Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.Huadong Medicine Co. Ltd.2024 Annual Report
April 2025
1Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
A Letter to the Shareholders
Distinguished shareholders
Time tempers our original aspiration and transformation propels us forward. As
the tides of era surge we persevere like determined climbers moving with deliberate
persistence and rising with steadfast strides. The year 2024 marked a year of formidable
challenges and steady yet significant progress for Huadong Medicine Co. Ltd.(“Huadong Medicine” “we” or “the Company”). We successfully completed our 7th
three-year plan marked significant strides in innovation and transformation and
advanced our R&D pipelines to the acceptance phase. Moreover all four of our core
business segments achieved accelerated growth a direct testament to the dedication
and perseverance behind these results. The Company is now operating on a high-
quality development trajectory with revenue and net profit attributable to shareholders
having grown by 21.24% and 52.59% respectively since 2021 continually setting new
historical records. Our team maintains strategic focus while strengthening foundational
capabilities renewing the Company’s vibrant image and driving continuous
transformation.As we look back on our journey each step has been illuminated by innovation
leading to a thriving ecosystem of novel products and solutions. Since 2024 we have
achieved successive historic breakthroughs in innovative product approvals marked
by pioneering industry-first milestones: Elahere China’s first FRα-targeting ADC for
platinum-resistant ovarian cancer was successfully approved;SAILEXIN emerged as
China’s first biosimilar of Ustekinumab Injection; and the world’s first bedside renal
function assessment device having secured approval overseas is on the verge of full
approval in China. In the meantime Rilonacept for Injection (ARCALYST) a
globally innovative product used for the treatment of Recurrent Pericarditis (RP) and
Cryopyrin-Associated Periodic Syndromes (CAPS) secured approval in China
thereby addressing critical unmet needs in the treatment of relevant rare diseases. Our
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CAR-T debut product zevorcabtagene autoleucel injection has demonstrated
remarkable commercial performance while the ovarian cancer PARP inhibitor
Senaparib Capsules successfully completed its debut on the Chinese market. Huadong
Medicine is now actively embedding its innovation capabilities and therapeutic
advantages into the Chinese and global innovative medicine landscape.Through relentless innovation we have strengthened our endogenous R&D
capabilities expanding our proprietary pipelines to over 80 innovative medicines. Key
advancements include accelerated clinical development of GLP-1 receptor agonists
(HDM1002 tablets and HDM1005 injection) FDA Orphan Drug designation for our
proprietary ADC HDM2005 and consistent presentation of breakthrough research at
premier global scientific forums. Our open innovation ecosystem continues to flourish
through strategic collaborations. In 2024 the Company acquired all stake of Hengba
Pharma and established strategic cooperation with renowned bio-pharmaceutical
enterprises such as Imunopharm Huisheng Pharma Qyuns Therapeutics Auzone and
IMBiologics Corp. from the Republic of Korea on CD19-targeting autologous CAR-T
IM19 injection Ganagliflozin Proline Tablets Shangkeling QX005N and Edaravone
Tablets (TTYP01). These endeavors have continuously enhanced our presence and
layout across innovative medicine pipelines in all therapeutic fields.Through collaborative synergy we are driving integrated development across all
business segments. The pharmaceutical industry segment maintains steady growth
momentum while the global aesthetic medicine business continues its expansion. The
optical RF therapy system Renotion (V20) and premium hyaluronic acid filler MaiLi
Extreme have successfully approved in China. Key products including MaiLi
Ellansé and KIO015 have initiated clinical registration processes in the U.S. and EU
demonstrating the growing potential of our injections and aesthetic device portfolio in
the aesthetic medicine field. The pharmaceutical business segment is diversifying its
business models through retail network optimization and CSO service upgrades
further enhancing its professional service capabilities. In the industrial microbiology
segment we have transitioned from exploration to implementation focusing on four
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strategic pillars: xRNA APIs&Intermediates Health&Biomaterials and Animal
Health. We have witnessed a doubled increase in our international customer base and
significant potential for rapid growth.Amidst the competitive tides of the industry we navigate with both humility and
determination. Rolling out its 8th three-year plan in 2025 the Company ushers in its
crucial mid-stream rapids where the waters run deepest and the course demands our
utmost skill. This journey follows no easy path but rather requires sustained and
measured progress. Our R&D innovations must still prove their mettle in the
marketplace for this is not yet the season of harvest. With a renewed beginner’s
mindset every member of Huadong Medicine reignites our pioneering spark
embracing the entrepreneurial spirit of our founding as we climb new peaks and write
new chapters in the Company’s next evolution.Moving forward the innovative medicine industry remains our anchor strategicfocus. Our R&D efforts will concentrate on three key words: “AccelerationEnhancement and Globalization”. Specifically we will speed up project R&D
progress and new product launches enhance competitive advantage through
differentiated layout of innovative medicines focusing on “targets + indications” and
transition from in-licensing to out-licensing of innovative products. Across our four
core segments of the pharmaceutical industry pharmaceutical business aesthetic
medicine and industrial microbiology we will steadfastly execute established
strategies while pioneering operational innovations on business ends. By adopting an
offensive posture to unlock market potential and promoting integrated resource sharing
and mutual support we will forge Huadong Medicine’s unshakable competitive edge.We will also endeavor to build an integrated empowerment system that synergizes
intelligent operations with cutting-edge R&D innovation by capitalizing on new
opportunities brought by AI advancement.The world changes with boundless possibilities as our journey shines with vibrant
promise. Despite unpredictable external challenges our commitment to innovation
globalization and achieving our Vision 2030 remains unwavering. The core values of
4Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
“Caring Integrity Persistence and Pragmatism” along with our enduring spirit of
resilience continue to define who we are.Having weathered challenges together we extend heartfelt gratitude to all
investors and partners who have journeyed with us. Moving forward we will reward
shareholders through proactive dividend policies while further honing our core
competencies translating your steadfast trust into exceptional operational results.The spirit that defines Zhejiang entrepreneurs—trekking countless mountains and
rivers exhausting every word and phrase exploring all means and methods enduring
untold hardships and toils—flows through Huadong Medicine’s gene. Guided by this
unwavering resolve we will pioneer the path toward evolving into an innovation-
driven pharmaceutical enterprise with global impact.Let us advance together with this shared conviction.Lv Liang Chairman
Huadong Medicine Co. Ltd.April 2025
5Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
2024 Annual Report
Section I. Important Declaration Contents and Definitions
The Board of Directors Board of Supervisors directors supervisors and
senior management of Huadong Medicine Co. Ltd. (hereinafter referred to as the
“Company”) hereby guarantee that the information presented in this annual
report is authentic accurate and complete and free of any false records
misleading statements or material omissions and shall undertake individual and
joint legal liabilities.Lv Liang the Company’s legal representative and the officer in charge of
accounting and Qiu Renbo head of accounting department (accounting manager)
hereby declare and guarantee that the financial statements in this annual report
are authentic accurate and complete.All directors have attended the Board of Directors meeting to review this
annual report.The future plans development strategies and other forward-looking
statements in this annual report shall not be considered as a substantial
commitment of the Company to investors. Investors and related parties should be
fully aware of the risks and understand the differences between plans forecasts
and commitments.The risks the Company faces in operation including industry policy and
product price reduction risk new drug R&D risk investment and M&A risk andexchange rate fluctuation risk. For details please refer to “v. Potential risks and
6Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.responses” under “XI. Prospect of the Company’s future development” in
“Section III. Management Discussion and Analysis”. Therefore investors are
kindly reminded to pay attention to possible investment risks.The dividend distribution scheme approved at the meeting of the Board of
Directors is as follows: On the basis of 1754077048 shares of the total share
capital of the Company RMB 5.80 (before tax) of cash dividends per ten common
shares will be distributed to all shareholders; a total of 0 bonus share (before tax)
will be issued; and no capital reserve will be converted to increase the capital stock.According to “Stock Listing Rules of the Shenzhen Stock Exchange” if listed
companies have both Chinese and other language version of public notice they
should ensure the content of both versions are the same. In the case of discrepancy
the original version in Chinese shall prevail.
7Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
CONTENTS
Section I. Important Declaration Contents and Defi... 6
Section II. Company Profile and Key Financial Indi.. 14
Section III Management’s Discussion and Analysis ... 19
Section IV. Corporate Governance ................... 87
Section V Environmental and Social Responsibilitie. 133
Section VI. Important Matters ..................... 149
Section VII. Share Changes and Shareholders Inform. 186
Section VIII. Information on Preferred Shares ..... 205
Section IX. Information on Bonds .................. 206
Section X. Financial Report ....................... 207
8Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Contents of Reference File
(I) Financial statements signed and stamped by the legal representative the officer in charge of accounting and the head of
accounting department (accounting manager).(II) Original audit report stamped by the accounting firm and signed and stamped by certified public accountants.(III) The original of all Company’s documents publicly disclosed in the press designated by CSRC during the reporting period
and the original of announcements.
9Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Definitions
Term refers to Definition
CSRC refers to China Securities Regulatory Commission
SSE refers to Shenzhen Stock Exchange
Huadong Medicine/the Company/our
refers to Huadong Medicine Co. Ltd.Company
China Grand Enterprises refers to China Grand Enterprises
Hangzhou Huadong Medicine Group
Huadong Medicine Group refers to
Co. Ltd.Hangzhou Zhongmei Huadong
Zhongmei Huadong refers to
Pharmaceutical Co. Ltd.Hangzhou Zhongmei Huadong
Jiangdong Company refers to
Pharmaceutical Jiangdong Co. Ltd.Jiangsu Joyang refers to Joyang Laboratories
Hangzhou Jiuyuan Genetic
Jiuyuan Gene refers to
Biopharmaceutical Co. Ltd.Doer Biologics refers to Zhejiang Doer Biologics Co. Ltd.Chongqing Peg-Bio refers to Chongqing Peg-Bio Biopharm Co. Ltd.Qyuns Therapeutics refers to Qyuns Therapeutics Co. Ltd.Nuoling Biomedical technology
Nuoling Bio refers to
(Beijing) Co. Ltd.
Anhui Meihua Hi-Tech Pharmaceutical
Meihua Hi-Tech/ Anhui Meihua refers to
Co. Ltd.Wuhu Huaren Science and Technology
Wuhu Huaren refers to
Co. Ltd.Huida Biotech refers to Zhejiang Huida Biotech Co. Ltd.Hizyme Biotech refers to Hangzhou Hizyme Biotech Co. Ltd.Hangzhou Perfect mRNA Biotechnology
Perfect mRNA refers to
Co. Ltd.Hubei Magic Health Technology Co.Magic Health refers to
Ltd.CARsgen Therapeutics refers to CARsgen Therapeutics Holdings Limited
Jiangsu Nanjing Nongda Animal
Nanjing Nongda Animal Pharmaceutical refers to
Pharmaceutical Co. Ltd.Zhejiang Shengji Material Technology
Shengji Material refers to
Co. Ltd.IMPACT Therapeutics refers to Nanjing IMPACT Therapeutics Co. Ltd.GLP-1 refers to Glucagon-like Peptide 1
Sinclair refers to Sinclair Pharma Limited
R2 refers to R2 Technologies Inc.MediBeacon refers to MediBeacon Inc.ImmunoGen refers to ImmunoGen Inc.RAPT refers to RAPT Therapeutics Inc.Kylane refers to Kylane Laboratoires SA
High Tech refers to High Technology Products S.L.U.Viora refers to Viora Ltd.Heidelberg Pharma refers to Heidelberg Pharma AG
Kiniksa refers to Kiniksa Pharmaceuticals (UK) Ltd.Arcutis refers to Arcutis Biotherapeutics Inc.ATGC refers to ATGC Co. Ltd.GMP refers to Good Manufacturing Practices
10Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
cGMP refers to Current Good Manufacturing Practices
GSP refers to Good Supply Practice
BE refers to Bioequivalence
Center for Drug Evaluation of National
CDE refers to
Medical Products Administration
MAH refers to Marketing Authorization Holder
FDA refers to U.S. Food and Drug Administration
National Medical Products
NMPA refers to
Administration
IPO refers to Initial Public Offering
API refers to Active Pharmaceutical Ingredient
Drug Master File a confidential
technical dossier prepared by the holder
on a precautionary basis which contains
comprehensive details about facilities
manufacturing processes and critical
materials involved in the preparation
processing packaging and storage of
one or more human drug products.DMF refers to
Pursuant to FDA regulations the
technical contents of a DMF may only be
referenced by the FDA during its review
of IND applications NDAs and ANDAs
upon receipt of a valid Letter of
Authorization from either the DMF
holder or their legally authorized
representative.National Healthcare Security
NHSA refers to
Administration
Key Opinion Leader individuals who
possess extensive and more accurate
information about products. They are
KOL refers to recognized and trusted by a relevant
community and have significant
influence over the purchasing decisions
of that group.NDA refers to New Drug Application
BLA refers to Biologic License Application
Abbreviated New Drug Application (or
ANDA refers to
Generic Drug Application)
The EU’s certification for products
which indicates that the products meet
the requirements of relevant EU
directives. It also serves as evidence that
the products have undergone the
CE certification refers to
corresponding conformity assessment
procedures and that the manufacturer has
made a declaration of conformity. This
certification shows that the products can
be sold in the EU market.Medical Devices Regulation (EU)
MDR refers to
International Council for Harmonisation
ICH refers to (of Technical Requirements for
Pharmaceuticals for Human Use)
IND refers to Investigational New Drug
11Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
PK/PD refers to Pharmacokinetics/ pharmacodynamics
Chemistry Manufacturing and Control
mainly such pharmaceutical researches
as manufacturing technology impurity
CMC refers to
research quality research and stability
research during drug research and
development.Contract Manufacturing Organization
i.e. Providing such services as
customized manufacturing of medical
CMO refers to
intermediates APIs and pharmaceutical
preparations entrusted by pharmaceutical
companies.Contract Development and
Manufacturing Organization mainly
including providing customized R&D and
production services for multinational
pharmaceutical companies and
biotechnology companies such as
CDMO refers to
process R&D and preparation process
optimization scale-up manufacturing
registration and verification batches
manufacturing and commercial
manufacturing of medicines especially
innovative medicines.QA refers to Quality Assurance (department)
ADC refers to Antibody-Drug Conjugates
EBD refers to Energy Based Devices
license-in refers to Product license introduction
license-out refers to Product External License Authorization
BD refers to Business Development
Earnings Before Interest Taxes
EBITDA refers to
Depreciation and Amortization
Environment Health and Safety
EHS refers to
Management Systems
MRCT refers to Multi-regional Clinical Trials
ESG refers to Environmental Social and Governance
Over the Counter i.e. medicines
published by the medical products
administration under the State Council
OTC refers to and purchased and used by consumers at
their discretion without the prescription
of practicing doctors or assistant
practicing doctors.PFS refers to Progression-free survival
DTP refers to Direct to Patient
Computer-Aided Drug Design a drug
CADD refers to design method based on computer
technology.Artificial Intelligence-Driven Drug
Design a method that applies Artificial
Intelligence (AI) technology for drug
AIDD refers to development. In AIDD AI algorithms
are utilized to analyze large-scale
molecular structure data helping to
predict intermolecular interactions and
12Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
their therapeutic effects on diseases.GLP-1 refers to Glucagon-like Peptide 1
Drugs that require medical prescriptions
Prescription Drugs refers to issued by physicians to be bought and
used
Real World Research/Study RWR/RWS
refers to collect data related to patients in
the real-world environment (Real World
RWR/RWS refers to Data) through analysis acquiring the use
value of medical products and clinical
evidence of potential benefits or risks
(Real World Evidence).Catalogue of Medicines Covered by
National Basic Medical Insurance/Work-
2024 Medicine Catalog refers to
related Injury Insurance/Maternity
Insurance (2024)
From January 1 2024 to December 31
Reporting Period refers to
2024
13Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section II. Company Profile and Key Financial Indicators
I. Company information
Stock name (abbreviation) Huadong Medicine Stock code 000963
Stock listed on Shenzhen Stock Exchange
Company name in Chinese 华东医药股份有限公司
Company name in Chinese华东医药
(abbreviation)
Company name in English (if
Huadong Medicine Co. Ltd.any)
Company name in English
Huadong Medicine
(abbreviation if any)
Legal representative Lv Liang
Floor 4/7 No. 439 Zhongshan North Road Gongshu District Hangzhou City Zhejiang
Registered address
Province
Zip code of the registered
310006
addressFrom the date of listing to July 2012 the registered address was “No. 439 Zhongshan NorthRoad Xiacheng District Hangzhou”. From July 2012 the registered address was changed to
“Floor 9/10 Gate No. 1 Building No. 1 468 Yan’an Road Hangzhou”. From July 2019 theregistered address was changed to “Floor 7/9/10 Gate No. 1 Building No. 1 468 Yan’an RoadChanges of registered addressHangzhou”. From July 2022 the registered address was changed to “Floor 9/10 Gate No. 1Building No. 1 468 Yan’an Road Hangzhou”. From June 2023 the registered address waschanged to “Floor 4/7 No. 439 Zhongshan North Road Gongshu District Hangzhou CityZhejiang Province”.Office address No. 866 Moganshan Road Hangzhou
Zip code of the office address 310011
Official website www.eastchinapharm.com
Email address hz000963@126.com
II. Contact persons and contact information
Secretary of the Board of Directors Securities affairs representative
Name Chen Bo Hu Shufen
Contact address No. 866 Moganshan Road Hangzhou No. 866 Moganshan Road Hangzhou
Tel. 0571-89903300 0571-89903300
Fax 0571-89903300 0571-89903300
Email address hz000963@126.com hz000963@126.com
III. Channels of disclosure and location of preparation
Website of the stock exchange for publishing the annual report Shenzhen Stock Exchange - www.szse.cn
China Securities Journal Securities Times Shanghai Securities
Media and website for publishing the annual report
News and Cninfo (www.cninfo.com.cn)
Location of preparation of the Company’s annual report Office of the Company’s Board of Directors
14Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
IV. Registration changes
Unified Social Credit Code 91330000143083157E
Changes of the Company's main business since its listing (if
None
any)
Previous changes of controlling shareholder (if any) None
V. Other information
Accounting firm
Name Pan-China Certified Public Accounts LLP
Office Building T2 Run'ao Business Center Yinfeng
Office address
Subdistrict Xiaoshan District Hangzhou Zhejiang Province
Signing accountants Hu Yanhua and Chen Xiaodong
Sponsors for continuous supervision and guidance during the reporting period
□ Applicable □ N/A
Financial consultant for continuous supervision and guidance during the reporting period
□ Applicable □ N/A
VI. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement of previous accounting data
□Yes □ No
Percentage
2024 2023 increase/decrease from 2022
last year to this year
Operating revenue
41905707385.9140623782520.433.16%37714587458.01
(yuan)
Net profit attributable
to shareholders of
3512104678.062838860542.8023.72%2499214359.57
listed companies
(yuan)
Net profit attributable
to shareholders of
listed companies after
3351680026.722736571736.9822.48%2409954557.05
deducting non-
recurring gains/losses
(yuan)
Net cash flow from
operating activities 3748928882.35 3929216706.70 -4.59% 2381852668.60
(yuan)
Basic earnings per
2.00461.621923.60%1.4283
share (yuan/share)
Diluted earnings per
2.00341.620723.61%1.4283
share (yuan/share)
Weighted average
15.93%13.96%1.97%14.21%
return on equity (ROE)
Percentage
End of 2024 End of 2023 increase/decrease from End of 2022
last year to this year
15Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Total assets (yuan) 37879046367.15 33509361816.98 13.04% 31192203406.84
Net assets attributable
to shareholders of
23060051397.3621047609756.669.56%18577919237.39
listed companies
(yuan)
The Company’s net profit before or after deducting non-recurring gains and losses whichever is lower in the last three fiscal years
are all negative and the audit report of last year shows doubt about the Company’s ability to continue as a going concern.□Yes □ No
The Company’s net profit before and after deducting non-recurring gains/losses whichever is lower is negative.□Yes □ No
The Company's total share capital as of the trading day prior to disclosure:
The Company’s total share capital as of the trading day prior to
1754077048.00
disclosure (share)
Fully diluted earnings per share based on the latest share capital:
Paid preference dividends 0.00
Paid perpetual bond interest (yuan) 0.00
Fully diluted earnings per share based on the latest share capital
2.0023
(yuan/share)
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences in net profit and net assets disclosed in financial statements under international and
Chinese accounting standards
□ Applicable □ N/A
There are no differences in net profit and net assets disclosed in financial statements under international and Chinese accounting
standards during the reporting period.
2. Differences in net profit and net assets disclosed in financial statements under overseas and Chinese
accounting standards
□ Applicable □ N/A
There are no differences in net profit and net assets disclosed in financial statements under overseas and Chinese accounting
standards during the reporting period.VIII. Key financial indicators by quarter
Unit: yuan
Q1 Q2 Q3 Q4
Operating revenue 10410809128.72 10554256476.95 10512589144.83 10428052635.41
Net profit attributable
to shareholders of 862411560.96 833609028.24 866306099.25 949777989.61
listed companies
Net profit attributable
838303551.41786896692.68856621563.99869858218.64
to shareholders of
16Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
listed companies after
deducting non-
recurring gains/losses
Net cash flow from
-484522666.132759779147.57231146327.471242526073.44
operating activities
Whether the above financial indicators or their totals are significantly different from relevant financial indicators in previous
quarterly and semiannual reports by the Company
□Yes □ No
IX. Items and amounts of non-recurring gains/losses
□ Applicable □ N/A
Unit: yuan
Item 2024 2023 2022 Note
Gains/losses on
disposal of non-current
assets (including the
-7497064.66-823262.362390031.00
written-off part of the
accrued assets
impairment reserve)
Government grants
included in current
gains/losses (excluding
those closely related to
daily business
operation distributed
See VII (67) of the
constantly in
Notes to Financial
accordance with 163972203.37 143315700.34 89767756.38
Statements for details
defined standards in
of government grants.line with national
policies and
regulations and
constantly affecting the
Company’s
gains/losses)
Gains/losses caused by
fair value changes in
financial assets and
financial liabilities held
by non-financial
enterprises and
gains/losses incurred -16466668.21 -13756372.80 28469286.61
by disposal of financial
assets and financial
liabilities excluding
hedging business
related to operating
activities
Return of receivables
impairment reserves
759760.705566940.29953089.60
that are individually
tested for impairment
One-time impact on
136860.05
current gains/losses
17Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
caused by adjustment
of tax accounting and
other laws and
regulations
See VII (74 75) of the
Other non-operating
Notes to Financial
income and
-20783317.88 18554535.07 -24166799.87 Statements for details
expenditures except the
of non-operating
aforesaid items
expenses.Other profit and loss
items that satisfy the See VII (70) of the
definition of non- 57557709.09 -11588239.52 13980545.50 Notes to Financial
recurring profit and Statements for details.loss
Minus: Amount
9728855.8128072652.9320305520.86
affected by income tax
Impact on
minority interests 7389115.26 11044702.32 1828585.84
(post-tax)
Total 160424651.34 102288805.82 89259802.52 --
Details of other items of gains/losses meeting the definition of non-recurring gains/losses:
□ Applicable □ N/A
There are no other items of gains/losses that meet the definition of non-recurring gains/losses.Explanation for recognizing an item listed as a non-recurring gain/loss in the Interpretative Announcement No. 1 on Information
Disclosure Criteria for Public Companies - Non-Recurring Gains/Losses as a recurring gain/loss
□ Applicable □ N/A
No item listed as a non-recurring gain/loss in the Interpretative Announcement No. 1 on Information Disclosure Criteria for Public
Companies - Non-Recurring Gains/Losses is recognized as a recurring gain/loss.
18Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section III Management’s Discussion and Analysis
I. Industry Situation during the Reporting Period
In 2024 the global economy has exhibited dynamic and complex fluctuations against the
backdrop of intensifying geopolitical tensions supply chain realignment and fragmentation of
international trade landscape. It is also a pivotal year for the implementation of China’s 14th Five-
Year Plan. Amid these complex circumstances the Chinese government has rolled out a
comprehensive suite of growth-oriented policy measures to maintain fundamental stability in the
national economy.The pharmaceutical industry embraced both challenges and opportunities. Enterprises are facing
sustained operational pressures against the backdrop of decelerating industry-wide growth narrowing
profit margins and intensified competition. However the sustained expansion of demands in the
pharmaceutical industry—driven by population aging and health consumption upgrades—has
amplified the market needs particularly for innovative drugs and high-end medical devices fueled
by rising prevalence of chronic diseases and oncology. Technological innovation and global market
expansion further presented new growth opportunities. Statistics show that the pharmaceutical R&D
investment in China remained elevated in 2024 albeit with slower growth momentum while the
quality and efficiency of innovation improved significantly. The volume of drug applications stayed
high with record approvals for new drugs. By leveraging its advantages of high value high efficiency
and affordable cost China is accelerating the integration of its innovative medicines into global
supply chains. It has emerged as a critical contributor to the international pharmaceutical development
ecosystem. China now sees highly active license-out transactions and continuously increasing
international recognition.In 2024 the Third Plenary Session of the 20th CPC Central Committee ratified the Resolution
of the Central Committee of the Communist Party of China on Further Deepening Reform
Comprehensively to Advance Chinese Modernization outlining critical healthcare reform initiatives
to guide the pharmaceutical industry’s high-quality development. Subsequently a State Council
executive meeting approved the Implementation Plan for Holistic Support of Innovative Drug
Development establishing a full-chain policy framework to accelerate breakthrough advancements
in innovative drugs. In 2024 China’s healthcare reform agenda continued to advance systematically.The Chinese government issued a series of policy documents aimed at reforming payment
mechanisms expanding volume-based procurement coverage encouraging pharmaceutical
19Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
innovation improving medical services and strengthening anti-corruption compliance. These
initiatives have collectively accelerated the structural transformation of the pharmaceutical industry.In 2024 China’s pharmaceutical industry demonstrated continued recovery across key economic
indicators. According to statistics in 2024 the added value of the pharmaceutical industry above
designated size increased by 3.4% year on year. Enterprises above designated size achieved 2.97627
trillion yuan of operating revenue and 405.09 billion yuan of profits remaining flat (0.0%) and down
by 0.9% year on year respectively with a significantly narrowed contraction compared to 2023. Key
factors influencing the industry’s performance in 2024 included: (I) accelerated growth in new drivers.In recent years the number of new products included in the catalogue of medicines covered by
medical insurance has been steadily increasing. The sales growth of innovative products such as
innovative medicines and biosimilars has been particularly notable reflecting the significant
achievements of innovation-driven transformation. The number of license-out projects has also seen
a substantial rise which has in turn enhanced the operating revenue and profit levels of some
innovative medicine companies. (II) Recovery in pharmaceutical exports; and (III) strong
performance in specific segments such as influenza medicines and bulk antibiotic active
pharmaceutical ingredients (APIs).II. Main Businesses of the Company during the Reporting Period
Founded in 1993 and headquartered in Hangzhou Zhejiang Province Huadong Medicine Co.Ltd. (stock code: 000963) was listed on Shenzhen Stock Exchange in December 1999. With its
businesses covering the entire pharmaceutical industry chain thanks to over 30 years of vigorous
development the Company has now fostered four major business segments of pharmaceutical
industry pharmaceutical business aesthetic medicine and industrial microbiology and has been a
large comprehensive listed pharmaceutical enterprise specialized in pharmaceutical R&D production
and marketing.Specialized in the R&D production and marketing of specialized medicines medicines for
chronic diseases as well as special medicines for years the Company has established complete
international pharmaceutical production systems and fostered core product lines focusing on chronic
nephrosis autoimmunity oncology internal secretion digestive system cardiovascular system and
other fields. With multiple first-line clinical medicines with market advantages in China the
Company has won international certifications for multiple varieties of its products. The Company has
strategically focused its R&D efforts on innovative medicines within three core therapeutic fields of
endocrinology autoimmunity and oncology through a combination of in-house development
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external partnerships and collaborative projects fostering a differentiated innovative medicine
pipeline that spans the entire R&D life cycle and a robust product portfolio. Moreover the Company
has established strategic partnership with numerous multinational innovative medicine R&D
companies and pharmaceutical companies on products in Chinese market.The Company’s pharmaceutical business segment strategically focused on three core businesses
of medicines medical devices and ginseng & antler pieces and further enhanced its core
competitiveness through innovative operations such as pharmaceutical logistics (notably cold chain
logistics vaccines and special medicines) and proprietary e-commerce platforms. It has maintained
leading market share and business scale in Zhejiang Province for consecutive years consistently
ranking among China’s Top 10 Pharmaceutical Wholesale Enterprises. The Company operates three
self-owned logistics hubs in Hangzhou (northern Zhejiang) Jinhua (central Zhejiang) and Wenzhou
(southern Zhejiang) supported by 13 logistics warehouses with a total storage space exceeding
190000 square meters. As for medicines the Company has fostered comprehensive strengths in full-
product and full-channel coverage integrated hospital and out-of-hospital services and coordinated
distribution and agency operations. With regard to medical devices the Company has actively
expanded its presence in professional agency backed by its large-scale distribution capability. Its
ginseng & antler pieces’ business spans the entire industrial chain from planting piece preparation
and automated decoction to marketing of proprietary functional products. Driven by its tenet of
innovation in services the Company has established a novel collaborative model for suppliers and
hospital clients through integrated partnerships with suppliers CSO services SPD systems and
industry-university-institute projects. Such approach helps the Company accurately adapt to upstreamand downstream needs solidifying its reputation as a premier “integrated pharmaceutical serviceprovider.”
In terms of aesthetic medicine the Company has created a comprehensive and differentiatedproduct matrix by following the strategy of “global operation layout and dual-circulation operation& development” with an international vision through forward-looking layout and now ranks at the
forefront of the industry in terms of product quantity and coverage. Specifically over 20 products
have been launched in China and abroad and more than a dozen innovative global products are in
development. Fostering differentiated product lines that cover three major categories of regeneration
products hyaluronic acids and botulinum toxin the Company is committed to becoming a global
leading aesthetic medicine comprehensive solution provider by offering patients with more
professional efficient comprehensive and safer integrated solutions through diversified combined
therapy techniques that combine “noninvasive and micro-invasive” “facial and body filling”
“products + technologies” and “injection + energy-based device”. Sinclair its wholly-owned
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subsidiary is the Company’s global aesthetic medicine platform. Sinclair is headquartered in U.K.and operates multiple R&D centers and production bases globally. Promoting and marketing PCL
microspheres for injection hyaluronic acid facial thread lifting and other products in global markets
Sinclair researches develops and expands its businesses of energy-based devices through its wholly-
owned subsidiaries High Tech and Viora. As for the aesthetic medicine segment the Company also
has Sinclair (Shanghai) a wholly-owned subsidiary and its market operation platform in China as
well as R2 in the U.S. and Kylane in Switzerland two overseas technical development-type joint-
stock companies.The Company’s industrial microbiology segment is strategically focused on two key directions
of synthetic biotechnology innovation and bio-pharmaceutical industry advancement prioritizing the
development of four core business segments: xRNA raw materials featured APIs & intermediates
massive health & biomaterials and animal health. Leveraging four decades of expertise the Company
has established a centralized R&D ecosystem anchored by Industrial Microbiology of Zhongmei
Huadong synergized with HIT Institute of Synthetic Biology Huida Biotech Hizyme Biotech
Perfect mRNA and Shengji Material. This framework integrates full-chain technological capabilities
in microbial engineering maintaining an R&D and production system that spans the entire life cycle
of microbial-derived medicines alongside interdisciplinary R&D platforms and industrial resource
networks. As for its industrial layout the Company operates seven coordinated industrial bases in
Hangzhou Xiangfuqiao Qiantang New Area Jiangsu Joyang Laboratories Magic Health Anhui
Meihua Wuhu Huaren and Nanjing Nongda Animal Pharmaceutical. Moreover the Company has
set up the largest fermentation monomer plants in Zhejiang Province and formed the industry-leading
intelligent production system that covers all stages from strain screening and process development to
scale production. With a complete manufacturing ecological chain that encompasses technological
R&D pilot-scale amplification engineering conversion and quality control the Company sustains
its industry leadership in fermentation capacity and process sophistication.III. Core Competitiveness
1. Open innovative medicine R&D system and continuously improved innovation ability
The Company has always attached great importance to innovative R&D and set up a global new
medicine R&D center that is responsible for formulating strategies for independent innovationproduct development pipeline layout clinical research and development. Being “ScientificResearch-based and Patient-centered” the Company has fostered a sound independent innovation
system for R&D of medicines that covers the whole process from medicine discovery pharmaceutical
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research pre-clinical research and clinical research to industrial production after years of vigorous
development with “clinical value pharmacoeconomic value and commercial value” as the starting
point.Focusing on the three core therapeutic fields of oncology endocrinology and autoimmunity the
Company keeps developing and has fostered differentiated innovative product lines that cover the full
R&D cycle via independent R&D external cooperation license-in etc. All these merits effectively
empower the continuous initiation and launching of innovative products offering impetuses for the
medium- and long-term development. The Company has continuously leveled up its independent
R&D and innovation capabilities with its innovative medicine pipelines now covering over 80 items
positioning it within the top tier of the pharmaceutical industry in China.
2. Diverse product lines for specialized and chronic diseases and featured layout in three
core therapeutic fields
Focusing on specialized and chronic diseases as well as special medicines for years the
Company has fostered good brand effect and laid strong market foundation in such fields as chronic
nephrosis autoimmunity endocrinology oncology digestive system and cardiovascular diseases
continuously keeping in the forefront of similar products in China in terms of market share. Having
launched the world’s first-in-class medicines in the three core therapeutic fields of oncology
endocrinology and autoimmunity the Company has fostered three featured product matrices of ADC
GLP-1 and external preparations with differentiated advantages formed.Specializing in medicines for diabetes for over two decades the Company has comprehensively
laid out product lines of innovative and differentiated generic medicines for clinical mainstream
therapeutic targets of diabetes with over 20 types of products under development or put in
commercial production. Now the Company has fostered good brand effect and laid strong market
foundation. The existing and subsequently-upgraded products cover multiple clinical mainstream
targets including α-glucosidase inhibitor DPP-4 inhibitor SGLT-2 inhibitor GLP-1 receptor single-
target and long-acting multi-target agonists insulin and its analogues. The Company has fostered all-
round and differentiated product lines that combine the long-acting and multi-target global innovative
and biosimilar medicines including oral tablets and injections revolving around GLP-1 target.
23Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
In the field of oncology the Company kept enriching its pipelines around the key layout of ADC
products. In the meantime the Company has successively invested in controlled and incubated
numerous biotechnology companies with leading technologies in China. Moreover the Company
established cooperation with Heidelberg Pharma (Germany) on equity investment and products as its
second largest shareholder and introduced its advanced proprietary ATAC (Antibody-Amanita
Conjugate) technology platform fostering a unique global ADC R&D ecology of Huadong Medicine
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and gradually creating a world-leading independent ADC R&D platform that is unique to Huadong
Medicine. The Company will keep developing ADC innovative medicines via a differentiated manner
and bringing tumor patients better and more advanced solutions.In the field of autoimmunity the indications of the Company’s existing and under-development
products include transplant immunity psoriasis atopic dermatitis seborrheic dermatitis recurrent
pericarditis Cryopyrin-Associated Periodic Syndromes etc. covering multiple types of diseases
related to skin rheumatism cardiovascular system respiratory system and transplantation. The
Company has become one of the pharmaceutical companies with comprehensive coverage in the field
of autoimmunity in China. To date the Company has had over 20 varieties of biomedicines and small-
molecule innovative products in the field of autoimmunity. In the meantime the Company’s
innovative medicine R&D center has been focusing on new targets and biological mechanisms
developing multiple early-stage projects for immune diseases all of which are progressing smoothly.
25Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
With regard to autoimmunity the Company stretched its coverage to external preparations built
external preparation R&D platforms and steadily advanced the R&D and innovation of external and
complicated preparations. To date its wholly-owned subsidiary Huadong Medicine (Xi’an) Bohua
Pharmaceutical Co. Ltd. has fostered three production lines for external preparations. The Company
now has as many as ten products of external preparations either under development or in commercial
production.
3. China’s leading professional pharmaceutical service team and complete commercial
format
In the pharmaceutical industry segment the Company has fostered a professional
pharmaceutical service and market development team. Coring at the clinical values and academic
promotion the team vigorously promotes the marketing mode that features the online integration of
comprehensive hospitals primary level medical institutions retailing third-party terminals and
Internet with its sales network covering over 30 provinces (autonomous regions and municipalities)
throughout China. To date the Company has gradually achieved extensive coverage and formed
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strong competitive advantages.As for the pharmaceutical business the Company has made its presence in Zhejiang for years
and boasts a complete business ecosystem with diverse categories of commercial forms products and
services maintaining a leading position in market access and coverage. To date the Company has
established business partnership with over 90% of mainstream pharmaceutical enterprises in and out
of China with its sales network covering all cities districts and counties (county-level cities) in
Zhejiang. All public medical institutions in Zhejiang have been covered. With regard to the out-of-
hospital market the Company kept developing high-value clients such as retail pharmacies and
private medical institutions with a leading market share in Zhejiang Province. In the meantime the
Company has continuously improved its core competence and formed significant competitive
advantages in terms of service innovation policy affairs organization and operation in addition to
its cooperation with leading hospitals. Actively implementing medical reform policies and further
deepening its partnership with major clients the Company has continuously maintained a leading
position in the industry in Zhejiang Province in terms of pharmaceutical service innovation cold
chain third-party logistics automated decoction etc.
4. High-end international aesthetic medicine product lines that cover noninvasive and
micro-invasive mainstream non-operative fields
The Company is strategically focusing on the global high-end aesthetic medicine market with
its wholly-owned subsidiary Sinclair (the U.K.) serving as the global operational platform for its
aesthetic medicine business. In recent years the Company has successively introduced multiple
premium products including the Préime DermaFacial multi-functional facial skin management
platform the KiOmed series of chitosan-based aesthetic medicine products and the recombinant
botulinum toxin type A YY001 through acquisitions of High Tech and Viora international enterprises
of energy-based devices in aesthetic medicine. Thanks to these efforts the Company has continuously
enhanced and enriched the layout in the high-end aesthetic medicine industry. With an international
aesthetic medicine operation and BD team the Company has covered all middle- and high-end
markets of non-operative aesthetic medicine injections and energy-based devices. Its injection
portfolio spans three major categories of regenerative therapies hyaluronic acid fillers and botulinum
toxins. The Company has established a comprehensive multi-dimensional facial aesthetic product
system that provides one-stop holistic facial aesthetic solutions for patients. Moreover the Company
has now held global rights of multiple patented products in such fields as facial and body filling
facial cleansing body shaping thread lifting and energy-based devices. To date the Company has
developed 40 types of international high-end “noninvasive and micro-invasive” aesthetic medicine
products that cover frown lines improvement facial and body filling thread lifting skin management
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body shaping depilation private repair and other non-operative mainstream aesthetic medicine fields.Specifically 26 types of these products have been launched in and out of China. With comprehensive
product clusters formed the Company now ranks at the forefront of the industry in terms of product
quantity and coverage and witnesses continuously increasing international influence. The
Company’s aesthetic medicine marketing network spans over 80 countries and regions worldwide
supported by a professional aesthetic medicine sales team of over 600 members across markets in and
out of China.
5. Building R&D industrial cluster and comprehensively improving the international
competitiveness of the industrial microbiology segment
With the establishment of the Industrial Microbiology Division the Company has led the overall
business development in the field of industrial microbiology and formed a complete and independent
management system in marketing operation R&D human resources and finance. The Company has
also established R&D clusters with Industrial Microbiology of Zhongmei Huadong HIT Institute of
Synthetic Biology Huida Biotech Hizyme Biotech Perfect mRNA and Shengji Material as the core
and seven industrial bases in Hangzhou Xiangfuqiao Qiantang New Area Jiangsu Joyang
Laboratories Magic Health Anhui Meihua Wuhu Huaren and Nanjing Nongda Animal
Pharmaceutical. Moreover the Company has set up the largest fermentation monomer plants in
Zhejiang Province formed the industry-leading microbiological medicine production ability and
high-level R&D capacity that covers all stages of microbiological engineering technologies from
strain construction metabolic regulation enzymatic catalysis synthetic modification to separation
and purification and built a complete manufacturing system for R&D pilot test commercial
production engineering and public system guarantee of microbiological projects. On this basis the
Company has further advanced the integrated development of “production research and marketing”
of the Industrial Microbiology Division making it an innovative international team with high synergy
and high efficiency.The Company’s industrial microbiology team has established a multi-tiered talent structure
centered on experienced industry experts and supported by emerging-generation research
professionals creating a specialized operational system that integrates profound technical expertise
with innovative dynamism. In terms of R&D the Company’s industrial microbiology segment has
been committed to forming an efficient R&D team with high-quality talents as the core. To date 27%
of its R&D personnel have obtained their master and/or doctoral degrees. In the industrial
microbiology sector the Company has initiated over 393 R&D projects including 70 projects for
xRNA (including 237 subprojects) 88 projects for featured APIs and pharmaceutical intermediates
38 projects for massive health and biomaterials and 30 projects for animal health.
28Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
6. Prudent and pragmatic operation style and stable returns to shareholders
Valuing innovation in management the Company has always endeavored to satisfy the demands
for market competition by improving the quality of its operations. As a result the Company has
achieved long-term steady development thanks to its high-quality products excellent
commercialization capability compliant yet efficient marketing services differentiated market
positioning innovative R&D layout and complete talent planning. Since it was listed the Company
has distributed dividends for 23 times with the cumulative amount of 7.242 billion yuan which is
28.97 times the fund that was raised during IPO (250 million yuan). The Company brings
shareholders consistent and steady returns on investment.IV. Main Businesses
1. Overview
The year 2024 marked the conclusion of the Company’s seventh three-year plan period. The
pharmaceutical market competition in China continued to escalate against the backdrop of China’s
intensified efforts in anti-corruption in the pharmaceutical industry deepened reforms in medicine
pricing governance strengthened supervision over medical insurance funds and normalized
advancement of volume-based procurement and medical insurance negotiations presenting new
challenges to the operations R&D strategies and market approaches of pharmaceutical enterprises.During the reporting period the Company continuously followed its operation philosophy of “highquality and efficiency” and “struggling forward for development and putting management first”
adapting dynamically to evolving conditions and achieving breakthroughs amidst uncertainty. It
actively explored and implemented a high-quality innovation-driven development strategy that is
unique to Huadong Medicine marked by sustained enhancements in R&D capabilities multiple
“milestone” achievements in new drug registrations and the transition of its self-developed
innovative product lines into validation stages alongside the gradual commercialization of BD-
introduced products. Accelerated resource synergy and integration across its four major business
segments of pharmaceutical industry pharmaceutical business aesthetic medicine and industrial
microbiology enabled stable operational progress with robust resilience. The Company has achieved
its best annual performance ever since inception fully accomplished its annual operational targets
delivered a high-quality development report demonstrating breakthrough growth under adversity and
entered a new phase of sustained upward momentum.In 2024 the Company achieved an operating revenue of 41.906 billion yuan up 3.16% year on
year. The net profit attributable to shareholders of listed companies was 3.512 billion yuan up 23.72%
29Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
year on year. The net profit attributable to shareholders of listed companies after deducting non-
recurring gains/losses was 3.352 billion yuan up 22.48% year on year. After deducting the equity
incentive expenses and the profits and losses of participating and holding R&D institutions the net
profit attributable to shareholders of listed companies after deducting non-recurring gains/losses in
2024 was 3.709 billion yuan up 35.52% compared with the Company’s net profit attributable to
shareholders of the parent company after deducting non-recurring gains/losses in 2023. This growth
demonstrates the increasingly robust profitability of its core businesses.During the reporting period the Company kept leveling up its operations and achieved the
consolidated gross margin of 33.21% increased by 0.81% year on year. The net cash flow from
operating activities of the Company was 3.749 billion yuan. As of the end of 2024 the Company’s
total assets net assets attributable to shareholders of listed companies asset-liability ratio and return
on equity (ROE) were 37.879 billion yuan 23.060 billion yuan 37.79% and 15.93% respectively.According to the audited 2024 financial report the Company achieved a 53.12% increase in the
net profit attributable to shareholders of the parent company after deducting non-recurring
gains/losses compared to that in 2021. After further excluding the impact of share-based payment
expenses related to the equity incentive plan the Company successfully met its overall performance
targets in 2024 set under the Restricted Share Incentive Scheme in 2022. As for the implementation
of the equity incentive plan in 2024 the Company completed series of work specified in Restricted
Share Incentive Scheme in 2022 including the second restriction release for the initially granted
restricted shares and the first restriction release for the reserved restricted shares.I. Operation and Development of the Four Business Segments of the Company during the
Reporting Period
(I) Pharmaceutical Industry
In 2024 the Company’s pharmaceutical industry segment focused on its seventh three-year plan
and Vision 2030. Guided by the integrated requirements of R&D production and sales the Company
adhered to a development path emphasizing “high quality and high efficiency” that is characterized
by strengthening collaboration controlling risks and accelerating execution. Through organizational
structure optimization continuous enhancement of capability building and accelerated market access
and expansion for new products the Company’s overall operational performance reached a new
historic high building upon the steady growth achieved in 2023.During the reporting period Zhongmei Huadong one of the Company’s core subsidiaries
witnessed steady and positive growth as a whole and achieved an operating revenue (including CSO
business) of 13.811 billion yuan up 13.05% year on year and a net profit attributable to shareholders
of the parent company after deducting non-recurring gains/losses of 2.876 billion yuan up 29.04%
30Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
year on year. The net return on equity was 25.33%. The segment has become the core impetus for the
Company’s performance growth.During the reporting period Zhongmei Huadong continued to strengthen foundational
management optimize internal resource allocation and enhance comprehensive operational
efficiency with production supply assurance as the core. Thanks to its management improvement and
technological advancement Zhongmei Huadong persistently advanced its second-phase production
transformation centered on “standardization and high efficiency” in line with the principle of cost-
effectiveness establishing a high-efficiency low-cost and agile production and operation system. In
the meantime the Company actively promoted factory standardization initiatives optimized
procurement management and supplier management systems streamlined engineering construction
processes and elevated factory management standards significantly improving inventory turnover
rates production efficiency and cost control capabilities. By coordinating balancing and rationally
allocating existing internal resources it maximized the utilization of existing assets. During the
reporting period the Company promoted the construction of Huadong Medicine Bio-innovation
Intelligence Center and the Production Base of Synthetic APIs as planned. In quality management
the Company continued to enhance “compliance” practices deepened “group-wide” quality control
and expanded its efforts to align with diversified business demands based on existing quality
management endeavors. It explored new breakthroughs across the entire industry chain collaborating
with other departments and business segments to establish and refine production and R&D quality
management systems. These initiatives were designed to support the Company’s evolving needs in
production R&D new businesses emerging fields and commercial opportunities.In 2024 Hangzhou Zhongmei Huadong Pharmaceutical Service Corporation continuously
deepened its transformation in pharmaceutical services by implementing professional and compliant
promotion models while actively aligning with industry trends and closely following the Company’s
strategic objectives. It continued to strengthen its presence in three core therapeutic fields of
endocrinology autoimmunity and oncology while cultivating a specialized pharmaceutical service
team grounded in medical expertise. The Company further refined its three major systems: KA access
academic promotion and personnel/organizational development. While reinforcing in-hospital
academic-driven initiatives it expanded out-of-hospital service systems through multi-product
coverage optimized staffing enhanced professional capabilities refined management practices and
digital marketing thereby increasing coverage and penetration in out-of-hospital and primary-level
markets. The Company accelerated the development of retail product strategies aligned with its
strategies by expanding its network and channels in online markets OTC markets and DTP
pharmacies. The Company prioritized its efforts in policy affairs advancement out-of-
31Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
hospital/primary-level market development strategic product collaborations academic platform
establishment system optimization and compliance reinforcement to drive comprehensive
improvements in pharmaceutical service capabilities.During the reporting period Zhongmei Huadong’s core products maintained stable sales growth
with steadily increasing market share. The Bailing product series successfully renewed its volume-
based procurement agreement under the National Traditional Chinese Medicine Patent Medicines and
Simple Preparations Joint Procurement Alliance and accelerated growth is expected in the future
considering the expanded indications of Bailing Capsule suitable for reimbursement under the
updated Catalogue of Medicines Covered by National Basic Medical Insurance. Liluping the first
Liraglutide Injection approved for dual indications of diabetes and weight management in China
sustained rapid growth by capitalizing on its first-mover advantages and established distribution
channels after it was approved in 2023 laying a solid market foundation for the Company’s
subsequent commercialization of GLP-1 products. The exclusively commercialized CAR-T
Zevorcabtagene Autoleucel Injection (Saikaize) achieved successful market entry in its launch year.Since it was approved in March 2024 over 200 Chinese medical institutions completed certification
and filing procedures. As of December 31 2024 the Company had placed 154 valid orders with its
partner CARsgen Therapeutics exceeding its annual targets and demonstrating the pharmaceutical
service team’s exceptional promotional capabilities and execution efficiency in the emerging
hematologic oncology sector. Saikaize is poised to maintain high-speed growth considering the
continuous market expansion and increased coverage under regional Huiminbao programs and
commercial insurance plans. Sailexin co-developed by the Company with Qyuns Therapeutics and
commercialized by the Company independently emerged as China’s first biosimilar of Ustekinumab
Injection in this category and marked the Company’s inaugural commercialization achievement in
autoimmune biosimilars. As for the product the Company has actively progressed its efforts in online
tendering and hospital access processes achieved bulk supply and obtained approval for its
supplemental application for the treatment of pediatric plaque psoriasis. This advancement has
enabled the Company to establish a “golden product portfolio” in psoriasis treatment that integrates
monoclonal antibodies oral agents and external preparations providing comprehensive treatment
options for adult and pediatric psoriasis patients across all disease stages.(II) Pharmaceutical Business
In 2024 the Company’s pharmaceutical business segment actively addressed the dual challenges
of payment-side cost control and weak consumer demand adopting a balanced strategy between in-
hospital and out-of-hospital markets. By emphasizing both business expansion and operational
efficiency improvement the segment achieved stable development through proactive internal
32Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
adjustments to counter external market pressures and competition. The segment reported revenues of
27.092 billion yuan up 0.41% year on year and achieved the net profit of 456 million yuan up 5.58%
year on year.During the reporting period the segment adhered to the operational philosophy of “preservingexisting business driving incremental growth and enhancing quality” continuously refining its
integrated business service capabilities. The segment diversified its business portfolio across
medicines medical devices TCM herbal pieces and non-pharmaceutical products while accelerating
retail upgrades and CSO service enhancements and enhancing its supply chain upgrade and digital
transformation. In terms of medicines the segment continuously strengthened group-based
collaborations with tertiary hospitals consolidated market share increased penetration in secondary
medical markets and expanded retail terminals and non-pharmaceutical businesses outside Zhejiang
Province. As for medical devices the segment leveraged volume-based procurement opportunities
for medical consumables to scale up operations and boost market share through concentrated
distribution networks. With regard to TCM herbal pieces the segment established “half-day”
delivery-standard herbal decoction centers across Zhejiang Province expanded production capacity
secured contracts with cultivation bases optimized product tiers and took diverse measures to
improve bid success rates get more orders and increase market shares. In terms of innovative
business the segment coordinated its agency layouts for chemical medicines biological products
and high-value consumables for synergistic distribution thus achieving two-way enhancement. As
for retail upgrade the segment enhanced “integrated pharmaceutical services” and expanded
“pharmacy+” models. To upgrade its CSO services the segment empowered its traditional business
to increase the in-hospital business focused on specialized areas like blood products and explored
aesthetic medicine markets in public healthcare institutions through product iteration and physician
training. The segment prioritized two core drivers: as for hardware the segment continued to place
its focus on supply chains for cold chains special medicines and nuclear medicines and further
refined third-party logistics services. With regard to software the segment upgraded its information
system for digital business operations logistics retail and overall management.During the reporting period the segment continued to explore innovative service models
excavate demands from upstream and downstream clients and enhance service quality to strengthen
brand recognition. Upholding the philosophy of “stabilizing scale and optimizing structure” the
segment consolidated its traditional delivery business maintained reasonable operational scale and
ensured dual growth in both market share and volume at leading hospitals. It further extended its
medicinal materials and medical device businesses to low-tier markets increasing its market sharesin various cities throughout Zhejiang Province. With the objective of “addressing weaknesses and
33Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.increasing profitability” the segment vigorously expanded its out-of-hospital markets further
developed the Company’s pharmaceuticals retail business and improved the terminal services and
profitability of in-hospital pharmacies and DTP pharmacies. In terms of product portfolio the
segment focused on high-margin chemical medicines and blood product agency extended the medical
device product lines and leveraged regional subsidiaries to directly reach end consumers. Innovative
marketing models were implemented to diversify its categories. OTC distribution and other
departments co-established business groups for businesses out of Zhejiang Province. The segment
actively fueled its distribution and delivery businesses through agency business and undertook scale-
up projects for branded partners. Huadong Medicine Supply Chain Management (Hangzhou) Co.Ltd. optimized multi-scenario logistics coordination completed phase IV cold storage expansion and
prioritized the enhancement of distribution capabilities for high-value pharmaceuticals such as
vaccines and biological products thereby solidifying its leadership in the pharmaceutical cold chain
logistics sector.(III) Aesthetic Medicine Business
During the reporting period the Company’s aesthetic medicine segment performed steadily
amid slowing macroeconomic growth and declining consumer demands in domestic and international
markets achieving the total operating revenue of 2.326 billion yuan (excluding internal offsetting
factors) down 4.94% year on year. With gradual recovery in global consumption and successive
regulatory approval of multiple differentiated new products the segment is expected to stabilize and
rebound unleashing long-term growth potential and securing broader mid-to-long-term development
opportunities.Sinclair one of Huadong Medicine’s wholly-owned subsidiaries and the global operating
platform of the Company’s aesthetic medicine business based in the UK proactively expanded sales
of its aesthetic medicine injection filling and EBD products globally. Affected by sluggish global
economic growth internal adjustments of EBD business and fluctuations in demands Sinclair
achieved the operating revenue of approximately 967 million yuan (down 25.81% year on year) and
the EBITDA of -12.61 million pounds during the reporting period.Sinclair (Shanghai) the Company’s wholly-owned subsidiary in China for its aesthetic medicine
business achieved the operating revenue of 1.139 billion yuan during the reporting period up 8.32%
year on year marking its continuously improved profitability and making important contribution to
the growth of the Company’s overall performance.During the reporting period the Company has continued to plan and promote the overseas
registration of its cosmetic medicine products. The MaiLi series products received approval for
launch in Singapore in June 2024. KIO015 a new-generation dermal filler for injection is currently
34Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
undergoing technical review for MDR-CE certification in the EU and is expected to receive the
certification in 2025. The Company has registered and launched all its injection products including
regenerative materials (Ellansé and Lanluma) hyaluronic acid fillers (MaiLi and Perfectha) and
thread lifting products (Silhouette Soft and Silhouette Instalift) in over ten major markets in the
Middle East. Additionally the registrations of EBD core products like Cooltech Elysion and the
Primelase series are being actively promoted in the Middle East with more than half of the
registration procedures completed. EllanséS has been approved to initiate clinical trials in the U.S.Its project initiation and investigator injection training have been completed and the trial has now
progressed to the subject enrollment phase. In the meantime the Company has started the registration
of MaiLi in the U.S. and is actively preparing for the registration and clinical trials of other injection
products such as KIO015.During the reporting period the Company kept advancing the registration and launching of its
core products in China. The optical RF therapy system Renotion (V20) was approved by the NMPA
in September 2024. V30 a high-end integrated multi-functional platform combining radio frequency
intense pulsed light and Nd:YAG laser technologies received a registration acceptance notice from
the NMPA in March 2025. MaiLi Precise a novel premium hyaluronic acid dermal filler with
lidocaine (indication: infraorbital pouch) completed main end-point follow-ups for all subjects in its
Chinese clinical trial in September 2024 and is currently undergoing safety follow-ups. MaiLi
Extreme another filler in the same series (indication: enhancement of jawline contour) was approved
by the NMPA in January 2025. For the EllanséS the enrollment of all subjects for the new indication
(enhancement of forehead contour) in its Chinese clinical trial was completed in November 2024 and
follow-ups are now in progress. EllanséM a long-acting collagen-stimulating variant (indication:
correction of temporal depression) received the registration acceptance notice from the NMPA in
January 2025. For the Poly-L-lactic acid (PLLA) collagen stimulant Lanluma the enrollment of all
subjects in its Chinese clinical trial was completed in November 2024 and follow-ups are now in
progress. The chitosan-based dermal filler KIO021 that utilizes innovative biomaterials secured
ethical approval for principal investigator of clinical trial in December 2024 and is poised to initiate
formal clinical trials. Additionally the marketing authorization application for the exclusively
distributed product YY001 (recombinant botulinum toxin type A for injection) was accepted by theNMPA in December 2024. Please see “(8) Progress of registration and launching of aestheticmedicine products in China” in “4. R&D investment” below in this section for the progress of
registration of the Company’s other key aesthetic medicine products in China.
35Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Figure: Key Aesthetic Medicine Products of Huadong Medicine
36Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
During the reporting period Sinclair (Shanghai) drove collaborative development of its multiple
subsidiary brands with the Company’s brand as the main body constantly launched high-quality
products gradually improved its product matrix linked global R&D and medical resources improved
its reputation on B and C ends and created a “professional” “aesthetic” and “high-end” brand image.As for products the Company launched the second-generation new products of Ellansé in
Shanghai in June 2024: three high-end regenerative facial fillers namely Ellansé Zhenyan
Ellansé Jinyan and Ellansé Zhizhen. By stratifying the core PCL microspheres into distinct
particle sizes these products deliver highly refined and personalized anti-aging solutions to patients.This innovation pioneers the concept of precision anti-aging in China driving demand while further
consolidating the Company’ leading role in the high-end anti-aging market in China and strengthening
its product matrix. Winning great concern and recognition after being launched these products have
been introduced and applied by approximately 300 high-end aesthetic medicine institutions so far.Additionally the Company further enhanced its industry influence through active participation
in major international aesthetic medicine exhibitions and the establishment of global academic
exchange platforms. In October 2024 Sinclair (Shanghai) successfully organized the World Expert
Meeting (WEM) in Barcelona Spain providing clinical case study sharing and cutting-edge materials
science knowledge to global aesthetic experts thereby delivering optimized anti-aging solutions for
worldwide patients. The meeting unveiled the Ellansé Asia-Pacific Consensus offering physicians
scientific methodologies for refined clinical applications of the Ellansé second-generation new
products tailored to diverse aesthetic needs. The meeting also showcased clinical case achievements
of these products. In 2024 Sinclair (Shanghai) reached academic cooperation with Massachusetts
General Hospital under Harvard Medical School on Asian Virtual Magic Wand which was
successfully implemented in March 2025 with academic exchange activities held at Harvard
University. With this initiative as a tie Sinclair (Shanghai) will pool together top-notch scholars
clinicians researchers and industry leaders across the globe to promote international academic
exchanges enhance the influence of Chinese physicians in the field of aesthetic medicine globally
expand more safe and effective treatment means and actively advance the vigorous development of
the global aesthetic medicine industry.The segment has always put medical science first. In 2024 Sinclair (Shanghai) conducted
hundreds of on-site medical training sessions and educational programs training over 5000
physicians. Concurrently it recorded over 120000 physician visits to its online education platform
and published 13 papers in academic journals including eight on SCI-indexed journals (English). By
the end of 2024 Sinclair (Shanghai) has signed cooperation contracts with over 1000 hospitals and
trained over 1000 certified physicians on Ellansé. As for Ellansé Sinclair (Shanghai) constantly
37Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
strengthened its brand building and consolidated the high-end orientation through diverse trans-
discipline activities being well-received by C-end markets and witnessing improved industry
influence and competitiveness.During the reporting period Sinclair (Shanghai) also achieved positive results in the expansion
of biological and aesthetic medicine equipment market. In March 2024 the Company officially
launched the Xinshurui Cordyceps Series Kit under the Glacial Spa brand. In May 2024 the launch
meeting of Reaction body program was kicked off during the MEVOS Congress in Hangzhou.Keeping the philosophy of “medicine-based aesthetics” in mind Sinclair (Shanghai) successfully
released the Expert Consensus on Strengthened Treatment of Ligament through Multi-channel Radio
Frequency. Two clinical trials with Peking University First Hospital and Shanghai Ninth People’s
Hospital are about to end. The Company’s energy-based products have been well-received by many
institutions and patients since their launch. To date more than 200 institutions have introduced Glacial
Spa or Reaction. The number of terminal treatments increased by more than 300% year on year. In
addition the Company actively advanced its efforts for the registration of Préime DermaFacial its
cosmetic device in China and kept offering patients excellent experience and services from all aspects
through constantly enriched product matrix.(IV) Industrial Microbiology
During the reporting period the Company kept implementing the industrial microbiology
development strategy and further strengthened its product R&D and market expansion capabilities
by continuously advancing four major fields of xRNA featured APIs & intermediates massive health
& biomaterials and animal health. With current strategic priorities established on accelerating global
market expansion and deeper integration into the global pharmaceutical supply chain the Company
has achieved positive progress in developing major customer partnerships across domestic and
international markets. Through years of exploration and practice the Company has forged a
challenging yet rewarding path for growth. During the reporting period all business departments
maintained a robust growth momentum demonstrating a sustained upward trend in overall sales and
achieving a total sales revenue of 711 million yuan up 43.12% year on year. Four major fields of
featured APIs & intermediates xRNA massive health & biomaterials and animal health witnessed
growth of 38% 20% 142% and 33% respectively. Major accomplishments across all business
segments are as follows:
Global market expansion remains a core mission for the industrial microbiology segment. In the
featured APIs & intermediates field that integrates traditional and innovative operations the product
portfolio for ADC toxin innovation business has now been established with all core toxin variants
having completed U.S. DMF registrations. Moreover the segment has secured multiple ADC small-
38Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
molecule CDMO projects offering global customers end-to-end services spanning from early-stage
R&D to clinical-phase product development and regulatory registration submissions. The polypeptide
business has completed an overall deployment and kept actively expanding into the international
market with anticipated gradual release of overseas order potential. Additionally the deployment of
high-potency API products of microbial origin (including anti-tumor anti-parasite compounds) has
been substantially completed.xRNA: Perfect mRNA has established full capabilities to undertake mRNA-related CDMO
businesses. It has successfully developed dozens of enzymatic and chemical raw materials for mRNA
vaccine synthesis and built an integrated platform that encompasses self-developed fermentation
plasmid preparation mRNA substance production and LNP formulations providing customers with
end-to-end solutions that span R&D production and quality control. Meanwhile Wuhu Huaren has
enhanced its full-chain development and production capabilities for upstream raw materials for
oligonucleotide medicines and in vitro diagnosis (IVD) delivering differentiated services and rapid
responses to serve globally renowned pharmaceutical enterprises CDMOs and IVD companies.Through sustained investments in innovation Wuhu Huaren has endeavored to continuously enhance
its R&D capabilities around raw materials for nucleic acid medicines delivery systems and
customized business. To date with ISO9001 certification and strict adherence to the ICH international
guidelines and GMP standards Wuhu Huaren has secured four U.S. DMF registrations. These
capabilities have enabled its partnerships with multiple multinational pharmaceutical enterprises thus
driving robust business growth.Massive health & biomaterials: For this segment focus has been placed on three core business
lines of functional food ingredients personal care raw materials and biomaterials. Magic Health
completed the fundamental construction of its Yichang Industrial Base obtained the production
license and shifted to normalized operation. It also obtained the following certifications: ISO9001
ISO22000 ISO14001 ISO45001 HACCP FSSC22000 Halal Kosher (OU) and cGMP and
accelerated the development of key domestic and international customer partnerships. Shengji
Material fostered an advanced medical-grade functional materials matrix with its self-developed
biodegradable materials products together with exclusively agent varieties introduced from overseas.Leveraging on its unique platform for preparation technologies innovation it proactively developed
biological medicine and aesthetic medicine CMC R&D businesses closely associated with its core
materials expertise that boast global competitiveness. This model facilitates co-development of
innovative products with global partners.Animal health: in 2024 Nanjing Nongda Animal Pharmaceutical the Company’s holding
subsidiary has been actively building a professional brand system for the pet healthcare industry
39Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
developing innovative solutions across three specialized segments in animal health: perioperative
care geriatric disease management and nutritional health services. Leveraging Butorphanol Tartrate
Injection (branded as Baoshining) its exclusively commercialized central analgesic medicine for
pets Nanjing Nongda Animal Pharmaceutical has implemented a three-pronged commercialization
strategy focusing on enhanced hospital coverage collaborations with KOLs at chain hospitals and
the establishment of flagship hospitals in major cities. By the end of 2024 these efforts had secured
coverage across over 5000 pet hospitals throughout China effectively driving the promotion and
sales of complementary professional products while fostering and strengthening its field professional
teams for pet care. Concurrently Nanjing Nongda Animal Pharmaceutical has vigorously
strengthened its innovative pet product lines through internal R&D and external partnerships
fostering robust product portfolios in perioperative care and dermatology treatments that are
scheduled to start commercial rollout progressively from 2025. Additionally Nanjing Nongda Animal
Pharmaceutical has also prioritized digital channel development by launching the pet e-commerce
brand “Mengdi” on Tmall TikTok and other mainstream e-commerce platforms. This initiative
directly addressed the evolving consumer needs while contributing to the entire industry development.Strategically advancing aquaculture health as a high-potential sector it has been committed to
improving water environments and enhancing aquatic nutrition through team restructuring product
innovation regional expansion and direct sales model trials. All these efforts have contributed to its
delivery of comprehensive support and services to aquaculture operators including animal health
products pathogen detection services and water quality testing.II. BD Cooperation during the Reporting PeriodOn March 11 2024 Huadong Medicine Investment Holding (Hong Kong) Limited (“HuadongMedicine Investment”) a wholly-owned subsidiary of the Company subscribed IPO shares of Qyuns
Therapeutics Co. Ltd. at the Stock Exchange of Hong Kong Limited as a cornerstone investor with
the consideration of 5 million US dollars equivalent in Hong Kong dollar from its own funds
(excluding brokerage commission related transaction fees and levies). For details please refer to the
Announcement on Subscribing IPO Shares of Qyuns Therapeutics Co. Ltd. in Hong Kong as
Cornerstone Investor (Announcement No.: 2024-013) disclosed by the Company on Cninfo
(http://www.cninfo.com.cn). On March 20 2024 Qyuns Therapeutics was successfully listed on the
main board of the Stock Exchange of Hong Kong with the stock code of 2509.HK. As of the date of
the Report the Company holds a total of 37876800 shares of Qyuns Therapeutics through its wholly-
owned subsidiaries Zhongmei Huadong and Huadong Medicine Investment Holding (Hong Kong)
Limited accounting for about 17.06% of the total issued shares of Qyuns Therapeutics including
35900000 shares held by Zhongmei Huadong and 1976800 shares held by Huadong Medicine
40Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Investment.On July 12 2024 Zhongmei Huadong a wholly-owned subsidiary of the Company signed the
Exclusive Product Licensing Agreement with Suzhou Auzone Biological Technology Co. Ltd.According to the agreement Zhongmei Huadong obtained the exclusive rights to develop register
manufacture and commercialize the globally innovative product TTYP01 Tablets (Edaravone Tablets)
for all indications within the Chinese mainland Hong Kong Macao and Taiwan. For details please
refer to the Announcement on Signing the Exclusive Agreement for Products by Wholly-owned
Subsidiary with Auzone (Announcement No.: 2024-060) disclosed by the Company on Cninfo
(http://www.cninfo.com.cn).On July 19 2024 Zhongmei Huadong a wholly-owned subsidiary of the Company signed the
Cooperative Development and Market Promotion Service Agreement on QX005N with its holding
company Qyuns Therapeutics Co. Ltd. listed on the Stock Exchange of Hong Kong (stock code
2509.HK). According to the agreement Zhongmei Huadong obtained the exclusive cooperative
development rights exclusive market promotion option and preferential cooperation right transferred
by listing license holder of QX005N of Qyuns Therapeutics within the Chinese mainland Hong Kong
Macao and Taiwan. For details please refer to the Announcement on Signing the Cooperative
Development and Market Promotion Service Agreement for Products by Wholly-owned Subsidiary
(Announcement No.: 2024-061) disclosed by the Company on Cninfo (http://www.cninfo.com.cn).
On July 19 2024 to further enhance the Company’s core competitiveness in the field of
traditional Chinese medicine and enrich its product lines of topical formulation the Company and its
wholly-owned subsidiary Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd. signed the
Agreement on Acquiring the Equity of Guizhou HengBa Pharmaceutical Limited Liability Company
with Guizhou HengBa Pharmaceutical Limited Liability Company and its original shareholders.According to the agreement Bohua Pharmaceutical acquired 100% equity of HengBa Pharmaceutical
for a base price of 528.47 million yuan with contingent consideration payment as stipulated in the
agreement. For details please refer to the Announcement on Acquisition of 100% Equity of Guizhou
HengBa Pharmaceutical Limited Liability Company (Announcement No.: 2024-064) disclosed by
the Company on Cninfo (http://www.cninfo.com.cn). HengBa Pharmaceutical was renamed Huadong
Medicine (Guizhou) Pharmaceutical Co. Ltd. on January 2 2025.On August 2 2024 Huadong Medicine (Hangzhou) Co. Ltd. a wholly-owned subsidiary of the
Company signed an Exclusive Commercialization Cooperation Agreement with Beijing
Imunopharm Technology Co. Ltd. According to the agreement Huadong Medicine Hangzhou
obtained the exclusive commercialization rights of CD19-targeting autologous CAR-T candidateproduct IM19 chimeric antigen receptor T cell injection within the Chinese mainland (“Licensed
41Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.Territory”). For details please refer to the Announcement on Signing the Exclusive Commercialization
Cooperation Agreement for Products by Wholly-owned Subsidiary (Announcement No.: 2024-065)
disclosed by the Company on Cninfo (http://www.cninfo.com.cn).On August 14 2024 Zhongmei Huadong a wholly-owned subsidiary of the Company signed
an Exclusive Product License Agreement with IMBiologics Corp. (“IMB”) of the Republic of Korea.According to the agreement Zhongmei Huadong obtained the exclusive rights to develop register
manufacture and commercialize IMB-101 and IMB-102 two globally innovative autoimmunity
products in 37 Asian countries including China (excluding Japan the Republic of Korea and the
DPRK). For details please refer to the Announcement on Signing the Exclusive License Agreement
for Products by Wholly-owned Subsidiary with IMBiologics (Announcement No.: 2024-071)
disclosed by the Company on Cninfo (http://www.cninfo.com.cn).On September 20 2024 Huadong Medicine (Hangzhou) Co. Ltd. a wholly-owned subsidiary
of the Company reached an exclusive strategic cooperation with Huisheng Biopharmaceutical Co.Ltd. (“Huisheng Biopharmaceutical”). Huisheng Biopharmaceutical is a non-wholly-owned
subsidiary of Hainan Sihuan Pharmaceutical Co. Ltd. (“Sihuan Pharmaceutical” Stock Code:
00460.HK). The cooperation concerns the commercial rights of their listed innovative product
Huiyoujing (Ganagliflozin Proline Tablets) within the Chinese mainland. Huiyoujing is an SGLT-2
inhibitor for type 2 diabetes approved by Huisheng Biopharmaceutical in China. On November 28
2024 the National Healthcare Security Administration officially released the results of the 2024
medical insurance negotiations. Huiyoujing (Ganagliflozin Proline Tablets) was formally included
in the Catalogue of Medicines Covered by National Basic Medical Insurance/Work-related Injury
Insurance/Maternity Insurance (2024 Edition) for the improvement of glycemic control in adult
patients with type 2 diabetes (T2DM) providing a new therapeutic option for clinical populations
prescribed SGLT-2 inhibitor. The updated Catalogue of Medicines Covered by National Basic
Medical Insurance became effective on January 1 2025.On December 27 2024 Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. (“ZhongmeiHuadong”) a wholly-owned subsidiary of the Company entered into a strategic collaboration with
Synerk Pharmaceutical Technology (Suzhou) Co. Ltd. (“Synerk”) to jointly develop SNK-2726 a
small interfering RNA (siRNA) candidate targeting angiotensinogen (AGT) for hypertension
treatment. According to the agreement Zhongmei Huadong obtained the exclusive option for
development registration manufacturing and commercialization rights of this product in Greater
China.III. ESG of the Company during the Reporting Period
With regard to ESG the Company maintained an unwavering commitment to sustainable
42Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
development. Overseen by a dedicated Board-level ESG Committee the Company integrates the core
ESG principles into corporate development strategy and daily operations management. Guided by a
scientific approach to social responsibility it promoted innovation across all business segments. Itupholds the idea of green manufacturing actively supports China’s “carbon neutrality and carbonpeaking” goals operates with integrity in strict accordance with laws and actively fulfills its social
responsibilities. By virtue of its excellent ESG governance the Company has been recognized
through multiple prestigious ratings and awards including the Rating A for ESG by MSCI Rating
AA for ESG by CNI Index of Shenzhen Stock Exchange and Rating A for ESG of WIND.Additionally the Company has also been honored with the “2024 Excellent Practice Cases forSustainable Development among Listed Companies” by the China Association for Public Companies
and the “ESG Best Practice Award 2024” by the New Fortune.For more information about ESG please refer to Huadong Medicine: Environmental Social and
Governance (ESG) Report in 2024 issued by the Company.IV. Awards during the Reporting Period
During the reporting period the Company’s comprehensive competitive strength efficient
operation and governance and value creation capabilities gained significant market recognition as
evidenced by a number of prestigious awards and honors. The Company was listed in Fortune China
500 for the 15th time rated as “2024 China Top 500 Private Enterprises” and “2024 China Top 500Private Manufacturing Enterprises” by the All-China Federation of Industry and Commerce and the
“Best Listed Companies 2024” by the New Fortune. It was selected into the Top 10 among “2023Top 100 Enterprises in the Pharmaceutical Industry in China” and “2023 Top 10 BigPharmaEnterprises in Innovation Power” by MENET. It was granted the “Top 100 Valuable Mainboard ListedCompanies” at the 18th China Listed Companies Value Evaluation by Securities Times as well as the
“Top 20 Most Competitive Chinese Pharmaceutical Listed Companies in 2024” and the “Top 100Innovative Pharmaceutical Enterprises in 2024” by E-medicine Agent. In terms of investor relations
management the Company won the “2024 Outstanding Board Practice Case of Listed Companies”
the “Excellent Practice in 2023 Annual Report Briefings of Listed Companies” and the “2024 BestPractice of Board Secretariat Operations of Listed Companies” by China Association for Public
Companies.
2. Income and cost
(1) Composition of operating revenue
Unit: yuan
43Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
20242023
Year-on-year
Proportion in Proportion in
Amount Amount increase/decrease
operating revenue operating revenue
Total operating
41905707385.91100%40623782520.43100%3.16%
revenue
By sectors
Commerce 28470546280.59 67.94% 27641104822.67 68.04% 3.00%
Manufacturing 15778029869.34 37.65% 14834472398.22 36.52% 6.36%
Including:
13752704745.0632.82%12663534159.1331.17%8.60%
Industry
Aesthetic
2326195010.665.55%2447076357.486.02%-4.94%
medicine
Including:
International 967371493.22 2.31% 1303938229.47 3.21% -25.81%
aesthetic medicine
Aesthetic
medicine in China 1481177976.86 3.53% 1328453681.15 3.27% 11.50%
[Note]
Offset (inter-
-2342868764.02-1851794700.46
sectoral offset)
By products
By regions
Sales in China 40811001140.88 97.39% 39196619466.20 96.49% 4.12%
Overseas sales 1094706245.03 2.61% 1427163054.23 3.51% -23.29%
By sales modes
[Note] The aesthetic medicine in China comprises the income from the self-operated aesthetic medicine products the income from
the aesthetic medicine products of the Company’s pharmaceutical commercial agency and the income from the OTC weight-loss
products of the Company.
(2) The operating revenue or profit that accounts for more than 10% of the total by industries products regions and sales
modes
□ Applicable □ N/A
Unit: yuan
Year-on-year Year-on-year Year-on-year
Operating Gross profit increase/decrea increase/decrea increase/decrea
Operating cost
revenue rate se in operating se in operating se in gross
revenue cost profit rate
By sectors
2847054628026391902389
Commerce 7.30% 3.00% 2.64% 0.33%.59.84
157780298693960294879.
Manufacturing 74.90% 6.36% 20.54% -2.95%.3425
By products
By regions
4081100114027528121461
Sales in China 32.55% 4.12% 2.02% 1.39%.88.12
1094706245.
Overseas sales 460425724.70 57.94% -23.29% -3.99% -8.46%
03
By sales modes
If the statistical methodology of the Company’s main business data has been adjusted during the reporting period the Company’s main
business data of the most recent year should be adjusted according to the methodology at the end of the reporting period.□ Applicable □ N/A
44Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(3) Whether the Company’s income from in-kind sales exceeds that from labor services
□□Yes □No
Reasons for over 30% year-on-year increase/decrease in related data
□ Applicable □ N/A
(4) Fulfillment of major sales contracts and major procurement contracts signed by the Company as of the reporting period
□ Applicable □ N/A
(5) Composition of operating cost
Sector
Unit: yuan
2024 2023 Year-on-year
Sector Item Proportion in Proportion in increase/decrea
Amount Amount
operating cost operating cost se
2639190238925712981178
Commerce Operating cost 94.30% 93.63% 2.64%.84.42
3960294879.3285586681.
Manufacturing Operating cost 14.15% 11.96% 20.54%
2598
Note
N/A
(6) Whether the scope of consolidation has changed during the reporting period
□ Yes □No
For details please refer to “IX. Change of consolidation scope” in “Section X. Financial Report”.
(7) Significant changes or adjustments to the Company’s business products or services during the reporting period
□ Applicable □ N/A
(8) Major customers and major suppliers
Information of the Company’s major customers
Total sales amount of the top five customers (yuan) 9706497755.50
Proportion of the total sales amount of the top five customers in
23.16%
the total annual sales amount
Proportion of related parties’ sales amount of the top five
0.00%
customers’ sales amount in the total annual sales amount
45Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Information of the Company’s top five customers
Proportion in total annual
No. Customer name Sales amount (yuan)
sales amount
1 Customer A1 3632628729.12 8.67%
2 Customer A4 2495601389.16 5.96%
3 Customer A3 1571238379.31 3.75%
4 Customer A10 1199422337.01 2.86%
5 Customer A2 807606920.90 1.93%
Total -- 9706497755.50 23.16%
Other information of major customers
□ Applicable □ N/A
Information of the Company’s major suppliers
Total purchase amount of the top five suppliers (yuan) 4404058660.36
Proportion of the total purchase amount of the top five
15.74%
suppliers in the total annual purchase amount
Proportion of related parties’ purchase amount of the top five
customers’ purchase amount in the total annual purchase 0.00%
amount
Information of the Company’s top five suppliers
Proportion in the total annual
No. Supplier name Purchase amount (yuan)
purchase amount
1 Supplier B6 1171559451.57 4.19%
2 Supplier B7 903057527.53 3.23%
3 Supplier B8 878967438.34 3.14%
4 Supplier B9 812574960.12 2.90%
5 Supplier B10 637899282.80 2.28%
Total -- 4404058660.36 15.74%
Other information of major suppliers
□ Applicable □ N/A
3. Expenses
Unit: yuan
Year-on-year Description of major
20242023
increase/decrease changes
Sales expenses 6408522136.28 6645411414.21 -3.56%
Administrative
1397388188.961420188961.59-1.61%
expenses
Primarily attributable
to decreased interest
Financial expenses 22264685.91 51189784.17 -56.51%
expenses and increased
interest revenue
R&D expenses 1425659218.47 1270803119.96 12.19%
46Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
4. R&D input
□ Applicable □ N/A
(1) R&D overview
During the reporting period following the “Scientific Research-based and Patient-centered”
corporate philosophy the Company has deepened its expertise in the fields of endocrinology
autoimmunity and oncology. Through sustained increase in the R&D investment and expansion of
innovative medicine R&D pipelines it has strengthened the innovative R&D ecosystem and
technological platforms while accelerating clinical trials with multiple significant milestone
achievements made. As of the date of the Report the Company has a total of 133 pharmaceutical
projects under development including 94 innovative and biosimilar medicine programs. During the
reporting period the Company’s R&D investment in the pharmaceutical industry (excluding equity
investment) reached 2.678 billion yuan up 16.77% year on year. This includes 1.770 billion yuan in
direct R&D expenditure up 10.63% year on year accounting for 12.91% of the operating revenue of
the pharmaceutical industry.
(2) Innovative R&D pipelines
The Company has strategically focused its innovative R&D efforts on three core therapeutic
areas: endocrinology autoimmunity and oncology. To date over 80 innovative medicine pipelines
have been rolled out. With continuous expansion of product lines the Company has diversified its
innovative medicine portfolio to include small-molecule medicines targeted protein degraders
polypeptides ADCs bispecific or multi-specific antibody medicines and small nucleic acid
medicines. Additionally the Company is also actively exploring innovative therapies for
endocrinology autoimmunity and oncology diseases.
(3) R&D Progress of innovative medicines medical devices and biosimilar medicines
Oncology
The Company endeavored to build a world’s leading innovative oncology medicines R&D
platform. Through discovery screening and validation of novel targets in early-stage R&D of
medicines it has established a robust pipeline of more than 30 innovative antineoplastic medicines
covering targeted small-molecule medicines ADCs antibodies PROTAC etc.In November 2024 Elahere (R&D code: IMGN853 HDM2002) the world’s first-in-class
Mirvetuximab Soravtansine Injection introduced by the Company obtained conditional approval
from the NMPA for the treatment of adult patients with FRα positive platinum-resistant epithelial
ovarian fallopian tube or primary peritoneal cancer who have received one to three prior systemic
treatment regimens. The Company’s supplemental application to convert the conditional approval of
47Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Elahere into regular approval was accepted in March 2025. Additionally in April 2024 the
Company gained approval to join the international multi-center phase III clinical study of PSOC
(platinum-sensitive ovarian cancer) for the maintenance treatment for adult patients with FRα-
positive recurrent platinum-sensitive epithelial ovarian cancer fallopian tube cancer or primary
peritoneal cancer who have not experienced disease progression after second-line platinum-based
chemotherapy in combination with bevacizumab. The first subject enrollment in China for the trial
was completed in September 2024. In addition the product was approved in Macao China in April
2024. In August 2024 through the ground-breaking policy of “Hong Kong & Macao RegisteredMedicine and Device Access to GBA Program” the product was approved in the Guangdong-Hong
Kong-Macao Greater Bay Area to benefit more patients.The NDA application of Mefatinib Tablet the Company’s first-class new medicine for the first-
line treatment of Locally Advanced or Metastatic Non-small Cell Lung Cancer (NSCLC) patients
with an exon L858R mutation in EGFR 21 was accepted in May 2024. The clinical and
pharmaceutical inspections were completed in September and October 2024 respectively and the
application is now under regulatory review.HDM2005 an ADC product independently developed by the Company and receptor tyrosine
kinase-like orphan receptor 1 (ROR1) is used for the treatment of advanced malignant neoplasm. In
August 2024 the Company completed the enrollment of the first subject and the first three dose-
escalation cohorts in its phase I clinical trial in China without observing dose-limiting toxicities
(DLT). The Company is currently advancing to the fourth dose-escalation cohort while initiating
expansion cohorts at the third dose level. In February 2025 the Company submitted an IND
application to the NMPA for HDM2005 combined with R-CHP in previously untreated diffuse large
B-cell lymphoma (DLBCL) which has been accepted for review. Simultaneously The Company’s
HDM2005 also received the Orphan Drug Designation (ODD) from the U.S. FDA for mantle cell
lymphoma (MCL).The IND application of HPK-1 PROTAC (hematopoietic progenitor kinase1 proteolysis
targeting chimera) the Company’s first self-developed small-molecule anti-tumor medicine
HDM2006 was approved in China by the NMPA in October 2024. The product is used for the
treatment of advanced solid tumors. In January 2025 the IND application of HDM2006 Tablet in the
U.S. was approved by FDA. The product is used for the treatment of advanced malignant neoplasm.In December 2024 the enrollment and administration of the first subject for phase I clinical research
evaluating the safety tolerability efficacy and pharmacokinetics of HDM2006 Tablet in patients with
advanced solid tumor were completed at the Fudan University Shanghai Cancer Center. The research
is currently progressing as planned.
48Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
The IND application of HDM2027 (HDP-101) an innovative medicine introduced by the
Company was approved in October 2024. The product is used for the treatment of clonal
hematological diseases with positive B cell maturation antigen (BCMA) such as recurrent/refractory
multiple myeloma.IND applications of HDM2020 HDM2012 and HDM2017 three ADC candidates with novel
targets developed independently by the Company are scheduled to be submitted in both China and
the U.S. in Q2/Q3 2025.For DR30206 a proprietary PD-L1/VEGF/TGF-β tri-specific antibody fusion protein wholly
owned and developed by the Company’s subsidiary Doer Biologics with global intellectual property
rights has completed seven dose-escalation cohorts in its phase Ia clinical trial in March 2025 and
the first subject administration was completed in April 2025 for its phase Ib clinical trial in the
treatment of non-small cell lung cancer. Available clinical data demonstrate that DR30206 exhibits
favorable human tolerability and preliminary efficacy across multiple solid tumor types. In January
2025 the clinical trial application submitted by Doer Biologics to the NMPA for DR30206 in
combination with standard chemotherapy for the treatment of patients with advanced or metastatic
gastrointestinal tumors was accepted and the company received approval for the trials in April 2025.The phase Ib clinical study on the DR30206 in combination with standard chemotherapy is expected
to begin in H1 2025.Endocrinology
The Company has established a robust portfolio of nearly 20 innovative small-molecule and
biological medicines targeting endocrine and metabolic diseases.The Company’s proprietary oral small-molecule GLP-1 receptor agonist HDM1002
(conveglipron) achieved positive top-line results in its phase II clinical trials for weight management
in October 2024. The data demonstrated statistically significant weight reduction versus placebo after
12 weeks of continuous administration with the 200mg BID and 400mg QD cohorts showing
clinically meaningful efficacy while maintaining favorable safety and tolerability profiles. The
enrollment of the first subject for phase III clinical research for weight management indication is
scheduled to be completed in April 2025. Concurrently the ongoing phase II clinical research for
diabetes is progressing smoothly with interim blinded data showing a linear reduction in HbA1c and
favorable safety as a whole. The top-line results are anticipated in Q3 2025 with phase III clinical
research anticipated in H2 2025.HDM1005 (poterepatide) injection a GLP-1R/GIPR long-acting polypeptide dual-target agonist
of the Company has secured IND approvals in China for multiple indications including type 2
diabetes weight management in overweight/obese groups metabolic-associated fatty liver disease
49Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(MAFLD)/metabolic-associated steatohepatitis (MASH) as well as the treatment of obstructive sleep
apnea (OSA) in adult patients with obesity or overweight and heart failure with preserved ejection
fraction (HFpEF) in adult patients with obesity or overweight. HDM1005 has also secured IND
approvals in the U.S. from FDA for four indications including weight management metabolic-
associated fatty liver disease (MAFLD) as well as the treatment of obstructive sleep apnea (OSA) in
adult patients with obesity or overweight and heart failure with preserved ejection fraction (HFpEF)
in adult patients with obesity or overweight. The product has demonstrated positive outcomes in the
ongoing phase Ia/Ib clinical trials in China with both the phase Ia clinical research in healthy subjects
and the phase Ib clinical research in overweight/obese cohorts demonstrating favorable post-
administration tolerability and controllable safety profiles. Common adverse reactions included
decreased appetite and gastrointestinal events (nausea vomiting and bloating). No unanticipated
adverse events were reported. Results of both cases revealed robust weight loss efficacy and clinically
meaningful glycemic control signals. The Phase Ib clinical research results were selected for oral
presentation at 2025 ADA. Meanwhile the Phase II clinical research for the indication of weight
management is in progress and the enrollment of all subjects for Phase II was completed as of April
2025 with Phase III clinical research anticipated in Q4 2025. Additionally the enrollment of the first
subject for phase II clinical trial for the indication of diabetes was completed in April 2025.DR10624 Injection a FGF21R/GCGR/GLP-1R tri-specific agonist being developed by the
Company’s holding company Zhejiang Doer Biologics Co. Ltd. is currently undergoing phase II
clinical trials for metabolic dysfunction-associated steatotic liver disease with a high risk of hepatic
fibrosis. Concurrently a previously initiated phase II clinical research of DR10624 for the treatment
of severe hypertriglyceridemia has completed the enrollment of all subjects with unblinded top-line
results anticipated in Q3 2025 to support upcoming phase III discussions with the Center for Drug
Evaluation (CDE). The Company’s phase Ib/IIa clinical trials evaluating DR10624 in obesity with
comorbid hypertriglyceridemia in New Zealand has concluded with findings selected for
presentation as a Late Breaker at the 2025 European Association for the Study of the Liver Congress
(EASL Congress 2025).
In March 2025 the marketing authorization application of Semaglutide Injection for diabetes
indication was submitted and accepted for review. In February 2025 full patient enrollment for
weight management indication was completed in phase III clinical trial of Semaglutide Injection.In February 2025 the marketing authorization application of Insulin Degludec Injection was
submitted and accepted for review.In December 2024 insulin Degludec and Insulin Aspart Injection completed the enrollment of
all subjects during phase III clinical trial with the top-line results anticipated in Q4 2025.
50Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Autoimmunity
The Company has established a diversified portfolio of over 20 innovative biomedicines and
small-molecule products targeting autoimmunity diseases.Rilonacept for Injection (ARCALYST) a globally innovative product from Kiniksa in the U.S.is used for the treatment of Cryo-Pyrin-Associated Periodic Syndromes (CAPS) and recurrent
pericarditis (RP). The marketing authorization applications for the treatment of CAPS and RP in
China were approved in November 2024 and December 2024 respectively.The marketing authorization application of HDM3001 (QX001S) a biosimilar of Ustekinumab
developed in collaboration between the company and Qyuns Therapeutics for the treatment of adult
plaque psoriasis was approved in China in November 2024. In the meantime the supplemental
application for the new pediatric plaque psoriasis indication was approved in March 2025.Additionally the marketing authorization application and supplemental application for Crohn’s
disease were accepted for review in February 2025.For the innovative medicine HDM3016 (QX005N) developed in collaboration between the
company andQyuns Therapeutics the enrollment of the first subject for phase III clinical trials in
China for two indications of prurigo nodularis in adults (≥18 years) and moderate-to-severe atopic
dermatitis in adolescents/adults was completed in May 2024. The enrollment of all subjects for phase
III clinical research for prurigo nodularis was completed in March 2025.In September 2024 the IND applications for Roflumilast Cream developed in collaboration
between the company and Arcutis targeting two indications—atopic dermatitis and seborrheic
dermatitis in patients aged 6 or above were approved in China. Both Phase III clinical trials
subsequently completed the first patient enrollment in China in November 2024.In March 2025 the IND application of HDM3019 (IMB-101) developed by the Company in
partnership with IMBiologics (Republic of Korea) was approved for the treatment of rheumatoid
arthritis in China.Additionally the Company’s proprietary product HDM3010 is undergoing the phase III clinical
trial for vitiligo alongside the ongoing phase I/II clinical research for prurigo nodularis.Other segments
The Transdermal Glomerular Filtration Rate System a Class III innovative medical device was
approved by the NMPA in February 2025. The marketing authorization application for Relmapirazin
Injection (MB-102) used cooperatively with the device was accepted by the NMPA in January 2024.Additionally MediBeaconTGFR (including the Transdermal Glomerular Filtration Rate System and
Relmapirazin Injection) was approved for launching by the U.S. FDA in January 2025.
51Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
The pre-BLA consultations on applying the Ranibizumab Injection for wet age-related macular
degeneration (wAMD) indication was submitted in January 2025 with market authorization
application scheduled to be submitted in Q2 2025.
52Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Figure: Pipeline Diagram of Main Innovative Medicines as of the Date of the Report
53Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(4) Others tasks regarding innovation R&D
Building innovation ecosystems and unlocking source-driven impetus for innovation
The Company launched its new innovative medicine R&D mechanism revolving around two
strategies of innovative transformation and internationalization showcasing huge potential in
independent R&D. Focusing on such fields as endocrinology autoimmunity and oncology the
Company continued to accelerate its differentiated innovation by identifying pilot frontier targets
through target discovery platform in combination with AI-driven drug design (AIDD). Since 2023
the Company has launched over 20 early exploratory and prospective projects and has successively
incubated the first-in-class or best-in-class innovative medicines of the same type. During the same
period the Company has been granted 14 patents for innovative medicines.Facilitating innovation transformation and advancing clinical development
Guided by the core philosophy of “Efficiency First Quality Foremost” the clinical R&D team
has established a full-cycle innovation system covering clinical research design operational
management biostatistical analysis regulatory registration and pharmaco-vigilance. By addressing
bottlenecks in differentiated innovation the team has been endeavoring to achieve diversified and
innovative advancements in clinical R&D. To date the R&D team has charged and supported
exceeding 40 clinical projects from such dimensions as clinical research operation biometrics
registration and pharmaco-vigilance.Applying AI technologies in medicine R&D
Since the establishment of its AIDD team under the innovative medicine global R&D center in
2021 the Company has achieved a significant transformation in AI technology advancement shifting
from reliance on external partnerships to a core focus on in-house development supplemented by
external collaborations. The Company continuously increased its input in AI and positioned AIDD as
its strategic priority in response to the rapid advancements in large-scale AI models (e.g. DeepSeek)
and Group-wide digital transformation strategies making a series of critical breakthroughs. Keeping
pace with the cutting-edge trends of the industry the AIDD team constantly enhanced its computing
and algorithmic systems and successfully established an AI-driven drug design platform. With a
deeply-coupled computational-experimental design cycle formed the platform enables the ongoing
optimization of drug-likeness prediction models that support critical predication of molecular affinity
hERG and membrane permeability. Additionally the team successfully deployed a variety of
biomacromolecule prediction models such as AlphaFold3 Boltz and Chai-1 as well as AI-driven
molecular generation software. These technological breakthroughs have been extensively applied in
R&D lines. The deep integration of AIDD and CADD methodologies has significantly enhanced the
54Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
efficiency of medicine development accelerated the advancement of multiple innovative medicine
projects and fully demonstrated the enormous potential of AI in medicine R&D.The AI team categorized application scenarios into five major domains of data integration large
language model application AI-driven drug design AI-assisted experimentation and intelligent
office solutions that cover more than 50 specific applications. To date all these innovative
applications have been integrated into the roadmap for the platform’s future development. Moving
forward the team will continue to explore cutting-edge technologies and expand the application of
AI across various therapeutic fields including small-molecule medicines PROTACs ADCs
protein/antibody-based medicines peptide medicines and small nucleic acid medicines thus
empowering the Company’s continuous breakthroughs in intelligent R&D of innovative medicines.Postdoctoral research workstation
In February 2021 Zhongmei Huadong a wholly-owned subsidiary of the Company was
approved to set up a postdoctoral research workstation in Zhejiang Province which was registered as
a national postdoctoral research workstation in September 2022. To date the workstation has
recruited 20 postdoctoral researchers. Among them twelve are currently active and eight have
completed their programs. Under joint cultivation projects with moving stations at Zhejiang
University Shanghai Institute of Materia Medica of Chinese Academy of Sciences Zhejiang
University of Technology and other universities postdoctors at the Company’s postdoctoral research
workstation are devoted to frontier and translational studies on R&D of innovative medicines in
combination with the Company’s development strategies and product lines under research.Other innovation results
1) Patent applications
The Company’s innovative medicine global R&D center has always attached great importance
to the protection of intellectual property rights valued the management of intellectual property rights
in the whole life cycle of medicines and the formulation of patent strategies and set up an intellectual
property BP for the early warning declaration and retention of patents in and out of China thus
improving the comprehensive competitiveness of its products. The center has filed over 100 patents
across various innovation domains over the past five years since its inception. In 2024 ten patents
were granted including five in China and five in overseas jurisdictions. Additionally the center
advanced its patent portfolio with seven PCT national patent applications and four Chinese patent
applications filed in 2024. Among them multiple key international patents are now under protection
in over 50 countries and regions.
2) Academic publications
55Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
From 2024 to date the Company’s innovation teams have successively published 22 papers in
journals and/or at conferences in oncology endocrinology/metabolism and autoimmunity segments.Specifically: research results of HDM1002 and HDM2006 published in Journal of Medicinal
Chemistry an international top journal; results of pre-clinical research of GLP-1/GIP dual-target
long-acting agonist HDM1005 selected for oral presentation at 2024 EASD and results of its phase I
clinical research selected for oral presentation at 2025 ADA; results of phase III clinical research of
Semaglutide Injection and phase Ib clinical research of HDM1002 selected for POSTER sharing at
2025 ADA; research results of STING-targeting small-molecule inhibitor selected as the POSTER of
2024 ECI; research on HPK1-targeting PROTAC selected as the POSTER of 2024 AACR; research
on the oral HPK1 small-molecule inhibitor HDM2004 selected as the POSTER of 2024 CIMT;
positive results from the phase III pivotal clinical trial of Mefatinib (HDHY-MHTN-III-1907)
selected as the POSTER of 2024 ASCO; research on the oral PTPN2 small-molecule inhibitor
HDM2010 selected in the summary of 2024 ASCO; pre-clinical research of the ROR1-targeting
antibody-drug conjugate HDM2005 selected as the POSTER of 2024 World ADC Asia; pre-clinical
research of HMD2020 and HMD2012 selected as the POSTER of 2024 World ADC SD; results of
pre-clinical research of HDM2006 HDM2022 HDM2012 HDM2017 and HDM2020 all selected as
the POSTER of 2025 AACR; results of pre-clinical research of the pan-KRAS antitumor degrader
HDM2025 selected as the POSTER of 2025 ASCO; results of clinical research of DR10624 a first-
in-class Fc-fusion protein medicine with triple agonist activity targeting GLP-1 GCG and
FGFRIc/KlothoB (FGF21R) receptors developed by the Company’s wholly-owned subsidiary Doer
Biologics selected as the Late-Breaker at 2025 EASL and its non-clinical research results selected
as the POSTER of 2025 EASL.The Company has successively garnered recognition within the global academic community for
its independent R&D achievements. Since 2022 a total of 31 groundbreaking innovative research
achievements have been published in authoritative journals and/or at academic conferences vividly
validating the sustained enhancement of its independent innovation capabilities and marking a
systemic breakthrough in its innovation-driven transformation strategy.
3) Governmental subsidies
To date the Company’s innovative medicine global R&D center has obtained approvals from
the government for 19 projects with the certified subsidies of over 55.50 million yuan. In 2024 the
Company was recognized as a “Pioneering Innovative Youth Team in Hangzhou City” and receivedfunding support for the pre-clinical research of HDM1002 from the “High-Quality DevelopmentSpecial Program in the Bio-pharmaceutical Industry in Hangzhou City”. Additionally the Companywas approved to establish the “Zhejiang Provincial Key Laboratory for Intelligent Innovation of New
56Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.Medicines for Metabolic Diseases” in 2024 with laboratory operations scheduled to commence this
year.
(5) Progress of development of major generic medicines
The Company further clarified the focused and prioritized varieties of existing generic medicines
under development by regularly organizing dynamic evaluation and analysis. As of the date of the
Report key varieties are as follows:
No. Field Item Specification Latest Progress
Approved by the NMPA in May
1 Immunity Tacrolimus Granules 1mg
2024
5mg version approved by the
Tacrolimus Sustained- NMPA in February 2024
2 Immunity 5mg 1mg 0.5mg
release Capsules 1mg and 0.5mg versions approved
by the NMPA in June 2024
Marketing Authorization
3 Immunity Sirolimus Tablets 1mg Application accepted in February
2024
Marketing Authorization
4 Immunity Sirolimus Gel 0.2% Application accepted in January
2024
Mycophenolate Mofetil Approved by the NMPA in
5 Immunity 34.98g
for Suspension February 2025
Mesalazine Enteric-coated
6 Immunity 0.5g Application accepted in June 2024
Tablets
Approved by the NMPA in June
7 Oncology Olaparib Tablets 100mg 150mg
2024
Marketing Authorization
8 Oncology Ibrutinib Capsules 140mg Application accepted in January
2024
Marketing Authorization
9 Oncology Carfilzomib for Injection 60mg Application accepted in February
2024
Icosapent Ethyl Soft Marketing Authorization
10 Angiocarpy 1g
Capsules Application accepted in June 2024
Approved by the NMPA in
11 Anti-infection Fusidic Acid Cream 15g:0.3g
November 2024
Marketing Authorization
Isavuconazonium Sulfate
12 Anti-infection 200mg Application accepted in August
for Injection
2024
Approved by the NMPA in
13 Easing pain Lornoxicam for Injection 8mg
October 2024
Marketing Authorization
Ketorolac Tromethamine
14 Easing pain 1ml:30mg Application accepted in August
Injection
2024
Marketing Authorization
Vonoprazan Fumarate
15 Gastroenterology 10mg 20mg Application accepted in January
Tablets
2024
Marketing Authorization
16 Others Adapalene Gel 0.1%; 30g/tube Application accepted in November
2024
(6) Progress of international registration
57Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
The Company has actively conducted its international registration tasks. As of the date of the
Report main progress is as follows:
No. Field Item Remarks Latest Progress
Renewed certificate by CEP obtained in
1 Endocrine Acarbose APIs
June 2024
Reply to the question of clinical implied
licensing of IND in the U.S. Submitted in
Liraglutide
2 Endocrine 3mL:18mg July 2024
Injection
Application for registration in Pakistan
submitted in November 2024
3 Endocrine Semaglutide (Oral) APIs DMFs submitted in India in October 2024
Boc-His(Trt)-Aib- DMFs submitted in the U.S. in October
4 Endocrine Intermediate
OH 2024
5 Immunity Ciclosporin APIs Renewed CEP obtained in June 2024
Tacrolimus Application for registration in the
6 Immunity 1mg
Capsules Philippines submitted in December 2024
Supplementary materials for ANDA
Caspofungin
application submitted in the U.S. in
7 Anti-infection Acetate for 50mg 70mg
January 2024; on-site verification of APIs
Injection
suppliers by FDA completed in June 2024
CEP Variation submitted in December
8 Anti-infection Mupirocin APIs
2024
Mupirocin CEP Variation submitted in December
9 Anti-infection APIs
Calcium 2024
Supplementary reply to DMF in the U.S.Polymyxin B
10 Anti-infection APIs completed in October 2024
Sulfate
CEP Submission made in December 2024
Fondaparinux Supplementary reply to DMF in the U.S.
11 Anticoagulant APIs
Sodium submitted in May 2024
2.5mg/0.5mL
Fondaparinux 5mg/0.4mL Approval from ANDA in the U.S.
12 Anticoagulant
Sodium Injection 7.5mg/0.6mL obtained in August 2024
10mg/0.8 mL
13 Oncology VcMMAE Intermediate DMFs submitted in the U.S. in May 2024
DMFs submitted in the U.S. in August
14 Oncology Olaparib APIs
2024
Nucleic acid DMFs submitted in the U.S. in January
15 C00 Intermediate
medicines 2024
ANDA and PAS in the U.S. submitted in
Daptomycin April 2024; supplementary replies to PAS
16 Antibiotics 500mg
Injection submitted in May June and July and
approval obtained in August
Digestive Pantoprazole
CBE-30 and CBE-0 Variations submitted
17 system Sodium for 40mg
in September and November 2024
medicines Injection
Nucleotide 2'-OMe-A(Bz) DMFs submitted in the U.S. in August
18 Intermediate
medicines Phosphoramidite 2024
DMFs submitted in the U.S. in December
19 Anti-epileptic Topiramate APIs
2024
(7) Progress of consistency evaluation
As of the date of the Report the progress of consistency evaluation on quality and efficacy of
the Company’s generic medicines is as follows:
58Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
No. Field Item Specification Latest Progress
The notification of approval for
supplementary application of
1 Immunity Tacrolimus Capsules 1mg 0.5mg
consistency evaluation for 0.5mg
version obtained in January 2024
The notification of approval for
20ml:60mg
supplementary application of
2 Angiocarpy Adenosine Injection 30ml:90mg
consistency evaluation for 2ml:6mg
2ml:6mg
version obtained in April 2024
Paracetamol and Application for consistency
3 Analgesic Dihydrocodeine Tartrate 500mg-10mg evaluation submitted and accepted in
Tablets July 2024
(8) Progress of registration and launching of aesthetic medicine products in China
No. Type Product Designation Purpose Latest Progress
Lidocaine-containing cross-
linked sodium hyaluronate gel Approval for registration
Enhancement of
1 Injections for injection obtained from the NMPA in
jawline contour
MaiLi Extreme (trade name: January 2025
MaiLi Shuoying)
Follow-ups of main end-point
MaiLiPrecise Improvement of of clinical trials completed in
2 Injections
Hyaluronic acid infraorbital pouch September 2024; safety follow-
up in progress.Lanluma
Enrollment of all subjects
V Enhancement of
3 Injections completed in November 2024;
Poly-l-lactic Acid mandibular margin
safety follow-up in progress.Ethical approval for principal
KIO021 Facial skin investigator obtained in
4 Injections
Chitosan improvement December 2024; pre-trial work
in progress.Enrollment of all subjects in
clinical trials for new
Ellansé-S Enhancement of
5 Injections indications completed in
Polycaprolactone frontal contour
November 2024; safety follow-
up in progress.Registration acceptance notice
Ellansé-M Improvement of
6 Injections obtained from the NMPA in
Polycaprolactone temporal depression
January 2025
YY001
Botulinum Improvement of BLA application submitted in
7 Recombinant botulinum toxin
toxin frown lines December 2024
type A
Improvement of
body and facial
wrinkles benign skin
Energy-
8 RenotionV20 lesions benign Approved in September 2024
based device
vascular lesions
inflammatory acne
depilation etc.Improvement of
body and facial
wrinkles benign skin
lesions benign Registration acceptance notice
Energy-
9 V30 vascular lesions obtained from the NMPA in
based device
benign pigmented March 2025
lesions
inflammatory acne
depilation etc.
59Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Cosmetic Facial skin To be launched in China as
10 Préime DermaFacial
device management cosmetic device
(9) Progress of patents
In recent years the Company has attached great importance to the protection of intellectual
property as well as the commercialization and application of achievements. The number of patent
applications and authorizations has been steadily increasing. Over the years the Company has applied
for more than 1600 patents in and out of China including over 530 authorized invention patents.Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. one of the Company’s wholly-controlled
subsidiaries is a national intellectual property demonstration enterprise. In November 2014 it passed
the external audit by Zhongzhi (Beijing) Certification Co. Ltd. becoming one of the first 147
companies that passed the standards implementation certification and successfully passed the
supervision and examination of the enterprise intellectual property management system in October
2024.
During the reporting period the Company’s patent applications and renewals progressed
smoothly. A total of 187 patent applications were submitted including 143 for inventions.Additionally 90 patents were granted.Increase during the reporting period Total quantity
Patent type Number of patents Number of patents Number of patents Number of patents
applied for (unit) received (unit) applied for (unit) received (unit)
Invention patent 143 64 1279 537
Utility patent 40 19 293 246
Appearance design
474342
patent
Total 187 90 1615 825
Note: The data in the above table represent the statistical patent information of main subsidiaries engaged in the
pharmaceutical industry industrial microbiology and aesthetic medicine within the Company’s consolidated
statements.R&D personnel of the Company
2024 2023 Percentage change
Number of R&D personnel
186417774.90%
(person)
Proportion of R&D personnel 12.44% 12.81% -0.37%
R&D personnel structure by education
Diploma below the bachelor
291421-30.88%
level
Bachelor 898 733 22.51%
Master’s degree 569 527 7.97%
Doctoral degree 106 96 10.42%
60Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
R&D personnel structure by age
<305405370.56%
30-4010239329.76%
>40301308-2.27%
R&D investment of the Company
2024 2023 Percentage change
R&D investment amount
1770011691.481599987406.0510.63%
(yuan)
Proportion of R&D
investment in operating 12.91% 13.10% -0.19%
revenue
Capitalized R&D investment
357162671.46368631977.43-3.11%
amount (yuan)
Proportion of capitalized R&D
investment in R&D 20.18% 23.04% -2.86%
investment
Note: The above R&D investment is from the direct R&D expenditure of the Company’s main industrial controlled subsidiary which
is mainly used for clinical research of products under research the upgrade of existing product process expenses for commissioned
technological development consistency evaluation and international registration certification. During the reporting period the
Company’s R&D investment in the pharmaceutical industry (excluding equity investment) was 2.678 billion yuan up 16.77% year on
year. Among them the direct R&D expenditure was 1.770 billion yuan up 10.63% year on year which accounts for 12.91% of the
operating revenue of the pharmaceutical industry. R&D personnel of the Company in 2024 means the number of employees in the
Company’s subsidiaries mainly engaged in R&D and manufacturing of the pharmaceutical industry and industrial microbiology. The
proportion of R&D personnel means the proportion of the number of employees in the Company’s subsidiaries mainly engaging in
R&D and manufacturing of the pharmaceutical industry and industrial microbiology. The proportion of R&D investment in operating
revenue means the proportion of the direct R&D expenditure of Company’s pharmaceutical industry segment in the operating revenue
of the Company’s pharmaceutical industry segment.Reasons and impacts of major changes in the composition of R&D personnel.□ Applicable □ N/A
Reasons for the year-on-year significant change in the proportion of total R&D investment in operating revenue.□ Applicable □ N/A
Reasons for the significant change in the capitalization rate of R&D investment and its rationality
□ Applicable □ N/A
5. Cash flows
Unit: yuan
Year-on-year percentage
Item 2024 2023
increase/decrease
Subtotal of cash inflows from
44970182586.2644170157818.411.81%
operating activities
Subtotal of cash outflows for
41221253703.9140240941111.712.44%
operating activities
Net cash flows from operating
3748928882.353929216706.70-4.59%
activities
Subtotal of cash inflows from
327006060.47243482795.7834.30%
investing activities
Subtotal of cash outflows for
2497277729.471994034738.2925.24%
investing activities
Net cash flows from investing -2170271669.00 -1750551942.51 -23.98%
61Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
activities
Subtotal of cash inflows from
5250514515.605099369770.652.96%
financing activities
Subtotal of cash outflows for
6000178834.726492731116.63-7.59%
financing activities
Net cash flows from financing
-749664319.12-1393361345.9846.20%
activities
Net increase of cash and cash
781991175.77791249308.58-1.17%
equivalents
Main influencing factors of significant changes in relevant data year on year
□ Applicable □ N/A
The cash inflows from investing activities in the current period are 327 million yuan up 34.30% compared with that in the same
period last year (243 million yuan). The increase is mainly due to the collection of large-value bank deposit certificates due in this
period.Reasons for the significant difference between the Company’s net cash flow from operating activities and the current year’s net profit
during the reporting period
□ Applicable □ N/A
V. Analysis of non-main business
□ Applicable □ N/A
Unit: yuan
Proportion in total
Amount Note on reasons Sustainable or not
profit
Mainly due to long term
equity investment gains
Total return -129190728.94 -3.00%
measured at equity
method
Gains and losses from
0.00 0.00% No
changes in fair value
Assets Impairment -41006057.96 -0.95%
Non-operating revenue 88009280.04 2.05% No
Non-operating
111232726.47 2.59% No
expenses
Mainly due to the
confirmation of
Other income 199889752.54 4.65% No
government grants in
the current period
VI. Assets and liabilities
1. Major changes in asset composition
Unit: yuan
End of 2024 Beginning of 2024
Change of Note on major
Proportion in Proportion in
Amount Amount proportion changes
total assets total assets
5276440245.4663378011.
Monetary funds 13.93% 13.92% 0.01%
3664
62Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Accounts 8425358862. 7455250690.
22.24%22.25%-0.01%
receivable 23 83
4776397278.4290214266.
Inventories 12.61% 12.80% -0.19%
0103
Investment real
11842042.670.03%12746181.870.04%-0.01%
estate
Long-term
1543646404.1535907809.
equity 4.08% 4.58% -0.50%
7685
investment
4422300775.4140144817.
Fixed assets 11.67% 12.36% -0.69%
0151
Construction in
836739481.602.21%913147212.172.73%-0.52%
progress
Right-of-use
149504562.990.39%151175007.160.45%-0.06%
Assets
Mainly due to
Short-term 2312339143. increase in
6.10%822380292.372.45%3.65%
borrowings 21 borrowings
from banks
Contract
173609109.580.46%135459275.170.40%0.06%
liabilities
Mainly due to
the repayment
in the current
Long-term period and
14262841.050.04%520759460.071.55%-1.51%
borrowings transfer to non-
current
liabilities due
within one year
Lease liabilities 71857938.46 0.19% 56695158.59 0.17% 0.02%
Foreign assets account for a relatively high proportion.□ Applicable □ N/A
2. Assets and liabilities measured at fair value
□ Applicable □ N/A
Unit: yuan
Gain/loss Accumulat
Amount at Depreciatio
from fair ed fair Purchase Selling
the n reserves Amount at
value value amount in amount in Other
Item beginning withdrawn the end of
changes in changes the current the current changes
of the during the the period
the current recognized period period
period period
period in equity
Financial assets
2.
Derivative 1643449 16434493.
0.00
financial 3.97 97
assets
4. Other
--
equity 5652238 33239542. 11488755. 60323276
6719404.73671921.0
instrument 72.68 34 92 6.22
24
investments
Subtotal of 5816583 - - 0.00 33239542. 16434493. 11488755. 60323276
63Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
financial 66.65 6719404.7 3671921.0 34 97 92 6.22
assets 2 4
Receivables 1434366 96367956 93935255 16776364
financing 300.69 62.26 42.86 20.09
--
2016024967003529409960011488755.22808691
Total 6719404.7 3671921.0 0.00
667.3404.6036.839286.31
24
Financial
0.000.00
liabilities
Other changes
Exchange rate changes and the increase in other equity instrument investments due to the inclusion of Huadong Medicine (Guizhou)
Pharmaceutical Co. Ltd. in the scope of the Company’s consolidated financial statements.Whether there are significant changes in the main asset measurement attribute of the Company during the reporting period.□Yes □ No
3. Limitation of asset rights at the end of the reporting period
Unit: yuan
Book balance at the Book value at the Type of
Item Reasons for limitation
end of the period end of the period limitation
The deposit is used for
Monetary funds 125188372.23 125188372.23 Deposit issuing bills letters of
credit etc.Certificate of deposit
Monetary funds 159771682.75 159771682.75 Pledge pledge is used for issuing
bills
Monetary funds 1000000.00 1000000.00 Freezing Judicially frozen payment
Special funds for reserve
Monetary funds 329003.70 329003.70 Freezing
materials
The house is used as the
Fixed assets 97916901.66 97916901.66 Mortgage
mortgage for borrowings
The land is used as the
Intangible assets 56297988.87 53303757.37 Mortgage
mortgage for borrowings
Total 440503949.21 437509717.71
VII. Investment
1. Overview
□ Applicable □ N/A
Investment amount in the reporting Investment amount in the same period of
Percentage change
period (yuan) last year (yuan)
3101859421.912386619197.3129.97%
2. Significant equity investments acquired during the reporting period
□ Applicable □ N/A
64Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Unit: yuan
Profit
or
Progr loss
Nam Invol
ess as of Discl Discl
e of Way Inves Share Term Proje ved
Main Fund Prod of the inves osure osure
inves of tment holdi Partn of cted in
busin sourc uct balan tment date index
ted inves amou ng er inves inco litigat
ess e type ce in the (if (if
comp tment nt ratio tment me ion or
sheet curre any) any)
any not
date nt
perio
d
1.
Equit
y
chan
ge
comp
leted
on
Augu
st 8
2024;
transf
er of
mana
geme
Prod nt
Guiz uctio contr
hou n and ol
Heng sales comp
Cninf
Ba of leted
Equit o
Phar tradit on
y or (http:
mace ional Acqu 5284 Augu 8205 July
100.0 self- Long Equit //ww
utical Chin isitio 7000 None st 15 / 431. Yes 22
0% raise term y w.cni
Limit ese n 0.00 2024. 03 2024
d nfo.c
ed medi 2.funds om.c
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pany medi ding
cines equit
y
transf
er
paym
ents
made
in
accor
dance
with
the
contr
act
terms.
65Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
3.
Guiz
hou
Heng
Ba
Phar
mace
utical
Limit
ed
Liabi
lity
Com
pany
was
rena
med
Huad
ong
Medi
cine
(Guiz
hou)
Phar
mace
utical
Co.Ltd.on
Janua
ry 2
2025.
52848205
Total -- -- 7000 -- -- -- -- -- -- / 431. -- -- --
0.0003
3. Significant non-equity investments in progress during the reporting period
□ Applicable □ N/A
Unit: yuan
Reaso
Cumul
Cumul ns for
ative
Invest ative not
Industr actual
ment incom meetin
Invest y invest
amoun e g the Disclo
ment involv ment Project Disclo
Way of t Project realize planne sure
Project in ed in amoun Fund ed sure
invest during progre d by d index
name fixed the t by source incom date (if
ment the ss the end schedu (if
assets invest the end e any)
reporti of the le and any)
or not ment of the
ng reporti project
project reporti
period ng ed
ng
period incom
period
e
Huado Self- Pharm 1235 1802 Equity 99.50 March Cninfo
Yes / / N/A
ng built aceutic 869.78 40385 funds % 9 (http://
66Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Medici project al 5.69 2017 www.c
ne manuf ninfo.c
Biome acturin om.cn)
dical g
Scienc
e and
Techn
ology
Park
Project
Phase
II
Huado
ng
Medici
ne Life
Scienc
Cninfo
e Pharm
Self- 38008 April (http://
Industr aceutic 4644 Equity 96.00
built Yes 9305. / / N/A 21 www.c
ial al 312.40 funds %
project 11 2021 ninfo.c
Park R&D
om.cn)
(Xiang
fu
south
plot)
project
Huado
ng
Medici Pharm
Cninfo
ne Bio- aceutic
Self- 17244 17244 Februa (http://
innova al Equity 35.00
built Yes 1282. 1282. / N/A ry 8 www.c
tion manuf funds %
project 32 32 2024 ninfo.c
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ence g
Center
Project
178322354
Total -- -- -- 1464. 93444 -- -- / / -- -- --
503.12
4. Investment in financial assets
(1) Securities investment
□ Applicable □ N/A
Unit: yuan
Gain/l Accu
Purch Sellin
Book oss mulat Gain/l
Accou ase g Book
value from ed fair oss
Stock Initial nting amou amou value
Type at the fair value during Accou
Stock abbre invest measu nt in nt in at the Fund
of begin value chang the nting
code viatio ment remen the the end of source
stock ning chang es report item
n cost t curren curren the
of the es in recog ing
model t t period
period the nized period
period period
curren in
67Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
t equity
period
Dome Other
Meas
stic - - equity
2020 ured 7122 Equit
and 6719 3671 5653 4599 instru
RAPT RAPT 7400. at the 858.9 0.00 0.00 y
overse 404.7 921.0 1.55 85.74 ment
00 fair 1 funds
as 2 4 invest
value
stock ments
--
20207122
6719367156534599
Total 7400. -- 858.9 0.00 0.00 -- --
404.7921.01.5585.74
001
24
Note: (1) Huadong Medicine Investment Holding (Hong Kong) Limited a wholly-owned subsidiary of the
Company purchased 218102 Series C-2 preferred shares of RAPT Therapeutics Inc. in a total of 3 million US
dollars in 2018. RAPT Therapeutics Inc. was listed on NASDAQ Exchange on October 30 2019 (stock code:
RAPT). As of the end of the reporting period Huadong Medicine Investment Holding (Hong Kong) Limited holds
39500 shares in RAPT accounting for approximately 0.0299% of the total shares of RAPT Therapeutics Inc.
(2) On March 11 2024 Huadong Medicine Investment Holding (Hong Kong) Limited one of the Company’s
wholly-owned subsidiaries subscribed IPO shares of Qyuns Therapeutics Co. Ltd. at the Stock Exchange of Hong
Kong Limited as cornerstone investor with the consideration of equivalent 5 million US dollars from its own funds
in Hong Kong dollar (excluding brokerage commission related transaction fees and levies). For details please refer
to the Announcement on Subscribing IPO Shares of Qyuns Therapeutics Co. Ltd. in Hong Kong as Cornerstone
Investor (Announcement No.: 2024-013) disclosed by the Company on Cninfo (http://www.cninfo.com.cn). On
March 20 2024 Qyuns Therapeutics was successfully listed on the main board of the Stock Exchange of Hong
Kong with the stock code of 2509.HK. As of the date of the Report the Company holds a total of 37876800 shares
of Qyuns Therapeutics through its wholly-owned subsidiaries Zhongmei Huadong and Huadong Medicine
Investment Holding (Hong Kong) Limited accounting for approximately 17.06% of the total shares of Qyuns
Therapeutics. Among them Zhongmei Huadong holds 35900000 shares and Huadong Medicine Investment holds
1976800 shares. The Company calculated the shares held by Zhongmei Huadong and Huadong Medicine
Investment in a consolidated manner which was reflected in the long-term equity investment in the financial
statements.
(3) On November 28 2024 Hangzhou Jiuyuan Genetic Biopharmaceutical Co. Ltd. one of the Company’s
shareholding enterprises was successfully listed on the main board of the Stock Exchange of Hong Kong with the
stock name (abbreviation) of Jiuyuan Gene and the stock code of 2566.HK. As of the date of the Report the
Company holds a total of 42120453 shares of Jiuyuan Gene through its wholly-owned subsidiary Zhongmei
Huadong accounting for approximately 17.16% of the total shares of Jiuyuan Gene. The Company’s shareholding
in Jiuyuan Gene was reflected in the long-term equity investment in the financial statements.
(2) Derivatives investment
□ Applicable □ N/A
68Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
1) Derivatives investment for hedging during the reporting period
□ Applicable □ N/A
Unit: ten thousand yuan
Proportion
of the
investment
amount at
Gain/loss Accumulat the end of
Amount at Purchase Selling
from fair ed fair the period
Type of Initial the amount amount Amount at
value value in the net
derivatives investment beginning during the during the the end of
changes in changes assets of
investment amount of the reporting reporting the period
the current recognized the
period period period
period in equity Company
at the end
of the
reporting
period
Currency
swap 2990.75 1643.45 0 0 0 1643.45 0 0.00%
derivatives
Total 2990.75 1643.45 0 0 0 1643.45 0 0.00%
Note on
accounting
policies and
specific
principles
of
accounting
concerning
hedging
business
during the
reporting N/A
period and
whether
they change
significantl
y when
compared
with that in
the
previous
reporting
period
Note on the
actual gains
and losses
N/A
during the
reporting
period
Note on the The Company carries out foreign currency hedging business based on specific situations which is based on normal
effect of production and operations and can effectively reduce risks on the foreign currency market. The risks faced by the
hedging Company are controlled within an acceptable range.Capital Equity or self-raised funds
69Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
source of
derivatives
investment
Risks: 1. Market risks: The interest rate exchange rate and other prices on the market may fluctuate due to changed
domestic and overseas economic policies and situations thus changing the price of financial derivative instruments
Note on the
and causing losses. 2. Liquidity risks: Transactions fail to be completed due to the market lacking liquidity and
risk
counterparties. 3. Operational risks: Trading financial derivative instruments requires experts who can deal with
analysis
complexity which may cause operational risks due to traders’ or managers’ fault or system failure and out of
and control
control. 4. Contractual risks: Contracts on financial derivative business expire some of which cannot be performed
measures
on time and thus they are breached. 5. Legal risks: Relevant legal changes lead to a contract that is not in
for
conformity with local laws so that the contract cannot be performed or contractual terms are omitted and unclear;
derivatives
or losses are caused to the Company due to the counter-party violating relevant laws and regulations and thus the
holding
contract cannot be performed as required. Measures: The Company and its wholly-controlled subsidiaries avoid
during the
speculation and arbitrage when trading financial derivatives so that strict risk control will be employed during the
reporting
execution of contracts concerning financial derivatives trading. 1. The Company strictly abides by prudent
period
investment principles selects prudent investment types and makes investments within the amount approved by the
(including
Board of Directors. 2. The Company carefully selects counter-parties for trading and only trades derivatives with
but not
financial institutions featuring robust operations sound reputation and business license for financial derivative
limited to
trading. The Company may resort to external professional investment and legal service institutions if it is necessary
market
to provide consulting services for the Company’s financial derivative trading as well as scientific and precise
risks
investment strategies and suggestions. 3. The Company has formulated the Management Rules for Securities
liquidity
Investment and Derivative Trading setting detailed rules on the management supervision and information closure
risks credit
related to the Company's derivative trading principles scope decision-making authority and capital use which can
risks
effectively prevent investment risks. Besides the Company will strictly implement related management rules
operational
assign special personnel to follow up on the progress of financial derivative trading. For instance relevant
risks and
measures shall be taken in time to control investment risks if there are risks that may affect the Company's capital
legal risks)
safety. 4. The Company’s audit department is in charge of monitoring and checking the execution of financial
derivative trading and reporting to the Audit Committee of the Board of Directors.In case of
changing
market
prices or
fair values
of invested
derivatives
during the
reporting
period the
analysis of
the
Measured at the market fair value
derivatives’
fair values
shall
disclose the
specific
methods
adopted
relevant
assumption
s and
parameter
settings.Litigation
(if N/A
applicable)
Date of
August 16 2024
announcem
70Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
ent of the
Board of
Directors
on
derivatives
investment
approval (if
any)
2) Derivatives investment for speculation during the reporting period
□ Applicable □ N/A
No such case during the reporting period.
5. Use of raised funds
□ Applicable □ N/A
No such case during the reporting period.VIII. Major assets and equity sales
1. Major assets sales
□ Applicable □ N/A
No such case during the reporting period.
2. Major equity sales
□ Applicable □ N/A
IX. Analysis of controlling and shareholding companies
□ Applicable □ N/A
Main subsidiaries and shareholding companies that have an impact on the Company’s net profit of more than 10%
Unit: yuan
Company Company Main Registered Operating Operating
Total assets Net assets Net profit
name type business capital revenue profit
Production
of
Traditional
Hangzhou Chinese
Zhongmei and
Huadong Western 87230813 19851009 12887826 13711038 34377112 28745296
Subsidiary
Pharmaceut medicines 0 800.35 974.85 029.80 37.27 84.78
ical Co. APIs and
Ltd. formulation
s and
health care
products
Acquisition and disposal of subsidiaries during the reporting period
71Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
□ Applicable □ N/A
Methods of acquisition and disposal of Impact on the overall production
Company name
subsidiaries during the reporting period operation and performance
Shaanxi Bohua (Weinan) Pharmaceutical Pharmaceutical industry business
Incorporation
Co. Ltd. expansion
Sinclair (Hangzhou) Supply Chain Business expansion for aesthetic
Incorporation
Management Co. Ltd. medicine products
Gongwei Lianchuang (Shanghai) Industrial microbiology business
Incorporation
Biotechnology Co. Ltd. expansion
Huadong Medicine (Jiaxing) Co. Ltd. Incorporation Pharmaceutical business expansion
Huadong Medicine (Guizhou) Pharmaceutical industry business
Equity acquisition
Pharmaceutical Co. Ltd. expansion
Information of major shareholding companies
X. Structured entities controlled by the Company
□ Applicable □ N/A
XI. Prospect of future development
(I) Prospect of macro-economy and trend of the pharmaceutical industry
In 2024 the global economy remained in its deep restructuring phase with persistent impacts
from geopolitical conflicts inflationary pressures and slowing growth in major economies. Amid
multiple challenges China’s economy has maintained a high-quality development trajectory
achieving overall stability and steady progress. According to the National Bureau of Statistics
China’s annual GDP reached 134.9084 trillion yuan in 2024 representing a 5.0% increase from the
previous year.From the perspective of demands in the pharmaceutical industry the global pharmaceutical
market showed a sustained growth trend driven by global economic development population aging
escalating chronic disease burdens breakthroughs in innovative therapies heightened health
management awareness and upgraded medical security systems.According to IQVIA’s forecast impacted by public health events from 2020 to 2023 global
pharmaceutical expenditures (calculated at list prices) are projected to reach 2.3 trillion US dollars
by 2028 with an annual growth rate of 5%-8% (including increased expenditures for COVID-19
vaccines and treatments). Factors influencing growth projections during the forecast period include
momentum from the launch of new medicines impacts of patent expirations and the rising
prominence of biosimilar medicines. Over the next five years China India and the broader Asia-
Pacific region are projected to experience the most rapid growth in pharmaceutical consumption with
each market expected to achieve a CAGR exceeding 3%. The key growth area in the next five years
72Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
is biomedicine that accounts for 39% of the global expenditures. Although the growth rate slowed
down to 9.5-12.5% the global biomedicine expenditure is expected to exceed 890 billion US dollars
by 2028. By 2028 the CAGRs of the world’s top two therapeutic fields — anti-tumor medicines and
immune system medicines — will increase by 14-17% and 2-5% respectively. It is expected that
approximately 100 new therapies will emerge in the anti-tumor field within five years and the market
size of anti-tumor medicines is expected to be 440 billion US dollars by 2028. Affected by the steady
increase in the number of patients and the launch of new medicines the market size of autoimmune
medicines is expected to reach 192 billion US dollars by 2028 as competitions brought by the launch
of biosimilar medicines are continuously offset. The treatment days for a range of endocrine hormone
regulation therapies including diabetes are growing at twice the global average rate. GLP-1 agonist
has been extensively applied in the fields of diabetes and obesity.According to IQVIA’s forecast China’s expenditures in medicines have increased from 103
billion US dollars in 2014 to 163 billion US dollars in 2023. Over the past five years the increase in
expenditure has been primarily driven by RLDs with their market share increasing from 20% in 2014
to 29% in 2023. In the next five years it is expected that the update of the catalogue of medicines
covered by medical insurance will promote more newly launched RLDs to be included in the medical
insurance promoting higher expenditure scale. More and more RLDs are developed by local
enterprises in China rather than multinational pharmaceutical companies. Such a mode reshapes the
Chinese market and has influenced China and other countries. Over the past five years the CAGR of
RLDs in China was up to 8.5%. It is estimated that the CAGR of RLDs will exceed 7.5% in the next
five years while the CAGR of other medicines will be 6% or lower slowing down the total growth
rate to 2-5%. Non-RLD medicines are the second largest part of medicine expenditures in China. It
is estimated that these medicine expenditures will increase by less than 1% each year due to cost
control of hospitals. In the coming five years China’s medicine expenditure is expected to increase
by approximately 30 billion US dollars and will exceed 197 billion US dollars by 2028.(II) Industrial development trend
1. Pharmaceutical industry in China
The pharmaceutical industry is a strategic sector that is closely related to national policies
people’s livelihood economic development and national security. It also serves as a vital foundation
for the implementation of the Healthy China 2030 initiative. The pharmaceutical industry is entering
a phase of high-quality growth propelled by the in-depth advancement of the Healthy China 2030
initiative and the comprehensive implementation of the 14th Five-Year Plan for the development of
the pharmaceutical industry. Medical demands continue to rise with rapid socioeconomic
development accelerated population aging increasing prevalence of chronic diseases enhanced
73Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
awareness of health management and improved accessibility to healthcare services. Generally
speaking the future development of the pharmaceutical industry shows a favorable trend and the
industry enjoys broad space for development.Policy initiatives focus on coordinated development among medical care medical insurance
and pharmaceuticals promoting industry transformation toward innovation-driven models through
measures such as control of medical insurance cost volume-based procurement expansion and
optimized regulatory reviews. Market potential will be further unleashed through the expansion of
medical insurance systems coordination of outpatient mutual aid prescription circulation
mechanisms dual-channel policies Internet-based healthcare and direct settlements between
medical insurance funds and enterprises. The state and local authorities are also increasing their
substantial support for innovative medicines through the continued implementation of major new
medicine development projects and the establishment of Category C reimbursement lists which
facilitate commercial insurance coverage for innovative medicines. All these efforts will further drive
the development of innovative medicines. Concurrently ongoing compliance enforcement continues
to purify industry ecology while enhancing professional standards and normative practices. The
aforesaid policies have driven the overall upgrade of the industry and provided guidance for the high-
quality and high-standard overall development of the pharmaceutical industry in China.The trend of innovative R&D shows that emerging bio-pharmaceutical companies in China have
constantly advanced the development of clinical trials and Chinese pharmaceutical companies have
witnessed vigorous improvement in the level of innovative R&D. According to the statistics of IQVIA
the participation of China-headquartered pharmaceutical companies in clinical trials continues to
increase with their pipeline shares increased from 1% in 2008 and 3% in 2013 to 28% in 2023. In
recent five years the number of new active substances (NAS) launched in China has seen a significant
increase second only to the U.S. According to incomplete statistics in 2024 China's pharmaceutical
industry completed approximately 150 cross-border transactions including approximately 110
license-out deals. The total value of these transactions exceeded 50 billion US dollars with upfront
payments surpassing 4 billion US dollars. Data reveals that in 2024 approximately 30% of the
innovative medicine candidates introduced by multinational pharmaceutical companies originated
from China. China’s innovative medicines have emerged as a critical contributor to the international
pharmaceutical development ecosystem and are increasingly recognized in the international market.From the perspective of breakthroughs in the field of diseases and new technology platforms
there are ceaseless breakthroughs in the field of diseases represented by GLP-1 and new technology
platforms represented by ADC. Chinese enterprises enjoy comparative advantages in competition.The underlying logic driven by innovation in the field of innovative medicines will not change and
74Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
breakthroughs have been made successively in the field of disease treatment. In addition to tumors
more indications are expected to be covered. Successive breakthroughs have also been made in
innovation of technology platforms represented by ADC CAR-T nuclear medicines gene editing
etc.
2. Aesthetic medicine
Currently the growth rate of the aesthetic medicine market in China has gradually slowed down
and the market competition has become increasingly fierce as more and more enterprises entered the
market. However the aesthetic medicine market in China continues to enjoy huge growth potential
in the long run. According to the statistics of the National Bureau of Statistics China’s per capita
disposable income was 41314 yuan in 2024 an increase of 5.3% over the previous year and an actual
increase of 5.1% after adjusting for price factors. The China Medical Aesthetic Industry Outlook 2024
jointly released by the Chinese Association of Plastic and Aesthetics and Deloitte China reveals that
the aesthetic medicine market in China was projected to grow by around 10% in 2024. Driven by the
continuous improvement in aesthetic medicine penetration rates and the increasing demand for high-
quality and diversified services the market is expected to maintain an annual growth rate of 10%-15%
over the next four years. As education and training on the aesthetic medicine market in China keep
deepening an increasing number of emerging aesthetic medicines enter the market to satisfy patients’
diverse demands. Moreover consumers raise their demands for anti-wrinkle and anti-aging and
depend more on brand effect which are expected to steadily expand the size of the aesthetic medicine
market in China.In recent years the proportion of non-surgical projects continues to increase and its market scale
expands gradually. According to the China Medical Aesthetic Industry Outlook 2024 non-surgical
projects were projected to account for 55% of the total aesthetic medicine market share in 2024. The
non-surgical projects mainly include two categories of injectable treatments and energy-based
treatments. Each category constitutes approximately 45% of the market with a CAGR of 20%-30%
and 15%-20% in the next five years respectively.(III) Innovative development strategies of various business segments of the Company
1. Development plan of the pharmaceutical industry
Upholding the main theme of development of innovative R&D the Company takes innovative
medicines as the foundation and orientation for building core competitiveness in the future closely
track the technological development and R&D dynamics of such frontier fields as biomedicine gene
therapy cell therapy and ADC medicines in and out of China. It focuses on and gives priority to the
development of innovative medicines and high-technical barrier generic medicines with outstanding
clinical values for oncology endocrinology autoimmunity and other major diseases and chronic
75Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
diseases with differentiated and pioneering innovative medicine pipelines formed. In terms of R&D
philosophy the Company will deepen all-round foreign cooperation and product introduction inject
new connotations into the long-term strategic plan of “digestion and absorption” and follow the
innovative R&D idea of “self-research + introduction”. The Company will continuously enrich its
product lines improve the medium- and long-term layout of innovative products keep maintaining
the dual-wheel driving and coordinated development engines of power and innovation for the
Company build a global R&D strategic cooperation ecosystem centered on Zhongmei Huadong.Moreover the Company will continue to improve the ability in international operation of products
and do well in external authorization of superior products advanced technologies and patents. During
the scientific and technological innovation in the future the Company will benchmark with
innovation and differentiation and grasp its basic orientation of clinical values focusing on the project
promotion speed as well as middle- and long-term pipeline layout. The Company will continue to
increase its investment in R&D continuously enrich and optimize lines of core innovative products
and form enriched product lines and a robust product portfolio.More efforts will be made to introduce top-notch talents to create high-level scientific research
teams. The Company will also create an innovative cultural atmosphere that encourages innovation
and success and bears failure and enhance the development of internal R&D system and
technological platforms. Another action is to build a scientific team with outstanding ability open
mind great passion and sense of responsibility that cherishes innovation to facilitate the
implementation of the Company’s international innovation strategy. The Company will establish a
dynamic evaluation mechanism for R&D projects to assist the Company in decision-making and
management of R&D and product introduction thus ensuring scientific advanced and feasible
scientific innovation.
2. Development plan of the pharmaceutical business
The Company has positioned the core mission of its pharmaceutical business segment for 2025
and the eighth three-year plan period as “innovation-driven breakthroughs”. Specifically the
Company aims to expand its market beyond Zhejiang Province through innovations in business
models product offerings and operational modes while also strengthening traditional operations to
ensure stable performance. Additionally it will pursue new development through three focal points:
preserving existing business driving incremental growth and enhancing labor efficiency. For
traditional operations the Company will prioritize enhancing innovative service quality to stabilize
and increase its market share in in-hospital distribution services ensuring concurrent growth in both
market share and operational scale. It will also accelerate the layout and expansion of out-of-hospital
markets transitioning from a traditional medicine distributor to a comprehensive pharmaceutical
76Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
service provider. Operational efficiency improvements will extend beyond monitoring critical
turnover metrics such as operating cycles accounts receivable and inventory with particular
emphasis placed on optimizing per-capita productivity and departmental efficiency indicators.Regarding innovative businesses the Company will differentiate operational models from traditional
approaches. The Company will integrate resources across business departments in addition to
expanding existing innovative operations including product agencies and third-party logistics
focusing on cold chains special medicines and nuclear medicines. Starting with logistics and
distribution services supporting aesthetic medicine and industrial microbiology operations the
Company aims to enter new fields including aesthetic medicine and animal health products. This
expansion will involve establishing new business frameworks and models while enhancing channel
distribution capabilities and terminal promotion effectiveness. Through these strategic initiatives in
both fields the Company plans to extend its footprint beyond Zhejiang Province and increase the
proportion of non-pharmaceutical businesses.
3. Development plan of the aesthetic medicineIn the field of aesthetic medicine adhering to the strategy of “global operation layout and dual-circulation operation & development” the Company continues to focus on the global high-end
aesthetic medicine market with its core subsidiary Sinclair as the global operating platform. It
integrates and leverages global technological innovation resources and constantly improves its
academic influence from clinical micro-technologies to industrial development. Additionally the
Company keeps refining its product lines to achieve a global layout in aesthetic medicine and
positions itself as an international aesthetic medicine enterprise with significant developmentpotential in the future. The Company successively introduces superior international “aestheticmedicine + biomedicine” products with great scientific connotation and huge market potential into
China a special market of the Company’s aesthetic medicine businesses thus expanding its presence
in China relying on its great registration and marketing abilities in China. The Company empowers
the rapid launching and commercialization of its superior international products fostering a new
pattern features dual-circulation coordinated development and mutual promotion of domestic and
international businesses.In the future the Company will continue to focus on the high-end market of global aesthetic
medicine to form an international aesthetic medicine business integrating R&D manufacturing and
marketing. Leveraging Sinclair’s global network of R&D centers and production bases the Company
is accelerating the integration of R&D resources and capabilities while actively optimizing its product
portfolio. Through these efforts it continues to enhance its global industrial footprint thereby
ensuring robust production capacity assurance for the internationalization of its aesthetic medicine
77Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
products. This strategic consolidation better positions the Company to address future development
needs and market demands. In the meantime the Company will continue to foster robust brand
strength based on cutting-edge innovative technologies strive to bring comprehensive solutions and
extraordinary aesthetic experience to patients by upholding the professional and rigorous attitude as
a pharmaceutical enterprise and bring long-term values to patients aesthetic medicine institutions
and physicians around the world.
4. Development plan of the industrial microbiology
Aiming at international development the industrial microbiology segment will keep up with the
development trend of global industrial microbiology and synthetic biology industry and technologies
and endeavors to become an industry leader in the field of industrial microorganism by building an
“industrialized large-scale and international” industrial cluster. The Company will keep practicing
the industrial microbiology development strategy and continue to enhance its product R&D and
market expansion by clarifying and continuously advancing the layout cored at four major fields of
xRNA featured APIs & intermediates massive health & biomaterials and animal health. The
Company will also actively develop major customers in and out of China and constantly improve its
overall sales.(IV) Business plan in 2025
In 2025 the Company will implement a new round of reforms aimed at strengthening system
and capability development accelerating the progress of R&D and the launch of new products and
deepening the expansion of its business models. On the R&D front the Company will continuously
refine its R&D decision-making mechanisms expand therapeutic fields for innovative products
through differentiated positioning and accelerate R&D progress. Regarding business operations the
Company will focus on four core business segments of pharmaceutical industry pharmaceutical
business aesthetic medicines and industrial microbiology while innovating business development
models and exploring new markets. The Company will fully leverage existing resources across these
operations to create synergistic empowerment thereby forging a solid foundation for sustainable
development.
1. Pharmaceutical industry
Being “Scientific Research-based and Patient-centered” the Company will continuously
increase the R&D input and keep enriching the layout of innovative medicine R&D. In 2025 the
R&D team will focus on the theme of “speed and quality” leveraging existing product and research
lines while maintaining the dual-driven strategy of “self-development + introduction”. This approach
will accelerate the development of innovative projects rapidly expand market-ready product
portfolios and continuously empower the Company’s sustainable development.
78Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
With regard to innovative projects the Innovation R&D Center focuses on the layout of three
core therapeutic fields of oncology endocrinology and autoimmunity oriented at the unmet clinical
demands of global patients while caring about the development of disruptive technologies and other
major unmet clinical demands. The Company will further strengthen its independent R&D
capabilities enhance the development of its innovative medicine R&D platforms and foster rational
and agile R&D management systems and project decision-making mechanisms to accelerate the
progress of its product R&D.In terms of generic medicines the CMC R&D Center continues to build an integrated “API +formulation” industrial chain advantage that combines generic and innovative approaches. While
advancing high-technological-barrier generic drugs the Company will deepen formulation
technology improvements and innovations.
2. Pharmaceutical business
Aligning with the Vision 2030 the Company will ensure a strong start for the first year of its
eighth three-year plan by focusing on three key priorities of existing business incremental growth
and workforce efficiency while deepening three primary profit models of distribution agency and
third-party logistics. The Company aims not only to achieve its annual targets but also to make
strategic investments with an eye on future trends. It will drive organizational restructuring to
implement corporate strategies address operational gaps advance unified management and
continuously enhance its core competencies. The Company is committed to dual growth in market
share and scale through its distribution model and continues to expand its presence in out-of-hospital
markets. Within Zhejiang Province’s hospital systems the market share of its medical devices and
ginseng & antler pieces is also continuously increasing. The product agency and third-party logistics
models will not only improve profitability but also leverage innovative service features to empower
distribution operations.
3. Aesthetic medicine business
In 2025 the Company’s aesthetic medicine segment will actively promote the R&D and
registration of high-end aesthetic medicine products worldwide endeavor to ensure the normal
progress of relevant projects and further enrich product lines vertically and horizontally thus
benefiting more patients. As for the aesthetic medicine business in China in 2025 the Company will
always target high-end markets put patients at the center improve service quality strengthen market
promotion for Sinclair and the Company’s brands and increase market share through multiple
channels. Moreover training for physicians is further enhanced and the brand image is promoted to
reach more customers.
4. Industrial microbiology
79Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
In 2025 the industrial microbiology segment will establish and strengthen its core operational
capabilities driven by synergistic product and marketing strengths. It will also implement core
management competencies in cost reduction expense control and efficiency enhancement. The
subsidiaries under the four segments of xRNA featured APIs & intermediates massive health &
biomaterials and animal health will develop clear short- medium- and long-term product lines with
a priority on cultivating high-potential products. For marketing strategies the segment will execute
action plans centered on “cost quality responsiveness and customer satisfaction” to achieve market
objectives. International market expansion and key account development will be intensified to
effectively improve market coverage while accelerated product certifications and registrations will
facilitate broader market access. The Company remains committed to its “customer-first” principle
dedicating all efforts to serve customers and aligning development directions with market and
customer demands. Internally product cost reduction targets will be achieved through technological
advancements procurement optimization and manufacturing cost controls. These measures will
collectively enhance its product competitiveness and overall operational effectiveness.
5. Production and quality management
In 2025 the production system will oversee centralized management of domestic formulation
operations and related businesses across industrial subsidiaries. It will ensure capacity expansion for
existing products and the launch of new products at designated facilities. In the meantime the
Company will continue to strengthen foundational management optimize internal resource allocation
and enhance operational efficiency. Thanks to its management improvement and technologicaladvancement the Company will advance its transformation centered on “standardization and highefficiency” in line with the principle of cost-effectiveness. As for the quality system the Company’s
will remain steadfast in upholding its core values enhance cross-functional collaboration and
communication and ensure zero tolerance for quality and safety risks.(V) Possible risks and countermeasures
1. Change of industry policy and risk of product price reduction
The pharmaceutical industry is a strategic industry supported and developed in China which is
closely related to people’s health and life safety. Being highly competitive and innovative it needs to
constantly adapt to market changes and policy adjustment. In recent years the pharmaceutical
industry has been gradually standardized normalized and systematized as policies such as volume-
based procurement and medical insurance negotiation continue to advance. In the meantime such
external factors as geopolitics and macroeconomic policies also disturb enterprise management and
market conditions posing new challenges to the production cost and profitability of the
pharmaceutical industry. Besides there is a risk of price reduction of new medicines.
80Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Countermeasures: The Company has always paid great attention to national policies and
industrial development with corresponding adjustment made when necessary. In terms of R&D the
Company continues to increase its R&D input and improves its competitiveness and potential for
future development by enriching product lines in core therapeutic fields. In the meantime the
Company actively expands the aesthetic medicine and industrial microbiology fields to create new
growth points. In addition the Company also reduces its production and operation risks through cost
reduction efficiency improvement lean management or by other means.
2. Risk in new medicine R&D
Generally it takes a long time for a new product to be launched from R&D to pre-clinical
research clinical trials application for registration production approval commercialization and etc.The R&D progress is affected by such factors as national policies market factors and regulatory
approval. In addition the R&D of innovative medicines needs excellent R&D personnel with high
education level. The investment of manpower and early R&D expenses will put some pressure on the
Company to achieve its current business objectives. Meanwhile new medicines will be tested by the
market demands after launching and may face such risks as price reduction which may result in return
on R&D investment that is less than expected.Countermeasures: The Company focuses on its core therapeutic fields continuously improves
its capacity in independent R&D keeps enriching and optimizing its product lines through
independent R&D + introduction and fosters the R&D ecology unique to Huadong Medicine with
featured R&D matrices formed in the fields of oncology endocrinology and autoimmunity. The
Company will continue to optimize its innovation mechanism constantly improve scientific research
evaluation and decision-making system for new medicines and strengthen close partnership with
well-known R&D institutions in and out of China. In the meantime the Company inputs more to
introduce high-level scientific research talents enhances training and incentive for internal core
technical staff and endeavors to foster a high-level innovative R&D team that supports the complete
cycle of innovative medicine R&D.
3. Risk in investment and merger
Foreign investment is one of important ways of enterprise development. In recent years the
Company has continued to invest and do mergers and acquisitions in such fields as innovative
medicines aesthetic medicine and industrial microbiology so as to form goodwill and realize the
innovation and transformation development strategy. If the company acquired in the future faces the
risk of performance fluctuation there may be a risk of goodwill impairment adversely affecting the
Company’s current operation performance. At the same time the post-investment management and
business integration of the target company also put forward higher requirements for the management
81Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
of the Company.Countermeasures: The Company exercises oversight over acquired subsidiaries by controlling
board decisions and appointing management and financial personnel to participate in major decision-
making and daily operations. Subsidiaries are required to comply with the listed company’s internal
control systems establish and implement comprehensive management frameworks. The management
teams of acquired subsidiaries maintain efficient communication with the Company ensuring that the
corresponding decision-making procedures for both daily operations and significant decisions are
strictly exercised in accordance with applicable laws regulations articles of association internal
policies and the rules of procedure of the Board of Directors/Shareholder Meeting. In terms of
acquisition risk control the Company conducts business financial and tax due diligence via third-
party intermediaries and performs regular specialized management audits on its subsidiaries.Additionally the Company is committed to enhancing its capabilities in operation planning
organizational structure and financial governance fostering resource sharing and synergistic
collaboration with subsidiaries to strengthen integrated operational and governance capabilities.Regular impairment testing for goodwill is conducted while post-investment management is
continuously improved in terms of comprehensiveness scientific rigor and timeliness.
4. Risk in exchange rate fluctuation
The Company has always been devoted to advancing its international development. In recent
years the Company increasingly develops international cooperation and exchanges expands the sales
network of aesthetic medicine in the world and accelerates the development of its industrial
microbiology segment rising the proportion of foreign currency settlement business. The fluctuation
in exchange rate will affect the price of the Company’s export products cause exchange gains and
losses to the Company and increase the operating costs thus affecting the Company’s assets
liabilities and income further its operation ability debt repayment ability and profitability.Countermeasures: the Company will pay close attention to the fluctuation in exchange rate
adjust our business countermeasures in time according to its own situation and resolve the adverse
effects; develop the exchange risk awareness and improve the foreign exchange risk management
system; strengthen the training of financial personnel's professional skills and risk awareness
enhance the awareness of risk avoidance and make good use of financial means to avoid exchange
rate risks.
82Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
XII. Registration form of receptions including research communication and interview
undertaken during the reporting period
□ Applicable □ N/A
Main content
of discussion Index of basic
Reception Reception Reception Type of
Visitors and information of the
date address method visitor
information research
provided
For details please
NCAM refer to the Record of
Citic Investor Relations
On-site
Conference Securities Investor Activities on January
January 9 to survey and Institutio
Room of the Guotai communicati 9 to 10 2024
10 2024 online n
Company Junan on presented on the
meeting
Securities websites of
etc. irm.cninfo.com.cn
and cninfo.com.cn.For details please
Haitong
refer to the Record of
Securities
Investor Relations
Origin Asset
Conference Investor Activities on January
January 16 to On-site Institutio Managemen
Room of the communicati 16 to 17 2024
17 2024 survey n t SWS MU
Company on presented on the
Fund
websites of
Managemen
irm.cninfo.com.cn
t etc.and cninfo.com.cn.Exchange
Soochow For details please
Meeting for
Securities refer to the Record of
Launching of
Institutio Zhong Ou Investor Relations Conference Saikaize
March 4 Online n and AMC Activities on March
Room of the between
2024 meeting individu Perseveranc 4 2024 presented on
Company Huadong
al e Asset the websites of
Medicine and
Managemen irm.cninfo.com.cn
CARsgen
t etc. and cninfo.com.cn.Therapeutics
For details please
CICC
2023 Annual refer to the Record of
China
Institutio Performance Investor Relations
Conference Securities
April 18 Online n and Exchange Activities on April 18
Room of the Cooperation
2024 meeting individu Meeting of 2024 presented on the
Company TF
al Huadong websites of
Securities
Medicine irm.cninfo.com.cn
etc.and cninfo.com.cn.For details please
Citic 2024 Q1 refer to the Record of
Institutio Securities Performance Investor Relations
Conference
April 26 Online n and China Exchange Activities on April 26
Room of the
2024 meeting individu Galaxy Meeting of 2024 presented on the
Company
al Securities Huadong websites of
CICC etc. Medicine irm.cninfo.com.cn
and cninfo.com.cn.
2023 Annual For details please
Conference
April 30 Online Individu Individual and 2024 Q1 refer to the Record of
Room of the
2024 meeting al investors Online Investor Relations
Company
Performance Activities on April 30
83Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Meeting of 2024 presented on the
Huadong websites of
Medicine irm.cninfo.com.cn
and cninfo.com.cn.For details please
refer to the Record of
Activities of Investor Relations
Citic
Institutio Investors’ Activities on May 8
Conference Securities
On-site n and Reception 2024 (Activities of
May 8 2024 Room of the CICC
survey individu Day of Investors’ Reception
Company Harvest
al Huadong Day) presented on the
Fund etc.Medicine websites of
irm.cninfo.com.cn
and cninfo.com.cn.For details please
Hua Chuang
2024 Interim refer to the Record of
Securities
Institutio Performance Investor Relations
Conference CSC
August 16 Online n and Exchange Activities on August
Room of the Financial
2024 meeting individu Meeting of 16 2024 presented
Company Citic
al Huadong on the websites of
Securities
Medicine irm.cninfo.com.cn
etc.and cninfo.com.cn.For details please
Guolian 2024 Q3 refer to the Record of
Institutio Minsheng Performance Investor Relations
Conference
October 25 Online n and Securities Exchange Activities on October
Room of the
2024 meeting individu CICC Citic Meeting of 25 2024 presented
Company
al Securities Huadong on the websites of
etc. Medicine irm.cninfo.com.cn
and cninfo.com.cn.XIII. Formulation and implementation of market value management system and valuation
enhancement plan
Whether the Company formulates its market value management system.□ Yes □No
Whether the Company discloses its valuation enhancement plan.□Yes □ No
To strengthen its market value management further standardize its market value management
practices and practically safeguard the legitimate rights and interests of the Company its investors
and other stakeholders the Company has formulated its market value management system in
compliance with relevant laws and regulations including the Company Law of the People’s Republic
of China the Securities Law of the People’s Republic of China the Several Opinions of the State
Council on Strengthening Regulation Guarding against Risks and Promoting High-Quality
Development of the Capital Market the Administrative Measures for the Disclosure of Information
of Listed Companies the Guidance No. 10 on Market Value Management for Listed Companies as
well as the Articles of Association and the Company’s operational realities. The system was approved
at the 32nd session of the 10th Board of Directors. Detailed information and the full text of the system
84Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
are available in the relevant announcement disclosed by the Company on Cninfo
(http://www.cninfo.com) on April 18 2025.XIV. Implementation of the Action Plan of “Improvement of Quality and Return”
Whether the Company discloses its Action Plan of “Improvement of Quality and Return”
□ Yes □No
The Company has formulated the Action Plan of “Improvement of Quality and Return” in a bidto implement the guiding principles of “Activating the capital market and boosting investors’confidence” put forward by the Political Bureau of the CPC Central Committee and “Vigorouslyimproving the quality and investment value of listed companies taking more powerful and effectivemeasures to stabilize the market and confidence” pointed out at the executive meeting of the State
Council safeguard the interests of all shareholders of the Company continuously enhance the
Company’s core competitiveness and investment values and realize high-quality high-efficiency and
sustainable development. For details please refer to the Announcement on Advancing the
Implementation of the Action Plan of “Improvement of Quality and Return” (Announcement No.:
2024-011) disclosed by the Company on Cninfo (http://www.cninfo.com.cn) on March 9 2024.
The Company implements the Action Plan of “Improvement of Quality and Return” focuses on
four business segments of pharmaceutical industry pharmaceutical business aesthetic medicine and
industrial microbiology and continues to advance the innovation and transformation strategy fully
stimulates the innovation vitality improves the operating quality and efficiency and promotes the
sustainable and high-quality development.The Company continuously increases its R&D input. During the reporting period the
Company’s R&D investment in the pharmaceutical industry (excluding equity investment) was 2.678
billion yuan up 16.77% year on year. Among them the direct R&D expenditure was 1.770 billion
yuan up 10.63% year on year which accounts for 12.91% of the operating revenue of the
pharmaceutical industry. Over the years the Company has applied for more than 1600 patents in and
out of China including over 530 authorized invention patents. During the reporting period the
Company’s patent applications and renewals progressed smoothly. A total of 187 patent applications
were submitted including 143 for inventions. Additionally 90 patents were granted.The Company conducted information disclosure and investor exchange activities based on the
needs of investors enhanced its transparency listened to and drawn opinions and suggestions of
investors continuously improved corporate governance strengthened internal control and risk
prevention and improved the level of standardized operation. The Company further standardized the
operation of the mechanism comprised of shareholders’ meeting board of directors and board of
85Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
supervisors gave full play to the roles of special committees independent directors and professional
organizations of the Board of Directors continuously improved the decision-making level and
safeguarded the interests of the Company and its stakeholders.The Company has always kept the philosophy of returning investors in mind and operated stably.In 2024 the Company achieved the total operating revenue of 41.906 billion yuan up 3.16% year on
year the net profit attributable to shareholders of listed companies of 3.512 billion yuan up 23.72%
year on year and the net profit attributable to shareholders of listed companies after deducting non-
recurring gains/losses of 3.352 billion yuan up 22.48% year on year.In May and September 2024 the Company implemented profit distributions for 2023 and H1
2024 with a total cash dividend of 1.632 billion yuan. Since it was listed the Company has distributed
dividends for 23 times with the cumulative amount of 7.242 billion yuan which is 28.97 times the
fund that was raised during IPO (250 million yuan). The Company brings shareholders consistent and
steady returns on investment.
86Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section IV. Corporate Governance
I. Overview of corporate governance
During the reporting period the Company strictly complied with the relevant laws regulationsand normative documents such as the Company Law of the People’s Republic of China (“theCompany Law”) the Securities Law of the People’s Republic of China (“the Securities Law”) the
Governance Guidelines for Listed Companies the Rules for Stock Listing of Shenzhen Stock
Exchange and the Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange
No.1 - Standardized Operation of Listed Companies on the Main Board. Aligning with its strategic
development goals and with a view to safeguarding the interests of all shareholders the Company
implemented comprehensive internal control and standardized management initiatives formulated
and optimized internal control systems strengthened internal management standardized information
disclosure and improved the corporate governance structure. According to the normative documents
on the governance of listed companies issued by the CSRC the Company has formed a system that
is legally compliant and in line with the actual operation of the Company.(I) About shareholders and the Shareholders’ Meeting
The Company strictly complies with the provisions and requirements of the Company Law and
the Rules of Procedure for the Shareholders’ Meeting to standardize the convening holding and
voting procedures of shareholders’ meetings thereby fully safeguarding the rights to information
access and equal participation for all shareholders particularly middle and minority shareholders.Additionally the Company engages legal counsels for on-site witnessing and issuing legal opinions
thereby ensuring the legitimacy of the procedures for convening holding and voting at shareholders’
meetings. During the reporting period the Company held three shareholders’ meetings all of which
were convened by the Board of Directors. There were no instances where shareholders individually
or collectively holding more than 10% of the Company’s shares requested to convene a shareholders’
meeting. There were also no instances where independent directors or the Board of Supervisors
proposed to convene a shareholders’ meeting. Additionally no material matters were implemented
prior to formal review and approval.(II) About directors and the Board of Directors
87Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
The 10th Board of Directors of the Company comprises nine members including three
independent directors (one of whom is an accounting professional). The number of directors board
composition and qualifications of directors comply with applicable laws and regulations as well as
the requirements of the Articles of Association. During the reporting period directors demonstrated
integrity and diligence actively participated in relevant training programs to enhance their
understanding of laws and regulations and leveraged their professional expertise in corporate
management technological R&D accounting and audit to safeguard the overall interests of the
Company. The Board of Directors strictly adhered to the Articles of Association and the Rules of
Procedure of the Board of Directors in convening and holding meetings. All voting procedures
aligned with relevant laws and regulations.(III) About supervisors and the Board of Supervisors
All supervisors of the Company perform their duties in accordance with laws regulations and
institutional requirements including the Company Law the Articles of Association and the Rules of
Procedure of the Board of Supervisors. The Board of Supervisors of the Company comprises six
members including two employee supervisors. During the reporting period the Board of Supervisors
strictly adhered to the Articles of Association and the Rules of Procedure of the Board of Supervisors
in convening and holding meetings. All voting procedures aligned with relevant laws and regulations.Supervisors diligently performed their supervisory duties actively attended meetings and inspected
and monitored the lawfulness and compliance of significant corporate matters financial status and
the performance of duties by the Company’s directors and senior management thereby safeguarding
the legitimate rights and interests of shareholders of the Company.(IV) About independent directors and the operation of special committees of the Board of
Directors
During the reporting period the Company’s independent directors fulfilled their duties with
integrity diligence and independence in strict compliance with the Company Law other
departmental regulations normative documents and institutional guidelines. They proactively
safeguarded the legitimate rights and interests of middle and minority shareholders and submitted
independent opinions on relevant matters in accordance with the Working System for Independent
Directors effectively safeguarding the interests of the Company and shareholders particularly
middle and minority stakeholders while reinforcing their supervisory role. The Board of Directors
88Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
governs five special committees: the Strategy Committee the Audit Committee the Nomination
Committee the Remuneration and Approval Committee and the ESG Committee. During the
reporting period these committees provided strategic counsel and actionable recommendations to the
Board of Directors in key areas including investment decision-making financial management
operational execution internal governance and human capital development ensuring informed and
well-rounded governance outcomes.(V) About information disclosure and transparency
The Company places great emphasis on information disclosure and strictly adheres to relevant
laws and regulations as well as its own Information Disclosure Management Regulations. It discloses
information through designated media platforms including the China Securities Journal Securities
Times Shanghai Securities News and Cninfo (www.cninfo.com.cn) in a truthful accurate complete
and timely manner. This practice effectively ensures investors’ right to information and guaranteed
equitable access to corporate updates for all shareholders. For material non-public information the
Company implements rigorous confidentiality protocols by limiting the circle of personnel with
access and maintaining strict control over the information flow.(VI) About investor relations management
Prioritizing and actively advancing the investor relations management the Company has
established an Investor Relations Management System with the Chairman as the primary responsible
person for investor relations affairs and the Secretary of the Board of Directors overseeing the
organization and coordination of these efforts. The Office of the Board of Directors is a functional
department tasked with investor relations management which is empowered to plan organize and
execute initiatives related to investor relations management. During the reporting period the
Company strengthened communication with securities regulatory authorities and the Shenzhen Stock
Exchange enhanced engagement with investors through on-site meetings phone calls email
interactive platforms and other channels addressed investor inquiries thoroughly and fostered
constructive relationships to ensure effective interaction with investors.(VII) About stakeholders
The Company fully respects and safeguards the legitimate rights and interests of stakeholders
including investors financial institutions other creditors employees clients and suppliers and
89Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
actively cooperates with them to jointly promote the sustained stable and healthy development of
the Company.As of the end of the reporting period the actual state of the Company’s corporate governance
has been generally in compliance with the regulatory documents on listed company governance issued
by the CSRC. Moving forward the Company will continue to consistently strengthen corporate
governance establish a long-term governance mechanism further improve its internal control
systems and intensify enforcement efforts to consolidate the foundation for sustained healthy and
steady growth.Whether the actual corporate governance of the Company is significantly different from laws administrative regulations and the
normative documents on corporate governance issued by the CSRC
□Yes □ No
No such case during the reporting period.II. The Company’s independence in corporate assets personnel finance institutions and
business from controlling shareholders and de facto controller
During the reporting period the Company continuously strengthened the corporate governance
structure and implemented standardized operation in accordance with the requirements of regulatory
authorities. The Company and its controlling shareholders realized the separation of management and
independent operation in terms of personnel assets finance institutions and business.Independent Category Note
or not
The Company has independent production and sales systems. The Company’s business
activities are completely independent from its controlling shareholders. Although the
Independence in business Yes subsidiaries of the Company and its controlling shareholders are engaged in
pharmaceutical business they focus on different medical fields and client groups.Therefore there is no competition between the Company and related parties.The Company is completely independent in the management of labor personnel and
Independence in personnel Yes salaries and has an independent Human Resources Department and a sound personnel
management system.The Company has independent production systems auxiliary production systems and
Independence in assets Yes supporting facilities; independent purchasing and sales systems; independent industrial
property rights trademarks non-patented technologies and other intangible assets.The Company has established a Board of Directors management and other internal
organizations with comprehensive functionalities. Each functional department is
independent from controlling shareholders and functions based on the decisions of the Independence in institutions Yes
Company’s management. There is no superior-subordinate relation between functional
departments of controlling shareholders and those of the Company which would have an
impact on the Company.The Financial Management Head Office is responsible for the financial accounting and
budget management of the Company and has established independent and sound Independence in finance Yes
financial accounting and budget management systems according to relevant laws and
regulations.
90Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Note: The Company is independent in businesses management assets institutions finance and personnel from its main shareholders.The Company does not face horizontal competition or engage in related transactions caused by partial restructuring industry
characteristics national policies or mergers and acquisitions.III. Horizontal competition
□ Applicable □ N/A
IV. Annual and extraordinary shareholders’ meetings held during the reporting period
1. Shareholders’ meetings during the reporting period
Proportion of
Sessions Meeting type Convening date Disclosure date Meeting resolution
investors present
Announcement of
the Resolutions of
2023 Annual
Shareholders’
Meeting
(Announcement
2023 Annual Annual
No.: 2024-043) on
Shareholders’ shareholders’ 62.86% May 8 2024 May 9 2024
China Securities
Meeting meeting
Journal Securities
Times Shanghai
Securities News
and Cninfo
(www.cninfo.com.cn)
Announcement of
the Resolutions of
2024 First
Extraordinary
Shareholders’
Meeting
2024 First
Extraordinary (Announcement
Extraordinary
shareholders’ 63.36% June 18 2024 June 19 2024 No.: 2024-056) on
Shareholders’
meeting China Securities
Meeting
Journal Securities
Times Shanghai
Securities News
and Cninfo
(www.cninfo.com.cn)
Announcement of
the Resolutions of
2024 Second
Extraordinary
2024 Second
Extraordinary Shareholders’
Extraordinary December 20 December 21
shareholders’ 64.17% Meeting
Shareholders’ 2024 2024
meeting (Announcement
Meeting
No.: 2024-111) on
China Securities
Journal Securities
Times Shanghai
91Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Securities News
and Cninfo
(www.cninfo.com.cn)
2. Extraordinary shareholders’ meetings convened at the request of preference shareholders with resumed
voting rights
□ Applicable □ N/A
V. Directors supervisors and senior management
1. Brief information
Shares
Shares Shares
held at Shares
increas decrea Reaso
Comm the Other held at
Holdin Termin ed sed ns of
encem beginn change the end
Positio g of ation during during change
Name Gender Age ent of ing of s of the
n positio of the the the s in
the the (shares period
n term period period shareh
term period ) (shares
(shares (shares olding
(shares )
))
)
April
Direct Incum June 1
26 N/A
or bent 2025
2010
Chair Incum June 6 June 1 20000 0 0 20000
Lv 0 N/A
Male 50 man bent 2019 2025 0 0
Liang
Genera
Octobe
l Incum June 1
r 26 N/A
Manag bent 2025
2021
er
Decem
Kang Direct Incum June 1
Female 56 ber 5 0 0 0 0 0 N/A
Wei or bent 2025
2016
Zhu Direct Incum June 1 June 1
Male 58 0 0 0 0 0 N/A
Feipeng or bent 2022 2025
Direct Incum June 1 June 1
Ye Bo Male 36 0 0 0 0 0 N/A
or bent 2022 2025
Zhu Direct Incum June 6 June 1
Male 47 30000 0 0 0 30000 N/A
Liang or bent 2019 2025
July
Wang Direct Incum June 1
Male 49 19 0 0 0 0 0 N/A
Yang or bent 2025
2023
Indepe
Wang ndent Incum June 1 June 1
Male 57 0 0 0 0 0 N/A
Ruwei Direct bent 2022 2025
or
Indepe
Gao
ndent Incum June 1 June 1
Xiangdo Female 61 0 0 0 0 0 N/A
Direct bent 2022 2025
ng
or
Indepe
Huang Incum May 8 June 1
Female 56 ndent 0 0 0 0 0 N/A
Jian bent 2023 2025
Direct
92Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
or
Januar
Bai Superv Incum June 1
Female 58 y 20 0 0 0 0 0 N/A
Xinhua isor bent 2025
1998
Zhou Superv Incum June 1 June 1
Male 55 0 0 0 0 0 N/A
Yanwu isor bent 2022 2025
May Decem
Superv Resign
Qin Yun Female 55 19 ber 3 0 0 0 0 0 N/A
isor ed
20062024
Decem
Wang Superv Incum June 1
Female 46 ber 20 0 0 0 0 0 N/A
Fang isor bent 2025
2024
Dong Superv Incum June 1 June 1
Female 40 0 0 0 0 0 N/A
Jiqin isor bent 2022 2025
Emplo
Xu yee Incum June 6 June 1
Male 49 0 0 0 0 0 N/A
Zhifeng Superv bent 2019 2025
isor
Emplo
May
Zhu yee Resign June 1
Female 50 16 0 0 0 0 0 N/A
Yinhua Superv ed 2022
2024
isor
Emplo
May
yee Incum June 1
Xia Jing Female 50 16 0 0 0 0 0 N/A
Superv bent 2025
2024
isor
Deput
y
Genera Incum June 6 June 1 15000 15000
Wu Hui Male 55 0 0 0 N/A
l bent 2019 2025 0 0
Manag
er
Deput
y
Octobe
Genera Incum June 1 18000 18000
Zhu Li Female 49 r 12 0 0 0 N/A
l bent 2025 0 0
2020
Manag
er
Deput
y
Zhang Genera Incum June 1 June 1 23000 23000
Male 49 0 0 0 N/A
Jianfei l bent 2022 2025 0 0
Manag
er
Secret
ary of
the June
Chen Incum June 1 10000 10000
Male 52 Board 30 0 0 0 N/A
Bo bent 2025 0 0
of 2009
Direct
ors
Officer
in Nove
Qiu Charge Incum mber June 1 10000 10000
Male 42 0 0 0 N/A
Renbo of bent 28 2025 0 0
Financ 2019
e
93Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
9900099000
Total -- -- -- -- -- -- 0.00 0.00 0.00 --
00
Note: The ages of directors supervisors and senior executives are calculated in full years based on their respective dates of birth as of
the disclosure date of the Report.Whether directors and supervisors left office or senior management were dismissed during their terms of office during the reporting
period
□ Yes □ No
On May 16 2024 the Board of Supervisors of the Company received a resignation report from
Ms. Zhu Yinhua an employee supervisor of the 10th Board of Supervisors of the Company. Ms. Zhu
Yinhua resigned from her position as employee supervisor for personal reasons. Following her
resignation Ms. Zhu will continue to work in a subsidiary of the Company.On December 3 2024 the Board of Supervisors of the Company received a written resignation
report from Ms. Qin Yun a supervisor of the 10th Board of Supervisors of the Company. Ms. Qin
Yun resigned from her position as supervisor for personal reasons. Ms. Qin Yun whose term was
originally scheduled to expire upon the conclusion of the 10th Board of Supervisors of the Company
will cease to hold any position within the Company following her resignation.Change of directors supervisors and senior management of the Company
□ Applicable □ N/A
Name Position Type Date Reasons
Zhu Yinhua Employee Supervisor Resigned May 16 2024 Personal reasons
Xia Jing Employee Supervisor Elected May 16 2024 Elected
Qin Yun Supervisor Resigned December 3 2024 Personal reasons
Wang Fang Supervisor Elected December 20 2024 Elected
2. Positions and incumbency
Professional background main working experiences and main responsibilities of the Company’s incumbent directors supervisors and
senior management
(1) Profile of directors
Chairman: Mr. Lv Liang: Born in 1974 holds a master’s degree. He was Project Manager of Grand Asset Management Co. Ltd. from
July 1997 to July 2001; Deputy General Manager and General Manager of Changshu Leiyunshang Pharmaceutical Co. Ltd. from July
2001 to March 2010; Director and Deputy General Manager of the Company from April 2010 to January 2016; Director and General
Manager of the Company from January 6 2016 to June 5 2019. He has been Chairman of the Board of the Company since June 6
2019 and General Manager of the Company since October 26 2021.
Director: Ms. Kang Wei: Born in 1968 holds a master’s degree. She served as Manager of the Trade Division Manager of the Capital
Division and Manager of Financial Management of the Financial Management Department of China Grand Enterprises Inc.; Chief
Financial Officer and Deputy General Manager of Heilongjiang Grand Shopping Center. She is now Chief Financial Officer of China
Grand Enterprises Inc. She has been Director of the Company since December 2016.
94Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Director: Mr. Zhu Feipeng: Born in 1966 Doctor of Cytopharmacology. He served as a reviewer Director of the Third Review Office
and Chief Reviewer of respiratory and tumor indications of the Center for Drug Evaluation of National Medical Products
Administration. He was Vice President of Pharmaceutical Management Head Office of China Grand Enterprises Inc. from March 2021
to June 2023. He has served as General Manager of Pharmaceutical Strategy Management Head Office of China Grand Enterprises
Inc. since July 2023 and Director of the Company since June 2022.Director: Mr. Ye Bo: Born in 1988 holds a master’s degree. He served as Customer Manager of Zhejiang Branch China Development
Bank; Manager of Bonds Investment Bank Headquarters Zheshang Securities Co. Ltd.; Deputy Head of the Department of Investment
and Operation and Deputy Head of the Assets Management Department Hangzhou State-owned Capital Investment and Operation
Co. Ltd.; Executive Deputy General Manager of Hangzhou Guoyou Asset Operation Co. Ltd. He has been Deputy Head of the
Investment and Development Department of Hangzhou State-owned Capital Investment and Operation Co. Ltd. since June 2024 and
Director of the Company since June 2022.Director: Mr. Zhu Liang: Born in 1977 holds a bachelor’s degree. He served as Director Vice Chairman and Chairman of the Labor
Union of Hangzhou Huadong Medicine Group Co. Ltd. and is now a member of the Party committee and Chairman of the Labor
Union of the Company. He served as Supervisor of the Company from April 2017 to June 2019 and has been Director of the Company
since June 2019.Director: Mr. Wang Yang: Born in October 1975 Doctor of Pharmaceutical Chemistry. He commenced his career in September 2003.He was a postdoctor at Southampton University Boston College and Texas A&M University. He was the R&D Director of Shanghai
ChemPartner Chemical Research Co. Ltd.; Assistant Director of BioDuro Beijing Co. Ltd.; Senior Reviewer at the Center for Drug
Evaluation NMPA; and Senior Director of Beijing Innocare Pharmaceutical Technology Co. Ltd. He has served as Assistant President
and R&D Head of the Pharmaceutical Management Head Office of China Grand Enterprises Inc. since September 2022 and Director
of the Company since July 2023.Independent Director: Ms. Gao Xiangdong: Born in July 1963 PhD. She served as teaching assistant lecturer associate professor at
the Biopharmaceutical Teaching and Research Department and professor Vice President President and Party Secretary of the School
of Life Science and Technology China Pharmaceutical University. She has served as professor at the School of Life Science and
Technology China Pharmaceutical University since April 2021 and Independent Director of the Company since June 2022.Independent Director: Ms. Huang Jian: Born in October 1968 master certified public accountant and senior accountant. She was
Senior Partner of RSM China Certified Public Accountants; Member of the third fourth and fifth Issuance Examination Committees
of the Growth Enterprise Market of China Securities Regulatory Commission; Partner of Ruihua Certified Public Accountants (Special
General Partnership); Partner of ShineWing Certified Public Accountants (Special General Partnership). She is now Non-executive
Director of Concord New Energy Group Limited and Independent Director of Hygon Information Technology Co. Ltd. She has been
Independent Director of the Company since May 8 2023.Independent Director: Mr. Wang Ruwei: Born in 1967 Doctor of Medicine of Shimane University in Japan a professor-level senior
engineer and a supervisor of PhD candidates (Zhejiang University Shenyang Pharmaceutical University Zhejiang Chinese Medical
University). He served as Business Vice President of No. 6 Hospital affiliated to Wenzhou Medical University Deputy Chairman and
President of Zhejiang Conba Pharmaceutical Co. Ltd. and Genor Biopharma Co. Ltd and Executive Vice President of Hangzhou
Tigermed Consulting Co. Ltd. and Founding Partner and Managing Director of Hangzhou Tailong Venture Capital Partnership
(Limited Partnership). He has been member of Chinese Pharmacopoeia Commission since 2010 and is now Specially-appointed
Researcher of the Chinese Academy of Sciences Independent Director of Zhejiang Longevity Valley Botanical Co. Ltd. and Special
Assistant of the Chairman of Yangtze River Pharmaceutical Group. He has been Independent Director of the Company since June 2022.
(2) Profile of supervisors
95Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Chairman of the Board of Supervisors: Ms. Bai Xinhua: Born in 1966 holds a master’s degree. She served as Assistant Auditor of
Beijing Municipal Bureau of Audit; Accounting Manager of the Financial Management Head Office and Audit Manager of the
Supervision and Audit Department of China Grand Enterprises Inc. She is now Deputy General Manager of the Financial Management
Head Office of China Grand Enterprises Inc. She has been Supervisor of the Company since 1998.Supervisor: Mr. Zhou Yanwu: Born in 1969 holds a master’s degree. He served as Assistant Accountant of the Office of Financial
Management China International Trust Investment Corporation Assistant of General Manager of Beijing Guoqiang Technology Co.Ltd. and Assistant of Financial Director of Electrolux (China) Home Appliance Co. Ltd. He worked for China Grand Enterprises Inc.in 2000 served as Accountant Manager and Financial Manager of Financial Management Head Office Deputy General Manager of
the Supervision and Audit Department and Financial Director of China Grand Enterprises (HK) Limited. He has been General Manager
of the Supervision and Audit Department China Grand Enterprises Inc. since January 2012 and Supervisor of the Company since
June 2022.Supervisor: Ms. Wang Fang: Born in November 1978 holds a master’s degree. She served as Secretary of Maxcourt Hotel in
Changchun and Manager of Orion Management Consulting Co. Ltd. She served as Secretary of the President of China Grand
Enterprises Inc. after she joined the company in May 2006. She is now Senior Secretary of the President of China Grand Enterprises
Inc.Supervisor: Ms. Dong Jiqin: Born in 1984 holds a master’s degree. She served as member of the Department of Finance Zhejiang
Ocean University (Xiaoshan College) and member of the Foreign Trade Department Xiaoshan Foreign Trade and Economic
Cooperation Bureau Deputy Chief and Chief of the Financial Audit Department Xiaoshan Commerce Bureau Hangzhou. She has
been Head of the Risk Control and Legal Department of Hangzhou State-owned Capital Investment and Operation Co. Ltd. since
October 2019 and Supervisor of the Company since June 2022.Employee Supervisor: Mr. Xu Zhifeng: Born in 1975 bachelor and economist. He served as Commissioner of the Business
Administration Office and Director Assistant of the General Manager Office of Hangzhou Zhongmei Huadong Pharmaceutical Co.Ltd. from August 1997 to July 2011; Manager of the Risk Management and Audit Department of the Company from August 2011 to
January 2018. He has been Director of the Risk Management and Audit Department of the Company since February 2018 and
Employee Supervisor of the Company since June 2019.Employee Supervisor: Ms. Xia Jing: Born in 1974 holds a master’s degree. She joined the Company in July 1996 and held successive
positions at Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. including Sales Representative Marketing Office Staff Director
and Deputy Office Director. She has been Director of the General Manager’s Office of Hangzhou Zhongmei Huadong Pharmaceutical
Service Corporation since April 2009.
(3) Profile of senior management
Deputy General Manager: Mr. Wu Hui: Born in April 1969 master and professor-level senior engineer. He joined the Company in
July 1991 and served as technician Workshop Director and Chief Engineer of Hangzhou Zhongmei Huadong Pharmaceutical Co.Ltd. He has been Deputy General Manager of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. since 2015 Deputy General
Manager of the Company since June 2019 and General Manager of the Industrial Microbiology Division of the Company since August
2021.
Deputy General Manager: Ms. Zhu Li: Born in 1975 master accountant and senior economist. She has joined Huadong Pharmaceutical
Distribution Company since August 1997. She took multiple positions successively including accountant Deputy General Manager
and General Manager of the Chinese Patent Medicine Branch and Deputy Director and Director of the Procurement and Management
Department for Chinese and Western Medicine. From September 2019 to September 2020 she served as Deputy General Manager of
Huadong Pharmaceutical Distribution Company (responsible for the overall work). She has served as Deputy General Manager
(responsible for the commercial matters) of the Company and concurrently General Manager of Huadong Pharmaceutical Distribution
Company since October 2020.
96Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Deputy General Manager: Mr. Zhang Jianfei: Born in April 1975 holds a bachelor’s degree. He served as a salesman/ director Manager
of Wuhan region Director of the Second Sales and Management Department of Hangzhou Zhongmei Huadong Pharmaceutical Co.Ltd. and General Manager and Director of the Second Pharmaceutical Service Management Department of Hubei Pharmaceutical
Service Co. Ltd. He has been Deputy General Manager of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. since December
2020 and Deputy General Manager of the Company since June 2022.
Secretary of the Board of Directors: Mr. Chen Bo: Born in 1972 master and economist. He joined the Company in 2002 and served as
investment commissioner and Deputy Manager of the Financing Department and Manager of the Investment Department. He has been
Secretary of the Board of Directors of the Company since June 2009.Officer in Charge of Financial Affairs: Mr. Qiu Renbo: Born in 1982 holds a master’s degree. He served as commissioner of the
Financial Management Head Office and Chief of the Finance Section of the Manufacturing Branch of the Company from August
2004 to July 2010; Manager of the Financial Department of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. from August
2010 to April 2015. He has served as Chief Financial Officer of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. since May
2015 and Officer in Charge of Financial Affairs of the Company since December 2019.
Positions in shareholders’ entities
□ Applicable □ N/A
Compensation and
Position in
Shareholders’ Commencement of Termination of the allowance from the
Name shareholders’
entity the term term shareholders'
entities
entity
China Grand
Kang Wei CFO February 1 2010 To date Yes
Enterprises Inc.Assistant President
and R&D Head of
China Grand
Wang Yang the Pharmaceutical September 1 2022 To date Yes
Enterprises Inc.Management Head
Office
Deputy General
Manager of the
China Grand
Bai Xinhua Financial September 1 2003 To date Yes
Enterprises Inc.Management Head
Office
Business Director
of the Bidding and
China Grand
Qin Yun Procurement May 1 2021 February 28 2025 Yes
Enterprises Inc.Management
Center
President of the
Pharmaceutical
China Grand
Zhu Feipeng Strategy March 1 2021 To date Yes
Enterprises Inc.Management Head
Office
General Manager
China Grand of the Supervision
Zhou Yanwu January 1 2012 To date Yes
Enterprises Inc. and Audit
Department
China Grand Senior Secretary of
Wang Fang January 4 2012 To date Yes
Enterprises Inc. President
China Grand Chairman of Board
Wang Fang July 30 2021 To date Yes
Enterprises Inc. of Supervisors
Note on positions None
97Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
in shareholders'
entities
Position in other entities
□ Applicable □ N/A
Compensation and
Name of other Position in other Commencement of Termination of the allowance from the
Name
entity entity the term term shareholders'
entity
Leiyunshang
Zhu Feipeng Pharmaceutical Director May 1 2022 To date No
Co. Ltd.Western Securities
Kang Wei Supervisor November 1 2010 To date Yes
Co. Ltd.Leiyunshang
Pharmaceutical
Co. Ltd. and other
Kang Wei wholly/partially Director / To date No
owned subsidiaries
of China Grand
Enterprises Inc.Grand Industrial
Holding Co. Ltd.and other
Director and
Bai Xinhua wholly/partially / To date Yes
Supervisor
owned subsidiaries
of China Grand
Enterprises Inc.Yunnan
Leiyunshang
Qin Yun Director September 1 2011 February 28 2025 No
Pharmaceutical
Co. Ltd.Sichuan Yuanda
Shuyang
Pharmaceutical
Co. Ltd. and other Director and
Zhou Yanwu / To date No
wholly/partially Supervisor
owned subsidiaries
of China Grand
Enterprises Inc.Hangzhou Guoyou
Ye Bo Asset Operation Director March 27 2020 To date No
Co. Ltd.Hangzhou State-
Deputy Head of
owned Capital
the Investment and
Ye Bo Investment and June 1 2024 To date Yes
Development
Operation Co.Department
Ltd.Hangzhou Yingde
Ye Bo Technology Co. Executive Director July 31 2023 To date No
Ltd.Hangzhou State-
owned Capital Head of the Risk
Dong Jiqin Investment and Control and Legal October 1 2019 To date Yes
Operation Co. Department
Ltd.Dong Jiqin Hangzhou State- Supervisor September 2 2020 To date No
98Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
owned Capital
Investment and
Operation Co.Ltd.Hangzhou Oxygen
Chairman of Board
Dong Jiqin Plant Group Co. April 21 2023 To date No
of Supervisors
Ltd.Concord New
Non-executive
Huang Jian Energy Group December 1 2012 To date Yes
Director
Limited
Hygon
Information Independent
Huang Jian September 1 2020 To date Yes
Technology Co. Director
Ltd.China
Teacher and
Gao Xiangdong Pharmaceutical August 1 1983 To date Yes
Professor
University
Hangzhou Institute
Specially-
of Medicine
Wang Ruwei appointed February 1 2023 To date No
Chinese Academy
Researcher
of Sciences
Zhejiang
Independent
Wang Ruwei Longevity Valley May 1 2021 To date Yes
Director
Botanical Co. Ltd.Yangtze River
Special Assistant
Wang Ruwei Pharmaceutical April 15 2024 To date Yes
of the Chairman
Group
Beijing Yanhuang Director and September 24
Wang Fang To date No
Property Co. Ltd. Manager 2021
Beijing Yuanda
Huachuang
Wang Fang Director September 1 2021 To date No
Investments Co.Ltd.Note on position in
None
other entities
Incumbent and off-office directors supervisors and senior management during the reporting period that have been imposed
administrative penalties by the SCRC during the last three years.□ Applicable □ N/A
3. Remuneration of directors supervisors and senior management
The decision-making procedure determination basis and actual remuneration for directors supervisors and senior management
The allowance plan of directors of the 10th Board of Directors and that of supervisors of the
10th Board of Supervisors of the Company have become effective since June 1 2022 after review
and approval by the Company’s shareholder’s meeting: Non-independent directors who hold
management positions or are in charge of business in the Company shall be paid according to the
business they are in charge of or position they hold and such persons shall not receive allowance for
non-independent directors separately; the annual allowance for independent directors of the Company
was 100000 yuan (before tax); that for non-independent directors not in charge of the Company’s
management or business was 30000 yuan (before tax); that for non-employee supervisors of the
99Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Company was 30000 yuan (before tax); employee supervisors shall receive performance-related
remuneration according to their positions in the Company and shall not receive allowance for
supervisors separately.Plan for assessment of remuneration of the Company’s senior management shall be implemented
upon the resolution of the 22nd session of the 10th Board of Directors of the Company.The Company has paid remunerations for the 10th Board of Directors the 10th Board of
Supervisors and senior management.Remuneration of directors supervisors and senior management of the Company during the reporting period
Unit: ten thousand yuan
Receive
Total pretax remuneration
Holding of remuneration from related
Name Gender Age Position
positions received from parties of the
the Company Company or
not
Chairman and
Lv Liang Male 50 General Incumbent 240 No
Manager
Kang Wei Female 56 Director Incumbent 3 Yes
Zhu Feipeng Male 58 Director Incumbent 3 Yes
Ye Bo Male 36 Director Incumbent 3 No
Zhu Liang Male 47 Director Incumbent 65 No
Wang Yang Male 49 Director Incumbent 3 Yes
Independent
Wang Ruwei Male 57 Incumbent 10 No
Director
Independent
Gao Xiangdong Female 61 Incumbent 10 No
Director
Independent
Huang Jian Female 56 Incumbent 10 No
Director
Bai Xinhua Female 58 Supervisor Incumbent 3 Yes
Zhou Yanwu Male 55 Supervisor Incumbent 3 Yes
Qin Yun Female 55 Supervisor Resigned 2.77 Yes
Wang Fang Female 46 Supervisor Incumbent 0 Yes
Dong Jiqin Female 40 Supervisor Incumbent 3 No
Employee
Xu Zhifeng Male 49 Incumbent 65 No
Supervisor
Employee
Zhu Yinhua Female 50 Resigned 13.83 No
Supervisor
Employee
Xia Jing Female 50 Incumbent 30 No
Supervisor
Deputy General
Wu Hui Male 55 Incumbent 140 No
Manager
Deputy General
Zhu Li Female 49 Incumbent 140 No
Manager
Deputy General
Zhang Jianfei Male 49 Incumbent 140 No
Manager
Secretary of the
Chen Bo Male 52 Board of Incumbent 130 No
Directors
Officer in
Qiu Renbo Male 42 Incumbent 130 No
Charge of
100Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Finance
Total -- -- -- -- 1147.6 --
Note on other situations
□ Applicable □ N/A
VI. Performance of duties of directors during the reporting period
1. Board meetings during the reporting period
Sessions Convening date Disclosure date Meeting resolution
Announcement of the
Resolutions of the 20th
Session of the 10th Board of
Directors (Announcement
The 20th session of the 10th
February 7 2024 February 8 2024 No.: 2024-005) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 21st
Session of the 10th Board of
Directors (Announcement
The 21st session of the 10th
April 8 2024 April 10 2024 No.: 2024-018) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 22nd
Session of the 10th Board of
Directors (Announcement
The 22nd session of the 10th
April 16 2024 April 18 2024 No.: 2024-024) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 23rd
Session of the 10th Board of
Directors (Announcement
The 23rd session of the 10th
April 25 2024 April 26 2024 No.: 2024-039) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 24th
Session of the 10th Board of
Directors (Announcement
The 24th session of the 10th
May 30 2024 May 31 2024 No.: 2024-047) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
101Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Announcement of the
Resolutions of the 25th
Session of the 10th Board of
Directors (Announcement
The 25th session of the 10th
July 12 2024 July 15 2024 No.: 2024-059) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 26th
Session of the 10th Board of
Directors (Announcement
The 26th session of the 10th
July 19 2024 July 22 2024 No.: 2024-062) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 27th
Session of the 10th Board of
Directors (Announcement
The 27th session of the 10th
August 15 2024 August 16 2024 No.: 2024-066) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 28th
Session of the 10th Board of
Directors (Announcement
The 28th session of the 10th
October 10 2024 October 11 2024 No.: 2024-079) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 29th
Session of the 10th Board of
Directors (Announcement
The 29th session of the 10th
October 24 2024 October 25 2024 No.: 2024-085) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
Resolutions of the 30th
Session of the 10th Board of
Directors (Announcement
The 30th session of the 10th
November 25 2024 November 27 2024 No.: 2024-091) on China
Board of Directors
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
Announcement of the
The 31st session of the 10th Resolutions of the 31st
December 4 2024 December 5 2024
Board of Directors Session of the 10th Board of
Directors (Announcement
102Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
No.: 2024-103) on China
Securities Journal Securities
Times Shanghai Securities
News and Cninfo
(www.cninfo.com.cn)
2. Attendance of directors at Board meetings and shareholders’ meetings
Attendance of directors at Board meetings and shareholders’ meetings
Has the
Number of director
Board Number of Number of Number of failed to
Number of Times of
meetings to Board Board Board attend Board
Name of absences attendance of
be attended meetings meetings meetings meetings in
directors from Board shareholders’
during the attended on attended attended by person for
meetings meetings
reporting site virtually proxy two
period consecutive
times
Lv Liang 12 12 0 0 0 No 3
Kang Wei 12 1 11 0 0 No 3
Zhu Feipeng 12 1 11 0 0 No 3
Wang Yang 12 1 11 0 0 No 3
Ye Bo 12 1 11 0 0 No 3
Zhu Liang 12 12 0 0 0 No 3
Gao
12 0 12 0 0 No 3
Xiangdong
Wang Ruwei 12 1 11 0 0 No 3
Huang Jian 12 1 11 0 0 No 3
Note on non-attendance of Board meetings in person for two consecutive times
N/A
3. Objections from directors on relevant issues of the Company
Whether directors have raised any objection to relevant issues of the Company
□Yes □ No
No such case during the reporting period.
4. Other details about the performance of duties by directors
Whether directors’ suggestions were adopted or not
□ Yes □ No
Note on the adoption or non-adoption of directors’ suggestions
During the reporting period all directors of the Company preformed duties and exercise their
functions and power earnestly strictly implemented the resolution of the shareholders’ meetings and
actively carried out all works of the Board of Directors in strict accordance with the relevant laws and
regulations normative documents the Articles of Association Rules of Procedure of the Board of
Directors and other relevant provisions. They also conscientiously reviewed and approved various
103Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
proposals of the Board of Directors exercised right to vote according to law actively participated in
corporate governance and decision-making activities and constantly standardized corporate
governance. With a responsible attitude towards the Company and all shareholders independent
directors performed their duties and obligations diligently and faithfully and carefully deliberated
various proposals of the Board of Directors. In addition they expressed objective opinions on relevant
matters under deliberation based on independent position actively promoted the standardized
operation of the Board of Directors and improved corporate governance safeguarding the interests
of the Company and all investors. All suggestions above have been adopted by the Company.VII. Performance of special committees under the Board of Directors during the reporting
period
Important
Other Details of
Committee Number of Convening Meeting comments
Members performance objection (if
name meetings date content and
of duties any)
suggestions
The Audit
Committee
and some
senior
management
of the
Company
communicate
d with the
The 1st
certified
session of the
public
Audit
accountants
Committee
and project
of the 10th
managers
Board of The annual
responsible
Directors in audit was
for the
2024 (the Lv Liang carried out as
January 16 Company’s
Audit Huang Jian 9 planned and None None
2024 audit work
Committee’s Wang Ruwei no major
regarding the
communicati problems
planning
on and were found.phase of the
exchange
audit. They
meeting on
also
the 2023
discussed
Annual
key matters
Report)
identified
during the
pre-audit
review of the
Company’s
financial
statements
for the period
from January
104Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
to September
2023.
The Audit
Committee
and some
senior
management
of the
Company
The 2nd communicate
session of the d with the
Audit certified
Committee public
of the 10th accountants
Board of and project The annual
Directors in managers audit was
2024 (the Lv Liang responsible carried out as
Audit Huang Jian 9 April 3 2024 for the planned and None None
Committee’s Wang Ruwei Company’s no major
communicati audit work problems
on and regarding the were found.exchange execution
meeting on phase of the
the 2023 audit. They
Annual also
Report) discussed
key matters
identified
during the
audit of the
Company’s
2023 annual
report.
1. Proposal
on the
Addition and
Revision of
The 3rd Some Polices
session of the of the
Audit Company; All proposals
Lv Liang
Committee 2. Proposal were
Huang Jian 9 April 8 2024 None None
of the 10th on the approved
Wang Ruwei
Board of Adjustment after review
Directors in of Members
2024 of the Audit
Committee of
the 10th
Board of
Directors
The 4th The Audit
session of the Committee The annual
Audit and some audit was
Committee Huang Jian senior carried out as
April 15
of the 10th Wang Ruwei 9 management planned and None None
2024
Board of Kang Wei of the no major
Directors in Company problems
2024 (the communicate were found.
Audit d with the
105Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Committee’s certified
communicati public
on and accountants
exchange and project
meeting on managers
the 2023 responsible
Annual for the
Report) Company’s
audit work
regarding the
completion
phase of the
audit. They
also
discussed the
completion
status of the
audit of the
Company’s
2023 annual
report.
1. Proposal
on the
Company’s
2023
Financial
Settlement
Report;
2. Proposal
on the
Company’s
2024
The work of
Financial
the
Budget
Company’s
Report;
The 5th Internal
3. Proposal
session of the Audit
on the
Audit Department
Company’s
Committee was carried
Huang Jian 2023 Annual
of the 10th April 16 out as
Wang Ruwei 9 Report and None None
Board of 2024 planned and
Kang Wei its Abstract;
Directors no major
4. Proposal
(regular problems
on the
meeting) in were found;
Company’s
2024 all proposals
2023 Internal
were
Control Self-
approved
assessment
after review.Report;
5. Proposal
on the
Company’s
2023 Profit
Distribution
Plan;
6. Proposal
on
Reappointing
the
106Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Accounting
Firm;
7. Proposal
on Providing
Guarantees
to
Subsidiaries
in 2024;
8. Proposal
on the
Estimated
Related-
party
Transactions
in 2024;
9. Proposal
on the
Company’s
Performance
Evaluation
Report of the
Accounting
Firm in
2023;
10. Proposal
on the Report
on the
Performance
of
Supervisory
Duties by the
Audit
Committee of
the Board of
Directors on
Accounting
Firms in
2023
11. Proposal
on the 2023
Work Report
of the
Company’s
Internal
Audit
Department;
12. Proposal
on the 2024
Work Plan of
the
Company’s
Internal
Audit
Department;
The 6th Huang Jian 1. Proposal The work of
April 25
session of the Wang Ruwei 9 on the the None None
2024
Audit Kang Wei Company’s Company’s
107Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Committee First Internal
of the 10th Quarterly Audit
Board of Report 2024; Department
Directors 2. Proposal was carried
(regular on the Work out as
meeting) in Report of the planned and
2024 Company’s no major
Internal problems
Audit were found;
Department all proposals
in Q1 2024; were
approved
after review.
1. Proposal
on the Work
Report of the
Company’s
Internal
Audit
Department
in H1 2024;
2. Proposal
on the Work
Plan of the
The work of
Company’s
the
Internal
Company’s
Audit
The 7th Internal
Department
session of the Audit
in H2 2024;
Audit Department
3. Proposal
Committee was carried
Huang Jian on the
of the 10th August 15 out as
Wang Ruwei 9 Company’s None None
Board of 2024 planned and
Kang Wei 2024 Semi-
Directors no major
Annual
(regular problems
Report and
meeting) in were found;
its Abstract;
2024 all proposals
4. Proposal
were
on the
approved
Company’s
after review.
2024 Semi-
Annual Profit
Distribution
Plan;
5. Proposal
on Engaging
in Hedging-
Related
Financial
Derivatives
Transactions.The 8th 1. Proposal The work of
session of the on the Work the
Audit Report of the Company’s
Huang Jian
Committee October 24 Company’s Internal
Wang Ruwei 9 None None
of the 10th 2024 Internal Audit
Kang Wei
Board of Audit Department
Directors Department was carried
(regular in Q3 2024; out as
108Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
meeting) in 2. Proposal planned and
2024 on the Work no major
Plan of the problems
Company’s were found;
Internal all proposals
Audit were
Department approved
in Q4 2024; after review.
3. Proposal
on the
Company’s
Third
Quarterly
Report 2024;
The Audit
Committee
and some
senior
management
of the
Company
communicate
d with the
certified
The 9th
public
session of the
accountants
Audit
and project
Committee
managers
of the 10th
responsible
Board of The annual
for the
Directors in audit was
Company’s
2024 (the Huang Jian carried out as
December audit work
Audit Wang Ruwei 9 planned and None None
17 2024 regarding the
Committee’s Kang Wei no major
planning
communicati problems
phase of the
on and were found.audit. They
exchange
also
meeting on
discussed
the 2024
key matters
Annual
identified
Report)
during the
pre-audit
review of the
Company’s
financial
statements
for the period
from January
to September
2024.
The 1st Proposal on
session of the Amending
Nomination Kang Wei the Rules of All proposals
Committee Gao Procedure of were
1 April 8 2024 None None
of the 10th Xiangdong the approved
Board of Huang Jian Nomination after review
Directors in Committee of
2024 the Board of
109Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Directors
Proposal on
The 1st
Amending
session of the
the Rules of
Remuneratio
Procedure of
n and Wang Ruwei All proposals
the
Approval Lv Liang were
4 April 8 2024 Remuneratio None None
Committee Gao approved
n and
of the 10th Xiangdong after review
Approval
Board of
Committee of
Directors in
the Board of
2024
Directors
Proposal on
Confirmation
The 2nd of the 2023
session of the Remuneratio
Remuneratio n for the
n and Wang Ruwei Company’s All proposals
Approval Lv Liang April 16 Senior were
4 None None
Committee Gao 2024 Management approved
of the 10th Xiangdong and the after review
Board of Formulation
Directors in of the 2024
2024 Remuneratio
n Assessment
Plan
Proposal on
the
Fulfillment of
Conditions
The 3rd for the First
session of the Restriction
Remuneratio Release
n and Wang Ruwei Period of All proposals
Approval Lv Liang October 10 Reserved were
4 None None
Committee Gao 2024 Restricted approved
of the 10th Xiangdong Shares after review
Board of Granted from
Directors in the
2024 Restricted
Share
Incentive
Scheme in
2022
1. Proposal
on the
The 4th Fulfillment of
session of the Conditions
Remuneratio for the
n and Wang Ruwei Second All proposals
Approval Lv Liang November Restriction were
4 None None
Committee Gao 25 2024 Release approved
of the 10th Xiangdong Period of after review
Board of Restricted
Directors in Shares
2024 Granted for
the First
Time from
110Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
the
Restricted
Share
Incentive
Scheme in
2022
2. Proposal
on Adjusting
the
Repurchase
Price of
Shares under
the
Restricted
Share
Incentive
Scheme in
2022
3. Proposal
on the
Repurchase
and
Cancellation
of Certain
Restricted
Shares
The 1st Proposal on
session of the Amending
Strategy the Rules of All proposals
Lv Liang
Committee Procedure of were
Wang Yang 1 April 8 2024 None None
of the 10th the Strategy approved
Wang Ruwei
Board of Committee of after review
Directors in the Board of
2024 Directors
The 1st Proposal on
session of the Amending
ESG the Rules of All proposals
Zhu Feipeng
Committee Procedure of were
Ye Bo Gao 2 April 8 2024 None None
of the 10th the ESG approved
Xiangdong
Board of Committee of after review
Directors in the Board of
2024 Directors
Proposal on
The 2nd
the
session of the
Company’s
ESG All proposals
Zhu Feipeng Environment
Committee April 16 were
Ye Bo Gao 2 al Social None None
of the 10th 2024 approved
Xiangdong and
Board of after review
Governance
Directors in
(ESG) Report
2024
in 2023.
111Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
VIII. Work of the Board of Supervisors
The Board of Supervisors of the Company fulfilled its due responsibilities and obligations in
strict compliance with the Company Law the Securities Law the Articles of Association and the
Rules of Procedure of the Board of Supervisors. By attending and participating in Board of Directors
meetings and shareholders’ meetings the Board of Supervisors gained insight into the Company’s
operational and financial status. Through regular and hoc special inspections it has rigorously
overseen the lawful operations of the company and the compliance of senior executives in fulfilling
their duties thereby effectively safeguarding the legitimate rights and interests of the Company and
all shareholders.(I) Performance of the Board of Supervisors in 2024
During the reporting period the Board of Supervisors convened a total of nine meetings
including one on-site voting meeting and eight hybrid meetings combining on-site and
telecommunication-based voting. Members of the Board of Supervisors attended all shareholders’
meetings and selected Board of Directors meetings.No. Sessions Convening time Proposal reviewed
Proposal on Revising the Articles of Association and
The 13th session
Its Annexes
1 of the 10th Board April 8 2024
of Supervisors Proposal on the Addition and Revision of Some
Polices of the Company;
Proposal on the Company’s Work Report of the
Board of Supervisors in 2023
Proposal on the Company’s 2023 Financial
Settlement Report;
Proposal on the Company’s 2024 Financial Budget
Report;
Proposal on the Company’s 2023 Annual Report and
its Abstract;
The 14th session Proposal on the Company’s 2023 Internal Control
2 of the 10th Board April 16 2024 Self-assessment Report;
of Supervisors Proposal on the Company’s 2023 Profit
Distribution Plan;
Proposal on Reappointing the Accounting Firm;
Proposal on the Company’s Environmental Social
and Governance (ESG) Report in 2023
Proposal on Providing Guarantees to Subsidiaries
in 2024;
Proposal on the Estimated Related-party
Transactions in 2024;
The 15th session
Proposal on the Company’s First Quarterly Report
3 of the 10th Board April 25 2024
2024;
of Supervisors
112Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Proposal on Adjusting the Repurchase Price of
The 16th session Shares under the Restricted Share Incentive Scheme
4 of the 10th Board May 30 2024 in 2022
of Supervisors Proposal on the Repurchase and Cancellation of
Some Restricted Shares
Proposal on the Company’s 2024 Semi-Annual
The 17th session
Report and its Abstract;
5 of the 10th Board August 15 2024
Proposal on the Company’s 2024 Semi-Annual
of Supervisors
Profit Distribution Plan;
Proposal on the Fulfillment of Conditions for the
The 18th session
First Restriction Release Period of Reserved
6 of the 10th Board October 10 2024
Restricted Shares Granted under the Restricted
of Supervisors
Share Incentive Scheme in 2022
The 19th session
Proposal on the Company’s Third Quarterly Report
7 of the 10th Board October 24 2024
2024;
of Supervisors
Proposal on the Fulfillment of Conditions for the
Second Restriction Release Period of Restricted
Shares Granted for the First Time under the
The 20th session Restricted Share Incentive Scheme in 2022
8 of the 10th Board November 25 2024 Proposal on Adjusting the Repurchase Price of
of Supervisors Shares under the Restricted Share Incentive Scheme
in 2022
Proposal on the Repurchase and Cancellation of
Some Restricted Shares
The 21st session of
Proposal on the on the Resignation of a Supervisor
9 the 10th Board of December 4 2024
and the Election of a New Supervisor
Supervisors
(II) Performance of the Board of Supervisors
1. The Board of Supervisors gained timely insights into the Company’s production operational
and financial activities as well as the operational activities of the Board of Directors and management
team by regularly convening supervisory board meetings attending the Board of Directors meetings
and shareholders’ meetings and reviewing specialized reports from the management.
2. The Board of Supervisors rigorously examined all regular reports of the Company as well as
the audit reports submitted by the accounting firm and fully exercised its responsibilities of financial
oversight.
3. The Board of Supervisors exercised statutory oversight over the official conduct of board
directors and senior executives and implementation of resolutions from shareholders’ meetings while
urging the management to comply with laws and regulations and to fulfill their duties diligently to
ensure standardized operations within the Company.
4. The Board of Supervisors maintained ongoing oversight of the Company’s information
disclosure practices effectively monitoring and verifying the timeliness and accuracy of mandatory
disclosures. This ensured the company’s strict compliance with the Rules for Stock Listing of
Shenzhen Stock Exchange the Articles of Association and its Information Disclosure Management
113Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Regulations as well as relevant laws and regulations in achieving truthful accurate timely and
complete information disclosure.(III) Review opinions of the Board of Supervisors on relevant matters of the Company in
2024
1. Legal compliance of corporate operations
During the reporting period the Board of Supervisors independently conducted regular and hoc
special inspections of the Company’s decision-making procedures and the performance of directors
and senior executives in fulfilling their duties in accordance with the Company Law the Articles of
Association and other applicable laws regulations and normative documents. The Board of
Supervisors concluded that during the reporting period the Company operated in strict compliance
with relevant laws regulations and the Articles of Association with all decision-making procedures
fully aligned with relevant regulations and the Company’s internal policies. The Company had
established a sound internal control system which continues to be improved and refined in practice.No illegal or non-compliant business activities have been identified. The Board of Directors operated
under standardized procedures made reasonable decisions in accordance with legal processes and
diligently implemented resolutions of the shareholders’ meetings within authorized mandates. The
Company’s directors and senior executives have faithfully implemented the resolutions of the Board
of Directors. The Board of Supervisors has identified no instances where directors or senior
executives in the performance of their duties violated laws regulations the Company’s Articles of
Association or acted in ways detrimental to the Company’s interests or infringing upon shareholders’
rights.
2. Internal control assessment
During the reporting period the Board of Supervisors reviewed the 2023 Internal Control Self-
assessment Report as well as the formulation and implementation of the Company’s internal control
policies. The Board of Supervisors concluded that the Company had established and effectively
improved its internal control mechanisms in consideration of its operational realities in line with the
basic principles for internal control and relevant regulations of the CSRC and the Shenzhen Stock
Exchange. These policies and mechanism had effectively ensured the orderly conduct of business
activities and safeguarded asset security and integrity. The Company maintained integrated internal
control structure effectively ensuring the full and effective implementation and oversight of key
internal control activities. The 2023 Internal Control Self-assessment Report comprehensively
truthfully accurately and objectively reflects the actual status of the Company’s internal control
system and the Board of Supervisors raised no objections to the said Report.
3. Financial oversight
114Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
During the reporting period the Board of Supervisors conducted comprehensive oversight of the
Company’s financial operations and business activities with rigorous review of all periodic reports
prepared by the Board of Directors. The Board of Supervisors concluded that the Company
maintained sound financial systems and standardized financial practices that are fully compliant with
relevant laws regulations and the Articles of Association and no violations of laws or regulations
were identified. The Company’s periodic reports objectively truthfully accurately and completely
reflect the Company’s financial and operational status containing no false records misleading
statements or material omissions.
4. Related-party transactions
During the reporting period all routine related-party transactions of the Company were
conducted around normal business operations in line with the principles of openness fairness and
impartiality. The Board of Directors followed lawful approval procedures for such transactions with
pricing rationally determined through market-based negotiations. These transactions did not harm the
interests of the Company and all shareholders.
5. External guarantees
The Company strictly implemented its External Guarantee Management Regulations to
effectively control risks associated with external guarantees and fund occupation by related parties.During the reporting period all guarantee decisions complied with applicable laws regulations and
the External Guarantee Management Regulations.
6. Establishment and implementation of Regulations for Management of Insiders with Access to
Material Non-public Information
During the reporting period the Board of Supervisors inspected the implementation of the
Regulations for Management of Insiders with Access to Material Non-public Information concluding
that the Company has rigorously enforced the regulations by establishing complete insider registries
implementing strict access authorization to material non-public information promptly maintaining
real-time insider registration and reporting information about insiders. The practice effectively
maintained its open and fair information disclosure principles strictly prevented abuse of insider
knowledge and safeguarded the legitimate rights and interests of investors. No instances of insider
trading involving the Company’s shares were identified during the reporting period.
7. Restricted Share Incentive Scheme
During the reporting period the Company completed the repurchase and cancellation of some
restricted shares granted under the Restricted Share Incentive Scheme in 2022 adjusted the repurchase
price released the restriction in the first restriction release period of reserved restricted shares and
released the restriction in the second restriction release period of restricted shares granted for the first
115Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
time. The Board of Supervisors reviewed matters during the implementation of the Equity Incentive
Scheme concluding that: the aforementioned actions of the Company complied with relevant laws
and regulations such as the Administrative Measures for Equity Incentives of Listed Companies as
well as the Company’s Restricted Share Incentive Scheme in 2022 and the Articles of Association
aligning with the authorization granted by the first Extraordinary General Meeting of Shareholders in
2022. Procedures followed by the Board of Directors in reviewing relevant matters complied with
relevant regulations without any damage to the interests of the Company and its shareholders.(V) Work outlook of the Board of Supervisors in 2025
In 2025 the Board of Supervisors will continue to strictly comply with the Company Law the
Articles of Association the Rules of Procedure of the Board of Supervisors and other relevant
regulations. It will constantly strengthen its professional development diligently perform its duties
actively exercise its oversight functions further promote standardized operations enhance the
corporate governance framework and steadfastly safeguard the interests of the Company and its
shareholders.
(1) The Board of Supervisors will convene meetings in a timely manner attend shareholders’
meetings and board meetings as required by law supervise and inspect daily operations continuously
elevate corporate governance standards and oversee the performance of directors and senior
executives in fulfilling their duties in strict accordance with the Company Law the Articles of
Association and the Rules of Procedure of the Board of Supervisors.
(2) The Board of Supervisors will intensify oversight effectiveness by strengthening capital
control and supervision regularly reviewing financial reports prioritizing risk management and
internal control system development and maintaining proactive communication with the
management and the Board of Directors. It will ensure full compliance with operational and
regulatory requirements promptly identify anomalies provide guidance to mitigate risks and protect
the Company’s interests and shareholders’ lawful rights thus empowering its sustainable and healthy
development.
(3) The Board of Supervisors will advance its institutional capacity-building actively participate
in regulatory and internal training programs expand professional expertise strengthen capital market
competencies and oversight capabilities refine corporate governance practices and optimize its
oversight role to better safeguard the rights and interests of the Company and its shareholders.Whether the Board of Supervisors identified any risks of the Company in the oversight activities during the reporting period
□Yes □ No
No such case during the reporting period.
116Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
IX. Employees of the Company
1. Number of employees expertise structure and educational background
Number of incumbent employees in the parent company at the
997
end of the reporting period (person)
Number of incumbent employees in major subsidiaries at the
17268
end of the reporting period (person)
Total number of incumbent employees at the end of the
18265
reporting period (person)
Total number of employees receiving remuneration in the
18265
current period (person)
Number of retired employees requiring the parent company and
0
its subsidiaries to bear costs (person)
Expertise structure
Category Number (person)
Production staff 1592
Sales staff 11571
Technical staff 2906
Financial staff 329
Administrative staff 1471
Storage and transportation staff 396
Total 18265
Educational background
Category Number (person)
Master’s degree or above 1535
Bachelor’s degree 8054
Junior college and technical secondary school 7151
Below technical secondary school 816
Others not disclosed 709
Total 18265
Note: “Others not disclosed” refer to the employees of overseas subsidiaries whose information has not been
disclosed due to privacy protection policies and other factors.
2. Staff remuneration policy
Aligned with the Company’s strategic development planning and talent strategy the Company
builds a market- oriented and differentiated remuneration system establishes a flexible and
diversified incentive mechanism and foster a talent team with younger more professional and
globally competitive personnel. By upgrading and optimizing the employee structure it drives
continuous innovation and value creation enabling both the employees themselves and the Company
to achieve sustainable development and strategic goals.
117Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
3. Training programs
Self-cultivation of talents is a cornerstone for the Company’s sustainable development. In recent
years the Company has always been committed to fostering a diversified and multi-layer talent
training system and prioritizing talents as a key driver to empower its transformation. In 2024 the
Company further advanced its pilot program new employees onboarding sailing program high-
potential talents cultivation and professional skills training to support the Company’s talent
development.The Company provided new employees with professional onboarding programs and full-process
probation management to facilitate smooth integration into our corporate environment.As fresh graduates represent the vibrant new blood of the Company the Company launched its
Sailing Program to help them accelerate their role transition develop professional competencies and
understand the Company’s culture. Moreover the Company quickly cultivated young talents through
collective training selection job rotation opportunities performance assessment practices etc.In enhancing management capabilities the Company adopted a tiered approach to focus on
building talent teams with emphasis on cultivating core and backbone management talents to
strengthen its internal talents cultivation and development mechanism.In enhancing business capabilities the Company conducted regular talents reviews and
development programs in R&D quality production and sales to ensure alignment with the
Company’s sustainable development and international strategic development.In enhancing professional competencies the Company improves employees’ skills quickly by
strengthening post standardization solidifying onboarding and retraining system combines
assessment and training replaces training with practice to quickly improve employees’ skills thus
optimizing business processes and efficiency.In developing the digital training platform the Company gradually enriched the curriculum
system regarding each business endeavored to build a systematic and comprehensive learning
platform and helped employees participate in training through personalized courses on the digital
platform thus ultimately enhancing their job competencies.
4. Labor outsourcing
□ Applicable □ N/A
X. The Company’s profit distribution and increase of capital stock by capital reserve conversion
Formulation implementation or adjustment of the profit distribution policy especially the cash dividend policy during the reporting
period
118Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
□ Applicable □ N/A
During the reporting period the Company reviewed relevant distribution policy and
implemented the profit distribution plan in strict compliance with the Articles of Association. The
criteria and proportion of dividends were clearly defined supported by sound decision-making
process and mechanism. The approved profit distribution plan was implemented within stipulated
timelines safeguarding the interests of all shareholders. During the reporting period the Company
did not make changes to the profit distribution policy.
1. On May 8 2024 the Company convened the 2023 Annual Shareholders’ Meeting on which
the Proposal on the Company’s 2023 Semi-Annual Profit Distribution Plan was reviewed and
approved. Specific plan: based on the Company’s existing total share capital of 1754327548 shares
the Company allocated 5.8 yuan (including tax) in cash for every 10 shares held by shareholders. No
bonus shares would be distributed and no reserved funds can be converted as the share capital. The
total cash dividend will be 1017509977.84 yuan (including tax). On May 21 2024 the Company
disclosed the Announcement on Implementation of 2023 Annual Equity Distribution announcing that
the annual equity distribution in 2023 had been completed.
2. On August 15 2024 the Company convened the 27th Meeting of the 10th Board of Directors
reviewed and approved the 2024 Semi-Annual Profit Distribution Plan. Specific plan: Based on the
1754262548 shares obtained after removing 65000 restricted shares that have not been repurchased
and canceled from the total share capital of 1754327548 shares of the Company the Company
allocated 3.5 yuan (including tax) in cash for every 10 shares held by shareholders. No bonus shares
would be distributed and no reserved funds can be converted as the share capital. The total cash
dividend will be 613991891.80 yuan (including tax). The 2024 Semi-Annual Profit Distribution
Plan falls within the scope authorized by the resolution of the Company’s Shareholders’ Meeting to
the Board of Directors in 2023 and will not be submitted to the Shareholders’ Meeting for review
and approval. On September 12 2024 the Company disclosed the Announcement on Implementation
of 2024 Semi-Annual Equity Distribution announcing that the semi-annual equity distribution in 2024
had been completed.The criteria and proportion of dividends were clearly defined in the Company’s profit
distribution plan with well-established decision-making process which complied with the Articles of
Association and resolutions of the Shareholders’ Meeting.Specific note on the cash dividend policy
Whether it complied with the Articles of Association and
Yes
resolutions of the Shareholders’ Meeting:
Whether the criteria and proportion of dividends were clearly
Yes
defined:
Whether the decision-making process and mechanism was Yes
119Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
well-established:
Whether independent directors performed their duties and
Yes
roles:
Specific reasons and measures to be taken in the next step to
increase investor returns if the Company does not pay cash N/A
dividends:
Whether minority shareholders could express their opinions
and requirements and whether their legal rights and interests Yes
were fully protected:
Whether conditions and process were conforming and
transparent if the cash dividend policy was adjusted or N/A
changed:
During the reporting period the Company made profits and the profit available to shareholders of the parent company was positive
but no cash dividend plan for common shares was proposed.□ Applicable □ N/A
Profit distribution and share capital increase by capital reserve conversion during the current reporting period
□ Applicable □ N/A
Number of bonus shares every 10 shares (share) 0
Dividends paid every 10 shares (yuan) (tax included) 5.80
Share capital base of the distribution plan (share) 1754077048
Cash dividends (yuan) (tax included) 1017364687.84
Cash dividends by other means (such as share repurchase)
0.00
(yuan)
Total cash dividends (including those by other means) (yuan) 1017364687.84
Distributable profit (yuan) 6058410535.83
Proportion of total cash dividends (including those by other
100%
means) in the total profit distributed
Current cash dividends
For companies at a mature stage of development with significant capital expenditure plans the cash dividends payout ratio shall
account for no less than 40% in the current profit distribution .Details of the profit distribution plan or the plan for capital stock increase by capital reserve conversion
The Company’s profit distribution plan for 2024 is as follows: based on the Company’s existing total share capital of 1754077048
shares the Company allocated 5.8 yuan (including tax) in cash for every 10 shares held by shareholders. No bonus shares would be
distributed and no reserved funds can be converted as the share capital. The total cash dividend will be 1017364687.84 yuan
(including tax) and the remaining undistributed profits will be carried forward to future annual distribution. If the total share capital
of the Company changes before the implementation of this profit distribution plan the distribution ratio per share will be adjusted
on the principle of maintaining the total distribution amount unchanged.XI. Implementation of the Company’s equity incentive scheme employee stock ownership
plan or other employee incentive measures
□ Applicable □ N/A
1. Equity incentive
(1) On August 8 2022 the Company convened the 2nd Meeting of the 10th Board of Directors
and the 2nd Meeting of the 10th Board of Supervisors which reviewed and approved the Proposal
on the Company’s Restricted Share Incentive Scheme in 2022 (Draft) and Its Abstract the Proposal
on Management Rules for the Implementation and Assessment of the Company’s Restricted Share
120Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Incentive Scheme in 2022 the Proposal on the Management Rules of the Company’s Restricted Share
Incentive Scheme in 2022 and the Proposal on Applying to the Shareholders’ Meeting for Authorizing
the Board of Directors to Handle Equity Incentive-related Matters. Independent directors expressed
their independent opinions on whether this incentive scheme is conducive to the sustainable
development of the Company and whether it may harm the interests of the Company and all
shareholders. For details see relevant announcement of the Company published on Cninfo
(http://www.cninfo.com.cn) on August 10 2022.
(2) On August 10 the Company disclosed the Announcement on Independent Directors Publicly
Soliciting Proxy Voting Rights on Cninfo (www.cninfo.com.cn). Mr. Wang Ruwei Independent
Director of the Company commissioned by other independent directors publicly solicited proxy
voting rights from all shareholders of the Company on proposals related to the Restricted Share
Incentive Scheme in 2022 reviewed on the 1st Extraordinary General Meeting of Shareholders in
2022 that was set to be convened on August 31 2022.
(3) The Company announced publicly the list of the first batch of employees receiving the
incentive under the restricted share incentive scheme on the Company’s intra-net from August 15 to
25 2022 which lasted for 10 days in total. As of the end of the announcement on August 25 2022
the Board of Supervisors did not receive any objection against these employees. On August 25 2022
the Company convened a meeting of the Board of Supervisors during which the Verification
Opinions and Announcement Note on the List of the First Batch of Employees Receiving the Incentive
under the Company’s Restricted Share Incentive Scheme in 2022 was reviewed and approved. On the
same day the Company disclosed the Board of Supervisors’ Verification Opinions and
Announcement Note on the List of the First Batch of Employees Receiving the Incentive from the
Company’s Restricted Share Incentive Scheme in 2022 and a related announcement on Cninfo
(www.cninfo.com.cn).
(4) On August 31 2022 the Company convened the first Extraordinary General Meeting of
Shareholders in 2022. During the meeting the Proposal on the Company's Restricted Share Incentive
Scheme in 2022 (Draft) and Its Abstract the Proposal on Management Rules for the Implementation
and Assessment of the Company’s Restricted Share Incentive Scheme in 2022 the Proposal on the
Management Rules of the Company's Restricted Share Incentive Scheme in 2022 and the Proposal
on Applying to the Shareholders’ Meeting for Authorizing the Board of Directors to Handle Equity
Incentive-related Matters were reviewed and approved. On the same day the Company disclosed on
www.cninfo.com.cn the Self-Inspection Report on Insiders and Incentive Receivers of the Restricted
Share Incentive Scheme in 2022 Purchasing and Selling the Company’s Shares and a related
announcement. The incentive scheme was approved in the Company’s first Extraordinary General
121Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Meeting of Shareholders in 2022 and the Board of Directors was authorized to implement the
restricted share incentive scheme in 2022 and handle relevant matters according to laws and
regulations.
(5) On October 27 2022 the Company convened the 4th Meeting of the 10th Board of Directors
and the 5th Meeting of the 10th Board of Supervisors. During these two meetings the Proposal on
Adjustments of the Company’s Restricted Share Incentive Scheme in 2022 and the Proposal on
Granting Restricted Shares to the First Batch of Employees Receiving Incentive under the Restricted
Share Incentive Scheme in 2022 were reviewed and approved. The Company’s Board of Directors
confirmed that conditions of the incentive scheme for granting restricted shares were fulfilled and
the Board of Supervisors re-verified the list of incentive receivers on the first grant date and
expressed opinions on the grant. The Company’s independent directors agreed on the above proposals
with related reports prepared by the lawyers and independent financial advisers. On October 28 2022
the Company disclosed a related announcement on www.cninfo.com.cn.
(6) On November 9 2022 the Company disclosed the Announcement on Completion of
Registration of the First Grant of the Restricted Share Incentive Scheme in 2022. The Company
completed the registration of the first grant of the restricted share incentive scheme in 2022 and the
listing date of the granted restricted shares was November 15 2022.
(7) On July 12 2023 the Company convened the 12th Meeting of the 10th Board of Directors
and the 8th Meeting of the 10th Board of Supervisors. During these two meetings the Proposal on
Adjustments of the Granted Price of the Company’s Restricted Share Incentive Scheme in 2022 and
the Proposal on Granting Reserved Restricted Shares to the First Batch of Employees Receiving
Incentive under the Restricted Share Incentive Scheme in 2022 were reviewed and approved. The
Company’s Board of Directors confirmed that reserved conditions of the incentive scheme for
granting restricted shares were fulfilled and the Board of Supervisors re-verified the list of incentive
receivers on the date of granting reserved shares and expressed opinions on the grant. The Company’s
independent directors agreed on the above proposals with related reports prepared by the lawyers
and independent financial advisers. On the same day the Company disclosed a related announcement
on www.cninfo.com.cn.
(8) The Company announced publicly the list of this batch of employees receiving the incentive
from the restricted share incentive scheme on the Company’s OA system from July 13 to 23 2023
which lasted for 10 days in total. As of the end of the announcement on July 23 2023 the Board of
Supervisors did not receive any objection against these employees. On July 26 2023 the Company
convened a meeting of the Board of Supervisors during which the Verification Opinions and
Announcement Note on the List of Employees Receiving the Reserved Restricted Share Incentive from
122Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
the Company’s Restricted Share Incentive Scheme in 2022 was reviewed and approved. On the same
day the Company disclosed the Board of Supervisors’ Verification Opinions and Announcement Note
on the List of Employees Receiving the Reserved Restricted Share Incentive under the Company’s
Restricted Share Incentive Scheme in 2022 and a related announcement on www.cninfo.com.cn.
(9) On September 27 2023 the Company disclosed the Announcement on Completion of
Registration of the Reserved Grant of Restricted Share Incentive Scheme in 2022. The Company
completed the registration of the reserved grant of the restricted share incentive scheme in 2022 and
the listing date of the granted restricted shares was September 28 2023.
(10) On November 21 2023 the Company convened the 18th Meeting of the 10th Board of
Directors and the 12th Meeting of the 10th Board of Supervisors. During these two meetings the
Proposal on Achievement of the Release of Restriction Conditions during the First Restriction Period
of Restricted Shares Granted for the First Time under the Restricted Share Incentive Scheme in 2022
the Proposal on Adjusting the Repurchase Price of Shares under the Restricted Share Incentive
Scheme in 2022 and the Proposal on Repurchase and Cancellation of Some Restricted Shares were
reviewed and approved. The Board of Directors confirmed that the Company attained conditions for
the release of restriction conditions during the first restriction period of restricted shares granted for
the first time under the Restricted Share Incentive Scheme in 2022. According to the authorization of
the Company’s first Extraordinary General Meeting of Shareholders in 2022 the Board of Directors
agreed that the Company can handle the procedures for releasing restricted sales of 1220940
restricted shares with the restricted sales period for 108 incentive subjects. The Board of Directors
also agreed to repurchase and cancel 97800 shares of restricted shares that have been granted but
have not been released for four incentive subjects who are no longer eligible for incentives due to
resignation and two incentive subjects who are not eligible due to under performance during the first
restricted sales releasing period. The Company’s independent directors issued independent opinions
on related matters and the Company’s Board of Supervisors issued verification opinions on related
matters with related reports prepared by the lawyers and independent financial advisers. On the same
day the Company disclosed a related announcement on www.cninfo.com.cn.
(11) On December 1 2023 the Company disclosed the Hint on Circulation of Restricted Shares
Released during the First Restriction Release Period of Restricted Shares Granted for the First Time
under the Restricted Share Incentive Scheme in 2022. The date of circulation of restricted shares
released during the first restriction release period of restricted shares granted for the first time under
the Restricted Share Incentive Scheme in 2022 is December 5 2023.
(12) On December 8 2023 the Company convened the second Extraordinary General Meeting
of Shareholders in 2023 during which the Proposal on Repurchase and Cancellation of Some
123Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Restricted Shares and the Proposal on Altering the Registered Capital and Amending the Articles of
Association were reviewed and approved. On the same day the Company disclosed the
Announcement on Repurchase and Cancellation of Some Restricted Shares to Reduce Registered
Capital and Notify the Creditors. As of January 24 2024 the benchmark date for capital verification
i.e. within forty-five days from the date when the Company announced the reduction of capital no
creditor requested the Company to pay off its debts or provide corresponding guarantees.
(13) On March 28 2024 the Company disclosed the Announcement on Completion of
Repurchase and Cancellation of Some Restricted Shares. On March 26 2024 the Company
completed the procedures for repurchase and cancellation of 97800 restricted shares in Shenzhen
Branch of China Securities Depository and Clearing Co. Ltd.
(14) On May 30 2024 the Company convened the 24th Meeting of the 10th Board of Directors
and the 16th Meeting of the 10th Board of Supervisors. During these two meetings the Proposal on
Adjusting the Repurchase Price in Restricted Share Incentive Scheme in 2022 and Proposal on
Repurchase and Cancellation of Some Restricted Shares were reviewed and approved. The Board of
Directors agreed to repurchase and cancel 65000 restricted shares that have been granted but have
not been released for five incentive subjects of firstly-granted or reserved shares who are no longer
eligible for incentives due to resignation. The Company’s Board of Supervisors issued verification
opinions on related matters with related reports prepared by lawyers and independent financial
advisers. On the same day the Company disclosed a related announcement on www.cninfo.com.cn.
(15) On June 18 2024 the Company convened the first Extraordinary General Meeting of
Shareholders in 2024 during which the Proposal on Repurchase and Cancellation of Some Restricted
Shares and the Proposal on Increasing the Business Scope Changing Registered Capital and
Amending the Articles of Association were reviewed and approved. On the same day the Company
disclosed the Announcement on Repurchase and Cancellation of Some Restricted Shares to Reduce
Registered Capital and Notify the Creditors. As of August 5 2024 the benchmark date for capital
verification i.e. within forty-five days from the date when the Company announced the reduction of
capital no creditor requested the Company to pay off its debts or provide corresponding guarantees.
(16) On August 29 2024 the Company disclosed the Announcement on Completion of
Repurchase and Cancellation of Some Restricted Shares. On August 27 2024 the Company
completed the procedures for repurchase and cancellation of 65000 restricted shares in Shenzhen
Branch of China Securities Depository and Clearing Co. Ltd.
(17) On October 10 2024 the Company convened the 28th Meeting of the 10th Board of
Directors and the 18th Meeting of the 10th Board of Supervisors. During these two meetings the
Proposal on the Fulfillment of Conditions for the First Restriction Release Period of Reserved
124Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Restricted Shares Granted under the Restricted Share Incentive Scheme in 2022 was reviewed and
approved. The Board of Directors confirmed that the Company attained the conditions for the release
of restriction conditions during the first restriction period of restricted shares granted for the first time
under the Restricted Share Incentive Scheme in 2022. Authorized by the Company’s first
Extraordinary General Meeting of Shareholders in 2022 the Board of Directors agreed that the
Company can handle the procedures for releasing restricted sales of 192500 restricted shares with
the restricted sales period for 18 incentive subjects. The Company’s Board of Supervisors issued
verification opinions on related matters with related reports prepared by the lawyers and independent
financial advisers. On the same day the Company disclosed a related announcement on
www.cninfo.com.cn.
(18) On October 24 2024 the Company disclosed the Hint on Circulation of Restricted Shares
Released during the First Restriction Release Period of Reserved Restricted Shares Granted under
the Restricted Share Incentive Scheme in 2022. The date of circulation of restricted shares released
during the first restriction release period of reserved restricted shares granted under the Restricted
Share Incentive Scheme in 2022 is October 28 2024.
(19) On November 25 2024 the Company convened the 30th Meeting of the 10th Board of
Directors and the 20th Meeting of the 10th Board of Supervisors. During these two meetings the
Proposal on the Fulfillment of Conditions for the Second Restriction Release Period of Restricted
Shares Granted for the First Time under the Restricted Share Incentive Scheme in 2022 the Proposal
on Adjusting the Repurchase Price of Shares under the Restricted Share Incentive Scheme in 2022
and the Proposal on Repurchase and Cancellation of Some Restricted Shares were reviewed and
approved. The Board of Directors confirmed that the Company attained the conditions for the release
of restriction conditions during the second restriction period of restricted shares granted for the first
time under the Restricted Share Incentive Scheme in 2022. Authorized by the Company’s first
extraordinary shareholders’ meeting in 2022 the Board of Directors agreed that the Company can
handle the procedures for releasing restricted sales of 1063740 restricted shares in the second
restricted sales period for 90 incentive subjects. The Board of Directors also agreed to repurchase and
cancel 185500 restricted shares that have been granted but have not been released for one incentive
subject who are no longer eligible for incentives due to resignation 16 incentive subjects who are not
eligible due to under-performance during the second restricted sales releasing period and one
incentive subject of reserved restricted shares who is not eligible due to under-performance during
the first restricted sales releasing period. The Company’s Board of Supervisors issued verification
opinions on related matters with related reports prepared by the lawyers and independent financial
125Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
advisers. On November 27 2024 the Company disclosed a related announcement on Cninfo
(www.cninfo.com.cn).
(20) On December 13 2024 the Company disclosed the Hint on Circulation of Restricted Shares
Released during the Second Restriction Release Period of Restricted Shares Granted for the First
Time under the Restricted Share Incentive Scheme in 2022. The date of circulation of restricted shares
released during the second restriction release period of restricted shares granted for the first time
under the Restricted Share Incentive Scheme in 2022 is December 16 2024.
(21) On December 20 2024 the Company convened the second Extraordinary General Meeting
of Shareholders in 2024 during which the Proposal on Repurchase and Cancellation of Some
Restricted Shares and the Proposal on Increasing the Business Scope Changing Registered Capital
and Amending the Articles of Association were reviewed and approved. On the same day the
Company disclosed the Announcement on Repurchase and Cancellation of Some Restricted Shares
to Reduce Registered Capital and Notify the Creditors. As of February 5 2025 the benchmark date
for capital verification within forty-five days from the date when the Company announced the
reduction of capital no creditor requested the Company to pay off its debts or provide corresponding
guarantees.
(22) On March 28 2025 the Company disclosed the Announcement on Completion of
Repurchase and Cancellation of Some Restricted Shares. On March 26 2025 the Company
completed the procedures for repurchase and cancellation of 185500 restricted shares in Shenzhen
Branch of China Securities Depository and Clearing Co. Ltd.Equity Incentive Received by the Company’s Directors and Senior Executives
□ Applicable □ N/A
Unit: share
Exerci
Numb Numb
se
er of Numb er of
Numb Numb Numb price Numb Marke Numb Numb
newly er of restric
er of er of er of of er of t price er of Grant er of
grante restric ted
share exerci exerci exerci share at the shares price restric
d ted shares
option sable sed sed option end of releas of ted
share shares newly
Positi s held shares shares shares s held the ed restric shares
Name option held grante
on at the during during during at the report during ted held
s at the d
begin the the the begin ing the shares at the
during begin during
ning report report report ning period curren (yuan/ end of
the ning the
of the ing ing ing of the (yuan/ t share) the
report of the report
year period period period period share) period period
ing period ing
(yuan/
period period
share)
Chair
Lv man 1400 6000 8000
00000034.60025.00
Liang and 00 0 0
Gener
126Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
al
Mana
ger
Deput 25.00
y
Wu Gener 1050 1050
00000034.6000
Hui al 00 00
Mana
ger
Deput 25.00
y
Zhu Gener 1050 4500 6000
00000034.600
Li al 00 0 0
Mana
ger
Deput 25.00
y
Zhang
Gener 1050 4500 6000
Jianfe 0 0 0 0 0 0 34.60 0
al 00 0 0
i
Mana
ger
Zhu Direct 2100 25.00 1200
00000034.6090000
Liang or 0 0
Secret 25.00
ary of
the
Chen 7000 3000 4000
Board 0 0 0 0 0 0 34.60 0
Bo 0 0 0
of
Direct
ors
Office 25.00
r in
Qiu Charg 7000 3000 4000
00000034.600
Renbo e of 0 0 0
Finan
ce
616021903970
Total -- 0 0 0 0 -- 0 -- 0 --
000000
In the Company’s Restricted Share Incentive Scheme in 2022 Chairman and General Manager Lyu Liang
Deputy General Manager Wu Hui Deputy General Manager Zhang Jianfei Deputy General Manager Zhu Li
Director Zhu Liang Secretary of the Board of Directors Chen Bo and Officer in Charge of Finance Qiu Renbo
were granted 200000 150000 150000 150000 30000 100000 and 100000 restricted shares respectively.For them 60000 0 45000 45000 9000 30000 and 30000 restricted shares were released during the
Note (if any)
reporting period. As a result a total of 120000 45000 90000 90000 18000 60000 and 60000 restricted
shares were released for them respectively. The accumulated repurchased restricted shares: 45000 restricted
shares were repurchased from Wu Hui. The repurchase and cancellation date was March 26 2025. As of the date
of the Report the above-mentioned persons held 80000 60000 60000 60000 12000 4000 and 40000
unreleased restricted shares respectively.Assessment mechanism and incentive for senior executives
(1) In order to ensure that the Company’s senior executives can better perform their duties with
clear rights and obligations the Company has established a sound performance assessment
management system combining the senior executives’ remuneration and performance. During the
reporting period the Company’s senior executives diligently performed their duties in strict
compliance with the Company Law the Articles of Association and relevant laws and regulations
127Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
actively implemented resolutions of the Shareholders’ Meetings and Board of Directors of the
Company and adhered to prudent operations under the guidance of the Board of Directors and
continuously strengthened internal management.
(2) During the reporting period in order to further establish and improve a long-term incentive
mechanism for the Company attract and retain outstanding experts fully motivate the Company’s
senior executives management personnel and core technicians (business specialists) the Company
launched the Restricted Share Incentive Scheme in 2022. This Scheme effectively aligns the interests
of shareholders the Company and the core teams fostering shared commitment to the Company’s
long-term growth. Under the principle of matching rewards with contributions and with full
consideration given to protecting shareholder interests the Scheme is designed to drive long-term
value creation. For the implementation of the Restricted Share Incentive Scheme in 2022 please refer
to “1. Equity incentive” above.
2. Implementation of the employee stock ownership plan
□ Applicable □ N/A
3. Other employee incentives
□ Applicable □ N/A
XII. Establishment and implementation of an internal control system during the reporting
period
1. Establishment and implementation of internal control
During the reporting period the Company constantly promoted the establishment of an internal
control system improved the corporate governance structure and internal control regulations
normalized the implementation of such regulations and strengthened the oversight and inspection of
internal control to ensure that the Company’s operation and management level was constantly
improved in accordance with the Basic Norms for Enterprise Internal Control Self-Regulatory
Guidelines for Listed Companies on the Shenzhen Stock Exchange No.1 - Standardized Operation of
Listed Companies on the Main Board and other relevant laws regulations and normative documents.During the reporting period the Company’s internal control system design remained sound and
reasonable. It maintained effective internal control in all major aspects in accordance with the
requirements of internal control standard system and relevant regulations with no major omission
identified. For details please refer to the Self-assessment Report on Internal Control published by the
Company on Cninfo (http://www.cninfo.com.cn) on April 18 2025.
128Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
2. Details of major internal control deficiencies identified during the reporting period
□Yes □ No
XIII. The Company’s management control over subsidiaries during the reporting period
Issues
Integration encountered Solutions Solution Subsequent
Company name Integration plan
progress during the adopted progress solutions
integration
Sinclair Incorporation
(Hangzhou) of a new
Supply Chain subsidiary no / / / / /
Management integration
Co. Ltd. involved.Incorporation
Shaanxi Bohua
of a new
(Weinan)
subsidiary no / / / / /
Pharmaceutical
integration
Co. Ltd.involved.Gongwei Incorporation
Lianchuang of a new
(Shanghai) subsidiary no / / / / /
Biotechnology integration
Co. Ltd. involved.Incorporation
Huadong
of a new
Medicine
subsidiary no / / / / /
(Jiaxing) Co.integration
Ltd.involved.In July 2024 1. Equity
the Company change
acquired 100% completed on
equity of August 8 2024;
Guizhou transfer of
HengBa management
Pharmaceutical control
Limited completed on
Liability August 15
Company. For 2024.details please 2. The
Huadong
refer to the corresponding
Medicine
Announcement equity transfer
(Guizhou) N/A N/A N/A N/A
on Acquisition payments made
Pharmaceutical
of 100% Equity in accordance
Co. Ltd.of Guizhou with the
HengBa contract terms.Pharmaceutical 3. Guizhou
Limited HengBa
Liability Pharmaceutical
Company Limited
disclosed by the Liability
Company on Company was
Cninfo renamed
(http://www.cni Huadong
nfo.com.cn) on Medicine
129Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
July 22 2024. (Guizhou)
Pharmaceutical
Co. Ltd. on
January 2
2025.
XIV. Assessment report on internal control or audit report on internal control
1. Assessment report on internal control
Disclosure date of the full text of
April 18 2025
assessment report on internal control
Disclosure index of the full text of
Cninfo (www.cninfo.com.cn)
assessment report on internal control
Proportion of assets evaluated in total
assets per consolidated financial 95.00%
statement
Proportion of operating revenue
evaluated in total operating revenue per 90.00%
consolidated financial statement
Recognition standard of deficiencies
Category Financial report Non-financial report
The Company stipulates that internal
control deficiencies involving the The qualitative criteria for the
following fields shall be identified as at assessment of internal control
least “important deficiencies”: anti-fraud deficiencies in non-financial report
procedure and control; internal control determined by the Company are as
over unconventional or unsystematic follows:
transactions; internal control over the The Company stipulates that internal
selection and application of accounting control deficiencies involving the
policies in relation to Generally Accepted following fields shall be considered as
Accounting Principles (GAAP); internal “material deficiencies”: serious violation
control over the end-of-period financial of laws and regulation; in addition to
reporting process. policy reasons the Company has been
The Company stipulates that internal losing money for years and its
control deficiencies involving the continuous operation has been
following fields shall be identified as at challenged; lack of system control or
least “important deficiencies” and has systematic failure in important business;Qualitative criteria strong indications of “material frequent exposure of negative news indeficiencies”: restatement of previously the media that causes material adverse
published financial statements to reflect effect; internal control assessment
correction of misstatements resulting results especially major or significant
from errors or fraud; the auditor found deficiencies have not been corrected.material misstatement in the Company’s The Company stipulates that internal
financial statements for the current control deficiencies involving the
period that was not initially detected by following fields shall be considered as
the Company’s internal control over “important deficiencies”: there is much
financial reports; the Audit Committee’s negative news in the major media at
failure to overseeing the Company’s provincial level and above which results
financial reports and internal control over in relatively large adverse effect; exodus
financial reports; compliance oversight of middle management or operating
function is invalid and the violation of personnel; general defects identified last
laws and regulations may have a year have not been rectified without any
significant impact on the reliability of reasonable explanation.financial reports; any level of
130Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
malpractice involving senior executives
is founded; Management failed to correct
important defects in a reasonable period
of time after such reporting to the
Management.
(1) Internal control deficiencies
satisfying one of the followingconditions can be considered as “materialdeficiencies”:
Impact of
Item
deficiency
Potential Misstated amount
misstatement ≥ 10% of total
of total profit profit
Potential
Misstated amount
misstatement
≥ 3% of total assets
of total assets
(2) Internal control deficiencies
satisfying one of the following
Type of
conditions can be considered as Impact on total assets
deficiencies
“important deficiencies”:
General Impact on total assets <
Item Impact of
deficiencies 1.5%
deficiency
Quantitative criteria 1.5% of total assets ≤
Potential 5% of total profit ≤ Important
impact on total assets <
misstatement misstated amount < deficiencies
3% of total assets
of total profit 10% of total profit
Material Impact on total assets ≥
Potential 1.5% of total assets
deficiencies 3%
misstatement ≤ misstated amount
of total assets < 3% of total assets
(3) Internal control deficiencies
satisfying one of the followingconditions can be considered as “generaldeficiencies”:
Item Impact of
deficiency
Potential Misstated amount
misstatement < 5% of total profit
of total profit
Potential Misstated amount
misstatement < 1.5% of total
of total assets assets
Number of material deficiencies in
0
financial reports
Number of material deficiencies in non-
0
financial reports
131Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Number of important deficiencies in
0
financial reports
Number of important deficiencies in non-
0
financial reports
2. Audit report on internal control
□ Applicable □ N/A
Opinions of Internal Control Audit Report
On December 31 2024 Huadong Medicine maintained effective internal control over financial reports in all major respects in
accordance with the Basic Norms for Enterprise Internal Control and relevant regulations.Disclosure of internal control audit report Disclosure
Disclosure date of the full text of audit report on internal
April 18 2025
control
Disclosure index of the full text of audit report on internal
Cninfo (www.cninfo.com.cn)
control
Type of opinions in the internal control audit report Unmodified unqualified opinions
Whether there are material deficiencies in non-financial
No
reporting
Whether the accounting firm has issued the audit report on internal control with non-standard opinions
□Yes □ No
Whether the audit report on internal control issued by the accounting firm is consistent with the self-assessment report of the Board of
Directors
□ Yes □No
XV. Rectification of self-detected problems through the special campaign to improve
governance of listed companies
N/A
132Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section V Environmental and Social Responsibilities
I. Major Environmental Protection Issues
Whether the listed company and its subsidiaries are designated as the key pollutant discharge units by the environmental protection
authorities
□ Yes □No
Relevant policies and industry standards for environmental protection
Environmental Protection Law of the People’s Republic of China; Law of the People’s Republic of China on
Water Pollution Prevention and Control; Law of the People’s Republic of China on Atmospheric Pollution
Prevention and Control; Law of the People’s Republic of China on the Prevention and Control of Environmental
Pollution by Solid Waste; Law of the People’s Republic of China on the Prevention and Control of Ambient Noise
Pollution; Law of the People’s Republic of China on the Prevention and Control of Soil Pollution; Emission
Standard of Air Pollutants for Pharmaceutical Industry (GB 37823-2019); Discharge Standard of Pollutants for Bio-
pharmaceutical Industry; Regulations on the Administration of Pollutant Discharges Permits; Standard for Fugitive
Emission of Volatile Organic Compounds (GB 37822-2019); Emission Standards for Odor Pollutants (GB 14554-
93); Wastewater Quality Standards for Discharge to Municipal Sewers; Emission Standard for Industrial Enterprises
Noise at Boundary (GB 12348-2008); Standard for Pollution Control on the Non-hazardous Industrial Solid Waste
Storage and Landfill (GB 18599-2020); Standard for Pollution Control on Hazardous Waste Storage (GB 18597-
2023); Technical Specification for Setting Identification Signs of Hazardous Waste (HJ 1276-2022); Integrated
Emission Standard of Air Pollutants (GB 16297-1996); Emission Standard of Volatile Organic Compounds (DB
61/T 1061-2017); National Catalogue of Hazardous Wastes; Integrated Wastewater Discharge Standard (GB 8978-
1996); Discharge Standard of Water Pollutants for Pharmaceutical Industry - Chemical Synthesis Products Category
(GB 21904-2008); Detailed Annotation of Integrated Emission Standard of Air Pollutants (GB 16297-1996);
Technical Guidelines for Environmental Impact Assessment - Atmospheric Environment; Environmental Quality
Standard for Surface Water; Environmental Quality Standards for Noise; Technical Methods for Making Local
Emission Standards of Air Pollutants; Technical Specification for Application and Issuance of Pollutant Permit -
General Programme; Technical Specification for Application and Issuance of Pollutant Permit - Active
Pharmaceutical Ingredient; General Specifications of Engineering and Technology for Hazardous Waste Disposal;
Standard for Groundwater Quality; Soil Environmental Quality - Risk Control Standard for Soil Contamination of
Development Land (Trial); Water Quality Standard for Sewage Treatment Plant in South of Wuhu City; Emission
Standards for Pollutants in the Bio-pharmaceutical Industry in Anhui Province; Integrated Wastewater Discharge
Standard of Yellow River Basin in Shaanxi Province (DB 61/ 224-2018); Discharge Standard of Pollutants for Bio-
pharmaceutical Industry of Zhejiang Province; Emission Standard of Air Pollutants for Pharmaceutical Industry.Information on environmental protection-related administrative licensing
Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. re-applied for the Pollutant Emission Permit on April
25 2024 which is valid until April 24 2029.
133Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co. Ltd. re-applied for the Pollutant Emission
Permit on November 15 2024 which is valid until November 14 2029.The Pollutant Emission Permit of Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd. is valid from
March 29 2024 to March 28 2029.Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd. completed the environment acceptance upon
completion of 50t/a Indobufen Product Technological Improvement Project in March 2024. Huadong Medicine
(Xi’an) Bohua Pharmaceutical Co. Ltd. completed the environment acceptance upon completion of its Emulsifiable
Paste Production Line Technological Improvement Project in March 2024. Huadong Medicine (Xi’an) Bohua
Pharmaceutical Co. Ltd. completed the environment acceptance upon completion of the Transformation Project of
Storage Tank Area of the Second Workshop of APIs in March 2024.Jiangsu Joyang Laboratories obtained the Pollutant Emission Permit according to the environmental protection
requirements on February 28 2022 which is valid until February 27 2027.Wuhu Huaren Science and Technology Co. Ltd. obtained the Pollutant Emission Permit on February 26 2024
which is valid until February 25 2029. In addition the Series Innovative Medicine and Biological Reagent API
R&D Center Project of Wuhu Huaren Science and Technology Co. Ltd. obtained the EIA approval on July 16
2024.
Industrial emission standards and specific situation of pollutant emissions involved in production and business activities
Category Name of
Executiv
Name of of main main Discharg
Quantity Distribut e Approve Excessiv
Compan and and e Total
Discharg of ion of pollutant d total e
y or particula particula concentr discharg
e pattern discharg discharg discharg discharg discharg
subsidiar r r ation/int es
e outlet e outlet e es e
y pollutant pollutant ensity
standard
s s
Hangzho
u Main
Zhongm Intermitt Entrance
ei Water ent Mogans
pH value 1 7.2 6-9 / / None
Huadong pollutant discharg han
Pharmac e Road
eutical No.866
Co. Ltd.Hangzho
u Main
Zhongm Intermitt Entrance
ei Water ent Mogans 51.5mg/
COD 1 500mg/L 9.52 tons 47.55 t/a None
Huadong pollutant discharg han L
Pharmac e Road
eutical No.866
Co. Ltd.Hangzho
u Main
Zhongm Intermitt Entrance
Ammoni
ei Water ent Mogans 3.10mg/ 0.158
a- 1 35mg/L 4.755 t/a None
Huadong pollutant discharg han L tons
nitrogen
Pharmac e Road
eutical No.866
Co. Ltd.
134Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Hangzho Within
Complia
u the
nt
Zhongm factory
Hazardo disposal
ei Solid at 1210.71
us solid by 3 / / / None
Huadong pollutant Mogans 2 tons
waste entrusted
Pharmac han
qualified
eutical Road
units
Co. Ltd. No.866
Hangzho Within
Complia
u the
nt
Zhongm factory
General disposal
ei Solid at 848.39
solid by 2 / / / None
Huadong pollutant Mogans tons
waste entrusted
Pharmac han
qualified
eutical Road
units
Co. Ltd. No.866
Hangzho
u
Roof of
Zhongm Organize
Boiler
ei Air Nitric d 1.653
1 Room at 20mg/m3 50mg/m3 17.7 t/a None
Huadong pollutant oxide discharg tons
Building
Pharmac e
25
eutical
Co. Ltd.Hangzho
u
Roof of
Zhongm Organize
Boiler
ei Air Sulfur d 4.5mg/m
1 Room at 20mg/m3 0.35 tons 5.663 t/a None
Huadong pollutant dioxide discharg 3
Building
Pharmac e
25
eutical
Co. Ltd.Hangzho
u
Roof of
Zhongm Organize
Boiler
ei Air Dust and d 1.15mg/ 0.092
1 Room at 10mg/m3 / None
Huadong pollutant fume discharg m3 tons
Building
Pharmac e
25
eutical
Co. Ltd.Hangzho
u
Zhongm 226.059 64.742
ei Continu 2 tons t/a
Phase II
Huadong Wastewa ous 100- (Nanotu (dischar
COD 1 Factory 500mg/L None
Pharmac ter discharg 350mg/L be ged to
Area
eutical e discharg environ
Jiangdon e) ment)
g Co.Ltd.Hangzho
u 4.1291
6.474 t/a
Zhongm Continu tons
Ammoni Phase II (dischar
ei Wastewa ous 0- (Nanotu
a- 1 Factory 35mg/L ged to None
Huadong ter discharg 25mg/L be
nitrogen Area environ
Pharmac e discharg
ment)
eutical e)
Jiangdon
135Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
g Co.Ltd.Hangzho
u
Zhongm 2.1125 0.6474
ei Continu tons t/a
Total Phase II
Huadong Wastewa ous (Nanotu (dischar
phospho 1 Factory 0-6mg/L 8mg/L None
Pharmac ter discharg be ged to
rus Area
eutical e discharg environ
Jiangdon e) ment)
g Co.Ltd.Hangzho
u
Zhongm
ei Non- Organize
Phase II
Huadong Exhaust methane d 0- 1.2539
1 Factory 60mg/L / None
Pharmac gas hydrocar discharg 30mg/L tons
Area
eutical bon e
Jiangdon
g Co.Ltd.Beside
Huadong
National
Medicin
Intermitt Highway
e (Xi’an)
Water ent 310
Bohua pH value 1 7.4 6-9 / / None
pollutant discharg Liuye
Pharmac
e River
eutical
Huayin
Co. Ltd.City
Beside
Huadong
National
Medicin
Intermitt Highway
e (Xi’an)
Water ent 310 18.4mg/ 0.71744
Bohua COD 1 50mg/L 3 t/a None
pollutant discharg Liuye L 0 tons
Pharmac
e River
eutical
Huayin
Co. Ltd.City
Beside
Huadong
National
Medicin
Intermitt Highway
e (Xi’an) Ammoni
Water ent 310 0.65mg/ 0.03361
Bohua a- 1 8mg/L 0.48 t/a None
pollutant discharg Liuye L 98 tons
Pharmac nitrogen
e River
eutical
Huayin
Co. Ltd.City
Beside
Huadong
National
Medicin
Intermitt Highway
e (Xi’an)
Water Total ent 310 10.44mg 0.36382
Bohua 1 9.9mg/L / None
pollutant nitrogen discharg Liuye /L 0 tons
Pharmac
e River
eutical
Huayin
Co. Ltd.City
Huadong Hazardo Complia Within
Solid 975.373
Medicin us nt 3 the / / / None
pollutant 3 tons
e (Xi’an) wastes disposal Compan
136Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Bohua by y
Pharmac entrusted
eutical qualified
Co. Ltd. units
Huadong
Medicin
Volatile Organize
e (Xi’an)
Air organic d APIs
Bohua 1 / 60mg/m3 / 0.388 t/a None
pollutant compou discharg Plant 1
Pharmac
nd e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an) Hydroge
Air d APIs
Bohua n 1 / 30mg/m3 / / None
pollutant discharg Plant 1
Pharmac chloride
e
eutical
Co. Ltd.Huadong
Medicin
Ammoni Organize
e (Xi’an)
Air a d APIs
Bohua 1 / 20mg/m3 / / None
pollutant (ammoni discharg Plant 1
Pharmac
a gas) e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an)
Air Sulfuric d APIs
Bohua 1 / 45mg/m3 / / None
pollutant acid mist discharg Plant 1
Pharmac
e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an) Hydroge
Air d APIs
Bohua n 1 / 30mg/m3 / / None
pollutant discharg Plant 2
Pharmac chloride
e
eutical
Co. Ltd.Huadong
Medicin
Non- Organize
e (Xi’an)
Air methane d APIs
Bohua 1 / 60mg/m3 / / None
pollutant hydrocar discharg Plant 2
Pharmac
bon e
eutical
Co. Ltd.Huadong
Medicin
Ammoni Organize
e (Xi’an)
Air a d APIs
Bohua 1 / 20mg/m3 / / None
pollutant (ammoni discharg Plant 2
Pharmac
a gas) e
eutical
Co. Ltd.Huadong Organize
Medicin Air d APIs
PM 1 / 20mg/m3 / / None
e (Xi’an) pollutant discharg Plant 2
Bohua e
137Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Pharmac
eutical
Co. Ltd.Huadong
Medicin
Ammoni Organize
e (Xi’an) Sewage
Air a d
Bohua 1 treatmen / 20mg/m3 / / None
pollutant (ammoni discharg
Pharmac t station
a gas) e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an) Sewage
Air Hydroge d
Bohua 1 treatmen / 5mg/m3 / / None
pollutant n sulfide discharg
Pharmac t station
e
eutical
Co. Ltd.Huadong
Medicin
Non- Organize
e (Xi’an) Sewage
Air methane d
Bohua 1 treatmen / 60mg/m3 / / None
pollutant hydrocar discharg
Pharmac t station
bon e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an) Odor Sewage
Air d
Bohua concentr 1 treatmen / 2000 / / None
pollutant discharg
Pharmac ation t station
e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an) Solid
Air d
Bohua PM 6 preparati / 20mg/m3 / / None
pollutant discharg
Pharmac on plant
e
eutical
Co. Ltd.Huadong
Medicin
Organize
e (Xi’an) Hydroge
Air d Pilot
Bohua n 1 / 30mg/m3 / / None
pollutant discharg plant
Pharmac chloride
e
eutical
Co. Ltd.Huadong
Medicin
Non- Organize
e (Xi’an)
Air methane d Pilot
Bohua 1 / 60mg/m3 / / None
pollutant hydrocar discharg plant
Pharmac
bon e
eutical
Co. Ltd.Intermitt No. 9
Joyang
Water ent Haidu
Laborato pH value 1 8.3 6-9 / / None
pollutant discharg North
ries
e Road
Joyang Water COD Intermitt 1 No. 9 240mg/L 500mg/L 18.2 tons 22.401 None
138Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Laborato pollutant ent Haidu t/a
ries discharg North
e Road
Intermitt No. 9
Joyang Ammoni
Water ent Haidu 7.26mg/
Laborato a- 1 35mg/L 0.4 tons 1.156 t/a None
pollutant discharg North L
ries nitrogen
e Road
Intermitt No. 9
Joyang
Water Total ent Haidu 12.4mg/
Laborato 1 45mg/L 1.12 tons 1.486 t/a None
pollutant nitrogen discharg North L
ries
e Road
Intermitt No. 9
Joyang Total
Water ent Haidu 1.54mg/
Laborato phospho 1 8mg/L 0.14 tons 0.164 t/a None
pollutant discharg North L
ries rus
e Road
Complia
nt
No. 9
Joyang Hazardo disposal
Solid Haidu 2222.10 3148.7
Laborato us by / / / None
pollutant North 9 tons t/a
ries wastes entrusted
Road
qualified
units
Non- Organize No. 9
Joyang
Air methane d Haidu 9.78mg/ 42.7409
Laborato 1 60mg/m3 6.3 t/a None
pollutant hydrocar discharg North m3 t/a
ries
bon e Road
Wuhu
Huaren
Organize
Science Roof of
Air d 18.975m 0.61355
and NMHC 1 Building 60mg/m3 5.4 t/a None
pollutant discharg g/m3 2 tons
Technol A
e
ogy Co.Ltd.Wuhu
Huaren
Organize
Science Roof of
Air Methyl d 0.10095
and 1 Building 2mg/m3 50mg/m3 None None
pollutant alcohol discharg tons
Technol A
e
ogy Co.Ltd.Wuhu
Huaren
Organize
Science Roof of
Air Dichloro d 0.499
and 1 Building 11mg/m3 40mg/m3 None None
pollutant methane discharg tons
Technol A
e
ogy Co.Ltd.Wuhu
Huaren
Organize
Science Roof of
Air Ethyl d 0.0155m 0.00074
and 1 Building 40mg/m3 None None
pollutant acetate discharg g/m3 4 tons
Technol A
e
ogy Co.Ltd.Wuhu Wastewa Sewage
Main
Huaren ter PH 1 main 7.81 6-9 0 0 None
outlet
Science pollutant outlet
139Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
and
Technol
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Sewage
Main 44.744m 0.13799 0.2272
and ter COD 1 main 360mg/L None
outlet g/L tons t/a
Technol pollutant outlet
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Sewage
Main 11.05mg 0.0104
and ter BOD5 1 main 170mg/L 0 None
outlet /L tons
Technol pollutant outlet
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Sewage
Main 19.5mg/ 0.012
and ter SS 1 main 230mg/L 0 None
outlet L tons
Technol pollutant outlet
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Ammoni Sewage
Main 4.48mg/ 0.0114 0.04735
and ter a- 1 main 30mg/L None
outlet L tons t/a
Technol pollutant nitrogen outlet
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Sewage
Total Main 14.835m 0.012
and ter 1 main 35mg/L 0 None
nitrogen outlet g/L tons
Technol pollutant outlet
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Total Sewage
Main 0.515mg 0.00041
and ter phospho 1 main 5mg/L 0 None
outlet /L tons
Technol pollutant rus outlet
ogy Co.Ltd.Wuhu
Huaren
Science Wastewa Sewage
Dichloro Main 0.0218m 0.00001
and ter 1 main 0.3mg/L 0 None
methane outlet g/L 92 tons
Technol pollutant outlet
ogy Co.Ltd.Pollutant treatment
1. Pollutant treatment of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd.
(1) Wastewater
140Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Name of pollution Treatment process Treatment capacity Time when put into operation Operation
prevention and control condition
facility
December 2001
Wastewater treatment Technical improvement in 2014
Facultative + CASS + Normal
system of new sewage 2200 t/d (adding IC and steam flotation)
steam flotation operation
treatment station IC tower outage for demolition in
2022
(2) Exhaust gas
Name of pollution prevention Treatment process Treatment capacity Time when put into Operation
and control facility (CMH) operation condition
DA002 (16#-1) Water Spraying + activated carbon 40000 2023 Normal
operation
DA010 (35#-1) Secondary water spraying + dry filter + activated 30000 / Under
carbon adsorption and desorption construction
DA013 (32#-1) Secondary water spraying + dry filter + activated 35000 2023 Normal
carbon adsorption and desorption operation
DA016 (18#-1) Two-level water spraying + activated carbon + 30000 2022 Normal
primary spraying operation
DA019 (3#-1) Primary water spraying + photo-oxidation 20000+52000 2019 Normal
operation
DA020 (36#-2) Two-level water spraying + condensation + 10000 2019 Normal
photo-oxidation + activated carbon + inorganic operation
nano-catalysis + water spraying
DA023 (27#-1) Condensation + alkaline spraying + all-in-one 15000 2009 Outage
machine + alkaline spraying
DA024 (33#-1) Secondary water spraying + dry filter + activated 1000 2023 Normal
carbon adsorption and desorption operation
DA026 (34#-1) Secondary water spraying + dry filter + activated 40000 2023 Normal
carbon adsorption and desorption operation
DA027 (7#-1) Secondary alkaline water spraying (activated 26000 2015 Normal
carbon) operation
DA028 (6#-1) Primary clean water spraying 12200 2016 Normal
operation
DA030 (18#-3) Primary clean water spraying + primary alkaline 5000 2017 Normal
water spraying operation
DA031 (25#-1) Low nitrogen combustion + high altitude 16000 2009 Normal
emission Low nitrogen operation
transformation
completed in
December 2019
Online monitoring
installed for integrated
emptying in 2023
DA034 (27#-2) Two-level water spraying + activated carbon 15000 2011 Outage
adsorption and desorption
DA035 (27#-3) Photo-oxidation + primary alkaline water 22300 2016 Outage
spraying
DA036 (8/13#-1) Secondary water spraying/ two-level spraying + 25000 2017 Normal
activated carbon adsorption and desorption operation
DA042 (10#-1) Primary clean water spraying 20000 2016 Normal
operation
DA043 (15#-1) Primary alkaline water spraying + photo 25000 2018 Normal
oxidation operation
DA044 (43#-1) Primary alkaline water spraying + primary water 45000 2014 Normal
spraying operation
DA045 (46#-1) Primary clean water spraying 3000 2015 Normal
operation
DA046 (46#-2) Primary clean water spraying 25000 2015 Normal
operation
DA047 (46#-3) Primary clean water spraying 30000 2015 Normal
operation
141Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
DA048 (23#-1) Two-level water spraying 7000 2019 Normal
operation
DA049 (36#-3) Secondary water spraying + dry filter + activated 10000 / Under
carbon adsorption and desorption construction
DA050 (3#-2) Secondary water spraying + activated carbon 45000 / Under
construction
(3) Solid wastes
Name of pollution prevention Treatment process Treatment capacity Time when put into Operation condition
and control facility operation
Normative storage 180 tons March 2012
Normative storage compliant
Hazardous waste warehouse Normative storage 107 tons October 2023 disposal by entrusted qualified
units
Normative storage 85 tons December 2022
General solid waste storage Normative storage 7 tons March 2010
Normative storage compliant
disposal by entrusted qualified
yard Normative storage 30 tons June 2004 units
2. Pollutant treatment of Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co. Ltd.
(1) Wastewater
Name of pollution Treatment process Treatment capacity Time when put into Operation
prevention and control operation condition
facility
Phase I sewage treatment Primary sedimentation + EGSB + facultative + 1500 t/d March 2016 Normal
station aerobic + advanced treatment operation
Phase II sewage treatment EGSB + facultative + aerobic + advanced 8500 t/d July 2019 Normal
station treatment operation
(2) Exhaust gas
Name of pollution prevention and control Treatment process Treatment capacity Time when put Operation condition
facility (CMH) into operation
Exhaust gas from Two-level alkaline
DA001 fermenting east spraying + photo- 45000 May 2016 Normal operation
section catalytic oxidation
Exhaust gas from Two-level alkaline
DA002 fermenting west spraying + photo- 40000 May 2016 Normal operation
section catalytic oxidation
Exhaust gas from Two-level alkaline
DA003 drying north spraying 80000 May 2016 Normal operation
section
Exhaust gas from Two-level alkaline
DA004 sewage treatment spraying 50000 May 2016 Normal operation
station
Exhaust gas from Primary alkaline
DA006 10000 May 2016 Normal operation
batching section spraying
Exhaust gas from Primary alkaline
DA007 quality testing and spraying + photo- 20000 May 2016 Normal operation
R&D catalytic oxidation
Exhaust gas from Two-level alkaline
DA008 drying south spraying 80000 May 2016 Normal operation
section
Exhaust gas from Two-level alkaline
DA010 plate-and-frame spraying + photo- 40000 May 2017 Normal operation
filter catalytic oxidation
Exhaust gas from Two-level alkaline
DA011 20000 May 2017 Normal operation
drying cooling bin spraying
Exhaust gas from Primary alkaline
DA012 20000 May 2016 Normal operation
drying 7m spraying
Exhaust gas from Primary alkaline
DA013 20000 May 2016 Normal operation
drying 18m spraying
Exhaust gas from Activated carbon + Waste gas
DA014 Few June 2019
tank area alkaline spraying containing solvent is
142Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
separately connected
to RTO system
Normal operation
Water spraying +
DA015 RTO exhaust gas RTO + alkaline 100000 June 2019 Normal operation
spraying
Exhaust gas I from Bag dust removal
DA016 Few June 2019 Normal operation
Vogely preparation
Photo-catalytic
DA033 MP exhaust gas 44000 June 2019 Normal operation
oxidation
Alkaline spraying
Exhaust gas from
+ photo-catalytic
DA018 super-resistant 20000 June 2019 Normal operation
oxidation + water
fermentation
spraying
Acid spraying +
DA019 X8 exhaust gas 6000 June 2019 Normal operation
water spraying
Alkaline spraying
Exhaust gas from + photo-catalytic
DA021 30000 June 2019 Normal operation
quality testing oxidation + water
spraying
Exhaust gas from Alkaline spraying
DA022 AK refining + water spraying 10000 June 2019 Normal operation
hydrochloric acid
Exhaust gas I from Bag dust removal +
DA023 Few June 2019 Normal operation
spray drying water spraying
Alkaline spraying
Exhaust gas from
+ photo-catalytic
DA024 AK fermenting 90000 June 2019 Normal operation
oxidation + water
north section
spraying
Alkaline spraying
Exhaust gas from
+ photo-catalytic
DA025 AK fermenting 90000 June 2019 Normal operation
oxidation + water
south section
spraying
Exhaust gas from Alkaline spraying
DA026 phase II sewage + water spraying 58000 June 2019 Normal operation
treatment station
Alkaline spraying
Exhaust gas from + photo-catalytic
DA027 8000 June 2019 Normal operation
center control oxidation + water
spraying
Alkaline spraying Connected to RTO
+ water spraying system after being
/ YT exhaust gas 4000 June 2019 pre-treated in this
system; this outlet
canceled
Exhaust gas II from Bag dust removal +
DA029 Few June 2019 Normal operation
spray drying water spraying
Exhaust gas from Alkaline spraying
DA030 AK refining ethyl + water spraying 1000 June 2019 Normal operation
alcohol
Condensation + Connected to RTO
Exhaust gas from two-level water system after being
/ Bailing Tablets spraying 20000 July 2022 pre-treated in this
preparation system; this outlet
canceled
Oxidation spraying Connected to RTO
HDG solvent- + two-level system after being
/ containing exhaust alkaline spraying 2000 September 2022 pre-treated in this
gas system; this outlet
canceled
HDG odor exhaust Oxidation spraying
FQ217 20000 September 2022 Normal operation
gas + alkaline spraying
Waste gas from Water spraying +
FQ 219 benzpyrole water spraying 30000 April 2024 Not operate
preparation
143Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(3) Solid wastes
Name of pollution
Time when put into
prevention and control Treatment process Treatment capacity Operation condition
operation
facility
Normative storage 10 tons March 2017 Normative storage
Hazardous waste compliant disposal by
warehouse Normative storage 200 tons May 2021 entrusted qualified
units
Normative storage 20 tons March 2016
Normative storage 15 tons March 2016 Normative storage
General solid waste compliant disposal by
Normative storage 40 tons July 2019
storage yard entrusted qualified
Normative storage 30 tons July 2019 units
Normative storage 30 tons May 2024
3. Pollutant treatment of Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd.
(1) Wastewater
Name of pollution Treatment process Treatment capacity Time when put into operation Operation condition
prevention and control
facility
Wastewater treatment Pretreatment + Fenton 250 t/d July 2012 Normal operation
system of sewage treatment system + facultative +
station aerobic + MBR + carbon
filtration
(2) Exhaust gas
Name of pollution prevention and control facility Treatment process Time when put into Operation condition
operation
Exhaust gas treatment equipment for APIs Plant 1 Alkaline solution spraying October 2020 Normal operation
+ dry filter (filter cotton) +
UV photolysis + activated
carbon adsorption
Exhaust gas treatment equipment for APIs Plant 2 Tertiary alkaline solution November 2019 Normal operation
spraying + steam-water
separator + dry filter +
two-level activated carbon
adsorption
Exhaust gas treatment equipment for solid Bag dust removal 2018 Normal operation
preparation
Exhaust gas treatment equipment for pilot plant Two-level alkaline 2023 Normal operation
solution spraying + dry
filter + two-level activated
carbon adsorption
(3) Solid wastes
Name of pollution Treatment process Storage capacity Time when put into Operation condition
prevention and control operation
facility
Hazardous waste repository Normative storage 133 tons January 2012 Normative storage compliant
transfer and disposal by entrusted
qualified units
4. Pollutant treatment of Jiangsu Joyang Laboratories
(1) Wastewater
Name of pollution Treatment process Treatment capacity Time when put into Operation
prevention and control operation condition
facility
Steam flotation tank + hydrolytic acidification +
IC tower +
Wastewater treatment system Normal
UASB tank + A/O tank + O tank + secondary 1000 t/d December 2014
of sewage treatment station operation
sedimentation
tank
(2) Exhaust gas
144Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Name of pollution prevention Treatment process Treatment capacity Time when put into Operation
and control facility (CMH) operation condition
Exhaust gas treatment Primary water spraying + water-steam separator
Normal
equipment for extracting + secondary activated carbon adsorption + 25m 10000 2014
operation
section in Plant 101 exhaust pipe high altitude emission
Exhaust gas treatment Primary water spraying + water-steam separator
Normal
equipment for fermentation + secondary activated carbon adsorption + 25m 20000 2019
operation
section in Plant 101 exhaust pipe high altitude emission
Exhaust gas treatment Primary water spraying + water-steam separator
Normal
equipment for drying section + secondary activated carbon adsorption + 25m 22000 2017
operation
in Plant 101 exhaust pipe high altitude emission
Exhaust gas treatment
Cyclone separator + primary water spray + 15m Normal
equipment for batching 5000 2014
exhaust pipe high altitude emission operation
section in Plant 101
Exhaust gas treatment
Primary water spraying + water-steam separator
equipment for fermentation Normal
+ secondary activated carbon adsorption + 25m 75000 2021
sections in Plants operation
exhaust pipe high altitude emission
104/107/108
Exhaust gas treatment Primary water spraying + water-steam separator
Normal
equipment for extracting + secondary activated carbon adsorption + 25m 10000 2015
operation
section in Plant 104 exhaust pipe high altitude emission
Exhaust gas treatment
equipment for drying Primary water spraying + water-steam separator Normal
200002015
sections in Plants + secondary activated carbon adsorption operation
104/107/108
Exhaust gas treatment Primary water spraying + water-steam separator
equipment for pretreatment + photo-catalytic oxidation + secondary activated Normal
400002019
tank and hazardous waste carbon adsorption + 25m exhaust pipe high operation
repository in Plant 303 altitude emission
Primary water spraying + water-steam separator
Exhaust gas treatment Normal
+ secondary activated carbon adsorption + 25m 10000 2015
equipment on F1 in Plant 106 operation
exhaust pipe high altitude emission
Exhaust gas treatment Primary water spraying + water-steam separator
Normal
equipment for extracting + secondary activated carbon adsorption + 25m 20000 2019
operation
section in Plant 107 exhaust pipe high altitude emission
Exhaust gas treatment Primary alkaline spraying + water-steam
equipment for separator + secondary activated carbon Normal
250002022
chromatography section in adsorption + 25m exhaust pipe high altitude operation
Plant 107 emission
Exhaust gas treatment Primary water spraying + water-steam separator
Normal
equipment for extracting + secondary activated carbon adsorption + 25m 40000 2019
operation
section in Plant 108 exhaust pipe high altitude emission
Primary water spraying + secondary activated
Exhaust gas treatment Normal
carbon adsorption + 25m exhaust pipe high 20000 2019
equipment on F3 in Plant 106 operation
altitude emission
Exhaust gas treatment Primary alkaline spraying+ secondary sodium
Normal
equipment for sewage hypochlorite spraying + water-steam separator + 20000 2023
operation
treatment station 303 25m exhaust pipe high altitude emission
Primary water spraying + water-steam separator
Exhaust gas treatment Normal
+ secondary activated carbon adsorption + 25m 45000 2022
equipment for Plant 103 operation
exhaust pipe high altitude emission
Exhaust gas treatment Normal
Spraying + activated carbon adsorption 25000 2023
equipment in laboratories operation
(3) Solid wastes
Name of pollution
Time when put into
prevention and control Treatment process Treatment capacity Operation condition
operation
facility
Normative storage
Hazardous waste compliant disposal by
Normative storage 3148.7 t/a October 2020
warehouse entrusted qualified
units
Household garbage Garbage disposal site in
Normative storage 1000 t/a March 2015
dumping site the east of the city
145Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
5. Pollutant treatment by Wuhu Huaren Science and Technology Co. Ltd.
(1) Wastewater:
Name of pollution Treatment process Treatment capacity Time when put into operation Operation
prevention and control condition
facility
pH regulation +
coagulation and Normal
Sewage treatment station 30 t/d August 2023
sedimentation + aerobic operation
bioremediation
(2) Exhaust gas:
Name of pollution prevention Treatment process Treatment capacity Time when put into Operation
and control facility (CMH) operation condition
Collected by pipeline and adsorbed by Normal
DA001 40000 May 2024
secondary activated carbon operation
Secondary water spraying + secondary Construction
DA002 activated carbon adsorption after being 8000 / completed
collected by pipeline application
for the
Pollutant
Low-nitrogen combustion in boiler and 15-
DA003 1000 / Emission
meter high altitude stack emission
Permit in
progress
(3) Solid wastes
Name of pollution Treatment process Treatment capacity Time when put into Operation condition
prevention and control operation
facility
Normative storage compliant
Hazardous waste warehouse Temporary storage 20 tons August 2022 disposal by entrusted qualified
units
Environmental self-monitoring program
Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. did not make any revision.Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co. Ltd. has formulated the entrusted monitoring
plan according to the self-monitoring requirements specified in the Pollutant Emission Permit and carried out daily
monthly quarterly or annual entrusted monitoring according to the monitoring plan.Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd. has formulated the monitoring plan according to
the self-monitoring requirements specified in the Pollutant Emission Permit and carried out daily monthly quarterly
semi-annual or annual monitoring according to the monitoring plan.Jiangsu Joyang Laboratories has formulated the Pollution Source Self-monitoring Plan according to the
requirements stipulated in the Pollutant Emission Permit and reported the monitoring data daily as required.Wuhu Huaren Science and Technology Co. Ltd. has formulated the Self-monitoring Program on February 2
2024 and conducted monitoring as per the program.
Emergency response plan for environmental incidents
Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. did not make any revision.Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co. Ltd. has modified the Emergency Plan for
Sudden Environmental Events in 2022 with the record No. of 330114-2022-069-M. In May 2024 it conducted an
emergency drill of “super-anti-sewage regulating tank overflowing”.
146Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd. has modified and improved the Emergency Plan
for Sudden Environmental Events as required in 2024 and recorded the Plan in Huayin Sub-bureau of Weinan
Ecological Environment Bureau with the record No. of 610582-2024-152-M.Jiangsu Joyang Laboratories has modified the Emergency Plan for Sudden Environmental Events in H1 2024
which has been approved and recorded. In June 2024 it conducted an emergency response plan drill for sudden fire
environmental incident. In December 2024 it conducted a comprehensive emergency response plan drill.Wuhu Huaren Science and Technology Co. Ltd. has formulated the Emergency Plan for Sudden
Environmental Events in July 2022 with the record No. of 340203-2022-018-L. Revised in October 2024 the
emergency response plan successfully passed the review by the regulatory review committee on December 25
2024 and is scheduled for final compliance filing by January 31 2025.
Investment in environmental governance and protection and relevant information on paying environmental protection tax
In 2024 Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. invested 11881400 yuan in environmental
governance and protection and paid the environmental protection tax of 2813.02 yuan.In 2024 Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co. Ltd. invested 59200000 yuan in
environmental governance and protection and was exempt from environmental protection tax pursuant to relevant
regulations.In 2024 Huadong Medicine (Xi’an) Bohua Pharmaceutical Co. Ltd. invested 3041460 yuan in environmental
governance and protection and paid the environmental protection tax of 1232.14 yuan.In 2024 Jiangsu Joyang Laboratories invested 8370000 yuan in environmental governance and protection
and paid the environmental protection tax of 142400 yuan.In 2024 Wuhu Huaren Science and Technology Co. Ltd. invested a total of 1055000 yuan in environmental
governance and protection and paid the environmental protection tax of 498.13 yuan.Measures taken to reduce carbon emissions during the reporting period and corresponding effects
□ Applicable □ N/A
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co. Ltd. continued to use biogas to generate
electricity reducing the emissions of methane hydrogen sulfide and other pollutants. It launched a new project to
replace natural gas with biogas. The project was put into use in May 2024 and since then the natural gas
consumption has been reduced by more than 190000 m3. It continuously took lean measures such as saving water
and reducing consumption in the plants to reduce pollutant emissions.Administrative penalties for environmental issues during the reporting period
During the reporting period no administrative penalties for environmental issues were imposed on the
Company’s subsidiaries which were designated as key pollutant-discharging entities by the environmental
protection authority.Other environmental information to be disclosed
Wuhu Huaren Science and Technology Co. Ltd. completed its environment information disclosure in 2024 on
the Enterprise Environmental Information Legally Disclosure Platform of Anhui Province.Other environmental protection related information
147Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
N/A.II. Social Responsibilities
In the process of its strategic transformation the Company strictly fulfills its corporate social
responsibilities addressing the needs of all stakeholders including shareholders governments and
regulatory agencies employees customers and patients suppliers communities the public as well
as partners: Through sound governance we solidify our foundation for growth; Anchored in
sustainable development we focus on long-term value; Mindful of our responsibilities we uphold
business ethics; Committed to quality we contribute to a healthy China; Valuing our employees we
build a thriving home together; Protecting the earth we prioritize energy efficiency and green
development; Actively engaging in public welfare we give back to society with tangible actions.For details of the Company’s social responsibility performance in 2024 please refer to the
Environmental Social and Governance (ESG) of Huadong Medicine in 2024.III. Consolidating and Expanding Achievements of Poverty Alleviation and Rural
Revitalization
During the reporting period the Company actively carried out targeted poverty alleviation and rural revitalization
initiatives. For details please refer to the Environmental Social and Governance (ESG) of Huadong Medicine in
2024.
148Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section VI. Important Matters
I. Fulfillment of commitments
1. Commitments made by interested parties such as the Company’s de facto controller shareholders related
parties acquirer(s) and the Company that are fulfilled during the reporting period or unfulfilled by the end
of the reporting period
□ Applicable □ N/A
Cause of Committing Type of Contents of Time of Duration of Degree of
Commitment Party Commitment Commitment Commitment Commitment Fulfillment“Theshareholder
hereby
proposes to
raise the
distribution
ratio of your
cash dividends
in 2023 and
interim cash
dividends in
2024 based on
our confidence
in your long-
term
development
good financial
position return
Grand to shareholders
Enterprises and other
Commitment
Other Inc.; Hangzhou factors to February 18 December 31
on dividend Fulfilled
Commitments Huadong ensure that all 2024 2024
distribution
Medicine shareholders
Group Co. Ltd. can share the
Company’s
business
development
achievements
and effectively
protect the
interests of
investors.Specific
suggestions are
as follows:
Proposed
profits
distribution
plan for 2023:
A total of 1
billion yuan
cash dividends
149Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(including tax);
no bonus shares
will be
distributed and
no reserved
funds can be
converted into
the additional
share capital. It
is further
proposed that
based on the
Company’s
actual operation
in H1 2024 if
the Company’s
net profits
maintains
steady growth
the Company’s
interim cash
dividend for
2024 should be
no less than
500 million
yuan (including
tax).Specific profit
distribution
plan will be
determined by
the Company
based on its
actual operation
performance
which will be
submitted to the
Board of
Directors and
Shareholders’
Meeting for
deliberation
and approval.The
shareholder
hereby
undertakes to
vote in favor of
the above
distribution
plan at the
Shareholders’
Meeting
deliberating on
and approvingsuch plan.”
Whether the
Yes
commitment is
150Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
fulfilled on
time
2. If the Company’s assets or projects are subject to profit forecasts and the reporting period remains within
the profit forecast period the Company shall provide explanations regarding whether such assets or projects
have achieved the original profit forecast along with the reasons thereof
□ Applicable □ N/A
II. Occupancy of non-operating funds of the listed companies by controlling shareholders and
related parties
□ Applicable □ N/A
No such case during the reporting period.III. External guarantees in violation of provisions
□ Applicable □ N/A
No such case during the reporting period.IV. Explanation by the Board of Directors on the latest “Non-Standard Audit Report”
□ Applicable □ N/A
V. Explanation by the Board of Directors the Board of Supervisors and the independent
directors (if any) on the “Non-Standard Audit Report” of the accounting firm during the
current reporting period
□ Applicable □ N/A
VI. Explanation of changes in accounting policies accounting estimates or the corrections of
significant accounting errors as compared with the previous annual financial report
□ Applicable □ N/A
1. The Company has implemented the provision on the “Classification of Current Liabilities and Non-currentLiabilities” stipulated in the Accounting Standards for Business Enterprises No. 17 issued by the Ministry of Finance
since January 1 2024. This change in accounting policy has no impact on the Company’s financial statements.
2. The Company has implemented the provision on the “Disclosure of Financing Arrangements of Suppliers”
stipulated in the Accounting Standards for Business Enterprises No. 17 issued by the Ministry of Finance since
January 1 2024.
3. The Company has implemented the provision on the “Accounting Treatment for Sale and LeasebackTransactions” stipulated in the Accounting Standards for Business Enterprises No. 17 issued by the Ministry of
Finance since January 1 2024. This change in accounting policy has no impact on the Company’s financial
statements.
151Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
4. The Company has implemented the provision on the “Accounting Treatment for Guarantee-type QualityAssurance Not Constituting Separate Performance Obligation” stipulated in the Accounting Standards for Business
Enterprises No. 18 issued by the Ministry of Finance since January 1 2024. This change in accounting policy has
no impact on the Company’s financial statements.VII. Changes in the scope of consolidated statements as compared with the previous annual
financial report
□ Applicable □ N/A
For details please refer to “IX. Change of consolidation scope” in “Section X. Financial Report”.VIII. Employment and dismissal of accounting firms
The Company’s currently engaged accounting firm
Name of the domestic accounting firm Pan-China Certified Public Accountants LLP
Remuneration of the domestic accounting firm (ten thousand
170
yuan)
Consecutive years of audit services provided by the domestic
27
accounting firm
Certified public accountants of the domestic accounting firm Hu Yanhua and Chen Xiaodong
Consecutive years of audit services provided by certified public
Hu Yanhua: 2 years; Chen Xiaodong: 3 years
accountants of the domestic accounting firm
Name of the overseas accounting firm (if any) None
Remuneration of the overseas accounting firm (ten thousand
0
yuan) (if any)
Consecutive years of audit services provided by the overseas
None
accounting firm (if any)
Certified public accountants of the overseas accounting firm (if
None
any)
Consecutive years of audit services provided by certified public
None
accountants of the overseas accounting firm (if any)
Whether there was a change in the appointed accounting firm during the current period
□Yes □ No
Information about the engagement of internal control audit accounting firm financial consultant or sponsor by the Company
□ Applicable □ N/A
In the current fiscal year the Company engaged Pan-China Certified Public Accountants LLP
as the auditing firm for both its annual financial report and internal control audit report; the total audit
fees for the 2024 annual financial report and internal control audit report amount to 1.7 million yuan
(including tax).IX. Delisting after annual report disclosure
□ Applicable □ N/A
152Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
X. Bankruptcy reorganization
□ Applicable □ N/A
The Company did not undergo any bankruptcy reorganization proceedings or related events during the reporting period.XI. Major litigation and arbitration matters
□ Applicable □ N/A
Litigation
Amount Whether an Execution of
Basic of Litigation (arbitration)
involved (ten estimated litigation Disclosure Disclosure
litigations (arbitration) adjudication
thousand liability is (arbitration) date index (if any)
(arbitrations) progress result and
yuan) formed judgments
impact
Some cases
are under
trials and
some
adjudications
Summary of Some cases
have come
the litigation have been
into force
matters that The enforced;
(with
did not meet summary of some
adjudicated
the the litigation adjudicated
amount
thresholds 14566.75 No matters has cases are /
reaching
for disclosure no significant under
90.9555
of major impact on the enforcement.million yuan
litigations Company Some cases
and
(arbitrations) are not
unenforced
(China) adjudicated.
balance
amounting to
18.3168
million
yuan).Some cases
Summary of are under
the litigation trials and
matters that some The
Some cases
did not meet adjudications summary of
have been
the have come the litigation
enforced.thresholds 256.7 No into force matters has /
Some cases
for disclosure (with no significant
are not
of major adjudicated impact on the
adjudicated.litigations amount Company
(arbitrations) reaching
(overseas) 297000
yuan)
Hangzhou As of the For details
Zhongmei date of the please refer
Huadong Report the to the
Pharmaceutic litigation has Announceme
Temporarily Temporarily January 3
al Co. Ltd. 11137.58 No undergone nt on the
no no 2024
the two court Wholly-
Company’s hearings at owned
wholly- the first Subsidiary
owned instance Receiving the
153Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
subsidiary before the Notice of
demanded Zhejiang Case
that Qinghai Provincial Acceptance
Everest High from
Cordyceps People’s Zhejiang
Sinensis Raw Court with Provincial
Materials no judgment Higher
Co. Ltd. yet rendered People’s
(Defendant in the first Court
1) and instance. (Announcem
Qinghai ent No.:
Everest 2024-001)
Cordyceps disclosed by
Sinensis the Company
Pharmaceutic on Cninfo
al Co. Ltd. (http://www.
(Defendant cninfo.com.c
2) n) on January
immediately 3 2024.cease all acts
of
infringement
of relevant
invention
patents of
Zhongmei
Huadong and
compensate
for damages.Note: During the reporting period the Company initiated administrative rulings and litigation against 15 enterprises for infringing
the invention patent “Indobufen Crystal form D and Its Preparation Method” (Patent No.: ZL202211596913.5) of Hangzhou Zhongmei
Huadong Pharmaceutical Co. Ltd. (“Zhongmei Huadong”) one of its wholly-owned subsidiaries with positive progress made. The
Company also actively defended against the patent invalidation request filed by the accused infringing enterprises. As of the date of
the Report relevant progresses are as follows:
1. Administrative rulings: Zhongmei Huadong has filed administrative ruling applications with the Hangzhou Intellectual Property
Office Huzhou Intellectual Property Office Chengdu Intellectual Property Office and Nanjing Intellectual Property Office against 15
infringing enterprises demanding the immediate cessation of the patent infringement acts. As of the date of the Report the Hangzhou
Intellectual Property Office has issued two administrative rulings confirming the existence of patent infringement acts and ordering
the involved enterprises to cease infringement acts immediately. The infringing enterprises have filed administrative lawsuits with the
Hangzhou Intermediate People’s Court to challenge these rulings with the Company as a third party. No court judgment has been
rendered yet. Other administrative ruling requests have been accepted by the respective local intellectual property offices but remain
pending.
2. Judicial litigation: In addition to the administrative ruling applications Zhongmei Huadong has filed a patent infringement
lawsuit with the Hangzhou Intermediate People’s Court demanding immediate cessation of the infringing acts and compensation for
damages. The case has been formally accepted by the court and is pending adjudication.
3. Patent invalidation proceedings: As of the date of the Report the Company has received invalidation requests filed by 10
petitioners with the China National Intellectual Property Administration (CNIPA) against the aforementioned patent. On January 7
2025 CNIPA issued a Case Closure Notice for one request confirming the withdrawal of one petitioner’s request. On March 12 2025
CNIPA rendered Invalidation Decision Notice for five petitioners upholding the full validity of the patent. The remaining cases are
still under review.XII. Punishment and rectification
□ Applicable □ N/A
No such case during the reporting period.
154Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
XIII. Integrity status of the Company its controlling shareholders and de facto controller
□ Applicable □ N/A
During the reporting period neither the Company its controlling shareholders nor its de facto controller has failed to comply with any
effective court judgment or defaulted on any material debt obligations .XIV. Major related-party transactions
1. Transactions related to daily operations
□ Applicable □ N/A
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155Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
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any of any's o
Yanhu House House banke
the relate April (http:/
ang s and s and Marke 247.4 r’s Marke
Comp d 0.01% 0 Yes 18 /www
Prope buildi buildi t price 9 accept t price
any’s transa 2024 .cninf
rty ngs ngs ance
contro ction o.com
Co. bill
lling decisi .cn)
Ltd.shareh on-
older makin
g
proces
s
53755332
Total -- -- -- -- -- -- -- --
3.887.76
Details of large-scale sales return N/A
In 2024 the Company and its subsidiaries estimated that the total amount of recurring related-
party transactions would be 533.2776 million yuan including 363.9134 million yuan with
entities affiliated with China Grand Enterprises Inc. and 169.3642 million yuan with other
The actual performance during the
related parties (for details please refer to the Announcement on Estimated Recurring Related-
reporting period if the total amount
Party Transactions in 2024 disclosed by the Company on Cninfo (http://www.cninfo.com.cn)
of the recurring related-party
on April 18 2024). In 2024 the actual total amount of recurring related-party transactions
transactions that will occur in the
between the Company its subsidiaries and related parties reached 537.5388 million yuan
current period is estimated by
comprising 402.5348 million yuan with entities affiliated with China Grand Enterprises Inc.category if any
and 135.0040 million yuan with other related parties. The total actual amount of recurring
related-party transactions deviated from the estimated amount by 0.80% indicating no
material discrepancy and high alignment with the Company’s projections. Any excess amount
174Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
beyond the estimated amount was duly approved by the General Manager and the senior
management in strict compliance with the Related-Party Transactions Management Policy
and the General Manager Working Procedures.Reasons for material deviations
between the transaction prices and
N/A
market reference value if
applicable
2. Related-party transactions involving the acquisition or selling assets and equity
□ Applicable □ N/A
No such case during the reporting period.
3. Related-party transactions of joint external investment
□ Applicable □ N/A
No such case during the reporting period.
4. Related-party receivables and payables
□ Applicable □ N/A
No such case during the reporting period.
5. Transactions with related-party financial companies
□ Applicable □ N/A
The Company has no deposits loans credit or other financial business with related financial companies or related parties
6. Transactions between the Company’s controlled financial subsidiaries and related parties
□ Applicable □ N/A
The Company’s controlled financial subsidiaries have no deposits loans credit or other financial transactions with related parties.
7. Other major related-party transactions
□ Applicable □ N/A
No such case during the reporting period.XV. Major contracts and their fulfillment
1. Entrustment contracting and leasing
(1) Entrustment
□ Applicable □ N/A
No such case during the reporting period.
175Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(2) Contracting
□ Applicable □ N/A
No such case during the reporting period.
(3) Leasing
□ Applicable □ N/A
Note on leasing
Refer to “8. Others - Leasing - Other material matters in Section X. Financial Report” for details.Projects contributing over 10% of the Company’s total profits during the reporting period
□ Applicable □ N/A
No such case during the reporting period.
2. Important guarantees
□ Applicable □ N/A
Unit: ten thousand yuan
External guarantees provided by the Company and its subsidiaries (excluding guarantees for subsidiaries)
Disclo
sure
date
of the
Guarante
annou Actual Actual Period
Guaran Collat Counter e for a
Guaranteed nceme date of guarante Type of of Fulfilled
tee eral (if guaranty related
party nt occurren ed guarantee guarante or not
quota any) (if any) party or
related ce amount e
not
to the
guaran
tee
quota
///////////
Total external
Total external
guarantee amount
guarantees quota
/ actually occurred /
approved during the
during the reporting
reporting period (A1)
period (A2)
Total approved Total actual external
external guarantee guarantee balance at
//
quota at the end of the the end of the reporting
reporting period (A3) period (A4)
Guarantee for subsidiaries
Disclo
sure Guarante
Actual Actual Period
date Guaran Collat Counter e for a
Guaranteed date of guarante Type of of Fulfilled
of the tee eral (if guaranty related
party occurren ed guarantee guarante or not
annou quota any) (if any) party or
ce amount e
nceme not
nt
176Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
related
to the
guaran
tee
cap
Hangzhou
Joint and
Zhongmei April
March several
Huadong 14 85000 8292 One year No No
20 2024 liability
Pharmaceuti 2023
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 June 26 several
Huadong 18 195 One year No No
0 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 July 4 several
Huadong 18 164 One year No No
0 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 August several
Huadong 18 248 One year No No
0 6 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 August several
Huadong 18 500 One year No No
0 26 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April Septemb
15500 several
Huadong 18 er 13 20699 One year No No
0 liability
Pharmaceuti 2024 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 October several
Huadong 18 8863 One year No No
0 23 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April Novemb
15500 several
Huadong 18 er 14 17003 One year No No
0 liability
Pharmaceuti 2024 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 July 12 several
Huadong 18 21425 One year No No
0 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Hangzhou
Joint and
Zhongmei April
15500 October several
Huadong 18 12281 One year No No
0 21 2024 liability
Pharmaceuti 2024
guarantee
cal Co. Ltd.Huadong April Joint and Ten
20000 No No
Medicine 19 several years
177Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Supply 2019 liability
Chain guarantee
Management
(Jinhua) Co.Ltd.Huadong
Medicine Joint and
April
(Xi’an) several
18 5000 One year No No
Bohua liability
2024
Pharmaceuti guarantee
cal Co. Ltd.Huadong
Medicine Joint and
July
(Xi’an) July 19 several Two
22 5285 5285 No No
Bohua 2024 liability years
2024
Pharmaceuti guarantee
cal Co. Ltd.Huadong
Joint and
Medicine April Septemb
several
Ningbo 18 16000 er 25 5000 One year No No
liability
Sales Co. 2024 2024
guarantee
Ltd.Huadong
Joint and
Medicine April
October several
Ningbo 18 16000 1900 One year No No
18 2024 liability
Sales Co. 2024
guarantee
Ltd.Huadong Joint and
April Novemb
Medicine several
18 15000 er 15 6000 One year No No
Jinhua Co. liability
20242024
Ltd. guarantee
Huadong Joint and
April Decemb
Medicine several
18 15000 er 10 3800 One year No No
Jinhua Co. liability
20242024
Ltd. guarantee
Huadong Joint and
April
Medicine October several
18 19300 4500 One year No No
Huzhou Co. 10 2024 liability
2024
Ltd. guarantee
Huadong Joint and
April Decemb
Medicine several
18 19300 er 6 3800 One year No No
Huzhou Co. liability
20242024
Ltd. guarantee
Huadong Joint and
April
Medicine March several
14 19000 3000 One year No No
Shaoxing 20 2024 liability
2023
Co. Ltd. guarantee
Huadong Joint and
April
Medicine October several
18 20000 5000 One year No No
Shaoxing 24 2024 liability
2024
Co. Ltd. guarantee
Huadong
Medicine Joint and
April
(Hangzhou) October several
18 5000 14 One year No No
Biological 11 2024 liability
2024
Products guarantee
Co. Ltd.
178Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Huadong
Medicine Joint and
April
(Hangzhou) October several
18 5000 660 One year No No
Biological 17 2024 liability
2024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Novemb
(Hangzhou) several
18 5000 er 11 20 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Novemb
(Hangzhou) several
18 5000 er 29 330 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Decemb
(Hangzhou) several
18 5000 er 19 264 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Decemb
(Hangzhou) several
18 5000 er 20 360 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Decemb
(Hangzhou) several
18 5000 er 23 51 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Decemb
(Hangzhou) several
18 5000 er 27 300 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Huadong
Medicine Joint and
April Decemb
(Hangzhou) several
18 5000 er 27 105 One year No No
Biological liability
20242024
Products guarantee
Co. Ltd.Joint and
April
Joyang several
18 5000 One year No No
Laboratories liability
2024
guarantee
Huadong Joint and
April
Medicine July 2 several
18 24000 1000 One year No No
Wenzhou 2024 liability
2024
Co. Ltd. guarantee
Huadong April 24000 July 3 1000 Joint and One year No No
179Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Medicine 18 2024 several
Wenzhou 2024 liability
Co. Ltd. guarantee
Huadong Joint and
April
Medicine July 5 several
18 24000 1000 One year No No
Wenzhou 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine July 8 several
18 24000 1000 One year No No
Wenzhou 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine July 10 several
18 24000 1000 One year No No
Wenzhou 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine July 17 several
18 24000 1000 One year No No
Wenzhou 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine July 26 several
18 24000 1000 One year No No
Wenzhou 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine August several
18 24000 1000 One year No No
Wenzhou 6 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine August several
18 24000 1000 One year No No
Wenzhou 8 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April Septemb
Medicine several
18 24000 er 4 1000 One year No No
Wenzhou liability
20242024
Co. Ltd. guarantee
Huadong Joint and
April Septemb
Medicine several
18 24000 er 10 1000 One year No No
Wenzhou liability
20242024
Co. Ltd. guarantee
Huadong Joint and
April Septemb
Medicine several
18 24000 er 13 1000 One year No No
Wenzhou liability
20242024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine October several
18 24000 1000 One year No No
Wenzhou 9 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine October several
18 24000 1000 One year No No
Wenzhou 16 2024 liability
2024
Co. Ltd. guarantee
Huadong Joint and
April
Medicine April 26 several
18 15000 5250 One year No No
Lishui Co. 2024 liability
2024
Ltd. guarantee
Huadong April Septemb Joint and
15000 3600 One year No No
Medicine 18 er 4 several
180Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Lishui Co. 2024 2024 liability
Ltd. guarantee
Huadong Joint and
April
Medicine October several
18 2500 475 One year No No
Daishan Co. 18 2024 liability
2024
Ltd. guarantee
Huadong
Joint and
Medicine April
October several
Cunde 18 9000 950 One year No No
18 2024 liability
(Zhoushan) 2024
guarantee
Co. Ltd.Huadong
Joint and
Medicine April Decemb
several
Cunde 18 9000 er 9 1900 One year No No
liability
(Zhoushan) 2024 2024
guarantee
Co. Ltd.Hangzhou
Zhongmei
Joint and
Huadong April
March several
Pharmaceuti 14 40000 3414 One year No No
21 2024 liability
cal 2023
guarantee
(Jiangdong)
Co. Ltd.Hangzhou
Zhongmei
Joint and
Huadong April Septemb
several
Pharmaceuti 18 60000 er 13 196 One year No No
liability
cal 2024 2024
guarantee
(Jiangdong)
Co. Ltd.Hangzhou
Zhongmei
Joint and
Huadong April Septemb
several
Pharmaceuti 18 60000 er 24 222 One year No No
liability
cal 2024 2024
guarantee
(Jiangdong)
Co. Ltd.Hangzhou
Zhongmei
Joint and
Huadong April Novemb
several
Pharmaceuti 18 60000 er 22 8258 One year No No
liability
cal 2024 2024
guarantee
(Jiangdong)
Co. Ltd.Hangzhou
Joint and
Huadong April Decemb
several
Pharmacy 18 10000 er 11 3800 One year No No
liability
Chain Co. 2024 2024
guarantee
Ltd.Hubei Magic Joint and
April
Health March several
14 5400 703 One year No No
Technology 21 2024 liability
2023
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health April 12 several
14 5400 62 One year No No
Technology 2024 liability
2023
Co. Ltd. guarantee
181Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Hubei Magic Joint and
April
Health April 29 several
18 9000 146 One year No No
Technology 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health May 17 several
18 9000 41 One year No No
Technology 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health May 28 several
18 9000 204 One year No No
Technology 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health June 25 several
18 9000 784 One year No No
Technology 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health June 28 several
18 9000 17 One year No No
Technology 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health July 26 several
18 9000 372 One year No No
Technology 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health August several
18 9000 231 One year No No
Technology 5 2024 liability
2024
Co. Ltd. guarantee
Hubei Magic Joint and
April Septemb
Health several
18 9000 er 27 30 One year No No
Technology liability
20242024
Co. Ltd. guarantee
Hubei Magic Joint and
April
Health October several
18 9000 66 One year No No
Technology 25 2024 liability
2024
Co. Ltd. guarantee
Jiangsu
Nanjing Joint and
April
Nongda several
18 4000 One year No No
Animal liability
2024
Pharmaceuti guarantee
cal Co. Ltd.Huadong
Medicine
Joint and
Investment April
several
Holding 18 50400 One year No No
liability
(Hong 2024
guarantee
Kong)
Limited
Nove Joint and
Sinclair
mber April 1 several Three
Pharma 52591 18153 No No
23 2022 liability years
Limited
2018 guarantee
Total guarantee quota Total guarantee amount
for subsidiaries for subsidiaries
429485174778
approved during the actually occurred
reporting period (B1) during the reporting
182Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
period (B2)
Total approved Total actual guarantee
guarantee quota for balance for
subsidiaries at the end 651476 subsidiaries at the end 192931
of the reporting period of the reporting period
(B3) (B4)
Subsidiaries guarantee for subsidiaries
Disclo
sure
date
of the
Guarante
annou Actual Actual Period
Guaran Collat Counter e for a
Guaranteed nceme date of guarante Type of of Fulfilled
tee eral (if guaranty related
party nt occurren ed guarantee guarante or not
quota any) (if any) party or
related ce amount e
not
to the
guaran
tee
quota
Chongqing Joint and
April
Peg-Bio May 7 several Three
18 1396 122.66 No Yes
Biopharm 2024 liability years
2024
Co. Ltd. guarantee
Chongqing Joint and
April
Peg-Bio July 26 several Three
18 1396 65.26 No Yes
Biopharm 2024 liability years
2024
Co. Ltd. guarantee
Chongqing Joint and
April
Peg-Bio August several Three
18 1396 34.98 No Yes
Biopharm 21 2024 liability years
2024
Co. Ltd. guarantee
Chongqing Joint and
April
Peg-Bio August several Three
18 1396 51.69 No Yes
Biopharm 23 2024 liability years
2024
Co. Ltd. guarantee
Chongqing Joint and
April Septemb
Peg-Bio several Three
18 1396 er 2 54.8 No Yes
Biopharm liability years
20242024
Co. Ltd. guarantee
Total guarantee amount
Total guarantee quota
for subsidiaries
for subsidiaries
1396 actually occurred 329
approved during the
during the reporting
reporting period (C1)
period (C2)
Total approved Total actual guarantee
guarantee quota for balance for
subsidiaries at the end 1396 subsidiaries at the end 329
of the reporting period of the reporting period
(C3) (C4)
Total amount of the Company's guarantees (i.e. the sum of the above-mentioned 3 types of guarantees)
Total guarantees quota Total actual guarantee
approved during the amount during the
430881175107
reporting period reporting period
(A1+B1+C1) (A2+B2+C2)
Total approved 652872 Total actual guarantee 193260
183Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
guarantee quota at the balance at the end of
end of the reporting the reporting period
period (A3+B3+C3) (A4+B4+C4)
Proportion of the actual guarantee amount
8.38%
(i.e. A4+B4+C4) in the Company's net assets
Among them:
Balance of guarantees for shareholders de
0
facto controllers and their related parties (D)
Amount of debt guarantees provided directly
or indirectly for the entities with a liability to 64828
asset ratio over 70% (E)
The total amount of guarantees exceeds 50%
0
of the net assets (F)
Total guarantee amount of the above-
mentioned three types of guarantees 64828
(D+E+F)
Note on the circumstance that guarantee
liability has occurred or there is potential
joint liability for settlement during the N/A
reporting period in terms of undue guarantee
contracts (if any)
Note of external guarantees in violation of
prescribed procedures (if any)
Note: The difference between the sum of the above totals and addends in mantissa is due to rounding.Note on the specific circumstance if multiple methods are adopted for guarantees
3. Entrusted management of cash assets
(1) Entrusted wealth management
□ Applicable □ N/A
No such case during the reporting period.
(2) Entrusted loans
□ Applicable □ N/A
No such case during the reporting period.
4. Other significant contracts
□ Applicable □ N/A
No other significant contract during the reporting period.XVI. Other major events
□ Applicable □ N/A
No such case during the reporting period.
184Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
XVII. Major events of subsidiaries
□ Applicable □ N/A
(I) Major medicines (products) newly included into and withdrawn from the catalogue of
medicines covered by medical insurance:
In November 2024 the National Healthcare Security Administration and the Ministry of Human
Resources and Social Security of the People’s Republic of China launched the Catalogue of
Medicines Covered by National Basic Medical Insurance/Work-related Injury Insurance/Maternity
Insurance (2024) (hereinafter referred to as the 2024 Medicine Catalog) which has been effective
since January 1 2025.As of the date of the Report the Company had a total of 46 core products (12 Category A and
35 Category B) approved for launching and 16 strategic cooperation products (1 Category A and 15
Category B) included into the 2024 Medicine Catalog. Among them the launched Ustekinumab
Injection as well as the strategic cooperation products Etanercept Injection mulberry twig total
alkaloids Icaritin soft capsule and Ganagliflozin Proline Tablets of the Company have been included
into the “Negotiated Medicines During the Agreement Period” of the 2024 Medicine Catalog. The
Tacrolimus Granules has been included into “Competitive Price Medicines” of the 2024 Medicine
Catalog. For more details about the Company’s new products included into the 2024 Medicine
Catalog please refers to relevant announcement (Announcement No.: 2024-101) disclosed by the
Company on Cninfo (http://www.cninfo.com.cn).(II) As of the date of the Report the liquidation of Huadong Ningbo Medicine Co. Ltd. has been
substantially completed under court supervision with the disposal of core assets finalized while the
collection of remaining receivables is ongoing. The Company will actively advance the subsequent
liquidation process. The Company confirmed the investment income of 57557709.09 yuan in the
reporting period by applying the equity accounting method.(III) During the reporting period Zhongmei Huadong a wholly-owned subsidiary of the Company participated
in the bidding of the National Chinese Patent Medicine Procurement Alliance Volume-based Procurement (“VBP”)
organized by the National Chinese Patent Medicine Joint Procurement Office (“Joint Procurement Office”) for its
Bailing Tablet and Bailing Capsule. According to the Notice on Announcing the Winning Results of the
National Chinese Patent Medicine Procurement Alliance Volume-based Procurement and Notice on
the Preliminary Winning Results of Revived and Non-Quoted Representative Products in the National
Chinese Patent Medicine Procurement Alliance Volume-based Procurement released by the Joint
Procurement Office the Bailing Tablet was successfully selected as a quoted representative product
while the Bailing Capsule was selected as a non-quoted representative product in this VBP.
185Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section VII. Share Changes and Shareholders Information
I. Changes in shares
1. Table of changes in shares
Unit: share
Before the change Change in the period (+/-) After the change
Shares
converte
New Bonus
Quantity Ratio d from Others Sub-total Quantity Ratio
shares shares
capital
reserve
I. Shares
subject to
condition 3521360 0.20% 0 0 0 -1200040 -1200040 2321320 0.13%
al
restriction
1.
Shares
00.00%0000000.00%
held by
the state
2.
Shares
held by
state- 0 0.00% 0 0 0 0 0 0 0.00%
owned
corporatio
ns
3.
Shares
held by
33723600.19%000-1119040-111904022533200.13%
other
domestic
investors
Inclu
ding:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domestic
corporatio
ns
Shar
es held by
domestic 3372360 0.19% 0 0 0 -1119040 -1119040 2253320 0.13%
natural
persons
4.
Shares
1490000.01%000-81000-81000680000.00%
held by
overseas
186Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
investors
Inclu
ding:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
overseas
corporatio
ns
Shar
es held by
overseas 149000 0.01% 0 0 0 -81000 -81000 68000 0.00%
natural
persons
II. Shares
17509031751941
without 99.80% 0 0 0 1037240 1037240 99.87%
988228
restriction
1.
Common 1750903 1751941
99.80%0001037240103724099.87%
shares in 988 228
yuan
2.
Domestic
ally listed 0 0.00% 0 0 0 0 0 0 0.00%
foreign
shares
3.
Foreign
shares 0 0.00% 0 0 0 0 0 0 0.00%
listed
overseas
4.
00.00%0000000.00%
Others
III. Total
17544251754262
number of 100.00% 0 0 0 -162800 -162800 100.00%
348548
shares
Reasons for the changes in share capital
□ Applicable □ N/A
During the reporting period the Company completed two separate repurchases and cancellations
of restricted shares under the Restricted Share Incentive Scheme in 2022 involving 97800 shares and
65000 shares respectively. This resulted in the repurchase and cancellation of a total of 162800
restricted shares thereby reducing the Company’s total shares by 162800 shares.During the reporting period as the conditions were met for the first restriction release period of
the reserved restricted shares granted under the Restricted Share Incentive Scheme in 2022 the
Company completed the restriction release procedures for 192500 restricted shares. Upon attainment
of the conditions for the second restriction release period of the restricted shares granted under the
Restricted Share Incentive Scheme in 2022 for the first time the Company completed the restriction
release procedures for 1063740 restricted shares. Therefore the Company’s restricted shares under
187Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
the equity incentive scheme decreased by 1256240 shares due to the release of sales restrictions.During the reporting period due to the repurchase and cancellation of restricted shares under the
equity incentive scheme the Company’s restricted shares under the equity incentive scheme
decreased by 1419040 shares in total. During the reporting period the Company’s locked-up shares
for senior management increased by 219000 shares. During the reporting period due to the decrease
of restricted shares under the equity incentive scheme and the increase of locked-up shares for senior
management the Company’s shares with restricted sales conditions decreased by 1200040 shares.During the reporting period due to the repurchase and cancellation of restricted shares under the
equity incentive scheme the Company’s total shares without sales restrictions increased by 1037240
shares in total.Approval for changes in share capital
□ Applicable □ N/A
(1) On November 21 2023 the Company convened the 18th Meeting of the 10th Board of
Directors and the 12th Meeting of the 10th Board of Supervisors during which the Proposal on
Achievement of the Release of Restriction Conditions during the First Restriction Period of Restricted
Shares Granted for the First Time from the Restricted Share Incentive Scheme in 2022 the Proposal
on Adjusting the Repurchase Price of Shares under the Restricted Share Incentive Scheme in 2022
and the Proposal on Repurchase and Cancellation of Some Restricted Shares were reviewed and
approved. The Board of Directors determined that the Company has attained the conditions for lifting
the first restriction period of the initially granted restricted shares under the Restricted Share Incentive
Scheme in 2022. According to the authorization granted at the Company’s first Extraordinary General
Meeting of Shareholders’ meeting in 2022 the Board of Directors approved the release of 1220940
restricted shares for 108 incentive subjects under the first restricted sales period. The Board of
Directors also approved to repurchase and cancel 97800 shares of restricted shares that have been
granted but have not been released for four incentive subjects who are no longer eligible for incentives
due to resignation and two incentive subjects due to under performance during the first restricted sales
releasing period. The Company’s independent directors issued their opinions on related matters with
the verification opinions on related matters issued by the Board of Supervisors the related reports
prepared by lawyers and independent financial advisers. On the same day the Company disclosed a
related announcement on www.cninfo.com.cn.
(2) On December 1 2023 the Company disclosed the Hint on Circulation of Restricted Shares
Released during the Second Restriction Release Period of Restricted Shares Granted for the First
Time from the Restricted Share Incentive Scheme in 2022. The date of circulation of restricted shares
188Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
released during the first restriction release period of restricted shares granted for the first time under
the Restricted Share Incentive Scheme in 2022 is December 5 2023.
(3) On December 8 2023 the Company convened the second Extraordinary General Meeting
of Shareholders in 2023 reviewed and approved the Proposal on Repurchase and Cancellation of
Some Restricted Shares and the Proposal on Altering the Registered Capital and Amending the
Articles of Association. On the same day the Company disclosed the Announcement on Repurchase
and Cancellation of Some Restricted Shares to Reduce Registered Capital and Notify the Creditors.As of January 24 2024 the benchmark date for capital verification i.e. within forty-five days from
the date when the Company announced the reduction of capital no creditor requested the Company
to pay off its debts or provide corresponding guarantees.
(4) On March 28 2024 the Company disclosed the Announcement on Completion of Repurchase
and Cancellation of Some Restricted Shares. On March 26 2024 the Company completed the
procedures for repurchase and cancellation of 97800 restricted shares in Shenzhen Branch of China
Securities Depository and Clearing Co. Ltd.
(5) On May 30 2024 the Company convened the twenty-fourth Meeting of the tenth Board of
Directors and the sixteenth Meeting of the tenth Board of Supervisors during which the Proposal on
Adjusting the Repurchase Price in 2022 Restricted Share Incentive Scheme and Proposal on
Repurchase and Cancellation of Some Restricted Shares were reviewed and approved. The Board of
Directors approved to repurchase and cancel 65000 restricted shares that have been granted but have
not been released for five incentive subjects of firstly-granted or reserved shares who are no longer
eligible for incentives due to resignation. The Company’s Board of Supervisors issued verification
opinions on related matters with related reports prepared by lawyers and independent financial
advisers. On the same day the Company disclosed a related announcement on www.cninfo.com.cn.
(6) On June 18 2024 the Company convened the first Extraordinary General Meeting of
Shareholders in 2024 reviewed and approved the Proposal on Repurchase and Cancellation of Some
Restricted Shares and the Proposal on Increasing the Business Scope Changing Registered Capital
and Amending the Articles of Association. On the same day the Company disclosed the
Announcement on Repurchase and Cancellation of Some Restricted Shares to Reduce Registered
Capital and Notify the Creditors. As of August 5 2024 the benchmark date for capital verification
i.e. within forty-five days from the date when the Company announced the reduction of capital no
creditor requested the Company to pay off its debts or provide corresponding guarantees.
(7) On August 29 2024 the Company disclosed the Announcement on Completion of
Repurchase and Cancellation of Some Restricted Shares. On August 27 2024 the Company
189Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
completed the procedures for repurchase and cancellation of 65000 restricted shares in Shenzhen
Branch of China Securities Depository and Clearing Co. Ltd.
(8) On October 10 2024 the Company convened the 28th Meeting of the 10th Board of
Directors and the 18th Meeting of the tenth Board of Supervisors during which the Proposal on the
Fulfillment of Conditions for the First Restriction Release Period of Reserved Restricted Shares
Granted under the Restricted Share Incentive Scheme in 2022 was reviewed and approved. The Board
of Directors determined that the Company has attained the conditions for lifting the first restriction
period of the initially granted restricted shares under the Restricted Share Incentive Scheme in 2022.According to the authorization of the Company’s first Extraordinary General Meeting of Shareholders
in 2022 the Board of Directors approved to release of 192500 restricted shares for 18 incentive
subjects under the first restricted sales period. The Company’s Board of Supervisors issued the
verification opinions on related matters with related reports prepared by lawyers and independent
financial advisers. On the same day the Company disclosed a related announcement on
www.cninfo.com.cn.
(9) On October 24 2024 the Company disclosed the Hint on Circulation of Restricted Shares
Released during the First Restriction Release Period of Reserved Restricted Shares Granted under
the Restricted Share Incentive Scheme in 2022. The date of circulation of restricted shares released
during the first restriction release period of reserved restricted shares granted from the Restricted
Share Incentive Scheme in 2022 is October 28 2024.
(10) On November 25 2024 the Company convened the 30th Meeting of the 10th Board of
Directors and the 20th Meeting of the 10th Board of Supervisors during which the Proposal on the
Fulfillment of Conditions for the Second Restriction Release Period of Restricted Shares Granted for
the First Time under the Restricted Share Incentive Scheme in 2022 the Proposal on Adjusting the
Repurchase Price of Shares under the Restricted Share Incentive Scheme in 2022 and the Proposal
on Repurchase and Cancellation of Some Restricted Shares were reviewed and approved. The Board
of Directors determined that the Company has attained the conditions for lifting the second restriction
period of restricted shares granted for the first time under the Restricted Share Incentive Scheme in
2022. According to the authorization of the Company’s first Extraordinary General Meeting of
Shareholders in 2022 the Board of Directors approved the release of 1063740 restricted shares for
90 incentive subjects under the second restricted sales period. The Board of Directors also approved
to repurchase and cancel 185500 restricted shares that have been granted but have not been released
for one incentive subject who are no longer eligible for incentives due to resignation 16 incentive
subjects who are not eligible due to under performance during the second restricted sales releasing
period and one incentive subject of reserved restricted shares who is not eligible due to under
190Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
performance during the first restricted sales releasing period. The Company’s Board of Supervisors
issued the verification opinions on related matters with related reports prepared by lawyers and
independent financial advisers. On November 27 2024 the Company disclosed a related
announcement on Cninfo (www.cninfo.com.cn).
(11) On December 13 2024 the Company disclosed the Hint on Circulation of Restricted Shares
Released during the Second Restriction Release Period of Restricted Shares Granted for the First
Time under the Restricted Share Incentive Scheme in 2022. The date of circulation of restricted shares
released during the second restriction release period of restricted shares granted for the first time
under the Restricted Share Incentive Scheme in 2022 is December 16 2024.Transfer of shares
□ Applicable □ N/A
In March 2024 the Company submitted the relevant registration materials to Shenzhen Branch
of China Securities Depository and Clearing Co. Ltd. for 97800 shares repurchased and canceled
under the equity incentive scheme. In the same month Shenzhen Branch of China Securities
Depository and Clearing Co. Ltd. issued the Confirmation of Securities Transfer Registration to the
Company and the total share capital of the Company was reduced from 1754425348.00 shares to
1754327548.00 shares.
In August 2024 the Company submitted the relevant registration materials to Shenzhen Branch
of China Securities Depository and Clearing Co. Ltd. for 65000 shares repurchased and canceled
under the equity incentive scheme. In the same month Shenzhen Branch of China Securities
Depository and Clearing Co. Ltd. issued the Confirmation of Securities Transfer Registration to the
Company and the total share capital of the Company was reduced from 1754327548.00 shares to
1754262548.00 shares.
Impact of changes in share capital on the basic earnings per share diluted earnings per share for the most recent year and the most
recent period the net assets per share attributable to the Company's common shareholders and other financial indicators
□ Applicable □ N/A
If we calculate based on the total number of shares before changes in share capital of
1754425348 shares the Company’s basic earnings per share diluted earnings per share and net
assets per share attributable to common shareholders of the Company in 2024 were 2.0036 yuan/share
2.0035 yuan/share and 12.57 yuan/share respectively. If we calculate based on the total number of
shares after changes in share capital of 1754262548 shares the Company’s basic earnings per share
diluted earnings per share and net assets per share attributable to common shareholders of the
Company in 2024 were 2.0046 yuan/share 2.0034 yuan/share and 12.59 yuan/share respectively.
191Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Generally speaking the aforesaid changes in share capital did not impose material impacts on
the basic earnings per share diluted earnings per share and the net assets per share attributable to the
Company’s common shareholders and other financial indicators in 2024.Other disclosures the Company deems necessary or required by securities regulatory authorities
□ Applicable □ N/A
2. Changes in restricted shares
□ Applicable □ N/A
Unit: share
Number of
Number of newly Number of Number of
restricted increased restricted restricted
Name of Reasons for
shares at the restricted shares released shares at the Release date
shareholder restriction
beginning of shares during during the end of the
the period the current current period period
period
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Zhang Jianfei 60000.00 0 0 60000.00
senior the
management management of
shares held by
senior
management
Release of
restrictions
according to
Equity
relevant rules
incentive and
Zhang Jianfei 105000.00 0 45000.00 60000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Zhang Jianfei 7500.00 45000.00 0 52500.00
senior the
management management of
shares held by
senior
management
Release of
restrictions
Equity
according to
incentive and
Lv Liang 140000.00 0 60000.00 80000.00 relevant rules
restricted
of the
shares
Company’s
Restricted
192Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Lv Liang 10000.00 60000.00 0 70000.00
senior the
management management of
shares held by
senior
management
Release of
restrictions
according to
Equity
relevant rules
incentive and
Zhu Li 105000.00 0 45000.00 60000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Zhu Li 22500.00 0 0 22500.00
senior the
management management of
shares held by
senior
management
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Zhu Li 7500.00 45000.00 0 52500.00
senior the
management management of
shares held by
senior
management
Release of
restrictions
according to
Equity
relevant rules
incentive and
Wu Hui 105000.00 0 0 105000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
Locked-up according to
shares for relevant
Wu Hui 7500.00 0 0 7500.00
senior regulations on
management the
management of
shares held by
193Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
senior
management
Release of
restrictions
according to
Equity
relevant rules
incentive and
Xu Junfang 105000.00 0 45000.00 60000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Equity
LIU relevant rules
incentive and
DONGZHOU 105000.00 0 45000.00 60000.00 of the
restricted
JEFFERY Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Equity
relevant rules
incentive and
Chen Bo 70000.00 0 30000.00 40000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Chen Bo 5000.00 30000.00 0 35000.00
senior the
management management of
shares held by
senior
management
Release of
restrictions
according to
Equity
relevant rules
incentive and
Qiu Renbo 70000.00 0 30000.00 40000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Locked-up relevant
shares for regulations on
Qiu Renbo 5000.00 30000.00 0 35000.00
senior the
management management of
shares held by
senior
management
194Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Release of
restrictions
according to
Equity
relevant rules
incentive and
Zhou Zhaohua 71000.00 0 34000.00 37000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Equity
relevant rules
incentive and
Huang Yanshan 71000.00 0 34000.00 37000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release of
restrictions
according to
Equity
relevant rules
incentive and
Qin Xiangtian 71000.00 0 34000.00 37000.00 of the
restricted
Company’s
shares
Restricted
Share Incentive
Scheme in 2022
Release
according to
relevant rules
of the
Company’s
Restricted
Other directors Equity
Share Incentive
mid-level incentive
Scheme in
management restricted
2022 and
and core shares and
2378360.00 9000.00 854240.00 1370320.00 release of
technicians locked-up
restrictions
(business shares for
according to
specialists) of senior
relevant
the Company management
regulations on
the
management of
shares held by
senior
management
Total 3521360.00 219000.00 1256240.00 2321320.00 -- --
II. Issuance and listing of securities
1. Securities (excluding preferred shares) issued during the reporting period
□ Applicable □ N/A
195Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
2. Explanation on changes in the total number of shares the structure of shareholders and the structure of
assets and liabilities
□ Applicable □ N/A
During the reporting period the Company completed two separate repurchases and cancellations
of restricted shares under the Restricted Share Incentive Scheme in 2022 involving 97800 shares and
65000 shares respectively. This resulted in the repurchase and cancellation of a total of 162800
restricted shares thereby reducing the Company’s total shares by 162800 shares. Such repurchase
and cancellation will not bring substantial impact on the Company’s financial position and operating
results will not result in failure of the Company’s equity distribution in meeting the listing conditions
nor will it lead to changes in the control rights of the Company’s controlling shareholders and de
facto controllers.
3. Existent shares held by internal employees of the Company
□ Applicable □ N/A
III. Particulars about shareholders and the de facto controller
1. Number of shareholders and their shareholdings
Unit: share
Total Total
number of number of
common preference
Total Total number of
shareholder shareholder
number of preference shareholders
s at the end s with
common with restored voting rights
of the restored
shareholder at the end of the previous
83384 previous 75847 voting 0 0
s at the end month before the
month rights at the
of the disclosure of the annual
before the end of the
reporting report (if any) (see Note
disclosure reporting
period 8)
of the period (if
annual any) (see
report Note 8)
Particulars about shareholders with a shareholding ratio of over 5% or the top 10 shareholders (excluding shares lent through
conversions)
Total Pledged marked or
Number of Number of
shares held Changes in locked-up status
shares with shares held
Name of Nature of Shareholdi at the end the
trading without
shareholder shareholder ng ratio of the reporting Status of
restrictions trading Quantity
reporting period shares
held restriction
period
China Domestic
Grand non-state- 73093815 73093815 14707000
41.67% 0 0 Pledge
Enterprises owned 7 7 0
Inc. corporation
Hangzhou State- 16.42% 28800000 0 0 28800000 N/A 0
196Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Huadong owned 0 0
Medicine corporation
Group Co.Ltd.Hong Kong
Securities
Overseas
Clearing 2.66% 46638628 -1316304 0 46638628 N/A 0
corporation
Company
Ltd.China Domestic
Securities non-state-
1.26% 22186818 0 0 22186818 N/A 0
Finance owned
Co. Ltd. corporation
Industrial
and
Commercia
l Bank of
China
Limited -
China- Others 1.09% 19149643 -11930872 0 19149643 N/A 0
Europe
Healthcare
Hybrid
Securities
Investment
Fund
China
Constructio
n Bank
Corporatio
n - E Fund
CSI 300
Medicine Others 0.92% 16203132 3306200 0 16203132 N/A 0
and Health
Exchange
Open Index
Securities
Investment
Fund
Industrial
and
Commercia
l Bank of
China
Limited -
Huatai-
Others 0.86% 15055845 8416700 0 15055845 N/A 0
PineBridge
CSI 300
Exchange
Open Index
Securities
Investment
Fund
China
Constructio
n Bank Others 0.83% 14500000 -4500000 0 14500000 N/A 0
Co. Ltd.-
ICBC
197Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Credit
Suisse
Frontier
Medical
Equity
Securities
Investment
Fund
National
Social
Security Others 0.63% 10983604 -2636200 0 10983604 N/A 0
Fund -
Profile 0
China
Constructio
n Bank
Corporatio
n - E Fund
CSI 300
Others 0.59% 10433985 7971453 0 10433985 N/A 0
Trading
Open Index
Initiated
Securities
Investment
Fund
Strategic investors or
general corporations
become the top 10
N/A
shareholders due to the
placement of new shares
(if any) (see Note 3)
Explanation on associated
relationships or concerted The Company is unaware of whether the above-mentioned shareholders are related parties or
actions among the above- whether they are acting-in-concert parties with one another.mentioned shareholders
Description about the
above-mentioned
shareholders’
N/A
entrusting/being entrusted
with and waiving voting
rights
Explanation of special
account for repurchase
among the top 10 N/A
shareholders (if any) (see
Note 10)
Information about the top 10 shareholders without trading restrictions (excluding shares lent through conversions and locked-up
shares for senior management)
Type of shares
Number of shares without restriction held at the end of the reporting
Name of shareholders Type of
period Quantity
shares
Common
China Grand Enterprises 73093815
730938157 shares in
Inc. 7
yuan
Hangzhou Huadong Common 28800000
288000000
Medicine Group Co. Ltd. shares in 0
198Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
yuan
Common
Hong Kong Securities
46638628 shares in 46638628
Clearing Company Ltd.yuan
Common
China Securities Finance
22186818 shares in 22186818
Co. Ltd.yuan
Industrial and
Commercial Bank of
Common
China Limited - China-
19149643 shares in 19149643
Europe Healthcare Hybrid
yuan
Securities Investment
Fund
China Construction Bank
Corporation - E Fund CSI
Common
300 Medicine and Health
16203132 shares in 16203132
Exchange Open Index
yuan
Securities Investment
Fund
Industrial and
Commercial Bank of
China Limited - Huatai- Common
PineBridge CSI 300 15055845 shares in 15055845
Exchange Open Index yuan
Securities Investment
Fund
China Construction Bank
Co. Ltd.-ICBC Credit Common
Suisse Frontier Medical 14500000 shares in 14500000
Equity Securities yuan
Investment Fund
Common
National Social Security
10983604 shares in 10983604
Fund - Profile 0
yuan
China Construction Bank
Corporation - E Fund CSI Common
300 Trading Open Index 10433985 shares in 10433985
Initiated Securities yuan
Investment Fund
Description for affiliated
relationship or concerted
action among the top 10
shareholders with
unrestricted circulating The Company is not aware of whether the above-mentioned shareholders are related parties or
shares and between the whether they are acting-in-concert parties with one another.top 10 shareholders with
unrestricted circulating
shares and the top 10
shareholders
Description of the top 10
common shareholders’
At the end of the reporting period none of the Company’s top 10 common shareholders held shares
participation in margin
through margin trading and securities lending accounts.trading business (if any)
(see Note 4)
Share lending through conversion by shareholders holding over 5% shares the top 10 shareholders and the top 10 shareholders with
unrestricted circulating shares
199Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
□ Applicable □ N/A
Unit: share
Share lending through conversion by shareholders holding over 5% shares the top 10 shareholders and the top 10 shareholders
with unrestricted circulating shares
Shareholding in common Shareholding in common
Shares lent and not Shares lent and not
accounts and credit accounts and credit
returned at the beginning returned at the end of the
Name of accounts at the beginning accounts at the end of the
of the period period
shareholder of the period period
s (full Proportion Proportion Proportion Proportion
name) Total in total Total in total Total in total Total in total
quantity share quantity share quantity share quantity share
capital capital capital capital
China
Grand 73093815 73093815
41.66%00.00%41.67%00.00%
Enterprises 7 7
Inc.Hangzhou
Huadong
2880000028800000
Medicine 16.42% 0 0.00% 16.42% 0 0.00%
00
Group Co.Ltd.Hong Kong
Securities
Clearing 47954932 2.73% 0 0.00% 46638628 2.66% 0 0.00%
Company
Ltd.China
Securities
221868181.26%00.00%221868181.26%00.00%
Finance
Co. Ltd.Industrial
and
Commercia
l Bank of
China
Limited -
China- 31080515 1.77% 0 0.00% 19149643 1.09% 0 0.00%
Europe
Healthcare
Hybrid
Securities
Investment
Fund
China
Constructio
n Bank
Corporatio
n - E Fund
CSI 300
Medicine 12896932 0.74% 328500 0.02% 16203132 0.92% 0 0.00%
and Health
Exchange
Open Index
Securities
Investment
Fund
200Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Industrial
and
Commercia
l Bank of
China
Limited -
Huatai-
66391450.38%175000.00%150558450.86%00.00%
PineBridge
CSI 300
Exchange
Open Index
Securities
Investment
Fund
China
Constructio
n Bank
Co. Ltd.-
ICBC
Credit
Suisse 19000000 1.08% 0 0.00% 14500000 0.83% 0 0.00%
Frontier
Medical
Equity
Securities
Investment
Fund
National
Social
Security 13619804 0.78% 0 0.00% 10983604 0.63% 0 0.00%
Fund -
Profile 0
China
Constructio
n Bank
Corporatio
n - E Fund
CSI 300
24625320.14%128000.00%104339850.59%00.00%
Trading
Open Index
Initiated
Securities
Investment
Fund
Change in the top 10 shareholders or the top 10 common shareholders without trading restrictions compared with the end of the previous
period due to shares lent/returned through conversions
□ Applicable □ N/A
Whether the Company’s top 10 common shareholders or the top 10 common shareholders without trading restrictions have conducted
any agreed repurchase transaction during the reporting period
□Yes □ No
The Company’s top 10 common shareholders or the top 10 common shareholders without trading restrictions have not conducted any
agreed repurchase transaction during the reporting period.
201Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
2. Information about the Company’s controlling shareholder
Nature of controlling shareholder: Natural person holding
Type of controlling shareholder: Corporation
Legal
Name of controlling
representative/person Date of establishment Organization code Main business
shareholder
in charge
China Grand Investment
Hu Kaijun October 27 1993 91110000101690952K
Enterprises Inc. management
Shares held by the
controlling shareholder
in other listed
The other two listed companies controlled by China Grand Enterprises Inc. are Grand Industrial
companies through
Holding Co. Ltd. and Grand Pharmaceutical Group Limited.controlling or holding
during the reporting
period
Change of the controlling shareholder during the reporting period
□ Applicable □ N/A
No such case during the reporting period.
3. Information about the Company’s de facto controller & concerted parties
Nature of de facto controller: Domestic natural person holding
Type of de facto controller: Natural person
Whether the de facto
Relationship with the de facto controller has obtained the
Name of de facto controller Nationality
controller right of abode in another
country or region
Hu Kaijun Hu Kaijun China Yes
Chairman of the Board and General Manager of China Grand Enterprises Inc.; Chairman of the
Main occupation and position
Board and General Manager of Beijing Yuanda Huachuang Investments Co. Ltd.Share held by the de facto
controlling shareholder in The three listed companies controlled by de facto controller are Huadong Medicine Co. Ltd.domestic or overseas listed Grand Industrial Holding Co. Ltd. and China Grand Pharmaceutical and Grand Pharmaceutical
companies in the past ten Group Limited.years
Change of the de facto controller during the reporting period
□ Applicable □ N/A
No such case during the reporting period.Block diagram of the property right and control relationship between the Company and the de facto controller
202Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
The de facto controller controls the Company through a trust or other way of assets management
□ Applicable □ N/A
4. The amount of shares pledged by the Company’s controlling shareholder or the largest shareholder and
its parties acting in concert accounts for 80% of the total shares of the Company held by them
□ Applicable □ N/A
5. Other corporate shareholders with a shareholding ratio over 10%
□ Applicable □ N/A
Legal
Name of legal Main business or
representative/person Date of establishment Registered capital
representative management activities
in charge
The production and
processing of
compound wine
bagged tea and
donkey-hide glue
products (the branches
operate only with
licenses) and the state-
Hangzhou Huadong
owned asset operation
Medicine Group Co. Dong Jiabo December 21 1992 60000000 yuan
within the authorized
Ltd.scope of the municipal
government; industrial
investment; wholesale
and retail: chemical
raw materials and
products (except
dangerous chemicals
and precursor
203Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
chemicals) package
materials medical
intermediates (except
dangerous chemicals
and precursor
chemicals); other legal
items that submission
for approval is not
required.
6. Reduction of restricted shares held by controlling shareholder de facto controller restructuring parties
and other commitment subjects
□ Applicable □ N/A
IV. Progress of share repurchase during the reporting period
Progress of share repurchase
□ Applicable □ N/A
Proportion of
repurchased
Proposed
Number of Number of shares to the
Scheme Proportion in repurchase Proposed
shares to be Purpose of shares total shares
disclosure total share amount (ten repurchase
repurchased repurchase repurchased covered by
date capital thousand duration
(share) (share) the Equity
yuan)
Incentive
Plan (if any)
45 days after
the Repurchase
Company’s and
Board of cancellation
June 15 Directors of restricted
650000.004%159.931344650001.41%
2024 disclosed the shares under
creditors equity
notification incentive
announceme scheme
nt
45 days after
the Repurchase
Company’s and
Board of cancellation
November Directors of restricted
1855000.01%462.19853400.00%
27 2024 disclosed the shares under
creditors equity
notification incentive
announceme scheme
nt
Note: On March 28 2025 the Company disclosed the Announcement on Completion of Repurchase and Cancellation of Some
Restricted Shares. On March 26 2025 the Company completed the procedures for repurchase and cancellation of 185500 restricted
shares in Shenzhen Branch of China Securities Depository and Clearing Co. Ltd.Progress of reducing repurchased shares through centralized bidding
□ Applicable □ N/A
204Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section VIII. Information on Preferred Shares
□ Applicable □ N/A
No such case during the reporting period.
205Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section IX. Information on Bonds
□ Applicable □ N/A
206Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Section X. Financial Report
I. Audit report
Audit Opinion Unmodified unqualified audit opinion
Audit Report sign-off Date April 16 2025
Audit Institution Name Pan-China Certified Public Accountants LLP
Audit Report Number T. J. S. (2025) No. 5206
Name of Certified Public Accountants Hu Yanhua and Chen Xiaodong
Text of the Audit Report
Audit Report
T. J. S. (2025) No. 5206
Shareholders of Huadong Medicine Co. Ltd.:
I. Audit Opinion
We audited the financial statements of Huadong Medicine Co. Ltd. (hereinafter referred to as
“Huadong Medicine”) including the consolidated and the parent company’s balance sheets as at
December 31 2024 the consolidated and the parent company’s income statements for the year 2024
the consolidated and the parent company’s cash flow statements the consolidated and the parent
company’s statements of changes in owners’ equity and the notes to relevant financial statements.In our opinion the attached financial statements are prepared in accordance with the accounting
standards for business enterprises in all material aspects and fairly reflect the consolidated and the
parent company's financial condition of Huadong Medicine as at December 31 2024 as well as the
consolidated and the parent company’s operating results and cash flows in 2024.II. Basis for Formation of the Audit Opinion
We conducted our audit in accordance with the China Registered Accountants Auditing Standards.Our responsibilities under those standards are further described in the Auditor's Responsibilities for
the Audit of the Financial Statements section of our report. In accordance with the code of
207Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
professional ethics for certified public accountants in China we are independent of Huadong
Medicine and have fulfilled other responsibilities in respect of professional ethics. We believe that
the audit evidence we have obtained is sufficient and appropriate providing a basis for auditor’s
opinion.III. Key audit matters
The key audit matters are those we consider most important to the audit of the financial statements
for the current period in our professional judgment. The response to these items is based on an audit
of the financial statements as a whole and the formation of auditor’s opinion. We do not comment on
these items separately.(I) Revenue recognition
1. Description
For details of relevant information please refer to Notes V (37) VII (61) and XVIII (6) to the
Financial Statements.The operating revenue of Huadong Medicine mainly comes from the production and sales of
medicines. The operating revenue of Huadong Medicine in 2024 was 41.906 billion yuan.As the operating revenue is one of the key performance indicators of Huadong Medicine there may
be inherent risks for the management of Huadong Medicine (hereinafter referred to as the
“Management”) to achieve specific goals or expectations through inappropriate revenue recognition.Therefore we identified revenue recognition as a key audit matter.
2. Audit response
For revenue recognition the audit procedures we implemented mainly include:
(1) Understanding the key internal controls related to revenue recognition evaluating the design of
these controls determining whether they are implemented and testing the operating effectiveness of
relevant internal controls;
(2) Reviewing the sales contract understanding the main contract terms or conditions and evaluating
whether the revenue recognition method is appropriate;
(3) Analyzing the operating revenue and gross profit rate by month product region etc. identifying
whether there are significant or abnormal fluctuations and ascertaining the reasons for the
fluctuations;
208Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(4) For domestic sales revenue choosing supporting documents for checked items including sales
contracts orders sales invoices accompanying documents and receipt forms shipping documents
and payment receipts. For overseas revenue obtaining e-port information and checking with the
accounting records and checking the sales contracts export declaration forms bills of lading sales
invoices and other supporting documents by sampling;
(5) In combination with accounts receivable confirmation confirming the current sales of sampled
items;
(6) Carrying out a cut-off test and evaluating whether the operating revenue is recognized within an
appropriate period;
(7) Acquiring the sales return records after the balance sheet date and checking whether there is any
incompliance of revenue recognition conditions on balance sheet date; and
(8) Checking whether the information relating to operating revenue has been properly presented in
the financial statements.(II) Impairment of accounts receivable
1. Description
For details of relevant information please refer to Notes V (11) V (13) and VII (5) to the Financial
Statements.As of December 31 2024 the book balance of accounts receivable of Huadong Medicine was 8.906
billion yuan the bad debt reserve was 481 million yuan and the book value was 8.425 billion yuan.Based on the credit risk characteristics of various accounts receivable and the individual account
receivable or the combination of accounts receivable the Management measured its loss reserve
according to the expected credit loss equivalent to the entire duration. Due to the significant amount
of accounts receivable and significant judgment of the Management involved in the impairment of
accounts receivable we determined the impairment of accounts receivable as a key audit matter.
2. Audit response
For the impairment of accounts receivable the audit procedures we implemented mainly include:
(1) Understanding the key internal controls related to the impairment of accounts receivable
evaluating the design of these controls determining whether they are implemented and testing the
operating effectiveness of relevant internal controls;
209Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(2) With regard to the Management’s forecast on bad debt reserve in previous years reviewing the
results or follow-up forecasts made by the Management;
(3) Reviewing the relevant considerations and objective evidence of the Management's credit risk
assessment of accounts receivable and evaluating whether the Management has properly identified
the credit risk characteristics of various accounts receivable;
(4) For the accounts receivable with expected credit loss measured on an individual basis reviewing
the Management’s forecast of the expected cash flow received evaluating the rationality relevance
and reliability of the key assumptions used in the forecast and checking with the external evidence
obtained;
(5) For the accounts receivable with expected credit loss measured based on a portfolio basis
evaluating the rationality of the Management’s division of portfolios by credit risk characteristics;
evaluating the rationality of the expected credit loss rate of accounts receivable determined by the
Management including the rationality of major assumptions used and the rationality relevance and
reliability of data; checking the accuracy of the Management’s calculation of bad debt reserve;
(6) Evaluating the rationality of the Management’s bad debt reserve in combination with the accounts
receivable confirmation results and repayment after the period; and
(7) Checking whether the information relating to the impairment of accounts receivable has been
properly presented in the financial statements.(III) Goodwill impairment
1. Description
For details of relevant information please refer to Notes V (6) V (30) and VII (27) to the Financial
Statements.As of December 31 2024 the original book value of goodwill of Huadong Medicine was 2.918 billion
yuan the impairment reserve was 5 million yuan and the book value was 2.913 billion yuan.The Management conducted the goodwill impairment test in combination with the relevant asset
group or asset portfolio and the recoverable amount of the relevant asset group or asset portfolio was
determined by the present value of the expected future cash flow or the net amount of fair value minus
the disposal expenses. Due to the significant amount of goodwill and the significant judgment of the
210Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Management involved in the goodwill impairment test we determined the goodwill impairment as a
key audit matter.
2. Audit response
For the goodwill impairment the audit procedures we implemented mainly include:
(1) Understanding the key internal controls related to goodwill evaluating the design of these controls
determining whether they are implemented and testing the operating effectiveness of relevant internal
controls;
(2) With regard to the Management’s forecast on present value of the expected future cash flow in
previous years reviewing the results or follow-up forecasts made by the Management;
(3) Understanding and evaluating the competence professional quality and objectivity of external
valuation experts employed by the Management;
(4) Evaluating the rationality and consistency of the Management’s methods in the impairment test;
(5) Evaluating the rationality of the key assumptions adopted by the Management in the impairment
test and verifying whether the relevant assumptions are consistent with the overall economic
environment industry conditions operating conditions historical experience operating plans
approved budgets meeting minutes and other assumptions used by the Management in relation to
the financial statements;
(6) Testing the accuracy completeness and relevance of the data used by the Management in the
impairment test and rechecking the internal consistency of the relevant information in the impairment
test;
(7) Testing whether the Management’s calculation of the present value of expected future cash flows
is accurate;
(8) Checking whether the information relating to the goodwill impairment has been properly
presented in the financial statements.IV. Other information
The Management is responsible for other information including information covered in the annual
report but not the financial statements and the auditor report.The auditor’s opinion on the financial statements does not cover other information and we do not
publish any form of corroborating conclusions on other information.
211Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
In conjunction with our audit of the financial statements it is our responsibility to read other
information and in doing so consider whether other information is materially inconsistent with the
financial statements or what we learned during the audit or appears to be materially misrepresented.Based on the work we have performed if we determine that other information is materially
misrepresented we should report that fact. In this regard we have nothing to report.V. Responsibility of the Management and governance for the financial statements
The Management is responsible for preparing the financial statements in accordance with the
accounting standards for business enterprises to achieve fair presentation and for designing
implementing and maintaining the necessary internal controls so that the financial statements are free
from material misstatement due to fraud or error.In preparing the financial statements the Management is responsible for assessing Huadong
Medicine’s competence for continuing operations disclosing matters relating to continuing
operations (if applicable) and applying the going concern assumption unless liquidation and
termination are planned or there is no other realistic alternative.Those charged with governance of Huadong Medicine is responsible for overseeing the Company’s
financial reporting process.VI. Responsibility of certified public accountants on the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement whether due to fraud or error and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with auditing standards will always detect a material
misstatement when it exists. Misstatements whether caused by fraud or error are considered material
if individually or in the aggregate they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.As part of the audit in accordance with the audit standards we exercise professional judgment and
maintain professional skepticism throughout the process. We also:
(I) Identify and assess the risks of material misstatement of the financial statements whether due to
fraud or error design and perform audit procedures responsive to those risks and obtain audit
212Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than that of not detecting one resulting from
error as fraud may involve collusion forgery omissions misrepresentations or the override of
internal control.(II) Understand the internal control associated with the audit to design appropriate audit procedures.(III) Evaluate the appropriateness of accounting policies used and the rationality of accounting
estimates and related disclosures made by the Management.(IV) Conclude on the appropriateness of using the going concern assumption by the Management
and conclude based on the audit evidence obtained whether a material uncertainty exists related to
events or conditions that may cast significant doubt on Huadong Medicine's ability to continue as a
going concern. If we conclude that a material uncertainty exists the auditing standards require us to
draw attention to users of the financial statements in our auditor's report to the related disclosures in
the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our audit report. However future events or
conditions may cause Huadong Medicine to cease to continue as a going concern.(V) Evaluate the overall presentation structure and content of the financial statements including
whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence on the financial information of entities or
business activities of Huadong Medicine to express auditor’s opinions on the financial statements.We are responsible for the guidance supervision and implementation of group audits and take full
responsibility for the auditor’s opinions.We communicated with those charged with governance regarding among other matters the planned
scope and timing of the audit and significant audit findings including any significant deficiencies in
internal control that we identify during our audit.We also provided those charged with governance with a statement that we have complied with the
professional ethical requirements associated with our independence and communicated to those
charged with governance all relationships and other matters that may reasonably be deemed to affect
our independence as well as relevant precautions (if applicable).
213Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
From the matters communicated to those charged with governance we determine which matters are
most important to the current financial statement audit and thus constitute key audit matters. We
describe these matters in our auditor report unless laws and regulations prohibit their public
disclosure or in rare cases if it is reasonably expected that the negative consequences of
communicating a matter in the audit report outweigh the benefits in the public interest we determine
that the matter should not be communicated in the audit report.Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: Hu Yanhua
(Project partner)
Hangzhou China Chinese Certified Public Accountant: Chen Xiaodong
April 16 2025
II. Financial statements
The unit of statements in the financial notes is: RMB yuan.
1. Consolidated balance sheet
Prepared by: Huadong Medicine Co. Ltd.December 31 2024
Unit: yuan
Item Ending balance Opening balance
Current assets:
Monetary funds 5276440245.36 4663378011.64
Settlement reserve
Lending funds
Trading financial assets
Derivative financial assets 16434493.97
Notes receivable 10696341.24 6812089.97
Accounts receivable 8425358862.23 7455250690.83
Receivables financing 1677636420.09 1434366300.69
Prepayments 400291510.71 279207655.40
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve receivable
214Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Other receivables 402870356.31 291135104.33
Including: Interests receivable
Dividends receivable 223608.84 2623608.84
Financial assets purchased for resale
Inventories 4776397278.01 4290214266.03
Including: Data resource
Contract assets
Assets held for sale
Other non-current assets due within one
year
Other non-current assets 82099747.34 59881757.08
Total current assets 21051790761.29 18496680369.94
Non-current assets:
Loans and prepayments issuance
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 1543646404.76 1535907809.85
Other equity instrument investments 603232766.22 565223872.68
Other non-current financial assets
Investment real estate 11842042.67 12746181.87
Fixed assets 4422300775.01 4140144817.51
Construction in progress 836739481.60 913147212.17
Productive biological assets
Oil and gas assets
Right-of-use Assets 149504562.99 151175007.16
Intangible Assets 3644956428.71 2333787357.62
Including: Data resource
Development expenditure 1033392377.69 992532091.86
Including: Data resource
Goodwill 2913334523.63 2598696062.31
Long-term Deferred Expenses 22601572.13 20053854.34
Deferred income tax assets 221848889.06 187808574.44
Other non-current assets 1423855781.39 1561458605.23
Total non-current assets 16827255605.86 15012681447.04
Total assets 37879046367.15 33509361816.98
Current liabilities:
Short-term borrowings 2312339143.21 822380292.37
Borrowing from the central bank
Borrowing from other banks and other
financial institutions
Trading financial liabilities
Derivative financial liabilities
215Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Notes payable 2576685923.31 1727420960.30
Accounts payable 4467770810.96 4374832979.95
Advances from customers 1115173.00 1393551.48
Contract liabilities 173609109.58 135459275.17
Financial assets sold for repurchase
Deposits from customers and due from
banks
Receipts for buying and selling securities
as proxy
Receipts for underwriting securities as
proxy
Employee benefit payable 417133101.11 359148474.25
Taxes payable 645950867.22 489385055.57
Other payables 2849833595.48 2518621382.87
Including: Interests payable
Dividends payable 125024219.60 143024219.60
Handling fees and commissions payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
330528920.89359342623.38
year
Other current liabilities 19268728.25 14621494.85
Total current liabilities 13794235373.01 10802606090.19
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 14262841.05 520759460.07
Bonds payable
Including: Preferred shares
Perpetual bond
Lease liabilities 71857938.46 56695158.59
Long-term payables 24715073.51 107251248.59
Long-term employee benefits payable
Estimated liabilities 28985982.19 37184074.06
Deferred income 183855718.48 171056435.34
Deferred income tax liabilities 197378528.33 184373974.04
Other non-current liabilities 47170650.00
Total non-current liabilities 521056082.02 1124491000.69
Total liabilities 14315291455.03 11927097090.88
Owners’ equity:
Share capital 1754262548.00 1754425348.00
Other equity instruments
Including: Preferred shares
Perpetual bond
Capital reserves 2550780602.69 2446313774.82
Minus: treasury stock 46804116.67 84519369.07
216Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Other comprehensive income -50598204.17 -40341544.18
Special reserves
Surplus reserves 1395568477.98 1277779972.18
General risk reserve
Undistributed profit 17456842089.53 15693951574.91
Total owners’ equity attributable to
23060051397.3621047609756.66
owners of the parent company
Minority interests 503703514.76 534654969.44
Total owner’s equity 23563754912.12 21582264726.10
Total liabilities & owners’ equity 37879046367.15 33509361816.98
Legal representative: Lv Liang Officer in charge of accounting: Lv Liang Officer in charge of the Accounting Department: Qiu
Renbo
2. Balance sheet of the parent company
Unit: yuan
Item Ending balance Opening balance
Current assets:
Monetary funds 3983448123.02 3202969593.32
Trading financial assets
Derivative financial assets
Notes receivable 10696341.24 6812089.97
Accounts receivable 4662202972.85 4232306149.56
Receivables financing 541117016.27 257987672.16
Prepayments 188207568.34 104299584.06
Other receivables 3038802968.09 1826331443.42
Including: Interests receivable
Dividends receivable 83200000.00 95200000.00
Inventories 2503932187.23 2064496012.45
Including: Data resource
Contract assets
Assets held for sale
Other non-current assets due within one
year
Other non-current assets
Total current assets 14928407177.04 11695202544.94
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 6006736952.86 5961344825.40
Other equity instrument investments 10080000.00 10080000.00
Other non-current financial assets
Investment real estate 6260645.98 6734389.40
Fixed assets 145702063.07 131994767.68
Construction in progress 1191031.68 423088.16
217Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Productive biological assets
Oil and gas assets
Right-of-use Assets 5766631.35 9101653.07
Intangible Assets 133847061.52 160438646.19
Including: Data resource
Development expenditure
Including: Data resource
Goodwill
Long-term Deferred Expenses 3873974.93
Deferred income tax assets 57148901.05 53563924.40
Other non-current assets 309896009.87 250146911.16
Total non-current assets 6680503272.31 6583828205.46
Total assets 21608910449.35 18279030750.40
Current liabilities:
Short-term borrowings 1281604281.83 425185172.23
Trading financial liabilities
Derivative financial liabilities
Notes payable 1017985699.91 500551829.47
Accounts payable 2957801912.13 3128538765.74
Advances from customers
Contract liabilities 74839113.94 56745329.30
Employee benefit payable 13536480.77 13664428.10
Taxes payable 84182562.88 67429440.31
Other payables 4502104700.45 1970918606.32
Including: Interests payable
Dividends payable 224219.60 224219.60
Liabilities held for sale
Non-current liabilities due within one
51064784.1441336796.82
year
Other current liabilities 9618803.23 6234741.10
Total current liabilities 9992738339.28 6210605109.39
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bond
Lease liabilities 3610383.31
Long-term payables
Long-term employee benefits payable
Estimated liabilities
Deferred income 30435411.27 33001286.19
Deferred income tax liabilities
Other non-current liabilities 47170650.00
218Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Total non-current liabilities 30435411.27 83782319.50
Total liabilities 10023173750.55 6294387428.89
Owners’ equity:
Share capital 1754262548.00 1754425348.00
Other equity instruments
Including: Preferred shares
Perpetual bond
Capital reserves 2346443494.22 2329361969.66
Minus: treasury stock 46804116.67 84519369.07
Other comprehensive income
Special reserves
Surplus reserves 1473424237.42 1355635731.62
Undistributed profit 6058410535.83 6629739641.30
Total owner’s equity 11585736698.80 11984643321.51
Total liabilities & owners’ equity 21608910449.35 18279030750.40
3. Consolidated income statement
Unit: yuan
Item 2024 2023
I. Total operating revenue 41905707385.91 40623782520.43
Including: Operating revenue 41905707385.91 40623782520.43
Interests income
Premiums earned
Handling fees and commissions received
II. Total operating cost 37493020210.87 37081915122.91
Including: Operating cost 27988547185.82 27461731573.59
Interest expenses
Handling fees and commissions paid
Surrender value
Net payment of insurance claims
Net appropriation of policy reserve
Policy dividends paid
Reinsurance expenses
Taxes and surcharges 250638795.43 232590269.39
Sales expenses 6408522136.28 6645411414.21
Administrative expenses 1397388188.96 1420188961.59
R&D expenses 1425659218.47 1270803119.96
Financial expenses 22264685.91 51189784.17
Including: Interest expenses 101203829.32 119514554.96
Interests income 103997474.21 94045345.71
Add: Other income 199889752.54 172492861.66
Investment income (Losses are indicated
-129190728.94-219713034.52
by “-”)
Including: Investment gains (losses) in
associated enterprise and joint-venture -68453149.32 -188390620.91
enterprise
219Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Gains on the derecognition of financial
assets measured at amortized cost
Gains on exchange (Losses are indicated
by “-”)
Gains on net exposure hedging (Losses
are indicated by “-”)
Gains from changes in fair values
-13756372.80
(Losses are indicated by “-”)
Credit impairment losses (Losses are
-112179415.60-25763586.64
indicated by “-”)
Assets impairment losses (Losses are
-41006057.96-6519844.03
indicated by “-”)
Asset disposal income (Losses are
-5463399.184319797.54
indicated by “-”)
III. Operating profit (Losses are indicated
4324737325.903452927218.73
by “-”)
Add: Non-operating revenue 88009280.04 50548825.60
Minus: Non-operating expenses 111232726.47 37490279.21
IV. Total profit (Total losses are indicated
4301513879.473465985765.12
by “-”)
Minus: Income tax expense 807328247.71 619588815.15
V. Net profit (Net losses are indicated by
3494185631.762846396949.97
“”)
(I) Classification by business continuity
1. Net profit from continuing operations
3494185631.762846396949.97
(Net losses are indicated by “-”)
2. Net profit at terminational operation
(Net losses are indicated by “-”)
(II) Classification by attribution of
ownership
1. Net profit attributable to shareholders
3512104678.062838860542.80
of the parent company
2. Profit or loss attributable to minority
-17919046.307536407.17
shareholders
VI. Other comprehensive income (net of
-10256659.9950506468.03
income tax)
Other comprehensive income attributable
to owners of the parent company (net of -10256659.99 50506468.03
tax)
(I) Other comprehensive income that
-6719404.723419879.00
cannot be reclassified into gains/losses
1. Changes in remeasurement on the
defined benefit plan
2. Other comprehensive income that
cannot be reclassified into gains/losses
under equity method
3. Changes in fair value of other equity
-6719404.723419879.00
instrument investments
4. Changes in fair value of credit risk of
the enterprise
5. Others
(II) Other comprehensive income to be
-3537255.2747086589.03
reclassified into gains/losses
220Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
1. Other comprehensive income that can
be reclassified into gains/losses under 5371371.90
equity method
2. Changes in fair value of other debt
investments
3. Amount of financial assets reclassified
into other comprehensive income
4. Credit impairment reserve of other
debt investments
5. Cash flow hedging reserve
6. Exchange differences from translation
-3576433.5626873320.16
of foreign currency financial statements
7. Others 39178.29 14841896.97
Net amount after tax of other
comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 3483928971.77 2896903418.00
Total comprehensive income attributable
3501848018.072889367010.83
to owners of the parent company
Total comprehensive income attributable
-17919046.307536407.17
to minority shareholders
VIII. Earnings per share (EPS)
(I) Basic EPS 2.0046 1.6219
(II) Diluted EPS 2.0034 1.6207
As for business merger under the same control in the current period the net profit generated by the merged party before the was yuan
and that generated during the previous period was yuan.Legal representative: Lv Liang Officer in charge of accounting: Lv Liang Officer in charge of the Accounting Department:
Qiu Renbo
4. Income statement of the parent company
Unit: yuan
Item 2024 2023
I. Total operating revenue 22701692653.34 22045386635.53
Less: Total operating cost 21468483836.91 20820391664.50
Taxes and surcharges 34372824.18 34048780.98
Sales expenses 563448468.46 650742977.03
Administrative expenses 201553978.00 225726564.80
R&D expenses
Financial expenses 6960607.59 -48770456.27
Including: Interest expenses 79164895.14 46882329.40
Interests income 85371844.79 75742432.47
Add: Other income 12712621.78 18760191.87
Investment income (Losses are indicated
1137666059.921152151267.18
by “-”)
Including: Investment gains (losses) in
associated enterprise and joint-venture 57997379.26 -12860749.73
enterprise
Gains on the derecognition of financial
assets measured at amortized cost
(Losses are indicated by “-”)
221Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Gains on net exposure hedging (Losses
are indicated by “-”)
Gains from changes in fair values
(Losses are indicated by “-”)
Credit impairment losses (Losses are
-244452303.69-146582684.69
indicated by “-”)
Assets impairment losses (Losses are
indicated by “-”)
Asset disposal income (Losses are
2112197.503563127.07
indicated by “-”)
II. Operating profit (Losses are indicated
1334911513.711391139005.92
by “-”)
Add: Non-operating revenue 170142.55 50286.42
Minus: Non-operating expenses 29837635.14 6496080.94
III. Total profit (Total losses are indicated
1305244021.121384693211.40
by “-”)
Minus: Income tax expense 127358963.15 119023884.42
IV. Net profit (Net losses are indicated by
1177885057.971265669326.98
“”)
(I) Net profit from continuous operations
1177885057.971265669326.98
(Net losses are indicated by “-”)
(II) Net profit from discontinued
operations (Net losses are indicated by
“”)
V. Other comprehensive income net of
43.94
income tax
(I) Other comprehensive income that
43.94
cannot be reclassified into gains/losses
1. Changes in remeasurement on the
defined benefit plan
2. Other comprehensive income that
cannot be reclassified into gains/losses 43.94
under equity method
3. Changes in fair value of other equity
instrument investments
4. Changes in fair value of credit risk of
the enterprise
5. Others
(II) Other comprehensive income to be
reclassified into gains/losses
1. Other comprehensive income that can
be reclassified into gains/losses under
equity method
2. Changes in fair value of other debt
investments
3. Amount of financial assets reclassified
into other comprehensive income
4. Credit impairment reserve of other
debt investments
5. Cash flow hedging reserve
6. Exchange differences from translation
of foreign currency financial statements
7. Others
VI. Total comprehensive income 1177885057.97 1265669370.92
222Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
VII. Earnings per share (EPS)
(I) Basic EPS
(II) Diluted EPS
5. Consolidated cash flow statement
Unit: yuan
Item 2024 2023
I. Cash flows from operating activities:
Cash received from the sale of goods and
43401956267.8043564701238.84
the rendering of services
Net increase in customer deposits and
due from banks
Net increase in borrowing from the
central bank
Net increase in borrowing from other
financial institutions
Cash from the premium of the original
insurance policy
Net cash from reinsurance
Net increase in deposits and investment
of the insured
Cash from interests handling fees and
commissions
Net increase in borrowing from other
banks and other financial institutions
Net increase in funds for repurchase
Net cash received for buying and selling
securities as proxy
Receipts of tax refund 11647283.25 60827371.05
Other cash receipts in relation to
1556579035.21544629208.52
operating activities
Subtotal of cash inflows from operating
44970182586.2644170157818.41
activities
Cash payments for goods purchased and
28195403709.5127689294593.31
services received
Net increase in customer loans and
prepayments
Net increase in deposits of central bank
and due from banks
Cash payments for original insurance
claims
Net increase in lending funds to other
banks and other financial institutions
Cash payments for interests handling
fees and commissions
Cash payments for policy dividends
Cash payments to and on behalf of
4755191780.743912660863.10
employees
Payments of various types of taxes 2574487192.25 2612807407.43
Other cash payments in relation to
5696171021.416026178247.87
operating activities
223Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Subtotal of cash outflows for operating
41221253703.9140240941111.71
activities
Net cash flows from operating activities 3748928882.35 3929216706.70
II. Cash flows from investing activities
Cash receipts from recovery of
1000000.002085916.63
investments
Cash receipts from investment income 45230192.98 94516496.70
Net cash receipts from disposal of fixed
assets intangible assets and other long- 19759145.85 10850236.05
term assets
Net cash from disposal of subsidiaries
and other business units
Other cash receipts in relation to
261016721.64136030146.40
investing activities
Subtotal of cash inflows from investing
327006060.47243482795.78
activities
Cash payments for purchase and
construction of fixed assets intangible 1727864860.12 1606618467.79
assets and other long-term assets
Cash payments for investment 69176613.40 221474250.00
Net increase in pledge loans
Net cash paid for acquisition of
461958981.61162367804.50
subsidiaries and other business units
Other cash payments in relation to
238277274.343574216.00
investing activities
Subtotal of cash outflows for investing
2497277729.471994034738.29
activities
Net cash flows from investing activities -2170271669.00 -1750551942.51
III. Cash flows from financing activities:
Cash receipts from absorbing
35625300.00
investments
Including: Cash receipts from capital
contributions from minority owners of 25000000.00
subsidiaries
Cash receipts from borrowing 4559775187.36 4662018278.15
Other cash receipts in relation to
690739328.24401726192.50
financing activities
Subtotal of cash inflows from financing
5250514515.605099369770.65
activities
Cash repayments of borrowings 3571431254.37 5353842747.11
Cash payments for distribution of
dividends or profits or settlement of 1733453239.02 613814534.49
interest expenses
Including: Dividends and profits paid by
31275554.9619599647.35
subsidiaries to minority shareholders
Other cash payments in relation to
695294341.33525073835.03
financing activities
Subtotal of cash outflows for financing
6000178834.726492731116.63
activities
Net cash flows from financing activities -749664319.12 -1393361345.98
IV. Impact of foreign exchange rate
-47001718.465945890.37
changes on cash and cash equivalents
V. Net increase in cash and cash
781991175.77791249308.58
equivalents
Add: Opening balance of cash and cash
4208160010.913416910702.33
equivalents
224Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
VI. Closing balance of cash and cash
4990151186.684208160010.91
equivalents
6. Cash flow statement of the parent company
Unit: yuan
Item 2024 2023
I. Cash flows from operating activities:
Cash received from the sale of goods and
23867991537.6423572571460.53
the rendering of services
Receipts of tax refund 3178131.15
Other cash receipts in relation to
1137241351.4396137098.06
operating activities
Subtotal of cash inflows from operating
25005232889.0723671886689.74
activities
Cash payments for goods purchased and
23459850561.0522245449767.50
services received
Cash payments to and on behalf of
337972950.15313589350.89
employees
Payments of various types of taxes 330934993.91 393222221.95
Other cash payments in relation to
1385309995.99529329348.56
operating activities
Subtotal of cash outflows for operating
25514068501.1023481590688.90
activities
Net cash flows from operating activities -508835612.03 190296000.84
II. Cash flows from investing activities
Cash receipts from recovery of
20914.50
investments
Cash receipts from investment income 1064716374.04 1096472035.41
Net cash receipts from disposal of fixed
assets intangible assets and other long- 2722222.40 4173691.06
term assets
Net cash from disposal of subsidiaries
and other business units
Other cash receipts in relation to
1433678028.272176393914.80
investing activities
Subtotal of cash inflows from investing
2501116624.713277060555.77
activities
Cash payments for purchase and
construction of fixed assets intangible 110849881.62 24448648.76
assets and other long-term assets
Cash payments for investment 35000000.00 468375000.00
Net cash paid for acquisition of
subsidiaries and other business units
Other cash payments in relation to
2546728071.362793998540.00
investing activities
Subtotal of cash outflows for investing
2692577952.983286822188.76
activities
Net cash flows from investing activities -191461328.27 -9761632.99
III. Cash flows from financing activities:
Cash receipts from absorbing
10625300.00
investments
Cash receipts from borrowing 2962976876.04 3846416549.97
Other cash receipts in relation to
12757177851.584365496086.39
financing activities
Subtotal of cash inflows from financing 15720154727.62 8222537936.36
225Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
activities
Cash repayments of borrowings 2217976876.04 3852457799.76
Cash payments for distribution of
dividends or profits or settlement of 1661513723.84 531097864.52
interest expenses
Other cash payments in relation to
10147300140.313102315256.45
financing activities
Subtotal of cash outflows for financing
14026790740.197485870920.73
activities
Net cash flows from financing activities 1693363987.43 736667015.63
IV. Impact of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
993067047.13917201383.48
equivalents
Add: Opening balance of cash and cash
2946999653.102029798269.62
equivalents
VI. Closing balance of cash and cash
3940066700.232946999653.10
equivalents
7. Consolidated statement of changes in owners' equity
Amount in the current period
Unit: yuan
2024
Owners' equity attributable to the parent company
Other equity Othe
instruments r Total
Min Gene Undi Min
Item Shar Capi com Spec Surp own
us: ral strib ority
e Min tal preh ial lus Othe Sub-
er’s
inter
capit Perp
treas risk uted
ority Othe reser ensiv reser reser rs total ests
equit
etual ury reser profial y inter rs ves e ves ves
bond stock ve t
est inco
me
I.Bala
nce
at
the - 156 210 215
175244845127534
end 403 939 476 822
442631193777654
of 415 515 097 647
53437769.0997969.
the 44.1 74.9 56.6 26.1
8.004.8272.1844
perio 8 1 6 0
d of
the
prior
year
Add:
Chan
ges
in
acco
untin
g
polic
226Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
ies
Error
corre
ction
in
the
prior
perio
ds
Othe
rs
II.Bala
nce
at
the
begi - 156 210 215
175244845127534
nnin 403 939 476 822
442631193777654
g of 415 515 097 647
53437769.0997969.
the 44.1 74.9 56.6 26.1
8.004.8272.1844
perio 8 1 6 0
d of
the
curre
nt
year
III.Amo
unt
of
chan
ge in
the
---
curre - 104 117 176 201 198
377102309
nt 162 466 788 289 244 149
152566514
perio 800. 827. 505. 051 164 018
52.459.954.6
d 00 87 80 4.62 0.70 6.02
098
(Dec
rease
s are
indic
ated
by
“-”)
(I)
Total
--
com 351 350 348
102179
preh 210 184 392
566190
ensiv 467 801 897
59.946.3
e 8.06 8.07 1.77
90
inco
me
Capi - 168 - 543 546
243
tal 162 383 377 908 339
146.
contr 800. 77.9 152 30.3 76.9
58
ibute 00 9 52.4 9 7
227Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
d by 0
own
ers
and
capit
al
decr
eases
1.
Com
mon
share - - -
s 162 162 162
inves 800. 800. 800.ted 00 00 00
by
own
ers
2.
Capi
tal
inves
ted
by
hold
ers
of
other
equit
y
instr
ume
nts
3.
Amo
unt
of
share
-
base
207207209
d 243
368368800
pay 146.
77.977.924.5
ment 58
997
inclu
ded
in
own
ers'
equit
y
-
-338338
4.377
389167167
Othe 152
85052.452.4
rs 52.4
0.0000
0
Profi 117 - - - -
228Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
t 788 174 163 132 164
distri 505. 921 142 755 470
butio 80 416 565 54.9 121
n 3.44 7.64 6 2.60
1.
With
-
draw 117
117
al of 788
788
surpl 505.
505.
us 80
80
reser
ve
2.
Prov
ision
of
gene
ral
risk
reser
ve
3.
Distr
ibuti
----
on to
163163132164
own
142142755470
ers
56556554.9121
(or
7.647.6462.60
share
hold
ers)
4.
Othe
rs
Inter
nal
conv
ersio
n of
own
ers'
equit
y
1.
Capi
tal
(or
share
capit
al)
incre
ase
from
capit
al
reser
229Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
ve
conv
ersio
n
2.
Capi
tal
(or
share
capit
al)
incre
ase
from
surpl
us
reser
ve
conv
ersio
n
3.
Reco
very
of
losse
s by
surpl
us
reser
ve
4.
Retai
ned
earni
ngs
from
trans
fer
of
chan
ges
in
the
defin
ed
bene
fit
plan
5.
Retai
ned
earni
ngs
from
trans
230Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
fer
of
other
com
preh
ensiv
e
inco
me
6.
Othe
rs
Spec
ial
reser
ve
1.
With
draw
al in
the
curre
nt
perio
d
2.
Use
in
the
curre
nt
perio
d
876876876
(VI)
284284284
Othe
49.849.849.8
rs
888
IV.Bala
nce
at
-174230235
the 175 255 468 139 503
505568600637
end 426 078 041 556 703
982420513549
of 254 060 16.6 847 514.
04.189.597.312.1
the 8.00 2.69 7 7.98 76
7362
curre
nt
perio
d
Amount in previous period
Unit: yuan
2023
Item Owners' equity attributable to the parent company Min Total
Shar Other equity Capi Min Othe Spec Surp Gene Undi Othe Sub- ority own
231Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
e instruments tal us: r ial lus ral strib rs total inter er’s
capit reser treas com reser reser risk uted ests equit
al Min ves ury preh ves ves reser profi y
Perp
ority Othe stock ensiv ve t
etual
inter rs e
bond
est inco
me
I.Bala
nce
at
the - 134 185 191
175237104115598
end 885 880 779 764
399788645121522
of 526 212 192 413
534724000.303145.
the 36.4 39.9 37.3 83.1
8.006.39009.4876
perio 2 4 9 5
d of
the
prior
year
Add:
Chan
ges
in
acco
untin
g
polic
ies
Error
corre
ction
in
the
prior
perio
ds
Othe
rs
II.Bala
nce
at
the
begi - 134 185 191
175237104115598
nnin 885 880 779 764
399788645121522
g of 526 212 192 413
534724000.303145.
the 36.4 39.9 37.3 83.1
8.006.39009.4876
perio 2 4 9 5
d of
the
curre
nt
year
III. 430 684 - 482 126 220 246 - 240
Amo 000. 265 201 110 566 593 969 638 582
232Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
unt 00 28.4 256 92.2 932. 033 051 671 334
of 3 30.9 4 70 4.97 9.27 76.3 2.95
chan 3 2
ge in
the
curre
nt
perio
d
(Dec
rease
s are
indic
ated
by
“-”)
(I)
Total
com 505 283 288 289
753
preh 064 886 936 690
640
ensiv 68.0 054 701 341
7.17
e 3 2.80 0.83 8.00
inco
me
(II)
Capi
tal
contr
ibute -
528734284101
d by 430 201
469025205823
own 000. 256
24.355.357.8113.
ers 00 30.9
92113
and 3
capit
al
decr
eases
1.
Com
mon
share 101 106 280 386
430
s 953 253 600 853
000.
inves 00.0 00.0 00.0 00.0
00
ted 0 0 0 0
by
own
ers
2.
Capi
tal
inves
ted
by
hold
ers
of
233Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
other
equit
y
instr
ume
nts
3.
Amo
unt
of
share
-
base
426426430
d 360
516516121
pay 557.
24.324.382.2
ment 81
990
inclu
ded
in
own
ers'
equit
y
-
201201
4.201
256256
Othe 256
30.930.9
rs 30.9
33
3
(III)
----
Profi 126
635508147656
t 566
225658689348
distri 932.
583.650.847.498.
butio 70
62921305
n
1.
With
-
draw 126
126
al of 566
566
surpl 932.
932.
us 70
70
reser
ve
2.
Prov
ision
of
gene
ral
risk
reser
ve
3.----
Distr 508 508 147 656
ibuti 658 658 680 338
on to 650. 650. 000. 650.own 92 92 00 92
234Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
ers
(or
share
hold
ers)
4.--
Othe 984 984
rs 7.13 7.13
(IV)
Inter
nal
conv -
229
ersio 229
5370.000.00
n of 537
5.79
own 5.79
ers'
equit
y
1.
Capi
tal
(or
share
capit
al)
incre
ase
from
capit
al
reser
ve
conv
ersio
n
2.
Capi
tal
(or
share
capit
al)
incre
ase
from
surpl
us
reser
ve
conv
ersio
n
3.
Reco
very
of
235Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
losse
s by
surpl
us
reser
ve
4.
Retai
ned
earni
ngs
from
trans
fer
of
chan
ges
in
the
defin
ed
bene
fit
plan
5.
Retai
ned
earni
ngs
from
trans -
229
fer 229
5370.000.00
of 537
5.79
other 5.79
com
preh
ensiv
e
inco
me
6.
Othe
rs
(V)
Spec
ial
reser
ve
1.
With
draw
al in
the
curre
nt
perio
236Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
d
2.
Use
in
the
curre
nt
perio
d
155155478634
(VI)
796796657453
Othe
04.004.005.809.8
rs
4437
IV.Bala
nce
at
-156210215
the 175 244 845 127 534
403939476822
end 442 631 193 777 654
415515097647
of 534 377 69.0 997 969.
44.174.956.626.1
the 8.00 4.82 7 2.18 44
8160
curre
nt
perio
d
8. Statement of changes in owners’ equity of the parent company
Amount in the current period
Unit: yuan
2024
Other equity instruments Other
compr Specia Surplu Total
Item Minori Capital Minus: UndistShare Perpet ehensi l s owner’
ty reserve treasur ributed Others capital ual Others ve reserve reserve s
interes s y stock profit
bond incom s s equity
t e
I.Balanc
e at the
end of 1754 2329 84519 1355 6629 11984
the 42534 36196 369.0 63573 73964 6433
period 8.00 9.66 7 1.62 1.30 21.51
of the
prior
year
Add:
Chang
es in
accoun
ting
policie
s
237Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Error
correct
ion in
the
prior
period
s
Others
II.Balanc
e at the
beginn
17542329845191355662911984
ing of
4253436196369.063573739646433
the
8.009.6671.621.3021.51
period
of the
current
year
III.Amou
nt of
change
in the
---
current - 17081 11778
377155713239890
period 16280 524.5 8505.
252.49105.6622.
(Decre 0.00 6 80
04771
ases
are
indicat
ed by
“-”)
(I)
Total
compr 1177 1177
ehensi 88505 88505
ve 7.97 7.97
incom
e
(II)
Capital
contrib
uted -
-1708154633
by 37715
16280524.5976.9
owners 252.4
0.0066
and 0
capital
decrea
ses
1.
Comm
on - -
shares 16280 16280
investe 0.00 0.00
d by
owners
238Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
2.
Capital
investe
d by
holder
s of
other
equity
instru
ments
3.
Amou
nt of
share-
based
2098020980
payme
024.5024.5
nt
66
includ
ed in
owners
'
equity
-
-33816
4.37715
3898752.4
Others 252.4
500.000
0
(III) - -
11778
Profit 1749 1631
8505.
distrib 21416 42565
80
ution 3.44 7.64
1.
Withdr -
11778
awal 11778
8505.
of 8505.
80
surplus 80
reserve
2.
Distrib
ution - -
to 1631 1631
owners 42565 42565
(or 7.64 7.64
shareh
olders)
3.
Others
(IV)
Interna
l
conver
sion of
owners
'
equity
1.
239Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Capital
(or
share
capital
)
increas
e from
capital
reserve
conver
sion
2.
Capital
(or
share
capital
)
increas
e from
surplus
reserve
conver
sion
3.
Recov
ery of
losses
by
surplus
reserve
4.
Retain
ed
earnin
gs
from
transfe
r of
change
s in the
define
d
benefit
plan
5.
Retain
ed
earnin
gs
from
transfe
r of
other
compr
ehensi
ve
240Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
incom
e
6.
Others
(V)
Specia
l
reserve
1.
Withdr
awal in
the
current
period
2. Use
in the
current
period
(VI)
Others
IV.Balanc
e at the 1754 2346 46804 1473 6058 11585
end of 26254 44349 116.6 42423 41053 7366
the 8.00 4.22 7 7.42 5.83 98.80
current
period
Amount in previous period
Unit: yuan
2023
Other equity instruments Other
compr Specia Surplu Total
Item Minori Capital Minus: UndistShare Perpet ehensi l s owner’reserve treasur ributed Others
capital ty ual Others ve reserve reserve s
interes s y stock profit
bond incom s s equity
t e
I.Balanc
e at the
end of 1753 2276 10464 - 1229 5999 11154
the 99534 38354 5000. 12912 06879 42498 0985
period 8.00 3.02 00 9.44 8.92 3.44 43.94
of the
prior
year
Add:
Chang
es in
accoun
ting
policie
s
Error
241Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
correct
ion in
the
prior
period
s
Others
II.Balanc
e at the
beginn
1753227610464-1229599911154
ing of
99534383545000.1291206879424980985
the
8.003.02009.448.923.4443.94
period
of the
current
year
III.Amou
nt of
change
in the
-
current 52978 12656 63031 83054
430002012512912
period 426.6 6932. 4657. 4777.
0.00630.99.44
(Decre 4 70 86 57
3
ases
are
indicat
ed by
“-”)
(I)
Total
compr 1265 1265
ehensi 43.94 66932 66937
ve 6.98 0.92
incom
e
(II)
Capital
contrib
uted -
5320773763
by 43000 20125
482.2113.1
owners 0.00 630.9
03
and 3
capital
decrea
ses
1.
Comm
on 10195 10625
43000
shares 300.0 300.0
0.00
investe 0 0
d by
owners
2.
242Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
Capital
investe
d by
holder
s of
other
equity
instru
ments
3.
Amou
nt of
share-
based
4301243012
payme
182.2182.2
nt
00
includ
ed in
owners
'
equity
-
20125
4.20125
630.9
Others 630.9
3
3
(III) - -
12656
Profit 63522 50865
6932.
distrib 5583. 8650.
70
ution 62 92
1.
Withdr -
12656
awal 12656
6932.
of 6932.
70
surplus 70
reserve
2.
Distrib
ution - -
to 50865 50865
owners 8650. 8650.(or 92 92
shareh
olders)
3.
Others
(IV)
Interna
l
-
conver 12908
12908
sion of 5.50
5.50
owners
'
equity
1.
Capital
243Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
(or
share
capital
)
increas
e from
capital
reserve
conver
sion
2.
Capital
(or
share
capital
)
increas
e from
surplus
reserve
conver
sion
3.
Recov
ery of
losses
by
surplus
reserve
4.
Retain
ed
earnin
gs
from
transfe
r of
change
s in the
define
d
benefit
plan
5.
Retain
ed
earnin
gs
from -
12908
transfe 12908
5.50
r of 5.50
other
compr
ehensi
ve
incom
244Full Text of the 2024 Annual Report of Huadong Medicine Co. Ltd.
e
6.
Others
(V)
Specia
l
reserve
1.
Withdr
awal in
the
current
period
2. Use
in the
current
period
--
(VI)
2290522905
Others
5.565.56
IV.Balanc
e at the 1754 2329 84519 1355 6629 11984
end of 42534 36196 369.0 63573 73964 6433
the 8.00 9.66 7 1.62 1.30 21.51
current
period
245
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