Lei Jufang: Tibetan medicine must modernize, and enterprises must also modernize.

　　In early June, the A-share market was marked by subdued indices: the Shanghai Composite Index hovered between 2,500 and 2,600 points, while the Shenzhen Component Index also lingered around the 10,000-point mark.

　　Old Wang, a veteran stock investor from Shijingshan District in Beijing, is in an excellent mood— the stock he bought at the end of last year is about to distribute a “red envelope”: On June 11, Qizheng Tibetan Medicine Co., Ltd. officially released its announcement on the implementation of the 2009 equity distribution. The company will pay all shareholders RMB 3.10 in cash (including tax) for every 10 shares held.

　　An economist jokingly remarked that a person’s happiness index is inversely proportional to the income of their neighbors. Although Old Wang hasn’t read much in economics, he noticed that the real estate stocks his neighbor bought around the same time have already plummeted by half, while the Qizheng Tibetan medicine stock he holds still remains above 20 yuan—a fact that makes him feel rather pleased with himself.

　　Lei Jufang is also very pleased. Like Old Wang, she is a shareholder of Qizheng Tibetan Medicine Co., Ltd. The difference is that she is one of the founding shareholders—the largest shareholder of Qizheng Group—and also the founder of Qizheng Group. She currently serves as the Chairperson of the Group’s Board of Directors.

　　Recently, on the fifth floor of the China Tibetology Research Center in Beijing, at the Qizheng Tibetan Medicine Beijing Office, Lei Jufang accepted an exclusive interview with our reporter.

　　At Qizheng Company, “Engineer Lei” is the standard way to refer to Lei Jufang. Outside the company—and especially in the eyes of the media—she’s known as “Sister Lei.” “My future achievement may not be the creation of a publicly listed company. If, around me, there’s a group of young people from various ethnic groups, including Tibetans and Han Chinese, who say, ‘This company is our own company,’ then I’d consider that true success,” says Lei Jufang. Lei Jufang has her own unique understanding of what modernization means. She says that the hallmark of a company’s modernization isn’t cold, bureaucratic, or purely procedural—it’s rather the heartfelt commitment and genuine endorsement of the enterprise by everyone involved. “I think if all our employees truly embrace the modernization of Tibetan medicine as a cause they deeply love, then we’ll have achieved success,” she adds.

　　More than a month before the interview, Lei Jufang spent most of her time in Linzhi, Tibet. During that period, in addition to refining the company’s corporate development strategy, she “accomplished two major tasks.” First, on May 12, she organized and convened the 2009 Annual General Meeting of Shareholders, at which the 2009 profit distribution plan was approved. Second, she led a rescue team to participate in disaster relief efforts in the Yushu earthquake-stricken area.

　　“Sometimes, meetings would go on until late at night. Some of the young team members were already drowsy, but Engineer Lei remained wide awake. He’d assign tasks—‘Who’s going to drive? What should we watch out for on the way to Yushu? Who’s going to contact about the supplies...’” said an executive standing beside Lei Jufang. Thanks to Engineer Lei’s meticulous planning, the rescue team hardly had to take any detours.

　　Since founding Qizheng Group in 1993, Lei Jufang has been on an entrepreneurial journey spanning 17 years. She clearly understands the significance of division of labor and collaboration for a company’s development. Yet when it came to participating in the Yushu earthquake relief efforts, she insisted on personally organizing and coordinating the work herself, and on boosting the morale of the rescue teams.

　　This rescue effort also served as a test and a baptism for Qizheng. As a result, Lei Jufang was deeply moved. “The frontline team members are mostly born in the 1980s. They’ve kept at it all this time, taking only two days off in between—and working more than ten hours every single day,” said Lei Jufang.

　　As of the time of writing, this rescue team has just departed from Yushu and is now planning to establish a Tibetan medicine clinic in Yushu to address the long-term medical needs of the local population.

　　An analyst from Beijing Securities said that the term “ethereal beauty” is the most fitting way to describe Qizheng Group.

　　It’s intriguing to see how a major shareholder of a publicly listed company is being evaluated. “Qizheng Tibetan Medicine Co., Ltd.’s flagship product, the Xiaotong Tie patch, enjoys an excellent reputation in the market and has maintained the top position in the industry for six consecutive years,” said the analyst mentioned above. Yet, the public knows very little about the company’s specific operations and products—only after Qizheng Tibetan Medicine went public did it gradually reveal its true nature to the capital market.

　　By leveraging modern technologies, Lei Jufang and her team are lifting the veil on Tibetan medicine, enabling more people to benefit from this mysterious cultural and scientific heritage. Accompanying this effort, through connecting with product markets, collaborating with research institutions and universities, and partnering with capital markets, Qizheng Tibetan Medicine has transformed itself from a private company into a modern, integrated group corporation.

　　In addition, as a publicly listed company that has high market expectations, Tibet Qizheng Tibetan Medicine Co., Ltd. has also ventured into other related markets. On June 7, the 18th meeting of the first board of directors of Qizheng Tibetan Medicine Co., Ltd. adopted a resolution deciding to invest in the construction of a “pollution-free specialty herbal medicine production base” in Longxi, Gansu Province.

　　The reason for planning to invest 180 million yuan in establishing this base, according to some analysts, is that, under conditions of ample cash flow, this represents a natural extension of Qizheng’s brand and technological advantages—and is therefore worth paying close attention to.

　　Modernizing traditional industries requires patience.

　　Reporter: Last year, when Qizheng Tibetan Medicine Co., Ltd. listed on the SME Board, it announced that the funds raised would be primarily allocated to the renovation and expansion of its production lines, the Tibetan Medicine Engineering Technology Center, and the marketing network. How is the progress now?

　　Lei Jufang: We’re all proceeding according to plan. A portion of the work has already been mechanized, but another part still needs to be handled manually. The main building of the Tibetan Medicine Engineering Technology Center we’ve established in Lhasa is now complete. It will serve as a model center showcasing the progress and achievements made in the modernization of Tibetan medicine.

　　Reporter: Besides serving as a platform for R&D, this center also has the function of showcasing and promoting Tibetan medicine culture. As a publicly listed company, why did the company’s board of directors make this decision— one that is both costly and unlikely to yield significant profits?

　　Lei Jufang: That’s indeed the case. The Tibetan Medicine Engineering Technology Center in Lhasa serves a dual purpose: First, it undertakes R&D functions—including secondary development research on classic Tibetan medicines and breakthrough studies aimed at overcoming key technological challenges common to Tibetan medicine. The second function is to serve as a demonstration model for the modernization of Tibetan medicine. Today, people—from authoritative experts to ordinary consumers—widely recognize and strongly support cultural phenomena characterized by inclusiveness and the coexistence of diverse cultures. Moreover, national industrial policies actively encourage and support this trend; for instance, national leaders have explicitly advocated the direction of “industrial characteristics tailored to Tibet’s unique features.”

　　From the perspective of our industry’s integration, Tibetan medicine—though it may sound mysterious and magical to outsiders—is actually underpinned by a robust cultural and technological system. It is precisely because of the coexistence of this region’s unique cultural and technological systems that Tibetan medicine has enjoyed years of prosperity and cultural appeal, drawing countless people eager to explore it. But what exactly do these visitors come to see? The center we’ve established aims precisely to address this “seeing” aspect: by infusing modern elements into the traditional Tibetan medicinal culture and technological framework, we seek to gradually elevate and enhance its value.

　　In the past, people have always regarded Tibetan medicine as miraculous and entirely natural—this is all wonderful. However, if it’s to embark on a path of industrialization, it can no longer remain in its original form. For instance, some traditional Tibetan medicines have a dark, almost black appearance. If they’re still packaged in the old folk-style paper wrappers, most people wouldn’t dare to take them. How hygienic are they? Are they even genuine? These are the kinds of questions that naturally arise.

　　Currently, we are leveraging our in-house R&D team and collaborating with over a dozen university research institutions—including Tianjin University, Lanzhou University, and the School of Pharmacy at the Chinese University of Hong Kong—to enhance traditional Tibetan medicine using modern pharmaceutical methodologies, thereby producing Tibetan medicines that doctors and consumers can both see and accept. At the same time, we are also vigorously working to establish and elevate modern standards for Tibetan medicine—a project that is truly massive in scope. The latter initiative has already received national support and has been included in the Chinese Pharmacopoeia Commission’s projects.

　　We believe this represents a valuable resource in China’s cultural and pharmaceutical-technological fields—a highly sophisticated and specialized industry sector. It is our mission and responsibility to unearth its potential, make it accessible through modern approaches, and ensure its better preservation and promotion. We simply must do this.

　　Reporter: You just mentioned “industrial characteristics and Tibetan features.” What exactly are the industrial characteristics of Tibetan medicine?

　　Lei Jufang: To put it another way, Tibetan medicine and traditional Chinese medicine are two distinct trees growing in the same soil—naturally, their fruits will also differ. Traditional Chinese medicine has its own classic medical texts, and Tibetan medicine has its own Four Medical Canons. In terms of content and structure, as well as pharmacology and pharmacodynamics, these two systems represent two parallel main branches. While there may be some mutual inspiration and learning during their development, their philosophical underpinnings and cultural frameworks remain distinctly different. Tibetan medicine is a quintessential ethnic medicine; it is not a component of traditional Chinese medicine. For example, traditional Chinese medicine emphasizes “decoctions, pills, powders, and pastes,” whereas Tibetan medicine does not require boiling—it simply involves grinding the herbs into fine powder, which helps preserve a higher concentration of active ingredients. Moreover, the entire processing procedure for Tibetan medicine involves air-drying in the shade, a practice that aligns with the principle of minimizing the loss of effective components.

　　History has already demonstrated its remarkable efficacy in many fields, including gastrointestinal disorders, cardiovascular and cerebrovascular diseases, gynecological conditions, hepatobiliary diseases, and musculoskeletal disorders. As a publicly listed company, our mission is to carry forward this legacy and further promote it in modern society.

　　Reporter: Qi has achieved remarkable progress in the modernization of Tibetan medicine. Many people are curious to know—what were the biggest challenges encountered during this process?

　　Lei Jufang: Of course, running a business comes with many challenges. For example, the first challenge is pulverization. Traditional Tibetan medicine requires low-temperature pulverization, but when machines are used, collisions and friction inevitably generate high temperatures, causing the temperature to rise and leading to a loss of medicinal efficacy—and significant losses in the raw materials themselves. We’ve spent many years working on this, especially with support from the National 11th Five-Year Plan for Science and Technology Support Project on the Modernization of Tibetan Medicine. Finally, we’ve managed to keep the temperature within the range of 40 to 50 degrees Celsius, meeting the requirements of traditional processing techniques and ensuring the precision of our production process.

　　Another important aspect is sterilization. To enter the larger market, we must sterilize our products according to the pharmacopoeia standards set by the relevant authorities. However, traditional manufacturing processes do not involve sterilization—a challenge that was entirely new for us. After spending roughly ten years on joint R&D and conducting extensive field trips to countries like Switzerland and Japan, we finally found a method that achieves safe and effective sterilization without using irradiation. This technology can accomplish instantaneous high-temperature sterilization in just five or six seconds.

　　Reporter: Does sterilization also cause the volatilization of active ingredients? For example, in some medicinal herbs, the active compounds themselves are actually attached to the microorganisms present on them.

　　Lei Jufang: In terms of traditional medicine, certain fungi do pose such a risk, but mineral and herbal medicines are generally less problematic. To achieve industrial-scale production and widespread application, safety must be absolutely guaranteed. Traditional Tibetan medicine prepared in hospital settings typically doesn't have major issues—once compounded, it’s used clinically within a few days. Moreover, Tibet is relatively dry, so even if finished products are stored for a year or two, they’re unlikely to suffer significant degradation. However, when it comes to industrial-scale production and sales, products may take anywhere from six months to a year to reach consumers through distribution channels. Particularly in coastal regions, there’s also the issue of moisture absorption; without sterilization, these products could face serious problems. Therefore, even if there’s some minor loss, as long as it doesn’t affect the efficacy of the medicine, sterilization is essential to ensure the overall safety of the product.

　　Reporter: With economic development and changes in lifestyle, have you ever expressed concern about the potential contamination of Tibetan medicine raw materials?

　　Lei Jufang: No. The purity and lack of pollution in the raw materials may precisely be the very strength of Tibetan medicine. In Tibetan medicine-producing regions, the impact of modern industry and lifestyles on local people is likely to be minimal. Moreover, these intrinsic elements—such as traditional humanistic culture—are also crucial factors. Several years ago, some local governments, in an effort to improve agricultural production conditions, provided farmers with fertilizers, pesticides, and other agricultural inputs free of charge. Yet after just one year, some farmers stopped using them. They realized that applying pesticides would kill insects—a practice that conflicted with their local cultural beliefs and spiritual values. As a result, they preferred to rely instead on time-consuming organic fertilizers like cow and sheep manure. This has earned the company immense respect from the local communities. Calling this land, where the principles of life balance and coexistence flow abundantly, “the last pristine sanctuary” is by no means an exaggeration.

　　Going public is a catalyst for the company’s development.

　　Reporter: Qizheng has always been operating as a private company. After Qizheng Shares went public last year, it became a publicly listed company. Compared to before the IPO, what noticeable changes have you observed in the course of running the company?

　　Lei Jufang: Of course, there have been significant changes. First, from the perspective of corporate compliance, after going public, companies must meet the stringent requirements imposed by regulatory authorities on standardized operations, which helps enhance corporate management. As a listed company, you’ll also have much greater exposure to external stakeholders. The second point is that you’ll attract attention from a broad base of individual investors.

　　I believe that for a company to achieve long-term success, self-discipline and compliance with established norms are critically important. As a publicly listed company today, we’re subject to external constraints that demand openness and transparency—some of which are even mandatory. These external requirements are highly beneficial for the company’s long-term development. For instance, as we’ve mentioned before, we’ve been working hard on strategic planning and striving to make our decision-making processes more solid and fair. However, it’s relatively difficult for companies themselves to put these principles into practice, because inertia can be incredibly powerful. In the end, many decisions still tend to be concentrated in the hands of just a few individuals—or even just one person. As a publicly listed company, the first step we took was establishing a system of external directors and independent directors, and this system has proven to be extremely effective. For a company to thrive, it not only needs strong decision-makers and an executive team; it also needs to gain a broader understanding of the industry and pay close attention to societal changes at the corporate level. If more external directors bring in a wealth of external information, it can greatly enhance the quality of decision-making. Additionally, for example, we’ve set up committees focused on decision-making, auditing, and strategy. In the past, we used to rely on consulting firms to assist the board of directors; but now, we’re gradually refining and strengthening these internal structures. Once the company grows larger, these internal bodies will play an even more significant role. Right now, we’ve already begun operating according to these established procedures. Although at first it felt unfamiliar and we weren’t yet fully able to carry out these practices consciously and in a standardized way, as we’ve continued to work through them, we’ve come to appreciate the real value and benefits that standardization brings.

　　After a company goes public, it comes into the public spotlight, and everyone hopes it will perform even better. As a result, various forces will step in to propel it forward. This is a striking difference between the pre- and post-listing phases. Before going public, a company could rely solely on self-awareness and self-discipline; but after listing, external constraints, oversight, and external experts—these additional resources—are introduced at both of those levels. I believe that these factors will provide tremendous benefits to listed companies in the future.

　　Reporter: In the various materials provided by Qizheng Company, the base is rarely mentioned. In the process of modernizing traditional medicine, this aspect is referred to by experts as the “foundation of foundations.”

　　Lei Jufang: Currently, we haven’t yet established large-scale cultivation sites like those for traditional Chinese medicine herbs. Tibetan medicinal herbs differ significantly from conventional Chinese medicinal herbs; at present, our raw materials are all wild-grown. Our approach involves collaborating with local farmers to purchase the wild herbs they harvest. Right now, our company has only a trial cultivation base covering just over 200 mu of land. In fact, building such a base is closely tied to securing our raw material supply—and fundamentally, it’s an integral part of our corporate resource strategy. Since its inception, Qizheng has placed great emphasis on both thinking about and putting into practice a robust resource strategy. Our resource strategy encompasses several key aspects: First, we closely integrate our resource strategy with our product R&D strategy, taking full account of resource sustainability when selecting plant varieties; second, we continuously rely on process innovation to improve the yield of medicinal herbs, thereby maximizing the efficiency of resource utilization; and third, we’re strengthening research into medicinal herb cultivation techniques, laying the technological groundwork for future cultivation of Tibetan medicinal herbs in their native environments. At present, Qizheng has already mastered cultivation techniques for a variety of Tibetan medicinal herbs.

　　Reporter: Without having its own base, could counterfeit drugs be produced?

　　Lei Jufang: No way. Local people wouldn't fake it. Besides, the cost of counterfeiting is extremely high. The seeds of wild Tibetan medicinal herbs, once they fall to the ground, will grow again. All you need to do is pay a little extra attention when harvesting. There's simply no need to counterfeit them.

　　Reporter: The company hasn't considered contracting some of the bases itself.

　　Lei Jufang: We do have that intention. But I think, given the extremely low population density in the area, the best approach would still be to collaborate with the local residents.