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/ASYMCHEM - Shanghai Ailein Biotechnology Development Co., Ltd.’s financial report and audit report for the latest year
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ASYMCHEM - Shanghai Ailein Biotechnology Development Co., Ltd.’s financial report and audit report for the latest year

HKEXnews
2026/08/12[Overseas Regulatory Announcement - Corporate Governance Related Matters]

makes no representation as to the accuracy or completeness of this announcement and expressly disclaims any liability whatsoever for the whole or any part of the contents of this announcement and shall not be liable for any loss incurred or caused by reliance on such content.

Asymchem Laboratories (Tianjin) Co., Ltd. Asymchem Pharmaceutical Group (Tianjin) Co., Ltd.

(a joint stock limited company incorporated in the People's Republic of China) (Stock code: 6821)

Overseas regulatory announcement

This overseas regulatory announcement is made by the Company in accordance with Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The full Chinese text of the following information published by the Company on the Shenzhen Stock Exchange website is hereby provided for reference only.

By order of the board of directors

Asymchem Pharmaceutical Group (Tianjin) Co., Ltd. Dr. Hao Hong Chairman, Executive Director and Chief Executive Officer

Tianjin, China, August 12, 2026

As of the date of this announcement, the Company’s Board of Directors consists of Dr. Hao Hong, Chairman and Executive Director, and Ms. Yang Rui, Executive Director.

, Mr. Zhang Da and Mr. Hong Liang, non-executive directors Dr. Ye Song and Ms. Zhang Ting, and independent non-executive director Sun Composed of Dr. Xuejiao, Dr. Hou Xinyi and Mr. Xie Weikai.

Shanghai Kailaiying Biotechnology Development Co., Ltd.

Audited financial statements

2025

Shanghai Kailaiying Biotechnology Development Co., Ltd.

Directory

Pages

  1. Audit Report 1 - 3

  2. Audited financial statements

Consolidated Balance Sheet 4 - 5 Consolidated Income Statement 6 Consolidated Statement of Changes in Owner’s Equity 7

Consolidated Statement of Cash Flows 8 - 9 Company Balance Sheet 10 - 11 Company Income Statement 12 Statement of Changes in Owner’s Equity of the Company 13

Company Cash Flow Statement 14 - 15 Notes to the Financial Statements 16 - 66

Audit report

Ernst & Young Hua Ming (2026) Review No. 70593659_B01 Shanghai Kailaiying Biotechnology Development Co., Ltd.

Board of Directors of Shanghai Aileen Biotechnology Development Co., Ltd.:

  1. Audit opinions

We have audited the financial statements of Shanghai Kai Laiying Biotechnology Development Co., Ltd., including December 31, 2025 The consolidated and company balance sheet, the consolidated and company income statement, statement of changes in owner's equity and cash in 2025 Flow statement and related notes to financial statements.

In our opinion, the accompanying financial statements of Shanghai Ailein Biotechnology Development Co., Ltd. Prepared in accordance with the provisions of the Accounting Standards for Business Enterprises, it fairly reflects the 2025 results of Shanghai Ailein Biotechnology Development Co., Ltd. The consolidated and company financial condition as of December 31 and the consolidated and company operating results and cash flows in 2025.

  1. The basis for forming audit opinions

We performed the audit work in accordance with the Chinese Certified Public Accountants Auditing Standards. Audit report "registration meeting"

Our responsibilities under these standards are further described in the "Accountants' Responsibilities for the Audit of Financial Statements" section. According to "Chinese National Standards on Independence for Certified Public Accountants No. 1 - Requirements for Independence in Financial Statement Auditing and Review Engagements" and China Code of Professional Ethics for Certified Public Accountants, we are independent from Shanghai Kailaying Biotechnology Development Co., Ltd. and have fulfilled Other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to publish The audit opinion provides the basis.

  1. Management’s responsibility for financial statements

The management of Shanghai Kailaying Biotechnology Development Co., Ltd. is responsible for preparing financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises. financial statements to achieve a fair reflection, and to design, implement and maintain necessary internal controls so that the financial statements do not Material misstatements due to fraud or error.

In preparing the financial statements, management is responsible for assessing the continuing operations of Shanghai Ailein Biotechnology Development Co., Ltd. ability to operate, disclose matters related to going concern (if applicable), and apply the going concern assumption unless plans to

liquidation, cessation of operations or no other realistic option.

This branch has been authorized by the head office of Ernst & Young Hua Ming LLP (Special General Partnership) to perform business

A member firm of Ernst & Young Global Limited

Audit Report (continued)

Ernst & Young Hua Ming (2026) Review No. 70593659_B01 Shanghai Kailaiying Biotechnology Development Co., Ltd.

  1. Responsibility of certified public accountants for auditing financial statements

Our goal is to obtain a reasonable understanding of whether the financial statements as a whole are free of material misstatements due to fraud or error. provide reasonable assurance and issue an audit report containing audit opinions. Reasonable assurance is a high level of assurance, but it is not a guarantee An audit performed in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements may be due to fraud or error As a result, if misstatements could reasonably be expected individually or in the aggregate to affect the performance of users of financial statements based on the financial statements, economic decisions, misstatements are generally considered material.

In the process of performing audit work in accordance with the auditing standards, we use professional judgment and maintain professional skepticism. At the same time, we also perform the following tasks:

(1) Identify and assess the risk of material misstatement of financial statements due to fraud or errors, and design and implement audit procedures

procedures to address these risks and to obtain sufficient and appropriate audit evidence as a basis for expressing an audit opinion. See the basis. Because fraud may involve collusion, forgery, intentional omissions, misrepresentations or overriding In addition to internal controls, the risk of failing to detect a material misstatement due to fraud is higher than the risk of failing to detect a material misstatement caused by fraud. The risk of material misstatement due to errors. (2) Understand the internal controls related to auditing in order to design appropriate audit procedures, but the purpose is not to Express an opinion on the effectiveness of controls. (3) Evaluate the appropriateness of the accounting policies adopted by management and the reasonableness of accounting estimates and related disclosures. (4) Draw conclusions on the appropriateness of management’s use of the going concern assumption. At the same time, according to the audit certificate obtained According to the data, it may cause serious damage to Shanghai Kailaying Biotechnology Development Co., Ltd.'s ability to continue operating. Conclude whether there is significant uncertainty about matters or situations of great concern. if we conclude

We believe that there are significant uncertainties, and the auditing standards require us to remind users of the statements in the audit report Pay attention to the relevant disclosures in the financial statements; if the disclosures are insufficient, we should issue a qualified statement See you. Our conclusions are based on information available as of the date of the auditor's report. However, future events may The situation may result in Shanghai Kai Laiying Biotechnology Development Co., Ltd. being unable to continue operating. (5) Evaluate the overall presentation (including disclosures), structure and content of the financial statements and evaluate whether the financial statements are Whether the relevant transactions and events are fairly reflected. (6) Obtain sufficient financial information about the entities or business activities of Shanghai Kailaying Biotechnology Development Co., Ltd. and appropriate audit evidence to express an audit opinion on the financial statements. We are responsible for guidance and supervision and performs group audits and takes full responsibility for the audit opinions.

We communicate with management on matters such as the planned audit scope, timing and significant audit findings, including This includes communicating significant internal control deficiencies identified during our audit.

This branch has been authorized by the head office of Ernst & Young Hua Ming LLP (Special General Partnership) to perform business

A member firm of Ernst & Young Global Limited

Audit Report (continued)

Ernst & Young Hua Ming (2026) Review No. 70593659_B01 Shanghai Kailaiying Biotechnology Development Co., Ltd.

(This page has no text)

Ernst & Young Hua Ming LLP (Special General Partnership) Shanghai Branch Chinese Certified Public Accountant: Xu Xinqiao

Chinese Certified Public Accountant: Lu Jun

Shanghai, China April 30, 2026

This branch has been authorized by the head office of Ernst & Young Hua Ming LLP (Special General Partnership) to perform business

A member firm of Ernst & Young Global Limited

Shanghai Kailaiying Biotechnology Development Co., Ltd. Notes to Financial Statements 2025 RMB

  1. Basic situation

Shanghai Kailaying Biotechnology Development Co., Ltd. (hereinafter referred to as "the Company" or "the Company", including subsidiaries (collectively referred to as the "Group") is a joint stock limited company registered in Shanghai, the People's Republic of China, in 2022 It was established on March 23, 2018, with a unified social credit code of 91310115MA7KPP1760. Our company is Asymchem Pharmaceutical Group A subsidiary of Tianjin (Tianjin) Co., Ltd. (hereinafter referred to as "Aalaiying Co., Ltd."), the registered capital is RMB 228.92 million yuan.

The Group’s main business activities are: medical research and experimental development (except human stem cells, genetic diagnosis and treatment technology development and application); in the fields of biotechnology, pharmaceutical technology, medical technology, medical device technology, and environmental protection technology

Technology development, technical consulting, technical services, technology transfer, engaged in technical consulting in the field of product testing technology, Technical services, technology development, pharmaceutical production, and sales of medical devices (limited to varieties that do not require a medical device license) Sales, nutrition and health consulting services, import and export of goods and technology import and export business, quality inspection technical services.

The parent company and ultimate controller of the Group is Asymlink Holdings, which was established in China.

  1. Basis for preparation of financial statements

The financial statements are prepared in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" promulgated by the Ministry of Finance and subsequently promulgated and revised Preparation of specific accounting standards, interpretations and other relevant regulations (collectively referred to as "Accounting Standards for Business Enterprises").

As of December 31, 2025, the amount of net current liabilities formed by the Group's current liabilities exceeding current assets was RMB 844,047,743.37 yuan (December 31, 2024: RMB 598,354,977.88 yuan). Based on the Group’s final The management of the Group believes that the Group will have sufficient liquidity in the foreseeable future. working capital and capital sources to meet future working capital and other daily operating needs, and will not be affected by the shortage of working capital. shortage and facing issues related to going concern. Therefore, the management of the Group believes that it is prepared on a going concern basis. These financial statements are appropriate.

When preparing these financial statements, except for certain financial instruments, the historical cost is used as the pricing principle. If assets are reduced value, corresponding impairment provisions will be made in accordance with relevant regulations.

Statement on compliance with corporate accounting standards

These financial statements comply with the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the results of the Group as of December 31, 2025. financial position and operating results and cash flows in 2025.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates

The financial information contained in the 2025 financial statements of the Company and the Group is based on the following prepared in accordance with the Accounting Standards for Business Enterprises: Important accounting policies and preparation of accounting estimates.

  1. Accounting period

The Group's accounting year adopts the Gregorian calendar year, that is, from January 1 to December 31 each year.

  1. Accounting standard currency

The Group's functional currency for accounting and the currency used in preparing these financial statements are RMB. Unless otherwise stated, all Expressed in RMB yuan.

  1. Consolidated financial statements

The scope of the consolidated financial statements is determined based on control and includes the financial statements of the Company and all its subsidiaries. Subsidiaries refer to entities controlled by the company (including divisible parts of enterprises and investee units, as well as the company's structured entities controlled by the company, etc.). If and only if the investor meets the following three elements, the investor can control the Investor: The investor has power over the investee; it enjoys variable returns due to its participation in the investee’s related activities.

returns; the ability to use power over the investee to affect the amount of its returns.

Assets, liabilities, equity, revenue, expenses and cash flows arising from all transactions between companies within the Group They are fully eliminated on consolidation.

The current losses shared by the subsidiary’s minority shareholders exceed the minority shareholders’ share of the subsidiary’s opening shareholders’ equity. share, the balance will still offset minority shareholders' equity.

If changes in relevant facts and circumstances lead to changes in one or more of the control elements, the Group will re- Evaluate whether you control the investee.

  1. Cash and cash equivalents

Cash refers to the Group’s cash on hand and deposits that can be used for payment at any time; cash equivalents refers to the Group’s Investments held by a group that are short-term, highly liquid, easily convertible into known amounts of cash, and have little risk of value changes capital.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Foreign currency business

For foreign currency transactions that occur, the Group converts the foreign currency amount into the recording currency amount.

When a foreign currency transaction is initially recognized, the foreign currency amount is converted into accounting terms using the approximate spot exchange rate on the date of the transaction. The amount is in functional currency, but the capital invested by investors in foreign currencies is converted at the spot exchange rate on the date of the transaction. on assets and liabilities On the balance sheet date, foreign currency monetary items are translated using the spot exchange rate on the balance sheet date. The resulting settlement and currency Conversion differences for special items, except for differences arising from special foreign currency borrowings related to the acquisition and construction of assets that meet capitalization conditions.

Except for the amount being treated in accordance with the principle of capitalization of borrowing costs, they are all included in the current profit and loss. Non-foreign currency measured at historical cost Monetary items are still translated using the exchange rate used at the time of initial recognition, and their recording currency amounts do not change.

Foreign currency cash flows are translated using an exchange rate approximate to the spot exchange rate on the date when the cash flow occurs. Exchange rate changes against cash The impact amount is presented separately in the cash flow statement as an adjustment item.

  1. Financial instruments

Financial instruments refer to the financial assets that form an enterprise and form the financial liabilities or equity instruments of other units. contract.

Recognition and derecognition of financial instruments

The Group recognizes a financial asset or financial liability when it becomes a party to a financial instrument contract.

If the following conditions are met, the recognition of a financial asset (or part of a financial asset, or a group of similar financial assets) shall be terminated: Part), that is, transferring previously recognized financial assets out of the balance sheet:

(1) The right to receive cash flows from financial assets expires; (2) The right to collect cash flows from financial assets has been transferred, or the obligation to collect cash flows in a timely manner under the "pass-through agreement" has been transferred.

The obligation to fully pay the cash flow to the third party; and substantially transfer the ownership of the financial assets. substantially all risks and rewards, or although ownership of the financial asset is neither transferred nor retained in substance Substantially all the risks and rewards but giving up control of the financial asset.

Financial liabilities are derecognised if the obligation for the financial liability has been performed, canceled or expired. If you have cash A financial liability is replaced by another financial liability of the same creditor on substantially different terms, or an existing liability If almost all of the terms are substantially modified, such replacement or modification shall be deemed as the derecognition of the original liability and the recognition of a new liability. Processed, the difference is included in the current profit and loss.

Buying and selling financial assets in a regular manner is recognized and derecognized based on transaction date accounting. Buy and sell finance the regular way Assets refer to the purchase or sale of financial assets in accordance with the provisions of a contract, and the terms of the contract stipulate that, in accordance with the provisions of the law usually

Deliver financial assets within a timetable determined by regulations or market practice. Trading day refers to the Group’s commitment to buy or sell The date on which the financial asset is released.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Financial instruments (continued)

Classification and measurement of financial assets

The Group's financial assets are initially recognized based on the Group's business model for managing financial assets and the contract structure of the financial assets. The same cash flow characteristics are classified as: financial assets measured at amortized cost and financial assets measured at fair value with changes included Financial assets with current profits and losses. If and only when the Group changes its business model for managing financial assets, all affected persons will be The relevant financial assets affected will be reclassified.

Financial assets are measured at fair value upon initial recognition, but accounts receivable arising from sales of goods or provision of services, etc. If the payment does not contain significant financing components or does not consider financing components that do not exceed one year, the initial calculation will be based on the transaction price. quantity.

For financial assets measured at fair value and whose changes are included in current profits and losses, relevant transaction costs are directly included in the current period. Profit and loss, transaction costs related to other types of financial assets are included in their initial recognition amount.

The subsequent measurement of a financial asset depends on its classification:

Debt instrument investments measured at amortized cost If a financial asset meets the following conditions at the same time, it is classified as a financial asset measured at amortized cost: Management of the financial asset The business model is aimed at collecting contractual cash flows; the contractual terms of the financial asset stipulate that on a specific date The cash flow generated is solely payments of principal and interest on the outstanding principal amount. such financial assets Interest income is recognized using the actual interest rate method, and any gains or losses arising from its derecognition, modification or impairment are included in the Current profit and loss.

Financial assets measured at fair value with changes included in current profits and losses Financial assets other than the above-mentioned financial assets measured at amortized cost are classified as measured at fair value and measured at fair value. Financial assets included in current profits and losses. For such financial assets, fair value is used for subsequent measurement. All fair values are

Changes in value are included in current profits and losses.

Classification and measurement of financial liabilities

The Group's financial liabilities are classified as financial liabilities measured at amortized cost upon initial recognition. Measured at amortized cost Transaction costs related to financial liabilities are included in their initial recognition amount.

The subsequent measurement of financial liabilities depends on their classification:

Financial liabilities measured at amortized cost For such financial liabilities, the actual interest rate method is adopted and subsequent measurement is carried out at amortized cost.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Financial instruments (continued)

Impairment of financial instruments

Based on expected credit losses, the Group performs impairment treatment on financial assets measured at amortized cost and recognizes losses. Unprepared.

For receivables that do not contain significant financing components, the Group uses a simplified measurement method and calculates the receivables on a basis equivalent to the entire duration.

The amount of expected credit losses during the period is measured as the loss provision.

Except for the above-mentioned financial assets that adopt simplified measurement methods, the Group assesses its credit risk on each balance sheet date. Whether the credit risk has increased significantly since the initial recognition. If the credit risk has not increased significantly since the initial recognition, it is in the third In the first stage, the Group measures loss provisions based on an amount equivalent to expected credit losses within the next 12 months, and Interest income is calculated based on the book balance and actual interest rate; if the credit risk has increased significantly since initial recognition but has not yet been If credit impairment occurs, it is in the second stage. The Group will calculate the amount equivalent to the expected credit loss during the entire duration. Measure loss provisions and calculate interest income based on the book balance and actual interest rate; if a credit is incurred after initial recognition If it is impaired, it is in the third stage. The Group measures the loss based on an amount equivalent to the expected credit loss during the entire duration. Loss provisions are made, and interest income is calculated based on amortized cost and actual interest rate.

The Group assesses at each balance sheet date whether the credit risk of relevant financial instruments has increased significantly since initial recognition. Add. The Group compares the risk of default of financial instruments on the balance sheet date with the risk of default on the initial recognition date. Contract risk to determine changes in default risk during the expected life of the financial instrument. For the balance sheet It is a financial instrument with relatively low credit risk. The Group assumes that its credit risk has not increased significantly since its initial recognition. Add.

The Group’s method of measuring expected credit losses on financial instruments reflects factors including: by evaluating a series of possible outcomes; The unbiased probability weighted average amount, time value of money, and no unnecessary payment on the balance sheet date are determined as a result. Information about past events, current conditions, and forecasts of future economic conditions that can be obtained without additional cost or effort.

Reasonable and supported information.

When one or more events occur that have an adverse impact on the expected future cash flows of a financial asset, the financial asset Become a financial asset that has suffered credit impairment.

When the Group no longer reasonably expects to recover all or part of the contractual cash flows of a financial asset, the Group directly deducts Record the book balance of the financial asset.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Financial instruments (continued)

Financial asset transfer

If the Group has transferred substantially all risks and rewards of ownership of a financial asset to the transferee, it shall derecognize the financial asset. Financial assets; if almost all risks and rewards of ownership of financial assets are retained, the recognition of the financial assets will not be terminated. produce.

The Group neither transfers nor retains substantially all risks and rewards of ownership of financial assets, as follows: Situation handling: If the company gives up control of the financial asset, the financial asset shall be terminated and the resulting assets and liabilities shall be recognized. debt; if the control of the financial asset has not been given up, the relevant funds shall be recognized according to the extent of its continued involvement in the transferred financial asset. financing assets, and corresponding liabilities are recognized accordingly.

  1. Inventory

Inventories include raw materials, work-in-progress, merchandise on hand and rotating materials.

Inventories are initially measured at cost. Inventory costs include purchasing costs, processing costs and other costs. issue deposit

For goods, the actual cost is determined using the weighted average method and the individual valuation method. Recycling materials include low-value consumables and packaging Low-value consumables and packaging materials are amortized using the one-time write-off method.

The inventory system of inventories adopts the perpetual inventory system.

On the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the cost is higher than the net realizable value, the inventory shall be measured at the lower of cost and net realizable value. Provision for inventory depreciation is made and included in the current profit and loss. Net realizable value refers to the estimated sales value of inventory in daily activities. The price is the amount after deducting the estimated costs to be incurred upon completion, estimated selling expenses and related taxes.

Costs to fulfill contracts classified as current assets are shown in inventories.

  1. Long-term equity investment

Long-term equity investment is equity investment in subsidiaries. Long-term equity investments are made at the initial investment cost when acquired Initial measurement.

For long-term equity investments that the company can control over the investee, the cost is used in the company's individual financial statements. Accounting by this method. Control refers to having power over the investee and enjoying it through participation in the investee’s relevant activities. variable returns and the ability to use power over the investee to affect the amount of returns.

When using the cost method, long-term equity investments are valued at the initial investment cost. If the investment is additional or withdrawn, the long-term shares will be adjusted.

The cost of equity investment. Cash dividends or profits declared by the investee to be distributed shall be recognized as investment income for the current period.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Fixed assets

Fixed assets are recognized only when the economic benefits related to them are likely to flow to the Group and their costs can be measured reliably. Confirm. Subsequent expenditures related to fixed assets that meet the recognition conditions shall be included in the cost of fixed assets and Terminate the recognition of the book value of the replaced part; otherwise, when it occurs, it will be included in the current profit and loss according to the beneficiary object or related Asset cost.

Fixed assets are initially measured at cost. The cost of purchasing fixed assets includes the purchase price, relevant taxes, usage

Other expenditures directly attributable to the asset that occur before the fixed asset reaches its intended usable condition. Fixed capital The depreciation of assets is calculated using the straight-line method. The service life, estimated net residual value rate and annual depreciation rate of various fixed assets are As follows:

Useful life Estimated net residual value rate Annual depreciation rate

Production and R&D equipment 5-10 years 1.00% 9.90%-19.80% Office equipment 3-5 years 1.00% 19.80%-33.00% Transportation 5-10 years 1.00% 9.90%-19.80%

At least at the end of each year, the Group reviews the useful life, estimated net residual value and depreciation method of fixed assets.

Check and adjust if necessary.

  1. Construction in progress

The cost of the project under construction is determined based on the actual project expenditure, including various necessary project expenditures incurred during the construction period and other Related costs, etc.

Construction in progress is transferred to fixed assets and long-term deferred expenses when it reaches the intended usable state.

  1. Intangible assets

Intangible assets are amortized using the straight-line method over their useful lives, and their useful lives are as follows:

Service life

Land use rights 50 years Software and others 10 years

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Research and development expenditures

The Group divides expenditures on internal research and development projects into expenditures in the research phase and expenditures in the development phase. research stage Expenditures shall be included in the current profit and loss when incurred.

Expenditures in the development stage can only be capitalized when the following conditions are met at the same time, namely: the completion of the intangible assets It is technically feasible to make the intangible asset available for use or sale; it is possible to complete the intangible asset and use or sell it Intention; the way in which intangible assets generate economic benefits, including the ability to prove the existence of products produced using the intangible assets

There is a market or market for the intangible assets themselves, and if the intangible assets will be used internally, their usefulness can be proven; there is sufficient Sufficient technical, financial and other resource support to complete the development of the intangible assets and the ability to use or export them The intangible assets can be sold; the expenditures attributable to the development stage of the intangible assets can be measured reliably. Does not meet the above conditions Development expenditures shall be included in the current profits and losses when incurred.

  1. Long-term deferred expenses

Long-term deferred expenses are amortized using the straight-line method, and the amortization period is as follows:

amortization period

Decoration fee 20 months-10 years

  1. Impairment of assets

Assets other than prepayments, inventories, assets related to contract costs, deferred income tax assets and financial assets are reduced. The value is determined according to the following method: judge whether there is any sign that the asset may be impaired on the balance sheet date. If there is If there is any indication of impairment, the Group will estimate its recoverable amount and conduct an impairment test. For businesses formed due to business mergers reputation, intangible assets with indefinite useful lives and intangible assets that have not yet reached a usable state, regardless of whether there is any reduction If there is any indication of value, impairment testing shall be conducted at least at the end of each year.

The recoverable amount is based on the net amount of the asset's fair value less disposal costs and the estimated future cash flows of the asset. The higher value between the two is determined. The Group estimates its recoverable amount on the basis of individual assets; it is difficult to estimate the recoverable amount of individual assets. If the recoverable amount of an asset is estimated, the recoverable amount of the asset group is determined based on the asset group to which the asset belongs. Um. The identification of an asset group is based on whether the main cash inflow generated by the asset group is independent of other assets or asset groups. Based on cash inflow.

When the recoverable amount of an asset or asset group is lower than its book value, the Group will write down its book value to the recoverable amount. The write-down amount will be included in the current profit and loss, and the corresponding asset impairment provision will be made at the same time.

Once the above-mentioned asset impairment losses are recognized, they will not be reversed in subsequent accounting periods.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Employee compensation

Employee compensation refers to the compensation paid by the Group to obtain services provided by employees or to terminate the labor relationship, except for share-based payments. various forms of remuneration or compensation. Employee compensation includes short-term compensation, post-employment benefits, dismissal benefits and other long-term benefits. Period employee benefits.

short term compensation

During the accounting period when employees provide services, the actual short-term remuneration is recognized as a liability and included in the current profit or loss or Related asset costs.

Post-employment benefits (defined contribution plan)

The employees of the Group participate in the pension insurance and unemployment insurance managed by the local government, and the corresponding expenses are included in the relevant expenses when incurred. related asset cost or current profit and loss.

  1. Share-based payment

Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment. equity-settled shares

Payment refers to a transaction in which the Group settles shares or other equity instruments as consideration in order to obtain services.

If equity-settled share-based payment is exchanged for services provided by employees, it shall be measured at the fair value of the equity instruments granted to employees. If the rights become exercisable immediately after the grant, the fair value will be included in the relevant costs or expenses on the date of grant, and the capital fair value will be increased accordingly. Accumulation; if the services within the waiting period are completed or the specified performance conditions are met before the vesting becomes available, each asset and liability during the waiting period will be vested. On the balance sheet date, based on the best estimate of the number of exercisable equity instruments, the fair value of the current period will be calculated based on the fair value on the date of grant. The services obtained are included in the relevant costs or expenses, and the capital reserve is increased accordingly. The fair value of equity instruments is calculated using the Bligh Determined by the K-Skoll model, see Note 11.

If the terms of equity-settled share-based payment are modified, at least the services obtained will be confirmed as if the terms had not been modified.

service. In addition, modifications that increase the fair value of the equity instruments granted, or changes that are beneficial to employees on the modification date, will be Confirm access to service additions.

If an equity-settled share-based payment is cancelled, it will be treated as accelerated exercise on the cancellation date and the unconfirmed options will be immediately confirmed. The amount recognized. If employees or other parties can choose to meet the non-vesting conditions but fail to do so during the waiting period, they will be deemed as Eliminate the processing of equity-settled share-based payments.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Revenue arising from contracts with customers

The Group has fulfilled its performance obligations in the contract, that is, when the customer obtains control of the relevant goods or services, it recognizes receipts. Enter. Obtaining control over relevant goods or services means being able to direct the use of the goods or the provision of the services and from obtain almost all economic benefits.

sales contract

The Group fulfills its contract performance obligations by delivering APIs, cGMP intermediate products, preparations and other commodities to customers. Based on taking into account the following factors, revenue is recognized at the point when the goods arrive at the designated location or are accepted by the customer:

transfer of the current right to payment for the goods, the transfer of the major risks and rewards of ownership of the goods, and the transfer of the legal ownership of the goods. Transfer, transfer of physical assets of goods, customer acceptance of the goods.

Provide technical service contracts

The service provision contracts between the Group and its customers usually include the provision of process research and development and preparation technology development to customers, as well as Clinical trial support service performance obligations are performance obligations performed at a certain point in time.

Performance obligations fulfilled at a certain point in time Biopharmaceutical process development services provide necessary process route development and process development for the production and druggability of biopharmaceuticals. Improvement, generally adopts FFS (Fee-for-service charging model) method to charge. The group is finishing

After the process is developed, the research results (referring to process reports or small batches of goods) are delivered to the customer, and an invoice is issued and confirmed. Recognize income.

For other technical services whose individual performance obligations can be clearly distinguished and whose delivery cycle is short, the Group shall provide the services specified in the delivery contract. Invoices are issued and revenue is recognized when results are achieved.

  1. Contract liabilities

The Group presents contract liabilities in the balance sheet based on the relationship between performance obligations and customer payments.

Contract liabilities

Contract liabilities refer to the obligation to transfer goods or services to customers for consideration received or receivable from customers. For example, when an enterprise transfers Payment previously received for promised goods or services.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Assets related to contract costs

The Group's assets related to contract costs are contract performance costs. Based on their liquidity, they are reported in inventories.

The costs incurred by the Group to fulfill the contract do not apply to the standards related to inventories, fixed assets or intangible assets. If the scope is within the scope and the following conditions are met at the same time, it will be recognized as an asset as the contract performance cost:

(1) The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing manufacturing costs (or similar costs), costs expressly borne by the customer and other costs incurred solely as a result of the contract.

cost; (2) This cost increases the company’s resources for fulfilling its performance obligations in the future; (3) The cost is expected to be recovered.

The Group amortizes assets related to contract costs on the same basis as the revenue recognition related to the assets. Included in current profit and loss.

If the book value of assets related to contract costs is higher than the difference between the following two items, the Group will make a deduction for the excess. Value provision is made and recognized as asset impairment loss:

(1) The remaining consideration expected to be obtained from the transfer of goods or services related to the asset; (2) The estimated cost to be incurred in transferring the relevant goods or services.

  1. Government subsidies

Government subsidies are recognized when the conditions attached to them can be met and received. Government subsidies are monetary resources If it is produced, it shall be measured according to the amount received or receivable. If the government subsidy is a non-monetary asset, it shall be measured at fair value. amount; if the fair value cannot be obtained reliably, it shall be measured according to the nominal amount. Government subsidies related to income are used to supplement If the relevant costs or losses in the subsequent period are repaid, it will be recognized as deferred income, and the relevant costs or losses will be recognized when the relevant costs or losses are recognized. The period of loss shall be included in the current profit and loss or offset the relevant costs; if it is used to compensate for the relevant costs or losses incurred, Directly included in current profit and loss or offset related costs. Government subsidies related to assets are recognized as deferred income.

The asset shall be included in the profit and loss in installments according to a reasonable and systematic method during the useful life of the asset (but the government subsidies shall be measured according to the nominal amount. assistance, directly included in the current profit and loss), the relevant assets are sold, transferred, scrapped or destroyed before the end of their useful life. If there is a loss, the undistributed balance of relevant deferred income will be transferred to the profit and loss of the current period of asset disposal.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Deferred income tax

The Group calculates the temporary differences between the book values and tax bases of assets and liabilities on the balance sheet date. and the book value and calculation of items that have not been recognized as assets and liabilities but whose tax basis can be determined in accordance with tax laws. For temporary differences arising from the difference between tax bases, deferred income tax is provided using the balance sheet liability method.

Deferred income tax liabilities are recognized for various taxable temporary differences. Unless:

(1) Taxable temporary differences arise from the following transactions: the transaction is not a business combination, and the transaction occurs It neither affects accounting profits nor taxable income or deductible losses when it is born, and the capital is initially recognized. The assets and liabilities do not result in equal taxable temporary differences and deductible temporary differences; (2) For taxable temporary differences related to investments in subsidiaries, the time of reversal of the temporary differences can be controlled. and the temporary difference is unlikely to be reversed in the foreseeable future.

For deductible temporary differences, deductible losses and tax credits that can be carried forward to future years, the Group shall use the The amount of future taxable income that can be used to offset deductible temporary differences, deductible losses and tax credits is limit, the resulting deferred income tax assets will be recognized unless:

(1) Deductible temporary differences arise from the following transactions: the transaction is not a business combination, and the transaction occurs It affects neither accounting profits nor taxable income or deductible losses during life; (2) For deductible temporary differences related to investments in subsidiaries, if the following conditions are met at the same time, the corresponding Deferred income tax assets: The temporary difference is likely to be reversed in the foreseeable future, and it is likely to be recognized in the future. The taxable income can be used to offset the deductible temporary differences.

On the balance sheet date, the Group's deferred income tax assets and deferred income tax liabilities are calculated based on tax laws. Measured according to the applicable tax rate during the period when the asset is expected to be recovered or the liability is settled, and reflects the expected recovery on the balance sheet date Income tax consequences of an asset or method of settling a liability.

On the balance sheet date, the Group reviews the book value of deferred income tax assets. If it is probable that the deferred income tax assets will be If sufficient taxable income cannot be obtained to offset the benefits of deferred income tax assets, the deferred income tax assets may be reduced. book value of the property. On the balance sheet date, the Group reassesses the unrecognized deferred income tax assets. Deferred tax assets are recognized to the extent that sufficient taxable income can be obtained to reverse all or part of the deferred income tax assets. Income Tax Assets.

When the following conditions are met at the same time, deferred income tax assets and deferred income tax liabilities are presented at the net amount after offsetting: Owned The legal right to settle current income tax assets and current income tax liabilities on a net basis; deferred income tax assets and deferred income tax Tax liabilities are related to income taxes levied by the same tax collection and administration department on the same taxable entity or on different taxpayers. related to the tax entity, but in each future period when significant deferred tax assets and deferred tax liabilities are reversed Within the period, the tax payer involved intends to settle the current income tax assets and current income tax liabilities on a net basis or obtain them at the same time.

Obtain assets and pay off debts.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Leasing

On the contract commencement date, the Group evaluates whether the contract is a lease or contains a lease. If one party in the contract transfers the A contract that provides the right to control the use of one or more identified assets within a certain period in exchange for consideration is a lease or Lease included.

as lessee

Except for short-term leases, the Group recognizes right-of-use assets and lease liabilities for leases.

On the commencement date of the lease term, the Group recognizes its right to use the leased asset during the lease term as a right-of-use asset. Initial measurement is based on cost. The cost of the right-of-use asset includes: the initial measurement amount of the lease liability; during the lease term The amount of lease payments paid on or before the start date (deducting the amount related to the lease incentives that have been enjoyed); the lessee’s Initial direct costs; lessee’s expenses for dismantling and removing the leased asset, restoring the site where the leased asset is located, or transferring the leased asset to Costs expected to be incurred to restore the property to the state agreed upon under the lease terms. The Group remeasures leases due to changes in lease payments If there is a liability, the book value of the right-of-use asset shall be adjusted accordingly. The Group subsequently adopts the straight-line method to calculate the right-of-use assets. Provision for depreciation. If it is reasonably certain that the Group will obtain ownership of the leased asset at the expiration of the lease term, the Group will retain the remaining ownership of the leased asset. Depreciation is calculated over the remaining useful life. If it is impossible to reasonably determine that the ownership of the leased asset will be obtained at the expiration of the lease term, the

The Group accrues depreciation over the shorter of the lease term and the remaining useful life of the leased asset.

At the beginning of the lease period, the Group recognizes the present value of the unpaid lease payments as lease liabilities. Short-term leases Except. Lease payments include fixed payments and actual fixed payments less lease incentives, depending on Index or rate of variable lease payments, payments expected to be made based on guaranteed residual value, and includes purchase options exercise price or payment required to exercise the option to terminate the lease, provided that the Group is reasonably certain that it will exercise the option The option or lease term reflects that the Group will exercise the option to terminate the lease. Variable leases not included in the measurement of lease liabilities The payment amount is included in the current profit and loss when it actually occurs, unless otherwise stipulated to be included in the cost of related assets. When the substance is solid Changes in the fixed payment amount, changes in the expected amount payable of the guaranteed residual value, and the index used to determine the lease payment amount or changes in ratios, evaluation results or actual exercise of purchase options, lease renewal options or termination options.

When a change occurs, the Group remeasures the lease liability based on the present value of the changed lease payment.

The Group considers a lease with a lease term of no more than 12 months on the start date of the lease term and that does not include a purchase option as Short-term leases; the Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases. During each period of the lease period The period is included in the relevant asset cost or current profit and loss according to the straight-line method.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Fair value measurement

Assets and liabilities measured or disclosed at fair value in the financial statements are based on the overall significance of the fair value measurement. The lowest level input value with significant significance determines the fair value level it belongs to: the first level input value is measured in Unadjusted quoted prices in active markets for the same assets or liabilities that can be obtained on the date; Level 2 input values, except Level 2 Input values that are directly or indirectly observable to relevant assets or liabilities other than the input values at the first level; input values at the third level, related Unobservable inputs for an asset or liability.

On each balance sheet date, the Group determines the assets and liabilities that are continuously measured at fair value and are recognized in the financial statements. A reassessment is performed to determine whether a transition between fair value measurement levels has occurred.

  1. Significant accounting judgments and estimates

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect earnings Presented amounts and disclosures of income, expenses, assets and liabilities, and disclosure of contingent liabilities at the balance sheet date. this The results caused by the uncertainty of these assumptions and estimates may affect the carrying value of assets or liabilities in the future. significant adjustments to the value.

judge

In applying the Group's accounting policies, management has made the following decisions regarding the amounts recognized in the financial statements: Judgment of significant impact:

Contract cash flow characteristics The classification of financial assets upon initial recognition depends on the contractual cash flow characteristics of the financial assets. It is necessary to judge the contract cash flow characteristics. Whether the cash flow is only a payment of principal and interest based on the outstanding principal, including the time value of money. When evaluating the revision, it is necessary to judge whether there is a significant difference compared with the baseline cash flow.

Uncertainty of estimate

The following are key assumptions about the future as at the balance sheet date and other key sources of estimation uncertainty that may It will result in significant adjustments to the book values of assets and liabilities in future accounting periods.

Impairment of financial instruments The Group uses the expected credit loss model to assess the impairment of financial instruments. Applying the expected credit loss model requires In making significant judgments and estimates, all reasonable and supportable information, including forward-looking information, must be considered. making When making these judgments and estimates, the Group bases its historical repayment data on economic policies, macroeconomic indicators, and industry risks. Risk and other factors are used to infer the expected changes in the debtor's credit risk. Different estimates may affect the provision of impairment provisions. The impairment reserves that have been provided may not equal the actual amount of future impairment losses.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Important accounting policies and accounting estimates (continued)

  2. Significant accounting judgments and estimates (continued)

Uncertainty of estimates (continued)

Impairment of non-current assets other than financial assets (other than goodwill) On the balance sheet date, the Group determines whether there is any possibility of impairment of non-current assets other than financial assets. signs. For intangible assets with indefinite service life, in addition to annual impairment testing, when there are signs of impairment impairment test is also performed. Other non-current assets other than financial assets, when there are signs that their book balance

When the amount is irrecoverable, an impairment test is performed. When the carrying amount of an asset or asset group exceeds its recoverable amount, it is fair The higher of the net value minus disposal costs and the present value of expected future cash flows, indicating that a decrease has occurred. value. The net amount after deducting disposal costs from fair value is determined by reference to the sale agreement price of similar assets in an arm's length transaction or the available price. The observed market price is determined less the incremental costs directly attributable to the disposal of the asset. Estimated future cash flow When measuring the present value, management must estimate the expected future cash flows of the asset or asset group and select an appropriate discount. The present rate determines the present value of future cash flows.

Deferred tax assets To the extent that it is probable that there will be sufficient taxable income to offset the deductible losses, all unutilized Deferred income tax assets are recognized for deductible losses. This requires management to use a great deal of judgment in estimating future accruals

The timing and amount of tax income, combined with tax planning strategies, are used to determine the amount of deferred income tax assets that should be recognized. Um.

Lessee’s incremental borrowing rate For leases for which the interest rate implicit in the lease cannot be determined, the Group uses the lessee's incremental borrowing rate as the discount rate to calculate the discount rate. The present value of lease payments. When determining the incremental borrowing interest rate, the Group uses observable interest rates based on the economic environment in which it operates. rate as the reference basis for determining the incremental borrowing interest rate. On this basis, based on its own situation, underlying asset conditions, The reference interest rate is adjusted based on the specific conditions of the leasing business such as the lease term and the amount of the lease liability to arrive at the applicable incremental borrowing rate. loan interest rate.

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Taxes

  2. Main tax types and tax rates

The Group’s main taxes and their tax rates for the year are listed below:

Value-Added Tax – Output tax is calculated on taxable income at a rate of 13% or 6%, and deductions are allowed in the current period. The difference after the input tax is calculated and paid VAT.

corporate income tax

Company name Tax rate (%)

Shanghai Kailaiying Biotechnology Development Co., Ltd. 25.00 Shanghai Kailaiying Biotechnology Co., Ltd. 15.00 Shanghai Ailein Biopharmaceutical Co., Ltd. 25.00 Jiangsu Kailaiying Biopharmaceutical Co., Ltd. 25.00

  1. Tax incentives

Shanghai Kailaiying Biotechnology Co., Ltd., a company of the Group, was approved by the Shanghai Municipal Science Committee and the Shanghai Municipal Science and Technology Commission in November 2023.

The Municipal Finance Bureau and the State Administration of Taxation, the Shanghai Municipal Taxation Bureau, have recognized it as a high-tech enterprise and will enjoy the high-tech status from 2023 to 2025. A preferential income tax rate of 15% for technology companies.

  1. Consolidation scope of consolidated financial statements

  2. Subsidiary situation

The situation of the Group’s subsidiaries is as follows:

Main place of business/business Registered capital Direct shareholding Voting rights Place of registration Nature (10,000 yuan) Proportion (%) Proportion (%)

Shanghai Aileen Biotechnology Co., Ltd. Shanghai Medical Technology 25,088.00 100.00 100.00 Shanghai Aileen Biopharmaceuticals Co., Ltd. Shanghai Medical Technology 10,000.00 100.00 100.00 Jiangsu Ailein Biopharmaceuticals Co., Ltd. Suzhou, Jiangsu Pharmaceutical Technology 1,000.00 100.00 100.00

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Notes on main items of consolidated financial statements

  2. Monetary funds

2025 2024

Bank deposits 33,371,614.26 30,998,608.23 Other monetary funds - 7,448,000.00

Total 33,371,614.26 38,446,608.23

As of December 31, 2025, the closing balance of other monetary funds was 0.00 yuan (December 31, 2024: 7,448,000.00 Yuan system is a land deposit with restricted title).

  1. Trading financial assets

2025 2024 Measured at fair value Financial assets whose changes are included in current profits and losses

Financial products 41,076,086.58 -

  1. Notes receivable

2025 2024

Bank acceptance draft 1,400,000.00 -

Less: Bad debt provision for notes receivable - -

Total 1,400,000.00 -

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Notes on main items of the consolidated financial statements (continued)

  2. Accounts receivable

The aging analysis of accounts receivable is as follows:

2025 2024

Within 1 year 194,825,614.90 106,949,036.78 1 year to 2 years 37,663,546.16 12,566,006.12

2 years to 3 years 10,133,436.46 - 242,622,597.52 119,515,042.90

Less: Bad debt provision for accounts receivable 17,505,021.62 7,502,143.63

Total 225,117,575.90 112,012,899.27

Changes in bad debt provisions for accounts receivable are as follows:

Balance at the beginning of the year Provision for the year Reversal for the year Write-off for the year End balance for the year 2025 7,502,143.63 10,534,107.89 (31,229.90 ) (500,000.00 ) 17,505,021.62

The expected credit losses of the Group's accounts receivable by aging are as follows:

2025 2024 Estimated credit losses for the entire duration of an estimated default Estimated credit losses for the entire duration of an estimated default Book balance Loss rate Credit loss Book balance Loss rate Credit loss (%) (%) Within 1 year 194,825,614.90 4.11 7,997,767.56 106,949,036.78 3.78 4,037,695.74 1 to 2 years 37,663,546.16 6.73 2,536,463.12 12,566,006.12 27.57 3,464,447.89 2 years to 3 years 10,133,436.46 68.79 6,970,790.94 - - - Total 242,622,597.52 7.21 17,505,021.62 119,515,042.90 6.28 7,502,143.63

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Notes on main items of the consolidated financial statements (continued)

  2. Advance payments

The aging analysis of prepayments is as follows:

2025 2024

Within 1 year 10,041,100.35 6,679,682.53 1 to 2 years 2,754,241.13 262,639.35

2 years to 3 years 183,003.49 44,790.00 More than 3 years 60,606.00 25,280.00

Total 13,038,950.97 7,012,391.88

  1. Other receivables

The aging analysis of other receivables is as follows:

2025 2024

Within 1 year 2,768,948.30 811,139.31 1 year to 2 years 746,577.74 13,500.00 2 years to 3 years 13,500.00 439,373.00 More than 3 years 438,423.00 - 3,967,449.04 1,264,012.31

Less: Bad debt provision for other receivables 1,195,487.55 291,303.54

Total 2,771,961.49 972,708.77

Bad debts for other receivables are separately accrued based on expected credit losses in the next 12 months and expected credit losses throughout the entire duration. The changes prepared are as follows:

Phase 1 Phase 2 Phase 3 Total Expected credit throughout the lifetime Credit expected throughout the lifetime Expected credit losses in the next 12 months (no credit losses have occurred (credit losses have occurred) Use loss value) value)

Balance at the beginning of the year 291,303.54 - - 291,303.54 Provision for this year 904,184.01 - - 904,184.01

Year-end balance 1,195,487.55 - - 1,195,487.55

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Notes on main items of the consolidated financial statements (continued)

  2. Inventory

2025 2024 Book balance Provision for price decline Book value Book balance Provision for price decline Book value Raw materials 56,137,840.01 (114,285.26) 56,023,554.75 26,839,032.18 (103,943.59) 26,735,088.59 Turnover materials 113.27 - 113.27 113.27 - 113.27 Contract performance costs 11,372,331.78 - 11,372,331.78 2,879,532.81 - 2,879,532.81 Inventory goods 1,146,977.83 - 1,146,977.83 - - - Products in progress 5,685,342.32 - 5,685,342.32 - - -

Total 74,342,605.21 (114,285.26) 74,228,319.95 29,718,678.26 (103,943.59) 29,614,734.67

Changes in inventory impairment provision are as follows:

Balance at the beginning of the year Provision for the year Decrease during the year Ending balance resale

Raw materials 103,943.59 10,341.67 - - 114,285.26

  1. Other current assets

2025 2024

Value-added tax credit 18,754,516.59 37,591,066.88

Input tax to be certified 1,817,426.41 250,331.94

Total 20,571,943.00 37,841,398.82

Shanghai Kailaiying Biotechnology Development Co., Ltd. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2025 RMB

  1. Notes on main items of the consolidated financial statements (continued)

  2. Fixed assets

Production and R&D equipment Office equipment Transportation tools Total

original price Balance at the beginning of the year 222,057,368.24 5,089,448.39 1,265,791.15 228,412,607.78 Purchase 1,820,049.75 1,034,854.78 - 2,854,904.53 Transfer of construction in progress 100,127,171.21 2,684,182.74 - 102,811,353.95 Disposal or scrapping (5,122,590.03) - - (5,122,590.03) Year-end balance 318,881,999.17 8,808,485.91 1,265,791.15 328,956,276.23

Accumulated depreciation Balance at the beginning of the year 53,457,197.50 4,325,049.45 707,324.06 58,489,571.01 Provision 22,93