Semi-annual evaluation report of Wuhan Keqian Biotechnology Co., Ltd.’s 2025 special action plan of “Improving Quality, Increasing Efficiency and Focusing on Return”
Wuhan Keqian Biological Co., Ltd.
Semi-annual evaluation report on the 2025 special action plan of “Improving Quality, Increasing Efficiency and Focusing on Return”
Based on confidence in the company's future development prospects, in order to practice the development concept of "science and technology creates value, Keqian repays society", strengthen market value management and practice, give full play to the role of listed company platforms, guide the company's reasonable return of value, and promote the company's high-quality development, Wuhan Keqian Biotechnology Co., Ltd. (hereinafter referred to as the "Company") released on April 29, 2025 the "Evaluation Report on the 2024 "Improving Quality, Efficiency, and Focus on Returns" Special Action Plan and 2025 Annual Special Action Plan for “Improving Quality, Increasing Efficiency and Focusing on Return”. In the first half of 2025, the company actively carried out and implemented relevant work, and now reports the specific implementation status for the first half of 2025 as follows:
1. Adhere to innovation-led development and continuously enhance the company’s core competitiveness
On the basis of consolidating the existing pig vaccine business, the company fully supports new business sectors such as ruminant and poultry vaccines, pet and ruminant vaccines, diagnostic reagents, microecological preparations, insect protein development, and improved seed breeding, and continuously optimizes the company's business structure. In the first half of 2025, the company achieved operating income of 487.2907 million yuan, a year-on-year increase of 21.67%; net profit attributable to the parent company was 219.8963 million yuan, a year-on-year increase of 44.09%; and realized net cash flow generated from operating activities of 174.326 million yuan.
The company continues to increase investment in R&D, accelerate the construction of new R&D platforms, build new technology platforms such as CHO and mRNA vaccines, and support the research and development of products such as subunit and gene vector vaccines. It continues to promote the upgrading and application of core process technologies, lays out product development for new drug delivery methods such as needle-free injections, accelerates industry-university-research cooperation, accelerates the launch of new products, continuously improves service plans, adheres to product innovation, service innovation, and technological innovation to enhance technological advantages and product brand advantages. In the first half of 2025, the company's research and development expenses were 45.4975 million yuan, and it obtained 6 new veterinary drug certificates, applied for 5 clinical approvals, obtained 1 production test approval for genetically modified safety evaluation, and 12 intermediate tests; it applied for 2 new invention patents and obtained 1 invention patent.
2. Optimize operation management and improve operating efficiency
In the first half of 2025, the company will continue to implement the forward lean operation and management strategy and actively reduce costs and increase efficiency. In terms of informatization, the company has completed the single-sign-on integration of the office approval system, merged weak systems into the main platform, and continued to promote the implementation of new ERP projects; it has built a "business-side-supply-side" full-link material and cost management system, comprehensively promoted the improvement of system management capabilities, and created delivery competitiveness.
The company continues to deepen the optimization of operation management and is committed to cost control and efficiency improvement. Further optimize inventory strategies, speed up inventory turnover, reduce capital occupation, and improve capital utilization efficiency; strengthen accounts receivable management, pay close attention to payment collection status and overdue collections, and handle overdue accounts in a timely manner to increase the turnover rate of accounts receivable.
The company continues to focus on establishing in-depth cooperative relationships with customers, maintaining full and close communication, and flexibly allocating resources according to changes in market demand to ensure that customers' diverse requirements are met in a timely manner. Further optimize the product structure, reduce operating costs, and effectively improve operating efficiency through lean production management.
3. Adhere to systematic and standardized governance and continuously improve the company’s operation and management level
The company attaches great importance to the soundness of the governance structure and the effectiveness of the internal control system, continues to improve the corporate governance and internal control systems, prevents external risks, improves the standardization of the company's operations and the scientificity of decision-making, and comprehensively protects the rights and interests of shareholders. In the first half of 2025, a total of 3 shareholder meetings, 4 board meetings and 4 supervisory board meetings were held. During the reporting period, the company implemented the 2025 employee stock ownership plan. A total of 55 people participated in the plan, including directors, supervisors, middle managers, key position personnel, and core business (technical) personnel. The plan has a lock-in period of 12 months and a duration of 48 months. This plan deeply binds the interests of shareholders, the company and core employees, enhances the awareness of the subject responsibilities of the incentive recipients, fully mobilizes their enthusiasm and creativity, and is conducive to promoting the long-term and healthy development of the company.
4. Pay attention to investor returns and continue to share company development dividends
Since its listing, the company has adhered to technological innovation, improved core competitiveness, and continued to create profit returns for shareholders. While growing and developing, the company has further improved its sustainable, scientific, and stable dividend decision-making and supervision mechanisms, rationally optimized cash dividend plans, and actively rewarded investors. The cumulative cash dividends from 2020 to 2024 were RMB 711.1042 million, and the five-year average cash dividend ratio was 32.23%. It highlights the company's concept of continuously returning investors and establishes a good market image.
The board of directors has carefully studied and demonstrated the timing, conditions and relevant procedures for the company's cash dividends, and on the basis of taking into account reasonable returns for investors and the company's sustainable development, and taking into account the company's development stage, industry characteristics and investor demands, it has formulated a profit distribution plan for 2024: The company's total share capital registered on the equity registration date for equity distribution is 466,128,056 shares, minus the number of shares in the company's special securities account for repurchase, which is 2,211,573. Based on the post-share capital of 463,916,483 shares, a cash dividend of 4.3 yuan (tax included) will be distributed to all shareholders for every 10 shares, with a total cash dividend of 199,484,087.69 yuan (tax included), accounting for 52.17% of the net profit attributable to shareholders of listed companies in 2024. The company has successfully completed the distribution of cash dividends for the 2024 annual profit distribution on June 16, 2025.
At the same time, the company continues to promote the repurchase plan. As of the expiration of the repurchase period on February 19, 2025, the company has repurchased a total of 2,211,573 shares of the company through centralized bidding transactions through the Shanghai Stock Exchange system, with a repurchase amount of RMB 35.8358 million.
In the future, the company will strictly implement investor dividend return planning and profit distribution policies in accordance with the requirements of relevant laws and regulations, continue to optimize the dynamic balance between company development, performance growth, and shareholder returns, build and maintain a sustained and stable shareholder return mechanism, and work hand in hand with all shareholders to share the results of the company's development.
5. Timely and standardized disclosure of information and strengthen communication with investors
The company attaches great importance to information disclosure and improves corporate governance, enhances market transparency, and establishes a good corporate image through information disclosure. In the first half of 2025, the company strictly performed its information disclosure obligations in accordance with laws and regulations, the relevant requirements of the China Securities Regulatory Commission and the Shanghai Stock Exchange, and adhered to the principles of authenticity, accuracy, completeness, timeliness and effectiveness. It disclosed 2 periodic reports, temporary announcements and 69 online attachments, and promptly disclosed major information such as the company's cooperative research and development projects with related party Huazhong Agricultural University, share repurchases, employee stock ownership plans, resignations of independent directors and the replacement of new independent directors.
The company uses a combination of online + offline communication methods to communicate with investors, including holding performance briefings, participating in collective reception day activities for listed companies, participating in brokerage strategy meetings, answering investor hotlines, responding to SSE E interactions, etc. It actively communicates with investors to better convey the company's value, deepen investors' understanding of the company's business and financial aspects, and enhance investors' sense of identification with the company. In addition, the company welcomes investors to fully communicate with the company's management through various methods such as participating in shareholder meetings, visits and surveys, to understand the company's operating and development status, and to establish a long-term, stable, mutual trust and win-win relationship with the company.
6. Strengthen the training of directors, supervisors and senior management, and strengthen the responsibilities of the “key minority”
The company attaches great importance to the important role of the "key minority" in the production and operation process, and continues to strengthen the performance responsibilities of the "key minority". The company promptly shares the latest regulatory developments and key matters of concern to raise awareness of legal and compliance operations. Fully support directors, supervisors, and senior managers to actively participate in various online and offline trainings organized by regulatory agencies, strengthen the "key minority"'s learning of relevant laws and regulations on the securities market, continue to improve the performance capabilities of directors, supervisors, and senior managers and the professional knowledge level of relevant business personnel, continuously enhance compliance awareness, and promote the company's continued standardized operations. The company strictly follows the regulatory requirements for the duties of independent directors and establishes a regular communication system with independent directors to ensure that it provides sufficient conditions and guarantees for independent directors to perform their duties. In the company's key decision-making process, independent directors use their professional knowledge and independent judgment to actively participate in decision-making discussions, contribute professional insights to the company's scientific decision-making, and become an important reference in the decision-making process.
The company's plans, development strategies, etc. involved in this report are forward-looking statements that are not fait accompli and do not constitute the company's substantive commitment to investors. Investors are advised to pay attention to the relevant risks.
Board of Directors of Wuhan Keqian Biological Co., Ltd.
August 24, 2025