and the first dose was completed in March, 2022.

　　As of the end of the reporting period, only two insulin glargine bio-similar drugs with interchangeability certification have been approved by the US FDA, but at present, no bio-similar drugs of insulin lispro or insulin aspart have obtained interchangeability certification in the United States. Our company, as the first biomedical enterprise in China to submit an application for the listing of insulin biological similar drugs to Europe and America, has demonstrated its potential and strength as an industry leader. The company is committed to promoting domestic high-quality drugs to the global market, aiming at improving the global accessibility and affordability of insulin products, so as to occupy a place in international competition and further consolidate and enhance the company’s market position.

　　With the advantages of local enterprises in emerging markets, the company continues to promote the registration of drugs and medical devices in emerging markets, and emerging markets have gradually become an important stage for the globalization of the company’s layout. By the end of the reporting period, the company’s insulin products have been approved in 20 overseas countries and formally sold in 18 countries. In addition, the company continues to speed up the registration of medical devices, and the disposable insulin pen needle (Xiulin needle) is the first product registered and approved by the US FDA.

　　2. Simultaneous development of the global market

　　(1) Developed markets such as Europe and America: The company signed a commercial and supply agreement with Sandoz in 2018. According to the agreement, after the approval of three biologically similar drugs, Sandoz will carry out the commercial operation of drugs in the United States, Europe and other specific regions, and the company will be responsible for drug development (including clinical research) and supply. In the future, the company is expected to seize the European and American markets through excellent product quality and cost advantages with years of experience in research, development, production and sales in the domestic diabetes drug field.

　　(2) Emerging markets: Through the two strategies of localization of preparation production and localization of operation, the company actively introduces superior resources into emerging markets, promotes the rapid development of international business, and realizes the expansion of international business territory. In view of the current international market situation, the company’s advantage of stable production capacity supply is favored by the market and recognized by customers. More customers actively seek cooperation with the company, and the company’s international sales orders are increasing, and sales revenue is accelerating.

　　V. Main operations during the reporting period

　　In 2023, the company’s operating income was 2,608,037,000 yuan, an increase of 52.31% over the same period of last year; The net profit attributable to shareholders of listed companies was 340,068,600 yuan, which turned losses into profits compared with the same period of last year.

　　VI. The Company’s Discussion and Analysis on the Company’s Future Development

　　(A) the industry pattern and trends

　　(II) Company development strategy

　　The company always takes the mission of "providing higher quality drugs and services for human beings" and focuses on human health; Adhering to the enterprise tenet of "quality first and innovation forever", we strive to explore the most urgent needs of patients and clinicians; Taking "the ultimate in science" as the core of corporate culture, we constantly innovate in academic and clinical practice, and take the vision of "laying out the global market and becoming the world’s top pharmaceutical enterprise" to provide high-quality diagnosis and treatment products and medical services for patients all over the world.

　　Based on this, the company closely revolves around the four strategies of R&D-driven, cost-leading, internationalization and talent highland to promote the sustainable and healthy development of the company.

　　R&D-driven strategy: The company always adheres to the corporate purpose of "quality first and innovation forever" and attaches great importance to independent R&D and innovation. Adhering to endogenous independent innovation as the core, we will continue to increase investment in research and development, achieve comprehensive coverage of product lines in the field of diabetes diagnosis and treatment, and further enhance the company’s market competitiveness in the field of diabetes treatment. The company will also actively invest in the research fields of chemical medicine, eukaryotic and prokaryotic protein engineering, tumor, cardiovascular and metabolic diseases, etc., and constantly provide kinetic energy for the company’s performance growth, and strive to build a world-class pharmaceutical company.

　　Cost lead strategy: that cost leading strategy is the key to keep the company’s performance grow continuously for a long time. from product research and development to product listing, from product production to product sales, the whole chain always considers the cost lead strategy, and establishes a scientific cost-benefit assessment mechanism to ensure the company’s cost advantage.

　　Internationalization strategy: At present, there are significant opportunities in the international market, and the pace of internationalization of the company in the industry continues to accelerate. By continuously developing the international market, the company will promote the scale benefits and consolidate its leading position in cost. Guided by the internationalization strategy, the company develops a long-term global layout of R&D, manufacturing and commercialization, and promotes the enterprise to become a first-class multinational pharmaceutical company.

　　Talent strategy: Talent is the basis for the company to achieve all strategic goals, and introducing, cultivating and accumulating talents is an important part of the company’s long-term planning. The company always insists on "self-worth and company vision advancing synchronously" as the cornerstone of cooperation, "scientific perfection" as the core of corporate culture, and advocates the values of talents full of resilience and result-oriented. Over the years, the company has recruited talents and built a multi-dimensional talent training system, constantly stimulating employees’ potential and innovation, and is committed to cultivating compound talents and teams with international strategic thinking. The company will continue to implement the people-oriented human resources strategy, so that all kinds of talents can show their talents in the company, so that they can apply what they have learned and grow. In order to achieve this goal, the company will constantly improve the internal incentive mechanism, assessment mechanism and post rotation mechanism to maximize the enthusiasm and creativity of employees.

　　(3) Business plan

　　In 2024, the company will consistently adhere to the enterprise development vision, implement the development strategy, and achieve the business objectives for the new year around the core business philosophy of "stable growth, innovation drive and cohesion improvement".

　　Steady growth: In 2024, the company will continue to pay equal attention to both the domestic market and the international market, comprehensively increase the market share of its products in the domestic insulin market, and at the same time accelerate the development of the international market to help double growth of the domestic and international markets. In 2024, the contract renewal of insulin purchase will be ushered in. The company will focus on the needs of patients and take the market demand as the guide to accelerate the upgrading iteration of insulin products in the domestic market. In the international market, the company will make every effort to promote the listing declaration process of existing product lines in key markets, continue to deepen sales cooperation with new and old customers, and further strengthen the overseas sales coverage of the company’s products.

　　Innovation-driven: relying on the existing mature R&D pipeline, broaden the R&D technology platform. In 2024, the company will adhere to independent innovation and research and development, focus on promoting research pipelines in the diabetes field such as GZR18 and GZR4, and strive to provide better treatment options for diabetic patients. In addition to continuing to deepen cultivation in the field of diabetes treatment, the company will gradually explore other fields, promote clinical application of multiple categories, further broaden the R&D technology platform and product pipeline layout, and seek opportunities for clinical and commercial licensing cooperation to provide endogenous growth momentum for sustainable development.

　　Enhancing cohesion: strengthening strategic management, optimizing management mechanism and improving efficiency and effectiveness are the keys to the company’s long-term development. In 2024, the company will focus on management institutionalization, system process and process informatization to realize efficient operation and value enhancement of the company. At the same time, in 2024, the company will continue to promote a scientific, extreme, pragmatic and economical corporate culture, and all departments will work together to promote the high-quality and sustainable development of the company.

　　(4) Possible risks

　　1. Industry policy risks

　　The pharmaceutical industry is one of the key industries in China, and it is also strongly supervised by the state. With the deepening of the reform of the national medical and health system and the gradual improvement of the social medical security system, China has successively issued a number of heavy policies in the pharmaceutical industry, such as: consistency evaluation of generic drugs, centralized procurement of drugs and medical consumables, and dynamic adjustment of the medical insurance drug list.

　　The company actively responded to the call of the state to reduce fees for the people, and won the bid for six products in the whole line in the centralized procurement. The company finally obtained the first year’s agreed purchase volume of 35,337,700 pieces (the first report was 16,641,800 pieces, and the weight was 18,695,900 pieces). As of May 2023, the procurement of insulin with special quantity organized by the state has been implemented in all provinces (autonomous regions and municipalities directly under the Central Government) for about one year. In the second half of 2023, according to the guidance of the state, various regions have successively formulated and issued renewal policies for their own provinces (autonomous regions and municipalities directly under the Central Government).

　　Countermeasures: pay close attention to the policy development trend of the pharmaceutical industry, adjust the business strategy of enterprises in time, and actively respond to changes in industry policies. Specific measures are as follows: (1) In addition to independent research and development of new drugs, actively seek external high-quality standards for introduction and expand product lines. (2) Refine the management of cost and quality, and reduce costs and increase efficiency to cope with the downward trend of product prices brought about by the special centralized purchase of insulin. (3) Accelerate the coverage of newly admitted medical institutions in the procurement of insulin quantity, strengthen the publicity of relevant policy requirements for the implementation of national insulin centralized procurement, actively promote medical institutions and doctors to understand the company’s product knowledge, and assist medical institutions to complete the agreed procurement quantity of centralized procurement as scheduled. (4) Accelerate the product certification in Europe and America, and open up new profit growth points for the company.

　　2. Supply risk of selected products in centralized purchasing

　　According to the requirements of the National Centralized Drug Procurement Document (Special Insulin Project), if the selected enterprise fails to fulfill its supply commitment, which affects the clinical use or causes serious quality problems of the selected product, the relevant enterprise will be listed in the "violation list", and its declaration qualification or selection qualification may be cancelled. At the same time, the enterprise or insulin products involved will be disqualified from participating in centralized drug procurement activities in various places within 2 years from the date of listing in the "violation list" according to the seriousness.

　　The company obtains a relatively high agreed purchase quantity in the procurement of insulin. If the company is affected by changes in the international political situation and large fluctuations in the exchange rate, there will be problems in the supply of raw materials and consumables, insufficient capacity arrangement or major quality problems in the supplied products, which may cause the supply risk of the selected products in centralized procurement. If the company has the above problems, it may face the risk of entering the illegal list, which will lead to the company’s loss of relevant market share and significant fluctuations in operating performance.

　　Countermeasures: (1) The company further promotes the localization process of raw materials and consumables to cope with the instability of international supply. (2) The company continuously strengthens the promotion of production capacity upgrading and supply guarantee, and makes reasonable inventory reserves. (3) Carry out lean production activities, improve the toughness of the supply chain, and take centralized procurement of the winning products as the first priority to ensure efficient production, quality first and stable supply. (4) At the same time, accelerate the construction of incremental capacity projects and enhance the company’s capacity scale.

　　3. Single income structure and risk of technical iteration

　　Relying on its own core technology and research and development strength, the company focuses on the field of diabetes treatment. The company’s operating income mainly comes from the sales of insulin preparations and insulin dry powder. Focusing on the field of diabetes treatment makes the company have significant product technology advantages, but it also makes the company face the risk of single income structure.

　　If subversive innovative technology appears in the field of basic research and application transformation, it may promote the research and development of innovative drugs with higher safety and effectiveness, which will have a potential impact on the existing listed products, greatly reduce the demand for insulin preparations, and then have a relatively adverse impact on the company’s operating performance. In addition, the scale of the overseas market for diabetes should not be underestimated, and the company’s current operating income mainly comes from domestic sales income, and international sales income accounts for a small proportion of operating income, which is not conducive to the enterprise becoming bigger and stronger.

　　Coping measures: (1) The company strengthened its R&D and innovation ability, and made continuous efforts in studying the formation mechanism and drug action mechanism of diabetes, exploring new targets, drug design, clinical trials and other aspects to promote the rapid transformation of new hypoglycemic drugs. (2) The company actively expands overseas business, strengthens cooperation with overseas customers, and increases the proportion of international business income to operating income. (3) The company strengthens cooperation with Industry-University-Research of universities and research institutes, distributes therapeutic drugs in many fields such as tumors and autoimmune diseases, enriches the company’s product pipeline, optimizes the company’s income structure, and ensures the sustainability and stability of the company’s profitability.

　　4. Innovative drug research and development faces the risk of uncertainty.

　　New drug research and development has the characteristics of long research and development cycle, high research and development investment and low success rate. From the early research and development of innovative drugs, clinical trials to production and listing, every link may face the risk of failure. In addition, considering that the development cycle of new drugs is too long, the future product listing may face the uncertainty of market competition. If the new drugs developed by the company cannot meet the changing market demand or face a more intense market competition environment after the new drugs are listed, it will adversely affect the growth of the company’s operating performance and the sustainability of profitability.

　　Countermeasures: (1) On the one hand, based on the current domestic clinical needs, the company develops new MeToo drugs with similar efficacy and safety or better MeBetter drugs on the basis of international new drug products; On the one hand, taking advantage of the company’s R&D platform, we gradually try to develop Class I new drugs. (2) Establish a scientific decision-making system. The company gives full play to its experience in new drug research and development, grasps the cutting-edge technology of science and technology in time, and ensures the scientific decision-making process of the project so as to make correct decisions. (3) The company conducts technical evaluation and risk control on the early stage of R&D projects (such as track selection, R&D cycle, cost and other inputs and economic benefit output evaluation, the influence of industry policy trends on the income of new drugs, and the iteration of new drug use technology, etc.) and key nodes, and tracks them in time during the R&D projects, so as to grasp the major nodes in the R&D process and reduce the R&D risks. (4) The company actively seeks high-quality resources suitable for the future development strategy, and cooperates with complementary biopharmaceutical R&D and innovation enterprises with cutting-edge technological advantages, thereby enhancing the R&D capabilities of enterprises, expanding product pipelines and continuously improving the core competitiveness of enterprises. (5) The company evaluates the input-output ratio of each link of R&D, outsources the R&D links with low added value, and makes corresponding organizational structure adjustment to speed up the process of listing new drugs.

"This is Daxing" WeChat in WeChat official account. From 15: 00 on November 23rd to 15: 00 on November 24th, there were 83 new COVID-19 virus-infected people in Daxing District, including 62 quarantine control personnel and 21 social screening personnel, all of whom have been transferred to designated hospitals for treatment. The main activity tracks in Beijing are as follows:

November 19th

00:00-00:15 Night fire roast bar in the north area of Nanting Xinyuan, Fengtai District;

09:05-09:20 Tiantangyuan Snack Public Welfare Xiqiao Store in Fengtai District;

10:00-19:00 3+ hair salon on the third floor of Chongwen Store, New World Department Store, Dongcheng District;

20:20-22:00 Talk about a small entertainment 24-hour billiards hall near Tongxing Garden, Xihongmen Town, Daxing District.

November 20 th

00:00-24:00 Middle Gate of Xindian, Haizijiao, Tiangongyuan Street, Daxing District;

08:40-19:00 Mujiushi counter of New World Department Store (Chongwenmen Store) in Dongcheng District;

09:50-18:00 Chaoyang District Yaojiayuan City Legend Vitality Oriental Outlets Factory Store Training Institution;

10:00-19:00 3+ hair salon on the third floor of Chongwen Store, New World Department Store, Dongcheng District;

10:45-11:50 Badoutong International Education Plaza, Qingyuan Street, Daxing District;

13:00-13:40 Dining Hall of Dahongmen Store in Jimei Furniture City, Fengtai District;

13:50-14:00 Billy Restaurant in Haidian District (F1 Floor, Jin ‘ao Building, No.19 Madian East Road);

14:10-16:00 Floor 3, Hyde Hot Spring Hotel, Chaoyang District;

15:00-16:10 wu mart Jianxing Store, Linxiao North Road, Linxiao Road Street, Daxing District;

15:45-16:00 Jiaguole Fresh Supermarket in Xihongmen Town, Daxing District (Xinghai Yueyuan Community, Huangliang Road)

16:30-16:40 Haizijiao Erwei Barbecue Shop and Tobacco Hotel in Tiangongyuan Street, Daxing District;

17:00-18:00 Huilongguan Store of Yonghui Supermarket in Changping District;

18:00-19:10 Fengtai District Beicai Convenience Market is equipped with optical shops and Tujia dregs cake shops;

18:50-19:10 Guankelong Supermarket in Shuanghe South Lane, Huangcun Town, Daxing District;

19:40-19:50 jiugong town Shouhang Supermarket Runxing Home Store in Daxing District;

20:20-21:50 Yonghui Supermarket, Dongpo, Meizhou, Hongkun Shopping Mall, Xihongmen Town, Daxing District;

23:30-24:00 Beijing Jiayuan Tangquan (No.38 Qingyuan Road), Qingyuan Street, Daxing District.

November 21st.

00:00-07:30 Xixiang Store, No.3 Middle School, Bowen Net City, Linxiao Road Street, Daxing District (Floor 2, Building 8, No.27, middle section of Xinghua Street);

00:00-24:00 Middle Gate of Xindian, Haizijiao, Tiangongyuan Street, Daxing District;

07:30-08:25 Waiting room and bathroom on the second floor of Chaopeng Xingkang Physical Examination Center in Sanzhong West Lane, Linxiao Road Street, Daxing District;

08:30-08:40 China Lanzhou Beef Lamian Noodles, the bottom of Building 8, Sanhe Nanli Community, Xingfeng Street, Daxing District;

09:00-09:15 Huaxia Bank (Building 1, No.5 Courtyard of Jinxing West Road), Block D, Greenland Central Plaza, Panggezhuang Town, Daxing District;

09:00-10:00 Land Department of Yangzhen Town, Shunyi District;

10:30-12:00 The nearest men’s bathroom of Lingshuai Company on the third floor of Meibo Building, Flower of the World Holiday Plaza, jiugong town, Daxing District;

10:40-11:00 Luogulou Steamed Bread Shop, Qingyuan Street, Daxing District;

11:55-19:00 Colorful Yunnan Store on the first floor of the second phase of New World Department Store in Dongcheng District, and the women’s bathroom on the B1 floor;

12:05-12:30: Sheng Ziyue, the bottom merchant of Rainbow New Town, Qingyuan Street, Daxing District, has a skin care styling haircut;

13:35-14:20 Floor 1, Building 7, City Mingyuan Beauty Salon, Chaoyang District;

13:45-13:55 Water station of the bottom shopping supermarket in Weierli Apartment, Xihongmen Town, Daxing District;

14:00-14:30 Naixue tea shop on the first floor of Longhu Tianjie, Yizhuang Town, Daxing District;

14:40-14:55 Female toilet on the first floor of Yinghai Brigade of Daxing District Environmental Monitoring Detachment, Yinghai Town, Daxing District;

17:00-24:00 jiugong town Nanjiao Hotel, Daxing District;

17:20-17:30 No.80 Pharmacy, Beijing Dongsheng Tianbaotang Chain Pharmacy, Shuanghe Nanli, Kannonji Street, Daxing District;

18:00-18:15 Ideal City Store of Shoulian Youxian Supermarket in Xihongmen Town, Daxing District;

18:10-20:00: Spicy boiled beef shop, POP MART shop, famous boutique shop and original Maishanqiu shop in Longhu Tianjie, Yizhuang Town, Daxing District;

20:10-20:20 Gufangyuan Mushroom Chicken Shop, Jiuzhong Road, Ma Chunguang, jiugong town, Daxing District;

20:25-20:35 jiugong town Yungou Fresh Supermarket in Daxing District and Beijing Linxingtang Good Pharmacist Pharmacy (the bottom business of Yulong Jiayuan in Jiuzhong Road);

20:35-21:00 Shopping at Green Fresh Supermarket in Huangcun Town, Daxing District;

20:40-21:00 Shanshan IOT Supermarket and Boyikang Pharmaceutical Co., Ltd. in Beizang Village, Daxing District;

November 22nd.

00:00-05:00 Middle Gate of Xindian, Haizijiao, Tiangongyuan Street, Daxing District;

07:10-07:40 Hongxing Erguotou Hualian Lifestyle Supermarket in Shaduiying Village, Qingyundian Town, Daxing District;

09:25-09:35 Oriental Kangsheng Pharmacy and KFC on the 1st floor of Vitality Oriental Shopping Plaza, Yaojiayuan Road, Chaoyang District;

10:00-10:35 Meilianfu Supermarket in Dazhang Village, Beizang Village, Daxing District;

10:25-10:40 Hongkun Plaza Store of Yonghui Supermarket in Xihongmen Town, Daxing District;

10:45-10:55 Babi Xianbao Dongxi Street Store in Jiugong Town, Daxing District;

11:15-11:45 Shopping at Xinfeng Ruilian Comprehensive Supermarket in Huangcun Town, Daxing District;

13:30-19:00 Flagship Store of Xinyang International Beauty Salon in Fengtai District;

13:50-14:20 Ouqianna Beauty Salon in Fengtai District, 2-6 new generations of GOGO in Fanggu Garden;

14:55-15:25 Wanfucheng Convenience Store in Xizhihe, Chaoyang District;

15:00-15:20 Le Jing Lifestyle Supermarket in Xihongmen Town, Daxing District and Gaoji Baikang Pharmacy near Xingduyuan Community;

16:15-16:35 Xuji Beef Noodles in unit9 Apartment, Xihongmen Town, Daxing District;

20:30-20:50 Shopping in Forand Supermarket, Qingyundian Town, Daxing District;

20:40-20:50 jiugong town Jiugong Hongyun Tobacco and Liquor Hotel, Daxing District.

Please report to the community (village), work unit and hotel where you live, and cooperate with the implementation of various control measures.

Here, I would like to remind the general public and friends to raise their awareness of protection, reduce unnecessary going out, advocate not leaving Beijing unless necessary, and abide by various epidemic prevention regulations. Home isolation and people living together should obey the unified management of the community (village), strictly stay at home, do not go out or visit, and cooperate with various prevention and control measures such as nucleic acid detection, antigen self-test and health monitoring; Open the window for ventilation every day, do a good job in ventilation and disinfection of shared areas such as toilets and bathrooms, reduce contact with people living together, do not share daily necessities, and keep a safe distance when contacting, wear masks and do personal protection. When you have to go out, you should take personal protective measures such as wearing a mask and keeping a safe social distance, and actively vaccinate. If you feel unwell, especially with respiratory symptoms such as fever and cough, you should seek medical treatment in time according to regulations.

Reporter Cha Rui

The "6 18" shopping festival has just come to an end, and express delivery is about to reach its peak. In Whale Warehouse-1 Logistics Warehouse, 42 containers "Spider-Man" shuttled through the 9-meter-high shelf gap. AI was their brains, and their task was to "get the boxes". Once the order is received, these "Spidermen" will accurately locate the box where the goods are stored in milliseconds, and quickly transfer it to the goods picking platform. The whole process takes only two minutes.

Different from previous years, these "Spidermen" have achieved "winding" for the first time in the industry, and all operational data are encrypted and circulated on the blockchain network, laying the foundation for the large-scale development and credible cooperation of the warehousing and logistics industry.

Seize the opportunity of the digital transformation of the real economy, while opening up its own "isolated island" of technology, domestic blockchain has found an industrialization road in the fields of finance, logistics and carbon reduction.

Break the "island"

Recently, the national standard "Blockchain and Distributed Accounting Technology Reference Architecture" was officially released and will be implemented on December 1 this year. This is also the first national standard in the blockchain technology field approved for release in China. According to the national standard, blockchain is a new database software integrating distributed network, encryption technology, smart contract and other technologies. At present, this national standard has been applied in hundreds of typical blockchain enterprises.

In the early days of the industry, different blockchain systems have different technical routes in communication protocols and identity management, and most of them are independent of each other, forming numerous "islands", which are not conducive to interconnection objectively and affect the efficient cooperation among institutions. At present, the demand for cross-chain interoperability is becoming more and more urgent. The key of blockchain from "local area network" to "Internet" lies in the need for "language communication" between different blockchain systems. After cross-chain, each chain becomes an interconnected and open ecosystem from an "island". Cross-chain technology can realize safe and credible information interaction between different blockchain systems, realize data exchange and value flow, and open up the boundary of "language", which is the technical basis of blockchain ecological prosperity.

"The introduction of national standards is only the first step. With national standards, enterprises can cross the chain more effectively." Li Ming, Chairman of the Standardization Committee of Blockchain and Distributed Accounting of IEEE (Institute of Electrical and Electronics Engineers) Computer Association, said that the cross-chain standard agreed on a unified communication protocol, just like letting people who used different dialects start speaking Mandarin in the past, which will greatly reduce the cost of interoperability.

"From now on, there have been three major trends in the development of domestic blockchain: platformization, componentization and integration." Li Ming told reporters that at present, all localities have their own blockchain services, such as Chang ‘an Chain, Shuxin Chain and Haihe Chain. These blockchains have formed platforms, and related enterprises can develop applications on existing platforms without building the underlying system, reducing development costs. At the same time, the key technologies of blockchain can be packaged separately, such as smart contracts and digital signatures, which can form independent products. With the further subdivision of blockchain industry, independently packaged components can improve system flexibility.

He also said that like a new generation of information technology such as artificial intelligence, blockchain is also a data-oriented technology, and integration with other technologies is an inevitable trend. For example, privacy computing and the Internet of Things are deeply related to blockchain. In addition, the demand for data interaction between different blockchain systems such as energy chain, financial chain and copyright chain requires not only cross-chain capability, but also the integration and coexistence of distributed and traditional centralized systems of blockchain.

Tamp the base

While the blockchain is constantly iterating, the application scenarios are also expanding. The new national standard recognizes blockchain as an important part of the new generation of information technology and an important technical support for the development of digital economy.

The intelligent three-dimensional storage system of the whale warehouse "Spider Man" is one of the examples of the blockchain empowerment industry. Li Linzi, the founder of Whale Warehouse, introduced that there are more than 2.5 million items of more than 40 brands stored in the 6,000-square-meter warehouse, the storage capacity is six times that of the traditional warehouse, the space utilization rate of the warehouse has increased from 10% to 85%, and the efficiency has also increased by three times. For better and more efficient cooperation, Whale Warehouse adopts blockchain and Internet of Things technology, and realizes the encryption of the operation information, order and fund transaction information of the picking system, so that many parties can look at a trusted account book together. Because these data are authentic and rich, Whale Warehouse can lease warehouses and equipment from industrial capital at lower cost to realize asset-light strategy.

In the capital market, the involvement of blockchain can also reduce credit risk and provide financing guarantee for innovative enterprises. Huidian Yunlian, an energy service provider, has participated in the construction of several energy storage power station projects at home and abroad. However, the pain points faced by the development of the global energy storage industry, such as security risk, quality assurance cycle risk, performance uncertainty and income uncertainty, have led to large risk exposure and financing difficulties between the demand of power station owners and the service system of equipment suppliers. To this end, Huidian Yunlian cooperated with Ant Chain to establish a full-cycle data, algorithm and digital technology service system based on materials, components, systems, scenarios and residual values, so that the data of energy storage projects can be trusted, the risks can be quantified, and the value can be evaluated. The energy storage system and the data sources such as asset evaluation, asset management and asset operation in the whole life cycle of the project are "wound up", which finally attracted Yicun Capital to provide financial solutions and financial support.

Blockchain has long been practiced in preventing people’s livelihood such as telecommunication network fraud. Ant Chain, the first anti-fraud alliance chain based on blockchain technology in China, solved the problem of risk information sharing through the cooperation of data on the chain with public security, people’s bank of China and operators, handled more than 2.4 million pieces of early warning data in one year, protected the victims’ fund accounts 1380 times, intercepted 13.4 million yuan of cheated funds, and safely shared 10 million pieces of black and gray data. This practice has also been included in the "Typical Application Case of Blockchain in 2022" of the Ministry of Industry and Information Technology.

Shanghai opportunity

According to IDC, a well-known research organization, it is estimated that the global blockchain market will reach US$ 18.95 billion in 2024, and the market size of China is expected to exceed US$ 2.5 billion, and the market size is expected to remain the second in the world. Faced with this billion-dollar market, Shanghai has already taken the lead in layout. According to the Report on Comprehensive Index of Urban Blockchain in China in 2021, Shanghai’s comprehensive index of blockchain ranks second in China, and there are nearly 1,400 blockchain enterprises with input and output in China, with Shanghai accounting for about a quarter. Among the units involved in drafting the national standards for blockchain, there are also Shanghai figures such as Ant Blockchain, Chain Intelligent Technology, Fudan University and Shanghai Computer Software Technology Development Center.

At present, speculation in virtual currencies such as Bitcoin is explicitly prohibited in China, but transactions such as NFT digital collections are already in the exploration stage. As early as July last year, Shanghai explicitly supported the exploration of NFT trading platform construction, and studied and promoted the digitalization of NFT and other assets, the global circulation of digital IP, and the protection of digital rights in Shanghai.

At the level of blockchain and digital assets, Shanghai has clearly defined the direction of industrialization and marketization. The "Three-year Action Plan for Promoting High-quality Development of Manufacturing Industry in Shanghai (2023-2025)" points out that in the implementation of the action plan of "four new tracks" and "five future industries", it is necessary to develop new digital economies such as blockchain and Web3.0, and promote major applications of the Meta-universe. In August last year, Shanghai Data Exchange set up the first digital asset section in China, and this year, it linked major domestic blockchain enterprises to strive to achieve cross-chain interconnection of blockchain. According to reports, in order to realize the interconnection of assets on the chain, the Shanghai Data Exchange has formed a "three-step" plan, which will build a credible hub for blockchain interconnection, formulate relevant standards for digital cultural and creative blockchain applications, and activate multi-scenario applications of cultural and creative resources.

At the end of last year, "Shanghai Carbon Bank", a carbon inclusive platform settled in digital RMB, was launched. Shanghai residents can take the subway or ride a bike to calculate carbon emission reduction according to their mileage, and users’ daily low-carbon behavior income can be converted into digital RMB in real time. In order to make carbon assets visible, available and measurable, blockchain deposit certificate and smart contract are adopted, and the data of carbon assets can be realized by code without human intervention.

"Shanghai’s blockchain application scenarios are particularly rich, and the financial industry, shipping industry and logistics industry are highly developed. Most of the blockchain businesses can find landing scenarios in Shanghai." Li Ming said that Shanghai’s policy support for blockchain is very strong, and its talent advantage is second to none in China. "Blockchain requires compound technical talents, integrating cryptography, programming languages, computer networks and other majors, and usually requires talents with higher professional skills. Shanghai is just a gathering place for relevant talents." He also believes that Shanghai has hatched many blockchain companies, and "killer" applications may appear in the future in commercial operations.

In the cross-river tunnel between popularization of science park station and danshuichi station of Wuhan Metro Line 12, the construction workers are working nervously on multiple faces. Photo courtesy of the correspondent.

　　At the depth of more than 30 meters at the bottom of the Yangtze River, the giant "earth tiger" is fully excavating; In Huashan, Wuhan, the subway line 19 tunnel has quietly crossed Yanxi Lake; In Wuchang South Area, the starting point adjustment project of Line 5 (Phase II of Line 5) is undergoing joint debugging and testing … … In the past few days, hundreds of work sites in Wuhan Metro have set off a great upsurge and made every effort to sprint the annual construction target. Jimu journalist learned from Wuhan Urban Construction Bureau that this year, the city plans to implement 13 subway projects with a total mileage of 182.8 kilometers, and build the second phase of Line 5 and Line 19.

　　Shield machine successfully crossed the Yangtze River levee.

　　At 9: 00 a.m. on June 3, the ring line of the subway in Asia’s largest city, Wuhan Metro Line 12, sent another good news — — In the river-crossing section from Popular Science Park Station to Danshuichi Station, the "Jiangcheng hms illustrious" shield machine successfully advanced to the 540th ring road, successfully breaking through 1080m, and safely realized two first-class risk sources, such as the shield machine originating and crossing the Yangtze River levee.

　　At the entrance of the construction site of the Popular Science Park Station, a row of cutters replaced by the shield machine are displayed, with an average diameter of about 45 cm and various shapes, which are like the "teeth" of the shield machine. When the shield machine digs underground, it relies on these teeth to "chew" obstacles such as rocks, mud and gravel to ensure the smooth progress of the shield machine.

　　"Don’t underestimate these knives, they are so small and worth 20,000 to 30,000 yuan." Ren Ruhua, project manager of China Railway 14th Bureau, the construction party, introduced that these cutters are divided into hobs, scrapers, tearing knives, etc. according to their different functions. They are installed on the cutter head of the shield machine in an orderly manner, and they cooperate with each other during construction to "gnaw" hard bones.

　　The shield machine has a diameter of 12.55 meters and a height of about 4 floors. There are 206 cutters installed on the cutter head at one time. "Because of the complicated geology, the cutters wear quickly. At present, we have replaced 350 cutters, which is equivalent to spending nearly 10 million yuan to replace 350 teeth for the shield machine." Ren Ruhua joked.

　　Jimu journalists enter the underground tunnel through the construction stairs. The tunnel that has been formed is very spectacular, and the tunnel segments are assembled neatly and seamlessly.

　　Zhou Xun, the owner’s representative of Wuhan Metro Group, said that segment construction is a very key link in subway construction, and its quality directly determines the safety of subway tunnels, and there should be no carelessness.

　　A segment weighs 13.5 tons. In the tunnel, a journalist saw a double-headed flatbed truck specially for transporting segments, which has a cockpit at both ends and can move forward and backward freely, which can solve the problem of vehicles turning around in the tunnel.

　　The section from Science Park Station to Danshuichi Station is about 4 kilometers long, which is the longest subway tunnel under construction in China. Line 12 is the first subway loop in Wuhan and the largest subway loop in Asia, with a total length of 59.9 kilometers and 37 stations. The line crosses the Yangtze River twice and the Han River once.

　　The "fastest" subway is scheduled to open to traffic this year.

　　"Now our interval tunneling task has been completed 98%, and victory is in sight!" On the morning of June 4th, Yin Huabin, project secretary of China Communications First Bureau, the construction party, said excitedly at Gujiashan Station, Bid 8 of Wuhan Metro Line 19.

　　The shield construction of this bid section is from Gujiashan Station to Wudong Station, with a total length of 3.2 kilometers, of which 1.1 kilometers goes under Yanxihu Section. In order to ensure the smooth crossing of Yanxi Lake, the most suitable shield machine was selected by repeated comparison before construction, and industry experts were invited to repeatedly demonstrate the construction plan and make detailed disclosure to the construction supervisors. During the shield machine crossing the lake, the builders used the remote monitoring system of the shield machine to carry out 24-hour uninterrupted monitoring. At the same time, they also used drones, telescopes and ships to patrol the water surface of Yanxi Lake every day. "We rented a small fishing boat to patrol the lake with drones, and found problems in time by checking whether the water body is bubbling or not, so as to start emergency plans and ensure that emergency rescue work can be carried out in time and effectively." Yin Huabin said.

　　In a clean and tidy tunnel, Zhou Hao, the second-level project manager of Wuhan Metro Group, said: "The tunnel segment damage, dislocation and water seepage have always been common quality problems in the process of shield tunneling. In order to effectively improve the engineering quality and create excellent projects, we strictly control the segment production from the source, and strive to create a pollution-free, dislocation-free, leakage-free and overrun-free ‘ Five tunnels ’ 。”

　　According to reports, Wuhan Metro Line 19 is designed to operate at a speed of 120 kilometers per hour, with a long-term operating condition of 140 kilometers, which is called the "fastest" subway line in Wuhan. It is expected to be opened for operation within this year, when residents in Guanggu area can go directly to Wuhan Railway Station through Line 19.

　　Steadily enter a world-class subway city

　　On the afternoon of June 4th, on the track of the starting point adjustment project of Wuhan Metro Line 5, the test train runs every 5 minutes and "gallops" back and forth between Hongxiacun Station and University of Traditional Chinese Medicine Station.

　　"This is an unmanned line, and it has to be docked with the first-phase site, so the debugging period of each system is several times that of ordinary lines." Yin Lei, the second-level project manager of Wuhan Metro Group, said that the joint debugging test is currently being carried out, and a systematic "physical examination" is carried out around the signal system, vehicle system, integrated monitoring system and communication system. During the joint debugging and test, the project team focused on the key parts, focusing on stations, yards, substations and other places, doing a good job in the investigation of potential safety hazards, maintenance and equipment operation, and strictly implementing various safety precautions.

　　In the joint debugging test, the smooth track has been affirmed by all parties. Zhou You, director of the Engineering Department of China Railway Shanghai Engineering Bureau, told the reporter that the starting point adjustment project of Line 5 benefited from the fact that they "grafted" the high-speed rail technology into the subway track laying, and controlled the track laying accuracy within 1 mm, which was much higher than the industry standard of 3 mm. "This will provide passengers with a more comfortable ride experience."

　　It is reported that since the opening of the first rail transit line in Wuhan in 2000, Wuhan rail transit has realized the historical transformation of "from scratch, from single line to network". At present, 11 lines have been opened and operated, with a total of 291 stations, steadily ranking among the top ten "metro cities" in the world. According to the relevant approval of the National Development and Reform Commission, by 2026, Wuhan will form a rail transit network with 14 subway lines and a total length of about 660 kilometers, and fully realize the "main city network and new city line".