Haixiang Pharmaceutical: Shareholder dividend return plan for the next three years (2026-2028)
Zhejiang Haixiang Pharmaceutical Co., Ltd.
Shareholder dividend return plan for the next three years (2026-2028)
In order to improve and perfect the shareholder return and dividend system of Zhejiang Haixiang Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), establish a scientific, sustainable and stable dividend decision-making and supervision mechanism, and guide investors to establish long-term investment and rational investment concepts, in accordance with the "Company Law of the People's Republic of China" of the China Securities Regulatory Commission According to the requirements of the "Securities Law of the People's Republic of China", "Listed Company Supervision Guidelines No. 3 - Cash Dividends of Listed Companies" and other documents, and based on the actual situation of the company, the company's board of directors formulated the "Zhejiang Haixiang Pharmaceutical Co., Ltd. Shareholder Dividend Return Plan for the Next Three Years (2026-2028)" (hereinafter referred to as the "plan"):
Article 1 Factors to consider in formulating shareholder return planning
The company will focus on long-term and sustainable development, comprehensively consider the company's actual situation, development goals, reasonable requirements and opinions of shareholders, especially small and medium-sized shareholders, external financing environment and other factors, and establish a sustained, stable and scientific return plan and mechanism for investors, thereby making institutional arrangements for dividend distribution to ensure the continuity and stability of the dividend distribution policy.
Article 2 Principles for formulating the company’s shareholder return plan
The company implements a sustained and stable profit distribution policy, attaches great importance to reasonable investment returns for investors and takes into account the company's sustainable development. It establishes a sustained and stable return mechanism for investors based on the company's profitability and the actual needs of the future business development strategy. The company's board of directors and shareholders' meetings should fully consider the opinions of independent directors and shareholders (especially public investors and small and medium-sized investors) in the decision-making and demonstration process of profit distribution policies. In order to meet the company's capital needs for normal operation and development, we will implement active profit distribution methods, give priority to cash dividends, and pay attention to reasonable investment returns for investors.
Article 3 The company’s specific dividend distribution plan for the next three years (2026-2028)
(1) Profit distribution principle: The company implements a sustained and stable dividend distribution policy. The company's dividend distribution should pay attention to reasonable investment returns for investors and take into account the company's sustainable development.
(2) Form of profit distribution: The company distributes dividends in the form of cash, stocks or a combination of cash and stocks, and cash distribution should be given priority.
(3) Interval of profit distribution periods: Provided that the conditions for profit distribution are met, the company shall distribute profits once a year. The company may make mid-term dividends and quarterly dividends based on its profitability and capital needs. The specific form and distribution ratio shall be formulated by the board of directors based on the company's operating conditions and relevant regulations, and shall be submitted to the shareholders' meeting for review and decision.
(4) Profit distribution policy:
- The company distributes profits in cash when the following specific conditions are met at the same time:
(1) The company’s distributable profits for the year (i.e., the after-tax profits after the company makes up for its losses and fully sets aside the statutory reserve fund and surplus reserve fund) are positive, and the cash flow is sufficient. The implementation of cash dividends will not affect the company’s subsequent continued operations;
(2) The audit institution hired by the company issues a standard unqualified audit report on the company’s financial report for that year;
(3) The company’s capital needs for normal production and operation are met, and no major investment plans or major cash expenditures occur.
The company's profit distribution shall not exceed the cumulative distributable profits. The cumulative annual cash dividend ratio shall not be less than 10% of the company's distributable profits realized in that year. The cumulative profits distributed in cash in the past three years shall not be less than 30% of the average annual distributable profits realized in the last three years. The specific dividend proportion shall be determined based on whether the stock dividend distribution method is adopted and based on the specific conditions of the company's operations in the current year and the needs of normal future operating development.
- If a company plans to distribute profits in cash, the board of directors shall comprehensively consider factors such as the characteristics of the industry, its development stage, its own business model, profitability, and whether there are major capital expenditure arrangements, distinguish the following situations, and propose differentiated cash dividend policies in accordance with the procedures stipulated in this Articles of Association:
(1) If the company is in a mature development stage and has no major capital expenditure arrangements, when distributing profits, the proportion of cash dividends in this profit distribution should be at least 80%;
(2) If the company is in a mature stage of development and has major capital expenditure arrangements, when distributing profits, the proportion of cash dividends in this profit distribution should be at least 40%;
(3) If the company is in the growth stage and has major capital expenditure arrangements, when distributing profits, the proportion of cash dividends in the profit distribution should be at least 20%;
If the company's development stage is difficult to distinguish but it has major capital expenditure arrangements, it may be handled in accordance with the provisions of item 3 of the preceding paragraph.
The proportion of cash dividends in this profit distribution is cash dividends divided by the sum of cash dividends and stock dividends.
- Conditions for stock dividend distribution
On the basis of ensuring the minimum cash dividend ratio, if the board of directors believes that the company's profits are growing rapidly, there are real and reasonable factors such as the company's growth potential and the dilution of net assets per share, and issuing stock dividends is conducive to the overall interests of all shareholders of the company, it can also use stock dividends to distribute profits.
Article 4 Decision-making procedures for formulating profit distribution policies
(1) During the demonstration process of the profit distribution plan, the company's board of directors must fully discuss with the independent directors, and propose and draft the company's profit distribution plan based on the company's profitability, capital needs, shareholder return planning and the relevant provisions of the Articles of Association, taking into account sustained, stable and scientific returns to all shareholders. The exercise of the above powers by independent directors must obtain the consent of more than half of all independent directors.
After the company's board of directors has reviewed and approved the profit distribution plan, the profit distribution matters can be submitted to the shareholders' meeting for review. When reviewing the profit distribution plan, the board of directors should carefully study and demonstrate the timing, conditions and minimum proportion of the company's cash dividends, adjustment conditions and decision-making process requirements and other matters.
If independent directors believe that the specific cash dividend plan may damage the rights and interests of the company or small and medium-sized shareholders, they have the right to express independent opinions. If the board of directors fails to adopt the opinions of independent directors or does not fully adopt them, it shall record the opinions of independent directors and the specific reasons for not adopting them in the board resolution and disclose them. The profit distribution plan reviewed by the board of directors must be approved by more than half of all directors and must be approved by more than half of the independent directors.
(2) Before the shareholders’ meeting reviews the specific cash dividend plan, the company should fully listen to the opinions and demands of small and medium-sized shareholders through multiple channels (telephone, fax, email, investor relations interactive platform), and promptly respond to issues of concern to small and medium-sized shareholders.
The shareholders' meeting shall vote on the profit distribution plan proposed by the board of directors in accordance with the provisions of laws, regulations and the company's articles of association. The company's board of directors, independent directors and shareholders who meet the relevant requirements may solicit their voting rights at the shareholders' meeting from the company's public shareholders before the shareholders' meeting. Independent directors must obtain the consent of more than half of all independent directors to exercise the above powers.
(3) If the board of directors fails to propose a profit distribution plan in the form of cash when the conditions for cash dividends are met that year, the reasons should be disclosed in regular reports. At the same time, when convening a shareholders' meeting, the company should provide online voting methods for the shareholders' meeting to facilitate small and medium-sized shareholders to participate in the shareholders' meeting voting.
(4) The audit committee supervises the implementation of profit distribution policies and decision-making procedures by the board of directors and operating management.
Article 5 Adjustment conditions and procedures for the company’s specific profit distribution plan
If the company adjusts its profit distribution policy based on production and operation conditions, investment planning and long-term development needs, the adjusted profit distribution policy shall not violate the relevant regulations of the China Securities Regulatory Commission and the stock exchange. Proposals on adjusting the profit distribution policy must be approved by more than half of all directors and must be approved by more than half of independent directors before they can be submitted to the shareholders' meeting for review. Proposals related to adjusting the profit distribution policy shall be passed by more than two-thirds of the voting rights held by shareholders attending the shareholders' meeting, and the shareholders' meeting shall be held simultaneously through online voting.
Article 6 Execution, information disclosure and supervision and restraint of profit distribution
(1) After the company's shareholders make a resolution on the profit distribution plan, or after the company's board of directors formulates a specific plan based on the conditions and upper limits for interim dividends and quarterly dividends for the next year reviewed and approved by the annual shareholders' meeting, the distribution of dividends (or shares) must be completed within two months.
(2) The company shall disclose in detail the formulation and implementation of the cash dividend policy in regular reports, and provide special explanations on the following matters:
Whether it complies with the provisions of the Articles of Association or the requirements of the shareholders’ meeting resolution;
Whether the dividend standards and proportions are clear and clear;
Whether the relevant decision-making procedures and mechanisms are complete;
If the company fails to distribute cash dividends, it should disclose the specific reasons and the next steps it plans to take to enhance investor returns;
Whether small and medium-sized shareholders have the opportunity to fully express their opinions and demands, and whether the legitimate rights and interests of small and medium-sized shareholders are fully protected. If the cash dividend policy is adjusted or changed, a detailed explanation of whether the conditions and procedures for the adjustment or change are compliant and transparent shall be given in detail.
(3) If a shareholder illegally appropriates company funds, the company shall deduct the cash dividend distributed by the shareholder to repay the funds occupied.
Article 7 Shareholder Return Plan Formulation Cycle
The company re-formulates or modifies the "Shareholder Return Plan" every three years, makes appropriate and necessary modifications to the company's immediately effective dividend distribution policy, and determines the shareholder return plan for that period.
Article 8 Supplementary Provisions
This plan shall take effect from the date of review and approval by the company's shareholders' meeting, and the same shall apply when it is revised. If there are any other matters not covered, they will be implemented in accordance with relevant laws, regulations, normative documents and the company's articles of association. This plan is interpreted by the company's board of directors.
Zhejiang Haixiang Pharmaceutical Co., Ltd.
Board of Directors April 29, 2026