Yongan Pharmaceutical: 2025 Annual Audit Report

Audit report and financial statements of Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Letter of Reunion [2026] No. ZE10121

Qianjiang Yongan Pharmaceutical Co., Ltd.

Audit reports and financial statements

(from January 1, 2025 to December 31, 2025)

Table of Contents Page

1. Audit report 1-5

2. Financial statements

Consolidated balance sheet and parent company's balance sheet 1-4 Consolidated income statement and parent company's income statement 5-6 Consolidated cash flow statement and parent company's cash flow statement 7-8 Consolidated statement of changes in owners' equity and statement of changes in parent company's owners' equity 9-12 Notes to financial statements 1-106

Audit report

Letter of Reunion [2026] No. ZE10121

All shareholders of Qianjiang Yongan Pharmaceutical Co., Ltd.:

1. Audit opinions

We have audited the financial statements of Qianjiang Yongan Pharmaceutical Co., Ltd. (hereinafter referred to as Yongan Pharmaceutical), 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 financial status of Yongan Pharmaceutical as of December 31, 2025, as well as the consolidated and parent company operating results and cash flows in 2025.

2. Form the basis for 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 "Independence Standards for Chinese Certified Public Accountants No. 1 - Requirements for Independence in Financial Statement Audit and Review Engagements" and the Chinese Code of Professional Ethics for Certified Public Accountants, we are independent from Yongan Pharmaceutical and have fulfilled other responsibilities in terms of professional ethics. In our audit, we followed the independence requirements for audits of public interest entities. 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.

A summary of the key audit matters identified in our audit are as follows:

Audit Report Page 1

Key audit matter How the matter was addressed in the audit

(1) Revenue recognition

For example, Note 3 (27) and Note 5 (30) to the financial statements. Our audit procedures for revenue recognition mainly include:

As shown in 3), Yongan Pharmaceutical’s annual main business income in 2025 (1) Understand, evaluate and test the relationship between management and revenue recognition: 778,287,026.11 yuan. Since revenue is an important financial indicator, the effectiveness of key internal controls is critical;

One of the objectives is that there is a risk of management manipulating revenue recognition in order to achieve specific goals or expectations. (2) Select samples to check sales contracts and identify risks related to product control. We use revenue recognition as a contract clause related to control transfer to evaluate the company's key revenue audit matters. Whether the time of confirmation meets the requirements of Accounting Standards for Business Enterprises;

(3) Select samples of revenue transactions recorded this year, check sales contracts, invoices, delivery orders, and acceptance orders. For export sales, check sales records with export sales documents such as freight bills of lading and sales invoices, and evaluate whether relevant revenue recognition complies with the company's accounting policies for revenue recognition;

(4) Carry out confirmation procedures for the sales revenue of selected sample customers, and carry out post-period payment inspection procedures for large accounts receivable to evaluate the authenticity of sales revenue;

(5) Analyze revenue and gross profit based on product type to determine whether there are abnormal fluctuations in the current period's revenue;

(6) Select samples of revenue transactions recorded before and after the balance sheet date, and check the outgoing documents and other supporting documents to evaluate whether the revenue is recorded in the appropriate accounting period.

(2) Impairment of fixed assets

As shown in Note 3 (16) and Note 5 (11) of the financial statements, our audit procedures for the impairment of fixed assets mainly include: As shown in the financial statements, as of December 31, 2025, (1) Understand and evaluate Yongan Pharmaceutical and the impairment of fixed assets. The balance of the impairment provision for fixed assets is 95,146,116.25 yuan. Test the effectiveness of the relevant internal control design, and test the provision of RMB 14,469,756.93 during the shutdown period. effectiveness of key control execution;

Due to the significant amount of asset impairment provisions for the current period, the assets are reduced. (2) Carry out sampling of important fixed assets and check the fixed value test involving major judgments of Yongan Pharmaceutical management and the status of estimated assets and their use this year, etc.;

Therefore, the fixed assets impairment test is regarded as a key audit matter. (3) Obtain and review the fixed asset items evaluated by the management of Yongan Pharmaceutical. Information based on whether there are signs of impairment in production value, evaluate

Audit Report Page 2

Evaluate the rationality of the identification of the asset group to which the asset belongs and the rationality of the key assumptions used in the impairment test of fixed assets; (4) Recruit appraisal experts to review the management's impairment test of fixed assets and the appraisal report of the appraisal agency hired by the management, and evaluate the appropriateness of the impairment test methods and models, key parameters and assumptions of the impairment test used in the management's relevant impairment test and the appraisal report of the appraisal agency;

(5) Review the presentation and disclosure of fixed asset impairment in financial statements

Dew.

4. Other information

The management of Yongan Pharmaceutical (hereinafter referred to as the management) is responsible for other information. The other information includes information included in Yongan Pharmaceutical's 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 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 are free of material misstatements due to fraud or errors.

When preparing financial statements, management is responsible for assessing Yongan Pharmaceutical's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the going concern assumption unless it plans to liquidate, terminate operations, or has no other realistic alternative.

Those charged with governance are responsible for overseeing Yongan Pharmaceutical’s financial reporting process.

Audit Report Page 3

6. Responsibility 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 the management and the reasonableness of the accounting estimates and related disclosures made.

(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 Yongan Pharmaceutical'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 Yongan Pharmaceutical to cease to continue as a going concern.

(5) Evaluate the overall presentation (including disclosure), 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 Yongan Pharmaceutical to express an audit opinion on the consolidated financial statements. We are responsible for directing, supervising and performing group audits and take full responsibility for our audit opinions.

Audit Report Page 4

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 independence and communicate with those charged with governance all relationships and other matters that may reasonably be considered to affect our independence, and related safeguards, if applicable.

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.

Lixin Accounting Firm Chinese Certified Public Accountant: Wang Tianping

(Special General Partnership) (Project Partner)

Chinese Certified Public Accountant: Liu Ruixiang

China•Shanghai April 15, 2026

Audit Report Page 5

Qianjiang Yongan Pharmaceutical Co., Ltd.

Consolidated Balance Sheet

December 31, 2025

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

Assets Notes Closing balance Current assets at the end of the previous year:

Monetary funds 5(1) 230,585,726.41 320,405,292.96 Settlement reserve fund

Loan funds

Trading financial assets 5(2) 687,885,327.94 600,160,393.06 Derivative financial assets

Notes receivable Five (three) 5,980,717.37 6,712,910.00 Accounts receivable Five (four) 116,835,678.92 153,967,383.89 Accounts receivable financing Five (five) 2,152,013.64 1,106,263.20 Prepayments Five (six) 8,813,805.83 10,333,758.27 Premiums receivable

Reinsurance accounts receivable

Receivable reinsurance contract reserves

Other receivables 5 (7) 5,437,851.15 6,144,785.84 Financial assets purchased under resale agreements

Inventory 5(8) 90,892,788.12 93,502,681.55 Including: data resources

contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 5 (9) 4,157,842.55 6,325,212.57 Total current assets 1,152,741,751.93 1,198,658,681.34 Non-current assets:

Grant loans and advances

debt investment

Other debt investments

long-term receivables

Long-term equity investment 5 (10) 74,455,305.70 74,547,492.91 Other equity instrument investments

Other non-current financial assets

investment real estate

Fixed assets Five (11) 859,783,604.44 881,816,043.56 Construction in progress Five (12) 18,900,382.64 66,409,104.74 Productive biological assets

oil and gas assets

right-of-use assets

Intangible assets 5 (13) 76,821,891.90 79,559,070.10 Including: data resources

development expenditure

Among them: data resources

Goodwill Five (14)

Long-term deferred expenses

Deferred income tax assets V (15) 11,410,902.47 5,839,916.81 Other non-current assets V (16) 6,547,752.02 1,772,596.39 Total non-current assets 1,047,919,839.17 1,109,944,224.51 Total assets 2,200,661,591.10 2,308,602,905.85 The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report Page 1

Qianjiang Yongan Pharmaceutical Co., Ltd.

Consolidated Balance Sheet (continued)

December 31, 2025

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

Liabilities and Owner's Equity Notes Closing balance Previous year's closing balance Current liabilities:

Short-term borrowings 5 (18) 750,000.00 39,526,078.47 Borrowings from the Central Bank

borrowing funds

Trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable Five (19) 115,570,758.96 124,018,386.07 Advance receipts

Contract liabilities five (twenty) 20,095,306.72 19,279,795.04 Financial assets sold under repurchase agreements

Taking deposits and placing deposits with other banks

Agent for buying and selling securities

Agent underwriting securities funds

Employee benefits payable V (Twenty-one) 36,103,443.98 38,857,601.21 Taxes payable V (Twenty-two) 12,323,913.03 9,001,779.73 Other payables V (Twenty-three) 7,508,018.13 8,904,431.95 Handling fees and commissions payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year

Other current liabilities 5 (24) 11,583,781.54 8,752,632.09 Total current liabilities 203,935,222.36 248,340,704.56 Non-current liabilities:

insurance contract reserves

long term borrowing

bonds payable

Among them: preferred shares

perpetual bond

Lease liability

long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income V (Twenty-five) 9,284,960.53 7,457,212.42 Deferred income tax liabilities V (Fifteen) 5,501,770.17 10,747,760.55 Other non-current liabilities

Total non-current liabilities 14,786,730.70 18,204,972.97 Total liabilities 218,721,953.06 266,545,677.53 Owners’ equity:

Share capital five (twenty-six) 294,682,500.00 294,682,500.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve V (twenty-seven) 722,296,494.36 714,435,114.70 Less: treasury shares V (twenty-eight) 40,475,988.99 24,183,171.45 Other comprehensive income V (twenty-nine) 2,231,518.43 2,401,801.91 Special reserves Five (thirty) 28,789,636.43 20,539,424.71 Surplus reserve Five (thirty-one) 148,676,496.29 148,676,496.29 General risk reserve

Undistributed profits 5 (32) 830,807,637.84 837,228,722.92 Total owners’ equity attributable to the parent company 1,987,008,294.36 1,993,780,889.08 Minority shareholders’ equity -5,068,656.32 48,276,339.24 Total owners’ equity 1,981,939,638.04 2,042,057,228.32 Total liabilities and owners’ equity 2,200,661,591.10 2,308,602,905.85 The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 2

Qianjiang Yongan Pharmaceutical Co., Ltd.

Parent company balance sheet

December 31, 2025

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

Assets Notes Closing balance Current assets at the end of the previous year:

Monetary funds 182,036,678.88 244,000,384.47 Trading financial assets 632,776,952.47 548,213,939.58 Derivative financial assets

Notes receivable 237,600.00 3,448,110.00 Accounts receivable 17 (1) 88,221,933.26 123,789,301.52 Accounts receivable financing 2,152,013.64

Prepayments 4,001,219.51 7,416,202.21 Other receivables Seventeen (II) 141,949,237.28 109,505,632.30 Inventory 60,952,425.34 64,102,688.52 Including: data resources

contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 84,140.61 87,846.86 Total current assets 1,112,412,200.99 1,100,564,105.46 Non-current assets:

debt investment

Other debt investments

long-term receivables

Long-term equity investment 17 (3) 306,400,223.96 267,436,353.06 Other equity instrument investments

Other non-current financial assets

investment real estate

Fixed assets 644,805,498.64 721,726,015.55 Construction in progress 7,699,067.26 6,702,655.89 Productive biological assets

oil and gas assets

right-of-use assets

Intangible assets 52,799,467.30 54,897,852.26 Including: data resources

development expenditure

Among them: data resources

goodwill

Long-term deferred expenses

Deferred tax assets

Other non-current assets 1,145,736.28 1,152,548.48 Total non-current assets 1,012,849,993.44 1,051,915,425.24 Total assets 2,125,262,194.43 2,152,479,530.70 The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 3

Qianjiang Yongan Pharmaceutical Co., Ltd.

Parent Company Balance Sheet (continued)

December 31, 2025

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

Liabilities and Owner's Equity Notes Closing balance Previous year's closing balance Current liabilities:

short term borrowing

Trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable 46,713,801.71 52,286,622.93 Advance payments

Contract liabilities 1,940,046.16 2,083,068.74 Employee benefits payable 29,941,788.44 34,348,547.36 Taxes payable 7,701,345.80 8,667,282.56 Other payables 3,462,599.17 4,058,389.59 Liabilities held for sale

Non-current liabilities due within one year

Other current liabilities 253,404.27 3,165,007.64 Total current liabilities 90,012,985.55 104,608,918.82 Non-current liabilities:

long term borrowing

bonds payable

Among them: preferred shares

perpetual bond

Lease liability

long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income 7,583,703.77 4,845,050.36 Deferred income tax liabilities 4,397,758.90 9,587,383.18 Other non-current liabilities

Total non-current liabilities 11,981,462.67 14,432,433.54 Total liabilities 101,994,448.22 119,041,352.36 Owners’ equity:

Share capital 294,682,500.00 294,682,500.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve 713,339,435.67 713,339,435.67 Less: treasury shares 40,475,988.99 24,183,171.45 Other comprehensive income

Special reserves 16,793,585.16 13,534,345.91 Surplus reserves 148,676,496.29 148,676,496.29 Undistributed profits 890,251,718.08 887,388,571.92 Total owners’ equity 2,023,267,746.21 2,033,438,178.34 Total liabilities and owners’ equity 2,125,262,194.43 2,152,479,530.70 The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 4

Qianjiang Yongan Pharmaceutical Co., Ltd.

consolidated income statement

2025

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

Item Note Amount for the current period Amount for the previous period

1. Total operating income 783,167,007.89 838,814,941.70 Including: operating income 5 (33) 783,167,007.89 838,814,941.70

2. Total operating costs 791,244,833.80 798,694,169.91 Including: Operating costs V (Thirty-three) 650,684,052.19 671,116,742.34 Taxes and surcharges V (Thirty-four) 10,030,751.49 9,445,248.41 Sales expenses Five (thirty-five) 40,065,902.58 17,277,364.95 Administrative expenses Five (thirty-six) 59,700,447.16 73,352,046.49 Research and development expenses Five (thirty-seven) 30,876,613.76 36,974,497.81 Financial expenses Five (thirty-eight) -112,933.38 -9,471,730.09 Including: interest expense 941,505.85 585,858.91

Interest income 1,357,016.04 1,096,356.27 plus: other income 5 (thirty-nine) 5,470,623.02 7,671,601.16 Investment income (losses are listed with "-") 5 (forty) 30,560,208.94 39,679,131.94 Including: Investment income from associates and joint ventures 4,277,572.16 4,727,889.17 Income from derecognition of financial assets measured at amortized cost

Exchange gains (losses are listed with "-")

Net exposure hedging income (losses are listed with a “-” sign)

Gains from changes in fair value (losses are listed with "-") Five (41) -1,085,650.93 4,431,333.86 Credit impairment losses (losses are listed with "-") Five (42) 124,223.68 -357,213.64 Asset impairment losses (losses are listed with "-") Five (43) -16,527,392.86 -18,286,031.52

Asset disposal income (losses are listed with "-") Five (forty-four) 185,682.47 -326,208.70

3. Operating profit (losses are listed with "-") 10,649,868.41 72,933,384.89 Plus: Non-operating income 5 (forty-five) 307,044.10 1,967,662.09 Less: Non-operating expenses 5 (46) 1,079,022.86 4,040,314.61

4. Total profits (total losses are listed with "-") 9,877,889.65 70,860,732.37 Less: income tax expenses 5 (forty-seven) 2,687,825.14 11,153,027.59

5. Net profit (net loss is listed with "-") 7,190,064.51 59,707,704.78

(1) Classification by business continuity

1． Net profit from continuing operations (net loss is listed with "-") 7,190,064.51 59,707,704.78

2. Net profit from discontinued operations (net loss is listed with "-")

(2) Classification according to ownership ownership

1． Net profit attributable to shareholders of the parent company (net losses are listed with "-") 22,493,429.92 61,766,022.21

2. Profit and loss of minority shareholders (net loss is listed with "-") -15,303,365.41 -2,058,317.43

3. Net amount of other comprehensive income after tax -170,283.48 -1,869,850.36 Net amount of other comprehensive income attributable to the owners of the parent company -170,283.48 -1,869,850.36

(1) Other comprehensive income that cannot be reclassified into profit or loss

1． Remeasurement of changes in defined benefit plan

2. Other comprehensive income that cannot be transferred to profit or loss under the equity method

3． Changes in fair value of other equity instrument investments

4． Changes in the fair value of the company's own credit risk

(2) Other comprehensive income that will be reclassified into profit and loss -170,283.48 -1,869,850.36 1. Other comprehensive income that can be converted to profit or loss under the equity method

2. Changes in fair value of other debt investments

3． The amount of financial assets reclassified and included in other comprehensive income

4． Credit impairment provisions for other debt investments

5. Cash flow hedging reserve

6． Translation difference of foreign currency financial statements -170,283.48 -1,869,850.36

7． Others

Other comprehensive income, net of tax, attributable to minority shareholders

7. Total comprehensive income 7,019,781.03 57,837,854.42 Total comprehensive income attributable to owners of the parent company 22,323,146.44 59,896,171.85 Total comprehensive income attributable to minority shareholders -15,303,365.41 -2,058,317.43

8. Earnings per share: five (forty-eight)

(1) Basic earnings per share (yuan/share) 0.0777 0.2107

(2) Diluted earnings per share (yuan/share) 0.0777 0.2096

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 5

Qianjiang Yongan Pharmaceutical Co., Ltd.

Parent company income statement

2025

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

Item Note Amount for the current period Amount for the previous period

1. Operating income Seventeen (Four) 562,261,441.31 705,847,595.50 Less: Operating costs Seventeen (Four) 471,905,997.44 543,310,466.41 Taxes and surcharges 8,121,945.21 8,223,401.66 Sales expenses 9,127,029.64 10,607,921.06Administrative expenses 40,384,929.11 55,754,282.99R&D expenses 19,593,566.81 26,752,645.35Financial expenses -1,142,014.53 -7,000,743.13 of which: interest expense

Interest income 1,234,472.09 688,579.34 plus: other income 3,629,333.13 3,548,051.14 Investment income (losses are listed with "-") Seventeen (Five) 29,005,036.54 35,370,840.47 Including: investment income from associates and joint ventures 4,463,870.90 4,043,617.10

Financial assets measured at amortized cost are derecognised

recognized income

Net exposure hedging income (losses are listed with a “-” sign)

Gains from changes in fair value (losses are listed with "-") -844,572.92 4,335,378.54 Credit impairment losses (losses are listed with "-") -4,810,642.57 -14,819,049.45 Asset impairment losses (losses are listed with "-") -3,648,916.63 -2,406,381.93 Asset disposal income (losses are listed with "-") 21,547.94 -331,354.82

2. Operating profit (losses are listed with "-") 37,621,773.12 93,897,105.11 plus: non-operating income 46,026.07 1,874,878.77 minus: non-operating expenses 260,227.93 2,869,582.72

3. Total profits (total losses are listed with "-") 37,407,571.26 92,902,401.16 Less: income tax expenses 5,629,910.10 13,462,016.61

4. Net profit (net loss is listed with "-") 31,777,661.16 79,440,384.55

(1) Net profit from continuing operations (net loss is listed with "-") 31,777,661.16 79,440,384.55

(2) Net profit from discontinued operations (net loss is listed with "-")

5. Net amount of other comprehensive income after tax

(1) Other comprehensive income that cannot be reclassified into profit or loss

1． Remeasurement of changes in defined benefit plan

2. Other comprehensive income that cannot be transferred to profit or loss under the equity method

3． Changes in fair value of other equity instrument investments

4． Changes in the fair value of the company's own credit risk

(2) Other comprehensive income that will be reclassified into profit and loss

1． Other comprehensive income that can be converted to profit or loss under the equity method

2. Changes in fair value of other debt investments

3． Financial assets reclassified into other comprehensive income

Um

4． Credit impairment provisions for other debt investments

5. Cash flow hedging reserve

6． Translation differences of foreign currency financial statements

7． Others

6. Total comprehensive income 31,777,661.16 79,440,384.55

7. Earnings per share:

(1) Basic earnings per share (yuan/share)

(2) Diluted earnings per share (yuan/share)

The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 6

Qianjiang Yongan Pharmaceutical Co., Ltd.

Consolidated Cash Flow Statement

2025

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

Item Note Amount for the current period Amount for the previous period

1. Cash flow generated from operating activities

Cash received from selling goods and providing services 832,727,212.11 868,377,965.49 Tax refunds received 23,469,372.92 28,713,253.51 Other cash received related to operating activities Five (fifty) 14,435,234.24 9,660,643.31 Subtotal of cash inflows from operating activities 870,631,819.27 906,751,862.31 Cash paid for purchasing goods and receiving services 534,171,092.27 571,567,824.89 Cash paid to and for employees 119,341,802.86 112,714,827.80 Various taxes paid 23,539,264.06 38,844,915.91 Other cash paid related to operating activities Five (fifty) 54,496,241.14 77,911,612.17 Subtotal of cash outflows from operating activities 731,548,400.33 801,039,180.77 Net cash flow generated from operating activities 139,083,418.94 105,712,681.54

2. Cash flow generated from investing activities

Cash received from investment recovery 1,057,033,842.43 1,684,200,279.76 Cash received from investment income 28,009,702.24 35,305,388.44 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 364,095.80 1,893,443.72 Net cash received from disposal of subsidiaries and other business units

Other cash received related to investing activities

Subtotal of cash inflows from investing activities 1,085,407,640.47 1,721,399,111.92 Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets 62,277,086.93 118,043,778.99 Cash paid for investment 1,143,180,134.33 1,650,739,320.93 Net increase in pledged loans

Net cash received from subsidiaries and other business units

Other cash payments related to investing activities

Subtotal of cash outflows from investing activities 1,205,457,221.26 1,768,783,099.92 Net cash flow generated from investing activities -120,049,580.79 -47,383,988.00

3. Cash flow generated from financing activities

Cash received from investment 2,500,000.00

Including: Cash received by subsidiaries from minority shareholders’ investments

Cash received from borrowings 15,000,000.00 40,000,000.00 Cash received from other financing activities Five (fifty) 600,000.00 Subtotal of cash inflows from financing activities 17,500,000.00 40,600,000.00 Cash paid to repay debts 54,500,000.00 10,500,000.00 Cash paid for distribution of dividends, profits or repayment of interest 29,882,099.32 35,816,071.86 Including: Dividends and profits paid by subsidiaries to minority shareholders 6,000,000.00 Cash paid for other financing activities Five (fifty) 43,292,817.54 31,683,171.45 Subtotal cash outflow from financing activities 127,674,916.86 77,999,243.31 Net cash flow generated from financing activities -110,174,916.86 -37,399,243.31

4. Impact of exchange rate changes on cash and cash equivalents 1,321,512.16 5,247,639.51

5. Net increase in cash and cash equivalents -89,819,566.55 26,177,089.74 Plus: opening balance of cash and cash equivalents 320,405,292.96 294,228,203.22

6. Closing balance of cash and cash equivalents 230,585,726.41 320,405,292.96 The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 7

Qianjiang Yongan Pharmaceutical Co., Ltd.

Parent company cash flow statement

2025

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

Item Note Amount for the current period Amount for the previous period

1. Cash flow generated from operating activities

Cash received from selling goods and providing services 595,225,890.03 723,209,863.15 Tax refunds received 21,857,696.11 28,518,364.40 Cash received from other operating activities 19,245,070.45 4,743,111.85 Subtotal of cash inflows from operating activities 636,328,656.59 756,471,339.40 Cash paid for purchasing goods and receiving services 380,956,728.58 481,010,680.66 Cash paid to and for employees 81,387,854.50 86,444,912.39 Various taxes and fees paid 19,984,417.63 27,522,336.83 Other cash payments related to operating activities 64,756,179.42 60,981,351.48 Subtotal of cash outflows from operating activities 547,085,180.13 655,959,281.36 Net cash flow generated from operating activities 89,243,476.46 100,512,058.04

2. Cash flow generated from investing activities

Cash received from recovery of investment 940,149,914.10 1,156,415,279.76 Cash received from investment income 24,549,015.07 32,776,369.04 Recovery from disposal of fixed assets, intangible assets and other long-term assets

Net cash of 58,145.80 1,757,598.72

Net cash received from disposal of subsidiaries and other business units

Other cash received related to investing activities

Subtotal of cash inflows from investing activities 964,757,074.97 1,190,949,247.52 Payment for purchase and construction of fixed assets, intangible assets and other long-term assets

12,307,795.36 44,882,638.00 in cash

Cash paid for investment 1,060,065,349.34 1,122,194,320.93 Net cash paid for acquisition of subsidiaries and other business units

Payment of other cash related to investing activities 2,837,375.00 Subtotal cash outflow from investing activities 1,072,373,144.70 1,169,914,333.93 Net cash flow generated from investing activities -107,616,069.73 21,034,913.59

3. Cash flow generated from financing activities

Absorbing cash received from investments

Obtain cash received from borrowing money

Other cash received related to financing activities

Subtotal of cash inflows from financing activities

Cash paid to repay debt

Cash paid for distribution of dividends, profits or repayment of interest 28,914,515.00 29,271,745.46 Cash paid for other financing activities 16,292,817.54 24,183,171.45 Subtotal of cash outflows from financing activities 45,207,332.54 53,454,916.91 Net cash flow generated from financing activities -45,207,332.54 -53,454,916.91

4. Impact of exchange rate changes on cash and cash equivalents 1,616,220.22 4,924,049.11

5. Net increase in cash and cash equivalents -61,963,705.59 73,016,103.83 Plus: opening balance of cash and cash equivalents 244,000,384.47 170,984,280.64

6. Balance of cash and cash equivalents at the end of the period 182,036,678.88 244,000,384.47 The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 8

Qianjiang Yongan Pharmaceutical Co., Ltd.

Consolidated Statement of Changes in Owner's Equity

2025

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

Amount of current period

Owner's equity attributable to parent company

Project

Other equity instruments Other comprehensive income General wind Minority interests Total owners’ equity Capital reserve Less: treasury shares Special reserves Surplus reserve Undistributed profits Subtotal

Preferred shares Perpetual bonds Other insurance provisions

1. Ending balance of the previous year 294,682,500.00 714,435,114.70 24,183,171.45 2,401,801.91 20,539,424.71 148,676,496.29 837,228,722.92 1,993,780,889.08 48,276,339.24 2,042,057,228.32 plus: changes in accounting policies

Early error correction

Business combination under common control

Others

2. Balance at the beginning of the year 294,682,500.00 714,435,114.70 24,183,171.45 2,401,801.91 20,539,424.71 148,676,496.29 837,228,722.92 1,993,780,889.08 48,276,339.24 2,042,057,228.32

3. Amount of increase or decrease in the current period (decreases are marked with “-”

Fill in the column) 7,861,379.66 16,292,817.54 -170,283.48 8,250,211.72 -6,421,085.08 -6,772,594.72 -53,344,995.56 -60,117,590.28

(1) Total comprehensive income -170,283.48 22,493,429.92 22,323,146.44 -15,303,365.41 7,019,781.03

(2) Owner’s investment and capital reduction 16,292,817.54 -16,292,817.54 2,500,000.00 -13,792,817.54 1. Ordinary shares invested by owners 16,292,817.54 -16,292,817.54 2,500,000.00 -13,792,817.54 2. Capital invested by other equity instrument holders

3． Share-based payment included in owner’s equity

Um

4． Others

(3) Profit distribution -28,914,515.00 -28,914,515.00 -28,914,515.00 1. Withdrawal from surplus reserve

2. Withdraw general risk reserve

3． Distribution to owners (or shareholders) -28,914,515.00 -28,914,515.00 -28,914,515.00

4． Others

(4) Internal carryover of owners’ equity

1． Conversion of capital reserves to capital (or share capital)

2. Conversion of surplus reserves to capital (or share capital)

3． Surplus reserve to cover losses

4． Changes in defined benefit plans are carried forward and retained

income

5. Other comprehensive income carried forward to retained earnings

6． Others

(5) Special reserves 2,884,853.60 2,884,853.60 -314,892.37 2,569,961.23 1. Withdrawal in this period 5,849,679.09 5,849,679.09 28,344.87 5,878,023.96

2. Used in this period 2,964,825.49 2,964,825.49 343,237.24 3,308,062.73

(6) Others 7,861,379.66 5,365,358.12 13,226,737.78 -40,226,737.78 -27,000,000.00

4. Ending balance of the current period 294,682,500.00 722,296,494.36 40,475,988.99 2,231,518.43 28,789,636.43 148,676,496.29 830,807,637.84 1,987,008,294.36 -5,068,656.32 1,981,939,638.04

The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 9

Qianjiang Yongan Pharmaceutical Co., Ltd.

Consolidated Statement of Changes in Owners’ Equity (Continued)

2025

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

Amount of last period

Owner's equity attributable to parent company

Project Other equity instruments

Other comprehensive income General wind Minority shareholders’ equity Owner’s equity Total equity Other capital reserves Less: treasury shares Special reserves Surplus reserves Undistributed profits Subtotal

Preferred shares Perpetual bonds Risk reserves

him

1. Ending balance of the previous year 294,682,500.00 712,920,308.95 4,271,652.27 18,617,340.50 140,732,457.83 812,688,884.17 1,983,913,143.72 64,377,295.46 2,048,290,439.18 plus: changes in accounting policies

Early error correction

Business combination under common control

Others

2. Balance at the beginning of the year 294,682,500.00 712,920,308.95 4,271,652.27 18,617,340.50 140,732,457.83 812,688,884.17 1,983,913,143.72 64,377,295.46 2,048,290,439.18

3. Amount of increase or decrease in the current period (decreases are listed with "-") 1,514,805.75 24,183,171.45 -1,869,850.36 1,922,084.21 7,944,038.46 24,539,838.75 9,867,745.36 -16,100,956.22 -6,233,210.86

(1) Total comprehensive income -1,869,850.36 61,766,022.21 59,896,171.85 -2,058,317.43 57,837,854.42

(2) Owner’s investment and capital reduction -18,787.77 24,183,171.45 -24,201,959.22 905,000.00 -23,296,959.22 1. Ordinary shares invested by owners 24,183,171.45 -24,183,171.45 905,000.00 -23,278,171.45 2. Capital invested by other equity instrument holders

3． The amount of share-based payment included in owners’ equity

4． Others -18,787.77 -18,787.77 -18,787.77

(3) Profit distribution 7,944,038.46 -37,226,183.46 -29,282,145.00 -6,000,000.00 -35,282,145.00 1. Withdrawal from surplus reserve 7,944,038.46 -7,944,038.46

2. Withdraw general risk reserve

3． Distribution to owners (or shareholders) -29,282,145.00 -29,282,145.00 -6,000,000.00 -35,282,145.00

4． Others

(4) Internal carryover of owners’ equity

1． Conversion of capital reserves to capital (or share capital)

2. Conversion of surplus reserves to capital (or share capital)

3． Surplus reserve to cover losses

4． Changes in defined benefit plans are carried forward to retained earnings

5. Other comprehensive income carried forward to retained earnings

6． Others

(5) Special reserves 1,922,084.21 1,922,084.21 85,954.73 2,008,038.94 1. Withdrawal in this period 6,618,844.40 6,618,844.40 412,665.84 7,031,510.24

2. Used in this period 4,696,760.19 4,696,760.19 326,711.11 5,023,471.30

(6) Others 1,533,593.52 1,533,593.52 -9,033,593.52 -7,500,000.00

4. Ending balance of the current period 294,682,500.00 714,435,114.70 24,183,171.45 2,401,801.91 20,539,424.71 148,676,496.29 837,228,722.92 1,993,780,889.08 48,276,339.24 2,042,057,228.32

The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 10

Qianjiang Yongan Pharmaceutical Co., Ltd.

Statement of changes in owner's equity of the parent company

2025

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

Amount of current period

Items Other equity instruments Other comprehensive

Share capital Capital reserve Less: treasury shares Special reserves Surplus reserves Undistributed profits Total owners’ equity

Preferred shares Perpetual bonds Other combined income

1. Ending balance of the previous year 294,682,500.00 713,339,435.67 24,183,171.45 13,534,345.91 148,676,496.29 887,388,571.92 2,033,438,178.34 plus: Changes in accounting policies

Early error correction

Others

2. Balance at the beginning of the year 294,682,500.00 713,339,435.67 24,183,171.45 13,534,345.91 148,676,496.29 887,388,571.92 2,033,438,178.34

3. Amount of increase or decrease in the current period (decreases are listed with “-”) 16,292,817.54 3,259,239.25 2,863,146.16 -10,170,432.13

(1) Total comprehensive income 31,777,661.16 31,777,661.16

(2) Owner’s investment and capital reduction 16,292,817.54 -16,292,817.54 1. Common shares invested by owners 16,292,817.54 -16,292,817.54 2. Capital invested by other equity instrument holders

3． The amount of share-based payment included in owners’ equity

4． Others

(3) Profit distribution -28,914,515.00 -28,914,515.00 1. Withdrawal from surplus reserve

2. Distribution to owners (or shareholders) -28,914,515.00 -28,914,515.00

3． Others

(4) Internal carryover of owners’ equity

1． Conversion of capital reserves to capital (or share capital)

2. Conversion of surplus reserves to capital (or share capital)

3． Surplus reserve to cover losses

4． Changes in defined benefit plans are carried forward to retained earnings

5. Other comprehensive income carried forward to retained earnings

6． Others

(5) Special reserves 3,259,239.25 3,259,239.25 1. Withdrawal in this period 5,807,161.78 5,807,161.78

2. Used in this period 2,547,922.53 2,547,922.53

(6) Others

4. Ending balance of the current period 294,682,500.00 713,339,435.67 40,475,988.99 16,793,585.16 148,676,496.29 890,251,718.08 2,023,267,746.21

The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 11

Qianjiang Yongan Pharmaceutical Co., Ltd.

Statement of changes in owner's equity of the parent company (continued)

2025

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

Amount of last period

Items Other equity instruments Other comprehensive

Share capital Capital reserve Less: treasury shares Special reserves Surplus reserves Undistributed profits Total owners’ equity

Preferred shares Perpetual bonds Other combined income

1. Ending balance of the previous year 294,682,500.00 713,358,223.44 11,882,899.72 140,732,457.83 845,174,370.83 2,005,830,451.82 Add: changes in accounting policies

Early error correction

Others

2. Balance at the beginning of the year 294,682,500.00 713,358,223.44 11,882,899.72 140,732,457.83 845,174,370.83 2,005,830,451.82

3. Amount of increase or decrease in the current period (decreases are listed with "-") -18,787.77 24,183,171.45 1,651,446.19 7,944,038.46 42,214,201.09 27,607,726.52

(1) Total comprehensive income 79,440,384.55 79,440,384.55

(2) Owner’s investment and capital reduction 24,183,171.45 -24,183,171.45 1. Common shares invested by owners 24,183,171.45 -24,183,171.45 2. Capital invested by other equity instrument holders

3． The amount of share-based payment included in owners’ equity

4． Others

(3) Profit distribution 7,944,038.46 -37,226,183.46 -29,282,145.00 1. Withdrawal from surplus reserve 7,944,038.46 -7,944,038.46

2. Distribution to owners (or shareholders) -29,282,145.00 -29,282,145.00

3． Others

(4) Internal carryover of owners’ equity

1． Conversion of capital reserves to capital (or share capital)

2. Conversion of surplus reserves to capital (or share capital)

3． Surplus reserve to cover losses

4． Changes in defined benefit plans are carried forward to retained earnings

5. Other comprehensive income carried forward to retained earnings

6． Others

(5) Special reserves 1,651,446.19 1,651,446.19 1. Withdrawal in this period 5,999,845.64 5,999,845.64

2. Used in this period 4,348,399.45 4,348,399.45

(6) Others -18,787.77 -18,787.77

4. Ending balance of the current period 294,682,500.00 713,339,435.67 24,183,171.45 13,534,345.91 148,676,496.29 887,388,571.92 2,033,438,178.34

The accompanying notes to the financial statements are an integral part of the financial statements.

Person in charge of the company: Person in charge of accounting work: Person in charge of the accounting department:

Report page 12

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Qianjiang Yongan Pharmaceutical Co., Ltd.

Notes to the 2025 Financial Statements

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

1. Basic information of the company

(1) Basic information of the company

Unified social credit code: 91429005728313974F

Enterprise type: joint stock limited company (listed, natural person investment or holding)

Company address: No. 2, Guangze Avenue, Qianjiang Economic Development Zone

Legal representative: Chen Yong

Registered capital: two hundred million nine thousand four hundred six hundred and eighty thousand two thousand five hundred yuan

Date of establishment: June 18, 2001

Business period: long term

Industry nature: Pharmaceutical manufacturing industry

Business scope: Licensed items: pharmaceutical production; pharmaceutical wholesale; pharmaceutical import and export; food additive production; feed additive production; hazardous chemical production; hazardous chemical business; hazardous chemical warehousing; pharmaceutical excipient production; pharmaceutical excipient sales. (Projects that require approval according to law can only be carried out with the approval of relevant departments. Specific business projects shall be subject to the approval documents or licenses of relevant departments) General projects: Sales of food additives; sales of feed additives; import and export of goods; import and export of food; technology import and export; sales of chemical products (excluding licensed chemical products); production of chemical products (excluding licensed chemical products); manufacturing of basic chemical raw materials (excluding manufacturing of licensed chemicals such as hazardous chemicals); technical services, technology development, technical consultation, technology exchange, technology transfer, technology promotion; sales of instruments and meters; manufacturing of instruments and meters; manufacturing of mechanical and electrical equipment; sales of mechanical and electrical equipment. (Except for licensed business, you can independently operate projects that are not prohibited or restricted by laws and regulations in accordance with the law)

(2) Corporate history

Qianjiang Yongan Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company" or "the Company") is a joint-stock company established by Qianjiang Yongan Pharmaceutical Co., Ltd. through an overall change. The change registration procedures were completed at the Qianjiang Administration for Industry and Commerce on April 14, 2006.

In accordance with the resolution of the company's extraordinary shareholders meeting on December 18, 2009 and the revised company's articles of association, and approved by the China Securities Regulatory Commission's "Zhengjian Xu [2010] No. 162" document "Approval of the Initial Public Offering of Qianjiang Yong'an Pharmaceutical Co., Ltd.", the company publicly issued 23.5 million RMB ordinary shares (face value 1 yuan per share) to the public. After the issuance, the company's registered capital was RMB 93.5 million.

According to the resolution of the 2010 Annual General Meeting of Shareholders and the revised Articles of Association, the company converted capital reserves to increase its share capital by 93.50 million shares. After the transfer, the company's registered capital was changed to 187 million yuan.

Notes to Financial Statements Page 1

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

According to the resolution of the company's second extraordinary shareholders meeting in 2016 and the revised articles of association, the company applied to increase its registered capital by RMB 9.455 million, and the registered capital after the change was RMB 196.455 million.

According to the resolution of the 2017 Annual General Meeting of Shareholders and the revised Articles of Association, the company increased its share capital by converting capital reserves to 98.2275 million shares. After the transfer, the company's registered capital changed to 294.6825 million yuan.

This financial statement has been approved by the company's board of directors on April 15, 2026.

2. Basis for preparation of financial statements

(1) Basis for compilation

These financial statements are prepared in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" and various specific accounting standards, application guidelines for Accounting Standards for Business Enterprises, interpretations of Accounting Standards for Business Enterprises and other relevant regulations promulgated by the Ministry of Finance (hereinafter collectively referred to as "Accounting Standards for Business Enterprises"), as well as the relevant provisions of the China Securities Regulatory Commission's "Information Disclosure Preparation Rules No. 15 for Companies that Offer Securities to the Public - General Provisions on Financial Reports".

(2) Going concern

These financial statements are prepared on a going concern basis.

3. Important accounting policies and accounting estimates

Specific accounting policies and accounting estimation tips:

The following disclosures cover the specific accounting policies and accounting estimates formulated by the Company based on actual production and operation characteristics. For details, please see "3. (16) Fixed Assets" and "3. (27) Income" of this note.

(1) Statement on compliance with accounting standards for enterprises

This financial statement complies with the requirements of the Accounting Standards for Business Enterprises promulgated by the Ministry of Finance, and truly and completely reflects the company's consolidated and parent company's financial status as of December 31, 2025, as well as the consolidated and parent company's operating results and cash flows in 2025.

(2) Accounting period

A fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.

(3) Business cycle

The company's operating cycle is 12 months.

(4) Accounting standard currency

The Company adopts RMB as the standard accounting currency. The company's subsidiaries determine their accounting standard currency according to the main economic environment in which they operate. Yongan Health (Hong Kong) Investment Co., Ltd., Ya'an Agricultural Investment (Cambodia)

Notes to Financial Statements Page 2

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

The company's functional currency is the U.S. dollar. These financial statements are presented in RMB.

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

Business merger under common control: The assets and liabilities acquired by the merging party in the business merger (including the goodwill formed by the ultimate controlling party's acquisition of the merged party) are measured based on the book value of the merged party's assets and liabilities in the ultimate controlling party's consolidated financial statements on the merger date. The difference between the book value of the net assets acquired in the merger and the book value of the merger consideration paid (or the total face value of the shares issued) is adjusted to the equity premium in the capital reserve. If the equity premium in the capital reserve is insufficient to offset it, the retained earnings are adjusted.

Merger of businesses not under common control: The merger cost is the fair value of the assets paid, liabilities incurred or assumed, and equity securities issued by the acquirer on the acquisition date to obtain control of the acquiree. The difference between the merger cost and the fair value of the acquiree's identifiable net assets acquired in the merger is recognized as goodwill; the difference between the merger cost and the fair value of the acquiree's identifiable net assets acquired in the merger is included in the current profit and loss. All identifiable assets, liabilities and contingent liabilities of the acquiree acquired in the merger that meet the recognition conditions are measured at fair value on the acquisition date.

Directly related expenses incurred for a business merger are included in the current profits and losses when incurred; transaction costs for the issuance of equity securities or debt securities for a business merger are included in the initial recognition amount of equity securities or debt securities.

(6) Judgment standards for control and preparation methods of consolidated financial statements

1. Judgment criteria for control

The scope of consolidation of the consolidated financial statements is determined based on control, and the scope of consolidation includes the company and all subsidiaries. Control refers to the company’s power over the investee through participation in the investee’s related activities.

Enjoy variable returns and the ability to use power over the investee to affect the amount of its returns.

2. Merger procedure

The company regards the entire enterprise group as an accounting entity and prepares consolidated financial statements in accordance with unified accounting policies to reflect the overall financial status, operating results and cash flow of the enterprise group. The effects of internal transactions between the Company and its subsidiaries and between subsidiaries are eliminated. If internal transactions indicate that impairment losses have occurred on related assets, the full amount of such losses shall be recognized. If the accounting policies and accounting periods adopted by subsidiaries are inconsistent with those of the Company, necessary adjustments shall be made in accordance with the Company's accounting policies and accounting periods when preparing consolidated financial statements.

The owner's equity of subsidiaries, current net profit and loss and current comprehensive income belonging to minority shareholders are presented separately under the owner's equity item in the consolidated balance sheet, the net profit item and the total comprehensive income item in the consolidated income statement. If the current losses shared by the minority shareholders of a subsidiary exceed the minority shareholders' share of the subsidiary's opening owner's equity, the balance is offset against the minority shareholders' equity.

Notes to Financial Statements Page 3

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(1) Add subsidiaries or businesses

During the reporting period, if a subsidiary or business is added due to a business merger under the same control, the operating results and cash flows of the subsidiary or business combination from the beginning of the current period to the end of the reporting period will be included in the consolidated financial statements. At the same time, the opening numbers of the consolidated financial statements and relevant items in the comparative statements will be adjusted. The post-merger reporting entity will be deemed to have existed from the time when the ultimate controlling party began to control.

If it is possible to control an investee under the same control due to additional investment or other reasons, the equity investment held before obtaining control of the merged party has recognized relevant profits and losses, other comprehensive income and other changes in net assets between the date of acquisition of the original equity and the date when the merging party and the merged party are under the same control, whichever is later, to the date of merger, and shall offset the opening retained earnings or current profits and losses of the comparative statement period respectively.

During the reporting period, if a subsidiary or business is added due to a business combination not under common control, the fair value of each identifiable asset, liability and contingent liability determined on the date of purchase will be included in the consolidated financial statements from the date of purchase.

If it is possible to exercise control over an investee not under the same control due to additional investment or other reasons, the equity of the purchased party held before the purchase date shall be remeasured according to the fair value of the equity on the purchase date, and the difference between the fair value and its book value shall be included in the investment income of the current period. Other comprehensive income related to the equity of the purchased party held before the purchase date that can be reclassified into profit and loss later, and other changes in owner's equity under equity method accounting are converted into investment income for the current period on the purchase date.

(2) Disposal of subsidiaries

①General treatment methods

When control over the investee is lost due to the disposal of part of the equity investment or other reasons, the remaining equity investment after disposal shall be remeasured according to its fair value on the date of loss of control. 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. Other comprehensive income related to the equity investment in the original subsidiary that can be reclassified into profit and loss in the future and other changes in owner's equity under equity method accounting will be converted into investment income for the current period when control is lost.

② Disposal of subsidiaries step by step

If the equity investment in a subsidiary is disposed of step by step through multiple transactions until control is lost, if the terms, conditions and economic impact of each transaction to dispose of the equity investment in the subsidiary meet one or more of the following circumstances, it usually indicates that the multiple transactions are a package deal:

ⅰ. the transactions were entered into simultaneously or with consideration of their effects on each other;

ⅱ. Only these transactions as a whole can achieve a complete business result;

ⅲ. The occurrence of one transaction depends on the occurrence of at least one other transaction;

ⅳ. A transaction that is uneconomical on its own is economical when considered together with other transactions.

Notes to Financial Statements Page 4

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

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

If each transaction does not belong to a package deal, before the loss of control, the equity investment in the subsidiary will be accounted for as a partial disposal without losing control; when the control is lost, the accounting treatment will be based on the general treatment method for disposing of a subsidiary.

(3) Purchase minority shares in subsidiaries

The difference between the newly acquired long-term equity investment due to the purchase of minority shares and the share of the subsidiary's net assets calculated continuously from the date of purchase or merger based on the newly added shareholding ratio shall be adjusted to the equity premium in the capital reserve in the consolidated balance sheet. If the equity premium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.

(4) Partially dispose of equity investments in subsidiaries without losing control

The difference between the disposal price and the share of the net assets of the subsidiary corresponding to the disposal of the long-term equity investment, calculated continuously from the date of purchase or merger, is adjusted to the equity premium in the capital reserve in the consolidated balance sheet. If the equity premium in the capital reserve is insufficient to offset, the retained earnings are adjusted.

(7) Classification of joint arrangements and accounting treatment of joint operations

Joint arrangements are divided into joint operations and joint ventures.

A joint operation refers to a joint arrangement in which the joint venture party enjoys the relevant assets of the arrangement and assumes the relevant liabilities of the arrangement. The company confirms the following items related to the interest share in joint operations:

(1) Recognize the assets held solely by the company, and recognize the assets held jointly according to the company's share; (2) Recognize the liabilities borne by the company alone, and recognize the liabilities jointly borne according to the company's share; (3) Recognize the income generated from the sale of the company's share of joint operating output;

(4) Recognize the income generated by the joint operation from the sale of output according to the company’s share;

(5) Recognize the expenses incurred individually, and recognize the expenses incurred by joint operations based on the company’s share.

The Company's investment in joint ventures is accounted for using the equity method. For details, see "III. (14) Long-term Equity Investment" in this note.

(8) Determination standards for cash and cash equivalents

Cash refers to the company's cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments held by the Company that are short-term, highly liquid, easily convertible into known amounts of cash, and have little risk of value changes.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(9) Foreign currency business and foreign currency statement conversion

1. Foreign currency business

For foreign currency business, the spot exchange rate on the date of transaction is used as the conversion exchange rate to convert the foreign currency amount into RMB for accounting.

The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate on the balance sheet date. The resulting exchange differences, except for the exchange differences arising from special foreign currency borrowings related to the acquisition and construction of assets that meet capitalization conditions, are treated in accordance with the principle of capitalization of borrowing costs, and are included in the current profit and loss.

2. Conversion of foreign currency financial statements

Assets and liability items in the balance sheet are translated using the spot exchange rate on the balance sheet date; owners' equity items, except for "undistributed profits" items, are translated using the spot exchange rate at the time of occurrence. Income and expense items in the income statement are converted using the moving weighted average of the exchange rates at the end of each month throughout the year.

When disposing of an overseas operation, the translation difference of the foreign currency financial statements related to the overseas operation will be transferred from the owner's equity items to the current profit and loss of the disposal.

(10) Financial instruments

The Company recognizes a financial asset, financial liability or equity instrument when it becomes a party to a financial instrument contract.

1. Classification of financial instruments

Based on the company's business model for managing financial assets and the contractual cash flow characteristics of financial assets, financial assets are classified upon initial recognition as: financial assets measured at amortized cost, financial assets measured at fair value with changes included in other comprehensive income, and financial assets measured at fair value with changes included in current profits and losses.

The Company will classify financial assets that meet the following conditions and are not designated as measured at fair value through profit or loss for the current period as financial assets measured at amortized cost:

• The business model is aimed at collecting contractual cash flows;

• Contractual cash flows are solely payments of principal and interest based on the outstanding principal amount.

The Company will classify financial assets that meet the following conditions and are not designated as measured at fair value through profit or loss for the current period as financial assets (debt instruments) at fair value through other comprehensive income:

• The business model aims at both collecting contractual cash flows and selling the financial assets;

• Contractual cash flows are solely payments of principal and interest based on the outstanding principal amount.

For non-trading equity instrument investments, the Company can irrevocably designate them as financial assets measured at fair value with changes included in other comprehensive income (equity instruments) upon initial recognition. The designation

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

is made on an individual investment basis and the underlying investment meets the definition of an equity instrument from the issuer’s perspective.

Except for the above-mentioned financial assets measured at amortized cost and at fair value with changes included in other comprehensive income, the Company classifies all remaining financial assets as financial assets measured at fair value with changes included in current profits and losses. At the time of initial recognition, if the accounting mismatch can be eliminated or significantly reduced, the Company may irrevocably designate financial assets that would have been classified as measured at amortized cost or at fair value through other comprehensive income as financial assets at fair value through profit or loss.

Financial liabilities are classified upon initial recognition into: financial liabilities measured at fair value through profit or loss for the current period and financial liabilities measured at amortized cost.

Financial liabilities that meet one of the following conditions can be designated as financial liabilities measured at fair value with changes included in current profits and losses at the time of initial measurement:

1. This designation can eliminate or significantly reduce accounting mismatches.

2. According to the enterprise risk management or investment strategies stated in formal written documents, manage and perform performance evaluation of financial liability portfolios or financial assets and financial liability portfolios based on fair value, and report to key management personnel on this basis within the enterprise.

3. The financial liability contains embedded derivatives that need to be separated separately.

2. Recognition basis and measurement method of financial instruments

(1) Financial assets measured at amortized cost

Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables, long-term receivables, debt investments, etc., which are initially measured at fair value, and relevant transaction costs are included in the initial recognition amount; accounts receivable that do not contain significant financing components and accounts receivable that the company decides not to consider financing components that do not exceed one year are initially measured at the contract transaction price.

Interest calculated using the actual interest rate method during the holding period is included in the current profit and loss.

When recovered or disposed of, the difference between the price obtained and the book value of the financial asset will be included in the current profit and loss.

(2) Financial assets (debt instruments) measured at fair value with changes included in other comprehensive income Financial assets (debt instruments) measured at fair value with changes included in other comprehensive income include receivables financing, other debt investments, etc., which are initially measured at fair value, and related transaction costs are included in the initial recognition amount. The financial assets are subsequently measured at fair value, and changes in fair value are included in other comprehensive income, except for interest calculated using the effective interest rate method, impairment losses or gains and exchange gains and losses.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

When derecognition is terminated, the accumulated gains or losses previously included in other comprehensive income are transferred out of other comprehensive income and included in the current profit and loss.

(3) Financial assets (equity instruments) measured at fair value with changes included in other comprehensive income Financial assets (equity instruments) measured at fair value with changes included in other comprehensive income, including other equity instrument investments, etc., are initially measured at fair value, and related transaction costs are included in the initial recognition amount. The financial assets are subsequently measured at fair value, and changes in fair value are included in other comprehensive income. Dividends received are included in the current profit and loss.

Upon derecognition, the accumulated gains or losses previously included in other comprehensive income are transferred out of other comprehensive income and included in retained earnings.

(4) Financial assets measured at fair value and changes included in current profits and losses

Financial assets measured at fair value and whose changes are included in the current profit and loss include trading financial assets, derivative financial assets, other non-current financial assets, etc., which are initially measured at fair value, and related transaction costs are included in the current profit and loss. The financial assets are subsequently measured at fair value, and changes in fair value are included in current profits and losses.

(5) Financial liabilities measured at fair value and changes included in current profits and losses

Financial liabilities measured at fair value and whose changes are included in the current profit and loss include trading financial liabilities, derivative financial liabilities, etc., which are initially measured at fair value, and related transaction costs are included in the current profit and loss. The financial liability is subsequently measured at fair value, and changes in fair value are included in current profits and losses.

When derecognition is terminated, the difference between its book value and the consideration paid is included in the current profit and loss.

(6) Financial liabilities measured at amortized cost

Financial liabilities measured at amortized cost include short-term borrowings, notes payable, accounts payable, other payables, long-term borrowings, bonds payable, and long-term payables. They are initially measured at fair value, and related transaction costs are included in the initial recognition amount.

Interest calculated using the actual interest rate method during the holding period is included in the current profit and loss.

When the recognition is terminated, the difference between the consideration paid and the book value of the financial liability will be included in the current profit and loss.

3. Recognition basis and measurement method for derecognition of financial assets and transfer of financial assets

When one of the following conditions is met, the company terminates the recognition of financial assets:

• Termination of the contractual right to receive cash flows from the financial asset;

• The financial asset has been transferred and substantially all the risks and rewards of ownership of the financial asset have been transferred to

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Transferring party;

• The financial asset has been transferred. Although the Company neither transfers nor retains substantially all risks and rewards of ownership of the financial asset, it does not retain control over the financial asset.

If the company and the counterparty modify or renegotiate the contract and it constitutes a substantial modification, the original financial asset will be terminated and a new financial asset will be recognized in accordance with the modified terms.

When a financial asset is transferred, if substantially all the risks and rewards of ownership of the financial asset are retained, the financial asset will not be derecognised.

When judging whether the transfer of financial assets meets the above conditions for derecognition of financial assets, the principle of substance over form is adopted.

The company distinguishes the transfer of financial assets into overall transfer and partial 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:

(1) Book value of the transferred financial assets;

(2) The sum of the consideration received for the transfer and the cumulative amount of changes in fair value that were originally directly included in the owner's equity (if the financial assets involved in the transfer are financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive income).

If a partial transfer of a financial asset meets the conditions for derecognition, the overall book value of the transferred financial asset will be apportioned between the derecognized part and the non-derecognized part according to their respective relative fair values, and the difference between the following two amounts shall be included in the current profit and loss:

(1) The book value of the part whose recognition is terminated;

(2) The sum of the consideration for the derecognition part and the amount corresponding to the derecognition part of the cumulative amount of changes in fair value that was originally directly included in the owner's equity (the financial assets involved are financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive income).

If the transfer of financial assets does not meet the conditions for derecognition, the financial assets will continue to be recognized, and the consideration received will be recognized as a financial liability.

4. Derecognition of financial liabilities

If the current obligations of a financial liability have been discharged in whole or in part, the recognition of the financial liability or part of it will be terminated; if the company signs an agreement with the creditor to replace the existing financial liability by assuming a new financial liability, and the contract terms of the new financial liability and the existing financial liability are substantially different, the recognition of the existing financial liability will be terminated and the new financial liability will be recognized at the same time.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

If all or part of the contract terms of an existing financial liability are substantially modified, the recognition of the existing financial liability or part of it will be terminated, and the financial liability after the modified terms will be recognized as a new financial liability. When all or part of a financial liability is derecognised, the difference between the book value of the derecognized financial liability and the consideration paid (including non-cash assets transferred out or new financial liabilities assumed) shall be included in the current profit and loss. If the company repurchases part of a financial liability, it will allocate the overall book value of the financial liability based on the relative fair value of the continued recognition part and the derecognized part on the repurchase date. The difference between the book value allocated to the derecognized part and the consideration paid (including non-cash assets transferred out or new financial liabilities assumed) is included in the current profit and loss.

5. Determination method of fair value of financial assets and financial liabilities

For financial instruments with an active market, their fair value is determined based on the quoted price in the active market. For financial instruments for which there is no active market, valuation techniques are used to determine their fair value. When valuing, the Company adopts valuation techniques that are applicable under the current circumstances and supported by sufficient available data and other information, selects input values ​​that are consistent with the characteristics of the assets or liabilities considered by market participants in transactions of related assets or liabilities, and gives priority to the use of relevant observable input values. Unobservable inputs are used only when the relevant observable inputs are unobservable or impracticable to obtain.

6. Testing methods and accounting treatment methods for impairment of financial instruments

The Company performs impairment accounting treatment on the basis of expected credit losses for financial assets measured at amortized cost, financial assets (debt instruments) measured at fair value with changes included in other comprehensive income, and financial guarantee contracts.

The company considers reasonable and well-founded information about past events, current conditions and predictions of future economic conditions, weights the risk of default, calculates the probability-weighted amount of the present value of the difference between the cash flow receivable in the contract and the cash flow expected to be received, and recognizes expected credit losses.

For receivables and contract assets formed by transactions regulated by "Accounting Standards for Business Enterprises No. 14 - Revenue", regardless of whether they contain significant financing components, the Company always measures its loss provisions at an amount equivalent to the expected credit losses during the entire duration.

For lease receivables formed by transactions regulated by "Accounting Standards for Business Enterprises No. 21 - Leasing", the Company chooses to always measure its loss provisions at an amount equivalent to the expected credit losses during the entire duration. For other financial instruments, the Company evaluates the changes in the credit risk of the relevant financial instruments since initial recognition on each balance sheet date.

The Company compares the risk of default of a financial instrument on the balance sheet date with the risk of default on the initial recognition date to determine the relative changes in the default risk of the financial instrument during its expected duration to evaluate the risk.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Evaluate whether the credit risk of a financial instrument has increased significantly since initial recognition. Generally, if the financial instrument is overdue for more than 30 days, the Company considers that the credit risk of the financial instrument has increased significantly, unless there is conclusive evidence that the credit risk of the financial instrument has not increased significantly since the initial recognition.

If the credit risk of a financial instrument is low on the balance sheet date, the Company considers that the credit risk of the financial instrument has not increased significantly since initial recognition.

If the credit risk of the financial instrument has increased significantly since initial recognition, the Company will measure its loss provisions at an amount equivalent to the expected credit losses of the financial instrument throughout its lifetime; if the credit risk of the financial instrument has not increased significantly since initial recognition, the Company will measure its loss provisions at an amount equivalent to the expected credit losses of the financial instrument within the next 12 months. The resulting increase or reversal of loss provisions is included in the current profit and loss as impairment losses or gains. For financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive income, the loss provision is recognized in other comprehensive income, and the impairment loss or gain is included in the current profit and loss, without reducing the book value of the financial asset listed in the balance sheet.

If there is objective evidence that a certain receivable has been credit-impaired, the Company will make impairment provisions for the receivable on an individual basis.

Except for the above-mentioned receivables for which bad debt provisions are individually made, the Company divides the remaining financial instruments into several combinations based on credit risk characteristics, and determines expected credit losses on the basis of the combinations. The company's combination categories and determination basis for expected credit losses for notes receivable, accounts receivable, receivable financing, other receivables, contract assets, long-term receivables, etc. are as follows:

Project Portfolio Category Determination Basis

For accounts receivable divided into aging portfolios, the company refers to historical credit loss experience and combines

Accounts receivable, other receivables, current situation and future economic conditions, aging portfolio of accounts receivable

Forecast, prepare a comparison table between the aging of accounts receivable and the expected credit loss rate throughout the duration, and calculate the expected credit losses.

Accounts receivable within the scope of consolidation: Accounts receivable and other receivables are separately accounted for related parties within the scope of consolidation of the group.

A combination is a combination and no provision for bad debts is made. For commercial acceptance notes receivable divided into aging portfolios, the company refers to historical credit losses

Aging of commercial acceptance notes receivable

Commercial acceptance notes receivable experience, combined with current conditions and future economic portfolio

Forecast of economic conditions, prepare the aging of commercial acceptance notes receivable and expected credit throughout the duration

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Project Portfolio Category Determination Basis

Loss rate comparison table to calculate expected credit losses.

For bank acceptance bills receivable that have not been derecognized at the end of the period, there is no significant recovery risk and no provision for bad debts is made.

Confirm the credit risk characteristic group based on the overdue time of the repayment plan and the customer's long-term receivables portfolio Long-term receivables portfolio

Comprehensive five-level classification calculation method.

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.

(11) Inventory

1. Inventory classification and cost

Inventories are classified into: materials in transit, raw materials, goods in stock, work in progress, goods shipped, etc.

Inventories are initially measured at cost, which includes purchase costs, processing costs and other expenses incurred to bring the inventory to its current location and status.

2. Valuation method for shipped inventory

Inventories are valued based on the weighted average method when shipped.

3. Inventory inventory system

Adopt a perpetual inventory system.

4. Amortization method for low-value consumables and packaging materials

(1) Low-value consumables adopt the one-time resale method;

(2) The packaging materials adopt the one-time resale method.

5. Recognition standards and accrual methods for inventory depreciation provisions

On the balance sheet date, inventories should be measured at the lower of cost and net realizable value. When the inventory cost is higher than its net realizable value, inventory depreciation provisions should be made. Net realizable value refers to the estimated selling price of inventory in daily activities minus the estimated costs to be incurred upon completion, estimated sales expenses and related taxes.

Inventories of goods directly used for sale, such as finished goods, inventory goods and materials for sale, are maintained during normal production.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

During the course of operations, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes. For material inventories that need to be processed, during the normal production and operation process, the estimated selling price of the finished products produced is deducted by the estimated costs to be incurred upon completion and the estimated sales expenses. and relevant taxes and fees, determine its net realizable value; for inventories held for the execution of sales contracts or labor contracts, the net realizable value is calculated based on the contract price. If the quantity of inventory held is greater than the quantity ordered in the sales contract, the net realizable value of the excess inventory is calculated based on the general sales price. After the provision for inventory depreciation is accrued, if the factors that previously caused the inventory value to be written down have disappeared, causing the net realizable value of the inventory to be higher than its book value, the amount of the inventory depreciation provision that was originally accrued will be reversed, and the amount reversed will be included in the current profit and loss.

(12) Contract assets

1. Recognition methods and standards for contract assets

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between performance obligations and customer payments. The right to receive consideration for which the Company has transferred goods or provided services to a customer (and that right is dependent on factors other than the passage of time) is shown as a contract asset. Contract assets and contract liabilities under the same contract are presented on a net basis. The Company's unconditional (subject only to the passage of time) right to receive consideration from customers is presented separately as receivables.

2. Determination method and accounting treatment method of expected credit loss of contract assets

For details on the determination method and accounting treatment method of expected credit losses of contract assets, please refer to "(10) 6. Testing method and accounting treatment method for impairment of financial instruments" in this note.

(13) Held for sale and discontinued operations

1. Held for sale

If the book value of a non-current asset or disposal group is recovered mainly through sale (including non-monetary asset exchange with commercial substance) rather than continued use, it is classified as held for sale.

The Company classifies non-current assets or disposal groups that simultaneously meet the following conditions into the category held for sale: (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 sale 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.

Classified as non-current assets held for sale (excluding financial assets, deferred income tax assets, assets formed by employee compensation) or disposal groups, if their book value is higher than the net amount of fair value minus selling expenses,

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

The book value is reduced to the net amount of fair value minus selling expenses. The amount of the reduction is recognized as asset impairment loss and included in the current profit and loss. At the same time, an impairment provision for assets held for sale is made.

2. Termination of operations

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

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

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

(3) The component is a subsidiary acquired exclusively for resale.

Profit and loss from continuing operations and profits and losses from discontinued operations are presented separately in the income statement. Impairment losses and reversal amounts from discontinued operations and other operating profits and losses as well as disposal gains and losses are presented as profits and losses from discontinued operations. 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.

(14) Long-term equity investment

1. Judgment criteria for joint control and significant influence

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 parties sharing control rights. If the company and other joint venture parties jointly control the invested unit and have rights to the net assets of the invested unit, the invested unit is a joint venture of the company.

Significant influence refers to the power to participate in the financial and operating decisions of the invested unit, but it is not able to control or jointly control the formulation of these policies with other parties. If the company can exert significant influence on the invested unit, the invested unit shall be an associate of the company.

2. Determination of initial investment cost

(1) Long-term equity investment formed by business merger

For long-term equity investments in subsidiaries resulting from a business combination under common control, the initial investment cost of the long-term equity investment shall be the share of the book value of the combined party's owner's equity in the ultimate controlling party's consolidated financial statements on the date of merger. The difference between the initial investment cost of a long-term equity investment and the book value of the payment consideration is adjusted to the equity premium in the capital reserve; when the equity premium in the capital reserve is insufficient for offset, the retained earnings are adjusted. If it is possible to control an investee under the same control due to additional investment or other reasons, the difference between the initial investment cost of the long-term equity investment confirmed according to the above principles and the book value of the long-term equity investment before the merger plus the book value of the new payment for further shares acquired on the merger date

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

If the equity premium is insufficient to offset the amount, the equity premium will be offset against retained earnings.

For long-term equity investments in subsidiaries resulting from a business combination not under common control, the merger cost determined on the purchase date shall be regarded as the initial investment cost of the long-term equity investment. If it is possible to exercise control over an investee that is not under common control due to additional investment or other reasons, the initial investment cost shall be the sum of the book value of the original equity investment plus the cost of the new investment.

(2) Long-term equity investment obtained through other methods other than business mergers

For long-term equity investments obtained by paying cash, the actual purchase price paid shall be regarded as the initial investment cost.

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.

3. Subsequent measurement and profit and loss recognition methods

(1) Long-term equity investment calculated using cost method

The company's long-term equity investments in subsidiaries are accounted for using the cost method, unless the investment meets the conditions of being held for sale. In addition to the actual price paid when acquiring the investment or the cash dividends or profits that have been declared but not yet distributed included in the consideration, the company recognizes the current investment income based on the cash dividends or profits declared and distributed by the investee.

(2) Long-term equity investment accounted for by equity method

Long-term equity investments in associates and joint ventures are accounted for using the equity method. If the initial investment cost is greater than the fair value share of the investee's identifiable net assets that should be enjoyed at the time of investment, the initial investment cost of long-term equity investment will not be adjusted; if the initial investment cost is less than the fair value share of the investee's identifiable net assets that should be enjoyed at the time of investment, the difference will be included in the current profit and loss, and the cost of 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; calculates the share of the investee's profits or cash dividends declared to be distributed, 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 profits and losses, other comprehensive income and profit distribution (referred to as "other changes in owner's equity"), the book value of the long-term equity investment is adjusted and included in the owner's equity.

When confirming the share of the investee's net profit and loss, other comprehensive income and other changes in owner's equity, the fair value of the investee's identifiable net assets when the investment is obtained is used as the basis, and in accordance with the company's accounting policies and accounting period, the net profit and other comprehensive income of the investee are adjusted and recognized.

Unrealized profits and losses from internal transactions between the company and its associates and joint ventures are calculated according to the proportion attributable to the company, and are offset. On this basis, investment income is recognized, but investment or sales are

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Except for assets constituting a business. Unrealized internal transaction losses with invested entities, which are asset impairment losses, are recognized in full.

The company's net losses from joint ventures or associates, in addition to its obligation to bear additional losses, are limited to the reduction to zero of the book value of long-term equity investments and other long-term equities that essentially constitute the net investment in joint ventures or associates. If the joint venture or associated enterprise realizes net profits in the future, the company will resume recognizing the income sharing amount after the income sharing amount makes up for the unrecognized loss sharing amount.

(3) Disposal of long-term equity investments

When a long-term equity investment is disposed of, the difference between its book value and the actual price obtained shall be included in the current profit and loss. If a long-term equity investment accounted for by the equity method is partially disposed of, and the remaining equity is still accounted for by the equity method, other comprehensive income recognized by the original equity method will be carried forward in proportion to the same basis as the investee's direct disposal of relevant assets or liabilities, and changes in other owners' equity will be carried forward to the current profit and loss in proportion.

If the joint control or significant influence on the invested unit is lost due to the disposal of equity investment or other reasons, other comprehensive income recognized by the original equity investment due to the use of equity method accounting shall be accounted for on the same basis as the investee's direct disposal of relevant assets or liabilities when the use of equity method accounting is terminated. All other changes in owner's equity will be transferred to the current profit and loss when the use of equity method accounting is terminated.

If control over the invested unit is lost due to disposal of part of the equity investment or other reasons, when preparing individual financial statements, if the remaining equity can exercise joint control or significant influence on the invested unit, it shall be accounted for according to the equity method instead, and the remaining equity shall be deemed to have been accounted for using the equity method from the time of acquisition for adjustment. For other comprehensive income recognized before obtaining control of the invested unit, the same method as for the direct disposal of relevant assets or liabilities by the invested unit shall be used. The basis is carried forward on a proportional basis, and changes in other owners' equity recognized by the equity method are carried forward proportionally to the current profit and loss; if the remaining equity cannot jointly control or exert significant influence on the invested unit, it is recognized as a financial asset, and the difference between its fair value and book value on the date of loss of control is included in the current profit and loss. Other comprehensive income and other changes in other owners' equity recognized before obtaining control of the invested unit are all carried forward.

If the equity investment in a subsidiary is disposed of in multiple transactions step by step until the control is lost, and it is a package transaction, each transaction is accounted for as a transaction in which the equity investment in the subsidiary is disposed of and control is lost; before the loss of control, the difference between the price of each disposal and the book value of the long-term equity investment corresponding to the equity disposed is first recognized as other comprehensive income in individual financial statements, and when control is lost, it is transferred to the current profit and loss for the loss of control. If the transaction does not belong to a package, each transaction shall be accounted for separately.

(15) Investment real estate

Investment real estate refers to real estate held to earn rent or capital appreciation, or both, including leased land use rights, land use rights held and prepared to be transferred after appreciation, and leased buildings (including self-owned

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Buildings intended for rental after completion of construction or development activities and buildings intended for future rental during construction or development).

Subsequent expenditures related to investment real estate are included in the cost of investment real estate when the relevant economic benefits are likely to flow in and the cost can be reliably measured; otherwise, they are included in the current profit and loss when incurred.

The Company adopts the cost model to measure existing investment real estate. For investment real estate measured according to the cost model - buildings for rental, the same depreciation policy is adopted as the company's fixed assets, and land use rights for rental are subject to the same amortization policy as intangible assets.

(16) Fixed assets

1. Recognition and initial measurement of fixed assets

Fixed assets refer to tangible assets held for the purpose of producing goods, providing labor services, leasing or operating management, and whose useful life exceeds one accounting year. Fixed assets are recognized when the following conditions are met at the same time: (1) The economic benefits related to the fixed assets are likely to flow into the enterprise;

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

Fixed assets are initially measured at cost (taking into account the impact of expected disposal costs).

Subsequent expenditures related to a fixed asset are included in the cost of the fixed asset when the economic benefits related to it are likely to flow in and its cost can be reliably measured; for the replaced part, its book value is derecognised; all other subsequent expenditures are included in the current profit and loss when incurred.

2. Depreciation method

Depreciation of fixed assets is calculated using the straight-line method, and the depreciation rate is determined based on the category of fixed assets, estimated service life and estimated net residual value rate. For fixed assets for which impairment provisions have been made, the depreciation amount will be determined based on the book value after deducting impairment provisions and the remaining useful life in the future period. If each component of a fixed asset has a different service life or provides economic benefits to the enterprise in different ways, different depreciation rates or depreciation methods should be selected to accrue depreciation separately.

The depreciation methods, depreciation years, residual value rates and annual depreciation rates of various types of fixed assets are as follows:

Category Depreciation method Depreciation life (years) Residual value rate (%) Annual depreciation rate (%) Houses and buildings Average life method 15.00-35.00 5.00 6.33-2.71 Machinery and equipment Average life method 10.00 5.00 9.50

Transportation equipment Average age method 8.00 5.00 11.88 Other equipment Average age method 5.00-10.00 5.00 19.00-9.50

3. Disposal of fixed assets

Fixed assets are derecognized when they are disposed of or when no economic benefits are expected to be generated from use or disposal.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

the fixed asset. Income from the sale, transfer, scrapping or damage of fixed assets shall be deducted from their book value and

The amount after relevant taxes and fees is included in the current profit and loss.

(17) Construction in progress

Construction in progress is measured based on actual costs incurred. Actual costs include construction costs, installation costs, borrowing costs eligible for capitalization and other necessary expenditures incurred before the project under construction reaches the intended usable condition. When the construction in progress reaches the intended usable state, it will be transferred to fixed assets and depreciation will be accrued from the next month. The standards and timing for transferring the company's construction-in-progress to fixed assets are as follows:

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. Self-operated projects are measured according to direct materials, direct labor, direct machinery construction fees, etc.; outsourced projects are measured according to the project price payable, etc. Borrowing costs incurred before the project carried out with borrowed money reaches the intended usable state and meet the capitalization conditions shall be capitalized and included in the cost of the project under construction.

For fixed assets built by the company that have reached the intended usable state but have not yet processed the final accounts for completion, the company will determine its cost based on the estimated value based on the project budget, cost or actual cost of the project from the date it reaches the intended usable state, transfer it to fixed assets, and accrue depreciation of the fixed assets in accordance with the company's fixed asset depreciation policy; after the final accounts for completion are processed, the original estimated value will be adjusted based on the actual cost, but the amount of depreciation that has been originally accrued will not be adjusted.

(18) Borrowing costs

1. Recognition principles for capitalization of borrowing costs

If the borrowing costs incurred by the company can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions, they will be capitalized and included in the cost of the relevant assets; other borrowing costs will be recognized as expenses based on the amount incurred when they are incurred and included in the current profits and losses.

Assets that meet the conditions for capitalization refer to assets that require a considerable period of acquisition, construction or production activities to achieve capitalization.

Fixed assets, investment real estate, inventories and other assets that are ready for intended use or sale.

2. Capitalization period of borrowing costs

The capitalization period refers to the period from the time when borrowing costs start to be capitalized to the time when capitalization stops. The period during which the capitalization of borrowing costs is suspended is not included.

Capitalization of borrowing costs begins when the following conditions are met at the same time:

(1) Asset expenditures have occurred. Asset expenditures include expenditures in the form of cash payments, transfers of non-cash assets or interest-bearing debts for the acquisition, construction or production of assets that meet capitalization conditions;

(2) Borrowing costs have been incurred;

(3) The necessary purchase, construction or production activities to bring the assets to the intended usable or salable state have been completed

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

has begun.

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 ceases.

3. Capitalization suspension 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; if the interruption is a necessary procedure for the assets that meet the capitalization conditions to be acquired, constructed or produced to reach the intended usable or salable state, the borrowing costs will continue to be capitalized. Borrowing costs incurred during the interruption period are recognized as current profits and losses, and the borrowing costs continue to be capitalized until the acquisition, construction or production activities of the assets restart.

4. Calculation method of capitalization rate and capitalization amount of borrowing costs

For special borrowings borrowed for the purpose of purchasing, constructing or producing assets that qualify for capitalization, the capitalized amount of borrowing costs is determined based on the amount of borrowing costs actually incurred for the special borrowing in the current period, minus the interest income from unused borrowed funds deposited in the bank or the investment income from temporary investments. For general borrowings used for the purchase, construction or production of assets that qualify for capitalization, the amount of borrowing costs that should be capitalized on the general borrowings is calculated and determined based on the weighted average of the asset disbursements that exceed the portion of the special borrowings multiplied by the capitalization rate of the general borrowings occupied. The capitalization rate is calculated and determined based on the weighted average actual interest rate of general borrowings.

During the capitalization period, the exchange differences on the principal and interest of special foreign currency borrowings are capitalized and included in the cost of assets that meet the capitalization conditions. Exchange differences arising from the principal and interest of foreign currency borrowings other than special foreign currency borrowings are included in the current profits and losses.

(19) Intangible assets

1. Valuation method of intangible assets

(1) When the company obtains intangible assets, it is initially measured at cost;

The cost of outsourced intangible assets includes the purchase price, relevant taxes and other expenses directly attributable to achieving the intended use of the asset.

(2) Subsequent measurement

Analyze and determine the useful life of intangible assets when acquiring them.

For intangible assets with a limited service life, they will be amortized within the period that they bring economic benefits to the enterprise; if the period in which the intangible assets can bring economic benefits to the enterprise cannot be foreseen, they will be regarded as intangible assets with an indefinite service life and will not be amortized.

Notes to Financial Statements Page 19

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Estimation of service life of intangible assets with limited service life

Item Estimated useful life Amortization method Basis

Land use rights 40.00-50.00 years average method Benefit life

Patented and non-patented technologies 10.00-20.00 Year average method Benefiting years

Trademark 10.00-20.00 Average life method Beneficial life

Software 10.00-15.00 Year average method Benefit life

Emission rights 5.00-15.00 Year average method Benefit years

Production license 10.00-15.00 Year average method Benefit life

3. Basis for judgment of intangible assets with indefinite service life and procedures for review of their service life. The Company did not have intangible assets with indefinite service life at the end of the period.

4. Scope of collection of R&D expenditures

The scope of the company's R&D expenditures includes wages, bonuses and labor costs such as social security provident funds for R&D personnel, materials directly invested in R&D activities, equipment used for R&D activities, depreciation and amortization of fixed assets and intangible assets such as buildings and software, testing and service fees and other expenses. The company calculates R&D expenses based on R&D projects and collects various expenditures.

5. Specific criteria for dividing the research stage and development stage

The company's internal research and development project expenditures are divided into research stage expenditures and development stage expenditures.

Research stage: The stage of original planned investigation and research activities to obtain and understand new scientific or technical knowledge.

Development stage: A stage in which research results or other knowledge are applied to a plan or design to produce new or substantially improved materials, devices, products, etc. before commercial production or use.

6. Specific conditions for capitalization of expenditures during the development phase

Expenditures in the research stage are included in the current profits and losses when incurred. Expenditures in the development stage that meet the following conditions at the same time are recognized as intangible assets. Expenditures in the development stage that do not meet the following conditions are included in the current profit and loss:

(1) It is technically feasible to complete the intangible asset so that it can be used or sold;

(2) Have the intention to complete the intangible asset and use or sell it;

(3) The way in which 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, it can be proven that they have

Notes to Financial Statements Page 20

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Usability;

(4) Have sufficient technical, financial and other resource support to complete the development of the intangible assets, and have the ability to use or sell the intangible assets;

(5) Expenditures attributable to the development stage of the intangible asset can be measured reliably.

If it is impossible to distinguish between expenditures in the research stage and expenditures in the development stage, all R&D expenditures incurred will be included in the current period's losses.

Benefit.

(20) Impairment of long-term assets

Long-term equity investments, investment real estate measured using the cost model, fixed assets, projects under construction, right-of-use assets, intangible assets with limited useful lives, oil and gas assets and other long-term assets will be tested for impairment if there are signs of impairment on the balance sheet date. If the impairment test results show that the recoverable amount of the asset is lower than its book value, impairment provisions will be made based on the difference and included in the impairment loss. The recoverable amount is the higher of the asset's fair value less disposal costs and the present value of the asset's expected future cash flows. Asset impairment provisions are calculated and recognized on the basis of individual assets. 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. An asset group is the smallest combination of assets that can independently generate cash inflows.

For goodwill formed due to business mergers, intangible assets with indefinite useful lives, and intangible assets that have not yet reached a usable state, regardless of whether there are signs of impairment, an impairment test shall be conducted at least at the end of each year.

The company conducts a goodwill impairment test. The book value of goodwill formed due to business mergers will 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 will be allocated to the relevant asset group combinations. The relevant asset group or combination of asset groups is an asset group or combination of asset groups that can benefit from the synergistic effects of the business combination.

When conducting an impairment test on a relevant asset group or combination of asset groups that contains goodwill, if there are signs of impairment in the asset group or combination of asset groups that are 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 compare it with the relevant book value to confirm the corresponding impairment loss. Then conduct an impairment test on the asset group or asset group combination that contains goodwill, and compare its book value with the recoverable amount. If the recoverable amount is lower than the book value, the impairment loss will first be deducted from the book value of the goodwill allocated to the asset group or asset group combination, and then deducted from the book value of other assets in proportion based on the proportion of the book value of other assets in the asset group or asset group combination except goodwill.

Once the above-mentioned asset impairment losses are recognized, they will not be reversed in subsequent accounting periods.

(21) Long-term deferred expenses

Long-term deferred expenses are expenses that have been incurred but should be borne by the current and subsequent periods with an amortization period of more than one year. Long-term deferred expenses are amortized in installments based on the expected benefit period of the expense item. If long-term deferred expenses are

Notes to Financial Statements Page 21

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

If it cannot benefit future accounting periods, all the amortized value of the project that has not been amortized will be transferred to the current profit and loss.

(22) Contract liabilities

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between performance obligations and customer payments. The Company's obligations to transfer goods or provide services to customers for consideration received or receivable from customers are listed as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis.

(23) Employee compensation

1. Accounting treatment method for short-term compensation

During the accounting period when employees provide services to the company, the company recognizes the actual short-term compensation as a liability and includes it in the current profit and loss or related asset costs.

The company pays social insurance premiums and housing provident funds for its employees, as well as union funds and employee education funds withdrawn in accordance with regulations. During the accounting period when employees provide services to the company, the corresponding amount of employee remuneration is calculated and determined based on the prescribed accrual basis and accrual ratio.

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

2. Accounting treatment of post-employment benefits

(1) Set up a withdrawal plan

The company pays basic pension insurance and unemployment insurance for its employees in accordance with relevant regulations of the local government. During the accounting period when employees provide services to the company, the amount payable is calculated based on the payment base and proportion specified by the local government, is recognized as a liability, and is included in the current profit and loss or related asset costs.

(2) Defined benefit plan

The company attributes the welfare obligations arising from the defined benefit plan to the period in which employees provide services based on the formula determined by the expected cumulative welfare unit method, and includes them in the current profit and loss or related asset costs.

The deficit or surplus formed by deducting the present value of the defined benefit plan obligations from the fair value of the defined benefit plan assets is recognized as the net liability or net assets of a defined benefit plan. 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. All defined benefit plan obligations, including obligations expected to be paid within twelve months after the end of the annual reporting period in which employees provide services, are discounted based on the market rate of return on Treasury bonds or high-quality corporate bonds in active markets on the balance sheet date that match the term and currency of the defined benefit plan obligation.

The service costs generated by the defined benefit plan and the net interest on the net liabilities or net assets of the defined benefit plan are included in the current profit and loss or related asset costs; the changes caused by the remeasurement of the net liabilities or net assets of the defined benefit plan are included in other comprehensive income and are not transferred back to profit or loss in subsequent accounting periods. They are included in the original defined benefit calculation.

Notes to Financial Statements Page 22

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

When the plan is terminated, all the portion originally included in other comprehensive income will be carried forward to undistributed profits within the scope of equity. When the defined benefit plan is settled, the present value of the defined benefit plan obligations and the settlement price determined on the settlement date are

The difference between the two is recognized as settlement gain or loss.

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 and included in the current profit and loss at the earliest of the following two situations: when the company cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relations plan or layoff proposal; the company recognizes the costs or expenses related to the restructuring involving the payment of dismissal benefits

Use time.

(24) Estimated liabilities

When the obligations related to contingencies meet the following conditions at the same time, the company will recognize them as estimated liabilities:

(1) The obligation is the current obligation of the company;

(2) Fulfilling this obligation is likely to cause economic benefits to flow out of the company;

(3) The amount of the obligation can be measured reliably.

Estimated liabilities are initially measured based on the best estimate of the expenditure required to fulfill the relevant current obligations.

When determining the best estimate, factors such as risks, uncertainties and time value of money related to contingencies are comprehensively considered. For those that have a significant impact on the time value of money, the best estimate is determined by discounting the relevant future cash outflows.

If there is a continuous range of required expenditures, and various outcomes within the range are equally likely to occur, the best estimate shall be determined based on the middle value within the range; in other cases, the best estimate shall be treated in the following situations:

• If the contingency involves a single project, it shall be determined based on the most likely amount.

• If the contingencies involve multiple projects, they shall be calculated and determined based on various possible outcomes and related probabilities.

If all or part of the expenses required to settle estimated liabilities are expected to be compensated by a third party, the compensation amount will be recognized separately as an asset when it is basically certain that it can be received, and the recognized compensation amount will not exceed the book value of the estimated liabilities.

The Company reviews the book value of estimated liabilities on the balance sheet date. If there is conclusive evidence that the book value does not reflect the current best estimate, the book value will be adjusted based on the current best estimate.

(25) Share-based payment

The company's share-based payment is a transaction in which equity instruments are granted or liabilities determined based on equity instruments are granted in order to obtain services from employees or other parties. The Company's share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment.

Notes to Financial Statements Page 23

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

1. Equity-settled share-based payment and equity instruments

If equity-settled share-based payment is exchanged for services provided by employees, it shall be measured at the fair value of the equity instruments granted to employees. For share-based payment transactions that become exercisable immediately after grant, the relevant costs or expenses will be included in the fair value of the equity instrument on the date of grant, and the capital reserve will be increased accordingly. For share-based payment transactions that are vested only after the completion of services within the waiting period or meeting specified performance conditions after grant, on each balance sheet date during the waiting period, the company will include the services obtained in the current period into relevant costs or expenses based on the best estimate of the number of exercisable equity instruments and the fair value on the date of grant, and increase the capital reserve accordingly.

If the terms of equity-settled share-based payment are modified, at least the services obtained will be recognized as if the terms had not been modified. In addition, any modification that increases the fair value of the equity instruments granted, or changes that are beneficial to employees on the modification date, is recognized as an increase in services obtained.

During the waiting period, if the granted equity instruments are canceled, the company will treat the cancellation of the granted equity instruments as accelerated exercise, and the amount that should be recognized during the remaining waiting period will be immediately included in the current profit and loss, and the capital reserve will be recognized at the same time. However, if new equity instruments are granted and it is determined on the grant date of the new equity instruments that the new equity instruments granted are used to replace the canceled equity instruments, the replacement equity instruments granted will be treated in the same manner as modifications to the terms and conditions of the original equity instruments.

2. Cash-settled share-based payment and equity instruments

Cash-settled share-based payments are measured based on the fair value of the liability calculated and determined based on shares or other equity instruments assumed by the company. For share-based payment transactions that become exercisable immediately after grant, the company will include the relevant costs or expenses based on the fair value of the liability on the date of grant, and increase the liability accordingly. For share-based payment transactions that are vested only after the completion of services within the waiting period or the fulfillment of specified performance conditions after grant, on each balance sheet date during the waiting period, based on the best estimate of the vesting situation and the fair value of the liabilities borne by the company, the services obtained in the current period are included in the relevant costs or expenses, and are included in the liabilities accordingly. On each balance sheet date and settlement date before the settlement of relevant liabilities, the fair value of the liability is remeasured, and its changes are included in the current profit and loss.

If the company modifies the terms and conditions in the cash-settled share-based payment agreement to make it an equity-settled share-based payment, on the modification date (whether it occurs during the waiting period or after the end of the waiting period), the company will measure the equity-settled share-based payment based on the fair value of the equity instrument granted on that day, and include the services received in the capital reserve. At the same time, it will terminate the recognition of the liabilities recognized by the cash-settled share-based payment on the modification date, and the difference between the two will be included in the current profit and loss. If the waiting period is extended or shortened due to modification, the company will perform accounting treatment according to the modified waiting period.

(26) Safety production fees

In accordance with relevant laws and regulations such as the Production Safety Law of the People's Republic of China, the State Council's Notice on Further Strengthening Safety

Notes to Financial Statements Page 24

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

"Decision on Production Work" (Guofa [2004] No. 2) and "Notice of the State Council on Further Strengthening Enterprise Safety Production Work" (Guofa [2010] No. 23), the Ministry of Finance and the Ministry of Emergency Management issued the "Management of Withdrawal and Use of Enterprise Safety Production Expenses" According to the notice of "Measures" (Caizi [2022] No. 136), the company shall use the actual operating income of ethylene oxide and finished products using ethylene oxide as raw materials in the previous year as the basis for accrual, and adopt an excess regressive method to withdraw production safety expenses on an average monthly basis according to the following standards:

Level Provision basis Provision ratio (%) 1 Part of operating income not exceeding 10 million yuan 4.50

2 The portion of operating income exceeding RMB 10 million to RMB 100 million 2.25

3 The portion of operating income exceeding RMB 100 million to RMB 1.00 billion 0.55

4 Part of operating income exceeding 1 billion yuan 0.20

(27) Income

1. Disclose specific revenue recognition methods and measurement methods according to business types

The company's products mainly include taurine, etc., which can be divided into two categories: export sales and domestic sales according to the sales area, and revenue is recognized on time. The timing of recognition of revenue from external sales and domestic sales is as follows:

Exported goods: If settled by letter of credit (L/C), revenue will be recognized in the month after the goods have been shipped and the bill of lading provided by the international shipping company has been obtained and the bank has completed the document delivery procedures; if settled by wire transfer (T/T), revenue will be recognized in the month after the goods have been shipped and the waybill provided by the international shipping company has been obtained. Domestic sales of goods: If the sales contract stipulates that the company will be responsible for delivering the goods to the customer's designated location, revenue will be recognized after the product is delivered to the customer's designated location and the customer confirms acceptance; if the sales contract stipulates that the customer will pick up the goods directly, revenue will be recognized in the month when the goods have been shipped and the delivery note is obtained; if the sales contract stipulates that the goods will be sold by pipeline transportation, revenue will be recognized after the goods have been transported through the pipeline and the pipeline flow meter reading certificate is obtained and is confirmed by both parties at the end of each month.

Those who use the online sales model will recognize revenue after the goods have been shipped and payment has been received or the network shows that the customer has signed for the goods and the no-reason return period has passed.

2. Accounting policies adopted for revenue recognition and measurement

The company fulfills its performance obligations in the contract, that is, when the customer obtains control of the relevant goods or services, revenue is recognized. Obtaining control over relevant goods or services means being able to direct the use of the goods or services 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 standalone selling price of the goods or services promised by each individual performance obligation on the contract commencement date. The Company measures revenue based on the transaction price allocated to each individual performance obligation.

Transaction price refers to the amount of consideration that the company is expected to be entitled to receive for transferring goods or services to customers.

Notes to Financial Statements Page 25

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Includes amounts collected on behalf of third parties as well as amounts expected to be returned to customers. The company determines the transaction price based on the terms of the contract and its past practices, and when determining the transaction price, it takes into account the impact of variable consideration, significant financing components in the contract, non-cash consideration, consideration payable to customers and other factors. The Company determines transaction prices that include variable consideration at an amount that does not exceed the amount at which a significant reversal of accumulated recognized revenue is unlikely to occur when the relevant uncertainty is eliminated. If there is a significant financing component in the contract, the company determines the transaction price based on the amount payable in cash when the customer obtains control of the goods or services, and uses the effective interest method to amortize the difference between the transaction price and the contract consideration during the contract period. 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:

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

• The customer has control over the goods under construction during the company's performance.

• The 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 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 considers the nature of the goods or services and uses the output method or the input method to determine the progress of the contract. When the progress of contract performance cannot be reasonably determined and the costs incurred are expected to be compensated, the Company will recognize revenue 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 or services. When judging whether the customer has obtained control of the goods or services, the company considers the following signs:

• The company has a current right to receive payment for the goods or services, which means the customer has a current payment obligation for the goods or services.

• The Company has transferred the legal ownership of the goods to the customer, which means that the customer already owns the legal ownership of the goods.

• The company has physically transferred the goods to the customer, which means that the customer has taken physical possession of the goods.

• 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.

• The customer has accepted the goods or services, etc.

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 main responsible person and recognizes revenue based on the total consideration received or receivable; otherwise, the company is the agent and is expected to be entitled to receive commissions or handouts.

Notes to Financial Statements Page 26

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

The amount of renewal is recognized as revenue.

(28) Contract costs

Contract costs include contract performance costs and contract acquisition costs.

If the costs incurred by the company to perform the contract do not fall within the scope of relevant standards such as inventory, fixed assets or intangible assets, they will be recognized as an asset as contract performance costs when the following conditions are met:

• The cost is directly related to a current or anticipated contract.

• This cost increases the Company's future resources to use to meet its performance obligations.

• The 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:

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

2. Estimate the costs that will be incurred to transfer the relevant goods or services.

If the factors causing impairment in the previous period subsequently change, causing the aforementioned difference to be higher than the book value of the asset, the company will reverse the impairment provision that was originally made and include it in the current profit and loss, but the book value of the asset after the reversal will not exceed the book value of the asset on the date of reversal if no impairment provision was made.

(29) Government subsidies

1. Type

Government subsidies are monetary assets or non-monetary assets that the company obtains from the government for free, and are divided into asset-related government subsidies and income-related government subsidies.

Asset-related government subsidies refer to government subsidies obtained by the company and used to purchase, construct or otherwise form long-term assets. Government subsidies related to income refer to government subsidies other than government subsidies related to assets.

The company’s specific criteria for classifying government subsidies related to income are:

Government subsidies related to income refer to government subsidies other than government subsidies related to assets. If government documents do not clearly stipulate the subsidy objects, the company will classify the government subsidies as income-related.

Notes to Financial Statements Page 27

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Confirmation time

Government subsidies are recognized when the company can meet the conditions attached to it and receive it.

3. Accounting processing

Government subsidies related to assets are offset by the book value of the relevant assets or recognized as deferred income. If it is recognized as deferred income, it will be included in the current profit and loss in installments in a reasonable and systematic manner within the useful life of the relevant assets (if it is related to the company's daily activities, it will be included in other income; if it is not related to the company's daily activities, it will be included in non-operating income);

Income-related government subsidies that are used to compensate the company for relevant costs or losses in subsequent periods are recognized as deferred income and included in the current profit and loss during the period in which the relevant costs or losses are recognized (if they are related to the company's daily activities, they are included in other income; if they are not related to the company's daily activities, they are included in operating income) Non-operating income) or offset related costs or losses; if used to compensate for the company's related costs or losses incurred, it will be directly included in the current profit and loss (if it is related to the company's daily activities, it will be included in other income; if it is not related to the company's daily activities, it will be included in non-operating income) or offset the relevant costs or losses.

The company obtains policy-based preferential loan interest discounts by distinguishing the following two situations and accounting for them respectively: (1) The finance department allocates interest discount funds to the lending bank, and the lending bank provides loans to the company at the policy-based preferential interest rate. The company uses the actual loan amount received as the entry value of the loan, and calculates related borrowing costs based on the loan principal and the policy-based preferential interest rate.

(2) If the finance department directly allocates interest discount funds to the company, the company will use the corresponding interest discount to offset related borrowing costs.

(30) Deferred income tax assets and deferred income tax liabilities

Income tax includes current income tax and deferred income tax. Except for income taxes arising from business mergers and transactions or events that are directly included in owners' equity (including other comprehensive income), the company includes current income taxes and deferred income taxes into current profits and losses.

Deferred income tax assets and deferred income tax liabilities are calculated and recognized based on the difference (temporary difference) between the tax basis of assets and liabilities and their book value.

The recognition of deferred income tax assets for deductible temporary differences shall be limited to the amount of taxable income that is likely to be obtained in the future period to offset the deductible temporary differences. For deductible losses and tax credits that can be carried forward to future years, the corresponding deferred income tax assets are recognized to the extent that it is probable that the future taxable income will be used to offset the deductible losses and tax credits.

For taxable temporary differences, deferred income tax liabilities are recognized except in special circumstances.

Special circumstances in which deferred tax assets or deferred tax liabilities are not recognized include:

• Initial recognition of goodwill;

Notes to Financial Statements Page 28

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

• It is neither a business combination nor a transaction or event that affects accounting profits and taxable income (or deductible losses) when it occurs, and the initial recognition of assets and liabilities does not result in equal amounts of taxable temporary differences and deductible temporary differences.

Deferred income tax liabilities are recognized for taxable temporary differences related to investments in subsidiaries, associates and joint ventures, unless the company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. For deductible temporary differences related to investments in subsidiaries, associates and joint ventures, deferred income tax assets are recognized when the temporary differences are likely to be reversed in the foreseeable future and it is likely to be taxable income that can be used to offset the deductible temporary differences in the future.

On the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the applicable tax rate during the period when the relevant assets are expected to be recovered or the relevant liabilities are settled in accordance with the provisions of tax laws.

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 the deferred tax assets, the carrying amount of the deferred tax assets will be written down. The amount of the write-down is reversed when it is probable that sufficient taxable income will be obtained. When there is a legal right to settle on a net basis and the intention is to settle on a net basis or to obtain assets and pay off liabilities at the same time, the current income tax assets and current income tax liabilities are presented at the net amount after offsetting.

On the balance sheet date, deferred income tax assets and deferred income tax liabilities are presented as the net amount after offsetting when the following conditions are met at the same time:

• The tax payer has the legal right to settle current income tax assets and current income tax liabilities on a net basis;

• Deferred income tax assets and deferred income tax liabilities are related to income taxes levied by the same tax collection authority on the same taxable entity or to different taxable entities. However, in each future period when important deferred income tax assets and 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.

(31) Leasing

Lease refers to a contract in which the lessor transfers the right to use an asset to the lessee for a consideration within a certain period of time. On the contract inception date, the Company evaluates whether the contract is a lease or contains a lease. A contract is a lease or contains a lease if one party transfers the right to control the use of one or more identified assets for a certain period in exchange for consideration.

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. If the contract contains both lease and non-lease parts, the lessee and lessor shall separate the lease and non-lease parts.

1. The company serves as the lessee

(1) Right-of-use assets

On the start date of the lease period, the Company recognizes the use of leases other than short-term leases and low-value asset leases.

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Notes to Financial Statements

rights assets. Right-of-use assets are initially measured at cost. This cost includes:

The initial measurement amount of the lease liability;



Lease payments paid on or before the start date of the lease term, if there are lease incentives, will be deducted from the amount already enjoyed.

The amount related to the leasing incentive;

Initial direct costs incurred by the Company;



The company dismantles and removes the leased assets, restores the site where the leased assets are located or restores the leased assets

Costs expected to be incurred up to the time agreed upon in the lease terms, excluding costs incurred for the production of inventory

cost.

The Company subsequently uses the straight-line method to accrue depreciation for right-of-use assets. If it is reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, the Company will accrue depreciation over the remaining useful life of the leased asset; otherwise, the company will accrue depreciation over the shorter of the lease term and the remaining useful life of the leased asset. The company determines whether the right-of-use assets have been impaired in accordance with the principles described in "III. (20) Impairment of long-term assets" in this note, and performs accounting treatment on the identified impairment losses.

(2) Lease liabilities

On the commencement date of the lease period, the Company recognizes lease liabilities for leases other than short-term leases and low-value asset leases. Lease liabilities are initially measured based on the present value of the lease payments that have not yet been paid. Lease payments include:

Fixed payments (including substantial fixed payments), if there are lease incentives, will be deducted from the lease incentives.

relevant amount;

Variable lease payments that depend on an index or rate;



The amount expected to be paid based on the residual value of the guarantee provided by the company;



The exercise price of an option to purchase if the Company is reasonably certain that it will exercise the option;



Amounts payable upon exercise of the option to terminate a lease if the lease term reflects that the Company will exercise termination

Lease options.

The company uses the interest rate implicit in the lease as the discount rate, but if the interest rate implicit in the lease cannot be reasonably determined, the company's incremental borrowing rate is used as the discount rate.

The company calculates the interest expense of the lease liability in each period during the lease term based on a fixed periodic interest rate, and includes it in the current profit and loss or related asset costs.

Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit and loss or related asset costs when actually incurred.

After the start date of the lease period, if the following circumstances occur, the company will remeasure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the difference will be included in the current profit and loss:

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Notes to Financial Statements

 When the evaluation results of the purchase option, lease renewal option or termination option change, or the actual exercise of the aforementioned options is inconsistent with the original evaluation results, the company shall calculate the lease payment amount after the change.

and remeasure the lease liability at its present value calculated at a revised discount rate;

 When the actual fixed payment amount changes, the expected amount payable of the guaranteed residual value changes, or the index or ratio used to determine the lease payment amount changes, the company remeasures the lease liability based on the present value of the changed lease payment amount and the original discount rate. However, changes in lease payments arise from floating

If the interest rate changes, the revised discount rate is used to calculate the present value.

(3) Short-term leasing and low-value asset leasing

If the company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value asset leases, the relevant lease payments will be included in the current profit and loss or related asset costs on a straight-line basis in each period during the lease term. Short-term lease refers to a lease with a lease period of no more than 12 months on the start date of the lease period and does not include a purchase option. Low-value asset lease refers to a lease with a low value when the single leased asset is a new asset. The company regards the lease of a single leased asset with a value of no more than 50,000 yuan as a new asset as a low-value asset lease. If a company subleases or anticipates subletting a leased asset, the original lease does not constitute a low-value asset lease.

(4) Lease changes

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:

The lease modification expands the scope of the lease by adding the right to use one or more leased assets;

The amount of the increased consideration and the separate price of the expanded part of the lease scope adjusted according to the circumstances of the contract

Quite.

If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the company re-allocates the consideration of the contract after the change, re-determines the lease term, and re-measures the lease liability based on the present value of the changed lease payment and the revised discount rate.

If a change in the lease results in a reduction in the scope of the lease or a shortening of the lease period, the company will reduce the book value of the right-of-use assets accordingly, and include the related gains or losses from the partial or complete termination of the lease into the current profits and losses. If other lease changes result in the remeasurement of lease liabilities, the company will adjust the book value of the right-of-use assets accordingly.

2. The company acts as the lessor

On the lease commencement date, the Company divides leases into finance leases and operating leases. Finance lease refers to a lease that substantially transfers almost all risks and rewards related to the ownership of the leased asset, regardless of whether the ownership is ultimately transferred. Operating leases refer to leases other than finance leases. The company acts as a sublease

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Notes to Financial Statements

When the lessor is the lessor, the sublease is classified based on the right-of-use asset generated by the original lease.

(1) Accounting treatment of operating leases

Lease receipts from operating leases are recognized as rental income on a straight-line basis throughout the lease term. The company capitalizes the initial direct expenses related to the operating lease and amortizes them into the current profit and loss during the lease period on the same basis as the rental income recognition. Variable lease payments that are not included in lease receipts are included in the current profit and loss when actually incurred. 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 payments received in advance or receivable related to the lease before the change will be regarded as the payment amount of the new lease.

(2) Accounting treatment of financial leases

On the lease commencement date, the Company recognizes finance lease receivables for finance leases and terminates the recognition of finance lease assets. When the Company initially measures the financial lease receivables, it takes the net lease investment as the entry value of the financial lease receivables. The net investment in a lease is the sum of the unguaranteed residual value and the present value of the lease payments that have not yet been received at the start of the lease term, discounted at the interest rate implicit in the lease.

The Company calculates and recognizes interest income in each period during the lease term based on fixed periodic interest rates. The derecognition and impairment of finance lease receivables shall be accounted for in accordance with "III. (10) Financial Instruments" of this note. Variable lease payments that are not included in the measurement of net lease investment are included in the current profit and loss when actually incurred. If a financial lease changes and the following conditions are met at the same time, the company will account for the change as a separate lease:

 The change expands the scope of the lease by adding the right to use one or more leased assets;

 The amount of the increased consideration and the separate price of the expanded part of the lease scope adjusted according to the circumstances of the contract

Quite.

If the change in the financial lease is not accounted for as a separate lease, the company will handle the changed lease under the following circumstances:

 If the change takes effect on the lease commencement date, the lease will be classified as an operating lease. The company will account for it as a new lease from the effective date of the lease change, and the lease change will take effect.

The current net lease investment is used as the book value of the leased asset;

 If the change takes effect on the lease commencement date, the lease will be classified as a finance lease, and the company will conduct accounting treatment in accordance with the policy on modifying or renegotiating contracts in "III. (10) Financial Instruments" of this note.

reason.

3. Sale and leaseback transactions

The company evaluates and determines the assets in the sale and leaseback transaction in accordance with the principles described in "III. (27) Income" of this note.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

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Notes to Financial Statements

Whether the transfer of property is considered a sale.

(1) As a lessee

If the asset transfer in a sale and leaseback transaction is a sale, the company, as the lessee, 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.

After the start date of the lease period, for details on the subsequent measurement of right-of-use assets and lease liabilities and lease changes, please refer to "III. (31) Lease 1. The Company as the lessee" in this note. In the subsequent measurement of the lease liability formed by the sale and leaseback, the company's method of determining the lease payment or the lease payment after the change will not result in the recognition of gains or losses related to the right of use obtained from the leaseback.

If the asset transfer in a sale and leaseback transaction is not a sale, the company continues to recognize the transferred assets as the lessee, and at the same time recognizes a financial liability equal to the transfer income. For details on the accounting treatment of financial liabilities, please refer to "III. (10) Financial Instruments" of this note.

(2) As a lessor

If the asset transfer in a sale and leaseback transaction is a sale, the company, as the lessor, will account for the asset purchase and perform accounting treatment on the asset leasing in accordance with the policy of "2. The Company as a Lessor" mentioned above; if the asset transfer in the sale and leaseback transaction is not a sale, the company, as the lessor, will not recognize the transferred assets, but will recognize a financial asset equal to the transfer income. For details on the accounting treatment of financial assets, please refer to “3.

(10) Financial instruments”.

(32) Repurchase of the company’s shares

If the company's shares are acquired for reasons such as reducing registered capital or rewarding employees, the actual amount paid will be treated as treasury shares, and registration will be carried out at the same time. If the repurchased shares are cancelled, the difference between the total par value of the shares calculated based on the par value of the canceled shares and the number of canceled shares and the actual amount paid for the repurchase will be offset against the capital reserve. If the capital reserve is insufficient for offset, the retained earnings will be offset; if the repurchased shares are awarded to the company The employee is an equity-settled share-based payment. When the employee exercises his option to purchase the company's shares and receives the price, the cost of the treasury shares delivered to the employee and the accumulated amount of capital reserve (other capital reserve) during the waiting period are written off, and at the same time, the capital reserve (equity premium) is adjusted according to the difference.

(33) Determination method and selection basis of materiality standards

Project Materiality Criteria

Important accounts payable aged more than 1 year RMB 8 million

The book value of long-term equity investments in associates accounts for an important amount in the company's consolidated financial position.

More than 10% of the total reported assets

Important non-wholly-owned subsidiaries The net profit of non-wholly-owned subsidiaries in the company’s consolidated financial statements is attributed to the parent company

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Qianjiang Yongan Pharmaceutical Co., Ltd.

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Notes to Financial Statements

Project Materiality Criteria

More than 10% of the company’s net profit

Important projects under construction The budget of a single project is greater than 5 million yuan

The recovery of bad debt provisions for important receivables in the current period. The single recovery or reversal amount accounts for more than 10% of the total amount of various types of receivables or the reversal amount, and the amount is greater than 1 million yuan.

The amount of individual write-offs accounts for 10% of the total bad debt provisions for all types of receivables and is written off for important receivables.

and the amount is greater than 1 million yuan

(34) Changes in important accounting policies and accounting estimates

1. Changes in important accounting policies

Implement the provisions of the "Financial Instrument Standards Implementation Questions and Answers" on the accounting treatment related to standard warehouse receipt transactions

The Ministry of Finance issued a Q&A on the implementation of accounting treatments related to standard warehouse receipt transactions on July 8, 2025, which clearly stipulates that according to the financial instrument recognition and measurement standards, companies can earn price differences by frequently signing contracts for the purchase and sale of standard warehouse receipts in futures trading venues without withdrawing the commodities corresponding to the standard warehouse receipts. In kind, it usually indicates that the enterprise has the practice of selling the contract object again in the short term after receiving it to obtain profits from short-term fluctuations. The enterprise should regard the contract signed by it to buy and sell standard warehouse receipts as a financial instrument and conduct accounting treatment in accordance with the provisions of the recognition and measurement standards for financial instruments. If an enterprise obtains standard warehouse receipts and then sells them within a short period of time in accordance with the aforementioned contract, the sales revenue should not be recognized, but the difference between the consideration received and the book value of the standard warehouse receipts sold should be included in investment income; if the enterprise holds unsold standard warehouse receipts at the end of the period, it should be reported as other current assets. For standard warehouse receipts obtained in accordance with the aforementioned contract, if the accounting mismatch can be eliminated or significantly reduced, the enterprise can choose to measure it at fair value with changes included in current profits and losses at the time of initial recognition, and apply it consistently to all standard warehouse receipts that meet the selection conditions. For standard warehouse receipts that have been selected to be measured at fair value and whose changes are included in current profits and losses upon initial recognition, the enterprise shall not revoke this selection in subsequent periods.

According to the requirements of the "Notice on Strictly Implementing Accounting Standards for Business Enterprises and Effectively Providing Enterprises' 2025 Annual Reports" (Financial Accounting [2025] No. 33), if an enterprise adjusts its accounting treatment method due to the implementation of the relevant provisions of the above standard warehouse receipts, it shall make adjustments to the comparable period information in the financial statements. The implementation of this provision will have no significant impact on the Company.

2. Changes in important accounting estimates

There are no significant changes in accounting estimates that need to be disclosed during the reporting period.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

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Notes to Financial Statements

4. Taxes

(1) Main tax types and tax rates

Type of tax Tax calculation basis Tax rate (%) is calculated based on the income from sales of goods and taxable services calculated according to the tax law.

13.00, 9.00 Value-added tax Output tax, after deducting the input tax allowed to be deducted in the current period, the difference

6.00, 3.00

VAT payable

Urban maintenance and construction tax is calculated and paid based on the actual value-added tax and consumption tax paid 7.00

The actual amount of turnover tax paid in the current period and the approved value-added tax exemption in the current period

Education fee surcharge sum of 3.00

The actual amount of turnover tax paid in the current period and the approved value-added tax exemption in the current period

Local education surcharge sum of 2.00

15.00, 16.50, corporate income tax calculated and paid based on taxable income

20.00, 25.00

If there are taxpayers with different corporate income tax rates, a description of the disclosure

Name of taxpayer Income tax rate (%) Qianjiang Yongan Pharmaceutical Co., Ltd. 15.00

Yongan Health Pharmaceutical (Wuhan) Co., Ltd. 15.00

Yongan Meishen (Wuhan) Brand Management Co., Ltd. 25.00

Qianjiang Qian Hydrogen Energy Development Co., Ltd. 25.00

Wing On Health (Hong Kong) Investment Co., Ltd. 16.50

Ya'an Agricultural Investment (Cambodia) Co., Ltd. 20.00

Wuhan Ya'an Investment Management Co., Ltd. 25.00

Hubei Ling'an Technology Co., Ltd. 25.00

Hubei Anlai Trading Co., Ltd. 25.00

Hubei He'an Biotechnology Co., Ltd. 20.00

Fuweile Pet Food (Wuhan) Co., Ltd. 20.00

(2) Tax incentives

1. Corporate income tax

(1) The company obtained the "High-tech Enterprise Certificate" (Certificate No.: GR202342010015) jointly issued by the Hubei Provincial Department of Science and Technology, the Hubei Provincial Department of Finance, and the State Administration of Taxation and the Hubei Provincial Taxation Bureau on October 26, 2023, and was recognized as a high-tech enterprise, which is valid for three years. Therefore, the income tax payable in 2025 is calculated at a tax rate of 15%.

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Qianjiang Yongan Pharmaceutical Co., Ltd.

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Notes to Financial Statements

(2) The Company's subsidiary Yongan Health Pharmaceutical (Wuhan) Co., Ltd. was recognized as a high-tech enterprise by the "High-tech Enterprise Certificate" (Certificate No.: GR202442005101) jointly issued by the Hubei Provincial Department of Science and Technology, the Hubei Provincial Department of Finance, and the State Administration of Taxation Hubei Provincial Taxation Bureau on December 24, 2024, which is valid for three years. Therefore, the income tax payable in 2025 is calculated at a tax rate of 15%.

(3) Subsidiaries Hubei He'an Biotechnology Co., Ltd. and Fuweile Pet Food (Wuhan) Co., Ltd. are based on the "Announcement on Further Supporting the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households" issued by the Ministry of Finance and the State Administration of Taxation (Announcement No. 12 of the Ministry of Finance and the State Administration of Taxation of 2023): small and low-profit enterprises are subject to a reduced rate of 25.00% to calculate taxable income and pay corporate income tax at a rate of 20%. The policy will continue until 2027. December 31, year.

2. Value-added tax

The company's overseas sales of taurine enjoy the country's preferential policy of "exemption, credit and refund" of value-added tax on exported goods. Starting from November 2018, the company's export value-added tax rebate rate for taurine sold overseas is 10%. According to the announcement of the Ministry of Finance and the State Administration of Taxation on increasing the export tax refund rate for some products on March 17, 2020, the export tax refund rate for 1,084 products such as porcelain sanitary ware was increased to 13%. The taurine products exported by the company belong to other acyclic monoamines and their derivatives and their salt products in the list of products with increased export tax refund rates. The export tax refund rate was increased from 10% to 13%.

5. Notes on Consolidated Financial Statement Items

(1) Monetary funds

Item Ending Balance Previous Year Ending Balance

Cash on hand 180,291.64 246,845.40 Bank deposits 229,175,817.97 260,327,127.09 Other monetary funds 1,229,616.80 59,831,320.47

Total 230,585,726.41 320,405,292.96 Including: Total amount deposited abroad 7,991.83 8,173.29

(2) Trading financial assets

Item Closing balance Financial assets with balance at the end of the previous year at fair value through profit or loss 687,885,327.94 600,160,393.06 Including: Equity instrument investment 28,041,265.15 33,901,129.15 Financial management products 659,844,062.79 566,259,263.91Total 687,885,327.94 600,160,393.06

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(3) Notes receivable

1. Classified presentation of notes receivable

Item Ending Balance Previous Year Ending Balance

Bank acceptance bill 5,980,717.37 5,055,160.00 Commercial acceptance bill 1,000,000.00 2,745,000.00 Less: bad debt provision 1,000,000.00 1,087,250.00 Total 5,980,717.37 6,712,910.00

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Notes receivable are classified and disclosed according to the bad debt accrual method.

Ending balance Last year's end balance

Book balance Bad debt provision Book balance Bad debt provision category

Proportion Provision Ratio Book Value Proportion Provision Ratio Book Value Amount Amount Amount Amount

(%) Example (%) (%) Example (%) Bad debts are accrued individually

1,000,000.00 14.33 1,000,000.00 100.00 1,000,000.00 12.82 1,000,000.00 100.00Preparation

Among them:

Commercial acceptance bill 1,000,000.00 14.33 1,000,000.00 100.00 1,000,000.00 12.82 1,000,000.00 100.00According to credit risk characteristics

Group provision for bad debts 5,980,717.37 85.67 5,980,717.37 6,800,160.00 87.18 87,250.00 1.28 6,712,910.00

Among them:

Bank acceptance bill 5,980,717.37 85.67 5,980,717.37 5,055,160.00 64.81 5,055,160.00 Commercial acceptance bill 1,745,000.00 22.37 87,250.00 5.00 1,657,750.00Total 6,980,717.37 100.00 1,000,000.00 5,980,717.37 7,800,160.00 100.00 1,087,250.00 6,712,910.00

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Important notes receivable for which bad debt provisions are made individually:

Ending balance Last year's end balance

Name Provision Ratio

Book balance Bad debt provision Provision basis Book balance Bad debt provision (%)

Not expected to be able to

Company 1 1,000,000.00 1,000,000.00 100.00 1,000,000.00 1,000,000.00 Recovery

Total 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00

3. Bad debt provisions accrued, reversed or recovered in the current period

Amount of changes in the current period

Remaining at the end of last year

Category Recovery or transfer Write-off or verification Closing balance Provision Other changes

Return sales

commercial acceptance

1,087,250.00 87,250.00 1,000,000.00 Money order

Total 1,087,250.00 87,250.00 1,000,000.00

4. Notes receivable that have been endorsed or discounted by the company at the end of the period and have not yet matured on the balance sheet date

Item Amount derecognized at the end of the period Amount not derecognized at the end of the period Bank acceptance bill 5,980,717.37

Total 5,980,717.37

(4) Accounts receivable

1. Accounts receivable are disclosed based on aging

Aging Closing balance Last year’s closing balance

Within 1 year (including 1 year) 118,521,545.39 156,982,005.95 1 to 2 years 2,976,887.53 4,588,037.76 2 to 3 years 2,466,848.60 365,287.80 More than 3 years 3,199,776.84 2,861,153.71 Subtotal 127,165,058.36 164,796,485.22 Less: Bad debt provision 10,329,379.44 10,829,101.33 Total 116,835,678.92 153,967,383.89

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Accounts receivable are classified and disclosed according to the bad debt accrual method.

Ending balance Last year's end balance

Book balance Bad debt provision Book balance Bad debt provision category

Proportion Provision Ratio Book Value Proportion Provision Ratio Book Value Amount Amount Amount Amount

(%) Example (%) (%) Example (%) Bad provision is calculated individually

3,419,839.41 2.69 3,419,839.41 100.00 1,759,951.93 1.07 1,759,951.93 100.00 Account provision

According to credit risk

Provision for bad debts by the acquisition group 123,745,218.95 97.31 6,909,540.03 5.58 116,835,678.92 163,036,533.29 98.93 9,069,149.40 5.56 153,967,383.89 Account provisions

Among them:

Aging analysis method 123,745,218.95 97.31 6,909,540.03 5.58 116,835,678.92 163,036,533.29 98.93 9,069,149.40 5.56 153,967,383.89 Total 127,165,058.36 100.00 10,329,379.44 116,835,678.92 164,796,485.22 100.00 10,829,101.33 153,967,383.89

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Provision for bad debts based on combination of credit risk characteristics:

Combined accrual items:

Ending balance

Name

Accounts receivable Bad debt provision Ratio of provision (%) Within 1 year 118,521,545.39 5,926,077.28 5.00 1-2 years 2,918,196.58 291,819.65 10.00 2-3 years 2,305,476.98 691,643.10 30.00

Total 123,745,218.95 6,909,540.03

3. Bad debt provisions accrued, reversed or recovered in the current period

Amount of changes in the current period

Remaining at the end of last year

Category Write-off or verification Other changes Closing balance Provision Recovery or reversal

pin move

Single provision 1,759,951.93 1,659,887.48 3,419,839.41 Aging analysis 9,069,149.40 2,159,609.37 6,909,540.03

Total 10,829,101.33 1,659,887.48 2,159,609.37 10,329,379.44

4. Accounts receivable and contract assets with the top five closing balances collected by debtors

Bad accounts receivable accounts receivable and

Accounts receivable and account provisions and combined accounts receivable period Contract asset period End of contract asset period

Unit name Contract asset period Ending balance of impairment of the same asset Ending balance Total balance

Ending balance Ending balance ratio of preparation period (%)

Customer 1 19,252,062.44 19,252,062.44 15.14 962,603.12 Customer 2 13,956,859.65 13,956,859.65 10.98 697,842.98 Customer 3 5,782,509.41 5,782,509.41 4.55 289,125.47Customer 4 3,858,747.94 3,858,747.94 3.03 192,937.40Customer 5 3,322,865.20 3,322,865.20 2.61 166,143.26

Total 46,173,044.64 46,173,044.64 36.31 2,308,652.23

(5) Accounts receivable financing

1. Classified presentation of financing receivables

Item Ending Balance Previous Year Ending Balance

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Ending Balance Previous Year Ending Balance

Notes receivable 2,152,013.64 1,106,263.20

Total 2,152,013.64 1,106,263.20

2. Changes in increases and decreases in receivables financing during the current period and changes in fair value

The accumulated balance of other comprehensive income at the end of the previous year was recognized as of the current period.

Items Newly added in this period Other changes Closing balance Amount recognized in Yizhong Recognition

The loss is accurate

Notes receivable 1,106,263.20 34,409,193.30 33,363,442.86 2,152,013.64

Total 1,106,263.20 34,409,193.30 33,363,442.86 2,152,013.64

3. Financing of receivables that have been endorsed or discounted by the company at the end of the period and have not yet matured on the balance sheet date

Item Amount derecognized at the end of the period Amount not derecognized at the end of the period Bank acceptance bill 8,729,330.03

Total 8,729,330.03

(6) Advance payments

1. Prepayments are listed based on aging

Ending balance Last year's end balance

Aging

Amount Proportion (%) Amount Proportion (%) Within 1 year 8,169,659.91 92.69 9,183,413.59 88.87 1 to 2 years 81,793.01 0.93 719,423.45 6.96 2 to 3 years 143,070.13 1.62 7,019.70 0.07 More than 3 years 419,282.78 4.76 423,901.53 4.10

Total 8,813,805.83 100.00 10,333,758.27 100.00

2. Prepayments of the top five ending balances by prepayment objects

Accounting for the closing balance of prepaid items and the closing balance of prepaid objects

Proportion of counts (%) Supplier 1 3,081,227.03 34.96 Supplier 2 818,814.75 9.29

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Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Accounting for the closing balance of prepaid items and the closing balance of prepaid objects

Proportion of counts (%) Supplier 3 618,403.20 7.02 Supplier 4 326,318.52 3.70 Supplier 5 264,810.00 3.00

Total 5,109,573.50 57.97

(7) Other receivables

Item Closing balance Other receivables at the end of the previous year 5,437,851.15 6,144,785.84

Total 5,437,851.15 6,144,785.84

1. Other receivables

(1) Disclosure based on aging

Aging Closing balance Last year's closing balance Within 1 year (including 1 year) 4,591,646.18 5,340,835.33 1 to 2 years 578,929.02 352,397.00 2 to 3 years 326,867.01 381,188.38 More than 3 years 2,874,094.41 2,949,841.36 Subtotal 8,371,536.62 9,024,262.07 Less: Bad debt provision 2,933,685.47 2,879,476.23 Total 5,437,851.15 6,144,785.84

Notes to Financial Statements Page 43

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(2) Classified disclosure according to bad debt accrual method

Ending balance Last year's end balance

Book balance Provision for bad debts Book balance Provision for bad debts

Category

Proportion Provision Ratio Book Value Proportion Provision Ratio Book Value Amount Amount Amount Amount

(%) Example (%) (%) Example (%) Provision for bad debts is based on individual items

2,195,588.58 26.23 2,195,588.58 100.00 1,868,748.97 20.71 1,868,748.97 100.00

Group by credit risk characteristics

6,175,948.04 73.77 738,096.89 11.95 5,437,851.15 7,155,513.10 79.29 1,010,727.26 14.13 6,144,785.84 Total provision for bad debts

Among them:

Aging analysis method 6,175,948.04 73.77 738,096.89 11.95 5,437,851.15 7,155,513.10 79.29 1,010,727.26 14.13 6,144,785.84Total 8,371,536.62 100.00 2,933,685.47 5,437,851.15 9,024,262.07 100.00 2,879,476.23 6,144,785.84

Notes to Financial Statements Page 44

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Important other receivables for which bad debt provisions are made individually:

Closing balance Name of last year's closing balance Provision ratio

Book balance Bad debt provision Provision basis Book balance Bad debt provision (%)

court decision

Individual 1 1,405,760.00 1,405,760.00 100.00 Still unable to recover 1,437,680.00 1,437,680.00

Total 1,405,760.00 1,405,760.00 1,437,680.00 1,437,680.00

Provision for bad debts based on combination of credit risk characteristics:

Combined accrual items:

Ending balance

Name

Other receivables Bad debt provision Proportion (%) Within 1 year 4,591,360.26 229,568.01 5.00 1-2 years 557,789.02 55,778.90 10.00 2-3 years 303,247.01 90,974.10 30.00 More than 3 years 723,551.75 361,775.88 50.00 Total 6,175,948.04 738,096.89

(3) Bad debt provision accrual

The first stage The second stage The third stage

entire duration

The entire life expectancy

Provision for bad debts Expected credit losses in the next 12 months Credit losses in the total period (not yet

period credit losses (credit losses occurred)

Credit impairment occurs)

with impairment)

Balance at the end of the previous year 1,010,727.26 1,868,748.97 2,879,476.23 Balance at the end of the previous year in the current period

--Transfer to the second stage

--Transfer to the third stage

--Return to the second stage

--Return to the first stage

Provision in this period 326,839.61 326,839.61 Transfer in this period 272,630.37 272,630.37

Notes to Financial Statements Page 45

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

The first stage The second stage The third stage

entire duration

The entire life expectancy

Provision for bad debts Expected credit losses in the next 12 months Credit losses in the total period (not yet

period credit losses (credit losses occurred)

Credit impairment occurs)

with impairment)

Sales in this period

Write-off in this period

Other changes

Closing balance 738,096.89 2,195,588.58 2,933,685.47

(4) Bad debt provisions accrued, reversed or recovered in the current period

Changes in balance at the end of the previous year and the current period

Category Ending Balance

Amount Provision Recovery or reversal Write-off or write-off Other changes

Single item count

1,868,748.97 326,839.61 2,195,588.58

Aging points

1,010,727.26 272,630.37 738,096.89 Analysis method

Total 2,879,476.23 326,839.61 272,630.37 2,933,685.47

(5) Classification by nature of payment

Nature of payment Book balance at the end of the period Book balance at the end of the previous year Employee borrowings and payments 637,100.37 903,207.68 Reserve funds and security deposits 2,154,200.82 1,819,551.50 Asset sales 1,405,760.00 1,437,680.00 Export tax rebate 3,289,172.58 3,746,844.84 Others 885,302.85 1,116,978.05Total 8,371,536.62 9,024,262.07

(6) Other receivables with top five closing balances based on debtors

Account for other receivables

Closing balance of accounts Bad debt provision period Unit name Nature of payment Closing balance Aging of accounts

Final balance proportion of total amount (%)

Notes to Financial Statements Page 46

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Account for other receivables

Closing balance of accounts Bad debt provision period Unit name Nature of payment Closing balance Aging of accounts

Final balance proportion of total amount (%)

1 year

Government Department 1 Export tax rebate 3,289,172.58 39.29 Within 164,458.63

Asset sale 3 years ago

Individual 1 1,405,760.00 16.79 1,405,760.00

more than 3 years

Government Department 2 Deposit 345,212.00 4.12 172,606.00 up

more than 3 years

Unit 1 Margin 272,650.00 3.26 272,650.00

on

Withholding and payment of personal pension insurance Withholding and payment for 1 year

197,300.48 2.36 9,865.02 Insurance premium Social security within

Total 5,510,095.06 65.82 2,025,339.65

(8) Inventory

Notes to Financial Statements Page 47

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

1. Inventory classification

Ending balance Last year's end balance

Category Provision for decline in value of inventory/contract Provision for decline in value of inventory/contract

Book balance Book value Book balance Book value

Provision for impairment of performance costs Provision for impairment of performance costs

Raw materials 37,721,032.37 1,067,122.66 36,653,909.71 38,091,164.20 1,132,221.94 36,958,942.26 Products in progress 4,941,069.92 4,941,069.92 4,189,906.46 4,189,906.46 Goods in stock 41,275,837.70 984,770.49 40,291,067.21 48,201,081.61 1,941,204.57 46,259,877.04 Goods shipped 9,006,741.28 9,006,741.28 5,911,417.56 5,911,417.56 Materials in transit 182,538.23 182,538.23

Total 92,944,681.27 2,051,893.15 90,892,788.12 96,576,108.06 3,073,426.51 93,502,681.55

2. Provision for inventory depreciation and provision for impairment of contract performance costs

Increase amount in this period Decrease amount in this period

Category Ending balance of previous year Ending balance

Provision Others Reversal or write-off Others

Raw materials 1,132,221.94 39,424.25 104,523.53 1,067,122.66 Inventory goods 1,941,204.57 1,365,470.28 2,321,904.36 984,770.49

Total 3,073,426.51 1,404,894.53 2,426,427.89 2,051,893.15

(9) Other current assets

Item Ending Balance Previous Year Ending Balance

Notes to Financial Statements Page 48

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Ending balance The ending balance of the previous year is to be deducted for input tax and prepaid taxes 4,157,842.55 6,325,212.57

Total 4,157,842.55 6,325,212.57

1. Information related to carbon emissions trading

(1) Changes in carbon emission quotas

Projects in this issue and previous issues

Quantity (unit: tons) Amount Quantity (unit: tons) Amount 1. Carbon emission quota at the beginning of this period

2. Increased carbon emission quotas in this period 202,042.00 72,550.24 225,866.00 (1) Quotas obtained from free allocation 200,051.00 225,866.00 (2) Quotas obtained from purchase 1,991.00 72,550.24

(3) Quotas increased by other means

3． Carbon emission quotas reduced in this period 202,042.00 72,550.24 225,866.00 1,303,501.35 (1) Quotas used for contract fulfillment 202,042.00 72,550.24 196,187.00 (2) Quotas sold 29,679.00 1,303,501.35 (3) Quota reduced by other means

4． Carbon emission quota at the end of this period

Notes to Financial Statements Page 49

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(10) Long-term equity investment

1. Long-term equity investment

Increases and decreases in the current period

Balance at the end of the previous year Impairment provision for the previous year Closing balance (account Impairment provision period invested unit Additional investment Investment recognized under the equity method Other comprehensive income Other equity Declaration of cash dividends Impairment provision Other

(Book value) Closing balance Decrease investment (Book value) Closing balance

Adjustment changes in capital gains and losses or profit provisions

1． Associates

Zhejiang Shuangzizhi

Energy Equipment Co., Ltd. 35,833,460.52 1,343,230.88 37,176,691.40 Company

Wuhan low-dimensional materials

Material Research Institute has 69,678,376.72 69,678,376.72 Co., Ltd.

Hubei Ling'an Chemical

4,556,337.74 2,450,000.00 -186,298.74 1,919,759.37 279.63 Xue Co., Ltd.

Huanggang Yongan Day

Yong Chemical Co., Ltd. 34,157,694.65 3,120,640.02 37,278,334.67 Company

Subtotal 74,547,492.91 69,678,376.72 2,450,000.00 4,277,572.16 1,919,759.37 74,455,305.70 69,678,376.72Total 74,547,492.91 69,678,376.72 2,450,000.00 4,277,572.16 1,919,759.37 74,455,305.70 69,678,376.72

Notes to Financial Statements Page 50

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(11) Fixed assets

1. Fixed assets and fixed asset liquidation

Item Closing balance Fixed assets at the end of the previous year 859,587,696.49 881,660,535.62 Liquidation of fixed assets 195,907.95 155,507.94 Total 859,783,604.44 881,816,043.56

Notes to Financial Statements Page 51

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Fixed assets

Items Houses and buildings Machinery and equipment Transportation equipment Others Total 1. original book value

(1) Ending balance of the previous year 591,661,078.62 1,366,292,333.61 11,435,959.83 24,829,184.99 1,994,218,557.05 (2) Increase in the current period 55,281,439.60 48,481,146.41 130,799.66 2,459,043.20 106,352,428.87 — Purchase 2,664,717.58 3,631.52 1,183,073.34 3,851,422.44

—Transfer of construction in progress 55,281,439.60 45,816,428.83 127,168.14 1,275,969.86 102,501,006.43 (3) Decrease amount in the current period 3,092,838.97 5,696,050.36 359,398.06 84,367.42 9,232,654.81

—Disposal or scrapping 3,092,838.97 5,696,050.36 359,398.06 84,367.42 9,232,654.81 (4) Closing balance 643,849,679.25 1,409,077,429.66 11,207,361.43 27,203,860.77 2,091,338,331.11 2. Accumulated depreciation

(1) Ending balance of the previous year 194,871,464.14 810,067,098.87 7,434,471.44 19,177,618.42 1,031,550,652.87 (2) Increase in the current period 29,008,506.91 82,934,218.12 678,936.47 710,804.75 113,332,466.25

—Provision 29,008,506.91 82,934,218.12 678,936.47 710,804.75 113,332,466.25 (3) Decrease amount in the current period 2,870,742.79 4,981,766.93 344,098.01 81,993.02 8,278,600.75

—Disposal or scrapping 2,870,742.79 4,981,766.93 344,098.01 81,993.02 8,278,600.75 (4) Closing balance 221,009,228.26 888,019,550.06 7,769,309.90 19,806,430.15 1,136,604,518.37 3. Impairment provision

(1) Ending balance of the previous year 9,735,495.78 71,263,132.77 8,740.01 81,007,368.56 (2) Increase in the current period 168,533.96 14,301,222.97 14,469,756.93

Notes to Financial Statements Page 52

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Items Houses and buildings Machinery and equipment Transportation equipment Others Total

—Provision 168,533.96 14,301,222.97 14,469,756.93 (3) Decrease amount in the current period 331,009.24 331,009.24

—Disposal or scrapping 331,009.24 331,009.24 (4) Closing balance 9,904,029.74 85,233,346.50 8,740.01 95,146,116.25 4. book value

(1) Book value at the end of the period 412,936,421.25 435,824,533.10 3,438,051.53 7,388,690.61 859,587,696.49 (2) Book value at the end of the previous year 387,054,118.70 484,962,101.97 4,001,488.39 5,642,826.56 881,660,535.62

Notes to Financial Statements Page 53

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

3. Temporarily idle fixed assets

Item Original book value Accumulated depreciation Impairment provision Book value Remarks Houses and buildings 39,775,491.41 22,099,532.05 9,904,029.74 7,771,929.62 Mechanical equipment and its

500,483,433.80 376,715,024.69 74,495,294.57 49,273,114.54 Others

Total 540,258,925.21 398,814,556.74 84,399,324.31 57,045,044.16

4. Fixed assets whose property rights certificates have not been obtained

Item Book value Reason for not completing the ownership certificate Yongan Pharmaceutical’s new oil furnace workshop 5,254,247.07 Processing in progress

5. Fixed assets liquidation

Item Ending balance of the previous year Machinery and equipment 195,907.95 155,507.94 Total 195,907.95 155,507.94

Notes to Financial Statements Page 54

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

6. Impairment testing of fixed assets

The recoverable amount is determined as the net amount after fair value minus disposal costs:

Fair value and disposal Determination of key parameters Book value Recoverable amount Impairment amount Key parameters

How fees are determined Basis

Usage status corrected to

Useful life revision and fair value to market

The usage status correction, delivery survey status correction and Yongan Asset Group 12,372,675.23 9,376,500.00 2,996,175.23 are determined legally, and the disposal costs

The right to amend the transaction status is determined, and the transaction status is determined based on the relevant rates.

Correction to capacity utilization

Rate calculation determined

Usage status corrected to

Useful life revision and fair value to market

Modification of usage status, modification of delivery and survey status Gazian Asset Group 10,475,950.20 9,207,900.00 1,268,050.20 Determination of disposal costs

The right to amend the transaction status is determined, and the transaction status is determined based on the relevant rates.

Correction to capacity utilization

Rate calculation determined

Total 22,848,625.43 18,584,400.00 4,264,225.43

The recoverable amount is determined based on the present value of expected future cash flows:

In the forecast period, in the stable period, it is related to the key parameters in the stable period. Book value, recoverable amount, impairment amount, key parameters in the forecast period.

Year Key Parameters Determination Basis

Ling'an Yishuiji Asset Group's operating income compound operating income growth operating income growth rate and profit 97,205,531.50 87,000,000.00 10,205,531.50 10

Acid asset group Growth rate: 9.66% Growth rate: 0% Profit rate passed rational analysis

Notes to Financial Statements Page 55

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

In the forecast period, in the stable period, it is related to the key parameters in the stable period. Book value, recoverable amount, impairment amount, key parameters in the forecast period.

Year Key Parameters Determination Basis

Gross profit margin: Gross profit margin: Analyzed revenue and profit forecast

6.00%-18.00% 18.00% Confirmed, the discount rate is after tax

Discount rate: 10.20% Discount rate: Weighted average cost of capital

10.20% (WACC) determines the discount rate

Operating income increased. The operating income growth rate was compounded by the compound operating income of the asset group.

Growth rate: 0% Profit rate passed rational growth rate: 11.24%

Ling'an Phenoxyethylene Gross profit margin: Analyzed revenue and profit forecast 14,860,214.45 15,000,000.00 0 10 Gross profit margin:

Alcohol asset group 16.00% determined, the discount rate adopts after-tax 10.00%-16.00%

Discount rate: Weighted average cost of capital discount rate: 10.20%

10.20% (WACC) determines the discount rate

Total 112,065,745.95 102,000,000.00 10,205,531.50

Notes to Financial Statements Page 56

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(12) Construction in progress

1. Projects under construction and engineering materials

Ending balance Last year's end balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Construction in progress 17,266,493.88 17,266,493.88 65,176,220.66 65,176,220.66 Engineering materials 1,633,888.76 1,633,888.76 1,232,884.08 1,232,884.08

Total 18,900,382.64 18,900,382.64 66,409,104.74 66,409,104.74

2. Projects under construction

Ending balance Last year's end balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value combined with three lines plus

145,132.75 145,132.75 into renovation project

EO renovation project 240,340.22 240,340.22Old factory renovation project

5,934,836.59 5,934,836.59

Head

Taurine production

Line renewal and reconstruction 2,925,047.60 2,925,047.60 project

Taurine mother liquor,

Creatine mother solution

2,781,437.69 2,781,437.69

sourced exploits

Head

Yongan Science and Technology Park

Phase II construction 47,297,593.32 47,297,593.32 projects

Special on the second floor of the workshop

Intelligent food technology 691,400.00 691,400.00 4,923,772.19 4,923,772.19 Technology transformation project

Workshop third floor renovation

198,225.00 198,225.00 2,586,761.01 2,586,761.01Construction project

Workshop first floor renovation

306,000.00 306,000.00 4,376,055.49 4,376,055.49Construction project

Notes to Financial Statements Page 57

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Closing balance Last year's closing balance items

Book balance Impairment provision Book value Book balance Impairment provision Book value

Phenoxyethanol item

227,527.33 227,527.33 items

Annual output of 10,000 tons

6,660,740.64 6,660,740.64

Water Creatine Project

Others 693,853.96 693,853.96 2,453,990.75 2,453,990.75

Total 17,266,493.88 17,266,493.88 65,176,220.66 65,176,220.66

Notes to Financial Statements Page 58

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

3. Changes in important projects under construction during the current period

Accumulated interest capital of the project Including: current period interest

Transferred to fixed in this period Other projects in this period are in progress

Project name Budget number Ending balance of the previous year Increase amount in the current period Ending balance Investment accounted for pre-accumulated funds Interest capitalization Capitalization rate Fund source asset amount Decrease amount (%)

Calculation proportion (%) Amount Amount (%) Taurine production

Production line update 12,177,800.00 2,925,047.60 473,689.78 3,398,737.38 96.74 100.00 Self-financed renovation project

Synthetic third line

Additional renovation 10,050,000.00 145,132.75 206,346.31 351,479.06 96.00 100.00 Self-financing project

Old factory renovation

7,340,600.00 5,934,836.59 5,934,836.59 80.85 80.00 Self-financed projects

Annual output of 10,000

Ton of muscle monohydrate 42,000,000.00 25,615,472.68 18,954,732.04 6,660,740.64 60.99 60.00 Self-financed acid project

Yongan Technology

Phase II of the park 60,000,000.00 47,297,593.32 6,576,604.87 53,874,198.19 90.45 95.00 Self-financed construction project

Workshop second floor

Teshan Intelligence 13,000,000.00 4,923,772.19 1,567,314.77 5,799,686.96 691,400.00 97.80 97.00 Self-financed technological transformation

Notes to Financial Statements Page 59

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Accumulated interest capital of the project Including: current period interest

Transferred to fixed in this period Other projects in this period are in progress

Project name Budget number Ending balance of the previous year Increase amount in the current period Ending balance Investment accounted for pre-accumulated funds Interest capitalization Capitalization rate Fund source asset amount Decrease amount (%)

Calculation proportion (%) Amount Amount (%) Project

Workshop third floor

9,000,000.00 2,586,761.01 1,314,316.52 3,702,852.53 198,225.00 92.11 92.00 Self-financed renovation project

Workshop first floor

8,000,000.00 4,376,055.49 2,656,844.11 6,726,899.60 306,000.00 103.72 95.00 Self-financed renovation project

Taurine

liquid, creatine

10,000,000.00 2,970,027.32 188,589.63 2,781,437.69 29.70 30.00 Self-raised liquid resources

Utilize items

Total 62,254,362.36 47,315,452.95 92,997,175.39 16,572,639.92

(13) Intangible assets

1. Intangible assets

Items Land use rights Trademark rights Patent rights Non-patented technology Software use rights Production licenses Emission rights Total

1. original book value

(1) Ending balance of the previous year 102,451,147.63 90,000.00 299,805.83 11,004,660.05 1,806,129.03 675,924.90 5,057,631.68 121,385,299.12 (2) Increase in the current period 400,000.00 367,321.64 767,321.64

Notes to Financial Statements Page 60

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Items Land use rights Trademark rights Patent rights Non-patented technology Software use rights Production licenses Emission rights Total

—Purchase 400,000.00 367,321.64 767,321.64 (3) Reduction amount in this period

(4) Closing balance 102,451,147.63 90,000.00 299,805.83 11,404,660.05 1,806,129.03 675,924.90 5,424,953.32 122,152,620.76 2. Accumulated amortization

(1) Ending balance of the previous year 28,547,014.38 90,000.00 215,124.46 8,593,209.98 1,330,958.55 675,924.90 2,373,996.75 41,826,229.02 (2) Increase in the current period 2,067,611.28 39,074.72 742,457.07 161,957.41 493,399.36 3,504,499.84

—Provision 2,067,611.28 39,074.72 742,457.07 161,957.41 493,399.36 3,504,499.84 (3) Decrease amount in the current period

(4) Closing balance 30,614,625.66 90,000.00 254,199.18 9,335,667.05 1,492,915.96 675,924.90 2,867,396.11 45,330,728.86 3. Impairment provision

4． book value

(1) Book value at the end of the period 71,836,521.97 45,606.65 2,068,993.00 313,213.07 2,557,557.21 76,821,891.90 (2) Book value at the end of the previous year 73,904,133.25 84,681.37 2,411,450.07 475,170.48 2,683,634.93 79,559,070.10

Notes to Financial Statements Page 61

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(14) Goodwill

1. Changes in goodwill

Increase in this period Decrease in this period

Name of the invested unit or events that formed goodwill. Ending balance of the previous year. Ending balance of the period.

Disposal resulting from business combination

original book value

Acquisition of Ling'an Technology Company 8,766,208.59 8,766,208.59 Subtotal 8,766,208.59 8,766,208.59 Impairment provision

Acquisition of Ling'an Technology Company 8,766,208.59 8,766,208.59 Subtotal 8,766,208.59 8,766,208.59 Book value

2. The composition of the asset group or asset group combination to which the goodwill belongs, and relevant information about the operating segment to which it belongs

The asset group or asset group it belongs to. Whether the name remains the same as in previous years. The operating segment it belongs to and its basis.

The composition and basis of the combination are consistent

Hubei Ling'an Technology Co., Ltd.

Division December 31, 2025

Lingan Technology’s polycarboxylic acid

Ling'an Technology Company excludes non-operating assets and Yes

Water agent related business

Accounts after liabilities and interest-paying liabilities

net worth

(15) Deferred income tax assets and deferred income tax liabilities

1. Deferred income tax assets without offset

Ending balance Last year's end balance

Items Deductible temporary differences Deferred income tax assets Deductible temporary differences Deferred income tax assets

Provision for impairment of assets of different assets 38,962,277.10 7,547,736.48 29,668,989.99 5,269,116.95 Deferred income 8,179,308.07 1,286,456.64 6,180,085.08 1,060,516.23 Expected to make up for losses 51,578,885.55 12,645,405.32 32,708,193.77 8,177,048.45 Unrealized profits from internal transactions 12,127.82 3,031.96 Total 98,720,470.72 21,479,598.44 68,569,396.66 14,509,713.59

Notes to Financial Statements Page 62

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Deferred income tax liabilities without offset

Ending balance Last year's end balance

Item Taxable temporary difference Deferred income tax liability Taxable temporary difference Deferred income tax liability

Differentiated Debt Differentiated Debt Trading Financial Assets - Fair

9,875,144.63 1,521,809.24 10,410,297.40 1,571,140.14 Gains and losses from value changes

Merger of enterprises not under common control

694,265.00 173,566.25 801,075.00 200,268.75 Added value of assets

One-time tax deduction for fixed assets 86,434,066.25 12,965,109.94 111,300,952.42 16,695,142.87 Unallocated income of Hong Kong subsidiaries

6,066,538.07 909,980.71 6,340,037.15 951,005.57 profit

Total 103,070,013.95 15,570,466.14 128,852,361.97 19,417,557.33

3. Deferred income tax assets or liabilities presented on a net basis after offsetting

End of period End of previous year

Deferred income after offset Deferred income items after offset Deferred income tax assets Deferred income tax assets

The balance of tax assets or liabilities The amount of the balance of tax assets or liabilities and the liabilities The amount of the balance of the liabilities and the offset of each other

Uh Uh

Deferred income tax assets 10,068,695.97 11,410,902.47 8,669,796.78 5,839,916.81 Deferred income tax liabilities 10,068,695.97 5,501,770.17 8,669,796.78 10,747,760.55

4. Details of deferred income tax assets not recognized

Item Ending balance of the previous year Deductible temporary differences 55,428,107.94 53,751,453.76 Deductible losses 136,481,496.79 137,066,723.38

Total 191,909,604.73 190,818,177.14

5. The deductible losses of unrecognized deferred income tax assets will expire in the following years

Year Ending Balance Last Year Ending Balance Remarks

2025 14,241,502.90 15,096,571.27

2026 12,087,051.92 12,087,051.92

2027 7,820,238.93 7,820,238.93

2028 15,607,909.55 15,607,909.55

Notes to Financial Statements Page 63

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Year Ending balance Ending balance of previous year Notes 2029-2035 86,724,793.49 86,454,951.71

Total 136,481,496.79 137,066,723.38

(16) Other non-current assets

Closing balance Last year's closing balance items

Book balance Impairment provision Book value Book balance Impairment provision Book value Prepaid equipment

8,028,093.42 1,480,341.40 6,547,752.02 2,600,196.39 827,600.00 1,772,596.39 and project funds

Total 8,028,093.42 1,480,341.40 6,547,752.02 2,600,196.39 827,600.00 1,772,596.39

Notes to Financial Statements Page 64

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(17) Assets with restricted ownership or use rights

End of Period Projects at the end of the previous year

Book balance Book value Restriction type Restriction situation Book balance Book value Restriction type Restriction situation

Because factoring discount is not

Accounts receivable 3,980,000.00 3,781,000.00 Restricted use Recognized but not terminated upon expiration

recognized debt

due to endorsement or discount

Because the endorsement has not expired, has not expired, and has not been terminated.

Notes receivable 5,980,717.37 5,980,717.37 Restricted use 6,472,470.00 6,385,220.00 Restricted use Confirmed acceptances that have not been derecognized

acceptance bill

Total 9,960,717.37 9,761,717.37 6,472,470.00 6,385,220.00

Notes to Financial Statements Page 65

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(18) Short-term borrowings

1. Classification of short-term loans

Item Closing balance Last year’s closing balance Discounted undue claims 750,000.00

Guaranteed loans 29,500,000.00 Credit loans 10,000,000.00 Prepaid loan interest 26,078.47

Total 750,000.00 39,526,078.47

(19) Accounts payable

1. Presentation of accounts payable

Item Ending Balance Previous Year Ending Balance

Within 1 year (including 1 year) 74,698,619.37 85,020,353.67 More than 1 year 40,872,139.59 38,998,032.40

Total 115,570,758.96 124,018,386.07

(20) Contract liabilities

1. Contract liabilities

Item Ending balance Last year’s end balance Advance payment 20,095,306.72 19,279,795.04

Total 20,095,306.72 19,279,795.04

(21) Employee benefits payable

1. List of employee benefits payable

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance Short-term compensation 38,857,601.21 108,213,235.28 110,967,392.51 36,103,443.98 Post-employment benefits - defined contribution plan 7,828,628.53 7,828,628.53

Dismissal benefits 410,511.37 410,511.37

Total 38,857,601.21 116,452,375.18 119,206,532.41 36,103,443.98

2. Presentation of short-term compensation

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance (1) Salaries, bonuses, allowances and 23,069,269.42 95,581,559.36 99,549,111.11 19,101,717.67

Notes to Financial Statements Page 66

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance subsidy

(2) Employee welfare fees 112,698.00 5,201,324.22 5,186,888.22 127,134.00 (3) Social insurance fees 3,884,158.59 3,884,158.59

Including: medical insurance premium 3,386,943.44 3,386,943.44

Work injury insurance premium 466,856.51 466,856.51

Maternity insurance premium 30,358.64 30,358.64

(4) Housing provident fund 2,090,140.20 2,090,140.20

(5) Union funds and employee education

15,675,633.79 1,456,052.91 257,094.39 16,874,592.31 Funding

Total 38,857,601.21 108,213,235.28 110,967,392.51 36,103,443.98

3. Set up the withdrawal plan display

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance Basic pension insurance 7,503,554.63 7,503,554.63

Unemployment insurance premium 325,073.90 325,073.90

Total 7,828,628.53 7,828,628.53

(22) Taxes payable

Tax items Ending balance Last year’s end balance

Value-added tax 1,466,796.96 57,041.01 Corporate income tax 8,911,274.59 7,061,544.66 Personal income tax 306,101.86 388,122.15 Urban maintenance and construction tax 8,567.10 7,301.48 Property tax 996,377.34 899,882.40 Education fee surcharge 3,671.60 3,127.87 Environmental protection tax 117,110.95 44,866.56 Land use tax 379,425.90 382,092.57 Local education fee surcharge 2,419.43 2,056.94 Stamp tax 132,167.30 155,744.09 Total 12,323,913.03 9,001,779.73

Notes to Financial Statements Page 67

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(23) Other payables

Item Closing balance Interest payable on the closing balance of the previous year

Dividends payable

Other payables 7,508,018.13 8,904,431.95

Total 7,508,018.13 8,904,431.95

1. Other payables

(1) Presented according to nature of payment

Item Ending Balance Previous Year Ending Balance

Deposit and security deposit 4,177,728.06 4,793,117.04 Office fees, rent and collection and payment 223,971.49 448,335.57 Union fund return 5,420.00 3,740.00 Freight and maintenance fees 166,000.00 212,000.00 Litigation fees 31,195.93 769,301.86 Others 2,903,702.65 2,677,937.48

Total 7,508,018.13 8,904,431.95

(24) Other current liabilities

Item Ending Balance Previous Year Ending Balance

End-of-period endorsement transfer of notes receivable that has not been derecognized

9,210,717.37 6,472,470.00 and accounts receivable

Output tax to be transferred 2,373,064.17 2,280,162.09

Total 11,583,781.54 8,752,632.09

(25) Deferred income

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance Reason for formation Government subsidy 7,457,212.42 5,000,000.00 3,172,251.89 9,284,960.53

Total 7,457,212.42 5,000,000.00 3,172,251.89 9,284,960.53

(26) Share capital

Item Ending balance of the previous year Changes in the current period Increase (+) Subtraction (-) Ending balance

Notes to Financial Statements Page 68

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Issue new provident fund

Bonus shares Other subtotal

Share conversion

Total shares 294,682,500.00 294,682,500.00

(27) Capital reserve

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance Capital premium (equity premium) 712,759,105.71 7,861,379.66 720,620,485.37 Other capital reserves 1,676,008.99 1,676,008.99

Total 714,435,114.70 7,861,379.66 722,296,494.36 Note: The increase in the company’s capital reserve in the current period is due to the company’s acquisition of minority shareholders’ interests.

(28) Treasury shares

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance treasury shares 24,183,171.45 16,292,817.54 40,475,988.99 Total 24,183,171.45 16,292,817.54 40,475,988.99

Notes to Financial Statements Page 69

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(29) Other comprehensive income

Amount of current period

Less: Included in the previous period Less: Other comprehensive items The balance at the end of the previous year Before income tax Attribution after tax Attribution after tax The balance at the end of the period Other comprehensive income Less: Income tax expense The amount of income transferred in the current period Parent company Minority shareholders

Transferred to profit and loss in the current period Retained earnings 1. Other comprehensive items that cannot be reclassified into profit or loss

combined income

2. Other comprehensive items to be reclassified into profit or loss

2,401,801.91 -170,283.48 -170,283.48 2,231,518.43Income

Differences in translation of foreign currency financial statements 2,401,801.91 -170,283.48 -170,283.48 2,231,518.43 Total other comprehensive income 2,401,801.91 -170,283.48 -170,283.48 2,231,518.43

Notes to Financial Statements Page 70

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(30) Special reserves

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance of safety production expenses 20,539,424.71 11,215,037.21 2,964,825.49 28,789,636.43

Total 20,539,424.71 11,215,037.21 2,964,825.49 28,789,636.43

(31) Surplus reserve

Item Ending balance of the previous year Increase in the current period Decrease in the current period Ending balance Statutory surplus reserve 148,676,496.29 148,676,496.29

Total 148,676,496.29 148,676,496.29

(32) Undistributed profits

Item Amount for the current period Amount for the previous period

Undistributed profits at the end of the previous year before adjustment 837,228,722.92 812,688,884.17 Total undistributed profits at the beginning of the year before adjustment (adjustment +, decrease -)

Adjusted undistributed profit at the beginning of the year 837,228,722.92 812,688,884.17 Plus: Net profit attributable to owners of the parent company for the current period 22,493,429.92 61,766,022.21 Less: Appropriation to statutory surplus reserve 7,944,038.46 Appropriation to discretionary surplus reserve

Withdraw general risk reserve

Dividends payable on ordinary shares 28,914,515.00 29,282,145.00

Dividends on common shares converted into equity capital

Undistributed profits at the end of the period 830,807,637.84 837,228,722.92

(33) Operating income and operating costs

1. Operating income and operating costs

Amount of current period Amount of previous period

Project

revenue cost revenue cost

Main business 778,287,026.11 649,411,384.38 833,343,248.35 670,929,975.14 Other businesses 4,879,981.78 1,272,667.81 5,471,693.35 186,767.20 Total 783,167,007.89 650,684,052.19 838,814,941.70 671,116,742.34

Operating income details:

Item Amount for the current period Amount for the previous period

Notes to Financial Statements Page 71

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

Main business income 778,287,026.11 833,343,248.35

1. Taurine 494,965,479.80 634,731,166.80

2. Polycarboxylate water reducing agent and related products 20,829,662.44 36,805,890.68

3. Health products 210,209,599.38 103,757,455.44

4. Others 52,282,284.49 58,048,735.43

Other business income 4,879,981.78 5,471,693.35

1. Sale of energy and raw materials 1,170,412.23 2,973,949.19

2. Service fees and others 3,709,569.55 2,497,744.16

Total 783,167,007.89 838,814,941.70

(34) Taxes and surcharges

Item Amount for the current period Amount for the previous period

Urban maintenance and construction tax 2,226,775.68 2,259,682.78 Education surcharge 954,332.44 966,518.28 Local education surcharge 636,221.61 644,273.04 Vehicle and vessel use tax 10,031.88 12,133.86 Property tax 3,870,873.64 3,583,413.79Land use tax 1,523,036.91 1,299,012.85Environmental protection tax 396,843.28 226,500.74Others 412,636.05 453,713.07

Total 10,030,751.49 9,445,248.41

(35) Sales expenses

Item Amount for the current period Amount for the previous period

Transportation fees and trolley fares, etc. 601,656.40 1,127,493.87 Exhibition fees, advertising and marketing fees, etc. 28,048,963.15 4,343,379.20 Employee compensation 8,737,615.24 7,424,248.79 Information fees, service fees, etc. 133,461.88 1,691,098.60 Office expenses, travel expenses, entertainment expenses, rental expenses, etc. 1,733,309.27 2,399,545.84 Others 810,896.64 291,598.65 Total 40,065,902.58 17,277,364.95

Notes to Financial Statements Page 72

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(36) Management expenses

Item Amount for the current period Amount for the previous period

Employee compensation 38,698,534.74 41,798,013.81 Depreciation and amortization expenses 6,648,663.51 8,214,869.88 Office expenses, travel expenses, entertainment expenses, intermediary service fees

6,858,553.52 8,253,234.44, etc.

Sewage fees, testing fees, safety fees, etc. 2,479,015.49 1,601,094.85 Transportation fees, car fares, insurance fees, etc. 762,877.07 855,024.02 Litigation fees 1,125,527.95 10,019,209.07 Others 3,127,274.88 2,610,600.42

Total 59,700,447.16 73,352,046.49

(37) Research and development expenses

Item Amount for the current period Amount for the previous period

Raw materials and fuel 10,675,969.16 14,387,054.67 Water and electricity charges 2,238,255.52 3,664,802.39 Employee compensation 12,097,280.86 12,010,200.84 Depreciation and amortization expenses 4,709,155.43 5,881,173.66 Other expenses 1,155,952.79 1,031,266.25

Total 30,876,613.76 36,974,497.81

(38) Financial expenses

Item Amount for the current period Amount for the previous period

Interest expenses 941,505.85 585,858.91 Less: Interest income 1,357,016.04 1,096,356.27 Exchange gains and losses 133,283.06 -9,170,406.38 Handling fees 169,293.75 209,173.65

Total -112,933.38 -9,471,730.09

(39) Other income

Item Amount for the current period Amount for the previous period

Government subsidies 5,343,693.61 7,218,825.45 Additional input tax deduction 25,147.18 287,677.38

Notes to Financial Statements Page 73

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

Personal income tax withholding fees 101,782.23 165,098.33

Total 5,470,623.02 7,671,601.16

(40) Investment income

Item Amount for the current period Amount for the previous period Income from long-term equity investments calculated using equity method 4,277,572.16 4,727,889.17 Investment income from disposal of long-term equity investment 1,095,000.00 Investment income from trading financial assets during the holding period and disposal 26,282,636.78 33,856,242.77

Total 30,560,208.94 39,679,131.94

(41) Gains from changes in fair value

Sources of gains from changes in fair value Amount for the current period Amount for the previous period Trading financial assets -1,085,650.93 4,431,333.86

Total -1,085,650.93 4,431,333.86

(42) Credit impairment losses

Item Amount for the current period Amount for the previous period

Bad debt losses on notes receivable -87,250.00 1,072,250.00 Bad debt losses on accounts receivable -499,721.89 -694,515.93 Bad debt losses on other receivables 54,209.24 -20,520.43 Impairment losses on prepayments 408,538.97

Total -124,223.68 357,213.64

(43) Asset impairment losses

Item Amount for the current period Amount for the previous period

Inventory depreciation losses and contract performance cost impairment losses

1,404,894.53 1,678,223.51 lost

Impairment losses on fixed assets 14,469,756.93 15,262,791.63 Impairment losses on goodwill 517,416.38 Impairment losses on other non-current assets 652,741.40 827,600.00 Total 16,527,392.86 18,286,031.52

Notes to Financial Statements Page 74

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(44) Income from asset disposals

Item Amount for the current period Amount for the previous period Amount included in non-recurring gains and losses for the current period Fixed asset disposal income 185,682.47 -326,208.70 185,682.47

Total 185,682.47 -326,208.70 185,682.47

(45) Non-operating income

Included in non-recurring items for the current period Amount for the current period Amount for the previous period

Amount of profit and loss Scraping of non-current assets 515,672.28 - Income from the sale of carbon emission allowances 1,303,501.35 - Others 307,044.10 148,488.46 307,044.10

Total 307,044.10 1,967,662.09 307,044.10

(46) Non-operating expenses

Included in non-recurring items for the current period Amount for the current period Amount for the previous period

Amount of profit and loss Loss from damage and scrapping of non-current assets 185,454.28 610,486.74 185,454.28 Compensation and fines 817,641.67 2,913,983.05 817,641.67 External donations 500,000.00

Others 75,926.91 15,844.82 75,926.91

Total 1,079,022.86 4,040,314.61 1,079,022.86

(47) Income tax expenses

1. Income tax expense schedule

Item Amount for the current period Amount for the previous period

Current income tax expense 13,520,985.30 28,077,799.71 Deferred income tax expense -10,833,160.16 -16,924,772.12

Total 2,687,825.14 11,153,027.59

2. Adjustment process of accounting profits and income tax expenses

Item Amount for this period

Total profit 9,877,889.65 Income tax expense calculated according to statutory [or applicable] tax rate 1,481,683.45

Notes to Financial Statements Page 75

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Amount for this period

The impact of different tax rates applicable to subsidiaries -4,159,467.28 The impact of adjusting income taxes in previous periods 1,127,582.27 The impact of non-taxable income -623,005.95 The impact of non-deductible costs, expenses and losses 5,306,980.97 The impact of using deductible losses that have not been recognized in previous periods of deferred income tax assets -748,952.40 The impact of deductible temporary differences or deductible losses not recognized in the current period for deferred income tax assets 1,876,491.55 Others -1,573,487.47 Income tax expenses 2,687,825.14

(48) Earnings per share

1. Basic earnings per share

Basic earnings per share is calculated by dividing the consolidated net profit attributable to ordinary shareholders of the parent company by the weighted average number of outstanding ordinary shares of the company:

Item Amount for the current period Amount for the previous period

Consolidated net profit attributable to common shareholders of the parent company 22,493,429.92 61,766,022.21 Weighted average number of common shares outstanding of the company 289,319,733.33 293,154,716.67 Basic earnings per share 0.0777 0.2107 Including: Basic earnings per share from continuing operations 0.0777 0.2107

Basic earnings per share from discontinued operations

2. Diluted earnings per share

Diluted earnings per share is calculated by dividing the consolidated net profit attributable to ordinary shareholders of the parent company (diluted) by the weighted average number of outstanding ordinary shares of the company (diluted):

Item Amount for the current period Amount for the previous period

Consolidated net profit attributable to common shareholders of the parent company (diluted) 22,493,429.92 61,766,022.21 Weighted average number of common shares outstanding of the company (diluted) 289,319,733.33 294,682,500.00 Diluted earnings per share 0.0777 0.2096 Including: diluted earnings per share from continuing operations 0.0777 0.2096

Diluted earnings per share from discontinued operations

(49) Supplementary information on the income statement classified by nature of expenses

Operating costs, sales expenses, administrative expenses, R&D expenses and financial expenses in the income statement are classified according to their nature.

Notes to Financial Statements Page 76

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Listed below:

Item Amount for the current period Amount for the previous period

Raw materials, energy costs, etc. 468,107,655.99 486,031,247.21 Changes in finished goods and work in progress inventories 2,122,322.65 -19,736,042.75 Employee compensation expenses 116,452,375.18 115,689,266.67 Depreciation and amortization expenses 116,836,966.09 112,831,161.19 Operation and management expenses 45,635,961.47 33,081,825.44 Financial expenses -112,933.38 -9,471,730.09 Other expenses 32,171,734.31 70,823,193.83

Total 781,214,082.31 789,248,921.50

(50) Cash flow statement items

1. Cash related to operating activities

(1) Other cash received related to operating activities

Item Amount for the current period Amount for the previous period

Government subsidies 7,273,223.95 6,174,202.06 Interest income 1,357,016.04 1,096,356.27 Current accounts and others 5,804,994.25 2,390,084.98 Total 14,435,234.24 9,660,643.31

(2) Other cash paid related to operating activities

Item Amount for the current period Amount for the previous period

Period expenses paid 48,639,161.39 73,291,698.59 Current accounts paid and others 5,857,079.75 4,619,913.58

Total 54,496,241.14 77,911,612.17

2. Cash related to financing activities

(1) Other cash received related to financing activities

Item Amount for the current period Amount for the previous period

Fuyang Chemical Loan 600,000.00 Total 600,000.00

Notes to Financial Statements Page 77

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(2) Other cash paid related to financing activities

Item Amount for the current period Amount for the previous period

Funds for capital reduction by minority shareholders of subsidiaries 7,500,000.00 Funds for acquisition of equity interests of minority shareholders of subsidiaries 27,000,000.00

Repurchase of treasury shares 16,292,817.54 24,183,171.45

Total 43,292,817.54 31,683,171.45

(51) Supplementary information for cash flow statement

1. Supplementary information for cash flow statement

Supplementary information Amount for the current period Amount for the previous period

1. Adjust net profit to cash flow from operating activities

Net profit 7,190,064.51 59,707,704.78 Plus: credit impairment loss -124,223.68 357,213.64 Asset impairment loss 16,527,392.86 18,286,031.52 Fixed asset depreciation 113,332,466.25 109,414,917.99 Amortization of intangible assets 3,504,499.84 3,416,243.20 Losses on disposal of fixed assets, intangible assets and other long-term assets

-185,682.47 326,208.70 (Income is listed with "-")

Losses from scrapping of fixed assets (income is listed with "-") 185,454.28 94,814.46 Loss from changes in fair value (income is listed with "-") 1,085,650.93 -4,431,333.86 Financial expenses (income is listed with "-") 941,505.85 -8,057,684.54 Investment losses (income is listed with "-") -30,560,208.94 -39,679,131.94 Decrease in deferred income tax assets (increase is indicated with "-") -5,570,985.66 5,418,711.22 Increase in deferred income tax liabilities (decrease is indicated with "-") -5,245,990.38 -22,343,483.34 Decrease in inventory (increases are indicated by "-") 3,631,426.79 -25,280,041.79 Decrease in operating receivables (increases are indicated by "-") 39,577,796.94 36,676,919.33 Increase in operating payables (decreases are listed with "-") -5,205,748.18 -28,194,407.83 Others

Net cash flow generated from operating activities 139,083,418.94 105,712,681.54

2. Major investments and financing activities that do not involve cash receipts and payments

debt to capital

Convertible corporate bonds due within one year

Obtain right-of-use assets by assuming lease liabilities

Notes to Financial Statements Page 78

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Supplementary information Amount for the current period Amount for the previous period

3. Net changes in cash and cash equivalents

Closing balance of cash 230,585,726.41 320,405,292.96 Less: Opening balance of cash 320,405,292.96 294,228,203.22 Add: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents -89,819,566.55 26,177,089.74

2. Composition of cash and cash equivalents

Item Ending Balance Previous Year Ending Balance

1. Cash 230,585,726.41 320,405,292.96 Of which: Cash on hand 180,291.64 246,845.40 Bank deposits that can be used for payment at any time 229,175,817.97 260,327,127.09

Other monetary funds available for payment at any time 1,229,616.80 59,831,320.47

2. Balance of cash and cash equivalents at the end of the period 230,585,726.41 320,405,292.96 Among them: held but cannot be used by the parent company or other subsidiaries within the group

Cash and cash equivalents used

(52) Foreign currency monetary items

1. Foreign currency monetary items

Item Foreign currency balance at the end of the period Conversion exchange rate Monetary funds converted into RMB at the end of the period 63,191,053.29 Including: US dollars 8,986,336.12 7.0288 63,163,159.31

HKD 30,883.44 0.9032 27,893.98 Accounts receivable 80,381,185.16 Including: USD 11,435,975.58 7.0288 80,381,185.16 Other receivables 71,974.91 Including: USD 10,240.00 7.0288 71,974.91Accounts payable 3,738,074.87 Including: USD 531,822.63 7.0288 3,738,074.87

Notes to Financial Statements Page 79

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

6. R&D expenditures

(1) R&D expenditures

Item Amount for the current period Amount for the previous period

Raw materials and fuel 10,675,969.16 14,387,054.67 Water and electricity charges 2,238,255.52 3,664,802.39 Employee compensation 12,097,280.86 12,010,200.84 Depreciation and amortization expenses 4,709,155.43 5,881,173.66 Other expenses 1,155,952.79 1,031,266.25

Total 30,876,613.76 36,974,497.81 Including: Expenditure R&D expenditure 30,876,613.76 36,974,497.81

Capitalized R&D expenditures

7. Changes in consolidation scope

In this period, the newly established subsidiaries Hubei He'an Biotechnology Co., Ltd. and the subsidiary companies Fuweile Pet Food (Wuhan) Co., Ltd., Yongan Healthy Nutritional Food (Wuhan) Co., Ltd., and Meian Nutritional Food (Wuhan) Co., Ltd. are included in the scope of consolidated statements.

8. Interests in other entities

(1) Interests in subsidiaries

1. Structure of enterprise groups

Shareholding ratio (%)

Name of subsidiary company Registered capital Main place of business Place of registration Nature of business How to obtain

direct indirect

Yongan Health Medicine Scientific Research

110 million

Industry (Wuhan) has Wuhan, China and technical services 100.00 established

yuan renminbi

Co., Ltd. Business

Yongan Meishen (Wu

8 million yuan wholesale and retail

Han) Brand Management Wuhan, China 80.00 Established

Renminbi Sales

Ltd.

Yongan Kangjian (fragrant

HK1 million leasing and commercial

Hong Kong) Investment Co., Ltd. China Hong Kong 100.00 Established

Yuan service industry

company

Wuhan Ya'an Investment

100 million leasing and commercial

Asset Management Co., Ltd. Wuhan, China 100.00 Established

RMB business service industry

company

Notes to Financial Statements Page 80

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Shareholding ratio (%)

Name of subsidiary company Registered capital Main place of business Place of registration Nature of business How to obtain

direct indirect

Ya'an Agricultural Investment

US$600,000

Capital (Cambodia) Cambodia Cambodia Plantation Industry 100.00 Establishment

Yuan

Ltd.

Scientific research non-commonly controlled Hubei Ling'anke 16.67 million yuan

China Qianjiang and Technical Services 100.00 Zhixia Enterprise Technology Co., Ltd. RMB

business merger

Qianjiang Qian Hydrogen is not under the same control

60 million yuan

Energy development has China Qianjiang Manufacturing 60.00 Enterprises under the system

RMB

Ltd. Merger

hubei anles

5 million yuan

Trading Co., Ltd. Wuhan, China Wholesale Industry 51.00 Established

RMB

Division

Hubei He Ansheng Technology Promotion

10 million yuan

Biotechnology Co., Ltd. Qianjiang, China and Application Services 75.00 Established

RMB

company business

Fowler Pets

2 million yuan

Food (Wuhan) China Wuhan Manufacturing 100.00 Establishment

RMB

Ltd.

Wing On Health Camp

5 million yuan food manufacturing

Yang Food (Wuhan, China 100.00 Established

RMB industry

Han) Co., Ltd.

Market America Nutritional Food

5 million yuan food manufacturing

Pin(Wuhan) has Wuhan, China 100.00 Established

RMB industry

Ltd.

2. Important non-wholly owned subsidiaries

Minority shares in this issue

Minority shareholders belong to the minority in the current period. The name of the subsidiary of the minority shareholder at the end of the period has declared distribution.

Shareholding ratio Shareholder’s profit and loss Equity balance

dividend

Qianjiang Qian Hydrogen Energy Development Co., Ltd.

40.00% -3,004,867.32 -22,325,782.71 Division

Notes to Financial Statements Page 81

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

3. Main financial information of important non-wholly owned subsidiaries

Ending balance Last year's end balance

Subsidiary name Non-current Non-current name Current assets Non-current assets Total assets Current liabilities Current liabilities Total liabilities Current assets Non-current assets Total assets Current liabilities Current liabilities Total liabilities

Debt Debt Qianjiang Qi'an

Hydrogen energy development

6,465,851.43 16,998,915.18 23,464,766.61 79,279,223.39 79,279,223.39 7,822,024.60 22,470,371.98 30,292,396.58 78,665,547.24 78,665,547.24 Zhanzhan Co., Ltd.

Division

Amount of current period Amount of previous period

Subsidiary name Cash from operating activities Cash from operating activities Operating income Net profit Total comprehensive income Operating income Net profit Total comprehensive income

Flow Flow Qianjiang Qian Hydrogen Energy Development

1,023,577.03 -7,512,168.30 -7,512,168.30 -851,965.96 1,574,715.18 -22,707,067.23 -22,707,067.23 -2,058,920.78Zhan Co., Ltd.

(2) Transactions in which the ownership share of the subsidiary changes and the subsidiary is still controlled

1. The impact of the transaction on minority shareholders’ equity and owner’s equity attributable to the parent company

Lingan Technology purchase cost

—Cash 27,000,000.00

Notes to Financial Statements Page 82

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Ling'an Technology minus: Share of net assets of subsidiaries calculated based on the proportion of equity acquired/disposed of 35,907,193.24 Difference 8,907,193.24 Including: Adjusted capital reserve 8,907,193.24

(3) Interests in joint arrangements or associated enterprises

1. Associates

Shareholding ratio (%) Whether the joint venture or joint venture has a name for the company's activities Main place of business Registration place Nature of business Accounting office of corporate investment Direct Indirect Strategic management method

Special equipment manufacturing

Zhejiang Shuangzi Intelligent Equipment Co., Ltd. Hangzhou City Hangzhou City 18.33 Equity method No

Industry

Hubei Ling'an Chemical Co., Ltd. Qianjiang City Qianjiang City Manufacturing 24.89 Equity method No Huanggang Yongan Daily Chemical Co., Ltd. Huanggang City Huanggang City Manufacturing 6.52 Equity method No

research and testing

Wuhan Low Dimensional Materials Research Institute Co., Ltd. Wuhan City Wuhan City 40.00 Equity method No development

Notes to Financial Statements Page 83

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Summary financial information of associates

Ending balance/Amount of the current period Ending balance of the previous year/Amount of the previous period Associates:

Total book value of investments 74,455,305.70 74,547,492.91 Total of the following items calculated based on shareholding ratio

—Net profit 4,277,572.16 4,805,928.39 —Other comprehensive income

—Total comprehensive income 4,277,572.16 4,805,928.39

9. Government subsidies

(1) Government subsidies included in current profits and losses

Type Amount of current period Amount of previous period

Government subsidies related to assets 3,172,251.89 2,001,252.82 Government subsidies related to income 2,171,441.72 5,217,572.63 Total 5,343,693.61 7,218,825.45

Notes to Financial Statements Page 84

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(2) Liability items involving government subsidies

New subsidy in this period This period is included in the business This period is transferred to others This period is used to offset costs in this period Asset-related/liability items The ending balance of the previous year Other changes Ending balance

Amount Amount of external income Amount of income Amount of expenses Income-related and asset-related deferred income 7,457,212.42 5,000,000.00 3,172,251.89 9,284,960.53

government subsidies

Notes to Financial Statements Page 85

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

10. Risks related to financial instruments

(1) Various risks arising from financial instruments

The company faces various financial risks in the course of its operations: credit risk, liquidity risk and market risk (including exchange rate risk, interest rate risk and other price risks). The above financial risks and the risk management policies adopted by the Company to reduce these risks are as follows:

The board of directors is responsible for planning and establishing the company's risk management structure, formulating the company's risk management policies and relevant guidelines, and supervising the implementation of risk management measures. The Company has formulated risk management policies to identify and analyze the risks faced by the Company. These risk management policies clearly define specific risks and cover many aspects such as market risk, credit risk and liquidity risk management. The Company regularly evaluates changes in the market environment and the Company's operating activities to determine whether to update risk management policies and systems. The Company's risk management is carried out by the Risk Management Committee in accordance with policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates and avoids relevant risks through close cooperation with other business departments of the Company. The Company's internal audit department conducts regular audits on risk management controls and procedures and reports the audit results to the Company's Audit Committee.

The Company diversifies financial instrument risks through appropriate diversification of investments and business portfolios, and reduces risks concentrated in a single industry, specific region or specific counterparty by formulating corresponding risk management policies.

1. Credit risk

Credit risk refers to the risk that the counterparty fails to perform its contractual obligations, causing the company to suffer financial losses. The Company's credit risk mainly arises from monetary funds, notes receivable, accounts receivable, receivable financing, contract assets, other receivables, debt investments, other debt investments and financial guarantee contracts, as well as debt instrument investments and derivative financial assets that are measured at fair value and whose changes are included in current profits and losses that are not included in the scope of impairment assessment. On the balance sheet date, the book value of the Company's financial assets represents its maximum credit risk exposure.

The company's monetary funds mainly consist of bank deposits deposited in state-owned banks and other large and medium-sized listed banks with good reputations and high credit ratings. The company believes that there are no significant credit risks and there will be almost no major losses caused by bank defaults.

In addition, the Company sets relevant policies to control credit risk exposure for notes receivable, accounts receivable, receivable financing, contract assets and other receivables. 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.

Notes to Financial Statements Page 86

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Liquidity risk

Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligations settled by delivering cash or other financial assets.

The Company's policy is to ensure that sufficient cash is available to meet its debt obligations as they fall due. Liquidity risk is centrally controlled by the Company's financial department. The Finance Department ensures that the company has sufficient funds to repay its debt under all reasonable forecasts by monitoring cash balances, marketable securities that are readily liquidable, and rolling forecasts of cash flows over the next 12 months. At the same time, we continue to monitor whether the company complies with the provisions of the borrowing agreement and obtain commitments from major financial institutions to provide sufficient standby funds to meet short-term and long-term funding needs.

The Company's various financial liabilities are listed as follows based on undiscounted contractual cash flows by maturity date:

Ending balance

Project 4 years and undiscounted contract fee

Within 1 year 1-2 years 2-3 years 3-4 years Book value

Total amount

short term loan

750,000.00 750,000.00 750,000.00

Accounts payable

115,570,758.96 115,570,758.96 115,570,758.96 models

Other should

7,508,018.13 7,508,018.13 7,508,018.13 Payment

Total 123,828,777.09 123,828,777.09 123,828,777.09

Balance at the end of the previous year

Project 4 years and undiscounted contract fee

Within 1 year 1-2 years 2-3 years 3-4 years Book value

Total amount

short term loan

39,526,078.47 39,526,078.47 39,526,078.47

Accounts payable

124,018,386.07 124,018,386.07 124,018,386.07

Other should

8,904,431.95 8,904,431.95 8,904,431.95 Payment

Total 172,448,896.49 172,448,896.49 172,448,896.49

3. Market risk

Market risk of financial instruments refers to the changes in the fair value or future cash flows of financial instruments due to market prices.

Notes to Financial Statements Page 87

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Risks of fluctuations due to changes in market conditions, including interest rate risk, exchange rate risk and other price risks.

(1) Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market interest rates.

Interest-bearing financial instruments with fixed interest rates and floating interest rates expose the Company to fair value interest rate risk and cash flow interest rate risk respectively. The Company determines the ratio of fixed-rate and floating-rate instruments based on market conditions, and maintains an appropriate mix of fixed-rate and floating-rate instruments through regular review and monitoring. When necessary, the Company will use interest rate swap instruments to hedge interest rate risks.

On December 31, 2025, with other variables held constant, if the borrowing rate calculated on a floating rate basis increases or decreases by 100 basis points, the company's net profit will decrease or increase by RMB 207,292.71 (December 31, 2024: RMB 167,349.00).

(2) Exchange rate risk

Exchange rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in foreign exchange rates.

The Company continuously monitors the scale of foreign currency transactions and foreign currency assets and liabilities to minimize the foreign exchange risks it faces. In addition, the company may also sign forward foreign exchange contracts or currency swap contracts to avoid exchange rate risks. During this period and the previous period, the Company did not sign any forward foreign exchange contract or currency swap contract. The exchange rate risk faced by the Company mainly comes from financial assets and financial liabilities denominated in US dollars. The amounts of foreign currency financial assets and foreign currency financial liabilities converted into RMB are listed as follows:

Ending balance Last year's end balance

Project

U.S. dollar Other foreign currencies Total U.S. dollars Other foreign currencies Total monetary funds 63,163,159.31 27,893.98 63,191,053.29 52,640,619.78 28,597.98 52,669,217.76 Accounts receivable 80,381,185.16 80,381,185.16 108,865,049.29 1,250,470.31 110,115,519.60 Other receivables 71,974.91 71,974.91 1,584,933.01 1,584,933.01 Accounts payable -3,738,074.87 -3,738,074.87 -10,724,560.14 -10,724,560.14Other payables -2,679.98 -2,679.98Total 139,878,244.51 27,893.98 139,906,138.49 152,363,361.96 1,279,068.29 153,642,430.25 On December 31, 2025, with all other variables held constant, if the RMB appreciates or depreciates by 5% against the US dollar, the company will reduce or increase its net profit by RMB 5,946,010.89 (December 31, 2024: 6,510,222.61 yuan).

11. Disclosure of fair value

The input values used in fair value measurement are divided into three levels:

Notes to Financial Statements Page 88

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

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.

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.

(1) Closing fair value of assets and liabilities measured at fair value

Closing fair value

third level

Project First Level Fairness Second Level Fairness

Fair value Total fair value measurement Value measurement

Measurement

1. Continuous fair value measurement

◆Trading financial assets

28,041,265.15 659,844,062.79 687,885,327.94 1. Measured at fair value and its changes

28,041,265.15 659,844,062.79 687,885,327.94 Financial assets included in current profits and losses

(1) Equity instrument investment 28,041,265.15 28,041,265.15

(2) Financial products 659,844,062.79 659,844,062.79

(2) Continuous and non-continuous second-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters

Important parameters

Item Closing fair value Valuation techniques

Qualitative information Quantitative information is based on the interest accrual period as agreed in the contract (2) Financial products 659,844,062.79

Adjust fair value rate

12. Related parties and related transactions

(1) Information about the company’s parent company

The ultimate controlling party of the company is: Chairman Mr. Chen Yong directly or indirectly holds 23.07% of the company's shares and is the actual controller of the company.

(2) Information about the company’s subsidiaries

For details of the Company's subsidiaries, please refer to "Eight. Interests in Other Entities" in this note.

Notes to Financial Statements Page 89

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(3) The Company’s joint ventures and associated enterprises

For details of the Company's important joint ventures or associates, please refer to "Eights in Other Entities" in this note.

The situation of other joint ventures or associates that have related party transactions with the company in the current period, or related party transactions with the company in previous periods that resulted in balances is as follows:

Name of joint venture or associated enterprise Relationship with the Company Zhejiang Shuangzi Intelligent Equipment Co., Ltd. Associated enterprise

Hubei Ling'an Chemical Co., Ltd. Associate Company

Huanggang Yongan Daily Chemical Co., Ltd. Associate Company

Wuhan Low Dimensional Materials Research Institute Co., Ltd. Associate Company

(4) Information about other related parties

Names of other related parties Relationship between other related parties and the company Huanggang Yongan Pharmaceutical Co., Ltd. Enterprises controlled by the company’s shareholders and the company’s actual controller Enterprises controlled by the company’s actual controller, the company holds its Huanggang Yongan Daily Chemical Co., Ltd.

6.52% equity.

Hubei Tianan Daily Chemical Co., Ltd. An enterprise controlled by the actual controller of the company

Huanggang Yongan Medical Equipment Co., Ltd. An enterprise controlled by the actual controller of the company

Hubei Yongbang Engineering Technology Co., Ltd. An enterprise controlled by the actual controller of the company

Dong Shihao, a senior executive of the company, serves as executive affairs Wuhan Amber Trade Center Partnership (Limited Partnership)

partner's firm

Mr. Chen Yong, the actual controller of the company, is appointed as deputy director of Zhejiang Shuangzi Zhejiang Shuangzi Intelligent Equipment Co., Ltd.

Chairman, the company holds 18.33% of its shares. Mr. Chen Yong, the actual controller of the company, serves as the director of Wuhan Low Dimensional Materials Research Institute Co., Ltd.

Chairman, the company holds 40% of its shares. Hong Rengui, Chen Zidi, Zhao Chunxiang, Zhang Bing, Guo Xiaohua, Xia Sha, Dong

Shihao, Fang Xiquan, Wang Zhihua, Ye Wei, Xiong Shengjie, Li Shaobo, Dong Company directors and senior managers

Wei, Wu Qiong, Deng Yonghong, Peng Bo, Wu Xu, Huang Ningjun

(5) Related transactions

1. Related transactions related to the purchase and sale of goods, provision and receipt of services

Procurement of goods/service acceptance form

Whether the approved transaction amount of related-party transactions exceeds the transaction amount

Related parties Amount for the current period Contents of the amount for the previous period Degree (if applicable) Quota (if applicable)

Notes to Financial Statements Page 90

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Whether the approved transaction amount of related-party transactions exceeds the transaction amount

Related parties Amount for the current period Amount for the previous period

Content Degree (if applicable) Amount (if applicable)

Hubei Yongbang Engineering Technology Equipment, Materials

4,119,603.55 20 million yuan No 8,753,702.12 Co., Ltd. Material

Hubei Tianan Daily Chemical Industry

Material -1,207,851.72 N/A N/A 2,055,618.42 Co., Ltd.

Zhejiang Shuangzi Intelligent Equipment

Equipment 6,297,336.78 10 million yuan No 365,155.01 Co., Ltd.

Hubei Ling'an Chemical Co., Ltd. Equipment and materials

77,029.92

Company information

Wuhan low-dimensional materials research

Service 679.25

Institute Co., Ltd.

List of goods sold/services provided

Related parties Related transaction content Amount for the current period Amount for the previous period Hubei Ling'an Chemical Co., Ltd. Sales of goods 2,833,639.75 6,013,843.26 Hubei Tian'an Daily Chemical Co., Ltd. Sales of goods 27,876,736.29 22,819,999.19 Huanggang Yong'an Daily Chemical Co., Ltd. Sales of goods 253,058.41

2. Related leasing situation

As a lessor, our company:

Name of the lessee Type of leased assets Lease income recognized in the current period Lease income recognized in the previous period Hubei Tianan Daily Chemical Co., Ltd. Houses and buildings 111,278.20 164,886.94 Hubei Ling'an Chemical Co., Ltd. Houses and buildings 4,587.16

3. Related guarantees

The company serves as the guarantor:

Whether the guarantee has been fulfilled by the guaranteed party, the guarantee amount, the guarantee starting date, the guarantee expiry date

After the trip, Hubei Ling'an Technology Co., Ltd.

30,000,000.00 2022/12/27 2025/12/26 Yes

Ltd.

Notes to Financial Statements Page 91

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

4. Asset transfer and debt restructuring of related parties

Related parties Related transaction content Amount for the current period Amount for the previous period Hubei Tianan Daily Chemical Co., Ltd. Sales of equipment 544,572.76 Hubei Tianan Daily Chemical Co., Ltd. Purchase of equipment 529,682.90

5. Remuneration of key management personnel

Item Amount for the current period Amount for the previous period Salary of key management personnel 12.0274 million yuan 14.6907 million yuan

(6) Unsettled items such as receivables and payables from related parties

1. Items receivable

Closing balance Last year's closing balance item name Related parties

Book balance Bad debt provision Book balance Bad debt provision Accounts receivable

Hubei Tianan Daily Chemical Industry

155,548.32 7,777.42 3,409,930.40 170,496.52

Ltd.

Receivables Financing

Hubei Tianan Daily Chemical Industry

2,077,013.64 327,690.00

Ltd.

Other receivables

Hubei Tianan Daily Chemical Industry

38,721.80 1,936.09

Ltd.

2. Payable items

Project name Related party Book balance at the end of the period Book balance at the end of the previous year Accounts payable

Zhejiang Shuangzi Intelligent Equipment Co., Ltd.

3,114,000.00 395,175.35 Company

Hubei Tianan Daily Chemical Co., Ltd.

1,520,344.08Company

Hubei Yongbang Engineering Technology Co., Ltd.

3,459,189.17 4,558,225.36Company

Notes to Financial Statements Page 92

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Project name Related party Book balance at the end of the period Book balance at the end of the previous year Other payables

Hubei Yongbang Engineering Technology Co., Ltd.

74,800.00 56,550.00Company

Hubei Ling'an Chemical Co., Ltd. 1,000,000.00 Contract liability

Hubei Ling'an Chemical Co., Ltd. 582,364.13

13. Commitments and contingencies

(1) Important commitments

The Company has no important commitments that need to be disclosed.

(2) Contingencies

In October 2021, VITAWORKSIP, LLC and VITAWORKS, LLC acted as plaintiffs in a lawsuit against Yongan Pharmaceutical’s taurine product customers GLANBIANUTRITIONALS (NA), INC and PRIN. In the patent infringement litigation case of OVAUS, LLC, a motion was submitted to the U.S. Federal District Court in Delaware to add Yongan Pharmaceutical as a defendant, suing Yongan Pharmaceutical for infringement of its U.S. patent No. 9745258 (Patent No. 258) by its taurine products. No. 9815778 (Patent No. 778), No. 9926265 (Patent No. 265), No. 10040755 (Patent No. 755), and No. 10961183 (Patent No. 183). The patents mainly involve the manufacturing process of taurine. On January 21, 2022, Yongan Pharmaceutical received a civil litigation summons from the U.S. Federal District Court of Delaware and a complaint regarding patent infringement served by the Hanjiang Intermediate People's Court of Hubei Province.

On February 5, 2024, the U.S. Federal District Court of Delaware ruled that Yongan Pharmaceutical and its customers did not infringe any of the five patents claimed by the plaintiffs VITAWORKSIP, LLC and VITAWORKS, LLC, and were required to compensate Yongan Pharmaceutical for part of its attorney fees in accordance with the court order.

On March 1, 2024, the plaintiffs VITAWORKSIP, LLC and VITAWORKS, ILC filed an appeal in the U.S. Court of Appeals for the Federal Circuit.

On December 31, 2024, VITAWORKSIP, ILC filed for bankruptcy in the Bankruptcy Court of New Jersey, U.S., and the U.S. Court of Appeals for the Federal Circuit suspended the appeal case process due to the bankruptcy proceedings.

14. Events after the balance sheet date

On April 15, 2026, the 14th meeting of the company's seventh board of directors reviewed and approved the "Profit Distribution Plan for 2025". The company plans to use the existing total share capital of 294,682,500 shares to deduct 5,537,350 from the special securities account for repurchase. Based on the post-share capital of 289,145,150 shares, a cash dividend of 1 yuan (tax included) will be distributed to all shareholders for every 10 shares. It is estimated that a cash dividend of 28,914,515.00 yuan (tax included) will be distributed. The remaining distributable profits will be transferred to the next year. No shares will be transferred.

Notes to Financial Statements Page 93

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

increase. After the disclosure of this profit distribution plan and before the implementation of equity distribution, if the total share capital of the company changes due to the exercise of equity incentives, conversion of convertible bonds, share repurchase, etc., the total distribution amount will be adjusted according to the principle of unchanged distribution ratio, and the actual total amount of dividends will be subject to the implementation of subsequent equity distribution. The plan still needs to be submitted to the company's 2025 annual shareholders' meeting for review and approval before it can be implemented.

15. Capital Management

Ensure the Company’s ability to continue as a going concern to continue to provide returns to shareholders and other stakeholders;

Price products and services accordingly based on risk levels to provide adequate returns to shareholders.

The Company sets an amount of capital proportional to risks and manages and adjusts the capital structure based on changes in the economic environment and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce liabilities. The asset-liability ratios at the end of 2025 and 2024 are: 9.94% and 11.55% respectively.

16. Other important matters

As of December 31, 2025, the company has no other important matters that need to be disclosed.

17. Notes on main items of the parent company’s financial statements

(1) Accounts receivable

1. Accounts receivable are disclosed based on aging

Aging Closing balance Last year’s closing balance

Within 1 year (including 1 year) 92,860,588.96 129,757,005.11 1 to 2 years 15,474.38 9,051.94 2 to 3 years 1,826.12 40,391.79 More than 3 years 1,071,484.93 1,043,922.81 Subtotal 93,949,374.39 130,850,371.65 Less: Bad debt provision 5,727,441.13 7,061,070.13 Total 88,221,933.26 123,789,301.52

Notes to Financial Statements Page 94

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Accounts receivable are classified and disclosed according to the bad debt accrual method.

Ending balance Last year's end balance

Book balance Bad debt provision Book balance Bad debt provision category

Proportion Provision Ratio Book Value Proportion Provision Ratio Book Value Amount Amount Amount Amount

(%) Example (%) (%) Example (%) Bad provision is calculated individually

1,083,925.71 1.15 1,083,925.71 100.00 74,939.07 0.06 74,939.07 100.00 Account provision

According to credit risk

Provision for bad debts by the acquisition group 92,865,448.68 98.85 4,643,515.42 5.00 88,221,933.26 130,775,432.58 99.94 6,986,131.06 5.34 123,789,301.52 Account provision

Among them:

Aging analysis method 92,865,448.68 98.85 4,643,515.42 5.00 88,221,933.26 130,746,432.58 99.92 6,986,131.06 5.34 123,760,301.52 Group within the consolidation scope

29,000.00 0.02 29,000.00 combined

Total 93,949,374.39 100.00 5,727,441.13 88,221,933.26 130,850,371.65 100.00 7,061,070.13 123,789,301.52

Notes to Financial Statements Page 95

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Combined accrual items:

Ending balance

Name

Accounts receivable Bad debt provision Proportion (%) Within 1 year 92,860,588.96 4,643,029.45 5.00 1-2 years 4,859.72 485.97 10.00

Total 92,865,448.68 4,643,515.42

3. Bad debt provisions accrued, reversed or recovered in the current period

Changes in balance at the end of the previous year and the current period

Category Ending Balance

Amount Provision Recovery or reversal Write-off or write-off Other changes

Single determination 74,939.07 1,008,986.64 1,083,925.71 Aging analysis

6,986,131.06 2,342,615.64 4,643,515.42

Total 7,061,070.13 1,008,986.64 2,342,615.64 5,727,441.13

4. Accounts receivable and contract assets with the top five closing balances collected by debtors

Accounting for accounts receivable and accounts receivable, bad debts and accounts receivable combined

Accounts receivable at the end of the period. Contract assets at the end of the period. Contract assets at the end of the period. Reserve and contract capital unit names. Same assets at the end of the period.

Balance Balance Total balance amount of production impairment provision period

Proportion (%) Ending balance Customer 1 17,579,208.04 17,579,208.04 18.71 878,960.40 Customer 2 13,956,859.65 13,956,859.65 14.86 697,842.98 Customer 3 5,782,509.41 5,782,509.41 6.15 289,125.47Customer 4 3,858,747.94 3,858,747.94 4.11 192,937.40Customer 5 3,322,865.20 3,322,865.20 3.54 166,143.26

Total 44,500,190.24 44,500,190.24 47.37 2,225,009.51

(2) Other receivables

Item Closing balance Interest receivable on the closing balance of the previous year

Dividends receivable

Other receivables 141,949,237.28 109,505,632.30 Total 141,949,237.28 109,505,632.30

Notes to Financial Statements Page 96

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

1. Other receivables

(1) Disclosure based on aging

Aging Closing balance Last year's closing balance within 1 year (including 1 year) 42,507,427.97 8,478,286.78 1 to 2 years 4,322,986.40 10,626,405.84 2 to 3 years 10,626,405.84 103,471,513.19 More than 3 years 123,729,859.29 20,431,136.11 Subtotal 181,186,679.50 143,007,341.92 Less: bad debt provision 39,237,442.22 33,501,709.62 Total 141,949,237.28 109,505,632.30

Notes to Financial Statements Page 97

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(2) Classified disclosure according to bad debt accrual method

Ending balance Last year's end balance

Book balance Provision for bad debts Book balance Provision for bad debts

Category

Proportion Provision Ratio Book Value Proportion Provision Ratio Book Value Amount Amount Amount Amount

(%) Example (%) (%) Example (%) Provision is made individually

54,533,705.73 30.10 38,947,493.53 71.42 15,586,212.20 52,643,521.53 36.81 32,996,984.59 62.68 19,646,536.94 Bad debt provision

by credit risk

Total characteristic combination 126,652,973.77 69.90 289,948.69 0.23 126,363,025.08 90,363,820.39 63.19 504,725.03 0.56 89,859,095.36 Provision for bad debts

Among them:

Aging analysis method 4,062,973.77 2.24 289,948.69 7.14 3,773,025.08 4,773,820.39 3.34 504,725.03 10.57 4,269,095.36Within the consolidated scope

122,590,000.00 67.66 122,590,000.00 85,590,000.00 59.85 85,590,000.00 combination

Total 181,186,679.50 100.00 39,237,442.22 141,949,237.28 143,007,341.92 100.00 33,501,709.62 109,505,632.30

Notes to Financial Statements Page 98

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Important other receivables for which bad debt provisions are made individually:

Ending balance Name of last year's end balance Provision ratio Provision basis

Book balance Bad debt provision Book balance Bad debt provision (%) Data

No expected

Subsidiary 2 52,663,755.84 37,077,543.64 70.40 51,019,587.56 31,373,050.62 Law recovery

The court ruled

Still after the decision

Individual 1 1,405,760.00 1,405,760.00 100.00 1,437,680.00 1,437,680.00 Unable to collect

return

Total 54,069,515.84 38,483,303.64 52,457,267.56 32,810,730.62

Provision for bad debts based on combination of credit risk characteristics:

Combined accrual items:

Ending balance

Name

Other receivables Bad debt provision Ratio of provision (%) Within 1 year 3,862,973.77 193,148.69 5.00 1-2 years 6,000.00 600.00 10.00 2-3 years 4,000.00 1,200.00 30.00 More than 3 years 190,000.00 95,000.00 50.00Total 4,062,973.77 289,948.69

(3) Bad debt provision accrual

The first stage The second stage The third stage

Lifetime forecasts Lifetime forecasts

Bad debt provision Estimated total period credit losses in the next 12 months (unexpected credit losses (already

period credit losses

Credit impairment occurs) Credit impairment occurs)

Balance at the end of the previous year 504,725.03 32,996,984.59 33,501,709.62 Balance at the end of the previous year in the current period

--Transfer to the second stage

--Transfer to the third stage

--Return to the second stage

--Return to the first stage

Notes to Financial Statements Page 99

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

The first stage The second stage The third stage

Lifetime forecasts Lifetime forecasts

Bad debt provision Estimated total period credit losses in the next 12 months (unexpected credit losses (already

period credit losses

Credit impairment occurs) Credit impairment occurs)

Provision in this period 5,950,508.94 5,950,508.94 Transfer in this period 214,776.34 214,776.34 Write-off in this period

Write-off in this period

Other changes

Ending balance 289,948.69 38,947,493.53 39,237,442.22

(4) Bad debt provisions accrued, reversed or recovered in the current period

Amount of changes in the current period

Remaining at the end of last year

Category Recovery or transfer Write-off or verification Closing balance Provision Other changes

Return sales

By item

Provision for bad accounts 32,996,984.59 5,950,508.94 38,947,493.53

Aging points

504,725.03 214,776.34 289,948.69 Analysis method

Total 33,501,709.62 5,950,508.94 214,776.34 39,237,442.22

(6) Classification by nature of payment

Nature of payment Book balance at the end of the period Book balance at the end of the previous year

Subsidiary borrowings 175,253,755.84 136,609,587.56 Deposits and guarantees 425,650.00 425,650.00 Employee borrowings 376,275.82 330,886.78 Export tax rebate 3,289,172.58 3,746,844.84 Asset sales 1,405,760.00 1,437,680.00 Others 436,065.26 456,692.74 Total 181,186,679.50 143,007,341.92

Notes to Financial Statements Page 100

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(7) Other receivables with top five closing balances based on debtors

Accounting for other receivables

Name of the unit at the end of the bad debt provision Nature of the payment Closing balance Aging of items Total closing balance

Balance

Proportion of counts (%)

Subsidiary 1 Subsidiary borrowings 85,590,000.00 More than 3 years 47.24

1-2 years, 2-3

Subsidiary 2 Subsidiary borrowings 52,663,755.84 29.07 37,077,543.64

years, more than 3 years

Subsidiary 3 Subsidiary borrowings 37,000,000.00 Within 1 year 20.42

Government department 1 Export tax rebate 3,289,172.58 Within 1 year 1.82 164,458.63 Individual 1 Asset sales 1,405,760.00 More than 3 years 0.78 1,405,760.00

Total 179,948,688.42 99.33 38,647,762.27

(3) Long-term equity investment

Ending balance Last year's end balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value to subsidiaries

274,804,909.17 42,859,711.28 231,945,197.89 240,304,909.17 42,859,711.28 197,445,197.89Investment

For joint ventures and joint ventures

Investment in private enterprises 144,133,402.79 69,678,376.72 74,455,026.07 139,669,531.89 69,678,376.72 69,991,155.17 capital

Total 418,938,311.96 112,538,088.00 306,400,223.96 379,974,441.06 112,538,088.00 267,436,353.06

Notes to Financial Statements Page 101

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

1. Investment in subsidiaries

Increases and decreases in the current period

Balance at the end of the previous year (Account impairment provision at the end of the previous year Ending balance (book value of the invested unit's impairment provision for the current period) Balance at the end of the period Additional investment Decrease in investment Other value)

Prepare

Yongan Health Pharmaceutical (Wuhan

110,419,570.64 110,419,570.64 Han) Co., Ltd.

Ya'an Agricultural Investment (Cambodia)

6,009,791.28 6,009,791.28Puzhai) Co., Ltd.

Wuhan Ya'an Investment Management

53,823,680.80 53,823,680.80 Management Co., Ltd.

Hubei Ling'an Technology Co., Ltd.

32,830,235.48 27,000,000.00 59,830,235.48 Co., Ltd.

US-Shenzhen (Wuhan) Trade

371,710.97 371,710.97 Co., Ltd.

Qianjiang Qian Hydrogen Energy

36,849,920.00 36,849,920.00 Development Co., Ltd.

Hubei He'an Biological Science and Technology Co., Ltd.

7,500,000.00 7,500,000.00 Technology Co., Ltd.

Total 197,445,197.89 42,859,711.28 34,500,000.00 231,945,197.89 42,859,711.28

Notes to Financial Statements Page 102

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

2. Investment in associates and joint ventures

Increases and decreases in the current period

Balance at the end of the previous year Impairment provision for the previous year Announcement of cash distribution Closing balance (account Impairment provision period invested unit reduced investment Recognized under the equity method Other comprehensive Other equity Provision for impairment

(Book value) Year-end balance Additional investment (Fund Dividends or Interests Other book value) Ending balance of capital Investment gains and losses Provision for change in income adjustment

Run

1. joint venture

2. Associates

Zhejiang Shuangzizhi

Energy Equipment Co., Ltd. 35,833,460.52 1,343,230.88 37,176,691.40 Company

Wuhan low-dimensional materials

Materials Research Institute has 69,678,376.72 69,678,376.72 Co., Ltd.

Huanggang Yongan Day

Yong Chemical Co., Ltd. 34,157,694.65 3,120,640.02 37,278,334.67 Company

Subtotal 69,991,155.17 69,678,376.72 4,463,870.90 74,455,026.07 69,678,376.72Total 69,991,155.17 69,678,376.72 4,463,870.90 74,455,026.07 69,678,376.72

Notes to Financial Statements Page 103

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

3. Impairment testing of long-term equity investments

The recoverable amount is determined based on the present value of expected future cash flows:

Key parameters in the forecast period Key parameters in the stable period Key parameters in the stable period Book value Recoverable amount Impairment amount Number of years in the forecast period

Number Number The basis for determining number

Operating income growth rate Qianjiang Yongan Pharmaceutical Stock

and profit margins are planned to be advanced through Jingfen Co., Ltd.

Compound growth of operating income. Long-term equity investment after rational analysis. Operating income growth rate:

Growth rate: 15.98% 0% involved in impairment test of revenue and profit forecast

59,830,235.48 110,000,000.00 0.00 5-year gross profit margin: Fixed, the discount rate adopts tax Hubei Ling'an Technology Co., Ltd. Gross profit margin: 17.67%

6.74%-17.67% Post-Weighted Average Capital Co., Ltd. 100.00% Discount rate: 10.22%

Discount rate: 10.22% cost (WACC) recoverable amount in exchange for equity

Calculated as a pre-tax discount rate assessment item

OK

Total 59,830,235.48 110,000,000.00 0.00

Notes to Financial Statements Page 104

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

(4) Operating income and operating costs

1. Operating income and operating costs

Amount of current period Amount of previous period

Project

revenue cost revenue cost

Main business 550,863,770.64 467,190,743.92 698,775,642.78 540,102,482.43 Other businesses 11,397,670.67 4,715,253.52 7,071,952.72 3,207,983.98 Total 562,261,441.31 471,905,997.44 705,847,595.50 543,310,466.41

Operating income details:

Item Amount for the current period Amount for the previous period

Main business income 550,863,770.64 698,775,642.78

(1) Taurine 495,770,347.12 635,073,644.71 (2) Ethylene oxide and others 55,093,423.52 63,701,998.07

Other business income 11,397,670.67 7,071,952.72

(1) Sale of energy 6,849,350.56 3,042,226.74 (2) Sale of spare parts 115,499.89 58,788.03 (3) Sale of raw materials 35,203.53 35,306.64 (4) Others 4,397,616.69 3,935,631.31

Total 562,261,441.31 705,847,595.50

(5) Investment income

Item Amount for the current period Amount for the previous period Long-term equity investment income calculated using the equity method 4,463,870.90 4,043,617.10 Investment income from trading financial assets during the holding period and disposal 24,541,165.64 31,327,223.37

Total 29,005,036.54 35,370,840.47

18. Supplementary information

(1) Detailed statement of non-recurring gains and losses for the current period

Item Amount Description

Profit and loss from disposal of non-current assets, including provision for asset impairment

185,682.47

The write-off portion of

Government subsidies included in the current profit and loss, but related to the company's normal business operations

5,343,693.61

Closely related, consistent with national policies and regulations, and enjoyed in accordance with established standards

Notes to Financial Statements Page 105

Qianjiang Yongan Pharmaceutical Co., Ltd.

2025

Notes to Financial Statements

Item Amount Description Yes, except for government subsidies that have a lasting impact on the company's profits and losses

Except for effective hedging business related to the company's normal operating business

In addition, non-financial enterprises hold financial assets and financial liabilities resulting from corporate losses.

25,196,985.85

Gains and losses from changes in fair value and disposal of financial assets and financial liabilities

profit and loss

Other non-operating income and expenses other than the above items -771,978.76

Subtotal 29,954,383.17

Income tax impact 4,451,122.78

Amount of impact on minority shareholders’ equity (after tax) 567,906.69

Total 24,935,353.70

(2) Return on net assets and earnings per share

Weighted average net assets income Earnings per share (yuan) Profit for the reporting period

Profit rate (%) Basic earnings per share Diluted earnings per share Net profit attributable to the company’s ordinary shareholders 1.13 0.0777 0.0777 After deducting non-recurring gains and losses, net profit attributable to the company’s ordinary shareholders

-0.12 -0.0084 -0.0084 net profit for shareholders

Qianjiang Yongan Pharmaceutical Co., Ltd. (with official seal) April 15, 2026

Notes to Financial Statements Page 106