Kunming Pharmaceutical Group’s First Quarter Report of 2026

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Securities code: 600422 Securities abbreviation: Kunyao Group

Kunyao Group Co., Ltd.

first quarter report

2026

The company's board of directors and all directors guarantee that the contents of this announcement do not contain any false records, misleading statements or major omissions, and assume legal responsibility for the authenticity, accuracy and completeness of its contents.

Important content reminder

The company's board of directors, directors and senior managers guarantee that the contents of the quarterly report are true, accurate and complete, and that there are no false records, misleading statements or major omissions, and bear individual and joint legal liability.

Zhong Jiang, the person in charge of the company, Sun Zhiqiang, the person in charge of accounting work, and Sun Lei, the person in charge of the accounting department (accounting supervisor), guarantee the authenticity, accuracy and completeness of the financial information in the quarterly report.

Are the first quarter financial statements audited?

□Yes √No

1. Main financial data

(1) Main accounting data and financial indicators

Unit: Yuan Currency: RMB Items for this reporting period compared with the same period last year Items for this reporting period compared with the same period last year

Increase or decrease in operating income (%)

836,158,258.40 1,608,452,032.42 -48.01Total profit

-138,290,887.81 149,103,911.43 -192.75Net profit attributable to shareholders of listed companies

-141,783,891.37 90,482,321.86 -256.70 Deductions attributable to shareholders of listed companies are not

-190,227,125.75 72,061,426.19 -363.98 Net profit from recurring gains and losses

Net cash flow from operating activities -613,688,789.72 -139,446,428.73 Not applicable Basic earnings per share (yuan/share)

-0.19 0.12 -258.33 Diluted earnings per share (yuan/share)

-0.19 0.12 -258.33

1/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Weighted average return on equity (%) -2.68 1.71, a decrease of 4.39 percentage points

The end of the reporting period is higher than the end of the reporting period of the previous year.

Total assets at the end of the year (%)

11,215,403,275.25 11,773,564,408.45 -4.74 Owners attributable to shareholders of listed companies

5,221,546,495.85 5,362,259,636.54 -2.62 equity

(2) Non-recurring profit and loss items and amounts

√Applicable □Not applicable

Unit: Yuan Currency: RMB Non-recurring profit and loss items Amount for the current period Description of profits and losses from disposal of non-current assets, including the write-off portion of asset impairment provisions 347,314.41

Government subsidies included in the current profit and loss, but closely related to the company's normal business operations,

Comply with national policies and regulations, enjoy according to determined standards, and contribute to the company’s profits and losses 3,611,211.41

Except for government subsidies that will continue to affect

In addition to effective hedging business related to the company's normal business operations, non-financial enterprises

Gains and losses from changes in fair value of financial assets and financial liabilities held by the enterprise and disposal 42,820,766.04

Gains and losses arising from financial assets and financial liabilities

Reversal of impairment provision for accounts receivable subject to separate impairment test 41,314.13

Other non-operating income and expenses other than the above items -4,198,331.37

Other profit and loss items that meet the definition of non-recurring profits and losses 18,027,553.46

Less: Income tax impact 9,626,265.16

Amount of impact on minority shareholders’ equity (after tax) 2,580,328.54

Total 48,443,234.38

If the company determines items not listed in the "Explanatory Announcement No. 1 on Information Disclosure of Companies that Offer Securities to the Public - Non-recurring Gains and Losses" as non-recurring gains and losses and is significant in amount, and if it defines the non-recurring gain or loss items listed in the "Explanatory Announcement No. 1 on Information Disclosure by Companies that Offer Securities to the Public - Non-recurring Gains and Losses" as recurring gains and losses, the reasons should be explained.

□Applicable √Not applicable

(3) Changes in main accounting data and financial indicators and reasons

√Applicable □Not applicable

Project name Change ratio (%) Main reasons

The pharmaceutical industry continues to undergo in-depth adjustments, retail channel changes deepen, and operating income -48.01. Superimposed on the company's own channel optimization and model reform, which are in the deepening stage, multiple factors have led to a year-on-year decline in operating income.

Total profit -192.75

The operating income of core products decreased, the gross profit decreased, the total net profit attributable to shareholders of listed companies and the net profit attributable to shareholders of listed companies declined.

-256.70

profit

2/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

As the net profit attributable to shareholders of listed companies decreased year-on-year, the deduction of recurring profits and losses not attributable to shareholders of listed companies increased compared with the same period last year, resulting in the deduction of non-recurring profits and losses.

-363.98

Net profit excluding recurring gains and losses The year-on-year decline in net profit attributable to the parent after recurring gains and losses expanded.

Big.

Cash flow from operating activities Cash inflow from operating activities in this period decreased compared with the same period last year, mainly due to

Not applicable

The net amount is due to the decrease in sales receipts in the current period.

Basic earnings per share (yuan/share) -258.33 was mainly caused by the year-on-year decrease in net profit attributable to shareholders of listed companies and diluted earnings per share (yuan/share) -258.33.

(4) Analysis of the company’s operating conditions

Since the first quarter of 2026, the pharmaceutical industry has continued to undergo in-depth adjustments, retail channel changes have continued to deepen, and the market environment faced by the company is still complex and severe; coupled with the company's own channel optimization and model changes, which are in the deepening stage, under the intertwined influence of multiple factors, the company's core financial indicators such as operating income and net profit faced greater pressure during the reporting period. The company closely relies on the strategic layout of China Resources Sanjiu's "one body and two wings" and has clearly defined its goal of becoming a leader in the silver health industry. It is firmly based on the needs related to "preparing and serving the elderly" and solidly implements the "one platform, two major capabilities, three inventories" strategy. It strengthens channel control and resource coordination, and uses two wheels of brand building and academic promotion to drive terminal sales. It draws on China Resources Sanjiu's mature management system to promote cost reduction and efficiency, intensive operation management, and strengthen risk control lines. The company insists on long-term development, proactively recognizes changes and adapts to changes, and accelerates the adjustment of channel operation rhythm. The company firmly believes that the periodic adjustments will build a healthier channel structure and more robust sales capabilities, and accelerate the company's operations to return to a sound and sustainable development track.

1. Deeply develop the silver hair strategy and make progress in chronic disease management under pressure

In the field of chronic disease management, the company's products are still facing competitive pressure caused by the increase in centralized purchasing of competing products and the convergence of price bands. Combined with the impact of multiple factors such as the company's own channel optimization and deepening of reforms, the hospital's in-hospital business is under significant pressure. The company strives to increase the coverage of Xuesaitong series products in medical institutions and further deepen the penetration of the grassroots market; it continues to strengthen the synergistic expansion effect of the dual brands of "Luotai + Lijuwang" and the dual channels inside and outside the hospital, providing solid support for the gradual recovery of subsequent product sales. During the reporting period, the company took the 777 brand as the core, adhered to "deepening academics, strengthening the brand, and strengthening users", and continued to build the brand image of "cardio-cerebrovascular health management expert". Focusing on the management of chronic diseases in the cardiovascular and cerebrovascular fields, the company has carried out a number of science popularization and public welfare activities: the "777 Vascular Health Open Course" IP column has been recommended by the official media of People's Daily Online's "People's Good Doctor", which not only spreads vascular health knowledge, but also effectively increases brand recognition; The "777 Brand·Carotid Artery Testing Charity Tour" was simultaneously promoted in ten core cities across the country to further consolidate the brand's professional influence in the field of chronic disease management; it also took advantage of the "March 7th Vascular Health Day" to launch a six-city roadshow to enhance consumers' awareness of vascular health. In terms of channels, the company closely relies on Sanjiu Business Road, focusing on core scenarios such as grassroots social welfare, and collaborates with China Resources Sanjiu to promote the sinking of channels and services, so that relevant high-quality products can reach more senior people and promote the release of channel synergy value.

2. Focus on brand channels, premium Sinopharm accumulates momentum amid challenges

In the field of premium Chinese medicines, in recent years, the accelerated integration of retail pharmacies and the fluctuation of customer flow in offline pharmacies, coupled with the deepening of the company's own marketing reforms, have put the company's out-of-hospital business under greater pressure. In the process, the company focused on channel and value reconstruction to find ways to break the situation, promote the transformation of the past decentralized sales model into an intensive model, and at the same time focus on core issues such as spleen, stomach, and emotions. Optimize product strategies for new varieties, accelerate grassroots market development, and continuously expand the breadth and depth of product channels; continue to work hard to build the Kunming Traditional Chinese Medicine 1381 corporate brand and key product brands, promote the establishment of a communication system of "central media matrix + strategic IP + digital ecology", improve brand communication penetration capabilities through refined operations, and continuously accumulate brand users. During the reporting period, the "Spleen and Stomach Master" IP created by Kunzhong Medicine was launched on the CCTV Financial Channel through the food documentary "Taste Master". Kunzhong Medicine Shenling Jianpiwei Granules' companion health management concept of "strengthening the spleen and stimulating the appetite" was widely disseminated. At the same time, Kunzhong Medicine was the special health guardian brand of the film, and the brand credibility and recognition were effectively improved; in addition, around the "Spleen"

3/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

The core proposition of "True, the Spring Festival is the right flavor" focuses on the core single product Shenling Jianpiwei Granules, and effectively increases exposure and reaches consumers extensively through the Good Spleen and Stomach New Year Taste Street, national brand bus tours, high-frequency outdoor media exposure and topic content linkage. In terms of channel operations, while promoting intensive operations and building benchmark chains, we strive to break through the shortcomings in the coverage of small and medium-sized chains and individual stores, and simultaneously explore the "commercial promotion" model at the grassroots level, striving to promote the implementation of the results of channel reform in releasing dynamic sales potential.

3. Anchor the needs of the elderly and build momentum for long-term development through R&D and innovation

The company closely focuses on the aging chronic diseases and the health-related needs of the elderly, deepens its innovation layout, optimizes the R&D pipeline structure, and steadily promotes new product research and development and improves the strength of existing products. During the reporting period, the Phase I clinical study of Project 232, a new chemical drug in Category 2.4, was officially launched; Project 111, a Category 1 innovative drug for the treatment of non-alcoholic fatty liver disease, and Project 020, a Category 1 natural drug suitable for the treatment of ischemic stroke, advanced phase I and phase IIb clinical research in an orderly manner respectively; generic drugs and product capacity improvement projects were steadily implemented as planned. The company will continue to rely on the collaborative empowerment of the China Resources system, continuously improve the research and development system, enhance innovation capabilities, and use technological innovation to assist the company's high-quality development.

4. Deepen cost reduction and efficiency improvement, and intensify efforts to safeguard corporate development.

The company continues to benchmark and learn from mature and advanced management systems and professional management tools in the industry, adheres to the concept of lean management, takes refinement, standardization, and systemization as the starting point, and takes multiple measures to systematically promote various tasks of reducing costs and increasing efficiency. By optimizing resource allocation and strictly controlling operating costs, we continue to optimize operating efficiency and risk control levels, and continuously improve operating quality and management effectiveness. At the same time, the company always strictly adheres to the red line of safe development, firmly establishes the risk prevention and control awareness of all employees, integrates compliance concepts and risk awareness throughout the entire operation and management process, continuously improves the full-process and full-chain risk identification, assessment, early warning and disposal prevention and control system, effectively builds a solid operational safety defense line, and protects the company's continued and stable operations.

2. Shareholder information

(1) The total number of common shareholders, the number of preferred shareholders whose voting rights have been restored, and the shareholding status of the top ten shareholders

Unit: Share

The total number of preference shareholders whose voting rights were restored at the end of the reporting period

Total number of ordinary shareholders at the end of the reporting period 55,570 0 (if any)

Shareholding status of the top 10 shareholders (excluding shares lent through refinancing)

Staking, token holding limited

Or freeze the shareholding ratio

Name of shareholder Nature of shareholder Number of shares held Conditional shares for sale

(%) shares

Number of servings

Quantity

Status

China Resources Sanjiu Pharmaceutical Co., Ltd.

State-owned legal person 212,311,616 28.05 0 None 0 Division

Yunnan Hehe (Group) Co., Ltd.

State-owned legal person 59,982,730 7.92 0 None 0 Co., Ltd.

Central Huijin Asset Management Co., Ltd.

State-owned legal person 11,814,900 1.56 0 None 0 companies

Industrial and Commercial Bank of China Co., Ltd.

Company - Wells Fargo Research Selected Flexible Allocation Others 9,445,641 1.25 0 None 0 Hybrid Securities Investment Fund

Hong Kong Securities Clearing Company Limited Others 9,213,845 1.22 0 None 0

4/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Agricultural Bank of China Co., Ltd.

Company - Invesco Great Wall Resources Monopoly Mixed Others 6,955,848 0.92 0 None 0 Consolidated Securities Investment Fund (LOF)

Industrial and Commercial Bank of China Co., Ltd.

Company - Invesco Great Wall Stable Gain Bond Others 4,024,400 0.53 0 None 0 Bond Securities Investment Fund

Nature within the territory

Zhang Xing 3,745,413 0.49 0 None 0 people

Nature within the territory

Yang Kefeng 3,500,000 0.46 0 None 0

people

China Construction Bank Co., Ltd.

Company – China China Securities Trading Co., Ltd.

Others 3,443,335 0.45 0 None Type 0 open-ended index securities investment fund

gold

Shareholding status of the top 10 shareholders without selling restrictions (excluding shares lent through refinancing)

Type and number of shares Name of shareholder Number of shares held without selling restrictions

Type of shares Quantity China Resources Sanjiu Pharmaceutical Co., Ltd. RMB general

212,311,616 212,311,616 Division shares

Yunnan Hehe (Group) Co., Ltd. RMB general

59,982,730 59,982,730 Division shares

Central Huijin Asset Management Co., Ltd. RMB General

11,814,900 11,814,900 Ren Company All shares

Industrial and Commercial Bank of China Co., Ltd.

RMB general

Division - Wells Fargo Research Selected Flexible Allocation 9,445,641 9,445,641

common stock

hybrid securities investment fund

RMB general

Hong Kong Securities Clearing Company Limited 9,213,845 9,213,845

common stock

Agricultural Bank of China Co., Ltd.

RMB general

Company - Invesco Great Wall Resources Monopoly 6,955,848 6,955,848

common stock

Combined Securities Investment Fund (LOF)

Industrial and Commercial Bank of China Co., Ltd.

RMB general

Company - Invesco Great Wall Stable Gain Bond 4,024,400 4,024,400

common stock

Securities investment funds

RMB general

Zhang Xing 3,745,413 3,745,413 shares

RMB general

Yang Kefeng 3,500,000 3,500,000

common stock

China Construction Bank Co., Ltd.

Company - China Universal CSI Traditional Chinese Medicine Trading RMB General

3,443,335 3,443,335 open-ended index securities investment fund shares

gold

5/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

China Resources Sanjiu Pharmaceutical Co., Ltd. is the controlling shareholder of the company, and there is no related relationship or consistent condition between the top ten shareholders and the other shareholders among the top ten shareholders. Description of the action. It is unknown whether there are any other shareholders of non-restricted tradable shares.

In the case of related relationships and persons acting in concert.

The top 10 shareholders and the top 10 non-company shareholders Zhang Xing holds 6,913 company shares through ordinary securities accounts, and holds 3,738,500 company shares through investment restricted shareholders' margin trading and investor credit securities accounts. The company's stock refinancing business holds a total of 3,745,413 shares; company shareholder Yang Kefeng holds 3,500,000 company shares through investor credit securities accounts.

The situation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares participating in the refinancing business and lending shares □ Applicable √ Not applicable

The top 10 shareholders and the top 10 shareholders of unrestricted tradable shares have changed from the previous period due to refinancing lending/returning.

□Applicable √Not applicable

3. Other reminders

Investors need to be reminded of other important information regarding the company’s operations during the reporting period.

√Applicable □Not applicable

1. Changes in the company’s directors: In January 2026, due to work adjustments, Mr. Wu Wenduo no longer serves as the chairman of the company; after review and approval at the 14th meeting of the company’s 11th board of directors, non-independent director Mr. Yu Xiang was elected as chairman of the company’s 11th board of directors. In January 2026, due to work adjustments, Mr. Li Hongshen applied to resign from his positions as vice chairman and director of the company's 11th board of directors, member of the strategy and ESG committee of the board of directors, and member of the audit and risk control committee. On March 18, 2026, due to work adjustments, Mr. Wu Wenduo applied to resign as a director of the company, a member of the Strategy and ESG Committee of the Board of Directors, and a member of the Nomination Committee of the Board of Directors. Mr. Guo Ting applied to resign as a director of the company; after review and approval at the 15th meeting of the 11th Board of Directors of the company, Mr. Wang Liang, Mr. Zhong Jiang, and Mr. Deng Kang were nominated as members of the 11th Board of Directors of the company. On April 17, 2026, after deliberation and approval at the first extraordinary shareholders' meeting in 2026, Mr. Wang Liang, Mr. Zhong Jiang, and Mr. Deng Kang were elected as members of the company's 11th Board of Directors. The term of directors shall be from the date of approval by the shareholders' meeting to the expiration date of the 11th Board of Directors. In April 2026, due to work adjustments, Mr. He Ming applied to resign as employee representative director of the company's 11th Board of Directors. The sixth meeting of the company's fifth workers' congress elected Ms. Meng Li as the employee representative director of the company's eleventh board of directors. Her term of office shall be from the effective date of the election of the company's workers' congress to the expiration date of the company's eleventh board of directors. On April 24, 2026, after review and approval at the 18th meeting of the company's 11th board of directors, Mr. Deng Kang, a non-independent director, was elected as the vice chairman of the company's 11th board of directors. For details, please refer to the company’s announcements No. 2026-001, 2026-002, 2026-004, 2026-009, 2026-016, 2026-018 and 2026-019.

2. Changes in the company’s senior management: In January 2026, due to job transfer, Mr. Yan Wei no longer serves as the company’s president and continues to serve as the company’s vice chairman, director and member of the strategy and ESG committee of the board of directors; Mr. Li Lichun no longer serves as the company’s vice president. On January 5, 2026, after review and approval at the 14th meeting of the company's 11th board of directors, Mr. Zhong Jiang was appointed as the company's president, with a term starting from the date of review and approval by the company's board of directors and ending on the expiration date of the 11th board of directors. On March 18, 2026, after review and approval at the 15th meeting of the company's 11th board of directors, Mr. Huang Yuanhong was appointed as the company's vice president, with a term starting from the date of review and approval by the company's board of directors and ending on the expiration date of the 11th board of directors. On March 31, 2026, due to personal reasons, Ms. Zhang Mengxun resigned from the positions of vice president, secretary of the board of directors, general counsel, and chief compliance officer of the company; after review and approval at the 17th meeting of the 11th board of directors of the company, Sun Yat-sen was appointed

6/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Mr. Zhiqiang is the secretary of the company's board of directors, and his term of office shall be from the date of review and approval by the company's board of directors to the expiration date of the eleventh session of the board of directors. In April 2026, due to personal reasons, Mr. Gao Tong applied to resign from the position of vice president of the company. Due to the adjustment of her job position, Ms. Meng Li applied to resign from the position of executive vice president of the company; after her resignation, Ms. Meng Li will serve as the full-time deputy secretary of the company's party committee and employee representative director. For details, please refer to the company’s announcements No. 2026-001, 2026-003, 2026-009, 2026-015, and 2026-019.

4. Quarterly Financial Statements

(1) Types of audit opinions

□Applicable √Not applicable

(2) Financial statements

Consolidated Balance Sheet

March 31, 2026

Prepared by: Kunming Pharmaceutical Group Co., Ltd.

Unit: Yuan Currency: RMB Audit type: Unaudited

Item March 31, 2026 Current assets on December 31, 2025:

Monetary funds 502,709,067.20 1,234,549,499.37 Settlement reserves

Loan funds

Trading financial assets 1,121,521,526.01 1,109,023,326.01 Derivative financial assets

Notes receivable 48,851,878.16 51,752,988.29 Accounts receivable 3,377,087,882.80 3,364,302,864.40 Accounts receivable financing 77,836,980.68 111,394,858.28 Advance payments 98,447,555.00 106,480,903.94 Premiums receivable

Reinsurance accounts receivable

Receivable reinsurance contract reserves

Other receivables 151,461,282.29 143,339,055.11 Including: interest receivable

Dividends receivable

Buy financial assets under resale agreements

Inventory 1,512,527,043.28 1,382,964,439.88 Including: data resources

contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 233,363,462.06 219,931,946.27 Total current assets 7,123,806,677.48 7,723,739,881.55

7/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Non-current assets:

Grant loans and advances

debt investment

Other debt investments

long-term receivables

Long-term equity investment 97,762,377.68 77,295,183.52 Other equity instrument investment 8,656,625.57 8,656,625.57 Other non-current financial assets 319,945,978.71 291,270,276.80 Investment real estate 21,272,154.86 21,494,032.11 Fixed assets 1,057,830,121.42 1,075,975,564.44 Construction in progress 110,616,487.32 100,399,657.14 Productive biological assets

oil and gas assets

Right-of-use assets 70,086,643.65 75,465,533.36 Intangible assets 362,252,945.77 373,314,920.95 Including: data resources

Development expenditure 270,541,062.43 256,873,801.06 Including: data resources

Goodwill 1,499,099,106.35 1,499,099,106.35 Long-term deferred expenses 12,786,291.24 13,160,910.18 Deferred income tax assets 222,061,691.04 216,306,458.93 Other non-current assets 38,685,111.73 40,512,456.49 Total non-current assets 4,091,596,597.77 4,049,824,526.90

Total assets 11,215,403,275.25 11,773,564,408.45 Current liabilities:

Short-term borrowings 751,980,340.81 813,371,619.05 Borrowings from the central bank

borrowing funds

Trading financial liabilities

Derivative financial liabilities

Notes payable 245,855,940.39 257,811,605.41 Accounts payable 537,692,463.29 618,430,503.11 Advance payments 54,242.08 80,361.13 Contract liabilities 50,376,541.76 51,376,159.43 Financial assets sold and repurchased

Taking deposits and placing deposits with other banks

Agent for buying and selling securities

Agent underwriting securities funds

Employee benefits payable 251,523,764.61 298,699,681.01 Taxes payable 56,327,119.94 133,533,916.71 Other payables 1,230,044,008.28 1,343,445,743.40 Including: interest payable

8/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Dividends payable

Handling fees and commissions payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year 122,390,069.99 135,223,010.03 Other current liabilities 165,678,939.59 173,716,565.42

Total current liabilities 3,411,923,430.74 3,825,689,164.70 Non-current liabilities:

insurance contract reserves

Long-term borrowings 693,468,592.57 683,238,879.66 Bonds payable

Among them: preferred shares

perpetual bond

Lease liabilities 47,691,415.16 53,422,750.30 Long-term payables

Long-term employee benefits payable 1,116,128.88 1,116,128.88 Estimated liabilities 41,454.00

Deferred income 239,230,813.53 243,241,640.42 Deferred income tax liabilities 20,569,235.34 21,636,317.83 Other non-current liabilities 3,814,940.00 3,814,940.00 Total non-current liabilities 1,005,932,579.48 1,006,470,657.09

Total liabilities 4,417,856,010.22 4,832,159,821.79 Owners’ equity (or shareholders’ equity):

Paid-in capital (or equity) 756,975,757.00 756,975,757.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve 522,099,683.10 519,660,042.40 less: treasury shares

Other comprehensive income -32,524,340.60 -31,155,450.58Special reserve 2,484,185.93 2,484,185.93 Surplus reserve 379,586,110.50 379,586,110.50General risk reserve

Undistributed profits 3,592,925,099.92 3,734,708,991.29 Attributable to the owners’ equity of the parent company (or

5,221,546,495.85 5,362,259,636.54 shareholders’ equity) total

Minority shareholders’ equity 1,576,000,769.18 1,579,144,950.12Owner’s equity (or shareholders’ equity)

6,797,547,265.03 6,941,404,586.66 total

Liabilities and owners' equity (or shares

11,215,403,275.25 11,773,564,408.45 East equity) total

9/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Person in charge of the company: Zhong Jiang Person in charge of accounting work: Sun Zhiqiang Person in charge of the accounting department: Sun Lei

consolidated income statement

January-March 2026

Prepared by: Kunming Pharmaceutical Group Co., Ltd.

Unit: Yuan Currency: RMB Audit type: Unaudited

Project First Quarter of 2026 First Quarter of 2025

1. Total operating income 836,158,258.40 1,608,452,032.42 Including: operating income 836,158,258.40 1,608,452,032.42 Interest income

Premiums earned

Fee and commission income

2. Total operating costs 1,005,316,275.73 1,490,477,668.68 Including: operating costs 647,460,348.24 1,014,740,498.50 Interest expenses

Handling fees and commission expenses

surrender deposit

Net compensation expenses

Net withdrawal of insurance liability reserves

policy dividend payout

Reinsurance cost

Taxes and surcharges 6,914,899.70 14,112,985.06 Sales expenses 241,421,364.92 341,535,462.86 Management expenses 83,628,103.79 86,280,268.09 Research and development expenses 15,270,107.62 22,356,968.35 Financial expenses 10,621,451.46 11,451,485.82 Including: interest expenses 8,663,197.43 13,732,056.89

Interest income 701,643.89 3,344,275.54 plus: other income 5,046,325.73 24,353,834.91 Investment income (losses are listed with "-") 19,627,546.81 -218,160.08 Including: losses to associates and joint ventures

18,027,553.46 -57,242.48 investment income

Financial assets measured at amortized cost

Derecognition of revenue

Exchange gains (losses are listed with "-")

Net exposure hedging income (losses are filled in with "-"

column)

Gains from changes in fair value (losses are marked with a “-”

40,566,944.52 194,273.91 fill in the column)

Credit impairment losses (losses are filled in with "-"

-17,747,958.82 9,095,275.76 columns)

10/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Asset impairment losses (losses are filled in with "-"

-12,774,711.76 -2,934,870.47 columns)

Asset disposal income (losses are filled in with "-"

438,657.93 -771.95 columns)

3. Operating profit (losses are listed with "-") -134,001,212.92 148,463,945.82 plus: non-operating income 291,931.28 2,067,494.82

Less: Non-operating expenses 4,581,606.17 1,427,529.21

4. Total profits (total losses are listed with "-") -138,290,887.81 149,103,911.43

Less: Income tax expense 6,556,763.98 35,551,469.84

5. Net profit (net loss is listed with "-") -144,847,651.79 113,552,441.59

(1) Classification by business continuity

1. Net profit from continuing operations (net loss is marked with "-"

-144,847,651.79 113,552,441.59 fill in the column)

2. Net profit from discontinued operations (net loss is marked with "-"

Fill in the column)

(2) Classification according to ownership ownership

1. Net profit attributable to shareholders of the parent company (net

-141,783,891.37 90,482,321.86 Losses are listed with a “-” sign)

2. Profit and loss of minority shareholders (net loss is filled in with "-"

-3,063,760.42 23,070,119.73 columns)

6. Net after-tax amount of other comprehensive income -1,449,310.54 1,281,044.33

(1) Other comprehensive assets attributable to the owners of the parent company

-1,368,890.02 1,295,331.14 Net after-tax income

1. Other comprehensive income that cannot be reclassified into profit or loss

benefit

(1) Remeasurement of changes in defined benefit plan

(2) Other comprehensive items that cannot be transferred to profit or loss under the equity method

income

(3) Changes in fair value of other equity instrument investments

(4) Changes in the fair value of the company’s own credit risk

2. Other comprehensive income to be reclassified into profit and loss -1,368,890.02 1,295,331.14

(1) Other comprehensive income that can be converted to profit or loss under the equity method

benefit

(2) Changes in fair value of other debt investments

(3) Financial assets are reclassified into other comprehensive income

amount of profit

(4) Credit impairment provisions for other debt investments

(5) Cash flow hedging reserve

(6) Translation difference of foreign currency financial statements -1,368,890.02 1,295,331.14 (7) Others

(2) Other comprehensive income attributable to minority shareholders

-80,420.52 -14,286.81 net profit after tax

7. Total comprehensive income -146,296,962.33 114,833,485.92

11/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

(1) Comprehensive income attributable to owners of the parent company

-143,152,781.39 91,777,653.00 total profit

(2) Total comprehensive income attributable to minority shareholders

-3,144,180.94 23,055,832.92 amount

8. Earnings per share:

(1) Basic earnings per share (yuan/share) -0.19 0.12

(2) Diluted earnings per share (yuan/share) -0.19 0.12 Person in charge of the company: Zhong Jiang Person in charge of accounting work: Sun Zhiqiang Person in charge of the accounting department: Sun Lei

Consolidated Cash Flow Statement

January-March 2026

Prepared by: Kunming Pharmaceutical Group Co., Ltd.

Unit: Yuan Currency: RMB Audit type: Unaudited

Project First Quarter of 2026 First Quarter of 2025

1. Cash flow generated from operating activities:

Cash received from selling goods and providing services 860,540,950.22 1,625,293,351.57 Net increase in customer deposits and interbank deposits

Um

Net increase in borrowing from the central bank

Net increase in borrowing funds from other financial institutions

Um

Cash received from premiums from the original insurance contract

Net cash received from reinsurance business

Net increase in policyholders’ savings and investment funds

Cash collected from interest, fees and commissions

Net increase in borrowing funds

Net increase in repurchase business funds

Net cash received from buying and selling securities on behalf of agents

Tax returns received 1,795,801.12 11,535,774.63 Other cash received related to operating activities 27,984,200.79 70,260,953.62

Subtotal of cash inflows from operating activities 890,320,952.13 1,707,090,079.82 Cash paid for purchasing goods and receiving services 801,950,371.79 1,027,979,308.89 Net increase in customer loans and advances

Net increase in deposits with central banks and inter-banks

Um

Cash used to pay compensation from the original insurance contract

Net increase in lending funds

Cash payments for interest, fees and commissions

Cash payment for policy dividends

Cash paid to and for employees 242,333,033.06 265,473,815.55 Various taxes and fees paid 111,277,367.14 167,314,871.87 Cash paid for other operating activities 348,448,969.86 385,768,512.24

12/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Subtotal of cash outflows from operating activities 1,504,009,741.85 1,846,536,508.55 Net cash flow from operating activities

-613,688,789.72 -139,446,428.73 amount

2. Cash flow generated from investing activities:

Cash received from recovery of investment 809,087,644.80 622,379,748.70 Cash received from investment income 3,559,219.33 2,799,839.62 Disposal of fixed assets, intangible assets and others

395,677.59 1,047,619.39 Net cash received from long-term assets

Received from disposal of subsidiaries and other business units

net cash

Other cash received related to investing activities

Subtotal of cash inflows from investing activities 813,042,541.72 626,227,207.71 Purchase and construction of fixed assets, intangible assets and others

32,294,992.01 13,248,028.73 Cash paid for long-term assets

Cash paid for investment 811,000,000.00 1,656,700,000.00 Net increase in pledged loans

Obtain payment from subsidiaries and other business units

net cash

Other cash payments related to investing activities

Subtotal of cash outflows from investing activities 843,294,992.01 1,669,948,028.73 Net cash flows from investing activities

-30,252,450.29 -1,043,720,821.02 amount

3. Cash flow generated from financing activities:

Absorbing cash received from investments

Among them: subsidiaries absorb investment from minority shareholders

cash received

Cash received from borrowings 241,761,560.45 953,621,441.38 Cash received from other financing activities

Subtotal of cash inflows from financing activities 241,761,560.45 953,621,441.38 Cash paid to repay debts 322,737,897.80 94,620,773.47 Distribution of dividends, profits or interest payments

8,975,445.10 9,950,596.42 in cash

Including: Payments made by subsidiaries to minority shareholders

dividends, profits

Cash payments related to other financing activities 5,896,035.33 722,141,297.86 Subtotal cash outflows from financing activities 337,609,378.23 826,712,667.75 Net cash flow generated from financing activities

-95,847,817.78 126,908,773.63 amount

4. Exchange rate changes on cash and cash equivalents

-1,835,325.48 35,093.62 impact

5. Net increase in cash and cash equivalents -741,624,383.27 -1,056,223,382.50 plus: opening balance of cash and cash equivalents 1,130,987,344.12 2,133,924,411.77

6. Balance of cash and cash equivalents at the end of the period 389,362,960.85 1,077,701,029.27

13/14

Kunming Pharmaceutical Group Co., Ltd. First Quarter Report of 2026

Person in charge of the company: Zhong Jiang Person in charge of accounting work: Sun Zhiqiang Person in charge of the accounting department: Sun Lei

(3) The first implementation of new accounting standards or standard interpretations starting in 2026 will involve adjustments to the financial statements at the beginning of the year of first implementation.

□Applicable √Not applicable

Announcement hereby

Kunyao Group Co., Ltd. Board of Directors April 24, 2026

14/14