/Wantai Biotech 2025 Annual Audit Report

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Wantai Biotech 2025 Annual Audit Report

Shanghai Stock Exchange

2026/04/21

Audit report

Beijing Wantai Biopharmaceutical Co., Ltd. Rongcheng Shen Zi [2026] 518Z0710

Rongcheng Accounting Firm (Special General Partnership) Beijing, China

1. Audit opinions

We have audited the financial statements of Beijing Wantai Biopharmaceutical Co., Ltd. (hereinafter referred to as "Wantai Biopharmaceutical Company" or the "Company"), including the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in owner's equity, and relevant financial statement notes for 2025.

We believe that the attached financial statements have been prepared in accordance with the Accounting Standards for Business Enterprises in all material respects and fairly reflect the consolidated and parent company's financial position of Wantai Biological Co., Ltd. on December 31, 2025, as well as the consolidated and parent company's operating results and cash flows in 2025.

2. The basis for forming audit opinions

We performed the audit work in accordance with the Chinese Certified Public Accountants Auditing Standards. Our responsibilities under these standards are further described in the "CPA's Responsibilities for the Audit of Financial Statements" section of the auditor's report. In accordance with the Chinese Code of Ethics for Certified Public Accountants and the Chinese Code of Independence for Certified Public Accountants, we are independent from Wantai Biotech and have complied with the provisions of the independence standards applicable to the audit of financial statements of public interest entities, while fulfilling other responsibilities in terms of professional ethics. We believe that the audit evidence we obtained is sufficient and appropriate and provides a basis for issuing an audit opinion.

3. Key audit matters

Key audit matters are matters that we, based on our professional judgment, consider to be most important in the audit of the current period's financial statements. The response to these matters is based on the audit of the financial statements as a whole and the formation of audit opinions. We do not express opinions on these matters individually.

(1) Operating income

Description of the matter

For details of relevant information disclosure, please refer to Note 3, 28, Revenue Recognition Principles and Measurement Methods, and 5, 40 Operating Income and Operating Costs of the Financial Statements.

The operating income of Wantai Biological Company in 2025 is 1,818.9675 million yuan, and the operating income of Wantai Biological Company in 2024 is 2,245.4032 million yuan. Operating income is an important component of Wantai Biotech's consolidated income statement, and there may be potential misstatements in terms of authenticity and cutoff. Therefore, we identify operating income recognition as a key audit matter.

Audit response

The relevant procedures we implement for operating income mainly include:

(1) Understand and evaluate the design of internal controls in the sales process of Wantai Biological Company from the approval of sales contracts to the recording of operating income, and test the effectiveness of the execution of relevant key internal controls.

(2) Sample sales contracts and interviews with relevant personnel of Wantai Biological Company, analyze the timing of transfer of control rights related to operating income recognition, and then evaluate the rationality of Wantai Biological Company's operating income recognition policy.

(3) Carry out analytical review procedures on operating income and gross profit to determine the rationality of changes in operating income and gross profit for the current period.

(4) Use sampling method to perform the following procedures on operating income:

① Select samples to check the original documents confirming the business income and verify the authenticity of the business income. At the same time, some original documents are extracted and compared with the accounting records to verify the completeness of the operating income.

② Select a sample of customers for confirmation. For major domestic distribution customers, obtain the ending inventory list of domestic distribution customers and the sales status of domestic distribution customers to their major downstream terminal customers through confirmation.

③Select samples to conduct a comparative analysis on the sales prices of Wantai Biological Company's products to verify whether the sales prices are true.

④ Perform a cut-off test on operating income, and evaluate whether the operating income has been included in the appropriate accounting period based on returns and exchanges during the period.

By implementing the above procedures, we found no abnormalities in operating income.

(2) Provision for inventory decline

Description of the matter

For details of relevant information disclosure, please refer to Notes 3.13 Inventories and 5.8 Inventories to the financial statements.

Wantai Biotech's main inventories other than equipment have expiration dates. On December 31, 2025, the inventory of Wantai Biological Company had a book value of 702.0771 million yuan, accounting for 5.00% of the consolidated total assets and 9.33% of the current assets. The balance of devaluation provisions has been accrued of 263.168 million yuan. On December 31, 2024, the inventory of Wantai Biological Company had a book value of 863.1929 million yuan, accounting for 5.88% of the consolidated total assets and 10.31% of the current assets. The balance of devaluation provisions has been accrued of 252.0476 million yuan. The management of Wantai Biological Company (hereinafter referred to as the "management") compares the cost of each inventory item with its net realizable value one by one, measures the inventory at the lower value, and accrues inventory depreciation reserves based on the difference between the cost and the net realizable value.

According to the accounting policies disclosed by the company, the net realizable value of inventory of goods directly for sale, such as goods in stock, goods shipped, semi-finished products for sale and materials for sale, is determined based on the estimated selling price of the inventory minus estimated sales expenses and related taxes; for material inventories held for production, the net realizable value is determined based on the estimated selling price of the finished products produced minus the estimated costs to be incurred upon completion, estimated sales expenses and related taxes.

Due to the large amount of inventory of Wantai Biological Company and its timeliness, the determination of the provision for inventory depreciation at the end of the year requires the management to make major judgments and assumptions after comprehensively considering various factors. For this reason, we identified the provision for inventory depreciation as a key audit matter.

Audit response

Regarding inventory depreciation provisions, the main audit procedures we implemented include:

(1) Evaluate and test the design and operating effectiveness of internal controls related to inventory depreciation provisions.

(2) Obtain the ending inventory list of Wantai Biological Company, perform inventory monitoring procedures, and pay attention to whether the inventory that cannot be sold and used normally has been identified.

(3) Evaluate the important assumptions involved in the management’s calculation of the net realizable value, such as checking the sales price and costs incurred to completion, sales expenses and related taxes, etc.

(4) For inventories other than equipment, check the expiration date, and analyze whether products that are close to the expiration date can be effectively sold or used before the expiration date based on the company's inventory turnover rate.

(5) Checked Note 5.8 (2) disclosure of inventory depreciation reserves or contract performance cost impairment reserves. Through the implementation of the above procedures, we found no abnormalities in the provision for inventory decline.

4. Other information

The management of Wantai Biotech is responsible for other information. Other information includes information covered in Wantai Biologics' 2025 annual report, but does not include the financial statements and our auditor's report.

Our audit opinion on the financial statements does not cover other information, nor do we express any form of assurance conclusion on other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the audit or otherwise appears to be materially misstated.

If we determine, based on the work we have performed, that other information is materially misstated, we should report that fact. We have nothing to report in this regard.

5. Responsibility of management and those charged with governance for financial statements

The management of Wantai Biological Company is responsible for preparing financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises to achieve fair reflection, and to design, implement and maintain necessary internal controls so that the financial statements do not contain material misstatements due to fraud or errors.

When preparing financial statements, management is responsible for assessing Wantai Biological's ability to continue as a going concern, disclosing matters related to continuing operations, and applying the going concern assumption, unless management plans to liquidate Wantai Biological, terminate operations, or has no other realistic choice.

Those charged with governance are responsible for overseeing Wantai Biologics' financial reporting processes.

6. Responsibilities of certified public accountants for auditing financial statements

Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free of material misstatements due to fraud or error, and to issue an audit report containing an audit opinion. Reasonable assurance is a high level of assurance, but it does not guarantee that an audit performed in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements may be due to fraud or error and are generally considered material if they are reasonably expected individually or in aggregate to affect the economic decisions made by users of financial statements based on the financial statements.

In the process of performing audit work in accordance with the auditing standards, we use professional judgment and maintain professional skepticism. At the same time, we also perform the following tasks:

(1) Identify and assess the risks of material misstatement of financial statements due to fraud or errors, design and implement audit procedures to respond to these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Because fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls, the risk of failing to detect a material misstatement resulting from fraud is higher than the risk of failing to detect a material misstatement resulting from error.

(2) Understand the internal controls related to auditing to design appropriate audit procedures.

(3) Evaluate the appropriateness of the accounting policies adopted by management and the reasonableness of accounting estimates and related disclosures.

(4) Draw conclusions on the appropriateness of management’s use of the going concern assumption. At the same time, based on the audit evidence obtained, a conclusion is drawn as to whether there are significant uncertainties in matters or conditions that may cause significant doubts about Wantai Biological Company's ability to continue as a going concern. If we conclude that significant uncertainty exists, auditing standards require us to draw the attention of users to the relevant disclosures in the financial statements in our audit report; if the disclosures are insufficient, we should issue a qualified opinion. Our conclusions are based on information available as of the date of the auditor's report. However, future events or conditions may cause Wantai Biotech to cease to continue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.

(6) Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Wantai Biological Company to express an audit opinion on the financial statements. We are responsible for directing, supervising and performing group audits and take full responsibility for our audit opinions.

We communicate with those charged with governance regarding, among other matters, the planned audit scope, timing and significant audit findings, including communication of significant internal control deficiencies identified during our audit.

We also provide statements to those charged with governance that we have complied with ethical requirements related to our independence and communicate with those charged with governance all relationships and other matters that may reasonably be believed to affect our independence, as well as related safeguards.

From the matters communicated with those charged with governance, we determine which matters are most significant to the audit of the current period's financial statements and therefore constitute key audit matters. We describe these matters in our auditor's report unless laws or regulations prohibit public disclosure of the matter or, in rare circumstances, we determine that the matter should not be communicated in our auditor's report if the adverse consequences of communicating the matter in the auditor's report are reasonably expected to outweigh the benefits in the public interest.

(No text below)

(This page has no text, but is the signature and seal page of the report No. [2026] 518Z0710 of Beijing Wantai Biopharmaceutical Co., Ltd.)

Rongcheng Accounting Firm Chinese Certified Public Accountants:

(Special General Partnership) Yang Ganlin (Project Partner)

Chinese Certified Public Accountant:

Tian Jianmin

Beijing, China Chinese Certified Public Accountants:

Peng Hongsi

April 20, 2026

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Beijing Wantai Biopharmaceutical Co., Ltd.

Notes to Financial Statements

2025

(Unless otherwise stated, the unit of amount is RMB)

1. Basic information of the company

Beijing Wantai Biopharmaceutical Co., Ltd. (hereinafter referred to as "Wantai Biopharmaceutical" or "the Company" or the "Company"), formerly known as Beijing Wantai Biopharmaceutical Co., Ltd., was established on April 24, 1991. In December 2007, the entire company was changed to Beijing Wantai Biopharmaceutical Co., Ltd., with a registered capital of 55 million yuan after the change. After capital increase and equity transfer, the company's registered capital as of December 31, 2019 was RMB 390 million.

As approved by the China Securities Regulatory Commission's Zhengjian Keke [2020] No. 518 and the Shanghai Stock Exchange's Self-Regulatory Supervision Decision No. 104, the company made its initial public offering of A shares on the Shanghai Stock Exchange on April 15, 2020. The total share capital before the public offering was 390 million shares, the number of shares issued this time was 43.6 million shares, and the post-issuance share capital was 433.6 million shares. Rongcheng Accounting Firm (Special General Partnership) verified the availability of funds for this issuance on April 21, 2020, and issued the "Rongcheng Yanzi [2020] No. 518Z0011" Capital Verification Report. The company's shares were publicly traded on the Shanghai Stock Exchange on April 29, 2020.

In May 2021, the company implemented a profit distribution plan based on the total share capital of 433.6 million shares before distribution, and distributed 0.4 bonus shares for each share, for a total of 173.44 million bonus shares. After the implementation of this profit distribution plan, the total share capital increased to 607.04 million shares.

In April 2022, the company implemented a profit distribution plan based on the total pre-distribution share capital of 607.04 million shares, with 0.2 bonus shares distributed per share and 0.25 shares converted from capital reserve for each share. A total of 121.408 million shares were distributed and 151.76 million shares were converted. After the implementation of this profit distribution plan, the total share capital increased to 880.208 million shares.

As approved by the China Securities Regulatory Commission’s Securities Regulatory Commission [2022] No. 1098, the company non-publicly issued 25,862,705 A shares. Rongcheng Accounting Firm (Special General Partnership) verified the availability of funds for this issuance on July 1, 2022, and issued the "Capital Verification Report" "Rongcheng Yanzi [2022] No. 518Z0069". The share registration procedures for the new shares were completed at the Shanghai Branch of China Securities Depository and Clearing Co., Ltd. on July 13, 2022.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

In June 2023, the company implemented a profit distribution plan. Based on the total share capital of 906,070,705 shares on the equity registration date for equity distribution, and 905,340,735 shares after deducting 729,970 shares in the company's special account for repurchase, 4 shares were transferred from capital reserve to all shareholders for every 10 shares, for a total of 362,136,294 shares. After the implementation of this profit distribution plan, the total share capital increased to 1,268,206,999 shares.

In September 2024, the company applied to cancel 3,084,225 shares of the company repurchased through centralized bidding transactions. After this cancellation, the total share capital was reduced to 1,265,122,774 shares.

In December 2025, the company canceled 729,970 shares that had been repurchased but not yet used in the special securities account for repurchase. After this cancellation, the company's total share capital was reduced from 1,265,122,774 shares to 1,264,392,804 shares.

As of December 31, 2025, the company's registered capital is RMB 1,264,392,804.00.

The legal representative of the company is Qiu Zixin.

The company's registered address is No. 31, Science Park Road, Changping District, Beijing.

The company is a high-tech enterprise engaged in the research, development, production and sales of in vitro diagnostic reagents, in vitro diagnostic instruments and vaccines. The company adheres to independent innovation and conquers key technologies, and has now developed into a leading domestic and internationally renowned enterprise in the research and development of innovative immune diagnostics and innovative vaccines.

Date of approval for issuance of financial statements: These financial statements have been approved for issuance by the company's board of directors on April 20, 2026.

2. Basis for preparation of financial statements

Basics of preparation

The company is based on going concern, recognizes and measures actual transactions and events in accordance with the Accounting Standards for Business Enterprises and their application guidelines and explanations of the standards, and prepares financial statements on this basis. In addition, the company also discloses relevant financial information in accordance with the China Securities Regulatory Commission's "Information Disclosure and Preparation Rules for Companies that Offer Securities to the Public No. 15 - General Provisions on Financial Reports (2023 Revision)".

Going concern

The Company has evaluated its ability to continue operating for 12 months from the end of the reporting period, and has found no events that affect the Company's ability to continue operating. It is reasonable for the Company to prepare financial statements on the basis of going concern.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

3. Important accounting policies and accounting estimates

The following important accounting policies and accounting estimates of the Company are formulated in accordance with the Accounting Standards for Business Enterprises. Businesses not mentioned are carried out in accordance with the relevant accounting policies in the Accounting Standards for Business Enterprises.

Statement on compliance with Accounting Standards for Business Enterprises

The financial statements prepared by the company comply with the requirements of accounting standards for enterprises and truly and completely reflect the company's financial status, operating results, changes in owner's equity, cash flow and other relevant information.

Accounting period

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

Business cycle

The company's normal operating cycle is one year.

Accounting standard currency

The company's accounting standard currency is RMB, and its overseas (branch) subsidiaries use the currency of the main economic environment in which they operate as the accounting standard currency.

Determination method and selection basis of materiality criteria

Project Materiality Criteria

Important prepayments Important debt investments with individual amounts exceeding 0.5% of total assets Important construction-in-progress projects with individual amounts exceeding 0.5% of total assets Important capitalized R&D projects with budgets exceeding 5% of total net assets Important accounts payable with individual amounts exceeding 0.5% of total assets Important other payables with individual amounts exceeding 0.5% of total assets Important cash received or paid related to investment activities with individual amounts exceeding 0.5% of total assets Important commitments with amounts exceeding 0.5% of total assets Significant contingencies when a single amount exceeds 0.5% of total assets When a single amount exceeds 0.5% of total assets

Total assets/total revenue/total profits exceed the group’s total assets/important non-wholly owned subsidiaries

15% of total revenue/profit for subsidiaries

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

(1) Business merger under common control

The assets and liabilities acquired by the company in a business combination are calculated based on the assets and liabilities acquired by the merged party from the ultimate controlling party on the merger date. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

and book value measurement in financial statements. Among them, if the accounting policies and accounting periods adopted by the merged party and the company before the business merger are different, the accounting policies and accounting periods will be unified based on the principle of importance, that is, the book value of the assets and liabilities of the merged party will be adjusted in accordance with the company's accounting policies and accounting periods. If there is a difference between the book value of the net assets acquired by the company in the business combination and the book value of the consideration paid, the capital reserve (capital premium or equity premium) will be adjusted first. If the balance of the capital reserve (capital premium or equity premium) is insufficient to offset it, the surplus reserve and undistributed profits will be offset in sequence.

For the accounting treatment method of business combination under common control achieved through step-by-step transactions, please refer to Note 3.7(5).

(2) Business combination not under common control

The identifiable assets and liabilities of the purchased party acquired by the Company in a business combination are measured at their fair value on the acquisition date. Among them, if the accounting policies and accounting periods adopted by the purchased party and the company before the business merger are different, the accounting policies and accounting periods shall be unified based on the principle of importance, that is, the book value of the assets and liabilities of the purchased party shall be adjusted in accordance with the accounting policies and accounting periods of the company. The difference between the company's merger cost on the acquisition date and the fair value of the acquiree's identifiable assets and liabilities acquired in the business merger is recognized as goodwill; if the merger cost is less than the difference between the fair values of the acquiree's identifiable assets and liabilities acquired in the business merger, the difference is recognized as goodwill. First, the merger cost and the fair value of the acquiree's identifiable assets and liabilities obtained in the business merger are reviewed. After the review, if the merger cost is still less than the fair value of the acquiree's identifiable assets and liabilities, the difference is recognized as the current profit and loss of the merger.

For the accounting treatment method of business combination not under common control achieved through step-by-step transactions, please refer to Note 3.7(5). (3) Treatment of transaction costs in business mergers

Intermediary fees such as auditing, legal services, evaluation and consulting, and other related management fees incurred for business mergers are included in the current profit and loss when incurred. The transaction costs of equity securities or debt securities issued as consideration for the merger shall be included in the initial recognition amount of the equity securities or debt securities.

Judgment criteria for control and preparation method of consolidated financial statements

(1) Judgment criteria for control and determination of consolidation scope

Control means that the company has power over the investee, enjoys variable returns by participating in the investee's relevant activities, and has the ability to use its power over the investee to affect the amount of its returns. The definition of control includes three basic elements: first, the investor has power over the investee; second, it enjoys variable returns due to participation in the investee’s relevant activities; third, it has the ability to use its power over the investee to affect the amount of its returns. When the company's investment in the investee meets the above three elements, it indicates that the company can control the investee.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

The scope of consolidation in consolidated financial statements is determined on the basis of control, including not only subsidiaries determined based on voting rights (or similar voting rights) alone or in combination with other arrangements, but also structured entities determined based on one or more contractual arrangements.

Subsidiaries refer to entities controlled by the company (including divisible parts of enterprises, investee units, and structured entities controlled by enterprises, etc.). Structured entities refer to entities designed without voting rights or similar rights as a decisive factor when determining their controllers (note: sometimes also called special purpose entities).

(2) Preparation method of consolidated financial statements

The company prepares consolidated financial statements based on its own and its subsidiaries' financial statements and other relevant information. The company prepares consolidated financial statements, treating the entire enterprise group as an accounting entity, and reflecting the overall financial status, operating results and cash flow of the enterprise group in accordance with the recognition, measurement and presentation requirements of relevant accounting standards for enterprises and in accordance with unified accounting policies and accounting periods.

① Consolidate the assets, liabilities, owners' equity, income, expenses, cash flow and other items of the parent company and subsidiaries. ② Offset the parent company's long-term equity investment in the subsidiary with the parent company's share of the subsidiary's owner's equity.

③ Offset the impact of internal transactions between the parent company and its subsidiaries, and between subsidiaries. If internal transactions indicate that impairment losses have occurred on related assets, the losses shall be recognized in full.

④Adjust special transaction matters from the perspective of the enterprise group.

(3) Processing of adding or removing subsidiaries during the reporting period

① Add subsidiaries or businesses

A. Subsidiaries or businesses added by business mergers under common control

(a) When preparing the consolidated balance sheet, adjust the opening balance of the consolidated balance sheet and adjust the relevant items in the comparative statement at the same time. It is deemed that the merged reporting entity has existed since the time when the ultimate controlling party began to control. (b) When preparing the consolidated income statement, the income, expenses and profits of the subsidiary and the business combination from the beginning of the current period to the end of the reporting period are included in the consolidated income statement, and relevant items in the comparative statement are adjusted at the same time. It is deemed that the post-merger reporting entity has existed since the time when the ultimate controlling party began to control.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(c) When preparing the consolidated cash flow statement, the cash flow of the subsidiary and the business combination from the beginning of the current period to the end of the reporting period is included in the consolidated cash flow statement, and relevant items in the comparative statement are adjusted at the same time. It is deemed that the post-merger reporting entity has existed since the time when the ultimate controlling party began to control.

B. Subsidiaries or businesses added by business combination not under common control

(a) When preparing the consolidated balance sheet, the opening balance of the consolidated balance sheet will not be adjusted.

(b) When preparing the consolidated income statement, include the income, expenses and profits of the subsidiary and business from the date of purchase to the end of the reporting period into the consolidated income statement.

(c) When preparing the consolidated cash flow statement, include the cash flow from the acquisition date of the subsidiary to the end of the reporting period into the consolidated cash flow statement.

②Dispose of subsidiaries or businesses

A. When preparing the consolidated balance sheet, the opening balance of the consolidated balance sheet will not be adjusted.

B. When preparing the consolidated income statement, include the subsidiary and the revenue, expenses and profits from the beginning of the business period to the disposal date into the consolidated income statement.

C. When preparing the consolidated cash flow statement, include the cash flow of the subsidiary and the business from the beginning of the period to the disposal date into the consolidated cash flow statement.

(4) Special considerations in merger elimination

① The long-term equity investment held by a subsidiary of the company shall be regarded as the company's treasury shares, and shall be listed as "less: treasury shares" under the owner's equity item in the consolidated balance sheet as a deduction from the owner's equity.

For long-term equity investments held by subsidiaries among each other, the long-term equity investment and its corresponding share of the owner's equity of the subsidiary are offset against each other in accordance with the offsetting method for the company's equity investments in subsidiaries.

② Since the "special reserves" and "general risk reserves" items are neither paid-in capital (or equity) nor capital reserves, nor are they different from retained earnings and undistributed profits, after the long-term equity investment and the subsidiary's owner's equity are offset, they will be restored according to the share attributable to the owners of the parent company.

③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the tax base of the taxable entity due to the offsetting of unrealized internal sales profits and losses, deferred income tax assets or deferred income tax liabilities will be recognized in the consolidated balance sheet, and the income tax expenses in the consolidated income statement will be adjusted at the same time, except for deferred income taxes related to transactions or events directly included in owner's equity and business mergers.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

④ Unrealized internal transaction gains and losses arising from the company's sale of assets to subsidiaries shall be fully offset against "net profits attributable to owners of the parent company". Unrealized internal transaction profits and losses arising from the sale of assets by a subsidiary to the company shall be allocated and offset between "net profits attributable to owners of the parent company" and "minority shareholders' profits and losses" in accordance with the company's distribution ratio to the subsidiary. Unrealized internal transaction profits and losses arising from the sale of assets between subsidiaries shall be allocated and offset between "net profits attributable to owners of the parent company" and "minority shareholders' profits and losses" in accordance with the company's distribution ratio to the selling subsidiary.

⑤ If the current loss shared by the minority shareholders of a subsidiary exceeds the minority shareholders' share of the subsidiary's opening owner's equity, the balance should still be offset against the minority shareholders' equity.

(5) Accounting treatment of special transactions

①Purchase minority shareholders’ equity

The company purchases the subsidiary's equity owned by minority shareholders. In individual financial statements, the investment cost of the newly acquired long-term equity investment for the purchase of the minority equity is measured according to the fair value of the consideration paid. In the consolidated financial statements, the difference between the newly acquired long-term equity investment due to the purchase of minority equity and the share of the subsidiary's net assets calculated continuously from the date of purchase or merger based on the new shareholding ratio shall be adjusted to the capital reserve (capital premium or equity premium). If the capital reserve is insufficient to offset, the surplus reserve and undistributed profits shall be offset in sequence.

② Obtaining control of a subsidiary step by step through multiple transactions

A. Merger of enterprises under common control through multiple transactions step by step

On the merger date, the company determines the initial investment cost of the long-term equity investment in its individual financial statements based on the share of the book value of the subsidiary's net assets in the ultimate controlling party's consolidated financial statements that it will enjoy after the merger; the initial investment cost is the same as the long-term equity before the merger. The difference between the book value of the investment and the book value of the newly paid consideration for further shares acquired on the merger date is adjusted to the capital reserve (capital premium or equity premium). If the capital reserve (capital premium or equity premium) is insufficient to offset, the surplus reserve and undistributed profits are offset in sequence.

In the consolidated financial statements, the assets and liabilities of the merged party acquired by the combining party during the merger are measured according to their book value in the consolidated financial statements of the ultimate controlling party on the date of merger, except for adjustments due to differences in accounting policies and accounting periods. The difference between the book value of the investments held before the merger plus the book value of the new consideration paid on the date of merger and the book value of the net assets acquired in the merger is adjusted to the capital reserve (equity premium/capital premium). If the capital reserve is insufficient for offset, the retained earnings are adjusted.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

For equity investments held by the merging party before acquiring control of the merged party, relevant profits and losses, other comprehensive income and other changes in owner's equity have been recognized between the date of acquisition of the original equity and the date when the merging party and the merged party are under the final control of the same party, whichever is later, to the date of merger, and shall be offset against the opening retained earnings or current profits and losses of the comparative statement period respectively. B. Merger of enterprises not under common control is realized step by step through multiple transactions.

On the merger date, in individual financial statements, the sum of the book value of the original long-term equity investment plus the new investment cost on the merger date will be regarded as the initial investment cost of the long-term equity investment on the merger date.

In the consolidated financial statements, the equity of the acquiree held before the acquisition date is remeasured according to the fair value of the equity on the acquisition date. The equity of the acquiree held before the acquisition date is designated as a financial asset measured at fair value and its changes are included in other comprehensive income. , the difference between the fair value and its book value is included in retained earnings, and the cumulative fair value changes of the equity that were originally included in other comprehensive income are transferred to retained earnings; the equity of the purchased party held before the purchase date is measured at fair value and its changes are included in the current profit and loss. For assets or long-term equity investments accounted for by the equity method, the difference between the fair value and its book value is included in the current investment income; the equity of the purchased party held before the acquisition date involves other comprehensive income under the equity method and net profit and loss and other comprehensive income under the equity method. If there are other changes in owners' equity other than profit distribution, the other comprehensive income related thereto will be accounted for on the date of purchase on the same basis as the investee's direct disposal of relevant assets or liabilities, and the changes in other owners' equity related thereto will be converted into investment income for the current period on the date of purchase.

③The company disposes of long-term equity investment in subsidiaries but does not lose control

If the parent company partially disposes of its long-term equity investment in a subsidiary without losing control, in the consolidated financial statements, the difference between the disposal price and the share of the subsidiary's net assets continuously calculated from the date of purchase or merger will be adjusted to the capital reserve (capital premium or equity premium). If the capital reserve is insufficient for offset, the retained earnings will be adjusted.

④The company disposes of its long-term equity investment in the subsidiary and loses control

A. One transaction disposal

If the company loses control over the investee due to disposal of part of its equity investment or other reasons, when preparing consolidated financial statements, the remaining equity will be remeasured according to its fair value on the date when control is lost. The difference between the sum of the consideration obtained for disposing of the equity and the fair value of the remaining equity, minus the sum of the share of the original subsidiary's net assets calculated continuously from the date of purchase or merger based on the original shareholding ratio and the sum of goodwill, shall be included in the investment income in the period when control is lost.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Other comprehensive income related to the equity investment of the atomic company will be accounted for on the same basis as the direct disposal of relevant assets or liabilities by the original subsidiary when control is lost. Other changes in owner's equity related to the original subsidiary that are accounted for under the equity method will be transferred to the current profit and loss when control is lost.

B. Step-by-step disposal of multiple transactions

In the consolidated financial statements, we should first determine whether the step-by-step transaction is a "package transaction".

If the step-by-step transaction does not belong to a "package transaction", in the individual financial statements, for each transaction before the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to each equity disposal will be carried forward, and the difference between the proceeds and the book value of the long-term equity investment disposed shall be included in the investment income of the current period; in the consolidated financial statements, it shall be handled in accordance with the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiary without losing control."

If the step-by-step transaction is a "package transaction", each transaction should be accounted for as a transaction in which the subsidiary is disposed of and control is lost; in individual financial statements, 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 equity disposed is first recognized as other comprehensive income. When control is lost, it will be transferred to the profit and loss of the current period when control is lost; in the consolidated financial statements, for each transaction before the loss of control, the difference between the disposal price and the share of the subsidiary's net assets corresponding to the disposal investment should be recognized as other comprehensive income, and when control is lost, it will be transferred to the profit and loss of the current period when control is lost.

If the terms, conditions and economic impact of each transaction meet one or more of the following conditions, multiple transactions are usually accounted for as a "package transaction":

(a) The transactions were entered into simultaneously or with consideration of their influence on each other.

(b) These transactions as a whole can achieve a complete business result.

(d) A transaction that is uneconomical when considered alone is economical when considered together with other transactions. ⑤ Dilution of the equity ratio owned by the parent company due to capital increase by minority shareholders of the sub-company

Other shareholders (minority shareholders) of the subsidiary increase capital in the subsidiary, thereby diluting the parent company's equity ratio in the subsidiary. In the consolidated financial statements, the share of the subsidiary's book net assets before the capital increase is calculated based on the parent company's equity ratio before the capital increase. The difference between this share and the subsidiary's share of the subsidiary's book net assets after the capital increase calculated based on the parent company's shareholding ratio after the capital increase is adjusted to the capital reserve (capital premium or equity premium). If the capital reserve (capital premium or equity premium) is insufficient to offset, the retained earnings are adjusted.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Classification of joint arrangements and accounting treatment of joint operations

A joint arrangement refers to an arrangement that is jointly controlled by two or more parties. The Company's joint venture arrangements are divided into joint operations and joint ventures.

(1) Joint operation

A joint operation refers to a joint arrangement in which the Company enjoys the relevant assets of the arrangement and assumes the relevant liabilities of the arrangement. The company confirms the following items related to its share of interests in joint operations, and performs accounting treatments in accordance with the relevant accounting standards for enterprises:

① Confirm the assets held individually and the assets held jointly according to their shares;

② Confirm the liabilities borne individually and the liabilities borne jointly according to their shares;

③ Recognize the income generated from the sale of its share of joint operating output;

④ Recognize the income generated by the joint operation from the sale of output according to its share;

⑤ Recognize the expenses incurred individually, and recognize the expenses incurred by joint operations according to their share.

(2) Joint venture

A joint venture is a joint arrangement in which the Company only has rights to the net assets of the arrangement.

The Company accounts for investments in joint ventures in accordance with the provisions on equity method accounting for long-term equity investments.

Determination criteria for cash and cash equivalents

Cash refers to corporate cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments that are held for a short period (generally due within three months from the date of purchase), are highly liquid, are easily convertible into known amounts of cash, and have little risk of changes in value.

Foreign currency business and foreign currency statement conversion

(1) Method for determining the conversion exchange rate in foreign currency transactions

When the Company's foreign currency transactions are initially recognized, they are converted into the accounting functional currency using the spot exchange rate on the date of the transaction or an exchange rate determined in a systematic and reasonable manner that is approximate to the spot exchange rate on the date of the transaction (hereinafter referred to as the "approximate exchange rate of the spot exchange rate").

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(2) Conversion method of foreign currency monetary items on the balance sheet date

On the balance sheet date, foreign currency monetary items are translated using the spot exchange rate on the balance sheet date. Exchange differences arising from differences between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition or the previous balance sheet date are included in the current profit and loss. For foreign currency non-monetary items measured at historical cost, the spot exchange rate on the date of transaction is still used for translation; for inventories measured at the lower of cost and net realizable value, the inventory is purchased in foreign currency and the net realizable value of the inventory on the balance sheet date is If the value is reflected in a foreign currency, the net realizable value is first converted into the recording currency amount according to the spot exchange rate on the balance sheet date, and then compared with the inventory cost reflected in the recording currency to determine the ending value of the inventory; for fair value Foreign currency non-monetary items measured at fair value are converted using the spot exchange rate on the date when the fair value is determined. For financial assets measured at fair value with changes included in current profits and losses, the difference between the converted accounting functional currency amount and the original accounting functional currency amount The amount is included in the current profit and loss. For non-trading equity instrument investments designated as measured at fair value and whose changes are included in other comprehensive income, the difference between the converted accounting functional currency amount and the original accounting functional currency amount is included in other comprehensive income.

(3) Conversion method of foreign currency statements

Before converting the financial statements of an enterprise's overseas operations, it is necessary to adjust the accounting period and accounting policies of the overseas operations to make them consistent with the accounting period and accounting policies of the enterprise, and then prepare financial statements in the corresponding currency (currency other than the accounting standard currency) based on the adjusted accounting policies and accounting periods, and then convert the financial statements of the overseas operations according to the following method:

① The assets and liability items in the balance sheet are translated at the spot exchange rate on the balance sheet date. Owner's equity items, except for the "undistributed profits" items, are translated at the spot exchange rate at the time of occurrence.

② The income and expense items in the income statement are converted using the spot exchange rate on the date of transaction or an approximate exchange rate of the spot exchange rate.

③ Foreign currency cash flows and cash flows of overseas subsidiaries are translated using the spot exchange rate on the date of cash flow occurrence or an approximate exchange rate of the spot exchange rate. The impact of exchange rate changes on cash should be presented separately in the cash flow statement as an adjustment item.

④ The resulting translation difference of foreign currency financial statements shall be listed in the "other comprehensive income" item under the owner's equity item in the consolidated balance sheet when preparing the consolidated financial statements.

When an overseas operation is disposed of and control is lost, the translation difference of foreign currency statements listed under the owner's equity item in the balance sheet and related to the overseas operation shall be transferred to the current profit and loss of the disposal in full or in proportion to the disposal of the overseas operation. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Financial instruments

A financial instrument refers to a contract that forms a financial asset of one party and a financial liability or equity instrument of another party. (1) Recognition and derecognition of financial instruments

When the company becomes a party to a financial instrument contract, the relevant financial assets or financial liabilities are recognized.

Financial assets shall be derecognized if they meet one of the following conditions:

①The contractual right to receive cash flows from the financial asset terminates;

②The financial asset has been transferred and meets the following conditions for derecognition of financial asset transfer.

If the current obligation of a financial liability (or part thereof) has been discharged, the financial liability (or part thereof) shall be derecognised. The company (borrower) and the lender sign an agreement to replace the original financial liability by assuming a new financial liability, and if the contract terms of the new financial liability are substantially different from the original financial liability, the original financial liability will be terminated and the new financial liability will be recognized at the same time. If the company makes substantial modifications to the contract terms of the original financial liability (or part thereof), it shall terminate the original financial liability and recognize a new financial liability in accordance with the modified terms.

When financial assets are bought and sold in a regular manner, accounting recognition and derecognition will be carried out based on the transaction date. The conventional way of buying and selling financial assets refers to delivering financial assets in accordance with the terms of the contract and at the time schedule determined by regulations or market practices. The trading day refers to the date when the company commits to buy or sell financial assets.

(2) Classification and measurement of financial assets

Upon initial recognition, based on the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the company classifies financial assets into: financial assets measured at amortized cost, financial assets measured at fair value with changes included in current profits and losses, and financial assets measured at fair value with changes included in other comprehensive income. Financial assets may not be reclassified after initial recognition unless the Company changes the business model in which the financial assets are managed, in which case all affected related financial assets are reclassified on the first day of the first reporting period following the change in business model.

Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value and whose changes are included in the current profit and loss, the relevant transaction costs are directly included in the current profit and loss, and the relevant transaction costs of other types of financial assets are included in their initial recognition amount. Notes receivable and accounts receivable arising from the sale of goods or provision of services that do not contain or take into account significant financing components are initially measured by the company based on the transaction price defined in the revenue standards.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

The subsequent measurement of a financial asset depends on its classification:

①Financial assets measured at amortized cost

If a financial asset meets the following conditions at the same time, it is classified as a financial asset measured at amortized cost: the company's business model for managing the financial asset is to collect contractual cash flows as the goal; the contract terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal and interest based on the outstanding principal amount. For such financial assets, the actual interest rate method is used and subsequent measurement is carried out at amortized cost. Gains or losses arising from their derecognition, amortization or impairment based on the actual interest rate method are included in the current profits and losses.

②Financial assets measured at fair value and changes included in other comprehensive income

If a financial asset meets the following conditions at the same time, it is classified as a financial asset measured at fair value with changes included in other comprehensive income: the company's business model for managing this financial asset is to both collect contractual cash flows and sell financial assets; the contract terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal and interest based on the outstanding principal amount. For such financial assets, fair value is used for subsequent measurement. Except for impairment losses or gains and exchange gains and losses that are recognized as current profits and losses, changes in the fair value of such financial assets are recognized as other comprehensive income until the financial assets are derecognised, and their accumulated profits or losses are transferred to current profits and losses. However, the interest income related to the financial assets calculated using the actual interest rate method is included in the current profit and loss.

The Company irrevocably chooses to designate some non-trading equity instrument investments as financial assets measured at fair value with changes included in other comprehensive income. Only relevant dividend income will be included in the current profit and loss, and changes in fair value will be recognized as other comprehensive income until the financial assets are derecognised, and their accumulated gains or losses will be transferred to retained earnings. ③Financial assets measured at fair value and changes included in current profits and losses

Financial assets other than the above-mentioned financial assets measured at amortized cost and financial assets measured at fair value through other comprehensive income are classified as financial assets measured at fair value through profit or loss for the current period. For such financial assets, fair value is used for subsequent measurement, and all changes in fair value are included in the current profit and loss. (3) Classification and measurement of financial liabilities

The Company classifies financial liabilities into financial liabilities measured at fair value through current profits and losses, loan commitments and financial guarantee contract liabilities for loans with lower than market interest rates, and financial liabilities measured at amortized cost.

The subsequent measurement of financial liabilities depends on their classification:

①Financial 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 fair. Notes to the financial statements of Beijing Wantai Biopharmaceutical Co., Ltd.

Financial liabilities whose value is measured and whose changes are included in the current profit and loss. After initial recognition, such financial liabilities are subsequently measured at fair value. Except for those related to hedging accounting, the gains or losses (including interest expenses) incurred are included in the current profits and losses. However, for financial liabilities designated by the Company as measured at fair value with changes included in current profits and losses, the change in the fair value of the financial liability caused by changes in its own credit risk is included in other comprehensive income. When the financial liability is derecognised, the accumulated gains and losses previously included in other comprehensive income should be transferred out of other comprehensive income and included in retained earnings.

②Loan commitments and financial guarantee contract liabilities

A loan commitment is a commitment provided by the Company to customers to provide loans to customers under established contract terms during the commitment period. Loan commitments are provided with impairment losses based on the expected credit loss model.

A financial guarantee contract refers to a contract that requires the company to pay a specific amount of compensation to the contract holder who has suffered a loss when a specific debtor is unable to repay the debt in accordance with the terms of the original or modified debt instrument when due. Financial guarantee contract liabilities are subsequently measured based on the higher of the loss reserve amount determined based on the impairment principle of financial instruments and the initial recognition amount minus the accumulated amortization amount determined based on the revenue recognition principle.

③Financial liabilities measured at amortized cost

After initial recognition, other financial liabilities are measured at amortized cost using the effective interest rate method.

Except for special circumstances, financial liabilities and equity instruments are distinguished according to the following principles:

① If the company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation, then the contractual obligation meets the definition of a financial liability. Although some financial instruments do not explicitly contain terms and conditions for the obligation to deliver cash or other financial assets, they may indirectly form contractual obligations through other terms and conditions.

② If a financial instrument must be settled or can be settled with the company's own equity instruments, it is necessary to consider whether the company's own equity instruments used to settle the instrument are used as a substitute for cash or other financial assets, or to enable the holder of the instrument to enjoy the remaining equity in the issuer's assets after deducting all liabilities. If it is the former, the instrument is a financial liability of the issuer; if it is the latter, the instrument is an equity instrument of the issuer. In some cases, a financial instrument contract stipulates that the company must or can use its own equity instruments to settle the financial instrument, and the amount of the contractual rights or contractual obligations is equal to the number of its own equity instruments that can be acquired or required to be delivered multiplied by its fair value at the time of settlement. Regardless of whether the amount of the contractual rights or contractual obligations is fixed or is based entirely or partially on changes in variables other than the market price of the company's own equity instruments (such as interest rates, the price of a certain commodity or the price of a certain financial instrument), the contract is classified as a financial liability.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(4) Derivative financial instruments and embedded derivatives

Derivative financial instruments are initially measured at their fair value on the date when the derivative transaction contract is signed, and are subsequently measured at their fair value. Derivative financial instruments with a positive fair value are recognized as an asset, and derivative financial instruments with a negative fair value are recognized as a liability.

Except for the effective part of the cash flow hedging, which is included in other comprehensive income and transferred out and included in the current profit and loss when the hedged item affects the profit and loss, gains or losses arising from changes in the fair value of derivative instruments are directly included in the current profit and loss.

For hybrid instruments containing embedded derivatives, such as if the main contract is a financial asset, the relevant provisions on the classification of financial assets shall apply to the hybrid instrument as a whole. If the main contract is not a financial asset, and the hybrid instrument is not measured at fair value and its changes are included in the current profit and loss for accounting treatment, and there is no close relationship between the economic characteristics and risks of the embedded derivative and the main contract, and if the conditions of the embedded derivative are the same and the stand-alone instrument meets the definition of a derivative, the embedded derivative is separated from the hybrid instrument and treated as a separate derivative financial instrument. If the fair value of the embedded derivative cannot be measured separately on the acquisition date or subsequent balance sheet date, the hybrid instrument as a whole is designated as a financial asset or financial liability at fair value through profit or loss for the current period.

(5) Impairment of financial instruments

The Company recognizes loss provisions based on expected credit losses for financial assets measured at amortized cost, debt investments measured at fair value with changes included in other comprehensive income, contract assets, lease receivables, loan commitments and financial guarantee contracts, etc.

①Measurement of expected credit losses

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 actual interest rate, that is, the present value of all cash shortfalls. Among them, credit-impaired financial assets purchased or originated by the company should be discounted according to the credit-adjusted actual interest rate of the financial assets.

Lifetime expected credit losses refer to the expected credit losses caused by all possible default events that may occur during the entire expected life of a financial instrument.

Expected credit losses within the next 12 months refer to the expected credit losses caused by default events on financial instruments that may occur within 12 months after the balance sheet date (if the expected duration of the financial instrument is less than 12 months, the expected duration), and are part of the expected credit losses throughout the duration.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

On each balance sheet date, the Company measures the expected credit losses of financial instruments at different stages respectively. If the credit risk of a financial instrument has not increased significantly since initial recognition, it is in the first stage, and the Company will measure loss provisions based on the expected credit losses within the next 12 months; if the credit risk of a financial instrument has increased significantly since initial recognition but has not yet incurred credit impairment, it is in the second stage, and the Company will measure loss provisions based on the expected credit losses throughout the entire duration of the instrument; if a financial instrument has experienced credit impairment since initial recognition, it is in the third stage, and the Company will measure loss provisions based on the expected credit losses throughout the entire duration of the instrument.

For financial instruments with low credit risk on the balance sheet date, the Company assumes that its credit risk has not increased significantly since initial recognition, and measures loss provisions based on expected credit losses within the next 12 months.

For financial instruments in the first and second stages and with lower credit risk, the company calculates interest income based on its book balance before impairment provisions and actual interest rate. For financial instruments in the third stage, interest income is calculated based on its book balance minus the amortized cost and actual interest rate after impairment provisions have been made.

For notes receivable, accounts receivable, receivable financing and contract assets, regardless of whether there is a significant financing component, the company measures loss provisions based on expected credit losses throughout the duration.

A. Receivables/Contract Assets

For bills receivable, accounts receivable, other receivables, receivables financing, contract assets and long-term receivables that have objective evidence of impairment, and other bills receivable, accounts receivable, contract assets and long-term receivables that are subject to individual assessment, individual impairment tests are conducted, expected credit losses are confirmed, and individual impairment provisions are made. For notes receivable, accounts receivable, other receivables, receivables financing, contract assets and long-term receivables where there is no objective evidence of impairment or when a single financial asset cannot assess expected credit losses at a reasonable cost, the company divides notes receivable, accounts receivable, other receivables, receivables financing, contract assets and long-term receivables into several combinations based on credit risk characteristics, and calculates expected credit losses on the basis of the combinations. The basis for determining the combinations is as follows:

The basis for determining the combination of notes receivable is as follows:

Notes Receivable Portfolio 1 Commercial Acceptance Bill

Notes Receivable Portfolio 2 Bank Acceptance Bill

For notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates expected credit losses through default risk exposure and the expected credit loss rate throughout the duration.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

The basis for determining the combination of accounts receivable is as follows:

Accounts receivable portfolio 1 Receivables from customers other than related parties within the scope of consolidation

Accounts receivable portfolio 2 Related party customers within the scope of receivable consolidation

For accounts receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, prepares a comparison table between the aging of accounts receivable and the expected credit loss rate for the entire duration, and calculates expected credit losses.

The basis for determining the combination of other receivables is as follows:

Other receivables portfolio 1 Interest receivable

Other receivables portfolio 2 Dividends receivable

Other receivables portfolio 3 Accounts receivable from related parties outside the scope of consolidation

Other receivables portfolio 4 Accounts receivable from related parties within the scope of consolidation

For other receivables classified into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates expected credit losses through default risk exposure and expected credit loss rate within the next 12 months or the entire duration.

The basis for determining the combination of receivables financing is as follows:

Receivables Financing Portfolio 1 Commercial Acceptance Bill

Receivables Financing Package 2 Bank Acceptance Bill

For the financing of receivables divided into portfolios, the Company refers to historical credit loss experience, combines current conditions and predictions of future economic conditions, and calculates expected credit losses through default risk exposure and the expected credit loss rate throughout the duration.

The Company's aging calculation method based on the combination of aging confirmation credit risk characteristics:

Aging Provision ratio of accounts receivable Proportion of other receivables within 1 year 5% 5% 1 to 2 years 10% 10% 2 to 3 years 20% 20%

3 to 4 years 50% 50% Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Account aging Provision ratio of accounts receivable Provision ratio of other receivables

4 to 5 years 80% 80% More than 5 years 100% 100% B. Debt investment, other debt investment

For debt investments and other debt investments, the Company calculates expected credit losses through the default risk exposure and the expected credit loss rate within the next 12 months or throughout the duration, based on the nature of the investment and various types of counterparties and risk exposures.

② Has lower credit risk

If the default risk of a financial instrument is low, the borrower has a strong ability to fulfill its contractual cash flow obligations in the short term, and even if there are adverse changes in the economic situation and operating environment in the longer term, it may not necessarily reduce the borrower's ability to fulfill its contractual cash flow obligations, the financial instrument is considered to have lower credit risk.

③Credit risk increases significantly

The Company compares the default probability of the financial instrument within the expected duration determined on the balance sheet date with the default probability within the expected duration determined at the time of initial recognition to determine the relative change in the default probability of the financial instrument during the expected duration to assess whether the credit risk of the financial instrument has increased significantly since the initial recognition.

When determining whether credit risk has increased significantly since initial recognition, the Company considers reasonable and supportable information, including forward-looking information, that is available without unnecessary additional cost or effort. The information considered by the company includes: A. Whether there are significant changes in internal price indicators caused by changes in credit risk;

B. Adverse changes in business, financial or economic conditions that are expected to result in significant changes in the debtor's ability to fulfill its debt repayment obligations;

C. Whether the actual or expected operating results of the debtor have significantly changed; whether the regulatory, economic or technological environment in which the debtor is located has significantly adverse changes;

D. Whether the value of the collateral used as collateral for the debt or the quality of the guarantee or credit enhancement provided by a third party has changed significantly. These changes are expected to reduce the debtor's economic motivation to repay within the time limit specified in the contract or affect the probability of default; E. Whether there is a significant change in the debtor's economic motivation that is expected to reduce the debtor's repayment within the time limit specified in the contract;

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

F. Anticipated changes in the loan contract, including whether anticipated breaches of the contract may result in the exemption or revision of contractual obligations, granting interest-free periods, jumps in interest rates, requirements for additional collateral or guarantees, or other changes to the contractual framework of financial instruments;

G. Whether the debtor’s expected performance and repayment behavior have changed significantly;

H. Whether the contract payment is overdue for more than 30 days (inclusive).

Depending on the nature of the financial instrument, the Company assesses whether the credit risk has increased significantly on the basis of a single financial instrument or a combination of financial instruments. When evaluating based on a portfolio of financial instruments, the Company may classify financial instruments based on common credit risk characteristics, such as overdue information and credit risk ratings.

Normally, if it is overdue for more than 30 days, the Company determines that the credit risk of a financial instrument has increased significantly. Unless the company can obtain reasonable and evidence-based information without excessive cost or effort, proving that although the payment period stipulated in the contract exceeds 30 days, the credit risk has not increased significantly since the initial recognition.

④ Financial assets that have suffered credit impairment

The Company assesses whether credit impairment has occurred on financial assets measured at amortized cost and debt investments measured at fair value through other comprehensive income on the balance sheet date. When one or more events occur that have an adverse impact on the expected future cash flows of a financial asset, the financial asset becomes a credit-impaired financial asset. Evidence that a financial asset has been credit-impaired includes the following observable information:

The issuer or the debtor encounters significant financial difficulties; the debtor breaches the contract, such as default or overdue payment of interest or principal; the creditor grants the debtor concessions that would not be made under any other circumstances due to economic or contractual considerations related to the debtor's financial difficulties; the debtor is likely to go bankrupt or undergo other financial reorganization; the issuer or debtor's financial difficulties cause the active market for the financial asset to disappear; a financial asset is purchased or originated at a substantial discount, and the discount reflects the fact that a credit loss has occurred.

⑤ Presentation of expected credit loss provisions

In order to reflect changes in the credit risk of financial instruments since initial recognition, the company remeasures expected credit losses on each balance sheet date, and the resulting increase or reversal of loss provisions shall be 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.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

⑥Writing off

If the company no longer reasonably expects that the contractual cash flows of a financial asset can be fully or partially recovered, it will directly write down the book balance of the financial asset. Such a write-down constitutes the derecognition of the relevant financial asset. This situation typically occurs when the Company determines that the debtor does not have the assets or sources of income to generate sufficient cash flow to repay the amount that will be written down. If a financial asset that has been written down is later recovered, the reversal of the impairment loss will be included in the profit and loss of the current period of recovery. (6) Transfer of financial assets

Financial asset transfer refers to the following two situations:

A. Transfer the contractual right to receive cash flows from financial assets to another party;

B. Transfer the financial asset in whole or in part to another party, but retain the contractual right to collect the cash flow from the financial asset and assume the contractual obligation to pay the collected cash flow to one or more payees.

① Termination of recognition of transferred financial assets

If substantially all the risks and rewards of ownership of a financial asset have been transferred to the transferee, or if substantially all the risks and rewards of ownership of a financial asset have neither been transferred nor retained, but control of the financial asset has been given up, the financial asset shall be derecognised.

When judging whether control of the transferred financial asset has been given up, the actual ability of the transferee to sell the financial asset is based on the transferee's actual ability to sell the financial asset. If the transferee can unilaterally sell the transferred financial assets as a whole to an unrelated third party, and there are no additional conditions to restrict this sale, the company has given up control of the financial assets.

When the Company determines whether the transfer of financial assets meets the conditions for derecognition of financial assets, the Company pays attention to the essence of the transfer of financial assets.

If the overall transfer of financial assets meets the conditions for derecognition, the difference between the following two amounts will be included in the current profit and loss: A. The book value of the transferred financial assets;

B. The sum of the consideration received for the transfer and the amount corresponding to the derecognition portion 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 financial assets classified as financial assets measured at fair value and their changes are included in other comprehensive income in accordance with Article 18 of "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments").

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

If a partial transfer of a financial asset meets the conditions for derecognition, the overall book value of the transferred financial asset shall be apportioned between the derecognized part and the non-derecognized part (in this case, the retained service assets shall be deemed to be part of the continued recognition of financial assets) 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:

A. The book value of the derecognized part on the date of derecognition;

B. The sum of the consideration for the derecognition part and the amount of the corresponding derecognition part of the cumulative amount of changes in fair value originally included in other comprehensive income (the financial assets involved in the transfer are financial assets classified as financial assets measured at fair value and their changes are included in other comprehensive income in accordance with Article 18 of "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments").

② Continue to be involved in the transferred financial assets

If it neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, and does not give up control of the financial asset, the relevant financial assets shall be recognized to the extent of its continued involvement in the transferred financial assets, and the relevant liabilities shall be recognized accordingly.

The degree of continued involvement in the transferred financial assets refers to the degree of risk or reward that the enterprise bears from changes in the value of the transferred financial assets.

③Continue to recognize the transferred financial assets

If it still retains substantially all the risks and rewards associated with the ownership of the transferred financial asset, the entire transferred financial asset shall continue to be recognized, and the consideration received shall be recognized as a financial liability.

The financial assets and the recognized related financial liabilities shall not be offset against each other. In subsequent accounting periods, the enterprise shall continue to recognize the income (or gains) generated by the financial assets and the expenses (or losses) generated by the financial liabilities.

(7) Offset of financial assets and financial liabilities

Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset against each other. However, if the following conditions are met at the same time, the net amount after offsetting each other will be presented in the balance sheet:

The company has the legal right to offset the recognized amount, and such legal right is currently enforceable;

The Company plans to settle on a net basis, or to 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 transferor shall not offset the transferred financial assets and related liabilities.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(8) Method for determining fair value of financial instruments

Please refer to Note 3.12 for the method of determining the fair value of financial assets and financial liabilities.

Fair value measurement

Fair value refers to the price that can be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The company measures the fair value of relevant assets or liabilities at the price in the main market. If there is no main market, the company measures the fair value of the relevant assets or liabilities at the most favorable market price. The Company uses the assumptions used by market participants to maximize their economic interests when pricing the asset or liability.

The main market refers to the market with the largest trading volume and the highest level of trading activity for relevant assets or liabilities; the most favorable market refers to the market that can sell relevant assets at the highest amount or transfer relevant liabilities at the lowest amount after taking into account transaction costs and transportation costs.

For financial assets or financial liabilities that have an active market, the Company determines their fair value using quotes in the active market. If there is no active market for a financial instrument, the Company uses valuation techniques to determine its fair value.

When measuring non-financial assets at fair value, the ability of market participants to use the asset for its best purpose to generate economic benefits is considered, or the ability to sell the asset to other market participants that can be used for its best purpose to generate economic benefits.

①Valuation technology

The Company adopts valuation techniques that are applicable under the current circumstances and supported by sufficient available data and other information. The valuation techniques used mainly include market method, income method and cost method. The company uses a method consistent with one or more of the valuation techniques to measure fair value. If it uses multiple valuation techniques to measure fair value, it considers the rationality of each valuation result and selects the amount that best represents the fair value under the current circumstances as the fair value.

In the application of valuation techniques, the Company gives priority to the use of relevant observable input values, and only uses unobservable input values when relevant observable input values cannot be obtained or are impractical to obtain. Observable input values refer to input values that can be obtained from market data. This input reflects the assumptions used by market participants when pricing the underlying asset or liability. Unobservable input values refer to input values that cannot be obtained from market data. The input is based on the best available information about the assumptions used by market participants in pricing the underlying asset or liability.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

②Fair value level

The company divides the input values used in fair value measurement into three levels, and first uses the first level input values, then uses the second level input values, and finally uses the third level input values. 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. The second level input value is the directly or indirectly observable input value of the relevant assets or liabilities in addition to the first level input value. The third level input value is the unobservable input value of the relevant asset or liability.

Inventory

(1) Classification of inventory

Inventories refer to the finished products or commodities held by the company for sale in daily activities, products in progress during the production process, materials and supplies consumed in the production process or the provision of labor services, including raw materials, semi-finished products, inventory goods, turnover materials, etc.

(2) Valuation method for issued inventory

The Company's inventories are valued using the weighted average method when shipped.

(3) Inventory inventory system

The company's inventory adopts a perpetual inventory system, which is counted at least once a year. The amount of inventory gain and loss is included in the current year's profit and loss. (4) Recognition standards and accrual methods for inventory depreciation provisions

On the balance sheet date, it is measured at the lower of cost and net realizable value. If the inventory cost is higher than its net realizable value, a provision for inventory depreciation is made and included in the current profit and loss.

When determining the net realizable value of inventory, it is based on the reliable evidence obtained and factors such as the purpose of holding the inventory and the impact of events after the balance sheet date are considered.

① For inventories that are directly for sale, such as finished products, commodities and materials for sale, during the normal production and operation process, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes. For inventories held for the execution of sales contracts or service contracts, the contract price is used as the measurement basis of its net realizable value; if the quantity of inventory held is greater than the quantity ordered in the sales contract, the excess net realizable value of the inventory is measured based on the general sales price. For materials used for sale, the market price is used as the measurement basis of their net realizable value.

② The inventory of materials that need to be processed, in the normal production and operation process, is determined by the estimated selling price of the finished products less the estimated costs to be incurred upon completion, the estimated sales expenses and related taxes. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

Current net worth. If the net realizable value of the finished product produced by it is higher than the cost, the material is measured at cost; if the drop in material price indicates that the net realizable value of the finished product is lower than the cost, the material is measured at net realizable value, and inventory depreciation provisions are made based on the difference.

③The company generally accrues inventory depreciation provisions based on individual inventory items; for inventories with large quantities and low unit prices, accrual is based on inventory categories.

④ On the balance sheet date, if the factors that caused the previous write-down of the inventory value have disappeared, the amount of the write-down will be restored and reversed within the amount of the inventory depreciation provision that was originally accrued, and the reversed amount will be included in the current profit and loss.

(5) Amortization method of turnover materials

① Amortization method for low-value consumables: The one-time write-off method is adopted when they are used.

②Amortization method of packaging materials: The one-time write-off method is adopted when receiving the goods.

Contract assets and contract liabilities

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between performance obligations and customer payments. Consideration that the Company has a right to receive for transferring goods or providing services to a customer (and that right is dependent on factors other than the passage of time) is shown as a contract asset. The Company's obligations to transfer goods or provide services to customers for consideration received or receivable from customers are listed as contract liabilities.

Please refer to Note 3.11 for details of the Company’s determination method and accounting treatment method of expected credit losses on contract assets.

Contract assets and contract liabilities are presented separately in the balance sheet. Contract assets and contract liabilities under the same contract are listed in a net amount. If the net amount is a debit balance, it is listed in the "contract assets" or "other non-current assets" item according to its liquidity; if the net amount is a credit balance, it is listed in the "contract liabilities" or "other non-current liabilities" item based on its liquidity. Contract assets and contract liabilities under different contracts cannot be offset against each other.

Contract costs

Contract costs are divided into contract performance costs and contract acquisition costs.

The costs incurred by the company to perform the contract are recognized as an asset as contract performance costs when the following conditions are met at the same time:

① The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing overhead (or similar expenses), costs clearly borne by the customer, and other costs incurred solely because of the contract. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

② This cost increases the company’s resources for fulfilling its performance obligations in the future.

③The cost is expected to be recovered.

The incremental costs incurred by the Company to obtain the contract are expected to be recovered and are recognized as an asset as the contract acquisition cost.

Assets related to contract costs are amortized on the same basis as the revenue recognition of goods or services related to the assets; however, if the amortization period of the contract acquisition costs does not exceed one year, the company will include them in the current profits and losses when incurred.

If the book value of assets related to contract costs is higher than the difference between the following two items, the company will make impairment provisions for the excess and recognize it as asset impairment losses, and further consider whether to accrue estimated liabilities related to loss-making contracts:

①The remaining consideration expected to be obtained from the transfer of goods or services related to the asset;

② The estimated cost that will be incurred to transfer the relevant goods or services.

If the above-mentioned asset impairment provision is subsequently reversed, the book value of the asset after the reversal shall not exceed the book value of the asset on the date of reversal if no impairment provision was made.

For contract performance costs recognized as assets, if the amortization period does not exceed one year or one normal operating cycle when initially recognized, they are listed in the "inventory" item. When initially recognized, the amortization period exceeds one year or one normal operating cycle and are listed in the "other non-current assets" item.

For contract acquisition costs recognized as assets, if the amortization period does not exceed one year or one normal operating cycle when initially recognized, they are listed in the "other current assets" item. When initially recognized, the amortization period exceeds one year or one normal operating cycle and are listed in the "other non-current assets" item.

Non-current assets or disposal groups held for sale

(1) Classification of non-current assets or disposal groups held for sale

The company classifies non-current assets or disposal groups that meet both the following conditions into the held-for-sale category:

① According to the practice of selling such assets or disposal groups in similar transactions, they can be sold immediately under the current conditions; ② The sale is very likely to occur, that is, the company has made a resolution on a sales plan and obtained a firm purchase commitment, and the sale is expected to be completed within one year. Relevant regulations require the company's relevant authorities or regulatory authorities to obtain approval before sale, and the approval has been obtained.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

If the non-current assets or disposal groups acquired by the Company specifically for resale meet the specified conditions of "the sale is expected to be completed within one year" on the acquisition date, and are likely to meet other classification conditions for the held-for-sale category in the short term (usually 3 months), the Company will classify them as held-for-sale categories on the acquisition date.

If the company loses control of the subsidiary due to reasons such as the sale of its investment in a subsidiary, regardless of whether the company retains part of the equity investment after the sale, when the investment in the subsidiary to be sold meets the conditions for classification as held for sale, the entire investment in the subsidiary will be classified as held for sale in the parent company's individual financial statements, and all assets and liabilities of the subsidiary will be classified as held for sale in the consolidated financial statements.

(2) Measurement of non-current assets or disposal groups held for sale

The measurement of investment real estate that is subsequently measured using the fair value model, biological assets that are measured using the net amount of fair value minus selling expenses, assets formed from employee compensation, deferred income tax assets, financial assets regulated by relevant accounting standards for financial instruments, and rights arising from insurance contracts that are regulated by relevant accounting standards for insurance contracts are respectively applicable to other relevant accounting standards.

When initial measurement or remeasurement on the balance sheet date of a non-current asset or disposal group held for sale, if its book value is higher than the net amount of fair value minus selling expenses, the book value will be written down to the net amount of fair value minus selling expenses. The amount of the write-down is recognized as an asset impairment loss and included in the current profit and loss, and an impairment provision for assets held for sale is made at the same time. If the net amount of the fair value of non-current assets or disposal groups held for sale less selling expenses increases on the subsequent balance sheet date, the amount previously written down will be restored and reversed within the amount of asset impairment losses recognized after being classified as held for sale, and the reversed amount will be included in the current profit and loss. The book value of goodwill that has been deducted cannot be reversed.

When a non-current asset or disposal group is no longer classified as a held-for-sale category because it no longer meets the classification conditions for the held-for-sale category or the non-current asset is removed from the held-for-sale disposal group, it shall be measured according to the lower of the following two:

① The book value before being classified as held for sale, adjusted for the depreciation, amortization or impairment that would have been recognized had it not been classified as held for sale;

②Recoverable amount.

(3) Determination criteria for terminating operations

Discontinued operations refer to an individually distinguishable component of the company that meets one of the following conditions, and the component has been disposed of or classified as held for sale:

① This component represents an independent main business or an independent main operating area;

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

② This component is part of an associated plan to dispose of an independent main business or an independent main operating area;

③This component is a subsidiary acquired exclusively for resale.

(4) Presentation

In the balance sheet, the Company presents non-current assets held for sale or assets in the disposal group held for sale separately from other assets, and liabilities in the disposal group held for sale separately from other liabilities. Non-current assets held for sale or assets in a disposal group held for sale and liabilities in a disposal group held for sale are not offset against each other and are presented as current assets and current liabilities respectively.

The company separately lists the profit and loss from continuing operations and the profit and loss from discontinued operations in the income statement. For discontinued operations reported in the current period, the company will re-present the information originally presented as profits and losses from continuing operations as profits and losses from discontinued operations in the comparable accounting period in the current financial statements. If the discontinued operations no longer meet the conditions for classification into the held-for-sale category, the company will re-present the information originally presented as profits and losses from discontinued operations as profits and losses from continuing operations in the comparable accounting period in the current financial statements.

Long-term equity investment

The Company's long-term equity investments include equity investments that control and have significant influence on the invested units, as well as equity investments in joint ventures. If the company can exert significant influence on the invested unit, it is an associate of the company.

(1) Basis for determining joint control and significant influence on the invested unit

Joint control refers to the shared control over an arrangement in accordance with relevant agreements, and the relevant activities of the arrangement must be decided only with the unanimous consent of the participants sharing control rights. When determining whether joint control exists, first determine whether all participants or a combination of participants collectively control the arrangement. If all participants or a group of participants must act in concert to decide on relevant activities of an arrangement, then all participants or a group of participants are deemed to collectively control the arrangement. Next, determine whether decisions on activities related to the arrangement must be unanimously agreed upon by the participants who collectively control the arrangement. If a combination of two or more parties can collectively control an arrangement, it does not constitute joint control. When determining whether joint control exists, the protective rights enjoyed are not taken into account.

Significant influence means that the investor has the power to participate in decision-making on the financial and operating policies of the invested unit, but it is not able to control or jointly control the formulation of these policies with other parties. When determining whether severe consequences can be imposed on the investee, Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

When the impact is significant, the investor's direct or indirect holding of voting shares of the investee and the impact of the current executable potential voting rights held by the investor and other parties are assumed to be converted into equity in the investee, including the impact of current convertible warrants, stock options and convertible corporate bonds issued by the investee.

When the company directly or indirectly through subsidiaries owns more than 20% (including 20%) but less than 50% of the voting shares of the invested unit, it is generally considered to have a significant impact on the invested unit. Unless there is clear evidence that it cannot participate in the production and operation decisions of the invested unit, it will not have a significant impact.

(2) Determination of initial investment cost

① The investment cost of long-term equity investment formed by enterprise merger shall be determined in accordance with the following provisions:

A. For a business merger under the same control, if the merging party pays cash, transfers non-cash assets or assumes debts as the merger consideration, the share of the book value of the owner's equity of the merged party in the final controlling party's consolidated financial statements on the merger date shall be used as the initial investment cost of the long-term equity investment. The difference between the initial investment cost of long-term equity investment and the cash paid, non-cash assets transferred and the book value of debts assumed shall be adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings shall be adjusted;

B. In the merger of enterprises under the same control, if the merging party issues equity securities as the merger consideration, the share of the book value of the merged party's owner's equity in the final controlling party's consolidated financial statements on the merger date shall be used as the initial investment cost of the long-term equity investment. The total face value of the shares issued is taken as share capital. The difference between the initial investment cost of the long-term equity investment and 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;

C. For business combinations not under the same control, the fair value of the assets paid, liabilities incurred or assumed, and equity securities issued to obtain control of the purchased party on the acquisition date is determined as the merger cost as the initial investment cost of the long-term equity investment. The merging party's intermediary fees such as auditing, legal services, evaluation and consulting, and other related management fees incurred by the company merger shall be included in the current profit and loss when incurred.

②Except for long-term equity investments formed through business mergers, the investment cost of long-term equity investments obtained through other means shall be determined in accordance with the following provisions:

A. For long-term equity investments obtained by paying cash, the investment cost shall be based on the actual purchase price paid. Initial investment costs include fees, taxes and other necessary expenses directly related to obtaining long-term equity investment;

B. For long-term equity investments obtained by issuing equity securities, the initial investment cost shall be based on the fair value of the equity securities issued;

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

C. For long-term equity investments obtained through the exchange of non-monetary assets, if the exchange has commercial substance and the fair value of the assets exchanged or exchanged out can be reliably measured, the fair value of the assets exchanged out and related taxes and fees will be used as the initial investment cost, and the difference between the fair value and book value of the assets exchanged out will be included in the current profit and loss; if the exchange of non-monetary assets does not meet the above two conditions at the same time, the book value of the assets exchanged out and related taxes and fees will be used as the initial investment cost.

D. For long-term equity investments obtained through debt restructuring, the book value is determined based on the fair value of the relinquished claims and taxes and other costs directly attributable to the asset, and the difference between the fair value of the relinquished claims and the book value is included in the current profit and loss.

(3) Subsequent measurement and profit and loss recognition methods

The long-term equity investment that the company can control over the investee is accounted for using the cost method; the long-term equity investment in associates and joint ventures is accounted for using the equity method. The Company's equity investments in associates, of which the portion held indirectly through venture capital institutions, mutual funds, trust companies or similar entities including investment-linked insurance funds, are measured at fair value through profit or loss, and the remaining portion is accounted for using the equity method.

①Cost method

For long-term equity investments accounted for using the cost method, the cost of the long-term equity investment is adjusted when the investment is added or recovered; cash dividends or profits declared by the investee to be distributed are recognized as investment income for the current period.

②Equity method

For long-term equity investments accounted for using the equity method, the general accounting treatment is:

If the investment cost of the company's long-term equity investment is greater than the fair value share of the investee's identifiable net assets at the time of investment, the initial investment cost of the long-term equity investment will not be adjusted; if the initial investment cost of the long-term equity investment is less than the fair value share of the investee's identifiable net assets at the time of investment, the difference will be included in the current profit and loss, and the cost of the long-term equity investment will be adjusted at the same time.

The company recognizes investment income and other comprehensive income respectively according to its share of the net profit or loss and other comprehensive income realized by the investee, and adjusts the book value of the long-term equity investment at the same time. The company calculates its share of the profits or cash dividends declared by the investee and reduces the book value of the long-term equity investment accordingly. For other changes in the owner's equity of the investee other than net profit or loss, other comprehensive income and profit distribution, the company adjusts the book value of the long-term equity investment and includes it in the owner's equity. When confirming the share of the investee's net profits and losses, the net profit of the investee is based on the fair value of the investee's identifiable net assets when the investment is obtained. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

Confirm after adjustment. If the accounting policies and accounting periods adopted by the invested unit are inconsistent with those of the Company, the financial statements of the invested unit shall be adjusted in accordance with the Company's accounting policies and accounting periods, and investment income and other comprehensive income shall be recognized accordingly. Unrealized gains and losses from internal transactions between the Company and its associates and joint ventures are offset according to the proportion attributable to the Company, and investment gains and losses are recognized on this basis. If the unrealized internal transaction losses between the company and the investee belong to asset impairment losses, they should be recognized in full.

If the investee can exert significant influence or implement joint control due to additional investment or other reasons but does not constitute control, the sum of the fair value of the original equity investment plus the new investment cost will be used as the initial investment cost to be calculated according to the equity method. If the equity investment originally held is classified as other equity instrument investment, the difference between its fair value and book value, as well as the accumulated gains or losses originally included in other comprehensive income, shall be transferred out of other comprehensive income in the current period when it is calculated according to the equity method and included in retained earnings.

If joint control or significant influence over the invested unit is lost due to disposal of part of the equity investment or other reasons, the remaining equity after disposal shall be measured at fair value, and the difference between its fair value and book value on the date of loss of joint control or significant influence shall be included in the current profit and loss. Other comprehensive income recognized as a result of the original equity investment being accounted for using the equity method will be accounted for on the same basis as if the investee directly disposed of relevant assets or liabilities when the equity method is terminated.

(4) Equity investments held for sale

If all or part of equity investments in associates or joint ventures are classified as assets held for sale, please refer to Note 3.16 for the relevant accounting treatment.

For remaining equity investments that are not classified as assets held for sale, the equity method is used for accounting treatment.

If an equity investment in an associate or joint venture that has been classified as held for sale no longer meets the classification conditions for assets held for sale, it will be retrospectively adjusted using the equity method from the date it is classified as an asset held for sale. The financial statements during the period classified as held for sale are adjusted accordingly.

(5) Impairment testing method and impairment provision accrual method

For investments in subsidiaries, associates and joint ventures, please refer to Note 3.23 for the method of calculating asset impairment.

Investment real estate

(1) Classification of investment real estate

An investment property is real estate held to earn rentals or for capital appreciation, or both. Mainly include: Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

①Leased land use rights.

② Land use rights held and prepared to be transferred after appreciation.

③ Buildings that have been leased.

(2) Measurement model of investment real estate

The Company adopts the cost model for subsequent measurement of investment real estate. Please refer to Note III. 23 for the method of accruing asset impairment.

The company calculates depreciation or amortization on a straight-line basis from the cost of investment real estate minus accumulated impairment and net residual value. The category, estimated economic useful life and estimated net residual value rate of investment real estate refer to the depreciation policy for similar fixed assets.

Fixed assets

Fixed assets refer to tangible assets with a high unit value that are held for the purpose of producing goods, providing labor services, renting or operating management, with a service life of more than one year.

(1) Confirmation conditions

When fixed assets meet the following conditions at the same time, they shall be recognized at the actual cost when acquired:

①The economic benefits related to the fixed asset are likely to flow into the enterprise.

②The cost of the fixed asset can be measured reliably.

Subsequent expenditures incurred on fixed assets that meet the fixed asset recognition conditions are included in the cost of the fixed assets; those that do not meet the fixed asset recognition conditions are included in the current profit and loss when incurred.

(2) Depreciation methods for various types of fixed assets

The company accrues depreciation based on the straight-line method from the month after the fixed assets reach their intended usable condition. The depreciation period and annual depreciation rate are determined according to the category of fixed assets, estimated economic useful life and estimated net residual value rate as follows:

Category Depreciation method Depreciation life (years) Residual value rate (%) Annual depreciation rate (%) Houses and buildings Straight-line method 10-40 5-10 2.25-9.5 Machinery and equipment Straight-line method 5-10 0-10 9-20 Transportation equipment Straight-line method 5 5-10 18-19 Office equipment and others Straight-line method 5 5-10 18-19 Purification project Straight-line method 5-10 5-10 9-19 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to financial statements

For fixed assets that have been provided for impairment, the provision for fixed assets that has been provided for impairment will be deducted when calculating depreciation.

At the end of each year, the company reviews the useful life, estimated net residual value and depreciation method of fixed assets. If the estimated useful life is different from the original estimate, the useful life of the fixed assets will be adjusted.

Construction in progress

(1) Construction in progress is classified and accounted for by approved projects.

(2) Standards and timing for transferring projects under construction into fixed assets

For projects under construction, all expenditures incurred before the asset reaches its intended usable state shall be regarded as the recorded value of the fixed assets. Including construction costs, the original price of machinery and equipment, other necessary expenditures incurred to bring the project under construction to its intended usable state, as well as the borrowing costs incurred for special borrowing for the project before the asset reaches its intended usable state and the borrowing costs incurred for general borrowings occupied. The company will transfer the construction in progress to fixed assets when the project installation or construction is completed and reaches the intended usable state. Fixed assets that have been constructed and have reached the intended usable state, but have not yet completed the final settlement, will be transferred to fixed assets at an estimated value based on the project budget, cost or actual project cost from the date they reach the intended usable state, and depreciation of the fixed assets will be accrued in accordance with the company's fixed asset depreciation policy. After the final settlement is processed, the original estimated value will be adjusted based on the actual cost, but the originally accrued depreciation amount will not be adjusted.

Borrowing costs

(1) Recognition principles and capitalization period of capitalization of borrowing costs

The borrowing costs incurred by the Company that are directly attributable to the acquisition, construction or production of assets that meet the capitalization conditions shall be capitalized and included in the cost of the relevant assets when the following conditions are met at the same time:

① Asset expenditure has occurred;

②The borrowing costs have been incurred;

③The necessary purchase, construction or production activities to bring the asset to its intended usable state have begun.

Other borrowing interests, discounts or premiums and exchange differences are included in the profits and losses of the current period.

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 will be suspended.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

When the acquisition, construction or production of assets that meet the capitalization conditions reaches the intended usable or salable state, the capitalization of borrowing costs will be stopped; subsequent borrowing costs will be recognized as expenses in the current period in which they are incurred.

(2) Calculation method of capitalization rate of borrowing costs and capitalization amount

If a special loan is borrowed for the purpose of purchasing, constructing or producing assets that meet the capitalization conditions, the capitalized amount of the special borrowing interest fee shall be determined as the amount of interest expense actually incurred on the special borrowing in the current period, minus the interest income obtained from depositing the unused borrowed funds in the bank or the investment income obtained from temporary investment.

If general borrowings are occupied by the acquisition, construction or production of assets that meet the capitalization conditions, the amount of interest that should be capitalized on the general borrowings shall be calculated and determined based on the weighted average of the asset disbursements of the part in which the accumulated asset disbursements exceed the special borrowings multiplied by the capitalization rate of the occupied general borrowings. The capitalization rate is calculated and determined based on the weighted average interest rate of general borrowings.

Intangible assets

(1) Valuation method of intangible assets

Recorded at actual cost when acquired.

(2) Useful life and amortization of intangible assets

① Estimation of useful life of intangible assets with limited service life:

Item Estimated service life (years) Basis

Land use rights 40-50 Legal use rights

Software 3-10 Determine the service life with reference to the period that can bring economic benefits to the company Intellectual property rights 10 Determine the service life with reference to the period that can bring economic benefits to the company

At the end of each year, the company reviews the service life and amortization method of intangible assets with limited service life. After review, the useful life and amortization method of the intangible assets at the end of the current period are no different from previous estimates.

② If the period in which the intangible asset can bring economic benefits to the enterprise cannot be foreseen, it shall be regarded as an intangible asset with an indefinite useful life. For intangible assets with uncertain useful lives, the company will review the useful lives of intangible assets with uncertain useful lives at the end of each year. If it is still uncertain after re-review, an impairment test will be conducted on the balance sheet date. ③Amortization of intangible assets

For intangible assets with limited service life, the company determines its service life when it acquires it, and uses the straight-line method to reasonably amortize it within the service life. The amortization amount is included in the current profit and loss according to the benefit items or included in the cost of related assets. Specific notes to the financial statements of Beijing Wantai Biopharmaceutical Co., Ltd.

The amortized amount is the cost minus the estimated residual value. For intangible assets for which impairment provisions have been made, the cumulative amount of impairment provisions for intangible assets that have been made shall be deducted. The residual value of an intangible asset with a limited service life is deemed to be zero, except in the following circumstances: a third party has committed to purchase the intangible asset at the end of its service life or the estimated residual value information can be obtained based on an active market, and the market is likely to exist at the end of the intangible asset's service life.

Intangible assets with indefinite useful lives are not amortized. The service life of intangible assets with indefinite service life is reviewed at the end of each year. If there is evidence that the service life of the intangible asset is limited, its service life is estimated and amortized systematically and reasonably within the expected service life.

(3) Scope of R&D expenditure collection

The company classifies various expenses directly related to the development of R&D activities as R&D expenditures, including employee salaries of R&D personnel, direct investment expenses, depreciation expenses and long-term prepaid expenses, design expenses, equipment commissioning expenses, amortization expenses of intangible assets, entrusted external research and development expenses, other expenses, etc.

(4) Specific standards for dividing the research stage and development stage of internal research and development projects

① The company regards the preparation of information and related aspects for further development activities as the research stage. Expenditures in the research stage of intangible assets are included in the current profit and loss when incurred.

② Development activities carried out after the company has completed the research phase are regarded as the development phase.

(5) Specific conditions for capitalization of expenditures during the development phase

Expenditures in the development stage can be recognized as intangible assets only when they meet the following conditions:

A. It is technically feasible to complete the intangible asset so that it can be used or sold;

B. Have the intention to complete the intangible asset and use or sell it;

C. The way intangible assets generate economic benefits includes being able to prove that there is a market for the products produced using the intangible assets or that the intangible assets themselves have a market. If the intangible assets will be used internally, their usefulness can be proven;

D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, and have the ability to use or sell the intangible asset;

E. The expenditures attributable to the development stage of the intangible asset can be measured reliably.

Capitalization conditions for specific R&D projects: On the premise that the specific conditions for capitalization of the development stage are met, all R&D expenditures after the company's drug R&D enters the Phase III clinical trial stage can be directly included in the R&D expenditures, mainly clinical trial fees, testing fees, Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

Necessary expenses such as direct R&D personnel salaries and insurance, travel expenses, conference fees, expert consulting fees, registration fees, and direct expenses related to the production of phase III clinical drugs are capitalized.

Impairment of long-term assets

The asset impairment of long-term equity investments in subsidiaries, associates and joint ventures, investment real estate, fixed assets, construction in progress measured using the cost model, productive biological assets measured using the cost model, right-of-use assets, intangible assets, goodwill, rights and interests in proven oil and gas mining areas and wells and related facilities (except inventories, investment real estate measured using the fair value model, deferred income tax assets, and financial assets) is determined according to the following method:

On the balance sheet date, it is judged whether there are any signs that the asset may be impaired. If there are signs of impairment, the company will estimate its recoverable amount and conduct an impairment test. Goodwill formed due to business mergers, intangible assets with indefinite useful lives and intangible assets that have not yet reached a usable state are subject to impairment testing every year regardless of whether there are signs of impairment.

The recoverable amount is determined based on the higher of the asset's fair value less disposal costs and the present value of the asset's expected future cash flows. The Company estimates the recoverable amount on the basis of a single asset; if it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs is determined based on the asset group. The identification of an asset group is based on whether the main cash inflow generated by the asset group is independent of the cash inflows of other assets or asset groups.

When the recoverable amount of an asset or asset group is lower than its book value, the company will write down its book value to the recoverable amount, and the amount of the write-down will be included in the current profit and loss, and the corresponding asset impairment provision will be made.

As far as the impairment test of goodwill is concerned, the book value of goodwill formed due to a business combination shall be allocated to the relevant asset groups in a reasonable manner from the date of purchase; if it is difficult to allocate it to the relevant asset groups, it shall be allocated to the relevant asset group combinations. The relevant asset group or asset group combination is an asset group or asset group combination that can benefit from the synergy effects of the business combination, and is no larger than the reporting segment determined by the company.

During impairment testing, if there are signs of impairment in an asset group or combination of asset groups related to goodwill, first conduct an impairment test on the asset group or combination of asset groups that does not contain goodwill, calculate the recoverable amount, and recognize the corresponding impairment loss. Then conduct an impairment test on the asset group or asset group combination containing goodwill, and compare its book value with the recoverable amount. If the recoverable amount is lower than the book value, the impairment loss of goodwill is recognized.

Once the asset impairment loss is recognized, it will not be reversed in subsequent accounting periods.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Long-term deferred expenses

Long-term deferred expenses are calculated as various expenses that have been incurred by the company but should be borne by the current and subsequent periods with an amortization period of more than one year.

The company's long-term deferred expenses are amortized evenly during the benefit period. The amortization period of each expense is as follows:

Item Amortization period

Expenditures on factory decoration and renovation Estimated benefit period

Employee compensation

Employee compensation refers to various forms of remuneration or compensation given by the company to obtain services provided by employees or to terminate labor relations. Employee compensation includes short-term compensation, post-employment benefits, termination benefits and other long-term employee benefits. The benefits provided by the company to employees' spouses, children, dependents, survivors of deceased employees and other beneficiaries are also employee benefits.

Based on liquidity, employee benefits are listed in the "Employee Benefits Payable" item and the "Long-term Employee Benefits Payable" item on the balance sheet respectively.

(1) Accounting treatment method for short-term compensation

①Basic salary of employees (salary, bonus, allowance, subsidy)

During the accounting period when employees provide services to them, the company recognizes actual short-term remuneration as liabilities and includes it in the current profit and loss, unless other accounting standards require or allow it to be included in the cost of assets.

②Employee welfare fees

The employee welfare expenses incurred by the company are included in the current profit and loss or related asset costs according to the actual amount when they are actually incurred. If employee benefits are non-monetary benefits, they are measured at fair value.

③Medical insurance premiums, work-related injury insurance premiums, maternity insurance premiums and other social insurance premiums and housing provident funds, as well as trade union funds and employee education funds

The company pays social insurance premiums such as medical insurance premiums, work-related injury insurance premiums, and maternity insurance premiums, and housing provident funds for its employees, as well as labor union funds and employee education funds withdrawn in accordance with regulations. During the accounting period when employees provide services to them, the corresponding amount of employee compensation is calculated and determined based on the prescribed accrual basis and accrual ratio, and the corresponding liabilities are recognized and included in the current profit and loss or related asset costs.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

④Short-term paid absence from work

When employees provide services that increase their future rights to paid absences, the company recognizes employee benefits related to accumulated paid absences and measures them based on the expected payment amount increased due to accumulated unexercised rights. The Company recognizes employee benefits related to non-cumulative paid absences during the accounting period in which employees are actually absent.

⑤Short-term profit sharing plan

If the profit sharing plan meets the following conditions at the same time, the company will confirm the relevant employee benefits payable:

A. The enterprise now has a legal obligation or constructive obligation to pay employee remuneration due to past events;

B. The amount of employee compensation obligations payable due to the profit sharing plan can be estimated reliably.

(2) Accounting treatment of post-employment benefits

① Set up a withdrawal plan

During the accounting period when employees provide services to them, the company recognizes the deposit amount payable calculated according to the defined contribution plan as a liability and includes it in the current profit and loss or related asset costs.

According to the defined contribution plan, if the entire amount of deposits payable is not expected to be paid within twelve months after the end of the annual reporting period in which employees provide relevant services, the company shall refer to the corresponding discount rate (determined based on the market rate of return of treasury bonds or high-quality corporate bonds in the active market that match the obligation period and currency of the defined contribution plan on the balance sheet date), and measure the entire amount of deposits payable at the discounted amount.

②Defined benefit plan

A. Determine the present value of defined benefit plan obligations and current service costs

According to the expected cumulative benefit unit method, unbiased and mutually consistent actuarial assumptions are used to estimate relevant demographic variables and financial variables, measure the obligations arising from the defined benefit plan, and determine the vesting period of the relevant obligations. The Company discounts the obligations arising from the defined benefit plan at the corresponding discount rate (determined based on the market yield of treasury bonds or high-quality corporate bonds in the active market that match the obligation term and currency of the defined benefit plan on the balance sheet date) to determine the present value of the defined benefit plan obligations and the current service cost.

B. Confirm the net liabilities or net assets of the defined benefit plan

If there are assets in the defined benefit plan, the company will recognize the deficit or surplus formed by the present value of the defined benefit plan obligations minus the fair value of the defined benefit plan assets as the net liability or net assets of a defined benefit plan.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

If there is a surplus in the defined benefit plan, the company shall measure the net assets of the defined benefit plan at the lower of the surplus of the defined benefit plan and the asset upper limit.

C. Determine the amount that should be included in the asset cost or current profit and loss

Service costs include current service costs, past service costs and settlement gains or losses. Among them, except for current service costs that are required or allowed to be included in asset costs by other accounting standards, other service costs are included in current profits and losses. The net interest on the net liabilities or net assets of a defined benefit plan, including interest income on plan assets, interest expenses on defined benefit plan obligations, and interest affected by the asset ceiling, are all included in the current profit and loss.

D. Determine the amount that should be included in other comprehensive income

Changes resulting from remeasurement of the net liabilities or net assets of the defined benefit plan include:

(a) Actuarial gain or loss, that is, the increase or decrease in the present value of the previously measured defined benefit plan obligations due to actuarial assumptions and experience adjustments;

(b) Return on plan assets, net of the amount included in the net interest on the net liabilities or net assets of the defined benefit plan;

(c) Changes affecting the asset cap, less the amount included in the net interest on the net liabilities or net assets of the defined benefit plan.

The changes resulting from the above-mentioned remeasurement of the net liabilities or net assets of the defined benefit plan are directly included in other comprehensive income, and are not allowed to be transferred back to profit and loss in subsequent accounting periods. When the original defined benefit plan is terminated, the company will carry forward all the parts originally included in other comprehensive income to undistributed profits within the scope of equity. .

(3) Accounting treatment method for dismissal benefits

If the company provides dismissal benefits to employees, the employee compensation liabilities arising from the dismissal benefits will be recognized at the earliest of the following two times, and included in the current profit and loss:

① When the enterprise cannot unilaterally withdraw the dismissal benefits provided due to the labor relationship termination plan or layoff proposal; ② When the enterprise confirms the costs or expenses related to the restructuring involving the payment of dismissal benefits.

If the dismissal benefit is not expected to be fully paid within twelve months after the end of the annual reporting period, the dismissal benefit amount will be discounted with reference to the corresponding discount rate (determined based on the market yield of treasury bonds or high-quality corporate bonds in the active market that match the obligation period and currency of the defined benefit plan on the balance sheet date), and the employee benefits payable will be measured at the discounted amount.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

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

①Those who meet the conditions of the defined contribution plan

If the company provides other long-term employee benefits to employees that meet the conditions of the defined contribution plan, the entire payable deposit amount will be measured as the discounted amount of employee benefits payable.

②Meet the conditions for defined benefit plan

At the end of the reporting period, the company recognizes employee compensation costs arising from other long-term employee benefits as the following components: A. Service costs;

B. Net interest on other long-term employee benefits net liabilities or net assets;

C. Changes resulting from the remeasurement of other long-term employee benefits net liabilities or net assets.

In order to simplify the relevant accounting treatment, the total net amount of the above items is included in the current profit and loss or related asset costs.

Estimated liabilities

(1) Recognition standards for estimated liabilities

If the obligation related to a contingency meets the following conditions at the same time, the company will recognize it as an estimated liability: ① The obligation is a current obligation assumed by the company;

②The performance of this obligation is likely to result in the outflow of economic benefits from the company;

③The amount of the obligation can be measured reliably.

(2) Measurement method of estimated liabilities

Estimated liabilities are initially measured based on the best estimate of the expenditure required to fulfill the relevant current obligations, and factors such as risks, uncertainties, and time value of money related to contingencies are comprehensively considered. The book value of estimated liabilities is reviewed on each balance sheet date. If there is conclusive evidence that the book value cannot reflect the current best estimate, the book value will be adjusted based on the current best estimate.

Share-based payment

(1) Types of share-based payment

The Company's share-based payment includes cash-settled share-based payment and equity-settled share-based payment.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(2) Method for determining the fair value of equity instruments

① For shares granted to employees, their fair value is measured based on the market price of the company's shares, and adjusted by taking into account the terms and conditions on which the shares are granted (excluding vesting conditions other than market conditions). ② For stock options granted to employees, in many cases it is difficult to obtain the market price. If no traded options exist with similar terms and conditions, the Company selects an applicable option pricing model to estimate the fair value of the options granted.

(3) Basis for confirming the best estimate of exercisable equity instruments

On each balance sheet date during the waiting period, the company makes its best estimate based on the latest changes in the number of vested employees and other subsequent information, and corrects the number of equity instruments expected to be vested to make the best estimate of the vested equity instruments. (4) Accounting treatment for the implementation of share-based payment plans

cash-settled share-based payment

① For cash-settled share-based payments that become exercisable immediately after grant, the fair value of the liability assumed by the company on the grant date will be included in the relevant costs or expenses, and the liability will increase accordingly. The fair value of the liability is remeasured on each balance sheet date and settlement date before settlement, and the changes are included in profit and loss.

② For cash-settled share-based payments that are exercisable only after the services within the waiting period are completed or the specified performance conditions are met, on each balance sheet date during the waiting period, based on the best estimate of the vesting situation and the fair value of the liability borne by the company, the services obtained in the current period are included in costs or expenses and corresponding liabilities.

Equity-settled share-based payment

① For equity-settled share-based payments in exchange for employee services that become exercisable immediately after grant, the fair value of the equity instrument on the grant date will be included in the relevant costs or expenses, and the capital reserve will be increased accordingly.

② For equity-settled share-based payments that are exercisable in exchange for employee services after completing services within the waiting period or reaching specified performance conditions, on each balance sheet date during the waiting period, based on the best estimate of the number of exercisable equity instruments and the fair value on the date of grant of the equity instrument, the services obtained in the current period are included in costs or expenses and capital reserves.

(5) Accounting treatment for modifications to share-based payment plans

When the company modifies the share-based payment plan, if the modification increases the fair value of the equity instruments granted, the increase in services obtained shall be recognized accordingly according to the increase in the fair value of the equity instruments; if the modification increases the equity instruments granted Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

amount, the increased fair value of the equity instrument will be recognized accordingly as an increase in services obtained. The increase in the fair value of equity instruments refers to the difference between the fair values of the equity instruments before and after the modification on the modification date. If the modification reduces the total fair value of share-based payment or the terms and conditions of the share-based payment plan are modified in other ways that are unfavorable to employees, the accounting treatment for the services obtained will continue to be performed as if the change has never occurred, unless the company cancels some or all of the equity instruments that have been granted.

(6) Accounting treatment for termination of share-based payment plan

If the granted equity instruments are canceled or settled during the waiting period (except those canceled due to failure to meet vesting conditions), the company:

① Treat cancellation or settlement as accelerated vesting, and immediately confirm the amount that should have been confirmed within the remaining waiting period;

② All payments to employees upon cancellation or settlement are treated as equity repurchases. The amount paid for repurchase that is higher than the fair value of the equity instrument on the repurchase date shall be included in the current expenses.

If the company repurchases an equity instrument that has been exercised by its employees, it will offset the owner's equity of the enterprise; the part of the repurchase payment that is higher than the fair value of the equity instrument on the repurchase date shall be included in the current profit and loss.

Revenue recognition principles and measurement methods

(1) General principles

Income is the total inflow of economic benefits generated by the company in its daily activities, which will lead to an increase in shareholders' equity and has nothing to do with the capital invested by shareholders.

The company fulfills its performance obligations in the contract, that is, when the customer obtains control of the relevant goods, revenue is recognized. Obtaining control over relevant goods means being able to direct the use of the goods and obtain almost all economic benefits from them.

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 or services promised by each individual performance obligation on the contract commencement date, and measure 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 payments received on behalf of third parties. When determining the contract transaction price, if there is variable consideration, the company determines the best estimate of the variable consideration based on the expected value or the most likely amount, and includes it in the transaction price at an amount that does not exceed the amount that is unlikely to significantly reverse the cumulative recognized revenue when the relevant uncertainty is eliminated. If there is a significant financing component in the contract, the company will determine the transaction price based on the amount payable in cash when the customer obtains control of the product. The transaction Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

The difference between the price and the contract consideration is amortized using the actual interest rate method during the contract period. If the interval between the transfer of control and the customer's payment does not exceed one year, the company does not consider the financing component.

If one of the following conditions is met, the performance obligation is performed within a certain period of time; otherwise, the performance obligation is performed at a certain point in time:

① When the company performs the contract, the customer obtains and consumes the economic benefits brought by the company's performance;

②The customer can control the goods under construction during the company's performance of the contract;

③The goods produced by the company during the performance of the contract 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 will recognize revenue based on the performance progress during that period, except where the performance progress cannot be reasonably determined. The Company determines the performance progress of services provided according to the input method (or output method). When the progress of contract performance cannot be reasonably determined, if the costs incurred by the company are expected to be compensated, revenue will 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, the Company recognizes revenue at the point when the customer obtains control of the relevant goods. When judging whether the customer has obtained control of the goods or services, the company will consider the following signs:

① The company has the current right to receive payment for the goods or services, that is, the customer has current payment obligations for the goods; ② The company has transferred the legal ownership of the goods to the customer, that is, the customer already has the legal ownership of the goods;

③The company has transferred the physical goods of 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;

⑤The customer has accepted the product.

Sales return terms

For sales with a sales return clause, when the customer obtains control of the relevant goods, the company recognizes revenue based on the amount of consideration that the customer is entitled to receive for transferring the goods to the customer, and recognizes the amount expected to be refunded due to sales return as estimated liabilities; at the same time, the book value of the goods expected to be returned when the goods are transferred, minus the expected cost of recovering the goods (including the value impairment of the returned goods), is recognized as an asset, that is, the return cost receivable, according to Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

The net carry-over cost after deducting the cost of the above-mentioned assets shall be based on the book value of the transferred goods at the time of transfer. On each balance sheet date, the company re-estimates future sales returns and re-measures the above assets and liabilities.

Warranty obligations

In accordance with contract stipulations, legal regulations, etc., the company provides quality assurance for the products sold and the projects constructed. For guarantee-type quality assurance that is used to ensure that the goods sold meet established standards, the Company conducts accounting treatment in accordance with "Accounting Standards for Business Enterprises No. 13 - Contingencies". For service-type quality assurance that provides a separate service to customers in addition to ensuring that the goods sold meet established standards, the company treats it as a single performance obligation and allocates part of the transaction price to the service-type quality assurance based on the relative proportion of the separate selling price of the goods and service-type quality assurance provided, and recognizes revenue when the customer obtains control of the service. When assessing whether a quality guarantee provides a separate service to customers beyond the assurance that the goods sold meet established standards, the Company considers factors such as whether the quality guarantee is a statutory requirement, the duration of the quality guarantee and the nature of the tasks to which the Company undertakes to perform.

Main Responsible Person and Agent

The Company determines whether the Company is the principal or agent when engaging in transactions based on whether it has control over the goods or services before transferring them to the customer. If the company is able to control the goods or services before transferring them to the customer, the company is the primary responsible person and recognizes revenue based on the total amount of consideration received or receivable. Otherwise, the company acts as an agent and recognizes revenue based on the amount of commissions or fees that it is expected to be entitled to receive. This amount should be determined based on the net amount of the total consideration received or receivable after deducting the price payable to other related parties, or based on the established commission amount or ratio.

Consideration payable to customers

If there is consideration payable to customers in the contract, unless the consideration is for obtaining other clearly distinguishable goods or services from customers, the company will offset the consideration payable from the transaction price, and offset the current revenue at the later of the recognition of relevant income and the payment (or commitment to pay) of the customer consideration.

Customer’s unexercised contractual rights

If the company receives payment in advance from customers for the sale of goods or services, it will first recognize the payment as a liability and then convert it into revenue when the relevant performance obligations are fulfilled. When the company's advance receipt does not need to be returned and the customer may give up all or part of its contractual rights, and the company expects to be entitled to the amount related to the contractual rights given up by the customer, the above amount will be recognized as revenue in proportion according to the customer's mode of exercising the contract rights; otherwise, the company will only convert the relevant balance of the above liabilities into revenue when the possibility of the customer's request to perform the remaining performance obligations is extremely low.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Contract changes

When the construction contract between the company and the customer is changed:

① If the contract change adds clearly distinguishable construction services and contract prices, and the new contract price reflects the separate selling price of the new construction services, the company will account for the contract change as a separate contract;

② If the contract change does not fall into the above ① situation, and the construction services that have been transferred and the construction services that have not been transferred can be clearly distinguished on the date of contract change, the company will treat it as the termination of the original contract, and at the same time, the unperformed part of the original contract and the changed part of the contract will be combined into a new contract for accounting treatment;

③ If the contract change does not fall into the above ① situation, and the construction services that have been transferred and the construction services that have not been transferred cannot be clearly distinguished on the date of contract change, the company will account for the contract change as an integral part of the original contract. The resulting impact on the recognized revenue will be adjusted to the current revenue on the contract change date.

(2) Specific methods

The specific method of revenue recognition of the Company is as follows:

① Goods sales contract

The sales contract between the Company and its customers contains performance obligations for the transfer of products, which is a performance obligation to be fulfilled at a certain point in time.

The recognition of revenue from domestically sold products must meet the following conditions: the company has delivered the product to the customer in accordance with the contract and the customer has accepted the product, the payment has been recovered or a receipt has been obtained and the relevant consideration is likely to be recovered, the main risks and rewards of the ownership of the product have been transferred, and the legal ownership of the product has been transferred.

Recognition of revenue from exported products must meet the following conditions: For export sales settled using the FOB method, the company has declared the product to customs in accordance with the contract, obtained the bill of lading and the product has been shipped across the ship's rail, the payment has been recovered or the receipt of payment has been obtained and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownership of the goods have been transferred, and the legal ownership of the goods has been transferred.

②Technical service income

The technical cooperation agreement signed between the company and the customer includes patent licensing, transfer of technical data, delivery of experimental raw materials, and delivery of clinical raw materials to cooperate with the marketing registration of the customer's product. Whether the technical cooperation agreement can ultimately successfully develop the target product is highly uncertain. During the entire technical cooperation period, both parties will independently carry out research activities in accordance with milestone obligations. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

In addition, the technical cooperation agreement sets milestone payments according to key nodes of the entire development progress. Only when development progress triggers milestone events, the company has the right to receive payment. The technical service contract signed between the company and the customer is a performance obligation at a certain point in time.

The recognition of technical service revenue must meet the following conditions: the completion time of each milestone is clear, and the settled milestone payment will not be retroactively increased or refunded due to subsequent performance progress. The company completes the contract performance obligations in accordance with the milestone stipulated performance obligations. It has received the milestone payment at this stage or obtained the receipt voucher and the relevant economic benefits are likely to flow in. The completion of the contract is recognized and the technical service income is determined.

Government subsidies

(1) Confirmation of government subsidies

Government subsidies can only be confirmed if they meet the following conditions at the same time:

① The company can meet the conditions attached to the government subsidy;

②The company can receive government subsidies.

(2) Measurement of government subsidies

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 of 1 yuan.

(3) Accounting treatment of government subsidies

①Government subsidies related to assets

Government subsidies obtained by the company for the purchase, construction or other formation of long-term assets are classified as asset-related government subsidies. Government subsidies related to assets are recognized as deferred income and are included in profits and losses in installments according to a reasonable and systematic method during the use period 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.

②Government subsidies related to income

Government subsidies other than asset-related government subsidies are classified as income-related government subsidies. Government subsidies related to income shall be accounted for in accordance with the following provisions on a case-by-case basis:

If it is used to compensate the company for relevant costs or losses in subsequent periods, it will be recognized as deferred income, and will be included in the current profit and loss during the period when the relevant costs or losses are recognized;

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

If it is used to compensate for the relevant costs or losses incurred by the company, it will be directly included in the current profit and loss.

For government subsidies that contain both asset-related parts and income-related parts, different parts shall be distinguished and accounted for separately; if it is difficult to distinguish, the whole shall be classified as income-related government subsidies.

Government subsidies related to the company's daily activities are included in other income based on the economic and business essence. Government subsidies that are not related to the company's daily activities are included in non-operating income and expenses.

③Policy preferential loan interest discounts

The finance department will allocate interest discount funds to the lending bank, and if the lending bank provides loans to the company at policy preferential interest rates, the actual borrowing amount received will be used as the entry value of the loan, and the relevant borrowing costs will be calculated based on the loan principal and the policy preferential interest rate.

The finance department will directly allocate interest discount funds to the company, and the company will use the corresponding interest discount to offset related borrowing costs. ④Refund of government subsidies

When a confirmed government subsidy needs to be returned, if the book value of the relevant assets is offset at the time of initial recognition, the book value of the assets is adjusted; if there is a balance of relevant deferred income, the book balance of the relevant deferred income is offset, and the excess is included in the current profit and loss; in other cases, it is directly included in the current profit and loss.

Deferred tax assets and deferred tax liabilities

The company usually uses the balance sheet liability method to recognize and measure the impact of taxable temporary differences or deductible temporary differences on income tax as deferred income tax liabilities or deferred income tax assets based on the temporary differences between the book values and tax bases of assets and liabilities on the balance sheet date. The Company does not discount deferred income tax assets and deferred income tax liabilities.

(1) Recognition of deferred income tax assets

For deductible temporary differences, deductible losses and tax credits that can be carried forward to future years, the impact on income tax is calculated based on the income tax rate during the expected reversal period, and the impact is recognized as deferred income tax assets, but only to the extent that the company is likely to obtain future taxable income that can be used to offset the deductible temporary differences, deductible losses and tax credits.

The impact of deductible temporary differences on income tax arising from the initial recognition of assets or liabilities in transactions or events with the following characteristics is not recognized as deferred income tax assets:

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

A. The transaction is not a business combination;

B. When the transaction occurs, it neither affects accounting profits nor taxable income (or deductible losses).

However, this exemption from the initial recognition of deferred income tax liabilities and deferred income tax assets does not apply to a single transaction that satisfies the above two conditions and whose initial recognition of assets and liabilities results in equal amounts of taxable temporary differences and deductible temporary differences. For the taxable temporary differences and deductible temporary differences arising from the initial recognition of assets and liabilities in this transaction, the company recognizes the corresponding deferred income tax liabilities and deferred income tax assets respectively when the transaction occurs. If the company's deductible temporary differences related to investments in subsidiaries, associates and joint ventures meet the following two conditions at the same time, its impact on income tax will be recognized as deferred income tax assets:

A. The temporary difference is likely to reverse in the foreseeable future;

B. It is likely to obtain taxable income in the future that can be used 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 periods will be recognized.

On the balance sheet date, the Company reviews the book value of deferred income tax assets. If it is probable that sufficient taxable income will not be available in future periods to offset the benefits of deferred tax assets, the carrying amount of the deferred tax assets will be reduced. The amount of the write-down is reversed when it is probable that sufficient taxable income will be obtained.

(2) Recognition of deferred income tax liabilities

All taxable temporary differences of the Company are measured to have an impact on income tax at the income tax rate expected to be reversed during the period, and the amount of the impact is recognized as deferred income tax liabilities, except for the following circumstances:

①The impact on income tax of taxable temporary differences arising from the following transactions or events is not recognized as deferred income tax liabilities:

A. Initial recognition of goodwill;

B. Initial recognition of assets or liabilities arising from a transaction with the following characteristics: the transaction is not a business combination, and when the transaction occurs, it neither affects accounting profits nor taxable income or deductible losses.

② The Company generally recognizes the taxable temporary differences related to investments in subsidiaries, joint ventures and associates, and their impact on income tax as deferred income tax liabilities, unless the following two conditions are met at the same time:

A. The company can control the time when temporary differences are reversed;

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

B. The temporary difference is likely not to be reversed in the foreseeable future.

(3) Recognition of deferred income tax liabilities or assets involved in specific transactions or events

① Deferred income tax liabilities or assets related to business combinations

For taxable temporary differences or deductible temporary differences arising from a business combination not under common control, while deferred income tax liabilities or deferred income tax assets are recognized, the related deferred income tax expenses (or income) are usually adjusted to the goodwill recognized in the business combination.

②Items directly included in owners’ equity

Current income taxes and deferred income taxes related to transactions or events that are directly included in owners' equity are included in owners' equity. Transactions or events that have the impact of temporary differences on income tax included in the owner's equity include: other comprehensive income resulting from changes in the fair value of other debt investments, changes in accounting policies using the retrospective adjustment method or the correction of differences in previous (important) accounting errors, the retrospective restatement method to adjust the opening retained earnings, mixed financial instruments that contain both liability components and equity components are included in the owner's equity at the time of initial recognition, etc.

③Can make up for losses and tax deductions

A. Recoverable losses and tax deductions generated by the company’s own operations

Deductible losses refer to losses calculated and determined in accordance with tax laws and allowed to be made up with taxable income in subsequent years. Uncovered losses (deductible losses) and tax credits that can be carried forward to future years in accordance with tax laws are treated as deductible temporary differences. When it is expected that sufficient taxable income will be obtained in the future period in which recoverable losses or tax credits can be utilized, the corresponding deferred income tax assets will be recognized to the extent of the taxable income that is likely to be obtained, and the income tax expense in the current income statement will be reduced at the same time.

B. Compensable uncompensated losses of the merged enterprise resulting from business mergers

In a business combination, if the company obtains deductible temporary differences from the purchased party and does not meet the conditions for recognition of deferred income tax assets on the acquisition date, it will not be recognized. Within 12 months after the purchase date, if new or further information is obtained indicating that the relevant circumstances on the purchase date already exist, and the economic benefits brought by the deductible temporary differences of the purchased party are expected to be realized on the purchase date, the relevant deferred income tax assets will be recognized, and the goodwill will be reduced at the same time. If the goodwill is insufficient to offset, the difference will be recognized as current profit and loss; except for the above circumstances, deferred income tax assets related to the business combination will be recognized and included in the current profit and loss.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

④Temporary differences resulting from merger elimination

When the company prepares the consolidated financial statements, if there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the tax basis of the tax entity to which it belongs due to the offsetting of unrealized internal sales gains and losses, deferred income tax assets or deferred income tax liabilities will be recognized in the consolidated balance sheet, and the income tax expenses in the consolidated income statement will be adjusted at the same time, except for deferred income taxes related to transactions or events directly included in owner's equity and business mergers. ⑤ Equity-settled share-based payment

If the tax law stipulates that expenses related to share-based payment are allowed to be deducted before tax, during the period when costs and expenses are recognized in accordance with accounting standards, the company will calculate and determine the tax base and the resulting temporary differences based on the information obtained at the end of the accounting period to estimate the amount that can be deducted before tax. If the recognition conditions are met, the relevant deferred income tax will be recognized. If the amount that is expected to be deducted before tax in the future exceeds the costs and expenses related to share-based payment recognized in accordance with accounting standards, the excess income tax impact shall be directly included in the owner's equity.

⑥Dividends related to financial instruments classified as equity instruments

For financial instruments classified as equity instruments by the company as the issuer, the relevant dividend payments are deducted before corporate income tax in accordance with the relevant provisions of tax policies. When the company recognizes the dividend payable, it recognizes the income tax impact related to the dividend. For the profits distributed from transactions or events that previously generated profits and losses, the income tax effects of the dividends are included in the current profits and losses; for the profits distributed from transactions or events previously recognized in owners' equity, the income tax effects of the dividends are included in the owners' equity items.

(4) Basis for presenting deferred income tax assets and deferred income tax liabilities on a net basis

When the company meets the following conditions at the same time, the deferred income tax assets and deferred income tax liabilities will be presented as the net amount after offsetting:

① The company has 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 the income tax levied by the same tax collection and administration department on the same taxable entity or to different taxable entities. However, in each future period when important deferred income tax assets and deferred income tax liabilities are reversed, the taxable entity involved intends to settle the current income tax assets and liabilities on a net basis or to obtain assets and pay off liabilities at the same time.

Leasing

(1) Identification of lease

On the contract commencement date, the company evaluates whether the contract is a lease or contains a lease. If one party in the contract transfers Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

A contract is a lease or contains a lease if it provides the right to control the use of one or more identified assets for a certain period of time in exchange for a consideration. In order to determine whether the contract transfers the right to control the use of the identified assets within a certain period, the Company evaluates whether the customer in the contract has the right to obtain substantially all the economic benefits generated from the use of the identified assets during the use period, and has the right to direct the use of the identified assets during the use period.

(2) Identification of separate leases

If the contract contains multiple separate leases at the same time, the company will split the contract and conduct accounting treatment for each separate lease. The right to use an identified asset constitutes a separate lease in the contract if the following conditions are met at the same time: ① The lessee can profit from using the asset alone or using it together with other easily available resources; ② The asset is not highly dependent or highly related to other assets in the contract.

(3) The company’s accounting treatment method as a lessee

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 lower value when a single leased asset is a new asset are identified as low-value asset leases. If the company subleases or anticipates subletting a leased asset, the original lease will not be recognized as 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 costs or current profits and losses on a straight-line basis in each period during 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.

①Right-of-use assets

Right-of-use assets refer to the lessee’s right to use the leased assets during the lease term.

On the commencement date of the lease term, the right-of-use asset is initially measured at cost. This cost includes:

• The initial measurement amount of the lease liability;

• For lease payments paid on or before the start date of the lease term, if there are lease incentives, the amount related to the lease incentives already enjoyed will be deducted;

• Initial direct costs incurred by the lessee;

• 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 follows the recognition standards and measurement methods for estimated liabilities. Notes to the financial statements of Beijing Wantai Biopharmaceutical Co., Ltd.

For confirmation and measurement, please refer to Note 3.26 for details. The aforementioned costs incurred for the production of inventory will be included in the inventory cost.

Depreciation of right-of-use assets is calculated using the straight-line method. For those who can reasonably determine that the ownership of the leased asset will be obtained when the lease term expires, the depreciation rate will be determined based on the right-of-use asset category and the estimated net residual value rate within the estimated remaining useful life of the leased asset; for those who cannot reasonably be sure that the ownership of the leased asset will be obtained when the lease term expires, the depreciation rate will be determined based on the right-of-use asset category during the shorter of the lease term and the remaining useful life of the leased asset. ②Lease liabilities

Lease liabilities should be initially measured based on the present value of the unpaid lease payments at the beginning of the lease term. Lease payments include the following five items:

• From the fixed payment amount and the actual fixed payment amount, if there is a lease incentive, the amount related to the lease incentive will be deducted;

• variable lease payments that depend on an index or rate;

• The exercise price of the purchase option if the lessee is reasonably certain that it will exercise the option;

• Amounts payable upon exercise of the lease termination option if the lease term reflects the lessee's exercise of the lease termination option;

• Expected payments based on the guaranteed residual value provided by the lessee.

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 expected 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, the company remeasures the lease liability based on the present value of the changed lease payment amount, and adjusts the book value of the right-of-use asset accordingly.

(4) The company’s accounting treatment method as a lessor

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.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

①Operating lease

The Company recognizes the lease receipts as rental income on a straight-line basis in each period during the lease term. The initial direct costs incurred are capitalized and apportioned 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.

②Financial lease

On the start date of the lease, the company recognizes the financial lease receivables 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.

(5) Accounting treatment of lease changes

① Lease change as a separate lease

If a lease changes and the following conditions are met at the same time, the company will account for the lease change as a separate lease: A. The lease change expands the scope of the lease by increasing the right to use one or more leased assets; B. The increased consideration is equivalent to the amount of the individual price of the expanded part of the lease scope adjusted according to the conditions of the contract.

②The lease change is not treated as a separate lease

A. The company serves as the lessee

On the effective date of the lease change, the Company re-determines the lease term and uses the revised discount rate to discount the changed lease payments to re-measure the lease liability. When calculating the present value of lease payments after the change, the interest rate implicit in the lease during the remaining lease period is used as the discount rate; if the interest rate implicit in the lease during the remaining lease period cannot be determined, the incremental borrowing rate on the effective date of the lease change is used as the discount rate.

Regarding the impact of the above lease liability adjustment, accounting treatment is carried out according to the following situations:

• If the lease change results in a reduction in the scope of the lease or a shortening of the lease period, the book value of the right-of-use asset will be reduced, and the related gains or losses from the partial or complete termination of the lease will be included in the current profit and loss;

• For other lease changes, the book value of the right-of-use asset is adjusted accordingly.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

B. The company acts as the lessor

If an operating lease changes, the Company will account for it as a new lease from the effective date of the change, and the amount of lease receipts received in advance or receivable related to the lease before the change is regarded as the amount of receipts from the new lease.

If the change in the financial lease is not accounted for as a separate lease, the company will treat the changed lease under the following circumstances: If the lease change takes effect on the lease commencement date, the lease will be classified as an operating lease, and the company will treat it as an operating lease from the effective date of the lease change. New leases are accounted for, and the net lease investment before the effective date of the lease change is used as the book value of the leased asset; if the lease change takes effect on the lease start date, the lease will be classified as a finance lease, and the company will conduct accounting treatment in accordance with the regulations on modifying or renegotiating the contract. (6) 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 Note 3.28. ①The company serves as the seller (lessee)

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 Note 3.11. If the asset transfer 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. ②The company acts as the buyer (lessor)

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 Note 3.11. If the asset transfer is a sale, the company will account for the asset purchase and account for the asset leasing in accordance with other applicable business accounting standards.

Buy back company shares

(1) If the company reduces its capital by acquiring its own stocks and is approved in accordance with legal procedures, the share capital will be reduced based on the total face value of the canceled stocks. The difference between the price paid to repurchase the shares (including transaction costs) and the face value of the shares will be adjusted to the owner's equity. The portion exceeding the total face value will be offset against the capital reserve (share premium), surplus reserve and undistributed profits in sequence; if it is lower than the total face value, the capital reserve (share premium) will be added to the portion below the total face value.

(2) The shares repurchased by the company are managed as treasury shares before they are canceled or transferred, and all expenditures for repurchasing the shares are converted into the cost of treasury shares.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(3) When treasury shares are transferred, the part of the transfer income that is higher than the cost of treasury shares will increase the capital reserve (equity premium); the part that is lower than the cost of treasury shares will be offset by the capital reserve (equity premium), surplus reserve, and undistributed profits in order.

Restricted stock

In the equity incentive plan, the company grants restricted stocks to the incentive recipients, who first subscribe for the shares. If the unlocking conditions specified in the equity incentive plan are not subsequently met, the company will repurchase the shares at a pre-agreed price. If the restricted stocks issued to employees have completed registration and other capital increase procedures in accordance with relevant regulations, on the date of grant, the company will confirm the share capital and capital reserve (share premium) based on the subscription payments received from employees; at the same time, the company will recognize treasury shares and other payables for repurchase obligations.

Significant accounting judgments and estimates

The Company continuously evaluates the important accounting estimates and key assumptions adopted based on historical experience and other factors, including reasonable expectations for future events. The important accounting estimates and key assumptions that are likely to cause a significant adjustment in the book value of assets and liabilities in the next fiscal year are listed below:

Classification of financial assets

The Company's significant judgments involved in determining the classification of financial assets include analysis of business models and contractual cash flow characteristics.

The Company determines the business model for managing financial assets at the level of financial asset portfolios. Factors considered include the way to evaluate and report the performance of financial assets to key management personnel, the risks that affect the performance of financial assets and their management methods, and the way in which relevant business managers are remunerated.

When the company evaluates whether the contractual cash flows of financial assets are consistent with the basic lending arrangements, the following main judgments are made: whether the time distribution or amount of the principal may change during the duration due to early repayment and other reasons; whether the interest only includes the time value of money, credit risk, other basic lending risks and consideration for costs and profits. For example, whether the amount of early repayment only reflects the unpaid principal and interest based on the unpaid principal, as well as reasonable compensation paid for early termination of the contract.

Goodwill impairment

The Company assesses whether goodwill is impaired at least annually. This requires an estimate of the value in use of the asset group to which goodwill is assigned. When estimating value in use, the company needs to estimate future cash flows from the asset group and select an appropriate discount rate to calculate the present value of future cash flows.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Deferred tax assets

Deferred tax assets should be recognized for all unused tax losses to the extent that it is probable that sufficient taxable profits will be available against which the losses can be utilised. This requires management to use a lot of judgment to estimate the timing and amount of future taxable profits, combined with tax planning strategies, to determine the amount of deferred income tax assets that should be recognized.

Changes in important accounting policies and accounting estimates

(1) Changes in important accounting policies

During the reporting period, the Company had no significant changes in accounting policies.

(2) Changes in important accounting estimates

During the reporting period, the Company had no significant changes in accounting estimates.

4. Taxes

Main tax types and tax rates

Tax type Tax basis Tax rate Value-added tax Value-added amount of taxable products/services 13%, 6%, 3%, 0% urban maintenance and construction tax According to the actual turnover tax paid 5%, 7% education surcharge According to the actual turnover tax paid 3% local education surcharge According to the actual turnover tax paid 2% corporate income tax Taxable income 15% The company's subsidiaries have different corporate income tax rates

Name of tax payer Income tax rate Beijing Wantederui Diagnostic Technology Co., Ltd. 15%

Xiamen Wantai Canghai Biotechnology Co., Ltd. 15%

Beijing Conchestan Biotechnology Co., Ltd. 15%

Xiamen Wantai Kairui Biotechnology Co., Ltd. 15%

Xiamen Umaike Medical Instrument Co., Ltd. 15%

Beijing Tairun Innovation Technology Incubator Co., Ltd. 25%

Jihotai (Beijing) Biotechnology Co., Ltd. 15%

Hangzhou Wantai Biotechnology Co., Ltd. 25%

Xiamen Inbermax Biotechnology Co., Ltd. 15%

Beijing Wantai Biopharmaceutical Co., Ltd. 20%

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Tax incentives

(1) Value-added tax tax benefits

According to the "Notice on the Application of Low VAT Rates and Simplified VAT Collection Policies for Certain Goods" (Caishui [2009] No. 9) and the "Notice on Simplified VAT Collection Rate Policies" (Caishui [2014] No. 7) issued by the Ministry of Finance and the State Administration of Taxation, the company's subsidiary Xiamen Wantai Canghai Biotechnology Co., Ltd. sells self-produced biological products and pays VAT at a 3% levy rate according to the simplified method.

(2) Corporate income tax preferential treatment

On October 26, 2023, the Beijing Municipal Science and Technology Commission, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the company as a high-tech enterprise (certificate number: GR202311000015). The company will apply a corporate income tax rate of 15% in 2025.

The recognition status of the Company's subsidiaries as high-tech enterprises during the reporting period is as follows:

On October 26, 2023, the Beijing Municipal Science and Technology Commission, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Beijing Wanteder Diagnostic Technology Co., Ltd. as a high-tech enterprise (certificate number: GR202311000109). The subsidiary Beijing Wanted Derui Diagnostic Technology Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

On November 22, 2023, Xiamen Municipal Science and Technology Bureau, Xiamen Municipal Finance Bureau, and Xiamen Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Xiamen Wantai Canghai Biotechnology Co., Ltd. as a high-tech enterprise (certificate number: GR202335100468). The subsidiary Xiamen Wantai Canghai Biotechnology Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

On October 28, 2025, the Beijing Municipal Science and Technology Commission, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Beijing Conchestan Biotechnology Co., Ltd. as a high-tech enterprise (certificate number: GS202511000038). The subsidiary Beijing Conchestan Biotechnology Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

On December 8, 2025, Xiamen Municipal Science and Technology Bureau, Xiamen Municipal Finance Bureau, and Xiamen Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Xiamen Wantai Carey Biotechnology Co., Ltd. as a high-tech enterprise (certificate number: GR202535100908). The subsidiary Xiamen Wantai Carey Biotechnology Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

On November 22, 2023, Xiamen Municipal Science and Technology Bureau, Xiamen Municipal Finance Bureau, and Xiamen Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Xiamen Umaike Medical Instrument Co., Ltd. as a high-tech enterprise (certificate number: GR202335100418). The subsidiary Xiamen Umaike Medical Instrument Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

On October 16, 2023, the Beijing Municipal Science and Technology Commission, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Jiehota (Beijing) Biotechnology Co., Ltd. as a high-tech enterprise (certificate number: GR202311000389). The subsidiary Jiehota (Beijing) Biotechnology Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

On December 8, 2025, Xiamen Municipal Science and Technology Bureau, Xiamen Municipal Finance Bureau, and Xiamen Municipal Taxation Bureau of the State Administration of Taxation jointly recognized the subsidiary Xiamen Inbermax Biotechnology Co., Ltd. as a high-tech enterprise (certificate number: GR202535100297). The subsidiary Xiamen Inbermax Biotechnology Co., Ltd. will be subject to a corporate income tax rate of 15% in 2025.

The company's subsidiaries enjoyed tax incentives for small and micro enterprises during the reporting period as follows:

According to the relevant provisions of the Finance and Taxation 2023 No. 12 "Announcement of the Ministry of Finance and the State Administration of Taxation on Tax Policies to Further Support the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households", the policy of calculating taxable income at a reduced rate of 25% for small and low-profit enterprises and paying corporate income tax at a rate of 20% will continue until December 31, 2027. Beijing Wantai Biopharmaceutical Co., Ltd. complies with the preferential income tax policies for small and low-profit enterprises. During the reporting period, it paid income tax in accordance with the preferential income tax policies for small and low-profit enterprises.

5. Notes on Consolidated Financial Statement Items

Monetary funds

Project December 31, 2025 December 31, 2024

cash on hand

Bank deposits 2,422,242,023.79 2,372,585,914.68 Other monetary funds 12,471,442.00 15,266,898.26 Total 2,434,713,465.79 2,387,852,812.94 Including: total amount deposited abroad

Note: Among other monetary funds, RMB 12,471,442.00 is the deposit deposited by the company. Apart from this, there are no other amounts in the monetary funds at the end of the period that have restrictions on use and have potential recovery risks due to mortgages, pledges or freezes.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Trading financial assets

Project December 31, 2025 December 31, 2024

Measured at fair value with changes included

71,806,665.70 Financial assets of current profit and loss

Among them: Fund 71,806,665.70 is designated to be measured at fair value and its changes

1,447,109,490.74 2,438,245,590.44 Financial assets included in current profits and losses

Including: financial products 1,447,109,490.74 2,438,245,590.44 Total 1,447,109,490.74 2,510,052,256.14

Notes receivable

(1) Classified listing

December 31, 2025 December 31, 2024

Type

Book balance Bad debt provision Book value Book balance Bad debt provision Book value Bank acceptance bill 8,691,495.94 8,691,495.94 4,188,684.42 4,188,684.42 Commercial acceptance bill

Total 8,691,495.94 8,691,495.94 4,188,684.42 4,188,684.42 (2) Pledged notes receivable at the end of the period

The company had no pledged notes receivable at the end of the period.

(3) Notes receivable that have been endorsed or discounted at the end of the period but have not yet matured

The company has no notes receivable that have been endorsed or discounted but have not yet matured at the end of the period.

(4) Classified disclosure according to bad debt accrual method

December 31, 2025

Book balance Bad debt provision

2. Joint ventures

MiracleCare Biotech LLC 714,180.00 -494,196.00

Total 714,180.00 -494,196.00

(Continued from above table)

Increases and decreases in this period 2025

2025

Investee announced cash distribution and made provision for impairment on December 31 Others December 31

Dividends or profits Impairment provision balance

2. Joint ventures

MiracleCare Biotech LLC 219,984.00

Total 219,984.00

Other non-current financial assets

Item December 31, 2025 Designated as fair value measurement on December 31, 2024 and its changes will be included in the current profit and loss

11,295,433.26 11,295,433.26 beneficial financial assets

Among them: Beijing Zhongke Gene Technology Co., Ltd.

11,295,433.26 11,295,433.26 Equity investment

Total 11,295,433.26 11,295,433.26

Fixed assets

(1) Classified listing

Item December 31, 2025 Fixed assets as of December 31, 2024 2,877,074,938.83 1,948,054,606.55 Total 2,877,074,938.83 1,948,054,606.55 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

(2) Fixed assets

①Fixed assets

Items Houses and buildings Machinery and equipment Transportation tools Office equipment and others Purification projects Total

1. Original book value:

December 31, 2024 779,648,166.99 1,778,840,084.38 10,337,706.88 126,701,427.68 317,013,706.37 3,012,541,092.30 2. Increase in the current period 777,236,913.15 458,294,958.48 257,000.00 4,637,898.47 1,001,732.88 1,241,428,502.98 (1) Purchase 239,594.91 5,494,090.46 1,308,450.69 340,000.00 7,382,136.06 (2) Transfer of construction in progress 776,997,318.24 443,903,000.30 257,000.00 3,329,447.78 661,732.88 1,225,148,499.20 (3) Inventory transfer 8,897,867.72 8,897,867.72 3. Decrease amount in the current period 179,792,864.67 44,800.00 16,557,434.16 126,095.40 196,521,194.23 (1) Disposal or scrapping 179,792,864.67 44,800.00 16,557,434.16 126,095.40 196,521,194.23 4. December 31, 2025 1,556,885,080.14 2,057,342,178.19 10,549,906.88 114,781,891.99 317,889,343.85 4,057,448,401.05

2. Accumulated depreciation

December 31, 2024 105,318,516.94 611,551,887.37 4,889,359.36 80,086,836.46 110,980,417.21 912,827,017.34 2. Increase in the current period 23,247,730.01 194,705,909.72 825,138.45 10,772,960.18 33,265,041.12 262,816,779.48 (1) Provision 23,247,730.01 194,705,909.72 825,138.45 10,772,960.18 33,265,041.12 262,816,779.48 3. Decrease amount in the current period 44,760,966.29 42,560.00 6,615,141.50 51,418,667.79 (1) Disposal or scrapping 44,760,966.29 42,560.00 6,615,141.50 51,418,667.79 4. December 31, 2025 128,566,246.95 761,496,830.80 5,671,937.81 84,244,655.14 144,245,458.33 1,124,225,129.03

3. Impairment provision

December 31, 2024 146,520,313.74 5,139,154.67 151,659,468.41 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Items Houses and buildings Machinery and equipment Transportation tools Office equipment and others Purification projects Total 2. Increased amount in this period

(1) Provision

Reduction amount in this period 90,371,980.55 5,139,154.67 95,511,135.22 (1) Disposal or scrapping 90,371,980.55 5,139,154.67 95,511,135.22 4. December 31, 2025 56,148,333.19 56,148,333.19

4. Book value of fixed assets

Book value on December 31, 2025 1,428,318,833.19 1,239,697,014.20 4,877,969.07 30,537,236.85 173,643,885.52 2,877,074,938.83 2. Book value on December 31, 2024 674,329,650.05 1,020,767,883.27 5,448,347.52 41,475,436.55 206,033,289.16 1,948,054,606.55 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

②Situation of temporarily idle fixed assets at the end of the period

Item Original book value Accumulated depreciation Impairment provision Book value Remarks Idle machinery and equipment and offices

157,517,534.06 54,780,163.33 3 0,184,565.27 72,552,805.46

Equipment

Total 157,517,534.06 54,780,163.33 3 0,184,565.27 72,552,805.46

③ Fixed assets leased through operating leases

Item Book value on December 31, 2025

Houses and buildings 160,553.63 Total 160,553.63 ④ Fixed assets with uncompleted property rights certificates

Item Book value on December 31, 2025 Reasons for not completing the property rights certificate Industrial research base-Bioport (Building 1, Building 3,

Building No. 6-1, Building 6-2, Building 7-1, Building 7-2 274,806,672.48 Planning acceptance processing Building No. 6, Building No. 9, Building No. 10, Building No. 12)

Silicon Valley SOHO project house 11,428,460.39 The developer has not paid off the debt to the bank Creative Park building 75,942.00 Historical problem diagnosis base 772,928,066.71 Total in comprehensive acceptance processing 1,059,239,141.58

Construction in progress

(1) Classified listing

Project December 31, 2025 Construction in progress on December 31, 2024 571,792,381.02 1,468,934,890.63 Total 571,792,381.02 1,468,934,890.63 (2) Construction in progress

①Projects under construction

December 31, 2025 December 31, 2024

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Equipment installation, etc. 73,361,653.52 2,666,540.00 70,695,113.52 50,457,910.38 2,666,540.00 47,791,370.38 Industrial Research Base - Biology

180,319,122.42 180,319,122.42 513,083,022.05 513,083,022.05 Hong Kong

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

December 31, 2025 December 31, 2024

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Industrial Research Base-Diagnosis

692,617,964.41 692,617,964.41 base

Decoration costs 768,807.34 768,807.34 2,958,200.00 2,958,200.00 Vaccine Industry Base

46,400.00 46,400.00 46,400.00 46,400.00Construction

20-valent pneumococci

Bacterial polysaccharide conjugated vaccine 309,484,111.20 309,484,111.20 202,250,377.22 202,250,377.22 Vaccine industrialization project

Innovative vaccine industry

10,478,826.54 10,478,826.54 10,187,556.57 10,187,556.57 Base project

Total 574,458,921.02 2,666,540.00 571,792,381.02 1,471,601,430.63 2,666,540.00 1,468,934,890.63 ②Changes in important projects under construction

2024 Other decreases transferred to fixed capital in this period Project name in 2025 Budget amount Increase in this period

December 31 Production Amount Amount December 31 Nine Price Cervical Cancer

Vaccine construction project 1,575,418,225.00 498,517,856.55 8,342,992.00 319,450,726.13 7,091,000.00 180,319,122.42 items

twenty-valent pneumonia

coccal polysaccharide knot

551,688,000.00 202,250,377.22 109,744,095.98 2,510,362.00 309,484,111.20 Combined vaccine industry

chemical projects

Production and research base-diagnosis

959,606,100.00 692,617,964.41 130,360,127.52 812,756,221.96 10,221,869.97

break base

Total 3,086,712,325.00 1,393,386,198.18 248,447,215.50 1,134,717,310.09 17,312,869.97 489,803,233.62 (continued from the above table)

Cumulative investment in the project Project interest capitalization Including: Profit for the current period Interest capital for the current period

Project name Funding source

Proportion of budget (%) Progress Cumulative amount Interest capitalization amount Capitalization rate (%)

Nine-valent cervical cancer vaccine own funds,

80.17 80.17

Construction Project Raising Funds Twenty-Valent Pneumococcus

Own funds, polysaccharide conjugate vaccine production 59.59 59.59

Raising funds for industrialization projects

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Cumulative investment in the project Project interest capitalization Including: Profit for the current period Interest capital for the current period

Project name Proportion of funding sources to budget (%) Progress Cumulative amount Capitalization rate of interest (%)

Own funds, production and research base-diagnosis

85.76 85.76 1,134,618.49 457,996.23 1.40 Bank loans and bases

Total funds raised — —

Note: During the reporting period, other decreases in the company's construction-in-progress were caused by the transfer of long-term deferred expenses.

③Provision for impairment of projects under construction

2024 2025

Item Increase amount in the current period Decrease amount in the current period Reasons for provision

December 31 December 31

There are signs of impairment and the recoverable amount is low.

2,666,540.00 2,666,540.00

Total book value of machinery and equipment 2,666,540.00 2,666,540.00

Right-of-use assets

(1) Right-of-use assets

Item Houses and Buildings Total

1. Original book value:

December 31, 2024 161,552,855.98 161,552,855.98 2. Increase in the current period 8,341,962.59 8,341,962.59 3. Decrease in the current period 37,228,766.62 37,228,766.62 4. December 31, 2025 132,666,051.95 132,666,051.95

2. Accumulated depreciation

December 31, 2024 40,345,839.98 40,345,839.98 2. Increase in the current period 29,629,992.40 29,629,992.40 (1) Provision 29,629,992.40 29,629,992.40 3. Decrease in the current period 6,317,017.38 6,317,017.38 (1) Disposal 6,317,017.38 6,317,017.38 4. December 31, 2025 63,658,815.00 63,658,815.00

3. Impairment provision

1.December 31, 2024

Increase amount in this period

(1) Provision

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Item Houses and Buildings Total

Reduction amount in this period

(1) Disposal

December 31, 2025

4. Book value

Book value as of December 31, 2025 69,007,236.95 69,007,236.95 2. Book value as of December 31, 2024 121,207,016.00 121,207,016.00

Note: The depreciation amount accrued for the right-of-use assets in 2025 is 29,629,992.40 yuan, of which the depreciation expense included in management expenses is 15,144,414.93 yuan, the depreciation expense included in sales expenses is 4,012,212.70 yuan, and the depreciation expense included in research and development expenses is 4,012,212.70 yuan. 6,956,987.19 yuan, and the depreciation expense included in manufacturing expenses is 3,516,377.58 yuan. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Intangible assets

(1) Intangible assets

intellectual property

Project Land use rights Software Total

Patent rights Trademark rights Caris200 proprietary technology Nine-valent HPV vaccine technology Subtotal

1. Original book value

December 31, 2024 570,709,825.52 66,696,318.35 12,588,312.49 671,000.00 20,809,312.50 34,068,624.99 671,474,768.86 2. Increase in the current period 18,015,686.54 320,187,120.48 320,187,120.48 338,202,807.02 (1) Purchase 18,015,686.54 18,015,686.54 (2) Internal research and development 320,187,120.48 320,187,120.48 320,187,120.48 3. Reduction amount in the current period 3,096,686.06 3,096,686.06 (1) Disposal 3,096,686.06 3,096,686.06 4. December 31, 2025 570,709,825.52 81,615,318.83 12,588,312.49 671,000.00 20,809,312.50 320,187,120.48 354,255,745.47 1,006,580,889.82

2. Accumulated amortization

December 31, 2024 105,592,673.00 25,432,862.50 6,819,422.78 357,002.72 20,809,312.50 27,985,738.00 159,011,273.50 2. Increase in the current period 20,218,616.70 13,377,108.01 910,993.31 94,199.18 18,677,582.04 19,682,774.53 53,278,499.24 (1) Provision 20,218,616.70 13,377,108.01 910,993.31 94,199.18 18,677,582.04 19,682,774.53 53,278,499.24 3. Reduction amount in the current period 3,092,305.67 3,092,305.67 (1) Disposal 3,092,305.67 3,092,305.67 4. December 31, 2025 125,811,289.70 35,717,664.84 7,730,416.09 451,201.90 20,809,312.50 18,677,582.04 47,668,512.53 209,197,467.07

3. Impairment provision

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

intellectual property

Project Land use rights Software Total

Patent rights Trademark rights Caris200 proprietary technology Nine-valent HPV vaccine technology Subtotal 1. December 31, 2024

Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal

December 31, 2025

4. Book value

1.December 31, 2025

444,898,535.82 45,897,653.99 4,857,896.40 219,798.10 301,509,538.44 306,587,232.94 797,383,422.75 Book value

2.December 31, 2024

465,117,152.52 41,263,455.85 5,768,889.71 313,997.28 6,082,886.99 512,463,495.36 Book value

(2) The proportion of intangible assets formed by the company’s internal research and development at the end of the period to the balance of intangible assets

As of December 31, 2025, the proportion of intangible assets formed through the company's internal research and development accounted for 31.81% of the balance of intangible assets. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Goodwill

(1) Original book value of goodwill

Increase in this period Decrease in this period

Name of invested unit or business merger form in 2024 and 2025

Events forming goodwill December 31 Others Disposal Others December 31

Made

Xiamen Umaike Medical Instruments

4,644,327.05 4,644,327.05 Co., Ltd.

Total 4,644,327.05 4,644,327.05 (2) Goodwill impairment provision

Name of invested unit or 2024 Increase in this period Decrease in this period 2025

Events forming goodwill December 31 Provision Others Disposal Others December 31 Xiamen Umaike Medical Instruments

4,644,327.05 4,644,327.05 Co., Ltd.

Total 4,644,327.05 4,644,327.05

Long-term deferred expenses

2024: Decrease in this period Projects in 2025: Increase in this period

December 31 Amortization for the current period Other decreases Decoration payment on December 31 159,014,629.28 63,001,318.25 20,117,727.35 84,121,544.31 117,776,675.87 Purification project 6,085,000.00 507,083.32 5,577,916.68 Production workshop renovation project 4,434,153.14 120,388.35 1,100,445.73 3,454,095.76 Total 163,448,782.42 69,206,706.60 21,725,256.40 84,121,544.31 126,808,688.31 Note: Other decreases in long-term prepaid expenses in the current period are mainly due to the sale of assets.

Deferred income tax assets and deferred income tax liabilities

(1) Deferred income tax assets without offset

December 31, 2025 December 31, 2024

Project

Deductible temporary differences Deferred income tax assets Deductible temporary differences Deferred income tax assets Asset impairment provision 504,134,798.88 75,620,219.83 565,901,725.57 84,885,258.84 Deferred income 49,984,094.58 7,497,614.19 38,112,373.89 5,716,856.08 Employee benefits payable 64,644,365.64 9,696,654.85 80,150,454.61 12,022,568.19 Unrealized profits from internal transactions 60,540,904.42 9,081,135.66 72,414,146.95 10,862,122.04 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

December 31, 2025 December 31, 2024

Project

Deductible temporary differences Deferred income tax assets can be used to offset losses and other temporary differences Deferred income tax assets can be used to offset losses and other temporary differences

1,778,366,437.73 266,754,965.66 980,833,712.08 147,125,056.81 Temporal differences

Temporary differences in leasing 58,280,916.83 8,742,137.52 66,358,560.18 9,953,784.03 Total 2,515,951,518.08 377,392,727.71 1,803,770,973.28 270,565,645.99 Note 1: Deductible losses include temporary differences related to the company’s expected returns and excess public welfare donations.

Note 2: According to the provisions of Article 9 of the Enterprise Income Tax Law, the part of the public welfare donation expenditure incurred by the enterprise within 12% of the total annual profit is allowed to be deducted when calculating the taxable income; the part exceeding 12% of the total annual profit is allowed to be carried forward and deducted when calculating the taxable income within the next three years. For public welfare donation expenditures, when reporting income tax, the income and costs need to be adjusted according to the fair price, and deferred income tax assets are recognized for the portion that cannot be fully deducted this year.

(2) Deferred income tax liabilities without offset

December 31, 2025 December 31, 2024

Project

Taxable temporary differences Deferred income tax liabilities Taxable temporary differences Deferred income tax liabilities One-time pre-tax deduction fixed

62,200,482.85 9,330,072.43 85,161,262.59 12,774,189.40Assets

Right-of-use assets 59,671,093.53 8,950,664.03 66,336,014.99 9,950,402.25 Changes in fair value and unavailability

139,556,204.26 20,933,430.64 30,052,256.14 4,507,838.42 period interest

Total 261,427,780.64 39,214,167.10 181,549,533.72 27,232,430.07 (3) Deferred income tax assets or liabilities presented as net amount after offset

Deferred income tax assets and deferred income tax after offsetting Deferred income tax assets and deferred income tax items after offsetting Liabilities in 202512 Assets or liabilities in 2025 Liabilities in 202412 Assets or liabilities in 2024

Offsetting amount on December 31, 2020 Balance on December 31, year -27,232,430.07

(4) Details of deferred income tax assets not recognized

Project December 31, 2025 December 31, 2024

Asset impairment provision 107,210,419.06 98,467,854.38 Deferred income 14,409,347.24 16,084,294.24 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

Item December 31, 2025 Temporary lease differences on December 31, 2024 835,335.92 23,648,137.36 Deductible losses 1,567,947,594.49 1,086,186,062.48 Total 1,690,402,696.71 1,224,386,348.46 (5) The deductible losses of unrecognized deferred income tax assets will expire in the following years

Year December 31, 2025 December 31, 2024 Note 2024 13,069,733.53

2025 7,271,789.24

2026 5,758,225.44 5,758,225.44

2027

2028 9,279,770.52 9,279,770.52

2029 13,098,946.82 13,098,946.82

2030

2031 32,542,685.62 32,542,685.62

2032 146,126,208.56 146,126,208.56

2033 485,130,226.97 485,130,226.97

2034 373,908,475.78 373,908,475.78

2035 502,103,054.78

Total 1,567,947,594.49 1,086,186,062.48

Other non-current assets

December 31, 2025 December 31, 2024 Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Tairun factory decentralization

The latter minority shareholders enjoy part of the value.

Prepaid long-term assets

69,488,438.47 69,488,438.47 58,803,496.66 58,803,496.66 Payment

Provision for debt investment

Receivable over one year 28,573,177.25 28,573,177.25 68,061,386.76 68,061,386.76 Interest

GMP transformation and inspection

14,804,445.99 14,804,445.99

Certificate fee

Total 280,670,304.28 280,670,304.28 294,669,125.99 294,669,125.99Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Assets with restricted ownership or rights of use

December 31, 2025

Project

Book balance Book value Restriction type Restriction situation Monetary funds 12,471,442.00 12,471,442.00 Restricted use rights Security deposit

Mortgage of borrowings and fixed assets with maximum amount 51,105,277.39 41,555,402.41 Mortgage

Mortgage contract results in

Mortgage of loans and maximum amount of intangible assets 73,398,447.99 61,359,098.69 Mortgage

The mortgage contract results in a non-payment due within one year.

260,000,000.00 260,000,000.00 Pledged large-denomination certificate of deposit liquid assets

Debt investment 80,000,000.00 80,000,000.00 Total pledged large deposit certificates 476,975,167.38 455,385,943.10 — —

Short-term borrowings

(1) Classification of short-term loans

Project December 31, 2025 December 31, 2024

Discounted bill borrowings 133,660,191.12 103,624,259.50 Total 133,660,191.12 103,624,259.50

Notes payable

Category December 31, 2025 December 31, 2024

Bank acceptance bill 19,874,196.58 24,407,681.88 Total 19,874,196.58 24,407,681.88

Accounts payable

(1) Listed by nature

Project December 31, 2025 December 31, 2024

Payment for goods 123,733,234.84 109,243,528.00 Purchase of long-term assets 272,330,974.60 306,923,829.11 Others 4,286,844.40 Total 396,064,209.44 420,454,201.51

(2) There are no important accounts payable aged more than 1 year at the end of the period

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Contract liabilities

(1) Contract liabilities

Project December 31, 2025 December 31, 2024

Advance payment for goods received 41,054,715.43 48,149,852.17 Total 41,054,715.43 48,149,852.17

Employee benefits payable

(1) Presentation of employee benefits payable

2024 2025 Project Increase in this period Decrease in this period

December 31 December 31

Short-term salary 177,825,624.41 957,834,583.50 940,517,483.31 195,142,724.60

2. Post-employment benefits-settings

3,069,405.66 97,975,484.54 96,943,142.40 4,101,747.80 Withdrawal plan

3. Dismissal benefits 231,474.00 14,013,081.60 14,244,555.60

Total 181,126,504.07 1,069,823,149.64 1,051,705,181.31 199,244,472.40 (2) Short-term compensation presentation

2024 2025 Project Increase in this period Decrease in this period

December 31 December 31

1. Salary, bonus, allowance

165,471,086.64 794,731,656.99 778,087,342.61 182,115,401.02 subsidies and subsidies

Employee welfare fees 920,920.72 28,520,475.37 28,566,196.43 875,199.66
Social insurance premiums 2,393,826.61 58,360,773.39 57,996,412.72 2,758,187.28 Including: medical insurance premiums 2,225,256.35 51,649,147.34 51,426,608.87 2,447,794.82 Work-related injury insurance premium 168,570.26 5,067,325.58 4,926,635.88 309,259.96 Maternity insurance premium 1,644,300.47 1,643,167.97 1,132.50
Housing provident fund 59,605,519.58 59,601,575.58 3,944.00

5. Union funds and employees

9,039,790.44 16,616,158.17 16,265,955.97 9,389,992.64 Education funds

6. Short-term paid absences

7. Others

Total 177,825,624.41 957,834,583.50 940,517,483.31 195,142,724.60 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(3) Display of defined contribution plan

2024 2025 Project Increase in this period Decrease in this period

December 31 Post-employment benefits on December 31:

Basic pension insurance 2,954,610.79 95,005,589.71 93,978,929.28 3,981,271.22 2. Unemployment insurance premium 114,794.87 2,969,894.83 2,964,213.12 120,476.58 3. Enterprise annuity payment

Total 3,069,405.66 97,975,484.54 96,943,142.40 4,101,747.80

Taxes payable

Project December 31, 2025 December 31, 2024

Value-added tax 12,001,238.30 7,286,499.09 Corporate income tax 427,200.49 8,593,783.31 Personal income tax 3,563,486.88 3,233,058.90 Urban maintenance and construction tax 853,712.14 710,077.68 Education fee surcharge 365,876.62 304,319.01 Local education surcharge 243,917.74 202,879.34 Property tax 1,742,551.21 1,608,235.14 Land use tax 250,505.92 250,505.92 Stamp tax, etc. 3,602,332.09 1,315,114.93 Total 23,050,821.39 23,504,473.32

Other payables

(1) Classified listing

Project December 31, 2025 December 31, 2024

interest payable

Dividends payable

Other payables 910,162,234.86 1,105,843,050.53 Total 910,162,234.86 1,105,843,050.53 (2) Other payables

① List other payables according to the nature of the payment

Project December 31, 2025 December 31, 2024

Service fee 355,344,354.03 587,809,179.02 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to financial statements

Project December 31, 2025 December 31, 2024

Accounts payable for purchasing assets 125,851,934.79 117,173,924.54 Estimated transportation and travel expenses 64,929,444.71 64,827,928.39 Security deposits and deposits 118,174,183.43 106,060,991.93 R&D cooperation fees payable 67,324,587.14 Sales commission 3,130,195.80 3,128,425.83 Others 242,732,122.10 159,518,013.68 Total 910,162,234.86 1,105,843,050.53 ② Closing aging exceeds 1 year of important other payables

Item Balance as of December 31, 2025 Accounts payable due to the purchase of assets that have not been repaid or carried forward 116,273,924.54 Tairun factory separation payment

Total 116,273,924.54 —

Non-current liabilities due within one year

Project December 31, 2025 December 31, 2024

Lease liabilities due within one year 19,522,074.58 38,431,039.47 Long-term borrowing principal and

56,847,872.21 65,683,260.00 Interest

Total 76,369,946.79 104,114,299.47

Other current liabilities

Project December 31, 2025 December 31, 2024

Output tax to be transferred 2,748,905.24 847,377.79 Total 2,748,905.24 847,377.79

Long-term borrowings

(1) Classification of long-term loans

Project December 31, 2025 December 31, 2024 Credit loan with interest rate range in 2025 97,330,000.00 83,057,260.00 2.90% to 3.25% guaranteed loan

Mortgage + guaranteed borrowings 58,240,000.00 76,740,000.00 3.25% to 3.60% interest payable on long-term borrowings 71,672.21 79,251.29

Subtotal 155,641,672.21 159,876,511.29

Less: Long-term borrowings due within one year 56,847,872.21 65,683,260.00

Total 98,793,800.00 94,193,251.29

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Lease liabilities

Project December 31, 2025 December 31, 2024

Lease payments 70,937,651.97 129,121,218.26 Less: Unrecognized financing costs 5,848,553.82 9,715,354.75

Subtotal 65,089,098.15 119,405,863.51 Less: Lease liabilities due within one year 19,522,074.58 38,431,039.47 Total 45,567,023.57 80,974,824.04

Deferred income

2024 2025

Item Increase in this period Decrease in this period Reason for formation December 31 December 31

Government subsidies pending acceptance and amortization 54,196,668.13 24,261,363.60 14,064,589.91 64,393,441.82

Total government subsidies 54,196,668.13 24,261,363.60 14,064,589.91 64,393,441.82 —

Equity capital

Unit: 10,000 yuan 2024 This increase or decrease change (+, one) 2025 project

December 31 Issuance of new shares Bonus shares Conversion of reserve funds Others Subtotal Total number of shares on December 31 126,512.28 -73.00 -73.00 126,439.28

Note: On October 15, 2025, the company held the 10th meeting of the 6th board of directors and the 10th meeting of the 6th board of supervisors, and held the first extraordinary shareholders meeting of 2025 on October 31, 2025. The company reviewed and approved the "Proposal on Changing the Use and Cancellation of Partial Repurchased Shares" and agreed that the company would repurchase the 729,970 repurchased but unused shares in the special securities account. The purpose of the shares was changed from "for employee stock ownership plans or equity incentives" to "for cancellation and reduction of registered capital". Upon application, the company canceled the repurchased but unused 729,970 shares from China Securities Depository and Clearing Co., Ltd. on December 17, 2025.

Capital reserve

2024 2025 Project Increase in this period Decrease in this period

December 31 Equity premium on December 31 3,117,629,882.30 73,910.49 91,441,388.60 3,026,262,404.19 Other capital reserves 21,810,428.10 21,810,428.10

Total 3,139,440,310.40 73,910.49 91,441,388.60 3,048,072,832.29 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Note 1: The increase in equity premium in this period is due to the repurchase of minority shareholders’ interests in subsidiaries.

Note 2: The decrease in equity premium in this period is due to the cancellation of treasury shares.

Treasury stock

2024 2025 Project Increase in this period Decrease in this period

December 31 Treasury stocks on December 31 92,171,358.60 92,171,358.60

Note: The decrease in treasury shares in this period is due to cancellation.

Surplus reserve

2024 2025 Project Increase in this period Decrease in this period

December 31 Statutory surplus reserve as of December 31 465,556,660.64 465,556,660.64 Discretionary surplus reserve 252,981,031.21 252,981,031.21 Total 718,537,691.85 718,537,691.85

Undistributed profits

Item 2025 Undistributed profit at the end of the previous period before adjustment in 2024 7,231,872,601.01 7,574,801,075.42

Adjust the total amount of undistributed profits at the beginning of the period (increase +, decrease -)

Undistributed profit at the beginning of the adjusted period 7,231,872,601.01 7,574,801,075.42 Plus: Net profit attributable to owners of the parent company for the period -398,267,667.27 106,235,425.64 Less: Appropriation to statutory surplus reserve 33,869,338.28 Appropriation to discretionary surplus reserve 9,874,552.49 Withdrawal of general risk reserve

Common stock dividends payable 405,420,009.28 Common stock dividends converted into share capital

Undistributed profits at the end of the period 6,833,604,933.74 7,231,872,601.01

Operating income and operating costs

2025 2024

Project

revenue cost revenue cost

Main business 1,765,617,890.66 895,354,212.28 2,215,090,773.45 742,805,329.39 Other businesses 53,349,567.21 26,472,673.54 30,312,472.20 16,239,392.94

Total 1,818,967,457.87 921,826,885.82 2,245,403,245.65 759,044,722.33Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(1) Main business (sub-business)

2025 2024

Business name

revenue cost revenue cost

Distribution 954,384,069.70 426,516,389.78 1,113,503,544.97 393,898,632.42 Direct sales 811,233,820.96 468,837,822.50 1,101,587,228.48 348,906,696.97 Total 1,765,617,890.66 895,354,212.28 2,215,090,773.45 742,805,329.39 (2) Main business (by product)

2025 2024

Product name

revenue cost revenue cost

Diagnostic reagents 1,124,825,624.48 331,739,005.20 1,433,300,032.38 351,758,714.62 Vaccine 457,052,000.90 332,486,939.87 606,432,558.89 179,306,715.39Diagnostic instruments 60,515,118.06 160,250,016.80 38,784,375.51 159,233,721.51Agent products 108,511,779.86 69,856,936.40 113,817,053.59 50,273,673.43Active raw materials 14,713,367.36 1,021,314.01 22,756,753.08 2,232,504.44Total 1,765,617,890.66 895,354,212.28 2,215,090,773.45 742,805,329.39 (3) Main business (by region)

2025 2024

area name

revenue cost revenue cost

Domestic income 1,353,507,732.93 655,851,940.38 1,999,156,371.89 598,206,098.18 of which:

Northeast China 73,853,220.75 34,602,899.60 70,543,072.36 23,474,831.39 North China 209,587,947.92 97,006,583.23 282,262,979.12 88,641,015.32 East China 472,582,351.49 236,220,235.37 655,857,995.28 216,338,311.91 South China 166,229,717.17 76,022,771.64 318,761,263.44 80,531,952.76 Central China 174,270,275.74 92,921,108.11 280,776,999.26 82,585,662.70 Western China 256,984,219.86 119,078,342.43 390,954,062.43 106,634,324.10 Overseas income 412,110,157.73 239,502,271.90 215,934,401.56 144,599,231.21Total 1,765,617,890.66 895,354,212.28 2,215,090,773.45 742,805,329.39 (4) Main business income breakdown information

In 2025, the company's operating income is broken down by operating region, product type, sales channel and revenue recognition time, and its relationship with the income of each reporting segment of the company:

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

2025

Project

Diagnostics Segment Vaccines Segment Offset Total

Classified by business area

Domestic income 1,578,231,638.96 92,656,530.59 -317,380,436.62 1,353,507,732.93 of which:

Northeast China 62,038,425.75 11,814,795.00 73,853,220.75 North China 224,718,239.51 7,033,314.50 -22,163,606.09 209,587,947.92 East China 744,075,874.24 23,723,307.78 -295,216,830.53 472,582,351.49 South China 144,406,108.19 21,823,608.98 166,229,717.17 Central China 166,450,447.78 7,819,827.96 174,270,275.74Western Region 236,542,543.49 20,441,676.37 256,984,219.86 Overseas income 47,714,687.42 364,395,470.31 412,110,157.73

Total 1,625,946,326.38 457,052,000.90 -317,380,436.62 1,765,617,890.66 Classified by main products

Diagnostic reagents 1,133,053,611.55 -8,227,987.07 1,124,825,624.48 Vaccines 457,052,000.90 457,052,000.90 Diagnostic instruments 261,075,435.32 -200,560,317.26 60,515,118.06Agent products 153,024,839.26 -44,513,059.40 108,511,779.86Active raw materials 78,792,440.25 -64,079,072.89 14,713,367.36

Total 1,625,946,326.38 457,052,000.90 -317,380,436.62 1,765,617,890.66 Classified by sales channel

Distribution 920,576,245.87 33,807,823.83 954,384,069.70 Direct sales 705,370,080.51 423,244,177.07 -317,380,436.62 811,233,820.96

Total 1,625,946,326.38 457,052,000.90 -317,380,436.62 1,765,617,890.66 Classified by revenue recognition time

Goods (transferred at a certain point in time)

1,625,946,326.38 457,052,000.90 -317,380,436.62 1,765,617,890.66)

Service (at a certain point in time

provided)

Total 1,625,946,326.38 457,052,000.90 -317,380,436.62 1,765,617,890.66 (5) Description of performance obligations

For sales of goods transactions, the Company completes its performance obligations when the customer obtains control of the relevant goods. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(6) Deductions from operating income

2025 2024 Item Amount Specific deduction Amount Specific deduction

(RMB 10,000) Situation (RMB 10,000) Situation Operating income 181,896.75 224,540.32 Total amount of items deducted from operating income 5,334.96 3,031.25 Total amount of items deducted from operating income accounts for % of operating income

2.93 1.35

Proportion (%)

Business income unrelated to the main business — — — — 1. Other business income other than normal operations. Such as renting a solid

Deduction of lease income: Deduction of lease receipt assets, intangible assets, packaging materials, sales materials,

Purchase and sale of materials Purchase and sale of materials for non-monetary asset exchange, entrusted management of operations 5,334.96 3,031.25

Income from materials, provision of services, provision of services, etc., as well as income from the main business income

Services and other income comes in, but it is income outside the normal operations of listed companies.

Income from quasi-financial business without qualifications, such as capital splitting

interest income; this fiscal year and the previous fiscal year

Income generated from new quasi-financial businesses, such as guarantees,

Commercial factoring, small loans, financial leasing, pawns and other industries

income generated from business, financing carried out for the sale of main products

Except for capital leasing business.

New trading industries in this fiscal year and the previous fiscal year

income generated from services.

Relationships that have nothing to do with the listed company’s existing normal business operations

Revenue generated from transactions.

Subsidiaries merged under the same control from the beginning of the period to the merger

daily income.

Business places that have not formed or are difficult to form a stable business model

revenue generated.

Subtotal of business income unrelated to main business 5,334.96 3,031.25

Income that does not have commercial substance — — — — 1. Does not significantly change the risk and timing of the company’s future cash flows

Income arising from transactions or events that vary in distribution or amount.

Income generated from transactions that do not have real business. As in

False income achieved through self-trading, using the Internet

False information generated by constructing transactions using Internet technology or other methods.

income etc.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

2025 2024

Item Amount Specific deduction Amount Specific deduction

(RMB 10,000) Situation (RMB 10,000) Situation 3. Income generated from business where the transaction price is obviously unfair.

In this fiscal year, the transaction was made at an obviously unfair consideration or by a non-trading party.

Income generated from subsidiaries or businesses acquired through a business combination

Enter.

Income involved in non-standard audit opinions in the audit opinions.
Other transactions or matters that are not commercially reasonable occur

income.

Income subtotal without commercial substance

3. Other matters that have nothing to do with the main business or have no commercial substance

his income

Amount after deduction of operating income 176,561.79 221,509.07

Taxes and surcharges

Project 2025 2024

Urban maintenance and construction tax 4,981,403.23 5,726,526.55 Education surcharge 2,134,849.14 2,454,223.79 Property tax 10,701,298.94 11,071,143.73 Local education surcharge 1,423,232.71 1,636,149.24 Stamp tax 1,436,610.08 1,379,496.50 Land use tax 771,678.42 767,192.04 Others 29,274.63 65,505.04 Total 21,478,347.15 23,100,236.89

Selling expenses

Project 2025 2024

Business expenses 23,980,524.56 72,945,955.18 Employee compensation 241,866,708.28 206,549,722.64 Sales commission 16,239,640.68 17,366,992.20 Travel expenses 31,535,350.27 28,284,555.69 Marketing expenses 16,970,416.47 9,992,641.47 Depreciation and amortization 37,504,791.82 30,822,037.69 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

Project 2025 2024

Conference fees 21,432,423.58 21,815,458.48 Material costs 27,990,250.95 17,819,491.64 Other expenses 12,930,265.22 12,884,952.09 Market development activity fees 13,631,385.41 18,363,091.83 Bidding fees 1,592,480.89 1,547,232.68 Total 445,674,238.13 438,392,131.59

Administrative expenses

Project 2025 2024

Employee compensation 178,499,607.01 168,981,850.44 Administrative fees 44,213,527.09 32,081,215.17 Travel expenses 6,364,886.66 6,117,337.47 Depreciation and amortization 100,950,177.48 107,043,211.42 Business entertainment expenses 1,416,589.35 2,717,789.28 Intermediary expenses 7,801,723.25 9,037,320.65 Material consumption 34,915,067.42 15,429,213.41 Power expenses 8,493,033.88 3,753,355.62 Patent fees 1,355,596.76 1,938,901.86 Total 384,010,208.90 347,100,195.32

Research and development expenses

Project 2025 2024

Testing and assay processing fees 49,048,750.24 88,363,256.91 Employee compensation 232,910,662.66 324,933,921.83 Material consumption 127,576,233.42 223,422,550.37 Entrusted development expenses 27,155,692.59 47,967,271.46 Depreciation and amortization 62,046,738.02 103,456,228.49 Fuel and power expenses 17,160,512.54 33,938,781.46 Office expenses 13,969,065.95 37,853,180.39 Expert consultation fees 20,488,905.67 14,629,966.90 Maintenance and repair fees 3,667,696.83 6,821,502.21 Lease fees 6,772,656.47 4,665,283.21 Total 560,796,914.39 886,051,943.23

Note: R&D expenses for this period decreased by 36.71% compared with the previous period, mainly due to the capitalization of the nine-valent HPV vaccine. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Financial charges

Project 2025 2024

Interest expense 6,457,746.22 8,324,928.73 Including: Interest expense on lease liabilities 2,649,595.41 3,409,707.44 Less: Interest income 32,898,979.54 59,455,687.13 Net interest expense -26,441,233.32 -51,130,758.40 Exchange losses 32,065,997.53 10,223,106.03 Less: Exchange gains 17,591,336.07 17,646,415.44 Net exchange losses 14,474,661.46 -7,423,309.41 Bank fees and others 596,831.12 486,156.07Total -11,369,740.74 -58,067,911.74

Other income

Project 2025 2024

Government subsidies 86,277,908.61 208,211,775.31 Individual income tax withholding fees 358,541.29 1,005,216.99 Tax reduction, exemption, and increase in tax deductions

1,777,288.73 1,369,468.72 amount, partial tax credit

Total 88,413,738.63 210,586,461.02

Investment income

Project 2025 2024

Investment income from trading financial assets 446,753.20 51,103,486.22 Interest income from debt investments during the holding period 66,262,638.77 58,532,592.89 Long-term equity investment income calculated using the equity method -494,196.00

Total 66,215,195.97 109,636,079.11

Gains from changes in fair value

Sources of gains from changes in fair value 2025 2024

Trading financial assets 48,297,071.98 36,707,335.76 Total 48,297,071.98 36,707,335.76

Credit impairment loss

Project 2025 2024

Bad debt losses on notes receivable 1,303.65 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

Project 2025 2024

Bad debt losses on accounts receivable -23,078,599.01 -11,891,189.08 Bad debt losses on other receivables 1,507,900.65 -5,281,415.49 Total -21,570,698.36 -17,171,300.92

Asset impairment losses

Project 2025 2024

Loss from inventory depreciation -201,677,022.12 -100,476,312.79

2. Impairment losses on fixed assets

3. Impairment losses on projects under construction

4. Impairment losses on long-term deferred expenses

Impairment loss on cost of returns receivable -5,684,000.00 -3,150,000.00 Total -207,361,022.12 -103,626,312.79

Explanation: The asset impairment loss for this period increased by 100.10% compared with the previous period, mainly due to the decline in sales of bivalent HPV vaccine and the provision of inventory depreciation provisions.

Income from asset disposal

Project 2025 2024

Income from fixed asset disposal 60,166,473.06 7,955,071.46 Income from early termination of lease 64,854.25 -31,598.94 Total 60,231,327.31 7,923,472.52

Non-operating income

Included in current non-recurring items 2025 2024

Amount of profit and loss Gains from damage and scrapping of non-current assets 3,357.43 16,956.03 3,357.43 Unable to pay payables 38,955.75 662,691.26 38,955.75 Others 754,716.90 1,950,185.85 754,716.90Total 797,030.08 2,629,833.14 797,030.08

Non-operating expenses

Included in current non-recurring items 2025 2024

Amount of profit and loss Loss from damage and scrapping of non-current assets 2,196,565.52 550,009.67 2,196,565.52 Tax late payment fees 169,590.41 69,051.13 169,590.41Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

Included in current non-recurring items 2025 2024

Amount of profit and loss, external donations, expenses, etc. 7,486,088.63 22,218,660.88 7,486,088.63 Liquidated damages 2,340,922.78 6,142,976.12 2,340,922.78 Others 265,836.78 5,965.19 265,836.78 Total 12,459,004.12 28,986,662.99 12,459,004.12

Income tax expenses

(1) Composition of income tax expenses

Project 2025 2024

Current income tax expense 27,923,117.72 43,764,570.71 Deferred income tax expense -94,845,344.69 -85,378,260.20 Total -66,922,226.97 -41,613,689.49 (2) Adjustment process of accounting profit and income tax expense

Project 2025 2024

Total profit -480,885,756.41 67,480,832.88 Income tax calculated according to statutory/applicable tax rates

-72,132,863.46 10,122,124.93 expenses

The impact of different tax rates applicable to subsidiaries -3,893,368.76 -3,656,195.92 The impact of adjusting income tax in previous periods 10,936,813.28 -1,207,035.08 The impact of non-taxable income

Non-deductible costs, expenses and losses

Impact of 5,222,972.37 6,333,874.28

Use of deferred income tax not recognized in previous periods

The impact of deductible losses on property

No deferred income tax assets have been recognized in the current period

Impact of deductible temporary differences or deductible losses 66,977,670.96 52,727,539.64

Additional deduction for R&D expenses -74,033,451.36 -105,900,723.38 Additional deductible expenses stipulated in the tax law -33,273.96 Income tax expenses -66,922,226.97 -41,613,689.49 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the financial statements

Notes on cash flow statement items

(1) Cash related to operating activities

①Other cash received related to operating activities

Item 2025 2024 Interest income 26,626,581.46 31,257,394.30 Government subsidies 96,526,078.05 229,761,521.15 Other income in non-operating income 754,716.90 1,950,185.85 Cash received from other receivables and other payables 15,333,929.31 66,935,687.43 Total 139,241,305.72 329,904,788.73 ② Other cash paid related to operating activities

Item 2025 Operating expenses in 2024 financial expenses 596,831.12 598,760.20 Expensive cash related to administrative expenses, R&D expenses and sales expenses

628,210,293.20 1,400,043,978.53 Expenditure

Operating expenses in non-operating expenses 2,776,349.97 6,217,992.44 Government subsidies returned 51,395.75 1,000,000.00 Cash paid in other receivables and other payables 15,026,415.14 116,488,061.55 Total 646,661,285.18 1,524,348,792.72 (2) Cash related to investing activities

①Cash received related to important investment activities

Item 2025 Investment in financial products in 2024 4,647,311,628.27 5,932,026,208.33 Income from investment in financial products 114,450,861.91 143,174,782.76 Receipts from disposal of long-term assets 210,726,017.05

Total 4,972,488,507.23 6,075,200,991.09 ②Cash paid related to important investment activities

Project 2025 2024

Purchase of equipment, payment of project fees, etc. 805,164,493.44 887,349,661.68 Investment in financial products 4,929,122,930.22 6,726,681,360.00

Total 5,734,287,423.66 7,614,031,021.68 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

③Other cash received related to investment activities

Project 2025 2024

Deposits for letter of guarantee business, etc. 5,775,292.24 25,400,359.52 Total 5,775,292.24 25,400,359.52 ④ Other cash paid related to investment activities

Project 2025 2024

Deposits for letter of guarantee business, etc. 2,985,107.80 5,985,111.68 Total 2,985,107.80 5,985,111.68 (3) Cash related to financing activities

①Other cash paid related to financing activities

Project 2025 2024

Payment of lease fees 20,878,088.52 20,422,610.71 Purchase of treasury shares 184,443,196.02 Employee stock ownership plan repurchase funds 53,998,245.50 Payment for repurchase of minority shareholders’ equity 923,443.68

Total 21,801,532.20 258,864,052.23 ② Changes in various liabilities arising from financing activities

2024 Increase in this period Decrease in this period Projects in 2025

December 31 Cash changes Non-cash changes Cash changes Non-cash changes December 31 Short-term borrowings 103,624,259.50 252,558,490.81 1,257,952.15 223,780,511.34 133,660,191.12 Due within one year

Non-current liabilities 104,114,299.47 76,369,946.79 84,910,267.79 19,204,031.68 76,369,946.79 debt

Long-term borrowings 94,193,251.29 91,000,000.00 2,198,275.37 31,821,526.66 56,776,200.00 98,793,800.00 Lease liabilities 80,974,824.04 5,438,103.81 1,651,080.73 39,194,823.55 45,567,023.57 Other payables -

Repurchase of minority shares 923,443.68 923,443.68

Equity funds

Total 382,906,634.30 343,558,490.81 86,187,721.80 343,086,830.20 115,175,055.23 354,390,961.48 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Supplementary information to the cash flow statement

(1) Supplementary information for cash flow statement

Supplementary information 2025 2024

Reconcile net profit to cash flow from operating activities:

Net profit -413,963,529.44 109,094,522.37 Plus: asset impairment provision 207,361,022.12 103,626,312.79 Credit impairment provision 21,570,698.36 17,171,300.92 Fixed asset depreciation, investment real estate depreciation, oil and gas asset depreciation

262,816,779.48 229,127,550.66 Depreciation of consumption and productive biological assets

Depreciation of right-of-use assets 29,629,992.40 39,942,067.31 Amortization of intangible assets 53,278,499.24 31,581,210.67 Amortization of long-term prepaid expenses 21,725,256.40 17,590,376.96 Losses on disposal of fixed assets, intangible assets and other long-term assets

-60,231,327.31 -7,923,472.52 (Income is listed with "-")

Losses from scrapping of fixed assets (income is listed with "-") 2,193,208.09 533,053.64 Loss from changes in fair value (income is listed with "-") -48,297,071.98 -36,707,335.76 Financial expenses (income is listed with "-") 14,660,009.60 -25,056,750.39 Investment losses (income is listed with "-") -66,215,195.97 -109,636,079.11 Decrease in deferred income tax assets (increase is listed with "-") -94,845,344.69 -85,378,260.20 Increase in deferred income tax liabilities (decrease is listed with "-")

Decrease in inventory (increases are indicated by "-") -40,540,197.18 -58,184,275.09 Decrease in operating receivables (increases are indicated by "-") 398,160,460.04 940,331,796.27 Increase in operating payables (decreases are indicated by "-") -183,403,743.15 -805,750,311.64 Others -14,145,472.91 -5,280,060.19 Net cash flow from operating activities 89,754,043.10 355,081,646.69 2. Major investing and financing activities that do not involve cash receipts and payments:

debt to capital

Convertible corporate bonds due within one year

New right-of-use assets 8,341,962.59 132,741,337.08 3. Net changes in cash and cash equivalents:

Closing balance of cash 1,344,952,704.67 2,027,005,826.50 Less: Beginning balance of cash 2,027,005,826.50 3,783,641,805.07Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Supplementary information Year 2025 Year 2024 plus: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents -682,053,121.83 -1,756,635,978.57 Note: During the reporting period, the company received an amount of RMB 13.0693 million in endorsement transfers of bank acceptance bills from selling goods. (2) Composition of cash and cash equivalents

Project December 31, 2025 December 31, 2024

Cash 1,344,952,704.67 2,027,005,826.50 including: cash on hand

Bank deposits that can be used for payment at any time 1,344,952,704.67 2,027,000,554.68 Other monetary funds that can be used for payment at any time 5,271.82 Amounts deposited with the central bank that can be used for payment

Deposit funds from other banks

Funds placed with other banks

2. Cash equivalents

Including: Bond investments due within three months

Balance of cash and cash equivalents at the end of the period 1,344,952,704.67 2,027,005,826.50 Including: restricted cash use by the parent company or subsidiaries within the group

gold and cash equivalents

(3) Monetary funds that are not cash and cash equivalents

Project FY 2025 FY 2024 Reason

Time deposits of more than three months 1,077,289,319.12 345,585,360.00 Expected to be held until maturity Performance security deposit, letter of credit guarantee

12,471,442.00 15,261,626.44 Certificate deposits, etc. cannot be withdrawn at any time

Total 1,089,760,761.12 360,846,986.44

Foreign currency monetary items

(1) Foreign currency monetary items:

December 31, 2025 Project December 31, 2025 Conversion exchange rate

Foreign currency balance converted into RMB balance monetary funds

Including: USD 111,531,761.53 7.0288 783,934,445.44 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

December 31, 2025 Project December 31, 2025 Conversion exchange rate

Foreign currency balance Converted into RMB balance in Euro 643,371.43 8.2355 5,298,485.41 Japanese yen 289,119.00 0.0448 12,951.66 Accounts receivable

Including: USD 1,150,566.69 7.0288 8,087,103.15 Euro 733,972.36 8.2355 6,044,629.37 Accounts payable

Including: USD 112,491.75 7.0288 790,682.01 Euro 53,881.50 8.2355 443,741.09 Japanese yen 54,232.14 0.0448 2,429.44 Other receivables

Including: USD 39,647.00 7.0288 278,670.83 Other payables

Including: USD 91,451.00 7.0288 642,790.79

Leasing

(1) The company serves as the lessee

Current profit and loss and cash flow related to leasing

Project Amount in 2025

Short-term leases with simplified treatment included in current profits and losses in the current period

10,140,702.62 expenses

Interest expense on lease liabilities 2,649,595.41 Total cash outflows related to leases 31,018,791.14 (2) The Company serves as the lessor

①Operating lease

Project Amount in 2025

Lease income 324,763.99 Including: variable lease payments not included in the measurement of lease receipts

related income

As of the balance sheet date, the Company has no operating lease contracts within the validity period and no undiscounted lease payments to be received after the period.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

6. R&D expenditures

Listed by nature of expenses

Project 2025 2024

Testing and assay processing fees 158,778,208.58 119,383,777.61 Employee compensation 254,735,122.59 340,931,589.32 Material consumption 231,959,875.01 244,616,324.86 Entrusted development expenses 25,157,210.59 50,197,271.46 Depreciation and amortization 68,123,652.31 113,918,376.26 Fuel and power expenses 19,424,543.62 41,516,851.41 Office expenses 18,084,025.14 40,215,224.42 Expert consultation fee 73,111,308.71 22,642,513.23 Maintenance and repair fee 3,672,571.48 10,096,073.38 Leasing fee 6,772,656.47 4,876,355.23

Total 859,819,174.50 988,394,357.18 Including: Expenditure R&D expenditure 560,796,914.39 886,051,943.23 Capitalized R&D expenditure 299,022,260.11 102,342,413.95

Development expenses

(1) Development expenditures on R&D projects that meet capitalization conditions

Increase amount in this period Decrease amount in this period

Projects in 2024 and 2025 are recognized as intangible assets and transferred to the current period.

December 31 Internal development expenses Other Other December 31

Profit and loss

Nine-valent HPV

Vaccine Phase III 198,783,349.40 135,058,324.08 320,187,120.48 13,654,553.00

clinical trial

Nine-valent HPV

Vaccine male clinical trial 1,616,978.14 92,698,435.92 94,315,414.06 clinical trial

Freeze-dried chickenpox reduction

71,265,500.11 71,265,500.11 Live virus vaccine

Total 200,400,327.54 299,022,260.11 320,187,120.48 13,654,553.00 165,580,914.17 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Among them, the status of important capitalized R&D projects

Estimated Economic Profit Starting Capital

Project R&D progress Specific basis for starting capitalization

How profit is generated and when it becomes

A. It is technically feasible to complete the intangible asset so that it can be used or sold;

B. Have the intention to complete the intangible asset and use or sell it; C. The way in which the intangible asset generates economic benefits, including being able to prove that the V10 interview has been completed

Nine-price HPV uses this intangible asset. It is clear that the products produced by using this intangible asset exist in the market or are intangible and are being developed. Enter III

There is a market for the assets produced by Vaccine III assets, and the intangible assets will be used internally, V11; it has been based on phase 1 clinical trials

Phase clinical trial products are on the market and can prove their usefulness;

V1-V8 phased testing phase

Test site D. Have sufficient technical, financial and other resource support to obtain approval for listing.

Complete the development of the intangible assets and have the ability to use or sell the intangible assets;

E. The expenditures attributable to the development stage of the intangible asset can be measured reliably.

A. It is technically feasible to complete the intangible asset so that it can be used or sold;

B. Have the intention to complete the intangible asset and use or sell it; have obtained clinical trials C. The way in which the intangible asset generates economic benefits, including the ability to obtain drugs

Approval document shall be issued, and the products produced using the intangible assets shall be proved to be in the market or intangible nine-valent HPV clinical trials shall be carried out during the application period.

Starting in April 2025, the assets produced by the assets themselves have a market, and the intangible assets will be used internally. Vaccine men are approved to enter.

Action, completed, the product exists in the market and can prove its usefulness;

clinical trials clinical trials

All 9,300 cases will be affected. D. There will be sufficient technical, financial and other resource support to ensure that after the stage

The candidates must complete the development of the intangible assets and have the ability to use or sell the intangible assets;

E. The expenditures attributable to the development stage of the intangible asset can be measured reliably.

Phase III has been completed. A. It is technically feasible to complete the intangible asset so that it can be used or sold for clinical trials;

use the intangible

Freeze-dried chickenpox Subjects enter the group to enter III B. Have the intention to complete the intangible asset and use or sell it; asset production

Live attenuated virus is in phase 1 clinical trial. C. The way intangible assets generate economic benefits, including being able to prove that the product exists in the market.

After the safety and effectiveness testing stage, it is clear that there is a market or intangible market for the products produced using the intangible assets.

There is a market for the asset itself, and the intangible asset will be used internally. be able to demonstrate its usefulness;

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Estimated Economic Profit Starting Capital

Project R&D progress Specific basis for starting capitalization

How profit is generated and when it becomes

D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, and have the ability to use or sell the intangible asset;

E. The expenditures attributable to the development stage of the intangible asset can be reliably

Geometry.

7. Changes in consolidation scope

During the reporting period, the company's scope of consolidation did not change.

8. Interests in other entities

Interests in subsidiaries

(1) Composition of enterprise groups

Unit: 10,000 yuan Currency: RMB

Main shareholding ratio (%) Name of acquired subsidiary Registered capital Place of registration Nature of business

Place of business Direct Indirect way Beijing Wantai Derui Diagnostics R&D of diagnostic reagents,

2,000.00 Beijing Beijing 100.00 Establishment of Technology Co., Ltd. Production and sales

Beijing Conchestan Bio-diagnostic reagent research and development,

1,000.00 Beijing Beijing 100.00 Establishment of Technology Co., Ltd. Production and sales

Xiamen Umaike Medical Instruments Diagnostic Instrument R&D,

8,000.00 Xiamen, Fujian Xiamen, Fujian 63.50 Purchaser Co., Ltd. Production and sales

Xiamen Wantai Canghai Biotech Vaccine R&D and Production

120,000.00 Xiamen, Fujian Xiamen, Fujian 100.00 Establishment of Technology Co., Ltd. and sales

Xiamen Wantai Carey Biotech develops diagnostic reagents,

50,000.00 Xiamen, Fujian Xiamen, Fujian 100.00 Establishment of Technology Co., Ltd. Production and sales

Beijing Tairun Innovation Technology Technology Enterprise Incubation,

5,000.00 Beijing Beijing 60.00 Purchase incubator Co., Ltd. Technology development

Jihotai (Beijing) Biotech Diagnostic Reagent Intermediates

4,000.00 Beijing Beijing 95.93 Mawu Technology Co., Ltd. R&D and production

Hangzhou Wantai Biotechnology Vaccine R&D and production

1,000.00 Hangzhou, Zhejiang Hangzhou, Zhejiang 100.00 Establishment of a limited company and sales

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Main shareholding ratio (%) Name of acquired subsidiary Registered capital Place of registration Nature of business

Place of business Direct Indirect Mode Xiamen InBima Biotech

2,500.00 Xiamen, Fujian Xiamen, Fujian Active raw material sales 60.00 Establishment of Technology Co., Ltd.

Beijing Wantai Biopharmaceutical Vaccine R&D and production

10,100.00 Beijing Beijing 100.00 Establishment of limited company and sales

(2) Important non-wholly owned subsidiaries

During the reporting period, the Company had no important non-wholly-owned subsidiaries.

Transactions in which the owner's equity share in the subsidiary changes and the subsidiary is still controlled

(1) Description of changes in the owner’s equity share of subsidiaries:

In September 2025, the company signed an agreement with Shanghai Yingwang Enterprise Management Partnership (Limited Partnership) to acquire 1% of its equity in Jiehotai (Beijing) Biotechnology Co., Ltd. for a consideration of 923,400 yuan. After this transaction, the company's shareholding ratio in Jihotai (Beijing) Biotechnology Co., Ltd. increased from 94.93% to 95.93%.

(2) The impact of the transaction on minority shareholders’ equity and owner’s equity attributable to the parent company:

Project Jihotai (Beijing) Biotechnology Co., Ltd.

Purchase cost/disposal consideration 923,443.68 ——Cash 923,443.68 ——Fair value of non-cash assets

Total purchase cost/disposal consideration 923,443.68 Less: Net assets of subsidiaries calculated based on the proportion of equity acquired/disposed

997,354.17 production share

Difference 73,910.49 Including: Adjustment of capital reserve 73,910.49 Adjustment of surplus reserve

Adjust undistributed profits

Interests in joint arrangements or associates

(1) Important joint ventures or associates

During the reporting period, the Company had no important joint ventures or associates.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(2) Summary financial information of unimportant joint ventures and associates

Project December 31, 2025/Year 2025 December 31, 2024/Year 2024 Associates:

MiracleCare BiotechLLC 219,984.00 714,180.00 Total investment book value 219,984.00 714,180.00 The following items are calculated based on shareholding ratio

-494,196.00

Total

——Net profit -494,196.00

——Other comprehensive income

——Total comprehensive income

9. Government subsidies

Government subsidies recognized according to the amount receivable at the end of the period

As of December 31, 2025, the company had no government subsidies recognized based on the amount receivable.

Liability items involving government subsidies

2024 This period is included in the balance sheet of 2025. New additions in this period are transferred to others in this period.

December 31st Operating income December 31st/Income presentation items Subsidy amount Other income changes

Balance Amount of deposit Balance Related and income deferred income 23,371,620.00 4,322,700.00 7,133,886.25 51,395.75 20,509,038.00

Related and asset deferred income 30,825,048.13 19,938,663.60 6,879,307.91 43,884,403.82

Relevant total 54,196,668.13 24,261,363.60 14,013,194.16 51,395.75 64,393,441.82 —Note: Other changes in deferred income in the current period are due to the completion of R&D projects and the return of remaining funds.

Government subsidies included in current profits and losses

Items presented in the income statement 2025 2024 Other income related to assets/income 6,879,307.91 6,056,915.54 Related to assets

Other income 79,398,600.70 202,154,859.77 Related to income

Total 86,277,908.61 208,211,775.31

10. Risks related to financial instruments

The Company's risks related to financial instruments originate from various financial assets and financial liabilities recognized by the Company in the course of its operations, including: credit risk, liquidity risk and market risk.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

The management of the Company is responsible for the management objectives and policies of the Company's various risks related to financial instruments. The operating management is responsible for daily risk management through functional departments (for example, the company's credit management department conducts a case-by-case review of the company's credit sales). The Company's internal audit department conducts daily supervision on the implementation of the Company's risk management policies and procedures, and reports relevant findings to the Company's Audit Committee in a timely manner.

The overall goal of the company's risk management is to formulate risk management policies that reduce risks related to various financial instruments as much as possible without unduly affecting the company's competitiveness and resilience.

Credit risk

Credit risk refers to the risk that one party to a financial instrument fails to perform its obligations, resulting in financial losses to the other party. The Company's credit risk mainly arises from monetary funds, notes receivable, accounts receivable, receivable financing, other receivables, contract assets, debt investments and long-term receivables. The credit risk of these financial assets originates from counterparty default, and the maximum risk exposure is equal to the carrying amount of these instruments.

The company's monetary funds are mainly deposited in financial institutions such as commercial banks. The company believes that these commercial banks have high reputation and asset status and have low credit risks.

For notes receivable, accounts receivable, receivable financing, other receivables, contract assets, debt investments and long-term receivables, the Company sets relevant policies to control credit risk exposure. The company evaluates the customer's credit qualifications and sets corresponding credit periods based on the customer's financial status, the possibility of obtaining guarantees from third parties, credit records and other factors such as current market conditions. The company will regularly monitor customer credit records. For customers with poor credit records, the company will use written reminders, shorten the credit period or cancel the credit period to ensure that the company's overall credit risk is within a controllable range.

(1) Judgment criteria for significant increase in credit risk

The Company assesses on 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 can be obtained without unnecessary additional cost or effort, including qualitative and quantitative analysis based on the Company's 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. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

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: the quantitative criteria are mainly that the default probability of the remaining duration on the reporting date has increased by more than a certain percentage compared with the initial recognition; the qualitative criteria are that there are major adverse changes in the operating or financial conditions of the main debtor, the list of early warning customers, etc.

(2) Definition of credit-impaired assets

In order to determine whether credit impairment has occurred, the definition standards adopted by the Company are consistent with the internal credit risk management objectives for relevant financial instruments, while taking into account both quantitative and qualitative indicators.

When the company assesses whether a debtor has suffered credit impairment, it mainly considers the following factors: the issuer or the debtor encounters major financial difficulties; the debtor breaches the contract, such as default or overdue payment of interest or principal; the creditor gives the debt due to economic or contractual considerations related to the debtor's financial difficulties; Concessions that a person would not make under any other circumstances; the debtor is likely to go bankrupt or undergo other financial reorganization; financial difficulties of the issuer or debtor result in the disappearance of an active market for the financial asset; purchase or origination of a financial asset at a substantial discount that reflects the fact that a credit loss has occurred.

Credit impairment of financial assets may be caused by the combined effect of multiple events and may not be caused by an individually identifiable event.

(3) Parameters for measuring expected credit losses

Depending on whether there is a significant increase in credit risk and whether credit impairment has occurred, the Company measures impairment provisions for different assets based on expected credit losses for 12 months or the entire duration. 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.

The relevant definitions are as follows:

Probability of default refers to the possibility that a debtor will be unable to meet its payment obligations in the next 12 months or throughout the remaining lifetime.

Loss given default refers to the Company’s expectation of the extent of loss due to default risk exposure. LGD rates vary depending on the type of counterparty, the method and priority of recourse, and the collateral. The loss given default rate is the percentage of risk exposure loss when a default occurs, calculated based on the next 12 months or the entire duration;

Exposure at default is the amount that the Company will be reimbursed in the event of a default over the next 12 months or throughout the remaining lifetime. The assessment of significant increases in credit risk and the calculation of expected credit losses involve forward-looking information. Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Through historical data analysis, the Company identifies key economic indicators that affect the credit risk and expected credit losses of each business type.

The Company's maximum exposure to credit risk is the carrying amount of each financial asset on the balance sheet. The Company has not provided any other guarantees that may expose the Company to credit risk.

Among the company's accounts receivable, the accounts receivable from the top five customers accounted for 4.08% of the company's total accounts receivable (comparison period: 4.48%); among the company's other receivables, the other receivables of the top five companies in arrears accounted for 42.70% of the company's total other receivables (comparison period: 40.56%).

Liquidity risk

Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligations to settle by delivering cash or other financial assets. The company is responsible for the overall cash management of all subsidiaries within the company, including short-term investment of cash surplus and raising loans to meet expected cash needs. The Company's policy is to regularly monitor short-term and long-term liquidity requirements and compliance with borrowing agreements to ensure that adequate cash reserves and marketable securities are readily liquidated.

As of December 31, 2025, the maturity period of the company's financial liabilities is as follows:

December 31, 2025

Project

Within 1 year 1-2 years 2-3 years Short-term loans over 3 years 133,660,191.12

Notes payable 19,874,196.58

Accounts payable 396,064,209.44

Other payables 910,162,234.86

Long-term borrowings 20,746,200.00 78,047,600.00

Lease liabilities 11,911,968.71 8,466,816.85 25,188,238.01 Non-current liabilities due within one year 76,369,946.79

Total 1,536,130,778.79 32,658,168.71 86,514,416.85 25,188,238.01 (continued from the above table)

December 31, 2024

Project

Within 1 year 1-2 years 2-3 years Short-term loans over 3 years 103,624,259.50

Notes payable 24,407,681.88

Accounts payable 420,454,201.51

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

December 31, 2024

Project

Within 1 year 1-2 years 2-3 years More than 3 years Other payables 1,105,843,050.53

Long-term borrowings 47,922,495.14 46,270,756.15

Lease liabilities 29,608,286.49 17,848,379.74 33,518,157.81 Non-current liabilities due within one year 104,114,299.47

Total 1,758,443,492.89 77,530,781.63 64,119,135.89 33,518,157.81

Market risk

(1) Foreign exchange risk

The Company's exchange rate risk mainly comes from foreign currency assets and liabilities held by the Company and its subsidiaries that are not denominated in their accounting functional currency. The company's exposure to exchange rate risks is mainly related to foreign currency bank deposits and accounts receivable denominated in US dollars. Except for sales to overseas customers that are denominated and settled in foreign currencies, the company's other main businesses are denominated and settled in RMB.

①As of December 31, 2025, please refer to the notes for the main foreign exchange risks of each foreign currency asset and liability item of the company.

5. 57. Foreign currency monetary items.

The Company pays close attention to the impact of exchange rate changes on the Company's exchange rate risk. The Company currently has not taken any measures to avoid exchange rate risks. However, management is responsible for monitoring exchange rate risks and will consider hedging significant exchange rate risks if necessary. ② Sensitivity analysis

On December 31, 2025, with other risk variables unchanged, if the RMB appreciates or depreciates by 10% against the US dollar on that day, the company's net profit for the year will increase or decrease by RMB 67.3329 million.

(2) Interest rate risk

The Company's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bank borrowings and bonds payable. Financial liabilities with floating interest rates expose the Company to cash flow interest rate risks, while financial liabilities with fixed interest rates expose the Company to fair value interest rate risks. The Company determines the relative proportions of fixed-rate and floating-rate contracts based on the prevailing market environment.

The financial department of the company's headquarters continues to monitor the group's interest rate levels. Rising interest rates will increase the cost of new interest-bearing debt and the interest expenses of the company's unpaid interest-bearing debt with floating interest rates, and will have a significant adverse impact on the company's financial performance. Management will make timely adjustments based on the latest market conditions.

As of December 31, 2025, with other risk variables held constant, if the borrowing rate calculated at floating interest rates increases or decreases by 100 basis points, the company's net profit for the year will decrease or increase by 1.3223 million yuan.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Transfer of financial assets

(1) Classified presentation according to the method of transfer of financial assets

Financial assets transferred Financial assets transferred Financial assets transferred Derecognition status Derecognition status

Method Nature Amount Basis for Judgment

Has transferred almost its bill endorsement. Receivable financing 5,168,373.09 Derecognized

All risks and rewards

Total — 5,168,373.09 — — (2) Financial assets transferred and derecognized

Profit items related to derecognition Method of transferring financial assets Amount of derecognition

Gain or loss of receivables financing Bill endorsement 5,168,373.09

Total — 5,168,373.09

(3) Amount of assets and liabilities resulting from transfer of financial assets and continued involvement

As of December 31, 2025, the company had no transferred financial assets at the end of the period and continued to be involved in the formation of assets and liabilities.

11. Disclosure of fair value

The level to which the fair value measurement result belongs is determined by the lowest level to which the input value that is significant to the overall fair value measurement belongs:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: input values that are directly or indirectly observable for relevant assets or liabilities in addition to input values at the first level. Level 3: Unobservable input values of related assets or liabilities.

On December 31, 2025, the fair value of assets and liabilities measured at fair value

Fair value as of December 31, 2025

Item First level fairness Second level fairness Third level fairness

total

value measurement value measurement value measurement

1. Continuous fair value measurement

(1) Trading financial assets 1,447,109,490.74 11,295,433.26 1,458,404,924.00 1. Measured at fair value with changes included in the current period

financial assets with period profits and losses

(1) Fund

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Fair value as of December 31, 2025

Item First level fairness Second level fairness Third level fairness

total

value measurement value measurement value measurement

Designated to be measured at fair value and its changes

1,447,109,490.74 11,295,433.26 1,458,404,924.00 Financial assets included in current profits and losses

(1) Debt instrument investment

(2) Financial management products issued by banks 1,447,109,490.74 1,447,109,490.74 (3) Investment in equity instruments 11,295,433.26 11,295,433.26

(2) Financing of receivables 12,644,999.45 12,644,999.45 Total assets continuously measured at fair value

1,447,109,490.74 23,940,432.71 1,471,049,923.45 amount

For financial instruments traded in an active market, the Company determines its fair value based on active market quotations; for financial instruments not traded in an active market, the Company uses valuation techniques to determine its fair value. The valuation models used are mainly discounted cash flow models and market comparable company models. The input values of valuation technology mainly include risk-free interest rates, benchmark interest rates, exchange rates, credit spreads, liquidity premiums, lack of liquidity discounts, etc.

Fair value of financial assets and financial liabilities not measured at fair value

The Company's financial assets and financial liabilities measured at amortized cost mainly include: monetary funds, notes receivable, accounts receivable, other receivables, debt investments, short-term loans, notes payable, accounts payable, other payables, long-term loans due within one year, long-term payables, long-term loans and bonds payable, etc.

12. Related parties and related transactions

Criteria for identifying related parties: If one party controls or jointly controls the other party or exerts significant influence on the other party, and two or more parties are controlled or jointly controlled by one party, they constitute a related party.

The company’s parent company and actual controller

Parent company to this company Parent company to this company Name Place of registration Nature of business Registered capital

Shareholding ratio (%) Voting rights ratio (%) Zhong Suisui —— —— —— 17.71 17.71 Yangshengtang Co., Ltd. Hangzhou, Zhejiang Investment 100,000,000.00 55.82 55.82

① Explanation of the company’s parent company: The company’s parent company is Yangshengtang Co., Ltd., and the actual controller is Zhong Suisui.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

②The ultimate controller of the company: Zhong Suisui.

Information about the company’s subsidiaries

For details of the company's subsidiaries, please see Note 8. Equity in other entities.

Information about the Company’s joint ventures and associated enterprises

(1) Information about the company’s important joint ventures and associated enterprises

The Company has no significant joint ventures or associates.

Information about other related parties of the company

Names of other related parties Other related parties’ relationship with the Company Zhejiang Yangshengtang Natural Medicine Research Institute Co., Ltd. Zhejiang Jiaoyang Biomedical Technology Co., Ltd., a wholly-owned subsidiary of the parent company Zhejiang Rainbow Fish Technology Co., Ltd., a wholly-owned subsidiary of the parent company Zhejiang Yangshengtang Biotechnology Co., Ltd., a wholly-owned subsidiary of the parent company Hangzhou Yangshengtang Biomedicine Co., Ltd., a wholly-owned subsidiary of the parent company Hangzhou Jiaozi Tea Co., Ltd., a wholly-owned subsidiary of the parent company Yangshengtang (Anji) Cosmetics Co., Ltd., a wholly-owned subsidiary of the parent company Yangshengtang (Anji) Sales Co., Ltd., a wholly-owned subsidiary of the parent company Yangshengtang (Anji) Cosmetics Co., Ltd.'s wholly-owned subsidiary Yangshengtang Pharmaceutical Co., Ltd. Parent company's holding subsidiary Zhejiang Yangshengtang Health Products Sales Co., Ltd. Yangshengtang Pharmaceutical Co., Ltd.'s wholly-owned subsidiary Nongfu Spring Co., Ltd. Parent company's holding subsidiary Zhongshan Bioengineering Co., Ltd. Guangzhou Da'an Gene Co., Ltd.'s holding subsidiary Hangzhou Darui Medical Technology Co., Ltd. Guangzhou Da'an Gene Co., Ltd.'s holding subsidiary Guangzhou Darui Biotechnology Co., Ltd. Guangzhou Da'an Gene Co., Ltd.'s holding subsidiary Guangzhou Datai Bioengineering Technology Co., Ltd. Guangzhou Da'an Gene Co., Ltd.'s controlling subsidiary Guangzhou Da'an Gene Co., Ltd. Japan's Otsuka Electronics Co., Ltd., the controlling shareholder of Umaco's minority shareholder Xu Xuejun, a minority shareholder of Umaco Youdao Biopharmaceutical (Hangzhou) Co., Ltd., a minority shareholder of Beijing Tairun Huzhou Sales Branch of Mother Food (Anji) Co., Ltd., a wholly-owned subsidiary of the parent company Hangzhou Esai Immuno-Biomedical Co., Ltd., a branch of a wholly-owned subsidiary of the parent company Hangzhou Yaye Agricultural Development Co., Ltd., a subsidiary of the parent company Nongfu Spring (Zhejiang) Beverage Research and Development Co., Ltd., a subsidiary controlled by the parent company Beijing Wantai Biopharmaceutical Co., Ltd., a subsidiary controlled by the parent company Notes to the financial statements

Related transactions

(1) Related transactions related to the purchase and sale of goods, provision and receipt of services

Purchasing goods and receiving services

Related party related transactions in 2025 and 2024

Amount Amount Otsuka Electronics Japan Co., Ltd. Technical services 2,064,014.49 8,338,810.35 Otsuka Electronics Co., Ltd. Purchase of goods 507,496.90 1,898,903.02 Zhejiang Jiaoyang Biomedical Technology Co., Ltd. Purchase of goods 4,713,534.58 1,889,195.22 Hangzhou Yangshengtang Biomedicine Co., Ltd. Purchase of goods 105,628.92

Zhejiang Rainbow Fish Technology Co., Ltd. Purchase of goods 34,183.61 Zhejiang Rainbow Fish Technology Co., Ltd. Technical services 257,484.00 248,606.00 Yangshengtang (Anji) Sales Co., Ltd. Purchase of goods 125,485.36 289,723.00 Yangshengtang Co., Ltd. Purchase of goods 39,746.48

Guangzhou Darui Biotechnology Co., Ltd. Purchased goods 105,600.00 Zhejiang Yangshengtang Health Products Sales Co., Ltd. Purchased goods 67.50

Hangzhou Jiaozi Tea Co., Ltd. Purchased goods 58,607.00 177,646.35 Guangzhou Da'an Gene Co., Ltd. Purchased goods 30,328.00 Nongfu Spring Co., Ltd. Purchased goods 219,213.24 103,401.87 Nongfu Spring Co., Ltd. Technical services 103,414.03

Youdao Biopharmaceutical (Hangzhou) Co., Ltd. Technical service 1,132,075.47 1,486,212.00 Mother Food (Anji) Co., Ltd. Huzhou Sales Branch Purchase of goods 21,384.40 Nongfu Spring (Zhejiang) Beverage Research and Development Co., Ltd. Technical service 675,347.84

Hangzhou Yangshengtang Biomedicine Co., Ltd. Technical services 463,901.04

Yangshengtang Co., Ltd. Purchasing services 113,357.73

Yangshengtang Pharmaceutical Co., Ltd. Purchasing services 11,706.12

Sales of goods and provision of services

Related party related transactions in 2025 and 2024

Amount incurred Hangzhou Yangshengtang Biomedicine Co., Ltd. Goods sold 292,787.60 874,517.99 Zhejiang Yangshengtang Natural Medicine Research Institute Co., Ltd. Technical services 1,226,529.56 1,415,094.34 Yangshengtang Co., Ltd. Goods sold 56,979.40 Guangzhou Darui Biotechnology Co., Ltd. Goods sold 26,961.15 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Related party related transactions in 2025 and 2024

Amount incurred Amount incurred Guangzhou Da'an Gene Co., Ltd. Goods sold 340.70 1,362.82 Youdao Biomedicine (Hangzhou) Co., Ltd. Goods sold 6,116.51 45,657.33 Hangzhou Yangshengtang Biomedicine Co., Ltd. Technical services 266,229.25

Yangshengtang Co., Ltd. Technical services 266,229.24

Hangzhou Aisai Immunology Biomedical Co., Ltd. Technical services 51,473.58

(2) Related leasing situation

As a lessee, our company:

2025

Simplified processing of short terms not included in the lease

Leased assets Leases assumed

Lessor name Long-term lease and low price Liability measurement Increased usage types Rent paid Liability interest expense

Variable lease payments for value asset leases

Rental fee amount

Health Hall Limited

Houses and buildings 7,528,362.39 267,830.79

company

Xu Xuejun Houses and buildings 47,282.92

(Continued from above table)

2024

Simplified processing of short terms not included in the lease

Leased assets Leases assumed

Lessor name Long-term lease and low price Liability measurement Increased usage types Rent paid Liability interest expense

Variable lease payments for value asset leases

Rental fee amount

Health Hall Limited

Houses and buildings 9,207,990.79 183,230.82 21,549,450.37 Company

Xu Xuejun Houses and buildings 1,244,691.32 48,383,600.87 (3) Asset transfer and debt restructuring of related parties

Related parties Contents of related transactions Amount incurred in 2025 Amount incurred in 2024 Hangzhou Aisai Immunology Biomedical Co., Ltd. Assets sold 230,618.20 1,197,567.25 Hangzhou Yaye Agricultural Development Co., Ltd. Assets sold 14,454,111.18 Yangshengtang Co., Ltd. Assets sold 189,579,478.13

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(4) Remuneration of key management personnel

Unit: 10,000 yuan

Item Amount incurred in 2025 Amount incurred in 2024

Remuneration of key management personnel 1,159.95 1,351.24

Accounts receivable and payable from related parties

(1) Items receivable

December 31, 2025 December 31, 2024 Project name Related parties

Book balance Bad debt provision Book balance Bad debt provision Accounts receivable Guangzhou Da'an Gene Co., Ltd. 385.00 19.25 Accounts receivable Hangzhou Yangshengtang Biomedicine Co., Ltd. 11,976.58 1,197.66 Prepayment Guangzhou Da'an Gene Co., Ltd. 640.00

Prepayment Japan Otsuka Electronics Co., Ltd. 51,318.86

(2) Payable items

2025 2024 Project name Related parties

December 31 Accounts payable on December 31 Guangzhou Darui Biotechnology Co., Ltd. 19,040.00 19,040.00 Accounts payable Zhejiang Jiaoyang Biomedical Technology Co., Ltd. 1,928,644.18 560,383.22 Accounts payable Hangzhou Yangshengtang Biomedicine Co., Ltd. 1,017,499.75 Accounts payable Yangshengtang Pharmaceutical Co., Ltd. 1,261.45 Accounts payable Yangshengtang Co., Ltd. 4,223,116.68 Accounts payable Japan Otsuka Electronics Co., Ltd. 323.12 Other payables Xu Xuejun 125,851,934.79 117,173,924.54 Other payables Japan Otsuka Electronics Co., Ltd. 515,653.29 1,985,036.06 Due within one year

Yangshengtang Co., Ltd. 6,990,744.87 non-current liabilities

Lease liabilities Yangshengtang Co., Ltd. 14,558,705.50 Contract liabilities Hangzhou Yangshengtang Biomedicine Co., Ltd. 831.86

Other current liabilities Hangzhou Yangshengtang Biopharmaceutical Co., Ltd. 108.14

Other payables Pan Huirong 58,188.46

Other payables Nongfu Spring (Zhejiang) Beverage Research and Development Co., Ltd. 715,868.71

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Other related party matters

The company provides Beijing Tairun with a financing loan limit of no more than 200 million yuan (including the principal amount) for the innovative drug base construction project. The capital cost of this part of the loan is calculated at an interest rate not higher than the bank's loan interest rate for the same period. Xu Xuejun, another shareholder of Beijing Tairun, provided guarantee for 50% of the borrowing and corresponding capital costs with his 40% equity stake in Beijing Tairun and its derivative interests.

13. Share-based payment

During the reporting period, the Company had no share-based payment.

14. Commitments and contingencies

Important commitments

Important external commitments, nature and amount on the balance sheet date:

(1) Operating lease commitment

Minimum lease payments for irrevocable operating leases December 31, 2025 December 31, 2024 The first year after the balance sheet date 21,454,293.01 42,405,380.96 The second year after the balance sheet date 12,634,501.20 31,340,272.40 The third year after the balance sheet date 9,196,952.89 19,159,078.54 and subsequent years 27,651,904.86 36,216,486.36 Total 70,937,651.97 129,121,218.26 (2) Other commitments

As of December 31, 2025, the Company has no other commitments that need to be disclosed.

Contingencies

As of December 31, 2025, the Company has no important contingencies that need to be disclosed.

15. Events after the balance sheet date

As of the date of approval of the report by the board of directors, the Company has no post-balance sheet events that should be disclosed.

16. Other important matters

Segment information

(1) Basis for determination of reporting segments and accounting policies

According to the company's internal organizational structure, management requirements and internal reporting system, the company's operating business is divided into Beijing Wantai Biopharmaceutical Co., Ltd. Notes to the Financial Statements

2 reporting segments. These reporting segments are determined based on the financial information required by the company for daily internal management. The Company's management regularly evaluates the operating results of these reportable segments to determine the allocation of resources to them and evaluate their performance.

The company's reportable segments include:

① Diagnostic segment, which produces and sells in vitro diagnostic reagents and instruments suitable for in vitro diagnostic reagent testing;

②Vaccine segment, produces and sells vaccines.

Segment reporting information is disclosed based on the accounting policies and measurement standards adopted by each segment when reporting to management. These accounting policies and measurement basis are consistent with those used when preparing financial statements.

(2) Segment profit or loss, assets and liabilities

2025/

Diagnostics Segment Vaccines Segment Elimination Total

December 31, 2025

Main business income 1,625,946,326.38 457,052,000.90 -317,380,436.62 1,765,617,890.66 Main business cost 816,745,516.66 332,486,939.87 -253,878,244.25 895,354,212.28Net profit/(loss) 67,284,903.24 -491,384,312.28 10,135,879.60 -413,963,529.44Total assets 9,980,516,708.39 7,436,359,850.58 -3,372,819,707.68 14,044,056,851.29 Total liabilities 1,193,677,088.99 1,926,681,170.84 -1,109,374,301.19 2,010,983,958.64

17. Notes on main items of the parent company’s financial statements

Accounts receivable

(1) Disclosure based on aging

Aging December 31, 2025 Within 1 year on December 31, 2024 166,050,757.46 123,787,178.51 1 to 2 years 7,581,716.98 3,849,126.88 2 to 3 years 816,833.10 6,463,924.83 3 to 4 years 5,884,263.71 890,346.92 4 to 5 years 391,346.32 524,640.28 More than 5 years 250,980.24 232,637.60

Subtotal 180,975,897.81 135,747,855.02 Less: provision for bad debts 10,510,244.90 8,853,772.29

Total 170,465,652.91 126,894,082.73Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

(2) Classified disclosure according to bad debt accrual method

December 31, 2025

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Provision for bad debts on an individual basis

Provision for bad debts on a group basis 180,975,897.81 100.00 10,510,244.90 5.81 170,465,652.91 1. Receivables within the scope of consolidation

136,575,489.03 75.47 10,510,244.90 7.70 126,065,244.13 Customers outside the joint party

Accounts receivable within the scope of consolidation

44,400,408.78 24.53 44,400,408.78 Joint customers

Total 180,975,897.81 100.00 10,510,244.90 5.81 170,465,652.91 (continued from the above table)

December 31, 2024

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Provision for bad debts on an individual basis

Provision for bad debts on a group basis 135,747,855.02 100.00 8,853,772.29 6.52 126,894,082.73 1. Receivables within the scope of consolidation

133,531,703.45 98.37 8,853,772.29 6.63 124,677,931.16 Customers outside the joint parties

Accounts receivable within the scope of consolidation

2,216,151.57 1.63 2,216,151.57 Joint customers

Total 135,747,855.02 100.00 8,853,772.29 6.52 126,894,082.73 Specific instructions for bad debt provision:

On December 31, 2025, accounts receivable for which bad debt provisions are made based on accounts receivable from customers other than related parties within the scope of consolidation

December 31, 2025 December 31, 2024

Account age Provision ratio Provision ratio Book balance Bad debt provision Book balance Bad debt provision

(%) (%) Within 1 year 121,650,348.68 6,082,517.42 5.00 121,571,026.94 6,078,551.35 5.00 1-2 years 7,581,716.98 758,171.70 10.00 3,849,126.88 384,912.69 10.00 2-3 years 816,833.10 163,366.62 20.00 6,463,924.83 1,292,784.97 20.00 3-4 years 5,884,263.71 2,942,131.86 50.00 890,346.92 445,173.46 50.00Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

December 31, 2025 December 31, 2024

Account age Provision ratio Provision ratio Book balance Bad debt provision Book balance Bad debt provision

(%) (%) 4-5 years 391,346.32 313,077.06 80.00 524,640.28 419,712.22 80.00 More than 5 years 250,980.24 250,980.24 100.00 232,637.60 232,637.60 100.00 Total 136,575,489.03 10,510,244.90 7.70 133,531,703.45 8,853,772.29 6.63 Please refer to Note 3.11 for the confirmation standards and explanation of bad debt provisions on a group basis.

(3) Changes in bad debt provisions

2024 Amount of changes in the current period 2025 category

Provision on December 31, Recovery or reversal, Write-off or write-off, Other changes Receivables within the scope of consolidation on December 31

8,853,772.29 1,656,472.61 10,510,244.90 Customers outside the joint party

Receivables within the scope of consolidation

Joint customers

Total 8,853,772.29 1,656,472.61 10,510,244.90 (4) There are no accounts receivable actually written off in this period.

(5) Accounts receivable and contract assets of the top five closing balances collected by debtors

Accounts receivable and contracts Accounts receivable and bad debt allowance

Accounts Receivable Contract Assets Accounts Receivable and Contracts

Unit name Total closing balance of assets Provision and contract assets minus closing balance Closing balance Closing balance of assets

Proportion of number (%) Value preparation closing balance first place 43,899,945.78 43,899,945.78 24.26 - second place 7,052,067.20 7,052,067.20 3.90 352,603.36 third place 5,428,399.63 5,428,399.63 3.00 271,419.98Fourth place 4,638,869.39 4,638,869.39 2.56 2,319,434.70Fifth place 3,339,289.96 3,339,289.96 1.85 166,964.50 Total 64,358,571.96 64,358,571.96 35.57 3,110,422.54

Other receivables

(1) Classified listing

Project December 31, 2025 December 31, 2024

interest receivable

Dividends receivable

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Project December 31, 2025 December 31, 2024

Other receivables 689,498,621.48 776,120,760.05 Total 689,498,621.48 776,120,760.05 (2) Other receivables

① Disclosure based on aging

Account aging December 31, 2025 December 31, 2024

Within 1 year 176,657,713.33 95,003,082.16 1 to 2 years 31,947,535.82 123,460,292.17 2 to 3 years 122,443,901.53 359,223,321.29 3 to 4 years 255,540,937.89 198,965,525.96 4 to 5 years 103,353,965.85 179,608.51 More than 5 years 546,382.31 562,617.75

Subtotal 690,490,436.73 777,394,447.84 Less: Bad debt provision 991,815.25 1,273,687.79 Total 689,498,621.48 776,120,760.05 ② Classification by nature of payment

Nature of payment December 31, 2025 December 31, 2024

Accounts from related parties 687,598,386.56 771,707,363.38 Loans for employees to purchase houses and cars 719,943.40 2,468,443.40 Guarantees and deposits 1,298,780.96 2,284,356.08 Reserve funds 19,000.00 46,000.00 Others 854,325.81 888,284.98

Subtotal 690,490,436.73 777,394,447.84 Less: provision for bad debts 991,815.25 1,273,687.79 Total 689,498,621.48 776,120,760.05 ③ Disclosure by classification according to bad debt accrual method

A. The bad debt provisions as of December 31, 2025 are accrued according to the three-stage model as follows:

Stage Book balance Bad debt provision Book value

The first stage 176,657,713.33 67,119.95 176,590,593.38 The second stage 513,832,723.40 924,695.30 512,908,028.10 The third stage

Total 690,490,436.73 991,815.25 689,498,621.48Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

On December 31, 2025, the first stage of bad debt provisions:

Provision ratio

Category Book balance Bad debt provision Book value Reason

(%)

Provision for bad debts on an individual basis

Provision for bad debts on a group basis 176,657,713.33 0.04 67,119.95 176,590,593.38

The related credit risk within the consolidation scope of receivables has not been

1,342,398.95 5.00 67,119.95 1,275,279.00

Current accounts outside the party increased significantly 2. Receivables are related within the scope of consolidation

175,315,314.38 175,315,314.38

Party's current account

Total 176,657,713.33 0.04 67,119.95 176,590,593.38

On December 31, 2025, bad debt provisions in the second stage:

Provision ratio

Category Book balance Bad debt provision Book value Reason

(%)

Provision for bad debts on an individual basis

Provision for bad debts on a group basis 513,832,723.40 0.18 924,695.30 512,908,028.10

Credit risk has increased significantly but is 1. Relevant within the consolidated scope of receivables.

1,549,651.22 59.67 924,695.30 624,955.92

The transaction amount outside the party has not yet occurred.

Impairment 2. Receivables are related within the consolidation scope

512,283,072.18 512,283,072.18

Party's current account

Total 513,832,723.40 0.18 924,695.30 512,908,028.10

As of December 31, 2025, the Company has no other receivables in the third stage.

B. The bad debt provisions as of December 31, 2024 are accrued according to the three-stage model as follows:

Stage Book balance Bad debt provision Book value First stage 95,003,082.16 118,785.94 94,884,296.22 Second stage 682,391,365.68 1,154,901.85 681,236,463.83 Third stage

Total 777,394,447.84 1,273,687.79 776,120,760.05 Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

On December 31, 2024, bad debt provisions in the first stage:

Provision ratio

Category Book balance Bad debt provision Book value Reason

(%)

Provision for bad debts on an individual basis

Provision for bad debts on a group basis 95,003,082.16 0.13 118,785.94 94,884,296.22

The related credit risk within the consolidation scope of receivables has not been

2,375,718.78 5.00 118,785.94 2,256,932.84

Current accounts outside the party increased significantly 2. Receivables are related within the scope of consolidation

92,627,363.38 92,627,363.38

Party's current account

Total 95,003,082.16 0.13 118,785.94 94,884,296.22

On December 31, 2024, bad debt provisions in the second stage:

Provision ratio

Category Book balance Bad debt provision Book value Reason

(%)

Provision for bad debts on an individual basis

Provision for bad debts on a group basis 682,391,365.68 0.17 1,154,901.85 681,236,463.83

Credit risk has increased significantly but is 1. Relevant within the consolidated scope of receivables.

3,311,365.68 34.88 1,154,901.85 2,156,463.83

The transaction amount outside the party has not yet occurred.

Impairment 2. Receivables are related within the consolidation scope

679,080,000.00 679,080,000.00

Party's current account

Total 682,391,365.68 0.17 1,154,901.85 681,236,463.83

As of December 31, 2024, the Company had no other receivables in the third stage.

Basis for the amount of bad debt provision for the current period:

Please refer to Note 3.11 for the recognition standards and explanation of bad debt provision on a group basis.

④Changes in bad debt provisions

2024 Amount of changes in the current period 2025 category

December 31 Provision Recovery or reversal Write-off or write-off Other changes Consolidated scope of receivables on December 31

Current accounts other than internal related parties 1,273,687.79 -281,872.54 991,815.25

Total 1,273,687.79 -281,872.54 991,815.25Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

⑤ Other receivables actually written off in the current period

During the reporting period, the company had no other receivables actually written off.

⑥ Other receivables with top five closing balances collected by debtors

2025 % of other receivables

Unit name Nature of payment December 31 Aging Total balance at the end of the period Bad debt provision

Balance ratio (%)

No. 1 Related party transactions 302,038,386.56 1 to 5 years 43.74

Second place Accounts with related parties 221,000,000.00 More than 2 years 32.01

Third place Accounts with related parties 164,560,000.00 Within 1 year 23.83

Fourth place Security deposit, deposit 654,776.49 1 to 3 years 0.09 32,744.07

Employees purchase houses and purchase

Fifth place 560,000.00 1 to 4 years 0.08 240,000.00 car loan

Total 688,813,163.05 99.75 272,744.07

Long-term equity investment

(1) Long-term equity investment situation

December 31, 2025 December 31, 2024

Item Impairment Impairment

Book balance Book value Book balance Book value

prepare prepare

Invest in subsidiaries

2,176,902,268.66 2,176,902,268.66 1,622,934,551.92 1,622,934,551.92 capital

For joint ventures and joint ventures

219,984.00 219,984.00 714,180.00 714,180.00 Business investment

Total 2,177,122,252.66 2,177,122,252.66 1,623,648,731.92 1,623,648,731.92 (2) Investment in subsidiaries

December 31, 2024 Increases and decreases in the current period Impairment provision on December 31, 2025 Impairment of investee units Decrease Other

Book value Provision for additional investment Impairment Book value Provision for investment Other

Balance Reserve Balance Xiamen Wantai Canghaisheng

1,130,699,999.69 220,000,000.00 1,350,699,999.69Physical Technology Co., Ltd.

Beijing Wantai Derrick Clinic

19,993,343.23 19,993,343.23 Breaking Technology Co., Ltd.

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

December 31, 2024 Increases and decreases in this period December 31, 2025

Impairment accrual Impairment investee decrease Other

Book value Provision for additional investment Impairment Book value Provision for investment Other

Balance Reserve Balance Beijing Conches Stanson

10,000,000.00 10,000,000.00 Wu Technology Co., Ltd.

Xiamen Wantai Kairuisheng

270,000,000.00 230,000,000.00 500,000,000.00 Wu Technology Co., Ltd.

Xiamen Umaike Medical

39,881,846.07 39,881,846.07 Instrument Co., Ltd.

Beijing Tairun Innovation Technology

Technology Incubator Co., Ltd. 90,000,000.00 90,000,000.00 Company

JHTA (Beijing)

Biotechnology Co., Ltd. 51,359,362.93 923,443.68 52,282,806.61 Company

Hangzhou Wantai Biotechnology

10,000,000.00 10,000,000.00Shu Technology Co., Ltd.

Beijing Wantai Biopharmaceuticals

1,000,000.00 103,044,273.06 104,044,273.06 Industrial Co., Ltd.

Total 1,622,934,551.92 553,967,716.74 2,176,902,268.66 (3) Investment in associates and joint ventures

2024 Increases and decreases in this period

Investment unit December 31 Addition Decrease Recognized under equity method Other comprehensive Other equity

(Book value) Investment Gains and losses on investment Adjustments to income Changes in associates

MiracleCare Biotech LLC 714,180.00 -494,196.00

Total 714,180.00 -494,196.00

(Continued from above table)

Changes in increases and decreases in the current period 2025 2025 Investment unit announced cash distribution on December 31 Provision for impairment on December 31 Others

Dividends or profits (book value) Impairment allowance balance Associates

MiracleCare BiotechLLC 219,984.00

Total 219,984.00

Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Operating income and operating costs

2025 2024

Project

revenue cost revenue cost

Main business 524,751,130.30 258,949,916.82 639,682,349.92 258,117,357.65 Other businesses 74,986,919.70 10,621,414.72 36,755,550.50 8,747,490.85 Total 599,738,050.00 269,571,331.54 676,437,900.42 266,864,848.50 (1) Main business (sub-business)

2025 2024

Business name

revenue cost revenue cost

Distribution 272,153,995.19 144,995,376.00 342,866,430.55 132,638,680.27 Direct sales 252,597,135.11 113,954,540.82 296,815,919.37 125,478,677.38 Total 524,751,130.30 258,949,916.82 639,682,349.92 258,117,357.65 (2) Main business (by product)

2025 2024

Product name

revenue cost revenue cost

Diagnostic reagents 458,294,629.87 216,235,760.17 559,369,970.68 211,949,591.38 Diagnostic instruments 1,555,717.85 3,015,085.74 4,097,345.14 6,827,470.13Agent products 64,900,782.58 39,699,070.91 74,869,403.04 39,056,535.40Vaccine 1,345,631.06 283,760.74Total 524,751,130.30 258,949,916.82 639,682,349.92 258,117,357.65 (3) Main business (by region)

2025 2024

area name

revenue cost revenue cost

Domestic income 478,267,821.92 243,680,110.36 581,649,421.77 238,398,897.56 of which:

Northeast China 28,545,148.11 13,751,038.09 34,971,960.56 13,410,623.21 North China 86,499,120.04 36,747,697.22 105,595,717.75 38,212,690.52 East China 121,753,209.64 61,612,896.73 147,620,025.85 58,868,286.80 South China 72,162,718.37 39,140,841.17 78,162,785.22 38,636,552.42 Central China 63,031,833.54 36,031,532.10 83,870,859.72 38,191,474.61 Western China 106,275,792.22 56,396,105.05 131,428,072.67 51,079,270.00 Overseas income 46,483,308.38 15,269,806.46 58,032,928.15 19,718,460.09

Total 524,751,130.30 258,949,916.82 639,682,349.92 258,117,357.65Beijing Wantai Biopharmaceutical Co., Ltd. Notes to Financial Statements

Investment income

Item 2025 Long-term equity investment income calculated by cost method in 2024 414,239,500.00 Long-term equity investment income calculated by equity method -494,196.00

Interest income obtained during the holding period of debt investment 33,445,534.28 27,873,392.73 Investment income obtained from trading financial assets 446,753.20 23,896,783.30 Total 33,398,091.48 466,009,676.03

18. Supplementary information

Detailed statement of non-recurring profits and losses for the current period

Item 2025 Explain the profit and loss from the disposal of non-current assets, including the write-off part of the asset impairment provision 58,038,119.22 Government subsidies included in the current profit and loss, but closely related to the company’s normal operating business and in compliance with

Except for government subsidies of 79,398,600.70 that are stipulated by national policies, enjoyed according to determined standards, and have a lasting impact on the company's profits and losses.

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

Gains and losses from changes in fair value of financial assets and financial liabilities and gains and losses from the disposal of financial assets and financial liabilities 115,006,463.95

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

Profit and loss from external entrusted loans

Loss of various assets due to force majeure factors, such as natural disasters

The impairment provision for receivables that are separately tested for impairment is reversed 93,400.00. The investment cost of the enterprise in acquiring subsidiaries, associates and joint ventures is less than when the investment was obtained.

Should enjoy the income generated from the fair value of the identifiable net assets of the investee

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 discontinuation of related business activities, such as placement of employees

expenses 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 payment, after the vesting date, the fair amount of employee remuneration payable shall be

Gains and losses arising from changes in value