Special Report on the Deposit, Management and Actual Use of Raised Funds for the First Half of 2026
Securities code: 603590 Securities abbreviation: Kangchen Pharmaceutical Announcement number: Lin 2026-052
Beijing Kangchen Pharmaceutical Co., Ltd.
Special report on the storage, management and actual use of funds raised in the first half of 2026
The board of directors and all directors of the company guarantee that the contents of this announcement do not contain any false records or misleading statements.
or major omissions, and assume legal responsibility for the authenticity, accuracy and completeness of its content.
1. Basic situation of raised funds
(1) Actual amount of funds raised and time of fund arrival
Approved by the China Securities Regulatory Commission's "Reply on the Approval of the Initial Public Offering of Beijing Kangchen Pharmaceutical Co., Ltd." (CSRC License [2018] No. 1084), the company made its initial public offering of 40 million RMB ordinary shares (A shares) to the public at an issue price of RMB 24.34 per share and raised total funds of RMB 97,360.00. Ten thousand yuan, the actual net amount of funds raised after deducting various issuance expenses was RMB 891,425,937. All the above-mentioned raised funds were received on August 20, 2018. Guangdong Genzhong Zhujiang Accounting Firm (Special General Partnership) verified the availability of funds for the company's public issuance of new shares and issued a capital verification report on August 20, 2018 (Guanghui Yanzi [2018] G16002320621 No.).
(2) Use and balance of raised funds as of June 30, 2026
Unit: Yuan
Item Amount
Net amount of raised funds (1) 891,425,937.00 Less: Amount of raised funds invested in investment projects in the first half of 2026 (2) 20,187,928.74 Amount used in previous years (3) 713,463,517.49
Amount of permanent replenishment of surplus raised funds (4) 43,403,979.79 plus: accumulated interest income less net handling fees (5) 79,644,269.21 Balance of raised funds as of June 30, 2026 (1-2-3-4+5) 194,014,780.19 Actual balance of raised funds as of June 30, 2026 194,014,780.19 of which: the closing balance of current deposits in the raised funds account 4,007,507.44 the closing balance of temporarily idle raised funds used for cash management 190,007,272.75
As of June 30, 2026, the company has invested a total of 733,651,446.23 yuan in investment projects with raised funds, and the cumulative net interest income received after deducting handling fees is 79,644,269.21 yuan. As of June 30, 2026, the company's unused balance of raised funds was 194,014,780.19 yuan, of which the ending balance of the raised funds special account was 4,007,507.44 yuan, and the ending balance of idle raised funds used for cash management was 190,007,272.75 yuan.
2. Management of raised funds
(1) Management of raised funds
Since its listing, the company has formulated the "Measures for the Management of Raised Funds" in accordance with the provisions of relevant laws, regulations, rules and normative documents such as the "Company Law of the People's Republic of China", the Securities Law of the People's Republic of China, the Shanghai Stock Exchange Stock Listing Rules, and the "Shanghai Stock Exchange Self-Regulatory Supervision Guidelines for Listed Companies No. 1 - Standardized Operations" and based on the company's actual situation. The company has implemented a special account for depositing the raised funds, established a special account for the raised funds in the bank, and signed the "Tripartite Supervision Agreement for the Special Account Storage of Raised Funds" with the bank where the account was opened on August 20, 2018, together with the original sponsor institution GF Securities Co., Ltd. (hereinafter referred to as "GF Securities"); on February 27, 2019 On the same day, the company and its subsidiary Hebei Kangchen Pharmaceutical Co., Ltd. signed the "Four-Party Supervision Agreement for the Deposit of Raised Funds in a Special Account" with the bank where the account was opened and GF Securities, which clarified the rights and obligations of all parties.
On June 21, 2021, the company hired Tianfeng Securities Co., Ltd. (hereinafter referred to as "Tianfeng Securities") as the sponsor based on the issuance needs, and Tianfeng Securities will undertake the ongoing supervision of the company's initial public offering of A shares. The company and Tianfeng Securities re-signed the "Tripartite Supervision Agreement on Raised Funds" with the bank where the account was opened. The company and its subsidiary Hebei Kangchen Pharmaceutical Co., Ltd. re-signed the "Four-Party Supervision Agreement on Raised Funds" with Tianfeng Securities and the bank where the account was opened, and signed a related termination agreement with the original sponsor GF Securities. For details, please refer to the "Announcement of Beijing Kangchen Pharmaceutical Co., Ltd. on Re-signing the Fund-raising Supervision Agreement after Changing the Sponsor" disclosed by the company in the designated information disclosure media on June 23, 2021.
On July 15, 2022, after review and approval at the 27th meeting of the company's third board of directors and the 24th meeting of the third board of supervisors, it was agreed that the company would establish a new special account for raised funds for the storage, use and management of raised funds for the new raised investment project KC1036. On August 12, 2022, the company signed the "Tripartite Supervision Agreement on the Funds Raised by Beijing Kangchen Pharmaceutical Co., Ltd.'s Initial Public Offering of Stocks and Listing on the Main Board" with Tianfeng Securities and China Merchants Bank Co., Ltd. Beijing Beiyuan Road Branch.
There are no major differences between the above-mentioned supervision agreement and the Shanghai Stock Exchange's three-party supervision agreement template. As of June 30, 2026, all parties to the agreement have performed relevant responsibilities in accordance with the provisions of the agreement.
(2) Storage status of raised funds in special account
As of June 30, 2026, the company's special account storage situation of raised funds is as follows:
Unit: Yuan account opening bank Account number Account type Balance of raised funds Ping An Bank Co., Ltd. Beijing Zhichun Road Branch 15000094847820 Special account for raised funds 768,330.67 Ping An Bank Co., Ltd. Beijing Zhichun Road Branch 15000097892304 Special account for raised funds 155,989.04 China Merchants Bank Co., Ltd.
110922393210203 Special account for raised funds 3,083,187.73Beijing Beiyuan Road Science and Technology Finance Branch
Total // 4,007,507.44
Note 1: The Beijing Branch of Ping An Bank Co., Ltd. designates the Beijing Zhichun Road Branch of Ping An Bank Co., Ltd. as the account opening and depository bank for funds raised by the company;
Note 2: Beiyuan Road Branch of China Merchants Bank Co., Ltd. Beijing Branch serves as the account opening and depository bank for funds raised by the company. Its name is now changed to: Beijing Beiyuan Road Science and Technology Finance Branch of China Merchants Bank Co., Ltd. Beijing Beiyuan Road.
3. Actual use of funds raised in this period
(1) Usage of funds raised for investment projects
For details on the use of funds for raised investment projects, please see Appendix 1 "Comparison of the Use of Raised Funds".
(2) Advance investment and replacement of raised funds in investment projects
On October 15, 2018, according to the "Assurance Report on Beijing Kangchen Pharmaceutical Co., Ltd.'s pre-investment of raised funds in investment projects with self-raised funds" issued by Guangdong Zhengzhong Zhujiang Accounting Firm (Special General Partnership) (Guanghui Zhuanzi [2018] G16002320772 No.), the company used raised funds to replace 58,870,526.66 yuan of self-raised funds pre-invested in investment projects with raised funds. The original sponsor GF Securities and the company's board of supervisors and independent directors expressed their respective opinions on the aforementioned replacement of raised funds for pre-invested raised funds projects. They all believed that the company's replacement of raised funds for pre-invested self-raised funds in investment projects had fulfilled the corresponding legal procedures and complied with relevant laws and regulations and the company's raised funds management system and other relevant regulations.
As of January 7, 2019, the company has completed the replacement of 58,870,526.66 yuan of self-raised funds pre-invested in investment projects with raised funds.
The company on August 27, 2025 The 19th meeting of the 4th Board of Directors and the 15th meeting of the 4th Board of Supervisors were held on the same day, and the "Proposal on Using Own Funds to Pay for the Funds Required for Raised Investment Projects and Replacement with Raised Funds in Equal Parts" was reviewed and approved. It was agreed that during the implementation of the raised investment projects, the company would use its own funds to pay for the funds required for the raised investment projects based on the actual situation and subject to relevant approvals, and replace them with raised funds in equal amounts within 6 months, that is, an equal amount of funds would be transferred from the raised funds special account to the company's own capital account, and the equal amount of replacement funds would be regarded as the funds used for the raised investment projects. As of June 30, 2026, the company had used its own funds to pay for the funds required for the raised investment projects and replaced the raised funds with equal amounts of 28.7266 million yuan, of which the current replacement amount was 11.3837 million yuan.
(3) Use of part of idle raised funds to supplement working capital
As of June 30, 2026, the company did not use part of the idle raised funds to supplement working capital.
(4) Use of part of idle raised funds for cash management
The company held the 21st meeting of the fourth board of directors and the 17th meeting of the fourth board of supervisors on October 29, 2025, and reviewed and approved the "Proposal on the Use of Idle Raised Funds for Cash Management", agreeing that the company can use idle raised funds not exceeding RMB 260 million for cash management in a timely manner. This limit is valid for 12 months from the date of review and approval by the company's board of directors, and can be used on a rolling basis during the validity period.
The company's current cash management income was 3.0105 million yuan. As of June 30, 2026, the company used idle raised funds to purchase unexpired securities income certificates totaling 190.0073 million yuan. The specific details are as follows:
Amount of raised funds Term Name of expected trustee Value date Maturity date
Financial account (10,000 yuan) (day) Annualized rate of return CITIC Securities Co., Ltd.
3000132777 4,000.00 2025.7.28 2026.7.27 364 ≥0.05% Co., Ltd.
CITIC Securities Co., Ltd.
3000132777 6,000.00 2025.10.28 2026.10.28 365 ≥0.05%
Ltd.
China Galaxy Securities
10100175899 1,000.00 2026.4.3 2027.3.31 363 0.1%/4% joint stock limited company
China Galaxy Securities
10100175899 2,000.00 2026.4.3 2027.3.31 363 1%-3.9% Co., Ltd.
China Galaxy Securities
10100175899 2,000.00 2026.5.19 2027.5.18 365 1%-3.9% Co., Ltd.
CITIC Securities 3.16%/0.1%- 3000132777 4,000.00 2026.5.19 2027.5.19 365
Ltd. 4.18%
Note: In addition to the above-mentioned unexpired principal of financial products, as of June 30, 2026, there are RMB 5,100 and RMB 2,200 respectively in account 3000132777 of CITIC Securities Co., Ltd. and account 10100175899 of China Galaxy Securities Co., Ltd., both of which are current interest.
The company's cash management with temporarily idle raised funds has gone through corresponding approval procedures, and the quota and term of investment products comply with relevant laws, regulations and relevant regulatory requirements of the China Securities Regulatory Commission and Shanghai Stock Exchange.
(5) Use of excess raised funds to permanently supplement working capital or return bank loans
As of June 30, 2026, the company has not used excess raised funds to permanently replenish working capital or repay bank loans.
(6) The use of excess raised funds for projects under construction and new projects (including acquisition of assets, etc.)
As of June 30, 2026, the company has not used excess raised funds for projects under construction or new projects (including acquisition of assets, etc.).
(7) Usage of surplus raised funds
The company held the 22nd meeting of the fourth board of directors and the 18th meeting of the fourth board of supervisors on December 15, 2025, and reviewed and approved the "Proposal on the Closing of Part of the Raised Investment Projects and the Permanent Replenishment of Working Capital with the Remaining Raised Funds"; on December 31, 2025, the company's 2025 Third Extraordinary General Meeting of Shareholders reviewed and approved the "Proposal on the Completion of Some Raised Investment Projects and the Permanent Replenishment of Working Capital with the Remaining Raised Funds." In order to use the raised funds more rationally and improve the efficiency of the use of raised funds, the company will use the remaining 42.9821 million yuan of raised funds from the "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project" (all of which are fund interest or financial management income, the specific amount is based on the account balance on the day when the funds are transferred out) for permanent replenishment of working capital.
As of June 30, 2026, the company has completed the above-mentioned fund transfer in accordance with the requirements for standardized management of raised funds, and the remaining raised funds of 43.404 million yuan transferred out will be used to permanently supplement working capital.
(8) Other uses of raised funds
As of June 30, 2026, the company has no other use of raised funds.
4. Changes in the use of funds for investment projects with raised funds
(1) Changes in some investment plans of the “Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project”
The company held the 13th meeting of the second board of directors and the sixth meeting of the second board of supervisors on November 7, 2018, and reviewed and approved the "Proposal on Changing the Partial Investment Plan of the Raised Fund Investment Project "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project" and the "Proposal on the Company's intention to sign a technology transfer contract for Jincao Pian"; on November 23, 2018, the company's third extraordinary shareholders' meeting in 2018 reviewed and approved the above proposals. Since the company transferred the relevant technical achievements of the Jincao Pian project to the outside world and concentrated its efforts and raised funds on the research and development of other targeted anti-tumor drugs and the construction of the targeted anti-tumor drug innovation platform, the company agreed to use the remaining raised funds of 76.1223 million yuan from the Jincao Pian R&D project, one of the raised-funded investment projects "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project", for other projects in the raised-fund investment project "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project".
The company held the second meeting of the third board of directors and the second meeting of the third board of supervisors on March 12, 2020, and reviewed and approved the "Proposal on Changing the Partial Investment Plan of the Raised Fund Investment Project "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project"; on March 30, 2020, the company's second extraordinary general meeting of shareholders in 2020 reviewed and approved the above motion. Based on the analysis of R&D strategic planning and business development trends, the company has terminated the "CX1409 R&D Project", one of the investment plans of the "Innovative Drug R&D and Targeted Anti-tumor Drug Innovation Platform Construction Project", and will focus R&D resources on more innovative and clinically valuable projects. Therefore, the company agreed to use the remaining raised funds of 110.8021 million yuan from the "CX1409 R&D Project", one of the "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Projects", to be used for other projects in the raised funds investment project "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project".
The company held the 27th meeting of the third board of directors and the 24th meeting of the third board of supervisors on July 15, 2022, and held the 2022 meeting on August 1, 2022. The second extraordinary general meeting of shareholders in 2019 reviewed and approved the "Proposal on Changing the Investment Projects of Part of the Raised Funds", and agreed that the company would add innovative drug discovery as a sub-project of the "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project" of the investment project raised by the initial public offering. At the same time, the amount of raised funds planned to be used in the "Innovative Drug Research and Development and Targeted Anti-tumor Drug Innovation Platform Construction Project" was reduced by 311.92 million yuan. The reduced raised funds were used for the new raised investment project KC1036 research and development, accounting for 34.99% of the net funds raised.
(2) The "Lolatrex Hydrochloride API Production Capacity Construction Project" was changed to "Anti-tumor API Production Base Construction Project with an Annual Output of 500kg"
The company held the third meeting of the third board of directors and the third meeting of the third board of supervisors on April 21, 2020, and held the fifth extraordinary shareholders' meeting of 2020 on June 29, 2020. The company reviewed and approved the "Proposal on Changing the Investment Project of Raised Funds "Loratrex Hydrochloride API Production Capacity Construction Project", and agreed that the company will change the raised investment project "Loratrex Hydrochloride API Production Capacity Construction Project" to "Annual Production of 500kg "Anti-tumor API Production Base Construction Project" to provide APIs for the company's other national first-class new anti-tumor drugs under research. The original raised investment project "Lolatrex Hydrochloride API Production Capacity Construction Project" has been put into completed factories and projects under construction, and will continue to be used for the production of other APIs under research by the company. The amount of funds raised involved in the aforementioned changes to the investment projects accounted for 9.25% of the total funds raised, of which a cumulative investment of 35.6108 million yuan, accounting for 3.99%; the remaining raised funds were 46.8905 million yuan (including the accumulated interest income after deducting net handling fees of 2.5013 million yuan), accounting for 5.26%. The company held the 14th meeting of the 4th board of directors and the 12th meeting of the 4th board of supervisors on December 16, 2024, and reviewed and approved the "Proposal on the Postponement of Some of the Company's Investment Projects". Based on the current actual progress of the company's "anti-tumor API production base construction project with an annual output of 500kg", the company has extended the time for the project to reach the expected usable state to December 2026, provided that the investment purpose and investment scale of the raised funds do not change.
For details about "KC1036" and "Anti-tumor API Production Base Construction Project with an Annual Output of 500KG", please refer to Appendix 2 "Change of Raised Funds Investment Project Status".
5. Problems in the use and disclosure of raised funds
During the reporting period, the company has made timely, true, accurate and complete information disclosure on the use of raised funds, and there are no violations in the storage, use, management and disclosure of raised funds.
Announcement is hereby made.
Board of Directors of Beijing Kangchen Pharmaceutical Co., Ltd.
Schedule 1 of August 26, 2026:
Comparison table of usage of raised funds
Unit: 10,000 yuan Currency: RMB
Issue Name 2018 Initial Public Offering of Shares
Date of receipt of raised funds: August 20, 2018
The total amount of raised funds invested in this period is 2,018.79
The total amount of raised funds invested is 73,365.14
Total amount of raised funds changed in use 39,192.00
Proportion of total raised funds changed use 43.97%
Yes
The project reaches the project deadline No
As of the end of the period, it is feasible to reach the scheduled period
Final investment reaches
Raised funds As of the end of the period, the total amount of investment available is actually committed investment projects and over-raised investment projects. Projects have been changed, including some adjusted investments. The current investment progress has reached
Commitment investment Commitment investment Cumulative investment and committed investment Status date Current Whether the raised funds will be invested Nature Change (if any) Total investment Amount of investment (%) Preliminary
Total Amount(1) Amount(2) Difference in Amount Period (Specific Weight(4)= Total
(3)＝(2)-(1) The body will be effective every month. (2)/(1) will be effective.
portion) Yihua
benefit
Innovative drug research and development and targeted antibiotics No No
Oncology drug innovation platform construction 41,142.59 9,950.59 9,950.59 - 10,195.17 244.58 102.46 Project completed Appropriate Appropriate Whether innovative drug development and targeting
Design project use
Anti-tumor Drug Innovation Platform R&D
No no
Taiwan construction project 2027
KC1036 - 31,192.00 31,192.00 2,018.79 14,267.88 -16,924.12 45.74 Suitable Suitable No 6 months
use use
No no
Brand building and marketing
Operation management / 20,000.00 20,000.00 20,000.00 - 20,138.08 138.08 100.69 Not applicable Suitable Suitable No project
use use
Loratrex hydrochloride raw material Production and construction Annual output of 500kg anti-tumor agent 8,000.00 8,000.00 8,000.00 - 8,356.31 356.31 104.45 2026 No No No
Pharmaceutical production capacity construction project Material and pharmaceutical production base construction project December Appropriate Applicable Purpose Use Not used Not to supplement working capital Supplementary flow / 20,000.00 20,000.00 20,000.00 - 20,407.70 407.70 102.04 Not applicable Applicable Applicable Not used Use
Total 89,142.59 89,142.59 89,142.59 2,018.79 73,365.14 -15,777.45 82.30 / / / /Failed to meet the planned schedule
Because (divided into specific fundraising items) Not applicable
item)
The feasibility of the project
Not applicable
Description of big changes
Raising funds for investment projects
For details on advance investment and replacement, please refer to “3. Actual Use of Raised Funds in the Current Period/(2) Advance Investment and Replacement of Raised Fund Investment Projects” in this special report
Use idle raised funds temporarily
When replenishing liquidity Not applicable
situation
Promote idle raised funds
Bank cash management and investment. For details, please refer to the relevant product information in "3. Actual use of funds raised in this period/(4) Use of part of idle raised funds for cash management" in this special report.
Use super-raised funds to permanently replenish
Replenish working capital or return N/A
Bank loan status
Fund raising balance
For details, please refer to "3. Actual use of raised funds in this period/(7) Use of surplus raised funds" in this special report and the reasons for its formation.
Other uses of raised funds
Not applicable
situation
Schedule 2:
Changes to the investment project status of raised funds
Unit: 10,000 yuan Currency: RMB Issuance name 2018 initial public offering of shares
Date of receipt of raised funds: August 20, 2018
change
this later
raise
Investment into the project has reached the period of the project. Directors and shareholders have invested in the following items. As of the end of the period, is it true?
The actual cumulative degree of the current period is scheduled to be feasible. Joint review. After the joint review and changes, the planned investment of the project is planned to be achieved.
Corresponding original project Implementing entity International investment Investment amount (%) Usage status Daily liquidity Yes Negotiated project destination Raised funds Investment amount Estimated
Amount (2) (3)=(2)/Period (Specific Whether Issued Obsolescence Obsolescence Point Total (1) Benefit
(1) to the year and month) the effect is to regenerate the interstitium
Great change
ization
Innovative drug research and development and 2022 2022
Beijing Kangchen Medicine No
Targeted anti-tumor drug research North 2027 6 Unsuitable Year 7 years 8 KC1036 Industry Co., Ltd. 31,192.00 31,192.00 2,018.79 14,267.88 45.74 Suitable No
Establishment and development of the innovation platform in Beijing Monthly Used 15 months 1
For company use
Set project day day year production
500kg
Health 2020 2020 Anti-tumor Loratrix Hydrochloride No
Production Hebei Kangchen Manufacturing Hebei December 2026 Not suitable Year 4 years 6 API Production capacity construction of API 8,000.00 8,000.00 - 8,356.31 104.45 Suitable No
China Construction Pharmaceutical Co., Ltd. Beihai Monthly Used Monthly 21-29 Production Infrastructure Project Used
Set up day and ground construction
Project
Total 39,192.00 39,192.00 2,018.79 22,624.19 57.73 — — — — — - Reasons for changes, decision-making procedures and information disclosure
For details, please refer to the description of "IV. Changes in the use of funds for investment projects with raised funds" in this special report (divided into specific raised investment projects)
Situations and reasons for failure to achieve planned progress
Not applicable (depending on specific fundraising projects)
The feasibility of the project after the change has changed significantly
Description of circumstances in which changes are not applicable