Chenxin Pharmaceutical Co., Ltd.’s evaluation report on the 2025 “Improving Quality, Increasing Efficiency and Emphasizing Returns” Action Plan and Announcement of the 2026 “Improving Quality, Efficiency and Emphasizing Returns” Action Plan
Securities code: 603367 Securities abbreviation: Chenxin Pharmaceutical Announcement number: 2026-011
Chenxin Pharmaceutical Co., Ltd.
Evaluation report on the 2025 action plan of “Improving Quality, Increasing Efficiency and Focusing on Return”
Announcement of the 2026 “Improving Quality, Increasing Efficiency and Focusing on Returns” Action Plan
The company's board of directors and all directors guarantee that the contents of this announcement do not contain any false records, misleading statements or major omissions, and assume legal responsibility for the authenticity, accuracy and completeness of its contents.
Chenxin Pharmaceutical Co., Ltd. (hereinafter referred to as "Chenxin Pharmaceutical" or the "Company") continues to respond to the Shanghai Stock Exchange's "Initiative on Carrying out the Special Action of "Improving Quality, Increasing Efficiency and Focusing on Returns" for Shanghai Stock Exchange Companies" to promote the company's high-quality development, enhance the company's investment value, protect the legitimate rights and interests of investors, especially small and medium-sized investors, and effectively perform the company's responsibilities and obligations. In order to protect the rights and interests of investors and promote the stability and health of the capital market Development, the company held the ninth meeting of the fifth board of directors on August 27, 2025, and reviewed and approved the "Evaluation Report on the 2024 Action Plan of "Improving Quality, Increasing Efficiency and Emphasizing Return" and the Proposal of the 2025 Action Plan of "Improving Quality, Increasing Efficiency and Emphasizing Return" (hereinafter referred to as the "Action Plan"), to evaluate the implementation of the 2024 Action Plan, and clarify the goals of the 2025 Action Plan.
Since the disclosure and implementation of the 2025 action plan of "Improving Quality, Increasing Efficiency and Focusing on Returns", the company has actively carried out and implemented relevant work and achieved good results in protecting the rights and interests of investors and establishing a good capital market image. The company held the 12th meeting of the fifth board of directors on April 2, 2026 to review The meeting approved the "Evaluation Report on the Action Plan of "Improving Quality, Increasing Efficiency and Emphasis on Return" in 2025 and the Proposal on the Action Plan of "Improving Quality, Increasing Efficiency and Emphasis on Return" in 2026, to evaluate the implementation of the action plan in 2025 and clarify the goals of the action plan in 2026. The specific contents are as follows:
1. Focus on the main business and lay a solid foundation for high-quality development
The company's main business is the research and development, production and sales of chemical pharmaceutical preparations. Business scope: Licensed items: pharmaceutical production; pharmaceutical commissioned production; special medical formula production; food production; health food production; beverage production; food additive production; pharmaceutical import and export; pharmaceutical wholesale; pharmaceutical retail; veterinary drug production; veterinary drug business. (Projects that require approval according to law can only be carried out with the approval of relevant departments. Specific business projects are subject to the approval documents or licenses of relevant departments), general projects: sales of formula foods for special medical purposes; food sales (only sales of pre-packaged food); food Internet sales ( Only sales of prepackaged food); sales of health food (prepackaged); sales of food additives; import and export of goods; import and export of technology; medical research and experimental development; technical services, technology development, technical consultation, technology exchange, technology transfer, technology promotion; engaging in investment activities with its own funds. (Except for projects that require approval according to law, business activities can be carried out independently with a business license and in accordance with the law).
The company's operating income in 2025 was 3.445 billion yuan, a decrease of 13.48% compared with the same period last year. The company's total profit in 2025 was 496 million yuan, a decrease of 13.82% compared with the same period last year. The net profit attributable to the owners of the parent company in 2025 was 421 million yuan, a decrease of 17.22% compared with the same period last year. The net profit excluding non-recurring gains and losses attributable to the owners of the parent company in 2025 was 256 million yuan, a decrease of 39.82% compared with the same period last year.
In 2026, Chenxin Pharmaceutical adheres to the core business philosophy of "innovating from the old, being honest and trustworthy", adhering to the original development intention of "working together to create a win-win situation", taking industry benchmarking learning as an important starting point, focusing on the core issues that restrict the company's high-quality development and making precise efforts - focusing on solving key issues such as the industrialization efficiency of complex preparations, the speed of transformation of innovative results, and supply chain synergy, and clearing development obstacles through process optimization and mechanism innovation.
In terms of brand building, we have deeply implemented the strategy of "double construction and dual development" and continued to strengthen the collaborative construction of corporate brands and product brands. Relying on the industry accumulation of being ranked on the "Top 100 List of China's Pharmaceutical Industry" for 15 consecutive years, with a brand value of 8.706 billion yuan as the cornerstone, we will further deepen the full-scenario channels of grade hospitals, primary care, and retail terminals. Through quality persistence and reputation accumulation, we will consolidate the status of the preferred drug brand for medical workers and patients, and continue to enhance brand reputation and user loyalty.
In terms of upgrading digital construction, we will promote transformation in depth with AI empowerment as the core. Based on the deployment of enterprise-level localized large-scale models, unmanned logistics vehicles, AI strain identification and other application scenarios, digitalization will cover the entire value chain of drug research and development, intelligent manufacturing, quality control, and smart supply chain. Through real-time data collection and intelligent analysis, we will achieve operational efficiency improvement and precise risk control, and strive to build a national pharmaceutical enterprise digital transformation demonstration factory.
At the level of management improvement, we closely adhere to the four-wheel drive strategy of "innovative drugs, high-end generic drugs, OTC topical drugs, and special medical foods", optimize the cross-department collaboration mechanism and performance appraisal system, and strengthen the closed-loop management of the entire chain of R&D, production, and sales; at the same time, we use talents as the core support to improve the "introduction , cultivate, use, evaluate” the whole process mechanism, through multi-level AI empowered training and practical exercises, create a composite team with both technical literacy and business insights, empower industrial upgrading with refined management, and promote enterprises to achieve sustainable and efficient development in innovation, transformation and scale growth.
2. Adhere to the research and development orientation and build a solid development engine with technological innovation
The company adheres to the combination of independent innovation and cooperative innovation. On the basis of independent research and development, it attaches great importance to various cooperation and has successively cooperated with Georgia State University in the United States, University of Liverpool in the United Kingdom, Peking University, Academy of Military Medical Sciences, China Pharmaceutical University, Shandong University, Shenyang Pharmaceutical University, and Shandong Pharmaceutical Industry Research Institute, Guangzhou Institute of Pharmaceutical Industry, Tianjin Institute of Pharmaceutical Research, Shanghai Institute of Pharmaceutical Industry, WuXi AppTec, etc. carry out scientific research cooperation to develop new products or tackle key technologies. Combined with the company's strong industrialization capabilities, we can achieve complementary resource advantages through internal and external cooperation and effectively transform scientific research results into productivity.
The total investment in R&D in 2025 is 286 million yuan, with more than 100 projects under development. The product directions focus on complex injections, sustained-release oral solid preparations, ophthalmic preparations, external preparations, generic drug consistency evaluation, preparation internationalization, new drugs with major clinical needs, etc. It aims to build a product portfolio with complementary advantages in the treatment fields of clinical nutrition, oncology, anesthesia, psychology, cardiovascular, ophthalmology, dermatology, etc., and provide more choices to meet major clinical needs.
In 2026, faced with the normalization of national drug centralized procurement and the market pressure brought by the global economic downturn, Chenxin Pharmaceutical will continue to deepen the action plan of "improving quality, increasing efficiency and focusing on returns", and implement cost reduction and efficiency improvement measures with digital transformation and lean management as the core: through high-end preparation research and development and The production capacity of intelligent intensive workshops is released, relying on advanced equipment such as fully automated three-dimensional warehouses and intelligent light inspection machines, while optimizing the supply chain system and production process, promoting the upgrade of workshop technology and technology, using large-scale production and technological innovation to hedge the price impact of centralized procurement, and ensuring the stability of operations.
On the premise of ensuring the continued efficiency of the company's operations, the company will further expand investment in research and development and continue to maintain industry standards. Centering on the two national innovation platforms of the National Enterprise Technology Center and the National and Local Joint Engineering Laboratory for Intravenous Nutrition Large Volume Injections, as well as the layout of multi-regional R&D institutions, we actively build a "introduction, cultivation, use, and evaluation" Full-process talent management system and performance incentive system: On the one hand, it targets to attract high-end talents such as national high-level talents and innovative drug experts with clinical research and development experience. On the other hand, it cultivates young backbones through on-the-job training, technical competitions, "teaching and mentoring" and other mechanisms, promotes the spirit of craftsman, and helps skilled talents grow into the core force of process optimization and technological innovation.
The company will focus on the "four-wheel drive" strategy of innovative drugs, high-end generic drugs, OTC topical drugs, and special medical foods, focus on strengthening core technology research in the pharmaceutical field, and improve the full-chain innovation capabilities such as innovative drug development, complex preparation process improvement, high-quality realization of special medical foods, and product performance testing; through Through systematic layout and talent empowerment, we will continue to improve product quality and technological added value, and build a high-quality R&D team driven by market demand, with clinical value as the core, strong technical expertise, and rich practical experience, laying a solid foundation for the company's "combination of imitation and innovation" transformation and long-term high-quality development.
3. Maintain communication with investors and enhance recognition in the capital market
The company strictly abides by the relevant laws, regulations and normative document requirements for information disclosure by listed companies, continues to improve the construction of the information disclosure system, conscientiously performs its information disclosure obligations, and ensures timely, accurate and complete disclosure of information.
In 2025, the company takes investor communication seriously and is committed to building a transparent and efficient communication bridge. Through various channels, including holding regular performance briefings, "SSE e-interaction" and receiving phone calls from investors, we provide detailed interpretations of the company's production and operations, in-depth explanations of the company's strategic layout and industry prospects, and effectively respond to investors' core concerns. During the year, the company held the 2024 annual and 2025 first quarter performance briefing, the 2025 semi-annual performance briefing and the 2025 third quarter performance briefing to actively convey the company's value and further enhance the market's understanding and confidence in the company. At the same time, the company disclosed a total of 115 announcements on the official website of the Shanghai Stock Exchange and designated information disclosure media, including 111 temporary announcements, 4 regular reports, and 108 attachments and related filing documents. Ensure that investors understand the company's business matters in a timely manner and protect the interests of investors to the greatest extent.
In 2026, Chenxin Pharmaceutical will continue to deepen investor relations management, and will "respect investors, reward investors, and protect investors' interests" throughout the entire operation process, fully listen to investors' opinions and suggestions through multiple channels, and consolidate the foundation of market trust with governance upgrades and transparent operations. The company will rely on the "Investor Relations Management System" to further optimize the governance mechanism, continue to improve the internal decision-making process and information transmission mechanism, and ensure that investors fully and comprehensively understand the progress of the company's business strategy, as well as the progress of major projects such as the industrialization of complex preparations and the research and development of innovative drugs.
In order to maintain the stability of market value and long-term shareholder returns, the company has clarified the core principles of market value management, the rights and responsibilities of responsible departments, and the abnormal fluctuation warning and response mechanism in accordance with the internal control management system, and achieved a deep binding of market value management with company operations and strategic planning. In terms of communication channel construction, the company will continue to hold performance briefings on a regular basis, organizing core management such as chairman, independent directors, senior managers, financial directors, board secretaries, etc., to discuss financial data, R&D pipelines, and centralized procurement that are generally concerned by investors through online interactions at the Shanghai Stock Exchange Roadshow Center. We should conduct in-depth interpretations of core issues such as the progress of the company's major events; at the same time, we should rely on multiple channels such as the investor relations column on the company's official website, the Shanghai Stock Exchange e-interactive platform, dedicated contact numbers and emails to respond to investor demands in a timely manner and build a full-process communication closed loop of "pre-event solicitation, in-process interaction, and post-event feedback".
4. Build a solid line of defense for the responsibility of the “key minority” and empower the upgrade of their ability to perform their duties.
In 2025, the company adhered to the concept of standardized operations, strengthened the performance responsibilities of the "key minority", and achieved remarkable results: it strictly followed the requirements of the "Company Law" and the "Securities Law", and regulated the performance of duties by controlling shareholders, directors and senior managers. During the year, no incidents that harmed the rights and interests of small and medium-sized investors occurred, and none of the company's directors and senior managers reduced their shareholdings. share, reflecting firm confidence in the company's development prospects; the company organized "key minorities" to actively participate in 4 compliance trainings organized by regulatory authorities and the company, and completed the annual goals on time, effectively improving the ability of directors and senior managers to perform their duties; the company continued to optimize the incentive mechanism and related compensation systems to achieve a close link between executive compensation and operating performance.
In 2026, Chenxin Pharmaceutical adheres to the core principles of standardized operations, with the goal of "modernized governance, scientific decision-making, and efficient execution", continues to deepen the construction of the corporate governance system, further revise and improve the company's internal control and other legal person governance systems, clarify the decision-making process, power and responsibility boundaries and supervision mechanisms, and effectively safeguard the legitimate rights and interests of investors throughout the entire governance process. The company has always maintained regular and close communication with "key minority" groups such as directors and senior managers, built a three-in-one capability improvement system of "policy interpretation, compliance training, and practical empowerment", closely tracked the dynamics of laws and regulations in the pharmaceutical industry and capital market regulatory policies, and regularly organized "key minorities" to participate in the pharmaceutical industry. Special trainings on corporate compliance management, information disclosure standards, and market value management practices are provided to strengthen their awareness of standardized operations and professional capabilities in performing duties; at the same time, they strictly implement the standardized operation requirements of the shareholders’ meeting, the board of directors, and various special committees to ensure that the company’s major decisions are fully demonstrated and reviewed for compliance, and to enhance the scientific nature and execution of decision-making.
5. Adhere to the principle of shareholder supremacy and build a long-term return system
In order to return more to investors, the company has comprehensively considered future development based on actual operating conditions and actively returned the interests of all shareholders. In 2025, the company's 2024 annual shareholders' meeting on May 20, 2025 reviewed and approved the "Proposal of the Company to Submit to the Shareholders' Meeting to Authorize the Board of Directors to Determine the 2025 Interim Dividend Plan", authorizing the Board of Directors to formulate the 2025 mid-term dividend plan. On October 13, 2025, the company implemented the 2025 mid-term equity distribution plan. Based on the company's total share capital of 452,754,129 shares at the time of equity distribution, a cash dividend of 0.188 yuan per share (tax included) was distributed, with a total cash dividend of 85,117,776.25 yuan. At the same time, as reviewed and approved by the company's 2024 annual shareholders' meeting, the company implemented the 2024 annual equity distribution on June 19, 2025. Based on the company's total share capital of 452,754,129 shares at the time of the equity distribution, a cash dividend of 0.22 yuan per share (tax included) was distributed, and a total cash dividend of 99,605,908.38 yuan was distributed. In summary, the company will distribute cash dividends in the first half of 2025 and in 2024, totaling RMB 184,723,684.63.
In 2026, the company will always insist on coordinating its overall business development and reasonable returns for all shareholders, taking into account the company's immediate operating benefits and long-term strategic layout. Based on the industry characteristics of large R&D investment, long cycle and continuous capital demand in the pharmaceutical industry, and adhering to the core ideas of sound operation and sustainable development, the company will effectively convey the company's firm confidence in future operating performance and long-term profits through a sustained and stable cash dividend mechanism, fully safeguard the legitimate rights and interests of all shareholders, especially small and medium-sized investors, and stabilize market investment expectations. The company strictly abides by relevant laws, regulations, regulatory requirements and the profit distribution policy stipulated in the company's articles of association. Under the premise of meeting normal profit distribution conditions, it adheres to the bottom line of reasonable dividend distribution, maintains the continuity and stability of the cash dividend policy, ensures that the overall dividend ratio meets the established standards, and fully guarantees investors to share in the company's operating and development results. Combining multiple core factors such as the company's current operating status, overall profitability level, mid- and long-term development plans, daily production and operation capital needs, project R&D investment arrangements, and future capital reserve planning, and on the basis of strictly complying with the relevant conditions for profit distribution, the company will adhere to the scientific, prudent and reasonable principles, comprehensively study and judge various key indicators, and formulate a staged profit distribution plan that adapts to the company's actual situation. In the future, the company will continue to balance core development needs such as business expansion, R&D innovation, and production capacity construction with cash returns to shareholders, and dynamically optimize profit distribution strategies to ensure the steady advancement of the company's core business and the continuous improvement of core competitiveness, while also effectively fulfilling the responsibilities and obligations of listed companies in returning shareholders, and achieving a win-win synergy between the company's high-quality development and the long-term interests of shareholders.
6. Procedures for implementation of this evaluation report and plan
The company held the 12th meeting of the fifth board of directors on April 2, 2026. The meeting reviewed and approved the "Evaluation Report on the 2025 Action Plan of "Improving Quality, Increasing Efficiency and Emphasis on Return" and the Proposal on the 2026 Action Plan of "Improving Quality, Increasing Efficiency and Emphasizing Return". The board of directors believes that the plan combines the development status of the industry in which the company operates and believes that it can objectively and truly reflect the actual situation of the company.
7. Other instructions and risk warnings
This evaluation report on the 2025 "Improve Quality, Increase Efficiency and Emphasis on Return" action plan and the 2026 "Improving Quality, Efficiency and Emphasis on Return" action plan have been reviewed and approved at the 12th meeting of the company's fifth board of directors. This plan is based on the company's current operating conditions and external environment, and does not constitute a relevant commitment to investors. In the future, it may be affected by macro policy adjustments, industry competition changes and other factors, and there is a certain degree of uncertainty. Investors are kindly requested to invest rationally and pay attention to investment risks.
Announcement is hereby made.
Board of Directors of Chenxin Pharmaceutical Co., Ltd.
April 2, 2026