Evaluation report of Wuhan Keqian Biotechnology Co., Ltd.’s 2025 “Improving Quality, Increasing Efficiency and Emphasis on Return” Special Action Plan and 2026 Annual “Improving Quality, Efficiency and Emphasis on Return” Special Action Plan
Wuhan Keqian Biological Co., Ltd.
Evaluation report of the 2025 “Improving Quality, Efficiency and Emphasis on Return” Special Action Plan and 2026 “Improving Quality, Efficiency and Emphasis on Return”
Special action plan
Based on confidence in the company's future development prospects, in order to implement the development concept of "science and technology creates value, and science and technology repays society", safeguard the interests of all the company's shareholders, establish a good market image of the company, strengthen market value management and practice, give full play to the role of a listed company platform, guide the company's reasonable return of value, share development dividends with shareholders, and promote the company's high-quality development, 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 Special Action Plan for “Improving Quality, Increasing Efficiency and Focusing on Return”.
In 2025, the company will earnestly implement and continuously evaluate the specific measures of the action plan. The implementation and effect evaluation status of the 2025 “Improving Quality, Efficiency, and Emphasis on Return” action plan and the 2026 “Improving Quality, Efficiency, and Emphasis on Return” action plan are reported as follows:
1. Adhere to innovation-led development and continuously enhance the company’s core competitiveness
In 2025, facing the dual challenges of the rapid intensification of the breeding industry and the complexity of disease prevention and control, the company adheres to the "four orientations" and the spirit of "innovation, creation, entrepreneurship" to organically combine forward-looking research, basic research and applied research. The annual investment in R&D was 964.114 billion yuan, and we will continue to accelerate the research on subunits, genetic engineering, multiple-linked multivalent, component and mRNA vaccines; deepen the application of chemiluminescence technology in the development of diagnostic reagent products; accelerate the research and development and application of pet vaccines and biological agents, focusing on promoting the development of pet biological products such as repair factors, interferons, and erythroid growth factors.
After continuous investment and research, the company has achieved fruitful innovation results in 2025: 7 new veterinary drug certificates (including 2 improved ones), 8 clinical approvals; 11 new authorized invention patents, and 20 new invention patent applications; 3 genetically modified safety certificates, 5 genetically modified safety evaluation production test approvals, 10 environmental release approvals, and 1 intermediate test approval. R&D innovation and achievement transformation capabilities continue to improve.
In terms of technology platform construction, the company relies on CHO, baculovirus vectors and E. coli high-efficiency expression platforms to lay a solid foundation for the research and development of new universal subunit (nano) vaccines; it has improved the mRNA vaccine and recombinant adenovirus vector vaccine platforms, and laboratory research on mRNA vaccines such as porcine viral diarrhea and cat abdominal transmission is progressing smoothly; it has laid out innovations in new adjuvants and delivery systems, carried out research on new vaccination routes, and explored new delivery methods such as needle-free injections, which can effectively reduce animal stress and simplify the immune process.
In terms of process upgrading and quality improvement, the company continues to promote the optimization of core processes and promotes the application of key technologies common to the industry such as large-scale bioreactor full suspension serum-free culture, carrier suspension culture and amplification, high-density bacterial fermentation, and large-scale and efficient purification of antigens to continuously improve product safety and quality stability. At the same time, we will deepen cooperation with universities, scientific research institutions and large-scale breeding enterprises, promote the in-depth integration of industry, academia, and research, integrate internal and external innovation resources, and continue to consolidate the first-mover advantage in scientific and technological innovation.
In terms of business layout, in the face of the increasing intelligence and intensification level of downstream breeding enterprises and the intensified homogeneous competition in the industry, the company has consolidated its leading position in pig vaccines and concentrated its superior resources to support new business sectors such as microecological preparations, poultry vaccines, pet vaccines, ruminant vaccines, diagnostic reagents, protein replacement engineering, and improved seed breeding. It has provided all-round support in terms of capital investment, team building, quality control, sales network, etc., and accelerated the construction of a multi-sector coordinated development pattern.
In 2026, the company will continue to leverage its advantages in R&D and technical services, adjust its R&D direction in a timely manner according to the epidemic trends of animal diseases, continue to deepen its research and development in the field of animal biological products, continue to increase R&D investment, advance the progress of ongoing research projects in an orderly manner, continuously enrich its product pipeline, and continue to enhance its core competitiveness.
2. Optimize operation management and improve operating efficiency
In 2025, the company will complete the in-depth optimization and upgrade of the ERP system, open up the data silos of the entire link of R&D, production, and sales, and realize the digital reengineering of business processes; by introducing big data analysis tools, the supply chain collaboration efficiency and inventory turnover rate will be improved, and the system management capabilities will be comprehensively improved with the project as the center, and the comprehensive delivery capability will be enhanced.
The company continues to promote positive lean operation and management and actively carries out cost reduction and efficiency improvement work. In terms of informatization construction, we have completed single sign-on, integrated the office approval system, merged weak systems into the main platform, and steadily promoted the implementation of new ERP projects; built a "business end-supply end" full-link material and cost management system to achieve refined operational management.
Facing the complex and ever-changing market environment, the company flexibly adjusts its capital management strategy, effectively controls financial expenses, reduces comprehensive financing costs, and maintains a sound financial position by optimizing debt structure, rationally using bill instruments, and strengthening cash flow management.
In 2026, the company will continue to deepen the optimization of operational management, focus on cost control and operational efficiency improvement, and strengthen the internal supervision mechanism. On the premise of ensuring customer needs, we will further optimize inventory strategies, speed up inventory turnover, reduce capital occupation, and improve capital utilization efficiency; strengthen full-cycle management of accounts receivable, increase collection efforts, promptly dispose of overdue accounts, and increase the turnover rate of accounts receivable. The company will continue to reduce operating costs, enhance profitability and improve asset quality while promoting the sustainable development of its main business.
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 2025, a total of 4 shareholders' meetings, 9 board of directors meetings and 9 supervisory board meetings were held. During the reporting period, the company's main measures to standardize governance and improve operation and management levels are as follows:
The company has implemented an employee stock ownership plan for 2025. A total of 55 people are participating in the plan, including directors, supervisors, senior managers, middle-level managers, key position personnel, and core business (technical) personnel. 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.
In accordance with the latest revised policies and regulations and the relevant departmental rules and normative document requirements of the China Securities Regulatory Commission, Shanghai Stock Exchange and other securities regulatory agencies, and based on the company's actual situation, the company has comprehensively and systematically sorted out, revised and improved the "Articles of Association" and relevant internal control systems to ensure that the company's operations are more institutionalized, standardized and standardized. In 2025, a total of more than 24 compliance management systems have been added or revised.
In order to implement the China Securities Regulatory Commission’s policy requirements such as “Transitional Arrangements for the Implementation of Supporting Systems and Rules of the New Company Law”, the company revised the Articles of Association in accordance with the Company Law, the Guidelines on the Articles of Association of Listed Companies and other relevant laws and regulations. This revision deletes the provisions involving the board of supervisors and supervisors, and clarifies in the articles of association that the company's board of directors shall set up an audit committee to exercise the statutory powers of the board of supervisors.
In order to improve the governance structure adjustment of the company's board of directors, Mr. Wu Meimei, the company's actual controller and former director, applied to resign as a director of the company on November 28, 2025. On the same day, the company held an employee representative meeting and made a resolution to elect Mr. Zou Jun, an employee of the company, as the employee representative director of the company's fourth session of the board of directors. The term will be from the date of review and approval by the employee representative meeting to the expiration date of the fourth session of the board of directors.
In 2026, in accordance with the revision and promulgation of laws, regulations and normative documents, the company will promptly update and revise the company's relevant internal governance systems, further improve the internal governance system, and promote the company's continued standardized operations; at the same time, the company will continue to implement the reform spirit of the independent director system of the regulatory authorities, ensure the conditions for independent directors to perform their duties, and better play the role of independent directors in participating in decision-making, supervision, checks and balances, and professional consultation in the governance of listed companies to ensure the scientific nature of decision-making and the full protection of shareholders' rights and interests.
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 2026, the company will strictly implement investor dividend return planning and profit distribution policies in accordance with 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 insists on using high-quality information disclosure to improve governance, enhance market transparency, and establish a good capital market image. In 2025, the company strictly abides by laws, regulations and relevant regulations of the Shanghai Stock Exchange, adheres to the principles of truthfulness, accuracy, completeness, timeliness and fairness. It discloses 4 regular reports and 57 temporary announcements throughout the year, and timely discloses major matters such as cooperative research and development, share repurchases, employee stock ownership plans, and changes in directors, supervisors and senior management.
The company uses a combination of online and offline methods to communicate with investors, and fully communicates with investors through various channels such as performance briefings, listed company collective reception days, brokerage strategy meetings, investor hotlines, and Shanghai Stock Exchange E interaction, actively conveys the company's value, and deepens investors' understanding of the company's operations and financial status. At the same time, the company welcomes investors to have in-depth communication with the management through shareholder meetings, on-site surveys, etc., to build a long-term, stable and mutually trusting cooperative relationship.
In 2026, the company will continue to adhere to the highest standards of information disclosure and enrich communication content and forms. Use official public accounts, visual financial reports and other easier-to-disseminate methods to comprehensively display the company's technological progress and operating results; continue to improve the investor relations management system, deepen exchanges and cooperation with various investment institutions, build long-term, stable, and mutually trusting investor relations, and ensure that the company's value is fully recognized by the market.
- Strengthen training for directors and senior managers and strengthen the responsibilities of “key minorities”
The company attaches great importance to the important role of "key minorities" such as directors and senior managers in corporate governance, and continues to strengthen their compliance awareness and responsibility. The company actively supports directors and senior executives to actively participate in various trainings organized by regulatory agencies, organizes special learning in a timely manner when regulatory rules undergo major changes, and continues to improve management's compliance awareness and ability to perform duties by updating regulatory documents and pushing typical regulatory cases, ensuring the company's standardized operations and preventing governance risks.
The company has established a normal communication mechanism with independent directors to provide sufficient guarantee for independent directors to perform their duties. Independent directors actively play a professional judgment and supervisory role in the company's major decisions, providing important support for scientific decision-making.
In 2026, the company will continue to maintain close communication with directors and senior managers, and actively organize relevant personnel to participate in special training organized by the China Securities Regulatory Commission, Shanghai Stock Exchange and other organizations to ensure that directors and senior managers understand the latest laws and regulations in a timely manner and improve the ability of directors and senior managers to perform their duties. At the same time, the company will strengthen interactive communication with directors and senior managers, provide timely feedback to directors and senior managers on relevant cases from the capital market regulatory authorities, improve corporate governance capabilities in multiple dimensions, effectively promote the company's high-quality development, and safeguard the interests of all shareholders.
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.
April 7, 2026