Thirty Years of Honing, Embarking on Entrepreneurship Once Again

Today marks the 30th anniversary of BYHEALTH's founding. We have chosen to hold our company's two-day, one-night "Crossing the Tengger Desert" 11th Extreme Challenge and our 30th birthday evening gala under a sky full of stars in the desert.

At this moment, what first comes to my mind are those two large lines of words I saw years ago when crossing the Taklamakan Desert with the founding team: "Only the desert is barren, not life."

Through over two decades of effort, BYHEALTH has participated in defining China's Vitamin and Dietary Supplements (VDS) industry, striving to promote the healthy development of China's VDS sector. We have survived in narrow spaces, grown with resilience, and profoundly benefited from the expansion of China's VDS market.

At the beginning of 2023, the theme of my letter to shareholders was "The New Cycle of Vitamin and Dietary Supplements Begins," pointing out that the new VDS cycle would certainly bring high-growth opportunities for more categories and brands.

Unfortunately, BYHEALTH missed the start of the new cycle it had identified and also missed the best adjustment opportunity in 2023.

At its 30th anniversary, BYHEALTH is squarely facing major challenges from both internal and external pressures in its growth history.

Over the past two years, we have slammed on the brakes and experienced a significant pullback just before the hundred-billion revenue milestone. There are external factors, such as healthcare policy changes and declining purchasing power leading to a sustained sharp downturn in the pharmacy VDS category. More critically, there are internal factors, primarily the absence from key growth and momentum channels like cross-border e-commerce and Douyin during the new cycle.

Internal causes are primary.

A sharp decline is more awakening than a slow boil.

The more applause there is, the greater the risk often is. Confronting and resolving crises and challenges breeds new opportunities.

After the sharp decline in 2024 and stabilization in 2025, we choose to launch a full-scale offensive in 2026 with an entrepreneurial mindset.

First, from 2026 to 2028, we will achieve new revenue highs within three years.

The pharmacy retail industry will continue to face shocks and pressure, but "crisis" and "opportunity" coexist. We will rapidly complete the full-link DDI digital infrastructure for pharmacies, test new commercial distribution models/new product control and sales models/reconstruction of new product value chains, etc., and scale up instant retail and chain store member co-creation businesses. This will create greater incremental value for consumers and partners, ultimately completing the transformation and upgrade of a new pharmacy business model.

We must forge a "new path" for VDS in Chinese pharmacies. This concerns not only BYHEALTH but also the VDS industry.

Under heavy pressure, starting in 2026, we aim to significantly outperform the VDS category growth rate even in the pharmacy channel.

Beyond pharmacies, businesses including traditional e-commerce, interest-based e-commerce, cross-border, supermarkets, and international markets will all resume rapid growth, substantially exceeding industry growth rates. Among these, the main brand will achieve high growth in 2026 in the strategically absent cross-border x Douyin channels.

The goal for 2026-2028 is to comprehensively outperform the growth rates of major industry/category segments across all channels.

Second, focus on major innovations in commercially viable products with significant functionalities, new functionalities, and new dosage forms.

2025 is the first major year for new products in BYHEALTH's history. New products, including multi-vitamin double-layer tablets, accounted for over 20% of sales for the first time, optimizing strategic consumer segments and brand equity.

Meanwhile, the first self-developed over-the-counter (OTC) product, HighFlex Glucosamine Sulfate, was launched in the first half of the year. The first self-developed formula powder for special medical purposes, "Mei Yi Le," was also recently launched.

Nurturing life with science.

We are implementing the transformation strategy of strengthening the brand and enhancing technological capabilities. With dedication, hands-on involvement, and a focus of greater resources on product R&D and innovation, we will create more inspiring, exciting, and pride-inducing products.

Let scientific nutrition take the lead in the AI wave of technological democratization.

Let everyone's work be more meaningful;

Take this as our mission and be proud of it.

Third, no matter how difficult, we will ensure brand-related investments for the long-term and health principles, even at the cost of sacrificing short-term profits.

Brand is the core competitiveness of consumer goods.

If penetration rates among strategic consumer segments comprehensively underperform, where is the future?

If total investment in key social media comprehensively underperform, where is the future?

"The Sword of Damocles" – do not sacrifice the future for the present!

Fourth, accelerate global market expansion to achieve sustained high growth.

Fifth, establish a long-term platform mechanism for innovation and entrepreneurship to cultivate more new projects as "growth engines."

Sixth, prioritize strong scenarios and high substitution rates, and build BYHEALTH's AI Agent matrix.

Seventh, resolutely and continuously streamline people, finances, and activities that do not create value, removing non-value-adding middle layers and management. At this 30-year milestone, we must rethink and rekindle the passionate, entrepreneurial spirit of our youth for the future.

For the next five years from 2026 to 2030, China's VDS market is expected to maintain high single-digit annual growth.

Opportunity cost is currently the biggest cost for BYHEALTH.

How does BYHEALTH shift from passive to active?

Battling algorithms will always be passive; brand and product innovation are the keys to escaping algorithmic manipulation.

If you are not at the table of "brand and product innovation," you are on the menu of "channels."

Ten years ago, twenty years ago, we could confidently say that BYHEALTH continuously created distinct value for consumer health and distinct value for the industry and partners.

Looking forward from this 30th anniversary point, we must ask ourselves: What unique value, possessed by no one else, can BYHEALTH still create for consumer health? What unique value, possessed by no one else, can BYHEALTH still create for the industry and partners?

The value of BYHEALTH fundamentally depends on how much incremental value it can bring to consumer health!

"True equality is equality of opportunity, not equality of outcome."

Thirty years of honing,

Sharpening for the task, advancing with double effort;

Thirty years of honing,

Embarking on entrepreneurship once again, taking action!

Speech at BYHEALTH's 30th Anniversary Celebration

Liang Yunchao

October 28, 2025

Tengger Desert