/Lukang Pharmaceutical’s 2025 Environmental, Social and Governance (ESG) Report

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Lukang Pharmaceutical’s 2025 Environmental, Social and Governance (ESG) Report

Shanghai Stock Exchange

2026/04/25

2024

Lu Kang

Lukang Medicine

ESG Sustainability Report

Build a green ecology and achieve sustainable development

A modern biopharmaceutical enterprise that contributes to society

Shandong Lukang Pharmaceutical Co., Ltd.

Address: No. 88, Deyuan Road, Jining High-tech Zone, Shandong Province

Tel: 400-0726669

Website: https://www.lkpc.com/

Shandong Lukang Pharmaceutical Co., Ltd. Postal code: 272000

SHANDONG LUKANG PHARMACEUTICAL CO.,LTD

2025

Lukang Medicine

ESG Sustainability Report

About this report

This report is the third environmental, social and governance (ESG) report released by Shandong Lukang Pharmaceutical Co., Ltd.

reporting time

This report is an annual report, covering the period from January 1, 2025 to December 31, 2025. To ensure the coherence and completeness of the report content, some of the content has been appropriately extended in time frame.

Reporting scope

All data and cases in this report come from Shandong Lukang Pharmaceutical Co., Ltd. and its branches and subsidiaries. For ease of presentation, the report uses collective terms such as "Shandong Lukang Pharmaceutical Co., Ltd.", "Lukang Pharmaceutical", "Company" and "we". The reporting scope is consistent with the scope of the company's annual financial report and consolidated statements.

Release cycle

Lukang Pharmaceutical's Environmental, Social and Governance (ESG) report is an annual report and is published once a year in principle.

Data description

The information and data used in this report come from official internal documents or relevant public information of Lukang Pharmaceutical and its member companies. Externally referenced data will be noted in the report. Unless otherwise specified, the financial data in this report are in RMB.

Compilation basis

Shanghai Stock Exchange "Self-regulatory Guidelines for Listed Companies No. 14 - Sustainability Report (Trial)" Shanghai Stock Exchange "Self-regulatory Guidelines for Listed Companies No. 4 - Sustainability Report Preparation"

Chinese Academy of Social Sciences "China Corporate Social Responsibility Reporting Guide (CASS-ESG 5.0)"

Global Reporting Initiative Sustainability Reporting Standards (GRI Standards)

International Organization for Standardization "ISO26000 Social Responsibility Guide"

quality assurance

This report is released after being reviewed and approved by the company's board of directors. The board of directors promises that the reported information and data are true and accurate and do not contain any false records, misleading statements or major omissions.

C directory o ntents

About this report 04 Green development and environmental management 07 Employee development and rights protection 09 Supply chain management and win-win cooperation with partners

01 Chairman’s speech

Green development concept and environmental management system 34 Concepts and goals 58 Actively carry out dividend distribution to ensure the rights and interests of investors 74

Main achievements in energy conservation and emission reduction in 2025 35 Work achievements 58 Creating a safe, resilient and responsible supply chain 74

02 Enter Lukang

Special environmental management and compliance control 37 Protect the legitimate rights and interests of employees and treat small and medium-sized enterprises equally for more people 76 Company Profile 04

Environmental Protection Industry Development 41 Creating Opportunities 59 Data Security and Customer Privacy Protection 76 Cultural Concepts 05

Continue to improve the salary and welfare system 60 Implement the national opening strategy and actively integrate into the international market 77 Organizational structure 06

Smooth career development channels and allow more employees to control shareholding subsidiaries 07 05 Quality Safety and Product Responsibility

Become the Protagonist 60 “14th Five-Year Plan” Strategic Achievements 08

Continuously improve occupational health 61 Strengthen quality management and ensure drug safety 44 10 ESG management and operation quality continues to improve 10

Promote democratic management 62 Improve system construction and enhance quality management capabilities 45

Important events 12

Care for employees 63 ESG concept 80 Pursue excellent performance and achieve innovative breakthroughs in quality management 46

Awards and Honors 16

Strengthen intrinsic safety and protect safe production 64 ESG governance 80 Quality honors and industry recognition 47

Analysis of substantive issues 81

03 Corporate governance and compliance operations 06 Innovation-driven and digital transformation 08 Social responsibility and community co-construction

Two sessions and one level of standardized operation 20

Vigorously promote technological innovation and release value creativity 50 Charitable donations 68 Strengthen the management and control of parent and subsidiary companies 22

The implementation of the bio-manufacturing industry has yielded fruitful results 52 Rural revitalization 68 Continue to deepen the reform of the three systems 23

Science and technology ethics management 53 Community co-construction 70 Improve compliance management system 25

Accelerate digital transformation and develop new productivity 54 Volunteer service 71 Comprehensive risk management and internal control construction 26

Smooth information communication channels for listed companies 27

Integrating Party Building into Production and Operation 28

Strengthening anti-corruption and promoting integrity 29

Due Diligence and Stakeholder Communication 30

Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Shandong Lukang Pharmaceutical Co.,Ltd and Compliance Operations and Environmental Management and Product Responsibility and Digital Intelligence Transformation and Rights Protection Co-construction with the Community Win-win with Partners 2025 ESG Sustainability Report

Dear shareholders, investors, partners and friends from all walks of life:

About this report Time series changes, Huazhang is new every day. In a critical year for the pharmaceutical industry to upgrade to quality and drive innovation, we released the company's ESG report as scheduled. It is not only a systematic review of the company's environmental, social and governance work in the past period, but also a profound insight into the development trend of the industry and a firm commitment to corporate responsibility and mission.

Chairman's speech

Must be practiced. As a listed company deeply involved in the pharmaceutical field, we have always taken "freeing mankind from the pain of disease" as our original intention. We have anchored the direction and taken proactive actions in policy guidance and industry changes. We have gathered strength in ESG practice and moved forward with determination. We have written the answer to the high-quality development of pharmaceutical companies with responsibility and innovation. party

Committee In 2025, the pharmaceutical industry will usher in a critical cycle of intensive policy implementation and accelerated ecological reconstruction. Challenges and opportunities coexist, and change and innovation coexist. This year, books

Note: The country continues to deepen the reform of the medical and health system, and a series of policy measures have been launched in a precise manner to draw a clear path for the high-quality development of the industry: promoting the inheritance and innovation of traditional Chinese medicine,

Dong Xin and the quality improvement of the whole chain have given "Chinese treasures" a new lease of life; the new generation of information technology has been deeply integrated with the pharmaceutical industry chain to cultivate new quality productivity in the industry;

In 2025, the new version of the national medical insurance drug catalog will be significantly expanded, the first version of the commercially insured innovative drug catalog will be implemented simultaneously, and the "1+3+N" multi-level medical security system will be accelerated, which will not only reduce the burden on patients, but also provide institutional support for the realization of corporate innovation value.

Facing the profound changes in the industry in 2025, we are clearly aware that competition in the pharmaceutical industry has shifted from pure product competition to comprehensive competition in innovation capabilities, quality control, social responsibility and sustainable development capabilities. On the one hand, the standardization and refined supervision of policies have put forward higher requirements for corporate compliance operations and quality control, forcing companies to improve their full-chain management levels; on the other hand, the acceleration of digital and intelligent transformation, the concentrated emergence of innovative drug results, the advancement of traditional Chinese medicine modernization, and the expansion of retail channels outside hospitals have injected new momentum into the development of the industry and created a broad space for development.

In terms of innovation and research and development, we focus on major disease areas and unmet clinical needs, increase investment in basic research and original innovation, and actively deploy cutting-edge tracks such as biopharmaceuticals, high-end preparations, and traditional Chinese medicine modernization around the "Two Advantages and Six Characteristics" product pipeline. A number of innovative products under research have achieved phased breakthroughs. During the "14th Five-Year Plan" period, we have obtained a total of 49 generic drug registration numbers and 58 consistency evaluation approvals, using scientific and technological innovation to protect people's health; in terms of strategic transformation, we have strengthened key core technologies We have tackled key problems, promoted the deep integration of technological innovation and industrial innovation, and continued to strengthen the transformation from traditional microbial fermentation to synthetic biotechnology applications. We have been approved by the Ministry of Industry and Information Technology as a key cultivation pilot platform, and have put into operation the world's first innovative biosynthetic product trans-aconitic acid green bio-manufacturing project. Several yeast chassis products have achieved industrialized production. In terms of quality control, we strictly follow the regulatory requirements of the State Food and Drug Administration, improve the full-chain quality traceability system, and strengthen the quality control of all aspects of production, operation, and use. Quality control, QMS and other systems are online, and the quality supervision center has passed CNAS certification. We adhere to the quality bottom line of pharmaceutical companies and protect patient medication safety, and won the 7th Jining Mayor Quality Award. In terms of digital and intelligent transformation, we actively responded to policy calls and promoted the deep integration of new generation information technology with the entire chain of R&D, production, and circulation to optimize production efficiency and management levels. We were awarded the Ministry of Industry and Information Technology’s Outstanding Smart Factory, the Ministry of Industry and Information Technology’s Industrial Internet Pilot Demonstration Project, and Shandong Province’s Advanced Intelligent Industry factory and the first batch of digital economy innovation platforms in Shandong Province; in terms of environmental protection, we practice the concept of green development, optimize production processes, reduce pollutant emissions, promote circular economy, achieve synergy between corporate development and ecological protection, and win the honorary title of Jining City’s “Waste-Free Factory”; in terms of social contributions, we actively participate in public welfare undertakings, promote health science popularization, grassroots medical assistance, help improve grassroots medical service capabilities, make high-quality medical resources more accessible, and convey the warmth of medicine with responsibility.

If you keep doing it, you will have a promising future. The industry changes in 2025 will be both pressure and motivation, challenges and opportunities. We firmly believe that the pharmaceutical industry, as a sunrise industry that protects human health, will usher in broader development prospects with the support of policies, technology driven and social needs. As a participant and promoter of the industry, we will always adhere to our original aspirations and shoulder our mission. With firmer confidence, a more pragmatic style, and more innovative measures, we will deepen our main business, strive for excellence, continue to deepen ESG practices, and promote high-quality corporate development; we will proactively comply with policy guidance, embrace digital and intelligent transformation, strengthen innovation-driven, and improve Core competitiveness, we will continue to move forward on the road of protecting human health; we will always adhere to the responsibilities and responsibilities of a listed company, communicate candidly, be pragmatic and responsible, work hand in hand with shareholders, investors, and partners to build a new future for high-quality development of the pharmaceutical industry, and contribute all our efforts to promote the construction of a "pharmaceutical power" and enhance people's health and well-being.

Finally, I would like to sincerely thank all shareholders, investors, partners and friends from all walks of life for their long-term trust, support and companionship in the company! May we go forward together and embark on a new journey together, and write more chapters of responsibility and responsibility on the road to protecting health!

Thank you all!

Chairman: Peng Xin

April 24, 2026

Peng

happy

About Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and Compliance Operations and Environmental Management and Product Responsibility and Digital Intelligence Transformation and Protection of Rights and Interests Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Entering LuKang

Enter Lukang

Company Profile

cultural concept

Organizational structure

controlled subsidiaries

"14th Five-Year Plan" strategic results

Operational quality continues to improve

important events

Awards and Honors

02 03 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical enters Lukang ESG management

Company Profile

Shandong Lukang Pharmaceutical Co., Ltd. (hereinafter referred to as "Lukang Pharmaceutical" or the company) was established in 1966 and listed on the main board of the Shanghai Stock Exchange in 1997.

It is a state-controlled comprehensive pharmaceutical enterprise. The company has total assets of 10 billion yuan, more than 6,000 employees, and a total of 16 wholly-owned and holding companies.

exported to more than 80 countries and regions. In 2024, the company ranked 51st in the Ministry of Industry and Information Technology's top 100 pharmaceutical industry rankings in China.

The company is a national-level enterprise technology center, a national high-tech enterprise, an excellent smart factory by the Ministry of Industry and Information Technology (2025), and an integrated enterprise by the Ministry of Industry and Information Technology.

Standard pilot enterprise, national “green factory”, Shandong Province’s “Top Ten” industrial cluster leading enterprise, Shandong Province quality benchmark enterprise, Shandong Province “One Enterprise, One Technology”

R&D center. It has 7 national high-tech enterprises, 1 national-level enterprise technology center, and 3 Shandong provincial enterprise technology centers. Newly approved national research

There are 2 development platforms and 5 provincial R&D platforms. Class 1 innovative drugs in many countries have entered clinical trials, including systemic anti-infective, hypoglycemic and cardiovascular drugs.

The competitiveness continues to improve, and the pipeline of specialty products such as respiratory, autoimmune, andrology, Chinese and Tibetan medicine, and high-end preparations are gradually enriched and improved. company

18 products ranked first in market share, and 56 products ranked among the top ten in market share.

The company has a 60-year history of microbial fermentation and is a domestic leader in industrial transformation of biomanufacturing products and biosynthesis technology. Undertake major national scientific and technological research

It has 3 related projects and 3 major innovation projects in Shandong Province. It has won 1 first prize of Shandong Province Technological Invention Award, first prize and second prize of Shandong Province Technological Progress Award.

1 item, 1 item among the top ten scientific and technological innovation achievements of provincial enterprises in Shandong Province.

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Build a modern biopharmaceutical enterprise with green ecology, sustainable development and contribution to society>>>

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In accordance with the relevant requirements for deepening the reform of the three systems, combined with the actual production and operation management

As needed, the company has made many optimization and adjustments to its organizational structure. By the end of 2025,

Organizational structure Distribution of controlling subsidiaries

The company's organizational structure consists of 15 professional management departments and 14 production workshops.

Organizational structure: controlled subsidiaries

It has 11 owned subsidiaries and 5 joint-stock subsidiaries. The specific organizational structure is as follows:

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Party committee office resources party performance environment

Notarization Public Group Financial Recommendation Guarantee Quality Discipline Medicine

Division Securities Office Department Affairs Jinan Quantity Committee Legal Materials

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Holding joint-stock company, production, sales, R&D

Shandong Lukang Serile Pharmaceutical Co., Ltd. Workshop 101

Shandong Lukang International Trade Co., Ltd. Workshop 102

Shandong Lukang Zhonghe Environmental Protection Technology Co., Ltd. Workshop 103

104 workshop

Shandong Lukang Biopesticide Co., Ltd.

701 workshop medicine quality

Shandong Lukang Mechanical and Electrical Engineering Co., Ltd.

702 Workshop Supervisor

Shandong Lukang Zerun Pharmaceutical Co., Ltd.

703 Workshop Medium

Shandong Lukang Biochemicals Management Co., Ltd.

705 workshop heart

Shandong Lukang Hecheng Pharmaceutical Co., Ltd. Workshop 706

Workshop 707 of Shandong Lukang Pharmaceutical Group Saite Co., Ltd.

Workshop 708 Qinghai Lukang Dadi Pharmaceutical Co., Ltd.

709 workshop

Shandong Lukang Haiboer Biotechnology Co., Ltd.

720 workshop

Beijing Yujing Health Technology Co., Ltd. Pharmaceutical R&D Center

609 workshop

Shandong Lukang Haoliyou Biotechnology Development Co., Ltd. Veterinary Drug R&D Center

Tiangong Biotechnology (Tianjin) Co., Ltd.

Shandong Province Biotechnology Industry Transformation Platform

Northern Health Medical Big Data Technology Co., Ltd.

06 07 things

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Serial number Full name of Lukang Pharmaceutical’s subsidiaries and joint-stock companies Abbreviation

Board of Directors 1 Shandong Lukang Shelile Pharmaceutical Co., Ltd. Shelile Company

management

2 Shandong Lukang International Trade Co., Ltd. International Trade Company

3 Shandong Lukang Zhonghe Environmental Protection Technology Co., Ltd. Zhonghe Environmental Protection Company Self-owned Enterprise (Mobile

Industry original recruitment chemical city

Management Standard Production and Assets Field Materials 4 Shandong Lukang Biological Pesticide Co., Ltd. Qihe Company

Pharmacy and medicine office technical machine supply camp

Activities related to sales and marketing, sales office department, engineering department 5 Shandong Lukang Mechanical and Electrical Engineering Co., Ltd. Mechanical and Electrical Company New Department) Process

department department

6 Shandong Lukang Zerun Pharmaceutical Co., Ltd. Zerun Company

7 Shandong Lukang Biochemicals Management Co., Ltd. Chemical Company

Quality Supervision 8 Shandong Lukang Hecheng Pharmaceutical Co., Ltd. Hecheng Company

9 Shandong Lukang Pharmaceutical Group Saite Co., Ltd. Saite Company

10 Qinghai Lukang Dadi Pharmaceutical Co., Ltd. Qinghai company general medicine sales

11 Shandong Lukang Hyper Biotechnology Co., Ltd. Lukang Hyper

12 Beijing Yujing Health Technology Co., Ltd. Yujing Company

New drug sales 13 Shandong Lukang Orion Biotechnology Development Co., Ltd. Lukang Orion Hospital

14 Tiangong Biotechnology (Tianjin) Co., Ltd. Tiangong Biotechnology

15 Northern Health Medical Big Data Technology Co., Ltd. Northern Big Data International Trade

16 Jining Lukang Property Management Co., Ltd. Lukang Property Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Strategic achievements of the 14th Five Year Plan

Scientific and technological innovation is accelerating across the board, and core momentum continues to increase

"14th Five-Year Plan" strategic results

The company adheres to the innovation-driven development strategy and accelerates the structural adjustment, transformation and upgrading of traditional pharmaceutical products. We have laid out six distinctive product pipelines including respiratory, anti-tumor, andrology, autoimmune, neurodegenerative and endocrine products, building a multi-field coverage, from fermented raw materials to semi-synthetic APIs to

The "14th Five-Year Plan" period is the beginning of my country's comprehensive promotion of socialist modernization in the new era. It is also the comprehensive deepening of reforms for Lukang Pharmaceutical and the realization of a complete product chain of preparations. Three innovative drugs have entered clinical trials. During the "14th Five-Year Plan" period, 33 newly approved preparation product registration numbers and 16 APIs were approved, marking a critical period for high-quality leapfrog development. The company adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and has issued 58 complete, accurate, and comprehensive evaluation approval documents, an increase of 31, 16, and 51 respectively compared with the "13th Five-Year Plan". We have approved 5 veterinary raw materials and 17 veterinary preparations. We have implemented new development concepts and conscientiously implemented the decisions and arrangements of the central and provincial committees and Hualu Group on deepening the reform of state-owned enterprises and accelerating the conversion of old and new growth drivers. We have firmly grasped 1 agricultural raw material and 13 agricultural preparations. There were 247 patents authorized, 151 more than the 13th Five-Year Plan, with a growth rate of 157.29%. The biosynthetic board's sixteen-character policy of "consolidating the foundation, strengthening the chain, innovative breakthroughs, and transformation and development" has always followed the "14th Five-Year Plan" general policy of production and operation, and continued to strengthen the "three blocks that have begun to take shape. Relying on the biotechnology industry transformation platform of Shandong Province, it has formed "an innovation platform, five support units, four development directions, and ten dimensions of management and control", deeply implemented the "four-in-one" budget management and supervision and assessment system, and comprehensively promoted the improvement of outstanding performance management, the ability, motivation, and corporate development capabilities. The development pattern of "innovative products" provides strong support for the company's transformation and upgrading. The world's first trans-aconitic acid green bio-manufacturing project was put into operation. Its synthetic strength and vitality have been comprehensively improved, and remarkable results have been achieved in production, operation, reform and development. Biological innovation products have been industrialized, and revenue from synthetic biological products will exceed 110 million yuan in 2025.

Accelerate the conversion of old and new driving forces and promote enterprise transformation and upgrading

Production and operation have grown steadily, and comprehensive strength has reached a new level.

Focusing on strengthening the chain and improving the competitiveness of leading products, we adhere to the principle of "doing one thing, achieving one thing; completing one thing, and making profit", and continue to optimize product structure.

During the "14th Five-Year Plan" period, the company's operating income and profitability have increased significantly, its asset scale has continued to expand, operating efficiency has significantly improved, and its operating income structure has accelerated industrial transformation and upgrading. It strives to build a product chain cluster with core competitiveness and inject lasting new momentum into the company's high-quality development. The "14th Five-Year Plan" increased from 4.2 billion yuan in 2020 to 5.766 billion yuan in 2025, with a growth rate of 37.12% and an average annual compound growth rate of 6.52%; the total profit increased from 7 key projects and 76 key technological transformation projects implemented during the "13th Five-Year Plan" period, with a cumulative fixed asset investment of 1.384 billion yuan. Remarkable achievements have been made in intelligent digital construction, with a total of 779 million yuan during the period increased to a total of 1.124 billion yuan during the "14th Five-Year Plan" period, an increase of 44.27%; R&D investment increased from 868 million yuan during the "13th Five-Year Plan" period, and per capita labor productivity increased significantly. 25 intelligent production lines and 2 digital pilot workshops were built, and the comprehensive management and control platform of the park was launched. The smart park increased to 1.754 billion yuan during the "14th Five-Year Plan" period, an increase of 102.12%; the total cash flow increased from 1.519 billion yuan at the end of the "13th Five-Year Plan" to the "14th Five-Year Plan" system and ERP and other management systems, and deployed large AI models and 35 RPA processes. During the "14th Five-Year Plan" period, the total number of employees increased by 5%, with per capita working life reaching 2.299 billion yuan, a growth rate of 51.31%; total assets increased from 7.3 billion yuan in 2020 to 10 billion yuan in 2025, with a growth rate of 37.97%, and the annual productivity increased by 33.89%. It has initially achieved refined production control, intelligent park operation and efficient management coordination. The company won the Ministry of Industry and Information Technology's Excellent Grade with an average compound growth rate of 6.65%; export revenue in 2025 will reach 1.149 billion yuan, an increase of 58.62% from the end of the "13th Five-Year Plan". In 2025, the average annual employee energy harvesting factory, an industrial Internet pilot demonstration project of the Ministry of Industry and Information Technology, has won the first batch of digital economy "Morning Star Factories" in Shandong Province, provincial smart manufacturing application scenarios, and revenue increased by 39.66% compared with 2020; the ranking of China's Top 100 Pharmaceutical Industry rose from 61st in 2020 to 51st in 2024, with comprehensive strength Shandong Province's advanced smart factory, Shandong Province's first batch of digital economy innovation platforms, Shandong Province's demonstration enterprise for the integration of real economy and digital economy. The newly added countries have reached a new level. There are 3 new technology enterprises and 3 provincial specialized and special new small and medium-sized enterprises.

08 09 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical enters Lukang ESG management

Continuous improvement in business quality

From 2023 to 2025, the ranking, advancement and growth of Lukang Pharmaceutical's key core competitiveness indicators (one profit and five profit margins) among listed companies.

Operational quality continues to improve

Business philosophy and goals

Project 2023 2024 2025 The company will implement the “four-in-one” budget management and control model and the “four-in-one” supervision and assessment model. Implement “three-dimensional control”, mobile management and excellence

Improve performance standards, improve the company's management and control and risk prevention capabilities, and promote high-quality development of the company. Total profit (10,000 yuan) 27,298 43,390 16,121 Return on net assets (%) 7.07 10.47 2.86 Development results

Indicators from 2023 to 2025 Operating cash ratio (%) 90.22 88.55 91.40 Amount unit: 10,000 yuan Asset-liability ratio (%) 57.50 55.36 47.61 R&D investment intensity (%) 6.56 7.15 6.92 Projects 2023 2024 2025

Total labor productivity (10,000 yuan/person) 25.11 28.77 23.07Total assets 880,243 909,798 1,003,405

Owners’ equity 374,135 406,157 525,664

According to the pharmaceutical industry data released by "WIND" information, among the 1-3 quarter data of 326 pharmaceutical listed companies in 2025, Lu's operating income is 614,672 623,309 576,612

Anti-pharmaceutical business revenue ranked 37th, up 1 place year-on-year; total profit ranked 113th, down 29 places year-on-year. Total profit 27,298 43,390 16,121

Net profit 25,679 40,835 11,191

Net profit attributable to parent company 24,617 39,462 11,230

Total profits and taxes 53,956 70,134 40,182

Total taxes payable 26,659 26,744 24,061

State-owned capital gains 6,863 9,570 2,674

Return on total assets 3.86 5.69 2.37

Return on equity 7.07 10.47 2.86

Value maintenance and appreciation rate of state-owned assets 107.90 106.98 101.66

Asset-liability ratio 57.50 55.36 47.61

10 11 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

May 2025

Important Events

◆ The company ranks among the top brands in promoting brand building in China

"2025 China Brand Value Evaluation" Pharmaceutical

March 2025

Ranked 35th in the health brand value list.

◆ The company’s “flexibility based on industrial Internet platform”

"Case Study of Liquid Dispensing and Intelligent Packaging Production Line" was selected into Industry and Information

February 2025 Typical cases of application scenarios of the Ministry of Chemical Industry’s “Digital Three Products”.

◆ The world’s first trans-aconitic acid green product

The company's propylene-1,2,3-tributyltricarboxylate and propylene-1,2,3-compound manufacturing projects were put into operation.

◆ The company’s quality supervision center received the China Conformity Assessment

Tricarboxylic acid triester (2-ethylhexyl) has obtained the "New Product" from the Ministry of Ecology and Environment

July 2025

National Accreditation Service (CNAS) test

Routine Registration Certificate for Environmental Management of Chemical Substances", a global exclusive.

Laboratory accreditation, testing capabilities and quality management system

Joint-stock Company and Serile Company won the title of "Advanced Level (Provincial Level)" and reached international standards, and the test results will be recognized globally.

Smart Factory", Saite Company was selected as "Excellent Provincial Intelligent Manufacturing Scenario". More than 100 countries and regions recognize each other.

List of Advanced (Provincial) Intelligent Factories in Shandong Province in 2025 List of Excellent Intelligent Manufacturing Scenarios in Shandong Province in 2025 Serial Number City Company Name Factory Name Serial Number City Company Name Scenario Name 41 2 3

Jiji Jiji Jinan South South South South City City City

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Gongwu Energy Factory Worker Zhimo Powder

Silicon

Factory flow factory can be a final medical treatment factory industrial intelligent medicine degree factory can be packaged and shipped customized assembly and operation 1 2 3

Jinan Nanshi City Jiji Nanzhong Chengdian Electric Power Technology Co., Ltd. Manufacturing Equipment Equipment Line Art Equipment Intelligent Performance Energy Warehouse Configuration Optimization Transportation Storage Placement

dimension

6 Jinan City Shandong Freda Biotechnology Co., Ltd. Freda Zhimei Science and Technology Innovation Park Smart Factory 6 Smart Marketing Management7 Jinan City Shandong Tianyue Advanced Technology Co., Ltd. Shandong Tianyue Carbon Energy Chemical Silicon Factory Substrate Material Intelligence 7 Energy Intelligent Management and Control 18 9

Jiji Jinan South Nanshi City

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Jinlangnan Lai Chaosheng Wujiquan Taishengji Group Biotechnology Co., Ltd. has a limited company. The company has a high efficiency environmental protection plant. 8

Dangerous production planning is planned from optimizing and chemicalizing 11 Jinan City Huaxi Biotechnology Co., Ltd. High-end pharmaceutical equipment and functional functions Factory-based skin care products intelligence 10 Intelligent warehousing 12 Jinan City Shandong Chenxi Intelligent Technology Co., Ltd. Printing industry large-scale intelligent scale model factory-specific customization 11 Integrated safety management and control 1 13 4 Jinan Jinan Nan City City Ji Shannan Dongyong Telecom, Industry, Gas and Materials Co., Ltd. Materials Group Co., Ltd. Technology Co., Ltd. Technology Co., Ltd. Shannan Electric Power Co., Ltd. and Water Engineering Co., Ltd. Pinci Electricity, Zhifei Industry, Gas, and Energy Weaving Factory Group Manufacturing Group Integrated Factory Materials New Materials Co., Ltd. into Zhike Technology Co., Ltd. 1 12 3 Jinan City Shandong Deyuan Electric Power Technology Co., Ltd. Supply Line Number Intelligent Inspection and Management 15 Jinan City China National Heavy Duty Truck Co., Ltd. Gongji Sinan Truck Co., Ltd. China National Heavy Duty Truck Heavy Truck Intelligent Manufacturing Factory 14 Digital Intelligence Lean Management 16 Jinan City Jicheng Electronics Co., Ltd. Jicheng Electronics Capability Work Automation System Intelligence 15 Process Dynamic Optimization 17 Jinan City Jinan Second Machine Tool Group Co., Ltd. Jinan Second Energy Machine Tool Making Metal Making Show Attribution Fan Cheng Work Shape Factory Equipment Intelligence 16 Product Intelligent Operation and Maintenance 18 Jinan City Shandong Lingxiu Plastic Industry Co., Ltd. Lingxiu Group Manufacturing Zhiwu Neng Plastic Products Factory Full Process Manufacturing 17 Intelligent Production Scheduling 19 Jinan City Shandong Electric Times Gongneng Siyuan Technology Co., Ltd. Battery Module and PA Factory CK Assembly Intelligent Machinery 18 Quality Traceability and Analysis Improvement 2 220 21 Ji Jinan Nannan City Shanshan Daduidong Han Jianhui Keyoujin Machinery Co., Ltd. Biaoshan Mixed Quasi-push Steam Condensate Construction Vehicle Soil Intelligent Poor Mixer Speed Mixing Mechanical Equipment Equipment Intelligent Equipment Personnel can be intelligent and flexible, and the factory can be limited in terms of factory intelligence. Factory energy department 1 29 0 Supply equipment chain equipment planning and operation planning co-monitoring and control optimization

April 2025 April 2025

June 2025

◆ The company was promoted by Shandong Province for the Integration of Industrialization and Industrialization ◆ Trans-aconitic acid microbial green manufacturing technology

August 2025

won the Shandong Provincial Science and Technology Award (Technical Invention Category) ◆ The company won the "Shandong Industrial Biotechnology Center"

"Demonstration Enterprise of Digital Economic Innovation and Integration". First Prize Certificate. Test Platform" was selected into the first batch of key projects of the Ministry of Industry and Information Technology

The company and five units jointly applied for a "pilot platform for PVC blood transfusion cultivation."

The key to new plasticizers of bio-based trans-aconitate for (liquid) appliances

Technology R&D" project, selected by the Ministry of Industry and Information Technology and the National Pharmaceutical ◆ Saite Company was selected by the Shandong Provincial Industry and

The Supervisory Bureau’s medical materials innovation tasks were announced (second batch). The Information Technology Department named the Digital Economy of the Year 2025

"Morning Star Factory".

12 13 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co., Ltd. and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

September 2025

◆ The Veterinary Drug R&D Center of Shelile Company was selected by the Shandong Provincial Government

It has been recognized as a “one enterprise, one technology” R&D center by the Department of Industry and Information Technology.

November 2025

December 2025

November 2025 ◆ The company's "AI China Enterprise Federation"

File

China Entrepreneurs Association

◆ The company’s “Shandong Province Industrial Biotechnology Pilot Demonstration Empowerment Digital Transformation” and China Enterprise Federation [2 025] No. 23

◆ The company was approved by the Shandong Provincial Department of Science and Technology as the “National Federation of Industry and Commerce Pharmaceutical Industry Chamber of Commerce Base”. Notice on the announcement of the seventh smart enterprise construction innovation case

Smart enterprise construction》In

Relevant units:

"Hundred companies with operating income in the pharmaceutical industry in 2024-2025. Since the release of the "Innovation Case for Organizing and Carrying out the Seventh Smart Enterprise Construction" in March this year ◆ The company's dapagliflozin tablets and cefradine capsules were selected by the China Enterprise Confederation. According to the "Recommendation and Recommendation" case required by the "Collection and Notification Activities" (for example, the following abbreviation: 42 "Item Notification") is organized by an organization, specializing in each Home Recommendations Recommendation Menu , location and root direction

◆"High-yielding spinosyn strains and their uses" were awarded the "2024-2025 Pharmaceutical Industry Legal Compliance and Integrity Regulations" meeting of the American Enterprises, which was announced and marked as one of the best. Case 2 Case 06 3 items 5 were confirmed and typical cases "Case 7 17th 1 Wisdom (Enterprise Details See Construction Attachment File Creation)" New, current case The Shandong Provincial Department of Industry and Information Technology's "Made in Shandong Lulian Premium" national smart enterprise construction was announced.

Invention patent authorization. The 7th Smart Enterprise Construction Innovation Case fully reflects the

Trust enterprise”. Guided by the Thought on Socialism with Chinese Characteristics for a New Era, we will implement the "14th Five-Year Plan" list (first batch). Innovation case. Digital product character, economic equipment development, business development planning, business development, operation depth, entry management implementation, human infrastructure, intelligent infrastructure + action and other actions, to develop digital intelligence technology, open business in the field of enterprises in the field

The latest practices of innovation help enterprises to further promote digital transformation and accelerate the construction of intelligent enterprises.

◆ The company won the "No.

The title of "Typical Enterprise with Practical Achievements in Management System" for three times.

October 2025

◆ The company was rated as

October 2025

December 2025

"Excellent Smart Factory in 2025".

December 2025◆ Trans-Aconitic Acid was selected by the Ministry of Industry and Information Technology Simplified | Traditional Email Login | Wisdom Office Industry Information Home News Center Government Affairs Disclosure Government Services Government-Citizen Interaction Industry Information Data◆ Company "Pharmaceutical"

"Biomanufacturing Iconic Products List (First Batch)". Home > Government Affairs Disclosure > Notices and Announcements > Public Announcements ◆ The company won the 7th Jining Mayor Quality Award.

About the 2025 "Hundred Scenes of Work and Industry" digital transformation of the manufacturing industry unveiled.

Announcement of the list of industry safety production AI sense projects (second batch)

Release date: 2025-11-28 18:46:40 Source of information: Industrial Internet Division Number of views: 405 Attachments Laws and regulations and implementation details Government and other related "Relevant measures to speed up and promote the transformation of industrial and industrial manufacturing and information information Department of Chemical Industry and Organizational Development" 25 " In 2016, Shandong Province’s “Provincial Industrial and Industrial Development Network, Hundreds of Interconnected Scenery Networks” Network System Development, Capacity-Building Industry System, Digital Manufacturing Industry, Digitalization, Transformation, Transformation, List-type, Capital-linked, Shuaijin, Project Management (First Office of Information Platform) were selected into the Shandong Province Second batch) application review work, after enterprise application, prefecture and city recommendation, compliance review, expert review and other procedures, 62 projects are planned to be selected as pilot projects, which are now publicized. The publicity period is from November 28 to December 4, 2025. If you have any objections during the publicity period, please provide written feedback to the Provincial Department of Industry and Information Technology. For personal complaints, please provide your real name and contact information. For unit complaints, please stamp the official seal.

(Public Notice) Email: :0 sj5 x3 w1 x- x5 h1 t7 j@82 s6 h6 a9 ndong.cn Share the Department of Industry and Information Technology of Dongfang Province Attachment: List of 2025 "Hundred Scenes of Work and Industry" Manufacturing Digital Transformation Projects (Second Batch).doc

Serial number Product name Application unit Field Location Product introduction Shandong Provincial Department of Industry and Information Technology 1 Clostridium ethanol protein Company North Sijing Shoulang Biotechnology Co., Ltd. Food additives, feed additives and Beijing Fermentation gas B produces medium alcohol to produce a shuttle, oxygen bacteria is to turn into eggs to produce carbon white, and is to feed secondary bacteria to use oxygen to micro-egg to produce white carbon materials and other fermentation has fermentation, supplement and micro-extraction Make the most of your life. The protein of nutritious egg-nourishing substances produced by biological organisms is of high quality. Through the production of beta-glucosan alcohol, the Clostridium saccharide industry has launched the 2025 annual "Working Hundred" November 28, 2025 Print 2 Allulose (Beijing Micro) Yuan Co., Ltd. Biotechnology (Beijing Food Additives, Added Feed Agents and Sugar Ketones) in Beijing is close to the production of sugar ketones such as Alulose. However, the amount of heat produced is small in this product. Tongji wheat is too low, too low, and has no flowering and fruiting properties. The fermented sweet plant and raw flavoring agent are used to improve the food quality of large-scale roasts, which can improve the taste, efficiency, and sweetness of the raw ice.

Polyhydroxyalkanoate is a bio-based material produced by a Beijing-based microorganism factory biotechnology company in Beijing. It has a polyhydroxyethyl salt, a single pollutant-reducing cell-stained lipolytic bacterium, and has acid or good esters. It is good to use bacteria (for strain P of medical H, human A for use in the body). The new group of materials is a material with a good texture and structure that can be used in pharmaceutical construction. The sea-like nature of the water slows down, and the fermentation process is used to ferment the material. The material can be molded to produce high-quality products. The base material is smaller in size, and the material is naturally reduced. The digital operation news production and operation office has made good fortune in the whole industry and transferred to the national bank. The first new word of the digital model has been unveiled. industry) to enter digital transformation to help the high-quality development of the industrial economy

production cost.

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14 15 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Awards and Honors

Awards and Honors Awards and Honors Received in 2025

China Enterprise Confederation Shelile Company's R&D platform was selected as one of Shandong Province's "One Enterprise, One Technology" in 2025

The company was selected into the list of outstanding practice cases of corporate integrity construction in 2024 January 2025 September 2025 R&D Center of China Entrepreneurs Association, Department of Industry and Information Technology of Shandong Province

"Construction and Implementation of the Standardized Management System for Team Standardization" won the first prize. Shandong Provincial Enterprise Management Modernization Shelile Company was selected into the list of "National Green Factories" January 2025 Ministry of Industry and Information Technology October 2025

Second-class achievement of the 39th Shandong Province Enterprise Management Modernization Innovation Innovation Achievements Approval Committee

State Drug Administration Drugs

The Qinghai company was selected into the list of commended cosmeceutical companies in 2024. In February 2025, the Evaluation Center and the National Drug Company were rated as the "Excellent Smart Factory in 2025". In October 2025, the Adverse Reaction Monitoring Center of the Ministry of Industry and Information Technology

China National Accreditation of Conformity Assessment 11 teams of the company won the 2025 "National Pharmaceutical Industry Quality Trust

Lukang Pharmaceutical Quality Supervision Center passed CNAS laboratory accreditation March 2025 October 2025 China Pharmaceutical Quality Management Association Committee (CNAS) passed the team"

The company was selected into the "Top 100 Enterprises in the Pharmaceutical Industry with Business Revenue in 2024-2025"

2025 Shandong Province Demonstration Enterprise for Innovation and Integration of Real Economy and Digital Economy April 2025 Shandong Province Integration Promotion Center November 2025 All-Union Pharmaceutical Industry Chamber of Commerce

Industry" "2024-2025 Law-abiding and Integrity Enterprises in the Pharmaceutical Industry" list

Trans-aconitic acid microbial green manufacturing technology won the Shandong Provincial Science and Technology Award from the Shandong Provincial Committee of the Communist Party of China

In April 2025, the company won the "Third Typical Enterprise for Management System Practice Achievements". In November 2025, the first prize certificate of the China Quality Assurance Center Award (Technical Invention Category) was awarded by the People's Government of Shandong Province.

Shandong industrial biotechnology pilot platform was selected into the "First Batch of Industry and Information Technology Shandong Pharmaceutical Industry Association"

June 2025 Ministry of Industry and Information Technology "AAA-level" credit rating enterprise in the pharmaceutical industry of Shandong Province December 2025

Preliminary list of the Ministry’s key cultivation pilot platforms" Green Shield Credit Information (Beijing) Co., Ltd. Lukang Pharmaceutical and Serile Company were awarded advanced (provincial level) smart factories. Products such as dapagliflozin tablets and cefradine capsules were selected into the 2025 "Shandong

July 2025 Shandong Provincial Department of Industry and Information Technology December 2025 Title of Shandong Provincial Department of Industry and Information Technology. Saite Company was selected into the list of 2 "Provincial Excellent Intelligent Manufacturing Scenes" Manufacturing Lulian Excellent Products

Top 100 companies in China's pharmaceutical industry by main business revenue in 2024 The 42nd National Pharmaceutical

July 2025 The joint-stock company won the seventh "Jining Mayor Quality Award" December 2025 Jining Municipal People's Government (51st) Industrial Information Annual Conference

Dapagliflozin tablets, cefotaxime sodium, amoxicillin sodium and clavulanic acid for injection

The Qinghai company passed the eighth batch of specialized and new small and medium-sized enterprises in Qinghai Province. September 2025 Qinghai Provincial Department of Industry and Information Technology December 2025 Jining Brand Building Promotion Association

Potassium, ceftazidime for injection and other products won the Jining Famous Brand Products in 2025

16 17 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Corporate governance

and compliant operation

Corporate Governance

and Compliance Operations

Standard operation of the two sessions and one level

Strengthen the management and control of parent and subsidiary companies

Continue to deepen the reform of the three systems

Improve compliance management system

Comprehensive risk management and internal control construction

Smooth information communication channels for listed companies

Party building integrated into production and operation

Strengthen anti-corruption and promote integrity

Due Diligence and Stakeholder Communication

18 19 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Standard operation

Standard operation of the two sessions and one level

Lukang Pharmaceutical continues to improve the modern corporate governance mechanism with statutory rights and responsibilities, transparent rights and responsibilities, coordinated operation, and effective checks and balances, and promotes the "two meetings and one layer" regulation

Give full play to the leadership role of the party committee

Fan operates efficiently.

The company's Party Committee has always adhered to and strengthened the party's overall leadership, always put the party's political construction in the first place, strictly implemented the "two consistency", ensured that the "three clear boundaries of powers and responsibilities, improved the governance system and one major" matters are in line with the spirit of the Party Central Committee, and effectively played the leadership role of "guiding the direction, managing the overall situation, and ensuring implementation". Strictly implement the Party's leadership fully embedded in corporate governance, continue to improve "Party building in the charter", adhere to "two-way entry, cross-appointment", ensure that rights and responsibilities are in place, and promote the Party's leadership and corporate governance. The company strictly follows the Party Committee's "direction, overall management, and implementation", the Board of Directors "setting strategies, making decisions, and preventing risks", and the managers "seeking operations and deeply integrating them." Strictly implement democratic centralism, always adhere to the principle of "collective leadership, democratic centralization, individual deliberation, and meeting decisions", and the responsibility positioning of "implementation of major operations and strong management", and continue to improve the corporate governance structure. By formulating and strictly implementing the "CPC Shandong Lukang Pharmaceutical Co., Ltd. All management matters have been subject to the party committee's preliminary research procedures, and 36 major matters have been studied throughout the year, effectively promoting the company's implementation of the Party Central Committee's major decision-making arrangements and the Xi Jinping Committee's Rules of Procedure and List of Procedures, "Rules of Procedure and List of Procedures of the Board of Directors", and "Rules of Procedure and List of Procedures of the General Manager's Office Meeting", further adhering to the spirit of General Secretary Ping's important instructions and instructions.

Clarify the boundaries of the rights and responsibilities of each governance body, optimize the decision-making process, and strengthen the rigid implementation of the system.

Strengthen the standardized operation of the board of directors

Standardize the decision-making management of "three majors and one major"

The board of directors continues to strengthen the standardized governance of listed companies, ensure the standardized operation of the decision-making system, and safeguard the rights and interests of all shareholders. To ensure that external directors account for the majority, the company focuses on system construction, continues to improve the "two meetings and one layer" governance system, and comprehensively standardizes the decision-making procedures and procedures for "three major and one major" matters.

Strictly follow the requirements of the independent director work system to ensure the independence of independent directors. Each professional committee performs its duties in accordance with the law, gives full play to the independent director's advance rules and implementation procedures, strictly implements the requirements for pre-research and risk prevention and control of major matters, and further regulates the party committee, board of directors, and general manager office meetings.

Gatekeeping role. In accordance with the relevant laws and regulations of the China Securities Regulatory Commission, the company timely revised various procedural documents and implementation details for the standardized operation of the board of directors, and continuously improved the quality of issues and review processes. Continue to improve the standardization, institutionalization and legalization of governance. Ensure that major decisions are made scientifically, democratically, in compliance with laws and regulations, and implemented

The level of governance standardization.

It is effective and provides a solid institutional and organizational guarantee for the company's high-quality development.

In 2025, a total of 20 party committee meetings were held to review 223 proposals; 21 general manager office meetings were held to review 162 proposals; 6 board meetings were held,

32 bills were considered.

Strengthen management implementation

In 2025, the management will resolutely implement the decisions and arrangements of the Board of Directors, closely adhere to the general requirements of "seeking progress while maintaining stability, and take the lead in doing things", and actively respond to

In response to the downward pressure on the pharmaceutical industry, we must proactively recognize and respond to changes, make every effort to expand the market, stabilize operations, reduce costs and increase efficiency, accelerate the conversion of momentum, and adhere to green and low-carbon development.

development, continue to deepen reform and innovation, and the enterprise as a whole maintains a good momentum of stable, healthy and high-quality development. A total of 31 matters decided by the board of directors were implemented throughout the year.

Covering key areas such as annual important investments, major financing, and capital operations, all decision-making matters were implemented efficiently and on schedule, and no decision-making errors or mistakes occurred.

Major risk events effectively ensure the implementation of the company's strategy and stable operations.

20 21 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Parent-subsidiary company control

Strengthen the management and control of parent and subsidiary companies

Based on the construction of modern enterprise system, the company has established scientific regulations

A parent-subsidiary management and control model with clear standards and clear rights and responsibilities ensures that the parent company

Strategy implementation, standardized operation of subsidiaries, and overall coordinated development. Yes

In wholly-owned and controlled subsidiaries, improve the board of directors (directors), managers

The legal person governance structure is divided into three levels, and the financial person in charge is uniformly appointed; for

A joint-stock company shall dispatch directors and managers in strict accordance with the company's articles of association.

candidates, perform investor duties in accordance with the law, and protect the company's legitimate rights and interests.

At the same time, party building work will be fully included in the charter of wholly-owned and controlled subsidiaries.

Continuously deepen the reform of the three systems

process, strictly implement the requirements for party building work, and promote party building and subsidiaries

Deep integration of operation and management. Continue to deepen the reform of the three systems

The company formulates and strictly implements subsidiary management and control measures, establishes an integrated management mechanism for parent and subsidiary companies, and coordinates the preparation of plans, annual budgets and production operations.

business plan; implement contract management for subsidiary managers; implement unified bidding and centralized procurement for bulk material procurement; fixed asset investment of each subsidiary Lukang Pharmaceutical strictly implements the "Opinions of Hualu Group on Establishing a Long-term Mechanism for Three System Reforms" and the three plans of Shandong Lukang Pharmaceutical Co., Ltd., and organizes and implements them by each subsidiary after hierarchical decision-making in strict accordance with the investment management methods of the parent company. "System Reform Normalization Plan" and other requirements, actively build a management mechanism with streamlined organizations, standardized employment, reasonable distribution, and efficient operation, and continue to promote the three

The company continues to carry out the "cultivating growth subsidiaries" activities to further improve and standardize the management of subsidiaries, strengthen party building, operation, finance, and life system reforms to deepen, implement and achieve results.

By focusing on improving the "three capabilities" and promoting the realization of the "six transformations", the profitability of subsidiaries has jumped.

Deepen the reform of personnel management, promote the ability of managers to move up and down, and continue to create a streamlined and efficient management and control system. Implement the merger of similar workshops to further streamline the organizational structure, optimize the allocation of management personnel, and improve management efficiency.

Implement the bottom position adjustment and incompetent exit systems.

Adhering to Hualu Group's philosophy of "horse racing and horse racing, who can do it?"

The concept of talent selection and employment, new promotions in 2025

66.67% of middle-level managers are under 40 years old;

Retirement through removal, demotion, demotion, transfer, etc.

17 people came out.

Take multiple measures to strengthen talent cultivation and strengthen independent responsibility

On the one hand, young cadres are trained. Carry out training for young cadres,

A total of 245 young cadres participated, and Zhejiang University,

Professors from Beijing University of Chemical Technology and other universities, focusing on synthesis,

Conducted lectures on professional cutting-edge technologies such as biology and automation improvement; selected 10 people to participate in the group's young cadre quality improvement and empowerment training courses; organized 5 batches of 31 people

Go to Hualu Group to carry out horizontal exchanges to broaden the horizons of cadres and improve their overall quality.

22 23 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Promote the vertical extension of contractual management of the tenure system and comprehensive coverage. The 37 management members of 11 subsidiaries continue to implement contractual management based on the tenure system.

The signing rate of the contractual agreement on the tenure system and the target responsibility letter reached 100%. Implement management personnel's responsibilities in different layers and categories to stimulate the motivation of all employees to start their own business

Strengthen the compliance management system

and vitality.

Improve compliance management system

Deepen the market-based employment mechanism and ensure that personnel can come in and out

Strictly implement internal rules and regulations and ensure smooth access for employees. As a 5A-level labor harmonious relations enterprise in Jining City, the company continues to improve internal management

The company adheres to the concept of "governing the enterprise according to law and operating in compliance" and strives to build a multi-level risk prevention and control system and management system of "individual self-control, departmental coordination and centralized management and control". In 2025, we proposed to strengthen the concept of full-cycle management of human resources, revise the employee handbook, establish a list of problem employees, and improve the "Employee Retirement Policy".

Integrate compliance management into corporate business decision-making and daily operations, continuously optimize and improve the compliance system, and lay a solid legal foundation for the company's high-quality development. "Management Regulations", optimize the exit mechanism for R&D and sales personnel, and clean up "three bad" employees in accordance with laws and regulations. 20 people took the initiative to terminate or terminate their labor contracts throughout the year.

Create a team of employees with excellent work style.

Continuously improve the compliance management system

Effectively improve the quality of talent recruitment and training. Revise and improve the "Personnel Recruitment and Onboarding Management Regulations" and "Notice on Further Clarifying the Company's Recruitment Majors"

"Knowledge", standardize the principles and processes of campus recruitment and social recruitment, and achieve 100% open recruitment in all recruitment channels. In 2025, 5 high-end talents will be introduced; in 2025, on the basis of six compliance management systems such as the "Compliance Management Measures" and the "Anti-Monopoly Compliance Management Measures", 11 people will be jointly trained for major business decisions with on-the-job master's and doctorate degrees; 1 Taishan industry leading talent will be independently trained, 1 provincial "May 1st" labor medal winner, Jining City and above Compliance Review Management Measures", established seven special management systems covering anti-monopoly, anti-commercial bribery, anti-unfair competition, compliance review of major business decisions, labor employment, and safety honor winners; through the golden blue-collar technician training, 37 technicians and above were trained as high-skilled talents, providing solid high-quality development of the company. Seven special management systems in key areas such as production have been improved, and the special management system has been improved; at the same time, professional management departments at all levels have further clarified the support for compliance talents from professional management departments at all levels. The main responsibility is to prepare the "Compliance Management Manual", promote the standardization and upgrading of the compliance management system, and strengthen the implementation of the system.

Strengthen total salary management to ensure that income can increase or decrease
Continuously strengthen compliance risk prevention and control

The company strictly implements the total salary management system and standardizes the salary accrual and payment process. There will be no over-issuance or over-mention of other violations in 2025.

Strictly implement the principles of "examine everything before making decisions" and "ask before making decisions", and conduct compliance reviews on major business decision-making matters. In 2025, the actual payment of major economic wages will be consistent with the accrual caliber, and the payment amount will be controlled within the approved salary budget. At the same time, we will further improve the broadband salary system and achieve

The company has reviewed the compliance of operating decisions 19 times; updated and improved the "three lists" to push compliance risk management and control forward to the source of decision-making, and accurately match the five sequences of management, technology, skills, marketing, and R&D through regular supervision and inspection of hidden compensation systems to provide strong support for employee development and value creation.

There were no major compliance violations throughout the year.

Strengthen compliance culture training

In 2025, we will continue to carry out various forms of compliance training and publicity to strengthen the compliance concept of all employees; organize and hold 4 compliance construction accountability meetings, use quarterly evaluations to promote the integration of compliance and production operations, and guide employees to transform their compliance concepts from passive compliance to active practice.

In 2025, the management team signed a target responsibility letter and 100% open recruitment

24 25 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Information communication channel

Smooth information communication channels for listed companies

Risk management and internal control construction

The company always adheres to the principles of openness, fairness and impartiality, strictly abides by relevant laws and regulations on information disclosure, builds a smooth investor communication mechanism, and effectively

Comprehensive risk management and internal control construction

Protect investors’ rights to know and participate, and continue to improve transparency and market trust.

Lukang Pharmaceutical integrates risk prevention and control into the entire production and operation process of the enterprise, and continues to improve the comprehensive risk management system.

Standardize information disclosure
Establish and improve the internal control system. The company strictly complies with relevant regulations such as the Securities Law, the Stock Listing Rules of the Shanghai Stock Exchange, the Articles of Association, and the Management Measures for Information Disclosure of Listed Companies, and fulfills its information disclosure obligations in a truthful, accurate, complete and timely manner. Through the official website of the Shanghai Stock Exchange and the China Securities Journal, the company has established a relatively complete internal control system in accordance with the "Basic Norms for Internal Control" and supporting guidelines. A dedicated department has been set up,

Various types of information were disclosed on platforms such as the Shanghai Securities Journal, and 125 information disclosures were issued throughout the year. Strictly implement confidentiality work before information disclosure, ensure that information disclosure regularly organizes and conducts internal control effectiveness evaluations, and dynamically optimizes management processes based on evaluation results to ensure the rigidity of the internal control system

It ensures openness, fairness and impartiality so that all shareholders have equal access to information, effectively protects the right to know of small and medium-sized shareholders, and fully protects the interests of investors.

Implement and implement effectively.

Diversified investor communication and investor relations management

The company attaches great importance to investor relations management, establishes a multi-level positive interaction mechanism based on the characteristics and focus of investors, and continues to enhance the capital market’s comprehensive understanding and value recognition of the company’s strategy and performance prospects.

The company has established an investor relations hotline, a dedicated email, and the "SSE e-Interactive" platform to provide timely responses to questions raised by investors, and increase 2. Build a solid "three lines of defense" comprehensive risk management and control mechanism

Improve the understanding and confidence of small and medium-sized investors in the company's production and operations. In 2025, the company organized two performance briefings and participated in an investor online collective reception day event organized by the Shandong Securities Regulatory Commission to introduce the company's performance to investors and seriously respond to investors' concerns. To receive internal and external risk factors, we have established various business units, professional management institutions, investors and professionals to visit and conduct research. The company's management directly interacts with investors, deeply analyzes and introduces the "three lines of defense" of the company's operating departments and leading risk management departments from the perspective of management, and consolidates responsibilities and operations at all levels to further enhance investors' comprehensive understanding and value recognition of the company's strategy and performance prospects.

Strengthen assessments and lead risk management departments to regularly schedule and track risk management and control

Implementation of measures and promote in-depth integration of risk management and production operations.

Strengthen regular monitoring and special audits

In 2025, the company will focus on key areas such as safety, environmental protection, and quality.

Carry out risk identification and special inspections in various areas. Through regular supervision and inspection and professional

Combining various audits, special inspections are carried out throughout the year for major and important risks.

More than 4 times, all problems found were rectified. By promptly checking and closing loopholes, strengthening

process management and control, effectively prevent and resolve various risks, and protect the company as a whole

Smooth and healthy operation.

26 27 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co., Ltd. and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Production and operation

Integrate party building into production and operation, strengthen publicity, guidance and empowerment, and gather synergy for development

Successfully hosted the party building observation activities of Hualu Group, which was published in "Shandong State-owned Assets"

The company's Party Committee adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and has thoroughly studied, publicized and implemented the 20th National Congress of the Communist Party of China and the 20th Central Committee of the Communist Party of China.

In line with the spirit of the Plenary Session, we will solidly carry out study and education on the spirit of thoroughly implementing the Eight Provisions of the Central Committee, promote the deep integration of party building work with production and operations, and penetrate the grassroots with high-quality party building reforms." The effectiveness of party building work has been widely recognized.

Lead the high-quality development of enterprises. At the same time, we vigorously carry forward the Xinlu resistance spirit and strive to cultivate and build new types of members

The team of workers must deeply implement the ideological and political policy of "Five must speak, five must talk, and five must visit".

Strengthen ideological leadership and build a solid organizational foundation

Adhere to the work methods, continue to build a solid ideological foundation for employees, and unite the company’s top management

In conjunction with the 104th anniversary of the founding of the Party, grassroots branches were organized to carry out a series of "Seven Ones" activities, and implemented the "Summer Childcare Classes for Employees" and "Summer Cooling" 2

A powerful force for quality development.

It is a practical matter for people's livelihood, and the employee satisfaction rate of learning education reached 94.2%. Continue to improve the institutional system, standardize the decision-making process, improve the governance mechanism, and revise the "three-level

The opinions on the implementation of the "One Big" decision-making system, the party committee's rules of procedure and the agenda were organized, and 40 grassroots party branches were organized to formulate a list of research matters for the branch committee to promote

The party’s leadership is embedded in the entire process of corporate governance to enhance the scientificity, democracy and transparency of decision-making.

Strengthen anti-corruption and promote integrity

Lukang Pharmaceutical adheres to comprehensive and strict party governance and regards fighting corruption and promoting integrity as an important guarantee for the sustainable development of the enterprise. In 2025, the company will continue to improve the integrity risk prevention and control system, strengthen supervision and accountability, and create an upright entrepreneurial atmosphere.

Strengthen political supervision and ensure healthy development

Strictly enforce political disciplines, regularly supervise and inspect the implementation of major decisions and arrangements of the Party Central Committee, key tasks of the Hualu Party Committee, and key tasks of the company's Party Committee, and use the "four-in-one" supervision and assessment mechanism to conduct disciplinary inspections and supervision to ensure the implementation of the "triple" work. Improve the political supervision system of "one account, two lists, dual responsibilities, and dual accountability", revise the "Guidelines for Political Supervision of Lukang Pharmaceuticals", update the annual political supervision leaflet and deepen its application.

Major Supervision Work Conference 2. Improve the responsibility system and deepen comprehensive and strict governance of the party

Consolidate the main responsibilities, formulate a list of responsibilities for party organizations to improve party style and clean government, clearly focus on central work, and strengthen party building.

Boundaries of responsibility. Build a "1+3N" disciplinary inspection system and a "1+1+N" supervision system, continue to promote the implementation of "three accounts and one log" in each unit, deeply implement the requirements of "three combinations of party building", and deeply integrate party building with the summit plan.

In 2025, 19 compliance reviews were conducted, and 8 suppliers were blacklisted. The grassroots branch of the Integrity Organization launched 61 key party-building projects focusing on party-building areas such as product quality improvement, cost reduction and efficiency improvement, and empowered production and operations with party-building. Accumulate

"Clean Self-Discipline Reminder Card", organized personnel in key positions to sign a letter of commitment on integrity risks, built an extremely strong party-building and co-building ecosystem, and successively carried out party-building and co-building with 16 units including the Qingdao Institute of the Chinese Academy of Sciences to help the company's key product, trans-aconitic acid, smoothly

Comprehensive prevention and control system. Organize diversified warning education, watch warning education films, realize commercial production, and work with scientific research institutes to overcome more than 10 technical problems with innovative drugs. Extensively guide party members to strive for safety in production, technical research and other fields

Notifying cases of violations of disciplines and laws, organizing integrity calligraphy activities, and visiting integrity culture exhibition halls, etc., 138 "Party Member Pioneer Posts" were named to give full play to the vanguard and exemplary role of Party members.

We carried out warning education 4 times, educating more than 900 people, and creating an atmosphere of upholding integrity and rejecting corruption.

Integrity talks at key positions

28 29 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Promote cleanliness and uprightness and strengthen the construction of a culture of integrity 2. Communication with stakeholders

The company continues to promote the construction of "Integrity and Lukang" to make the culture of integrity deeply rooted in the hearts of the people. Condensation The company attaches great importance to regular communication with stakeholders, and has formed a multi-layered integrity culture system with Lukang characteristics. It organizes calligraphy, painting and photography exhibitions on integrity culture, and a multi-channel, institutionalized communication network. Through regular meetings, special surveys, and short video contests, it achieves full coverage of the unit, with nearly a thousand participants, and spreads the story of integrity; Through various channels such as report disclosure, we respond to the concerns of all parties in a timely manner, and are committed to building an anti-corruption culture exhibition hall and an anti-corruption education base with Shandong characteristics with all stakeholders, so as to create a long-term partnership based on trust with all stakeholders that advocates integrity and resists corruption. In 2025, the company will further develop a good atmosphere. Further improve the stakeholder communication mechanism and incorporate the collected opinions and suggestions into the Management Reform Warning Education Conference

Enter. For details on investor communication, please refer to the “Three (6) Smooth Information Communication Channels for Listed Companies” section of this report.

The company actively builds diversified channels such as offline customer visits, online exchanges, academic conferences, promotion of rational drug use, customer service center hotline, and customer satisfaction surveys, and establishes a sound communication mechanism around product quality and service, customer satisfaction, complaint handling, etc., to extensively understand customers' expectations and suggestions for the company's sustainable development work. According to the "Customer Satisfaction Survey Procedure Document", the company will conduct regular satisfaction surveys for customers of preparation products from April 2025 to March 2026. The surveys cover various customers such as distributors, hospitals, and clinics. According to statistics, the product quality satisfaction score is 96.66 points, the product packaging satisfaction score is 93.66 points, sales process and integrity and self-discipline reminder cards are issued, and personnel promotion talks

After-sales service satisfaction is 94.31 points, customer satisfaction in the three core dimensions are all above 90 points, and customer recognition, repurchase, and recommendation intentions remain at a high level.

The company standardizes the answering and handling of drug quality hotlines, and implements differentiated and programmed communication strategies for different appeal bodies such as patients, medical institutions, internal departments, regulatory authorities, etc., fully covering the three major categories of consultation, complaints, and adverse reactions.

Due Diligence and Stakeholder Communication

Strictly implement the main responsibilities of MAH and achieve closed-loop management of the whole process. Answer medication questions for consumers in accordance with laws and regulations and provide scientific guidance for rational drug use; for medical institutions 1. Due diligence

Provide professional, rigorous, traceable written explanations and technical support; integrate due diligence into the entire supply chain management and investment decision-making process for bad anti-corruption companies, proactively follow up on information, record it completely, and handle it in a timely manner; establish a TSQ sales number internally to effectively identify, evaluate and prevent related risks. The ledger forms a closed loop of communication of "frontline feedback - technology iteration - quality improvement"; in terms of supply chain management, the company has established a full-cycle management system covering supplier access and cooperation, maintaining rapid response and accurate coordination with regulatory authorities, and effectively ensuring drug safety and evaluation to exit, and ensuring customer satisfaction through multi-dimensional comprehensive evaluation.

The company conducts strict audits on potential suppliers and regularly tracks contract performance and contract performance. The company relies on the full-cycle supply chain management system to maintain normal communication and compliance with suppliers. In 2025, the company carried out compliance review through regular due diligence, and conducted 19 timely inspections through regular meetings, special surveys, compliance reviews and other channels, focusing on anti-commercial bribery, production safety, environmental protection and other business ethics, production safety, environmental compliance, occupational health and other requirements. At the same time, 8 suppliers were blacklisted for compliance risks, and the company adhered to a zero-tolerance attitude. The company actively guided the joint improvement of the value chain, worked with key suppliers on green production, adhered to the bottom line of supply chain responsibility, and ensured the safety and sustainability of the supply chain. We have carried out special dialogues and collaborations on carbon emission reduction, occupational health and other issues to promote sustainability in external investment. The company has established a full-process investment due diligence management and control system covering business, finance, legal and other dimensions. In 2025, the 4 exhibition requirements will be transformed into a common language and action goals for the industrial chain, and we will be committed to constructing a proposed investment area to conduct on-site inspections, comprehensively evaluate regional investment policies, industrial supporting facilities and investment environment, and prudently promote foreign investment decisions. A win-win community of responsibility.

30 31 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Green development and

environmental management

Green development

and environmental management

Green development concept and environmental management system

Main achievements in energy conservation and emission reduction in 2025

Special environmental management and compliance control

Environmental protection industry development

32 33 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Green development concept and environmental management system

The company adheres to the environmental management concept of "domestic first-class, industry-leading, one step ahead, green development" and regards "green development" as its corporate strategy

With a clear background, we will take the opportunity of retreating from the city and entering the park to systematically build land intensification, harmless raw materials, clean production, waste recycling, and low-carbon energy.

A new green development model, and strive to create a new green image of Shandong Province.

The company continues to improve its environmental management system and strengthen the management of "three wastes". By carrying out environmental management knowledge training and building an environmental management association

Taiwan and participate in various environmental protection publicity activities, implement the social responsibilities of state-owned enterprises, and promote the long-term mechanism of environmental protection management to be in-depth and practical. In 2025, the company

The external audit of system certificate renewal was successfully completed, and the environmental protection management system was further improved to ensure the systematic and effective operation of the system.

The company continues to increase investment in environmental protection, investing 164.19 million yuan in 2023, 181.2 million yuan in 2024, and 18992.13 yuan in environmental protection in 2025.

million, providing a solid guarantee for the stable operation of environmental protection facilities and the continuous improvement of governance levels.

The company continues to increase investment in environmental protection

Investment in 2023 Investment in 2024 Investment in 2025

Ten thousand yuan Ten thousand yuan Ten thousand yuan

Key achievements in energy conservation and emission reduction in 2025

Main achievements in energy conservation and emission reduction in 2025

Completion of the company’s energy-saving goals during the “14th Five-Year Plan”

(1) In 2025, the company's comprehensive energy consumption per 10,000 yuan of output value was 0.2852 (tons of standard coal/10,000 yuan), a decrease of 11.76% from the end of 2020; (2) In 2025, the company's comprehensive energy consumption per 10,000 yuan of added value was 1.0454 (tons of standard coal/10,000 yuan), a decrease of 16.76% from the end of 2020; 2. Annual comprehensive energy consumption

The comprehensive energy consumption per 10,000 yuan of output value was 0.2852 tons of standard coal, a year-on-year increase of 11.32%. The comprehensive energy consumption per 10,000 yuan of operating income was 0.2523 tons of standard coal, a year-on-year increase of 3.91%. The comprehensive energy consumption per 10,000 yuan of added value was 1.0454 tons of standard coal, a year-on-year increase of 18.73%. 3. Annual pollutant emissions

In 2025, COD emissions per 10,000 yuan of output value will increase by 13.38% year-on-year. Mainly affected by the comprehensive impact of factors such as the company's product structure adjustment and industry market prices, the emissions per 10,000 yuan output value fluctuated.

34 35 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Environmental special management and compliance control

Annual comprehensive utilization of resources Special environmental management and compliance control (1) Green energy application: Make full use of factory roof and open space resources,

Continue to promote distributed photovoltaic power generation projects. By the end of 2025, photovoltaic development

Pollutant Emission and Compliance Control The installed capacity reaches 24MW and the annual power generation is 24.98 million kWh.

(2) Waste recycling and collaborative utilization: By 2025, bacteria residue will be

The company will always strictly abide by the national 100% resource utilization, and the collaborative utilization rate of waste solvents reaches 33%. At the same time,

National and local environmental protection laws and regulations continue to carry out resource utilization assessment of new products and explore resource utilization paths from the source.

The top priority is to implement pollution discharge permit management to effectively reduce waste disposal costs and effectively promote the company's environmentally friendly and green development.

management requirements for waste water, waste gas, noise

Implement full-process management of sound and other pollutants

control to ensure stable emission standards. ring

Environmental data are uploaded to the National Pollution 5. Annual energy conservation and emission reduction typical projects and results in real time.

Source sharing platform to disclose sewage discharge in accordance with the law (1) Energy-saving technological transformation

Licensing information, accepting government and social air compressor waste heat utilization projects: maintaining the stable operation of air compressor waste heat utilization projects that have been put into operation, saving more than 70,000 tons of steam annually, and annual energy saving benefits of 1,400

supervision.

More than 10,000 yuan.

Build a bridge of trust between enterprises and society through institutionalized processes and proactive information disclosure. In terms of project construction, we strictly adhere to the permanent magnet energy-saving motor project: promote the transformation of permanent magnet synchronous energy-saving motors to replace ordinary three-phase asynchronous motors, with a total investment of more than 23 million yuan.

Implement the "three simultaneous" system; strengthen the management and monitoring of "three wastes" in daily operations, and no environmental emergencies or environmental penalties occurred during the reporting period. The electricity is about 14 million kWh, and the annual energy saving benefit is nearly 10 million yuan.

Energy-saving air compressor project: Use imported energy-saving air compressors to replace high-energy-consuming equipment to keep the equipment running efficiently, and add new ones on this basis

15 magnetic levitation air compressors save a total of approximately 30 million kWh of electricity annually, with an annual energy saving benefit of more than 20 million yuan.

Energy Utilization, Energy Saving and Carbon Reduction

(2) Clean energy applications

The distributed photovoltaic power generation project is operating stably, with an annual power generation of 24.98 million

The company has established an energy measurement system kWh. In 2025, the company received central pollution prevention and control subsidy funds of 1,436

The system ensures that the data is true and accurate, can be used to recover 10,000 yuan, and is specially used for upgrading environmental protection facilities and green process innovation.

Traceability, mainly consuming steam, electricity, etc. (3) Upgrading of environmental protection facilities

Energy, the fluctuation of energy prices and the supply of Shandong Qinghai Dadi Company completed the low-nitrogen transformation of the gas-fired steam boiler, nitrogen

Should stability be regarded as the main risk, the emission concentration of oxides should be reduced from 400mg/Nm³ to 30mg/Nm³, which is optimal.

Continuously improving energy through energy-saving technological transformation is in line with the requirements of the "Boiler Air Pollutant Emission Standards" (GB 13271-2014).

Use efficiency to effectively reduce energy prices. Annual emissions dropped from 1.109 tons to 0.236 tons, significantly reducing air pollution.

sensitivity to price fluctuations to ensure product emissions.

Biogas power generation stability. During the reporting period, the company’s (4) trans-aconitic acid green bio-manufacturing project was put into production

Continue to promote energy-saving air compressor transformation, photovoltaic power generation, fermentation permanent magnet motor transformation, waste heat recovery and other projects, and strive to achieve annual savings of 1.5. In May 2025, the world's first trans-aconitic acid bio-manufacturing project was officially put into operation, using synthetic biology technology to replace traditional chemical synthesis processes.

Energy saving target of 10,000 tons of standard coal. The company's distributed photovoltaic power generation projects are operating stably. The installed capacity will reach 24MW in 2025, and the annual power generation will achieve green and low-carbon production from the source. This project won the first prize of Shandong Province’s Technological Invention Award and was selected into the list of biomanufacturing landmark products of the Ministry of Industry and Information Technology.

24.98 million kWh, and the application of clean energy continues to expand. Provide demonstration plans for the green development of the basic materials industry.

36 37 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Coping with climate change and green and low-carbon transformation

Water resources utilization and water saving and efficiency improvement

The company's production water mainly includes drinking water and surface water. Drinking water is directly used in production processes, while surface water is mainly used for recycled water. The company will incorporate climate change and promote green and low-carbon transformation into its sustainable development plan, and systematically promote climate risk identification, emergency water replenishment and other auxiliary production links. The company regards water shortages and rising water prices as its main risks, and implements full-process management of water intake, water use, and drainage, management, greenhouse gas control, and energy conservation and carbon reduction.

Continue to promote water-saving technological transformation and promote the intensive and efficient use of water resources. Through electrochemical treatment, reverse osmosis concentrated water reuse and steam condensate recovery 1. Climate risk identification and management

Utilize and other water-saving measures to continue to improve water resource utilization, reduce water costs, and achieve the goal of annual water saving of 500,000 tons. Combining industry characteristics and operational realities, the company identifies climate-related physical risks such as policy transitions, heavy rainfall, hurricanes, and extreme weather, and establishes and improves climate risk management mechanisms. The "Flood Control Emergency Plan" is issued every year. In response to waterlogging caused by heavy rainfall, damage to factories, pipe networks, supports and other buildings caused by hurricanes, contamination of deep wells by backflow of primary water wellheads, and other force majeure disasters, waste treatment and circular economy should be established.

Emergency response organizations have been organized to clarify work responsibilities, and through emergency plan training and drills, we can effectively handle the three-level flood response.

Greenhouse gas control and accounting

The company adheres to clean production and green development management models, continues to carry out solid waste resource utilization and circular economy construction, and builds material circulation,

The company attaches great importance to greenhouse gas emission management and will complete the "Green Production Model for Shandong Lukang Pharmaceutical Co., Ltd.'s Carbon Peak Action Cascade Utilization of Energy" in November 2024.

Waste Resource Utilization Plan" and preparation instructions, which have passed expert review and will be submitted to the Shandong Provincial State-owned Assets Supervision and Administration Commission for filing in December 2024. According to the "Central SOE Carbon Reduction Plan" by 2025, the company's solid waste resource utilization rate will reach more than 93%, an increase of 1 percentage point from 2024. Among them, the "Reference Outline" for the preparation of the action plan for achieving the peak of bacterial residues is used to establish an accounting system.

100% resource utilization, and the collaborative utilization rate of waste solvent outsourcing reaches 33%, transforming waste management from a cost center to a value creation center. accounting method. Scope 1 mainly refers to the carbon dioxide emissions produced during the fermentation process of fermented products. Based on the principle of fermentation reaction, the company was awarded the honorary title of Jining City’s “Waste-Free Factory”. Use the activity data of starch or glucose, the raw material used in product production, and consider its entire metabolic decomposition and conversion into carbon dioxide to calculate fermentation products. 2. Resource recycling system Carbon dioxide emissions during the production process. Scope 2 refers to the carbon dioxide emissions contained in net purchased electricity and heat. It uses activity level data and the company vigorously promotes the construction of a resource recycling system and takes multiple measures to collaboratively promote the circular economy: the corresponding emission factors are multiplied and added.

Waste resource recycling. In 2025, the solid waste resource utilization rate will reach more than 93%, the bacterial residue will be 100% resource utilized, and the waste solvent association will

accounting boundaries. Legal person boundary: The utilization rate of fossil fuels involved in the production of products in the workshops of various pharmaceutical manufacturers of Lukang Pharmaceutical in Shandong reaches 33%, achieving effective conversion of waste into resources.

Direct and indirect carbon dioxide emissions from fuel combustion, industrial production processes, and net purchased electricity and heat, including the comprehensive energy utilization cycle of subsidiaries at all levels. Through solar photovoltaics, energy-saving air compressors, permanent magnet motors, fermentation and continuous elimination technology, air compressor waste heat recovery,

and branches, excluding joint-stock companies and the upstream and downstream supply chains of enterprises other than holding companies, focusing on the application of magnetic levitation fans and refrigeration machines in Shandong Lukang Shelile Pharmaceutical Co., Ltd. to improve the level of clean production and resource conservation.

Co., Ltd., Shandong Lukang Pharmaceutical Co., Ltd. Zoucheng Branch, Shandong Lukang Pharmaceutical Co., Ltd. (High-tech Zone), Shandong Water Resources Recycling. Through electrochemical treatment, reverse osmosis concentrated water reuse, steam condensate recovery and other measures, the internal circulation of water resources is realized.

Lukang Biopesticide Co., Ltd., Shandong Lukang Pharmaceutical Saite Co., Ltd., Dongyue Branch, and Zhonghe Environmental Protection Company were split to save 500,000 tons of water per year.

Each production plant is calculated, and the mechanical and electrical engineering company is not included in the calculation. Time boundary: Taking 2020 as the base year, covering 2020-2023. Closed-loop management of pollution prevention and control. Carry out soil and groundwater pollution investigation, improve emergency plans and conduct regular drills, and build a system from prevention to emergency response.

Data boundary: Only carbon dioxide is accounted for, covering both direct and indirect emissions.

closed-loop pollution prevention and control system.

38 39 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Carbon peak target
Greenhouse gas emissions and intensity

In 2024, the company has completed the carbon footprint reports of four key products.

In 2026, it plans to start compilation of carbon footprints for six products.

Indicators 2020 2021 2022 2023 2024 2025 At the end of 2030, total carbon dioxide emissions will peak, total carbon emissions will be controlled within 1.1 million tons, and carbon emission intensity will be controlled within 0.75tCO2/10,000 yuan.

Greenhouse gas range 1 emission

4006.573 4810.68 5430.8 5332.75 5381.77 5071.72 In 2035, carbon emissions will stabilize and then decrease after peaking, and a green and low-carbon development model will be fully formed.

Volume (tCO2)

Steady progress in energy conservation and carbon reduction

Greenhouse gas scope 2 emissions. With reference to the national greenhouse gas accounting standards, the company continues to improve energy measurement and data statistics, and strengthens energy-saving technological transformation, energy-saving equipment upgrades, and optimization.

Volume (tCO2)

Through measures such as optimizing the energy structure, applying green bio-manufacturing processes, and strengthening equipment operation and maintenance and supply chain resilience management, we will coordinately promote energy conservation, carbon reduction, pollution reduction, and efficiency improvement, steadily advance green and low-carbon transformation, and help achieve carbon peak and carbon neutrality goals.

Total carbon emissions (tCO2) 381450.29 382671.6 532584.92 532611.63 547044.93 560221.23

Carbon emissions per 10,000 yuan output value

1.018 0.817 0.859 0.873 0.877 0.972

(t/10,000 yuan)

Development of environmental protection industry

As production increases, the company's total carbon emissions show a reasonable upward trend, but the carbon emissions per unit of output value per 10,000 yuan are at a different level than in 2020.

Environmental protection industry development

The degree of low-carbon development has steadily declined, and the results of low-carbon development have steadily emerged.

Shandong Lukang Zhonghe Environmental Protection Technology Co., Ltd., as a wholly-owned subsidiary of Lukang Pharmaceutical that focuses on environmental protection services, has always been committed to the innovation and industrial application of environmental protection technology. The company is a national high-tech enterprise and a specialized small and medium-sized enterprise in Shandong Province. It has 35 patents and has obtained many qualifications such as hazardous waste management and environmental protection project contracting, as well as 23 product registration certificate numbers such as organic fertilizer and bio-organic fertilizer. It has established Jining Organic Solid Waste Resource Disposal Engineering Technology Research Center and Jining One Enterprise One Technology R&D Center. Its core competitiveness continues to increase.

The company insists on laying a solid foundation internally to ensure the stable operation of production and operations, and is determined to forge ahead externally to vigorously expand its external business territory, achieving sustained growth in operating performance. Build a diversified and comprehensive business system, covering core areas such as sewage treatment technical services, trusteeship operations, high-concentration sewage treatment, hazardous waste (including HW02 bacterial residue, HW09 emulsion, cutting fluid, HW34, HW35 waste acid and waste alkali, etc.) standardized disposal and resource utilization, odor control project contracting and construction, and water treatment chemical operations. It can provide all-round, one-stop environmental protection solutions, accurately match the diversified environmental protection needs of customers, and has become a comprehensive and professional comprehensive environmental protection service provider in the industry.

The fertilizer business has improved both quality and efficiency. It has expanded from a single organic fertilizer powder to the parallel production and sales of multiple categories such as powder, granular fertilizer, and bio-organic fertilizer.
Create "quality projects" and achieve a leap forward in the environmental protection engineering sector. The company maintains close cooperation with COFCO and other companies. Several environmentally friendly wastewater EPC projects have successfully passed completion acceptance. The brand reputation of the "Lukang Zhonghe" project has continued to improve, making positive contributions to local ecological environmental protection and green agricultural development.
The business model opens up new tracks and achieves multi-business development. The development of sewage station trusteeship operation business has broadened the path for building a diversified revenue system. Training photos

Management System Certificate The company continues to expand into new business areas, relying on its rich operational experience and technical advantages to provide customers with professional environmental protection services. Related businesses have become a new revenue and profit growth point.

40 41 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Quality safety and

product liability

Quality and safety

and product liability

Strengthen quality management and ensure drug safety

Improve system construction and enhance quality management capabilities

Pursue excellent performance and achieve innovative breakthroughs in quality management

Quality honors and industry recognition

42 43 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Lukang Pharmaceutical always regards quality as the lifeline of the enterprise, adheres to the "four strictest" as the core quality concept, and implements quality management throughout R&D, production,

Throughout the sales process, we continue to improve the quality management system and build a three-dimensional management and control model of comprehensive quality management covering the entire value chain, providing a solid foundation for product quality.

Real guarantee. Improve system construction and enhance quality management capabilities

Improve system construction and enhance quality management capabilitiesStrengthen quality management to ensure drug safety

Deepen the quality culture and strengthen the awareness of excellent quality among all employees

Strengthen quality management and ensure drug safety

The company systematically promotes the integrated training model of "learning, practicing and competing", relies on the online learning platform to carry out regular training, promotes 26 learning highlights, establishes a question bank random examination and knowledge competition mechanism, and conducts more than 100 quality special trainings throughout the year. Through the "Quality Month", the skills competition of the Quality Management Association, and the efficient operation of the company's quality management system, we will achieve 100% product passing rate and 100% quality indicator plan completion rate in 2025;

Activities such as horizontal exchanges and learning for young employees and management backbones have deepened the quality culture and continued to enhance the quality awareness and professional capabilities of all employees. There were 0 major quality accidents; there were no quality incidents reported at the provincial level or above; there were no national warnings for serious clustered adverse reactions.

Improve the pharmacovigilance system and build a solid external defense system for drug safety
Innovate quality control models and improve full-process control capabilities

The company continues to strengthen the monitoring of third-party data sources, uses big data and artificial intelligence technology to improve the efficiency and accuracy of information screening, and improves adverse reactions. The company focuses on the core goals of "two eliminations, two strictnesses, two improvements, and five guarantees", with quality as the center and based on the participation of all employees, and continuous optimization

Reporting processes and information collection channels ensure data traceability and security. Build an electronic pharmacovigilance system, realize a closed-loop quality management system for drug safety risks, and innovatively create a "three-quality linkage" quality control model.

management, effectively ensuring patient medication safety, and assisting the high-quality development of public health management and health cultural industries. From 2023 to 2025, the company has received a total of 71 on-site inspections by the pharmaceutical administration department and 186 audits by foreign customers. All inspections have been successfully passed.

The drug inspection pass rate and internal quality spot inspection pass rate both maintained 100%, demonstrating the company's stable and reliable quality assurance capabilities.

Pharmaceutical regulatory inspections and customer audits from 2023 to 2025

Year Drug administration inspection (number of times) Domestic and foreign audits (number of times)

2023 21 70

2024 50 120

2025 25 74

Lay a solid foundation for process management and build a solid quality and safety defense line

The company adheres to the risk management concept of “strict prevention at the source and strict control over the process”.

We implement "Quality by Design (QbD)" in the R&D process and conduct precise management in the production process.

control, and then to the efficient traceability of products after the market, the entire process is based on laws and regulations, and the system

We will implement the quality lifeline project in a unified manner to achieve closed-loop quality management throughout the life cycle. pass

Through daily supervision, video surveillance, special inspections, morning meeting system, etc., quality control

Integrate quality supervision into the entire production and operation process to promptly investigate and eliminate hidden quality risks.

Continue to improve the level of on-site management and control in the workshop and build a solid foundation for product quality.

44 45 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Pursue excellent performance and achieve innovative

breakthroughs in quality management

Quality honors and industry recognition

Pursue excellent performance and achieve innovative breakthroughs in quality management

In 2025, Lukang Pharmaceutical won the 7th Jining Mayor Quality 1. Testing standards are in line with international standards

Award; in the 46th National Pharmaceutical Industry Quality Management (QC) Team, the company's quality supervision center successfully passed the CNAS certification, marking the testing capabilities and quality management system

At the fruit exchange meeting, all four QC teams won the first prize for QC results, reaching international standards. The test results were mutually recognized by more than 100 countries and regions around the world, effectively improving production.

11 grassroots teams were awarded the honorary title of "Quality Trustworthy Team", demonstrating the credibility of quality and international market competitiveness.

The company's Yang Sujuan was rated as a leader in the national pharmaceutical industry's quality management group activities. 2. Breakthroughs in quality informatization and technological innovation. Dapagliflozin Tablets and Cefradine Capsules were selected into the 2025 "Made in Shandong Lulian Excellent Products" list; Dapagliflozin Tablets, Cefotaxime Sodium, and the company have fully launched the four core modules of the QMS system, covering supplier management, changes, deviations,

Amoxicillin sodium and clavulanate potassium for injection and ceftazidime for injection are four core components of CAPA. Promote the application of PAT technology in preparation production and complete near-infrared quantification

The product was rated as "Jining Famous Brand Product in 2025".

Model establishment, active promotion of major change declarations, and efforts to build a national benchmark enterprise for PAT application.

The 7th Jining City "Mayor Quality Award" Review Meeting 3. Serve production and operation and help business expansion

In 2025, we successfully passed 25 inspections by the pharmaceutical administration department and obtained 7 GMP compliance inspections.

Result notification, compliance management level continues to improve. International registration has achieved fruitful results, with a total of 5 systems obtained.

agent certificate, 1 raw material certificate, and 2 raw material approvals; 18 registration materials were submitted throughout the year.

Quality Supervision Center CNAS Certificate

Eight new registrations were added to the "Belt and Road" market, providing strong support for market expansion.

Industry demonstration and technology output

The company was awarded the "Standardized Practice Base for Pharmacovigilance for Drug Marketing Authorization Holders in Shandong Province" and participated in the 2025 Shandong Province Pharmacovigilance Knowledge Competition.

Won the second prize of the group and many individual honors. Cooperated with Jining Adverse Drug Reaction Monitoring Center to apply for Shandong Province’s “Adverse Drug Reaction Monitoring Special Project”

Research Platform (Jining)", carried out "Exploration of Safety of Ceftriaxone Sodium for Injection and Research on Multi-target Precision Prevention and Control Model" to provide quality risk management and control for the industry.

The 46th pharmaceutical industry quality management QC group results release and exchange meeting provided technical support and practical experience.

46 47 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Innovation-driven and digital

and intelligent transformation

Innovation Driven

and digital intelligence transformation

Vigorously promote technological innovation and release value creativity

The implementation of biomanufacturing industry has yielded fruitful results

Science and technology ethics management

Accelerate digital transformation and develop new productive forces

48 49 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

(2) Strengthen industry-research cooperation and build a high-level talent platform

Vigorously promote technological innovation and the company cooperates with the Chinese Academy of Sciences (Tianjin Institute of Engineering and Biotechnology, Shenzhen Institute of Advanced Technology, Institute of Youth Science and Technology), Beijing University of Chemical Technology, China Pharmaceutical University, Zhejiang University, Shandong University,

unleash value creation potential

More than 30 high-level medical research institutions and R&D teams, including Wuhan University and East China University of Science and Technology, have carried out technical cooperation, introduced more than 10 high-level academicians, professors and other high-level talents to vigorously promote scientific and technological innovation and release value and creativity. The company signed a strategic cooperation framework agreement with China Pharmaceutical University, and the "China Pharmaceutical University-Lukang Pharmaceutical Innovative Drug Evaluation and Drug Repositioning Joint Laboratory" was officially unveiled. Conducted joint learning activities with the Party Committee Theoretical Learning Center of the Qingdao Institute of Energy, Chinese Academy of Sciences, signed the "Party Building Leading to Promote Deep Integration of Scientific and Technological Innovation and Industrial Innovation Cooperation Agreement", and jointly unveiled the graduate practice base. At present, the company has established various scientific and technological innovation platforms with universities and scientific research institutes, including: Shandong Industrial Biotechnology Industrialization Platform (co-constructed with Tianjin Institute of Engineering and Biotechnology), National Industrial Enzyme Engineering Research Center (co-constructed with Tianjin Institute of Engineering and Biotechnology), Synthetic Biotechnology and Microbial Drugs Joint Laboratory (co-constructed with Qingneng Institute), Innovation Transformation Center (co-constructed with Shenzhen First Company). The company insists that "innovation is the first driving force for development" and will

Enter the hospital to build together), etc.

As the fourth lifeline of enterprise development, R&D should be implemented in depth

(3) New breakthroughs in innovative drugs

The overall requirements of the "Benchmarking Project" are to break through innovative drugs and high-end generic drugs.

In 2025, the company has three national Class 1 new drugs in the clinical trial stage, and the research and development of innovative drugs has entered an intensive harvest period:

As the goal, based on enriching the product pipeline, we will enrich the production line load

CIGB-814: This drug treats autoimmune diseases such as rheumatoid arthritis and lupus erythematosus by rebuilding the immune tolerance mechanism. It provides a basis for immunotherapy, continues to strengthen the core competitiveness of the product, and accelerates the realization of

Created new ideas and new directions. In 2025, the drug has entered Phase I clinical trials.

The strategic shift from traditional microbial fermentation to the application of synthetic biotechnology.

CMS203: As a highly effective inhibitor of PDE5, its inhibitory effect is 31.6 times that of existing drug reference substances. It is used to treat male erectile function. In 2025, the company will further improve its top-level design capabilities in research and development.

disorders (ED). In 2025, the drug has completed Phase IIa clinical trials.

Adhere to the innovation-driven development strategy and regard R&D as the core of the company’s development.

TRN-157: As a highly efficient and selective muscarinic receptor antagonist, it is a long-acting M receptor agonist drug Spiriva (tiotoxin engine). In terms of strategic layout, the company focuses on "innovative drugs, high-end preparations,

ammonium bromide) improved innovative drugs. TRN-157 is more stable in aqueous media and can be developed as an aerosol inhalation dosage form for severe asthma and used to treat chronic biomanufacturing.

Obstructive pulmonary disease (COPD). In 2025, the drug is undergoing Phase IIa clinical trials.

reform measures to adjust the structure, optimize the incentive system and adjust the organizational structure. In terms of open innovation, the company has deepened cooperation with the Chinese Academy of Sciences, China Pharmaceutical University, Shanxi

(4) Strengthen intellectual property protection

The industry-university-research cooperation between top scientific research institutes such as Dong University accelerates technological innovation through the in-depth integration mechanism of "enterprises setting questions, schools and enterprises jointly answering, and market marking"

In 2025, the company accepted a total of 88 patent applications, including 24 invention patents, 56 utility model patents, and 8 design patents; and transformation of results. In terms of resource security, the company continues to increase investment in R&D. During the "14th Five-Year Plan" period, R&D investment accounted for more than 6% of operating income.

A total of 51 patent authorizations have been obtained, including 12 invention patents, 32 utility model patents and 7 design patents.

Provide solid support for innovative breakthroughs. In terms of talent team building, the company introduces and cultivates high-quality R&D talents, implements high-level talent cultivation plans, and builds

In September 2025, the company applied for the U.S. invention patent "SPINOSAD HIGH·YIELD STRAIN AND USE THEREOF" to create a professional, efficient, and innovative R&D team. In terms of project management, the company improved the level of R&D project approval, closely connected with production and sales needs, and accelerated

High-yield bacteriocin strains and their applications) were authorized. According to China's pesticide toxicity classification standards, spinosyn is a low-toxicity pesticide, which is a quick product structure adjustment for comprehensive pest management, enhances the company's ability to resist risks and market competitiveness, and supports high-quality development of companies.

Preferred variety. The invention provides a high-yielding spinosad strain, a preparation method thereof, and a pesticide composition containing the strain.

Achievements in R&D and innovation work

(5) Project application and achievement transformation

The company's R&D investment in 2023 was 390.26 million yuan, a year-on-year increase of 25.68%; in 2024, the R&D investment was 401.57 million yuan, a year-on-year increase of 2.90%; in 2025, the 2020 Taishan Industrial Innovation Leading Talent Project undertaken by the company successfully passed the project expiration acceptance organized by the Provincial Department of Industry and Information Technology; the R&D investment in 2025 was 340.76 million yuan, a year-on-year decrease of 15.14%. Five technological innovation projects passed the expert review organized by the Provincial Department of Industry and Information Technology and were approved for project approval; dapagliflozin tablets were selected into the recommended catalog of innovative product applications in Shandong Province. (1) Continue to strengthen R&D and innovation capabilities

The company's "Shandong Industrial Biotechnology Pilot Platform" was successfully selected into the National Industry and Information Technology

The Ministry’s first batch of key cultivation pilot platforms, “Shandong Province Industrial Biotechnology Pilot Demonstration Base”

"Land" was recognized as a pilot demonstration base for the transformation of scientific and technological achievements by the Department of Science and Technology of Shandong Province. Public

The company successfully passed the Provincial National Cooperation Base and Provincial Project organized by the Provincial Department of Science and Technology and the Provincial Development and Reform Commission.

The annual evaluation of the research center, the results jointly declared with the Provincial Academy of Agricultural Sciences won the Provincial Science and Technology Progress Award

The second prize of the Progress Award, the third prize of the Provincial Pharmaceutical Association Science and Technology Award, and the 9th Shandong

One second prize each in the Provincial Science and Technology Workers Innovation Competition. In recent years, the company has accumulated

49 varieties of generic drugs were approved, and 58 varieties passed the consistency evaluation of generic drugs.

76 standards have been defined and issued by CDE, and the product pipeline continues to be enriched and optimized.

50 51 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

The biomanufacturing industry has taken root

and yielded fruitful results Management of science and technology ethics

The implementation of the biomanufacturing industry has yielded fruitful results, and scientific and technological ethics management

The company is based on the national bio-economy strategic orientation and actively responds to the Shantou Group. The company adheres to the concept of "science and technology for good" and builds a comprehensive development plan for the bio-manufacturing industry cluster in Dongfang Province covering organizational structure, scientific research integrity, subject protection, risk prevention and control, and fairness of results. It focuses on technological innovation and production site management systems to ensure that scientific and technological innovation is carried out in an orderly manner within ethical boundaries.

Industrialization and platform upgrading will promote the biomanufacturing industry to become more efficient and green. 1. Ethical governance system. Incorporate ethical management into the corporate governance system, embed ethics and high-end transformation in R&D project establishment, process management, project completion and acceptance, etc., to help cultivate emerging industries and future industries, meet ethical review requirements, and promote the implementation of ethical responsibilities on the R&D front line.

The high-quality development of enterprises injects new momentum. 2. Research integrity. Establish R&D QA to regularly check experimental records and data to ensure that the R&D process is compliant and the data is authentic, complete, and traceable. 2025,

In May 2025, the company built the FT606 workshop. The company's quality supervision center was the first in the world to pass CNAS certification, and the test results were mutually recognized by more than 100 countries and regions around the world. In recent years, the trans-aconitic acid biomanufacturing project that has been a key national, provincial and ministerial-level project has been put into production and commercialized, with more than 10 projects and more than 50 drug registration applications, all of which have achieved zero breach of trust in scientific research data and effectively adhered to the bottom line of scientific research integrity and academic ethics. Aiming at the company to take a key step in the industrial application of synthetic biotechnology 3. Subject and animal protection. Clinical trials strictly follow the Good Clinical Practice (GCP), and all projects are approved by the ethics committee. During the same period, the biomanufacturing technology of sesquiterpene series natural products was approved and an "informed consent" was signed; preclinical research strictly followed the "3R" principle of animal welfare (reduce, replace, optimize) to minimize the incubation and amplification of experimental completion; the genetic engineering of industrial strains and the production of bio-based new material demonstration projects were continued to promote the number of animals used.

The fermentation control process is upgraded to continuously improve production efficiency and promote biological 4. Responsible innovation. Facing the ethical challenges brought by cutting-edge technologies such as synthetic biology, the company has established a forward-looking risk assessment and prevention and control mechanism. Improve the quality and efficiency of the anti-manufacturing industry. The aconitic acid project passed a strict biosafety assessment and was approved for the "Routine Registration Certificate for Environmental Management of New Chemical Substances" in 2025;

Strengthen platform construction and intellectual property layout. The company's industrial biotechnology industry transformation platform was successfully selected as one of the first batch of pilot platforms to be cultivated by the Ministry of Industry and Information Technology, and the bacterial residue and waste liquid generated will be processed in a standardized manner to ensure that biosafety risks are controllable.

Undertaken 1 project announced by the Ministry of Industry and Information Technology; made a breakthrough in the international layout of intellectual property rights, and obtained 1 US patent authorization, in order to expand the international market and improve 5. Inclusivity and fairness. The company adheres to the mission of "developing ecological medicine and serving human health" and is committed to benefiting from scientific and technological innovation achievements and laying the foundation for improving core competitiveness. A wide range of people. In terms of drug accessibility, product competitiveness is improved through technological iteration, cost reduction and efficiency improvement. In recent years, a total of 49 new generic drug products have been approved

In 2026, the company will continue to delve into the field of biomanufacturing, with technological innovation as the core driving force, deepen the collaboration between industry, academia and research, and accelerate the batch and commercialization of digital intelligence, including the first domestic generic diabetes drug dapagliflozin tablets and gefitinib tablets for the treatment of small cell lung cancer. It will improve its localization capabilities, systematically lay out R&D projects, and strive to build a leading high-level technology platform in the country. At the same time, we will accelerate the construction of biomanufacturing production bases and replace them. In its international layout, the company has accelerated the export of preparations and international certification. Many products have passed FDA and EU GMP international high-end certifications. Quality supervision has promoted the industrialization of reserve products. It strives to build a leading enterprise in modern bio-manufacturing and promote the high-quality development of the bio-economy. The center's test results are mutually recognized globally, promoting the ethical standards of Chinese pharmaceutical innovation to the international market.

52 53 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Accelerate the digital transformation and

develop new productive forces

Accelerate digital transformation and develop new productive forces

Lukang Pharmaceutical deeply implements the national and Hualu Holding Group’s digital transformation work requirements, actively promotes automation, digitalization, and intelligent construction, and widely

Extensively apply new equipment, new technologies, and new processes to continuously improve the level of production process technology and equipment automation and intelligence. By optimizing resource allocation and improving

Improve management efficiency, accelerate the creation of smart factories and smart enterprises, continue to cultivate and enhance the core competitiveness of enterprises, and help enterprises achieve high-quality leaps

development.

Overall achievements of digital construction during the “14th Five-Year Plan”

During the "14th Five-Year Plan" period, the total number of employees increased by 5%, and sales revenue

Zoucheng Park’s personnel and vehicle data billboard income increased by 37.12%, and per capita labor productivity increased by 33.89%.

Preliminary formation of refined production control and intelligent park operation and management (4) Main achievements and honors of digital transformation. The company was awarded the title of a pilot enterprise for the integration of industrialization and informatization by the Ministry of Industry and Information Technology, and was successfully selected as a good pattern for the Ministry of Industry and Information Technology's excellent intelligent industry and efficient collaboration. Factory and the Ministry of Industry and Information Technology's Industrial Internet Pilot Demonstration Project; digital transformation results have been selected as national smart enterprise construction innovation cases three times, and will be successfully shortlisted as national smart enterprise benchmark cases in 2025. At the same time, it was rated as the fourth batch of "green factories" in the country, and was selected into the 2025 Shandong Province Innovation Integration of Real Economy and Digital Economy 2. Key Progress in Digital Construction in 2025

It has been listed as a joint demonstration enterprise and the provincial "Hundred Industrial Scenic Spots" project; it has been rated as an outstanding enterprise in the integration of informatization and informatization in Shandong Province for eight consecutive years, and won the Shandong Province Intelligent Manufacturing Standard (1) New Workshop Intelligent Upgrade. In 2025, the company will set high standards

It has won many titles such as Pole Enterprise, Shandong Province Smart Factory, Shandong Province Industrial Internet Platform, Shandong Province Digital Economy “Morning Star Factory”, etc. Two digital pilot workshops, SY25 and SS16, are about to be completed and fully implemented.

Intelligent workshop

The local "four mentions, four self" and 100-person workshop construction concepts create raw materials

A new benchmark for continuous flow pharmaceutical production.

(2) New progress in park intelligence. In 2025, the company will go online

Run the smart park management system to realize smart attendance, smart visitors,

Integrated online management of intelligent vehicles; completion of three major park monitoring systems

Centralized management and control, using video AI analysis technology to detect abnormal events in the park

automatic alarm; realize online management and construction process of external construction personnel

Cheng video intelligent supervision.

(3) Manage intelligent new applications. In 2025, the company will complete

Intelligent three-dimensional library

The treasury system and the document management system are online to realize attendance and visitation.

Integrated management of passengers and vehicles; the RPA scenario was promoted to 35 applications; the ERP system of Zerun Commercial Company and the intelligent expense control system were launched online.

Operation, subsidiary cost project implementation, quality management system online and OA system Xinchuang transformation.

54 55 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Employee development and rights protection

Employee Development

and rights protection

Philosophy and goals

Work effectiveness

Protect the legitimate rights and interests of employees and create opportunities for more people

Continuously improve the salary and welfare system

Smooth career development channels and let more employees become protagonists

Continuous improvement of occupational health

Promote democratic management

Caring for employees wholeheartedly

Strengthen intrinsic safety and protect safe production

56 57 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co., Ltd. and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Concept and Objective

Protect the legitimate rights and interests of employeesPhilosophy and goals

Protect the legitimate rights and interests of employees and create opportunities for more people

Lukang Pharmaceutical has always implemented the new development concept in depth, adhered to the core orientation of people-oriented, respecting values and achieving employees, in order to build a healthy, harmonious and

We aim to be a modern enterprise that is fair, just, innovative, diligent and thoughtful, and strive to create a broad platform for all employees to start their own business and a safe development environment for all employees.

As a 5A harmonious labor relations enterprise in Jining City, the company strictly abides by

A solid harbor and a stage for growth to realize the value of life.

"Labor Law", "Labor Contract Law" and other relevant laws and regulations to implement labor contracts

The signing rate is 100%, and all types of employment discrimination are resolutely put to an end. Adhere to equal pay for equal work,

Work performance pays labor remuneration in full and on time, pays five insurances and one fund for employees in accordance with the law, and continues to

Improve the salary incentive and welfare guarantee system. Continuously improve trade union organizations and employees

Work effectiveness

Key indicators of the company’s employee rights and interests: the representative conference system, smooth channels for employees to express their demands, and establish efficient labor disputes.

discuss the mediation mechanism and actively build harmonious and stable labor relations. In 2025, Lu

Anti-Medicine was rated as “Excellent Unit in Creating Harmonious Labor Relations”.

Year 2025 2024 2023

The company adheres to the employment principles of openness, equality, competition and merit, recruits talents from universities and society, and provides equal employment opportunities for all types of groups. Labor contract signing rate (%) 100% 100% 100%

It will provide 115 jobs by 2025. We always adhere to the concept of diversity and inclusion, care and support the growth of female employees, young employees, skilled talents and special groups, and ensure that all employees enjoy equal promotion, training and development resources. Establish a dual career development channel with management sequence and professional sequence in parallel, based on ability and social insurance coverage (%) 100% 100% 100%

Performance is the core orientation, breaking restrictions such as identity and qualifications, allowing outstanding talents to stand out. Carry out regular training of new employees, improve professional skills, and manage the proportion of female managers (%) 24.11% 24.00% 24.32%

We provide training such as management ability empowerment and continuing education to provide full-cycle, all-round support for employees to grow and become talents. Number of paid vacation days per capita (days) 9.12 9.10 8.99

Employee training coverage (%) 100% 100% 100%

Average salary level of employees (10,000 yuan) 8.06 8.77 8.71

Employee turnover rate (%) 1.71% 1.50% 2.31%

Statistics related to the company’s employee assistance projects

2025 2024 2023

Assistance project statistics

Person (household) time Amount (yuan) Person (household) time Amount (yuan) Person (household) time Amount (yuan)

Assisting employees in need 73 143700 71 183200 107 160000

Visiting and expressing condolences to the families of employees in need 32 64000 30 79200 35 75500

Subsidies for children of employees in need to attend school 99 99000 124 124000 108 108000

Assisting seriously ill employees 9 31131 16 41189 23 78156

58 59 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Continuously improve the compensation and benefits system Continuously improve occupational health Continuously improve the compensation and benefits system Continuously improve occupational health

In 2025, a job grade assessment management system will be established for the marketing system. 1. Strengthen the prevention and control of occupational diseases. In 2025, we will strictly implement the requirements of laws and regulations such as the "Law on the Prevention and Control of Occupational Diseases", formulate annual measures for the prevention and control of occupational disease hazards, further strengthen incentive orientation, stimulate team vitality, complete the occupational health supervision classification and classification self-evaluation report through work plans and implementation plans, organize occupational health inspections for 2,381 people in positions involving occupational hazard factors, and establish a more scientific, fair and competitive salary distribution mechanism. The company conducts physical and 954-point detection of occupational disease hazard factors to ensure that occupational disease prevention and control work is in compliance with laws and regulations; at the same time, it actively promotes the construction of "healthy enterprises" and fully mobilizes the enthusiasm and initiative of marketing personnel. The new method will promote the creation of provincial-level "healthy enterprises".

Performance contribution is closely linked to salary returns, emphasizing value creation and extra work. The company's emergency rescue team regularly conducts emergency rescue drills for occupational hazard accidents. The company should receive more rewards and pay those who perform better. This not only ensures the overall stability of the team, but also encourages the company to be fully equipped with emergency equipment, facilities and first aid supplies. In 2025, a health first aid knowledge campaign will be organized to be the first to create excellence, which will help promote the efficient implementation of marketing goals, improvement and skills training. Professional lecturers and medical staff will be invited to focus on occupational hazard protection, on-site market expansion capabilities and overall operating efficiency to provide teaching for the company's sustainable and healthy development of emergency response, basic emergency first aid knowledge, self-rescue and mutual rescue skills, etc., and inject stronger impetus into the exhibition. A total of 145 personnel have been trained, effectively improving employees’ emergency rescue capabilities.

At the same time, we have solidly carried out the "Law on the Prevention and Control of Occupational Diseases" Publicity Week activities to strengthen legal publicity and enhance employees' legal awareness of the prevention and control of occupational diseases; we invite provincial and municipal experts from time to time to conduct mental health education and training, provide psychological consultation and counseling services, and protect the physical and mental health of employees in an all-round way. 2. Strengthen the protection of the rights and interests of female employees. For many years, we have organized free TCM clinics and women’s

Let more employees take the lead

Free Chinese medicine clinics, health lectures for female employees, mental health lectures and other health service activities were held to popularize

Smooth career development channels and let more employees become protagonists

and health knowledge, and care for the physical and mental development of female employees. At the same time, model worker craftsmen are carefully organized to carry out flower arrangement and other cultural, sports and aesthetic activities to enrich spiritual and cultural life, cultivate sentiment and relieve stress.

The company continues to optimize positions and ranks in parallel, actively carries out cultural and entertainment activities that suit the characteristics of female employees, organizes dual-channel career development systems before marriage, pre-pregnancy and pregnancy, breaks the traditional promotion barriers, lectures on health care and women’s mental health knowledge, and builds rest rooms for female workers and loving mothers’ cabins.

We conduct emergency rescue drills for occupational disease hazard accidents, broaden employees’ career growth paths, and effectively protect the rights and interests of female employees and promote their physical and mental health and comprehensive development.

The company's development is deeply integrated with employees' personal career planning, promoting the company to continue to improve the female employee organization system, giving full play to the role of female employees' organizational functions, actively safeguarding the legitimate rights and special interests of female employees, providing a solid organizational guarantee for the coordinated development and common growth of employees and the company, and assisting female employees in safeguarding their rights. Every year, female employees are organized to study the "Law on the Protection of Women's Rights and Interests", "Special Provisions on Labor Protection of Female Employees" and "Marriage" to achieve a positive interaction between personal progress and organizational evolution. The Marriage Law and other laws and regulations guide female employees to learn, understand and abide by the law, and protect their legitimate rights and interests in accordance with the law.

The company adheres to human value-oriented and builds

Systematize and standardize talent training system, establish a sound

All-youth talent training, reserve cadre selection, public

Long-term mechanisms such as competitive recruitment and high-skilled talent training will continue to

Continue to improve the comprehensive capabilities and professional qualities of employees, and provide

The company's high-quality and sustainable development builds a solid talent foundation.

In 2025, 66.9% of young students will have good evaluations or above, becoming an important force in front-line management positions; more than 1,000 employees will have acquired skills, management

Manager promotion.

Free Traditional Chinese Medicine Clinic for Female Employees "Blooming Youth with Craftsmanship" Celebration of March 8th

60 61 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Promote democratic management Show heartfelt care for employees

Lukang Pharmaceutical continues to improve the construction of cultural and sports activities for employees.

Lukang Pharmaceutical insists on building table tennis rooms, reading rooms, basketball courts, gyms and other representative conferences for employees as basic system-based activity venues, providing a solid guarantee for employees to carry out cultural and sports activities. Focusing on the reform and development of the enterprise, the company regularly organizes employee sports meetings, Thousand Person Walks, and key and difficult events in table tennis exhibitions, as well as professional tennis, basketball, badminton and other events to effectively enhance the hot issues of concern to employees and the party's physical quality, and enrich the spiritual and cultural life of employees.

Regarding matters related to the construction of a clean and honest government, we continued to carry out in-depth team building activities with the theme of "carrying forward the spirit of Xinlu's resistance, building new employees, and continuing to deepen the disclosure of factory affairs. Company team", with more than 5,100 employees participating. We continue to pay attention to the mental health of employees, hold psychological work brands for three consecutive years, and earnestly implement special lectures on health education of the trade union, covering more than 600 employees, equipped with various functions, constantly optimize relevant books and materials on factory affairs, comprehensively care for the physical and mental development of employees, create open work arrangements, and improve a harmonious and progressive corporate atmosphere for employees.

workers' congress

Representative proposal handling mechanism to further

to further unblock and expand public channels. First, insist on making meetings open and regular. Through the annual workers’ congress, quarterly party-building work meetings, and weekly production scheduling

We will disclose relevant matters in a timely manner through meetings and other forms to protect employees’ rights to know and participate. The second is to insist on openness and diversity in the media. Fully rely on OA

The public system, "Lukang Daily", the company's WeChat public account, official website, internal video news and other platforms promptly release corporate development trends and key projects.

Work progress and other factory conditions. The third is to insist on the effectiveness of front-line openness. In-depth implementation of mobile management, managers at all levels go deep into the grassroots and front-line, facing employees

Accurately interpret company policies and related measures to guide employees to better understand, support and participate in corporate management.

62 63 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Enter Lukang ESG Management

Strengthen the construction of safety management system

Strengthen inherent safety and ensure safe production The company is established and improved based on total factor management and precise control

"Lukang safety production excellence" with controllable key and core elements

Strengthen intrinsic safety and protect safe production

Performance Management Model”. In 2025, Lukang Co., Ltd. will initially complete

It has become a second-level safety production standardization construction, and each subsidiary has completed

Three-level safety production standardization construction, comprehensively establishing risk classification

Lukang Pharmaceutical has always adhered to the development concept of "life first, safety first", regards production safety as the lifeline of corporate development, and continues to improve safety

Dual prevention system of management and control and hidden danger investigation and management. by promoting

Complete management system, strengthen risk prevention and control capabilities, and safeguard the high-quality development of enterprises.

Excellent performance management of the whole production, strictly implement the "three basics" and "three disciplines"

Continue to increase investment in production safety and "three-dimensional management and control" requirements, and continue to carry out "walk-through" management

management, find gaps, make up for shortcomings, detect hidden dangers, solve the crux, and further

The company continues to strengthen the basic guarantee of production safety. The investment in production safety and team building from 2023 to 2025 is as follows:

Work injury prevention capability improvement training

Strengthen basic management at the grassroots level. Solidly carry out three-year action to address root causes

Project The amount of investment in production safety (2024-2026), clarify the "six major actions" and the "four rectifications", a total of 24 tasks, complete the evaluation of the current situation of production safety and the number of major emergency drills in 2025 Number of employees trained Number of registered safety engineers

Year (10,000 yuan)

19 key tasks including hazard source assessment and occupational health status assessment.

2023 621 1912 6636 16

Deeply promote the construction of safety culture

2024 703 2579 6675 18

The company has compiled a safety culture construction manual, comprehensively promoted "morning meetings" for grassroots teams and on-site KKT activities, and carried out daily hazard identification training for on-site employees to continuously improve employees' comprehensive quality in safe production. 2025 676 2696 6523 19 In 2025, all-employee activities such as production safety month, fire protection publicity month, occupational disease prevention and control publicity week, safety skills competition, analysis of typical accident cases, and "looking back" on accidents around us were organized to further enhance employees' safety awareness, operational skills, self-protection and mutual supervision levels, and create a good atmosphere in which "everyone pays attention to safety and everything is safe".

In 2025, the company will invest 26.96 million yuan in safety production, and the number of registered safety engineers will increase to 19, providing a basis for improving the professional level of safety management.

Carry out safety education and training in a solid manner

Solid protection.

In 2025, the company will continue to carry out the special action of "big learning, big training, big examination", adopting a combination of online and offline methods to organize the "first lesson" for starting work, the certification of the qualifications of main responsible persons and safety management personnel, safety laws and regulations and standard training, strengthening the "three basics" and strict "three disciplines" to combat the "three violations" and work-related injury prevention training, risk assessment training, guardianship training, new personnel three-level safety education, safety information and other education and training. Throughout the year, 1,830 safety education and training sessions were organized, with 78,955 participants. The safety awareness of all employees continued to be strengthened, and employees’ operating skills were continuously improved, providing a solid guarantee for safe production.

Strictly organize emergency plan drills

In 2025, the company will re-review the "Emergency Plan for Production Safety Accidents", formulate an annual drill plan and strictly organize and implement it. 639 drills were organized and carried out throughout the year, with 13,481 participants, including 2 comprehensive drills, 69 special drills, and 568 on-site disposal drills. On June 20, Workshop 103 organized a special emergency plan drill for fire fighting and emergency evacuation drills in crowded places, with a total of 76 people including the safety director and related personnel participating. On July 4, the company organized a comprehensive emergency plan drill in the 707 workshop turnover tank area, with a total of 39 general managers and related personnel participating.

Deepen the investigation and rectification of potential safety hazards

In 2025, the company organized 4 special activities to investigate and rectify hidden safety hazards, including special activities to investigate and rectify hidden safety hazards and natural disaster risks during the "Two Sessions", special actions to prevent and control fires this winter and next spring, investigate and rectify hidden safety hazards in summer, and investigate and rectify major accident hazards. We organized and carried out 3 comprehensive diagnostics on production safety, including the China Chemicals Association diagnostic organized by the Jining Emergency Bureau, the Shandong Chemical Industry Research Institute of Qingdao University of Science and Technology invited by the company, and the production safety diagnostic organized by Hualu Holding Group, to effectively prevent and resolve various safety risks. 2025 company comprehensive emergency plan drill

64 65 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Social responsibility and

community co-construction

Social Responsibility

Build with the community

Charity donation

rural revitalization

Community building

Volunteer service

66 67 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co., Ltd. and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Lukang Pharmaceutical adheres to the people-oriented concept, integrates social responsibility into the corporate development strategy, and continues to delve into charity, rural revitalization, disaster reduction and poverty alleviation. First, it improves infrastructure and solves public problems such as mass travel and community co-construction. It is an education base for the next generation cared for by the Shandong Provincial State-owned Assets Supervision and Administration Commission. The company actively fulfills its responsibilities as a state-owned enterprise and responds to major disasters such as major disasters and epidemics, drainage and waterlogging prevention, and agricultural irrigation issues. In the face of social incidents, we actively donate money and materials to help the masses overcome difficulties, demonstrate the social responsibility of state-owned enterprises, and contribute to the building of a harmonious society. With an aid fund of 2 million yuan, 8,743 square meters of main roads in the village were repaired, 18,229 square meters of household access roads were built, 575 meters of underground drainage pipes were laid, and 270 photovoltaic street lights were installed. The annual electricity bill was saved more than 8,000 yuan, effectively improving the appearance of the village and the production and living conditions of the people. A new water pumping station will be built to introduce Yellow River water for irrigation to solve the problem of

Charity donation

With more than 3,000 acres of farmland being irrigated, the underground water irrigation company is dedicated to helping disadvantaged groups realize their dreams of studying and improving their living and learning conditions. During the "99 Charity Day" in 2023, a fund-raising activity to care for retired military personnel was carried out to "pay tribute to the cutest people and increase production per acre by more than 10%. The second is to cultivate industries that enrich the people and continue the red bloodline". 341 cadres and employees participated; more than 600 employees were organized to donate 85,740 yuan for needy workers. Coordinated financial guarantee institutions to obtain low-interest entrepreneurial loans to help villagers. In 2024, more than 900 employees were organized to donate 114,211.19 yuan to continue to carry out relief work for employees in need. In 2025, we will organize a fund of 200,000 yuan to build a standardized laying hen breeding factory.

First Secretary employees participated in the "99 Charity Day" charity fund-raising and the Red Cross Society of China's "5.8 Humanitarian Charity Day" crowdfunding activities. 113 employees participated in donations, and the organization invited animal husbandry experts to provide technical guidance and epidemic prevention training. More than 700 employees donated 96,000 yuan to help employees in need. Promote advanced breeding and management models. At present, the breeding farm is in normal operation, with annual income exceeding 1 million yuan, creating stable employment for more than 8 people. The third is to create characteristic agricultural product brands to help traditional industries improve quality and efficiency. For local heritage

Rural revitalization

The sesame oil processing industry of nearly 80 years has registered the "Luolou" brand of rural revitalization sesame oil trademark to enhance product visibility and added value, promote the standardized and branded development of the sesame oil industry, and drive village companies to actively respond to the call of the provincial party committee and solidly promote the first secretary's village assistance work. Since 2015, he has been stationed in Liu Dongzhou (2015-2017

People's income continues to increase. The fourth is to strengthen investment promotion and empower rural areas), Zhang Chuanlei (2017-2021), Zhang Fengcheng (2021-2023), and Wang Chuange (2024 to present) have served as first secretaries. 2024

Revitalization and successful introduction of Shandong Honglei Steel Structure Co., Ltd. In 2006, the company sent its first secretary Wang Chuange to Hulou Village, Zuoying Town, Juancheng County to provide assistance.

Investing in the construction of a factory in Zuoying Town, the project has an annual output value of 40 million yuan, creating employment for more than 200 local people and creating a good foundation for the village.

The first secretary cultivated and enriched the people's industrial farm economy and injected strong impetus into the high-quality development of the economy.

68 69 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

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Community co-construction Volunteer service

Community Co-construction Volunteer Service

The company regularly organizes life science experience center open day activities, and has received three batches of 150 primary and secondary school students, including young reporters from Guangming Daily and Liaohe Foreign Language. The company always upholds the fine tradition of helping the disabled and actively practices social

Study. Through such activities, we can popularize the scientific concepts of life and health and common knowledge about medication, let them experience the pharmaceutical production process on the spot, inspire them to take responsibility, fully support the development of the cause of disabled people, and effectively ensure the employment of disabled people.

Scientific interest and curiosity sow the seeds of reverence for life and protection of health; giving away schoolbags and stationery shows concern for the growth of the next generation with practical actions. Rights and interests, and support disabled people with heart and soul in returning to work. In 2025, the company

The company has successively organized and carried out drug safety science propaganda activities, fire protection knowledge propaganda activities, environmental protection volunteer service activities, voluntary legal consultation, and will carefully organize 100 employees to watch "Strive for a New Journey, Chasing Dreams and a New Era" on-site.

There have been more than 30 volunteer activities including conference services and a total of 1,500 hours of volunteer service.

"Generation of Love and Aid to the Disabled" special cultural evening, conveying the love and care to the disabled with practical actions

The care and warmth of the whole body condense the positive social energy of helping the disabled. Carrying out "hot

"Blood Delivery, Shandong and Kangxi Go Together" voluntary blood donation event vigorously promotes friendship and mutual assistance

social customs and deeply practice the values of “dedication, friendship, mutual assistance and progress”

Volunteerism. The company’s employees actively participated, with a total of 82 cadres and staff

The Federation of Industry and Commerce donated 24,500 ml of blood, fulfilling its responsibilities as a state-owned enterprise with passion and passing on

Deliver warmth to the world.

"Hot Blood, Shandong and Kangxi Go Together" Free Blood Donation Activity

70 71 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Supply chain management and win-win cooperation with partners

Supply Chain Management

Win-win with partners

Actively carry out dividend distribution to ensure the rights and interests of investors

Build a safe, resilient and responsible supply chain

Treat small and medium-sized enterprises equally

Data security and customer privacy protection

Implement the national opening-up strategy and actively integrate into the international market

72 73 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

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Strengthen supply chain security and risk prevention and control

Actively distribute dividends to ensure the rights and

The company regards supply chain security as an important guarantee for business development, implements procurement excellence performance standards in material procurement, and promotes procurement "category"

interests of investors

In terms of management model, we innovatively tried a new model of joint bidding and separate procurement for the same "category" of subsidiaries, and the procurement cost dropped significantly year-on-year. main

Actively carry out dividend distribution to ensure the rights and interests of investors

Measures include: using the winning bid price of pharmaceuticals to guide the procurement price of raw and auxiliary packages to achieve precise cost control; for key raw materials, intermediates, packaging materials and other core materials, summarize historical patterns, analyze cost composition, and sign long-term purchase contracts in low price ranges to lock in costs and prevent the risk of price fluctuations; for grain materials, increase procurement reserves when prices are low during the off-season to further reduce procurement costs.

Dividend distribution from 2023 to 2025

In order to ensure a stable supply of raw materials and finished products, the company has established strategic partnerships with key material suppliers to effectively prevent the risk of supply interruption. Appropriate safety stocks are set for various materials. The material supply department and the production technology department work closely together to jointly monitor the amount of materials in transit and contract execution. Through comprehensive analysis, the material availability period can be accurately predicted, and bidding and procurement can be carried out in advance on the premise of ensuring safety stock. At the same time, rationally plan the amount of finished product deposits and cash dividends

The time of dividend distribution is the net profit of the common shareholders of the listed company.

Annual (tax included) (yuan) storage space, ensuring the continuity and adequacy of the supply of finished products based on safety inventory, and making every effort to maintain the stability of the company's overall operations.

Net profit (yuan) Profit ratio (%)

Promote industrial chain collaboration and innovation

June 2025 2024 100,650,998.784 394,615,735.73 25.51

The company firmly believes that close cooperation with upstream and downstream partners is the key to driving the company's continuous progress and enhancing the overall competitiveness of the industry chain. On the client side, through December 2024 Semi-annual 2024 17,976,392.64 299,962,355.17 5.99 expand the domestic market through deepening cooperation, strengthen customer relationship maintenance, achieve resource integration and complementary advantages, and improve customer satisfaction and market share. On the R&D and supply side, in response to the company's strategic requirements of "consolidating the foundation and strengthening the chain", we actively seek cooperation opportunities in cutting-edge technologies such as biological fermentation, plus June 2024 2023 80,744,189.58 246,171,797.53 32.80

In the development and industrial application of fast new biotechnology, through technology joint research, market sharing, and complementary advantages, we work with partners to enhance the overall competitiveness and value of the industry chain and promote high-quality coordinated development of the industry chain.

July 2023 2022 48,896,776.445 138,013,129.39 35.43

Build a safe, resilient, and responsible supply chain

Build a safe, resilient and responsible supply chain

The company is committed to building a supply chain system that is long-term stable, safe, reliable, collaborative, and socially responsible. Through systematic supplier management,

Risk management and in-depth cooperation with upstream and downstream partners ensure the resilience and stability of the supply chain, actively promote the common prosperity and development of the industrial chain, and provide high-quality services to enterprises.

Build a solid supply chain guarantee through quantitative development.

Deepen the full-cycle management of suppliers and jointly build a value ecosystem

The company has established a full-cycle management system covering supplier admission, cooperation, evaluation and exit. Formulate and improve the "Procurement Management System" and a series of implementation details,

Ensure that all procurement activities are legal, compliant and transparent. Build a multi-dimensional supplier performance comprehensive evaluation system, implement hierarchical management, and continuously track contract performance.

To drive quality improvements and synergies. From 2023 to 2025, the company will carry out systematic management of production material suppliers, with more than 1,100 cooperative suppliers.

The cumulative total purchase amount reached more than 4 billion yuan. In order to continuously optimize the supply chain structure, the company carried out special governance, eliminated a total of 45 unqualified suppliers, and established

Supplier blacklist system. Vigorously promote the "direct procurement" model, compress intermediate links, effectively reduce procurement costs, ensure reasonable profits for suppliers, and achieve

Mutual benefit and win-win. Innovatively build the "Lukang Procurement Online Mall" to provide a digital procurement platform for non-production standard parts materials, significantly improving procurement efficiency.

Reduce capital occupation and manpower consumption.

74 75 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

Implement the national opening-up strategy and actively treat small and medium-sized enterprises equally

integrate into the international market and treat small and medium-sized enterprises equally

Implement the national opening-up strategy and actively integrate into the international market

The company always adheres to the principles of fairness, justice and openness, treats small and medium-sized enterprises equally and supports the healthy development of small and medium-sized suppliers as a way to build a responsible,

Accelerate the development of international business

The important content of a resilient supply chain is to ensure equal participation and fair participation of small and medium-sized enterprises in the entire process, including procurement access, process services, contract performance, and fund payment.

From 2023 to 2025, the company's export revenue will continue to grow steadily and hit new highs repeatedly. In 2025, the export revenue in 2025 will be evenly competitive and develop steadily compared with the year-on-year growth at the end of the "13th Five-Year Plan".

63%. The company's business in all segments has grown steadily, demonstrating strong market competitiveness. In terms of procurement management, the company strictly regulates bidding and inquiry activities, resolutely puts an end to discriminatory terms such as ownership and enterprise size, and protects small and medium-sized enterprises.

Businesses have the right to compete on an equal footing. By simplifying the procurement process, clearly announcing requirements and standards, and providing timely technical clarification and business guidance, we can effectively alleviate the asymmetry of supply and demand information and improve the convenience of participation for small and medium-sized enterprises. In the process of cooperation, we actively promote technology sharing, management collaboration, and mid- and long-term orders.

The company's products are mainly sold to Europe, Southeast Asia, the Middle East, Africa, Latin America and other regions. During the "14th Five-Year Plan" period, the company actively implemented the national "Belt and Road" support and other methods to cultivate high-quality small and medium-sized suppliers, and strived to build an inclusive, collaborative, and dynamic supply chain ecosystem.

strategy to increase the development of countries along the “Belt and Road” and emerging markets, with a compound growth rate of 20%. In terms of fund payment and account period management in the markets along the “Belt and Road”, the company will include the payment of small and medium-sized suppliers into the key protection scope of the fund budget, strictly in accordance with the contract

Become the support point of the company's international marketing. Periodic payments are made to prevent unreasonable delays and disguised occupation of funds of small and medium-sized enterprises. Continue to optimize bill settlement, online payment and other channels to reduce the supply of small and medium-sized enterprises

It can effectively alleviate the cash flow pressure of small and medium-sized pharmaceutical supporting enterprises and ensure the stable operation of small and medium-sized enterprises.

In the future, the company will continue to improve the fair management system of the supply chain, operate with compliance, transparency, and digitalization to equally protect the legal status of all types of suppliers.

rights, promote the integrated development of large, small and medium-sized enterprises, and continuously improve the resilience and sustainable development level of the pharmaceutical supply chain.

Data security and customer privacy protection

On the basis of strengthening the supply chain security defense line and promoting the coordinated development of the industrial chain, the company attaches great importance to data security and customer privacy protection, and

Based on the actual development of the enterprise, build a comprehensive and full-process data security and privacy protection management and control system to effectively protect the enterprise’s core data assets and protect customers.

legitimate rights and interests of the owner.

Improve the data security management system, refer to relevant national laws, regulations and industry standards, and formulate and improve the "Data Security Management Measures" and other supporting facilities

system, clarifying the principles of “clear responsibilities, reasonable authorization, standardized processes, and integration of technology and management”. Implement data classification and hierarchical control and full life cycle security

Management; clearly require suppliers to have information security management system certification during the procurement process to build a solid data security defense line from the source.

Establish a complete data security emergency response mechanism, formulate emergency plans and conduct regular drills, clarify the division of responsibilities and disposal procedures, and ensure that emergencies

Able to respond quickly and handle situations appropriately. In 2025, the company did not have any data security incidents.

Strengthen customer privacy protection. The company has established a complete institutional system covering all aspects of customer information collection, storage, use, transmission and deletion.

Strictly follow the principles of minimum collection and explicit consent to prevent the risk of privacy leakage.

Improve the safety awareness of all employees. The company regularly conducts training related to data security and customer privacy protection to enhance the compliance awareness and operational capabilities of all employees.

At the same time, we put forward clear data security requirements for suppliers and partners, and standardize cooperation by signing confidentiality agreements and conducting security qualification reviews.

The data processing behavior in the process builds a collaborative and linked security protection pattern to effectively protect data security and customer privacy.

76 77 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

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ESG Management

ESG concept

ESG governance

Analysis of substantive issues

78 79 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical walks into Lukang ESG Management Shandong Lukang Pharmaceutical Co.,Ltd and compliance operations and environmental management and product responsibility and digital transformation and rights protection Co-construction with the community Win-win with partners 2025 ESG Sustainability Report

ESG Concept Material Issues Analysis

Lukang Medicine has always taken "keeping human beings away from the pain of disease" as its mission, adhering to the principle of "building a healthy and harmonious Lukang, a fair and just Lukang, and daring to innovate. Lukang Medicine relies on a complete stakeholder communication mechanism to systematically develop

The purpose of "New Lukang, Lukang good at learning" is to build a modern biopharmaceutical enterprise with green ecology, sustainable development and contribution to society. Carry out the identification and assessment of substantive issues. The company refers to the Shanghai Securities Exchange

Self-Regulatory Guidelines for Listed Companies on the Exchange No. 14—Sustainable Development Report

Report (Trial Implementation)", "CASS-ESG5.0" and other requirements, and conduct in-depth research on the national macro

Economic policies, domestic and foreign social responsibility standards, combined with the characteristics of the pharmaceutical industry,

ESG governance The company's development strategy and stakeholder concerns are assessed through dual importance.

Complete the identification and confirmation according to the 21 issues in the "Guidelines" and finally determine the company's

We uphold the original intention of being responsible for society and the environment, continue to improve the ESG governance structure, clarify the division of responsibilities at each level, and ensure effective ESG management.

There are 20 substantive issues in 2025, including 7 environmental issues, social issues

Landed. As the highest responsible body of the ESG working group, the Board of Directors is responsible for approving ESG reports and supervising and managing ESG matters. strategic development

There were 9 meeting topics and 4 governance issues, fully reflecting the company’s sustainable development.

The Development Committee is responsible for planning and researching the company's mid- and long-term strategies, making recommendations on the company's ESG goal formulation, and supervising the implementation progress of the goals.

Management focus.

and evaluation, research ESG development trends, evaluate and make recommendations on major ESG decision-making matters. The company established an ESG working group, composed of directors

After evaluation, ecosystem and biodiversity protection issues are not of financial importance or impact importance to the company and have not been included in the list of material issues. It is composed of the Council Office, Securities Affairs Department, Company Office, Human Resources Party and Mass Department, Enterprise Management and Innovation Department and other relevant departments, and is responsible for the preparation of ESG reports.

Combined with the evaluation results, the company determined that ensuring drug quality, environmental compliance management, technological innovation, energy conservation and emission reduction, and safe production are the annual ESG management review and release, and reported to the Strategic Development Committee.

issues and information disclosure priorities.

Anti-unfair competition

Pollutant emissions Product and service safety and quality impact Water resources utilization Energy utilization

Economic High Waste Disposal Innovation Driven Economy Social Contribution Employees

, operating performance

社

rural revitalization

Will

Anti-unfair competition and combating climate change

Stakeholder Communication Environment Circular Economy Supply Chain Security

Jing

Anti-commercial bribery and anti-corruption

of

Impact Data security and customer privacy protection

ring

Focus on technology ethics and due diligence

Treat small and medium-sized enterprises equally

Sex

Ecosystem and Biodiversity Conservation

low

low medium high

financial importance

80 81 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

Report postscript

Not yet

Come

Outlook

In 2026, pharmaceutical companies will usher in a new strategic cycle driven by innovation, return to value, and global expansion. Biomedicine has been identified as an emerging pillar industry in the country. Policies have shifted from controlling costs to stimulating innovation and ensuring clinical value. Review and approval have been accelerated, medical insurance negotiations have been optimized, commercial insurance has been expanded, and a multi-level payment system has been established. At the same time, the normalization of centralized procurement goes hand in hand with full-chain compliance supervision, forcing companies to focus on true innovation, strong supply, and optimized costs. The industry structure is accelerating differentiation. Only companies that deeply cultivate clinical value, have a global presence, and operate in compliance can take the lead in the wave of high-quality development.

Standing at a new starting point, the company will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, focus on the four major positionings of the "15th Five-Year Plan" and the three major directions of "innovative drugs, high-end preparations, and biomanufacturing" to accelerate the clinical process of innovative drugs and promote the industrialization of key projects to expand production and increase efficiency; with the construction of four general technology platforms as the core, comprehensively improve biomanufacturing products, microbial development fermentation products and chemical synthesis API competitiveness, to build a leading domestic biomanufacturing enterprise; deepen green transformation, continue to promote energy-saving air compressor transformation, and photovoltaic power generation expansion; take the opportunity of being selected as an excellent smart factory to further promote the integration of artificial intelligence and production operations, further promote digital transformation, cultivate new productivity, and contribute to the construction of a healthy China and the "double carbon" strategy.

82 83 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

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Key Performance

Key Performance Social Performance

environmental performance

Indicator Unit 2023 2024 2025

Indicator Unit 2023 2024 2025 Total number of employees Person 6484 6388 6469Environmental protection investment Ten thousand yuan 16419 18120.29 18992.13 Proportion of female employees % 42.15 41.78 42.06 Number of general and above environmental emergencies 0 0 0 Proportion of male employees % 57.85 58.22 57.94 Number of employed people 456 226 115 Comprehensive energy consumption Tens of thousands of tons of standard coal 13.87 15.13 15.54

Proportion of female managers % 22.78 24 24.11 General waste emissions tons 43095.82 49556.5 48082.02

Labor contract signing rate % 100 100 100 Hazardous waste emissions tons 103115.23 95832.57 98973.66

Social insurance coverage rate % 100 100 Comprehensive energy consumption per 1 million yuan of added value tons of standard coal / 10,000 yuan 0.8206 0.8805 1.0454

Employee turnover rate % 2.31 1.50 Comprehensive energy consumption of operating income of 17,100 yuan tons of standard coal / 10,000 yuan 0.2257 0.2428 0.2523

Employee physical examination coverage % 53 56 55 Electricity consumption kWh 689826000 708204300 726287500

Number of new cases of occupational diseases 0 0 0 Electricity consumption per unit area kWh / square meter 457.66 469.85 481.85

Total employee training time hours 291780 312450 307889 Annual fresh water consumption tons 5139100 5662118 5704956

Employee training coverage % 100 100 100Number of environmental training 140 146 102

Proportion of employees participating in trade unions % 100 100 100Environmental protection training investment Ten thousand yuan 10.7 2.4866 2.2844

Investment in assisting employees in need Ten thousand yuan 31.36 32 33.78Number of people trained in environmental protection Person-time 6136 6388 6389

Number of production safety training times 1384 1804 1830Environmental protection training coverage rate % 100% 100% 100% Safety production training coverage rate % 100% 100% 100%

84 85 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical

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Governance Performance

Indicator Unit 2023 2024 2025 Indicator Unit 2023 2024 2025

Shareholders' meeting 1 2 3 Investment in safety production 10,000 yuan 1912 2579 2696

Board of Directors times 6 7 6 Number of safety emergency drills times 621 703 676 Board of Supervisors times 6 7 4 Periodic reports 4 4 4 Investment costs for quality training RMB 10,000 7.6 2.75 7.3

Temporary announcements 91 111 121Quality training times 38 41 42

Cash dividend distribution RMB 10,000 4889.68 9871.76 10065.10 Person-times for quality training Person-times 1700 2078 2451 Special audits carried out times 8 6 6 Penalties for major violations of laws and regulations Number of times 0 0 0 Quality training hours Hours 172 167 187

Number of law-abiding and compliance training times 7 8 4 Number of major quality liability accidents 0 0 0

Compliance training coverage rate % 100 100 100Total public welfare donations Ten thousand yuan 0.4 0.3 0.2

Number of risk management training times 2 2 2 Investment in rural revitalization assistance 10,000 yuan 43.3 3 3

Number of people trained in risk management Person-time 312 330 332Number of anti-corruption training times 4 7 5 Number of people trained in anti-corruption Person-time 710 2300 900Total assets Ten thousand yuan 880,243 909,798 1,003,405Operating income Ten thousand yuan 614,672 623,309 576,612Total profit Ten thousand yuan 27,298 43,390 16,121 Net profit Ten thousand yuan 25,679 40,835 11,191 Total tax paid Ten thousand yuan 26,659 26,744 24,061 Return on net assets % 7.07 10.47 2.86 Return on total assets % 3.86 5.69 2.37 Asset-liability ratio % 57.50 55.36 47.61 State-owned assets value preservation and appreciation rate % 107.90 106.98 101.66

86 87 Shandong Lukang Pharmaceutical Co., Ltd. Corporate governance Green development Quality and safety Innovation-driven Employee development Social responsibility Supply chain management Lukang Pharmaceutical enters Lukang ESG management

report index

Report Catalog CASS-ESG 5.0 Benchmarking Issues in the SSE's "Guidelines" Report Catalog CASS-ESG 5.0 Benchmarking Issues in the SSE's "Guidelines"

Chairman’s speech P2.1-P2.2 /

Vigorously promote technological innovation and release value creativity V2.1-V2.2, V2.4 Introduction to innovation-driven enterprises P4.1, P4.3 /

The implementation of the biomanufacturing industry bears fruitful results V2.2, V2.4 innovation-driven innovation-driven and digital transformation

Cultural concept P4.2 /

Science and Technology Ethics Management / Science and Technology Ethics Organizational Structure P4.4 /

Accelerate digital transformation and develop new productive forces V2.2, V2.4 Innovation Driven Holdings’ subsidiaries P4.4 /

Philosophy and goals Employees come to Lukang

“14th Five-Year Plan” Strategic Achievements P4.2 /

Work effectiveness and employee management quality continue to improve P4.1 /

Protect the legitimate rights and interests of employees and create opportunities for more people Employees

Important events // Continuously improve the salary and welfare system S1.1-S1.4, S1.6-S1.8, employees

S1.10, S2.1-S2.4

Awards and Honors P3.1 / Employee Development and Rights Protection Smooth career development channels and allow more employees to become protagonists Employees

Standardized operation of the two sessions and one level / continuous improvement of occupational health employees

Strengthen parent-subsidiary management and control/promote democratic management of employees

Continue to deepen the reform of the three systems / Caring for employees Employees G1.3-G1.4, G1.7-G1.9

Anti-commercial bribery and anti-corruption,

Improve the compliance management system, strengthen intrinsic safety, and protect safe production S3.1, S3.4-S3.9 Employees fight against unfair competition

Anti-commercial bribery and anti-corruption, public welfare donations V3.4, V3.6-V3.7 Social contribution Corporate governance and compliance operations Comprehensive risk management and internal control construction

Anti-unfair competition

Rural Revitalization V3.4, V3.6-V3.7 Rural Revitalization Smooth Information Communication Channels for Listed Companies Stakeholder Communication Social Responsibility and Community Co-construction

Community co-construction V3.4, V3.6-V3.7 Social contribution party building integrated into production and operation /

V1.1-V1.3 Volunteer service V3.4, V3.6-V3.7 Social contribution Anti-commercial bribery and anti-corruption,

Strengthen anti-corruption and promote integrity

Anti-unfair competition

Actively carry out dividend distribution to ensure the rights and interests of investors, communicate with stakeholders, conduct due diligence,

Due diligence and stakeholder communication /

Stakeholder communication to create a safe, resilient and responsible supply chain Supply chain security

S4.1, S4.5-S4.8

Green Development Concept and Environmental Management System E1.1-E1.2, E1.4-E1.6 Environmental Compliance Management

Supply chain management and partners create a win-win situation Treat small and medium-sized enterprises equally V2.7-V2.8 Treat small and medium-sized enterprises equally E2.1-E2.3, E3.5-E3.9, V2.7-V2.8

Main achievements in energy conservation and emission reduction in 2025: Addressing climate change Data security and customer privacy protection Data security and customer privacy protection E1.3, E2.4-E2.6

Green development and environmental management Pollutant discharge, waste treatment, implementation of the national opening-up strategy, and active integration into the international market Product and service safety and quality special environmental management and compliance control E1.1-E1.2, E1.4-E1.6 Energy utilization, water resource utilization,

ESG Concept G3.2/Circular Economy, Addressing Climate Change

Environmental protection industry development E2.14-E2.15, E1.7 / ESG management ESG governance G3.1, G3.3 /

Strengthen quality management and ensure drug safety. Analysis of substantive issues //

Improve system construction and enhance quality management capabilities. Future outlook A1/Quality safety and product responsibility S4.1, S4.2 Product and service safety and quality

Key Performance A2/Pursue excellent performance and achieve innovative breakthroughs in quality management

Appendix Report Index A4/Quality Honors and Industry Recognition

Feedback A5 /

88 89 Shandong Lukang Pharmaceutical Co., Ltd.

Corporate Governance Green Development Quality and Safety

About Shandong Lukang Pharmaceutical Co., Ltd. and Compliance Operations and Environmental Management and Product Responsibility

Feedback

Dear readers

Hello! Thank you very much for taking the time out of your busy schedule to read this report! In order to continuously improve Lukang Pharmaceutical's ESG work and ESG report preparation, we especially hope to listen to your opinions and suggestions. Please help complete the relevant questions in the feedback form and choose the following methods to give us feedback:

Address: No. 88, Deyuan Road, Jining High-tech Zone, Shandong Province

Tel: 400-0726669

Website: https://www.lkpc.com/

Postal code: 272000

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