Luoxin Pharmaceutical: 2025 Board of Directors Work Report

Luoxin Pharmaceutical Group Co., Ltd.

2025 Board of Directors Work Report

In 2025, the board of directors of Luoxin Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Company") strictly complied with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), the "Shenzhen Stock Exchange Stock Listing Rules" and other relevant laws, regulations and normative documents, as well as the "Articles of Association of Luoxin Pharmaceutical Group Co., Ltd." (hereinafter referred to as the "Articles of Association"), The "Rules of Procedure of the Board of Directors" and other company systems provide full play to the decision-making functions of the board of directors, effectively perform the board of directors' responsibilities assigned by the shareholders' meeting, strictly implement the resolutions of the shareholders' meeting, actively promote the implementation of the board of directors' resolutions, continuously standardize the company's corporate governance structure, ensure the scientific decision-making and standardized operation of the board of directors, effectively ensure the stable operation of the company's business operations, and protect the legitimate rights and interests of all shareholders. The main work of the Board of Directors in 2025 is now reported as follows:

1. The company’s main business during the reporting period

During the reporting period, the company's main business did not undergo significant changes. The company is mainly engaged in the research and development, production and sales of pharmaceutical products. Its core products cover chemical preparations, raw materials and proprietary Chinese medicines. Chemical preparations are further divided into patent period chemical preparations and non-patent period chemical preparations according to the product life cycle.

As of the end of this reporting period, the company managed a total of 247 varieties and 386 approval numbers, including 185 varieties and 324 approval numbers in the chemical preparations segment; 62 varieties and 62 approval numbers in the API segment, forming a product matrix covering multiple dosage forms and multiple treatment areas.

The company's main products are:

1. Business situation

2025 is a critical year for Luoxin Pharmaceutical to deepen its innovation and transformation. It is also a year for the company's operational quality to improve and its strategic direction to become clearer. Faced with the complex environment of structural adjustment and intensified market competition in the pharmaceutical industry, the company achieved operating income of 2.2734577 million yuan, a year-on-year decrease of 14.12%; net profit attributable to shareholders of listed companies -288.5802 million yuan, a year-on-year loss reduction of 70.11%; non-net profit after deducting -28,804.73 million, a year-on-year loss reduction of 62.50%; the comprehensive gross profit margin was 49.65%, a year-on-year increase of 7.50%.

Revenue scale has shrunk in the short term, but profit quality and asset efficiency have improved significantly. The cash flow from operating activities has achieved fundamental improvement, with a net operating cash inflow of 253 million yuan, a complete reversal from the net outflow of 158 million yuan in the same period last year, and the hematopoietic capacity of the main business has been significantly enhanced. This improvement is mainly due to the company's continuous optimization of the cooperation mechanism with distributors, which effectively alleviates the financial pressure caused by delayed payment collection by hospitals and accelerates the speed of payment collection. At the same time, the company strictly controls inventory scale and revitalizes working capital to further reduce financial risks. The company has not yet achieved profitability, mainly due to the one-time non-recurring gains and losses and equity investment impairment caused by Shanghai Pharma Luoxin's operations not meeting expectations, as well as the periodic impact of the pending disposal of loss-making businesses of Lekang Pharmaceutical and Luoxin Anruvita, and related factors are not sustainable.

The company promotes business structure reshaping and resource focus: divesting long-term loss-making proprietary Chinese medicine business, shutting down inefficient API production capacity, and orderly withdrawing from generic drug varieties with weak competitiveness, in exchange for short-term structural contraction in exchange for long-term high-quality development space. The details are as follows:

Chemical preparations: The company's chemical preparations business shows a structural differentiation pattern in which preparations under patent period are growing rapidly and preparations under patent period are under short-term pressure.

(1) Preparations under patent period: The core engine position is established, and the volume, price and profit are simultaneously improved. The annual revenue of preparations under patent period was 674.1273 million yuan, accounting for 29.65% of the overall revenue and 35.27% of the preparation business, and its proportion in the revenue of the pharmaceutical industry increased significantly. Among them, the core product Tegora Raw Tablets (Taixinzan®) has become the main growth driver relying on full medical insurance coverage and the continuous deepening of the commercialization process.

(2) Off-patent preparations: Under pressure due to centralized procurement and demand, the structure is optimized. Non-patented preparations achieved annual revenue of 1,237.0756 million yuan, accounting for 54.41% of the overall revenue and 64.73% of the preparation business. The annual revenue of off-patent preparations fell by 27.70% year-on-year. The decline was mainly affected by the normalization of centralized purchasing, changes in clinical demand and intensified industry competition. It was also related to the company's strategic adjustment to proactively shrink inefficient businesses and focus on resources. Among them, due to factors such as weak terminal demand due to the warm winter climate and price reductions in centralized procurement, the revenue of antibiotics fell by 39.81%, and the revenue of respiratory products fell by 45.36%.

(3) APIs: Phased adjustments are under pressure, and strategic transformation has entered the deep water zone. The revenue from APIs was RMB 99.6068 million, a year-on-year decrease of 54.74%. The pressure on the sector is mainly due to intensified competition in the industry, coupled with internal shortcomings such as insufficient reserves of high-value-added products, slow technological upgrades, weak cost control, and lagging quality systems and international layout. The overall situation is declining sales, price pressure, and low production capacity utilization. It is in a period of deep adjustment and strategic reshaping.

(4) Chinese patent medicines: complete the divestiture and focus on the main business. During the reporting period, the company completed the transfer of 100% of the equity of Lekang Pharmaceutical, officially divested the long-term loss-making and less competitive proprietary Chinese medicine sector, optimized the asset structure, and concentrated resources on cultivating the core pharmaceutical business.

2. Important work progress during the reporting period

2.1 Chemical preparations during the patent period: Core varieties are growing in volume, and R&D pipelines are advancing in an orderly manner

In 2025, the company's core commercial variety Tegora Raw Tablets (Taixinzan®) will be fully included in the national medical insurance directory for three major indications: "Combined with appropriate antibiotics to eradicate Helicobacter pylori" is newly admitted, and "reflux esophagitis" and "duodenal ulcer" are successfully renewed.

During the reporting period, the annual shipment volume of Tegora raw tablets exceeded 10 million boxes, a year-on-year increase of over 60%, and sales continued to rise. Relying on excellent clinical efficacy, product value continues to be widely recognized by medical institutions and patients, coupled with stable support from medical insurance policies and continued decline in channel coverage, Tegora Raw Tablets has entered a deterministic growth cycle, laying a solid foundation for the company's 2026 and mid- to long-term performance growth.

In terms of clinical research, we have solidly promoted the construction of clinical evidence throughout the year in core areas such as reflux disease, Helicobacter pylori (Hp) infection, ulcers and bleeding. There were 12 new clinical research results throughout the year, and 4 national clinical studies and about 13 regional studies were carried out, covering laryngopharyngeal reflux, reflux esophagitis, Helicobacter pylori eradication, ulcer bleeding, etc., forming a high-quality, multi-center, large-sample clinical evidence chain. A number of post-marketing research results have been published in authoritative international journals such as Helicobacter, providing solid evidence-based support for standardized clinical medication and further consolidating the product's leading edge in the field of new generation acid-suppressing drugs.

Progress of important varieties under research:

The company continues to develop differentiated and high clinical value innovation pipelines focusing on the digestive field. The new drug clinical trial application (IND) of LX22001 for injection has been approved, and it has the potential to prevent re-bleeding after endoscopic hemostasis in patients with peptic ulcer bleeding. Compared with the current standard treatment, it has the pharmacological characteristics of rapid acid-suppressive onset, stronger acid-suppressive effect, and long-lasting action. Indications include peptic ulcer bleeding and prevention of stress ulcer bleeding in critically ill patients.

At present, pharmacokinetics, pharmacodynamics and safety studies on healthy subjects have been completed, and subsequent Phase II and Phase III clinical development for patients with peptic ulcer bleeding and stress ulcer patients have been promoted as planned. As of the end of 2025, 60% of subjects have been enrolled in the Phase II clinical study; and all subjects will be enrolled in early April 2026. The company is currently actively preparing for the launch of subsequent Phase III studies.

In the future, the company will continue to deepen the P-CAB category, create an integrated product layout with wide coverage of oral preparations and strong demand for injectable dosage forms, comprehensively open up the full-scenario diagnosis and treatment chain of gastroenterology outpatient and inpatient services, continue to upgrade clinical value and core competitive barriers, and build a deeper and more stable industrial moat for the company's long-term high-quality development.

Project name Registration classification Indications R&D progress Previous phase progress Current phase progress Injection for peptic ulcer bleeding, prevention of serious complications IND has been approved and is in progress Phase I clinical trial has been completed and is in progress

Chemical drug class 2, phase II clinical trial

Phase I clinical trial of stress ulcer bleeding in patients with LX22001 syndrome is ongoing. Phase II clinical trial is underway.

In order to optimize the allocation of R&D resources, focus on advantageous tracks, and improve input-output efficiency, the company has prudently terminated three ongoing research projects including LX-039 tablets, LX-086 tablets, and budesonide solution nasal spray based on a comprehensive evaluation of clinical value, market space, and commercialization prospects. This adjustment is the company's proactive strategic optimization and will not have a major adverse impact on the company's operations.

Serial number Project name Registration classification Indications R&D progress 1 LX-039 tablets Chemical drug category 1 Advanced breast cancer Termination 2 LX-086 tablets Chemical drug category 1 Advanced solid tumors Termination 3 Budesonide solution nasal spray Chemical drug category 2 Allergic rhinitis Termination

2.2 Off-patent chemical preparations: collaborative upgrade of research, production and sales, structural optimization, quality and efficiency improvement

In terms of varieties under research, the company actively introduces new drugs and technologies launched abroad. Focus on promoting the research and development of pukanatide tablets. This product is a guanylate cyclase-C (GCC) receptor agonist. It provides a safer, gentler standardized treatment plan for functional constipation by regulating intestinal fluid secretion and physiological peristalsis.

As the first GC-C agonist in China to complete phase III clinical trials and achieve strict primary endpoints, plucanatide tablets have outstanding clinical value. The 12-week long-lasting overall response rate of the 3 mg dose group was significantly better than that of placebo. It was superior in terms of complete spontaneous defecation, frequency of defecation, stool properties, relief of abdominal pain and distension, and improvement in quality of life. It had a fast onset of action and stable efficacy. The product had good safety and tolerability, convenient once-daily administration, and significant advantages in long-term compliance. The relevant results have been published in the international journal "Drugs".

The prevalence of functional constipation (FC) in adults in my country is about 10%, with the number of patients exceeding 100 million, and the number of patients with constipation-predominant irritable bowel syndrome (IBS-C) is about 14 million. There is an urgent clinical need for safe and efficient innovative drugs. Compared with traditional laxatives, this product has a more precise mechanism, less intestinal irritation, and a broad market space. The company originally planned to import this product as Category 5.1, but based on consideration of the impact of the international trade environment and patient medication prices, and in order to better ensure future commercial production and reduce patient medication costs, it reached a decision with its partners to develop real estate in China. At present, the company is accelerating the localization and registration application of preparations, striving to go public as soon as possible, further enriching the matrix of innovative digestive tract products, and cultivating new performance growth points.

R&D

Project name Registration classification Indications Progress in the previous period Progress in this period

Phase III clinical research report

Phase III clinical study report has been completed

Pulkanatide tablets, Category 3 chemical drugs, functional constipation, localization, has been finalized and is being finalized locally

industrialization

The company's research and development and project establishment of off-patent preparations are guided by clinical needs, focusing on the company's advantageous areas, and focusing on the development of varieties with a wide audience and outstanding market competitiveness. During the reporting period, the company basically completed the consistency evaluation of products on sale. During the year, 5 new API projects and 4 preparation projects were approved. Ibuprofen concentrated solution for injection, ceftizoxime sodium (quality improvement) and other varieties were approved.

On the production side, we continue to promote structural transformation and improve quality and efficiency. During the reporting period, the company implemented three measures to reduce costs and increase efficiency throughout the entire process by strictly controlling production losses, broadening supply channels, and promoting domestic substitution of raw materials, and carried out special cost optimization for main products such as meropenem and omeprazole. Among them, the yield of omeprazole enteric-coated capsules increased from 86.5% to 90%, and the yield of esomeprazole magnesium enteric-coated tablets increased from 85% to 91.8%. Continuing to promote process iteration and lean production of core varieties, Yuxin Pharmaceutical has passed international standard certifications such as PIC/S, providing strong support for stable product quality and international market access. Affected by industry policies, demand structure and product iteration, the company's annual output showed differentiation: the output of traditional general medicines declined, while the proportion of varieties in specialty and advantageous fields continued to increase. In 2025, the storage volume of preparations will decrease year-on-year, and Shandong Luoxin and Lekang Pharmaceuticals will be significantly affected by product structure adjustments.

The sales end continues to promote refined operations. During the reporting period, the company implemented a comprehensive review and streamlined efficiency enhancement strategy for off-patent preparation varieties. Based on product attributes, life cycle, and competitiveness, products are divided into four categories: specialty and centralized purchasing continuation varieties, continuation varieties, general drug varieties, and low-efficiency varieties, and differentiated operations are implemented. The company resolutely exits weakly competitive and low-profit varieties, releases production capacity, human resources and market resources, and significantly improves overall operational efficiency.

① Advantages and varieties of centralized purchasing: Deepen the full-cycle operation of centralized purchasing and establish a two-line mechanism of "guaranteing supply of stock and expanding incrementally". In 2025, the company will actively respond to the normalization of national centralized drug procurement. In the eleventh batch of national centralized procurement, the company's core antibiotic variety ceftizoxime sodium for injection was successfully selected with a reasonable reduction and obtained national supply qualification, ensuring the continued access and stable supply of this variety in mainstream public medical institutions. In the first eight batches of national procurement continuation projects, the company has been selected for a total of 14 varieties, of which 5 varieties have achieved a year-on-year increase in the selected price, including ambroxol hydrochloride injection, donepezil hydrochloride dispersible tablets, etc., which fully reflects the company's improvement in bargaining power and the effect of restoring the value of existing varieties in the centralized procurement continuation stage.

② General drug varieties: Sales of general drugs will decline in 2025, mainly affected by shrinking demand from the third terminal and centralized procurement diversion.

2.3 Phased adjustments to the API business, comprehensively promoting quality improvement, efficiency improvement and strategic transformation

Affected by factors such as homogeneous competition in the industry, product structure optimization, and changes in downstream demand, the company's API business is in a phased adjustment period, with capacity utilization and profitability declining in phases.

In response to core issues such as homogeneous product structure, weak cost competitiveness, insufficient quality control and international layout, the company has comprehensively launched an API rectification and transformation optimization strategy: shutting down low-margin and low-value-added varieties; optimizing the technology improvement system, adding professional technical improvement teams, clarifying the division of labor between research and production, optimizing product quality and cost, and increasing product competitiveness; benchmarking international GMP and sterile drug regulatory requirements, promoting workshop intelligence and quality control upgrades, and preparing for international certification. The sector is currently at a critical stage of strategic transformation.

In terms of production and quality system, the company benchmarks against the latest GMP appendix requirements for sterile drugs, promotes workshop automation and intelligent upgrades, improves control strategies, comprehensively improves quality control levels, and makes preparatory preparations for subsequent international certification applications such as the European Union and FDA.

2.4 Spin off the loss-making business of proprietary Chinese medicines, optimize the asset structure and focus on the development of the main business

In view of the company's long-term losses in the proprietary Chinese medicine business and lack of variety competitiveness, which has dragged down the company's overall operations, the company completed the transfer of 100% equity of Lekang Pharmaceutical during the reporting period and officially divested the proprietary Chinese medicine segment to optimize the asset structure, reduce operating risks, and concentrate resources to focus on the core pharmaceutical business.

3. Actively implement the ESG development concept and comprehensively build a sustainable development system

During the reporting period, the company deeply integrated ESG sustainable development into the entire chain of innovation transformation and production and operation, and solidly advanced around the four core pillars of green manufacturing, innovative medicines to benefit the people, employee development, and compliance governance, building a solid foundation for high-quality development.

At the environmental level, 14.0132 million yuan was invested in environmental protection throughout the year, and 44 environmental protection trainings and 15 emergency drills were carried out. Promoting energy intensification and full-process management and control of pollutants, Shandong Luoxin was rated as a national green factory, leading the industry in green operation capabilities.

At the social level, the bottom line of drug safety is strictly adhered to. The three major indications of Tegora Raw Tablets are fully included in the medical insurance, and a number of generic drugs have passed the consistency evaluation. Throughout the year, there were 196 employee trainings and 173 safety trainings, covering 25,797 people. The employee physical examination and safety training coverage rate reached 100%. Actively participate in public welfare student aid and rural revitalization, and earnestly fulfill the social responsibilities of pharmaceutical companies.

At the governance level, the company continued to optimize its corporate governance structure, holding 15 board meetings and 7 shareholders' meetings throughout the year, with independent directors accounting for 42.86%. We deepened the long-term mechanism for internal control compliance and anti-commercial bribery, disclosed 161 documents throughout the year, responded to 63 investor inquiries, and steadily improved the standardization and transparency of governance.

2. Board of Directors meetings

In 2025, the company's board of directors held a total of 15 meetings. The convening, holding and voting procedures of the meetings complied with relevant laws, regulations, normative documents, the "Articles of Association", "Board of Directors Rules of Procedure" and other relevant regulations. All directors attended each meeting in person and carefully reviewed all proposals submitted to the board of directors. The details are as follows:

Time of convening Meeting session Proposal to be considered Review results Fifth session of directors

2025 1 1. "Proposal on the Appointment of the Head of the Internal Audit Institution"

Meeting 21st Passed on the 14th of the month 2. "Proposal on Providing Guarantees for Controlled Subsidiaries"

meetings

Fifth term of directors

2025 1 1. "Proposal on Providing Guarantees for Controlled Subsidiaries"

Meeting 22nd Passed on the 20th of the month 2. "Proposal on Convening the First Extraordinary General Meeting of Shareholders in 2025" meeting

Fifth term of directors

2025 2 1. "Proposal on Amending the Articles of Association"

The 23rd meeting passed on the 14th of the month 2. "Proposal on Convening the Second Extraordinary General Meeting of Shareholders in 2025" meeting

1. "Proposal on the 2024 Board of Directors Work Report"

2. "Proposal on the 2024 General Manager Work Report"

3. "Proposal on the 2024 Internal Control Evaluation Report"

4. "Proposal on Determining the Remuneration Plan for Directors in 2025"

5. "Proposal on Determining the 2025 Remuneration Plan for Senior Management"

6. "Proposal on the 2024 Financial Final Account Report"

7. "Proposal on the 2025 Financial Budget Report"

8. "Proposal on the Full Text and Summary of the 2024 Annual Report" 9. "Proposal on the 2024 Profit Distribution Plan"

9. "Proposal on Renewing the Audit Institution for 2025"

Fifth term of directors

April 11, 2025. "Proposal on the Confirmation of Daily Related Transactions in 2024 and the Estimation of Daily Related Transactions on the 21st of the 24th Annual Meeting of 2025"

meetings

12. "Proposal on using own funds to purchase bank financial products in 2025"

13. "Proposal on Applying for Comprehensive Credit Lines and External Guarantees from Financial Institutions in 2025"

14. "Proposal on the First Quarter Report of 2025"

15. "Proposal on the Audit Committee of the Board of Directors' Report on the Accounting Firm's Assessment of Duty Performance and Supervision Responsibilities in 2024"

16. "Proposal on Special Report on Independent Directors' Self-examination of Independence"

17. "Proposal on Convening the 2024 Annual General Meeting of Shareholders"

18. "Proposal on the by-election of independent directors of the fifth session of the Company's Board of Directors"

The fifth session of directors 2. "About adjusting the members of the special committee of the company's fifth session of the board of directors in June 2025"

Proposal of the 25th session of the meeting passed on the 27th of the month

Meeting 3. "Proposal on Amending the Articles of Association"

4. "Proposal on Convening the Third Extraordinary General Meeting of Shareholders in 2025"

Fifth term of directors

2025 7

Meeting 26 "Proposal on Carrying out Financial Leasing Business" Adopted on 21st of the month

meetings

The Fifth Session of Directors 1. "Proposal on Providing Guarantees for Controlled Subsidiaries"

2025 8

Meeting 27 2. "Meeting on Convening the Fourth Extraordinary General Meeting of Shareholders in 2025" was adopted on the 1st of the month

Proceedings of the Second Meeting

2025 August 5th Board of Directors

"Proposal on the Full Text and Summary of the 2025 Semi-annual Report" Adopted on the 27th of the month, the 28th of the meeting

meetings

Fifth term of directors

9, 2025

Meeting 29th "Proposal on Appointment of Financial Manager" Passed on 8th of the month

meetings

1. "Proposal on Amending the Articles of Association"

2. "Proposal on Amending the Rules of Procedure for Shareholders' Meetings"

3. "Proposal on Amending the Rules of Procedure of the Board of Directors"

4. "Proposal on Adjusting the Reserved Shares and Distribution of the Employee Stock Ownership Plan in 2024"

5. "Proposal on the Company's Compliance with the Conditions for Issuing A Shares to Specific Targets"

6. "Proposal on the Company's Plan for Issuing A Shares to Specific Targets in 2025"

7. "Proposal on the Company's Plan for Issuing A Shares to Specific Targets in 2025"

8. "About the Company <The fifth session of directors issuance of A shares to specific objects in 2025"

Proposal of 2025 9-ticket issuance plan demonstration and analysis report>

The 30th meeting passed on January 29th 9. "Meeting on the Company's Issuance of A Shares to Specific Targets in 2025"

Feasibility Analysis Report on the Use of Funds Raised by Tickets>Proposal"

10. "Proposal on the issuance of A-shares to specific objects in 2025 to dilute current returns and the adoption of filling measures and commitments from relevant entities"

11. "Proposal on the Company's Shareholder Return Plan for the Next Three Years (2025-2027)"

12. "Proposal on Establishing Special Account for Raised Funds"

13. "Proposal on requesting the general meeting of shareholders to authorize the board of directors and its authorized persons to handle specific matters concerning the issuance of A shares to specific objects"

14. "Proposal on Convening the Fifth Extraordinary General Meeting of Shareholders in 2025"

The Fifth Session of Directors 1. "Proposal on Appointment of Secretary to the Board of Directors"

10, 2025

Meeting 31st 2. "About the election and nomination of non-independent director candidates for the fifth session of the Board of Directors" passed on the 13th of the month

People’s motions at the second meeting

1. "Proposal on the Third Quarterly Report of 2025"

2. "Proposal on Amending the Articles of Association"

3. "Proposal on Amending the Rules of Procedure of the Board of Directors"

Fifth term of directors

October 4, 2025. "Proposal on the Company's Non-recurring Profit and Loss Detailed Statement and Attestation Report passed on the 32nd of the 27th of the month"

meetings

5. "Proposal on the report on the use of funds raised last time by the company"

6. "Proposal on Convening the Sixth Extraordinary Shareholders' Meeting in 2025" Fifth Session of Directors

November 2025 "Proposal on the Adjustment and Distribution of Reserved Shares of the Employee Stock Ownership Plan in 2024 Passed on the 28th of the 33rd Meeting"

meetings

December 2025 The Fifth Session of Directors "Proposal on Transferring Equity Interests in Controlled Subsidiaries" Adopted on 22nd of the month 34th meeting

meetings

Fifth term of directors

December 2025 "Proposal on the transfer of equity interests in holding subsidiaries and passive formation of financial assistance meeting passed on the 35th of December 29"

meetings

3. The situation of the shareholders’ meeting convened by the board of directors

In 2025, the company held a total of 7 shareholders' meetings, all convened by the board of directors. The board of directors organized the shareholders' meeting in a standardized manner and adopted a combination of on-site and online voting to facilitate the majority of investors to participate in the shareholders' meeting.

Facilitate voting and effectively protect the participation and supervision rights of small and medium-sized investors. The company strictly follows relevant laws

The relevant provisions of laws and regulations, the "Articles of Association" and the "Rules of Procedure of the Shareholders' Meeting" were conscientiously implemented.

The various resolutions adopted effectively safeguarded the interests of all shareholders. The specific situation is as follows:

Convening time Session Proposal review status

2025 2 2025

An interim 1. The "Proposal on Providing Guarantees for Controlled Subsidiaries" was reviewed and approved

July 7

shareholders meeting

2025 3 2025

1. Considered and approved the "Proposal on Amending the Articles of Association"

Second temporary

March 3

shareholders meeting

2. Considered and approved the "Proposal on Amending the Rules of Procedure of the Supervisory Board"

3. The "Proposal on the Work Report of the Board of Directors for 2024" was considered and approved. 2. The "Proposal on the Work Report of the Board of Supervisors for 2024" was considered and approved. 3. The "Proposal on Determining the Remuneration Plan for Directors for 2025" was considered and approved. 4. The "Proposal on Determining the Remuneration Plan for Supervisors for 2025" was considered and approved. 5. The "Proposal on the 2024 Financial Final Account Report" was considered and approved. 6. The "Proposal on the Financial Budget Report for 2025" was considered and approved 2024 7. The "Proposal on the Full Text and Summary of the 2024 Annual Report" was considered and approved 2025 May

4. The "Proposal on the Profit Distribution Plan for 2024" was reviewed and approved on the 12th of the General Meeting of Shareholders.

The meeting 9. reviewed and approved the "Proposal on Renewal of the Audit Institution for 2025" 10. reviewed and approved the "Proposal on the Confirmation of Daily Related Transactions in 2024 and the Estimation of Daily Related Transactions in 2025"

11. Reviewed and approved the "Proposal on Using Own Funds to Purchase Bank Financial Products in 2025"

12. The "Proposal on Applying for Comprehensive Credit Lines and External Guarantees from Financial Institutions in 2025" was reviewed and approved.

Year 2025

July 2025 1. The "Proposal on the By-Election of Independent Directors of the Fifth Board of Directors of the Company" was reviewed and approved three times.

December 16th 2. The "Proposal on Amending the Articles of Association" was reviewed and approved

shareholders meeting

Year 2025

2025 8

Four temporary 1. Reviewed and approved the "Proposal on Providing Guarantees for Controlled Subsidiaries"

January 18

shareholders meeting

2025 2025 No. 1. The "Proposal on Amending the Articles of Association" was considered and approved

October 15 Five temporary 2. Considered and approved the "Proposal on Amending the Rules of Procedure of the Shareholders' Meeting"

Day Shareholders Meeting 3. Considered and approved the “Proposal on Amending the Rules of Procedure of the Board of Directors”

1. Considered and approved the "Proposal on Amending the Articles of Association"

2. Considered and approved the "Proposal on Amending the Rules of Procedure of the Board of Directors"

3. Considered and approved the "Proposal on the Election of Non-Independent Directors of the Fifth Board of Directors"

4. The "Proposal on the Company's Compliance with the Conditions for Issuing A Shares to Specific Targets" was reviewed and approved

5. Considered and approved the “Proposal on the Company’s Plan for Issuing A Shares to Specific Targets in 2025”

6. The "Proposal on the Company's Plan for Issuing A Shares to Specific Targets in 2025" was reviewed and approved

2025 No. 7. The "About the Company's Issuance of A Shares to Specific Targets in 2025" was reviewed and approved in 2025. 11

Proposal of the Demonstration and Analysis Report of the Sixth Temporary Implementation Plan>

month 14

Shareholders Meeting 8. Reviewed and approved the "Proposal on the Company's Feasibility Analysis Report on the Use of Funds Raised by Issuing A Shares to Specific Targets in 2025"

9. Considered and approved the "Proposal on the Issuance of A Shares to Specific Targets in 2025 to Dilute Current Returns and the Adoption of Compensation Measures and Commitments of Relevant Entities"

10. Reviewed and approved the “Proposal on the Company’s Shareholder Return Plan for the Next Three Years (2025-2027)”

11. Reviewed and approved the "Proposal on Establishing a Special Account for Raised Funds"

12. Reviewed and approved the "Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors and its Authorized Persons to Fully Handle the Specific Issues of the Issuance of A Shares to Specific Targets"

13. Reviewed and approved the "Proposal on the Report on the Use of Funds Raised in the Company's Previous Raising"

4. Duty performance of independent directors

During the reporting period, the company’s independent directors strictly followed the Company Law, Securities Law and Independent Directors of Listed Companies.

Administrative Measures and other relevant laws, regulations, normative documents as well as the provisions and requirements of the Articles of Association, and carefully

Perform duties. The company’s independent directors are diligent and responsible, actively attend relevant meetings, discuss and review various proposals in depth, and

express opinions on company-related matters, and use their professional knowledge and experience to standardize the company’s operations, business management

Propose positive suggestions on management and development strategies to safeguard the interests of the company and all shareholders. At the same time, take the initiative to pay attention to

The company's operation management, financial status and major matters, and give full play to its professional knowledge to provide suggestions and suggestions for the company.

Effectively enhance the scientificity and rationality of the board of directors' decision-making.

The company's independent directors submitted the "2025 Independent Directors' Work Report" to the board of directors, which will be published in the company's

Work will be reported at the 2025 Annual Shareholders Meeting.

5. Performance of duties of each special committee of the Board of Directors

The company's board of directors consists of the Strategy Committee, Audit Committee, Nomination Committee, and Remuneration and Appraisal Committee.

four specialized committees. During the reporting period, the special committees of the board of directors strictly followed relevant laws, regulations and norms.

In accordance with the provisions of the company's regulatory documents and the implementation rules of the special committees of the company's board of directors, they conscientiously performed their duties, gave full play to their professional advantages and abilities, and provided good support for the board of directors' decision-making. The performance of duties by each special committee is as follows:

During the reporting period, the Strategy Committee of the company's board of directors held a total of 2 meetings and reviewed proposals related to the issuance of A shares to specific objects, the transfer of equity interests in controlled subsidiaries, and the passive formation of financial assistance. The Audit Committee of the Board of Directors held a total of 8 meetings, which mainly discussed and reviewed matters such as the company's regular financial reports, the implementation of the internal control system, the final financial report, the renewal of the accounting firm, and the audit work of the internal audit department. The Nomination Committee of the Board of Directors held three meetings and reviewed the proposals for nominating independent director candidates for the fifth session of the Board of Directors, appointing the financial controller, appointing the Secretary of the Board of Directors, and nominating non-independent director candidates for the fifth session of the Board of Directors. The Remuneration and Appraisal Committee of the Board of Directors held a total of 7 meetings and reviewed proposals such as the 2025 remuneration plan for directors and senior managers, the withdrawal of partial holder shares of the 2024 Employee Stock Ownership Plan, and the adjustment and distribution of reserved shares and distribution of the 2024 Employee Stock Ownership Plan.

6. Improve internal management system

During the reporting period, the company revised the "Articles of Association", "Rules of Procedure for Shareholders' Meetings", "Rules of Procedure for Board of Directors" and other internal system documents in accordance with the latest laws, regulations, normative documents and the actual situation of the company. In the future, the company will continue to strictly comply with the requirements of the latest laws, regulations and relevant normative documents, further improve the company's relevant rules and regulations and corporate governance structure, continuously improve the level of standardized operations, and ensure the company's healthy, stable and sustainable development.

7. Information disclosure and investor relations work

In 2025, the company's board of directors strictly abided by the relevant regulations on information disclosure, adhered to the principle of "fairness, openness and impartiality", completed regular report disclosures on time in accordance with the information disclosure format guidelines of the China Securities Regulatory Commission and the Shenzhen Stock Exchange and other relevant regulations on information disclosure, and based on the company's actual situation, it truthfully, accurately, completely and timely issued temporary announcements on meeting resolutions, major events, etc., faithfully performed its information disclosure obligations, ensured that investors were informed of the company's major events in a timely manner, and protected the interests of investors to the greatest extent. The company attaches great importance to new changes in information disclosure regulatory regulations, continuously strengthens its own learning, improves the standardization and effectiveness of information disclosure, adapts to regulatory requirements and meets the needs of investors, and protects the legitimate rights and interests of investors.

In 2025, the company will strictly follow relevant regulations and conscientiously manage investor relations. The company has established diversified investor communication channels, including dedicated telephone lines, consultation emails, investor interaction platforms, performance briefings and other forms to promptly answer investors' concerns about the company's performance, corporate governance, development strategy, operating conditions and other issues, and maintain good relationships with investors. At the same time, the company also uses its official website, WeChat public account and other independent channels to display the company's business, products, news, corporate culture and other information in multiple dimensions to enhance investors' understanding of the company's intrinsic value. During the reporting period, the company designated "Shanghai Securities News" and Juchao Information Network (www.cninfo.com.cn) as the company's designated information disclosure media and websites to protect investors' right to know and ensure that all shareholders of the company have fair access to company information.

8. Key tasks of the Board of Directors in 2026

In 2026, the company's board of directors will continue to uphold the principle of being responsible to all shareholders, give play to the correct leadership role of the board of directors, optimize the company's governance structure, standardize the company's operations, and promote the company's steady development by establishing and improving the company's internal control and risk control systems.

The board of directors will strictly comply with the latest laws and regulations and other requirements, conscientiously fulfill its information disclosure obligations, ensure timely, authentic, accurate and complete information disclosure, and continuously improve the transparency and timeliness of the company's information disclosure; strengthen investor relations management, establish a more complete investor relations management mechanism, strengthen contact and communication with investors through multiple channels, convey the company's vision and the business philosophy of seeking common development with investors, promote long-term, stable and good relations between the company and investors, establish a good capital market image of the company, and help the company develop high quality.

Board of Directors of Luoxin Pharmaceutical Group Co., Ltd.

April 22, 2026