Chengda Pharmaceutical: Everbright Securities Co., Ltd.’s 2025 continuous supervision on-site inspection report of Chengda Pharmaceutical Co., Ltd.
About Everbright Securities Co., Ltd.
Chengda Pharmaceutical Co., Ltd.
2025 Continuous Supervision On-site Inspection Report
Name of sponsor: Everbright Securities Co., Ltd. Abbreviation of sponsored company: Chengda Pharmaceutical Name of sponsor representative: Yang Ke Contact number: 021-22169999 Name of sponsor representative: Han Jianlong Contact number: 021-22169999 Name of on-site inspectors: Yang Ke, Geng Zhongliang
On-site inspection corresponding period: 2025
On-site inspection time: December 16, 2025
- On-site inspection matters On-site inspection opinions
(1) Corporate governance Yes No On-site inspection methods are not applicable:
Review the company's relevant rules and regulations, documents of the three meetings, and information disclosure documents; interview the company's actual controller, board secretary, financial director and other personnel.
- Whether the company’s articles of association and corporate governance system are complete and compliant √ 2. Whether the company’s articles of association and the rules of shareholders’ meetings and board of directors are effectively implemented √ 3. Whether the minutes of shareholders’ meetings and board of directors’ meetings are complete, including time, place and attendance
√ Whether the necessary personnel and meeting content are complete, and whether the meeting materials are completely preserved
- Whether the resolutions of shareholders’ meetings and board of directors meetings are signed by relevant persons attending the meetings
√Name confirmation
- Whether the company’s directors and senior managers act in accordance with relevant laws, regulations and the Exchange
√Perform responsibilities according to relevant business rules
- If there are major changes in the company’s directors and senior managers, have they fulfilled their duties?
√Corresponding procedures and information disclosure obligations
- If the company’s controlling shareholders or actual controllers change, have they fulfilled their obligations?
√Corresponding procedures and information disclosure obligations
- Whether the company’s personnel, assets, finance, organization, business, etc. are independent? √ 9. Whether there is no horizontal competition between the company and its controlling shareholders and actual controllers √
(2) Internal control
On-site inspection methods:
Check the company's relevant systems; check the company's internal audit department and audit committee related documents. 1. Whether to establish an internal audit system and establish an internal audit department in accordance with relevant regulations
√ Door (if applicable)
- Whether to establish an internal audit system and set up an internal audit system within 6 months after the stock is listed?
√Ministry Audit Department (if applicable)
- Whether the composition of the internal audit department and audit committee complies with regulations (if appropriate)
√Use)
- Whether the audit committee meets at least once every quarter to review the internal audit
√Work plans and reports submitted by the accounting department (if applicable)
- Whether the audit committee reports internal audit to the board of directors at least quarterly
√Work progress, quality and major problems discovered (if applicable)
- Does the internal audit department report to the audit committee at least quarterly?
The implementation of the department’s audit work plan and the problems discovered during the internal audit work, etc. (if applicable)
- Whether the internal audit department deposits and uses raised funds at least quarterly
√Conduct an audit if applicable (if applicable)
- Whether the internal audit department reports to the auditor within two months before the end of each fiscal year
√The Planning Committee submits the internal audit work plan for the next year (if applicable)
- Does the internal audit department report to the auditor within two months after the end of each fiscal year?
√The Planning Committee submits the annual internal audit work report (if applicable)
- Does the internal audit department submit internal audit reports to the audit committee at least once a year?
√Department control evaluation report (if applicable)
- Is it necessary to engage in venture capital, entrusted financial management, hedging business and other matters?
√Established a complete and compliant internal control system
(3) Information disclosure
On-site inspection methods:
Check the company's information disclosure documents, check the documents of the three meetings and disclosure announcements; check the records of investor visits, check the investor relations activity record form published on the Shenzhen Stock Exchange Interactive website; interview the board secretary and securities affairs representative.
- Whether the company’s disclosed announcements are consistent with the actual situation √ 2. Whether the company’s disclosed content is complete √ 3. Whether the company’s disclosed matters have not undergone major changes or made important progress √ 4. Whether there are no major matters that should be disclosed but have not been disclosed √ 5. Whether the transmission, disclosure process, confidentiality, etc. of major information are in compliance with the company’s requirements
√Relevant provisions of information disclosure management system
- Whether the investor relations activity record form is published on the Exchange’s interactive website in a timely manner √
(4) Establishment and implementation of a long-term mechanism to protect the company’s interests from infringement
On-site inspection methods: review the company's relevant systems, information disclosure documents, and documents of the three meetings; interview the secretary of the board of directors and the chief financial officer.
- Whether there is a mechanism to prevent controlling shareholders, actual controllers and their affiliates from directly
√ Or a system that indirectly occupies funds or other resources of listed companies
Whether the controlling shareholder, actual controller and their related persons do not directly or indirectly occupy the listed company’s funds or other resources
Whether the review procedures for related-party transactions are in compliance with regulations and the corresponding information disclosure has been performed
√Obligations
- Whether the price of related party transactions is fair √ 5. Whether there is no non-related party transaction √ 6. Whether the review process for external guarantees complies with regulations and fulfills the corresponding information disclosure obligations
√Note 1 service
- Whether the guaranteed party has no deterioration in financial status or failure to pay off the guaranteed party when due
√Debts and other situations
- If the guarantee continues to be provided after the guaranteed debt expires, will the relevant obligations be re-performed?
√Approval procedures and disclosure obligations required
Note 1: In addition to providing guarantee for its wholly-owned subsidiary Shanghai Jiuqiancheng Biopharmaceutical Co., Ltd. to apply for credit from the bank, the company has no other external guarantees.
(5) Use of raised funds
On-site inspection methods:
Review the information disclosure documents related to raised funds; review the three-party supervision agreement, bank statement of the special account for raised funds, and major expenditure contracts; interview the actual controller, board secretary, and financial director. 1. Whether the three-party supervision agreement is signed within one month after the raised funds are received. √ 2. Whether the three-party supervision agreement for the raised funds is effectively implemented. √ 3. Whether the raised funds are not occupied by a third party or entrusted financial management in violation of regulations.
√Situation
- Whether there is no unauthorized change of the purpose of raised funds or temporary
√Replenish working capital, replace advance investment, change implementation location, etc.
- Use idle raised funds to temporarily supplement working capital and invest the raised funds in
Change to permanently replenish working capital or use super-raised funds to replenish working capital
√ If the company fails to pay off the loan or repay the bank loan, whether the company has not carried out the risk during the commitment period.
investment
- Whether the use of raised funds is consistent with the disclosed situation, project progress, investment
√Whether the benefits are consistent with the prospectus, etc.
- Are there no major risks during the implementation of the raised funds project √
(6) Performance
On-site inspection methods:
Check the periodic reports disclosed by the company and companies in the same industry for comparative analysis. Interview company executives and inspect the company's production and operation sites.
- Whether there are significant fluctuations in performance √ 2. Whether there is a reasonable explanation for the significant fluctuations in performance √ 3. Compared with comparable companies in the same industry, whether there are no obvious abnormalities in the company’s performance √
(7) Fulfillment of commitments by the company and shareholders
On-site inspection methods:
Review relevant commitments and information disclosure documents of the company and its shareholders; interview the board secretary and securities affairs representative. 1. Whether the company has fully fulfilled relevant commitments √
- Whether the company’s shareholders have fully fulfilled relevant commitments √
(8) Other important matters
On-site inspection methods:
Review the company's relevant systems, documents of the three meetings, and information disclosure documents; review the company's major contracts, large-amount fund payment records and related vouchers; interview the actual controller, board secretary, financial director and other personnel.
Whether the cash dividend system is fully implemented and disclosed truthfully √
Whether the financial assistance provided to external parties is legal and compliant, and disclosed truthfully √ Note 2
Whether the large-amount capital transaction has a real transaction background and reasonable reasons √
Whether there are no major changes during the performance of major investments or major contracts
√
or risk
Whether there are no major changes or risks in the company’s production and operation environment √
Whether the problems existing in the company discovered by the regulatory agencies and sponsors in the early stage have been dealt with accordingly
√ Correct the relevant requirements
Note 2: Except for providing loans to its subsidiaries Shanghai Ruiqiyuan Biotechnology Co., Ltd., Shanghai Chengjiutai Biopharmaceutical Co., Ltd., and its wholly-owned subsidiary Shanghai Jiuqiancheng Biopharmaceutical Co., Ltd., the company does not provide other external financial assistance.
2. Problems discovered during on-site inspection and explanations
After continuing to supervise the project team’s on-site inspection in 2025, no problems in the company that need to be rectified were found. Other instructions are as follows:
- Explanation on Article 6 of “(5) Use of Raised Funds”
Changes and adjustments in the use of funds raised by the company are as follows:
On January 12, 2023, the company held the first extraordinary general meeting of shareholders in 2023, and reviewed and approved the "Proposal on Adjusting the Name, Amount and Implementation Period of Partially Raised Funds Investment Projects". The company adjusted the names, amounts and implementation periods of some of the raised capital investment projects: (1) The name of the raised fund investment project "Technical Transformation Project to Expand Annual Production of Pharmaceutical Intermediates by 155 tons and Food Additives and Feed Additives by 2,481 tons" was changed to "Relocation and Expansion of Annual Production of Pharmaceutical Intermediates" 155 tons, food additives and feed additives 3,561 tons technical transformation project." (2) Adjust the amount of raised funds to be used for the "R&D Center Expansion Project" from RMB 70 million to RMB 130 million. The additional investment of RMB 60 million was the excess funds raised from the company's initial public offering. (3) The implementation periods of "Pharmaceutical Intermediates Project", "API Project", "R&D Center Expansion Project", and "Technical Transformation Project to Expand Annual Production of 155 tons of Pharmaceutical Intermediates and 2,481 tons of Food Additives and Feed Additives" are adjusted to December 31, 2023, June 30, 2023, and December 31, 2024 respectively.
On January 12, 2023, the company held the first extraordinary general meeting of shareholders in 2023, reviewed and approved the "Proposal on Using Part of the Super Raised Funds to Invest in the Construction of Chengda Pharmaceutical Shanghai Institute of Medicine", and agreed to use RMB 163.3304 million of super raised funds to invest in the construction of Chengda Pharmaceutical Shanghai Institute of Medicine.
On January 12, 2023, the company held the first extraordinary general meeting of shareholders in 2023, reviewed and approved the "Proposal on Using Part of the Over-raised Funds to Permanently Supplement Working Capital", and agreed that the company would use 332.00 million yuan of over-raised funds to permanently replenish working capital.
On June 30, 2023, the company held the second meeting of the fifth board of directors and the second meeting of the fifth board of supervisors, reviewed and approved the "Proposal on Extending the Implementation Period of Partially Raised Fund Investment Projects", and agreed to adjust the implementation periods of the "Pharmaceutical Intermediates Project", "API Project", and "R&D Center Expansion Project" to June 30, 2024, June 30, 2024, and December 31, 2023 respectively.
On January 12, 2024, the company held the first extraordinary general meeting of shareholders in 2024, reviewed and approved the "Proposal on Terminating the Chengda Pharmaceutical Shanghai Institute of Drug Research Project" and agreed to terminate the Chengda Pharmaceutical Shanghai Institute of Drug Research project.
On June 28, 2024, the company held the eighth meeting of the fifth board of directors and the eighth meeting of the fifth board of supervisors, and reviewed and approved the "Proposal on Extending the Implementation Period of Part of the Investment Projects with Raised Funds" and agreed to adjust the implementation period of the "Pharmaceutical Intermediates Project" and "API Project" of the raised fund investment projects to December 31, 2024.
On December 25, 2024, the company held the 11th meeting of the fifth board of directors and the 11th meeting of the fifth board of supervisors, and reviewed and approved the "Proposal on Extending the Implementation Period of Part of the Investment Projects with Raised Funds", and agreed to adjust the estimated date of reaching the usable state of the raised-funded investment project "Technical Improvement Project to Relocate and Expand an Annual Production of 155 tons of Pharmaceutical Intermediates and 3,561 tons of Food Additives and Feed Additives" to December 31, 2026.
On December 18, 2025, the company held the third meeting of the sixth board of directors, and reviewed and approved the "Proposal on Using Part of the Over-raised Funds to Permanently Supplement Working Capital", and agreed that the company would use 332.00 million yuan of over-raised funds to permanently replenish working capital. The proposal still needs to be submitted to the company's shareholders' meeting for review.
The above matters have all gone through necessary review procedures and complied with the provisions of relevant laws, regulations and normative documents, and there has been no disguised change in the use of raised funds. The sponsor has no objection to the above matters. The company's use of raised funds is consistent with what has been disclosed.
- Explanation on “(6) Performance”
From January to September 2025, the company achieved operating income of 285.0947 million yuan and net profit attributable to the parent company of 16.7733 million yuan. From January to September 2024, the company achieved operating income of 243.7687 million yuan and realized net profit attributable to the parent company of 40.3928 million yuan. The company's operating income increased compared with the same period last year 16.95%, and the net profit attributable to the parent company decreased by 58.47% compared with the same period last year. This was mainly due to the year-on-year increase in depreciation and amortization expenses after the investment projects reached the intended usable state and were transferred to fixed assets, as well as the decline in financial management income. In addition to the above main impacts, the company's various businesses are currently operating in an orderly manner. Sponsors will continue to pay attention to the performance of listed companies and supervise listed companies to fulfill their information disclosure obligations in accordance with relevant laws and regulations.
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Sponsor representative:
Yang Ke Han Jianlong
Everbright Securities Co., Ltd.
December 30, 2025