Semi-annual Report for 2026

Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Company code: 601089 Company abbreviation: Fuyuan Pharmaceutical Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-annual Report

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Important tips

1. The company’s board of directors, directors and senior managers guarantee the authenticity, accuracy and completeness of the contents of the semi-annual report and that there are no false records, misleading statements or major omissions, and bear individual and joint legal liability.

2. All directors of the company shall attend the board meeting.

3. This semi-annual report has not been audited.

4. Huang He, the person in charge of the company, Yang Xuyan, the person in charge of accounting work, and Li Yan, the person in charge of the accounting department (accounting supervisor) declare that they guarantee the authenticity, accuracy and completeness of the financial report in the semi-annual report.

5. There is no profit distribution plan for the reporting period or a plan for converting public reserve funds into share capital passed by the board of directors.

6. Risk Statement for Forward-Looking Statements

√Applicable □Not applicable

The forward-looking statements such as future plans and development strategies involved in this report do not constitute the company's substantive commitment to investors. Investors are advised to pay attention to investment risks.

7. Whether there is any non-operational occupation of funds by controlling shareholders and other related parties

No

8. Whether there is any violation of the prescribed decision-making procedures in providing external guarantees

No

9. Whether more than half of the directors cannot guarantee the authenticity, accuracy and completeness of the semi-annual report disclosed by the company

10. Major Risk Warning

During the reporting period, the company had no relevant major risks. The company has described in detail other possible risks in this report. Please refer to "(1) Possible Risks" in "V. Other Disclosure Matters" in Section 3 "Management Discussion and Analysis".

11. Others

□Applicable √Not applicable

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Directory

Section 1 Interpretation......................................................................................................................................4

Section 2 Company Profile and Main Financial Indicators......................................................................................4

Section 3 Management Discussion and Analysis................................................................................................................6

Section 4 Corporate Governance, Environment and Society......................................................................................18

Section 5 Important Matters................................................................................................................................20

Section 6 Changes in Shares and Shareholders...................................................................................................31

Section 7 Bond-related situations................................................................................................................35

Section 8 Financial Report................................................................................................................................36

Financial statements signed and stamped by the person in charge of the company, the person in charge of accounting work, and the person in charge of the accounting department (accounting supervisor).

Catalog of documents available for inspection: The originals of all company documents and announcements publicly disclosed on the website designated by the China Securities Regulatory Commission during the reporting period.

The full text and summary of this semi-annual report signed by the legal representative and stamped by the company.

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Section 1 Interpretation

In this report, unless the context otherwise requires, the following words have the following meanings:

Commonly used word definitions

Fuyuan Pharmaceutical, the Company, the Company refers to Beijing Fuyuan Pharmaceutical Co., Ltd.

Xinhecheng Holdings refers to Xinhecheng Holdings Group Co., Ltd., the company’s controlling shareholder

Xinchang Qinjin Investment Co., Ltd. is the shareholder and actual controller of the company controlling Qinjin Investment.

of enterprises

Huakang Taifeng refers to Beijing Huakang Taifeng Technology Co., Ltd., a shareholder of the company

Xuancheng Renhe refers to Xuancheng Renhe Investment Partnership (Limited Partnership), which is a shareholder of the company. State Food and Drug Administration refers to the State Food and Drug Administration.

The National Medical Insurance Catalog refers to the National Basic Medical Insurance, Work Injury Insurance and Maternity Insurance Drug Catalog, which is the basis for the provision and use of drugs in medical institutions. It includes two parts: the National Essential Drug Catalog for Primary Care.

The registration application for a drug that is equipped and used in health institutions and other medical institutions has been approved for marketing abroad or has been approved by the State Food and Drug Administration and has a national standard generic drug. It is called a generic drug application, and the drug that has obtained the registration application is called a generic drug.

First generic drugs and first generics refer to the first generic drugs produced and marketed in China.

The drug registration approval document issued by the State Food and Drug Administration to approve a drug manufacturer to produce the variety refers to

statutory document

Good Manufacturing Practice refers to the pharmaceutical production GMP standards and regulations formulated by the State Food and Drug Administration for the domestic pharmaceutical industry. It requires pharmaceutical manufacturers to have good production equipment, reasonable production processes, perfect quality management, strict testing systems, etc.

The consistency evaluation of the quality and efficacy of generic drugs refers to the consistency evaluation of generic drugs that have been approved for marketing. It refers to the consistency evaluation of generic drugs based on the principle of consistency with the quality and efficacy of the original drugs.

Volume-based procurement refers to the centralized procurement of drugs in which the required drug procurement quantities are announced in the bidding announcement.

Section 2 Company Profile and Main Financial Indicators

1. Company information

The Chinese name of the company: Beijing Fuyuan Pharmaceutical Co., Ltd.

The company’s Chinese abbreviation: Fuyuan Pharmaceutical

The company’s foreign name: Beijing Foyou Pharma Co.,Ltd

Legal representative of the company Huang He

2. Contact person and contact information

Secretary of the Board of Directors Securities Affairs Representative

Name Zhang Lijin Zheng Kaiwei

Contact address: Tongzhou Industrial Development Zone, Tongzhou District, Beijing No. 8, Guangyuan East Street, Tongzhou Industrial Development Zone, Tongzhou District, Beijing No. 8, Guangyuan East Street

Phone 010-65020399 010-65020399

Fax 010-65021289 010-65021289

Email [email protected] [email protected]

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3. Introduction to changes in basic situation

Company registered address: No. 8, Guangyuan East Street, Tongzhou Industrial Development Zone, Tongzhou District, Beijing

Historical changes of the company’s registered address Not applicable

Company office address: No. 8, Guangyuan East Street, Tongzhou Industrial Development Zone, Tongzhou District, Beijing

Postal code of company office address 101113

Company website www.foyou.com.cn

Email [email protected]

Query index for changes during the reporting period Not applicable

4. Brief introduction to changes in information disclosure and storage location

The name of the newspaper selected by the company for information disclosure: "Shanghai Securities News" and "Securities Times"

The website address for publishing the semi-annual report is http://www.sse.com.cn

The company's semi-annual report is prepared at the company's board of directors office

Query index for changes during the reporting period Not applicable

5. Brief introduction of company stocks

Stock type Stock listing exchange Stock abbreviation Stock code Stock abbreviation before change

A shares Shanghai Stock Exchange Fuyuan Pharmaceutical 601089 No change

6. Other relevant information

□Applicable √Not applicable

7. The company’s main accounting data and financial indicators

(1) Main accounting data

Unit: Yuan Currency: RMB Main accounting data for this reporting period compared with the same period last year

(January to June) Increase/decrease in the same period (%) Operating income 1,710,146,067.10 1,633,971,250.02 4.66Total profit 200,831,661.41 301,518,066.14 -33.39Net profit attributable to shareholders of listed companies 186,196,276.96 267,867,639.64 -30.49 Deduction of non-recurring expenses attributable to shareholders of listed companies

170,364,837.56 258,234,147.69 -34.03 Net profit of profit and loss

Net cash flow generated from operating activities 256,833,786.35 218,031,007.68 17.80 The end of this reporting period compared with the end of this reporting period The end of the previous year

Year-end increase or decrease (%) Net assets attributable to shareholders of listed companies 3,731,413,375.15 3,779,337,701.95 -1.27 Total assets 4,809,244,089.90 4,923,915,153.64 -2.33

(2) Main financial indicators

Main financial indicators of this reporting period This reporting period compared with the same period of the previous year

(January to June) Increase/decrease in the same period (%) Basic earnings per share (yuan/share) 0.40 0.56 -28.57 Diluted earnings per share (yuan/share) 0.40 0.56 -28.57Basic earnings per share after deducting non-recurring gains and losses

0.36 0.54 -33.33 profit (yuan/share)

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Weighted average return on equity (%) 4.86 7.36 Decrease 2.50 percentage points Weighted average net return after deducting non-recurring gains and losses

4.44 7.10 Decrease return on assets by 2.66 percentage points (%)

Description of the company’s main accounting data and financial indicators

√Applicable □Not applicable

Reasons for changes in total profits, net profits attributable to shareholders of listed companies, net profits attributable to shareholders of listed companies after deducting non-recurring gains and losses, and basic earnings per share after deducting non-recurring gains and losses: Mainly due to the decrease in the price of centralized procurement renewal products, the increase in new base conversion verification costs, resulting in a decrease in gross profit, and an increase in R&D investment.

8. Differences in accounting data under domestic and foreign accounting standards

□Applicable √Not applicable

9. Non-recurring profit and loss items and amounts

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Non-recurring profit and loss items Amount Note (if applicable) Profit and loss from disposal of non-current assets, including accrued assets minus Mainly due to the proceeds from asset disposal in the current period

253,924.98

The write-off portion of the value provision earns income

Government subsidies are included in the current profit and loss, but are not related to the company’s normal operations.

are closely related to the operating business, comply with national policies and regulations, and are mainly related to the revenue received during the current period and the

7,282,110.53

Determined standards are enjoyed and have a continuous impact on the company's profits and losses, except for government subsidies that are relevant to the company's profits and losses.

Gains and losses from entrusting others to invest or manage assets 11,394,743.61 Mainly due to other non-operating income and expenses other than the above items from financial management income in the current period -377,047.68

Less: Income tax impact 2,698,779.16

Amount of impact on minority shareholders’ equity (after tax) 23,512.88

Total 15,831,439.40

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

□Applicable √Not applicable

10. Companies with equity incentives and employee stock ownership plans may choose to disclose net profits after deducting the impact of share-based payments.

□Applicable √Not applicable

11. Others

□Applicable √Not applicable

Section 3 Management Discussion and Analysis

1. Description of the company’s industry and main business during the reporting period

(1) Industry situation description

2026 is the first year of the "15th Five-Year Plan", and China's pharmaceutical industry has ushered in a historic leap in strategic positioning: for the first time, the government work report includes biomedicine, integrated circuits, aerospace, and low-altitude economy in the category of "emerging pillar industries." The "15th Five-Year Plan" outline further builds a support system from multiple dimensions such as scientific and technological innovation, review and approval, medical insurance payment, and commercial insurance.

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The biopharmaceutical industry has been upgraded from a simple livelihood security industry to an emerging pillar industry of the national economy and has become the core battlefield of economic development. In the first half of 2026, the pharmaceutical industry will rely on the triple drive of policy, industry, and capital, and will gradually enter a turning point in switching between old and new driving forces.

Generic drugs: moving from “extensive price reduction” to “value governance.” After two stages of reform, namely consistency evaluation and national centralized procurement, the generic drug industry has basically solved the problems of uneven quality, inflated prices, and insufficient substitution. In 2026, the policy focus will further shift to collaborative governance of price, quality, supply, clinical value and industry sustainability. In April, the General Office of the State Council issued the "Several Opinions on Improving the Drug Price Formation Mechanism" to clearly implement drug price risk early warning and prevent irrational bidding from affecting supply. In June, the twelfth batch of centralized drug procurement organized by the state was officially launched, with 65 varieties covering a market size of tens of billions. Continuing the principle of "stabilizing clinical practice, ensuring quality, resisting involution, and preventing bid rigging", price is no longer the only determining factor. Supply chain resilience, production capacity stability and clinical substitute reputation have become the key weights for gaining share. As centralized procurement rules continue to improve, outstanding pharmaceutical companies with large-scale production capabilities, stable quality product output, and refined cost control systems will gain more market share, and industrial concentration is expected to further increase. The role of generic drugs in the pharmaceutical industry has gradually become clear - it is no longer a high-profit growth point, but as the "ballast stone" and cash flow support of the medical system, its stable operation forms an indispensable basic support for the development of innovative drugs.

Innovative drugs: From "quantity catch-up" to the critical period of "value realization and capability verification". In the first half of 2026, the main line of development of China's innovative drug industry has completely switched from the early "pipeline quantity competition" to a new stage of "clinical value realization" and "global competitiveness verification". A total of 38 innovative drugs have been approved in China, of which 11 drugs with new targets and new mechanisms are all domestically produced. The driving force for industry growth no longer relies solely on capital transfusions and track narratives, but has initially formed the prototype of a positive cycle of "autonomous innovation". The R&D end shows a significant characteristic of "improving quality and reducing quantity": the clustering of applications for popular targets has significantly reduced, source innovation and differentiated layout have become industry consensus, corporate R&D decisions have become more prudent, and resources are further tilted towards potential varieties with clear clinical advantages, which means that the utilization efficiency of R&D resources has been systematically improved. At the same time, the market access environment for innovative drugs is undergoing systematic reshaping. The dual-track mechanism of medical insurance payment and commercial insurance supplement is gradually taking shape. The path to commercialization and volume expansion after the launch of innovative drugs is smoother than before. This makes the commercial closed loop of "R&D investment-marketing approval-market returns-re-development" initially operable, and the sustainability of the industry's profit model has been improved.

Three-medicine linkage: collaboration deepens and institutional breakthroughs occur frequently. In 2026, the work focus of the three departments of the National Health Commission, the National Medical Insurance Administration, and the State Food and Drug Administration reflects the systematic thinking of promoting the reform of "medical care, medical insurance, and medicine" in an integrated manner. In the field of medical insurance, the new version of the National Medical Insurance Catalog and the first version of the Commercial Insurance Catalog of Innovative Drugs will be implemented simultaneously on January 1, 2026. The two have formed a complementary pattern of "basic medical insurance and advanced levels of commercial insurance". The health care field focuses on the six-character policy of "strengthening the base, stabilizing the second level, and controlling the third level" - strengthening the grassroots, stabilizing the second-level hospitals, and controlling the expansion of the third-level hospitals. The field of drug supervision continues to “step on the accelerator” and improve review efficiency through early intervention and linkage of research and review. In the first year of the “15th Five-Year Plan”, the three-medicine collaboration has accelerated its implementation from policy design to implementation.

Going overseas and License-out: reaching a new record high. In the first half of 2026, China's innovative drugs will reach a milestone in overseas licensing: the total transaction volume of China's innovative drugs for external licensing is close to US$110 billion, exceeding 80% of the transaction scale for the whole year of 2025. The cooperation model is being upgraded from the traditional single license (License-out) to the Co-Co model of joint development and profit sharing. Chinese pharmaceutical companies have transformed from "selling young products" to global innovation partners, and are deeply involved in the formulation of global clinical development strategies, the establishment of production and supply systems, and overseas commercialization profit sharing. The content and form of my country's pharmaceutical products overseas are also more diverse. In addition to traditional small molecule and large molecule innovative drug pipeline licensing, Chinese companies are particularly globally competitive in emerging technologies such as ADC (antibody drug conjugates), dual antibodies, cell therapy, and nuclear drugs, and have become one of the most active suppliers in international transactions. China's innovative drugs are moving from "follow-up innovation" to a new stage of "global competitiveness re-evaluation".

Population aging and the silver economy: transforming from “social pressure” to “industrial deterministic growth pole”. Data show that by the end of 2025, the country's population aged 60 and over has reached 323 million, accounting for 23.0% of the country's total population. It is predicted that during the "15th Five-Year Plan" period, the average annual growth rate of the elderly population will reach 3.6%, and the aging level will increase to 27.8%. This profound change in the demographic structure is gradually affecting the demand pattern and development logic of the pharmaceutical industry. On the one hand, the total medical demand and the medication structure have changed. The demand for medication for high-risk diseases in the elderly such as hypertension, diabetes, cardiovascular and cerebrovascular diseases, bone and joint diseases, Alzheimer's disease, etc. will continue to be released rigidly and on a large scale, becoming the common "basic base" of generic drugs and innovative drugs. On the other hand, industrial demand extends from "single treatment" to the entire chain of "prevention-treatment-rehabilitation-nursing-elderly care". In addition to the growth of pharmaceuticals, the scale of the medical device market represented by rehabilitation assistive devices will develop rapidly. In terms of medical services, the market demand for health management services will receive further attention.

(2) The company’s main business

The company is mainly engaged in the research and development, production and sales of drugs and medical devices, and its products have strong competitiveness and high market recognition.

The company's product categories are rich, and pharmaceutical preparations currently mainly cover cardiovascular system, chronic kidney disease, skin diseases, digestive system, diabetes, psychiatric and nervous system, gynecological and other product segments. It has ezetimibe tablets, kaiselu, olmesartan medoxomil tablets, gliclazide sustained-release tablets, pinaverium bromide tablets, telmisartan tablets, repaglinide tablets, powerful loquat dew, progesterone soft tablets

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Capsules, atorvastatin calcium tablets, venlafaxine hydrochloride extended-release capsules, acarbose tablets, sodium valproate extended-release tablets, mupirocin ointment, dapagliflozin metformin extended-release tablets, paroxetine hydrochloride tablets, saxagliptin metformin extended-release tablets and other major products; the medical device business is mainly based on humidified oxygen inhalation devices, and the main products include disposable oxygen inhalation tubes.

During the reporting period, the company achieved operating income of 1,710.1461 million yuan, a year-on-year increase of 4.66%; net profit attributable to shareholders of listed companies was 186.1963 million yuan, a year-on-year decrease of 30.49%.

(3) Company business model

1. R&D model

The company is committed to the research and development of urgently needed clinical products for major and multiple diseases, and has established product groups in important treatment areas such as cardiovascular, diabetes, and digestive systems to form a combination of fields and products; it continues to improve the accumulation of innovative technology platforms, gradually increases the proportion of innovative drug research and development, and promotes the "combination of generics and innovations" research and development strategy; at the same time, it gradually improves the integration of raw materials and preparations and the research and development capabilities of the entire process from laboratory process development to commercial production.

Gradually improve the R&D team so that it has full-chain R&D capabilities. Technical capabilities are the core capabilities of R&D. The company ensures the continuous progress of R&D concepts and technologies by establishing a reasonable learning and improvement mechanism, and ensures that the R&D organizational system is compatible with the company's development stage.

2. Procurement model

The company has a purchasing department, which is responsible for purchasing activities and the daily management of suppliers. The Procurement Department formulates a procurement plan based on a comprehensive analysis of R&D, production, and business plans, combined with existing inventory conditions and other factors, and conducts procurement through bidding, price inquiry, and online procurement. In terms of supplier management, the Procurement Department conducts strict screening of suppliers and determines procurement relationships after comprehensively considering the supplier's production capacity, stability, relevant qualifications and other factors. The Procurement Department signs framework agreements or purchase contracts with qualified suppliers to agree on supply prices, product specifications, quality standards, settlement methods, liability for breach of contract, validity period and other terms, so as to reasonably control material purchase prices and inventory, and reduce capital occupation. Through the professional procurement management model, the company's procurement costs can be effectively reduced while ensuring quality and stability.

3. Production mode

The company organizes production in strict accordance with GMP specifications and conducts full life cycle quality management of products from registration transfer, production process, listing and other processes. The company's business departments closely integrate the company's internal resources, and carry out plan management and coordination throughout the entire production process chain to optimize and share resources and information. The production of the company's products mainly adopts the sales-based production model. Based on the sales department's annual, quarterly, and monthly sales plans, the production management department checks workshop capacity, inventory, procurement, equipment, inspection and other information, and prepares production plans corresponding to each cycle; each workshop develops weekly work plans based on the monthly plan priority and issues them for execution. The production management department implements closed-loop control from planning to implementation through scheduling and coordination. The Quality Control Department is responsible for material quality control, intermediate product quality control, and finished product quality control; the Quality Assurance Department comprehensively uses the quality system management system for system management, and conducts strict quality monitoring and auditing throughout the production process to ensure and improve product quality.

4. Sales model

The company focuses on products and customers, continues to improve its marketing system, strictly adheres to full-process compliance, and relies on a mature commercial marketing team and diversified sales channels to continue to expand market coverage. At the same time, the company actively expands the international market, explores diversified international cooperation paths, and is committed to bringing high-quality drugs to patients around the world.

In terms of domestic business, the medical terminal relies on the distribution of compliant and high-quality pharmaceutical business partners to build a standardized strategic cooperation system and build a systematic strategic promotion model; offline retail implements the "Fuyou Plan" to supply highly competitive products and output comprehensive solutions; online, it adopts dual-track operations of leading e-commerce self-operation and brand flagship stores to build digital direct sales channels, improve product accessibility, and build the Fuyuan brand.

In terms of international business, the company adopts a distribution cooperation model, selects compliant dealers to be responsible for overseas promotion and sales, and continues to enhance competitiveness and brand influence in overseas markets. During the reporting period, the company's products have been exported to many countries and regions such as Africa, the United States, and Southeast Asia.

(4) The company’s industry status

The company is a nationally recognized high-tech enterprise. It has been selected as a G20 enterprise in Beijing's leap-forward development project of biopharmaceutical industry. It is listed among the top 50 comprehensive pharmaceutical R&D capabilities in China, the top 100 private enterprises in Beijing for scientific and technological innovation, and the top 20 chemical pharmaceutical R&D capabilities in China. It has established a national-level postdoctoral research station. , Beijing Enterprise Technology Center, passed the national intelligent manufacturing capability maturity level three certification, and was rated as a national green factory, Beijing Integrity Creation Enterprise, Beijing Health Enterprise, trimetazidine hydrochloride tablets and other products were rated as Beijing New Technology and New Products, and have been widely recognized by the market.

With the mission of "focusing on the pharmaceutical field and creating a healthy life together", the company has carefully built the core competitive advantages of R&D, production and sales, and established a national sales network. As of the end of the reporting period, 90 varieties of products on the market, including moxifloxacin hydrochloride tablets, have passed or are deemed to have passed the national generic drug consistency evaluation, and 23 varieties, including trimetazidine hydrochloride tablets, have won the national centralized drug procurement bid.

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The company's main products rank among the top domestic manufacturers in market segments or show a good growth trend, and have strong market competitiveness. Some products have passed the US FDA certification and relevant certifications in the Philippines, Nigeria, Kenya, Ethiopia and other countries. As of the end of the reporting period, a total of 193 products of the company were included in the National Medical Insurance List, and 68 varieties were included in the National Essential Drug List.

As a national innovative generic drug industrialization base, the company has established a national postdoctoral research workstation and a R&D team of more than 400 people. The core technical personnel have international R&D backgrounds and develop cardiovascular, metabolic, mental, anti-infective, respiratory, digestive, nutritional, gynecological, external medicine, medical devices and other products. It has authorized 287 patents. The company adheres to the concept of innovation-driven development, promotes the development of new products, enriches and improves product layout, laying a solid foundation for the sustainable development of the enterprise.

Description of the company’s new important non-main business during the reporting period

□Applicable √Not applicable

2. Discussion and analysis of operating conditions

In the first half of 2026, the company adhered to party building work as a guide to seize opportunities, promote development and seek the future. All employees worked together and firmly implemented the requirements of the company's development strategy, adhered to culture-led development, actively responded to policy changes, formulated scientific and reasonable business plans, and strived to achieve production and operation goals. We will continue to build our three-in-one core competitive advantage, constantly adjust our marketing management models and strategies, and actively explore the market; we will consolidate our advantages in generic drug research and development, continue to promote multi-variety research and development strategies, and accelerate innovative drug research; we will solidly advance the production transfer of products at the Miao County base; we will strengthen cost management, strengthen safety production, promote various business development tasks in a pragmatic and efficient manner, and continuously improve our comprehensive operational capabilities. Related work has achieved phased progress and results. The details are as follows.

In the first half of 2026, the company achieved operating income of 1,710.1461 million yuan, a year-on-year increase of 4.66%; net profit attributable to shareholders of listed companies was 186.1963 million yuan, a year-on-year decrease of 30.49%. As of the end of the reporting period, the company's total assets were 4,809.2441 million yuan, a decrease of 2.33% from the end of the previous year; the owner's equity attributable to shareholders of listed companies was 3,731.4134 million yuan, a decrease of 1.27% from the end of the previous year.

1. Optimize the sales management system, improve quality and efficiency, and expand the market

During the reporting period, the company closely followed changes in the industry market environment, dynamically adjusted marketing strategies, optimized product structure, accurately formulated special strategies for circulating products, adhered to market demand as the core, increased investment in precision marketing, and continued to increase market share and brand industry influence. At the same time, the company continues to deepen the flat management mechanism, focusing on the management and control of key nodes in the entire marketing process, effectively improving the overall operating efficiency of the marketing center and the ability to respond quickly to the market. The company continues to iteratively optimize the marketing organizational structure, promote the in-depth integration of the marketing systems of each branch company, and comprehensively improve the management quality and per capita labor productivity of the marketing team; it implements special individual assessment mechanisms for key products, consolidates operating responsibilities, and effectively helps achieve the implementation of operating goals.

2. Adhere to the strategy of combining imitation and innovation to accelerate technological research and development innovation

Focusing on the R&D strategy of "combination of imitation and innovation", the company continues to build a stable, sustainable and forward-looking R&D business structure. In the generic drug sector, the company adheres to the R&D strategy of "multiple, fast and difficult", that is, with the goal of "leading the number of R&D, striving for the first generic, and overcoming difficult technical barriers", it steadily promotes the R&D of various varieties. Relying on the advantages of excellent product quality and refined cost control, the company actively participated in the national drug procurement and successfully won the bid for multiple varieties, further solidifying the company's market fundamentals and industry competitive position. In the innovative drug sector, the company focuses on the cutting-edge field of small nucleic acid drugs and has built a technology platform covering "integration of nucleic acid design, synthesis, and in vitro and in vivo evaluation". Two innovative drugs have successfully advanced to the clinical trial stage. The generic drug business provides stable financial support for the research and development of innovative drugs, and innovative technological breakthroughs continue to promote the upgrading of products to high added value. The two major business segments form a development closed loop of benign complementation and collaborative empowerment, driving the company's high-quality and sustainable development.

During the reporting period, the company continued to increase its R&D investment, with a total R&D investment of 205.1218 million yuan, a year-on-year increase of 23.80%. 14 new preparation varieties and 3 API varieties were newly approved (deemed to have been reviewed), and 8 new preparation varieties were approved for new specifications. Among them, diclofenac sodium dual-release enteric-coated capsules and pinaverium bromide tablets were the first in China to be reviewed (deemed the same); 9 preparations, including acetylcysteine ​​tablets, clopidogrel aspirin tablets, and calcipotriol liniment, were reviewed (deemed to be the same) by the top five domestic products; and three APIs, pinaverium bromide, iguratimod and bripiprazole, were approved. The research and development of innovative drugs has achieved fruitful results. A total of 23 patents have been applied for, and 2 patents have been authorized. The innovative drugs FY101 and FY103 are steadily advancing the first phase of clinical trials. The R&D pipeline continues to expand and the innovation strength is steadily improved.

3. Steadyly promote investment projects and implement transfer and upgrade of production capacity

During the reporting period, the company's raised-funded investment project, the High-Precision Drug Industrialization Construction Project (Phase I), focused on product transfer verification and completed a total of 34 varieties (40 product specifications) of production transfer verification. With the gradual release of production conversion work and production capacity, the company's production of oral solid preparations has entered a critical stage of collaborative transition between the old and new production bases. The company has established the overall idea of ​​"intelligent empowerment, dual-core collaboration" and established a division of labor and collaboration mechanism between the two bases. Through digital integration, flexible production lines and dynamic production conversion management, it has achieved double breakthroughs in production capacity upgrades and stable product supply, effectively breaking the bottleneck of production capacity supply, and laying a solid foundation for the production supply chain for the company's centralized procurement of varieties and the market promotion of new products.

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4. Improve the quality control system and build a solid foundation for compliance operations

In order to adapt to the guidance of industry regulatory policies and the company's business scale development needs, the company's production quality center will fully launch the construction of a unified quality management system in 2026. In the first half of the year, nine core systems including the "Quality Manual" were released and implemented, and each branch company was guided to complete system transformation and implementation. The company regularly tracks the dynamics of domestic and foreign drug regulatory policies, regularly sorts out and summarizes quality information, holds special meetings to analyze and judge risks, optimize management and control measures, and effectively improve risk prevention and control levels. At the same time, the company continues to carry out QC group activities to promote the unified construction of quality culture and communication empowerment, and selects 8 outstanding topics to participate in the national competition to comprehensively improve the company's overall quality management capabilities.

5. Adhere to the bottom line of safety and environmental protection and lay a solid foundation for safe production

During the reporting period, the company adhered to the bottom line of safe production and green environmental protection, adhered to the concepts of compliance operation and safe development, and established a unified safety and environmental protection management and control system. By carrying out multi-level safety special training and practical multi-scenario emergency drills, we have achieved full coverage of all employees and key risk positions, effectively improving employees' safety compliance awareness, risk identification and emergency response capabilities; improving normalized hidden danger investigation and management, monthly risk research and judgment, and hidden danger reporting reward mechanisms, promoting the digital information upgrade of safety and environmental management, improving the entire process of personnel supervision, hidden danger tracing, and pollution control, and strengthening risk classification prevention and control and closed-loop management. In terms of environmental protection management, we strictly implement sewage control and trace the entire process of hazardous waste, and complete environmental compliance declarations in a standardized manner. Emission indicators such as production wastewater and exhaust gas stably meet standards, some of which are better than local control standards. The safety and environmental protection management system operates efficiently, providing a solid guarantee for the sustainable and healthy development of the enterprise.

6. Deepen the construction of corporate culture and empower enterprises to develop with high quality

During the reporting period, the company continued to deepen the construction of its corporate culture system and promoted the in-depth integration of cultural construction and business development. The company has improved institutional systems such as brand promotion and public opinion management, unified corporate culture construction standards, and carried out cultural inspections and exchanges on a regular basis. Closely adhere to the core goals of business development, refine and create exclusive marketing culture modules, and promote deep integration and two-way empowerment of corporate culture and business operations. Steadily promote the construction of harmonious teams and consolidate the cultural foundation at the grassroots level. Strengthen the construction of cultural talent teams, organize mid- and high-level corporate culture lectures and special training on publicity skills, and build a professional cultural empowerment team. At the same time, the company digs deep into advanced models, sets benchmarks and role models, promotes key projects such as corporate brand upgrades and official website optimization in an orderly manner, carries out publicity activities based on various theme nodes, uses cultural soft power to gather team efforts, and continues to empower high-quality corporate development.

Major changes in the company's operating conditions during the reporting period, as well as events that occurred during the reporting period that have a significant impact on the company's operating conditions and are expected to have a significant impact in the future

□Applicable √Not applicable

3. Analysis of core competitiveness during the reporting period

√Applicable □Not applicable

(1) Rich product categories and strong market competitiveness

The company is mainly engaged in the research and development, production and sales of pharmaceutical preparations and medical devices. Pharmaceutical preparations mainly cover cardiovascular system, chronic kidney disease, dermatology, digestive system, diabetes, psychiatric and nervous system, gynecological and other product segments. Medical devices mainly cover the field of humidification and oxygen inhalation devices. The company has built a multi-dimensional business system such as oral solid preparations, external preparations, and medical devices. Diversified product lines enable the company to have multiple sources of profit, and the company's operating risks are relatively lower.

The company has a number of first-in-class generic drugs in China, such as compound α-keto acid tablets, olmesartan medoxomil tablets, trimetazidine hydrochloride tablets, losartan potassium hydrochlorothiazide tablets, moxifloxacin hydrochloride tablets, pinaverium bromide tablets, diclofenac sodium dual-release enteric-coated capsules, progesterone soft capsules, etc. Its main products rank among the top domestic manufacturers in market segments or show a good growth trend, and have strong market competitiveness.

As of the end of the reporting period, the company had obtained a total of 251 domestic drug registration approvals for pharmaceutical preparations, and a total of 193 products were included in the National Medical Insurance Catalog, including 62 Category A medical insurance products, and 68 varieties were included in the National Essential Drugs Catalog. The company's 14 main pharmaceutical preparation products have been included in the national medical insurance catalog.

(2) Strong R&D capabilities and abundant research and development reserves

The company is committed to first imitating and quickly imitating clinically urgently needed varieties for major and multiple diseases, establishing product groups in important treatment areas such as cardiovascular, diabetes, and dermatology, forming a combination of product and treatment areas; the company continues to increase investment in products and treatment areas with existing advantages, and strengthens the accumulation of technology and products; at the same time, it continues to improve the accumulation of innovative capabilities and promote the research and development of innovative drugs, with a view to gradually realizing global registered R&D capabilities.

The company has established multiple technology platforms including nucleic acid innovation platform, chemical synthesis technology platform, oral solid preparation technology platform, external preparation technology platform, and medical device oxygen therapy technology platform. Relying on the above-mentioned technology platform, the company has formed a number of core technologies and applied them to the company's main products, providing relatively strong technical support for the products.

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As of the end of the reporting period, the company had 90 varieties that had passed the consistency evaluation or were deemed to have passed the consistency evaluation; there were 91 projects under development for generic pharmaceutical preparations, 4 projects under development for innovative drugs focusing on nucleic acid drugs, and 4 projects for medical devices.

(3) Extensive sales network coverage

The company has established a relatively comprehensive sales network and has carried out in-depth cooperation with large-scale national and regional pharmaceutical distribution companies such as Sinopharm Holdings, Shanghai Pharmaceuticals, China Resources Pharmaceuticals, and Jiuzhoutong. The terminals cover hospitals, health service centers, clinics, and pharmacies at all levels. The company has relatively rich commercialization experience, focuses on products, and has established a professional and efficient sales team to deeply cultivate the market. It has also built a professional sales team and is growing in scale. The comprehensiveness of the sales network and the professionalism of the sales team ensure the steady growth of the company's sales scale.

(4) The talent management system is relatively complete and the core team is relatively stable.

The company has established a complete management system including R&D, production, procurement, and sales. It has established a relatively complete system for each link and is equipped with experienced management personnel. The company's core management team is stable and has many years of management experience in the pharmaceutical industry. It has rich experience in R&D, production, marketing, management, and technology. It has a strong grasp of industry development trends and market demands, which effectively guarantees the company's sustainable and healthy development.

4. Main operating conditions during the reporting period

(1) Main business analysis

1. Analysis table of changes in relevant accounts of financial statements

Unit: Yuan Currency: RMB account Amount for the current period Amount for the same period last year Change ratio (%) Financial expenses -1,458,323.88 -4,319,350.01 Not applicable Other income 17,348,574.93 8,797,559.28 97.20 Credit impairment loss 1,842,748.81 -566,309.52 Not applicable Asset impairment losses -6,101,874.66 -4,085,112.27 Not applicable Asset disposal income 803,249.67 -35,004.55 Not applicable Non-operating expenses 1,879,961.87 4,910,008.82 -61.71 Income tax expenses 13,123,141.44 33,045,980.60 -60.29 Net cash flow generated from investing activities -160,217,662.40 864,234,796.74 -118.54

Explanation of reasons for changes in financial expenses: Mainly due to decrease in interest income.

Explanation of reasons for changes in other income: Mainly due to the increase in government subsidies received in the current period.

Explanation of reasons for changes in credit impairment losses: Mainly due to the decrease in the balance of accounts receivable.

Explanation of reasons for changes in asset impairment losses: Mainly due to the increase in inventory depreciation losses in the current period.

Explanation of reasons for changes in asset disposal income: Mainly due to the increase in income from asset disposal in the current period.

Explanation of reasons for changes in non-operating expenses: Mainly due to the one-time large non-recurring profit and loss expenditures that occurred in the previous period and did not occur in this period. Explanation of reasons for changes in income tax expenses: Mainly due to the decrease in total profits for the current period.

Explanation of reasons for changes in net cash flows generated from investing activities: Mainly due to the decrease in redemptions of mature financial products in the current period.

2. Detailed description of major changes in the company’s business type, profit composition or profit sources during this period

□Applicable √Not applicable

(2) Explanation of significant changes in profits caused by non-main business

□Applicable √Not applicable

(3) Analysis of assets and liabilities

√Applicable □Not applicable

1. Assets and liabilities status

Unit: Yuan Currency: RMB

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End of current period

End of current period End of previous year

The amount is higher

Number accounted for total capital Number accounted for total capital Situation: Project name Number at the end of the period Number at the end of the previous year Number at the end of the year Changes at the end of the period

Proportion of production Proportion of production Clearly

dynamic ratio

(%) (%)

(%)

Mainly due to the increase in investment in project construction in progress 43,263,256.18 0.90 19,265,143.26 0.39 124.57 Mainly due to renovation and long-term deferred expenses

8,808,813.58 0.18 13,004,127.82 0.26 -32.26 Cost of construction

Due to amortization

Mainly due to the company's other non-current

9,275,342.92 0.19 24,368,129.18 0.49 -61.94 Equipment assets paid

Due to the arrival of payment

Mainly due to advance receipt contract liabilities 66,410,260.85 1.38 23,879,554.59 0.48 178.11

due to increase in payment

Mainly due to value-added tax and taxes payable in the current period 22,999,256.90 0.48 45,347,615.62 0.92 -49.28

The decrease in corporate income tax was mainly due to the decrease in non-current liabilities of some lease contracts due within one year 10,983,706.91 0.23 16,762,855.49 0.34 -34.48 Debt within one year Due within one year

Other instructions

Not applicable

2. Overseas assets

□Applicable √Not applicable

3. Restrictions on major assets as of the end of the reporting period

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Item Closing book value Reason for restriction

300,000.00 Monetary funds as guarantee deposit

7,000.00 ETC deposit total 307,000.00

4. Other instructions

□Applicable √Not applicable

(4) Investment status analysis

1. Overall analysis of external equity investment

□Applicable √Not applicable

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(1)Significant equity investment

□Applicable √Not applicable

(2) Significant non-equity investment

□Applicable √Not applicable

(3) Financial assets measured at fair value

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Included in equity

Fair price for the current period Provision for the current period Asset category sold/redempted for the current period Opening amount Cumulative fair price Purchase amount for the current period Other changes Gains and losses from changes in value at the end of the period Impairment amount

value change

Others 1,428,800,000.00 4,288,000,000.00 4,161,800,000.00 1,555,000,000.00Total 1,428,800,000.00 4,288,000,000.00 4,161,800,000.00 1,555,000,000.00

Securities investment situation

□Applicable √Not applicable

Explanation of securities investment situation

□Applicable √Not applicable

Private equity fund investment situation

□Applicable √Not applicable

Derivatives investment situation

□Applicable √Not applicable

(5) Major assets and equity sales

□Applicable √Not applicable

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(6) Analysis of major holding and participating companies

√Applicable □Not applicable

Major subsidiaries and joint-stock companies that affect the company’s net profit by more than 10% √ Applicable □ Not applicable

Unit: 10,000 yuan Currency: RMB Company name Company type Main business Registered capital Total assets Net assets Operating income Operating profit Net profit Mainly engaged in medical treatment Beijing Wansheng Renhe Science and Technology

Subsidiaries Production of equipment, 1,538.50 14,276.44 9,052.66 10,453.80 1,012.60 916.51 Technology Co., Ltd.

R&D and sales are mainly engaged in dermatology and digestive system Fuyuan Pharmaceutical Co., Ltd.

Subsidiary Research and Development of Traditional Drugs 7,500.00 94,418.80 73,071.11 53,911.42 9,816.47 8,788.40 Division

development, production and sales

Mainly engaged in the research and development, production and sales of gynecological Zhejiang Aisheng Pharmaceutical Co., Ltd.

Acquisition and disposal of subsidiaries during the reporting period

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

(7) Structured entities controlled by the company

□Applicable √Not applicable

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5. Other disclosure matters

(1) Possible risks

√Applicable □Not applicable

1. Risks of intensified market competition

The company's product categories are rich, and pharmaceutical preparations currently mainly cover cardiovascular system, chronic kidney disease, dermatology, digestive system, diabetes, psychiatric and nervous system, gynecology and other product segments. It has olmesartan medoxomil tablets, telmisartan tablets, trimetazidine hydrochloride tablets, atorvastatin calcium tablets, ezetimibe tablets, compound alpha-keto acid tablets, pinaverium bromide tablets, repaglinide tablets, aka There are many main products including Botang Tablets, Paroxetine Hydrochloride Tablets, Gliclazide Sustained Release Tablets, Saxagliptin Metformin Sustained Release Tablets, Dapagliflozin Metformin Sustained Release Tablets, Sodium Valproate Sustained Release Tablets, Venlafaxine Hydrochloride Sustained Release Capsules, Progesterone Soft Capsules, Hasinide Solution, Kaiselu, Qianli Loquat Dew, etc.; the company's medical device business mainly focuses on humidification and oxygen inhalation devices, and its main products include disposable oxygen inhalation tubes. The company's main products have formed certain competitive advantages in market segments, but if competitors in the industry launch products with greater efficacy or cost-effectiveness in the future, or even upgraded new products, the company's existing advantages will be weakened.

In the face of the above risks, the company will insist on building the brand image of first-time imitation and fast imitation, and deepen the layout consistency evaluation work; continue to improve the integrated layout of "API + preparation" to ensure cost control and stable supply; actively promote the research and development of innovative drugs and realize the development strategy of "combination of generics and innovations".

2. Risks related to industry policies

As the number of competing companies continues to increase and the national drug volume-based procurement policy is implemented in a regular and cyclical manner, we may face the risk that our products will fail to win the bid or that the price of the product will drop after winning the bid, resulting in a slowdown or even a decline in operating performance growth.

In the face of the above risks, the company will pay close attention to policy changes, strengthen policy interpretation and analysis, and actively respond. At the same time, the company takes advantage of its rich product categories and multiple core technical advantages to actively adapt to national policies related to mass procurement. On the other hand, by implementing a diversified sales structure and innovative marketing, we have expanded sales volume to offset price reductions; in terms of channel management, we have broadened and deepened channels, refined management, expanded terminal coverage, and reduced reliance on a single channel through multi-channel layout such as out-of-hospital retail and effectively responded to policy fluctuations. Carry out internal lean management, improve internal skills, and seize development opportunities amid challenges.

3. Product development risks

The company's long-term competitiveness depends on the successful development and subsequent industrialization of new products. The research and development of pharmaceutical preparations and medical devices is characterized by large capital investment, high technical difficulty, and long test cycles. During this period, it may also be affected by adjustments to national drug or medical device registration management regulations. There is a risk of failure at every stage of research and development. The research and development of generic drugs generally needs to go through stages such as pharmaceutical research, clinical research, and registration application, and must be approved by the national food regulatory authorities before drug registration approval can be obtained; the research and development of innovative drugs generally needs to go through drug discovery, preclinical development, clinical application (IND), clinical research (clinical phase I, phase II, phase III, phase IV), and new drug application ( NDA) and other stages, drug registration approval can only be obtained after approval by the national drug regulatory authority; medical device research and development generally needs to go through stages such as conceptual design, sample testing, mass production testing, clinical research, registration application, etc., and only after review and approval or filing by the local or national drug regulatory authority can a medical device registration or filing certificate be obtained. If key technologies fail to make breakthroughs, clinical trials are suspended or terminated, regulatory approvals are not successfully passed, or the approval speed is slower than expected, the company is at risk of being unable to complete the registration of its products under development as scheduled or to be successfully launched.

In the face of the above risks, the company continues to conduct research and development in order to continuously bring new products to the market, thereby realizing its development strategy and improving industry competitiveness. Based on the understanding of the industry and market, analysis and prediction of market demand, and full consideration of factors such as the existing product structure and its own research and development capabilities, the pharmaceutical preparations mainly carry out research and development layout in the fields of cardiovascular system, diabetes, psychiatric and nervous system, digestive system, anti-infective and dermatological drugs, etc., and the medical devices are extended based on existing products and markets. The company continues to increase investment in products and treatment areas where it already has advantages, and strengthens the accumulation of technology and products; at the same time, it continues to improve the accumulation of innovation capabilities and promote the research and development of innovative drugs, with a view to gradually realizing global registered research and development capabilities. The company has established multiple technology platforms such as nucleic acid innovation platform, chemical synthesis technology platform, oral solid preparation technology platform, external preparation technology platform, and medical device oxygen therapy technology platform. Relying on the above technology platforms, the company has formed a number of core technologies and applied them in the company's

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As for the main products, it provides relatively strong technical support for the products. The company's core technical personnel have extensive experience in the field of drug R&D and registration, and the core technical personnel remain stable. As of the end of the reporting period, the company had 90 varieties that had passed the consistency evaluation or were deemed to have passed the consistency evaluation, and the innovative drugs FY101 and FY103 were steadily advancing into phase I clinical trials.

(2) Other disclosure matters

□Applicable √Not applicable

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Section 4 Corporate Governance, Environment and Society

1. Changes in directors and senior managers of the company

□Applicable √Not applicable

Description of changes in directors and senior managers of the company

□Applicable √Not applicable

2. Profit distribution or capital reserve conversion plan

The profit distribution plan and the plan for converting public reserve funds into share capital prepared in the semi-annual period

Whether to distribute or transfer No

Number of bonus shares for every 10 shares (shares) 0 Number of dividends for every 10 shares (yuan) (tax included) 0 Number of bonus shares for every 10 shares (shares) 0

Explanations related to profit distribution or capital reserve conversion plan are not applicable

3. The situation and impact of the company’s equity incentive plan, employee stock ownership plan or other employee incentive measures

(1) Applicable if relevant equity incentive matters have been disclosed in temporary announcements and there is no progress or change in subsequent implementation √Not applicable

(2) Incentives not disclosed in temporary announcements or with subsequent progress

Equity incentives

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

Employee stock ownership plan status

□Applicable √Not applicable

Other incentives

□Applicable √Not applicable

4. Environmental information of listed companies and their major subsidiaries included in the list of companies that disclose environmental information in accordance with the law √Applicable □Not applicable

Companies included in the list of companies that disclose environmental information in accordance with the law

Quantity (pieces)

Preface

Company name Query index number of environmental information disclosure report according to law

Beijing Fuyuan Pharmaceutical Co., Ltd. Cangzhou Branch Hebei Enterprise Environmental Information Disclosure System in accordance with the law, the website is: Company http://121.29.48.71:8080/#/index Zhejiang Enterprise Environmental Information Disclosure System in accordance with the law, the website is: 2 Zhejiang Aisheng Pharmaceutical Co., Ltd.

https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-search

Other instructions

□Applicable √Not applicable

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5. Consolidate and expand the results of poverty alleviation, rural revitalization and other work □Applicable √Not applicable

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Section 5 Important Matters

1. Fulfillment of commitments

(1) Commitments made by the company’s actual controller, shareholders, related parties, acquirers and the company and other relevant parties during the reporting period or continuing into the reporting period

√Applicable □Not applicable

If it fails to perform in time, if it fails to meet the promise, whether it has been fulfilled, whether it is timely and strictly performed, it should be explained that it has not been completed. The background of the commitment, the commitment time, the commitment period,

Type Contents Period Qualified performance Specific details of performance Indicate the next reason Restriction on sales of shares in step plan See note 1 See note 1 See note 1 Yes See note 1 Yes Not applicable Not applicable

solve peers

See note 2 for initial public offering See note 2 See note 2 No See note 2 Yes Not applicable Not applicable

competition

Guan's commitment

resolve association

See note 3 See note 3 See note 3 No See note 3 Yes Not applicable Not applicable

transaction

Note 1:

1. The controlling shareholder Xinhecheng Holdings promises:

1. Within 36 months from the date of listing of the company's stocks, the company shall not transfer or entrust others to manage the shares issued before the company's initial public offering held directly or indirectly by the company, nor shall the company repurchase the shares.

2. Within two years after the expiration of the above-mentioned lock-up period, the price at which the company reduces the company's shares shall not be lower than the issue price (if the company's stock undergoes ex-rights and ex-dividend events such as dividend distribution, bonus shares, capital reserve transfer to share capital, etc. during this period, the issue price shall be adjusted accordingly, the same below); if the company's shares are listed 6 months later If the closing price of the company's shares for 20 consecutive trading days is lower than the issue price, or the closing price of the company's shares at the end of the six-month period after listing (if that day is not a trading day, then the first trading day after that day) is lower than the issue price, the lock-up period of the company's shares held by the company will be automatically extended for six months.

3. In addition, the company will also strictly abide by the China Securities Regulatory Commission's "Several Provisions on the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Management of Listed Companies", the "Implementation Rules for Shareholding Reductions by Shareholders, Directors, Supervisors and Senior Management of Listed Companies on the Shanghai Stock Exchange" and the applicable regulations issued and implemented from time to time in the future. Laws, regulations, rules, normative documents on share lock-up, shareholding reduction and information disclosure and the provisions of the Shanghai Stock Exchange's self-regulatory norms. If these provisions are different from the above commitments, the Company will strictly comply with the provisions of such laws, regulations, rules, normative documents and the Shanghai Stock Exchange's self-regulatory norms.

2. The actual controller Hu Baifan promises:

1. Within 36 months from the date of listing of the company's stocks, the company shall not transfer or entrust others to manage the shares that were issued before the company's initial public offering held directly or indirectly by the person, nor shall the company repurchase the shares.

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2. Within two years after the expiration of the above-mentioned lock-up period, the price at which I reduce my holdings of the company's shares shall not be lower than the issue price (if the company's shares undergo ex-rights and ex-dividend events such as dividend distribution, bonus shares, capitalization of capital reserves, etc. during this period, the issue price shall be adjusted accordingly, the same below); if the company's shares continue to decline for 2 consecutive years within 6 months after the company's listing, If the closing price on 0 trading days is lower than the issuance price, or if the closing price at the end of 6 months after listing (if that day is not a trading day, then the first trading day after that day) is lower than the issuance price, the lock-up period of the company's stocks held by me will be automatically extended for 6 months, and will not be terminated due to job changes or resignations.

3. After the expiration of the above-mentioned lock-in period, during my tenure as a director and/or senior manager of the company, the shares transferred each year shall not exceed 25% of the total number of company shares held directly or indirectly by me; within six months after leaving office, the company shares held directly or indirectly by me shall not be transferred.

4. In addition, I will also strictly abide by the China Securities Regulatory Commission's "Several Provisions on the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Management of Listed Companies", the "Implementation Rules for Shareholding Reductions by Shareholders, Directors, Supervisors and Senior Managers of Listed Companies on the Shanghai Stock Exchange" and the applicable regulations issued and implemented from time to time in the future. Laws, regulations, rules, normative documents on share lock-up, shareholding reduction and information disclosure and the provisions of the Shanghai Stock Exchange's self-regulatory standards. If these provisions are different from the above commitments, I will strictly comply with the provisions of such laws, regulations, rules, normative documents and the Shanghai Stock Exchange's self-regulatory norms.

3. Qinjin Investment Commitments of shareholders holding more than 5% of the shares:

1. Within 36 months from the date of listing of the company's stocks, the company shall not transfer or entrust others to manage the shares issued before the company's initial public offering held directly or indirectly by the company, nor shall the company repurchase the shares.

2. Within two years after the expiration of the above-mentioned lock-up period, the price at which the company reduces the company's shares shall not be lower than the issue price (if the company's stock undergoes ex-rights and ex-dividend events such as dividend distribution, bonus shares, capital reserve transfer to share capital, etc. during this period, the issue price shall be adjusted accordingly, the same below); if the company's shares are listed 6 months later If the closing price of the company's shares for 20 consecutive trading days is lower than the issue price, or the closing price of the company's shares at the end of the six-month period after listing (if that day is not a trading day, then the first trading day after that day) is lower than the issue price, the lock-up period of the company's shares held by the company will be automatically extended for six months.

3. In addition, the company will also strictly abide by the China Securities Regulatory Commission's "Several Provisions on the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Management of Listed Companies", the "Implementation Rules for Shareholding Reductions by Shareholders, Directors, Supervisors and Senior Management of Listed Companies on the Shanghai Stock Exchange" and the applicable regulations issued and implemented from time to time in the future. Laws, regulations, rules, normative documents on share lock-up, shareholding reduction and information disclosure and the provisions of the Shanghai Stock Exchange's self-regulatory norms. If these provisions are different from the above commitments, the Company will strictly comply with the provisions of such laws, regulations, rules, normative documents and the Shanghai Stock Exchange's self-regulatory norms.

4. Commitment from relatives of actual controllers who indirectly hold company shares

(1) Hu Shaoyi, a relative of the actual controller and director of the company, promises:

1. Within 36 months from the date of listing of the company's stocks, the company shall not transfer or entrust others to manage the shares that were issued before the company's initial public offering held indirectly by the person, nor shall the company repurchase the shares.

2. Within two years after the expiration of the above-mentioned lock-up period, the price at which I reduce my holdings of the company's shares shall not be lower than the issue price (if the company's shares undergo ex-rights and ex-dividend events such as dividend distribution, bonus shares, capitalization of capital reserves, etc. during this period, the issue price shall be adjusted accordingly, the same below); if the company's shares continue to decline for 2 consecutive years within 6 months after the company's listing, If the closing price on 0 trading days is lower than the issuance price, or if the closing price at the end of 6 months after listing (if that day is not a trading day, then the first trading day after that day) is lower than the issuance price, the lock-up period of the company's stocks held by me will be automatically extended for 6 months, and will not be terminated due to job changes or resignations.

3. After the expiration of the above-mentioned lock-in period, during my tenure as a director and/or senior manager of the company, the shares transferred each year shall not exceed 25% of the total number of company shares held directly or indirectly by me; within six months after leaving office, the company shares held directly or indirectly by me shall not be transferred.

4. In addition, I will also strictly abide by the China Securities Regulatory Commission's "Several Provisions on Share Reductions by Shareholders, Directors, Supervisors and Senior Management of Listed Companies", "Shanghai Stock Exchange Implementation Rules for Share Reductions by Shareholders, Directors, Supervisors and Senior Management of Listed Companies" as well as the applicable laws, regulations, rules, normative documents and Shanghai Stock Exchange on share locking, shareholding reduction and information disclosure that will be issued and implemented from time to time in the future.

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If there is any difference between these provisions and the above commitments, I will strictly abide by the provisions of the laws, regulations, rules, normative documents and the self-regulatory regulations of the Shanghai Stock Exchange.

(2) Wang Liying, Hu Baishan and Deng Rong, relatives of the actual controllers, promise:

1. Within 36 months from the date of listing of the company's stocks, the company shall not transfer or entrust others to manage the shares that were issued before the company's initial public offering held indirectly by the person, nor shall the company repurchase the shares.

2. Within two years after the expiration of the above-mentioned lock-up period, the price at which I reduce the company's shares shall not be lower than the issue price (if the company's shares undergo ex-rights and ex-dividend events such as dividend distribution, bonus shares, capital reserve transfer to share capital, etc. during this period, the issue price shall be adjusted accordingly, the same below); if the company's shares are listed 6 months later If the closing price of the company's stocks for 20 consecutive trading days is lower than the issue price, or the closing price of the company's stocks at the end of the six-month period after listing (if that day is not a trading day, then the first trading day after that day) is lower than the issue price, the lock-up period of the company's stocks held by me will be automatically extended for six months.

3. In addition, I will also strictly abide by the China Securities Regulatory Commission's "Several Provisions on the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Management of Listed Companies", the "Implementation Rules for Shareholding Reductions by Shareholders, Directors, Supervisors and Senior Management of Listed Companies on the Shanghai Stock Exchange" and the applicable regulations issued and implemented from time to time in the future. Laws, regulations, rules, normative documents on share lock-up, shareholding reduction and information disclosure and the provisions of the Shanghai Stock Exchange's self-regulatory standards. If these provisions are different from the above commitments, I will strictly comply with the provisions of such laws, regulations, rules, normative documents and the Shanghai Stock Exchange's self-regulatory norms.

Note 2:

The controlling shareholder Xinhecheng Holdings and the actual controller Hu Baifan promise:

(1) Commit that it or other enterprises it controls other than the company and its subsidiaries (hereinafter referred to as "other affiliated enterprises") are not currently engaged in activities that directly or indirectly constitute horizontal competition with the existing business of the company and its subsidiaries;

(2) Commitment to support the professional development of its affiliated enterprises, support the company’s R&D, production and sales business of raw materials (for personal use), pharmaceutical preparations and medical devices, and does not support Xinhecheng’s R&D, production and sales business of pharmaceutical preparation products;

(3) Commit to strictly abide by the regulations on avoiding horizontal competition. For new businesses that the company and its subsidiaries will expand in the future and other affiliated enterprises have not yet engaged in, the actual controller, controlling shareholder and other affiliated enterprises will not engage in activities that directly or indirectly compete with the new business of the company and its subsidiaries;

(4) The actual controller and controlling shareholder will, in accordance with the relevant provisions of laws, regulations and internal corporate governance norms, and through the nomination, election, appointment or appointment of personnel and their own control rights status, legally urge other affiliated enterprises to fulfill their obligations in this commitment to avoid horizontal competition and not engage in activities that may compete with the company and its subsidiaries' existing and aforementioned new businesses. The actual controller and controlling shareholder are willing to bear liability for the economic losses caused to the company and its subsidiaries by themselves and other affiliated enterprises in violation of the above commitments.

Note 3:

1. The controlling shareholder Xinhecheng Holdings and the shareholder holding more than 5% of the shares Qinjin Investment have made the following commitments:

1. The Company has made complete and detailed disclosure of related parties and related transactions in accordance with the requirements of securities regulatory laws, regulations and normative documents. As of the date of issuance of this commitment letter, there are no related transactions between the Company and its affiliated enterprises that should be disclosed in accordance with laws and regulations and the relevant provisions of the China Securities Regulatory Commission and the Shanghai Stock Exchange but have not been disclosed between the Company and other companies and other related parties that the Company controls or exerts significant influence on (hereinafter referred to as the "Company and its related parties") other than the Company and its affiliated enterprises (referring to the operating entities included in the Company's consolidated statements, the same below).

2. The company promises that it will not seek to provide the company and its affiliates with conditions or benefits that are superior to those of independent third parties in terms of business operations.

3. The company promises to take effective measures to avoid related transactions between the company and its related parties and the company and its subsidiaries as much as possible; for related transactions that are unavoidable or occur for reasonable reasons related to the business activities of the company and its subsidiaries, the company and its related parties will follow the principles of fair and reasonable market pricing, sign agreements in accordance with the law, perform necessary procedures in accordance with the company's articles of association, relevant laws, regulations and normative documents, and will not use such related transactions to harm the interests of the company and other shareholders of the company.

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4. Prevent the Company and its affiliates from illegally occupying the funds and assets of the Company and its affiliated enterprises. Under any circumstances, the Company and its affiliated enterprises will not be required to provide any form of guarantee to the Company and its affiliated parties in violation of regulations.

5. The Company strictly abides by the information disclosure rules regarding related party transactions.

6. If the company violates the commitments in this commitment letter and causes any losses to the company and/or its affiliated enterprises, the company will bear the liability for damages to the company and/or its affiliated enterprises.

2. Commitment of the actual controller Hu Baifan

Hu Bofan, the actual controller of the company, promised as follows:

1. The promisee has made complete and detailed disclosure of related parties and related transactions in accordance with the requirements of securities regulatory laws, regulations and normative documents. Except for the related transactions disclosed in the company's initial public offering of shares and listing prospectus and other related documents related to the issuance and listing of the company, there are no other related transactions between the company and its affiliates that should be disclosed in accordance with laws and regulations and the relevant regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange.

2. The promisee promises not to use its controlling position over the company to seek conditions or benefits from the company and its subsidiaries that are superior to independent third parties in terms of business operations and other aspects of business operations for the promisee and its related parties.

3. The pledger promises to take effective measures to avoid related transactions between the pledger and its related parties and the company and its subsidiaries as much as possible; for related transactions that are unavoidable or occur for reasonable reasons related to the business activities of the company and its subsidiaries, the pledger and its related parties will follow fair and reasonable market pricing principles, sign agreements in accordance with the law, perform necessary procedures in accordance with the company's articles of association, relevant laws, regulations and normative documents, and will not use such related transactions to harm the interests of the company and other shareholders of the company.

4. Put an end to the illegal occupation of the funds and assets of the company and its affiliated companies by the promisee and its related parties. Under any circumstances, the company and its subsidiary companies will not be required to provide any form of guarantee to the promisee and its related parties in violation of regulations.

5. The promisee will strictly abide by the information disclosure rules regarding related party transactions.

6. If the promisee violates the commitments in this commitment letter and causes any losses to the company and/or its subordinate enterprises, the promisee will bear the liability for damages to the company and/or its subordinate enterprises.

3. Huakang Taifeng, a shareholder holding more than 5% of the shares, commits to the following:

1. The Company has made complete and detailed disclosure of related parties and related transactions in accordance with the requirements of securities regulatory laws, regulations and normative documents. As of the date of issuance of this commitment letter, there are no related transactions between the Company and its affiliated enterprises that should be disclosed in accordance with laws and regulations and the relevant provisions of the China Securities Regulatory Commission and the Shanghai Stock Exchange but have not been disclosed between the Company and other companies and other related parties that the Company controls or exerts significant influence on (hereinafter referred to as the "Company and its related parties") other than the Company and its affiliated enterprises (referring to the operating entities included in the Company's consolidated statements, the same below).

2. The company promises that it will not seek to provide the company and its affiliates with conditions or benefits that are superior to those of independent third parties in terms of business operations.

3. The company promises to take effective measures to avoid related transactions between the company and its related parties and the company and its subsidiaries as much as possible; for related transactions that are unavoidable or occur for reasonable reasons related to the business activities of the company and its subsidiaries, the company and its related parties will follow the principles of fair and reasonable market pricing, sign agreements in accordance with the law, perform necessary procedures in accordance with the company's articles of association, relevant laws, regulations and normative documents, and will not use such related transactions to harm the interests of the company and other shareholders of the company.

4. Prevent the Company and its affiliates from illegally occupying the funds and assets of the Company and its affiliated enterprises. Under any circumstances, the Company and its affiliated enterprises will not be required to provide any form of guarantee to the Company and its affiliated parties in violation of regulations.

5. The Company strictly abides by the information disclosure rules regarding related party transactions.

6. If the company violates the commitments in this commitment letter and causes any losses to the company and/or its affiliated enterprises, the company will bear the liability for damages to the company and/or its affiliated enterprises.

4. Commitments of the company’s directors, supervisors and senior managers The company’s directors, supervisors and senior managers promise as follows:

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1. I have made complete and detailed disclosure of related parties and related transactions in accordance with the requirements of securities regulatory laws, regulations and normative documents. Except for the related transactions disclosed in the company's initial public offering of shares and listing prospectus and other related documents related to the company's current issuance and listing, there are no other related transactions between me and other companies and other related parties that I control or exert significant influence (hereinafter referred to as "I and my related parties") and the company and its subsidiaries (referring to the operating entities included in the consolidated statements, the same below) that should be disclosed in accordance with laws and regulations and the relevant regulations of the China Securities Regulatory Commission and Shanghai Stock Exchange.

2. I promise that I will not seek conditions or benefits from the company and its affiliates that are superior to independent third parties in terms of business operations and other aspects for me and its related parties.

3. I promise to take effective measures to avoid related transactions between myself and my related parties and the company and its subsidiaries as much as possible; for related transactions that are unavoidable or occur for reasonable reasons related to the business activities of the company and its subsidiaries, I and my related parties will follow the principles of fair and reasonable market pricing, sign agreements in accordance with the law, perform necessary procedures in accordance with the company's articles of association, relevant laws, regulations and normative documents, and will not use these related transactions to harm the interests of the company and other shareholders of the company.

4. Prevent me and my related parties from illegally occupying the funds and assets of the company and its affiliated companies. Under any circumstances, do not require the company and its subordinate companies to provide any form of guarantee to me and my related parties in violation of regulations.

5. As a director/supervisor/senior manager of the company, I guarantee that I will abide by the corresponding recusal procedures when the company convenes the board of directors and shareholders' meetings to vote on related transactions in accordance with laws, regulations and the company's articles of association.

6. I will strictly abide by the information disclosure rules regarding related party transactions.

7. If I violate the commitments in this commitment letter and cause any losses to the company and/or its affiliated enterprises, I will bear the liability for damages to the company and/or its affiliated enterprises.

2. Non-operating capital occupation by controlling shareholders and other related parties during the reporting period

□Applicable √Not applicable

3. Illegal guarantee situation

□Applicable √Not applicable

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4. Audit status of semi-annual report

□Applicable √Not applicable

5. Changes and handling of matters involved in non-standard audit opinions in last year’s annual report □ Applicable √ Not applicable

6. Matters related to bankruptcy and reorganization

□Applicable √Not applicable

7. Major litigation and arbitration matters

□The company has major litigation and arbitration matters during this reporting period √The company has no major litigation and arbitration matters during this reporting period

8. Listed companies and their directors, senior managers, controlling shareholders, and actual controllers are suspected of violating laws and regulations, and have been punished and reorganized.

Change the situation

□Applicable √Not applicable

9. Explanation of the integrity status of the company, its controlling shareholders and actual controllers during the reporting period □ Applicable √ Not applicable

10. Major related transactions

(1) Related transactions related to daily operations

1. Matters that have been disclosed in temporary announcements and have no progress or changes in subsequent implementation □Applicable √Not applicable

2. Matters that have been disclosed in temporary announcements but have subsequent progress or changes in implementation □ Applicable √ Not applicable

3. Matters not disclosed in temporary announcements

□Applicable √Not applicable

(2) Related transactions arising from asset acquisition or equity acquisition or sale

1. Matters that have been disclosed in temporary announcements and have no progress or changes in subsequent implementation □Applicable √Not applicable

2. Matters that have been disclosed in temporary announcements but have subsequent progress or changes in implementation □ Applicable √ Not applicable

3. Matters not disclosed in temporary announcements

□Applicable √Not applicable

4. If a performance agreement is involved, the performance achievement during the reporting period should be disclosed □Applicable √Not applicable

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(3) Major related transactions of joint external investments

1. Matters that have been disclosed in temporary announcements and have no progress or changes in subsequent implementation □Applicable √Not applicable

2. Matters that have been disclosed in temporary announcements but have subsequent progress or changes in implementation □ Applicable √ Not applicable

3. Matters not disclosed in temporary announcements

□Applicable √Not applicable

(4) Related credit and debt transactions

1. Matters that have been disclosed in temporary announcements and have no progress or changes in subsequent implementation □Applicable √Not applicable

2. Matters that have been disclosed in temporary announcements but have subsequent progress or changes in implementation □ Applicable √ Not applicable

3. Matters not disclosed in temporary announcements

□Applicable √Not applicable

(5) Financial business between the company and related financial companies, company-controlled financial companies and related parties □ Applicable √ Not applicable

(6) Other major related transactions

□Applicable √Not applicable

(7) Others

□Applicable √Not applicable

11. Major contracts and their performance

(1) Custody, contracting and leasing matters

□Applicable √Not applicable

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(2) Major guarantees performed and not yet completed during the reporting period

√Applicable □Not applicable

Unit: Yuan Currency: RMB Company’s external guarantees (excluding guarantees to subsidiaries)

Guarantor Guarantee Issuer Guarantee is

Is the collateral

Listed Guaranteed Date of Birth Guarantee Guarantee Main Debt No Already Guaranteed Yes Guarantee Overdue Counter Guarantee Related Guarantor Guarantee Amount Guarantee Type (such as Related Party

Party of the company (agreement signed, starting date, expiration date, situation, performance completed, overdue, amount, situation, relationship) Guarantee

Relationship (Date of Department) Completed

Total amount of guarantees incurred during the reporting period (excluding guarantees for subsidiaries)

Total guarantee balance at the end of the reporting period (A) (excluding guarantees for subsidiaries)

The company’s guarantees for subsidiaries

Total amount of guarantees for subsidiaries during the reporting period 0.00 Total balance of guarantees for subsidiaries at the end of the reporting period (B) 60,000,000.00

Total amount of company guarantees (including guarantees to subsidiaries)

Total guarantee (A+B) 60,000,000.00

The ratio of total guarantees to the company’s net assets (%) 1.61, of which:

Amount of guarantee provided to shareholders, actual controllers and their related parties (C) 0.00 Debt guarantee provided directly or indirectly to guaranteed objects whose asset-liability ratio exceeds 70%

0.00 amount (D)

The amount of the total guarantee exceeding 50% of the net assets (E) 0.00 The total amount of the above three guarantees (C+D+E) 0.00 Explanation of the possible joint liability for unexpired guarantees

Guarantee description

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(3) Other major contracts

□Applicable √Not applicable

12. Instructions on the use of raised funds

√Applicable □Not applicable

(1) Overall use of raised funds

√Applicable □Not applicable

Unit: 10,000 yuan

Among them: as of the reporting date as of the reporting date

Prospectus or As of the end of the reporting period The end of the reporting period This year

Super fundraising as of report

Raising instructions End of reporting period Raised funds Exceeding raised funds Investment amount Total raised funds used for change Accumulated at the end of the period Current year

Raised Funds Raised Funds Raised Funds Raised Funds Proportion of Total Raised Funds Over Raised Funds Cumulative Funds Raised Funds Raised in Full (3) = Investment Fund Raising Investment Funds

Fund Source Total Net Amount (1) Fund Commitment Cumulative Fund Input Input In (%) Fund Raising Time (1) - Total Fund Amount (8)

Total investment Total investment degree (%) Degree (%) (9) Total amount (2) (4)

(2) Amount (6)＝ (7)＝ =(8)/(1)

(5) (4)/(1) (5)/(3)

First public announcement in 2022 175,440.00 163,591.98 163,591.98 141,520.68 86.51 Not applicable 2,411.56 1.47 4,388.42 Development Bank June 27

stock day

Total / 175,440.00 163,591.98 163,591.98 141,520.68 86.51 Not applicable 2,411.56 1.47 4,388.42

Other instructions

□Applicable √Not applicable

(2) Details of fundraising projects

√Applicable □Not applicable

1. Detailed use of raised funds

√Applicable □Not applicable

Unit: 10,000 yuan

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Is the investment project ready for investment? As of the progress report, the project status is reported. Yes, or by the end of the reporting period, it has been reached. Yes Yes. Is this project a major project? Is the investment progress this year?

Raising Raising Funds raised Accumulated at the end of the period Accumulated Scheduled No No Realized Big change project target Involved Investment in this year did not meet the plan Realized

Fund description Planned investment Investment raise Investment can maximize the benefits that have been met, and the name of the savings amount can change the specific reasons for the investment amount.

Source Total amount in the book (1) Total amount of funds Progress Status of use Combination or research Quality Investment direction Cause and benefit

Commitment (2) (%) The current status of the project is that the development results of the project are promising (3)= Phase 1. Please describe the specific progress of the project (2)/(1)

High degree of precision Yes, 97,488.42 1,331.04 73,245.94 75.13 2025 Not applicable 977.36

Sharp Medicine This Item Year 9

Product Item Month

First industrialized birth

Make construction production and consumption public,

Yes Yes Yes -2,980.00 No 17,136.34 Issue Project Construction Adjustment

Stocks (one set up to raise

period) funds

investment

total amount

Innovation Yes, 46,211.58 1,080.52 48,382.76 104.70 2026 Not applicable Not applicable

Medicine and this item for 12 years old

The first imitation project has not been completed for months

Publicly available pharmaceutical research

Yes No Yes Not applicable No /Issue Send item Send cancel,

Stock item adjustment

Recruit

funds

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investment

total amount

First Commitment Supplement 19,891.98 0.00 19,891.98 100.00 Unsuitable Not applicable to disclosure Supplement Current use Unfit

Yes No Yes Yes Not Applicable No /Issue Current Repay Stock Fund Loan

Total / / / / 163,591.98 2,411.56 141,520.68 86.51 / / / / / / 17,136.34

2. Detailed usage of excess raised funds

□Applicable √Not applicable

3. Details of the re-evaluation of investment projects during the reporting period

□Applicable √Not applicable

(3) Changes or termination of fundraising during the reporting period

□Applicable √Not applicable

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(4) Other uses of raised funds during the reporting period

1. Advance investment and replacement of raised funds in investment projects

□Applicable √Not applicable

2. Use idle raised funds to temporarily supplement working capital

□Applicable √Not applicable

3. Cash management of idle raised funds and investment in related products

√Applicable □Not applicable

Unit: 10,000 yuan Currency: RMB raised funds

During the reporting period, the maximum amount of cash spent during the period was

Is the closing cash balance managed by the board of directors on the date of review? The start date and end date of the management balance exceed the authorized review amount?

amount amount

degree

2025/3/28 50,000.00 2025/4/28 2026/4/27 0.00 No

Other instructions

On March 28, 2025, the 16th meeting of the second board of directors and the 13th meeting of the second board of supervisors passed the "Proposal on the Use of Idle Raised Funds for Cash Management", agreeing that the company will use no more than RMB 500 million of temporarily idle raised funds to purchase highly secure bank capital-guaranteed financial products such as structured deposits and certificates of deposit. The above-mentioned amount of funds can be used on a rolling basis within 12 months from the date of review and approval by the company's shareholders' meeting.

As of June 30, 2026, the actual balance of the company's use of temporarily idle raised funds to purchase financial products (including structured deposits and seven-day notice deposits) was 0 yuan.

4. Others

□Applicable √Not applicable

(5) Explanation of the intermediary agency’s abnormal verification of the storage and use of raised funds □ Applicable √ Not applicable

(6) Subsequent rectification of unauthorized changes in the use of raised funds and illegal occupation of raised funds

□Applicable √Not applicable

13. Description of other major matters

□Applicable √Not applicable

Section 6 Changes in Shares and Shareholders

1. Changes in share capital

(1) Statement of changes in shares

1. Statement of changes in shares

During the reporting period, the total number of shares and capital structure of the company did not change.

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2. Description of changes in shares

□Applicable √Not applicable

3. The impact of changes in shares between the reporting period and the disclosure date of the semi-annual report on financial indicators such as earnings per share and net assets per share (if any)

□Applicable √Not applicable

4. Other content that the company deems necessary or required to be disclosed by securities regulatory authorities

□Applicable √Not applicable

(2) Changes in restricted shares

□Applicable √Not applicable

2. Shareholder situation

(1) Total number of shareholders:

Total number of common shareholders (households) as of the end of the reporting period 19,183 Total number of preference shareholders (households) with restored voting rights as of the end of the reporting period 0

(2) Shareholding status of the top ten shareholders and top ten tradable shareholders (or shareholders without selling restrictions) as of the end of the reporting period

Unit: Shareholding status of the top ten shareholders (excluding shares lent through refinancing)

Held with a sale limit, pledged, marked or frozen

Name of shareholder Increase during the reporting period Shareholding ratio at the end of the period Shareholder status

Conditional number of shares Situation

(Full name) Less Number of shares (%) Quality

Amount Share Status Quantity

Xinhecheng Control Domestic Non-profit

176,316,

Shareholding group has 0 36.73 0 None State-owned legal company Person Xinchang Qinjin Domestic non-profit

98,337,2

Limited investment 0 20.49 0 None State-owned legal company Beijing Huakang

Domestic non-Taifeng Technology 70,240,8

0 14.63 0 None Limited liability under state-owned law 81

company

China's foreign relations

Economics and trade

TRUST LIMITED

Company-Outside

Trade Trust - 6,467,40

1,558,800 1.35 0 None Other Double Ninth Festival goals 0

Return 1 issue

Securities investment

Pooled funds

trust plan

Hong Kong Central

4,544,33 Overseas legal settlement limited 1,533,678 0.95 0 None

2 person company

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Xuancheng people and

Investment partnership 3,782,53

0 0.79 0 None Other companies (there are 5

limited partnership)

Safe Shanghai and Shenzhen

300 index

enhance stock

type pension 3,740,90

107,400 0.78 0 None Other products - Medium 0

ICBC

Bank shares have

Ltd.

3,080,00 Domestic from Wang Binchao 0 0.64 0 None

0 Ranren

2,508,50 Domestic from Deng Jinming -30,000 0.52 0 None

0 Ranren Shanghai Chongyang Festival

investment management

Limited by Shares

Company - Heavy 1,318,40

1,318,400 0.27 0 None Other Yang Hengxiang 10 0

No. Private Placement Certificate

Securities investment fund

gold

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

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

Type Quantity Xinhecheng Holding Group Co., Ltd. 176,316,354 RMB ordinary shares 176,316,354 Xinchang Qinjin Investment Co., Ltd. 98,337,233 RMB ordinary shares 98,337,233 Beijing Huakang Taifeng Technology Co., Ltd.

70,240,881 RMB ordinary shares 70,240,881 Ren Company

China Foreign Economic and Trade Trust Co., Ltd.

Co., Ltd.-Foreign Trade Trust-Chongyang Festival

6,467,400 RMB ordinary shares 6,467,400 Target return 1 securities investment set

Joint Fund Trust Plan

Hong Kong Securities Clearing Company Limited 4,544,332 RMB ordinary shares 4,544,332 Xuancheng Renhe Investment Partnership

3,782,535 RMB ordinary shares 3,782,535 (limited partnership)

Ping An CSI 300 Index Enhanced Stocks

Note type pension products - China Industrial and Commercial Bank of China 3,740,900 RMB ordinary shares 3,740,900 Commercial Bank Co., Ltd.

Wang Binchao 3,080,000 RMB ordinary shares 3,080,000 Deng Jinming 2,508,500 RMB ordinary shares 2,508,500 Shanghai Chongyang Investment Management Co., Ltd.

Co., Ltd. - Chongyang Hengxiang No. 10 Private 1,318,400 RMB ordinary shares 1,318,400 Securities investment fund

At the end of the reporting period, Beijing Fuyuan Pharmaceutical Co., Ltd. held no special repurchase accounts among the top ten shareholders.

There are 12,000,000 restricted tradable shares, accounting for 2.50% of the company’s total share capital, located in the company’s description

The fourth position on the shareholder list on June 30, 2026.

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The above-mentioned shareholders have entrusted voting rights and are subject to

Entrusting the right to vote or giving up the right to vote Not applicable

Description

Among the top ten shareholders, Xinhecheng Holding Group Co., Ltd. and Xinchang Qinjin Investment Co., Ltd.

Sitong is controlled by Hu Baifan; Xuancheng Renhe holds 0.79% of the company's shares; the above-mentioned shareholders of Xinhecheng Holdings are related or consistent

Holds 89.04% of Xuancheng Renhe’s shares and is its limited partner; Wang Binchao is Xuancheng Renhe’s explanation of actions

Executive partner of an investment partnership (limited partnership). Company unknown other top ten

Whether there is an associated relationship or a relationship between persons acting in concert among the shareholders. Preferred shareholders whose voting rights have been restored.

Not applicable

and description of the number of shares held

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

The top ten shareholders and the top ten shareholders of unrestricted tradable shares have changed from the previous period due to refinancing lending/returning □ Applicable √ Not applicable

Number of shares held by the top ten shareholders subject to selling restrictions and conditions for selling restrictions

□Applicable √Not applicable

(3) Strategic investors or general legal persons become the top ten shareholders due to the placement of new shares □Applicable √Not applicable

3. Directors and senior managers

(1) Changes in shareholdings of current and outgoing directors and senior managers during the reporting period □Applicable √Not applicable

Other situation description

□Applicable √Not applicable

(2) Equity incentives granted to directors and senior managers during the reporting period □ Applicable √ Not applicable

(3) Other instructions

□Applicable √Not applicable

4. Changes in controlling shareholders or actual controllers

□Applicable √Not applicable

5. Relevant information on preference shares

□Applicable √Not applicable

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Section 7 Bond-Related Information

1. Corporate bonds (including corporate bonds) and non-financial corporate debt financing instruments □ Applicable √ Not applicable

2. Convertible corporate bonds

□Applicable √Not applicable

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Section 8 Financial Report

1. Audit report

□Applicable √Not applicable

2. Financial statements

Consolidated Balance Sheet

June 30, 2026

Prepared by: Beijing Fuyuan Pharmaceutical Co., Ltd.

Unit: Yuan Currency: RMB

Item Notes June 30, 2026 Current assets as of December 31, 2025:

Monetary funds 488,403,299.12 634,355,094.30 Settlement reserves

Loan funds

Trading financial assets 1,555,000,000.00 1,428,800,000.00 Derivative financial assets

Notes receivable

Accounts receivable 375,736,333.72 412,371,338.04 Accounts receivable financing 81,816,694.32 110,191,392.50 Prepayments 32,497,135.22 42,017,152.32 Premiums receivable

Reinsurance accounts receivable

Receivable reinsurance contract reserves

Other receivables 1,650,321.44 1,420,319.53 Including: interest receivable

Dividends receivable

Buy financial assets under resale agreements

Inventory 426,084,177.53 412,664,480.33 Including: data resources

contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 10,347,745.03 10,686,511.42

Total current assets 2,971,535,706.38 3,052,506,288.44 Non-current assets:

Grant loans and advances

debt investment

Other debt investments

long-term receivables

long term equity investment

Other equity instrument investments

Other non-current financial assets

investment real estate

Fixed assets 1,620,130,007.10 1,646,281,517.79 Construction in progress 43,263,256.18 19,265,143.26 Productive biological assets

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oil and gas assets

Right-of-use assets 17,442,452.69 24,308,785.61 Intangible assets 133,667,561.99 139,789,688.16 Including: data resources

development expenditure

Among them: data resources

goodwill

Long-term deferred expenses 8,808,813.58 13,004,127.82 Deferred income tax assets 5,120,949.06 4,391,473.38 Other non-current assets 9,275,342.92 24,368,129.18 Total non-current assets 1,837,708,383.52 1,871,408,865.20

Total assets 4,809,244,089.90 4,923,915,153.64 Current liabilities:

short term borrowing

Borrow from the central bank

borrowing funds

Trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable 280,601,122.74 258,494,120.67 Advance receipts 47,499.98 86,900.00 Contract liabilities 66,410,260.85 23,879,554.59 Financial assets sold under repurchase

Taking deposits and placing deposits with other banks

Agent for buying and selling securities

Agent underwriting securities funds

Employee benefits payable 120,931,423.55 157,998,297.42 Taxes payable 22,999,256.90 45,347,615.62 Other payables 455,255,743.29 521,289,333.21 Including: interest payable

Dividends payable

Handling fees and commissions payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year 10,983,706.91 16,762,855.49 Other current liabilities 23,823,194.92 27,446,644.56

Total current liabilities 981,052,209.14 1,051,305,321.56 Non-current liabilities:

insurance contract reserves

long term borrowing

bonds payable

Among them: preferred shares

perpetual bond

Lease liabilities 6,644,512.20 8,998,546.65 Long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income 51,155,852.60 49,062,521.01

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Deferred income tax liabilities 24,041,254.13 21,786,418.80 Other non-current liabilities

Total non-current liabilities 81,841,618.93 79,847,486.46

Total liabilities 1,062,893,828.07 1,131,152,808.02 Owners’ equity (or shareholders’ equity):

Paid-in capital (or equity) 480,000,000.00 480,000,000.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve 1,662,392,718.51 1,662,392,718.51 Less: treasury shares 176,186,608.79 176,186,608.79 Other comprehensive income

Special reserves 10,274,390.96 10,394,994.72 Surplus reserves 223,002,790.53 223,002,790.53 General risk reserves

Undistributed profits 1,531,930,083.94 1,579,733,806.98 Attributable to the owner’s equity of the parent company

3,731,413,375.15 3,779,337,701.95 (or shareholders’ equity) total

Minority shareholders’ equity 14,936,886.68 13,424,643.67 Owner’s equity (or shareholder’s rights

3,746,350,261.83 3,792,762,345.62 profit) total

Liabilities and Owner's Equity

4,809,244,089.90 4,923,915,153.64 (or shareholders’ equity) total

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

Parent company balance sheet

June 30, 2026

Prepared by: Beijing Fuyuan Pharmaceutical Co., Ltd.

Unit: Yuan Currency: RMB

Item Notes June 30, 2026 Current assets as of December 31, 2025:

Monetary funds 336,396,964.27 372,762,947.00 Trading financial assets 1,390,000,000.00 1,380,000,000.00 Derivative financial assets

Notes receivable

Accounts receivable 96,190,635.00 137,149,542.14 Accounts receivable financing 11,642,338.83 26,541,615.36 Prepayments 4,242,165.78 12,879,248.47 Other receivables 672,943.63 690,850.91 including: interest receivable

Dividends receivable

Inventory 266,133,982.83 234,440,372.65 Including: data resources

contract assets

Assets held for sale

Non-current assets due within one year

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Other current assets 9,539,039.02 9,767,814.02

Total current assets 2,114,818,069.36 2,174,232,390.55 Non-current assets:

debt investment

Other debt investments

long-term receivables

Long-term equity investment 269,177,285.63 269,177,285.63 Other equity instrument investments

Other non-current financial assets

investment real estate

Fixed assets 1,288,721,112.16 1,307,354,955.08 Construction in progress 30,353,126.96 7,472,365.46 Productive biological assets

oil and gas assets

Right-of-use assets 4,321,793.08 7,988,879.09 Intangible assets 108,959,255.88 112,963,155.64 Including: data resources

development expenditure

Among them: data resources

goodwill

Long-term deferred expenses 2,561,053.79 5,070,167.58 Deferred income tax assets

Other non-current assets 966,094.56 19,850,685.71 Total non-current assets 1,705,059,722.06 1,729,877,494.19

Total assets 3,819,877,791.42 3,904,109,884.74 Current liabilities:

short term borrowing

Trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable 196,681,729.84 156,701,549.43 Advance payments

Contract liabilities 47,945,871.80 8,363,478.01 Employee benefits payable 72,553,115.65 96,862,057.85 Taxes payable 10,812,049.83 28,943,152.14 Other payables 373,713,485.50 408,210,215.83 including: interest payable

Dividends payable

Liabilities held for sale

Non-current liabilities due within one year 1,458,403.48 7,767,091.72 Other current liabilities 11,851,222.43 6,158,299.94

Total current liabilities 715,015,878.53 713,005,844.92 Non-current liabilities:

long term borrowing

bonds payable

Among them: preferred shares

perpetual bond

Lease liabilities 2,993,318.43 729,584.06

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long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income 28,769,598.89 31,233,748.97 Deferred income tax liabilities 22,883,866.94 20,814,780.97 Other non-current liabilities

Total non-current liabilities 54,646,784.26 52,778,114.00

Total liabilities 769,662,662.79 765,783,958.92 Owners’ equity (or shareholders’ equity):

Paid-in capital (or equity) 480,000,000.00 480,000,000.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve 1,771,374,676.98 1,771,374,676.98 Less: treasury shares 176,186,608.79 176,186,608.79 Other comprehensive income

special reserve

Surplus reserve 211,224,074.11 211,224,074.11 Undistributed profits 763,802,986.33 851,913,783.52 Owners’ equity (or shareholders’ rights

3,050,215,128.63 3,138,325,925.82 profit) total

Liabilities and Owner's Equity

3,819,877,791.42 3,904,109,884.74 (or shareholders’ equity) total

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

consolidated income statement

January-June 2026

Unit: Yuan Currency: RMB

Item Notes 2026 Half Year 2025 Half Year

1. Total operating income 1,710,146,067.10 1,633,971,250.02 Including: operating income 1,710,146,067.10 1,633,971,250.02 Interest income

Premiums earned

Fee and commission income

2. Total operating costs 1,533,370,517.07 1,345,375,722.90 Including: operating costs 681,028,628.94 547,546,114.03Interest expenses

Handling fees and commission expenses

surrender deposit

Net compensation expenses

Net withdrawal of insurance liability reserves

policy dividend payout

Reinsurance cost

Taxes and surcharges 22,464,288.90 18,678,286.14 Sales expenses 551,518,617.95 548,468,828.83 Administrative expenses 74,695,524.43 69,310,070.02

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Research and development expenses 205,121,780.73 165,691,773.89 Financial expenses -1,458,323.88 -4,319,350.01 Including: interest expenses 461,775.19 939,165.49

Interest income 2,487,179.52 5,250,418.46 plus: other income 17,348,574.93 8,797,559.28 investment income (losses are marked with "-"

11,377,810.15 12,989,935.70 fill in the column)

Of which: for associates and joint ventures

investment income

Money measured at amortized cost

Gains from derecognition of financial assets (losses are represented by “-”

(Fill in the number)

Exchange gains (losses are marked with "-"

Fill in the column)

Net exposure hedging gain (loss calculated as

Fill in the column with "-" sign)

Gains from changes in fair value (losses calculated as

Fill in the column with "-" sign)

Credit impairment losses (losses are marked with “-”

No. 1,842,748.81 -566,309.52 (please fill in the list)

Asset impairment losses (losses are marked with “-”

-6,101,874.66 -4,085,112.27)

Proceeds from asset disposal (loss calculated as

803,249.67 -35,004.55 (Fill in “-”)

3. Operating profit (losses are filled in with "-" in columns 202,046,058.93 305,696,595.76)

Add: Non-operating income 665,564.35 731,479.20 Less: Non-operating expenses 1,879,961.87 4,910,008.82

4. Total profits (total losses are filled in with "-" in columns 200,831,661.41 301,518,066.14)

Less: Income tax expenses 13,123,141.44 33,045,980.60

5. Net profit (net loss is listed with "-") 187,708,519.97 268,472,085.54

(1) Classification by business continuity

1. Net profit from continuing operations (net loss divided by

187,708,519.97 268,472,085.54 (Fill in “-”)

2. Net profit from discontinued operations (net loss equal to

Fill in the column with "-" sign)

(2) Classification according to ownership ownership

1. Net profit attributable to shareholders of the parent company

186,196,276.96 267,867,639.64 (Net loss is listed with "-")

2. Profit and loss of minority shareholders (net loss divided by

1,512,243.01 604,445.90 (please fill in the column with "-")

6. Net amount of other comprehensive income after tax

(1) Others belonging to the owners of the parent company

Comprehensive income, net of tax

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

combined income

(1) Remeasurement of changes in defined benefit plans

Um

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

Comprehensive income

(3) Fair value of other equity instrument investments

change

(4) Fair value of the company’s own credit risk

change

2. Other comprehensive items that will be reclassified into profit and loss

income

(1) Other comprehensive items that can be transferred to profits and losses under the equity method

combined income

(2) Changes in fair value of other debt investments

(3) Financial assets are reclassified into other comprehensive

Amount of combined income

(4) Credit impairment provisions for other debt investments

(5) Cash flow hedging reserve

(6) Translation differences of foreign currency financial statements

(7) Others

(2) Other comprehensive assets attributable to minority shareholders

net of tax on joint income

7. Total comprehensive income 187,708,519.97 268,472,085.54

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

186,196,276.96 267,867,639.64 Total income

(2) Comprehensive income attributable to minority shareholders

1,512,243.01 604,445.90 Total profit

8. Earnings per share:

(1) Basic earnings per share (yuan/share) 0.40 0.56

(2) Diluted earnings per share (yuan/share) 0.40 0.56

If a business merger under the same control occurs in this period, the net profit realized by the merged party before the merger is: 0.00 yuan, and the net profit realized by the merged party in the previous period is: 0.00 yuan.

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

Parent company income statement

January-June 2026

Unit: Yuan Currency: RMB

Item Notes 2026 Half Year 2025 Half Year

1. Operating income 1,019,465,192.58 1,029,634,514.35 Less: Operating costs 308,388,235.22 236,729,027.45 Taxes and surcharges 14,738,881.29 11,637,896.69 Sales expenses 416,886,901.05 402,117,912.30 Administrative expenses 53,555,120.53 48,394,234.09 Research and development expenses 156,778,019.94 124,472,967.85 Financial expenses -1,980,744.51 -3,961,407.69 Including: interest expense 96,457.12 239,608.12

Interest income 2,101,404.71 4,262,764.42 plus: other income 8,831,585.20 3,965,695.23

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Investment income (losses are marked with "-"

70,451,581.29 12,511,424.03 fill in the column)

Including: Investment income from associates and joint ventures

Income from derecognition of financial assets measured at amortized cost (losses are listed with a “-” sign)

Net exposure hedging income (losses are listed with a “-” sign)

Gains from changes in fair value (losses are listed with a “-” sign)

Credit impairment losses (losses are marked with “-”

No. 2,219,323.29-67,449.03 (please fill in the list)

Asset impairment losses (losses are marked with “-”

-4,032,559.10 -2,246,160.45 (fill in the numbers)

Proceeds from asset disposal (loss calculated as

514,366.50 -17,880.16 (please fill in the column with "-")

2. Operating profit (loss should be filled in with "-"

149,083,076.24 224,389,513.28 columns)

Add: Non-operating income 244,326.86 338,781.46 Less: Non-operating expenses 840,976.74 4,382,561.38

3. Total profit (total loss is represented by “-”

148,486,426.36 220,345,733.36 (please fill in the list)

Less: Income tax expense 2,597,223.55 19,973,674.66

4. Net profit (net loss is filled in with "-"

145,889,202.81 200,372,058.70 columns)

(1) Net profit from continuing operations (net loss

145,889,202.81 200,372,058.70 (please fill in with "-")

(2) Net profit from discontinued operations (net loss is listed with "-")

5. Net amount of other comprehensive income after tax

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

1. Remeasure the changes in defined benefit plan

2. Other comprehensive income that cannot be transferred to profit or loss under the equity method

3. Changes in fair value of other equity instrument investments

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

(2) Other comprehensive income that will be reclassified into profit and loss

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

2. Changes in fair value of other debt investments 3. Amount of financial assets reclassified and included in other comprehensive income

3. Credit impairment provisions for other debt investments

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5. Cash flow hedging reserve

6. Translation differences of foreign currency financial statements

7.Others

6. Total comprehensive income 145,889,202.81 200,372,058.70

7. Earnings per share:

(1) Basic earnings per share (yuan/share)

(2) Diluted earnings per share (yuan/share)

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

Consolidated cash flow statement from January to June 2026 Unit: Yuan Currency: RMB

Item Notes 2026 Half Year 2025 Half Year

1. Cash flow generated from operating activities: cash received from selling goods and providing services

1,664,304,246.52 1,579,528,111.81 cash

Net increase in customer deposits and deposits from banks

Net increase in borrowing from the central bank

Net increase in borrowing funds from other financial institutions

Cash received from premiums from the original insurance contract

Net cash received from reinsurance business

Cash received from interest, fees and commissions on the net increase in policyholders’ savings and investment funds

Net increase in borrowing funds

Net increase in repurchase business funds

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

Tax refunds received 721,226.14 Other tax refunds related to business activities received

25,566,346.61 21,978,322.13 cash

Subtotal of cash inflows from operating activities 1,689,870,593.13 1,602,227,660.08 Purchase of goods and acceptance of payment for services

267,793,384.54 282,064,387.68 cash

Net increase in loans and advances to customers

Net increase in deposits with central banks and inter-banks

Cash used to pay compensation from the original insurance contract

Net increase in lending funds

Cash payments for interest, fees and commissions

Cash payment for policy dividends

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Payments made to and for employees

412,744,841.29 358,050,620.89 cash

Various taxes and fees paid 183,798,043.49 196,214,203.99 Paid other taxes related to business activities

568,700,537.46 547,867,439.84 cash

Subtotal of cash outflows from operating activities 1,433,036,806.78 1,384,196,652.40 Cash flow generated from operating activities

256,833,786.35 218,031,007.68 Net amount

2. Cash flow generated from investing activities:

Recover cash received on investments

Cash received from investment income 12,078,428.22 13,873,096.77 Disposal of fixed assets, intangible assets and

461,435.00 114,086.55 Net cash received from other long-term assets

Disposal of subsidiaries and other business units

Net cash received

Receive other information related to investment activities

4,161,800,000.00 5,302,000,000.00 cash

Subtotal of cash inflows from investing activities 4,174,339,863.22 5,315,987,183.32 Purchase and construction of fixed assets, intangible assets and

46,557,525.62 297,752,386.58 Cash paid for other long-term assets

Cash paid for investments

Net increase in mortgage loans

Acquire subsidiaries and other business units

Net cash paid

Payments related to other investment activities

4,288,000,000.00 4,154,000,000.00 cash

Subtotal of cash outflows from investing activities 4,334,557,525.62 4,451,752,386.58 Cash flow generated from investing activities

-160,217,662.40 864,234,796.74 Net amount

3. Cash flow generated from financing activities:

Absorbing cash received from investments

Among them: subsidiaries absorb minority shareholders

Cash received from investments

Obtain cash received from borrowing money

Receive other information related to fundraising activities

263,420.40

Cash

Subtotal of cash inflows from financing activities 263,420.40

Cash paid to repay debts 40,000,000.00 Distribute dividends, profits or pay interest

234,000,000.00 234,241,491.67 Cash paid

Of which: Subsidiaries pay minority shares

Dividends and profits of shareholders

Make other payments related to financing activities

8,831,339.53 10,449,698.61 cash

Subtotal of cash outflows from financing activities 242,831,339.53 284,691,190.28 Cash flow generated from financing activities

-242,567,919.13 -284,691,190.28 Net amount

4. Exchange rate changes on cash and cash, etc.

price impact

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5. Net increase in cash and cash equivalents

-145,951,795.18 797,574,614.14 amount

Add: Opening cash and cash equivalents

634,048,094.30 713,759,803.65 Balance

6. Cash and cash equivalents at the end of the period

488,096,299.12 1,511,334,417.79

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

Parent company cash flow statement

January-June 2026

Unit: Yuan Currency: RMB

Item Notes 2026 Half Year 2025 Half Year

1. Cash flow generated from operating activities:

Received from selling goods and providing services

1,119,336,364.33 1,079,280,999.12 cash

tax refund received

Receive other information related to business activities

12,664,998.54 13,661,315.50 cash

Subtotal of cash inflows from operating activities 1,132,001,362.87 1,092,942,314.62 Purchasing goods and accepting payment for services

146,154,445.21 122,962,445.01 cash

Payments made to and for employees

255,170,124.33 221,537,985.07 cash

Various taxes and fees paid 119,776,198.02 135,246,168.91 Paid other taxes related to business activities

439,847,950.00 440,086,534.72 cash

Subtotal of cash outflows from operating activities 960,948,717.56 919,833,133.71 Net cash flow from operating activities

171,052,645.31 173,109,180.91 amount

2. Cash flow generated from investing activities:

Recover cash received on investments

Cash received from investment income 71,078,676.16 13,262,109.49 Disposal of fixed assets, intangible assets and

33,800.00 848,810.03 Net cash received from other long-term assets

Disposal of subsidiaries and other business units

Net cash received

Receive other information related to investment activities

3,730,000,000.00 5,080,000,000.00 cash

Subtotal of cash inflows from investing activities 3,801,112,476.16 5,094,110,919.52 Purchase and construction of fixed assets, intangible assets and

31,623,316.40 275,992,001.14 Cash paid for other long-term assets

Cash paid for investments

Acquire subsidiaries and other business units

Net cash paid

Payments related to other investment activities

3,740,000,000.00 3,915,000,000.00 cash

Subtotal of cash outflows from investing activities 3,771,623,316.40 4,190,992,001.14

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cash flow from investing activities

29,489,159.76 903,118,918.38 Net amount

3. Cash flow generated from financing activities:

Absorbing cash received from investments

Obtain cash received from borrowing money

Receive other information related to fundraising activities

263,420.40 - cash

Subtotal of cash inflows from financing activities 263,420.40 - Cash paid to repay debts

Distribution of dividends, profits or payment of interest

234,000,000.00 234,000,000.00 Cash paid

Make other payments related to financing activities

3,171,208.20 5,063,587.23 cash

Subtotal of cash outflows from financing activities 237,171,208.20 239,063,587.23 Cash flow generated from financing activities

-236,907,787.80 -239,063,587.23 Net amount

4. Exchange rate changes on cash and cash, etc.

price impact

5. Net increase in cash and cash equivalents

-36,365,982.73 837,164,512.06 amount

Add: Opening cash and cash equivalents

372,762,947.00 530,186,602.76 Balance

6. Cash and cash equivalents at the end of the period

336,396,964.27 1,367,351,114.82 amount

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

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Consolidated Statement of Changes in Owner's Equity

January-June 2026

Unit: Yuan Currency: RMB 2026 Half Year

Owner's equity attributable to parent company

Other rights and interests 1

Item Tools Others General Minority shareholders’ equity Owners’ equity Total paid-in capital Comprehensive risk Other profit calculation Premium Capital reserve Less: treasury shares Special reserve Surplus reserve Undistributed profits Subtotal (or share capital) Other joint risks Others

Continue first

He received it accurately

stocks bonds

Be prepared

1.

Previous year 480,000,00 1,662,392,71 176,186,60 10,394,99 223,002,79 1,579,733,80 3,779,337,70 13,424,64 3,792,762,34 End of period 0.00 8.51 8.79 4.72 0.53 6.98 1.95 3.67 5.62 Balance

Add:

accounting

policy

change

before

period difference

Wrong update

Right

its

him

2.

This year 480,000,00 1,662,392,71 176,186,60 10,394,99 223,002,79 1,579,733,80 3,779,337,70 13,424,64 3,792,762,34 Beginning of the period 0.00 8.51 8.79 4.72 0.53 6.98 1.95 3.67 5.62 Balance

3. • • • 1,512,243. -This period 120,603.7 47,803,723.0 47,924,326.8 01 46,412,083.7

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Increase/Decrease 6 4 0 9 Amount of changes (decreases are listed with a “-” sign)

(1) Comprehensive income 186,196,276. 186,196,276. 1,512,243. 187,708,519. Total income 96 96 01 97

(2) Owner’s investment and capital reduction 1. Common shares invested by owners 2. Capital invested by other equity instrument holders

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3. The amount of share-based payment included in owners’ equity 4. Others

(III - - -) Profit 234,000,000. 234,000,000. 234,000,000. Profit share 00 00 00 with 1. Withdraw surplus reserve 2. Extract general risk reserves 3. to owner

• • • (or

234,000,000. 234,000,000. 234,000,000. shares

00 00 00 East) distribution 4. Others

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(4) Internal carryover of owners’ equity 1. Convert capital reserve to capital (or share capital) 2. Convert surplus reserves to capital (or share capital) 3. Surplus reserve to make up for losses 4. Changes in defined benefit plans are carried forward and retained

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Deposit and receive

benefit

5.

Others

Comprehensive

income

carry forward

retain

income

6.

Others

(V-) Special 120,603.7 -120,603.76 -120,603.76 item reserves 6 reserves

1.

This issue

Extract

2. -This period 120,603.7 -120,603.76 -120,603.76 used 6

(six

) its

him

4.

Current period 480,000,00 1,662,392,71 176,186,60 10,274,39 223,002,79 1,531,930,08 3,731,413,37 14,936,88 3,746,350,26 End of period 0.00 8.51 8.79 0.96 0.53 3.94 5.15 6.68 1.83Balance

2025 Semi-Annual Project

Owner’s equity attributable to the parent company Minority shareholders’ equity Total owner’s equity

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Other equity Other equity accounting tools Other general paid-in capital (or comprehensive risk Its preferred permanent capital reserve Less: treasury shares Special reserves Surplus reserve Undistributed profits Subtotal equity) Other joint ventures Continued

He collects quasi-equities and bonds

Be prepared

1.

Previous year 480,000,00 1,662,392,71 176,186,60 10,977,57 192,060,12 1,375,312,23 3,544,556,03 11,525,34 3,556,081,38 Period-end 0.00 8.51 8.79 1.60 1.76 5.02 8.10 9.40 7.50 Balance

Add:

accounting

policy

change

before

period difference

Wrong update

Right

its

him

2.

This year 480,000,00 1,662,392,71 176,186,60 10,977,57 192,060,12 1,375,312,23 3,544,556,03 11,525,34 3,556,081,38 Beginning of the period 0.00 8.51 8.79 1.60 1.76 5.02 8.10 9.40 7.50 Balance

3.

This issue

increase or decrease

change

-

Amount 33,867,639.6 33,373,169.8 604,445.9 33,977,615.7

494,469.8

(Minus 4 2 0 2 less than

"-" sign

fill in

column)

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(1) Comprehensive income 267,867,639. 267,867,639. 604,445.9 268,472,085. Total income 64 64 0 54

(2) Owner’s investment and capital reduction 1. Common shares invested by owners 2. Capital invested by other equity instrument holders 3. The amount of share-based payment included in owners’ equity

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4. Others

(III - - -) Profit 234,000,000. 234,000,000. 234,000,000. Profit share 00 00 00 with 1. Withdraw surplus reserve 2. Extract general risk reserves 3. to owner

• • • (or

234,000,000. 234,000,000. 234,000,000. shares

00 00 00 East) distribution 4. Others

(4) Internal carryover of owners’ equity 1. capital

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Convert public reserves to capital (or share capital) 2. Convert surplus reserves to capital (or share capital) 3. Surplus reserve to make up for losses 4. The amount of changes in the defined benefit plan is carried forward to retained earnings 5. Other comprehensive income carried forward to retained earnings

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6.

Others

(five -

) Special 494,469.8 -494,469.82 -494,469.82 item reserve 2

Prepare

1.

This issue

Extract

This period 494,469.8 -494,469.82 -494,469.82 used 2

(six

) its

him

4.

Current period 480,000,00 1,662,392,71 176,186,60 10,483,10 192,060,12 1,409,179,87 3,577,929,20 12,129,79 3,590,059,00End of period 0.00 8.51 8.79 1.78 1.76 4.66 7.92 5.30 3.22Balance

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

Statement of changes in owner's equity of the parent company

January-June 2026

Unit: Yuan Currency: RMB 2026 Half Year

Items Paid-in capital Other equity instruments Less: Inventories Other comprehensive Undistributed profits Owners’ equity capital reserve Special reserves Surplus reserve

(or equity) Preferred shares Perpetual bonds Other shares Income Total profit

480,000,0 1,771,37 176,186,6 211,224, 851,913, 3,138,32

1. Ending balance of the previous year

00.00 4,676.98 08.79 074.11 783.52 5,925.82

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Add: Changes in accounting policies

Early error correction

Others

480,000,0 1,771,37 176,186,6 211,224, 851,913, 3,138,32

2. Opening balance of this year

00.00 4,676.98 08.79 074.11 783.52 5,925.82

3. Amount of increase or decrease in the current period (minus

88,110,7 88,110,7 (leave with "-")

97.19 97.19 145,889, 145,889,

(1) Total comprehensive income

202.81 202.81

(2) Owner’s investment and capital reduction

Ben

1. Common stock invested by owners

2. Other equity instrument holders invest

invest capital

3. Share-based payments are included in ownership rights

amount of profit

4. Others

(3) Profit distribution 234,000, 234,000,

000.00 000.00 1. Withdrawal from surplus reserve

• • 2． To the owner (or shareholder)

234,000, 234,000,distribution

000.00 000.00 3． Others

(4) Internal carryover of owners’ equity

1. Conversion of capital reserves into capital (or

equity)

2. Conversion of surplus reserves into capital (or

equity)

3. Surplus reserve to cover losses

4. Defined benefit plan change balance

Transfer to retained earnings

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5. Other comprehensive income carried forward and retained

income

6. Others

(5) Special reserves

1. Extract this period

2. Used in this issue

(6) Others

480,000,0 1,771,37 176,186,6 211,224, 763,802, 3,050,21

4. Ending balance of the current period

00.00 4,676.98 08.79 074.11 986.33 5,128.63

2025 half year

Item Paid-in capital Other equity instruments Less: Inventory Other comprehensive Undistributed profits Owner’s rights

Capital reserve Special reserve Surplus reserve

(or equity) Preferred shares Perpetual bonds Other shares Income Total profit 480,000,0 1,771,37 176,186,6 180,281, 807,429, 3,062,89

1. Ending balance of the previous year

00.00 4,676.98 08.79 405.34 764.62 9,238.15 plus: changes in accounting policies

Early error correction

Others

480,000,0 1,771,37 176,186,6 180,281, 807,429, 3,062,89

2. Opening balance of this year

00.00 4,676.98 08.79 405.34 764.62 9,238.15

3. Amount of increase or decrease in the current period (minus

33,627,9 33,627,9 (please fill in with "-")

41.30 41.30

(1) Total comprehensive income 200,372, 200,372,

058.70 058.70

(2) Owner’s investment and capital reduction

Ben

1. Common stock invested by owners

2. Other equity instrument holders invest

invest capital

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3. Share-based payments are included in ownership rights

amount of profit

4. Others

(3) Profit distribution 234,000, 234,000, 000.00 000.00 1. Withdrawal from surplus reserve

• • 2． To the owner (or shareholder)

234,000, 234,000,distribution

000.00 000.00 3． Others

(4) Internal carryover of owners’ equity

1. Conversion of capital reserves into capital (or

equity)

2. Conversion of surplus reserves into capital (or

equity)

3. Surplus reserve to cover losses

4. Defined benefit plan change balance

Transfer to retained earnings

5. Other comprehensive income carried forward and retained

income

6. Others

(5) Special reserves

1. Extract this period

2. Used in this issue

(6) Others

480,000,0 1,771,37 176,186,6 180,281, 773,801, 3,029,27

4. Ending balance of the current period

00.00 4,676.98 08.79 405.34 823.32 1,296.85

Person in charge of the company: Huang He Person in charge of accounting work: Yang Xuyan Person in charge of the accounting department: Li Yan

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3. Basic situation of the company

1. Company profile

√Applicable □Not applicable

Beijing Fuyuan Pharmaceutical Co., Ltd. (hereinafter referred to as the company or the company) was formerly Beijing Wansheng Pharmaceutical Co., Ltd. (hereinafter referred to as Wansheng Pharmaceutical Company). Wansheng Pharmaceutical Company was jointly funded and established by Beijing Biochemical Pharmaceutical Factory and Beijing Comprehensive Investment Company. It was registered with the Beijing Municipal Administration for Industry and Commerce on February 3, 1999, and obtained an enterprise legal person business license with registration number 1100001021511. With August 31, 2018 as the base date, Wansheng Pharmaceutical Company was changed into a joint-stock company as a whole. It was registered with the Tongzhou Branch of the Beijing Municipal Administration for Industry and Commerce on May 31, 2019, and is headquartered in Beijing. The company currently holds a business license with a unified social credit code of 91110112700216160K, a registered capital of 480 million yuan, and a total of 480,000,000 shares (face value 1 yuan per share). Among them, there are 480,000,000 A shares that are not subject to selling restrictions. The company's shares have been listed for trading on the Shanghai Stock Exchange on June 30, 2022.

The company belongs to the pharmaceutical manufacturing industry. The main business activities are the research and development, production and sales of chemical preparations and medical devices.

4. Basis for preparation of financial statements

1. Basics of preparation

The company's financial statements are prepared on a going concern basis.

2. Continuous operation

√Applicable □Not applicable

The Company has no events or circumstances that would cause significant doubts about its ability to continue operating within 12 months from the end of the reporting period.

5. Important accounting policies and accounting estimates

Specific accounting policies and accounting estimation tips:

√Applicable □Not applicable

Important note: The Company has formulated specific accounting policies and accounting estimates based on the actual production and operation characteristics for transactions or matters such as impairment of financial instruments, inventory, depreciation of fixed assets, construction in progress, intangible assets, revenue recognition, etc.

1. Statement on compliance with corporate accounting standards

The financial statements prepared by the company comply with the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the company's financial status, operating results, changes in shareholders' equity, cash flow and other relevant information.

2. Accounting period

The company's fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.

3. Business cycle

√Applicable □Not applicable

The company's operating business has a short operating cycle, and 12 months is used as the liquidity classification standard for assets and liabilities.

4. Accounting standard currency

The company's accounting standard currency is RMB.

5. Determination method and selection basis of materiality criteria

√Applicable □Not applicable

Project Materiality Criteria

Important write-off accounts receivable: individual amount exceeds 0.5% of total assets

Important prepayments aged more than 1 year. The individual amount exceeds 0.5% of total assets.

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Important write-off of other receivables, the individual amount exceeds 0.5% of the total assets

Important construction projects under construction The total investment in a single project exceeds 0.5% of the total assets

Important accounts payable aged more than 1 year, the individual amount exceeds 0.5% of total assets

Important other payables aged more than 1 year. The individual amount exceeds 0.5% of the total assets.

Important cash flows from investing activities: The amount of a single item exceeds 10% of total assets

For important capitalized R&D projects and outsourced R&D projects, the individual amount exceeds 0.5% of total assets.

Important subsidiaries and non-wholly owned subsidiaries whose total assets/total income/total profits exceed the total capital of the group

15% of total output/total revenue/total profit

6. Accounting treatment methods for business combinations under the same control and those not under the same control

√Applicable □Not applicable

1. Accounting treatment methods for business combinations under common control

The assets and liabilities acquired by the company in a business merger are measured according to the book value of the merged party in the consolidated financial statements of the ultimate controlling party on the merger date. The company adjusts the capital reserve based on the difference between the book value share of the owner's equity of the merged party in the final controlling party's consolidated financial statements and the book value of the merger consideration paid or the total face value of the shares issued; if the capital reserve is insufficient for offset, the company adjusts the retained earnings.

2. Accounting treatment methods for business combinations not under common control

On the acquisition date, the company recognizes the difference between the merger cost and the fair value share of the acquiree's identifiable net assets acquired in the merger as goodwill; if the merger cost is less than the fair value share of the acquiree's identifiable net assets acquired in the merger, the difference is first recognized as goodwill. The fair value of the acquiree's identifiable assets, liabilities and contingent liabilities and the measurement of merger costs are reviewed. After review, if the merger cost is still less than the fair value share of the acquiree's identifiable net assets obtained in the merger, the difference is included in the current profit and loss.

7. Judgment standards for control and preparation methods of consolidated financial statements

√Applicable □Not applicable

1. Judgment of control

If it has power over the investee, enjoys variable returns by participating in the relevant activities of the investee, and has the ability to use its power over the investee to affect the amount of its variable returns, it is deemed to be control.

2. Preparation method of consolidated financial statements

The parent company includes all subsidiaries it controls in the consolidated financial statements. The consolidated financial statements are based on the financial statements of the parent company and its subsidiaries, and based on other relevant information, are prepared by the parent company in accordance with the "Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements".

8. Classification of joint arrangements and accounting treatment of joint operations

□Applicable √Not applicable

9. Determination standards for cash and cash equivalents

The cash shown in the cash flow statement refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments held by an enterprise that have short maturities, are highly liquid, are easily convertible into known amounts of cash, and have little risk of changes in value.

10. Foreign currency business and foreign currency statement conversion

√Applicable □Not applicable

When foreign currency transactions are initially recognized, they are converted into RMB amounts using the approximate exchange rate of the spot exchange rate on the date of the transaction. On the balance sheet date, foreign currency monetary items are translated using the spot exchange rate on the balance sheet date. The exchange differences arising from different exchange rates, except for the exchange differences on the principal and interest of special foreign currency borrowings related to the acquisition and construction of assets that qualify for capitalization, are included in the current profit and loss; calculated at historical cost. Non-monetary items in foreign currencies are still translated at the approximate exchange rate of the spot exchange rate on the date of the transaction, without changing their RMB amounts; non-monetary items in foreign currencies measured at fair value are translated at the spot exchange rate on the date when the fair value is determined, and the difference is included in the current profit or loss or other comprehensive income.

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11. Financial instruments

√Applicable □Not applicable

1. Classification of financial assets and financial liabilities

Financial assets are divided into the following three categories upon initial recognition: (1) Financial assets measured at amortized cost; (2) Financial assets measured at fair value with changes included in other comprehensive income; (3) Financial assets measured at fair value with changes included in current profits and losses.

Financial liabilities are divided into the following four categories upon initial recognition: (1) Financial liabilities measured at fair value and whose changes are included in current profits and losses; (2) Financial liabilities formed by the transfer of financial assets that do not meet the conditions for derecognition or continued involvement in the transferred financial assets; (3) Financial guarantee contracts that do not belong to the above (1) or (2), and loan commitments that do not belong to the above (1) and loan at a lower than market interest rate; (4) Financial liabilities measured at amortized cost.

2. Recognition basis, measurement method and derecognition conditions of financial assets and financial liabilities

(1) Recognition basis and initial measurement method of financial assets and financial liabilities

When a company becomes a party to a financial instrument contract, it recognizes a financial asset or financial liability. When financial assets or financial liabilities are initially recognized, they are measured at fair value; for financial assets and financial liabilities measured at fair value and whose changes are included in current profits and losses, relevant transaction costs are directly included in current profits and losses; for other types of financial assets or financial liabilities, relevant transaction costs are included in the initial recognition amount. However, if the company's initial recognition of accounts receivable does not contain a significant financing component or the company does not consider the financing component of a contract that does not exceed one year, the initial measurement shall be based on the transaction price defined in "Accounting Standards for Business Enterprises No. 14 - Revenue". (2) Subsequent measurement method of financial assets

1. Financial assets measured at amortized cost

The actual interest rate method is adopted and subsequent measurement is carried out based on amortized cost. Gains or losses arising from financial assets that are measured at amortized cost and are not part of any hedging relationship are included in the current profit and loss when derecognized, reclassified, amortized according to the effective interest method, or impairment is recognized.

2. Debt instrument investments measured at fair value and changes included in other comprehensive income

Fair value is used for subsequent measurement. Interest, impairment losses or gains and exchange gains and losses calculated using the effective interest rate method are included in the current profit and loss, and other gains or losses are included in other comprehensive income. When derecognition is terminated, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in the current profit and loss.

3. Equity instrument investments measured at fair value and changes included in other comprehensive income

Fair value is used for subsequent measurement. Dividends received (except for the recovery part of investment costs) are included in the current profits and losses, and other gains or losses are included in other comprehensive income. Upon derecognition, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in retained earnings.

4. Financial assets measured at fair value and changes included in current profits and losses

Fair value is used for subsequent measurement, and the resulting gains or losses (including interest and dividend income) are included in the current profit or loss, unless the financial asset is part of a hedging relationship.

(3) Subsequent measurement method of financial liabilities

1. Financial liabilities measured at fair value and changes included in current profits and losses

Such financial liabilities include trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities designated as measured at fair value with changes included in current profits and losses. Such financial liabilities are subsequently measured at fair value. The amount of changes in the fair value of financial liabilities designated as at fair value through profit or loss due to changes in the company's own credit risk is included in other comprehensive income, unless such treatment would cause or expand accounting mismatches in profit or loss. Other gains or losses arising from such financial liabilities (including interest expenses, excluding changes in fair value caused by changes in the company's own credit risk) are included in the current profits and losses, unless the financial liabilities are part of a hedging relationship. Upon derecognition, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in retained earnings.

2. The transfer of financial assets does not meet the conditions for derecognition or the financial liabilities formed by continuing to be involved in the transferred financial assets

Measurement shall be carried out in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets".

3. Financial guarantee contracts that do not fall under 1) or 2) above, and loan commitments that do not fall under 1) above and provide loans at lower than market interest rates

After initial recognition, subsequent measurement shall be based on the higher of the following two amounts: ① The amount of loss provision determined in accordance with the impairment regulations of financial instruments; ② The balance after the initial recognition amount deducts the accumulated amortization amount determined in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 14 - Revenue".

4. Financial liabilities measured at amortized cost

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Measured at amortized cost using the effective interest method. Gains or losses arising from financial liabilities that are measured at amortized cost and are not part of any hedging relationship are included in the current profit and loss when they are derecognized and amortized according to the effective interest method.

(4) Derecognition of financial assets and financial liabilities

1. Financial assets will be derecognised when one of the following conditions is met:

①The contractual right to receive cash flows from financial assets has terminated;

② The financial assets have been transferred, and the transfer meets the provisions of "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets" regarding the derecognition of financial assets.

2. When the current obligation of a financial liability (or part thereof) has been discharged, the financial liability (or part thereof) shall be derecognised accordingly.

3. Recognition basis and measurement method of financial asset transfer

If the company transfers almost all the risks and rewards of the ownership of the financial asset, it shall terminate the recognition of the financial asset, and separately recognize the rights and obligations arising or retained in the transfer as assets or liabilities; if it retains almost all the risks and rewards of the ownership of the financial asset, it shall continue to recognize the transferred financial asset. If the company neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, the following situations will be dealt with: (1) If it does not retain control over the financial asset, the financial asset will be terminated, and the rights and obligations arising or retained in the transfer will be separately recognized as assets or liabilities; (2) If it retains control over the financial asset, the relevant financial assets will be recognized according to the degree of continued involvement in the transferred financial assets, and the relevant liabilities will be recognized accordingly.

If the overall transfer of a financial asset meets the conditions for derecognition, the difference between the following two amounts will be included in the current profit and loss: (1) The book value of the transferred financial asset on the date of derecognition; (2) The sum of the consideration received for the transfer of the financial asset and the amount corresponding to the derecognition part of the cumulative amount of changes in fair value that was originally directly included in other comprehensive income (the financial assets involved are debt instrument investments that are measured at fair value and their changes are included in other comprehensive income). If a part of a financial asset is transferred, and the transferred part as a whole meets the conditions for derecognition, the book value of the entire financial asset before transfer will be apportioned between the derecognized part and the continued recognition part according to their respective relative fair values on the date of transfer, and the difference between the following two amounts shall be included in the current profit and loss: 1) The book value of the derecognized part; (2) The sum of the consideration of the derecognized part and the amount corresponding to the derecognized part of the cumulative amount of changes in fair value that was originally directly included in other comprehensive income (the financial assets involved in the transfer are debt instrument investments measured at fair value and their changes are included in other comprehensive income).

4. Determination method of fair value of financial assets and financial liabilities

The company determines the fair value of relevant financial assets and financial liabilities using valuation techniques that are applicable under the current circumstances and supported by sufficient available data and other information. The company divides the input values used in the valuation technology into the following levels and uses them in sequence:

(1) The first level input value is the unadjusted quoted price in an active market for the same asset or liability that can be obtained on the measurement date;

(2) The second level input value is the directly or indirectly observable input value of relevant assets or liabilities in addition to the first level input value, including: quotations of similar assets or liabilities in active markets; quotations of the same or similar assets or liabilities in inactive markets; other observable input values other than quotations, such as interest rates and yield curves that are observable during normal quotation intervals; market verification input values, etc.;

(3) The third level input value is the unobservable input value of the relevant assets or liabilities, including interest rates, stock volatility, future cash flows of abandonment obligations assumed in business mergers, financial forecasts made using its own data, etc. that cannot be directly observed or verified by observable market data.

5. Impairment of financial instruments

Based on expected credit losses, the company calculates financial assets measured at amortized cost, debt instrument investments measured at fair value with changes included in other comprehensive income, contract assets, lease receivables, and financial liabilities classified as measured at fair value with changes included in current profits and losses. Other than loan commitments, financial liabilities that are not measured at fair value through profit or loss, or financial guarantee contracts that are not financial liabilities arising from the transfer of financial assets that do not meet the conditions for derecognition or that continue to be involved in the transferred financial assets are subject to impairment treatment and loss provisions are recognized.

Expected credit losses refer to the weighted average of the credit losses of financial instruments with the risk of default as the weight. Credit loss refers to the difference between all contractual cash flows receivable under the contract and all cash flows expected to be received by the company, discounted at the original effective interest rate, that is, the present value of all cash shortfalls. Among them, credit-impaired financial assets purchased or originated by the company are discounted according to the credit-adjusted actual interest rate of the financial assets.

For purchased or originated financial assets that have suffered credit impairment, the company will only recognize the cumulative change in expected credit losses during the entire duration since initial recognition as loss provisions on the balance sheet date.

For lease receivables, receivables and contract assets formed by transactions regulated by "Accounting Standards for Business Enterprises No. 14 - Revenue", the company uses simplified measurement methods and measures loss provisions based on an amount equivalent to the expected credit losses during the entire duration.

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For financial assets other than the above measurement methods, the company evaluates at each balance sheet date whether its credit risk has increased significantly since initial recognition. If the credit risk has increased significantly since initial recognition, the company will measure loss provisions based on the amount of expected credit losses during the entire duration; if the credit risk has not increased significantly since initial recognition, the company will measure loss provisions based on the amount of expected credit losses on the financial instrument within the next 12 months.

The Company uses reasonable and evidence-based information available, including forward-looking information, to determine whether the credit risk of a financial instrument has increased significantly since initial recognition by comparing the risk of default on the financial instrument on the balance sheet date with the risk of default on the initial recognition date.

On the balance sheet date, if the company determines that a financial instrument has only low credit risk, it is assumed that the credit risk of the financial instrument has not increased significantly since initial recognition.

The company assesses expected credit risk and measures expected credit losses on the basis of a single financial instrument or a combination of financial instruments. When based on a portfolio of financial instruments, the company divides financial instruments into different portfolios based on common risk characteristics.

The company remeasures expected credit losses on each balance sheet date, and the resulting increase or reversal of loss provisions is included in the current profit and loss as impairment losses or gains. For financial assets measured at amortized cost, the loss provision is deducted from the book value of the financial asset listed in the balance sheet; for debt investments measured at fair value with changes included in other comprehensive income, the company recognizes its loss provision in other comprehensive income and does not deduct the book value of the financial asset.

6. Offset of financial assets and financial liabilities

Financial assets and financial liabilities are presented separately in the balance sheet and do not offset each other. However, if the following conditions are met at the same time, the company will present the net amount after offsetting each other in the balance sheet: (1) The company has the legal right to offset the recognized amount, and the legal right is currently enforceable; (2) The company plans to settle on a net basis, or realize the financial assets and pay off the financial liabilities at the same time. For transfers of financial assets that do not meet the conditions for derecognition, the company will not offset the transferred financial assets and related liabilities.

12. Notes receivable

□Applicable √Not applicable

13. Accounts receivable

√Applicable □Not applicable

Combination categories and determination basis for bad debt provisions based on combinations of credit risk characteristics

√Applicable □Not applicable

Portfolio category Basis for determining portfolio Method for measuring expected credit losses

Refer to historical credit loss experience and combine it with the current situation

situation and forecasts of future economic conditions, and prepare accounts receivable - aging portfolio Aging

Comparison of accounts receivable aging and expected credit loss rate

Table, Calculation of Expected Credit Loss

Account aging calculation method based on aging confirmation credit risk characteristic combination

√Applicable □Not applicable

Accounts receivable

Account age

Expected credit loss rate (%)

Within 1 year (inclusive, the same below) 5

1-2 years 20

2-3 years 80

More than 3 years 100

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Judgment criteria for single provision based on the determination of individual provision for bad debts

√Applicable □Not applicable

For receivables whose credit risk is significantly different from the combined credit risk, the company accrues expected credit losses on an individual basis.

14. Receivables Financing

√Applicable □Not applicable

Combination categories and determination basis for bad debt provisions based on combinations of credit risk characteristics

√Applicable □Not applicable

Portfolio category Basis for determining portfolio Method for measuring expected credit losses

With reference to historical credit loss experience, combined with current conditions and predictions of future economic conditions, bank acceptance bills receivable are used. Note types

Default risk exposure and expected credit loss rate throughout the duration, calculating expected credit losses

Account aging calculation method based on aging confirmation credit risk characteristic combination

□Applicable √Not applicable

Judgment criteria for individual provision of bad debt provisions based on individual provision

√Applicable □Not applicable

For receivables whose credit risk is significantly different from the combined credit risk, the company accrues expected credit losses on an individual basis.

15. Other receivables

√Applicable □Not applicable

Combination categories and determination basis for bad debt provisions based on combinations of credit risk characteristics

√Applicable □Not applicable

Portfolio category Basis for determining portfolio Method for measuring expected credit losses

With reference to historical credit loss experience, combined with current conditions and predictions of future economic conditions, other receivables - related matters within the consolidation scope

Nature of payment, default risk exposure and combination of joint parties within the next 12 months

Expected credit loss rate for a duration, calculate expected credit losses

Prepare other receivables - aging portfolio with reference to historical credit loss experience, combined with current conditions and predictions of future economic conditions.

Comparison table of aging of other receivables and expected credit loss rate to calculate expected credit losses

Account aging calculation method based on aging confirmation credit risk characteristic combination

√Applicable □Not applicable

Other receivables

Account age

Expected credit loss rate (%)

Within 1 year (inclusive, the same below) 5

1-2 years 20

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Other receivables

Account age

Expected credit loss rate (%)

2-3 years 80

More than 3 years 100

Judgment criteria for individual provision of bad debt provisions based on individual provision

√Applicable □Not applicable

For receivables whose credit risk is significantly different from the combined credit risk, the company accrues expected credit losses on an individual basis.

16. Inventory

√Applicable □Not applicable

Inventory categories, issue valuation methods, inventory systems, and amortization methods for low-value consumables and packaging materials

√Applicable □Not applicable

1. Classification of inventory

Inventories include finished products or commodities held for sale in daily activities, work-in-progress in the production process, materials and supplies consumed in the production process or in the process of providing services, etc.

2. Pricing method for issued inventory

Inventories are issued using the weighted average method at the end of the month.

3. Inventory inventory system

The inventory system of inventories is the perpetual inventory system.

4. Amortization method for low-value consumables and packaging materials

(1) Low value consumables

Amortization is carried out according to the one-time write-off method.

(2)Packaging

Amortization is carried out according to the one-time write-off method.

Recognition standards and accrual methods for inventory depreciation provisions

√Applicable □Not applicable

On the balance sheet date, inventories are measured at the lower of cost and net realizable value, and inventory depreciation provisions are made based on the difference between cost and net realizable value. For inventories that are directly used for sale, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes in the normal production and operation process; for inventories that need to be processed, the estimated selling price of the finished products produced during the normal production and operation process is deducted by the estimated costs to be incurred upon completion. The amount after the estimated sales expenses and related taxes is determined to determine its net realizable value; on the balance sheet date, if part of the same inventory has a contract price and other parts do not have a contract price, its net realizable value is determined separately and compared with its corresponding cost to determine the amount of provision or reversal of inventory depreciation provisions.

The combination categories and basis for determining inventory depreciation provisions according to the combination, and the basis for determining the net realizable value of different types of inventories √ Applicable □ Not applicable

Combination Category Basis for Determination of Combination Basis for Determination of Net Realizable Value of Inventories

Raw materials/entrusted processing materials - validity period combination Validity period Determine the net realizable value of inventory based on the validity period

Inventory goods/issued goods - validity period combination Validity period Determine the net realizable value of inventory based on the validity period

Packaging - validity period combination Validity period Determine the net realizable value of inventory based on the validity period

Calculation method and basis for determination of net realizable value under term combination

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Raw materials/entrusted processing materials Inventory goods/shipped goods Net realizable effect of packaging materials Period

Net realizable value calculation method Net realizable value calculation method Value calculation method

Within 6 months (inclusive, the same below) 0% of the book balance 0% of the book balance 0% of the book balance

More than 6 months 100% of the book balance 100% of the book balance 100% of the book balance

The basis for determining the net realizable value of the validity period combination: the company's product sales are affected by the validity period. The possibility of sales of inventory within 6 months of the validity period is low, and the net realizable value is expected to be 0; the sales of inventories with a validity period of more than 6 months are good, and the net realizable value is expected to be equal to the closing book balance of the inventory.

The calculation method and basis for determining the net realizable value of each warehouse age combination based on the inventory age confirmation

□Applicable √Not applicable

17. Contract assets

√Applicable □Not applicable

Recognition methods and standards for contract assets

√Applicable □Not applicable

Companies present contract assets or contract liabilities on their balance sheets based on the relationship between the fulfillment of performance obligations and payments from customers. The company will present the net amount after offsetting contract assets and contract liabilities under the same contract.

The Company presents the right to receive consideration from customers that is unconditional (i.e., dependent only on the passage of time) as receivables and the right to receive consideration for goods transferred to the customer (that is, a right that is dependent on factors other than the passage of time) as a contract asset.

Combination categories and determination basis for bad debt provisions based on combinations of credit risk characteristics

□Applicable √Not applicable

Account aging calculation method based on aging confirmation credit risk characteristic combination

□Applicable √Not applicable

Judgment criteria for single provision based on the determination of individual provision for bad debts

□Applicable √Not applicable

18. Non-current assets or disposal groups held for sale

□Applicable √Not applicable

Recognition standards and accounting treatment methods for non-current assets or disposal groups classified as held for sale

□Applicable √Not applicable

Determination standards and presentation methods for discontinued operations

□Applicable √Not applicable

19. Long-term equity investment

√Applicable □Not applicable

1. Judgment of joint control and significant influence

If there is shared control over an arrangement in accordance with relevant agreements, and the relevant activities of the arrangement must be decided with the unanimous consent of the parties sharing control rights, it is deemed to be joint control. Having the power to participate in decision-making on the financial and operating policies of the investee, but not being able to control or jointly control the formulation of these policies with other parties, is deemed to have significant influence.

2. Determination of investment costs

(1) Formed by a business merger under common control, if the merging party pays cash, transfers non-cash assets, assumes debts or issues equity securities as the merger consideration, the owner's equity of the merged party will be recorded in the final controlling party's consolidated financial statements on the date of merger.

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share of the book value as its initial investment cost. The difference between the initial investment cost of the long-term equity investment and the book value of the merger consideration paid or the total face value of the shares issued is adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings are adjusted.

The company realizes the long-term equity investment formed by the merger of enterprises under the same control step by step through multiple transactions to determine whether it is a "package transaction". If it belongs to a "package transaction", each transaction shall be accounted for as a transaction that obtains control. If it does not belong to a "package deal", on the merger date, the initial investment cost will be determined based on the share of the book value of the combined party's net assets in the ultimate controlling party's consolidated financial statements that should be enjoyed after the merger. The difference between the initial investment cost of the long-term equity investment on the merger date and the book value of the long-term equity investment before the merger plus the book value of the new payment for further shares acquired on the merger date is adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings are adjusted.

(2) If it is formed by a business combination not under the same control, the fair value of the merger consideration paid on the purchase date shall be regarded as its initial investment cost.

The company realizes the long-term equity investment formed by the merger of enterprises not under common control step by step through multiple transactions, and distinguishes individual financial statements and consolidated financial statements for relevant accounting treatment:

1. In individual financial statements, the sum of the book value of the original equity investment plus the new investment cost is regarded as the initial investment cost that is calculated according to the cost method.

2. In the consolidated financial statements, determine whether it is a "package deal". If it belongs to a "package transaction", each transaction shall be accounted for as a transaction that obtains control. If it does not belong to a "package transaction", the equity of the purchased party held before the purchase date will be remeasured according to the fair value of the equity on the purchase date, and the difference between the fair value and its book value will be included in the investment income of the current period; if the equity of the purchased party held before the purchase date involves other comprehensive income under equity method accounting, the other comprehensive income related to it will be converted into the current period income on the purchase date. However, other comprehensive income arising from changes in the net liabilities or net assets of the defined benefit plan due to the remeasurement of the investee is excluded.

(3) Except for business mergers: if it is obtained by paying cash, the actual purchase price paid will be used as its initial investment cost; if it is obtained by issuing equity securities, its initial investment cost will be based on the fair value of the equity securities issued; if it is obtained by debt restructuring, its initial investment cost will be determined according to "Accounting Standards for Business Enterprises No. 12 - Debt Reorganization"; if it is obtained by exchanging non-monetary assets, its initial investment cost will be determined according to "Accounting Standards for Business Enterprises No. 7 - Exchange of Non-monetary Assets".

3. Subsequent measurement and profit and loss recognition methods

Long-term equity investments that control the invested unit are accounted for using the cost method; long-term equity investments in associates and joint ventures are accounted for using the equity method.

4. Methods of disposing of investments in subsidiaries step by step through multiple transactions until loss of control

(1) Principles for judging whether it is a “package deal”

If the equity investment in a subsidiary is disposed of in stages through multiple transactions until it loses control, the company shall determine whether the step-by-step transaction is a "package transaction" based on the transaction agreement terms of each step of the step-by-step transaction, the disposal consideration obtained respectively, the object of the equity sale, the disposal method, the time of disposal, and other information. If the terms, conditions and economic impact of each transaction meet one or more of the following conditions, it usually indicates that multiple transactions are a "package deal":

1. These transactions are entered into at the same time or with consideration of mutual effects;

2. These transactions as a whole can achieve a complete business result;

3. The occurrence of one transaction depends on the occurrence of at least one other transaction;

4. A transaction is uneconomical on its own but is economical when considered together with other transactions.

(2) Accounting treatment that does not belong to “package deal”

1. Individual financial statements

For the equity disposed of, the difference between its book value and the actual price obtained shall be included in the current profit and loss. For the remaining equity, if it still has a significant influence on the invested unit or exercises joint control with other parties, it will be converted to equity method accounting; if it can no longer exercise control, joint control or significant influence on the invested unit, it will be accounted for in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments".

2. Consolidated financial statements

Before the loss of control, the difference between the disposal price and the share of net assets of the subsidiary corresponding to the disposal of the long-term equity investment continuously calculated from the date of purchase or merger is adjusted to the capital reserve (capital premium). If the capital premium is insufficient to offset, the retained earnings are offset.

When control over the atomic company is lost, the remaining equity will be remeasured according to its fair value on the date of loss of control. The sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity, minus the share of the original subsidiary’s self-purchase rights calculated based on the original shareholding ratio.

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The difference between the shares of net assets continuously calculated starting from the date of the merger or the merger date shall be included in the investment income in the period when control is lost, and goodwill shall be offset at the same time. Other comprehensive income related to the equity investment in the original subsidiary shall be converted into investment income for the current period when control is lost.

(3) Accounting treatment for “package transactions”

1. Individual financial statements

Each transaction is accounted for as a transaction in which a subsidiary is disposed of and control is lost. However, the difference between the price of each disposal before the loss of control and the book value of the long-term equity investment corresponding to the disposal investment is recognized as other comprehensive income in individual financial statements, and is transferred to the profit and loss of the current period when control is lost.

2. Consolidated financial statements

Each transaction is accounted for as a transaction in which a subsidiary is disposed of and control is lost. However, before the loss of control, the difference between the price of each disposal and the share of the subsidiary's net assets corresponding to the disposal investment is recognized as other comprehensive income in the consolidated financial statements, and is transferred to the profit and loss of the current period when the control is lost.

20. Investment real estate

Not applicable

21. Fixed assets

(1) Confirmation conditions

√Applicable □Not applicable

Fixed assets refer to tangible assets held for the production of goods, provision of labor services, leasing or operation and management, and with a useful life of more than one accounting year. Fixed assets are recognized when it is likely that economic benefits will flow in and the cost can be measured reliably.

(2) Depreciation method

√Applicable □Not applicable

Category Depreciation method Depreciation life (years) Residual value rate Annual depreciation rate Houses and buildings Straight-line method 5-40 3%-10% 19.40%-2.25% General equipment Straight-line method 3-10 3%-10% 32.33%-9.00% Special equipment Straight-line method 3-10 3%-10% 32.33%-9.00% Means of transportation Year-average method 4-10 3%-10% 24.25%-9.00%

22. Projects under construction

√Applicable □Not applicable

1. Construction in progress is recognized when it is likely that economic benefits will flow in and the cost can be measured reliably. Construction in progress is measured based on the actual costs incurred before the asset reaches its intended usable condition.

2. When the project under construction reaches the intended usable state, it will be transferred to fixed assets according to the actual cost of the project. If the asset has reached the intended usable state but has not yet completed the final settlement, the estimated value will be transferred to fixed assets first. After the final settlement is completed, the original temporary estimated value will be adjusted according to the actual cost, but the originally accrued depreciation will not be adjusted.

Category Standards and timing for transferring construction in progress to fixed assets

The main construction project and supporting projects of houses and buildings have been substantially completed, met the predetermined design requirements and have been accepted.

General equipment shall meet the design requirements or standards stipulated in the contract after installation and commissioning.

Special equipment shall meet the design requirements or standards stipulated in the contract after installation and commissioning.

23. Borrowing costs

√Applicable □Not applicable

1. Recognition principles for capitalization of borrowing costs

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If the borrowing costs incurred by the company can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions, they shall be capitalized and included in the cost of the relevant assets; other borrowing costs shall be recognized as expenses when incurred and included in the current profits and losses.

2. Borrowing cost capitalization period

(1) Capitalization begins when borrowing costs meet the following conditions at the same time: 1) Asset expenditures have occurred; 2) Borrowing costs have been incurred; 3) The purchase, construction or production activities necessary to bring the asset to its intended usable or salable state have begun.

(2) If an asset that meets the capitalization conditions is abnormally interrupted during the acquisition, construction or production process, and the interruption lasts for more than 3 months, the capitalization of borrowing costs is suspended; the borrowing costs incurred during the interruption are recognized as current expenses until the acquisition, construction or production activities of the asset are restarted.

(3) When the assets purchased, constructed or produced that meet the capitalization conditions reach the intended usable or salable state, the capitalization of borrowing costs ceases.

3. Capitalization rate and capitalization amount of borrowing costs

If a special loan is borrowed for the purpose of purchasing, constructing or producing assets that meet the capitalization conditions, the actual interest expenses incurred on the special loan in the current period (including the amortization of discounts or premiums determined in accordance with the actual interest rate method) shall be deducted from the interest income obtained from depositing the unused borrowed funds in the bank or the investment income obtained from temporary investment. The amount of interest that should be capitalized is determined based on the amount after profit; if general borrowings are occupied for the purchase, construction or production of assets that meet the capitalization conditions, the amount of interest that should be capitalized on the general borrowings is calculated and determined based on the weighted average of the cumulative asset expenditures exceeding the special borrowings multiplied by the capitalization rate of the general borrowings occupied.

24. Biological assets

□Applicable √Not applicable

25. Oil and gas assets

□Applicable √Not applicable

26. Intangible assets

(1) Useful life and its basis for determination, estimation, amortization method or review procedure

√Applicable □Not applicable

1. Intangible assets include land use rights, patent rights, non-patented technologies and special software, etc., which are initially measured at cost.

2. Intangible assets with limited service life shall be amortized systematically and reasonably within the service life according to the expected realization method of the economic benefits related to the intangible asset. If the expected realization method cannot be reliably determined, the straight-line method shall be used for amortization. The details are as follows:

Item Useful life and basis for determination Amortization method

The useful life of land use rights is 20-50 years based on the property rights registration period. Straight-line method

Patent rights are determined according to the expected benefit period and the service life is 5-10 years. Straight-line method

Non-patented technology has a useful life of 10 years based on the expected benefit period. Straight-line method

Special software. Determine the service life based on the expected benefit period, which is 3-10 years. Straight-line method

(2) Scope of aggregation of R&D expenditures and related accounting treatment methods

√Applicable □Not applicable

1. Scope of collection of R&D expenditures

(1) Personnel labor costs

Personnel labor expenses include the wages and salaries of the company's R&D personnel, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, maternity insurance premiums and housing provident funds, as well as labor costs for external R&D personnel.

If R&D personnel serve multiple R&D projects at the same time, labor costs will be recognized based on the working hours records of R&D personnel for each R&D project provided by the company's management department, and will be allocated proportionally among different R&D projects.

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For those who are directly engaged in R&D activities or external R&D personnel who are also engaged in non-R&D activities, the company will allocate the actual labor costs incurred by the R&D personnel between R&D expenses and production and operating expenses based on reasonable methods such as the proportion of actual working hours based on the R&D personnel’s working time records in different positions.

(2) Direct investment costs

Direct investment expenses refer to the actual expenditures incurred by the company to implement research and development activities. Including: 1) Direct consumption of materials, fuel and power costs; 2) Development and manufacturing costs of molds and process equipment used for intermediate testing and product trial production, purchase costs for samples, prototypes and general testing means that do not constitute fixed assets, and inspection fees for trial products; 3) Operation and maintenance, adjustment, inspection, detection, repair and other costs of instruments and equipment used for research and development activities.

(3) Depreciation expenses and long-term prepaid expenses

Depreciation expenses refer to the depreciation expenses of instruments, equipment and buildings in use used for research and development activities.

If instruments, equipment, and buildings in use are used for R&D activities and are also used for non-R&D activities, necessary records shall be made of the use of such instruments, equipment, and buildings in use, and the actual depreciation expenses incurred shall be allocated between R&D expenses and production and operating expenses in a reasonable manner based on factors such as actual working hours and usage area.

Long-term deferred expenses refer to the long-term deferred expenses incurred during the reconstruction, modification, decoration and repair of R&D facilities. They are collected based on actual expenditures and amortized evenly in installments within the specified period.

(4) Amortization expense of intangible assets

Amortization expenses of intangible assets refer to the amortization expenses of software, intellectual property, non-patented technology (proprietary technology, licenses, design and calculation methods, etc.) used in research and development activities.

(5) Test costs

Expenses incurred for routine tooling preparation and industrial engineering for large-scale batch and commercial production are not included in the scope of the collection.

Trial expenses include clinical trial fees for new drug development, etc.

(6) Commissioned external research and development expenses

Entrusted external research and development expenses refer to the expenses incurred by the company entrusting other institutions or individuals at home and abroad to conduct research and development activities (the results of research and development activities are owned by the company and are closely related to the company's main business).

(7) Other expenses

Other expenses refer to other expenses directly related to research and development activities in addition to the above expenses, including technical book materials fees, data translation fees, expert consultation fees, high-tech R&D insurance fees, retrieval, demonstration, review, identification, and acceptance fees for R&D results, intellectual property application fees, registration fees, agency fees, conference fees, travel expenses, communication fees, etc.

2. Expenditures in the research phase of internal research and development projects shall be included in the current profits and losses when incurred. Expenditures in the development phase of internal research and development projects are recognized as intangible assets if they meet the following conditions: (1) It is technically feasible to complete the intangible asset so that it can be used or sold; (2) There is the intention to complete the intangible asset and use or sell it; (3) The way in which the intangible asset generates economic benefits includes being able to prove that there is a market for the products produced using the intangible asset or that the intangible asset itself has a market. If the intangible asset will be used internally, its usefulness can be proven; (4) It has sufficient technical, financial and other resource support to complete the development of the intangible asset and has the ability to use or sell the intangible asset; (5) Expenditures attributable to the development stage of the intangible asset can be measured reliably.

3. Impairment of long-term assets

√Applicable □Not applicable

For long-term assets such as long-term equity investments, fixed assets, projects under construction, right-of-use assets, and intangible assets with limited useful lives, if there are signs of impairment on the balance sheet date, the recoverable amount is estimated. Goodwill and intangible assets with indefinite useful lives formed due to business combinations are subject to impairment testing every year regardless of whether there are signs of impairment. Goodwill is tested for impairment in combination with its related asset groups or combinations of asset groups.

If the recoverable amount of the above-mentioned long-term assets is lower than its book value, the asset impairment provision shall be recognized based on the difference and included in the current profit and loss.

28. Long-term deferred expenses

√Applicable □Not applicable

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Long-term deferred expenses are calculated as expenses that have been spent and have an amortization period of more than 1 year (excluding 1 year). Long-term deferred expenses are recorded based on the actual amount incurred, and are amortized evenly over the benefit period or a specified period. If a long-term deferred expense item cannot benefit future accounting periods, all the amortized value of the item that has not yet been amortized will be transferred to the current profit and loss.

29. Contract liabilities

√Applicable □Not applicable

Companies present contract assets or contract liabilities on their balance sheets based on the relationship between the fulfillment of performance obligations and payments from customers. The company will present the net amount after offsetting contract assets and contract liabilities under the same contract.

The Company presents obligations to transfer goods to customers for consideration received or receivable from customers as contract liabilities.

30. Employee compensation

(1) Accounting treatment of short-term compensation

√Applicable □Not applicable

During the accounting period when employees provide services to the company, the actual short-term compensation is recognized as a liability and included in the current profit and loss or related asset costs.

(2) Accounting treatment of post-employment benefits

√Applicable □Not applicable

Post-employment benefits are divided into defined contribution plans and defined benefit plans.

(1) During the accounting period when employees provide services to the company, the deposit amount payable calculated according to the defined contribution plan is recognized as a liability and included in the current profit and loss or related asset costs.

(2) The accounting treatment of defined benefit plans usually includes the following steps:

1. Based on the expected cumulative benefit unit method, use unbiased and mutually consistent actuarial assumptions to estimate relevant demographic variables and financial variables, measure the obligations arising from the defined benefit plan, and determine the period to which the relevant obligations belong. At the same time, the obligations arising from the defined benefit plan are discounted to determine the present value of the defined benefit plan obligations and the current service cost;

2. If there are assets in the defined benefit plan, the deficit or surplus formed by deducting the present value of the defined benefit plan obligations from the fair value of the defined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. If a defined benefit plan has a surplus, the net assets of the defined benefit plan shall be measured at the lower of the surplus of the defined benefit plan and the asset upper limit;

3. At the end of the period, the employee compensation costs generated by the defined benefit plan are recognized as service costs, net interest on the net liabilities or net assets of the defined benefit plan, and changes caused by remeasurement of the net liabilities or net assets of the defined benefit plan. Among them, service costs and net liabilities or net assets of the defined benefit plan are The net interest is included in the current profit and loss or related asset costs, and the changes resulting from the remeasurement of the net liabilities or net assets of the defined benefit plan are included in other comprehensive income, and are not allowed to be transferred back to profit or loss in subsequent accounting periods, but these amounts recognized in other comprehensive income can be transferred within the scope of equity.

(3) Accounting treatment of dismissal benefits

√Applicable □Not applicable

For dismissal benefits provided to employees, the employee compensation liabilities arising from the dismissal benefits are recognized and included in the current profit and loss at the earliest of the following two situations: (1) when the company cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relations plan or layoff proposal; (2) when the company recognizes costs or expenses related to the restructuring involving the payment of dismissal benefits.

(4) Accounting treatment methods for other long-term employee benefits

√Applicable □Not applicable

Other long-term benefits provided to employees that meet the conditions of the defined contribution plan shall be accounted for in accordance with the relevant provisions of the defined contribution plan; other long-term benefits shall be accounted for in accordance with the relevant provisions of the defined benefit plan. In order to simplify the relevant accounting treatment, the employee compensation costs incurred are recognized as service costs, net interest on other long-term employee benefit net liabilities or net assets, and the total net amount of the changes resulting from the remeasurement of other long-term employee benefit net liabilities or net assets shall be included in the current profit and loss or related asset costs.

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31. Estimated liabilities

√Applicable □Not applicable

1. Obligations resulting from contingencies such as external guarantees, litigation matters, product quality guarantees, loss-making contracts, etc., become current obligations borne by the company. When the performance of the obligation is likely to cause economic benefits to flow out of the company, and the amount of the obligation can be reliably measured, the company will recognize the obligation as an estimated liability.

2. The company initially measures estimated liabilities based on the best estimate of the expenditure required to fulfill relevant current obligations, and reviews the book value of estimated liabilities on the balance sheet date.

3. Share-based payment

□Applicable √Not applicable

33. Preferred shares, perpetual bonds and other financial instruments

□Applicable √Not applicable

34. Income

(1) Disclose the accounting policies adopted for revenue recognition and measurement according to business type

√Applicable □Not applicable

1. Principles of revenue recognition

On the contract commencement date, the company evaluates the contract, identifies each individual performance obligation contained in the contract, and determines whether each individual performance obligation is to be performed within a certain period of time or at a certain point in time.

When one of the following conditions is met, the performance obligation is fulfilled within a certain period of time; otherwise, the performance obligation is fulfilled at a certain point in time: (1) The customer obtains and consumes the economic benefits brought by the company's performance while the company performs the contract; (2) The customer is able to control the goods under construction during the company's performance; (3) The goods produced during the company's performance have irreplaceable uses, and the company has the right to collect payment for the cumulative performance part that has been completed so far during the entire contract period.

For performance obligations performed within a certain period of time, the company recognizes revenue based on the performance progress within that period of time. When the progress of contract performance cannot be reasonably determined, if the costs incurred are expected to be compensated, revenue shall be recognized based on the amount of costs incurred until the progress of contract performance can be reasonably determined. For performance obligations fulfilled at a certain point in time, revenue is recognized at the point when the customer obtains control of the relevant goods or services. When judging whether the customer has obtained control of the goods, the company considers the following signs: (1) the company has a current right to receive payment for the goods, that is, the customer has a current payment obligation for the goods; (2) the company has transferred the legal ownership of the goods to the customer, that is, the customer already has legal ownership of the goods; (3) the company has physically transferred the goods to the customer, that is, the customer has physical possession of the goods; (4) The company has transferred the main risks and rewards of ownership of the commodity to the customer, that is, the customer has obtained the main risks and rewards of ownership of the commodity; (5) the customer has accepted the commodity; (6) other indications that the customer has obtained control of the commodity.

2. Income measurement principles

(1) The company measures revenue based on the transaction price allocated to each individual performance obligation. The transaction price is the amount of consideration that the company expects to be entitled to receive for transferring goods or services to the customer, excluding amounts collected on behalf of third parties and amounts expected to be returned to the customer.

(2) If there is variable consideration in the contract, the company determines the best estimate of the variable consideration based on the expected value or the most likely amount, but the transaction price including the variable consideration shall not exceed the amount at which a significant reversal of the cumulative recognized revenue is unlikely to occur when the relevant uncertainty is eliminated.

(3) If there is a significant financing component in the contract, the company determines the transaction price based on the amount payable in cash when the customer obtains control of the goods or services. The difference between the transaction price and the contract consideration is amortized using the effective interest method during the contract period. On the contract start date, if the company expects that the interval between the customer's obtaining control of the goods or services and the customer's payment of the price will not exceed one year, it will not consider the significant financing component in the contract.

(4) If the contract contains two or more performance obligations, the company will allocate the transaction price to each individual performance obligation based on the relative proportion of the stand-alone selling price of the goods promised by each individual performance obligation on the contract commencement date.

(2) Similar businesses using different business models involve different revenue recognition methods and measurement methods

√Applicable □Not applicable

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The company mainly sells products such as chemical preparations and medical devices, which are required to perform performance obligations at a certain point in time. Domestic sales revenue is recognized when the company delivers the product to the delivery location stipulated in the contract and the customer confirms acceptance, the price has been collected or the right to receive payment has been obtained, and the relevant economic benefits are likely to flow in. Export sales revenue is recognized when the company has declared the product to customs according to the contract, obtained the bill of lading, collected payment or obtained the right to receive payment, and the relevant economic benefits are likely to flow in.

35. Contract costs

□Applicable √Not applicable

36. Government subsidies

√Applicable □Not applicable

1. Government subsidies are recognized when the following conditions are met at the same time: (1) the company can meet the conditions attached to the government subsidy; (2) the company can receive the government subsidy. If government subsidies are monetary assets, they shall be measured based on the amount received or receivable. If the government subsidy is a non-monetary asset, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the nominal amount.

2. Judgment basis and accounting treatment method for government subsidies related to assets

Government documents stipulate that government subsidies used to purchase, construct or otherwise form long-term assets are classified as asset-related government subsidies. If the government documents are unclear, the judgment will be based on the basic conditions that must be met to obtain the subsidy. If the basic condition is the acquisition, construction or other means of forming long-term assets, it will be regarded as an asset-related government subsidy. Government subsidies related to assets are offset against the book value of the relevant assets or recognized as deferred income. If government subsidies related to assets are recognized as deferred income, they shall be included in profits and losses in installments according to a reasonable and systematic method within the useful life of the relevant assets. Government subsidies measured according to the nominal amount are directly included in the current profit and loss. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the undistributed balance of relevant deferred income will be transferred to the profit and loss of the current period of asset disposal.

3. Basis for judgment and accounting treatment of government subsidies related to income

Government subsidies other than asset-related government subsidies are classified as income-related government subsidies. For government subsidies that contain both asset-related parts and income-related parts, it is difficult to distinguish whether they are asset-related or income-related, and are classified as a whole as income-related government subsidies. If government subsidies related to income are used to compensate for relevant costs, expenses or losses in the future period, they are recognized as deferred income. During the period when the relevant costs, expenses or losses are recognized, they are included in the current profits and losses or offset the relevant costs; if they are used to compensate for the relevant costs, expenses or losses that have already occurred, they are directly included in the current profits and losses or offset the relevant costs.

4. Government subsidies related to the company's daily operating activities shall be included in other income or offset related costs and expenses according to the economic business essence. Government subsidies that have nothing to do with the company's daily activities are included in non-operating income and expenses.

5. Accounting treatment method for policy preferential loan interest discounts

(1) The finance department allocates interest discount funds to the lending bank, and the lending bank provides loans to the company at policy-based preferential interest rates. The actual loan amount received is used as the entry value of the loan, and the relevant borrowing costs are calculated based on the loan principal and the policy-based preferential interest rate.

(2) If the finance department directly allocates interest discount funds to the company, the corresponding interest discount will be used to offset related borrowing costs.

37. Deferred income tax assets/deferred income tax liabilities

√Applicable □Not applicable

1. Based on the difference between the book value of assets and liabilities and their tax basis (if the tax basis of items not recognized as assets and liabilities can be determined in accordance with tax laws, the difference between the tax basis and their book amount), deferred income tax assets or deferred income tax liabilities are calculated and recognized according to the applicable tax rate during the period when the asset is expected to be recovered or the liability is settled.

2. Deferred income tax assets are recognized to the extent that it is probable that the taxable income will be available to offset the deductible temporary differences. On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely to be obtained in the future period to offset the deductible temporary differences, deferred income tax assets that have not been recognized in previous accounting periods will be recognized.

3. On the balance sheet date, the book value of the deferred tax assets is reviewed. If it is likely that sufficient taxable income will not be available in the future period to offset the benefits of the deferred tax assets, the book value of the deferred tax assets will be written down. The amount of the write-down is reversed when it is probable that sufficient taxable income will be obtained.

4. The company's current income tax and deferred income tax are included in the current profit and loss as income tax expenses or income, but do not include income tax arising from the following situations: (1) business merger; (2) transactions or events directly recognized in owner's equity.

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5. When the following conditions are met at the same time, the company will present the deferred income tax assets and deferred income tax liabilities as the net amount after offsetting:

(1) Have the legal right to settle current income tax assets and current income tax liabilities on a net basis; (2) Deferred income tax assets and deferred income tax liabilities are related to income taxes levied by the same tax collection and administration department on the same taxpayer or to different tax entities, but in each future period when important deferred income tax assets and deferred income tax liabilities are reversed, the involved taxpayers intend to settle current income tax assets and current income tax liabilities on a net basis or acquire assets and pay off debts at the same time.

38. Leasing

√Applicable □Not applicable

As a lessee, the judgment basis and accounting treatment method for simplified treatment of short-term leases and low-value asset leases

√Applicable □Not applicable

On the start date of the lease period, the company identifies leases with a lease term of no more than 12 months and that do not include a purchase option as short-term leases; leases with a low value when a single leased asset is a new asset are identified as low-value asset leases. If a company subleases or anticipates subletting a leased asset, the original lease will not be deemed a low-value asset lease.

For all short-term leases and low-value asset leases, the company includes the lease payments into the relevant asset cost or current profit and loss on a straight-line basis throughout the lease term.

In addition to the above-mentioned short-term leases and low-value asset leases that adopt simplified treatment, the company recognizes right-of-use assets and lease liabilities for leases on the start date of the lease period.

(1) Right-of-use assets

The right-of-use assets are initially measured at cost, which includes: 1) the initial measurement amount of the lease liability; 2) the lease payment amount paid on or before the start date of the lease period, and if there is a lease incentive, the amount related to the lease incentive that has been enjoyed is deducted; 3) the initial direct costs incurred by the lessee; 4) the costs that the lessee expects to incur to dismantle and remove the leased asset, restore the site where the leased asset is located, or restore the leased asset to the state agreed upon in the lease terms.

The company depreciates right-of-use assets on a straight-line basis. If it is reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, the company will accrue depreciation over the remaining useful life of the leased asset. If it is not reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, the company will accrue depreciation during the shorter of the lease term and the remaining useful life of the leased asset.

(2) Lease liabilities

At the beginning of the lease period, the company recognizes the present value of the unpaid lease payments as lease liabilities. When calculating the present value of lease payments, the interest rate implicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot be determined, the company's incremental borrowing rate is used as the discount rate. The difference between the lease payment and its present value is regarded as an unrecognized financing expense, and interest expenses are recognized at the discount rate used to confirm the present value of the lease payment during each period of the lease term, and included in the current profit and loss. Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit and loss when actually incurred.

After the start date of the lease period, when the actual fixed payment amount changes, the estimated amount payable of the guaranteed residual value changes, the index or ratio used to determine the lease payment amount changes, the evaluation results or actual exercise of the purchase option, lease renewal option or termination option change, When a change occurs, the company remeasures the lease liability based on the present value of the changed lease payment, and adjusts the book value of the right-of-use asset accordingly. If the book value of the right-of-use asset has been reduced to zero, but the lease liability still needs to be further reduced, the remaining amount will be included in the current profit and loss.

Sale and leaseback

The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in accordance with the provisions of "Accounting Standards for Business Enterprises No. 14 - Revenue".

If the asset transfer in a sale and leaseback transaction is a sale, the company measures the right-of-use assets formed by the sale and leaseback based on the portion of the original asset's book value related to the right of use obtained through the leaseback, and only recognizes relevant gains or losses for the rights transferred to the lessor.

If the asset transfer in a sale and leaseback transaction does not constitute a sale, the company will continue to recognize the transferred assets, and at the same time recognize a financial liability equal to the transfer income, and perform accounting treatment on the financial liability in accordance with the "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments".

Lease classification standards and accounting treatment methods as a lessor

√Applicable □Not applicable

On the lease commencement date, the Company classifies leases that substantially transfer almost all risks and rewards related to the ownership of the leased assets as finance leases, and other leases as operating leases.

(1) Operating lease

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The company recognizes the lease receipts as rental income according to the straight-line method in each period during the lease term. The initial direct expenses incurred are capitalized and amortized on the same basis as the rental income recognition, and included in the current profit and loss in installments. Variable lease payments obtained by the company related to operating leases that are not included in the lease receipts are included in the current profit and loss when they actually occur.

(2) Finance lease

On the start date of the lease period, the company recognizes the financial lease receivable based on the net lease investment (the sum of the unguaranteed residual value and the present value of the lease payments not yet received on the start date of the lease discounted at the interest rate implicit in the lease), and terminates the recognition of financial lease assets. During each period of the lease term, the company calculates and recognizes interest income based on the interest rate implicit in the lease.

Variable lease payments obtained by the company that are not included in the measurement of net lease investment are included in the current profit and loss when actually incurred.

Sale and leaseback

The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in accordance with the provisions of "Accounting Standards for Business Enterprises No. 14 - Revenue".

If the asset transfer in a sale and leaseback transaction is a sale, the company will account for the asset purchase in accordance with other applicable accounting standards for enterprises, and account for the asset leasing in accordance with "Accounting Standards for Business Enterprises No. 21 - Lease".

If the asset transfer in a sale and leaseback transaction does not constitute a sale, the company does not recognize the transferred asset, but recognizes a financial asset equal to the transfer income, and performs accounting treatment on the financial asset in accordance with the "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments".

39. Other important accounting policies and accounting estimates

√Applicable □Not applicable

The safety production fees withdrawn by the company in accordance with the "Administrative Measures for the Withdrawal and Use of Enterprise Safety Production Expenses" (Caizi [2022] No. 136) issued by the Ministry of Finance and the Ministry of Emergency Response shall be included in the cost of related products or current profits and losses, and shall also be recorded in the "Special Reserve" account. If the use of extracted safety production costs time and is an expense, it will be directly offset against the special reserve. If a fixed asset is formed, the expenditure incurred is collected through the "construction in progress" account and is recognized as a fixed asset when the safety project is completed and reaches the intended usable state; at the same time, the special reserve is offset according to the cost of forming the fixed asset, and the accumulated depreciation of the same amount is recognized. The fixed asset will no longer be depreciated in subsequent periods.

40. Changes in important accounting policies and accounting estimates

(1) Changes in important accounting policies

□Applicable √Not applicable

(2) Changes in important accounting estimates

□Applicable √Not applicable

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

□Applicable √Not applicable

41. Others

√Applicable □Not applicable

The company determines its operating segments based on its internal organizational structure, management requirements, internal reporting system, etc. A company's operating segments refer to components that simultaneously meet the following conditions:

1. This component can generate income and incur expenses in daily activities;

2. The management can regularly evaluate the operating results of the component to decide to allocate resources to it and evaluate its performance;

3. Be able to obtain relevant accounting information such as the financial status, operating results and cash flow of the component through analysis.

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6. Taxes

1. Main tax types and tax rates

Main tax types and tax rates

√Applicable □Not applicable

Type of tax Tax calculation basis Tax rate

Sales of goods calculated in accordance with tax laws

3%, 5%, 6%, 9%, 13%; sales and taxable service income are calculated based on

Export tax refund goods enjoy “exemption, offset, and value-added tax, with deductions allowed for the current period.”

"Tax refund" policy, the export tax refund rate is the input tax, and the difference is the amount payable

13%

value added tax

If the tax is assessed on an ad valorem basis, it will be based on the original value of the property.

1.2% of the remaining value after deducting 30% is calculated as payment;

Property tax 1.2%, 12%

Taxed based on rent, based on rental income

12% calculated payment

Urban maintenance and construction tax Actual turnover tax paid 5%, 7%

Education fee surcharge Actual turnover tax paid 3%

Local education surcharge Actual turnover tax paid 2%

Corporate income tax: taxable income 15%, 20%

If there are taxpayers with different corporate income tax rates, a description of the disclosure

√Applicable □Not applicable

Name of tax payer Income tax rate (%)

Zhejiang Yanjitang Pharmaceutical Technology Co., Ltd. 20 Other taxpayers other than the above 15

2. Tax incentives

√Applicable □Not applicable

1. Income tax

(1) Tax incentives for high-tech enterprises

According to the "High-tech Enterprise Certificate" No. GS202411000115 jointly issued by the Beijing Municipal Science and Technology Commission, the Beijing Municipal Bureau of Finance, and the Beijing Municipal Taxation Bureau of the State Administration of Taxation, the company is recognized as a high-tech enterprise and will enjoy the preferential tax policies for high-tech enterprises from 2024 to 2026. In 2026, the corporate income tax will be calculated and paid at a rate of 15%.

According to the "High-tech Enterprise Certificate" No. GS202511000019 jointly issued by the Beijing Municipal Science and Technology Commission, the Beijing Municipal Bureau of Finance, and the Beijing Municipal Taxation Bureau of the State Administration of Taxation, the subsidiary Beijing Wanshengren Technology Co., Ltd. was recognized as a high-tech enterprise and will enjoy the preferential tax policies for high-tech enterprises from 2025 to 2027. In 2026, the corporate income tax will be calculated and paid at a rate of 15%.

According to the "High-tech Enterprise Certificate" No. GR202534001007 jointly issued by the Anhui Provincial Department of Industry and Information Technology, the Anhui Provincial Department of Finance, and the Anhui Provincial Taxation Bureau of the State Administration of Taxation, the subsidiary Fuyuan Pharmaceutical Co., Ltd. was recognized as a high-tech enterprise and will enjoy the preferential tax policies for high-tech enterprises from 2025 to 2027. In 2026, corporate income tax will be calculated and paid at a rate of 15%.

According to the "High-tech Enterprise Certificate" No. GR202433012318 issued by the Zhejiang Provincial Department of Economy and Information Technology, the Zhejiang Provincial Department of Finance, and the Zhejiang Provincial Taxation Bureau of the State Administration of Taxation, the subsidiary Zhejiang Aisheng Pharmaceutical Co., Ltd. is recognized as a high-tech enterprise and will enjoy the preferential tax policies for high-tech enterprises from 2024 to 2026. In 2026, corporate income tax will be calculated and paid at a rate of 15%.

(2) Tax incentives for small and micro enterprises

According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on Relevant Tax Policies to Further Support the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households" (Announcement No. 12 of the Ministry of Finance and the State Administration of Taxation of 2023), from January 1, 2023 to December 31, 2027, small and low-profit enterprises will be included in taxable income at a reduced rate of 25%, and corporate income tax will be paid at a rate of 20%. The subsidiary Zhejiang Yanjitang Pharmaceutical Technology Co., Ltd. calculates and pays corporate income tax according to the corresponding preferential tax rate.

2. Additional VAT deduction

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According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on the Additional VAT Deduction Policy for Advanced Manufacturing Enterprises" (Announcement No. 43 of the Ministry of Finance and the State Administration of Taxation in 2023), from January 1, 2023 to December 31, 2027, advanced manufacturing enterprises are allowed to deduct an additional 5% of the deductible input tax for the current period to offset the value-added tax payable. The Company and its subsidiaries Beijing Wanshengren Technology Co., Ltd., Fuyuan Pharmaceutical Co., Ltd., and Zhejiang Aisheng Pharmaceutical Co., Ltd. enjoy the preferential policy of super deduction of input tax.

3. Others

□Applicable √Not applicable

7. Notes on Consolidated Financial Statement Items

1. Monetary funds

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Cash on hand 897.76 2,354.22 Bank deposits 488,095,401.36 634,045,740.08 Other monetary funds 307,000.00 307,000.00 Deposits in finance companies

Total 488,403,299.12 634,355,094.30 including: stored abroad

of total payment

Other instructions

Other monetary funds at the end of the period include a guarantee deposit of RMB 300,000.00 and an ETC deposit of RMB 7,000.00.

2. Trading financial assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Closing balance Opening balance Reason and basis for designation Measured at fair value and its changes /

1,555,000,000.00 1,428,800,000.00

Financial assets included in current profits and losses

Among them:

Capital-guaranteed and floating-income financial products 1,555,000,000.00 1,428,800,000.00 / Designated to be measured at fair value and its change

Financial assets automatically included in current profits and losses

Among them:

Total 1,555,000,000.00 1,428,800,000.00 /Other instructions:

□Applicable √Not applicable

3. Derivative financial assets

□Applicable √Not applicable

4. Notes receivable

(1) Classified presentation of notes receivable

□Applicable √Not applicable

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(2) The company’s pledged notes receivable at the end of the period □ Applicable √ Not applicable

(3) Notes receivable that have been endorsed or discounted by the company at the end of the period and have not yet matured on the balance sheet date □ Applicable √ Not applicable

(4) Classified disclosure according to bad debt accrual method □ Applicable √ Not applicable

Provision for bad debts is made individually:

□Applicable √Not applicable

Provision for bad debts by group:

□Applicable √Not applicable

Provision for bad debts based on the general expected credit loss model □ Applicable √ Not applicable

The basis for dividing each stage and the proportion of bad debt provisions not applicable

Explanation of significant changes in the book balance of notes receivable that have experienced changes in loss provisions in the current period: □ Applicable √ Not applicable

(5) Bad debt provisions

□Applicable √Not applicable

Among them, the amount of bad debt provision recovery or reversal in the current period is important: □ Applicable √ Not applicable

Other notes:

Not applicable

(6) Notes receivable actually written off in the current period □ Applicable √ Not applicable

Among them, the important write-off of bills receivable: □ Applicable √ Not applicable

Instructions for writing off notes receivable:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

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5. Accounts receivable

(1) Disclosure based on aging

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Aging Book balance at the end of the period Book balance at the beginning of the period Within 1 year (including 1 year) 392,501,450.96 431,030,711.48 1 to 2 years 3,368,044.06 3,504,030.45 2 to 3 years 827,600.23 444,688.88 More than 3 years 456,642.14 429,289.93

Total 397,153,737.39 435,408,720.74

(2) Classified disclosure based on bad debt accrual method

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Book balance Provision for bad debts Book balance Provision for bad debts

Plan

Category mention

Book Book Category Proportion Ratio Ratio

Amount Amount Value Amount Amount Value (%) Example (%) Example

(% (%

) )

press

group

combine

plan

397,153,737 100.0 21,417,403. 5.3 375,736,333 435,408,720. 100.0 23,037,382. 5.2 412,371,338.

.39 0 67 9 .72 74 0 70 9 04 bad

account

Accurate

Prepare

Among them:

press

group

combine

plan

397,153,737 100.0 21,417,403. 5.3 375,736,333 435,408,720 100.0 23,037,382. 5.2 412,371,338

.39 0 67 9 .72 .74 0 70 9 .04bad

account

Accurate

Prepare

Total 397,153,737 / 21,417,403. / 375,736,333 435,408,720 / 23,037,382. / 412,371,338 total .39 67 .72 .74 70 .04

Provision for bad debts is made individually:

□Applicable √Not applicable

Provision for bad debts by group:

√Applicable □Not applicable

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Group accrual items: Bad debt provisions are accrued on a group basis

Unit: Yuan Currency: RMB Closing balance

Name

Book balance Bad debt provision Proportion (%) Within 1 year (including 1 392,501,450.96 19,625,072.55 5.00 years)

1-2 years 3,368,044.06 673,608.80 20.00 2-3 years 827,600.23 662,080.18 80.00 More than 3 years 456,642.14 456,642.14 100.00

Total 397,153,737.39 21,417,403.67 5.39 Instructions on the provision of bad debt provisions by group:

□Applicable √Not applicable

Provision for bad debts based on the general expected credit loss model

□Applicable √Not applicable

Basis for division of each stage and provision ratio for bad debts

For details, please refer to the description of "13. Accounts receivable" in Section 8 of this report, Financial Report V.

Explanation of significant changes in the book balance of accounts receivable that have experienced changes in loss provisions during the current period:

□Applicable √Not applicable

(3) Bad debt provisions

√Applicable □Not applicable

Unit: Yuan Currency: RMB Change amount in the current period

Category Opening balance Recovery or transfer Write-off or verification Ending balance accrual Other changes

Return sales

Provision based on combination

23,037,382.70 -1,585,601.03 34,378.00 21,417,403.67 Bad debt provision

Total 23,037,382.70 -1,585,601.03 34,378.00 21,417,403.67

Among them, the amount of recovery or reversal of bad debt provisions for the current period is important:

□Applicable √Not applicable

Other notes:

Not applicable

(4) Accounts receivable actually written off in the current period

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Write-off Amount

Accounts receivable actually written off 34,378.00

Among them, the important write-off of accounts receivable

□Applicable √Not applicable

Instructions for writing off accounts receivable:

□Applicable √Not applicable

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(5) Accounts receivable and contract assets of the top five ending balances by debtors

√Applicable □Not applicable

Unit: Yuan Currency: RMB as a proportion of accounts receivable and contract assets accounts receivable period contract asset period bad debt provision period unit name contract asset period closing balance closing balance closing balance closing balance closing balance count

(%) Customer one 19,757,785.21 19,757,785.21 4.97 987,889.26 Customer two 8,218,277.38 8,218,277.38 2.07 410,913.87 Customer three 7,749,437.12 7,749,437.12 1.95 387,471.86Customer four 7,664,840.90 7,664,840.90 1.93 383,242.05Customer five 7,510,676.84 7,510,676.84 1.89 375,533.84

Total 50,901,017.45 50,901,017.45 12.81 2,545,050.88

Other instructions

Not applicable

Other notes:

□Applicable √Not applicable

6. Contract assets

(1) Contract assets

□Applicable √Not applicable

(2) Amount and reasons for significant changes in book value during the reporting period

□Applicable √Not applicable

(3) Classified disclosure based on bad debt accrual method

□Applicable √Not applicable

Provision for bad debts is made individually:

□Applicable √Not applicable

Instructions on accruing bad debt provisions individually:

□Applicable √Not applicable

Provision for bad debts by group:

□Applicable √Not applicable

Provision for bad debts based on the general expected credit loss model

□Applicable √Not applicable

Basis for division of each stage and provision ratio for bad debts

Not applicable

Explanation of significant changes in the book balance of contract assets that have experienced changes in loss provisions during the current period:

□Applicable √Not applicable

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(4) Bad debt provisions for contract assets in the current period

□Applicable √Not applicable

Among them, the amount of recovery or reversal of bad debt provisions for the current period is important:

□Applicable √Not applicable

Other notes:

Not applicable

(5) Contract assets actually written off in the current period

□Applicable √Not applicable

Among them, the important write-off of contract assets

□Applicable √Not applicable

Instructions for write-off of contract assets:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

7. Accounts receivable financing

(1) Classified presentation of financing receivables

√Applicable □Not applicable

Unit: Yuan Currency: RMB items Closing balance Opening balance Bank acceptance bill 81,816,694.32 110,191,392.50 Total 81,816,694.32 110,191,392.50

(2) Financing of the company’s pledged receivables at the end of the period

□Applicable √Not applicable

(3) Financing of receivables that have been endorsed or discounted by the company at the end of the period and have not yet matured on the balance sheet date

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Amount derecognized at the end of the period Amount not derecognized at the end of the period Bank acceptance bill 266,928,638.50

Total 266,928,638.50

The acceptor of the bank acceptance bill is a commercial bank with relatively high credit, and the possibility that the bank acceptance bill accepted by it will not be paid when due is low, so the company will derecognize the bank acceptance bill that has been endorsed or discounted. However, if the bills are not paid when due, the company will still be jointly and severally liable to the holders in accordance with the provisions of the Negotiable Instruments Law.

(4) Classified disclosure based on bad debt accrual method

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Ending balance Beginning balance category

Bad debt allowance book Bad debt allowance book balance Book balance Book balance

Prepare value Prepare value

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Provision Proportion Proportion Fund Ratio Amount Amount

(%) Amount Example (%) Amount Example (% (%

) ) press

group

combine

plan

81,816,694. 100.0 81,816,694. 110,191,392. 100.0 110,191,392.

32 0 32 50 0 50 bad

account

Accurate

Prepare

Among them:

silver

OK

Acceptance 81,816,694. 100.0 81,816,694. 110,191,392. 100.0 110,191,392. Exchange 32 0 32 50 0 50

ticket

Total 81,816,694. / / 81,816,694. 110,191,392. / / 110,191,392. Total 32 32 50 50

Provision for bad debts is made individually:

□Applicable √Not applicable

Instructions on accruing bad debt provisions individually:

□Applicable √Not applicable

Provision for bad debts by group:

√Applicable □Not applicable

Combined accrual items: bank acceptance bill

Unit: Yuan Currency: RMB Closing balance

Name

Book balance Bad debt provision Provision ratio (%) Bank acceptance bill portfolio 81,816,694.32

Total 81,816,694.32

Instructions on accruing bad debt provisions by portfolio

□Applicable √Not applicable

Provision for bad debts based on the general expected credit loss model

□Applicable √Not applicable

Basis for division of each stage and provision ratio for bad debts

Not applicable

Explanation of significant changes in the book balance of accounts receivable financing that have experienced changes in loss provisions in the current period:

□Applicable √Not applicable

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(5) Bad debt provisions

□Applicable √Not applicable

Among them, the amount of recovery or reversal of bad debt provisions for the current period is important:

□Applicable √Not applicable

Other notes:

Not applicable

(6) Financing of receivables actually written off in the current period

□Applicable √Not applicable

Important financing write-offs of receivables

□Applicable √Not applicable

Write-off instructions:

□Applicable √Not applicable

(7) Increases and decreases in receivables financing and changes in fair value during the current period:

□Applicable √Not applicable

(8) Other instructions:

□Applicable √Not applicable

8. Advance payments

(1) Prepayments are presented based on aging

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Aging

Amount Proportion (%) Amount Proportion (%) Within 1 year 32,321,630.52 99.46 41,501,522.26 98.77 1 to 2 years 158,568.68 0.49 143,050.09 0.34 2 to 3 years 13,471.42 0.04 311,076.57 0.74 More than 3 years 3,464.60 0.01 61,503.40 0.15

Total 32,497,135.22 100.00 42,017,152.32 100.00 Explanation of reasons why prepayments with an aging of more than 1 year and important amounts were not settled in time:

Not applicable

(2) Prepayments of the top five closing balances by prepayment objects

√Applicable □Not applicable

Unit: Yuan Currency: RMB accounted for the total closing balance of prepayments Unit name Closing balance

Proportion (%)

Supplier one 4,374,559.24 13.46 Supplier two 3,766,201.54 11.59 Supplier three 2,751,181.88 8.47 Supplier four 1,631,097.36 5.02 Supplier five 1,117,388.46 3.44

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Total 13,640,428.48 41.98

Other notes:

Not applicable

Other instructions

□Applicable √Not applicable

9. Other receivables

Item list

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Closing balance Opening balance Interest receivable

Dividends receivable

Other receivables 1,650,321.44 1,420,319.53

Total 1,650,321.44 1,420,319.53Other instructions:

□Applicable √Not applicable

interest receivable

(1) Classification of interest receivable

□Applicable √Not applicable

(2) Important overdue interest

□Applicable √Not applicable

(3) Classified disclosure according to bad debt accrual method □Applicable √Not applicable

Provision for bad debts is made individually:

□Applicable √Not applicable

Explanation on the provision of bad debt provisions on an individual basis: □ Applicable √ Not applicable

Provision for bad debts by group:

□Applicable √Not applicable

(4) Provision for bad debts is made based on the general expected credit loss model □Applicable √Not applicable

(5) Bad debt provisions

□Applicable √Not applicable

Among them, the amount of bad debt provision recovery or reversal in the current period is important: □ Applicable √ Not applicable

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Other notes:

Not applicable

(6) Interest receivable actually written off in the current period □ Applicable √ Not applicable

Among them, the important write-off of interest receivable □ Applicable √ Not applicable

Write-off instructions:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

Dividends receivable

(1) Dividends receivable

□Applicable √Not applicable

(2) Important dividends receivable aged more than 1 year □ Applicable √ Not applicable

(3) Classified disclosure according to bad debt accrual method □Applicable √Not applicable

Provision for bad debts is made individually:

□Applicable √Not applicable

Explanation on the provision of bad debt provisions on an individual basis: □ Applicable √ Not applicable

Provision for bad debts by group:

□Applicable √Not applicable

(4) Provision for bad debts is made based on the general expected credit loss model □Applicable √Not applicable

(5) Bad debt provisions

□Applicable √Not applicable

Among them, the amount of bad debt provision recovery or reversal in the current period is important: □ Applicable √ Not applicable

Other notes:

Not applicable

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(6) Dividends receivable actually written off in the current period

□Applicable √Not applicable

Among them, the important write-off of dividends receivable

□Applicable √Not applicable

Write-off instructions:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

Other receivables

(1) Disclosure based on aging

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year (including 1 year) 1,102,911.18 1,074,824.82 1 to 2 years 736,582.13 373,038.24 2 to 3 years 66,450.62 504,026.74 More than 3 years 2,854,737.26 2,835,937.26

Total 4,760,681.19 4,787,827.06

(2) Classification by nature of payment

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Nature of payment Book balance at the end of the period Book balance at the beginning of the period

Deposit and security deposit 4,392,184.60 4,569,144.82 Others 368,496.59 218,682.24

Total 4,760,681.19 4,787,827.06

(3) Bad debt provision accrual

√Applicable □Not applicable

Unit: Yuan Currency: RMB Phase 1 Phase 2 Phase 3

Lifetime expectations Lifetime expectations

Provision for bad debts Estimated total credit losses in the next 12 months (have not occurred Credit losses (have occurred)

period credit loss

credit impairment) credit impairment)

January 1, 2026

53,741.24 74,607.64 3,239,158.65 3,367,507.53 amount

January 1, 2026

Amount in this period

--Transfer to the second stage -36,829.11 36,829.11

--Transfer to the third stage -13,290.12 13,290.12

--Return to the second stage

--Return to the first stage

Provision in this period 38,233.43 49,169.80 -344,551.01 -257,147.78 Transferred in this period

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Sales in this period

Write-off in this period

Other changes

June 30, 2026

55,145.56 147,316.43 2,907,897.76 3,110,359.75 Balance

Basis for division of each stage and provision ratio for bad debts

The basis for dividing each stage: accounts aged less than 1 year are classified into the first stage, accounts aged 1-2 years are classified into the second stage, and accounts aged over 2 years are classified into the third stage.

Explanation of significant changes in the book balance of other receivables where loss provisions have changed in the current period: □ Applicable √ Not applicable

The amount of bad debt provision for the current period and the basis for assessing whether the credit risk of financial instruments has increased significantly: □ Applicable √ Not applicable

(4) Bad debt provisions

√Applicable □Not applicable

Unit: Yuan Currency: RMB Change amount in the current period

Category Opening balance Recovery or transfer Write-off or verification Ending balance accrual Other changes

Return sales

Provision based on combination

3,367,507.53 -257,147.78 3,110,359.75 Bad debt provision

Total 3,367,507.53 -257,147.78 3,110,359.75

Among them, the amount of bad debt provision reversed or recovered in the current period is important:

□Applicable √Not applicable

Other instructions

Not applicable

(5) Other receivables actually written off in the current period

□Applicable √Not applicable

Important write-offs of other receivables:

□Applicable √Not applicable

Instructions for writing off other receivables:

□Applicable √Not applicable

(6) Other receivables with top five closing balances based on debtors

√Applicable □Not applicable

Unit: Yuan Currency: RMB as a share of other receivables at the end of the period

Name of bad debt provision unit Closing balance Proportion of total balance Nature of payment Aging closing balance

(%)

Beijing Futian Embroidery

1,389,095.00 29.18 Deposit security deposit More than 3 years 1,389,095.00 Machinery Co., Ltd.

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Beijing Dongxing Tangke

Technology Development Co., Ltd. 720,142.26 15.13 Deposit guarantee more than 3 years 720,142.26 Company

Aramark service products

Industry (China) Co., Ltd.

342,090.00 7.19 Deposit guarantee 1-2 years 68,418.00 Company Beijing Branch

Division

Guangzhou Defu Ali

Healthy Pharmacy has 330,000.00 6.93 Deposit Security Deposit More than 3 years 330,000.00 Co., Ltd.

Beijing Jinglin Yuantai

Technology Development Co., Ltd. 203,800.00 4.28 Deposit and security deposit More than 3 years 203,800.00 Responsible company

Total 2,985,127.26 62.71 / / 2,711,455.26

(7) Presented in other receivables due to centralized management of funds

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

10. Inventory

(1) Inventory classification

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Inventories are accurate for price decreases Inventories are accurate for decreases in price

Project preparation/contract performance preparation/contract performance

Book Balance Book Value Book Balance Book Value Impairment of Approximate Cost Impairment of Approximate Cost

prepare prepare

Raw materials 165,615,239.67 3,322,090.27 162,293,149.40 142,929,952.65 4,939,944.60 137,990,008.05Work in progress 114,916,325.54 114,916,325.54 121,026,815.17 121,026,815.17 Inventory goods 74,618,593.85 3,110,437.45 71,508,156.40 100,206,514.91 3,247,676.12 96,958,838.79 Goods shipped 26,014,049.19 26,014,049.19 12,203,162.42 12,203,162.42 Commissioned processing

12,292,823.71 126,584.96 12,166,238.75 8,440,771.10 4,600.60 8,436,170.50 Materials

Packaging 31,585,876.73 138,717.40 31,447,159.33 28,762,124.27 370,148.74 28,391,975.53 Low value and easy to consume

7,786,953.34 47,854.42 7,739,098.92 7,705,364.29 47,854.42 7,657,509.87 products

Total 432,829,862.03 6,745,684.50 426,084,177.53 421,274,704.81 8,610,224.48 412,664,480.33

(2) Data resources confirmed as inventory

□Applicable √Not applicable

(3) Provision for inventory depreciation and provision for impairment of contract performance costs

√Applicable □Not applicable

Unit: Yuan Currency: RMB items Beginning balance of the current period Increased amount of the current period Decreased amount of the current period Ending balance

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Provision Others Reversal or write-off Others

Raw materials 4,939,944.60 2,083,362.96 3,701,217.29 3,322,090.27 Work in progress

Inventory goods 3,247,676.12 3,644,555.88 3,781,794.55 3,110,437.45Consigned processing

4,600.60 288,160.31 166,175.95 126,584.96 Materials

Packaging 370,148.74 85,795.51 317,226.85 138,717.40 Low value and easy to consume

47,854.42 47,854.42 products

Total 8,610,224.48 6,101,874.66 7,966,414.64 6,745,684.50

Reasons for the reversal or write-off of inventory depreciation provisions in the current period

√Applicable □Not applicable

Determine net realizable value, reverse inventory depreciation, write off inventory depreciation

Project

Specific basis for preparation Reason for preparation

Raw materials/inventory Valid within 6 months, variable

In this period, the current net value of inventory depreciation products/issuers will be equal to 0, and the validity period is 6 months

Not applicable Inventory prepared for scrapping/sold/product/entrusted processing for more than 3 months, net realizable value, etc.

consumption

Materials/packaging in book balance

Estimated selling price of relevant finished goods minus

Provision for inventory depreciation was made in previous periods. Inventory depreciation has been made provision for this period.

Estimated selling expenses and related

The net realizable amount of inventory prepared for low-value consumables is determined by the amount after scrapping/sold/taxes of inventory prepared.

value increases consumption

net worth

Estimated selling price of relevant finished goods minus

Costs estimated to be incurred until completion. Provision for inventory decline has been made in previous periods. In this period, the inventory net realizable cost, estimated sales expenses and price provision for inventory at the beginning of the period have been provided for inventory decline. The amount after inventory scrapping/consumption of related taxes and fees for decline in price has been determined to increase in value.

net realizable value

Provision for inventory decline in value on a group basis

√Applicable □Not applicable

Unit: Yuan Currency: RMB End of Period Beginning of Period

Falling price, falling price

Preparation combination name Preparation provision

Book balance Provision for price decline Book balance Provision for price decline Provision ratio

Proportion (%)

(%) Raw materials—

—Validity group

combine

Among them: 6

3,322,090.27 3,322,090.27 100.00 4,939,944.60 4,939,944.60 Within 100.00 months

More than 6 months 162,293,149.40 137,990,008.05

Inventory items

——Validity period

combination

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Among them: 6

3,110,437.45 3,110,437.45 100.00 3,247,676.12 3,247,676.12 Within 100.00 months

More than 6 months 71,508,156.40 96,958,838.79 Products shipped

——Validity period

combination

Among them: 6

Within months

More than 6 months 26,014,049.19 12,203,162.42 Commissioned processing

Materials——

Validity combination

Among them: 6

126,584.96 126,584.96 100.00 4,600.60 4,600.60 Within 100.00 months

More than 6 months 12,166,238.75 8,436,170.50 Packaging—

—Validity group

combine

Among them: 6

138,717.40 138,717.40 100.00 370,148.74 370,148.74 Within 100.00 months

6 months and older

31,447,159.33 28,391,975.53 on

Total 310,126,583.15 6,697,830.08 292,542,525.35 8,562,370.06

Standards for accruing inventory depreciation provisions on a group basis □ Applicable √ Not applicable

(4) The capitalized amount of borrowing costs included in the closing balance of inventories and its calculation standards and basis □Applicable √Not applicable

(5) Explanation of the amortization amount of contract performance costs for the current period □Applicable √Not applicable

Other notes:

□Applicable √Not applicable

11. Assets held for sale

□Applicable √Not applicable

12. Non-current assets due within one year

□Applicable √Not applicable

Debt investments due within one year

□Applicable √Not applicable

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Other debt investments due within one year

□Applicable √Not applicable

Other instructions for non-current assets due within one year

Not applicable

13. Other current assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Closing balance Opening balance Prepaid corporate income tax 6,587,755.19 6,510,833.28 Value-added tax input tax to be deducted 213,310.13 Prepaid expenses 3,546,679.71 4,175,678.14

Total 10,347,745.03 10,686,511.42

Information about compensating assets

□Applicable √Not applicable

Other notes:

Not applicable

14. Debt investment

(1) Debt investment situation

□Applicable √Not applicable

Changes in provision for impairment of debt investments during the current period

□Applicable √Not applicable

(2) Important debt investments at the end of the period

□Applicable √Not applicable

(3) Provision for impairment losses

□Applicable √Not applicable

Basis for dividing each stage and proportion of impairment provision:

Not applicable

Explanation of significant changes in the book balance of debt investments that have experienced changes in loss provisions in the current period: □ Applicable √ Not applicable

The amount of impairment provision for the current period and the basis for assessing whether the credit risk of financial instruments has increased significantly: □ Applicable √ Not applicable

(4) Actual write-off of debt investments in the current period

□Applicable √Not applicable

Among them, the important debt investment situation is written off

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□Applicable √Not applicable

Instructions for writing off debt investments: □ Applicable √ Not applicable

Other notes:

Not applicable

15. Other debt investments

(1) Other debt investments □Applicable √Not applicable

Changes in impairment provisions for other debt investments during the period □ Applicable √ Not applicable

(2) Important other debt investments at the end of the period □ Applicable √ Not applicable

(3) Impairment provision accrual □Applicable √Not applicable

(4) Other debt investments actually written off in the current period □ Applicable √ Not applicable

Among them, the write-off of other important debt investments □Applicable √Not applicable

Instructions for writing off other debt investments: □ Applicable √ Not applicable

Other notes:

□Applicable √Not applicable

16. Long-term receivables

(1) Long-term receivables □Applicable √Not applicable

(2) Classified disclosure according to bad debt accrual method □ Applicable √ Not applicable

Provision for bad debts on an individual basis: □ Applicable √ Not applicable

Explanation on the provision of bad debt provisions on an individual basis: □ Applicable √ Not applicable

Provision for bad debts by combination: □ Applicable √ Not applicable

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Provision for bad debts based on the general expected credit loss model □ Applicable √ Not applicable

(3) Bad debt provisions

□Applicable √Not applicable

Among them, the amount of bad debt provision recovery or reversal in the current period is important: □ Applicable √ Not applicable

Other notes:

Not applicable

(4) Long-term receivables actually written off in the current period □ Applicable √ Not applicable

Among them, the important write-off of long-term receivables □ Applicable √ Not applicable

Write-off instructions:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

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17. Long-term equity investment

(1) Long-term equity investment

□Applicable √Not applicable

(2) Impairment testing of long-term equity investments □ Applicable √ Not applicable

Other instructions

Not applicable

18. Investment in other equity instruments

(1) Investment in other equity instruments □Applicable √Not applicable

(2) Explanation of termination of recognition in this period □ Applicable √ Not applicable

Other notes:

□Applicable √Not applicable

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19. Other non-current financial assets

□Applicable √Not applicable

20. Investment real estate

Investment real estate measurement model

Not applicable

21. Fixed assets

Item list

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Fixed assets 1,620,130,007.10 1,646,281,517.79 Liquidation of fixed assets

Total 1,620,130,007.10 1,646,281,517.79Other instructions:

Not applicable

fixed assets

(1) Fixed assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Items Houses and buildings General equipment Special equipment Transportation tools Total

1. Original book value:

1. Opening balance 1,287,988,651.51 58,304,205.28 842,322,401.35 10,914,664.76 2,199,529,922.90 2. Increase in the current period 3,455,369.91 1,700,293.48 33,461,602.93 185,840.71 38,803,107.03 (1) Purchase 180,091.27 955,166.94 18,621,878.14 185,840.71 19,942,977.06 (2) Transfer of construction in progress

3,275,278.64 745,126.54 14,839,724.79 18,860,129.97

(3) Business merger increases

add

3. Decrease amount in this period 764,072.63 514,816.27 1,814,532.02 350,936.68 3,444,357.60

(1) Disposal or scrapping 764,072.63 514,816.27 1,814,532.02 350,936.68 3,444,357.60 4. Closing balance 1,290,679,948.79 59,489,682.49 873,969,472.26 10,749,568.79 2,234,888,672.33

2. Accumulated depreciation

1. Opening balance 193,251,884.76 27,929,245.81 325,680,626.71 6,368,489.41 553,230,246.69 2. Increase in the current period 21,432,835.46 3,587,357.02 38,842,606.75 363,043.88 64,225,843.11

(1) Provision 21,432,835.46 3,587,357.02 38,842,606.75 363,043.88 64,225,843.11 3. Decrease amount in the current period 286,761.48 497,141.18 1,595,471.73 336,208.60 2,715,582.99

(1) Disposal or scrapping 286,761.48 497,141.18 1,595,471.73 336,208.60 2,715,582.99 4. Closing balance 214,397,958.74 31,019,461.65 362,927,761.73 6,395,324.69 614,740,506.81

3. Impairment provision

1. Balance at the beginning of the period 18,158.42 18,158.42 2. Increase in the current period

(1) Provision

3. Reduction amount in this period

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(1) Disposal or scrapping

4. Ending balance 18,158.42 18,158.42

4. Book value

1. Book value at the end of the period 1,076,281,990.05 28,470,220.84 511,023,552.11 4,354,244.10 1,620,130,007.10 2. Book value at the beginning of the period 1,094,736,766.75 30,374,959.47 516,623,616.22 4,546,175.35 1,646,281,517.79

(2) Temporarily idle fixed assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Original book value Accumulated depreciation Impairment provision Book value Remarks Special equipment 6,918,850.67 4,659,106.17 2,259,744.50

General equipment 4,058.97 3,937.21 121.76

(3) Fixed assets leased through operating leases

□Applicable √Not applicable

(4) Fixed assets for which title certificates have not been obtained

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Book value Reasons for not completing the property ownership certificate Houses and buildings 82,410,615.19 Processing in progress

(5) Impairment testing of fixed assets

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

Fixed asset liquidation

□Applicable √Not applicable

22. Projects under construction

Item list

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Closing balance Opening balance

Construction in progress 43,263,256.18 19,265,143.26 Total 43,263,256.18 19,265,143.26 Other instructions:

Not applicable

Construction in progress

(1) Situation of projects under construction

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Closing balance Beginning balance items

Book balance Impairment provision Book value Book balance Impairment provision Book value High-precision pharmaceutical industry

1,739,724.49 1,739,724.49 1,980,871.82 1,980,871.82 Chemical construction projects

Equipment to be installed and its

41,523,531.69 41,523,531.69 17,284,271.44 17,284,271.44Other sporadic projects

Total 43,263,256.18 43,263,256.18 19,265,143.26 19,265,143.26

(2) Changes in important projects under construction during the current period

□Applicable √Not applicable

(3) Provision for impairment of projects under construction in the current period

□Applicable √Not applicable

(4) Impairment testing of projects under construction

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

Engineering supplies

□Applicable √Not applicable

23. Productive biological assets

(1) Productive biological assets using cost measurement model □ Applicable √ Not applicable

(2) Impairment testing of productive biological assets using the cost measurement model □ Applicable √ Not applicable

(3) Productive biological assets using fair value measurement model □ Applicable √ Not applicable

Other instructions

□Applicable √Not applicable

24. Oil and gas assets

(1) Oil and gas assets

□Applicable √Not applicable

(2) Impairment testing of oil and gas assets

□Applicable √Not applicable

Other notes:

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Not applicable

25. Right-of-use assets

(1) Right-of-use assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Project Houses and Buildings Total

1. Original book value

1. Balance at the beginning of the period 69,181,685.97 69,181,685.97 2. Increase in the current period 3,410,814.64 3,410,814.64

(1) Rental 3,410,814.64 3,410,814.64 3. Decrease amount in the current period 11,598,458.29 11,598,458.29

(1) Disposal 11,598,458.29 11,598,458.29 4. Closing balance 60,994,042.32 60,994,042.32

2. Accumulated depreciation

1. Balance at the beginning of the period 44,872,900.36 44,872,900.36 2. Increase in the current period 6,975,190.64 6,975,190.64

(1) Provision 6,975,190.64 6,975,190.64 3. Decrease amount in the current period 8,296,501.37 8,296,501.37

(1) Disposal 8,296,501.37 8,296,501.37 4. Closing balance 43,551,589.63 43,551,589.63

3. Impairment provision

1. Opening balance

2. Increase amount in this period

(1)Provision

3. Reduction amount in this period

(1)Disposal

4. Ending balance

4. Book value

1. Book value at the end of the period 17,442,452.69 17,442,452.69 2. Book value at the beginning of the period 24,308,785.61 24,308,785.61

(2) Impairment testing of right-of-use assets

□Applicable √Not applicable

Other notes:

Not applicable

26. Intangible assets

(1) Intangible assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Land use rights Patent rights Special software Non-patented technology Total

1. Original book value

138,674,084. 51,022,996.3 13,605,823.3 33,726,412. 237,029,316 1. Opening balance

78 5 2 13 .58

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2. Increase amount in this period

(1) Purchase

(2)Internal research and development

(3) Increase in business mergers

3. Reduction amount in this period

(1)Disposal

138,674,084. 51,022,996.3 13,605,823.3 33,726,412. 237,029,316 4. Ending balance

78 5 2 13 .58

2. Accumulated amortization

37,710,879.8 46,447,368.8

1. Opening balance 5,586,097.07 7,495,282.6 97,239,628. 7 6

2 42

2. Increase in the current period 2,861,219.22 898,964.04 599,353.51 1,762,589.4 6,122,126.1

0 7

(1) Provision 2,861,219.22 898,964.04 599,353.51 1,762,589.4 6,122,126.1

0 7 3. Reduction amount in this period

(1)Disposal

40,572,099.0 47,346,332.9 6,185,450.58 9,257,872.0 103,361,754 4. Ending balance

9 0 2 .59

3. Impairment provision

1. Opening balance

2. Increase amount in this period

(1) Provision

3. Reduction amount in this period

(1)Disposal

4. Ending balance

4. Book value

98,101,985.6 24,468,540. 133,667,561 1. Closing book value 3,676,663.45 7,420,372.74

9 11 .99 100,963,204. 26,231,129. 139,789,688 2. Book value at the beginning of the period 4,575,627.49 8,019,726.25

91 51 .16 The proportion of intangible assets formed through the company's internal research and development at the end of the current period to the balance of intangible assets is 0.00%

(2) Data resources recognized as intangible assets

□Applicable √Not applicable

(3) Land use rights for which property rights certificates have not been obtained

□Applicable √Not applicable

(4) Impairment testing of intangible assets

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

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27. Goodwill

(1) Original book value of goodwill

□Applicable √Not applicable

(2) Goodwill impairment provision

□Applicable √Not applicable

(3) Relevant information about the asset group or asset group combination where the goodwill is located

□Applicable √Not applicable

Changes in asset group or asset group combination

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

(4) Specific determination method of recoverable amount

The recoverable amount is determined as the net amount after fair value minus disposal costs.

□Applicable √Not applicable

The recoverable amount is determined based on the present value of expected future cash flows.

□Applicable √Not applicable

Reasons for the obvious inconsistency between the above information and the information used in impairment testing in previous years or external information □ Applicable √ Not applicable

Reasons for the significant inconsistency between the information used in the company's impairment testing in previous years and the actual situation of the year □ Applicable √ Not applicable

(5) Performance commitments and corresponding goodwill impairment

There is a performance commitment when goodwill is formed and the reporting period or the previous period of the reporting period is within the performance commitment period □ Applicable √ Not applicable

Other notes:

□Applicable √Not applicable

28. Long-term deferred expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB Increase in the current period Amortization items in the current period Beginning balance Other decreases Ending balance

Uh Uh

Renovation and renovation support

12,969,883.63 4,301,465.89 27,522.94 8,640,894.80 out

Property fees 34,244.19 12,841.56 21,402.63 Others 212,389.39 65,873.24 146,516.15

Total 13,004,127.82 212,389.39 4,380,180.69 27,522.94 8,808,813.58Other instructions:

Not applicable

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29. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets without offset

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Items Deductible temporary deferred income tax Deductible temporary deferred income tax

Difference Asset Difference Asset impairment provision 28,855,894.60 4,328,384.19 31,383,538.73 4,707,530.81 Unrealized profits from internal transactions 205,007.86 30,751.18 34,318.92 5,147.84 Deductible losses

Deferred income 51,155,852.60 7,673,377.89 49,062,521.01 7,359,378.15 Lease liabilities 17,628,219.11 2,450,574.79 25,761,402.14 3,624,115.12 Expenses that can be deducted in subsequent periods

73,272,368.08 10,990,855.21 73,272,368.08 10,990,855.21 and expenses

Total 171,117,342.25 25,473,943.26 179,514,148.88 26,687,027.13

(2) Deferred income tax liabilities without offset

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Item Taxable temporary deferred income tax Taxable temporary deferred income tax

Difference Liabilities Difference Liabilities fixed assets depreciation difference 279,789,688.61 41,968,453.30 270,571,925.96 40,585,788.90 Right-of-use assets 17,442,452.69 2,425,795.03 24,308,785.61 3,408,101.76 Unrealized losses from internal transactions 587,212.57 88,081.89

Total 297,232,141.30 44,394,248.33 295,467,924.14 44,081,972.55

(3) Deferred income tax assets or liabilities presented on a net basis after offsetting

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Deferred income tax is deferred after offsetting Deferred income tax is deferred after offsetting

Assets and liabilities are offset against each other, tax assets or liabilities are offset against each other, tax assets or liabilities are offset against each other, tax assets or liabilities are offset against each other,

Amount Debt balance Amount Debt balance Deferred income tax assets 20,352,994.20 5,120,949.06 22,295,553.75 4,391,473.38 Deferred income tax liabilities 20,352,994.20 24,041,254.13 22,295,553.75 21,786,418.80

(4) Details of deferred income tax assets not recognized

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Deductible losses 158,703,572.30 170,157,689.87 Asset impairment provisions 2,417,553.32 3,631,575.98 Unrealized profits from internal transactions 1,526,245.90 555,658.39 Total 162,647,371.52 174,344,924.24

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(5) Deductible losses that have not been recognized as deferred income tax assets will expire in the following years

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Year Ending amount Beginning amount Remarks

2026 3,785.09

2027 272,829.11 283,382.51

2028 7,609,862.71 7,609,862.71

2029 3,777,680.28 3,777,680.28

2032 13,563,724.06 13,560,364.76

2033 10,519,466.93 10,519,466.93

2034 8,457,455.78 8,457,455.78

2035 114,502,553.43 125,945,691.81

Total 158,703,572.30 170,157,689.87 /

Other notes:

□Applicable √Not applicable

30. Other non-current assets

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Item Impairment allowance Impairment allowance

Book balance Book value Book balance Book value

Be prepared

Prepaid long-term capital

9,214,168.36 9,214,168.36 24,294,719.72 24,294,719.72 Production amount

emissions trading rights

61,174.56 61,174.56 73,409.46 73,409.46 fee

Total 9,275,342.92 9,275,342.92 24,368,129.18 24,368,129.18

Information about compensating assets

□Applicable √Not applicable

Other notes:

Not applicable

31. Assets with restricted ownership or use rights

√Applicable □Not applicable

Unit: Yuan Currency: RMB

End of period Beginning of period

Item Book balance Book value Restricted Restricted Book balance Book value Restricted Restricted

Type Situation Type Situation Currency Letter of Guarantee Letter of Guarantee Fund 300,000.00 300,000.00 Pledge Guarantee 300,000.00 300,000.00 Pledge Guarantee

Gold Gold Currency ETC Deposit ETC Deposit Fund 7,000.00 7,000.00 Pledge Deposit Guarantee 7,000.00 7,000.00 Pledge Deposit Guarantee

Securities and funds Total securities and funds 307,000.00 307,000.00 / / 307,000.00 307,000.00 / /

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Other notes:

Not applicable

32. Short-term borrowings

(1) Classification of short-term loans

□Applicable √Not applicable

(2) Overdue short-term borrowings that have not been repaid □Applicable √Not applicable

Other notes:

□Applicable √Not applicable

33. Trading financial liabilities

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

34. Derivative financial liabilities

□Applicable √Not applicable

35. Notes payable

□Applicable √Not applicable

36. Accounts payable

(1) Presentation of accounts payable

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance Purchase payment 169,474,604.47 139,846,995.51 Engineering and equipment payment 111,126,518.27 118,647,125.16

Total 280,601,122.74 258,494,120.67

(2) Important accounts payable that are aged more than 1 year or are overdue □Applicable √Not applicable

Other notes:

□Applicable √Not applicable

37. Advance payments

(1) Presentation of accounts received in advance

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Item Ending balance Beginning balance

Rent collected in advance 47,499.98 86,900.00

Total 47,499.98 86,900.00

(2) Important advances from customers aged more than 1 year

□Applicable √Not applicable

(3) Amount and reasons for significant changes in book value during the reporting period

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

38. Contract liabilities

(1) Contract liabilities

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Sales payment 66,410,260.85 23,879,554.59

Total 66,410,260.85 23,879,554.59

(2) Important contract liabilities aged more than 1 year

□Applicable √Not applicable

(3) Amount and reasons for significant changes in book value during the reporting period

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

39. Payable to employees

(1) Presentation of employee benefits payable

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Opening balance Increase in the current period Decrease in the current period Ending balance

1. Short-term salary 154,663,310.90 347,099,993.05 384,196,789.25 117,566,514.70

2. Post-employment benefits-set bonus

3,334,986.52 29,644,341.20 29,614,418.87 3,364,908.85 Savings plan

3. Dismissal benefits

4. Other benefits that expire within one year

profit

Total 157,998,297.42 376,744,334.25 413,811,208.12 120,931,423.55

(2) Presentation of short-term remuneration

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Beginning balance Increase in the current period Decrease in the current period Ending balance

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1. Salaries, bonuses, allowances and

150,088,284.10 293,982,815.19 331,591,773.71 112,479,325.58 Subsidy

2. Employee welfare fees 13,468,942.66 13,468,942.66

3. Social insurance premiums 2,018,702.17 17,317,168.37 17,293,101.41 2,042,769.13 Including: medical insurance premiums 1,957,305.73 16,393,889.17 16,367,658.49 1,983,536.41Work-related injury insurance premium 54,319.07 879,402.70 881,589.06 52,132.71

Maternity insurance premium 7,077.37 43,876.50 43,853.86 7,100.01

4. Housing provident fund 147.00 16,816,250.68 16,816,250.68 147.00

5. Trade union funds and employee education

2,556,177.63 5,514,816.15 5,026,720.79 3,044,272.99 Funding

6. Short-term paid absences

7. Short-term profit sharing plan

Total 154,663,310.90 347,099,993.05 384,196,789.25 117,566,514.70

(3) Display of defined contribution plan

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Opening balance Increase in the current period Decrease in the current period Ending balance

1. Basic pension insurance 3,229,140.03 28,700,123.58 28,671,128.17 3,258,135.44

2. Unemployment insurance premium 105,846.49 944,217.62 943,290.70 106,773.41

3. Enterprise annuity payment

Total 3,334,986.52 29,644,341.20 29,614,418.87 3,364,908.85

Other notes:

□Applicable √Not applicable

40. Taxes payable

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Value-added tax 14,057,653.35 28,085,767.41 Corporate income tax 3,795,656.52 10,849,365.32 Personal income tax withheld 1,338,511.20 1,459,854.95 Urban maintenance and construction tax 1,264,384.98 1,495,706.29 Property tax 328,207.51 683,486.53 Land use tax 640,595.33 837,647.83 Education surcharge 660,357.38 849,268.60 Local education surcharge 440,238.26 566,179.06 Water conservancy construction fund 56,809.71 62,845.63 Stamp duty 413,097.57 448,160.36 Environmental protection tax 3,745.09 9,333.64

Total 22,999,256.90 45,347,615.62Other instructions:

Not applicable

41. Other payables

(1) Project list

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Item Ending balance Beginning balance

interest payable

Dividends payable

Other payables 455,255,743.29 521,289,333.21 Total 455,255,743.29 521,289,333.21

(2) Interest payable

□Applicable √Not applicable

(3) Dividends payable

□Applicable √Not applicable

(4) Other payables

Present other payables according to nature of payment

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Marketing fees payable 382,793,204.99 437,153,504.13 Deposit and security deposit 56,771,733.09 68,648,780.44 Unpaid fees payable 15,104,513.15 15,025,440.54 Others 586,292.06 461,608.10

Total 455,255,743.29 521,289,333.21

Important other payables aged more than 1 year or overdue

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

42. Liabilities held for sale

□Applicable √Not applicable

43. Non-current liabilities due within one year

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

Lease liabilities due within one year 10,983,706.91 16,762,855.49

Total 10,983,706.91 16,762,855.49Other instructions:

Not applicable

44. Other current liabilities

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Item Closing balance Opening balance Output tax to be transferred 7,744,604.65 2,262,084.02 Amount of discount on withholding invoice 16,078,590.27 25,184,560.54

Total 23,823,194.92 27,446,644.56

Changes in short-term bonds payable:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

45. Long-term loans

(1) Classification of long-term loans

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

46. Bonds payable

(1) Bonds payable

□Applicable √Not applicable

(2) Details of bonds payable: (excluding preference shares, perpetual bonds and other financial instruments classified as financial liabilities) □ Applicable √ Not applicable

(3) Description of convertible corporate bonds

□Applicable √Not applicable

Accounting treatment and judgment basis for equity transfer

□Applicable √Not applicable

(4) Description of other financial instruments classified as financial liabilities

Basic information on preferred shares, perpetual bonds and other financial instruments outstanding at the end of the period □ Applicable √ Not applicable

Table of changes in outstanding preferred stocks, perpetual bonds and other financial instruments at the end of the period □ Applicable √ Not applicable

Explanation of the basis for classifying other financial instruments as financial liabilities

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

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47. Lease liabilities

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Closing balance Opening balance

Unpaid lease payments 6,715,333.10 9,245,487.19 Less: Unrecognized financing expenses 70,820.90 246,940.54 Total 6,644,512.20 8,998,546.65 Other notes:

Not applicable

48. Long-term accounts payable

Item list

□Applicable √Not applicable

long-term payables

□Applicable √Not applicable

Special payables

□Applicable √Not applicable

49. Long-term employee benefits payable

□Applicable √Not applicable

50. Estimated liabilities

□Applicable √Not applicable

51. Deferred income

Deferred income

√Applicable □Not applicable

Unit: Yuan Currency: RMB items Beginning balance Increase in the current period Decrease in the current period Closing balance Causes: Asset-related government subsidies received 49,062,521.01 6,000,000.00 3,906,668.41 51,155,852.60 Government subsidies, amortized according to the depreciation progress of the corresponding assets

Total 49,062,521.01 6,000,000.00 3,906,668.41 51,155,852.60 /

Other notes:

□Applicable √Not applicable

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52. Other non-current liabilities

□Applicable √Not applicable

53. Share capital

√Applicable □Not applicable

Unit: Yuan Currency: RMB Increase or decrease in this change (+, one)

Balance at the beginning of the period Issuance of new provident fund Balance at the end of the period bonus shares Other subtotal

Share conversion

Total number of shares 480,000,000 480,000,000Other instructions:

Approved by the China Securities Regulatory Commission's "Reply on the Approval of the Initial Public Offering of Beijing Fuyuan Pharmaceutical Co., Ltd.", the company was approved to publicly issue 120,000,000 RMB ordinary shares (A shares) to the public, with a face value of 1 yuan per share, an issue price of 14.62 yuan per share, and a total raised capital of 1,754,400,000.00 yuan, of which RMB was included in the paid-in share capital. 120,000,000.00 yuan, included in the capital reserve (share premium) of 1,634,400,000.00 yuan. After the issuance cost of RMB 118,480,188.68 (excluding tax) is used to offset the capital reserve (equity premium), the net amount of funds raised is RMB 1,635,919,811.32.

54. Other equity instruments

(1) Basic information on preferred shares, perpetual bonds and other financial instruments outstanding at the end of the period

□Applicable √Not applicable

(2) Statement of changes in outstanding preferred stocks, perpetual bonds and other financial instruments at the end of the period

□Applicable √Not applicable

Changes in other equity instruments during the current period, explanations of the reasons for the changes, and the basis for relevant accounting treatments:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

55. Capital reserve

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Opening balance Increase in the current period Decrease in the current period Ending balance Capital premium (shares

1,662,392,718.51 1,662,392,718.51 premium)

Other capital reserves

Total 1,662,392,718.51 1,662,392,718.51 Other explanations, including changes in increases and decreases in the current period and explanation of reasons for changes:

Not applicable

56. Treasury stocks

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Opening balance Increase in the current period Decrease in the current period Ending balance treasury shares 176,186,608.79 176,186,608.79 Total 176,186,608.79 176,186,608.79

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Other explanations, including changes in increases and decreases in the current period and explanations of reasons for changes:

Treasury shares are part of the company's repurchase of public shares for the purpose of implementing equity incentives or employee stock ownership plans.

57. Other comprehensive income

□Applicable √Not applicable

58. Special reserves

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Beginning balance Increase in the current period Decrease in the current period Ending balance Safety production expenses 10,394,994.72 120,603.76 10,274,390.96

Total 10,394,994.72 120,603.76 10,274,390.96 Other explanations, including changes in increases and decreases in the current period and explanation of reasons for changes:

Due to the cancellation of the dangerous goods production and storage license of subsidiary Zhejiang Aisheng Pharmaceutical Co., Ltd. in 2021, safety production fees will no longer be accrued from 2021. The decrease in production safety expenses was due to expenditures of 120,603.76 yuan on improving, transforming and maintaining safety protection facilities and equipment.

59. Surplus reserve

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Opening balance Increase in the current period Decrease in the current period Ending balance Statutory surplus reserve 223,002,790.53 223,002,790.53 Discretionary surplus reserve

reserve fund

Enterprise Development Fund

Others

Total 223,002,790.53 223,002,790.53 Description of surplus reserve, including changes in increases and decreases in the current period and explanation of reasons for changes:

Not applicable

60. Undistributed profits

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Items for this period and previous year

Undistributed profits at the end of the previous period before adjustment 1,579,733,806.98 1,375,312,235.02 Total undistributed profits at the beginning of the period before adjustment (adjusted to increase

+, decrease -)

Adjusted opening undistributed profits 1,579,733,806.98 1,375,312,235.02 plus: net profit attributable to owners of the parent company for the period

186,196,276.96 469,364,240.73Profit

Less: Appropriation of statutory surplus reserve 30,942,668.77 Appropriation of discretionary surplus reserve

Withdraw general risk reserve

Dividends payable on ordinary shares 234,000,000.00 234,000,000.00

Dividends on common shares converted into equity capital

Undistributed profits at the end of the period 1,531,930,083.94 1,579,733,806.98 Adjustment of undistributed profits at the beginning of the period:

1. Due to the retrospective adjustment of the "Accounting Standards for Business Enterprises" and its related new regulations, the undistributed profit at the beginning of the period was affected by RMB 0.00.

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2. Due to changes in accounting policies, the undistributed profit at the beginning of the period is affected by RMB 0.00.

3. Due to the correction of major accounting errors, the undistributed profit at the beginning of the period was affected by RMB 0.00.

4. The change in the scope of consolidation due to the same control affects the undistributed profit at the beginning of the period by RMB 0.00.

5. The total impact of other adjustments on the undistributed profit at the beginning of the period is RMB 0.00.

6. Operating income and operating costs

(1) Operating income and operating costs

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Amount for the current period Amount for the previous period

Project

Revenue Cost Revenue Cost Main business 1,676,715,380.03 649,798,153.83 1,629,141,048.14 543,832,800.65 Other business 33,430,687.07 31,230,475.11 4,830,201.88 3,713,313.38 Total 1,710,146,067.10 681,028,628.94 1,633,971,250.02 547,546,114.03 Including: with customers

cooperation between households

1,710,081,495.66 681,028,628.94 1,632,830,140.55 546,724,605.70 Revenue generated from the same contract

enter

(2) Breakdown information of operating income and operating costs

√Applicable □Not applicable

Unit: Yuan Currency: RMB Total

Contract classification

Operating Income Operating Cost Product Type

Pharmaceutical preparations 1,573,129,222.48 593,767,536.70 Medical devices 103,397,241.45 55,888,949.23 Others 33,555,031.73 31,372,143.01 Classified by time of commodity transfer

Revenue recognized at a certain point in time 1,710,081,495.66 681,028,628.94

Total 1,710,081,495.66 681,028,628.94

Other instructions

□Applicable √Not applicable

(3) Description of performance obligations

□Applicable √Not applicable

(4) Description of allocation to remaining performance obligations

□Applicable √Not applicable

(5) Major contract changes or major transaction price adjustments

□Applicable √Not applicable

Other notes:

Not applicable

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62. Taxes and surcharges

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Urban maintenance and construction tax 7,795,989.46 6,716,083.26 Education surcharge 4,140,634.67 3,598,902.66 Local education surcharge 2,760,423.12 2,376,728.16 Stamp tax 854,206.81 819,594.63 Property tax 5,287,677.47 3,560,259.63Land use tax 1,584,154.50 1,580,137.50Vehicle and vessel tax 9,680.00 10,140.00Environmental protection tax 31,522.87 16,440.30

Total 22,464,288.90 18,678,286.14

Other notes:

Not applicable

63. Sales expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Marketing expenses 348,525,329.46 385,404,922.40 Employee compensation 140,835,998.46 116,116,650.35 Office expenses and travel expenses 22,087,880.48 20,070,848.14 Business promotion expenses 20,467,550.01 11,137,540.39 Business entertainment fee 8,284,576.01 7,742,738.25 Leasing fee 2,181,283.76 3,367,531.83 Intermediary service fee 5,359,750.74 3,390,239.31 Depreciation and amortization 2,214,023.20 537,267.90 Others 1,562,225.83 701,090.26

Total 551,518,617.95 548,468,828.83

Other notes:

Not applicable

64. Management expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Employee compensation 47,278,567.24 45,546,102.54 Office expenses and travel expenses 6,403,967.66 5,827,319.99 Business entertainment expenses 2,581,022.57 2,592,226.74 Depreciation and amortization 12,075,715.56 8,548,069.78 Intermediary service fee 4,254,029.09 3,931,824.57 Rental fee 1,164,340.14 1,791,864.12 Employment security fund for persons with disabilities 622.16 7,255.14 Others 937,260.01 1,065,407.14

Total 74,695,524.43 69,310,070.02Other instructions:

Not applicable

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65. Research and development expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Employee compensation 57,627,155.24 55,968,286.54 R&D materials 41,058,978.51 36,985,544.25 Outsourcing expenses 76,219,857.97 43,706,859.93 Depreciation and amortization 11,728,724.47 10,516,158.59 Pilot test expenses 9,160,694.90 10,119,496.89 Business entertainment expenses 1,743,416.88 2,331,396.18 Research and development of fuel and power 1,973,109.47 2,654,616.44 Others 5,609,843.29 3,409,415.07

Total 205,121,780.73 165,691,773.89Other instructions:

Not applicable

66. Financial expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Interest expense 461,775.19 939,165.49Interest income -2,487,179.52 -5,250,418.46 Exchange gains and losses 495,756.97 -116,102.29Bank fees and others 71,323.48 108,005.25

Total -1,458,323.88 -4,319,350.01Other instructions:

Not applicable

67. Other income

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Classification by nature Amount incurred in the current period Amount incurred in the previous period

Government subsidies related to assets 3,906,668.41 808,180.83 Government subsidies related to income 7,237,310.53 2,646,580.91 Refund of withholding personal income tax fees 471,999.63 438,004.86 Additional deduction for value-added tax 5,732,596.36 4,904,792.68

Total 17,348,574.93 8,797,559.28Other instructions:

Not applicable

68. Investment income

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Income from bank financial products 11,394,743.61 13,087,827.13 Bill discount interest -16,933.46 -97,891.43

Total 11,377,810.15 12,989,935.70

Other notes:

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Not applicable

69. Net exposure hedging income

□Applicable √Not applicable

70. Income from changes in fair value

□Applicable √Not applicable

71. Credit impairment losses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Items Amount incurred in the current period Amount incurred in the previous period Bad debt losses on accounts receivable 1,585,601.03 -333,075.64 Bad debt losses on other receivables 257,147.78 -233,233.88

Total 1,842,748.81 -566,309.52Other instructions:

Not applicable

72. Asset impairment losses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

1. Impairment losses on contract assets

2. Inventory depreciation losses and contract performance costs

-6,101,874.66 -4,085,112.27 Impairment loss

3. Impairment losses on long-term equity investments

4. Impairment losses on investment real estate

5. Impairment losses on fixed assets

6. Impairment losses of engineering materials

7. Impairment losses on projects under construction

8. Impairment losses on productive biological assets

9. Impairment losses on oil and gas assets

10. Impairment losses on intangible assets

11. Goodwill impairment loss

12. Others

Total -6,101,874.66 -4,085,112.27Other instructions:

Not applicable

73. Income from asset disposal

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount incurred in the current period Amount incurred in the previous period Income from disposal of fixed assets 286,314.92 -35,004.55 Income from disposal of right-of-use assets 516,934.75

Total 803,249.67 -35,004.55

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Other notes:

□Applicable √Not applicable

74. Non-operating income

√Applicable □Not applicable

Unit: Yuan Currency: RMB Included in non-recurring losses for the current period Amount incurred in the current period Amount incurred in the previous period

amount of profit

Government subsidies 44,800.00 44,800.00 Fines and compensation income 462,591.87 116,005.60 462,591.87 Others 158,172.48 615,473.60 158,172.48

Total 665,564.35 731,479.20 665,564.35

Other notes:

□Applicable √Not applicable

75. Non-operating expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB Included in non-recurring losses for the current period Amount incurred in the current period Amount incurred in the previous period

amount of profit

Loss on disposal of non-current assets

549,324.69 559,445.43 549,324.69 Total loss

Among them: Fixed Assets Department

549,324.69 559,445.43 549,324.69 Losses

Intangible Assets Division

loss

External donations 620,000.00 50,000.00 620,000.00 Local water conservancy construction fund 332,825.15 284,911.39

Others 377,812.03 4,015,652.00 377,812.03

Total 1,879,961.87 4,910,008.82 1,547,136.72Other instructions:

Not applicable

76. Income tax expenses

(1) Income tax expense schedule

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Current income tax expense 11,597,781.79 45,844,167.68 Deferred income tax expense 1,525,359.65 -12,798,187.08

Total 13,123,141.44 33,045,980.60

(2) Adjustment process of accounting profits and income tax expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Amount incurred in the current period

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Total profit 200,831,661.41 Income tax expense calculated based on statutory/applicable tax rates 30,124,749.21 Impact of different tax rates applicable to subsidiaries -7,035.48 Impact of adjusting income tax in previous periods 254,059.55 Impact of non-taxable income

The impact of non-deductible costs, expenses and losses 995,009.48 Use the deductible losses of deferred income tax assets not recognized in the previous period

impact of loss

The impact of deductible temporary 9,528,860.90 differences or deductible losses of deferred income tax assets not recognized in the current period

The impact of the super deduction of R&D expenses -27,772,502.22 Income tax expense 13,123,141.44

Other notes:

□Applicable √Not applicable

77. Other comprehensive income

□Applicable √Not applicable

78. Cash flow statement items

(1) Cash related to operating activities

Other cash received related to operating activities

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Government subsidy income 13,195,710.53 3,378,691.15 Bank interest income 2,487,179.52 5,250,413.96 Deposit 8,421,525.59 9,629,739.52 Other net amounts received and transactions 1,461,930.97 3,719,477.50

Total 25,566,346.61 21,978,322.13 Description of other cash received related to operating activities:

Not applicable

Other cash paid related to operating activities

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Marketing fee 395,017,375.24 392,041,103.59 Deposit and security deposit 11,199,070.73 22,363,856.41 Outsourcing fees and intermediary service fees 84,909,817.69 65,646,430.35 Office expenses and travel expenses 26,220,342.61 24,311,455.19 Business entertainment expenses 13,310,241.29 13,154,621.54 Business promotion expenses 19,746,589.20 13,274,951.17 Rental expenses 3,438,528.86 4,826,307.83 Others 14,858,571.84 12,248,713.76

Total 568,700,537.46 547,867,439.84 Description of other cash paid related to operating activities:

Not applicable

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

(2) Cash related to investing activities

Cash received in connection with significant investing activities

□Applicable √Not applicable

Cash payments related to significant investment activities

□Applicable √Not applicable

Other cash received related to investing activities

√Applicable □Not applicable

Unit: Yuan Currency: RMB items Amount incurred in the current period Amount incurred in the previous period Recovery of financial products 4,161,800,000.00 5,302,000,000.00 Total 4,161,800,000.00 5,302,000,000.00 Description of other cash received related to investment activities:

Not applicable

Other cash paid related to investing activities

√Applicable □Not applicable

Unit: Yuan Currency: RMB items Amount for the current period Amount for the previous period Purchase of financial products 4,288,000,000.00 4,154,000,000.00 Total 4,288,000,000.00 4,154,000,000.00 Description of other cash paid related to investment activities:

Not applicable

(3) Cash related to financing activities

Other cash received related to financing activities

√Applicable □Not applicable

Unit: Yuan Currency: RMB Item Amount for the current period Amount for the previous period Received payment of long-term rent Return of deposit Security deposit 263,420.40

Total 263,420.40

Description of other cash received related to financing activities:

Not applicable

Other cash payments related to financing activities

√Applicable □Not applicable

Unit: Yuan Currency: RMB items Amount incurred in the current period Amount incurred in the previous period Payment of lease liabilities and deposits 8,831,339.53 10,449,698.61 Total 8,831,339.53 10,449,698.61 Description of other cash payments related to financing activities:

Not applicable

Changes in various liabilities arising from financing activities

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√Applicable □Not applicable

Unit: Yuan Currency: RMB Increase in this period Decrease in this period

Current non-cash changes Cash changes Non-cash changes

Item Opening balance Cash Change in closing balance

move

Lease liability

(including one year

Due within 25,761,402.14 19,066,624.01 8,831,339.53 3,534,818.27 32,461,868.35 Lease liabilities

debt)

Payable shares

234,000,000.00 234,000,000.00

profit

Total 25,761,402.14 253,066,624.01 242,831,339.53 3,534,818.27 32,461,868.35

(4) Explanation on presenting cash flows in net amount

□Applicable √Not applicable

(5) Major activities and financial activities that do not involve current cash receipts and payments but affect the company's financial status or may affect the company's cash flow in the future.

business impact

□Applicable √Not applicable

79. Supplementary information for cash flow statement

(1) Supplementary information for cash flow statement

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Supplementary information Amount for the current period Amount for the previous period

1. Reconcile net profit to cash flow from operating activities:

Net profit 187,708,519.97 268,472,085.54 Plus: asset impairment provision 6,101,874.66 4,085,112.27 Credit impairment losses -1,842,748.81 566,309.52 Fixed asset depreciation, oil and gas asset depreciation, production

64,225,843.11 43,538,863.54 Depreciation of productive biological assets

Amortization of right-of-use assets 6,975,190.64 8,939,635.53 Amortization of intangible assets 6,122,126.17 6,580,177.16 Amortization of long-term prepaid expenses 4,380,180.69 4,066,452.43 Disposal of fixed assets, intangible assets and other long-term

Loss of future assets (enter the income column with "-" sign -803,249.67 35,004.55)

Loss on scrapping of fixed assets (income is marked with "-"

549,324.69 559,445.43 fill in the column)

Loss from change in fair value (income is marked with “-”

Fill in the column)

Financial expenses (income is listed with "-") 461,775.19 939,165.49 Investment losses (income is listed with "-") -11,394,743.61 -13,087,827.13 Decrease in deferred income tax assets (increase is marked with "-"

-729,475.68 284,470.69 (please fill in the list)

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Increase in deferred tax liabilities (decrease indicated by “-”

No. 2,254,835.33 -13,082,657.77 (please fill in the list)

Decrease in inventory (increase indicated by "-") -19,521,571.86 -16,767,055.63 Decrease in operating receivables (increase indicated by "-")

76,515,610.89 -4,535,638.12 (Fill in “-”)

Increase in operating payables (decrease by

-64,049,101.60 -72,068,066.00 (Fill in “-”)

Others -120,603.76 -494,469.82 Net cash flow generated from operating activities 256,833,786.35 218,031,007.68 2. Major investing and financing activities that do not involve cash receipts and payments:

debt to capital

Convertible corporate bonds due within one year

Financing leased fixed assets

3. Net changes in cash and cash equivalents:

Closing balance of cash 488,096,299.12 1,511,334,417.79 Less: Opening balance of cash 634,048,094.30 713,759,803.65 Add: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents -145,951,795.18 797,574,614.14

(2) Net cash paid in the current period to acquire subsidiaries

□Applicable √Not applicable

(3) Net cash received from disposal of subsidiaries in the current period

□Applicable √Not applicable

(4) Composition of cash and cash equivalents

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

1. Cash 488,096,299.12 634,048,094.30 Including: Cash on hand 897.76 2,354.22 Bank deposits that can be used for payment at any time

488,095,401.36 634,045,740.08

Other goods that can be used for payment at any time

coin funds

Deposit central bank that can be used for payments

bank payment

Deposit funds from other banks

Funds placed with other banks

2. Cash equivalents

Including: Bond investments due within three months

3. Balance of cash and cash equivalents at the end of the period 488,096,299.12 634,048,094.30 Among them: the parent company or subsidiaries within the group use

With restricted cash and cash equivalents

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(5) Situations where the scope of use is limited but still presented as cash and cash equivalents

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Reason Monetary funds 125,307,121.18 Raised funds can be paid at any time

Total 125,307,121.18 /

(6) Monetary funds other than cash and cash equivalents

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance Reason Monetary funds 300,000.00 300,000.00 Letter of guarantee Monetary funds 7,000.00 7,000.00 ETC margin

Total 307,000.00 307,000.00 /

Other notes:

□Applicable √Not applicable

80. Notes on items in the statement of changes in owners’ equity

Explain the names of "other" items that were adjusted to the closing balance of the previous year and the amount of adjustment, etc.:

□Applicable √Not applicable

81. Foreign currency monetary items

(1) Foreign currency monetary items

√Applicable □Not applicable

Unit: yuan Conversion into RMB items at the end of the period Foreign currency balance at the end of the period Conversion exchange rate

Balance of monetary funds - -

Of which: US dollars

Euro

Hong Kong dollar

Accounts receivable - - 6,492,426.33 Including: USD 953,240.59 6.8109 6,492,426.33 EUR

Hong Kong dollar

Long-term borrowings - -

Of which: US dollars

Euro

Hong Kong dollar

Other notes:

Not applicable

(2) The nature of currency lack of convertibility and its financial impact, the spot exchange rate used and its estimation process, and the risks faced by the enterprise due to currency lack of convertibility

□Applicable √Not applicable

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(3) Description of overseas operating entities, including for important overseas operating entities, their main overseas operating place, accounting standard currency and basis for selection should be disclosed. If the accounting standard currency changes, the reasons should also be disclosed.

□Applicable √Not applicable

(4) Lack of convertibility between the accounting functional currency of overseas operations and the enterprise’s presentation currency □ Applicable √ Not applicable

82. Leasing

(1) As a lessee

√Applicable □Not applicable

Variable lease payments not included in the measurement of lease liabilities

□Applicable √Not applicable

Simplified treatment of short-term leases or lease payments for low-value assets

√Applicable □Not applicable

The amount of short-term lease expenses included in the current profit and loss in this period was 3,209,541.38 yuan, and the amount in the same period last year was 5,297,939.27 yuan, a year-on-year decrease of 39.42%.

Sale and leaseback transactions and basis for judgment

□Applicable √Not applicable

The total cash outflow related to leasing is 12,040,880.91 (unit: yuan, currency: RMB)

(2) As a lessor

Operating lease as lessor

√Applicable □Not applicable

Unit: Yuan Currency: RMB Including: Available items not included in lease receipts Lease income

Income related to variable lease payments Lease income 64,571.44

Total 64,571.44

Finance lease as lessor

□Applicable √Not applicable

Reconciliation of undiscounted lease receipts and net lease investment

□Applicable √Not applicable

Lease receipts

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Annual undiscounted lease receipts items

Ending amount Beginning amount First year 65,800.00 86,900.00 Second year 16,400.00 Third year 16,400.00 Fourth year 12,872.88

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fifth year

Total undiscounted lease payments after five years

111,472.88 86,900.00

(3) Recognizing financial lease sales profits and losses as a manufacturer or distributor

□Applicable √Not applicable

Other instructions

Not applicable

83. Data resources

□Applicable √Not applicable

84. Others

□Applicable √Not applicable

8. R&D expenditures

1. List according to nature of expenses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Employee compensation 57,627,155.24 55,968,286.54 R&D materials 41,058,978.51 36,985,544.25 Outsourcing expenses 76,219,857.97 43,706,859.93 Depreciation and amortization 11,728,724.47 10,516,158.59 Pilot test expenses 9,160,694.90 10,119,496.89 Business entertainment expenses 1,743,416.88 2,331,396.18 Research and development of fuel and power 1,973,109.47 2,654,616.44 Others 5,609,843.29 3,409,415.07

Total 205,121,780.73 165,691,773.89 Including: Expenditure R&D expenditure 205,121,780.73 165,691,773.89

Capitalized R&D expenditures

Other notes:

Not applicable

2. Development expenditures on R&D projects that meet capitalization conditions

□Applicable √Not applicable

Significant Capitalized R&D Projects

□Applicable √Not applicable

Impairment provision for development expenditures

□Applicable √Not applicable

Other instructions

Not applicable

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3. Important outsourced research projects □Applicable √Not applicable

9. Changes in consolidation scope

1. Business merger not under common control □Applicable √Not applicable

2. Business merger under common control □Applicable √Not applicable

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3. Reverse purchase

□Applicable √Not applicable

4. Disposal of subsidiaries

Are there any transactions or events that result in the loss of control of subsidiaries in this period? Applicable √ Not applicable

Other notes:

□Applicable √Not applicable

Is there any situation where investments in subsidiaries are disposed of step by step through multiple transactions and control is lost in the current period? Applicable √ Not applicable

Other notes:

□Applicable √Not applicable

5. Changes in the scope of consolidation due to other reasons Describe changes in the scope of consolidation caused by other reasons (such as the establishment of new subsidiaries, liquidation of subsidiaries, etc.) and their related situations: □ Applicable √ Not applicable

6. Others

□Applicable √Not applicable

10. Interests in other entities

1. Interests in subsidiaries

(1) Composition of enterprise groups

√Applicable □Not applicable

Unit: 10,000 yuan Currency: RMB

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Shareholding ratio (%) Name of acquired subsidiary Main place of business Registered capital Place of registration Nature of business

Direct Indirect way Beijing Wanshenghe Science and Technology Promotion and Application Not under common control

Beijing 1,538.50 Beijing 83.50

Technology Co., Ltd. Service Industry and acquired Zhejiang Aisheng Pharmaceutical merged under common control

Hangzhou 4,302.98 Hangzhou Pharmaceutical Manufacturing 100.00

Co., Ltd. acquired Fuyuan Pharmaceutical Co., Ltd. and merged under common control

Xuancheng 7,500.00 Xuancheng Pharmaceutical Manufacturing 100.00

The company obtained Zhejiang Yanjitang Medical

Technology promotion and application Merger Pharmaceutical Technology Co., Ltd. under common control Hangzhou 1,000.00 Hangzhou 100.00

Services Acquisition Division

Explanation on the difference between the proportion of shareholding in subsidiaries and the proportion of voting rights:

Not applicable

Basis for holding half or less of the voting rights but still controlling the invested unit, and holding more than half of the voting rights but not controlling the invested unit:

Not applicable

For important structured entities included in the scope of consolidation, the basis for control is:

Not applicable

Basis for determining whether a company is agent or principal:

Not applicable

Other notes:

Beijing Fuyuan Pharmaceutical Co., Ltd. holds Zhejiang Yanjitang Pharmaceutical Technology Co., Ltd. through its subsidiary Zhejiang Aisheng Pharmaceutical Co., Ltd.

(2) Important non-wholly owned subsidiaries

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Shares held by minority shareholders Shares distributed to minority shareholders in the current period

Name of subsidiary company Profit and loss attributable to minority shareholders for the current period Balance of minority shareholders’ equity at the end of the period

Proportion (%) Profit

Beijing Wansheng Renhe Technology Co., Ltd.

16.50 1,512,243.01 14,936,886.68 Company

Explanation on the difference between the shareholding ratio of minority shareholders of subsidiaries and the voting rights ratio:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

(3) Main financial information of important non-wholly owned subsidiaries

√Applicable □Not applicable

Unit: 10,000 yuan Currency: RMB

Ending balance Beginning balance

Subsidiary name

Non-current assets Non-current liabilities Non-current assets Non-current liabilities Total liabilities Current assets Total assets Current liabilities Total liabilities Current assets Total assets Current liabilities

Asset Debt Asset Debt Measurement Beijing Wansheng

Renhe Technology 11,239.54 3,036.90 14,276.44 4,685.76 538.02 5,223.78 9,447.60 3,665.13 13,112.73 4,028.51 948.08 4,976.59 Co., Ltd.

Amount for the current period Amount for the previous period

Subsidiary name Total comprehensive income Cash from operating activities Total comprehensive income Cash from operating activities Operating income Net profit Operating income Net profit

Amount Traffic Amount Traffic Beijing Wansheng Renhe Technology Co., Ltd.

10,453.80 916.51 916.51 1,634.79 9,809.09 366.33 366.33 778.61 Co., Ltd.

Other notes:

Not applicable

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(4) Significant restrictions on the use of enterprise group assets and settlement of enterprise group debts:

□Applicable √Not applicable

(5) Financial support or other support provided to structured entities included in the scope of consolidated financial statements: □Applicable √Not applicable

Other notes:

□Applicable √Not applicable

2. Transactions in which the ownership share of the subsidiary changes and the subsidiary is still controlled

□Applicable √Not applicable

3. Interests in joint ventures or associated enterprises

□Applicable √Not applicable

4. Important joint operations

□Applicable √Not applicable

5. Interests in structured entities not included in the scope of consolidated financial statements

Relevant instructions for structured entities not included in the scope of consolidated financial statements:

□Applicable √Not applicable

6. Others

□Applicable √Not applicable

11. Government subsidies

1. Government subsidies recognized according to the amount receivable at the end of the reporting period

□Applicable √Not applicable

Reasons for failure to receive the estimated amount of government subsidy at the estimated time

□Applicable √Not applicable

2. Liability items involving government subsidies

√Applicable □Not applicable

Unit: Yuan Currency: RMB for this period

Included in Capital Finance for the current period

The newly added business in this period is transferred to its production/receipt statement in this period. Opening balance Others Closing balance

Subsidy amount External income Other income Yixiang project Variable deposit amount

deferral

49,062,521.01 6,000,000.00 3,906,668.41 51,155,852.60 Production-related income

close

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Total 49,062,521.01 6,000,000.00 3,906,668.41 51,155,852.60 /

3. Government subsidies included in current profits and losses

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Type Amount for the current period Amount for the previous period

Related to income 11,188,778.94 3,454,761.74

Total 11,188,778.94 3,454,761.74

Other notes:

Not applicable

12. Risks related to financial instruments

1. Risks of financial instruments

√Applicable □Not applicable

The company's goal in risk management is to strike a balance between risks and returns, minimize the negative impact of risks on the company's operating performance, and maximize the interests of shareholders and other equity investors. Based on this risk management objective, the company's basic risk management strategy is to confirm and analyze the various risks faced by the company, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliable manner to control risks within a limited range.

The Company faces various risks related to financial instruments in its daily activities, mainly including credit risk, liquidity risk and market risk. Management has reviewed and approved policies for managing these risks, which are summarized below.

(1) Credit risk

Credit risk refers to the risk that one party to a financial instrument cannot fulfill its obligations, causing financial losses to the other party.

1. Credit risk management practices

(1) Credit risk evaluation methods

The Company assesses at each balance sheet date whether the credit risk of relevant financial instruments has increased significantly since initial recognition. When determining whether credit risk has increased significantly since initial recognition, the Company considers reasonable and evidence-based information that is available without unnecessary additional cost or effort, including qualitative and quantitative analysis based on historical data, external credit risk ratings, and forward-looking information. Based on a single financial instrument or a combination of financial instruments with similar credit risk characteristics, the company determines the changes in default risk during the expected duration of the financial instrument by comparing the risk of default of the financial instrument on the balance sheet date with the risk of default on the initial recognition date.

When one or more of the following quantitative and qualitative criteria are triggered, the company believes that the credit risk of financial instruments has increased significantly:

1. The quantitative standard is mainly that the default probability of the remaining duration on the balance sheet date has increased by more than a certain percentage compared with the initial recognition;

2. Qualitative standards mainly include major adverse changes in the debtor's operating or financial conditions, existing or expected changes in technology, market, economic or legal environment, which will have a major adverse impact on the debtor's ability to repay the company, etc.

(2) Definition of defaulted and credit-impaired assets

When a financial instrument meets one or more of the following conditions, the company defines the financial asset as having defaulted, and its standards are consistent with the definition of credit impairment:

1. The debtor encounters major financial difficulties;

2. The debtor violates the binding terms on the debtor in the contract;

3. The debtor is likely to go bankrupt or undergo other financial reorganization;

4. The creditor grants concessions to the debtor that the debtor would not have made under any other circumstances due to economic or contractual considerations related to the debtor's financial difficulty.

2. Measurement of expected credit losses

Key parameters for measuring expected credit losses include probability of default, loss given default rate and exposure to default risk. The company considers quantitative analysis and forward-looking information of historical statistical data (such as counterparty ratings, guarantee methods and collateral types, repayment methods, etc.) to establish default probability, default loss rate and default risk exposure models.

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3. For the reconciliation statement between the opening balance and the closing balance of financial instrument loss provisions, please refer to the explanations "5", "7" and "9" in Section 8 of this report, Financial Report VII, for details.

4. Credit risk exposure and credit risk concentration

The company's credit risk mainly comes from monetary funds and accounts receivable. In order to control the above-mentioned related risks, the Company has taken the following measures.

(1) Monetary funds

The Company places bank deposits and other monetary funds in financial institutions with higher credit ratings, so its credit risk is lower.

(2) Accounts receivable

The company regularly conducts credit assessments on customers who trade on credit. Based on the credit assessment results, the Company chooses to conduct transactions with approved customers with good credit and monitors their receivable balances to ensure that the Company does not face significant bad debt risks.

Since the company's accounts receivable risk points are distributed among multiple partners and customers, as of June 30, 2026, 12.81% of the company's accounts receivable (December 31, 2025: 7.52%) originated from the top five customers with balances, and the company does not have significant credit concentration risk.

The Company's maximum exposure to credit risk is the carrying value of each financial asset on the balance sheet.

(2) Liquidity risk

Liquidity risk refers to the risk of a shortage of funds when the company fulfills its obligations to settle by delivering cash or other financial assets. Liquidity risk may arise from the inability to sell financial assets at fair value as quickly as possible; or from the counterparty's inability to repay its contractual debts; or from debts that mature prematurely; or from the inability to generate expected cash flows.

In order to control this risk, the Company comprehensively uses various financing methods such as bill settlement and bank borrowing, and adopts an appropriate combination of long-term and short-term financing methods to optimize the financing structure and maintain a balance between financing continuity and flexibility. The Company has obtained bank credit lines from a number of commercial banks to meet its working capital requirements and capital expenditures.

Financial liabilities are classified by remaining maturity

Unit: Yuan Currency: RMB

Closing amount

Project

Book value Undiscounted contract amount Within 1 year 1-3 years More than 3 years

Accounts payable 280,601,122.74 280,601,122.74 280,601,122.74

Other payables 455,255,743.29 455,255,743.29 455,255,743.29

Due within one year

Non-current negative 10,983,706.91 11,508,791.69 11,508,791.69

debt

Lease liabilities 6,644,512.20 6,715,333.10 6,715,333.10

Subtotal 753,485,085.14 754,080,990.82 747,365,657.72 6,715,333.10

(Continued from above table)

End of last year

Project

Book value Undiscounted contract amount Within 1 year 1-3 years More than 3 years

Accounts payable 258,494,120.67 258,494,120.67 258,494,120.67

Other payables 521,289,333.21 521,289,333.21 521,289,333.21

Due within one year

Non-current negative 16,762,855.49 17,517,780.05 17,517,780.05

debt

Lease liabilities 8,998,546.65 9,245,487.19 9,245,487.19

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End of last year

Project

Book value Undiscounted contract amount Within 1 year 1-3 years More than 3 years

Subtotal 805,544,856.02 806,546,721.12 797,301,233.93 9,245,487.19

(3) Market risk

Market risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market prices. Market risks mainly include interest rate risk and foreign exchange risk.

1. Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market interest rates. Fixed-rate interest-bearing financial instruments expose the Company to fair value interest rate risk, while floating-rate interest-bearing financial instruments expose the Company to cash flow interest rate risk. The Company determines the proportion of fixed-rate and floating-rate financial instruments based on market conditions, and maintains an appropriate portfolio of financial instruments through regular review and monitoring. The cash flow interest rate risk faced by the Company is mainly related to the Company's bank borrowings with floating interest rates.

As of June 30, 2026, the Company had no bank borrowings with floating interest rates (December 31, 2025: RMB 0.00). Assuming that other variables remain unchanged, assuming that the interest rate changes by 50 basis points, it will not have a significant impact on the Company's total profit and shareholders' equity.

2. Foreign exchange risk

Foreign exchange risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in foreign exchange rates. The Company operates in Mainland China and its main activities are denominated in RMB. Therefore, the market risk of foreign exchange changes borne by the Company is not significant.

For details of the company's foreign currency monetary assets and liabilities at the end of the period, please refer to the description of "81" in Section 8 of this financial report.

2. Hedging

(1) The company carries out hedging business for risk management

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

(2) The company carries out qualified hedging business and applies hedging accounting

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

(3) The company carries out hedging business for risk management and expects to achieve risk management objectives but does not apply hedging accounting

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

3. Transfer of financial assets

(1) Classification of transfer methods

√Applicable □Not applicable

Unit: Yuan Currency: RMB Financial assets transferred Transferred financial assets Transfer method of termination of recognition Status of termination of recognition

Nature Amount Basis for Judgment

Several other note endorsements have been transferred. Receivables financing 262,385,470.84 Derecognized

almost all risks and

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Remuneration has been transferred to other bills discounted receivable financing 4,543,167.66 Derecognition Almost all risks and rewards total / 266,928,638.50 / /

(2) Financial assets derecognized due to transfer

√Applicable □Not applicable

Unit: Yuan Currency: RMB Financial assets derecognized Profit items related to derecognition Method of transfer of financial assets

Amount Gain or loss of receivables financing Endorsement 262,385,470.84

Accounts receivable financing discount 4,543,167.66 -16,933.46 total / 266,928,638.50 -16,933.46

(3) Transferred financial assets with continued involvement

□Applicable √Not applicable

Other instructions

□Applicable √Not applicable

13. Disclosure of fair value

1. Closing fair value of assets and liabilities measured at fair value

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing fair value

Item Level 1 fair price Level 2 fair price Level 3 fair price

Total value measurement Value measurement Value measurement

1. Continuous fair value measurement

quantity

(1) Trading financial assets 1,555,000,000.001,555,000,000.00 1. Measured at fair value and changes

Financial financing included in current profit and loss

produce

(1) Debt instrument investment

(2) Equity instrument investment

(3) Derivative financial assets

(4) Capital-guaranteed and floating-income financial management

1,555,000,000.001,555,000,000.00Products

2. Designated to be measured at fair value

And its changes are included in the current profit and loss

financial assets

(1) Debt instrument investment

(2) Equity instrument investment

(2) Other debt investments

(3) Investment in other equity instruments

Capital

(4) Investment real estate

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1. Land use rights for lease 2. Buildings for lease

2. Hold and prepare to transfer land use rights after appreciation

(5) Biological assets

1. Consumable biological assets

2. Productive biological assets

(6) Financing of receivables 81,816,694.32 81,816,694.32 Continuously measured at fair value

1,636,816,694.321,636,816,694.32Total assets

(7) Trading financial liabilities 1. Financial liabilities measured at fair value and changes included in current profits and losses

Including: trading bonds issued

Derivative financial liabilities

Others

2. Financial liabilities designated as measured at fair value and changes included in current profit and loss

Total liabilities measured at fair value on an ongoing basis

2. Non-continuous fair value measurement

(1) Assets held for sale

Total assets measured at fair value on an ongoing basis

Total liabilities measured at fair value on an ongoing basis

2. Basis for determining the market price of continuous and non-continuous first-level fair value measurement items □Applicable √Not applicable

3. Continuous and non-continuous second-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters □ Applicable √ Not applicable

4. Continuous and non-continuous third-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters √ Applicable □ Not applicable

The trading financial assets measured at the third level of fair value held by the Company are bank wealth management products, and their fair value is determined by using the par amount.

The third-level fair value measurement receivable financing held by the Company is bank acceptance bill receivable, which has low credit risk and short remaining period. The Company determines its fair value based on its face balance.

5. For ongoing third-level fair value measurement items, the reconciliation information and unobservable parameters between the opening and closing book values are sensitive

sexual analysis

□Applicable √Not applicable

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6. For ongoing fair value measurement items, if there is a conversion between various levels during the current period, the reasons for the conversion and the policy for determining the time of conversion

□Applicable √Not applicable

7. Valuation technology changes that occurred during the period and reasons for the changes

□Applicable √Not applicable

8. Fair value of financial assets and financial liabilities not measured at fair value

□Applicable √Not applicable

9. Others

□Applicable √Not applicable

14. Related parties and related transactions

1. Information about the parent company of this enterprise

√Applicable □Not applicable

Unit: 10,000 yuan Currency: RMB

The proportion of voting rights held by the parent company in the enterprise. The parent company’s name, place of registration, nature of business, and registered capital.

(%) (%)New Hecheng Holdings Chemical raw materials and

Zhejiang Province New

Group Co., Ltd. Chemical products manufacturing 12,000.00 37.43 37.67

Chang County

Division manufacturing industry

Description of the parent company of this enterprise

Xinhecheng Holding Group Co., Ltd. directly holds 36.73% of the company's shares, and indirectly holds 0.70% of the company's shares through Xuancheng Renhe Investment Partnership (Limited Partnership).

The ultimate controller of this enterprise is Hu Baifan

Other notes:

Hu Baifan directly and indirectly holds 61.8138% of the shares of Xinhecheng Holding Group Co., Ltd.

2. Information about the company’s subsidiaries

Please refer to the notes for details of the company’s subsidiaries.

√Applicable □Not applicable

For details of the company's subsidiaries, please refer to "1. Equity in Subsidiaries" in Section 8 Financial Report 10 of this report.

3. Information about the company’s joint ventures and associated enterprises

Please refer to the notes for details of important joint ventures or associates of this company.

□Applicable √Not applicable

The information of other joint ventures or associates that have related party transactions with the company in the current period, or have balances from related party transactions with the company in previous periods, is as follows:

□Applicable √Not applicable

4. Other related parties

√Applicable □Not applicable

Names of other related parties Relationship between other related parties and the company

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Zhejiang Xinhecheng Co., Ltd. is also controlled by Xinhecheng Holding Group Co., Ltd. Zhejiang Jingshi Real Estate Co., Ltd. is also controlled by Xinhecheng Holding Group Co., Ltd. Shaoxing Jinghe Hotel Management Co., Ltd. Courtyard Hotel Branch

A company controlled by Xinhecheng Holdings Group Co., Ltd.

Zhejiang New Seco Pharmaceutical Co., Ltd. Hu Baishan, the brother of the actual controller, serves as a director of the company. Zhejiang Deli Equipment Co., Ltd. is also controlled by Xinhecheng Holding Group Co., Ltd. Qionghai Boao Heyue Hotel Management Co., Ltd. is also controlled by Xinhecheng Holding Group Co., Ltd. Shangyu New Hecheng Biochemical Co., Ltd. Shandong Xinhecheng Pharmaceutical Co., Ltd., a subsidiary of Zhejiang New Hecheng Co., Ltd. Shandong Xinhecheng Refined Chemical Technology Co., Ltd., a subsidiary of Zhejiang New Hecheng Co., Ltd. Shandong Xinhecheng Holdings Co., Ltd., a subsidiary of Zhejiang New Hecheng Co., Ltd. Beijing Hecheng Real Estate Holdings Co., Ltd., a subsidiary of Zhejiang New Hecheng Co., Ltd. Weifang Hecheng Real Estate Co., Ltd., a subsidiary of Beijing Hecheng Real Estate Holdings Co., Ltd. Zhejiang Yuexiu Foreign Languages University, a subsidiary of Beijing Hecheng Real Estate Holdings Co., Ltd. Zhejiang Saiya Chemical Materials Co., Ltd., a subsidiary of Zhejiang New Hecheng Co., Ltd. Shaoxing Heyue Property Services Co., Ltd., an associate of Zhejiang New Hecheng Co., Ltd. Heilongjiang Xinhecheng Biotechnology Co., Ltd., a subsidiary of Zhejiang Jingshi Real Estate Co., Ltd. Shaoxing Yuchen New Materials Co., Ltd., a subsidiary of Zhejiang Xinhecheng Co., Ltd. Zhejiang Xinhecheng Pharmaceutical Co., Ltd., a subsidiary of Zhejiang Xinhecheng Co., Ltd. Other descriptions of subsidiaries of Zhejiang Xinhecheng Co., Ltd.

Not applicable

5. Related transactions

(1) Related transactions related to the purchase and sale of goods, provision and receipt of services

Procurement of goods/service acceptance form

√Applicable □Not applicable

Unit: Yuan Currency: RMB Whether it exceeds the approved transaction amount Related parties occurred in the previous period Contents of related transactions Amount occurred in this period Amount (if appropriate (if applicable) Amount

Used) Zhejiang Xinhe Chengdu

Purchase of materials 3,379,744.20 789,739.52 Co., Ltd.

Shaoxing Jinghe Hotel

Management Co., Ltd.

Purchase of materials 36,392.46 42,149.04 Courtyard Hotel Branch

Division

Zhejiang Deli Equipment

Purchase materials 589,872.77 163,240.89 Co., Ltd.

Qionghai Boao Heyue

7,686.80

Hotel Management Co., Ltd. Procurement of Labor Services

company

Shandong Xinhe Chengjing

Chemical Technology Co., Ltd. Procurement of labor services 1,769.91

Division

List of goods sold/services provided

√Applicable □Not applicable

Unit: Yuan Currency: RMB Related parties Contents of related transactions Amount of the current period Amount of the previous period

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Zhejiang Xinhecheng Co., Ltd. Health products, etc. 101,876.13 42,477.87 Zhejiang Xinhecheng Pharmaceutical Co., Ltd. Health products, etc. 637.17 Shaoxing Yuchen New Materials Co., Ltd. Health products, etc. 3,185.84 Shandong Xinhecheng Refining Technology Co., Ltd. Health products, etc. 3,185.84 Company

Zhejiang Deli Equipment Co., Ltd. Health products, etc. 9,557.52 3,185.84 Shandong Xinhecheng Pharmaceutical Co., Ltd. Health products, etc. 3,185.84

Description of related transactions for purchasing and selling goods, providing and receiving services

□Applicable √Not applicable

(2) Related entrusted management/contracting and entrusted management/outsourcing situation

The company's entrusted management/contracting status table:

□Applicable √Not applicable

Description of associated hosting/contracting situations

□Applicable √Not applicable

The company’s entrusted management/outsourcing status table:

□Applicable √Not applicable

Description of association management/outsourcing situation

□Applicable √Not applicable

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(3) Related lease situation

As a lessor, our company:

□Applicable √Not applicable

As a lessee, our company:

√Applicable □Not applicable

Unit: Yuan Currency: RMB

The current period's balance and the previous period's balance are simplified. Simplified processing

Not included in rent Short-term rental not included in rent Short-term rental not included in rent

Calculation of lease liabilities Calculation of lease liabilities and low prices Name of the lessor of leases Types of leased assets Variable amount of lease payments Increased use of variable amount of lease payments Increased value of assets Lease liabilities Interest value of assets Lease liabilities Interest payments

Use) Use) Applicable) Applicable)

Zhejiang Jing Real Estate

Houses and buildings 93,529.38

Industry Co., Ltd.

Description of related leasing situation

□Applicable √Not applicable

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(4) Related guarantees

The company acts as a guarantor

□Applicable √Not applicable

The company as the guaranteed party

□Applicable √Not applicable

Description of related guarantees

□Applicable √Not applicable

(5) Related party fund lending

□Applicable √Not applicable

(6) Asset transfer and debt restructuring of related parties

□Applicable √Not applicable

(7) Remuneration of key management personnel

√Applicable □Not applicable

Unit: 10,000 yuan Currency: RMB

Item Amount incurred in the current period Amount incurred in the previous period Remuneration of key management personnel 799.43 531.46 Note: Due to the increase in the number of directors and senior managers to be re-elected in 2025, the remuneration of key management personnel increased year-on-year.

(8) Other related transactions

□Applicable √Not applicable

6. Unsettled items such as receivables and payables to related parties

(1) Items receivable

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance Item name Related parties

Book balance Provision for bad debts Book balance Provision for bad debts

Zhejiang Jingshi Real Estate

Other receivables 27,612.00 1,380.60 27,612.00 1,380.60

Ltd.

Subtotal 27,612.00 1,380.60 27,612.00 1,380.60

Zhejiang Jingshi Real Estate

Other current assets 62,352.87 155,882.25

Ltd.

Subtotal 62,352.87 155,882.25

Zhejiang Deli Equipment

Other current assets 22,800.00 116,900.00

Ltd.

Subtotal 22,800.00 116,900.00

(2) Items payable

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Project name Related party Book balance at the end of the period Book balance at the beginning of the period

Accounts payable of Zhejiang Xinhecheng Co., Ltd. 1,100,000.00

company

Subtotal 1,100,000.00

(3) Other items

□Applicable √Not applicable

7. Related party commitments

□Applicable √Not applicable

8. Others

□Applicable √Not applicable

15. Share-based payment

1. Various equity instruments

(1) Details

□Applicable √Not applicable

(2) Stock options or other equity instruments outstanding at the end of the period □ Applicable √ Not applicable

2. Equity-settled share-based payment

□Applicable √Not applicable

3. Share-based payment settled in cash

□Applicable √Not applicable

4. Share-based payment expenses for this period

□Applicable √Not applicable

5. Modification and termination of share-based payment

□Applicable √Not applicable

6. Others

□Applicable √Not applicable

16. Commitments and contingencies

1. Multiple partners and multiple customers

√Applicable □Not applicable

Important external commitments, nature and amount existing on the balance sheet date

1. Various unexpired letters of guarantee issued as of June 30, 2026. The unexpired letters of guarantee issued by the company and its subsidiaries are as follows:

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Unit: Yuan Currency: RMB

Issuing bank Applicant unit Guarantee type Guarantee amount Conditions for issuance

Bank of China Limited

Hangzhou Jianbei Branch Zhejiang Aisheng Pharmaceutical Co., Ltd. Performance guarantee 300,000.00 Subtotal of deposit guarantee 300,000.00

2. Except for "31 Assets with Restricted Ownership or Use Rights" in Section 8 of this report, Financial Report 7, and the above-mentioned matters, as of the balance sheet date, the Company has no other major commitments.

3. Contingencies

(1) Important contingencies existing on the balance sheet date □Applicable √Not applicable

(2) If the company has no important contingencies that need to be disclosed, it should also be explained: √Applicable □Not applicable

As of the balance sheet date, the Company has no major contingencies that need to be disclosed.

3. Others

□Applicable √Not applicable

17. Events after the balance sheet date

1. Important non-adjustment matters

□Applicable √Not applicable

2. Profit distribution

□Applicable √Not applicable

3. Sales returns

□Applicable √Not applicable

4. Description of other post-balance sheet events

□Applicable √Not applicable

18. Other important matters

1. Correction of previous accounting errors

(1) Retrospective restatement method

□Applicable √Not applicable

(2) Prospective applicable law

□Applicable √Not applicable

2. Important debt restructuring

□Applicable √Not applicable

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3. Asset replacement

(1) Non-monetary asset exchange

□Applicable √Not applicable

(2) Other asset swaps

□Applicable √Not applicable

4. Annuity plan

□Applicable √Not applicable

5. Termination of operations

□Applicable √Not applicable

6. Branch information

(1) Determination basis and accounting policies of reportable segments

√Applicable □Not applicable

The company determines reporting segments based on internal organizational structure, management requirements, internal reporting systems, etc., and determines reporting segments based on business segments.

(2) Financial information of reportable segments

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Drug Medical Device Inter-segment offset Total operating income 1,606,808,358.58 104,538,035.85 1,200,327.33 1,710,146,067.10 Including: with customers

Income generated from contracts 1,606,664,330.46 104,538,035.85 1,120,870.65 1,710,081,495.66

Operating costs 625,485,153.48 56,688,756.89 1,145,281.43 681,028,628.94 Total assets 4,683,035,018.42 142,764,368.26 16,555,296.78 4,809,244,089.90 Total liabilities 1,010,656,045.77 52,237,782.30 1,062,893,828.07

(3) If the company has no reportable segments, or cannot disclose the total assets and total liabilities of each reportable segment, the reasons should be stated □Applicable √Not applicable

(4) Other instructions

□Applicable √Not applicable

7. Other important transactions and matters that have an impact on investors’ decision-making

□Applicable √Not applicable

8. Others

□Applicable √Not applicable

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19. Notes on main items of the parent company’s financial statements

1. Accounts receivable

(1) Disclosure based on aging

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Aging Book balance at the end of the period Book balance at the beginning of the period Within 1 year (including 1 year) 100,321,683.47 144,194,696.60 1 to 2 years 1,095,794.62 165,275.46 2 to 3 years 42,000.00 161,800.00 More than 3 years 119,800.00

Total 101,579,278.09 144,521,772.06

(2) Classified disclosure based on bad debt accrual method

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Book balance Provision for bad debts Book balance Provision for bad debts

Accounting category

Withdrawal Book Proportion Proportion Proportion

Amount Amount Ratio Value Amount Ratio Value (%) (%)

Example Example

(%) (%)Press

Single

item

plan

mention

bad

account

Accurate

Prepare

Among them:

press

group

combine

plan

101,579,278. 100.0 5,388,643. 5.3 96,190,635. 144,521,772. 100.0 7,372,229. 5.1 137,149,542.

09 0 09 0 00 06 0 92 0 14 bad

account

Accurate

Prepare

Among them:

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Group 09 0 09 0 00 06 0 92 0 14 combined

plan

mention

bad

account

Accurate

Prepare

Total 101,579,278. / 5,388,643. / 96,190,635. 144,521,772. / 7,372,229. / 137,149,542. Total 09 09 00 06 92 14

Provision for bad debts is made individually:

□Applicable √Not applicable

Provision for bad debts by group:

√Applicable □Not applicable

Group accrual items: Bad debt provisions are accrued on a group basis

Unit: Yuan Currency: RMB Closing balance

Name

Book balance Bad debt provision Provision ratio (%) Within 1 year (including 1

100,321,683.47 5,016,084.17 5.00 years)

1-2 years 1,095,794.62 219,158.92 20.00 2-3 years 42,000.00 33,600.00 80.00 More than 3 years 119,800.00 119,800.00 100.00

Total 101,579,278.09 5,388,643.09 5.30 Instructions on the provision of bad debt provisions by group:

□Applicable √Not applicable

Provision for bad debts based on the general expected credit loss model

□Applicable √Not applicable

Basis for division of each stage and provision ratio for bad debts

For details, please refer to the description of "13. Accounts receivable" in Section 8 of this report, Financial Report V.

Explanation of significant changes in the book balance of accounts receivable that have experienced changes in loss provisions during the current period:

□Applicable √Not applicable

(3) Bad debt provisions

√Applicable □Not applicable

Unit: Yuan Currency: RMB Change amount in the current period

Category Opening balance Recovery or write-off or verification Ending balance accrual Other changes

reversal pin

Provision based on combination

7,372,229.92 -1,949,208.83 34,378.00 5,388,643.09 Bad debt provision

Total 7,372,229.92 -1,949,208.83 34,378.00 5,388,643.09

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Among them, the amount of recovery or reversal of bad debt provisions for the current period is important:

□Applicable √Not applicable

Other instructions

Not applicable

(4) Accounts receivable actually written off in the current period

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Write-off Amount

Accounts receivable actually written off 34,378.00

Among them, the important write-off of accounts receivable

□Applicable √Not applicable

Instructions for writing off accounts receivable:

□Applicable √Not applicable

(5) Accounts receivable and contract assets of the top five ending balances by debtors

√Applicable □Not applicable

Unit: Yuan Currency: RMB in accounts receivable

Accounts receivable and contract assets

Accounts receivable period Contract asset period Bad debt provision period Unit name Contract asset period Total ending balance

Ending Balance Ending Balance Ending Balance Ending Balance Count Ratio

(%)

Customer One 19,757,785.21 19,757,785.21 19.45 987,889.26 Customer Two 7,107,602.00 7,107,602.00 7.00 355,380.10 Customer Three 6,725,429.49 6,725,429.49 6.62 336,271.47Customer four 3,992,932.11 3,992,932.11 3.93 199,646.61Customer five 3,412,037.15 3,412,037.15 3.36 170,601.86

Total 40,995,785.96 40,995,785.96 40.36 2,049,789.30Other instructions

Not applicable

Other notes:

□Applicable √Not applicable

2. Other receivables

Item list

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Ending balance Beginning balance

interest receivable

Dividends receivable

Other receivables 672,943.63 690,850.91

Total 672,943.63 690,850.91

Other notes:

146/156

Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-annual Report □Applicable √Not applicable

interest receivable

(1) Classification of interest receivable

□Applicable √Not applicable

(2) Important overdue interest

□Applicable √Not applicable

(3) Classified disclosure according to bad debt accrual method □Applicable √Not applicable

Provision for bad debts on an individual basis: □ Applicable √ Not applicable

Explanation on the provision of bad debt provisions on an individual basis: □ Applicable √ Not applicable

Provision for bad debts by combination: □ Applicable √ Not applicable

(4) Provision for bad debts is made based on the general expected credit loss model □Applicable √Not applicable

(5) Bad debt provision □Applicable √Not applicable

Among them, the amount of bad debt provision recovery or reversal in the current period is important: □ Applicable √ Not applicable

Other notes:

Not applicable

(6) Interest receivable actually written off in the current period □ Applicable √ Not applicable

Among them, the important write-off of interest receivable □ Applicable √ Not applicable

Write-off instructions:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

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Dividends receivable

(1) Dividends receivable

□Applicable √Not applicable

(2) Important dividends receivable aged more than 1 year □ Applicable √ Not applicable

(3) Classified disclosure according to bad debt accrual method □Applicable √Not applicable

Provision for bad debts is made individually:

□Applicable √Not applicable

Explanation on the provision of bad debt provisions on an individual basis: □ Applicable √ Not applicable

Provision for bad debts by group:

□Applicable √Not applicable

(4) Provision for bad debts is made based on the general expected credit loss model □Applicable √Not applicable

(5) Bad debt provisions

□Applicable √Not applicable

Among them, the amount of bad debt provision recovery or reversal in the current period is important: □ Applicable √ Not applicable

Other notes:

Not applicable

(6) Dividends receivable actually written off in the current period □ Applicable √ Not applicable

Among them, the important write-off of dividends receivable □ Applicable √ Not applicable

Write-off instructions:

□Applicable √Not applicable

Other notes:

□Applicable √Not applicable

Other receivables

(1) Disclosure based on aging

√Applicable □Not applicable

Unit: Yuan Currency: RMB

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year (including 1 year) 313,643.82 509,790.00 1 to 2 years 460,390.00 237,378.82 2 to 3 years 33,350.00 83,236.74 More than 3 years 843,642.26 1,108,642.26

Total 1,651,026.08 1,939,047.82

(2) Classification by nature of payment

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Nature of payment Book balance at the end of the period Book balance at the beginning of the period

Deposit security deposit 1,651,026.08 1,939,047.82

Total 1,651,026.08 1,939,047.82

(3) Bad debt provision accrual

√Applicable □Not applicable

Unit: Yuan Currency: RMB Phase 1 Phase 2 Phase 3

Lifetime expectations letter Lifetime forecast letter

Estimated total bad debt provisions for the next 12 months

loss of use (no credit loss occurred (credit loss occurred)

period credit loss

Use impairment) Use impairment)

January 1, 2026

25,489.50 47,475.76 1,175,231.65 1,248,196.91

January 1, 2026

25,489.50 47,475.76 1,175,231.65 1,248,196.91 amount in this period

--Transfer to the second stage -23,019.50 23,019.50

--Transfer to the third stage -175,398.45 175,398.45

--Return to the second stage

--Return to the first stage

Provision in this period 13,212.19 196,981.19 -480,307.84 -270,114.46 Transferred in this period

Sales in this period

Write-off in this period

Other changes

June 30, 2026

15,682.19 92,078.00 870,322.26 978,082.45 Balance

Basis for division of each stage and provision ratio for bad debts

The basis for dividing each stage: accounts aged less than 1 year are classified into the first stage, accounts aged 1-2 years are classified into the second stage, and accounts aged over 2 years are classified into the third stage.

Explanation of significant changes in the book balance of other receivables that have experienced changes in loss provisions during the current period:

□Applicable √Not applicable

The amount of bad debt provision for the current period and the basis for assessing whether the credit risk of financial instruments has increased significantly:

□Applicable √Not applicable

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Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

(4) Bad debt provisions

√Applicable □Not applicable

Unit: Yuan Currency: RMB Change amount in the current period

Category Opening balance Recovery or transfer Write-off or verification Ending balance accrual Other changes

Return sales

Provision based on combination

1,248,196.91 -270,114.46 978,082.45 Bad debt provision

Total 1,248,196.91 -270,114.46 978,082.45

Among them, the amount of bad debt provision reversed or recovered in the current period is important:

□Applicable √Not applicable

Other instructions

Not applicable

(5) Other receivables actually written off in the current period

□Applicable √Not applicable

Important write-offs of other receivables:

□Applicable √Not applicable

Instructions for writing off other receivables:

□Applicable √Not applicable

(6) Other receivables with top five closing balances based on debtors

√Applicable □Not applicable

Unit: Yuan Currency: RMB as a share of other receivables at the end of the period

Name of bad debt provision unit Closing balance Proportion of total balance Nature of payment Aging of accounts

Ending balance

(%)

Beijing Dongxing Tangke

Technology Development Co., Ltd. 720,142.26 43.62 Deposit and security deposit More than 3 years 720,142.26 Company

Aramark service products

Industry (China) Co., Ltd.

342,090.00 20.72 Deposit guarantee 1 to 2 years 68,418.00 Company Beijing Branch

Division

Beijing Tongniu Co., Ltd.

202,460.22 12.26 Deposit security deposit Within 1 year 10,123.01 Co., Ltd.

Shanghai Haiyuan Investment

42,383.60 2.57 Deposit security deposit Within 1 year 2,119.18 Management Co., Ltd.

Cangzhou Lingang New Development

Dian House Management 34,000.00 2.06 Deposit Security Deposit More than 3 years 34,000.00 Management Co., Ltd.

Total 1,341,076.08 81.23 / / 834,802.45

(7) Presented in other receivables due to centralized management of funds

□Applicable √Not applicable

150/156

Other notes on the 2026 semi-annual report of Beijing Fuyuan Pharmaceutical Co., Ltd.:

□Applicable √Not applicable

151/156 Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-annual Report

3. Long-term equity investment

√Applicable □Not applicable

Unit: Yuan Currency: RMB Closing balance Opening balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Investment in subsidiaries 269,177,285.63 269,177,285.63 269,177,285.63 269,177,285.63 Investment in associates and joint ventures

Total 269,177,285.63 269,177,285.63 269,177,285.63 269,177,285.63

(1) Investment in subsidiaries

√Applicable □Not applicable

Unit: Yuan Currency: RMB Increase or decrease in the current period

Balance at the beginning of the period (account for impairment provision at the beginning of the period Ending balance (account for impairment provision at the end of the period) Invested unit

(face value) Balance Additional investment Decrease investment Provision for impairment Others (face value) Balance Beijing Wansheng Renhe Technology

12,846,000.00 12,846,000.00 Co., Ltd.

Zhejiang Aisheng Pharmaceutical Co., Ltd.

126,059,881.14 126,059,881.14 Company

Fuyuan Pharmaceutical Co., Ltd. 130,271,404.49 130,271,404.49 Total 269,177,285.63 269,177,285.63

(2) Investment in associates and joint ventures

□Applicable √Not applicable

(3) Impairment testing of long-term equity investments

□Applicable √Not applicable

Other notes:

152/156

Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-annual Report □Applicable √Not applicable

153/156

Beijing Fuyuan Pharmaceutical Co., Ltd. 2026 Semi-Annual Report

4. Operating income and operating costs

(1) Operating income and operating costs

√Applicable □Not applicable

Unit: Yuan Currency: RMB Amount for the current period Amount for the previous period

Project

Revenue Cost Revenue Cost Main business 979,850,578.02 270,249,275.85 1,025,524,141.54 233,238,132.76 Other business 39,614,614.56 38,138,959.37 4,110,372.81 3,490,894.69

Total 1,019,465,192.58 308,388,235.22 1,029,634,514.35 236,729,027.45 Including: Contracts with customers

1,019,385,735.90 308,388,235.22 1,028,292,009.36 235,907,519.12

revenue generated from the same

(2) Breakdown information of operating income and operating costs

√Applicable □Not applicable

Unit: Yuan Currency: RMB Total

Contract classification

Operating income Operating costs

Product type

Drugs 979,850,578.02 270,249,275.85

Others 39,535,157.88 38,138,959.37 Classified by time of commodity transfer

Revenue recognized at a certain point in time 1,019,385,735.90 308,388,235.22

Total 1,019,385,735.90 308,388,235.22

Other instructions

□Applicable √Not applicable

(3) Description of performance obligations

□Applicable √Not applicable

(4) Description of allocation to remaining performance obligations

□Applicable √Not applicable

(5) Major contract changes or major transaction price adjustments

□Applicable √Not applicable

Other notes:

Not applicable

5. Investment income

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount for the current period Amount for the previous period

Income from bank financial products 10,451,581.29 12,456,995.32 Interest income from interbank lending 54,428.71

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Dividends from subsidiaries 60,000,000.00

Total 70,451,581.29 12,511,424.03Other instructions:

Not applicable

6. Others

□Applicable √Not applicable

20. Supplementary information

1. Detailed statement of non-recurring profits and losses for the current period

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Item Amount Explanation of gains and losses from disposal of non-current assets, including accrued assets minus Mainly due to gains and losses from asset disposal in the current period

The offset portion of the value reserve of 253,924.98 is a government subsidy whose income is included in the current profit and loss, but is closely related to the company's normal operating business, complies with national policies and regulations, and is mainly received in the current period.

7,282,110.53 The determined standards are enjoyed and have a continuous impact on the company's profits and losses, except for government subsidies related to benefits.

In addition to the effective hedging business related to the company's normal operating business, non-financial enterprises' gains and losses from changes in fair value arising from holding financial assets and financial liabilities and gains and losses arising from the disposal of financial assets and financial liabilities

Fund occupation fees charged to non-financial enterprises included in current profits and losses

Gains and losses from entrusting others to invest or manage assets 11,394,743.61 Mainly due to gains and losses from external entrusted loans for the current period’s financial management income

Loss of various assets due to force majeure factors, such as natural disasters

The impairment provision for receivables that is separately tested for impairment is reversed if the investment cost of the enterprise in acquiring subsidiaries, associates and joint ventures is less than the income generated from the fair value of the investee's identifiable net assets when the investment is obtained.

Net profit and loss for the current period from the beginning of the period to the date of merger of subsidiaries resulting from business mergers under common control

Gains and losses on non-monetary asset exchanges

Debt restructuring gains and losses

One-time expenses incurred by the enterprise due to the cessation of relevant business activities, such as expenses for relocating employees, etc.

One-time impact on current profits and losses due to adjustments to tax, accounting and other laws and regulations

One-time confirmation of share-based payment expenses due to cancellation or modification of equity incentive plan

For cash-settled share-based payments, gains and losses arising from changes in the fair value of employee compensation payable after the vesting date

Gains and losses arising from changes in the fair value of investment properties that are subsequently measured using the fair value model

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Item Amount Indicates the income generated from transactions where the transaction price is obviously unfair

Contingencies unrelated to the company's normal business operations arise

Profit and loss

Custody fee income from entrusted operations

Other non-operating income and expenses other than the above items -377,047.68

Other profit and loss items that meet the definition of non-recurring profits and losses

Less: Income tax impact 2,698,779.16

Amount of impact on minority shareholders’ equity (after tax) 23,512.88

Total 15,831,439.40

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

Other instructions

□Applicable √Not applicable

2. Return on net assets and earnings per share

√Applicable □Not applicable

Weighted average net assets Earnings per share Profit for the reporting period

Yield (%) Basic earnings per share Diluted earnings per share Net attributable to the company’s ordinary shareholders

4.86 0.40 0.40Profit

After deducting non-recurring gains and losses, attributable to

4.44 0.36 0.36 Net profit of the company’s common shareholders

3. Differences in accounting data under domestic and foreign accounting standards

□Applicable √Not applicable

4. Others

□Applicable √Not applicable

Legal representative: Huang He

Board approval submission date: August 13, 2026

Revision information

□Applicable √Not applicable

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