Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.Huadong Medicine Co. Ltd.2025 Annual Report
April 24 2026
1Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
To Shareholders
To Our Shareholders
Though mist veils the mountains the pines stand firm; As wild clouds race
across the sky they remain composed. 2025 marks the first year of Huadong
Medicine’s 8th Three-Year Plan and a pivotal year in which we drive growth through
innovation and disciplined execution. Driven by a pioneering spirit resilience and a
commitment to excellence the company has fully delivered the annual business
targets amid a complex and evolving environment. We continued to expand our
business scale made tangible progress in our innovation-driven transformation
strengthened our core competitiveness and further reinforced the foundation for
high-quality development. Together these efforts have delivered resilient growth with
continued gains in both quality and efficiency.Innovative R&D remains the cornerstone of our development and a key driver of
sustainable growth through market cycles. Since 2025 a total of six innovative
products including Mairuidong and MediBeacon TGFR have been approved for
marketing in China. Meanwhile Senaparib Capsules (a PARP inhibitor) and
Linaprazan Glurate Capsules (a P-CAB inhibitor) have been included in the 2025
national medical insurance drug list. Zevorcabtagene autoleucel our CAR-T therapy
has been included in China’s inaugural commercial insurance innovative drug list.Driven by an expanding portfolio of approved innovative products and robust
commercialization capabilities revenue from innovative products reached RMB 2.34
billion in 2025 representing a year-on-year increase of 64.2%. Among these
Elahere has reached cumulative sales of over RMB 100 million in China since its
approval. Our innovation momentum continues to strengthen and has become a key
engine driving the Company’s growth.
2Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Over the past year Huadong Medicine’s R&D has made steady progress along a
clear strategic roadmap. In the endocrinology field our key pipeline projects
including HDM1002 HDM1005 and DR10624 have generated positive clinical data
and are advancing at the forefront of R&D. We have also broadened into
cardiovascular and cerebrovascular indications to build differentiated strengths. In
oncology our ADC franchise features a diversified target portfolio and a tiered
pipeline underscoring our differentiated strategy. Multiple ADC candidates have
been granted six Orphan Drug Designations and one Fast Track Designation by the
U.S. FDA. In addition HDM2027 a novel amanitin-based ADC has entered the
clinical development in China. In the autoimmune field Roflumilast Cream has been
filed in China for marketing approval in atopic dermatitis and psoriasis and is
expected to open up new growth opportunities in dermatology. Meanwhile nearly 30
clinical study results have been presented at leading international scientific
conferences further strengthening our global influence.In 2026 the Company’s innovative R&D will enter a phase of accelerated value
delivery driven by a dual model of in-house R&D and in-licensing. Our R&D center
for innovative drugs is advancing 96 pipeline projects with 12 products under
regulatory review for marketing approval and the number of innovative candidates
advancing to Phase 3 clinical trials is expected to reach 16. The innovative product
segment is expected to maintain strong growth momentum throughout the year. Over
the next five years more than 40 innovative products are expected to be launched in
phases driving sustainable growth. At the same time we remain focused on three
core therapeutic areas: endocrinology autoimmune diseases and oncology with a
view to building a sustainable and competitive innovation ecosystem.With the launch of innovative aesthetic products our medical aesthetics business
has achieved full coverage across three major injectable categories: regenerative
products hyaluronic acid fillers and botulinum toxin in the domestic market. Key
newly approved products include Ellansé-M which enables effective autologous
3Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
collagen regeneration; MaiLi Extreme the world’s first oxygen-free hyaluronic
acid originally developed in Switzerland; and Ruituoxin the world’s first
recombinant type A botulinum toxin. The medical aesthetics business has entered a
new phase of portfolio synergy and multi-engine growth. In the coming five years
more than ten innovative products—including ECM collagen next-generation
regenerative materials and the world’s only non-animal-derived chitosan—are
expected to be launched. This robust pipeline will further enrich our high-end product
portfolio and drive us toward a leading position in global medical aesthetics.To support the accelerated industrialization of its core pipeline the Company
leveraged its integrated strengths to complete and put into operation a 60000-square-
meter intelligent biopharmaceutical innovation and manufacturing center within one
year marking a notable industry milestone. The facility focuses on the commercial
manufacturing of core biologics including ADCs polypeptides and antibodies
enabling an end-to-end coverage from clinical-stage materials to large-scale
commercial production. This self-built and self-operated industrial platform not only
enhances supply chain security and cost efficiency but also ensures end-to-end
control and rapid commercialization of key innovative projects providing a strong
foundation for our global competitiveness.True gold is proven in fire and strong capabilities are forged through challenges.We fear no competition as every encounter deepens our insight into the industry nor
do we shy away from confrontation as every contest forges our competitive edge.With unwavering strategic resolve we will deliver on the decisive phase of
innovation realization scale new heights in our medical aesthetics business fortify
the cornerstone of our pharmaceutical business and open up new growth pathways in
industrial microbiology.We highly value the trust and support of our shareholders and remain committed
to an active dividend policy sharing the Company’s growth achievements with our
shareholders. Looking ahead we will continue to enhance the quality of our growth
4Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
and deliver strong performance to create value for our shareholders.As rivers converge into the sea and streams surge in competition with favorable
winds and sails set we set our sights firmly on the summit. Huadong Medicine will
break through bottlenecks with the courage to innovate and forge ahead with
grounded determination. We will advance toward the Company’s 2030 vision
striving to build Huadong Medicine into a globally competitive research-driven
pharmaceutical leader.Lv Liang Chairman
On behalf of Huadong Medicine
April 2026
5Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
2025 Annual Report
Section I Important Notes Contents and Definitions
The Board of Directors directors and senior management of Huadong
Medicine Co. Ltd. (hereinafter the "Company") hereby warrant that the
information presented in this Annual Report is authentic accurate and
complete and free of false records misleading statements or material
omissions and shall undertake individual and joint legal liabilities accordingly.Lv Liang the Company's legal representative and the officer in charge of
accounting and Qiu Renbo the head of Accounting Department (accounting
manager) hereby declare that the financial statements contained in this
Annual Report are authentic accurate and complete.All directors have attended the meeting of the Board of Directors 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
changes and product price reduction risk new drug R&D risk investment and
M&A risk and exchange rate fluctuation risk. For details please refer to "(V)
Potential risks and responses" under "XI. Prospect of the Company's future
development" in "Section III. Management Discussion and Analysis".
6Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Therefore investors are kindly reminded to pay attention to possible
investment risks.The profit distribution plan deliberated and approved at the meeting of
the Board of Directors is as follows: On the basis of 1753736848 shares of the
total share capital of the Company a cash dividend of RMB 5.80 (tax inclusive)
per 10 shares will be distributed to all shareholders; a total of 0 bonus share
(tax inclusive) will be issued; and no capital reserves will be converted to
increase the share capital.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 2025 Annual Report of Huadong Medicine Co. Ltd.
Contents
Section I Important Notes Contents and Definitions... 6
Section II Company Profile and Key Financial Indic...14
Section III Management's Discussion and Analysis ... 19
Section IV Corporate Governance Environment and So...98
Section V Important Matters ....................... 145
Section VI Share Changes and Shareholders Informat..200
Section VII. Information on Bonds ................. 224
Section VIII. Financial Reports ................... 225
8Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Contents of Reference File
(I) Financial accounting 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 2025 Annual Report of Huadong Medicine Co. Ltd.
Definitions
Item refers to Definition
CSRC refers to China Securities Regulatory Commission
SZSE 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 Inc.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 mRNABiotechnology
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 TechnologiesInc.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.
10Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Arcutis refers to Arcutis Biotherapeutics Inc.ATGC refers to ATGC Co. Ltd.GMP refers to Good Manufacturing Practice
cGMP refers to Current Good Manufacturing Practice
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 dossier
prepared by the holder on a
precautionary basis which contains
comprehensive details about facilities
manufacturing processes and materials
involved in the preparation processing
packaging and storage of one or more
DMF refers to
human drug products. The contents of a
DMF may only be referenced by the
FDA during its review of IND
applications NDAs and ANDAs upon
receipt of a 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 regarding 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 Biologics License Application
Abbreviated New Drug Application (i.e.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
11Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
International Council for Harmonisation
ICH refers to of Technical Requirements for
Pharmaceuticals for Human Use
IND refers to Investigational New Drug
PK/PD refers to Pharmacokinetics/pharmacodynamics
Chemistry Manufacturing and Control
mainly such pharmaceutical researches
as manufacturing process 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 drugs.QA refers to Quality Assurance (department)
ADC refers to Antibody-Drug Conjugates
EBD refers to Energy-based device
license-in refers to Product license introduction
license-out refers to Product External License Authorization
BD refers to Business Development
Environment Health and Safety
EHS refers to
Management System
MRCT refers to Multi-regional Clinical studies
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
AIDD refers to
Design a method that applies Artificial
12Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Intelligence (AI) technology for drug
development. In AIDD AI algorithms
are utilized to analyze large-scale
molecular structure data helping to
predict intermolecular interactions and
their therapeutic effects on diseases.GLP-1 refers to Glucagon-like Peptide-1
Drugs that can only be purchased and
Prescription Drugs refers to used with a prescription issued by a
physician
Real World Research/Study RWR/RWS
which involves collection of data related
to patients in the real world environment
RWR/RWS refers to (real world data) and analysis to obtain
the use value of medical products and
clinical evidence of potential benefits or
risks(real world evidence).National Reimbursement Drug List for
Basic Medical Insurance Work-related
2025 Medicine Catalog refers to
Injury Insurance and Maternity
Insurance (2025)
From January 1 2025 to December 31
Reporting period refers to
2025
13Full Text of the 2025 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 Huadong Medicine Co. Ltd.Company name in Chinese
Huadong Medicine
(abbreviation)
Company name in English (if
HUADONG MEDICINE CO. LTD
any)
Company name in English
HUADONG MEDICINE
(abbreviation if any)
Legal representative of the
Lv Liang
Company
Floors 4/7 No. 439 Zhongshan North Road Gongshu District Hangzhou City Zhejiang
Registered address
Province
Postal code of registered
310006
address
From the date of listing to July 2012 the registered address was "No. 439 Zhongshan North
Road Xiacheng District Hangzhou". From July 2012 the registered address was changed to
"Floors 9/10 Gate No. 1 Building No. 1 No. 468 Yan'an Road Hangzhou". From July 2019 the
registered address was changed to "Floors 7/9/10 Gate No. 1 Building No. 1 No. 468 Yan'an
Changes of registered address
Road Hangzhou". From July 2022 the registered address was changed to "Floors 9/10 Gate No.
1 Building No. 1 No. 468 Yan'an Road Hangzhou". From June 2023 the registered address was
changed to "Floors 4/7 No. 439 Zhongshan North Road Gongshu District Hangzhou City
Zhejiang Province".New Office Building of Huadong Medicine No. 858 Moganshan Road Gongshu District
Office address
Hangzhou City Zhejiang Province
Postal code of office address 310011
Company website www.eastchinapharm.com
Email address ir@eastchinapharm.com
II. Contact persons and contact information
Secretary of the Board of Directors Securities affairs representative
Name Chen Bo Hu Shufen
New Office Building of Huadong New Office Building of Huadong
Medicine No. 858 Moganshan Road Medicine No. 858 Moganshan Road
Contact address
Gongshu District Hangzhou City Gongshu District Hangzhou City
Zhejiang Province Zhejiang Province
Tel. 0571-89903300 0571-89903300
Fax 0571-89903366 0571-89903366
Email address ir@eastchinapharm.com ir@eastchinapharm.com
14Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
III. Channels of disclosure and location of preparation
Website of the stock exchange for publishing the annual report Shenzhen Stock Exchange - http://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
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 engaged by the Company
Pan-China Certified Public Accountant LLP (Special General
Name
Partnership)
Office Building T2 Run'ao Business Center Yinfeng
Office address of accounting firm
Subdistrict Xiaoshan District Hangzhou Zhejiang Province
Signing accountants Hu Yanhua and Chen Xiaodong
Sponsors for continuous supervision and guidance during the reporting period
□Applicable□Not applicable
Financial consultant for continuous supervision and guidance during the reporting period
□Applicable□Not applicable
VI. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement of previous accounting data
□Yes□No
Year-on-year
202520242023
increase/decrease
Operating revenue
43612009891.0241905707385.914.07%40623782520.43
(RMB)
Net profits attributable
to shareholders of the 3414335326.41 3512104678.06 -2.78% 2838860542.80
listed company (RMB)
Net profits attributable
to shareholders of the
listed company after
3311448470.603351680026.72-1.20%2736571736.98
deduction of non-
recurring profit and
loss (RMB)
Net cash flow from
operating activities 4245604371.17 3748928882.35 13.25% 3929216706.70
(RMB)
15Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Basic earnings per
1.94842.0046-2.80%1.6219
share (RMB/share)
Diluted earnings per
1.94652.0034-2.84%1.6207
share (RMB/share)
Weighted average
14.28%15.93%-1.65%13.96%
return on equity
Change from prior
End of 2025 End of 2024 End of 2023
year-end
Total assets (RMB) 39038036320.92 37879046367.15 3.06% 33509361816.98
Net assets attributable
to shareholders of the 24811339992.99 23060051397.36 7.59% 21047609756.66
listed company (RMB)
The Company's net profit before or after deducting non-recurring profits 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 lowest of the Company's audited total profit net profit and net profit after deducting non-recurring profits and losses during
the reporting period 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
1753736848.00
disclosure (shares)
Fully diluted earnings per share based on the latest share capital:
Preferred dividends paid 0.00
Paid perpetual bond interest (RMB) 0.00
Fully diluted earnings per share based on the latest share capital
1.9469
(RMB/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□Not applicable
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□Not applicable
There are no differences in net profit and net assets disclosed in financial statements under overseas and Chinese accounting
standards during the reporting period.
16Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
VIII. Key financial indicators by quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 10735787899.82 10939141065.39 10989214170.47 10947866755.34
Net profit attributable
to shareholders of the 914708484.70 900118376.16 933089158.25 666419307.30
listed company
Net profit attributable
to shareholders of the
listed company after
897337982.42864396273.56931780891.87617933322.75
deduction of non-
recurring profit and
loss
Net cash flow from
-832728693.883289577203.98154003434.081634752426.99
operating activities
Whether the above financial indicators or their totals are significantly different from relevant financial indicators in previous
quarterly and semi-annual reports disclosed by the Company
□Yes□No
IX. Items and amounts of non-recurring profit and loss
□Applicable □Not applicable
Unit: RMB
Item Amount in 2025 Amount in 2024 Amount in 2023 Description
Profits/losses on
disposal of non-current
assets (including the
2263396.06-7497064.66-823262.36
written-off part of the
accrued impairment
provision of assets)
Government grants
included in current
profits and losses
(excluding those
closely related to
normal business
operation of the
See VII (67) of the
Company distributed
Notes to Financial
constantly in 218030365.40 163972203.37 143315700.34
Statements for details
accordance with
of government grants.defined standards in
line with national
policies and
regulations and
constantly affecting the
Company's profits and
losses)
Profits and losses See VII (70) of the
caused by fair value -600622.90 -16466668.21 -13756372.80 Notes to Financial
changes in financial Statements for details
17Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
assets and financial
liabilities held by non-
financial enterprises
and profits and losses
arising from the
disposal of financial
assets and liabilities
excluding the effective
hedging business
related to the normal
business operation of
the Company
Reversal of impairment
provision of
receivables 160503.73 759760.70 5566940.29
individually tested for
impairment
One-time impact on
current profits and
losses due to
136860.05
adjustments in tax
accounting and other
laws and regulations
See VII (74 75) of the
Other non-operating
Notes to Financial
revenue and expenses
-90997459.11 -20783317.88 18554535.07 Statements for details
other than those
of non-operating
mentioned above
incomes and expenses.Other profit and loss
items that satisfy the
definition of non- 57557709.09 -11588239.52
recurring profit and
loss
Less: Amount affected
16756165.349728855.8128072652.93
by income tax
Amount affected
by minority interests 9213162.03 7389115.26 11044702.32
(after tax)
Total 102886855.81 160424651.34 102288805.82 --
Details of other profit and loss items conforming to the definition of non-recurring profits and losses
□Applicable□Not applicable
There are no other profit and loss items that meet the definition of non-recurring profits and losses
Explanation for recognizing an item listed as a non-recurring profit and loss in the Interpretative Announcement No. 1 on
Information Disclosure Criteria for Public Listed Companies - Non-Recurring Profits and Losses as an item of recurring profit and
loss
□Applicable□Not applicable
The Company did not recognize any item of non-recurring profit and loss items listed in the Interpretative Announcement No. 1 on
Information Disclosure Criteria for Public Listed Companies - Non-Recurring Profits and Losses as an item of recurring profit and
loss.
18Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Section III Management's Discussion and Analysis
I. Main business 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 distribution 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 kidney disease immunology oncology endocrinology 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 drugs within three core
therapeutic areas of endocrinology autoimmunity and oncology through a combination of in-house
development 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 has long been deeply engaged in three major business segments—
pharmaceuticals medical devices and herbal decoction pieces. It has further expanded its service
portfolio to encompass project support channel development government affairs services and
compliance solutions. Leveraging a highly specialized and large-scale logistics system for cold-
chain products vaccines and specialty medicines as well as its proprietary branded pharmaceutical
e-commerce business the Company continues to strengthen its omni-channel marketing capabilities
and enhances its market competitiveness. It has consistently ranked among the "China's Top 10
Pharmaceutical Wholesalers" for multiple consecutive years. The Company has operated three
major supply chain hubs in Hangzhou Jinhua and Wenzhou within Zhejiang Province supported
by 13 regional warehouses with a total storage area exceeding 190000 m2. This has enabled the
19Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
formation of an integrated multi-warehouse logistics network across Zhejiang Province. The
pharmaceuticals segment boasts comprehensive and full-category service capabilities and an omni-
channel operational framework enabling seamless integration of in-hospital and out-of-hospital
coordination along with distribution and agency services. The medical devices segment built on a
foundation of large-scale distribution network continuously expands its specialized agency and
supply chain service offerings. The herbal decoction pieces segment has established a complete
industrial chain covering base cultivation decoction piece processing automated decoction and
proprietary brand sales achieving full-chain coverage from source to end-user. Driven by a
commitment to "service innovation" the Company continues to enhance precision services for
upstream and downstream partners through the integration of supplier collaboration Contract Sales
Organization (CSO) services Supply Processing & Distribution (SPD) operations and industry–
academia–research initiatives. It is dedicated to becoming a "comprehensive pharmaceutical
services provider" trusted by society at large.In the field of aesthetic medicine the Company has created a comprehensive and differentiated
product matrix aligned with its strategy of "global operational layout and dual-circulation business
development" supported by an international perspective and forward-looking strategic planning.The Company currently stands as an industry leader in terms of product quantity and market
coverage. Specifically it has launched over 30 products in China and overseas with nearly 20
global innovative products under development. By cultivating differentiated product pipelines
across three major injectable categories—regenerative products hyaluronic acid and botulinum
toxin—the Company aims to become a leading global provider of comprehensive aesthetic
medicine solutions. It is committed to delivering more professional efficient holistic and safe
treatment solutions to the patients through diversified combination therapies that integrate "non-
invasive and minimally invasive" "facial and body contouring" and "injectable + energy-based
device" approaches. The Company operates multiple R&D centers and manufacturing bases
worldwide promoting and selling injectable regenerative fillers botulinum toxin hyaluronic acid
fillers facial lifting threads while also advancing and expanding energy-based aesthetic device
business in the global markets.The Company's industrial microbiology business focuses on two strategic pillars: innovation in
synthetic biotechnology and the advancement of the biopharmaceutical industry. It prioritizes the
development of four core segments—xRNA featured APIs and intermediates massive health and
biomaterials and animal health. Leveraging four decades of expertise the Company has established
a comprehensive R&D ecosystem centered on synthetic biology R&D platform industrial
microbiology R&D platform and synthetic chemistry R&D platform. With full-chain technological
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capabilities in microbial engineering the Company has built an integrated system spanning 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 c
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 scaled 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.II. Industry situation during the reporting period
The year 2025 marks both the conclusion of China's 14th Five-Year Plan period and a pivotal
juncture at which China's pharmaceutical industry advances toward high-quality development
amidst profound structural transformations. Globally the geopolitical landscape has grown
increasingly intricate and volatile characterized by intensified competition and strategic rivalries in
international politics and trade. Unilateral measures such as tariff barriers continue to evolve
while the momentum of economic growth has weakened. Against the backdrop of further regulatory
compliance medical insurance payment reforms and the normalization of centralized drug
procurement in China's pharmaceutical sector. These dynamics have fundamentally reshaped the
industry's value logic. The market space for generic drugs has been increasingly compressed
compelling companies to accelerate the restructuring of competitive landscapes and transition
toward innovation-driven strategies. The rebound of capital markets coupled with the
implementation of innovation-friendly policies has driven further industry consolidation. An
innovation ecosystem with global competitiveness is gradually taking shape marking a historic
shift in China's pharmaceutical sector from "generic-driven catch-up" to "independent innovation".At the policy level the General Office of the State Council issued the Opinions on
Comprehensively Deepening the Reform of Drug and Medical Device Regulation to Promote the
High-Quality Development of the Pharmaceutical Industry unveiling major initiatives to optimize
the review and approval processes strengthen innovation support enhance intellectual property
protection and reinforce full life-cycle supervision. These initiatives significantly bolster the
research and development (R&D) and innovation efforts for key innovative drugs medical devices
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and traditional Chinese medicine (TCM) that are urgently needed clinically providing clearer
pathways for high-quality industry development. Medical insurance authorities continued to refine
the dynamic adjustment mechanism for the National Reimbursement Drug List (NRDL)
prioritizing the inclusion of innovative therapies and rare-disease medicines with high clinical value
in the payment scope. Meanwhile the General Office of the State Council released the Opinions on
Improving the Quality of Traditional Chinese Medicine to Promote the High-Quality Development
of the TCM Industry aiming to elevate TCM quality standards support high-quality development of
the TCM industry and facilitate breakthroughs in the modernization and internationalization of
TCM industry.From an industry performance perspective China's pharmaceutical industry has exhibited
signs of stabilization and recovery characterized by "slight fluctuations in revenue steady profit
repair and continuous structural optimization" with increasingly prominent features of high-quality
development. In 2025 the pharmaceutical manufacturing industry above designated size nationwide
achieved an operating revenue of RMB 2487 billion representing a year-on-year decrease of 1.2%.The annual total profit reached RMB 349 billion with a steady increase in the overall industry
profit margin. The trend of profit recovery continued to solidify further highlighting the resilience
of industrial development. The outcomes of innovation-driven development continue to manifest.Innovative products with substantial clinical value—including innovative drugs biosimilars high-
end medical devices and differentiated TCM—have rapidly achieved commercial scale-up through
pathways such as NRDL negotiations and more standardized market access mechanisms. China's
innovative drug R&D achievements have witnessed a surge with the transaction amount of BD
(Business Development) reaching record highs. Going global has increasingly become a critical
driver of growth. In parallel the internationalization of the pharmaceutical industry has accelerated
with greater efficiency. The export scale of featured APIs high-end preparations aesthetic medicine
products and industrial microbial products have expanded steadily. The proportion of revenue
derived from overseas markets continued to rise serving as an important buffer against domestic
market fluctuations and providing new avenues for growth.III. Core competitiveness analysis
1. Open innovative drug R&D system and continuously improved innovation ability
The Company has consistently placed a high priority on innovation and research and
development and adhered to the philosophy of "research-driven and patient-centered" development.
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Guided by the principles of clinical value pharmacoeconomic value and commercial viability the
Company continues to sustain a high level of investment in R&D activities. Its Global Innovative
Drug R&D Center serves as the cornerstone for innovation strategy formulation pipeline planning
and clinical study and development. Following years of dedicated development the Company has
established a relatively comprehensive and independent drug R&D system that encompasses the
entire life cycle of drug development—from drug discovery and pharmaceutical research through
preclinical and clinical studies to industrialization.Focusing on three core therapeutic fields—oncology endocrinology and autoimmunity—the
Company remains committed to continuous development and has cultivated a diversified portfolio
of differentiated innovative product pipelines that cover the full R&D cycle via independent R&D
external cooperation license-in. All these merits effectively empower the continuous initiation and
marketing of innovative products offering impetuses for the Company's medium- and long-term
development. The Company has continuously leveled up its independent R&D and innovation
capabilities with its innovative drug pipelines now covering over 90 items positioning it within the
top tier of the pharmaceutical industry in China.
2. Diverse product pipelines for specialized and chronic diseases and featured layout in
three core therapeutic fields
Focusing on specialized medicines medicines for 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 kidney disease immunology endocrinology oncology digestive system
and cardiovascular diseases continuously keeping in the forefront of similar products in China in
terms of market share. Meanwhile the Company has successfully launched first-in-class drugs in
three core therapeutic fields—oncology endocrinology and autoimmunity—and has developed
three featured product matrices: ADC GLP-1 and topical preparations forming differentiated
competitive advantages.Specializing in medicines for diabetes for over two decades the Company has
comprehensively laid out product pipelines of innovative and differentiated generic drugs 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
mainstream targets including α-glucosidase inhibitors DPP-4 inhibitors SGLT-2 inhibitors GLP-1
receptor single-target and long-acting multi-target agonists as well as insulin and its analogs.Centered on the GLP-1 target the Company has developed a comprehensive and differentiated
product pipeline that combines long-acting and multi-target global innovative drugs and biosimilars
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including oral tablets and injections.In the field of oncology the Company focused on cutting-edge therapies such as ADCs and
CAR-T continuously strengthening its product pipeline. Additionally the Company has invested in
acquired controlling stakes in and incubated a number of domestic biotechnology enterprises with
leading-edge technologies while also establishing both product and equity partnerships with
Heidelberg Pharma in Germany (where the Company serves as its second-largest shareholder). By
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introducing Heidelberg's proprietary ATAC (antibody-amanitin conjugate) technology platform the
Company has built a distinctive global ADC R&D ecosystem. The Company is actively developing
a world-class ADC innovation platform with fully integrated in-house capabilities. Its ADC
innovative drug is characterized by differentiated targets and a well-structured pipeline architecture.These efforts are dedicated to delivering more advanced and effective therapeutic options to cancer
patients.In the field of autoimmunity the Company's marketed and pipeline products cover a wide
range of indications including transplant immunology psoriasis atopic dermatitis rheumatoid
arthritis seborrhoeic dermatitis prurigo nodularis vitiligo recurrent pericarditis and cryopyrin-
associated periodic syndromes. These indications span across dermatology rheumatology
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cardiovascular respiratory and transplant-related diseases making the Company one of the most
comprehensive pharmaceutical enterprises in China in terms of coverage in the autoimmune disease
area. Additionally the Company's innovative drug 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. With regard to autoimmunity the Company stretched its coverage
to topical preparations built topical preparation R&D platforms and steadily advanced the R&D
and innovation of external and complicated preparations. Currently the Company's wholly-owned
subsidiary Huadong Medicine (Xi'an) Bodyguard Pharmaceutical Co. Ltd. and its controlled
subsidiary Shaanxi Jiuzhou Pharmaceutical Co. Ltd. have jointly fostered four production lines for
topical preparations. The Company now has as many as 10 products of topical preparations either
under development or in commercial production.
3. A leading professional pharmaceutical service team in China and a mature and well-
established commercial operation system
The Company's pharmaceutical development is supported by a highly specialized team
dedicated to pharmaceutical services and market development. Centered on clinical value and
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academic promotion the team advances an integrated marketing model that connects
comprehensive hospitals primary-level medical institutions the retail sector third-terminal
channels and online platforms. With a sales network covering more than 30 provinces autonomous
regions and municipalities nationwide the Company has established a multi-channel wide-
coverage presence with strong competitive advantages.Leveraging Zhejiang as its strategic hub the Company's pharmaceutical distribution has
developed a mature and comprehensive commercial infrastructure backed by an extensive product
portfolio. The Company enjoys a significant competitive edge in market access and channel
networks. It has forged strategic partnerships with over 95% of leading domestic and international
pharmaceutical manufacturers. Its sales network extends to all 90 counties and districts across
Zhejiang Province achieving 100% coverage of public medical institutions. In parallel the
Company continues to expand its footprint into high-end retail pharmacies and private hospitals
further consolidating its long-standing leading position in regional market share. Through
continuous enhancement of core competencies—particularly in strategic collaborations with top-tier
hospitals policy alignment innovation in professional and diversified service systems and efficient
organizational operations—the Company has established differentiated and sustainable competitive
strengths. The Company offers dedicated and profound service to its upstream and downstream
partners and delivers holistic value spanning from project-oriented specialized market access and
integrated commercial solutions (CSO) to retail and DTP channel deployment local government
liaison and compliant payment assistance. Actively responding to healthcare reform policies the
Company reinforces strategic collaborations with major partners and continues to lead in key
domains such as specialized market access multi-channel marketing government-affairs
coordination pharmaceutical service innovation third-party cold-chain logistics and automated
herbal decoction services thereby solidifying its position as an industry leader in Zhejiang Province.
4. A comprehensive high-end international aesthetic medicine product pipeline
Focusing on the global high-end medical aesthetics market the Company has established an
internationalized team dedicated for aesthetic medicine operations and BD. Through mergers and
acquisitions and product in-licensing in recent years the Company has progressively refined and
enriched its industrial layout for high-end aesthetic medicines. The Company now provides full-
spectrum coverage in the mid- to high-end markets for non-surgical aesthetic injectables and
energy-based devices. Its portfolio comprises more than 50 high-end internationally sourced
minimally invasive and non-invasive aesthetic products 33 of which have already been launched in
domestic or overseas markets. Its globally patented product suite spans mainstream non-surgical
aesthetic categories including frown lines improvement facial and body filling thread lifting skin
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management body contouring depilation and intimate rejuvenation. The Company has thus
established a comprehensive product cluster ranking among the industry leaders in terms of product
number and coverage breadth while continuing to expand its global presence. Meanwhile the
Company has achieved full coverage across three major injectable categories—regenerative
products hyaluronic acid and botulinum toxin—forming a multi-dimensional full-face aesthetics
treatment system. This allows the Company to provide consumers with integrated and one-stop
facial aesthetic solutions. 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. Outstanding and leading international competitiveness in industrial microbiology
segment
The Company has been deeply engaged in the field of industrial microbiology. It operates the
largest fermentation monomer plant in Zhejiang Province and maintains industry-leading
capabilities in microbial drug production. Its advanced R&D strengths span all stages of microbial
engineering technologies including strain development metabolic pathway regulation enzymatic
catalysis synthetic modification separation and purification. The Company has constructed a
complete manufacturing system encompassing microbial project R&D pilot-scale test commercial
production engineering and utility system support. It has also established an R&D cluster centered
on the Synthetic Biology R&D Platform (Huadong Synthetic Biology Research Institute) Industrial
Microbiology R&D Platform (Huida Biotech) and Synthetic Chemistry R&D Platform as well as
seven industrial bases in Hangzhou Xiangfuqiao Qiantang New Area Jiangsu Joyang Laboratories
Magic Health Anhui Meihua Wuhu Huaren and Nanjing Nongda Animal Pharmaceutical.Building on these capabilities the Company is making every effort to the integrated development of
"production research and marketing" in the field of industrial microbiology.For the industrial microbiology team of the Company an innovative internationalized team
characterized by strong collaboration and high efficiency has been built. It features a composite
talent structure with seasoned industry experts at the core and a new generation of young
researchers as the backbone forming a specialized operating system that combines deep technical
expertise with vibrant innovation. In terms of R&D the Company's Industrial Microbiology
Division has been committed to forming an efficient R&D team centered around high-caliber
talents. To date 34% of its R&D personnel hold master and/or doctoral degrees. In the field of
industrial microbiology the Company has initiated over 463 R&D projects including 266 projects
for xRNA raw materials 113 projects for featured APIs & intermediates 49 projects for wellness &
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biomaterials and 35 projects for animal health.
6. Prudent and pragmatic operation style and stable returns to shareholders
The Company places strong emphasis on management innovation and strives to enhance its
market competitiveness through continuous improvements in operational excellence. Supported by
high-quality products superior commercialization capabilities compliant and efficient marketing
services differentiated market positioning forward-looking innovation-driven R&D layout and
comprehensive talent development the Company continues to exhibit long-term and resilient
growth. Since it was listed the Company has distributed dividends for 25 times with a cumulative
dividend amount of RMB 8.873 billion which is 35.49 times the funds raised through its initial
public offering (IPO) of RMB 250 million providing continuous and stable investment returns to
shareholders.IV. Analysis of main business
1. Overview
The year 2025 marks the inaugural year and heralds the commencement of the Company's
eighth three-year development plan. Amid evolving policies and an increasingly complex and
challenging pharmaceutical landscape the Company remained firmly committed to its strategic
direction. All employees of Huadong Medicine rose to the challenge took proactive actions and
stayed closely aligned with the Company's overarching strategy and annual business objectives.Guided by the business philosophy of "driving development through decisive execution and
empowering frontline management" and by adhering to the action guidelines of "upholding the
entrepreneurial spirit continuing to deepen reforms strengthening organizational structure and
seizing development opportunities" the Company has actively explored pathways for high-quality
and innovation-driven growth. By adopting a mindset of agile response and forward-looking
transformation the Company steadily advanced its key initiatives and achieved continuous
breakthroughs in R&D innovation commercialization expansion and cross-segment synergy and
integration. Despite external volatility the Company has delivered a solid set of high-quality
development results and successfully accomplished the phased goals of its eighth three-year
development plan entering a new stage of stable and resilient growth.In 2025 the Company recorded operating revenue of RMB 43.612 billion representing a year-
on-year ("YoY") increase of 4.07%. It reported a net profit attributable to shareholders of the listed
company in the amount of RMB 3.414 billion down 2.78% YoY; net profit attributable to
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shareholders after deducting non-recurring profit and loss was RMB 3.311 billion showing a YoY
decline of 1.20%.During the reporting period the Company maintained stable operations with a consolidated
gross profit margin of 32.36%. Net cash flow from operating activities reached RMB 4.246 billion
up 13.25% YoY. As of the end of 2025 the Company's total assets stood at RMB 39.038 billion and
net assets attributable to shareholders of the listed company amounted to RMB 24.811 billion. The
asset-liability ratio was 35.52% and return on equity (ROE) was 14.28%.During the reporting period the overall performance of the Company's joint stock companies
at home remained on a positive trajectory with the corresponding long-term equity investments
accounted for under the equity method turning profitable. In contrast overseas joint stock
companies abroad (primarily Heidelberg Pharma in Germany and R2 in the United States) incurred
operating losses for the current period which when accounted for under the equity method
collectively reduced the Company's consolidated net profits by approximately RMB 140 million.Additionally Sinclair the Company's wholly-owned subsidiary in the United Kingdom conducted
internal organizational and product-related optimization within its energy-based device (EBD)
business. Due to a decline in revenue Sinclair incurred operating losses and collectively recognized
goodwill impairment in the amount of RMB 78.11 million during the current period. Excluding the
impact of the aforementioned goodwill impairment the Company's net profit attributable to
shareholders after deducting non-recurring profit and loss for 2025 would have been RMB 3.39
billion representing a YoY increase of 1.13%.I. Operating and development situation of four major business segments of the Company
during the reporting period
(I) Pharmaceutical industry
During the reporting period Zhongmei Huadong the Company's core subsidiary adeptly
navigated through a labyrinth of complex regulatory changes and intensely competitive market
conditions. It did so by steadfastly focusing on the core objective of achieving steady business
growth. This subsidiary bolstered its compliance management framework further enhanced its
medical market and market-access systems expedited the launch and promotion efforts of new
products expanded emerging business sectors such as hospital-based aesthetic medicines and
animal health and continued to fortify its product pipeline. As a result its overall business
performance sustained a positive growth trajectory. In 2025 the Company's pharmaceutical industry
segment achieved operating revenue (including CSO services) of RMB 14.784 billion representing
a year-on-year increase of 7.04%. It reported a net profit attributable to the parent company in the
amount of RMB 3.355 billion up 15.59% year-on-year with a return on equity of 25.75%.
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Supported by sustained R&D investment and the introduction of high-quality projects during
the reporting period the pharmaceutical industry segment of the Company continued to expand its
portfolio of innovative products. Coupled with its marked pipeline products the Company has
constructed a diversified and highly competitive product portfolio targeting key therapeutic areas
including oncology autoimmune diseases endocrinology and gastroenterology offering
individualized and full-cycle treatment solutions for clinical practice. Benefiting from the
continuous enhancement of its product portfolio the Company witnessed a steady increase in its
market share in hospitals while its product structure continued to undergo optimization and
upgrading. This fully demonstrated the Company's strong capabilities in transforming and
commercializing innovation achievements.Leveraging its leading R&D system and core technology platforms the Company has built a
diversified portfolio of innovative products. In the oncology field it boasts major products such as
Elahere (Mirvetuximab Soravtansine Injection) CAR-T product zevor-cel (Zevorcabtagene
Autoleucel Injection) PARP inhibitor Paishuning (Senaparib Capsules) and Mairuidong
(Mifanertinib Maleate Tablets). In the endocrinology field it possesses core varieties such as
Nesina (Alogliptin Benzoate Tablets) Liluping (Liraglutide Injection) and Huiyoujing
(Ganagliflozin Proline Tablets). In the autoimmune field it has deployed Sailexin (Ustekinumab
Injection). In the gastroenterology field it launched Xinlian (linaprazan glurate). Meanwhile
MediBeacon TGFR the world's first bedside renal function precision monitoring and evaluation
product suitable for patients with normal or impaired renal function has officially entered the
commercialization promotion stage creating a differentiated and innovative competition barrier.During the reporting period as multiple innovative products were successively approved for
launch the resulting incremental revenue continued to accelerate with innovative products
contributing an increasing share of revenues. During the current period sales and agency service
revenue from innovative products reached RMB 2.34 billion up 64.2% YoY accounting for 15.81%
of the pharmaceutical industry segment's (including CSO services) operating revenue. The overall
business has therefore entered a high-growth trajectory continuously validating the transformation
efficiency of the Company's R&D achievements and reflecting the professionalism of its
commercialization operations.The Company continues to focus on its three core therapeutic areas—oncology endocrinology
and autoimmunity diseases—and has established a diversified and distinctive portfolio covering
ADCs GLP-1 therapies and topical preparations. The Company's pipeline under development is
well-diversified encompassing both first-in-class innovative drugs and biosimilars and covering
multiple high-growth niche therapeutic segments. Starting in 2026 a series of internally developed
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and in-licensed innovative products are expected to enter a period of intensive regulatory
submissions and approvals further accelerating the conversion of R&D achievements into
commercial value.Looking ahead with continuously strengthened R&D capabilities increasingly robust product
pipeline structure rising efficiency in the transformation of innovation outcomes and a mature
commercialization system the pharmaceutical segment is well positioned to deliver sustainable
medium- to long-term growth. The Company has abundant future growth drivers and a clearly
defined growth path. It is expected to steadily enter a high-quality development stage characterized
by the concentrated realization of R&D achievements and the continuous release of its intrinsic
values.During the reporting period the Pharmaceutical Services Division of Zhongmei Huadong the
core subsidiary of the Company remained committed to the core principles of innovation
professionalism and service excellence. Anchored in value-driven efficiency-first and academic-
led operating criteria it responded actively to policy reforms and the evolving competitive
landscape in the market. Through deeper digital-marketing transformation omni-channel
deployment and continued enhancement of its specialized pharmaceutical-services system the
Company achieved steady breakthroughs in the aspect of innovative drug commercialization
market coverage brand influence and organizational efficiency.The Company further strengthened engagement with top-tier hospitals and key clinical
departments and leveraged professional academic promotion and evidence-based medicine to
consolidate the market leadership of its established products. For key innovative drugs such as
zevor-cel Elahere Sailexin and Huiyoujing the Company established dedicated
commercialization teams and implemented medical-driven expert-guided and fast-access strategies
to efficiently promote hospital admission of new drugs prescription penetration and early sales
ramp-up. In alignment with the tiered diagnosis and treatment policy in China the Company
expedited its channel penetration into lower-tier markets and achieved full coverage across county-
level hospitals community health centers and township clinics. Academic-promotion programs
pharmaceutical-care services and co-construction initiatives enhanced clinical practice and
awareness in primary care settings. As the Company simultaneously expanded the penetration of
innovative and chronic-disease drugs into lower-tier markets accessibility and market penetration
were improved significantly. Out-of-hospital channels have thus emerged as a key growth engine.In the retail sector the Company adopted an integrated online-offline model placing equal
emphasis on OTC and DTP channels. In the online channel the Company deepened partnerships
with mainstream e-commerce platforms strengthened its own direct-to-consumer (DTC) channels
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enhanced the medication purchasing experience enabled precise patient outreach and convenient
delivery and consequently achieved a continuously increasing share of online sales. Within the
OTC segment the Company has intensified brand promotion and patient education to enhance
brand influence. As for DTP pharmacies the Company focused on innovative drugs featured drugs
and chronic disease management and developed a distinctive service model featuring professional
pharmacy clinical pharmacists and medication follow-up thereby building a key platform for the
out-of-hospital commercialization of innovative drugs. The Company adheres to an evidence-based
and academically-driven development strategy continuously invests in evidence-based medicine
real-world studies and expansion of new indications to provide high-level evidence support for
clinical applications. By strengthening collaboration between the medical and commercial teams
the Company has established a closed-loop system encompassing medical strategy academic
promotion clinical feedback and evidence iteration. Leveraging academic conferences expert
consensus statements and clinical guidelines the Company continued to elevate the academic value
and professional reputation of its products and built core competitive barriers supported by robust
academic capabilities.During the reporting period the sales of newly approved innovative drugs continued to exert
strength becoming one of the core drivers of sustained growth in the pharmaceutical industry. Since
its launch the CAR-T product Zevorcabtagene Autoleucel Injection (zevor-cel) has dominated the
market receiving excellent feedback on clinical safety and efficacy. In 2025 zevor-cel obtained
certification and completed registration at medical institutions across more than 20 provinces and
municipalities nationwide. The Company placed 218 valid orders with its partner CARsgen
Therapeutics. In parallel the Company accelerated cooperation with national medical insurance
authority and Huiminbao (a city-specific supplemental medical insurance program). Zevor-cel was
successfully listed in the Commercial Health Insurance Innovative Drug List. As of the release date
of this Report over 100 commercial insurance and Huimin Bao programs have included zevor-cel
for reimbursement significantly alleviating the financial burden on patients. Looking ahead zevor-
cel is expected to maintain high-speed growth considering the continuous market expansion and
increased coverage under regional Huiminbao programs and commercial insurance plans.Following its inclusion in the updated National Reimbursement Drug List (NRDL)
Huiyoujing (Ganagliflozin Proline Tablets) the Category 1 innovative drug intended for diabetes
has seen the pharmaceutical service promotion team of Zhongmei Huadong make active efforts for
hospital access. It is now listed in more than 1900 tiered hospitals laying a solid foundation for
subsequent rapid market growth. Additionally multiple national and regional large-scale clinical
studies have been conducted including real world studies (RWS) and various clinical studies on
33Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
complications/comorbidities in patients with type 2 diabetes mellitus (T2DM). In product
promotion effective synergy has been achieved by sharing resources with Metformin
Hydrochloride and Empagliflozin Tablets (Enshuangping) consolidating the Corporation's core
competitiveness in the SGLT-2 inhibitor segment for diabetes.Elahere (Mirvetuximab Soravtansine Injection) recognized as the world's first and currently
the sole FRα-targeted Antibody-Drug Conjugate (ADC) drug approved for the treatment of
platinum-resistant ovarian cancer was officially launched for commercial sale in China in
November 2025. The Company is diligently and expeditiously advancing its market access
endeavors. As of the end of Q1 Elahere has been listed on procurement platforms in 29 provinces
prescribed in more than 200 hospitals and made available across more than 400 medical institutions
and over 200 DTP pharmacies. Currently Elahere has also been successfully incorporated in
multiple Huiminbao (a city-specific supplemental medical insurance program) programs and
commercial insurance programs such as Beijing Inclusive Medical Insurance Program Jiangxi
Ganhuibao (inclusive commercial health insurance program) Leshan Huijiabao (city-customized
insurance program) and Shaanxi Universal Health Insurance. Prior to its domestic commercial
launch Elahere underwent pilot implementation in the Hainan Boao Lecheng Pilot Zone and
conducted real-world studies for platinum-resistant ovarian cancer at Hainan Boao Ruijin Hospital.In August 2024 Elahere was approved under the innovative "Hong Kong-Macao Drug and Device
Access" policy and introduced in the Guangdong-Hong Kong-Macao Greater Bay Area enabling
patients to receive integrated diagnosis and treatment at designated hospitals in the Area. Since its
official commercialization in Q4 2025 Elahere generated annual sales of approximately RMB 68
million in 2025.Senaparib Capsules (Paishuning) a novel PARP inhibitor exclusively promoted by the
Company was approved for market launch in January 2025 and was successfully included in the
National Reimbursement Drug List for Basic Medical Insurance Maternity Insurance and Work
Injury Insurance (2025) in December 2025. To enhance market access and patient affordability the
Company has implemented multiple key initiatives: on the one hand it has accelerated the listing of
drugs on official procurement platforms and hospital access process. Currently it has completed the
layout of over 300 DTP pharmacies covering more than 900 medical institutions and built a multi-
level drug supply network; on the other hand the Company actively promotes the inclusion of the
product in insurance programs. It has successfully incorporated the product into regional
Huiminbao programs (e.g. West Lake Yilianbao (Hangzhou) Shanghai Huibao Chonghuibao
(Nanchong) Jiaxing Huiminbao and CPIC-Shanghai Xiangbao) as well as other commercial
insurance programs thereby effectively alleviating the financial burden on patients. Since its launch
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market sales of this product have demonstrated sustained positive momentum with steady growth
observed in Q4 2025.Since its approval and market launch in November 2024 the Corporation's Ustekinumab
Injection SAILEXIN has demonstrated consistently excellent market performance. The
pharmaceutical services team has deeply explored the product's outstanding advantages in terms of
ease of use drug safety and accessibility under medical insurance reimbursement. By leveraging
shared resources and close collaboration with the Corporation's existing autoimmune product line it
has established effective synergies. To date over 2000 hospitals have prescribed the product with
market sales gradually increasing. Through initiatives such as soliciting outstanding case studies
launching public welfare science popularization projects organizing multi-level and multi-
dimensional online and offline academic seminars and conducting nationwide multi-center real-
world studies (RWS) the Company has expanded the product influence and optimized the concept
of clinical medication. SAILEXIN is expected to become a new core product in the Corporation's
autoimmune disease field. In 2025 Sailexin achieved domestic sales (including VAT) of nearly
RMB 300 million. Additionally the marketing authorization application and post-approval change
application for Sailexin in Crohn's disease (CD) were accepted in February 2025 with approval
expected in Q2 2026.In the reporting period the Company actively expanded its medical device sales and
promotion team. In October 2025 the domestic marketing authorization application for the first-in-
class innovative drug Relmapirazin Injection (R&D code: MB-102) was officially approved. Its
companion Transdermal GFR Measurement System (TGFR) had previously received approval in
February 2025 marking the overall authorization of the world's first bedside renal function
assessment product MediBeacon TGFR suitable for patients with both normal and impaired renal
function in the Chinese market. Currently MediBeacon TGFR has officially commenced
commercial sales. To date consumables of MediBeacon TGFR have been listed in 25 provinces
while Relmapirazin Injection has been listed in 21 provinces.During the reporting period Huadong Medicine (Guizhou) Pharmaceutical Co. Ltd.(hereinafter referred to as "Guizhou Company") established a professional self-operated promotion
team to vigorously advance the market access of its core product Shangkeling in large and
medium-sized hospitals and primary healthcare institutions while continuously expanding the
coverage of retail pharmacies and sales promotion reach. As of now the product has reached more
than 1780 tiered hospitals nearly 9500 primary healthcare institutions and over 120000 retail
pharmacies forming a broad and scalable distribution network. Driven by the expanding channel
footprint Guizhou Company achieved rapid growth generating RMB 249 million in operating
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revenue during the reporting period (+200% YoY) and RMB 72 million in net profits (+400% YoY).Looking forward Zhongmei Huadong will continue to advance coordinated development across
tiered hospitals primary healthcare institutions and out-of-hospital markets and systematically
bolster the omni-channel marketing capabilities of its pharmaceutical team. By fully harnessing the
distinctive advantages of Shangkeling—a compound Miao ethnic medicine for topical application
with "multi-effect" and "dual-channel" properties—the Company aims to fully tap into the market
potential for both in-hospital and out-of-hospital utilization. Meanwhile through concerted efforts
such as compiling exemplary clinical cases advancing research on drug mechanisms and
undertaking multiple national multi-center clinical research projects encompassing osteoarthritis
soft tissue injuries fractures eczema herpes burns and scalds the Company has amassed a wealth
of evidence-based medical data for Shangkeling and enhanced its penetration across various
departments. Leveraging diversified scenario-based marketing strategies including health runs and
sponsorships of sports events the Company has further elevated its brand influence laying a robust
foundation for the market promotion of its forthcoming topical product portfolio.During the reporting period the production system of Zhongmei Huadong remained closely
aligned with the high-quality and high-efficiency development objectives propelling the
transformation of its production management system through the dual engines of system innovation
and lean operations. By accelerating cost-reduction and efficiency-enhancement initiatives
strengthening refined cost control and improving per-capita output efficiency the Company
continued to optimize its operational performance. Simultaneously relying on artificial intelligence
and digital technologies the Company advanced the automation of workshops unmanned
distribution electronic inspections and the construction of systems such as LIMS MES and
EQMS expediting the intelligent transformation of its manufacturing model. Centered on ensuring
stable production and supply while improving quality and efficiency the Company continued to
consolidate lean management optimize resource allocation and internal collaboration and advance
its second-phase transformation towards standardized efficient and intelligent manufacturing.These endeavors aimed to build a modern production system characterized by high efficiency low
cost agile responsiveness green and low-carbon operations. The Company fully implemented
standardized factory construction improved full-lifecycle management of procurement and
suppliers and standardized engineering project management. These measures significantly
enhanced operational management asset turnover and lean manufacturing capabilities enabling
balanced allocation and stable supply of capacity materials labor and equipment across multiple
manufacturing sites and product lines.In terms of quality control the Company adhered to stringent compliance standards
36Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
continuously deepened its group-wide and integrated quality management system and improved
full-process quality risk control and traceability mechanisms. As the Company diversified its
business formats and rapidly expanded its innovative businesses its quality system was extended to
cover the entire industrial chain. It collaborated with R&D production supply chain and new
business sectors to establish and iteratively upgrade an integrated production quality and R&D
quality management system. This reinforced quality assurance throughout the entire lifecycle from
R&D translation and commercial production to post-market stages fully meeting the quality
requirements for the Company's innovation transformation expansion into new fields and
international development thereby laying a solid foundation for sustainable development with a
high-standard quality system.The construction of the Area I of Huadong Medicine Bio-Innovation Intelligence Center was
completed in June 2025. It was put into operation after equipment commissioning in December
2025. This area focuses on the commercial production of ADCs (antibody-drug conjugates)
peptides and antibody products supported by international-standard QC laboratories integrated
warehousing facilities and R&D infrastructure. It is designed to meet full-chain needs from clinical
sample preparation to large-scale commercial manufacturing. The construction of Area II
commenced in June 2025 with emphasis on critical auxiliary facilities such as hazardous chemical
warehouses Class A workshops and environmental treatment systems which are scheduled for
completion and put into use by June 2026. Upon the overall completion of the project a
comprehensive biopharmaceutical industrialization platform covering R&D production and
logistics will be formed to support the technology transformation of the Company's global
innovation and R&D ecosystem. The Huadong Medicine Synthetic API Base Project (Xi'an
Bodyguard) officially broke ground in June 2025. This project plans to build 3 intelligent
production lines capable of manufacturing 20 types of high-end APIs for cardiovascular and
cerebrovascular diseases and oncology indications. Designed in strict compliance with international
standards this project will further strengthen the Company's full-chain capacity layout in synthetic
biology and create strategic synergies with the Bio-Innovation Intelligent Manufacturing Center.The smooth progress of this project marks a new milestone in the Company's industrialization
capabilities for biologics and synthetic APIs. By establishing a dual-driven production system that
integrates "Biopharmaceutical Manufacturing + Synthetic APIs" the Company is positioned to
provide full-cycle capacity support—from clinical application to commercial stages—for its
innovative drug pipeline (including key products like ADCs and GLP-1). To date the main
structures of multiple monomer buildings in this project have been completed.During the reporting period the Company invested RMB 2.982 billion in R&D for
37Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
pharmaceutical industry segment (excluding equity investments) up 11.36% year-on-year. Direct
R&D expenses reached RMB 2.472 billion up 39.64% year-on-year accounting for 16.60% of
operating revenues of pharmaceutical industry segment. The Company's Innovative Drug R&D
Center is advancing the development of over 96 innovative drugs in its pipelines with multiple
positive results achieved in 2025 as detailed in Section "4. R&D Investment" below.(II) Pharmaceutical distribution
In 2025 despite continued dual pressure from medical insurance cost containment measures
and weakening terminal demand the pharmaceutical distribution segment of the Company pursued
a dual-market model across in-hospital and out-of-hospital channels balancing business expansion
with operational efficiency improvement. Through proactive internal restructuring and institutional
reforms the Company effectively mitigated external shocks and competitive pressures delivering
stable operational performance. Annual operating revenue reached RMB 28.697 billion up 5.92%
year on year while net profit rose 5.16% YoY to RMB 479 million.During the reporting period the pharmaceutical distribution segment of the Company closely
aligned with the strategic priorities set for the inaugural year of the eighth "Three-Year Plan"
emphasizing "innovation and breakthroughs". Centered on three directions—"preserving existing
business promoting incremental growth and improving labor efficiency"— the Company
accelerated its transition from scale-driven expansion to value-oriented development. By providing
upstream industrial customers with integrated services covering market access government affairs
channel management sales and supply chain the Company continued to deepen industrial synergy
built a value-sharing ecosystem and laid a solid foundation for transforming into a "comprehensive
pharmaceutical services provider" while further consolidating its core business. It also actively
explored new businesses markets and models.In the aspect of optimization of existing business this segment prioritized enhancing
professional service capabilities to reinforce the foundation of operational performance. In the
aspect of in-hospital market the Company expanded strategic partnership with tertiary hospitals
and delivered comprehensive solutions for pharmacy management optimization and refined supply
chains to consolidate and increase distribution shares. Simultaneously it expanded its coverage in
secondary and primary medical institutions by optimizing personnel allocation and product
portfolios to address market gaps. The Company accelerated the out-of-hospital market layout
prioritized the "quality enhancement" for its self-operated retail business focused on hospital-
collaborative pharmacies and DTP specialty pharmacies and strengthened project evaluation and
operational control to establish benchmarks for professional services. Newly established
pharmaceuticals and international trade subsidiaries specialized in out-of-hospital and non-
38Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
pharmaceutical businesses respectively and enhanced nationwide distribution capabilities and non-
pharmaceutical product introduction efficiency. In terms of operations management the Company
emphasized key operational indicators such as operating cycles and accounts receivable while
improving per-capita efficiency and departmental performance evaluation. These initiatives pushed
the transformation of traditional businesses towards refined and efficient operation.In the aspect of development of growth businesses the Company created new growth drivers
by breaking traditional business boundaries. Product-agency operations which focused on chemical
drugs blood products and medical devices have deepened the Company's presence in Zhejiang
Province while helping the Company progressively expand into other regions with the aim of
building a leading regional CSO brand. Third-party logistics capabilities centered on cold chain
specialty drugs and radiopharmaceuticals continued to be enhanced supporting the expansion of a
national professional distribution network. Leveraging internal resources such as aesthetic
medicines and industrial microbiology the Company expanded into emerging fields like aesthetics
and animal health. Supported by nationwide distribution of products such as recombinant botulinum
toxin the Company established national organizational structures business models and promotion
systems effectively advancing its strategy of "Going beyond Zhejiang".In the aspect of management and capability building the Company aligned organizational
innovations with business development. It integrated medical device business to establish a
dedicated Medical Device Division and set up specialized subsidiaries to undertake out-of-hospital
and non-pharmaceutical business. The Company continuously advanced digital upgrades of
information systems and enabled integrated intelligent management across business logistics retail
and operations. It has initiated supply chain upgrades and strengthened nationwide cold chain
distribution capabilities to support national expansion. The human resources and financial systems
deepened group-wide control centered on the principles of "improving labor efficiency cost
reduction and expense control" and optimized resource allocation to establish a solid foundation
for high-quality development.(III) Aesthetic medicine business
The Company's aesthetic medicine business is anchored in core values of medical
professionalism leading-edge aesthetic concepts and an innovation-driven development philosophy.In 2025 the aesthetic medicine segment of the Company experienced temporary operational
pressure attributable to market cycle adjustments and intensifying competition in both domestic and
international markets. During the reporting period the total operating revenue of the Company's
aesthetic medicine segment reached RMB 1.826 billion (excluding internal offsets) representing a
21.50% decline year on year.
39Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Sinclair the Company's wholly-owned subsidiary responsible for overseas aesthetic medicine
operations continued to proactively expand the global footprint of its aesthetic medicine injectable
fillers and EBD products. During the reporting period due to a combination of multiple factors—
including sluggish global economic recovery cyclical adjustments in the aesthetic medicine
industry and the strategic optimization of its overall business plan—Sinclair generated sales
revenue of approximately RMB 958 million showing a slight decline of 0.95% year on year. In
response to industry cycle adjustments the Company remained committed to its strategic vision of
becoming a "global leader in aesthetic medicine". It proactively aligned with the trend toward
flattened management among global multinational enterprises and implemented strategic
optimizations across its organizational structure and workforce allocation for its global aesthetic
medicine business. Through advancing management model upgrades optimizing resource
distribution and streamlining operational layers the Company continuously enhanced operational
efficiency. These initiatives aimed to build a lean and efficient global operational system with
sustained innovation capabilities concentrating superior resources on breakthroughs in core
business areas.Although these forward-looking strategic adjustments exerted a certain impact on short-term
operating performance they represent necessary steps to strengthen the Company's core market
competitiveness. As these strategic adjustments gradually take effect the long-term sustainable
growth potential of the Company's aesthetic medicine business is expected to be steadily realized.In China the aesthetic medicine industry experienced continued to undergo adjustment in 2025
amid rapidly evolving consumer preferences and intensifying competitive dynamics. Coupled with
factors such as slower-than-expected overall market recovery and fierce competition across terminal
channels these factors exerted a more pronounced impact on the Company's domestic aesthetic
medicine business resulting in a certain degree of pressure on revenue scale and profitability during
the reporting period. Sinclair China achieved an annual operating revenue of RMB 780 million
down 31.50% YoY. Currently the Chinese aesthetic medicine industry is entering a new stage of
deep structural adjustment and a return to rational development. The Company will continue to
strengthen internal strategic alignment solidly brand building and market cultivation and focus on
developing differentiated core competitiveness in its products to avoid homogeneous and price
competition. Relying on a diversified product matrix and integrated multi-product treatment
solution the Company precisely matched the diverse needs of aesthetic-treatment consumers
continuously improved the end-user experience further consolidated its leading position in the
domestic high-end injectable aesthetic medicine market and continuously increased channel
coverage in public hospitals and private chain institutions to steadily enhance its market share and
40Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
industry influence.Despite cyclical industry fluctuations and external challenges the Company remained firmly
committed to increasing R&D investment expanding its product pipeline and continuously
optimizing its global channel network and product portfolio. It also advanced clinical studies
regulatory registration and certification processes in key markets with greater efficiency. With the
scheduled successive launch and commercialization of multiple key new products in 2026 the
Company's aesthetic medicine portfolio will be further enriched and improved and its
comprehensive competitiveness and market coverage capabilities are expected to continue to
strengthen driving the aesthetic medicine business to gradually emerge from the industry
adjustment cycle and return to a trajectory of steady growth.During the reporting period with the Company's main brand at its core Sinclair continued to
strengthen the layout of its injectable product pipeline and advanced the coordinated development
of its multiple sub-brands. The Company closely integrated global R&D resources upheld its
principle of professional medicine first and further strengthened its professional influence among
B-end aesthetic medicine institutions and brand awareness among C-end aesthetic-treatment
consumers. It remained focused on shaping a brand identity centered on "innovation
professionalism and aesthetics". The Company has now established a business pattern with dual
channels spanning both public hospitals and private aesthetic medicine institutions enabling it to
better consumers' growing demands for diversified professional high-end and personalized
aesthetic solutions.As of December 2025 the second-generation Ellansé product family—Zhenyan Jinyan
and Zhizhen—had been adopted by nearly 500 aesthetic medicine institutions. These products
received strong market feedback and reinforced their leading position within the PCL-based
regenerative segment. To address differentiated channel needs and further expand market
penetration Sinclair launched the classic edition of Ellansé which has gained access to multiple
major public hospitals nationwide. It also initiated customized product development collaborations
with strategic partners. In addition MaiLi Extreme (trade name: MaiLi Extreme) the premium
lidocaine-containing sodium hyaluronate filler which was officially launched in May 2025 has
been adopted by over 100 partner institutions. Originating in Switzerland and powered by the first-
in-class OxiFree (oxygen-free) cross-linking technology this product continues to gain steady
market acceptance due to its advantages and effects of "lower dosage better enhanced and dynamic
shaping".The Company's aesthetic medicine EBD business has further strengthened its presence at the
terminal end with multiple products widely recognized by institutions and aesthetic-treatment
41Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
consumers. By the end of 2025 more than 400 institutions had adopted Glacial Spa Reaction
and the new-generation Renotion with institutional coverage doubling compared to 2024 further
consolidating the competitive advantage of the Company's EBD product pipeline. The successful
launch of Préime DermaFacial also enhanced the Company's footprint in aesthetics device solutions
and supported the continued expansion of its channel business.Throughout 2025 Sinclair conducted over 380 offline medical education and training sessions
engaging more than 6000 physicians. Its online education platform recorded over 280000
physician views. In addition the Company published 21 academic papers including 17 English-
language papers indexed in SCI. As of December 31 2025 Ellansé had partnered with over 1108
hospitals trained and certified more than 2400 physicians.Against the backdrop of national policies vigorously promoting the standardized and regulated
development of the aesthetic medicine industry the aesthetic medicine market in public hospitals
has entered a period of strategic opportunity for accelerated expansion. During the reporting period
the pharmaceutical service team of Zhongmei Huadong and the Sinclair medical team strengthened
collaboration and jointly advanced the development of the aesthetic medicine market within public
hospitals through a "dual-wheel drive" model. Clear market promotion strategies delineated
responsibility division and well-defined market-entry pathways enabled more effective
implementation. The pharmaceutical service team expedited the team building product listing
processes in hospitals admission negotiations and professional training programs. It assumed full
responsibility for the promotion and implementation of injectable fillers and energy-based device
(EBD) products in public hospitals. Focused on establishing a highly specialized public market
promotion team the Company has built a closed-loop ecosystem encompassing "product admission
– clinical promotion – continuous service" thereby cultivating new growth drivers for its aesthetic
medicine segment.Currently the public aesthetic medicine market has progressed steadily and delivered phased
achievements in product admission physician training and ecological synergies. To date Ellansé
has been admitted to dozens of large public hospitals in nine provinces across the country; the
listing process for MaiLi Extreme on hospital formularies has progressed efficiently with listing
and price-adjustment procedures completed in 23 provinces. In collaboration with the
pharmaceutical service team of Huadong Medicine Sinclair has conducted more than 20 physician
training sessions covering nearly 500 physicians from public medical institutions. These efforts
have laid a solid foundation for improving clinical technical capabilities delivering high-quality
aesthetic medical services and enhancing the satisfaction of aesthetic-treatment consumers.During the reporting period the Company also continued to advance the overseas registration
42Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
of its aesthetic medicine portfolio while actively implementing the registration and implementation
of multiple core products in China. For information on the registration progress of the Company's
key aesthetic medicine products at home and abroad please refer to the subsections "(6)
Registration and launching progress of domestic aesthetic medicine product" and "(7) Registration
and launching progress of overseas aesthetic medicine product" under "4. R&D investment" below
in this section.
43Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Figure: Key Aesthetic Medicine Products Launched by Huadong Medicine
(IV) Industrial microbiology business
During the reporting period the Company continued to advance the development strategy of
its industrial microbiology business segment. Anchored in the steady execution of four strategic
pillars—xRNA featured APIs & intermediates massive health & biomaterials and animal health—
the Company further strengthened its capabilities in product R&D and innovation and market
development both at home and abroad. The Company took acceleration of its global footprint and
deep integration into the global pharmaceutical industry supply chain as its core task at the current
stage yielding notable progress in developing key customers domestically and internationally. After
years of exploration and practice the Company has embarked on a high-quality development path
marked by both challenges and growth. All business units delivered improving performance during
the reporting period achieving growth against market trends. Total sales revenue reached RMB 777
million representing a year-on-year increase of 9.34%. Both the xRNA and animal health segments
recorded growth rates of approximately 50%. Major accomplishments across all fields are as
44Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
follows:
Featured APIs & intermediates segment (ADC toxins + polypeptide): Expanding international
markets remained the central task of industrial microbiology at this stage. In the field of the featured
APIs & intermediates segments which integrates traditional and innovative product lines the
Company has completed the establishment of its ADC toxin innovation portfolio with all major
toxin variants having obtained U.S. DMF registrations. Additional DMF filings for new molecular
entities are planned for 2026. Multiple CDMO contracts for ADC toxins have been executed
enabling the Company to provide global partners with small-molecule development services from
early-stage research through clinical stages as well as supporting services for regulatory
submissions. Stable supply of linker-toxin products for both clinical and commercial use has been
achieved. The Company has finalized its global strategy for polypeptide business. It is actively
expanding its international market presence advancing overseas licensing for finished preparations
and building an internationalized API supply system. Both polypeptide preparations and API
businesses are expected to achieve scaled commercial sales over the next two years. The Company
will continue to enhance international registration and market-access capabilities as a cornerstone of
its globalization strategy while steadily building a world-class biologics pipeline for metabolic
diseases.xRNA Segment: Leveraging Wuhu Huaren as its core platform for the xRNA segment the
Company has established a full-chain R&D and production system for upstream raw materials of
oligonucleotide drugs and raw materials for in-vitro diagnostics. With an emphasis on
differentiation and efficiency the Company provides products and services to domestic and
international pharmaceutical companies CDMOs and IVD enterprises. The Company has
continuously increased its investment in innovation and R&D by focusing on three major
directions: raw materials for nucleic acid drug (phosphoramidite monomers) delivery systems
(GalNAc) and specially modified custom monomers. It has obtained ISO9001 ISO14001 and
ISO45001 certifications strictly adhered to international standards of International Council for
Harmonisation (ICH) and Good Manufacturing Practice (GMP) regulations to control product
quality. It has completed 10 U.S. DMF registrations and established collaborations with multiple
multinational pharmaceutical companies leading to rapid business growth during the reporting
period.Massive health & biomaterials: Focused on three core businesses—functional food ingredients
personal care raw materials and biomaterials In 2025 Magic Health launched six new products in
the fields of bone health brain health and anti-aging while maintaining effective operation of food
quality systems such as ISO9001/KOSHER/GMP/FSSC22000. In terms of customer development
45Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
and new application expansion the Company successfully forged partnerships with leading
international health supplement enterprises and entered the domestic dairy product sector
establishing a new growth segment. Shengji Material centered on its proprietary biodegradable
materials has built a matrix of high-end medical functional materials. Leveraging its
pharmaceutical preparation technology platform it has established a presence in CMC research and
development and product incubation for biologics and aesthetic medicines. Two GMP-compliant
manufacturing facilities for biodegradable materials and microspheres have been completed and put
into operation. By collaborating with overseas universities and domestic/global
pharmaceutical/aesthetic medicine companies on raw material supply and applied R&D for
complex injectables the Company aimed to build a globalized innovation-driven supply chain.Animal health segment: Nanjing Nongda Animal Pharmaceutical has accelerated the
construction of a professional brand system in the pet healthcare field focusing on three core areas:
perioperative care chronic disease management and deworming while deepening its product
pipeline layout. Adhering to a dual-track model of independent R&D and external collaboration it
has built a full-channel closed loop integrating "prescription therapeutics + nutritional supplements"
and "offline hospitals + online e-commerce". In 2025 it entered a period of commercial harvest.One new veterinary drug registration certificate was obtained during the year covering core
therapeutic scenarios such as pain relief chronic diseases and deworming and another 6 products
were under registration review with an emphasis on innovation and differentiation. Among them
Prepotide Injection (a GLP-1/GIP dual-target long-acting agonist) the first Class 1 new veterinary
drug independently developed by Huadong Medicine represents a significant milestone in the
Company's R&D of innovative veterinary drugs. Indicated for weight management in obese adult
cats the product's marketing registration application has been accepted by the Ministry of
Agriculture and Rural Affairs filling the gap in targeted drugs for feline obesity. This product offers
clear scientific value and strong market exclusivity positioning itself in the blue ocean market of
pet weight-loss drugs. In terms of marketing channel development the offline business segment
relies on the exclusive commercialization of Butorphanol Tartrate Injection (Boshining)—China's
first domestically developed opioid central analgesic for pets targeting moderate-to-severe surgical
or traumatic pain. The Company continued to deepen collaborations with KOLs in major veterinary
hospital chains and strengthened the establishment of benchmark hospitals in key cities further
expanding perioperative and pain-management application scenarios. By the end of 2025 its offline
network covered more than 8000 veterinary hospitals nationwide. Online business remained
centered on end-user needs with deworming and nutritional supplement products as its core
offerings. The Company successfully built its proprietary brands "Mengdi" and "JNN" and
46Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
completed channel deployment on mainstream e-commerce platforms such as Tmall Douyin and
Pinduoduo. Synergies between online and offline channels continued to reinforce its professional
brand influence and overall market competitiveness.II. BD collaboration during the reporting period
On August 8 2025 the exclusive commercialization cooperation agreement for VC005
between Huadong Medicine (Hangzhou) Co. Ltd. (hereinafter referred to as "Huadong Medicine
Hangzhou") a wholly-owned subsidiary of the Company and Jiangsu Vcare PharmaTech Co. Ltd.(hereinafter referred to as "Jiangsu Vcare") officially came into effect. Huadong Medicine
Hangzhou has obtained the exclusive commercialization rights for the oral formulation of VC005
from Jiangsu Vcare in Chinese mainland. For further details please refer to the Company's
announcement titled Announcement on the Signing of an Exclusive Commercialization Cooperation
Agreement for Products by a Wholly-Owned Subsidiary (Announcement No.: 2025-078) published
on CNINFO (http://www.cninfo.com.cn).To further strengthen the Company's industrial investment ecosystem expand its industrial
chain layout leverage the expertise and resource advantages of professional institutions integrate
resources from all parties and enhance its core competitiveness the Company as a limited partner
jointly signed the Partnership Agreement with Hangzhou Fuguang Hongze Equity Investment
Partnership (Limited Partnership) on August 18 2025 together with the general partner executive
partner and fund manager Shanghai Fuguang Private Equity Management Co. Ltd. and limited
partners Hangzhou Industrial Investment Co. Ltd. and Hangzhou Gongshu Industrial Fund Co.Ltd. to jointly establish the Hangzhou Fuguang Hongze Equity Investment Partnership (Limited
Partnership) (hereinafter referred to as the "Special Pharmaceutical Industry Investment Fund").The total committed capital of the Special Pharmaceutical Industry Investment Fund is RMB 2
billion of which the Company as a limited partner has committed RMB 980 million of own funds
representing a 49.00% share of the total committed capital. For detailed information please refer to
the Company's announcement titled Announcement on Joint Investment with Professional
Investment Institutions to Establish a Special Pharmaceutical Industry Investment Fund and
Related Party Transaction (Announcement No.: 2025-083) published on CNINFO
(http://www.cninfo.com.cn).As of September 22 2025 the Special Pharmaceutical Industry Investment Fund has
completed its business registration and filing with the Asset Management Association of China and
the first tranche of capital has been successfully raised. For detailed information please refer to the
Company's announcement titled Progress Announcement on Joint Investment with Professional
47Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Investment Institutions to Establish a Special Pharmaceutical Industry Investment Fund and
Related Party Transaction (Announcement No.: 2025-087) published on CNINFO
(http://www.cninfo.com.cn). To date the Special Pharmaceutical Industry Investment Fund has
completed five rounds of capital raising and has signed investment agreements for multiple projects
with target companies covering fields such as innovative drugs cell therapy and medical devices.On October 9 2025 Huadong Medicine Hangzhou a wholly-owned subsidiary of the
Company announced that it had entered into an exclusive commercialization cooperation
agreement with Hangzhou Chance Pharmaceuticals Co. Ltd. (hereinafter referred to as "Chance
Pharmaceutical") in Chinese mainland for Chance Pharmaceutical's product CXG87 (improved
Budesonide and Formoterol powder for inhalation). CXG87 is a Class 2.2 new drug independently
developed by Chance Pharmaceuticals intended for the treatment of asthma and other respiratory
diseases. In accordance with the terms and conditions of the agreement Chance Pharmaceuticals
acting as the Marketing Authorization Holder (MAH) is responsible for the R&D registration
manufacturing and supply of CXG87 while Huadong Medicine is responsible for the
commercialization and promotion of CXG87 in the Chinese mainland.On December 7 2025 Huadong Medicine (Hangzhou) Co. Ltd. a wholly-owned subsidiary
of the Company announced that it had entered into an exclusive commercialization cooperation
agreement with Guizhou Sinorda Pharmaceutical Co. Ltd. and its wholly-owned subsidiaries—
Shanghai Sinorda Pharmaceutical Co. Ltd. and Jiangsu Tairui Sinorda Biopharmaceutical Co. Ltd.(collectively "Sinorda Pharmaceutical")—for the commercialization of and other dosage forms in
the Chinese mainland. Linaprazan Glurate Capsules a next-generation potassium-competitive acid
blocker was jointly developed by Sinorda Pharmaceutical and Cinclus Pharma for the treatment of
gastrointestinal disorders. Currently this drug has been approved in China for the indication of
reflux esophagitis and has been successfully included in the 2025 National Reimbursement Drug
List. Under the terms and conditions of the agreement Sinorda Pharmaceutical acting as the MAH
will oversee the R&D registration production and supply of Linaprazan Glurate while Huadong
Medicine will be responsible for its commercialization and promotion in the Chinese mainland.III. ESG of the Company during the reporting period
With regard to ESG the Company maintained an unwavering commitment to sustainable
development. A Sustainability (ESG) Committee has been established under the Board of Directors
to oversee ESG-related matters. The Company integrates the core ESG principles into corporate
development strategy and daily operations management guiding and innovating business practices
with a science-based approach to social responsibility. It upholds the idea of green manufacturing
48Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
actively supports China's "carbon neutrality and carbon peaking" goals operates in strict
compliance with laws and regulations with integrity and actively fulfills its social responsibilities.During the reporting period the Company demonstrated outstanding ESG capabilities leading to a
notable upgrade in its ESG rating by WIND from A to AA. Additionally the Company currently
holds a AAA rating under CNI ESG system of the Shenzhen Stock Exchange an A rating under the
CSC ESG system and an A rating under the China Securities ESG framework. Moreover it has
been honored with several prestigious awards including the "Best Practice Case for Sustainable
Development among Listed Companies in 2025" by the China Association for Public Companies
the "ESG Best Practice" award from New Fortune magazine in 2024 the "2025 Biopharmaceutical
Sustainable Value Leadership Award" and the "2025 Top 20 ESG Competitiveness among Chinese
Pharmaceutical Listed Companies (Large-Cap Stocks)" from E-Pharmaceutical Manager.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 has been included in the
Fortune's Top 500 Chinese Companies for the sixteenth consecutive year and has been ranked
among the top 50 global pharmaceutical companies by Pharmaceutical Executive magazine in the
United States. It has also received accolades such as the "2025 Top 500 Private Enterprises in
China" and the "2025 Top 500 Pharmaceutical Enterprises in China" awarded by the All-China
Federation of Industry and Commerce the "Best Listed Company" title awarded by New Fortune
magazine in 2024 the "Top 100 Mainboard Listed Companies by Value" in the 19th China Listed
Company Value Selection and the "Most Investment-Worthy Award" in the 27th Listed Company
Golden Bull Awards. In terms of investor relations management the Company has been honored
with the "2025 Best Practice Award for Board Offices of Listed Company" by the China
Association for Public Companies the "Investor Relations Management Prize" in the 16th Tianma
Awards and the "Top 10 Zhejiang Listed Companies (Shenzhen and Shanghai A-Shares) Most
Favored by Institutions" by Securities Times.
2. Income and cost
(1) Composition of operating revenue
Unit: RMB
2025 2024 Year-on-year
49Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Proportion to Proportion to increase/decrease
Amount operating Amount operating
revenue revenue
Total operating
43612009891.02100%41905707385.91100%4.07%
revenue
By industries
Commerce 29449035991.19 67.53% 28470546280.59 67.94% 3.44%
Manufacturing 15846613196.31 36.34% 15778029869.34 37.65% 0.43%
Incl.: industry 14783948709.90 33.90% 13752704745.06 32.82% 7.50%
Medical
1826005939.494.19%2326195010.665.55%-21.50%
aesthetics business
Incl.:
international
958213356.682.20%967371493.222.31%-0.95%
medical aesthetics
business
Medic
al aesthetics
1057512017.222.42%1481177976.863.53%-28.60%
business in China
[Note]
Offset (inter-
-1683639296.48-2342868764.02
sectoral offset)
By products
By regions
Sales in China 42486903712.40 97.42% 40811001140.88 97.39% 4.11%
Overseas sales 1125106178.62 2.58% 1094706245.03 2.61% 2.78%
By sales mode
[Note] The medical aesthetics business in China includes revenue from self-operated aesthetic medicine products
revenue from aesthetic medicine products distributed by the Company's pharmaceutical commercial agency and
revenue from proprietary OTC weight-loss products.
(2) Operating revenue or operating profit that accounts for more than 10% of the total by industries products regions and
sales modes
□Applicable □Not applicable
Unit: RMB
Year-on-year
Year-on-year Year-on-year
Operating Gross profit change in
Operating cost change in change in gross
revenue margin operating
operating cost profit margin
revenue
By industries
2944903599127291087507
Commerce 7.33% 3.44% 3.41% 0.03%.19.51
158466131963649030115.
Manufacturing 76.97% 0.43% -7.86% 2.07%.3103
By products
By regions
4248690371228979186886
Sales in China 31.79% 4.11% 5.27% -0.75%.40.73
1125106178.
Overseas sales 520292564.29 53.76% 2.78% 13.00% -4.18%
62
50Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
By sales mode
If the statistical method of the Company's main business data has been adjusted during the reporting period the Company's main
business data for the most recent year shall be adjusted according to the method at the end of the reporting period
□Applicable□Not applicable
(3) Whether the Company's revenue from in-kind sales exceeds that from labor services
□Yes □No
Reasons for over 30% year-on-year increase/decrease in related data
□Applicable□Not applicable
(4) Fulfillment of major sales contracts and major procurement contracts signed by the Company as of the reporting
period
□Applicable□Not applicable
(5) Composition of operating costs
Sector classification
Sector classification
Unit: RMB
2025 2024 Year-on-year
Sector
Item
classification Proportion in Proportion in
increase/decrea
Amount Amount
operating cost operating cost se
2729108750726391902389
Commerce Operating cost 92.51% 94.30% 3.41%.51.84
3649030115.3960294879.
Manufacturing Operating cost 12.37% 14.15% -7.86%
0325
Description
Not applicable.
(6) Whether the scope of consolidation has been changed during the reporting period
□Yes □No
For details please refer to "IX. Changes in the consolidation scope" under "Section VIII. Financial Reports".
(7) Significant changes or adjustments to the Company's business products or services during the reporting period
□Applicable□Not applicable
(8) Major customers and major suppliers
Information of the Company's major customers
Total sales amount from the top five customers (RMB) 9891034152.44
Proportion of the total sales amount of the top five customers in
22.68%
the total annual sales amount
51Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Proportion of related parties' sales amount of the top five
0.00%
customers' sales amount in the total annual sales amount
Information of the Company's top 5 customers
Proportion in total annual
No. Customer name Sales amount (RMB)
sales amount
1 Customer A1 3854833157.95 8.84%
2 Customer A2 2106985093.04 4.83%
3 Customer A3 1868199035.19 4.28%
4 Customer A10 1268766268.88 2.91%
5 Customer A11 792250597.38 1.82%
Total -- 9891034152.44 22.68%
Other information of major customers
□Applicable□Not applicable
Information on the Company's major suppliers
Total purchase amount from the top five suppliers (RMB) 5316753137.12
Proportion of the total purchase amount of the top five
18.02%
suppliers in the total annual purchase amount
Proportion of related parties' purchase amount of the top five
suppliers' 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 Procurement amount (RMB)
purchase amount
1 Supplier B6 1902117852.86 6.45%
2 Supplier B7 998329179.60 3.38%
3 Supplier B8 884475397.84 3.00%
4 Supplier B9 766414040.52 2.60%
5 Supplier B10 765416666.30 2.59%
Total -- 5316753137.12 18.02%
Other information of major suppliers
□Applicable□Not applicable
During the reporting period the Company's trade business revenue accounted for more than 10% of its total operating revenue.□Applicable□Not applicable
3. Expenses
Unit: RMB
Year-on-year Description of
20252024
increase/decrease significant changes
Selling expenses 6526826370.64 6408522136.28 1.85%
Management expenses 1344109556.03 1397388188.96 -3.81%
Financial expenses 18773120.98 22264685.91 -15.68%
Primarily attributable
R&D expenses 1753147744.43 1425659218.47 22.97% to increased investment
in research and
52Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
development
4. R&D input
□Applicable □Not applicable
(1) R&D overview
During the reporting period adhering to 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 drug R&D pipelines it has strengthened the innovative R&D ecosystem and
technological platforms while accelerating clinical studies with multiple significant milestone
achievements made. As of the release date of this Report the Company's Innovative Drug R&D
Center is advancing 96 projects for innovative drug pipeline. Over the past 5 years the Company
has submitted more than 150 patent applications for innovative drugs with 29 patents granted to
date. During the reporting period the Company invested RMB 2.982 billion in R&D for
pharmaceutical industry segment (excluding equity investments) up 11.36% year-on-year. Direct
R&D expenses reached RMB 2.472 billion up 39.64% year-on-year accounting for 16.60% of
operating revenues of pharmaceutical industry segment.
(2) Key progress in innovation and R&D
Oncology
The post-approval change application to convert the conditional approval of Mirvetuximab
Soravtansine Injection (Elahere R&D code: IMGN853 HDM2002) to regular approval was
accepted in March 2025. Regular approval was granted for market launch in November 2025.The NDA for the Company's Class 1 new drug Mairuidong (Mifanertinib Maleate Tablets)
was approved in October 2025 for the first-line treatment of adult patients with locally advanced or
metastatic non-small cell lung cancer (NSCLC) harboring epidermal growth factor receptor (EGFR)
exon 21 (L858R) substitution mutations.The Company's self-developed ADC drug pipeline has established a differentiated target layout
and a gradient pipeline layout. Current key advancing projects include HDM2005 HDM2020
HDM2012 HDM2017 and HDM2024.Among these projects HDM2005 a ROR1-targeting ADC remained in the global first
echelon of ROR1 ADC clinical development. Three clinical studies are currently underway in China:
A Phase I clinical study of monotherapy for advanced hematologic malignancies (mantle cell
53Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
lymphoma (MCL) diffuse large B-cell lymphoma (DLBCL) classical Hodgkin lymphoma (cHL))
which has completed Phase Ia monotherapy dose escalation and is conducting dose expansion
studies for MCL and cHL; A Phase I clinical study of monotherapy for advanced solid tumors
which administered the first dose to a subject in May 2025 has enrolled 17 subjects and is
conducting dose expansion at 2.5 mg/kg; and a Phase Ib & II clinical study of combination therapy
for DLBCL subjects which enrolled the first subject in September 2025 and is currently
conducting combination therapy dose escalation. In addition the Company has submitted
communication and meeting requests to the CDE respectively for combination therapy in MCL
and cHL.HDM2020 an FGFR2b-targeting ADC received IND approvals in China and the United
States in June and July 2025 respectively. Its monotherapy dose escalation clinical study has
progressed to the fourth dose cohort and a Phase Ia study for lung squamous cell carcinoma has
been officially commenced with subject screening in progress. In February 2026 HDM2020 was
granted orphan drug designation (ODD) by the U.S. FDA for gastric cancer (including
gastroesophageal junction cancer).HDM2012 a MUC17-targeting ADC received IND approvals in China and the United States
in July and June 2025 respectively. The first subject administration in a Phase I trial for advanced
solid tumors was completed in August 2025. As the first MUC17 ADC to enter clinical
development globally it has now progressed to the fourth dose cohort. In December 2025
HDM2012 received ODD from the U.S. FDA for two indications: gastric cancer (including
gastroesophageal junction cancer) and pancreatic cancer.HDM2017 a CDH17-targeting ADC received IND approvals in both the United States and
China in September 2025 and Phase I clinical studies were initiated concurrently in China and
Australia. The monotherapy Phase Ia trial in China has progressed to the fourth dose cohort with
dose expansion at 3.2 mg/kg underway. The first study site in Australia was activated in February
2026 and is conducting subject screening. In addition in March 2026 HDM2017 received ODD
from the U.S. FDA for three indications: biliary tract cancer gastric cancer and pancreatic cancer.HDM2024 an EGFR/HER3-targeting bispecific ADC received IND approvals in the United
States and China in March 2026 for the treatment of advanced solid tumors. The first subject
administration in a Phase I clinical study in China was completed in April 2026.HDP-101 (HDM2027) a BCMA-targeting amanitin ADC enrolled its first patient in China in
March 2026 for the treatment of plasma-cell disorders including multiple myeloma. Furthermore
HDP-101 (HDM2027) was granted Fast Track Designation by the U.S. FDA in October 2025.
54Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
The small-molecule antineoplastic agent HPK-1 PROTAC (hematopoietic progenitor kinase 1
proteolysis-targeting chimera) HDM2006 tablets is currently undergoing a Phase I clinical study in
China for the treatment of advanced solid tumors with enrollment for the third dose cohort
underway.DR30206 Injection a proprietary triple-target PD-L1/VEGF/TGF-β antibody fusion protein
that is developed by Doer Biologics a controlled subsidiary of the Company continued to lead
global R&D progress for this target class. In April 2025 the first subject was successfully dosed in
the Phase Ib clinical study evaluating DR30206 as a first-line therapy for NSCLC. The dose
escalation study is nearing completion showing overall good efficacy. Combination-therapy studies
are progressing as planned. The Phase Ib/IIa study evaluating DR30206 in combination with
standard chemotherapy for advanced or metastatic gastrointestinal tumors achieved the
administration to the first subject in June 2025. In November 2025 the DR30206 was administered
to the first subject in the monotherapy expansion cohort for head and neck squamous cell carcinoma
(HNSCC) during its Phase Ib trial. In January 2026 the DR30206 was administered to the first
subject in the monotherapy expansion cohort for platinum-resistant ovarian cancer during its Phase
Ib trial. In March 2026 DR30206 received IND approval in China for its combination with standard
chemotherapy in patients with locally advanced or metastatic non-small cell lung cancer.Endocrinology
The oral small-molecule GLP-1 receptor agonist HDM1002 (conveglipron) has now
completed enrollment of all subjects for its Phase III clinical study in China for the weight
management indication. The study is currently in the treatment follow-up and data collection phase.The NDA application is expected to be submitted in Q4 2026. Both Phase III clinical studies for the
type 2 diabetes mellitus indication of this product have completed full enrollment. Pre-NDA
application is expected to be submitted in Q4 2026.The HDM1005 (poterepatide) Injection a GLP-1R/GIPR long-acting polypeptide dual-target
agonist enrolled all subjects in the Phase III clinical study for the weight management indication in
November 2025. Top-line results for the Phase II clinical study for diabetes were obtained in
February 2026. The first subjects have been enrolled in both Phase III studies for diabetes. Two
Phase III studies for the obstructive sleep apnea hypopnea syndrome (OSAS) indication are
currently in preparation.DR10624 a first-in-class triple agonist (FGF21R/GCGR/GLP-1R) developed by Doer
Biologics the controlling subsidiary of the Company has successfully completed a Phase II clinical
study for severe hypertriglyceridemia. The study results were selected as the Late-Breaking Science
for the 2025 American Heart Association Scientific Sessions (AHA Scientific Sessions 2025) and
55Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
were featured as the opening session presentation on the main stage of the AHA 2025 main venue
held in November 2025. Preparations are currently underway for the Phase III clinical study
targeting the indication of severe hypertriglyceridemia. Furthermore the IND application for severe
hypertriglyceridemia in the U.S. received approval in October 2025. In January 2026 DR10624
was included in the Breakthrough Therapy Designation by the CDE for severe hypertriglyceridemia.The Phase II clinical study targeting patients with metabolic dysfunction-associated steatotic liver
disease with high risk of liver fibrosis is currently being conducted concurrently. Top-line results are
expected to be obtained in Q3 2026.HDM1014 injection which is the GalNAc-siRNA weight-loss drug self-developed by the
Company is undergoing IND development work. It is expected to submit IND application in China
in Q4 2026.The IND application for HDM1010 tablets (a fixed-dose oral combination formulation of
HDM1002) for the treatment of type 2 diabetes mellitus was approved by the U.S. FDA in June
2025 and clinical study preparations are currently underway.
The NDA for the diabetes indication of Semaglutide Injection was submitted and accepted in
March 2025 and successfully passed clinical inspection; the NDA for the weight management
indication was accepted in April 2026.The NDA for Insulin Degludec Injection was submitted and accepted in February 2025; the
on-site inspection has been completed and the application is currently under technical review.The top-line results for the Phase III clinical study of Insulin Degludec and Insulin Aspart
Injection were obtained in September 2025 and a Pre-NDA communication application was
submitted in November 2025. It is expected to submit NDA in Q2 2026.Autoimmunity
The supplemental application of HDM3001 (QX001S) a biosimilar of Ustekinumab
developed in collaboration between the Company and Qyuns Therapeutics for the new pediatric
plaque psoriasis indication was approved in March 2025. The marketing authorization application
and supplemental application for the Crohn's disease indication were accepted in February 2025
with approval expected in Q2 2026.The Phase III clinical studies for the innovative drug Oturkibart (R&D code:
HDM3016/QX005N) which was developed by the Company in collaboration with Qyuns
Therapeutics for the treatment of prurigo nodularis (PN) and atopic dermatitis (AD) have reached
their primary endpoints. The NDAs for the PN and AD indications are expected to be submitted in
the first and second halves of 2026 respectively.
56Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
The Chinese NDA applications for HDM3014 (Roflumilast Cream) developed in
collaboration with U.S. Arcutis for two indications—plaque psoriasis in patients aged 6 years and
older and atopic dermatitis in patients aged 6 years and older—were submitted in October and
November 2025 respectively. Both applications have passed the clinical on-site inspection by the
National Medical Products Administration. In addition the Chinese NDA application for
Roflumilast Cream for atopic dermatitis indication in patients aged 2 to 5 was accepted in February
2026.
The Phase I/II clinical study for the treatment of prurigo nodularis with Ruxolitinib Gel
(HDM3010) which is a modified new drug developed by the Company has generated top-line data.A Pre-Phase III communication application was submitted in September 2025. Feedback has been
received from the CDE and subsequent study preparations are progressing in accordance with the
CDE feedback. In addition a Phase III clinical study in vitiligo is currently ongoing.The MC2-01 Cream developed in collaboration between the Company and MC2 Therapeutics
received approval in July 2025 to initiate a Phase III clinical study in China for plaque psoriasis. To
date more than 120 subjects have been enrolled.HDM4002 Injection the first-in-class bispecific antibody candidate independently developed
by the Company is currently under IND-enabling development. It is anticipated that IND
applications will be submitted in China and the US in the second half of 2026.Other segments
The Transcutaneous Glomerular Filtration Rate (TGFR) Measurement Equipment an
innovative Class III medical device received marketing approval from the National Medical
Products Administration (NMPA) in February 2025. The domestic NDA for Relmapirazin Injection
(R&D code: MB-102)—a first-in-class innovative drug used in combination with this device—was
subsequently approved in October 2025.The NDA for Ranibizumab Injection was submitted and accepted in May 2025. Subsequently
the on-site inspection has been completed for the production. Ranibizumab Injection has
successfully passed the clinical on-site inspection conducted by the National Medical Products
Administration.
57Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Figure: Pipeline of Major Innovative Products
Major regulatory milestones in pharmaceutical innovation since 2025 (innovative drugs
medical devices and biosimilars)
From the beginning of 2025 to the disclosure date of this Report the Company's products have
obtained a total of 6 marketing approvals. During the same period 12 NDAs were accepted
(including one veterinary drug) 26 Investigational New Drug (IND) approvals were granted and its
products received 6 U.S. orphan drug designations and 1 Chinese Breakthrough Therapy
designation. For details see the table below:
China
Type Item Category Registration Milestone Event
Class
Paishuning(Senaparib Innovative Class 1 chemical
Capsules) drug drug NDA obtained in China in January 2025
Transdermal GFR Innovative Class 3 medical
Measurement System medical device NDA obtained in China in February 2025device
SAILEXIN Class 3.3 Supplemental application for the new
(Ustekinumab Biosimilar therapeutic pediatric indication of plaque psoriasis was
Marketing Injection)
biological
product approved in China in March 2025
approval Relmapirazin Injection Innovative Class 1 chemicaldrug drug NDA obtained in China in October 2025
Mairuidong
(Mifanertinib Maleate Innovative Class 1 chemical NDA obtained in China in October 2025
Tablets) drug drug
Elahere Class 3.1
(Mirvetuximab Innovative therapeutic The post-approval change application
Soravtansine drug biological converted from conditional to standard
Injection) product approval was approved in November 2025
58Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
SAILEXIN
(Ustekinumab Class 3.3 Marketing authorization application and
Injection) and Biosimilar therapeutic supplemental application for Crohn's
Ustekinumab Injection biologicalproduct disease were accepted in February 2025(intravenous infusion)
Class 3.3
Insulin Degludec
Injection Biosimilar
therapeutic
biological NDA accepted in February 2025
product
Class 3.3
Semaglutide Injection Biosimilar therapeutic NDA for diabetes indication was acceptedbiological in March 2025
product
Class 3.3
Ranibizumab Injection Biosimilar therapeuticbiological NDA accepted in May 2025
product
Edaravone Tablets Modified Class 2.2new drug chemical drug NDA accepted in July 2025
NDA
acceptance 0.3% Roflumilast Innovative Class 5.1Cream drug chemical drug NDA accepted in October 2025
0.15% Roflumilast Innovative Class 5.1
Cream drug chemical drug NDA accepted in November 2025
Prepotide Injection Veterinary Class 1 newdrug veterinary drug NDA accepted in December 2025
SAILEXIN Class 3.3 Post-approval change application for new
(Ustekinumab Biosimilar therapeutic strengths of Crohn's disease was accepted
Injection) biologicalproduct in January 2026
0.05% Roflumilast Innovative Class 5.1
Cream drug chemical drug NDAwas accepted in February 2026
Class 3.3
Semaglutide Injection Biosimilar therapeutic NDA for weight management indicationbiological was accepted in April 2026
product
Budesonide and
Formoterol Fumarate Modified Class 2.2
Powder for Inhalation new drug chemical drug NDA accepted in April 2026
(IV) capsule type
HDM2006 Innovative Class 1 chemical The IND for advanced malignancies wasdrug drug approved in the U.S. in January 2025
HDM1005 Innovative Class 1 chemical
The IND for OSA in patients with obesity
drug drug or overweight was approved in China inFebruary 2025
Class 1
DR10624 Innovative therapeutic CTA for MASLD was approved in Hongdrug biological Kong in February 2025
product
IND
approved HDM1005 Innovative Class 1 chemical
The IND for HFpEF in patients with
drug drug obesity or overweight was approved inChina in March 2025
Class 1
HDM3019 Innovative therapeutic The IND for rheumatoid arthritis wasdrug biological approved in China in March 2025
product
Class 1 The IND for combination standard
DR30206 Innovative therapeutic chemotherapy in patients with advanced ordrug biological metastatic gastrointestinal tumors was
product approved in China in April 2025
59Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
HDM7008 Innovative Class 1 chemical The IND for hypertension was approved indrug drug China in April 2025
Class 1
HDM2005 Innovative therapeutic
The IND for R-CHP combination therapy
drug biological in patients with DLBCL was approved in
product China in May 2025
HDM1010 Innovative Class 1 chemical The IND for diabetes was approved in thedrug drug U.S. in June 2025
0.3% roflumilast Innovative Class 5.1 The IND for seborrhoeic dermatitis was
topical foam drug chemical drug approved in China in June 2025
Class 1
HDM2020 Innovative therapeutic The IND for advanced solid tumors wasdrug biological approved in China in June 2025
product
Class 1
HDM2012 Innovative therapeutic The IND for advanced solid tumors wasdrug biological approved in the U.S. in June 2025
product
Class 1
HDM2020 Innovative therapeutic The IND for advanced solid tumors wasdrug biological approved in the U.S. in July 2025
product
Class 1
HDM2012 Innovative therapeutic The IND for advanced solid tumors wasdrug biological approved in China in July 2025
product
HDM1002 Innovative Class 1 chemical The IND for weight management wasdrug drug approved in the U.S. in July 2025
MC2-01 Cream Innovative Class 5.1 The IND for plaque psoriasis was approveddrug chemical drug in China in July 2025
Class 1
HDM2017 Innovative therapeutic
The IND for advanced malignant solid
drug biological tumors was approved in the U.S. in
product September 2025
Class 1
Innovative therapeutic The IND for advanced malignant solidHDM2017 drug biological tumors was approved in China in
product September 2025
Class 1
DR10624 Innovative therapeutic The IND for severe hypertriglyceridemiadrug biological was approved in the U.S. in October 2025
product
Class 1
HDM2017 Innovative therapeutic The clinical CTN filing was approved indrug biological Australia in December 2025
product
Class 1
DR10624 Innovative therapeutic
The IND for metabolic dysfunction-
drug biological associated steatotic liver disease was
product approved in the U.S. in January 2026
Class 1 The IND for the combination therapy with
Innovative therapeutic Rituximab and Lenalidomide for theHDM2005 drug biological treatment of relapsed/refractory mantle cell
product lymphoma was approved in China inJanuary 2026
Class 1
DR10624 Innovative therapeutic IND for hypertriglyceridemia approved indrug biological China in February 2026
product
60Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Class 1 The IND for combination with standard
Innovative therapeutic chemotherapy in locally advanced orDR30206 drug biological metastatic non-small cell lung cancer
product patients was approved in China in February2026
Class 1 The IND for advanced malignant solid
HDM2024 Innovative therapeuticdrug biological tumors was approved in China in March
product 2026
Class 1
HDM2024 Innovative therapeutic
The IND for advanced malignant solid
drug biological tumors was approved in the U.S. in March
product 2026
Class 1 Orphan drug designation was granted in the
HDM2012 Innovative therapeutic U.S. in December 2025 for indications ofdrug biological gastric cancer and gastroesophageal
product junction cancer
Class 1
Innovative therapeutic Orphan drug designation was granted in theHDM2012 drug biological U.S. in December 2025 for pancreatic
product cancer indication
Class 1 Orphan drug designation was granted in the
HDM2020 Innovative therapeutic U.S. in February 2026 for indications ofdrug biological gastric cancer and gastroesophageal
Orphan drug product junction cancer
designation Class 1
HDM2017 Innovative therapeutic
Orphan drug designation was granted in the
drug biological U.S. in March 2026 for biliary tract cancer
product indication
Class 1
HDM2017 Innovative therapeutic
Orphan drug designation was granted in the
drug biological U.S. in March 2026 for gastric cancer
product indication
Class 1
HDM2017 Innovative therapeutic
Orphan drug designation was granted in the
drug biological U.S. in March 2026 for pancreatic cancer
product indication
Class 1
Breakthrough DR10624 Innovative therapeutic
Chinese breakthrough therapy designation
Therapy drug biological was obtained in January 2026 for severe
product hypertriglyceridemia
Note: Paishuning (Senaparib Capsules) and budesonide and formoterol powder for inhalation(Ⅳ) (capsule type)
are products exclusively commercialized/marketed by the Company in the Chinese mainland.The Company's pharmaceutical innovation achievements presented at international
academic conferences since 2025
No. Date of release Item Conference/journal Presentationname format Title
American Preclinical development of
Association for Poster HDM2020 a novel ADC targeting1 April 2025 HDM2020 Cancer Research presentation FGFR2b in gastric cancer (GC) and(AACR) Annual squamous non-small cell lung cancer
Meeting (sq-NSCLC) xenograft models
American Translational studies of HDM2012 a
2 April 2025 HDM2012 Association for Poster novel topoisomerase inhibitor ADCCancer Research presentation targeting MUC17 in patient derived
(AACR) Annual GC CRC PDAC tumor models
61Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Meeting
American
Association for
3 April 2025 HDM2017 Cancer Research Poster Discovery of HDM2017 a CDH17-
(AACR) Annual presentation targeting ADC for colorectal cancers
Meeting
American
Association for Discovery of potent selective and
4 April 2025 HDM2022 Cancer Research Poster orally bioavailable GSPT1 molecular
(AACR) Annual presentation glue degraders (MGDs) for the
Meeting treatment of MYC-driven tumors
American
Association for HDM2006 A Novel and Potent HPK1
5 April 2025 HDM2006 Cancer Research Poster PROTAC Enhances Immune Cell
(AACR) Annual presentation Activation and Induces Robust Tumor
Meeting Growth Inhibition
DR10624 a First-In-Class FGF21
Receptor (FGF21R)/Glucagon
Poster Receptor (GCGR)/GLP-1 Receptor(GLP-1R) Triple Agonist Rapidly and
6 May 2025 DR10624 EASLAnnual presentationMeeting and Late- Significantly Reduced Liver Fat in
Breaker Obese Subjects With ModestHypertriglyceridemia: A 12-Week
Randomized Placebo-Controlled
Double-Blind Multi-Center Trial
DR10624 a novel FGF21R GCGR
and GLP-1R tri-agonist demonstrated
7 May 2025 DR10624 EASLAnnual Poster extraordinary efficacy in B6-Alms1-Meeting presentation del mice a spontaneous MASH model
of mice with obesity hyperglycemia
and dyslipidemia phenotype
8 June 2025 HDM2025 ASCO Poster
Discovery of Potent Degraders of pan-
presentation KRAS Based on a Novel KRASBinder
HDM2020 Oral Triad of precision: FGFR2b MUC17
9 June 2025 HDM2012 World ADC Asia presentation and CDH17 directed ADC for
HDM2017 poster Advancing the treatment of solidtumors
Safety Tolerability Pharmacokinetics
(PK) and Pharmacodynamics (PD) of
a Dual GLP-1/GIP Receptor Agonist
10 June 2025 HDM1005 ADA Scientific OralSessions presentation (HDM1005)—A Phase IRandomized Double-Blind Placebo-
Controlled Single and Multiple Dose-
Escalation Study
HDM1002-102: A Randomized
11 June 2025 HDM1002 ADA Scientific Poster Placebo-Controlled Four-Week PhaseSessions presentation 1b Study in Chinese Adults with
Overweight or Obesity
Efficacy and Safety of HDG1901 vs
Semaglutide ADA Scientific Poster Ozempic
in Patients with Type 2
12 June 2025 Injection Sessions presentation Diabetes (T2D): A RandomizedOpen-label Bioequivalence Phase 3
Trial
Significant Body Weight Reduction
13 September 2025 HDM1005 EASDAnnual Oral with Improved Body Composition byMeeting presentation HDM1005 a Novel Long-Acting
GLP-1R/GIPR Dual Agonist
62Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Significant Weight Reduction with
14 September 2025 HDM1002 EASDAnnual Oral Improved Body Composition andMeeting presentation Serum TG/TC by HDM1002 a Novel
Oral Small Molecule GLP-1R Agonist
WEIGHT MANAGEMENT IN
15 September 2025 HDM7006- WSAVA Poster OBESE PET CATS BY HDM7006 ACAT presentation GLP-1/GIP DUAL-TARGET
AGONIST
WEIGHT MANAGEMENT IN
16 September 2025 HDM7006-CANINES WSAVA
Poster OBESE CANINES BY HDM7006 A
presentation GLP-1/GIP DUAL-TARGET
AGONIST
DR510: A Dual-Masking T-Cell
17 October 2025 DR510 ESMO Abstract and Engager Prodrug with Single-Sitee-Poster Cleavage for Balancing Efficacy and
Safety in Solid Tumor Therapy
Opening DR10624 a First-In-Class FGF21
remarks at Receptor/Glucagon Receptor/GLP-1
the main Receptor Triple Agonist Rapidly and
18 November 2025 DR10624 AHA Scientific venue and Significantly Reduced TriglyceridesSessions Late- Atherogenic Lipids and Liver Fat in
Breaking Patients With Severe
Science Hypertriglyceridemia: Primary ResultsFrom a Randomized Phase 2 Trial
SITC Annual Poster Discovery of HDM2021 as a Highly19 November 2025 HDM2021 Meeting presentation Potent CBL-B Inhibitor for CancerTreatment
Potent Bispecific Antibody Inhibiting
20 November 2025 HDM4002 ASN Poster Activation of Complement Alternativepresentation Pathway and Lectin Pathway for lgAN
Therapy
A phase I study of HDM2005 a
ROR1 targeted antibody-drug
21 December 2025 HDM2005 ASH Annual Poster conjugate (ADC) in patients withMeeting presentation Relapsed or Refractory B-cell non-
Hodgkin lymphoma (B-NHL) or
classical Hodgkin lymphoma(cHL)
Efficacy and Safety of Roflumilast
American Academy Cream 0.3% in Chinese Adult and
22 March 2026 HDM3014 of Dermatology Oral Pediatric Patients with Plaque
(AAD) Psoriasis: Results From a Phase 3
Trial
American Academy Roflumilast Cream 0.15% for Mild-to-
23 March 2026 HDM3014 of Dermatology Poster Moderate Atopic Dermatitis: A
(AAD) presentation Multicenter vehicle-Controlled Phase3 Bridging Study in China
Society of Critical Clinical Validation of a Transdermal
24 March 2026 HD-NP-102 Care Medicine Oral GFR Measurement System in Chinese
(SCCM) Individuals
Society of Critical Bioequivalence and Efficacy Study of
25 March 2026 HD-NP-102 Care Medicine Oral MB-102 With Transdermal GFR
(SCCM) Measurement in Chinese Subjects
American HDM2021 a potent and selective
26 April 2026 HDM2021 Association for Poster CBL-B inhibitor exhibits robustCancer Research presentation immunomodulatory efficacy for anti-
(AACR) tumor therapy
American A novel EGFR and HER3 bispecific
27 April 2026 HDM2024 Association for Poster antibody-drug conjugate exhibitsCancer Research presentation superior antitumor activity and
(AACR) favorable toxicological profile
63Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
American
28 April 2026 DR319 Association for Poster
DR319-DP: A Nectin-4/Trop-2
Cancer Research presentation bispecific ADC with an avidity-driven
(AACR) VHH design and dual-MOA payloads
Progress in the development and application of the AI-Enabled Drug Discovery (AIDD)
Platform
In 2025 the Company continued to advance the systematic development and implementation
of its AI-Enabled Drug Discovery (AIDD) platform. Having progressed beyond the initial stage of
technical capability building this platform has gradually moved into a phase of systematic
empowerment of the R&D pipeline becoming a critical engine that supports the Company's
innovation-driven R&D strategy. In terms of data and information analysis the Company has
developed an AI-based module for analysis of competitive products. This module integrates multi-
source data including clinical studies patents and academic literature focusing on global trends in
new drug R&D. Through automated data acquisition and algorithm-based analytics this module
delivers structured insights on key dimensions such as targets indications molecular types and
R&D stages. This module supports continuous tracking of competitive products assessment of
evolving R&D trends and generation of standardized reports thereby offering data-driven support
for R&D decision-making and pipeline planning. With respect to molecular design and predictive
capabilities the Company has established a protein drug prediction module powered by advanced
algorithmic models. This module features functionalities such as multi-round sampling molecular
interaction prediction and structure generation under constraints laying the technical foundation
for high-throughput screening of candidate molecules.In 2025 the AIDD platform generated over 1 million candidate molecules and independently
developed 14 core computational tools substantially enhancing R&D efficiency in the early stages
of drug discovery. Throughout the reporting year the platform provided deep technical support to
22 ongoing R&D projects of the Company covering multiple technical fields such as small
molecules polypeptides antibodies and antibody-drug conjugates (ADCs). Simultaneously the
Company continued to expand the application capabilities of the AIDD platform in frontier domains
such as oligonucleotide drugs and other novel specific molecules and developed several key
prediction models to further enrich its technological reserves. Through continuous improvement of
a technical system featured by coordinated development of "computing power data and specialized
talent" AI technology has gradually been embedded across multiple critical stages of the
Company's new drug development workflow. Such embedding not only enhances R&D efficiency
but also plays a positive role in shortening R&D cycles and improving the quality of candidate
molecules.
64Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Others
Government funding: Since 2021 the Company's Global Innovative Drug R&D Center has
been approved for 26 government-funded projects with total confirmed funding of approximately
RMB 136 million. During the reporting period the HDM2005 and DR10624 projects were selected
as major initiatives under the National Science and Technology Major Project for R&D of
Innovative Drug; the HDM4002 project received special funding under the program of "Capacity
Building of the Zhongmei Huadong National Enterprise Technology Center" in 2025; the
HDM3013 preclinical project was funded by Zhejiang Province's "Vanguard and Leader" Program;
the preclinical studies of HDM1005 and HDM2006 received financial support from the 2025
Hangzhou Special Fund for the High-Quality Development of the Biomedicine Industry (for drug
preclinical study and public service platforms); the Phase I and Phase II clinical studies of
HDM1002 were supported by the 2025 Hangzhou Special Fund for the High-Quality Development
of the Biomedicine and Synthetic Biology Industries; the intelligent drug delivery project jointly
conducted with Zhejiang University was approved as a research project of the Lingang National
Laboratory. Additionally the Company was approved to establish the "Zhejiang Provincial Key
Laboratory for Intelligent Innovation of New Medicines for Metabolic Diseases" in 2024 with the
provincial key laboratory commenced full operation in 2025.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.Postdoctoral researchers at the workstation conduct cutting-edge and translational research in
innovative drug development in alignment with the Company's strategic priorities and R&D
pipeline layout. Postdoctoral researchers receive joint training through collaborations with mobile
postdoctoral stations at leading academic institutions including Zhejiang University the Shanghai
Institute of Materia Medica of the Chinese Academy of Sciences Shandong University and
Zhejiang University of Technology. To date the workstation has recruited 33 postdoctoral
researchers among whom 18 are currently in residence while 15 have successfully completed the
program.
(3) Major R&D progress in generic drugs
The Company further clarified the focused and prioritized varieties by regularly organizing
dynamic evaluation and analysis of existing generic drugs under development. From the beginning
of the year until the release of this Report the following products have been approved for marketing:
Mycophenolate Mofetil for Suspension Icosapent Ethyl Soft Capsules and Carfilzomib for
65Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Injection from Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. (the Company's wholly-
owned subsidiary); and Sirolimus Gel Vonoprazan Fumarate Tablets Ibrutinib Capsules
Mesalazine Enteric Coated Tablets and Ketorolac Trometamol Injection from Huadong Medicine
(Xi'an) Bodyguard Pharmaceutical Co. Ltd. (the Company's wholly-owned subsidiary).
(4) Progress in international registration
The Company has actively pursued international registration efforts. As of the date of the
Report main progress is as follows:
No. Field Item Remarks Latest progress
Approved KDMF in South Korea on
1 Endocrinology Acarbose APIs February 21 2025Submitted data for EP monograph
revision in July 2025
Submitted Type C meeting request to
the U.S. FDA in May 2025;
For diabetes treatment: 1.34 Obtained EAEU GMP certificate in
mg/mL 3 mL July 2025;
2 Endocrinology Semaglutide Submitted NDA to Azerbaijan inInjection December 2025;
For weight loss: 0.68 mg/mL
1.5 mL 1.34 mg/mL 1.5 mL Submitted EAEU DRL response in
1.34 mg/mL 3 mL 2.27 mg/mL December 2025
3 mL 3.2 mg/mL 3 mL
3 Endocrinology Semaglutide APIs Submitted DMF amendment to the(Injection) U.S. FDA in July 2025
Submitted UAE registration
4 Endocrinology Liraglutide APIs application in March 2025;Drug product application approved in
December 2025
5 Endocrinology Semaglutide (Oral) APIs Completed initial US DMFsubmission in January 2025
Obtained Japanese MF approval in
February 2025
6 Immunology Cyclosporine APIs Obtained Japanese GMP certificationin February 2025
Completed FDA on-site inspection in
April 2025
7 Immunology TacrolimusCapsules 0.5 mg/1/mg/5 mg
U.S. ANDA amendment approved in
October 2025
Submitted DMF amendment to the
8 Immunology Tacrolimus APIs U.S. FDA in March 2025Completed on-site inspection of FDA
in April 2025 (Jiuyang);
Caspofungin U.S. ANDA approved in July 2025;
9 Anti-infection Acetate for 50 mg 70 mg Approved in Costa Rica in September
Injection 2025 (50mg)
10 Anti-infection Mupirocin APIs Submitted DMF amendment to theU.S. FDA in March 2025
11 Anti-infection Mupirocin Calcium APIs Submitted DMF amendment to theU.S. FDA in March 2025
Submitted DMF amendment
12 Anti-infection Polymyxin BSulfate APIs application in the U.S. in February2025;
66Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
CEP (Sister file) approved in February
2026;
13 Oncology MMAE Intermediate Submitted DMF amendment to theU.S. FDA in March 2025
14 Oncology PyVAExd Intermediate Completed pre-IND submission inMay 2025
15 Oncology DM1 Intermediate Submitted DMF amendment to theU.S. FDA in July 2025
4-
16 Oncology ([124]Triazolo[15- Intermediate Completed initial US DMF in AprilA]pyridin-7-yloxy)- 2025
3-methylaniline
17 Anti-infection Daptomycin APIs Submitted DMF amendment to theU.S. FDA in April 2025
Submitted ANDA amendment
application in the U.S. in March 2025;
Digestive Pantoprazole
Submitted U.S. ANDA labeling
18 system drugs Sodium for 40 mg
changes and IR responses in March
Injection and April 2025 with approvalobtained in May;
Submitted IR responses to U.S.ANDA amendment in December 2025
Nucleotide 2'-F-dG(ibu)19 Phosphoramidite Intermediate Completed initial U.S. DMF indrugs monomer January 2025
20 Nucleotide Completed initial U.S. DMFdrugs rU Phosphoramidite Intermediate submission in January 2025
Completed U.S. ANDA submission in
21 Anti-infection Isavuconazonium September 2025;Sulfate for Injection 372 mg Completed U.S. ANDA IR responses
in December 2025
22 Nucleotide 2'-OMe-U Intermediate Completed initial U.S. DMFdrugs Phosphoramidite submission in September 2025
23 Nucleotide 2'-F-dA(Bz)drugs Phosphoramidite Intermediate
Completed initial U.S. DMF
submission in September 2025
24 Immunology Voclosporin APIs Completed initial U.S. DMFsubmission in September 2025
25 Endocrinology Insulin Degludec APIs Completed initial U.S. DMFsubmission in September 2025
26 Nucleotidedrugs 2'-OMe-G(ibu) Intermediate
Completed initial U.S. DMF
submission in November 2025
27 Oncology Olaparib APIs Completed initial U.S. DMFsubmission in November 2025
28 Linker SMCC Intermediate Completed initial U.S. DMFsubmission in November 2025
29 Nucleotide 2'-F-dU Intermediate Completed initial U.S. DMFdrugs Phosphoramidite submission in December 2025
30 Endocrinology Insulin Aspart APIs Completed initial U.S. DMFsubmission in January 2026
31 Nucleotide 2'-F-dC(Ac)drugs Phosphoramidite Intermediate
Completed initial U.S. DMF
submission in March 2026
32 Oncology Leptomycin B Intermediate Completed initial U.S. DMFsubmission in March 2026
33 Oncology Calicheamicin Intermediate Completed initial U.S. DMFsubmission in March 2026
(5) Progress in consistency evaluation
67Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
From the beginning of 2025 until the release of this Report Paracetamol and Dihydrocodeine
Tartrate Tablets of Shaanxi Jiuzhou Pharmaceutical Co. Ltd. (the Company's controlled subsidiary)
and Ibuprofen Tablets of Huadong Medicine (Xi'an) Bodyguard Pharmaceutical Co. Ltd. (the
Company's wholly-owned subsidiary) received approval notices for supplemental application for
consistency evaluation.
(6) Progress in registration of major domestic aesthetic medicines
No. Type Product designation Intended use Latest progress
Lidocaine-containing Cross-
linked Sodium Hyaluronate Enhancement of jawline Obtained marketing approval from1 Injections Gel for Injection contour NMPA in January 2025; held a
MaiLi Extreme MaiLi Extreme
launch in May 20
Received registration acceptance
notice from the Center for Medical
2 Injections MaiLi Precise Improvement of Device Evaluation of the NationalHyaluronic acid infraorbital pouch Medical Products Administration in
October 2025; the application is
currently under technical review
Completed 12-month safety follow-up
3 Injections Lanluma
V Improvement of jawline in clinical studies in December 2025;
Poly-L-lactic acid contour it is currently in the data compilation
stage for the clinical study report
Completed enrollment of the first
4 Injections KIO021 Improvement of facial subject in September 2025 andChitosan skin condition finished enrollment of all 500 subjects
by January 2026
Completed 12-month safety follow-up
Ellansé-S Improvement of frontal in the additional indication clinical5 Injections Polycaprolactone contour study in December 2025; it iscurrently in the data compilation stage
for the clinical study report
Received registration acceptance
6 Injections Ellansé-M Improvement of notice from NMPA in January 2025;Polycaprolactone temporal hollow the application is currently in the
registration review stage
Recombinant Botulinum
7 Injections Toxin Type A for Injection Moderate-to-severe Received marketing approval from
(trade name: Retoxin) glabellar lines NMPA in March 2026
Improvement of body
and facial wrinkles Received registration acceptance
Energy- benign skin lesions notice from NMPA in March 2025;
8 based V30 benign vascular lesions received supplementary information
device benign pigmented notice in June 2025; preparation of
lesions inflammatory technical documents in progress.acne depilation etc.Preparing technical documents for
9 Thread lift Silhouette Instalift Facial lifting NDA in Taiwan China with approval
expected in Q2 2027.Energy- Benign skin lesions Registration application in Taiwan
10 based Primelase pigmented lesions and China: Currently in the technical
device Laser device benign vascular lesions review stage; the application isexpected to get approval in Q1 2027
(7) Main registration progress of overseas aesthetic medicines
68Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
No. Type Product Indication Latest progress
Facial filling skin quality Currently it is in the technical review stage for1 Injections KIO015 improvement EU MDR-CE certification; it is expected toobtain the EU CE certification within 2026
Completed enrollment of all subjects for U.S.
2 Injections Ellansé S Nasolabial folds clinical study by end of March 2026; currentlyconducting safety follow-ups according to the
study protocol
Currently it is in the protocol discussion and
3 Injections ATGC-110 Frown lines development stage for U.S. clinical study
programs
Energy-
4 based Primelase
Benign skin lesions Japan registration application: Currently the
pigmented lesions and application is in the technical review stage; it
device Laser device benign vascular lesions is expected to get approval in Q4 2026
(8) Patent situation
In recent years the Company has placed great emphasis on the protection of intellectual
property rights and the application of research outcomes with both the number of patent
applications and grants steadily increasing. The Company has filed a total of over 1900 patent
applications domestically and internationally over the years including more than 580 authorized
invention patents. Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. a wholly-owned
subsidiary of the Company is a national intellectual property demonstration enterprise. It passed the
external audit by Zhongzhi (Beijing) Certification Co. Ltd. in November 2014 and became one of
the first 147 enterprises that passed the standards implementation certification. In October 2025 it
smoothly passed the audit of the enterprise intellectual property compliance management system
(Certificate No.: 165IP250489R0L).
During the reporting period the Company's patent application and maintenance work
proceeded smoothly. A total of 292 patent applications were filed including 259 invention patents
and 81 patents were authorized.Increase during the reporting period Total quantity
Patent type Number of patents Number of patents Number of patents Number of patents
applied for (units) received (units) applied for (units) received (units)
Invention patent 259 50 1538 587
Utility patent 28 27 321 273
Appearance design
patent 5 4 48 46
Total 292 81 1907 906
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.Information of R&D Personnel
69Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
2025 2024 Change proportion
Number of R&D personnel
194118644.13%
(person)
Proportion of R&D personnel 12.16% 12.44% -0.28%
R&D personnel structure by education
Bachelor's Degree 897 898 -0.11%
Master's Degree 619 569 8.79%
Doctoral Degree 107 106 0.94%
R&D personnel structure by age
<305595403.52%
30–40105910233.52%
>403233017.31%
R&D investment of the Company
2025 2024 Change proportion
R&D investment amount
2471680907.051770011691.4839.64%
(RMB)
Proportion of R&D
investment in operating 16.60% 12.91% 3.69%
revenue
Capitalized R&D investment
752182425.87357162671.46110.60%
amount (RMB)
Proportion of capitalized
R&D investment in R&D 30.43% 20.18% 10.25%
investment
Note: The above R&D investment amount refers to the direct R&D expenditures of the Company's main industrial controlled
subsidiaries 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 invested RMB 2.982 billion in R&D for pharmaceutical industry segment (excluding equity
investments) up 11.36% year-on-year. Direct R&D expenses reached RMB 2.472 billion up 39.64% year-on-year accounting for
16.60% of operating revenues of pharmaceutical industry segment. R&D personnel of the Company in 2025 means the total
number of personnel engaged in development in the R&D and manufacturing systems of the Company's main subsidiaries in the
aspect of pharmaceutical industry and industrial microbiology. The proportion of R&D personnel means the proportion of the
number of R&D personnel in the total number of personnel in the subsidiaries mainly engaged in the R&D production 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 for and impacts of major changes in the composition of R&D personnel
□Applicable□Not applicable
Reasons for the year-on-year significant change in the proportion of total R&D investment in operating revenue
□Applicable □Not applicable
During the current period the direct R&D expenditure of the Company's main industrial
controlled subsidiaries was RMB 2.472 billion showing an increase of 39.64% over the previous
period mainly due to the Company's increased R&D investment during the current period.Reasons for and rationality explanation of significant changes in the capitalization rate of R&D investment
□Applicable□Not applicable
70Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
5. Cash flow
Unit: RMB
Year-on-year
Item 2025 2024
increase/decrease
Subtotal of cash inflows from
48473910236.8744970182586.267.79%
operating activities
Subtotal of cash outflows
44228305865.7041221253703.917.29%
from operating activities
Net cash flow from operating
4245604371.173748928882.3513.25%
activities
Subtotal of cash inflows from
106264743.31327006060.47-67.50%
investing activities
Subtotal of cash outflows
1776037156.152497277729.47-28.88%
from investing activities
Net cash flows from investing
-1669772412.84-2170271669.00-23.06%
activities
Subtotal of cash inflows from
4240271213.395250514515.60-19.24%
financing activities
Subtotal of cash outflows
7062742873.336000178834.7217.71%
from financing activities
Net cash flow from financing
-2822471659.94-749664319.12276.50%
activities
Net increase in cash and cash
-254229522.78781991175.77-132.51%
equivalents
Explanation of main influencing factors for significant changes in relevant data year on year
□Applicable □Not applicable
1. The cash inflows from investing activities in the current period are RMB 106 million down
67.50% compared with RMB 327 million in the same period last year. The decrease is mainly due
to the decline in the collection of large-denomination bank certificates of deposit 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□Not applicable
V. Analysis of non-main business
□Applicable □Not applicable
Unit: RMB
Proportion to total Whether it is
Amount Reason for formation
profit sustainable
Mainly attributable to
income from long-term
Investment income -137842753.21 -3.43% equity investment
accounted for using the
equity method
Gains or losses from 0.00 0.00% No
71Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
changes in fair value
Impairment of assets -87895771.71 -2.19%
Non-operating revenue 34205807.33 0.85% No
Non-operating
125636387.92 3.13% No
expenses
Mainly attributable to
the recognition of
Other income 245152017.73 6.10% No
government grants
during the period
VI. Analysis of assets and liabilities
1. Significant changes in asset composition
Unit: RMB
End of 2025 Beginning of 2025 Increase or Description of
Proportion to Proportion to decrease in significant
Amount Amount
total assets total assets proportion changes
Mainly
attributable to
the increase in
net cash
4978052188.5276440245.
Monetary funds 12.75% 13.93% -1.18% outflows from
8436
financing
activities
during the
current period
Accounts 8985587945. 8425358862.
23.02%22.24%0.78%
receivable 31 23
Mainly
attributable to
the increase in
inventory
5535765919.4776397278.
Inventory 14.18% 12.61% 1.57% goods and
8601
finished
products during
the current
period
Investment
10946776.470.03%11842042.670.03%0.00%
property
Long-term
1509122017.1543646404.
equity 3.87% 4.08% -0.21%
2276
investment
4470264264.4422300775.
Fixed assets 11.45% 11.67% -0.22%
8801
Construction in
832431516.182.13%836739481.602.21%-0.08%
progress
Right-of-use
170395474.590.44%149504562.990.39%0.05%
assets
Mainly
Short-term 1621903523. 2312339143.
4.15% 6.10% -1.95% attributable to
borrowings 77 21
the repayment
72Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
of some
matured loans
during the
current period
Contract
188554462.610.48%173609109.580.46%0.02%
liabilities
Long-term
252034854.550.65%14262841.050.04%0.61%
borrowings
Lease liabilities 88813504.20 0.23% 71857938.46 0.19% 0.04%
Mainly
attributable to
the decrease in
Receivables 1677636420.
460578206.16 1.18% 4.43% -3.25% bank
financing 09
acceptance bills
at the end of the
current period
Mainly
attributable to
the increased
Development 1757196902. 1033392377. capitalization
4.50%2.73%1.77%
expenditure 53 69 of R&D
expenses
during the
current period
Mainly
attributable to
the increase in
Accounts 5059850765. 4467770810.
12.96% 11.79% 1.17% trade accounts
payable 02 96
payable at the
end of the
current period
Mainly
attributable to
the decrease in
payable loans at
2215275211.2849833595.
Other payables 5.67% 7.52% -1.85% call and
5548
temporary
receipts at the
end of the
current period
Foreign assets account for a relatively high proportion
□Applicable□Not applicable
2. Assets and liabilities measured at fair value
□Applicable □Not applicable
Unit: RMB
Profits or
losses from Cumulative
Impairment Purchase Sale
changes in fair value
Opening accrued in amount in amount in Other Closing
Item fair value changes
balance the current the current the current changes balance
in the recorded in
period period period
current equity
period
73Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Financial assets
4. Other
equity -
603232765303654.71631733.677928475.68100625
instrument 5458642.1
6.2206003.76
investment 6
s
Subtotal of -
603232765303654.71631733.677928475.68100625
financial 5458642.1
6.2206003.76
assets 6
Receivable 16776364 92490335 10466091 46057820
s financing 20.09 63.73 777.66 6.16
-
Total of the 22808691 5303654.7 1631733.6 93269620 10466091 11415844
5458642.1
above 86.31 0 6 38.73 777.66 59.92
6
Financial
0.000.000.00
liabilities
Description of other changes
Other changes are due to exchange rate fluctuations.Whether there is any significant change in the measurement attributes of the Company's main assets during the reporting period
□Yes□No
3. Restrictions on asset rights as of the end of the reporting period
Item Closing book balance Closing carrying Type ofamount restriction Reason for restriction
Monetary funds 167868783.56 167868783.56 Deposit Deposit used for issuingbills letters of credit etc.Large-denomination
Monetary funds 54025000.00 54025000.00 Pledged certificate of deposit
pledged for issuing bills
Monetary funds 440524.72 440524.72 Frozen Special funds for reservematerials
Fixed assets 104874654.12 101722559.68 Mortgage Property used asmortgage for loan
Intangible assets 56297988.87 52175635.57 Mortgage Land used as mortgagefor loan
Total 383506951.27 376232503.53
VII. Analysis of investment status
1. Overall situation
□Applicable □Not applicable
Investment amount in the reporting Investment in the same period of the
Percentage change
period (RMB) prior year (RMB)
2574757344.863101859421.91-16.99%
74Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
2. Significant equity investments acquired during the reporting period
□Applicable□Not applicable
3. Significant non-equity investments in progress during the reporting period
□Applicable □Not applicable
Unit: RMB
Reaso
Accum ns for
Accum
ulated failure
Invest ulated
Industr actual to
ment incom
Invest ies invest meet Disclo
amoun e Disclo
ment involv ment Expect the sure
Way of t Source Project realize sure
in ed in amoun ed planne index
Item invest during of progre d by date (if
fixed the t by earnin d (if
ment the funds ss the end applica
assets invest the end gs progre applica
reporti of the ble)
or not ment of the ss and ble)
ng reporti
project reporti expect
period ng
ng ed
period
period earnin
gs
Huado
ng
Medici
Pharm CNIN
ne
aceutic FO
Bio- Self- 25827 43071 Not Februa
al Own 51.00 (http://
innova built Yes 3627. 4910. / / applica ry 8
manuf funds % www.c
tion project 72 04 ble 2024
acturin ninfo.c
Intellig
g om.cn)
ence
Center
Project
2582743071
Total -- -- -- 3627. 4910. -- -- / / -- -- --
7204
4. Investment in financial assets
(1) Investment in securities
□Applicable □Not applicable
Unit: RMB
Profit Cumu
s or Purch Gainslative Sale
Accou Openi
Securi losses
ase or Closin
fair amou
Initial nting ng amou losses g
Securi Securi ty from value nt in Accou Sourc
invest measu carryi nt in during carryi
ty ty abbre chang chang the nting e of
ment remen ng the the ng
type code viatio es in es curren item funds
cost t amou curren report amou
n fair record t
model nt value t ing nted in period
in the period periodequity
curren
75Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
t
period
Invest
Dome
Fair ment
stic -
2020 value - 1158 in
and 4599 7085 2963 Own
RAPT RAPT 7400. measu / / 1021 325.5 other
overse 85.74 52.66 368.3 funds
00 remen 2.81 9 equity
as 8
t instru
stocks
ments
-
459970852963
Total 7400. -- 0.00 0.00 1021 325.5 -- --
85.7452.66368.3
002.819
8
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 USD 3 million
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 held 4937
shares in RAPT accounting for approximately 0.0177% 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 USD 5 million 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 this 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
16.68% 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 Hangzhou
Zhongmei Huadong Pharmaceutical Co. Ltd. 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) Investment in derivatives
□Applicable□Not applicable
76Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
The Company had no derivative investment during the reporting period.VIII. Sale of major assets and significant equity
1. Sale of major assets
□Applicable□Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of significant equity
□Applicable□Not applicable
IX. Analysis of major shareholding companies
□Applicable □Not applicable
Major subsidiaries and shareholding companies with an impact of more than 10% on the Company's net profit
Unit: RMB
Company Type of Main Registered Operating Operating
Total assets Net assets Net profit
name company business capital revenue profit
Production
of
Traditional
Hangzhou
Chinese
Zhongmei
and
Huadong 87230813 21270628 14064996 14891980 39591003 34221608
Subsidiary Western
Pharmaceut 0.00 463.65 683.46 529.72 01.01 90.70
APIs and
ical Co.formulation
Ltd.s and
health care
products
Acquisition and disposal of subsidiaries during the reporting period
□Applicable □Not applicable
Method of acquisition and disposal of Impact on overall production operation
Company name
subsidiaries during the reporting period and performance
Huadong Pharmaceutical Sales
Incorporation Pharmaceutical distribution development
(Zhejiang) Co. Ltd.Huadong Medicine International Trade
Incorporation Pharmaceutical distribution development
(Zhejiang) Co. Ltd.Huadong Peiyuantang (Hangzhou)
Incorporation Pharmaceutical distribution development
Comprehensive Clinic Co. Ltd.Wenzhou Huiren Health Food Co. Ltd. Incorporation Pharmaceutical distribution development
Description of major shareholding companies
X. Structured entities controlled by the Company
□Applicable□Not applicable
77Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
XI. Prospect of the Company's future development
(I) Prospect of macro-economy and trend of the pharmaceutical industry
In 2025 the global economy remained in a period of profound adjustment. A combination of
factors—including increasingly complex geopolitical dynamics persistent inflationary pressures in
certain economies and weakening growth momentum in advanced markets—continued to disrupt
the pace of global economic recovery and reshape international trade patterns. Amid external
pressures and internal challenges China's economy has demonstrated remarkable resilience by
steadfastly advancing toward the overarching objective of high-quality development. Its overall
performance continued the steady upward trajectory marked by synchronized improvements in both
growth quality and efficiency. According to the 2025 Statistical Bulletin on National Economic and
Social Development released by the National Bureau of Statistics China's gross domestic product
(GDP) reached RMB 140.1879 trillion in 2025 surpassing the RMB 140 trillion mark for the first
time and growing by 5.0% year on year. China once again met its annual growth target and
continued to contribute approximately 30% to global economic growth maintaining its position as
the largest contributor and strongest stabilizing force for global economic expansion.From the perspective of core demands in the pharmaceutical industry a combination of key
drivers are converging to sustain robust growth in the global pharmaceutical market including the
accelerating aging of the global population the rising prevalence of chronic diseases a
comprehensive enhancement in residents' awareness of lifelong health management accelerated
innovation in drugs and therapies continuous upgrades to global healthcare systems and sustained
increases in global healthcare resource investments following the occurrence of public health events.These factors collectively underscore the industry's structural growth characteristics.According to forecasts by IQVIA after industry fluctuations caused by earlier public health
events the global pharmaceutical market is gradually returning to a normalized growth trajectory.By 2029 global pharmaceutical spending (at list prices) is projected to reach USD 2.4 trillion
representing a compound annual growth rate (CAGR) of 5–8% over the next five years (excluding
special expenditures on COVID-19 vaccines and treatments). Future industrial growth will continue
to be shaped by two key dynamics: on one hand the launch of global innovative drugs and
breakthroughs in biopharmaceutical technologies will continue to fuel growth momentum; on the
other hand the concentrated patent expirations of drugs and accelerated adoption of biosimilars will
intensify market competition partially offsetting the overall growth momentum. Over the next five
years emerging markets—particularly China India and other Asia-Pacific economies—are
expected to remain the fastest-growing regions in terms of pharmaceutical consumption each with a
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projected CAGR above 3.5% significantly higher than growth rates in developed markets such as
Europe and the United States. Biopharmaceuticals will remain the core growth engine of the global
pharmaceutical market. By 2029 spending on biopharmaceuticals is expected to account for
approximately 41% of total global pharmaceutical spending. Although growth will moderate to 10–
13% the global biopharmaceutical market is still expected to exceed USD 950 billion in value.
By 2029 oncology and immunology will remain the two largest therapeutic segments in terms
of global pharmaceutical spending. Oncology drugs are expected to maintain a CAGR of 10.5–
13.5% with the launch of estimated 100 new oncology therapies worldwide over the next five years
driving the market size of global oncology drug to reach USD 441 billion by 2029. Supported by
the gradual mitigation of competitive pressures from biosimilars steady expansion of the patient
population and the gradual implementation of innovative therapies the global immunology drug
market is expected to grow at a CAGR of 3.5–6.5% with its market size surpassing USD 200
billion by 2029. Meanwhile the endocrine and metabolic disease sector is exhibiting strong growth
momentum particularly driven by explosive demands for therapies related to diabetes and obesity.The application of GLP-1 agonists in glycemic control and weight management continues to expand
with related treatment days growing at more than twice the global average for pharmaceuticals
making it a key source of incremental market growth.Shifting focus to the Chinese pharmaceutical market data from IQVIA reveals that
pharmaceutical expenditures in China have exhibited a consistent upward trajectory increasing
from USD 112 billion in 2015 to USD 178 billion in 2024. This growth has positioned China as the
world's second-largest pharmaceutical market in terms of volume. Over the past five years growth
in China's pharmaceutical spending has been primarily driven by originators. The share of
originator spending rose from 22% in 2015 to 31% in 2024. The rapid enhancement of R&D
capabilities among domestic innovative pharmaceutical companies has led to an increasing number
of originators that are independently developed and launched by domestic enterprises gradually
breaking the traditional dominance of multinational pharmaceutical companies and reshaping the
competitive landscape of pharmaceutical market in China. Over the past five years the domestic
originator market has achieved a CAGR of 9.2%. Looking ahead it is anticipated that amidst the
normalized adjustments to the National Reimbursement Drug List the expedited medical insurance
coverage for innovative drugs and the continuous unleashing of clinical demands the CAGR of
innovative drugs will sustain above 7.8% over the forthcoming five-year period. This rate will
markedly surpass the growth rates of 6% or lower observed in other drug categories; influenced by
policies such as hospital cost containment and the regularization of centralized drug procurement
non-originators—the second-largest segment of China's pharmaceutical spending—are expected to
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attain a CAGR of less than 1% over the next five years. Consequently the overall growth of the
pharmaceutical market may decelerate to a reasonable range of 2.5–5.5%. It is projected that
China's pharmaceutical spending will witness a cumulative increase of approximately USD 32
billion over the next five years surpassing USD 210 billion by 2029. Given the substantial potential
for market expansion the innovation-driven nature of the market will become increasingly
prominent.(II) Industry development trends
1. Domestic pharmaceutical industry
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 year 2025 marks a
pivotal moment for China's pharmaceutical sector—a year defined by the deepened implementation
of the "Healthy China 2030" initiative the successful conclusion of the 14th Five-Year Plan for
pharmaceutical industry development and forward-looking planning for the sector's layout under
the forthcoming 15th Five-Year Plan. The industry is entering a phase characterized by innovation-
driven transformation structural optimization and high-quality growth. With the continued
acceleration of population aging ongoing improvements in chronic disease management systems
rising public awareness of health management and enhanced accessibility of primary healthcare
services overall demand within the pharmaceutical market continues to expand. The long-term
fundamentals of the industry remain solid providing broad prospects for sustained and high-quality
industrial development.At the policy level China's pharmaceutical sector continues to follow the core reform direction
of coordinated advancement across "healthcare medical insurance and pharmaceuticals". The
volume-based procurement (VBP) program of pharmaceuticals has been fully regularized and
institutionalized with its operational framework continuously optimized and upgraded. The
previous model of awarding contracts solely based on the lowest price has been abandoned. Instead
the program now focuses primarily on mature generics and approved varieties while preserving
adequate commercialization windows for innovative products. This approach guides the industry
away from homogeneous low-price competition toward value-based differentiation. Medical
insurance payment reforms are progressing in depth. Negotiation mechanisms are becoming
increasingly mature and the construction of a tiered payment structure is accelerating. Supported by
policies such as dual medical insurance channels outpatient pooling and prescription circulation
structural barriers in drug distribution and primary care access are being dismantled. These changes
are releasing incremental demands in primary and outpatient markets and restructuring the
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industry's channel structure. Drug evaluation approval and industry regulation maintain a dual
focus on encouraging innovation while strictly controlling risks. Priority review pathways for
innovative drugs are being optimized the launch of urgently needed drugs and medical devices is
accelerating and compliance regulation is being strengthened across the entire value chain to foster
greater industry concentration. Overall policy reforms are steering the domestic pharmaceutical
industry away from extensive growth. In the future the domestic pharmaceutical industry will
continue to develop along the key directions of innovation-driven advancement quality-first
development compliant operations and intensified operational efficiency.From the perspective of innovation and R&D trends China's pharmaceutical innovation
capabilities have continued to leap forward and local pharmaceutical companies demonstrated
significant breakthroughs in innovation and R&D strengths and gained stronger global influence
and recognition. Publicly available data from the National Medical Products Administration (NMPA)
show that 76 innovative drugs were approved for marketing in China in 2025 showing a record
high including 11 first-in-class drugs. According to IQVIA and authoritative industry statistics
China's Investigational New Drug (IND) pipeline accounts for approximately 30% of the global
total ranking second worldwide with increasingly rising global participation in clinical studies by
pharmaceutical companies headquartered in China. Domestically produced innovative drugs have
been fully integrated into the global pharmaceutical innovation system becoming an increasingly
important source of new drug R&D worldwide.From the perspective of breakthroughs in disease areas and technology platforms the
underlying logic of innovative drug development continues to focus on unmet clinical needs with
multiple breakthroughs observed across high-demand therapeutic areas and cutting-edge technology
platforms. In the field of metabolic disorder management GLP-1 receptor agonists stand as the
cornerstone therapy with their indications continuously expanding and market potential burgeoning.In the oncology field traditional treatment boundaries are being transcended marked by a series of
breakthroughs in cutting-edge technology platforms including antibody-drug conjugates (ADCs)
bispecific/multispecific antibodies nuclide-targeted drugs CAR-T cell therapies and gene editing.Domestic pharmaceutical companies have established core comparative advantages through
differentiated target layouts and technological process optimization. In addition to the oncology
field innovative achievements continue to emerge in large-scale indication areas such as
autoimmune disorders and rare diseases further augmenting the industry's growth potential and
injecting robust momentum into the long-term high-quality development of the pharmaceutical
industry.
2. Aesthetic medicine industry
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The aesthetic medicine industry has transitioned from its initial phase of rapid and extensive
market expansion to a more rational growth trajectory. The number of industry participants
continues to rise intensifying the market competition. However from a long-term perspective
China's aesthetic medicine market still exhibits lower per capita penetration rates compared to
mature overseas markets. Coupled with steady increases in residents' disposable income continuous
popularization of consumption awareness towards aesthetic medicine and an expanding consumer
base for minimally invasive aesthetic procedures the industry's long-term growth resilience remains
robust with vast development potential. According to data from the National Bureau of Statistics
China's per capita disposable income reached RMB 43377 in 2025 maintaining steady growth and
achieving a real increase of 5% after adjusting for price factors providing solid support for the
upgrading of aesthetic medicine consumption. The 2025 Insight Report on China's Aesthetic
Medicine Industry jointly released by the Chinese Association of Plastics and Aesthetics and
Deloitte China projects that China's aesthetic medicine market will sustain a growth rate of 8–12%
in 2025. Driven by strengthened compliance regulations refined consumer demands and increasing
penetration of minimally invasive aesthetic procedures the industry is expected to maintain steady
growth of 8–13% over the next three to five years.Non-surgical minimally invasive aesthetic medicines characterized by minimal trauma rapid
recovery and high repurchase rates continue to gain growing market share becoming the core
driver of industry growth. Data from the 2025 Insight Report on China's Aesthetic Medicine
Industry reveals that the market share of domestic non-surgical aesthetic medicines surpassed 60%
in 2025. Among non-surgical aesthetic medicines injectable products and energy-based products
account for approximately 45% of market share respectively with both segments maintaining
steady growth. Injectable products are expected to achieve a CAGR of 18–25% over the next five
years while energy-based products are expected to attain a CAGR of 12–18% over the same period.With the comprehensive tightening of compliance regulation in the aesthetic medicine market
non-compliant products and institutions are being swiftly phased out and consumer reliance on
compliant brands high-quality products and professional services continues to grow. Refined
demands such as body contouring anti-aging wrinkle removal and skin whitening are becoming
mainstream driving the steady expansion and quality improvement of China's aesthetic medicine
market.(III) Innovative development strategies of various business segments of the Company
1. Development plan of pharmaceutical industry
By upholding the main development theme of innovation-driven R&D the Company will take
innovative medicines as the foundation and orientation for building core competitiveness in the
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future closely track the technological development and R&D dynamics of such frontier fields as
biopharmaceuticals gene therapy cell therapy and ADC medicines at home and abroad. It focuses
on and gives priority to the development of innovative drugs and high-technical barrier generic
medicines with outstanding clinical values for oncology endocrinology autoimmunity and other
major diseases and chronic diseases with differentiated and pioneering innovative medicine
pipelines formed. In terms of its R&D philosophy the Company is committed to deepening
comprehensive external collaborations and infusing fresh vitality into its long-term strategic plan
for "digestion and absorption". It will persistently enrich its product pipeline refine the medium- to
long-term layout of innovative products and uphold the dual-wheel drive and synergistic
development of its "power engine" and "innovation engine" for R&D endeavors. The Company will
construct a global R&D strategic collaboration ecosystem centered around Zhongmei Huadong
while continuously enhancing its capabilities for international product operations and effectively
licensing out its competitive products advanced technologies and patents. Looking ahead to its
scientific innovation efforts the Company will take innovativeness and differentiation as its
benchmarks adhere to the fundamental principle of clinical value and prioritize the project
advancement speed guided by a medium- to long-term perspective on pipeline development. It will
continuously increase R&D investment enhance the efficiency of R&D fund utilization
consistently enrich and optimize its core innovative product pipeline and form a diverse product
pipeline and a well-structured lineup of products.The Company will accelerate the recruitment of high-level talent and build a high-caliber
scientific research team. It will foster an innovative cultural environment and atmosphere that
encourages innovation celebrates success and tolerates failure while strengthening the
construction of its internal R&D system and technology platforms. With the goal of building a
research team marked by strong capabilities open-mindedness passion responsibility and an
innovative spirit the Company is dedicated to driving the full implementation of its innovation
internationalization strategy. It will establish a dynamic evaluation mechanism for R&D projects to
guide decision-making and management related to R&D and product license-in activities ensuring
the scientific rigor advancement and feasibility of scientific innovation efforts.
2. Development plan of the pharmaceutical distribution
Amid slowing industry growth the Company's pharmaceutical distribution segment will
optimize existing business and explore new growth opportunities. To consolidate its existing
business the Company will safeguard the scale and market share of mature businesses such as
pharmaceuticals medical devices and herbal decoction pieces in hospital settings. For
pharmaceuticals it will strengthen engagement with tertiary hospitals expand out-of-hospital retail
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channels and enhance store efficiency. For medical devices it will deepen cooperation with brand
partners and strive to secure distribution rights under centralized procurement. For herbal decoction
pieces it will respond to centralized procurement through large-scale decoction services and
diversified product portfolio. The Company will concentrate on breaking through new growth areas
in "dual non-core" businesses (non-pharmaceutical and non-medical insurance products). On one
hand it will leverage resource channels such as private hospitals to introduce high-margin varieties.On the other hand it will develop its own brands by constructing robust supply chains. At the same
time with per capita labor efficiency as the core metric the Company will continue to reinforce its
advantages in chemical drug and medical device agency business while prioritizing the expansion
of biologics agency business. To further enhance business synergies the Company will continue
advancing its portfolio of innovative business. Beyond expanding existing initiatives—such as
product agency services and third-party logistics with a strategic emphasis on cold chain specialty
drugs and radiopharmaceuticals—the Company is also opening new business fronts through
collaboration with its aesthetic medicine and industrial segments. By undertaking new nationwide
distribution mandates for botulinum toxin products and upgrading its cold chain supply capabilities
accordingly the Company is strengthening the logistics backbone needed to support future business
development across all segments.
3. Development plan of the aesthetic medicine
The Company's aesthetic medicine business adheres to the strategic approach of "global
operational layout and dual-circulation business development". It will maintain a steadfast focus on
the global high-end aesthetic medicine market integrate and harness global technological
innovation resources to continually elevate its academic influence. Ranging from refined clinical
techniques to broader industrial development the Company is consistently strengthening its product
pipeline to establish a comprehensive global operational framework for aesthetic medicines and
create new avenues for future development. The Company intends to introduce high-tech
international premium products with significant market potential which combine "aesthetic
medicine + life cosmetology" into the Chinese market. By leveraging its registration and
commercialization capabilities in China the Company will steadily expand its presence in China
accelerate the localization and market launch of these premium international products and shape a
new development pattern characterized by mutually reinforcing domestic and international dual
cycles.Looking ahead the Company will continue to focus on the global high-end aesthetic medicine
market and build an internationalized aesthetic medicine business that integrates R&D
manufacturing and marketing. Drawing on multiple global R&D centers and production bases the
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Company will further integrate its R&D resources and capabilities actively optimize and upgrade
its product mix enrich and refine its international industrial layout and provide robust production
capacity assurances for the internationalization of its aesthetic medicine products. This will better
meet future development and market demands. Simultaneously the Company will continuously
build its brand strength through cutting-edge innovative technologies and adhere to the
professionalism and rigor of pharmaceutical professionals. It is committed to delivering
comprehensive solutions and exceptional aesthetic experiences for aesthetic-treatment consumers
bringing long-term value to aesthetic-treatment consumers aesthetic medicine institutions and
doctors worldwide.
4. Development plan of the industrial microbiology
Industrial microbiology segment of the Company will adopt international development as its
strategic orientation and closely keep up with global technological and industrial trends in
industrial microbiology and synthetic biology. The Company will concentrate on constructing an
"industrialized large-scale and internationalized" industrial cluster aspiring to become a global
leader in the industrial microbiology sector. The Company will persist in implementing its
development strategy for the industrial microbiology segment: I) Internationalization: Keep abreast
of emerging industrial development in new therapeutic areas (such as drug conjugates and gene
therapy drugs) and establish an internationally influential biopharmaceutical manufacturing chain
(encompassing the manufacturing and international sales of polypeptide drugs ADC drugs and
RNA drugs); II) Diversification: Actively expand into non-human pharmaceutical markets (such as
raw materials for massive health biomaterials and animal health); III) Platformization: Actively
introduce new technologies and products continuously upgrade and leverage synthetic biology as
the core innovation platform to fully utilize the Company's robust industrialization capabilities and
enhance the market competitiveness of industrial microbiology products. Industrial microbiology
will continue to penetrate new markets improve global business coverage and inject sustained
momentum for long-term growth.(IV) Business Plan in 2026
In 2026 the Company will continue to uphold its core management philosophy of "solving
problems and creating value" further advance the comprehensive implementation of its strategic
pillars including innovation-driven development resource integration and enterprise-wide synergy.By enhancing internal execution and driving reform while fostering new capabilities the Company
aims to sustain steady growth in its mature businesses while unlocking the growth potential of its
emerging businesses. Centered around its four core business segments—pharmaceutical industry
pharmaceutical distribution medical aesthetics and industrial microbiology—the Company will
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pursue new market opportunities new product value new organizational effectiveness and new
core capabilities.
1. Pharmaceutical industry segment
The Company will steadfastly uphold its corporate philosophy of being "research-based and
patient-centered" and continue to augment its R&D investment to progressively enrich the layout
of its innovative drug R&D pipeline. In 2026 the Company's R&D team will elevate its overall
R&D strategic thinking implement R&D management reforms establish robust project evaluation
criteria improve the project quality fortify R&D capabilities boost R&D efficiency increase
project success rates stimulate the enthusiasm of R&D personnel concentrate on key technological
areas and continuously optimize the quality and core competitiveness of the product pipeline.For innovative programs the Innovation R&D Center will remain guided by the unmet clinical
needs of patients worldwide focus on core areas and cultivate differentiated competitiveness. It will
delve deeply into clinical demands and competitive dynamics tackle treatment protocols and
iterative technologies expand new indications for existing products and expedite the R&D speed of
products.In terms of generic drugs the CMC Center will persist in establishing and forming an "API +
DP" industrial chain advantage that combines generic and innovative drugs while continuously
deepening the preparation technology improvements and innovations in the development of high-
tech barrier generic drugs.
2. Pharmaceutical distribution segment
The year 2026 marks a pivotal juncture in the Company's eighth three-year plan aligning with
its 2030 strategic plan. In terms of pharmaceutical distribution segment the Company will take
service value innovation as its cornerstone and transform into a comprehensive pharmaceutical
services provider. Leveraging the organizational structure reforms the Company will address
business shortcomings focus on improving human efficiency innovate in line with industry trends
and construct an omni-channel marketing system to achieve high-quality development in both
current business improvement and future business cultivation. The Company will firmly grasp
traditional businesses such as pharmaceuticals medical devices and herbal medicines and actively
foster business growth and market share through innovative measures. The non-pharmaceutical
business will continue to expand supported by the establishment of a resilient and scalable supply
chain system. As a key growth engine the agency business—in conjunction with distribution
services and third-party logistics—will form a "three-pronged" growth model enabling the
Company to build the leading CSO brand among pharmaceutical distribution enterprises in
Zhejiang Province. Simultaneously the Company will also fully undertake nationwide distribution
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for veterinary medicines and recombinant botulinum toxin products while upgrading its nationwide
cold chain logistics capabilities to match the expanding portfolio.
3. Aesthetic medicine segment
In 2026 the Company's aesthetic medicine segment will continue to advance the global
development and regulatory registration of high-end aesthetic medicine products ensuring that all
programs progress as scheduled. These efforts will further enrich and expand the product pipeline
and deliver greater benefits to more aesthetic-treatment consumers. In 2026 the Chinese aesthetic
medicine business will remain committed to the philosophy of "innovation driven and aesthetic-
treatment consumers centered" enhance the service quality and strengthen brand-building efforts
for both the Sinclair brand and corporate brand. The Company will expand the market share through
multi-channel strategies and develop combined treatment protocol across multiple product lines to
address diverse aesthetic needs under difference scenarios. At the same time the Company will
strengthen collaborations with leading international academic organizations enhance physician
training and continuously improve injection techniques and aesthetic concepts with the goal of
providing consumers with diversified safer and more effective treatment options.
4. Industrial microbiology segment
In 2026 the Company will adopt a pragmatic and focused approach in its industrial
microbiology segment refine its strategic priorities and seek high-quality operational performance.The Company will concentrate on cultivating key product varieties to establish core product
competitiveness while prioritizing cost reduction and expense control to enhance overall
profitability. On the marketing front the Company will anchor its efforts in cost competitiveness
product quality responsiveness and customer satisfaction. The Company will ensure effective
execution of commercial objectives and action plans intensify international market expansion and
enhance key-account development to substantially increase the market coverage. At the same time
the Company will accelerate product certification and regulatory registration processes to support
faster market access and broader product reach. The Company will continue to uphold the
"customer-first" philosophy wholeheartedly serve customers and align all development and
operational priorities with market needs and customer expectations. On the internal operational
front the Company will achieve cost-reduction targets through various measures such as
technological advancement procurement optimization and manufacturing expense control.Moreover the Company will take various measures across multiple dimensions to comprehensively
enhance the market competitiveness and overall operational performance of its products.
5. Production and quality management
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In 2026 the production system will institutionalize the vision of "cost reduction and efficiency
improvement" as a standard operating practice. Guided by the core tenets of "high efficiency
compliance and productivity" it will optimize resource integration and organizational reform
while sharing production management expertise to help all production enterprises within the
system strengthen production management concepts and elevate their production management
levels. As for the quality system the Company will remain steadfast in upholding its work
principles of "integrity efficiency quality first international alignment and innovative excellence"
and implement the concept that "quality is the lifeline." It will construct a scientific and efficient
quality management system to ensure zero tolerance for quality and safety risks.(V) Possible risks and countermeasures
1. Risks arising from industry policy changes and product price reductions
The pharmaceutical industry is a strategic sector strongly supported and promoted in China as
it is closely related to public health and life safety. It is also a highly competitive and innovation-
driven industry that must continuously adapt to market changes and policy adjustments. In recent
years with the ongoing advancement of policies such as volume-based procurement and medical
insurance negotiations the industry has been moving toward greater standardization normalization
and systematization. In the meantime such external factors as geopolitics and macroeconomic
policies have also disturbed business operations 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 drugs.Countermeasures: The Company maintains close attention to national policies and industry
trends with corresponding adjustment made when necessary. In terms of R&D the Company is
increasing investment to further enrich its product pipeline in core therapeutic areas thereby
enhancing competitiveness and growth potential. At the same time the Company actively expands
the aesthetic medicine and industrial microbiology fields to create new growth drivers. In addition
the Company also mitigates its production and operation risks through cost reduction efficiency
improvement lean management or by other means.
2. Risks in new drug R&D
Generally the R&D cycle of innovative products is lengthy. From R&D to market launch
these products must go through a series of stages including preclinical study clinical study
regulatory submission and registration manufacturing approval and final commercialization. This
process is lengthy and subject to numerous uncertainties such as national policies market factors
and regulatory approvals. In addition the R&D of innovative drugs requires high-level talent with
advanced academic and professional backgrounds and the labor costs and upfront R&D
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expenditures may put pressure on the Company's short-term operational performance. Post-launch
sales ramp-up also take time and may face risks such as price reductions which could result in
returns on R&D investment falling short of expectations.Countermeasures: The Company focuses on its core therapeutic fields and continuously
enhances its in-house R&D capabilities. In recent years it has enriched and optimized its product
pipelines through a combination of independent R&D and licensed introductions thereby building a
distinctive R&D ecosystem for Huadong Medicine with specialized research matrices in oncology
endocrinology and autoimmune diseases. The Company will continue to optimize its innovation
mechanisms improve its scientific evaluation and decision-making system for new drug research
and strengthen close collaborations with leading R&D institutions both in China and abroad. In the
meantime it will continue to increase its efforts in recruiting high-level research talents enhance
the training and incentive mechanisms for its core technical staffs and develop a world-class
innovation team capable of supporting the full cycle of innovative drug R&D.
3. Risk in investment and merger
External investment is one of the key approaches for enterprise development. In recent years
to advance its strategic transformation toward innovation the Company has continuously engaged
in investments and acquisitions in innovative drugs aesthetic medicine and industrial microbiology
leading to the recognition of goodwill. If acquired companies experience performance fluctuations
in the future goodwill may be impaired which could adversely affect the Company's performance
for the period. In addition post-investment management and business integration of target
companies place higher demands on the Company's management capabilities.Countermeasures: The Company exercises oversight over acquired subsidiaries through
control of Board of Directors and by 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 and to establish and implement comprehensive management
systems. The Management of acquired subsidiaries maintains efficient communication with the
Company while daily operations and major decisions are strictly carried out in accordance with
relevant laws and regulations the Company's Articles of Association management rules the Board
of Directors and the Rules of Procedure for Shareholders' Meeting. In terms of acquisition risk
prevention and control the Company will conduct business financial and tax due diligence on
target companies by engaging external intermediaries and regularly carry out specialized
management audits of subsidiaries. Furthermore the Company is committed to enhancing its
capabilities in operational planning management structure and financial management while
continuously strengthening resource sharing and synergy with acquired subsidiaries and improving
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business integration in consolidated operations and governance. It also conducts regular goodwill
impairment tests and reinforces comprehensiveness rigor and timeliness in post-investment
management.
4. Risk in exchange rate fluctuation
The Company has been committed to advancing its international development process. 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 impacting its operation ability debt repayment ability and
profitability.Countermeasures: The Company will maintain a vigilant watch over fluctuations in exchange
rates and make timely adjustments to its business strategies to effectively mitigate any adverse
impacts. It will establish awareness of exchange rate risks and continuously improve the foreign
exchange risk management system. Meanwhile the Company will strengthen training for financial
personnel to improve professional skills and risk awareness reinforce risk mitigation practices and
fully utilize financial instruments to hedge against exchange rate risks.XII. Activities such as research communication and interviews conducted during the
reporting period
□Applicable □Not applicable
Main content of
Index of basic
Reception Reception discussion and
Reception date Type of visitor Visitors information of
address method information
the research
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For details see
the Record
Sheet of
Tianfeng 2024 Annual
Investor
Securities Performance
Conference Relations
Online Institutions and Soochow Exchange
April 18 2025 room of the Activities on
exchange individuals Securities Meeting of
Company April 18 2025
Sinolink Huadong
which was
Securities etc Medicine
published by
the Company at
https://irm.cnin
90Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
fo.com.cn/ and
at
www.cninfo.co
m.cn.For details see
the Record
Sheet of
Investor
2025 First Relations
CITIC Quarter Activities on
Conference Securities Performance April 25 2025
Online Institutions and
April 25 2025 room of the CICC Exchange which was
exchange individuals
Company Industrial Meeting of published by
Securities etc. Huadong the Company at
Medicine https://irm.cnin
fo.com.cn/ and
at
www.cninfo.co
m.cn.For details see
the Record
Sheet of
Investor
2024 Annual
Relations
and 2025 First
Activities on
Quarter Online
Conference May 13 2025
Online Individual Performance
May 13 2025 room of the Individuals which was
exchange investors Briefing
Company published by
Meeting of
the Company at
Huadong
https://irm.cnin
Medicine
fo.com.cn/ and
at
www.cninfo.co
m.cn.For details see
the Record
Sheet of
Investor
Relations
Activities
(Investor
Yinhua Fund Investor
Reception Day
Conference CIB Fund reception day
Institutions and Events) on May
May 15 2025 room of the Field visits Aegon- events of
individuals 15 2025 which
Company Industrial Fund Huadong
was published
etc. Medicine
by the
Company at
https://irm.cnin
fo.com.cn/ and
at
www.cninfo.co
m.cn.
2025 Semi- For details see
Soochow
annual the Record
Conference Securities
August 20 Online Institutions and Performance Sheet of
room of the Sinolink
2025 exchange individuals Exchange Investor
Company Securities GF
Meeting of Relations
Securities etc.Huadong Activities on
91Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Medicine August 20
2025 which
was published
by the
Company at
https://irm.cnin
fo.com.cn/ and
at
www.cninfo.co
m.cn.For details see
the Record
Sheet of
Investor
Relations
Citibank
Activities on
Carlyle
September 25
Conference Sumitomo
September 25 Institutions and Investor 2025 which
room of the Field visits Mitsui DS
2025 individuals communication was published
Company Asset
by the
Management
Company at
etc.https://irm.cnin
fo.com.cn/ and
at
www.cninfo.co
m.cn.For details see
the Record
Sheet of
Investor
Relations
2025 Third
Activities on
Quarter
CICC CITIC October 28
Conference Performance
October 28 Online Institutions and Securities 2025 which
room of the Exchange
2025 exchange individuals China was published
Company Meeting of
Securities etc. by the
Huadong
Company at
Medicine
https://irm.cnin
fo.com.cn/ and
at
www.cninfo.co
m.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
92Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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 Forestalling Risks and
Promoting High-Quality Development of the Capital Market the Administrative Measures for the
Disclosure of Information of Listed Companies the No. 10 Guideline for the Supervision of Listed
Companies - Market Value Management as well as the Articles of Association and the Company's
operational realities. The system was approved at the 32nd Meeting of the 10th Board of Directors.Detailed information and the full text of the system 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 for "Dual Enhancement of Quality and Return"
Whether the Company discloses its Action Plan for "Dual Enhancement of Quality and Return".□Yes □No
The Company has formulated the Action Plan for "Dual Enhancement of Quality and Return"
to 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 of "Vigorously
improving the quality and investment value of listed companies taking more powerful and effective
measures to stabilize the market and confidence" emphasized at the executive meeting of the State
Council. The Plan aims to safeguard the interests of all shareholders continuously strengthen the
Company's core competitiveness and investment value and achieve high-quality efficient and
sustainable development. For details please refer to the Announcement on Advancing the
Implementation of the Action Plan for "Dual Enhancement of Quality and Return" (Announcement
No.: 2024-011) disclosed by the Company on Cninfo (http://www.cninfo.com) on March 9 2024.The progress of the Action Plan is presented as follows:
I. Staying focused on core mission and main lines of business with stable operating
performance and efficiency
The Company implemented the Action Plan for "Dual Enhancement of Quality and Return"
concentrated on four major business segments: pharmaceutical industry pharmaceutical distribution
aesthetic medicine and industrial microbiology. These segments have advanced in a coordinated
and in-depth manner ensuring stable operational performance and efficiency. In 2025 the Company
recorded operating revenue of RMB 43.612 billion representing a year-on-year ("YoY") increase of
93Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
4.07%. It reported a net profit attributable to shareholders of the listed company in the amount of
RMB 3.414 billion down 2.78% YoY; net profit attributable to shareholders after deducting non-
recurring profit and loss was RMB 3.311 billion showing a YoY decline of 1.20%.During the reporting period the Company maintained stable operations with a consolidated
gross profit margin of 32.36%. Net cash flow from operating activities reached RMB 4.246 billion
up 13.25% YoY. As of the end of 2025 the Company's total assets stood at RMB 39.038 billion and
net assets attributable to shareholders of the listed company amounted to RMB 24.811 billion. The
asset-liability ratio was 35.52% and return on equity (ROE) was 14.28%. In 2025 the Company
was listed in the Fortune China 500 for the sixteenth consecutive year.II. Increasing R&D investment to enhance core competitiveness
Adhering to the "research-driven and patient-centered" philosophy the Company places great
emphasis on innovation-driven R&D. In recent years annual R&D expenditures of the Company
have consistently surpassed RMB 1 billion.During the reporting period the Company invested RMB 2.982 billion in R&D for
pharmaceutical industry segment (excluding equity investments) up 11.36% year-on-year. Direct
R&D expenses reached RMB 2.472 billion up 39.64% year-on-year accounting for 16.60% of
operating revenues of pharmaceutical industry segment. As of now the Company's Innovative Drug
R&D Center is actively advancing 96 innovative drug pipeline projects. Over the past 5 years it has
submitted over 150 innovative drug patents with 29 patents granted.In recent years the Company has placed great emphasis on the protection of intellectual
property rights and the application of research outcomes with both the number of patent
applications and grants steadily increasing. The Company has filed a total of over 1900 patent
applications domestically and internationally over the years including more than 580 authorized
invention patents. Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. a wholly-owned
subsidiary of the Company is a national intellectual property demonstration enterprise. It passed the
external audit by Zhongzhi (Beijing) Certification Co. Ltd. in November 2014 and became one of
the first 147 enterprises that passed the standards implementation certification. In October 2025 it
smoothly passed the audit of the enterprise intellectual property compliance management system
(Certificate No.: 165IP250489R0L). In 2025 the Company's patent application and maintenance
endeavors proceeded smoothly. A total of 292 patent applications were filed including 259
invention patents and 81 patents were authorized.III. Improving corporate governance and enhancing standardized operations
In 2025 in compliance with the latest provisions of pertinent laws regulations and normative
documents such as the Company Law of the People's Republic of China the Interim Arrangements
94Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
for the Implementation of Supporting System Rules for the New Company Law issued by the China
Securities Regulatory Commission and the Guidelines for the Articles of Association of Listed
Companies and by taking into account the Company's operational and developmental realities the
Company added or revised 27 governance systems including the Articles of Association and
relevant rules of procedure. Such efforts facilitated the smooth implementation of reforming the
Board of Supervisors and achieved a seamless transition of supervisory functions from the Board
of Supervisors to the Audit Committee of the Board of Directors. The continuously refined
institutional framework further clarified the boundaries of powers and responsibilities among
governance entities optimized decision-making processes strengthened job performance
safeguards for independent directors and various specialized committees aligned the corporate
governance system more closely with market-oriented development and standardized operation
requirements provided robust institutional support for the scientific and efficient decision-making
of the Company's operations and effectively safeguarded the legitimate rights and interests of the
Company shareholders and all stakeholders. Additionally in 2025 an employee director was
elected by the Company's Congress of Workers and Staff to participate in decision-making on their
behalf and safeguard the legitimate rights and interests of employees.With regard to ESG the Company maintained an unwavering commitment to sustainable
development. A Sustainability (ESG) Committee has been established under the Board of Directors
to oversee ESG-related matters. The Company integrates the core ESG principles into corporate
development strategy and daily operations management guiding and innovating business practices
with a science-based approach to social responsibility. It upholds the idea of green manufacturing
actively supports China's "carbon neutrality and carbon peaking" goals operates in strict
compliance with laws and regulations with integrity and actively fulfills its social responsibilities.In 2025 the Company demonstrated outstanding ESG capabilities leading to a notable upgrade in
its ESG rating by WIND from A to AA. Additionally the Company currently holds a AAA rating
under CNI ESG system of the Shenzhen Stock Exchange an A rating under the CSC ESG system
and an A rating under the China Securities ESG framework. Moreover it has been honored with
several prestigious awards including the "Best Practice Case for Sustainable Development among
Listed Companies in 2025" by the China Association for Public Companies and the "ESG Best
Practice" award by New Fortune magazine in 2024.IV. Prioritizing shareholder returns and sharing development achievements
The Company places strong emphasis on management innovation and strives to enhance its
market competitiveness through continuous improvements in operational excellence. Supported by
high-quality products superior commercialization capabilities compliant and efficient marketing
95Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
services differentiated market positioning forward-looking innovation-driven R&D layout and
comprehensive talent development the Company continues to exhibit long-term and resilient
growth. Since it was listed the Company has distributed dividends for 25 times with a cumulative
dividend amount of RMB 8.873 billion which is 35.49 times the funds raised through its initial
public offering (IPO) of RMB 250 million providing continuous and stable investment returns to
shareholders.According to the Proposal on the 2025 Profit Distribution Plan of the Company reviewed and
approved at the 6th meeting of the 11th Board of Directors on April 22 2026 the Company intends
to distribute a cash dividend of RMB 5.80 (tax inclusive) per 10 shares to all shareholders based on
its existing total share capital of 1753736848.00 shares. No bonus shares were issued and no
capital reserves was converted into share capital. It is expected to distribute a total cash dividend of
RMB 1017167371.84 (tax inclusive). This matter is subject to review at the Shareholders'
Meeting of the Company. Furthermore the 6th meeting of the 11th Board of Directors reviewed and
approved the Proposal on Requesting the Shareholders' Meeting to Authorize the Board of
Directors to Formulate the 2026 Interim Dividend Distribution Plan. It is proposed to conduct the
2026 interim dividend distribution if the conditions for interim dividends are met. This matter is
also subject to review at the Shareholders' Meeting of the Company.V. Improving information disclosure and strengthening the communication with investors
The Company consistently prioritizes the quality of information disclosure and utilizes high-
quality high-standard and easily understandable disclosures to comprehensively and accurately
convey its operational and developmental status to investors. To facilitate understanding of
company dynamics among international investors the Company publishes English versions of its
periodic reports further enhancing its international communication capabilities. Furthermore the
Company continuously innovates in the format of information disclosure introduces visual tools
such as "snapshot reports" to present its operational achievements and development plans in a more
intuitive manner enhancing the practicality and readability of information disclosure. In 2025 the
Company continued to strengthen its information disclosure efforts releasing 182 documents
throughout the year and maintaining a record of "zero supplements zero corrections and zero
inquiries".The Company regarded investor relations management as a vital component of corporate
governance. It was committed to establishing smooth and efficient communication channels to
continuously enhance interaction quality with the capital market. Through diversified investor
communication activities the Company actively conveyed its operational achievements and
96Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
development strategies effectively safeguarded investors' right to information and strengthened
market recognition of the Company's long-term value.The Company proactively organized specialized activities such as investor Q&A sessions
performance briefing investor research events and the "Investor Reception Day" to provide in-
depth interpretations of its strategies and financial performance. In 2025 the Company responded to
167 investor inquiries via the Interactive platform (https://irm.cninfo.com.cn/) of Shenzhen Stock
Exchange achieving a 100% response rate. Meanwhile the Company arranged for dedicated
personnel to answer investor hotlines and promptly responded to investor concerns through official
and investor relations email channels ensuring unimpeded communication. In 2025 the Company
held a total of 5 performance exchange meetings (including 1 performance briefing) and
participated in 41 external strategy meetings showing a significant increase compared to the
previous year. Throughout the year it also organized multiple online and offline research activities
covering institutional investors and analysts. In 2025 the Company continued to host the event of
"Investor Reception Days" in an on-site format attracting 221 institutional and individual investors.The Company has established a comprehensive new media communication matrix including
WeChat official account Tongshunhao account as well as Snowball and East Money corporate
accounts. In 2025 the Company flexibly utilized various new media tools to convey the latest
developments such as operational performance BD project introductions R&D progress award
information and interpretations of regular reports to the capital market and a broad range of
investors in a concise and innovative manner. In 2025 the "Official Account of Huadong Medicine
Investor Relations Management on WeChat " published 105 news articles accumulating over
195000 clicks throughout the year and attracting over 11800 subscribers. By the end of 2025
Huadong Medicine's official account on the website of Tongshunhao (https://www.10jqka.com.cn/)
had nearly 1.8 million followers. Since its establishment Huadong Medicine's official Snowball
account has become another important media platform for the Company to engage with investors
with over 6500 followers. To further expand communication channels with investors the Company
launched its Huadong Medicine official account at Eastmoney.com in July 2025 with stock
watchlist engagement exceeding 630000.
97Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Section IV Corporate Governance Environment and Society
I. Overview of corporate governance
During the reporting period the Company strictly adhered to the provisions of relevant laws
regulations and normative documents including the Company Law of the People's Republic of
China (hereinafter referred to as the "Company Law") the Securities Law of the People's Republic
of China (hereinafter referred to as the Securities Law") the Governance Guidelines for Listed
Companies the Rules for Stock Listing of Shenzhen Stock Exchange and the Basic Standards for
Enterprise Internal Control 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 established and improved various internal control systems strengthened
internal management standardized information disclosure and improved the corporate governance
structure and effectively protected the shareholders' rights and interests. In accordance with the
normative documents on corporate governance issued by the China Securities Regulatory
Commission (CSRC) the Company has established a system of rules and regulations that are
legitimate compliant and tailored to its actual operational needs.(I) About shareholders and Shareholders' Meeting
The Company strictly complied with the provisions and requirements of the Company Law and
the Rules of Procedure for 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 engaged 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 a total of 3 General
Meetings of Shareholders/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 nor were there
any instances where independent directors or the Audit Committee proposed to convene a
Shareholders' Meeting. Additionally no material matters were implemented prior to formal review
and approval.
98Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(II) About Directors and the Board of Directors
During the reporting period members of the Board of Directors performed their duties with
integrity diligence and a strong sense of responsibility. They actively participated in relevant
training familiarized themselves with relevant laws and regulations and fully utilized their
professional expertise in corporate management technology research and development and
accounting and auditing to safeguard the overall interests of the Company. The Company's Board of
Directors strictly followed the requirements of the Articles of Association and the Rules of
Procedure for the Board of Directors to convene and hold meetings of the Board of Directors with
voting procedures complying with legal and regulatory requirements.(III) Operation of independent directors and Special Committees of the Board of Directors
During the reporting period the Company's independent directors fulfilled their duties
honestly diligently and independently in accordance with the provisions of the Company Law
other departmental regulations normative documents and detailed institutional rules. They actively
paid attention to the legitimate rights and interests of minority shareholders expressed opinions on
relevant matters in accordance with the Working System for Independent Directors effectively
safeguarded the interests of the company and shareholders especially minority shareholders and
played a good supervisory role as independent directors. The Company's Board of Directors
established the Strategy Committee the Audit Committee Nomination Committee Remuneration
and Appraisal Committee and Sustainability (ESG) Committee. During the reporting period each
special committee provided professional advice and constructive suggestions for the decision-
making of the Board of Directors in terms of investment decisions financial management business
operations internal governance and human resources.(V) About information disclosure and transparency
The Company placed great emphasis on information disclosure and strictly adhered to the
requirements of relevant laws and regulations and its Information Disclosure Management System.It discloses information through designated information disclosure media including China
Securities Journal Securities Times Shanghai Securities News and the website of Cninfo
(http://www.cninfo.com.cn) in a truthful accurate complete and timely manner. This practice
ensures investors' right to information and guarantees equitable access to information for all
shareholders of the Company. The Company implemented strict confidentiality procedures for non-
disclosed major information of the Company reduced the scope of informed personnel and kept
the information under control.(VI) About investor relations management
99Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Prioritizing and actively advancing the investor relations management the Company has
established an Investor Relations Management System and designated the chairman of the
Company as the primary responsible person for investor relations management affairs. The
Secretary of the Board of Directors is responsible for organizing and coordinating investor relations
management. The Office of the Board of Directors is a functional department tasked with investor
relations management which is empowered to arrange organize and execute initiatives related to
investor relations management of the Company. During the reporting period the Company
strengthened its communication with securities regulatory authorities and the Shenzhen Stock
Exchange enhanced engagement with investors through multiple channels including on-site visits
phone calls emails and Interactive platform (https://irm.cninfo.com.cn/) to answer their inquiries
as much as possible and build a good interactive relationship with investors to ensure effective
interaction with investors.(VII) About stakeholders
The Company fully respected and safeguarded the legitimate rights and interests of
stakeholders including investors financial institutions other creditors employees customers and
suppliers and actively cooperated with stakeholders to jointly promote the sustained stable and
healthy development of the Company.As of the end of the reporting period the actual governance status of the Company has been
generally in compliance with the regulatory documents on listed company governance issued by the
CSRC. The Company will continue to strengthen corporate governance in the future establish a
long-term mechanism for corporate governance better improve the construction of internal control
systems strengthen implementation efforts and lay a solid foundation for its sustained healthy and
steady development.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
There is no significant difference between the actual corporate governance and the provisions on corporate governance in laws
administrative regulations and those issued by the CSRC.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 its corporate
governance structure and implemented standardized operation in accordance with the
requirements of regulatory authorities. The Company and its controlling shareholders realized the
100Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
separation of management and independent operation in terms of personnel assets finance
organizational structure and business.Whether
Category independent Note
and complete
The Company possesses an independent and complete business system and carries out
operation with full autonomy. Its business activities are completely independent of its
Independence and Yes controlling shareholder. Although the subsidiaries of the Company and its controllingcompleteness in business shareholders are engaged in pharmaceutical business pharmaceuticals are categorized as
specialized products with distinct customer bases. Therefore there is no horizontal
competition between the Company and the related companies.Independence and The Company is completely independent in the management of labor personnel and
completeness in personnel Yes salaries and has an independent Human Resources Department and a sound personnelmanagement system.Independence and The Company has independent production systems auxiliary production systems and
completeness in assets Yes supporting facilities; independent purchasing and sales systems; independent industrialproperty rights trademarks and non-patented technologies and other intangible assets.The Company has established a fully-functional Board of Directors management team
Independence and and corresponding management institutions that are independent of the controlling
completeness in Yes shareholder. Each functional department operates based on the decisions of the
organizational structure Company's management team. There is no superior-subordinate relationship between thefunctional departments and the controlling shareholder and the functional departments
are not influenced by the controlling shareholder.The Company's Financial Management Department is responsible for the Company's
Independence and Yes financial accounting and budget management; and has established and improvedcompleteness in finance financial accounting and budget management systems in accordance with relevant laws
and regulations and conducted independent accounting.Note: The Company is independent in business assets organizational structure finance and personnel from its main shareholders.There is no horizontal competition. The Company does not face horizontal competition or engage in related party transactions
caused by partial restructuring industry characteristics national policies or mergers and acquisitions.III. Horizontal competition
□Applicable□Not applicable
IV. Information on directors and senior management
1. Basic information
Shares Shares Shares
held at increas decrea Shares
Reaso
Comm the ed sed Other held at
Termin ns for
Positio encem beginn during during change the end
Gende Positio ation change
Name Age n ent of ing of the the s of the
r n of the s in
status the the current current (shares period
term shareh
term period period period ) (shares
olding
(shares (shares (shares )
)))
April July Not
Lv Direct Incum
Male 51 26 16 applica
Liang or bent
2010 2028 20000 200000 0 0 ble
00
July Not
Lv Chair Incum June 6
Male 51 16 applica
Liang man bent 2019
2028 ble
101Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Genera
Octobe July Not
Lv l Incum
Male 51 r 26 16 applica
Liang Manag bent
2021 2028 ble
er
Decem July Not
Kang Femal Direct Incum
57 ber 5 16 0 0 0 0 0 applica
Wei e or bent
2016 2028 ble
Zhu July Not
Direct Incum June 1
Feipen Male 59 16 0 0 0 0 0 applica
or bent 2022
g 2028 ble
July July Not
Wang Direct Incum
Male 50 19 16 0 0 0 0 0 applica
Yang or bent
2023 2028 ble
Qian July July Not
Direct Incum
Yuche Male 37 16 16 0 0 0 0 0 applica
or bent
n 2025 2028 ble
July July Not
Dong Direct Incum
Male 56 16 16 0 0 0 0 0 applica
Jiabo or bent
2025 2028 ble
July Not
Zhu Direct Incum June 6
Male 48 16 30000 0 0 0 30000 applica
Liang or bent 2019
2028 ble
Indepe
July Not
Huang Femal ndent Incum May 8
57 16 0 0 0 0 0 applica
Jian e Direct bent 2023
2028 ble
or
Indepe
May Not
Wang ndent Incum June 1
Male 58 31 0 0 0 0 0 applica
Ruwei Direct bent 2022
2028 ble
or
Indepe
Xue July July Not
Femal ndent Incum
Lixian 53 16 16 0 0 0 0 0 applica
e Direct bent
g 2025 2028 ble
or
Indepe
Wei July July Not
Femal ndent Incum
Shuzh 57 16 16 0 0 0 0 0 applica
e Direct bent
en 2025 2028 ble
or
July Not
Direct Depart June 1
Ye Bo Male 37 16 0 0 0 0 0 applica
or ure 2022
2025 ble
Indepe
Gao July Not
Femal ndent Depart June 1
Xiang 62 16 0 0 0 0 0 applica
e Direct ure 2022
dong 2025 ble
or
Cancel
lation
Deput of
y restrict
July
Wu Genera Incum June 6 15000 10500 ed
Male 56 16 0 45000 0
Hui l bent 2019 0 0 stock
2028
Manag under
er equity
incenti
ve
Femal Deput Incum Octobe July 18000 18000 Not
Zhu Li 50 0 0 0
e y bent r 12 16 0 0 applica
102Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Genera 2020 2028 ble
l
Manag
er
Deput
y
July Not
Zhang Genera Incum June 1 23000 23000
Male 50 16 0 0 0 applica
Jianfei l bent 2022 0 0
2028 ble
Manag
er
Deput
y
Zhang July July Not
Genera Incum
Zhong Male 43 16 16 20000 0 0 0 20000 applica
l bent
xing 2025 2028 ble
Manag
er
Secret
ary of
the June July Not
Chen Incum 10000 10000
Male 53 Board 30 16 0 0 0 applica
Bo bent 0 0
of 2009 2028 ble
Direct
ors
Officer
in Nove
July Not
Qiu charge Incum mber 10000 10000
Male 43 16 0 0 0 applica
Renbo of bent 28 0 0
2028 ble
financ 2019
e
101096500
Total -- -- -- -- -- -- 0 45000 0 --
0000
Note: The ages of directors supervisors and senior management are calculated in full years based on their respective dates of birth
as of the disclosure date of this Report.Whether any directors or senior management left office during their terms of office in the reporting period.□Yes □No
The Company's Board of Directors completed the reelection process on July 16 2025. Mr.Ye Bo ceased to serve as the director of the Company and Ms. Gao Xiangdong no longer served
as the independent director of the Company.Changes in directors and senior management of the Company
□Applicable □Not applicable
Name Position Type Date Reason
Departure upon
Ye Bo Director July 16 2025 Reelection
completion of term
Departure upon
Gao Xiangdong Independent Director July 16 2025 Reelection
completion of term
Xue Lixiang Independent Director Elected July 16 2025 Reelection
Wei Shuzhen Independent Director Elected July 16 2025 Reelection
Qian Yuchen Director Elected July 16 2025 Reelection
Dong Jiabo Director Elected July 16 2025 Reelection
Deputy General
Zhang Zhongxing Appointed July 16 2025 Reelection
Manager
103Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
2. Positions and incumbency
Professional background main working experiences and current primary responsibilities of the Company's incumbent directors
and senior management
(1) Profile of directors
Chairman: Mr. Lv Liang: Born in 1974 he holds a master's degree. He was the 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; the
Director and General Manager of the Company from January 6 2016 to June 5 2019. He has served as Chairman of the Company
since June 6 2019. He has concurrently worked as the General Manager of the Company since October 26 2021.Director: Ms. Kang Wei: Born in 1968 she holds a master's degree. She previously served as the Manager of the Trade Division
Manager of the Treasury Division and Manager of Financial Management at the Financial Management Division of China Grand
Enterprises; Financial Director and Deputy General Manager of Heilongjiang Grand Shopping Center. She currently works as
Chief Financial Officer of China Grand Enterprises. She has assumed the office of Director of the Company since December 2016.Director: Mr. Zhu Feipeng: Born in 1966 he holds a Ph.D. in Cellular Pharmacology. He previously served as the Reviewer
Director of the Third Review Office and Chief Reviewer of respiratory and tumor indications at the Center for Drug Evaluation of
National Medical Products Administration. He was the Vice President of Pharmaceutical Management Head Office of China
Grand Enterprises Inc. from March 2021 to June 2023. He has served as the General Manager of Pharmaceutical Strategy
Management Head Office of China Grand Enterprises Inc. since July 2023. He has held the post of the Director of the Company
since June 2022.Director: Mr. Zhu Liang: Born in 1977 he holds a bachelor's degree. He previously served as the Supervisor Vice Chairman and
Chairman of Labor Union in Hangzhou Huadong Medicine Group Co. Ltd. Currently he works as a member of the Party
committee and Chairman of the Labor Union of the Company. He has held the post of the Supervisor of the Company from April
2017 to June 2019. He has assumed the office of the Director of the Company since June 2019.
Director: Mr. Wang Yang: Born in October 1975 he holds a Ph.D. in Medicinal Chemistry. He commenced his career in
September 2003. He previously served as the postdoctoral researcher at Southampton University Boston College and Texas
A&M University. He was the R&D Supervisor of Shanghai ChemPartner Co. Ltd.; Assistant Director of BioDuro (Beijing) Co.Ltd.; Senior Reviewer at the Center for Drug Evaluation NMPA; and Senior Director of InnoCare Pharma Tech Co. Ltd. He
acted as the Assistant President and R&D Head of the Pharmaceutical Management Head Office of China Grand Enterprises Inc.from September 2022 to May 2025. He has held the post of the Assistant President of Grand Pharmaceutical (China) Co. Ltd.since May 2025. He has acted as the Director of the Company since July 2023.Director: Mr. Qian Yuchen: Born in 1988 he holds a master's degree. He previously served as the Business Manager at Hangzhou
Jintou Finance Lease Co. Ltd.; the Investment Manager and Senior Business Manager of the Financial Investment Division at
Hangzhou Financial Investment Group Co. Ltd.; Deputy General Manager of Hangzhou HFI Wealth Management Co. Ltd.;
Chairman and General Manager of Hangzhou Guoyou Asset Operation Co. Ltd. and Chairman of Hangzhou Turbine Power
Group Co. Ltd. He has held the post of the Director of the Asset Management Department at Hangzhou State-owned Capital
Investment and Operation Co. Ltd. since December 2023 the Director of Hangzhou Turbine Power Group Co. Ltd. since March
2026 and the Director of Hangzhou Oxygen Plant Group Co. Ltd. since October 2025. He has been the Director of the Company
since July 2025.
104Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Director: Mr. Dong Jiabo: Born in 1969 he holds a bachelor's degree. He previously served as the Deputy Director of the
Technical Reform Office and Senior Engineer at Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd.; the Plant Manager at
Esteve Huayi Pharmaceutical Co. Ltd.; the Investment Department Manager at Hangzhou Huadong Medicine Group Co. Ltd.; the
Director and General Manager of Hangzhou Huadong Medicine Minsheng Development Co. Ltd.; the Executive Director and
General Manager of Hangzhou Tourism Group Co. Ltd.; the Chairman of Hangzhou Wandong Electron Co. Ltd.. He was the
Director and Asset Management Department Manager of Hangzhou Guoyou Asset Operation Co. Ltd. from July 2020 to present;
the Executive Director of Hangzhou Guoyou Huitong Enterprise Management Co. Ltd. from October 2021 to present; the
Executive Director and General Manager of Hangzhou Huadong Medicine Group Co. Ltd. from June 2023 to present; the
Director of Hangzhou Biotechnology Pilot Base Co. Ltd. from February 2026 to present. He has been the Director of the
Company since July 2025.Independent Director: Ms. Huang Jian: Born in October 1968 she holds a master's degree and possesses the titles of Certified
Public Accountant and Senior Accountant. She previously served as the Senior Partner at RSM China Certified Public
Accountants; the Member of the Third Fourth and Fifth Issuance Examination Committee for the Growth Enterprise Market of
the China Securities Regulatory Commission; the Partner of Ruihua Certified Public Accountants Co. Ltd. (Special General
Partnership); the Partner of ShineWing Certified Public Accountants (Special General Partnership) Co. Ltd. She is now the 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 he holds a Ph.D. in Medicine from Shimane University in Japan and
possesses the titles of Professor-level Senior Engineer and the Supervisor of PhD candidates (Zhejiang University Shenyang
Pharmaceutical University Zhejiang Chinese Medical University). He previously served as the Business Vice President of No. 6
Hospital affiliated to Wenzhou Medical University; the Deputy Chairman and President of Zhejiang Conba Pharmaceutical Co.Ltd.; the Deputy Chairman and President of Genor Biopharma Co. Ltd.; the Executive Vice President of Hangzhou Tigermed
Consulting Co. Ltd.; the Founding Partner and Managing Director of Hangzhou Tailong Venture Capital Partnership (Limited
Partnership); the Independent Director of Zhejiang Longevity Valley Botanical Co. Ltd. among other positions. He has been a
member of the Chinese Pharmacopoeia Commission since 2010. He is also a Specially-appointed Researcher of the Chinese
Academy of Sciences. He currently holds the post of Special Assistant to the Chairman of Yangtze River Pharmaceutical Group
Co. Ltd. He has been Independent Director of the Company since June 2022.Independent Director: Ms. Xue Lixiang: Born in May 1972 she holds a Ph.D. degree. She previously served as the Lecturer
Associate Professor and the Supervisor of Master's degree candidates in the Department of Biochemistry at School of Basic
Medical Sciences of Peking University and Associate Professor at the Institute of Medical Innovation of Peking University Third
Hospital. Since July 2020 she has acted as the Professor the Supervisor of PhD candidates Director of the Basic Medical
Research Center Deputy Director of the Oncology Center Principal Investigator (PI) at the National Key Laboratory of Vascular
Homeostasis and Remodeling and PI at the Beijing Key Laboratory of Medical-X Collaborative Innovation for Gastrointestinal
Tumors at the Institute of Medical Innovation of Peking University Third Hospital. She has been the Independent Director of the
Company since July 2025.Independent Director: Ms. Wei Shuzhen: Born in June 1968 she holds a bachelor's degree and is a Certified Public Accountant.She previously served as the Head of Guangzhou Rongcheng Certified Public Accountants Co. Ltd. and the Department Manager
and Deputy General Manager at Guangdong Branch of Beijing Yongtuo Certified Public Accountants Co. Ltd. Since December
2011 she has been a Partner and Head of the Guangdong Branch of Zhongxi CPAs. She has been the Independent Director of the
Company since July 2025.
105Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(2) Biographies of senior management
Deputy General Manager: Mr. Wu Hui: Born in April 1969 he holds a master's degree and is a Professor-level Senior Engineer.He joined the Company in July 1991 and served as the Technician Workshop Director and Chief Engineer of Hangzhou
Zhongmei Huadong Pharmaceutical Co. Ltd. He has been the Deputy General Manager of Hangzhou Zhongmei Huadong
Pharmaceutical Co. Ltd. since 2015 the Deputy General Manager of Huadong Medicine Co. Ltd. since June 2019 and the
General Manager of the Industrial Microbiology Division of the Company since August 2021.Deputy General Manager: Ms. Zhu Li: Born in 1975 she holds a master's degree and is an Accountant and Senior Economist. She
has joined Huadong Pharmaceutical Distribution Company since August 1997. She took multiple positions successively including
the Accountant Deputy Manager and 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 the Deputy General Manager of Huadong Pharmaceutical Distribution Company (responsible for the overall work). She
assumed the office of the Deputy General Manager (overseeing commercial matters) of the Company and concurrently served as
the General Manager of Huadong Pharmaceutical Distribution Company since October 2020.Deputy General Manager: Mr. Zhang Jianfei: Born in April 1975 he holds a bachelor's degree. He served as the Sales
Representative/Supervisor Wuhan Regional Manager 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. He has been the Company's Deputy General Manager since
June 2022.Deputy General Manager: Mr. Zhang Zhongxing: Born in September 1982 he holds a master's degree. He formerly acted as the
visiting scholar at the Gapminder Foundation of Karolinska Institute in Sweden; Operation Manager at Shanghai Huasitai Medical
Consulting Co. Ltd.; Senior Medical Manager at GlaxoSmithKline (China) Investment Co. Ltd.; Medical Director at McCann
Erickson Advertising Co. Ltd.; Chief Medical Officer of the Dermatology and Aesthetics Division at L'Oréal (China) Co. Ltd.;
Deputy General Manager of the Innovative Drug R&D Center at Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd.. He has
been the Chief Medical Officer of Sinclair (Shanghai) Medical Technology Co. Ltd. since March 2023. He has assumed the office
of the Deputy General Manager of the Company since July 2025.Secretary of the Board of Directors: Mr. Chen Bo: Born in 1972 he holds a master's degree and is an economist. He joined the
Company in 2002 and has since served successively as an Investment Specialist then Deputy Manager of the Financing
Department and subsequently Manager of the Investment and Financing Department. He has been Secretary of the Board of
Directors of the Company since June 2009.Officer in charge of finance: Mr. Qiu Renbo: Born in 1982 he holds a master's degree. He served as a Specialist in the Financial
Management Headquarters and Chief of the Finance Section of the Manufacturing Branch of the Company from August 2004 to
July 2010; then as Manager of the Financial Department of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. from August
2010 to April 2015; and then as Chief Financial Officer of Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. from May
2015 to November 2019. He has been the Officer in charge of finance of the Company since December 2019.
Circumstances where the controlling shareholder or de facto controller concurrently serves as the Chairman and General Manager
of the listed company
□Applicable□Not applicable
106Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Position in shareholding entities
□Applicable □Not applicable
Whether
Position held in remuneration or
Name of Commencement of Termination of the
Name of employee the shareholding allowances are
shareholding entity the term term
entity received from the
shareholding entity
Assistant President
and R&D Head of
China Grand
Wang Yang the Pharmaceutical September 1 2022 May 27 2025 No
Enterprises Inc.Management Head
Office
General Manager
of Pharmaceutical
China Grand
Zhu Feipeng Strategy March 1 2021 To date Yes
Enterprises Inc.Management Head
Office
China Grand Chief Financial
Kang Wei February 1 2010 To date Yes
Enterprises Inc. Officer
Hangzhou Executive Director
Dong Jiabo Huadong Medicine and General June 27 2023 To date No
Group Co. Ltd. Manager
Explanation of
positions held in
None
the shareholding
entity
Positions held in other entities
□Applicable □Not applicable
Whether
remuneration or
Name of other Position held in Commencement of Termination of the
Name of employee allowance is
entities other entities the term term
received from
other entities
Grand
Wang Yang Pharmaceutical Assistant President May 27 2025 To date Yes
(China) Co. Ltd.
Lei Yunshang
Zhu Feipeng Pharmaceutical Director May 1 2022 To date No
Group Co. Ltd.Lei Yunshang
Pharmaceutical
Group Co. Ltd.Kang Wei and other Director / To date No
subsidiaries
controlled by
Grand Enterprises
Hangzhou Institute
of Medicine Distinguished
Wang Ruwei February 1 2023 To date No
Chinese Academy Research Fellow
of Sciences
Zhejiang
Independent
Wang Ruwei Longevity Valley May 1 2021 May 14 2025 Yes
Director
Botanical Co. Ltd.Wang Ruwei Yangtze River Special Assistant April 15 2024 To date Yes
107Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Pharmaceutical to the Chairman
Group Co. 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.Zhongxi CPAs Partner and Head
December 30
Wei Shuzhen (Special General of Guangdong To date Yes
2011
Partnership) Branch
Professor the
Supervisor of PhD
candidates
Director of the
Basic Medical
Research Center
Deputy Director of
the Oncology
Center Principal
Investigator (PI) at
the National Key
Laboratory of
Vascular
Peking University
Xue Lixiang Homeostasis and July 31 2020 To date Yes
Third Hospital
Remodeling and
PI at the Beijing
Key Laboratory of
Medical-X
Collaborative
Innovation for
Gastrointestinal
Tumors at the
Institute of
Medical
Innovation of
Peking University
Third Hospital
Hangzhou State-
owned Capital Director of Asset
December 28
Qian Yuchen Investment and Management To date Yes
2023
Operation Co. Department
Ltd.Hangzhou Turbine
Qian Yuchen Power Group Co. Director March 16 2026 To date No
Ltd.Hangzhou Oxygen
Qian Yuchen Plant Group Co. Director October 10 2025 To date No
Ltd.Hangzhou Guoyou
Chairman and September 18
Qian Yuchen Asset Operation April 17 2024 No
General Manager 2025
Co. Ltd.Hangzhou Turbine
Qian Yuchen Power Group Co. Chairman May 15 2024 March 16 2026 No
Ltd.Dong Jiabo Hangzhou Guoyou Director and July 1 2020 To date Yes
108Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Asset Operation Manager of Asset
Co. Ltd. Management
Department
Hangzhou Guoyou
Huitong Enterprise
Dong Jiabo Executive Director October 22 2021 To date No
Management Co.Ltd.Hangzhou
Biotechnology
Dong Jiabo Director February 14 2026 To date No
Pilot Base Co.Ltd.Hangzhou
September 22
Dong Jiabo Wandong Electron Chairman April 29 2024 No
2025
Co. Ltd.Explanation of
positions held in None
other entities
Incumbent and off-office directors and senior management during the reporting period that have been imposed administrative
penalties by the securities regulator during the last three years.□Applicable□Not applicable
3. Remuneration of directors and senior management
Decision-making procedure determination basis and actual remuneration for directors and senior management
The director allowance scheme for the 10th Board of Directors of the Company came into
effect on June 1 2022 after being reviewed and approved by the Company's General Meeting of
Shareholders. The director allowance scheme for the Company's 11th Board of Directors came into
effect on July 16 2025 following the approval by the Company's General Meeting of Shareholders.Non-independent directors who hold management positions or are in charge of specific business
segments within the Company shall be paid according to the business they are in charge of or
position they hold and such persons do not receive allowance for non-independent directors
separately; Independent directors receive an annual allowance for independent director in the
amount of RMB 100000 (pre-tax) from the Company; non-independent directors who do not hold
management positions or oversee specific business segments within the Company receive an annual
allowance for non-independent director in the amount of RMB 30000 (pre-tax) from the Company.The remuneration assessment scheme for senior management shall be implemented upon the
resolution of the 32nd meeting of the Company's 10th Board of Directors.The Company has paid remunerations to the 10th Board of Directors and the 11th Board of
Directors and senior management.Remuneration of directors and senior management during the reporting period
Unit: RMB 10000
Name Gender Age Position Position status Total pre-tax Receive
remuneration remuneration
109Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
received from from related
the Company parties of the
Company or
not
Chairman
Lv Liang Male 51 General Incumbent 280.4 No
Manager
Kang Wei Female 57 Director Incumbent 3 Yes
Zhu Feipeng Male 59 Director Incumbent 3 Yes
Wang Yang Male 50 Director Incumbent 3 Yes
Qian Yuchen Male 37 Director Incumbent 1.39 No
Dong Jiabo Male 56 Director Incumbent 1.39 No
Zhu Liang Male 48 Director Incumbent 69.7 No
Independent
Huang Jian Female 57 Incumbent 10 No
Director
Independent
Wang Ruwei Male 58 Incumbent 10 No
Director
Independent
Xue Lixiang Female 53 Incumbent 4.63 No
Director
Independent
Wei Shuzhen Female 57 Incumbent 4.63 No
Director
Ye Bo Male 37 Director Departure 1.62 No
Independent
Gao Xiangdong Female 62 Departure 5.4 No
Director
Deputy General
Wu Hui Male 56 Incumbent 153.9 No
Manager
Deputy General
Zhu Li Female 50 Incumbent 153.9 No
Manager
Deputy General
Zhang Jianfei Male 50 Incumbent 163.9 No
Manager
Zhang Deputy General
Male 43 Incumbent 131 No
Zhongxing Manager
Secretary of the
Chen Bo Male 53 Board of Incumbent 143.8 No
Directors
Officer in
Qiu Renbo Male 43 charge of Incumbent 143.8 No
finance
Total -- -- -- -- 1288.46 --
Assessment basis for actual remuneration received by all The remuneration of the Company's directors and senior
directors and senior management at the end of the reporting management is determined in accordance with the Company's
period relevant remuneration management system.For 2025 the allowances received by independent directors and
non-independent directors who do not hold management
positions or oversee specific business segments within the
Company are exempt from performance assessment. Non-
Assessment completion status of actual remuneration received independent directors and senior management who hold
by all directors and senior management at the end of the management responsibilities or oversee specific business
reporting period segments within the Company receive corresponding
remuneration in accordance with the Company's performance
assessment regulations. Performance assessments are reviewed
determined and effectively implemented in accordance with the
Company's specific systems.Deferred payment arrangements for actual remuneration For 2025 the allowances received by independent directors and
received by all directors and senior management at the end of non-independent directors who do not hold management
110Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
the reporting period positions or oversee specific business segments within the
Company are not subject to deferred payment mechanisms.Annual performance-based bonuses for non-independent
directors and senior management who hold managerial
responsibilities or oversee specific business segments are
subject to deferred payment mechanisms.Status of suspension and clawback of actual remuneration
received by all directors and senior management at the end of Not applicable
the reporting period
Other explanatory notes
□Applicable□Not applicable
V. Performance of directors' duties during the reporting period
1. Attendance of directors at meetings of the Board of Directors and Shareholders' Meetings
Directors' attendance at meetings of the Board of Directors and Shareholders' Meeting
Number of
Number of Whether fail
meetings of Number of Number of Number of
meetings of to attend two
the Board of meetings of meetings of absences Times of
the Board of consecutive
Director Directors to the Board of the Board of from attendance of
Directors meetings of
Name be attended Directors Directors meetings of Shareholders'
attended via the Board of
during the attended in attended by the Board of Meeting
communicati Directors in
reporting person proxy Directors
on means person
period
Lv Liang 8 8 0 0 0 No 3
Kang Wei 8 1 7 0 0 No 3
Zhu Feipeng 8 1 7 0 0 No 3
Wang Yang 8 1 7 0 0 No 3
Qian Yuchen 5 0 5 0 0 No 1
Dong Jiabo 5 1 4 0 0 No 1
Zhu Liang 8 8 0 0 0 No 3
Huang Jian 8 1 7 0 0 No 3
Wang Ruwei 8 1 7 0 0 No 3
Xue Lixiang 5 0 5 0 0 No 1
Wei Shuzhen 5 0 5 0 0 No 1
Ye Bo 3 1 2 0 0 No 2
Gao
3 1 2 0 0 No 2
Xiangdong
Note on failure to attend two consecutive meetings of the Board of Directors in person
Not applicable
2. Objections from directors on relevant issues of the Company
Whether directors have raised any objection to relevant issues of the Company
□Yes□No
No objections were raised by directors to company-related matters during the reporting period.
111Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
3. Other details about the performance of duties by directors
Whether directors' suggestions regarding the Company were adopted
□Yes □No
Note on adoption or non-adoption of directors' suggestions by the Company
During the reporting period all directors of the Company conscientiously fulfilled their
obligations and exercised their powers strictly implemented resolutions of the Shareholders'
Meeting and actively carried out various work of the Board of Directors in strict compliance with
relevant laws regulations normative documents the Company's Articles of Association and the
Rules of Procedure for the Board of Directors. They also conscientiously reviewed various
proposals of the Board of Directors exercised their voting rights in accordance with the law
actively participated in the Company's governance and decision-making activities and continuously
standardized the Company's governance; with a responsible attitude towards the Company and all
shareholders independent directors fulfilled their duties and obligations diligently and faithfully
carefully deliberated various proposals of the Board of Directors and expressed objective opinions
on the relevant matters under review based on an independent stance actively promoted the
standardized operation of the Board of Directors and the improvement of the Company's
governance level and safeguarded the interests of the Company and all investors. All suggestions
above have been adopted by the Company.VI. 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 contents and
of duties any)
suggestions
The Audit
Committee
along with
some senior
management
The 1st
of the The annual
session of the
Company audit was
Audit
Huang Jian communicate carried out as
Committee
Kang Wei 8 April 3 2025 d with the planned and None None
of the 10th
Wang Ruwei certified no major
Board of
public problems
Directors in
accountants were found.
2025
and project
managers
who are
responsible
for the
112Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Company's
audit work
during the
execution
phase. They
exchanged
views and
discussed
significant
matters
identified in
the audit of
the
Company's
2024 Annual
Report with
the Audit
Committee.The Audit
Committee
along with
some senior
management
of the
Company
communicate
d with the
certified
public
accountants
The 2nd and project
The annual
session of the managers
audit was
Audit who are
Huang Jian carried out as
Committee April 15 responsible
Kang Wei 8 planned and None None
of the 10th 2025 for the
Wang Ruwei no major
Board of Company's
problems
Directors in audit work
were found.
2025 during the
completion
phase. They
exchanged
views and
discussed the
audit
completion
of the 2024
Annual
Report with
the Audit
Committee.The 3rd 1. Proposal The
session of the on the Company's
Audit Company's internal audit
Huang Jian
Committee April 15 "2024 Final work was
Kang Wei 8 None None
of the 10th 2025 Financial carried out in
Wang Ruwei
Board of Accounts an orderly
Directors in Report"; manner as
2025 2. Proposal planned and
113Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
on the no major
Company's problems
"2025 were found.Financial All proposals
Budget were
Report"; approved
3. Proposal after review.
on the
Company's
"2024
Annual
Report and
its Abstract";
4. Proposal
on the
Company's
2024 Self-
assessment
Report on
Internal
Control;
5. Proposal
on the
Company's
"2024 Profit
Distribution
Plan";
6. Proposal
on the
Reappointme
nt of the
Accounting
Firm;
7. Proposal
on Providing
Guarantees
for
Subsidiaries
in 2025;
8. Proposal
on the
Estimated
Daily
Related
Party
Transactions
in 2025;
9. Proposal
on the "2024
Evaluation
Report on the
Performance
of the
Accounting
Firm";
10. Proposal
on the
"Report on
114Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
the
Performance
of
Supervisory
Duties by the
Audit
Committee of
the Board of
Directors
over
Accounting
Firms in
2024";
11. Proposal
on Changes
in
Accounting
Policies;
12. Proposal
on the 2024
Work
Summary of
the
Company's
Internal
Audit
Department;
13. Proposal
on the 2025
Work Plan of
the
Company's
Internal
Audit
Department.
1. Proposal
on the
Company's
"First
Quarterly The
Report Company's
2025"; internal audit
2. Proposal work was
The 4th
on the Work carried out in
session of the
Summary of an orderly
Audit
Huang Jian the manner as
Committee April 24
Kang Wei 8 Company's planned and None None
of the 10th 2025
Wang Ruwei Internal no major
Board of
Audit problems
Directors in
Department were found.
2025
in Q1 2025; All proposals
3. Proposal were
on the Work approved
Plan of the after review.Company's
Internal
Audit
Department
115Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
in Q2 2025
1. Proposal
on the
Revision of
the "Rules of
Procedure
for the Audit
Committee of
the Board of
Directors";
2. Proposal
on the
Revision of
the "External
Guarantee
Management
System";
3. Proposal
on the
Revision of
the "Related
Party
Transaction
Management
System";
4. Proposal
The 5th
on the
session of the
Revision of
Audit All proposals
Huang Jian the "External
Committee June 27 were
Kang Wei 8 Investment None None
of the 10th 2025 approved
Wang Ruwei Management
Board of after review.System";
Directors in
5. Proposal
2025
on the
Revision of
the
"Managemen
t System for
Securities
Investment
Futures and
Derivatives
Transactions
";
6. Proposal
on the
Revision of
the
"Managemen
t System for
Changes in
Accounting
Policies and
Estimates
and
Corrections
of
Accounting
116Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Errors";
7. Proposal
on the
Revision of
the
"Accounting
Firm
Selection and
Appointment
System";
8. Proposal
on the
Addition of
the "Anti-
Corruption
and Anti-
Fraud
System";
9. Proposal
on the
Addition of
the
"Responsible
Marketing
Policy".The 1st Proposal on
session of the the
Audit Appointment The proposal
Huang Jian
Committee of the was
Kang Wei 8 July 16 2025 None None
of the 11th Company's approved
Wei Shuzhen
Board of Officer in after review.Directors in Charge of
2025 Finance
1. Proposal
on the Work
Summary of
the
Company's
Internal The
Audit Company's
Department internal audit
in Q2 2025; work was
The 2nd
2. Proposal carried out in
session of the
on the Work an orderly
Audit
Huang Jian Plan of the manner as
Committee August 18
Kang Wei 8 Company's planned and None None
of the 11th 2025
Wei Shuzhen Internal no major
Board of
Audit problems
Directors in
Department were found.
2025
in Q3 2025; All proposals
3. Proposal were
on the approved
Company's after review."2025 Semi-
annual
Report and
its Abstract";
4. Proposal
117Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
on the
Company's
"2025 Semi-
annual Profit
Distribution
Plan";
5. Proposal
on Engaging
in Hedging-
Related
Financial
Derivatives
Transaction
1. Proposal
on the
Company's
"Third
Quarterly
Report
2025";
2. Proposal
on the The
Revision of Company's
the Internal internal audit
Audit work was
The 3rd
Management carried out in
session of the
System; an orderly
Audit
Huang Jian 3. Proposal manner as
Committee October 27
Kang Wei 8 on the Work planned and None None
of the 11th 2025
Wei Shuzhen Summary of no major
Board of
the problems
Directors in
Company's were found.
2025
Internal All proposals
Audit were
Department approved
in Q3 2025; after review.
4. Proposal
on the Work
Plan of the
Company's
Internal
Audit
Department
in Q4 2025;
1. Proposal
on the
Revision of
The 1st the "Rules of
session of the Procedure
Nomination Huang Jian for the All proposals
Committee Kang Wei June 27 Nomination were
2 None None
of the 10th Gao 2025 Committee of approved
Board of Xiangdong the Board of after review
Directors in Directors";
2025 2. Proposal
on the
General
Election of
118Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
the
Company's
Board of
Directors
and the
Nomination
of Non-
Independent
Director
Candidates
for the 11th
Board of
Directors;
3. Proposal
on the
General
Election of
the
Company's
Board of
Directors
and the
Nomination
of
Independent
Director
Candidates
for the 11th
Board of
Directors.
1. Proposal
on the
Appointment
of the
Company's
General
Manager;
2. Proposal
on the
Appointment
The 1st of the
session of the Company's
Nomination Deputy All proposals
Huang Jian
Committee General were
Kang Wei 2 July 16 2025 None None
of the 11th Managers; approved
Wang Ruwei
Board of 3. Proposal after review
Directors in on the
2025 Appointment
of the
Secretary of
the Board of
Directors of
the
Company;
4. Proposal
on the
Appointment
of the
119Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Company's
Officer in
Charge of
Finance;
5. Proposal
on the
Appointment
of the
Company's
Securities
Affairs
Representativ
e.Proposal on
the
Confirmation
The 1st
of the 2024
session of the
Remuneratio
Remuneratio
n for the
n and Wang Ruwei The proposal
Company's
Appraisal Lv Liang April 15 was
4 Senior None None
Committee Gao 2025 approved
Management
of the 10th Xiangdong after review
and the
Board of
Formulation
Directors in
of the 2025
2025
Remuneratio
n Assessment
Scheme
1. Proposal
on Adjusting
the
Repurchase
Price of the
Restricted
Stock
Incentive
Plan in 2022;
2. Proposal
The 2nd on
session of the Repurchase
Remuneratio and
n and Wang Ruwei Cancellation All proposals
Appraisal Lv Liang June 27 of Certain were
4 None None
Committee Gao 2025 Restricted approved
of the 10th Xiangdong Stocks and after review
Board of Reduction of
Directors in the
2025 Company's
Registered
Capital;
3. Proposal
on Amending
the "Rules of
Procedure
for
Remuneratio
n and
Appraisal
120Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Committee of
the Board of
Directors";
4. Proposal
on the
Allowance
Scheme for
Directors of
the 11th
Board of
Directors of
the
Company.Proposal on
the
Fulfillment of
Conditions
The 1st for the
session of the Second
Remuneratio Restriction
n and Wang Ruwei Release All proposals
Appraisal Wei October 13 Period of were
4 None None
Committee Shuzhen 2025 Reserved approved
of the 11th Xue Lixiang Restricted after review
Board of Stocks
Directors in Granted
2025 under the
Restricted
Stock
Incentive
Plan in 2022
1. Proposal
on the
Fulfillment of
the Release
Conditions
during the
Third
Restriction
Release
The 2nd
Period for
session of the
First Grant
Remuneratio
of Reserved
n and Wang Ruwei All proposals
Restricted
Appraisal Wei November were
4 Stocks under None None
Committee Shuzhen 20 2025 approved
the
of the 11th Xue Lixiang after review
Restricted
Board of
Stock
Directors in
Incentive
2025
Plan in
2022;
2. Proposal
on Adjusting
the
Repurchase
Price of the
Restricted
Stock
121Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Incentive
Plan in 2022;
3. Proposal
on
Repurchase
and
Cancellation
of Certain
Restricted
Stocks
Proposal on
The 1st
the Revision
session of the
of the "Rules
Strategy The proposal
Lv Liang of Procedure
Committee June 27 was
Wang Yang 2 for the None None
of the 10th 2025 approved
Wang Ruwei Strategy
Board of after review
Committee of
Directors in
the Board of
2025
Directors"
Proposal on
the
Establishmen
t of a
Specialized
The 1st
Pharmaceuti
session of the
cal Industry
Strategy The proposal
Lv Liang Investment
Committee August 18 was
Zhu Feipeng 2 Fund in None None
of the 11th 2025 approved
Wang Ruwei Collaboratio
Board of after review
n with
Directors in
Professional
2025
Investment
Institutions
and Related
Party
Transactions
Proposal on
The 1st
the
session of the
Company's
Sustainabilit
"2024 The proposal
y (ESG) Zhu Feipeng
April 15 Environment was
Committee Ye Bo Gao 2 None None
2025 al Social approved
of the 10th Xiangdong
and after review
Board of
Governance
Directors in
(ESG)
2025
Report"
Proposal on
The 2nd
the Revision
session of the
of the "Rules
Sustainabilit
of Procedure The proposal
y (ESG) Zhu Feipeng
June 27 for the was
Committee Ye Bo Gao 2 None None
2025 Sustainabilit approved
of the 10th Xiangdong
y (ESG) after review
Board of
Committee of
Directors in
the Board of
2025
Directors"
122Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
VII. Work of the Audit Committee
Whether the Audit Committee identify any risks in the Company during its oversight activities during the reporting period
□Yes□No
The Audit Committee raised no objections to the oversight matters during the reporting period.VIII. Employees of the Company
1. Number of employees expertise structure and educational background
Number of incumbent employees in the parent company at the
1039
end of the reporting period (person)
Number of incumbent employees in major subsidiaries at the
18056
end of the reporting period (person)
Total number of incumbent employees at the end of the
19095
reporting period (person)
Total number of employees receiving remuneration in the
19095
current period (person)
Number of retired employees requiring the parent company and
0
its subsidiaries to bear costs (person)
Expertise structure
Expertise category Number (person)
Production personnel 1411
Sales personnel 12479
Technical personnel 3162
Financial personnel 226
Administrative personnel 1425
Storage and transportation personnel 392
Total 19095
Educational background
Category of educational background Number (person)
Master's degree or above 1839
Bachelor's degree 9663
Junior college and technical secondary school 6352
Below technical secondary school 729
Others not disclosed 512
Total 19095
Note: "Others not disclosed" refer to the fact that the information of employees in overseas subsidiaries has
not been disclosed due to privacy protection policies and other factors.
2. Remuneration policy
Aligned with the Company's strategic development planning and talent strategy the Company
has built a market-oriented and differentiated remuneration system and established a flexible and
diversified incentive mechanism. These efforts aim to foster a talent team consisting of younger
123Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
more professional and globally competitive personnel. By upgrading and optimizing the employee
structure the Company drives continuous innovation and value creation enabling both the
employees themselves and the Company to achieve sustainable development and strategic goals.
3. Training plan
Adherence to self-cultivation of talents is a crucial cornerstone for the Company's long-term
development. Over the years the Company has remained committed to establishing a diversified
and multi-tiered talent cultivation system placing talent development at the core of Huadong
Medicine's transformation. In 2025 the Company continued to advance key programs—including
the Leadership Program onboarding training for new employees the Starter Program high-
potential talent development initiatives and professional talent cultivation programs—to further
reinforce the Company's talent pipeline.The Company offered professional onboarding training and full-process probation-period
management for new employees to support their smooth integration into the Company.Fresh graduates represent an important source of young talents. Through the "Starter Program"
the Company supported new graduates in making a swift transition into their roles fostering sound
professional conduct and gaining a deeper understanding of the Company's culture. By adopting a
comprehensive training model—including intensive onboarding courses selection and rotation
mechanisms performance assessments and hands-on practice—this Program accelerated the
development of young talents.In terms of strengthening managerial competencies the Company adopted a hierarchical and
classified approach emphasized the structured and tiered talent team development paid attention to
the cultivation and development of its core and key management personnel and continuously
improved its internal talent "self-renewal" mechanism.With respect to enhancing business capabilities the Company regularly reviewed and
developed talents across R&D quality manufacturing sales and other business segments to meet
the evolving demands of its long-term development and internationalization strategy.In terms of improving professional competencies the Company advanced the standardization
of job requirements institutionalized onboarding and refresher training systems and adopted a
blended "learning-through-practice" model. These initiatives help rapidly strengthen employee
skillsets optimize business processes and improve operational efficiency.Regarding the development of a digital training platform the Company gradually enriched
course offerings across various business domains. It is committed to building a systematic and
124Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
comprehensive learning ecosystem. Through personalized course training on the digital platform
the Company helped employees participate in training and learning conveniently and effectively
thereby enhancing their job competencies.
4. Labor outsourcing
□Applicable□Not applicable
IX. Profit distribution and increase of share capital by capital reserve conversion
Formulation implementation or adjustment of profit distribution policies especially cash dividend policies during the reporting
period
□Applicable □Not applicable
During the reporting period the Company strictly reviewed and implemented its profit
distribution plans in accordance with the relevant profit distribution policies mentioned in the
Articles of Association. The criteria and proportion of dividends were clearly defined supported
by sound decision-making procedures and complete mechanism. The approved profit distribution
plans were implemented within the stipulated timelines safeguarding the interests of all
shareholders. During the reporting period the Company did not make any changes to its profit
distribution policies.
1. On May 15 2025 the Company convened the 2024 Annual General Meeting of
Shareholders on which the Proposal on the Company's "2024 Profit Distribution Plan" was
reviewed and approved. The specific plan was as follows: Based on the Company's existing total
share capital of 1754077048 shares the Company allocated RMB 5.8 (tax inclusive) in cash for
every 10 shares held by shareholders. No bonus shares would be distributed and no capital
reserves would be converted into share capital. The total cash dividends distributed would be
RMB 1017364687.84 (tax inclusive). On May 28 2025 the Company disclosed the
Announcement on Implementation of 2024 Annual Equity Distribution announcing that the
annual equity distribution in 2024 had been completed.
2. On August 18 2025 the Company convened the 2nd meeting of the 11th Board of
Directors on which the Proposal on the Company's "2025 Semi-Annual Profit Distribution Plan"
was reviewed and approved. The specific plan was as follows: Based on the Company's existing
total share capital of 1754077048.00 shares the Company allocated RMB 3.50 (tax inclusive) in
cash for every 10 shares held by shareholders. No bonus shares would be distributed and no
125Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
capital reserves would be converted into share capital. The total cash dividends distributed would
be RMB 613907366.80 (tax inclusive). This 2025 Semi-Annual Profit Distribution Plan falls
within the scope authorized by the Board of Directors in the resolution of the 2024 Annual
General Meeting of Shareholders and does not need to be submitted to the shareholders' meeting
for review and approval. On September 12 2025 the Company disclosed the Announcement on
Implementation of 2025 Semi-annual Equity Distribution announcing that the semi-annual equity
distribution in 2025 had been completed.During the reporting period the decision-making procedures for the implementation of the
Company's profit distribution plans were well-established and complete. Dividend criteria and
payout ratios were clearly defined and the entire process complied with the requirements of the
Articles of Association as well as the resolutions adopted at the General Meeting of Shareholders.Special note on cash dividend policy
Whether it complied with the Articles of Association and
Yes
resolutions of the Shareholders' Meeting:
Whether the criteria and payout ratios of dividends were clearly
Yes
defined:
Whether the decision-making process and mechanism was
Yes
well-established:
Whether independent directors fulfilled their duties and played
Yes
their due role:
Specific reasons and measures to be taken in the next step to
increase investor returns if the Company does not pay cash Not applicable
dividends:
Whether minority shareholders could express their opinions
and requirements and whether their legitimate rights and Yes
interests were fully protected:
Whether conditions and process were conforming and
transparent if the cash dividend policy was adjusted or Not applicable
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 distribution plan was proposed.□Applicable□Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
□Applicable □Not applicable
Number of bonus shares issued per 10 shares (shares) 0
Dividend distribution per 10 shares (RMB) (tax inclusive) 5.80
Share capital base for distribution plan (shares) 1753736848.00
Amount of cash dividends (RMB) (tax inclusive) 1017167371.84
Amount of cash dividends in other ways (e.g. share repurchase)
0.00
(RMB)
126Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Total amount of cash dividends (including other ways) (RMB) 1017167371.84
Distributable profits (RMB) 6415013556.84
Proportion of total cash dividends (including other ways) to
100%
total profit distribution
Current situation of 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.Detailed description of the profit distribution or plan for conversion of capital reserve into share capital
The Company's distribution plan for 2025 is as follows: Based on the Company's existing total share capital of 1753736848.00
shares the Company allocated RMB 5.80 (tax inclusive) in cash for every 10 shares held by shareholders. No bonus shares would
be distributed and no capital reserves would be converted into share capital. The total cash dividend will be RMB
1017167371.84 (tax inclusive) and the remaining undistributed profits will be carried forward to subsequent 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.X. Implementation of the Company's equity incentive plan employee stock ownership plan
or other employee incentive measures
□Applicable □Not applicable
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 on which the following proposals were
reviewed and approved: the Proposal on the Company's Restricted Stock Incentive Plan in 2022
(Draft) and Its Abstract the Proposal on Management Rules for the Implementation and
Assessment of the Company's Restricted Stock Incentive Plan in 2022 the Proposal on the
Management Rules of the Company's Restricted Stock Incentive Plan in 2022 and the Proposal on
Applying to the General Meeting of Shareholders for Authorizing the Board of Directors to Handle
Equity Incentive-related Matters. Independent directors provided their independent opinions on
whether this incentive plan is conducive to the Company's sustainable development and whether it
may harm the interests of the Company and all shareholders. For specific details please refer to the
relevant announcement published by the Company on CNINFO on August 10 2022.
(2) On August 10 2022 the Company disclosed the Announcement on Independent Directors
Publicly Soliciting Proxy Voting Rights on Cninfo (http://www.cninfo.com.cn). Mr. Wang Ruwei
an Independent Director of the Company acting as the convener and commissioned by other
independent directors publicly solicited proxy voting rights from all shareholders of the Company
for the proposals related to the Restricted Stock Incentive Plan in 2022 reviewed at the 1st
Extraordinary General Meeting of Shareholders in 2022 which was set to be convened on August
312022.
127Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(3) From August 15 to 25 2022 the Company posted on its intranet the list of the first batch of
incentive recipients under the Restricted Stock Incentive Plan in 2022 for a total of 10 days. As of
the end of the announcement on August 25 2022 the Board of Supervisors did not receive any
objection against these incentive recipients. On August 25 2022 the Board of Supervisors of the
Company convened a meeting to review and approve the Verification Opinions and Announcement
Note on the List of the First Batch of Incentive Recipients under the Company's Restricted Stock
Incentive Plan in 2022. The Company then disclosed these Verification Opinions and relevant
announcements on Cninfo (http://www.cninfo.com.cn).
(4) On August 31 2022 the Company convened the 1st Extraordinary General Meeting in
2022 on which the following proposals were reviewed and approved: the Proposal on the
Company's Restricted Stock Incentive Plan in 2022 (Draft) and Its Abstract the Proposal on
Management Rules for the Implementation and Assessment of the Company's Restricted Stock
Incentive Plan in 2022 the Proposal on the Management Rules of the Company's Restricted Stock
Incentive Plan in 2022 and the Proposal on Applying to the General Meeting of Shareholders for
Authorizing the Board of Directors to Handle Equity Incentive-related Matters. On the same day
the Company disclosed the Self-Inspection Report on Trading of Company Shares by Insiders and
Incentive Recipients under Restricted Stock Incentive Plan in 2022 and related announcements on
Cninfo (http://www.cninfo.com.cn). This incentive plan was approved at the Company's 1st
Extraordinary General Meeting in 2022 and the Board of Directors was authorized to implement
the Company's Restricted Stock Incentive Plan in 2022 and handle relevant matters according to the
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 on which the following proposals
were reviewed and approved: the Proposal on Adjustments of the Company's Restricted Stock
Incentive Plan in 2022 and the Proposal on Granting Restricted Stocks to the First Batch of
Incentive Recipients under the Restricted Stock Incentive Plan in 2022. The Board of Directors
confirmed that the grant conditions under the incentive plan were satisfied. The Board of
Supervisors re-verified the list of incentive recipients on the first grant date and provided opinions
on the adjustment and 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 the relevant announcement on CNINFO.
(6) On November 9 2022 the Company disclosed the Announcement on Completion of
Registration of the First Grant of Restricted Stocks under the Restricted Stock Incentive Plan in
2022. The Company completed the registration of the restricted stocks initially granted under the
128Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Restricted Stock Incentive Plan in 2022 and the listing date of the granted restricted stocks 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 on which the following proposals were
reviewed and approved: the Proposal on Adjusting the Grant Price of Reserved Stocks under the
Restricted Stock Incentive Plan in 2022 and the Proposal on Granting Reserved Restricted Stocks to
Incentive Recipients under the Restricted Stock Incentive Plan in 2022. The Board of Directors
confirmed that reserved conditions of the incentive plan for granting restricted stocks were fulfilled
and the Board of Supervisors re-verified the list of incentive recipients on the date of granting
reserved stocks and provided 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 the relevant announcement on CNINFO.
(8) From July 13 to 23 2023 the Company publicly displayed the list of incentive recipients
for the reserved restricted stocks under this Restricted Stock Incentive Plan through its OA system
for a total of 10 days. By the end of the public announcement period on July 23 2023 the Board of
Supervisors had not received any objections against the incentive recipients from any individuals.On July 26 2023 the Company convened a meeting of the Board of Supervisors on which the
following proposals were reviewed and approved: the Verification Opinions of the Board of
Supervisors and Announcement Note on the List of Incentive Recipients for Reserved Restricted
Stocks Granted under the Company's Restricted Stock Incentive Plan in 2022. On the same day the
Company disclosed the Verification Opinions of the Board of Supervisors and Announcement Note
on the List of Incentive Recipients for Reserved Restricted Stocks Granted under the Company's
Restricted Stock Incentive Plan in 2022 and related announcements on Cninfo
(http://www.cninfo.com.cn).
(9) On September 27 2023 the Company disclosed the Announcement on Completion of the
Reserved Grant under the Restricted Stock Incentive Plan in 2022. The Company completed the
registration of the reserved restricted stocks granted under the Restricted Stock Incentive Plan in
2022 and the listing date of the granted restricted stocks 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 on which the following proposals
were reviewed and approved: Proposal on the Fulfillment of Conditions for the First Restriction
Release Period of the Initial Grant of Restricted Stocks under the Restricted Stock Incentive Plan in
2022 the Proposal on Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in
2022 and the Proposal on Repurchase and Cancellation of Certain Restricted Stocks. The Board of
129Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Directors confirmed that the conditions for releasing restrictions during the first restriction release
period of the first grant of restricted stocks under the Restricted Stock Incentive Plan in 2022 had
been satisfied. Pursuant to the authorization granted by the Company's 1st Extraordinary General
Meeting in 2022 the Board of Directors approved the completion of the procedures for releasing
the restrictions on 1220940 restricted stocks under the first restriction release period for 108
incentive recipients. The Board of Directors also approved the repurchase and cancellation of a total
of 97800 restricted stocks that had been granted but not yet released corresponding to 4 incentive
recipients who were no longer eligible due to resignation and 2 incentive recipients who failed to
fully meet the individual performance assessment criteria for the first restriction release period. The
Company's independent directors issued concurring independent opinions on the relevant matters
and the Board of Supervisors provided verification opinions with related reports prepared by the
lawyers and independent financial advisers. On the same day the Company disclosed the relevant
announcement on CNINFO.
(11) On December 1 2023 the Company disclosed the Hint on Circulation of Restricted
Stocks Released during the First Restriction Release Period for First Grant of Restricted Stocks
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the first
restriction release period of the first grant under the Restricted Stock Incentive Plan in 2022 became
tradable on December 5 2023.
(12) On December 8 2023 the Company convened its 2nd Extraordinary General Meeting in
2023 where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and the
Proposal on Altering the Registered Capital and Amending the Articles of Association were
approved after review. On the same day the Company disclosed the Announcement on Reducing
Registered Capital by Repurchasing and Canceling Some Restricted Stocks and Notifying 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 the Completion of the
Repurchase and Cancellation of Certain Restricted Stocks. On March 26 2024 the Company
completed the procedures for repurchase and cancellation of 97800 restricted stocks in Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(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 which the Proposal on
Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in 2022 and the Proposal on
Repurchase and Cancellation of Certain Restricted Stocks were reviewed and approved. The Board
130Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
of Directors agreed to repurchase and cancel a total of 65000 restricted stocks that had been
granted but not yet released from restrictions corresponding to 5 incentive recipients who were no
longer eligible due to resignation. The Board of Supervisors provided verification opinions on the
relevant matters. with related reports prepared by the lawyers and independent financial advisers.On the same day the Company disclosed the relevant announcement on CNINFO.
(15) On June 18 2024 the Company convened its 1st Extraordinary General Meeting in 2024
where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and the Proposal
on Expanding the Business Scope Altering the Registered Capital and Amending the "Articles of
Association" were reviewed and approved. On the same day the Company disclosed the
Announcement on Reducing Registered Capital by Repurchasing and Canceling Some Restricted
Stocks and Notifying 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 the Completion of the
Repurchase and Cancellation of Certain Restricted Stocks. On August 27 2024 the Company
completed the procedures for repurchase and cancellation of 65000 restricted stocks in Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(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 the Release Conditions during the First Restriction Release Period
of the Reserved Restricted Stocks Granted under the Restricted Stock Incentive Plan in 2022 was
reviewed and approved. The Board of Directors confirmed that the conditions for releasing
restrictions during the first restriction release period of the reserved grant of restricted stocks under
the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to the authorization granted
by the Company's 1st Extraordinary General Meeting in 2022 the Board of Directors approved the
completion of the procedures for releasing the restrictions on 192500 restricted stocks under the
first restriction release period for 18 incentive recipients. The Board of Supervisors provided
verification opinions on the relevant matters. with related reports prepared by the lawyers and
independent financial advisers. On the same day the Company disclosed the relevant
announcement on CNINFO.
(18) On October 24 2024 the Company disclosed the Hint on Circulation of Restricted Stocks
Released during the First Restriction Release Period of Reserved Restricted Stocks Granted under
the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the first restriction
131Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
release period of the reserved grant under the Restricted Stock Incentive Plan in 2022 became
tradable on 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 which the following
proposals were reviewed and approved: Proposal on the Fulfillment of the Release Conditions
during the Second Restriction Release Period for First Grant of Reserved Restricted Stocks under
the Restricted Stock Incentive Plan in 2022 the Proposal on Adjusting the Repurchase Price of the
Restricted Stock Incentive Plan in 2022 and the Proposal on Repurchase and Cancellation of
Certain Restricted Stocks. The Board of Directors confirmed that the conditions for releasing
restrictions during the second restriction release period of the first grant of restricted stocks under
the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to the authorization granted
by the Company's 1st Extraordinary General Meeting in 2022 the Board of Directors approved the
completion of the procedures for releasing the restrictions on 1063740 restricted stocks under the
second restriction release period for 90 incentive recipients. The Board of Directors also approved
the repurchase and cancellation of a total of 185500 restricted stocks that had been granted but not
yet released from restrictions corresponding to 1 incentive recipient who was no longer eligible due
to resignation 16 incentive recipients whose individual performance assessment results for the
second restriction release period were unqualified and 1 reserved incentive recipient whose
individual performance assessment results for the first restriction release period were unqualified.The Board of Supervisors provided verification opinions on the relevant matters. with related
reports prepared by the lawyers and independent financial advisers. On November 27 2024 the
Company disclosed the relevant announcement on CNINFO.
(20) On December 13 2024 the Company disclosed the Hint on Circulation of Restricted
Stocks Released during the Second Restriction Release Period for First Grant of Restricted Stocks
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the second
restriction release period of the first grant under the Restricted Stock Incentive Plan in 2022 became
tradable on December 16 2024.
(21) On December 20 2024 the Company convened its 2nd Extraordinary General Meeting in
2024 where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and the
Proposal on Expanding the Business Scope Altering the Registered Capital and Amending the
"Articles of Association" were reviewed and approved. On the same day the Company disclosed
the Announcement on Reducing Registered Capital by Repurchasing and Canceling Some
Restricted Stocks and Notifying Creditors. As of February 5 2025 the benchmark date for capital
verification i.e. within forty-five days from the date when the Company announced the reduction
132Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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 the Completion of the
Repurchase and Cancellation of Certain Restricted Stocks. On March 26 2025 the Company
completed the procedures for repurchase and cancellation of 185500 restricted stocks in Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(23) On June 27 2025 the Company convened the 34th Meeting of the 10th Board of
Directors and the 24th Meeting of the 10th Board of Supervisors where the Proposal on Adjusting
the Repurchase Price of the Restricted Stock Incentive Plan in 2022 and the Proposal on
Repurchase and Cancellation of Certain Restricted Stocks and Reduction of the Company's
Registered Capital were reviewed and approved. The Board of Directors agreed to repurchase and
cancel a total of 56000 restricted stocks that had been granted but not yet released from restrictions
corresponding to 6 incentive recipients who were no longer eligible due to resignation and to
reduce the Company's registered capital accordingly. The Board of Supervisors provided
verification opinions on the relevant matters. with related reports prepared by the lawyers and
independent financial advisers. On July 01 2025 the Company disclosed the relevant
announcement on CNINFO.
(24) On July 16 2025 the Company convened its 1st Extraordinary General Meeting in 2025
where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and Reduction of
the Company's Registered Capital was reviewed and approved. On the same day the Company
disclosed the Announcement on Reducing Registered Capital by Repurchasing and Canceling Some
Restricted Stocks and Notifying Creditors. As of September 1 2025 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.
(25) On September 11 2025 the Company disclosed the Announcement on the Completion of
Repurchase and Cancellation of Certain Restricted Stocks. On September 9 2025 the Company
completed the procedures for repurchase and cancellation of 56000 restricted stocks at Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(26) On October 13 2025 the Company convened the 3rd Meeting of the 11th Board of
Directors where the Proposal on the Fulfillment of Conditions for the Second Restriction Release
Period of Reserved Restricted Stocks Granted under the Restricted Stock Incentive Plan in 2022
was reviewed and approved. The Board of Directors confirmed that the conditions for releasing
restrictions during the second restriction release period of the reserved restricted stocks granted
133Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
under the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to the authorization
granted by the Company's 1st Extraordinary General Meeting in 2022 the Board of Directors
approved the completion of the procedures for releasing the restrictions on 175000 restricted stocks
under the second restriction release period for 16 incentive recipients. The Remuneration and
Appraisal Committee of the Board of Directors issued verification opinions on relevant matters
while lawyers and independent financial advisors provided corresponding reports. On October 15
2025 the Company disclosed the relevant announcements on Cninfo (http://www.cninfo.com.cn).
(27) On October 25 2025 the Company disclosed the Hint on Circulation of Restricted Stocks
Released during the Second Restriction Release Period of Reserved Restricted Stocks Granted
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the second
restriction release period of the reserved restricted stocks granted under the Restricted Stock
Incentive Plan in 2022 became tradable on October 29 2025.
(28) On November 20 2025 the Company convened the 5th Meeting of the 11th Board of
Directors on which the following proposals were reviewed and approved: Proposal on the
Fulfillment of the Release Conditions during the Third Restriction Release Period for First Grant of
Reserved Restricted Stocks under the Restricted Stock Incentive Plan in 2022 the Proposal on
Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in 2022 and the Proposal on
Repurchase and Cancellation of Certain Restricted Stocks. The Board of Directors believed that the
conditions for releasing restrictions during the third restriction release period of the first grant of
restricted stocks under the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to
the authorization granted by the Company's 1st Extraordinary General Meeting in 2022 the Board
of Directors agreed to handle the releasing procedures for 1275120 restricted stocks for 77
incentive recipients during the third restriction release period and also approved the repurchase and
cancellation of a total of 284200 restricted stocks that had been granted but not yet released from
trading restrictions corresponding to 6 incentive recipients who were no longer eligible due to
resignation 16 incentive recipients whose individual performance assessment results for the third
restriction release period were unqualified 3 incentive recipients whose individual performance
assessment results for the restriction release period were qualified among the initially granted
incentive recipients 1 reserved incentive recipient who was no longer eligible due to resignation
and 2 incentive recipients whose individual performance evaluations for the second restriction
release period were unqualified among the incentive recipients of reserved grants. The
Remuneration and Appraisal Committee of the Board of Directors issued verification opinions on
relevant matters while lawyers and independent financial advisors provided corresponding reports.
134Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
On November 22 2025 the Company disclosed the relevant announcements on Cninfo
(http://www.cninfo.com.cn).
(29) On December 6 2025 the Company disclosed the Hint on Circulation of Restricted
Stocks Released during the Third Restriction Release Period for First Grant of Restricted Stocks
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the third
restriction release period of the first grant under the Restricted Stock Incentive Plan in 2022 became
tradable on December 10 2025.
(30) On December 9 2025 the Company convened its 2nd Extraordinary Shareholders'
Meeting in 2025 where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks
and the Proposal on Expanding the Business Scope Altering the Registered Capital and Amending
the "Articles of Association" were reviewed and approved. On the same day the Company
disclosed the Announcement on Reducing Registered Capital by Repurchasing and Canceling Some
Restricted Stocks and Notifying Creditors. As of January 23 2026 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.
(31) On March 7 2026 the Company disclosed the Announcement on the Completion of
Repurchase and Cancellation of Certain Restricted Stocks. On March 5 2026 the Company
completed the procedures for repurchase and cancellation of 284200 restricted stocks at Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.Equity incentive situation of the Company's directors and senior management
□Applicable □Not applicable
Unit: Shares
Exerci
Numb se Numb
Numb
er of price Numb Marke Numb er of
Numb Numb Numb Numb er of
newly of er of t price er of restric Grant
er of er of er of er of restric
grante exerci share at the restric ted price
share exerci exerci shares ted
d sed option end of ted stocks of
option sable sed releas stocks
share shares s held the stocks newly restric
Positi s held shares shares ed held
Name option during at the report held grante ted
on at the during during during at the
s the end of ing at the d stocks
begin the the the end of
during report the period begin during (RMB
ning report report curren the
the ing report (RMB ning the /share
of the ing ing t report
report period ing /share of the report )
year period period period ing
ing (RMB period ) period ing
period
period /share period
)
Chair
Lv 8000 8000
man 0 0 0 0 0 0 39.45 0 25.00 0
Liang 0 0
and
135Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Gener
al
Mana
ger
Deput
y
Wu Gener 1050 6000
00000039.45025.000
Hui al 00 0
Mana
ger
Deput
y
Zhu Gener 6000 6000
00000039.45025.000
Li al 0 0
Mana
ger
Deput
y
Zhang
Gener 6000 6000
Jianfe 0 0 0 0 0 0 39.45 0 25.00 0
al 0 0
i
Mana
ger
Deput
y
Zhang
Gener 1000 1000
Zhong 0 0 0 0 0 0 39.45 0 25.00 0
al 0 0
Mana
ger
Zhu Direct 1200 1200
00000039.45025.000
Liang or 0 0
Secret
ary of
the
Chen 4000 4000
Board 0 0 0 0 0 0 39.45 0 25.00 0
Bo 0 0
of
Direct
ors
Office
r in
Qiu charg 4000 4000
00000039.45025.000
Renbo e of 0 0
financ
e
40703620
Total -- 0 0 0 0 -- 0 -- 0 -- 0
0000
Under the Company's Restricted Stock Incentive Plan in 2022 Mr. Lv Liang (Chairman and General Manager)
Mr. Wu Hui (Deputy General Manager) Mr. Zhu Li (Deputy General Manager) Mr. Zhang Jianfei (Deputy
General Manager) Mr. Zhang Zhongxing (Deputy General Manager) Mr. Zhu Liang (Director) Mr. Chen Bo
(Secretary of the Board of Directors) and Mr. Qiu Renbo (Officer in charge of finance) were granted 200000
shares 150000 shares 150000 shares 150000 shares 20000 shares 30000 shares 100000 shares and
Remarks (if 100000 shares of restricted stocks respectively. During the reporting period the restricted stocks of 80000
any) shares 60000 shares 60000 shares 60000 shares 10000 shares 12000 shares 40000 shares and 40000
shares were released to the above-mentioned individuals respectively. The cumulative numbers of restricted
stocks released for these individuals to date amounted to 200000 shares 105000 shares 150000 shares
150000 shares 20000 shares 30000 shares 100000 shares and 100000 shares respectively. The aggregated
quantity of repurchased restricted stocks is as follows: 45000 shares held by Hui Wu with the repurchase
cancellation date set for March 26 2025. As of the disclosure date of this Report none of the aforementioned
136Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
individuals hold any restricted stocks that remain subject to lock-up.Assessment mechanism and incentive arrangements for senior management
(1) To ensure that the Company's senior management effectively performs its duties and that
their rights and responsibilities are clearly defined the Company has established a sound
performance evaluation system and implemented a remuneration assessment mechanism that links
remuneration with work performance for senior management. During the reporting period all
members of the senior management diligently fulfilled their responsibilities and effectively
implemented the relevant resolutions of the Shareholders' Meeting and the Board of Directors in
accordance with the Company Law the Articles of Association and other applicable laws and
regulations. Under the proper guidance of the Board of Directors they maintained prudent and
compliant operations while continuously strengthening internal management and oversight.
(2) To further establish and enhance a sustainable long-term incentive mechanism attract and
retain outstanding talents and fully motivate the senior management management officers and
core technical (business) personnel of Huadong Medicine Co. Ltd. the Company launched the
Restricted Stock Incentive Plan in 2022. This plan is designed to align the interests of shareholders
the Company and its core team and ensure that all parties remain focused on the Company's long-
term development. Under the principle that rewards should correspond to contributions and while
fully safeguarding shareholder interests the incentive plan effectively links the Company's value
creation with the personal interests of its key personnel. For specific implementation details of the
Restricted Stock Incentive Plan in 2022 please refer to the Section "1. Equity incentive" above.
2. Implementation of employee stock ownership plan (ESOP)
□Applicable□Not applicable
3. Other employee incentives
□Applicable□Not applicable
XI. Establishment and implementation of an internal control system during the reporting
period
1. Establishment and implementation of internal controls
Throughout the reporting period in strict compliance with pertinent legal provisions
regulatory requirements and normative documents—including the Basic Standards for Enterprise
Internal Control and the Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock
Exchange No.1 - Standardized Operation of Listed Companies on the Main Board—the Company
137Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
has sustained its efforts to enhance its internal control framework continuously improved its
corporate governance structure established and optimized its internal control system standardized
the implementation of internal control systems and strengthened internal control supervision and
inspection to ensure the ongoing elevation of the Company's operational and management level.During the reporting period the Company's internal control system was demonstrated to be well-
conceived and rationally structured. The Company maintained effective internal controls across all
material respects in accordance with the requirements of the enterprise internal control framework
and relevant regulations without any material omissions. For details please refer to the Proposal
on the Company's 2024 Self-assessment Report on Internal Control published by the Company on
April 24 2026 on the website of Cninfo (http://www.cninfo.com.cn/).
2. Details of material internal control weaknesses identified during the reporting period
□Yes□No
XII. The Company's management control over subsidiaries during the reporting period
Issues
Integration encountered Solutions Solution Subsequent
Company name Integration plan
progress during adopted progress solutions
integration
Huadong Incorporation
Pharmaceutical of a new
Sales subsidiary no / / / / /
(Zhejiang) Co. integration
Ltd. involved
Huadong
Incorporation
Medicine
of a new
International
subsidiary no / / / / /
Trade
integration
(Zhejiang) Co.involved
Ltd.Huadong Incorporation
Peiyuantang of a new
(Hangzhou) subsidiary no / / / / /
Comprehensive integration
Clinic Co. Ltd. involved
Incorporation
Wenzhou of a new
Huiren Health subsidiary no / / / / /
Food Co. Ltd. integration
involved
Abnormalities in the management and control of subsidiaries
□Yes□No
138Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
XIII. 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 24 2026
assessment report on internal control
Disclosure index of the full text of
Cninfo (http://www.cninfo.com.cn)
assessment report on internal control
Proportion of total assets included in the
evaluation scope to the total assets in the
95.00%
Company's consolidated financial
statements
Proportion of operating revenue of
entities included in the evaluation scope
to the operating revenue of the 90.00%
Company's consolidated financial
statements
Recognition standard of deficiencies
Category Financial report Non-financial report
The Company specifies that internal
control deficiencies involving the
following fields shall be identified as
The Company applies the following
"important deficiencies" at a minimum:
qualitative standards to evaluate internal
anti-fraud procedures and controls;
control deficiencies in non-financial
internal controls over non-routine or non-
reports:
systematic transactions; internal controls
The Company stipulates that internal
governing the selection and application
control deficiencies involving the
of accounting policies in compliance
following fields shall be identified as
with Generally Accepted Accounting
"material weaknesses": serious violations
Principles (GAAP); and internal controls
of laws and regulations; consecutive
over the end-of-period financial
years of losses and challenges to
reporting process.sustained operations for reasons other
The following circumstances shall be
than policy; lack of institutional control
classified as "important deficiencies" and
over important operations or systemic
strongly indicate the presence of material
failure of institutions; frequent negative
weaknesses: Restatement of previously-
news coverage in mainstream media
issued financial statements to correct
Qualitative criteria resulting in significant negative impacts;
material misstatements arising from
and failure to rectify significant or
errors or fraud; identification by auditors
important deficiencies identified in
of material misstatements in the
internal control evaluations.Company's current financial statements
The Company stipulates that internal
that were not initially detected by
control deficiencies involving the
internal controls over financial reporting;
following areas shall be identified as
failure of the Audit Committee to
"important deficiencies": significant
adequately oversee the Company's
negative news coverage in major media
financial reporting and internal control
at the provincial level or above during
processes; compliance regulatory failures
the year resulting in substantial negative
where violations of laws or regulations
impacts; severe attrition among middle
materially impact the reliability of
management or key personnel;
financial reporting; discovery of fraud
unjustified failure to address general
regardless of scale involving the senior
deficiencies identified in the previous
management; the Management's failure
year's internal control assessment.to remediate important deficiencies
within a reasonable period after
identification and reporting.
139Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(1) Internal control deficiencies
satisfying any of the following
conditions may be identified as material
weaknesses:
Item Impact of deficiency
Potential
misstatement Misstated amount ≥
of total profit 10% of total profit
Potential
misstatement Misstated amount ≥
of total assets 3% of total assets The Company's quantitative criteria for
(2) Internal control deficiencies assessing internal control deficiencies in
satisfying one of the following non-financial reports are as follows:
conditions can be considered as Type of Impact on total assets
important deficiencies: deficiencies
Item Impact of deficiency Minor defect Impact on total assets <
Quantitative criteria Potential 5% of total profit ≤ 1.5%
misstatement misstated amount < Important 1.5% of total assets ≤
of total profit 10% of total profit deficiencies impact on total assets < 3%
Potential 1.5% of total assets ≤ of total assets
misstatement misstated amount < Significant
deficiencies Impact on total assets ≥ 3%of total assets 3% of total assets
(3) Internal control deficiencies
satisfying one of the following
conditions can be considered as minor
defects:
Item Impact of deficiency
Potential Misstated amount <
misstatement 5% of total profit
of total profit
Potential Misstated amount <
misstatement 1.5% of total assets
of total assets
Number of material weaknesses in
0
financial reports (nos.)
Number of material weaknesses in non-
0
financial report (nos.)
Number of important deficiencies in
0
financial report (nos.)
Number of important deficiencies in non-
0
financial report (nos.)
2. Audit report on internal control
□Applicable □Not applicable
Review opinions of audit report on internal control
Huadong Medicine has maintained effective internal control in all material respects of the financial report in accordance with the
relevant regulations of the Basic Specifications for Internal Control of the Enterprise on December 31 2025.Disclosure of internal control audit report Disclosed
Disclosure date of the full text of audit report on internal
April 24 2026
control
Index of disclosure of the full text of the audit report on
Cninfo (http://www.cninfo.com.cn)
internal control
Type of opinions in the audit report on internal control Standard unqualified opinions
Whether there are material weaknesses in non-financial report No
Whether the accounting firm issues an audit report on internal control with non-standard opinions
140Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
□Yes□No
Whether the audit report on internal control issued by the accounting firm is consistent with the self-evaluation report of the Board
of Directors
□Yes □No
Whether a non-standard audit opinion was issued for internal control during the reporting period or the previous year
□Yes□No
XIV. Rectification of issues identified in the self-inspection of the special campaign to
improve governance of listed companies
Not applicable
XV. Environmental information disclosures
Whether the listed company and its major subsidiaries are included in the list of enterprises legally required to disclose
environmental information
□Yes □No
Number of enterprises included in the list of enterprises legally required to disclose
6
environmental information (unit)
Index for accessing the environmental
No. Enterprise name
information disclosure report
Enterprise Environmental Information
Disclosure System (Zhejiang):
https://mlzj.sthjt.zj.gov.cn/eps/index/ente
rprise-
morecode=91330100609120774J&uniq
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Hangzhou Zhongmei Huadong National Pollutant Discharge Permit
1
Pharmaceutical Co. Ltd. Management Information Platform
(Public Access):
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rt/#/pubViewreportId=353fa9b0989243
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rprise-
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Hangzhou Zhongmei Huadong &type=true
2
Pharmaceutical Jiangdong Co. Ltd.National Pollutant Discharge Permit
Management Information Platform
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rt/#/pubViewreportId=674ef93e308af25
a23813cf32f6cc04a0c7b778e0c92e4c51f
141Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
cde96e4040d33c&provinceSharding=14
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Filling of "Environmental Portrait"
enterprise environmental information
disclosure system for Jiangsu enterprises
(One File for One Enterprise):
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sarchive-
webapp//web/viewRunner.htmlviewId=
http%3A%2F%2Fywxt.sthjt.jiangsu.gov.cn%3A18181%2Fspsarchive-
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html/#/companyDetailsname=%E5%A
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Anhui Meihua Hi-Tech Pharmaceutical
4 5%8D%8E%E9%AB%98%E7%A7%91
Co. Ltd.%E5%88%B6%E8%8D%AF%E6%9C
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142Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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Wuhu Huaren Science and Technology
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Pharmaceutical Co. Ltd. 8F%B8
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XVI. Social responsibilities
During its strategic transformation the Company has rigorously fulfilled its corporate social
responsibilities as a conscientious corporate citizen maintaining close oversight of the evolving
needs of diverse stakeholders—including shareholders government and regulatory authorities
employees customers and patients suppliers local communities the broader public and strategic
143Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
partners. By standardizing governance practices to fortify its developmental foundation prioritizing
sustainable objectives adhering to rigorous business ethics and advancing high-quality growth
initiatives the Company actively contributes to the national vision of building a Healthy China.Simultaneously it demonstrated unwavering commitment to employee development promoted
environmentally sustainable and low-carbon operations and actively engages in public welfare
initiatives to deliver tangible societal value through concrete actions.For details on the Company's fulfillment of social responsibilities in 2025 please refer to the
Huadong Medicine 2025 Environmental Social and Governance (ESG) Report.XVII. Consolidating and expanding achievements of poverty alleviation and rural
revitalization
During the reporting period the Company actively carried out work related to rural
revitalization. For specifics please refer to the Huadong Medicine 2025 Environmental Social and
Governance (ESG) Report.
144Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Section V 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□Not applicable
During the reporting period the Company did not have any commitments made by the de facto controller shareholders related
parties acquirers or the Company itself that were fulfilled during the reporting period or remained overdue as of the end of the
reporting period.
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□Not applicable
3. Performance commitments involved by the Company
□Applicable□Not applicable
II. Non-operational appropriation of funds of the listed company by controlling
shareholders and other related parties
□Applicable□Not applicable
During the reporting period there was no non-operational appropriation of funds of the listed company by controlling shareholders
and other related parties
III. Violations of external guarantees
□Applicable□Not applicable
There was no violation of external guarantee during the reporting period.IV. Explanation by the Board of Directors on the latest "Non-Standard Audit Report"
□Applicable□Not applicable
V. Explanations by the Board of Directors and the Independent Directors (if any) on the
"Non-standard Audit Report" of the accounting firm during the reporting period
□Applicable□Not applicable
145Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
VI. Explanations on changes in accounting policies accounting estimates or corrections of
material accounting errors compared to the previous annual financial report
□Applicable□Not applicable
The Company did not have any changes in accounting policies accounting estimates or corrections of material accounting errors
during the reporting period.VII. Explanation of changes in the scope of consolidated statements compared to the
previous annual financial report
□Applicable □Not applicable
For details please refer to "IX. Changes in the consolidation scope" under "Section VIII. Financial Reports".VIII. Employment and dismissal of accounting firms
Currently engaged accounting firm
Pan-China Certified Public Accountant LLP (Special General
Name of domestic accounting firm
Partnership)
Remuneration of domestic accounting firm (in RMB 10000) 170
Continuous years of audit services provided by the domestic
28
accounting firm
Name of certified public accountant from the domestic
Hu Yanhua and Chen Xiaodong
accounting firm
Continuous years of audit services provided by the certified
3 years for Hu Yanhua and 4 years for Chen Xiaodong
public accountant from the domestic accounting firm
Name of overseas accounting firm (if any) None
Remuneration of overseas accounting firm (in RMB 10000) (if
0
any)
Continuous years of audit services provided by the overseas
None
accounting firm (if any)
Name of certified public accountant from the overseas
None
accounting firm (if any)
Continuous years of audit services provided by the overseas
None
certified public accountant (if any)
Whether the accounting firm was changed during the current period
□Yes□No
Engagement of an accounting firm for internal control audit financial advisor or sponsor
□Applicable □Not applicable
During the year the Company engaged Pan-China Certified Public Accountant LLP (Special
General Partnership) as the audit firm for its annual financial report and audit report on internal
control. The audit fees paid for the 2025 Financial Report and Audit Report on Internal Control
amounted to RMB 1.7 million (tax inclusive).
146Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
IX. Delisting after annual report disclosure
□Applicable□Not applicable
X. Matters related to bankruptcy and reorganization
□Applicable□Not applicable
The Company was not involved in matters related to bankruptcy and reorganization during the reporting period.XI. Major litigation and arbitration matters
□Applicable □Not applicable
Outcome and
Basic Amount Whether an Execution of
Litigation impact of
circumstance involved estimated litigation Disclosure Disclosure
(arbitration) litigation
s of litigation (RMB liability is (arbitration) date index
progress (arbitration)
(arbitration) 10000) formed judgments
judgments
Some cases
are under
trial and
some
judgments Some cases
Summary of have become have been
matters not effective (of The executed
meeting the which the summary of some
thresholds amount of the litigation adjudicated
for disclosure 36422.24 No closed cases matters has cases are /
of major is RMB no significant under
litigations 58.092 impact on the enforcement
(arbitrations) million and Company some cases
(China) the are not
unenforced adjudicated
amount is
RMB
21.5753
million)
Some first-
Summary of
instance
matters not The
judgments
meeting the summary of
have been
thresholds the litigation
All cases are issued and
for disclosure 6930.00 Yes matters has /
under trials are still
of major no significant
under appeal.litigations impact on the
some cases
(arbitrations) Company
are not
(overseas)
adjudicated
Hangzhou The first- This For details
Zhongmei instance litigation is The first- please refer
Huadong judgment has still at the instance to the
Pharmaceutic been first-instance judgment has December Announceme
11138.64 No
al Co. Ltd. received judgment not yet 15 2025 nt on the
the from the stage. No become Receipt of
Company's Zhejiang material effective. the First-
wholly- High impact is Instance
147Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
owned People's generated on Civil
subsidiary Court. the Judgment by
demanded Zhongmei Company. the Wholly-
that Qinghai Huadong has Owned
Everest filed an Subsidiary
Cordyceps appeal in (Announcem
Sinensis Raw accordance ent No.:
Materials with the law. 2025-113)
Co. Ltd. The Supreme disclosed by
(Defendant People's the Company
1) and Court held a on the
Qinghai hearing on website of
Everest April 23 Cninfo
Cordyceps 2026. (http://www.Sinensis cninfo.com.c
Pharmaceutic n) on
al Co. Ltd. December
(Defendant 15 2025.
2)
immediately
cease all acts
of
infringement
of relevant
invention
patents of
Zhongmei
Huadong and
compensate
for damages.Note: (I) For details on the provision for estimated liabilities due to pending litigation during the reporting period please refer to
the relevant content in "Section VIII Financial reports" - "VII. Notes to items in the consolidated financial statement- "50. Estimated
liabilities" herein.(II) During the reporting period the Company made positive progress in initiating administrative rulings and lawsuits against 15
infringing enterprises for violating the invention patent "Indobufen Crystal form D and Its Preparation Method" (Patent No.:
ZL202211596913.5) owned by Hangzhou Zhongmei Huadong Pharmaceutical Co. Ltd. (hereinafter referred to as "Zhongmei
Huadong") one of its wholly-owned subsidiaries. The Company also actively defended against the patent invalidation request filed
by the accused infringing enterprises. As of April 20 2026 the progress is as follows:
1. Administrative rulings: Zhongmei Huadong has submitted administrative ruling applications to the Hangzhou Intellectual
Property Office Huzhou Intellectual Property Office Chengdu Intellectual Property Office and Nanjing Intellectual Property Office
regarding patent infringement by 15 companies demanding an immediate cessation of the infringing activities. As of April 20 2026
the Hangzhou Intellectual Property Office has rendered 4 administrative ruling decisions confirming the establishment of
infringement and mandating the immediate cessation of infringing activities by the involved enterprises; in response to these
administrative ruling decisions the involved enterprises have filed administrative lawsuits with the Hangzhou Intermediate People's
Court with the Company serving as a third party. One administrative ruling was revoked due to jurisdictional issues; one ruling was
upheld by the Hangzhou Intermediate People's Court; the remaining cases remain pending adjudication. The remaining
administrative ruling applications have been accepted and subjected to oral hearings by various intellectual property authorities but
have yet to receive final determinations.
2. Judicial litigation: In addition to the administrative ruling applications Zhongmei Huadong filed patent infringement lawsuits
with the Hangzhou Intermediate People's Court in 2024 and 2025 respectively requesting an immediate cessation of the infringing
acts and compensation for losses. One case has obtained a judgment determining infringement and the involved enterprise has filed
an appeal with the Supreme People's Court which has been accepted and is pending adjudication; the other case has been accepted
by the Hangzhou Intermediate People's Court but has not yet been adjudicated.
3. Patent invalidation proceedings: As of April 20 2026 the Company has been notified of 14 patent invalidation requests
concerning the disputed patent. The China National Intellectual Property Administration (CNIPA) issued the Decision on the Review
of a Request for an Invalidation Declaration for five cases simultaneously on March 12 2025 upholding the validity of the doubt
patent in its entirety; 4 cases were closed due to withdrawal by the requesters and the remaining 5 cases are currently under review.In response to the Decision on the Review of a Request for an Invalidation Declaration issued by the China National Intellectual
Property Administration two invalidation petitioners dissatisfied with the decisions filed administrative lawsuits for invalidation
with the Beijing Intellectual Property Court which ruled to uphold the original decisions and dismissed the petitioners' claims; two
petitioners still dissatisfied with the judgment subsequently appealed to the Supreme People's Court which has accepted the case
but has not yet rendered a judgment.
148Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
In addition during the reporting period the Company received: (1) a non-infringement confirmation lawsuit filed by a related
party of the involved enterprise with the Jinan Intermediate People's Court which ruled to reject all claims brought by the related
party of the involved enterprise; (2) an unfair competition lawsuit filed by the involved enterprise with the Yinchuan Intermediate
People's Court which was later voluntarily withdrawn by the involved enterprise; subsequently the involved enterprise filed another
unfair competition lawsuit with the Wucheng District People's Court in Jinhua City. As of April 20 2026 this case has been
transferred to the Gongshu District People's Court in Zhejiang Province for handling and has not yet been heard or adjudicated.XII. Penalties and rectifications
□Applicable□Not applicable
The Company had no penalties or rectifications during the reporting period.XIII. Integrity status of the Company its controlling shareholders and de facto controllers
□Applicable □Not applicable
During the reporting period neither the Company its controlling shareholders nor its de facto controller has failed to comply with
any effective court judgment nor defaulted on any material debt obligations that had become due.XIV. Major related party transactions
1. Related party transactions related to daily operations
□Applicable □Not applicable
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149Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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150Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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151Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
any decisi
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152Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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153Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
ctions
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154Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
for
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155Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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156Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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157Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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158Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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159Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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160Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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161Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
g diary rty rty t price t price bank t price 18 FO
Grand of mana mana deter accept 2025
Innov contro geme geme mined ance
ation lling nt fee nt fee accor bill
Prope shareh ding
rty older to the
Mana of the Comp
geme Comp any's
nt any decisi
Co. on-
Ltd. makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
Xi'an diary
Contr Contr Comp
Grand of
act act any's Cash
Deten contro
manuf manuf decisi bank April
Pharm lling Marke Marke CNIN
acturi acturi on- 49.85 0.00% 0 Yes accept 18
aceuti shareh t price t price FO
ng ng makin ance 2025
cal older
servic servic g bill
Co. of the
es es proce
Ltd. Comp
dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
Subsi
accor
diary
ding
of
Grand to the Cash
contro
Bay Confe Confe Comp bank April
lling Marke Marke CNIN
Hotel rence rence any's 2.55 0.00% 0 Yes accept 18
shareh t price t price FO
Zhuha fee fee decisi ance 2025
older
i on- bill
of the
makin
Comp
g
any
proce
dures
for
relate
162Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
diary
Comp
of
Grand any's Cash
contro
Bay decisi bank April
lling Servic Servic Marke Marke CNIN
Hotel on- 97.83 0.00% 0 Yes accept 18
shareh e fee e fee t price t price FO
Zhuha makin ance 2025
older
i g bill
of the
proce
Comp
dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
diary
Comp
of
Grand any's Cash
contro
Bay Confe Confe decisi bank April
lling Marke Marke CNIN
Hotel rence rence on- 3.69 0.00% 0 Yes accept 18
shareh t price t price FO
Beijin fee fee makin ance 2025
older
g g bill
of the
proce
Comp
dures
any
for
relate
d
party
transa
ctions
Marke
Subsi t price
diary deter
of mined
Grand Cash
contro accor
Bay bank April
lling Servic Servic ding Marke Marke CNIN
Hotel 22.31 0.00% 0 Yes accept 18
shareh e fee e fee to the t price t price FO
Beijin ance 2025
older Comp
g bill
of the any's
Comp decisi
any on-
makin
163Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Cheng to the
diary
du Comp
of
Shetai any's Cash
contro
Medic Sales Sales decisi bank April
lling Marke 393.8 945.1 Marke CNIN
al of of on- 0.01% No accept 18
shareh t price 1 5 t price FO
Techn drugs drugs makin ance 2025
older
ology g bill
of the
Co. proce
Comp
Ltd. dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Grand Subsi
to the
Thera diary
Comp
vac of
any's Cash
Life contro
Sales Sales decisi bank April
Scien lling Marke Marke CNIN
of of on- 367.7 0.01% 250 Yes accept 18
ce shareh t price t price FO
drugs drugs makin ance 2025
(Hang older
g bill
zhou) of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Suzho Subsi Marke
u diary t price Cash
Leiyu of Sales Sales deter bank April
Marke 245.3 Marke CNIN
nshan contro of of mined 0.01% 500 No accept 18
t price 4 t price FO
g lling drugs drugs accor ance 2025
Sinop shareh ding bill
harm older to the
164Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Chain of the Comp
Store Comp any's
Co. any decisi
Ltd. on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Hubei to the
diary
Grand Comp
of
Life any's Cash
contro
Scien Sales Sales decisi bank April
lling Marke 945.1 Marke CNIN
ce & of of on- 137.7 0.00% No accept 18
shareh t price 5 t price FO
Techn drugs drugs makin ance 2025
older
ology g bill
of the
Co. proce
Comp
Ltd. dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
diary
Comp
Wuha of
any's Cash
n contro
Sales Sales decisi bank April
Grand lling Marke 945.1 Marke CNIN
of of on- 99.7 0.00% No accept 18
Hoyo shareh t price 5 t price FO
drugs drugs makin ance 2025
Co. older
g bill
Ltd. of the
proce
Comp
dures
any
for
relate
d
party
transa
ctions
Guan Subsi Sales Sales Marke Marke Cash Marke April CNIN
96.3 0.00% 250 Yes
gdong diary of of t price t price bank t price 18 FO
165Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Leiyu of drugs drugs deter accept 2025
nshan contro mined ance
g lling accor bill
Pharm shareh ding
aceuti older to the
cal of the Comp
Co. Comp any's
Ltd. any decisi
on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Yunna Subsi
to the
n diary
Comp
Leiyu of
any's Cash
nshan contro
Sales Sales decisi bank April
g lling Marke Marke CNIN
of of on- 41.3 0.00% 20 Yes accept 18
Pharm shareh t price t price FO
drugs drugs makin ance 2025
aceuti older
g bill
cal of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
Subsi accor
Lei
diary ding
Yunsh
of to the
ang Cash
contro Comp
Pharm Sales Sales bank April
lling any's Marke Marke CNIN
aceuti of of 37.65 0.00% 500 No accept 18
shareh decisi t price t price FO
cal drugs drugs ance 2025
older on-
Group bill
of the makin
Co.Comp g
Ltd.any proce
dures
for
relate
d
166Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Shaan to the
diary
xi Comp
of
Jianm any's Cash
contro
in Sales Sales decisi bank April
lling Marke Marke CNIN
Pharm of of on- 26.55 0.00% 20 Yes accept 18
shareh t price t price FO
aceuti drugs drugs makin ance 2025
older
cal g bill
of the
Co. proce
Comp
Ltd. dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Hangz to the
diary
hou Comp
of
Grand any's Cash
contro
Biolo Sales Sales decisi bank April
lling Marke Marke CNIN
gic of of on- 16.5 0.00% 165 No accept 18
shareh t price t price FO
Pharm drugs drugs makin ance 2025
older
aceuti g bill
of the
cal proce
Comp
Inc. dures
any
for
relate
d
party
transa
ctions
Marke
t price
Subsi
Anhui deter
diary
Leiyu mined
of
nshan accor Cash
contro
g Sales Sales ding bank April
lling Marke Marke CNIN
Pharm of of to the 13.98 0.00% 500 No accept 18
shareh t price t price FO
aceuti drugs drugs Comp ance 2025
older
cal any's bill
of the
Co. decisi
Comp
Ltd. on-
any
makin
g
167Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
Grand ding
Subsi
Life to the
diary
Scien Comp
of
ces any's Cash
contro
(Hang Sales Sales decisi bank April
lling Marke Marke CNIN
zhou) of of on- 0.32 0.00% 165 No accept 18
shareh t price t price FO
Pharm drugs drugs makin ance 2025
older
aceuti g bill
of the
cal proce
Comp
Co. dures
any
Ltd. for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Chang Subsi
to the
chun diary
Comp
Lei of
any's Cash
Yun contro
Sales Sales decisi bank April
Shang lling Marke Marke CNIN
of of on- 11.84 0.00% 250 Yes accept 18
Pharm shareh t price t price FO
drugs drugs makin ance 2025
aceuti older
g bill
cal of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Weiyu Subsi Marke
an diary t price
Cash
Shuya of deter
Sales Sales bank April
ng contro mined Marke Marke CNIN
of of 7.79 0.00% 57 No accept 18
Plasm lling accor t price t price FO
drugs drugs ance 2025
a shareh ding
bill
Collec older to the
tion of the Comp
168Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Statio Comp any's
n Co. any decisi
Ltd. on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Guipi Subsi
to the
ng diary
Comp
Shuya of
any's Cash
ng contro
Sales Sales decisi bank April
Plasm lling Marke Marke CNIN
of of on- 7.79 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs makin ance 2025
Collec older
g bill
tion of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Pingn Subsi
to the
an diary
Comp
Shuya of
any's Cash
ng contro
Sales Sales decisi bank April
Plasm lling Marke Marke CNIN
of of on- 6.99 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs makin ance 2025
Collec older
g bill
tion of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Grand Subsi Sales Sales Marke Cash April
Marke 945.1 Marke CNIN
Beilin diary of of t price 5 0.00% No bank 18
t price 5 t price FO
(Xi'an of drugs drugs deter accept 2025
169Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
) contro mined ance
Pharm lling accor bill
aceuti shareh ding
cal older to the
Co. of the Comp
Ltd. Comp any's
any decisi
on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Danle Subsi
to the
ng diary
Comp
Shuya of
any's Cash
ng contro
Sales Sales decisi bank April
Plasm lling Marke Marke CNIN
of of on- 2.92 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs makin ance 2025
Collec older
g bill
tion of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
Kaijia Subsi
ding
ng diary
to the
Shuya of
Comp Cash
ng contro
Sales Sales any's bank April
Plasm lling Marke Marke CNIN
of of decisi 2.39 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs on- ance 2025
Collec older
makin bill
tion of the
g
Co. Comp
proce
Ltd. any
dures
for
relate
d
party
170Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Santai to the
diary
Shuya Comp
of
ng any's Cash
contro
Plasm Sales Sales decisi bank April
lling Marke Marke CNIN
a of of on- 1.59 0.00% 57 No accept 18
shareh t price t price FO
Collec drugs drugs makin ance 2025
older
tion g bill
of the
Co. proce
Comp
Ltd. dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Jiangy Subsi
to the
ou diary
Comp
Shuya of
any's Cash
ng contro
Sales Sales decisi bank April
Plasm lling Marke Marke CNIN
of of on- 1.59 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs makin ance 2025
Collec older
g bill
tion of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Marke
t price
Guan Subsi deter
ghan diary mined
Shuya of accor
Cash
ng contro ding
Sales Sales bank April
Plasm lling to the Marke Marke CNIN
of of 1.49 0.00% 57 No accept 18
a shareh Comp t price t price FO
drugs drugs ance 2025
Collec older any's
bill
tion of the decisi
Co. Comp on-
Ltd. any makin
g
proce
171Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
Grand diary
Comp
Life of
any's Cash
Scien contro
Sales Sales decisi bank April
ces lling Marke Marke CNIN
of of on- 1.44 0.00% 250 Yes accept 18
(Shan shareh t price t price FO
drugs drugs makin ance 2025
dong) older
g bill
Co. of the
proce
Ltd. Comp
dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
Sichu diary
Comp
an of
any's Cash
Grand contro
Sales Sales decisi bank April
Biotec lling Marke Marke CNIN
of of on- 0.85 0.00% 250 Yes accept 18
hnolo shareh t price t price FO
drugs drugs makin ance 2025
gy older
g bill
Co. of the
proce
Ltd. Comp
dures
any
for
relate
d
party
transa
ctions
Cangx Subsi Marke
i diary t price
Shuya of deter Cash
ng contro Sales Sales mined bank April
Marke Marke CNIN
Plasm lling of of accor 0.8 0.00% 57 No accept 18
t price t price FO
a shareh drugs drugs ding ance 2025
Collec older to the bill
tion of the Comp
Co. Comp any's
172Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Ltd. any decisi
on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Longc Subsi
to the
hang diary
Comp
Shuya of
any's Cash
ng contro
Sales Sales decisi bank April
Plasm lling Marke Marke CNIN
of of on- 0.8 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs makin ance 2025
Collec older
g bill
tion of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Rong' Subsi
to the
an diary
Comp
Shuya of
any's Cash
ng contro
Sales Sales decisi bank April
Plasm lling Marke Marke CNIN
of of on- 0.8 0.00% 57 No accept 18
a shareh t price t price FO
drugs drugs makin ance 2025
Collec older
g bill
tion of the
proce
Co. Comp
dures
Ltd. any
for
relate
d
party
transa
ctions
Yantin Subsi Marke Cash
Sales Sales April
g diary t price Marke bank Marke CNIN
of of 0.8 0.00% 57 No 18
Shuya of deter t price accept t price FO
drugs drugs 2025
ng contro mined ance
173Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Plasm lling accor bill
a shareh ding
Collec older to the
tion of the Comp
Co. Comp any's
Ltd. any decisi
on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Jiange to the
diary
Shuya Comp
of
ng any's Cash
contro
Plasm Sales Sales decisi bank April
lling Marke Marke CNIN
a of of on- 0.8 0.00% 57 No accept 18
shareh t price t price FO
Collec drugs drugs makin ance 2025
older
tion g bill
of the
Co. proce
Comp
Ltd. dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
Miany mined
ang accor
Anzh Subsi ding
ou diary to the
Distri of Comp
Cash
ct contro any's
Sales Sales bank April
Shuya lling decisi Marke Marke CNIN
of of 0.8 0.00% 57 No accept 18
ng shareh on- t price t price FO
drugs drugs ance 2025
Plasm older makin
bill
a of the g
Collec Comp proce
tion any dures
Co. for
Ltd. relate
d
party
transa
174Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
ctions
Marke
t price
deter
mined
accor
Sheho ding
Subsi
ng to the
diary
Shuya Comp
of
ng any's Cash
contro
Plasm Sales Sales decisi bank April
lling Marke Marke CNIN
a of of on- 0.8 0.00% 57 No accept 18
shareh t price t price FO
Collec drugs drugs makin ance 2025
older
tion g bill
of the
Statio proce
Comp
n Co. dures
any
Ltd. for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
diary
Comp
of
China any's Cash
contro
Grand Sales Sales decisi bank April
lling Marke Marke CNIN
Enter of of on- 0.66 0.00% 250 Yes accept 18
shareh t price t price FO
prises drugs drugs makin ance 2025
older
Inc. g bill
of the
proce
Comp
dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
Chang Subsi
mined
shu diary
accor
Lei of
ding Cash
Yun contro
Sales Sales to the bank April
Shang lling Marke Marke CNIN
of of Comp 0.29 0.00% 500 No accept 18
Pharm shareh t price t price FO
drugs drugs any's ance 2025
aceuti older
decisi bill
cal of the
on-
Co. Comp
makin
Ltd. any
g
proce
dures
175Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
Xi'an diary
Comp
Grand of
any's Cash
Deten contro Agenc Agenc
decisi bank April
Pharm lling y y Marke 5938. Marke CNIN
on- 0.14% 3879 Yes accept 18
aceuti shareh servic servic t price 87 t price FO
makin ance 2025
cal older es es
g bill
Co. of the
proce
Ltd. Comp
dures
any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
Hangz to the
diary
hou Comp
of
Grand any's Cash
contro Techn Techn
Biolo decisi bank April
lling ical ical Marke Marke CNIN
gic on- 38.68 0.00% 200 No accept 18
shareh servic servic t price t price FO
Pharm makin ance 2025
older es es
aceuti g bill
of the
cal proce
Comp
Inc. dures
any
for
relate
d
party
transa
ctions
Marke
Chon t price
gqing Form Form deter
Assoc Cash
Peg- ulatio ulatio mined
iate of bank April
Bio n n accor Marke 295.3 Marke CNIN
the 0.01% 380 Yes accept 18
Bioph filling filling ding t price 8 t price FO
Comp ance 2025
arm servic servic to the
any bill
Co. e e Comp
Ltd. any's
decisi
176Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Grand Subsi
Trans Trans to the
Shuya diary
portati portati Comp
ng of
on on any's Cash
Life contro
and and decisi bank April
Scien lling Marke Marke CNIN
wareh wareh on- 13.24 0.00% 15 No accept 18
ces shareh t price t price FO
ousin ousin makin ance 2025
(Chen older
g g g bill
gdu) of the
servic servic proce
Co. Comp
e e dures
Ltd. any
for
relate
d
party
transa
ctions
Marke
t price
deter
mined
accor
ding
Subsi
to the
Hangz diary
Comp
hou of
any's Cash
Sihan contro Techn Techn
decisi bank April
Biotec lling ical ical Marke Marke CNIN
on- 5.19 0.00% 70 Yes accept 18
hnolo shareh servic servic t price t price FO
makin ance 2025
gy older es es
g bill
Co. of the
proce
Ltd. Comp
dures
any
for
relate
d
party
transa
ctions
Beijin Subsi Marke Cash
House House
g diary t price bank April
s and s and Marke 246.6 Marke CNIN
Yanhu of deter 0.01% 0 Yes accept 18
buildi buildi t price 5 t price FO
ang contro mined ance 2025
ngs ngs
Real lling accor bill
177Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Estate shareh ding
Co. older to the
Ltd. of the Comp
Comp any's
any decisi
on-
makin
g
proce
dures
for
relate
d
party
transa
ctions
41214089
Total -- -- -- -- -- -- -- --
2.128.62
Details of significant sales returns Not applicable
For 2025 the Company and its subsidiaries estimated to enter into routine related party
transactions in the amount of RMB 408.9862 million including RMB 402.2862 million
with entities affiliated with China Grand Enterprises and RMB 6.7 million with other related
Estimated total amount of daily parties. (For details please refer to the Announcement on the Estimated Routine Related
related party transactions expected Party Transactions for 2025 disclosed by the Company on the website of Cninfo on April
to occur in the current period by 18 2025.) In 2025 the actual amount of routine related party transactions conducted by the
category and the actual fulfillment Company and its subsidiaries was RMB 412.1212 million of which RMB 409.1673 million
during the reporting period (if any) was incurred with entities affiliated with China Grand Enterprises and RMB 2.9538 million
with other related parties. The variance between the actual and estimated total amounts of
routine related party transactions in 2025 was 0.77% which does not constitute a material
deviation and is generally consistent with the Company's estimates.Reasons for significant differences
between transaction prices and Not applicable
market prices (if applicable)
2. Related party transactions involving the acquisition or selling assets and equity
□Applicable□Not applicable
During the reporting period the company did not have any related party transactions arising from the acquisition or sale of assets
or equity interests.
3. Related party transactions of joint investments abroad
□Applicable□Not applicable
The company did not have any related party transactions of joint investments abroad during the reporting period.
4. Related-party receivables and payables
□Applicable□Not applicable
The company did not have any related credit and debt transactions during the reporting period.
5. Transactions with related-party financial companies
□Applicable□Not applicable
178Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
There was no deposit loan credit or other financial business among the Company the finance company with which the Company
has established a relationship and the related parties.
6. Transactions between the Company's controlled financial subsidiaries and related parties
□Applicable□Not applicable
There was no deposit loan credit facility or other financial transactions between the finance companies controlled by the
Company and related parties.
7. Other major related party transactions
□Applicable□Not applicable
The Company did not have other significant related party transactions during the reporting period.XV. Major contracts and their fulfillment
1. Entrustment contracting and leasing
(1) Trusteeship
□Applicable□Not applicable
The company did not have trusteeship during the reporting period.
(2) Contracting
□Applicable□Not applicable
The company did not have contracting during the reporting period.
(3) Leasing
□Applicable □Not applicable
Lease description
Refer to the relevant content in "Section VIII Financial Report - VII. Notes to items of consolidated financial statement - 82.Leasing"
Items that brought gains and losses to the Company amounting to more than 10% of the Company's total profit during the
reporting period
□Applicable□Not applicable
There was no leasing item that brought gains and losses to the Company amounting to more than 10% of the Company's total
profit during the reporting period.
2. Important guarantees
□Applicable □Not applicable
Unit: RMB 10000
External guarantees by the Company and its subsidiaries (excluding guarantees for subsidiaries)
179Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Disclosu
re date
Whether
of
Name of Actual Whether it is a
announc Actual Type of Counter-
guarante Guarante guarante Collatera Guarante it has guarante
ement occurren guarante guarante
e e quota ed l (if any) e period been e for
regardin ce date e e (if any)
recipient amount fulfilled related
g the
parties
guarante
e quota
////
The company's guarantees for its subsidiaries
Disclosu
re date
Whether
of
Name of Actual Whether it is a
announc Actual Type of Counter-
guarante Guarante guarante Collatera Guarante it has guarante
ement occurren guarante guarante
e e quota ed l (if any) e period been e for
regardin ce date e e (if any)
recipient amount fulfilled related
g the
parties
guarante
e quota
Hangzho
u
Zhongm Joint and
ei several
April 18 July 25
Huadon 155000 7038.72 liability None None 1 year No No
20252025
g guarante
Pharmac e
eutical
Co. Ltd.Hangzho
u
Zhongm Joint and
ei several
April 18 August
Huadon 155000 3522.45 liability None None 1 year No No
2025142025
g guarante
Pharmac e
eutical
Co. Ltd.Hangzho
u
Zhongm Joint and
ei several
April 18 October
Huadon 155000 6903.87 liability None None 1 year No No
2025302025
g guarante
Pharmac e
eutical
Co. Ltd.Hangzho
u
Zhongm Joint and
ei Novemb several
April 18 13778.4
Huadon 155000 er 20 liability None None 1 year No No
20253
g 2025 guarante
Pharmac e
eutical
Co. Ltd.
180Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Hangzho
u
Zhongm Joint and
ei Decemb several
April 18
Huadon 155000 er 23 3186.34 liability None None 1 year No No
2025
g 2025 guarante
Pharmac e
eutical
Co. Ltd.Hangzho
u
Zhongm Joint and
ei several
April 18 August
Huadon 155000 500 liability None None 1 year No No
2024262024
g guarante
Pharmac e
eutical
Co. Ltd.Hangzho
u
Zhongm Joint and
ei Decemb several
April 18
Huadon 155000 er 26 5000 liability None None 1 year No No
2025
g 2025 guarante
Pharmac e
eutical
Co. Ltd.Huadon
g
Medicin
e Supply
April 19
Chain 20000 0 10 years No No
2019
Manage
ment
(Jinhua)
Co. Ltd.Huadon
g
Medicin Joint and
e (Xi'an) several
July 22 July 19
Bodygua 5284.7 5284.7 liability None None 2 years No No
20242024
rd guarante
Pharmac e
eutical
Co. Ltd.Huadon
g
Medicin Joint and
e (Xi'an) several
April 18 June 23 27681.2
Bodygua 37000 liability None None 1 year No No
202520256
rd guarante
Pharmac e
eutical
Co. Ltd.Huadon Joint and
Septemb
g April 18 several
16000 er 18 2850 None None 1 year No No
Medicin 2025 liability
2025
e guarante
181Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Ningbo e
Sales
Co. Ltd.Huadon
g Joint and
Medicin several
April 18 October
e 16000 950 liability None None 1 year No No
2025282025
Ningbo guarante
Sales e
Co. Ltd.Huadon
g Joint and
Medicin several
April 18 October
e 16000 950 liability None None 1 year No No
2025282025
Ningbo guarante
Sales e
Co. Ltd.Huadon
g Joint and
Medicin Decemb several
April 18
e 16000 er 12 950 liability None None 1 year No No
2025
Ningbo 2025 guarante
Sales e
Co. Ltd.Huadon
g Joint and
Medicin Decemb several
April 18
e 16000 er 12 950 liability None None 1 year No No
2025
Ningbo 2025 guarante
Sales e
Co. Ltd.Huadon
g Joint and
Medicin Decemb several
April 18
e 16000 er 12 950 liability None None 1 year No No
2025
Ningbo 2025 guarante
Sales e
Co. Ltd.Huadon Joint and
g Decemb several
April 18
Medicin 15000 er 12 950 liability None None 1 year No No
2025
e Jinhua 2025 guarante
Co. Ltd. e
Huadon Joint and
g Decemb several
April 18
Medicin 15000 er 12 950 liability None None 1 year No No
2025
e Jinhua 2025 guarante
Co. Ltd. e
Huadon Joint and
g Decemb several
April 18
Medicin 15000 er 12 950 liability None None 1 year No No
2025
e Jinhua 2025 guarante
Co. Ltd. e
Huadon Joint and
Decemb
g April 18 several
15000 er 12 950 None None 1 year No No
Medicin 2025 liability
2025
e Jinhua guarante
182Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Co. Ltd. e
Huadon
Joint and
g
Septemb several
Medicin April 18
19300 er 26 4275 liability None None 1 year No No
e 2025
2025 guarante
Huzhou
e
Co. Ltd.Huadon
Joint and
g
Decemb several
Medicin April 18
19300 er 12 950 liability None None 1 year No No
e 2025
2025 guarante
Huzhou
e
Co. Ltd.Huadon
Joint and
g
Decemb several
Medicin April 18
19300 er 12 950 liability None None 1 year No No
e 2025
2025 guarante
Huzhou
e
Co. Ltd.Huadon
Joint and
g
Decemb several
Medicin April 18
19300 er 12 950 liability None None 1 year No No
e 2025
2025 guarante
Huzhou
e
Co. Ltd.Huadon
g Joint and
Medicin Septemb several
April 18
e 20000 er 18 2850 liability None None 1 year No No
2025
Shaoxin 2025 guarante
g Co. e
Ltd.Huadon
g Joint and
Medicin Decemb several
April 18
e 20000 er 12 950 liability None None 1 year No No
2025
Shaoxin 2025 guarante
g Co. e
Ltd.Huadon
g Joint and
Medicin Decemb several
April 18
e 20000 er 12 950 liability None None 1 year No No
2025
Shaoxin 2025 guarante
g Co. e
Ltd.Huadon
g Joint and
Medicin Decemb several
April 18
e 20000 er 12 950 liability None None 1 year No No
2025
Shaoxin 2025 guarante
g Co. e
Ltd.Huadon Joint and
g April 18 July 7 several
5000 79.86 None None 1 year No No
Medicin 2025 2025 liability
e guarante
183Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(Hangzh e
ou)
Biologic
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
several
(Hangzh April 18 July 28
5000 34.7 liability None None 1 year No No
ou) 2025 2025
guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
several
(Hangzh April 18 August
5000 39.33 liability None None 1 year No No
ou) 2025 4 2025
guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
several
(Hangzh April 18 August
5000 133.7 liability None None 1 year No No
ou) 2025 11 2025
guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
several
(Hangzh April 18 August
5000 37.3 liability None None 1 year No No
ou) 2025 18 2025
guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
several
(Hangzh April 18 October
5000 122.93 liability None None 1 year No No
ou) 2025 9 2025
guarante
Biologic
e
al
Product
Co. Ltd.Huadon April 18 October Joint and
5000 61.75 None None 1 year No No
g 2025 13 2025 several
184Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Medicin liability
e guarante
(Hangzh e
ou)
Biologic
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
several
(Hangzh April 18 October
5000 3.92 liability None None 1 year No No
ou) 2025 23 2025
guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
Novemb several
(Hangzh April 18
5000 er 10 3.84 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
Novemb several
(Hangzh April 18
5000 er 17 7.03 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
Novemb several
(Hangzh April 18
5000 er 21 2.04 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
Novemb several
(Hangzh April 18
5000 er 26 9.23 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.
185Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Huadon
g
Medicin
Joint and
e
Decemb several
(Hangzh April 18
5000 er 15 15.65 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
Decemb several
(Hangzh April 18
5000 er 18 285 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.Huadon
g
Medicin
Joint and
e
Decemb several
(Hangzh April 18
5000 er 26 3000 liability None None 1 year No No
ou) 2025
2025 guarante
Biologic
e
al
Product
Co. Ltd.Joyang
April 18
Laborato 5000 0 1 year No No
2025
ries
Huadon
g Joint and
Proporti
Medicin several
April 18 July 4 onal
e 24000 3000 liability None 1 year No No
2025 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin several
April 18 August onal
e 24000 3000 liability None 1 year No No
2025 6 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin several
April 18 August onal
e 24000 1000 liability None 1 year No No
2025 14 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon Joint and Proporti
April 18 October
g 24000 51.51 several None onal 1 year No No
2025282025
Medicin liability guarante
186Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
e guarante e
Wenzho e
u Co.Ltd.Huadon
g Joint and
Proporti
Medicin several
April 18 October onal
e 24000 69.72 liability None 1 year No No
2025 28 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin several
April 18 October onal
e 24000 15.84 liability None 1 year No No
2025 28 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin several
April 18 October onal
e 24000 318.86 liability None 1 year No No
2025 28 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Novemb several
April 18 onal
e 24000 er 26 69.6 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Novemb several
April 18 onal
e 24000 er 26 17.26 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Novemb several
April 18 onal
e 24000 er 26 237.92 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Novemb several
April 18 onal
e 24000 er 26 11.73 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon Joint and Proporti
Decemb
g April 18 several onal
24000 er 23 69.07 None 1 year No No
Medicin 2025 liability guarante
2025
e guarante e
187Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Wenzho e
u Co.Ltd.Huadon
g Joint and
Proporti
Medicin Decemb several
April 18 onal
e 24000 er 23 210.9 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Decemb several
April 18 onal
e 24000 er 23 32.51 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Decemb several
April 18 onal
e 24000 er 23 116.79 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin several
April 18 July 4 onal
e 24000 1000 liability None 1 year No No
2025 2025 guarante
Wenzho guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Decemb several
April 18 onal
e 24000 er 4 1760 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Novemb several
April 18 onal
e 24000 er 18 110.56 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon
g Joint and
Proporti
Medicin Decemb several
April 18 onal
e 24000 er 15 129.44 liability None 1 year No No
2025 guarante
Wenzho 2025 guarante
e
u Co. e
Ltd.Huadon Joint and
Guarante
g Novemb several
April 18 e +
Medicin 15000 er 25 712.5 liability None 1 year No No
2025 financial
e Lishui 2025 guarante
loan
Co. Ltd. e
188Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Huadon Joint and
Guarante
g Novemb several
April 18 e +
Medicin 15000 er 25 950 liability None 1 year No No
2025 financial
e Lishui 2025 guarante
loan
Co. Ltd. e
Huadon Joint and
Guarante
g Novemb several
April 18 e +
Medicin 15000 er 25 950 liability None 1 year No No
2025 financial
e Lishui 2025 guarante
loan
Co. Ltd. e
Huadon Joint and
Guarante
g Novemb several
April 18 e +
Medicin 15000 er 25 950 liability None 1 year No No
2025 financial
e Lishui 2025 guarante
loan
Co. Ltd. e
Huadon
g
Medicin April 18
2500 0 1 year No No
e 2025
Daishan
Co. Ltd.Huadon
g Joint and
Medicin Septemb several
April 18
e Cunde 7600 er 24 950 liability None None 1 year No No
2025
(Zhoush 2025 guarante
an) Co. e
Ltd.Huadon
g Joint and
Medicin Novemb several
April 18
e Cunde 7600 er 27 950 liability None None 1 year No No
2025
(Zhoush 2025 guarante
an) Co. e
Ltd.Hangzho
u
Zhongm
ei
Huadon
April 18
g 60000 0 1 year No No
2025
Pharmac
eutical
Jiangdon
g Co.Ltd.Hangzho
u Joint and
Huadon Decemb several
April 18
g 10000 er 12 950 liability None None 1 year No No
2025
Medicin 2025 guarante
e Chain e
Co. Ltd.Hangzho Joint and
Decemb
u April 18 several
10000 er 12 950 None None 1 year No No
Huadon 2025 liability
2025
g guarante
189Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Medicin e
e Chain
Co. Ltd.Hubei
Joint and
Magic Proporti
Septemb several
Health April 18 onal
3600 er 5 57.68 liability None 1 year No No
Technol 2025 guarante
2025 guarante
ogy Co. e
e
Ltd.Hubei
Joint and
Magic Proporti
several
Health April 18 October onal
3600 64.98 liability None 1 year No No
Technol 2025 23 2025 guarante
guarante
ogy Co. e
e
Ltd.Hubei
Joint and
Magic Proporti
Novemb several
Health April 18 onal
3600 er 14 50.05 liability None 1 year No No
Technol 2025 guarante
2025 guarante
ogy Co. e
e
Ltd.Hubei
Joint and
Magic Proporti
Decemb several
Health April 18 onal
3600 er 16 105.06 liability None 1 year No No
Technol 2025 guarante
2025 guarante
ogy Co. e
e
Ltd.Huadon
g
Medicin April 18
10000 0 1 year No No
e 2025
(Jiaxing)
Co. Ltd.Zhejiang
Yiqun
Biologic
al April 18
2000 0 1 year No No
Pharmac 2025
eutical
Trading
Co. Ltd.Hangzho
u Huayi
April 18
Pharmac 3000 0 1 year No No
2025
y Co.Ltd.Hangzho
u
Huadon
April 18
g Wulin 1000 0 1 year No No
2025
Pharmac
y Co.Ltd.Anhui Joint and
Meihua April 18 July 25 several
5000 485.95 None None 1 year No No
Hi-Tech 2025 2025 liability
Pharmac guarante
190Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
eutical e
Co. Ltd.Anhui
Joint and
Meihua
several
Hi-Tech April 18 August
5000 49.55 liability None None 1 year No No
Pharmac 2025 14 2025
guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
several
Hi-Tech April 18 August
5000 281.3 liability None None 1 year No No
Pharmac 2025 20 2025
guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
several
Hi-Tech April 18 August
5000 328.51 liability None None 1 year No No
Pharmac 2025 28 2025
guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
Septemb several
Hi-Tech April 18
5000 er 10 143.62 liability None None 1 year No No
Pharmac 2025
2025 guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
Septemb several
Hi-Tech April 18
5000 er 23 83.25 liability None None 1 year No No
Pharmac 2025
2025 guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
several
Hi-Tech April 18 October
5000 306.17 liability None None 1 year No No
Pharmac 2025 10 2025
guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
several
Hi-Tech April 18 October
5000 102.17 liability None None 1 year No No
Pharmac 2025 17 2025
guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
several
Hi-Tech April 18 October
5000 407.03 liability None None 1 year No No
Pharmac 2025 29 2025
guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
Novemb several
Hi-Tech April 18
5000 er 5 101.39 liability None None 1 year No No
Pharmac 2025
2025 guarante
eutical
e
Co. Ltd.Anhui April 18 5000 Novemb 242.34 Joint and None None 1 year No No
191Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Meihua 2025 er 25 several
Hi-Tech 2025 liability
Pharmac guarante
eutical e
Co. Ltd.Anhui
Joint and
Meihua
Decemb several
Hi-Tech April 18
5000 er 19 97.68 liability None None 1 year No No
Pharmac 2025
2025 guarante
eutical
e
Co. Ltd.Anhui
Joint and
Meihua
Decemb several
Hi-Tech April 18
5000 er 29 290.42 liability None None 1 year No No
Pharmac 2025
2025 guarante
eutical
e
Co. Ltd.Huadon
g
Medicin
e
Internati April 18
10000 0 1 year No No
onal 2025
Trade
(Zhejian
g) Co.Ltd.Huadon
g
Pharmac
eutical April 18
5000 0 1 year No No
Sales 2025
(Zhejian
g) Co.Ltd.Wuhu
Huaren
Science
April 18
and 3000 0 1 year No No
2025
Technol
ogy Co.Ltd.Huadon
g
Medicin Joint and
e Septemb several
April 18
(Guizho 20000 er 26 2603.36 liability None None 1 year No No
2025
u) 2025 guarante
Pharmac e
eutical
Co. Ltd.Huadon
Joint and
g
Novemb several
Medicin April 18
20000 er 10 1539.01 liability None None 1 year No No
e 2025
2025 guarante
(Guizho
e
u)
192Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Pharmac
eutical
Co. Ltd.Bailing
Health
Science April 18
1200 0 1 year No No
(Hangzh 2025
ou) Co.Ltd.Gongwe
i
Lianchu Joint and
ang Septemb several
April 18
(Shangh 2000 er 28 26.51 liability None None 1 year No No
2025
ai) 2025 guarante
Biotechn e
ology
Co. Ltd.Gongwe
i
Lianchu Joint and
ang several
April 18 October
(Shangh 2000 20.73 liability None None 1 year No No
2025202025
ai) guarante
Biotechn e
ology
Co. Ltd.Gongwe
i
Lianchu Joint and
ang several
April 18 October
(Shangh 2000 4.63 liability None None 1 year No No
2025292025
ai) guarante
Biotechn e
ology
Co. Ltd.Jiangsu
Nanjing
Nongda
April 18
Animal 1000 0 1 year No No
2025
Pharmac
eutical
Co. Ltd.Total approved Total actual
guarantee quota for guarantee amount
subsidiaries during 458200 for subsidiaries 121147.95
the reporting period during the reporting
(B1) period (B2)
Total actual
Total approved
guarantee balance
guarantee quota for
for subsidiaries at
subsidiaries at the 638484.7 126932.65
the end of the
end of the reporting
reporting period
period (B3)
(B4)
Guarantees provided by subsidiaries to other subsidiaries
Name of Disclosu 担保额 Actual Actual Type of Collatera Counter- Guarante Whether Whether
193Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
guarante re date 度 occurren guarante guarante l (if any) guarante e period it has it is a
e of ce date ed e e (if any) been guarante
recipient announc amount fulfilled e for
ement related
regardin parties
g the
guarante
e quota
Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 April 21 onal
1396.4 5.49 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 April 25 onal
1396.4 10.44 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 April 29 onal
1396.4 19.14 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 May 15 onal
1396.4 15.79 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 May 20 onal
1396.4 58.54 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 May 28 onal
1396.4 12.01 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 June 6 onal
1396.4 15.41 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 June 12 onal
1396.4 79.95 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi April 18 1396.4 June 26 15.65 Joint and None Proporti 3 years No Yes
194Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
ng Peg- 2025 2025 several onal
Bio liability guarante
Biophar guarante e
m Co. e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 July 10 onal
1396.4 22.48 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 July 14 onal
1396.4 8.06 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 July 23 onal
1396.4 14.31 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 July 31 onal
1396.4 14.49 liability None 3 years No Yes
Biophar 2025 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 August onal
1396.4 24.31 liability None 3 years No Yes
Biophar 2025 7 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 August onal
1396.4 9.85 liability None 3 years No Yes
Biophar 2025 21 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
Septemb several
Bio April 18 onal
1396.4 er 15 8.06 liability None 3 years No Yes
Biophar 2025 guarante
2025 guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 October onal
1396.4 23.43 liability None 3 years No Yes
Biophar 2025 16 2025 guarante
guarante
m Co. e
e
Ltd.Chongqi Joint and Proporti
ng Peg- April 18 October several onal
1396.4 6.65 None 3 years No Yes
Bio 2025 28 2025 liability guarante
Biophar guarante e
195Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
m Co. e
Ltd.Chongqi
Joint and
ng Peg- Proporti
Novemb several
Bio April 18 onal
1396.4 er 13 32.21 liability None 3 years No Yes
Biophar 2025 guarante
2025 guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
Decemb several
Bio April 18 onal
1396.4 er 16 30.37 liability None 3 years No Yes
Biophar 2025 guarante
2025 guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
Decemb several
Bio April 18 onal
1396.4 er 31 2.79 liability None 3 years No Yes
Biophar 2025 guarante
2025 guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 May 7 onal
1396.4 116.37 liability None 3 years No Yes
Biophar 2024 2024 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 July 26 onal
1396.4 62 liability None 3 years No Yes
Biophar 2024 2024 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 August onal
1396.4 33.23 liability None 3 years No Yes
Biophar 2024 21 2024 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
several
Bio April 18 August onal
1396.4 49.1 liability None 3 years No Yes
Biophar 2024 23 2024 guarante
guarante
m Co. e
e
Ltd.Chongqi
Joint and
ng Peg- Proporti
Septemb several
Bio April 18 onal
1396.4 er 2 52.06 liability None 3 years No Yes
Biophar 2024 guarante
2024 guarante
m Co. e
e
Ltd.Total approved Total actual
guarantee quota for guarantee amount
subsidiaries during 1396.4 for subsidiaries 429.43
the reporting period during the reporting
(C1) period (C2)
Total approved 2792.8 Total actual 742.2
guarantee quota for guarantee balance
196Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
subsidiaries at the for subsidiaries at
end of the reporting the end of the
period (C3) reporting period
(C4)
Total Company guarantees (sum of the fore-mentioned three major items)
Total approved Total actual
guarantee quota guarantee amount
during the reporting 459596.4 during the reporting 121577.38
period (A1 + B1 + period (A2 + B2 +
C1) C2)
Total approved Total actual
guarantee quota at guarantee balance at
the end of the 641277.5 the end of the 127674.85
reporting period (A3 reporting period (A4
+ B3 + C3) + B4 + C4)
Proportion of total actual guarantees (i.e. A4
5.15%
+ B4 + C4) in the Company's net assets
Incl.:
Balance of guarantees provided for
shareholders de facto controllers and their 0
related parties (D)
Outstanding debt guarantees provided
directly or indirectly to guarantee recipients
28136.1
with an asset liability ratio exceeding 70%
(E)
Amount of guarantees exceeding 50% of net
0
assets (F)
Total of the above three guaranteed amounts
28136.1
(D + E + F)
Explanation of situations where for
unexpired guarantee contracts guarantee
liabilities arise during the reporting period or
Not applicable
there is evidence indicating a possible
assumption of joint and several liquidation
liabilities (if any)
Explanation of guarantees provided
externally in violation of prescribed Not applicable
procedures (if any)
Explanation of specific situations for composite guarantee
3. Entrusted management of cash assets
(1) Entrusted wealth management
□Applicable□Not applicable
The Company did not have any entrusted wealth management during the reporting period.
197Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(2) Entrusted loans
□Applicable□Not applicable
The Company had no entrusted loans during the reporting period.
4. Other significant contracts
□Applicable□Not applicable
The Company did not have any other significant contracts during the reporting period.XVI. Use of raised funds
□Applicable□Not applicable
The Company had no use of raised funds during the reporting period.XVII. Other major events
□Applicable□Not applicable
The Company had no other significant matters requiring explanation during the reporting period.XVIII. Major events of subsidiaries
□Applicable □Not applicable
(I) As of the date of the Report the liquidation of Huadong Ningbo Medicine Co. Ltd. has
reached a stage under the supervision of the court where major assets have been disposed of with
only the collection of remaining receivables pending. The Company will actively advance the
subsequent liquidation. During this reporting period the Company recognized an investment
income of RMB -600622.9 by using the equity method.(II) Information on major pharmaceutical items (products) included in newly added to or
removed from the National Reimbursement Drug List
In December 2025 the National Healthcare Security Administration (NHSA) and the Ministry
of Human Resources and Social Security (MOHRSS) jointly issued the National Reimbursement
Drug List for Basic Medical Insurance Maternity Insurance and Work Injury Insurance
(hereinafter referred to as the "2025 Reimbursement Drug List") and the Commercial Health
Insurance Innovative Drug List (2025) (hereinafter referred to as the "Commercial Insurance
Innovative Drug List") both of which officially came into effect on January 1 2026.As of the release date of this Report a total of 55 core products (comprising 11 Class A and 45
Class B products) and 15 strategic collaboration products (including 1 Class A and 14 Class B
products) of the Company which were approved for marketing have been included in the 2025
Reimbursement Drug List. Specifically the Company's marketed product Carfilzomib for Injection
198Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
along with its strategic collaboration products namely Etanercept Solution for Injection Mulberry
Twig Total Alkaloids Epimedium Brevicornu Soft Capsules Ganagliflozin Proline Tablets
Senaparib Capsules and Linaprazan Glurate Capsules fall under the "negotiated drugs during the
agreement period" section of the 2025 Reimbursement Drug List. Tacrolimus Granules are included
in the "bidding drugs" section of the 2025 Reimbursement Drug List and the strategic collaboration
product Zevorcabtagene Autoleucel Injection is included in the Commercial Insurance Innovative
Drug List.
199Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Section VI Share Changes and Shareholders Information
I. Changes in shares
1. Changes in shares
Unit: Shares
Before the change Change in the period (+/-) After the change
Shares
converted
New Bonus
Quantity Ratio from Others Subtotal Quantity Ratio
shares shares
capital
reserve
I. Shares
subject to
--
trading 2321320 0.13% 0 0 0 996700 0.06%
13246201324620
restriction
s
1.
Shares
00.00%0000000.00%
held by
the State
2.
Shares
held by
the state- 0 0.00% 0 0 0 0 0 0 0.00%
owned
corporatio
ns
3.
Shares
held by - -
22533200.13%0009967000.06%
other 1256620 1256620
domestic
investors
Incl.:
Shares
held by
00.00%0000000.00%
domestic
corporatio
ns
Shar
es held by
--
domestic 2253320 0.13% 0 0 0 996700 0.06%
12566201256620
natural
persons
4.
Shares
held by 68000 0.00% 0 0 0 -68000 -68000 0 0.00%
overseas
investors
200Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Incl.:
shares
held by
00.00%0000000.00%
overseas
corporatio
ns
Shar
es held by
overseas 68000 0.00% 0 0 0 -68000 -68000 0 0.00%
natural
persons
II. Shares
without
17519411753024
trading 99.87% 0 0 0 1083120 1083120 99.94%
228348
restriction
s
1.
Common 1751941 1753024
99.87%0001083120108312099.94%
shares in 228 348
RMB
2.
Foreign
capital
00.00%0000000.00%
shares
listed in
China
3.
Foreign
capital
00.00%0000000.00%
shares
listed
overseas
4.
00.00%0000000.00%
Others
III. Total
17542621754021
number of 100.00% 0 0 0 -241500 -241500 100.00%
548048
shares
Reason for changes in shares
□Applicable □Not applicable
During the reporting period the Company completed two separate repurchases and
cancellations of restricted stocks under the Restricted Stock Incentive Plan in 2022 involving
185500 shares and 56000 shares respectively. This resulted in the repurchase and cancellation of a
total of 241500 restricted stocks thereby reducing the Company's total shares by 241500
shares.During the reporting period as the conditions were met for the second restriction release
period of the reserved restricted shares granted under the Restricted Stock Incentive Plan in 2022
the Company completed the restriction release procedures for 175000 restricted stocks. Upon
attainment of the conditions for the third restriction release period of first grant of the restricted
201Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
shares granted under the Restricted Stock Incentive Plan in 2022 the Company completed the
restriction release procedures for 1275120 restricted stocks. As a result the Company's restricted
stocks under equity incentives decreased by a total of 1450120 shares due to release during the
reporting period. During the reporting period the Company's restricted stocks under equity
incentives decreased by a total of 1691620 shares due to release repurchase and cancellation.During the reporting period the Company's locked-up stocks held by the senior management
increased by a total of 367000 shares. During the reporting period due to the decrease in restricted
stocks under equity incentives and the increase in locked-up stocks held by the senior management
the Company's stocks with trading restrictions decreased by 1324620 shares.Due to the release of restricted stocks under equity incentives and the increase in locked-up
stocks held by the senior management the Company's stocks without trading restrictions increased
by a total of 1083120 shares during the reporting period.Approval of changes in shares
□Applicable □Not applicable
(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 on which the following proposals were
reviewed and approved: the Proposal on the Company's Restricted Stock Incentive Plan in 2022
(Draft) and Its Abstract the Proposal on Management Rules for the Implementation and
Assessment of the Company's Restricted Stock Incentive Plan in 2022 the Proposal on the
Management Rules of the Company's Restricted Stock Incentive Plan in 2022 and the Proposal on
Applying to the General Meeting of Shareholders for Authorizing the Board of Directors to Handle
Equity Incentive-related Matters. Independent directors provided their independent opinions on
whether this incentive plan is conducive to the Company's sustainable development and whether it
may harm the interests of the Company and all shareholders. For specific details please refer to the
relevant announcement published by the Company on CNINFO on August 10 2022.
(2) On August 10 2022 the Company disclosed the Announcement on Independent Directors
Publicly Soliciting Proxy Voting Rights on Cninfo (http://www.cninfo.com.cn). Mr. Wang Ruwei
an Independent Director of the Company acting as the convener and commissioned by other
independent directors publicly solicited proxy voting rights from all shareholders of the Company
for the proposals related to the Restricted Stock Incentive Plan in 2022 reviewed at the 1st
Extraordinary General Meeting of Shareholders in 2022 which was set to be convened on August
312022.
(3) From August 15 to 25 2022 the Company posted on its intranet the list of the first batch of
incentive recipients under the Restricted Stock Incentive Plan in 2022 for a total of 10 days. By the
202Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
end of the public announcement period on August 25 2022 the Board of Supervisors had not
received any objections against the incentive recipients from any individuals. On August 25 2022
the Board of Supervisors of the Company convened a meeting to review and approve the
Verification Opinions and Announcement Note on the List of the First Batch of Incentive Recipients
under the Company's Restricted Stock Incentive Plan in 2022. The Company then disclosed these
Verification Opinions and relevant announcements on Cninfo (http://www.cninfo.com.cn).
(4) On August 31 2022 the Company convened the 1st Extraordinary General Meeting in
2022 on which the following proposals were reviewed and approved: the Proposal on the
Company's Restricted Stock Incentive Plan in 2022 (Draft) and Its Abstract the Proposal on
Management Rules for the Implementation and Assessment of the Company's Restricted Stock
Incentive Plan in 2022 the Proposal on the Management Rules of the Company's Restricted Stock
Incentive Plan in 2022 and the Proposal on Applying to the General Meeting of Shareholders for
Authorizing the Board of Directors to Handle Equity Incentive-related Matters. On the same day
the Company disclosed the Self-Inspection Report on Trading of Company Shares by Insiders and
Incentive Recipients under Restricted Stock Incentive Plan in 2022 and related announcements on
Cninfo (http://www.cninfo.com.cn). This incentive plan was approved at the Company's 1st
Extraordinary General Meeting in 2022 and the Board of Directors was authorized to implement
the Company's Restricted Stock Incentive Plan in 2022 and handle relevant matters according to the
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 on which the following proposals
were reviewed and approved: the Proposal on Adjustments of the Company's Restricted Stock
Incentive Plan in 2022 and the Proposal on Granting Restricted Stocks to the First Batch of
Incentive Recipients under the Restricted Stock Incentive Plan in 2022. The Board of Directors
confirmed that the grant conditions under the incentive plan were satisfied. The Board of
Supervisors re-verified the list of incentive recipients on the first grant date and provided opinions
on the adjustment and 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 the relevant announcements on Cninfo (http://www.cninfo.com.cn).
(6) On November 9 2022 the Company disclosed the Announcement on Completion of
Registration of the First Grant of Restricted Stocks under the Restricted Stock Incentive Plan in
2022. The Company completed the registration of the restricted stocks initially granted under the
Restricted Stock Incentive Plan in 2022 and the listing date of the granted restricted stocks was
November 15 2022.
203Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(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 on which the following proposals were
reviewed and approved: the Proposal on Adjusting the Grant Price of Reserved Stocks under the
Restricted Stock Incentive Plan in 2022 and the Proposal on Granting Reserved Restricted Stocks to
Incentive Recipients under the Restricted Stock Incentive Plan in 2022. The Board of Directors
confirmed that reserved conditions of the incentive plan for granting restricted stocks were fulfilled
and the Board of Supervisors re-verified the list of incentive recipients on the date of granting
reserved stocks and provided 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 the relevant announcement on CNINFO.
(8) From July 13 to 23 2023 the Company publicly displayed the list of incentive recipients
for the reserved restricted stocks under this Restricted Stock Incentive Plan through its OA system
for a total of 10 days. By the end of the public announcement period on July 23 2023 the Board of
Supervisors had not received any objections against the incentive recipients from any individuals.On July 26 2023 the Company convened a meeting of the Board of Supervisors on which the
following proposals were reviewed and approved: the Verification Opinions of the Board of
Supervisors and Announcement Note on the List of Incentive Recipients for Reserved Restricted
Stocks Granted under the Company's Restricted Stock Incentive Plan in 2022. On the same day the
Company disclosed the Verification Opinions of the Board of Supervisors and Announcement Note
on the List of Incentive Recipients for Reserved Restricted Stocks Granted under the Company's
Restricted Stock Incentive Plan in 2022 and related announcements on Cninfo
(http://www.cninfo.com.cn).
(9) On September 27 2023 the Company disclosed the Announcement on Completion of the
Reserved Grant under the Restricted Stock Incentive Plan in 2022. The Company completed the
registration of the reserved restricted stocks granted under the Restricted Stock Incentive Plan in
2022 and the listing date of the granted restricted stocks 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 on which the following proposals
were reviewed and approved: Proposal on the Fulfillment of Conditions for the First Restriction
Release Period of the Initial Grant of Restricted Stocks under the Restricted Stock Incentive Plan in
2022 the Proposal on Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in
2022 and the Proposal on Repurchase and Cancellation of Certain Restricted Stocks. The Board of
Directors confirmed that the conditions for releasing restrictions during the first restriction release
period of the first grant of restricted stocks under the Restricted Stock Incentive Plan in 2022 had
204Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
been satisfied. Pursuant to the authorization granted by the Company's 1st Extraordinary General
Meeting in 2022 the Board of Directors approved the completion of the procedures for releasing
the restrictions on 1220940 restricted stocks under the first restriction release period for 108
incentive recipients. The Board of Directors also approved the repurchase and cancellation of a total
of 97800 restricted stocks that had been granted but not yet released corresponding to 4 incentive
recipients who were no longer eligible due to resignation and 2 incentive recipients who failed to
fully meet the individual performance assessment criteria for the first restriction release period. The
Company's independent directors issued concurring independent opinions on the relevant matters
and the Board of Supervisors provided verification opinions with related reports prepared by the
lawyers and independent financial advisers. On the same day the Company disclosed the relevant
announcement on CNINFO.
(11) On December 1 2023 the Company disclosed the Hint on Circulation of Restricted
Stocks Released during the First Restriction Release Period for First Grant of Restricted Stocks
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the first
restriction release period of the first grant under the Restricted Stock Incentive Plan in 2022 became
tradable on December 5 2023.
(12) On December 8 2023 the Company convened its 2nd Extraordinary General Meeting in
2023 where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and the
Proposal on Altering the Registered Capital and Amending the Articles of Association were
approved after review. On the same day the Company disclosed the Announcement on Reducing
Registered Capital by Repurchasing and Canceling Some Restricted Stocks and Notifying 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 the Completion of the
Repurchase and Cancellation of Certain Restricted Stocks. On March 26 2024 the Company
completed the procedures for repurchase and cancellation of 97800 restricted stocks in Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(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 which the Proposal on
Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in 2022 and the Proposal on
Repurchase and Cancellation of Certain Restricted Stocks were reviewed and approved. The Board
of Directors agreed to repurchase and cancel a total of 65000 restricted stocks that had been
granted but not yet released from restrictions corresponding to 5 incentive recipients who were no
205Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
longer eligible due to resignation. The Board of Supervisors provided verification opinions on the
relevant matters. with related reports prepared by the lawyers and independent financial advisers.On the same day the Company disclosed the relevant announcement on CNINFO.
(15) On June 18 2024 the Company convened its 1st Extraordinary General Meeting in 2024
where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and the Proposal
on Expanding the Business Scope Altering the Registered Capital and Amending the "Articles of
Association" were reviewed and approved. On the same day the Company disclosed the
Announcement on Reducing Registered Capital by Repurchasing and Canceling Some Restricted
Stocks and Notifying Creditors. As of August 05 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 the Completion of the
Repurchase and Cancellation of Certain Restricted Stocks. On August 27 2024 the Company
completed the procedures for repurchase and cancellation of 65000 restricted stocks in Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(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 the Release Conditions during the First Restriction Release Period
of the Reserved Restricted Stocks Granted under the Restricted Stock Incentive Plan in 2022 was
reviewed and approved. The Board of Directors confirmed that the conditions for releasing
restrictions during the first restriction release period of the reserved grant of restricted stocks under
the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to the authorization granted
by the Company's 1st Extraordinary General Meeting in 2022 the Board of Directors approved the
completion of the procedures for releasing the restrictions on 192500 restricted stocks under the
first restriction release period for 18 incentive recipients. The Board of Supervisors provided
verification opinions on the relevant matters. with related reports prepared by the lawyers and
independent financial advisers. On the same day the Company disclosed the relevant
announcement on CNINFO.
(18) On October 24 2024 the Company disclosed the Hint on Circulation of Restricted Stocks
Released during the First Restriction Release Period of Reserved Restricted Stocks Granted under
the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the first restriction
release period of the reserved grant under the Restricted Stock Incentive Plan in 2022 became
tradable on October 28 2024.
206Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(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 which the following
proposals were reviewed and approved: Proposal on the Fulfillment of the Release Conditions
during the Second Restriction Release Period for First Grant of Reserved Restricted Stocks under
the Restricted Stock Incentive Plan in 2022 the Proposal on Adjusting the Repurchase Price of the
Restricted Stock Incentive Plan in 2022 and the Proposal on Repurchase and Cancellation of
Certain Restricted Stocks. The Board of Directors confirmed that the conditions for releasing
restrictions during the second restriction release period of the first grant of restricted stocks under
the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to the authorization granted
by the Company's 1st Extraordinary General Meeting in 2022 the Board of Directors approved the
completion of the procedures for releasing the restrictions on 1063740 restricted stocks under the
second restriction release period for 90 incentive recipients. The Board of Directors also approved
the repurchase and cancellation of a total of 185500 restricted stocks that had been granted but not
yet released from restrictions corresponding to 1 incentive recipient who was no longer eligible due
to resignation 16 incentive recipients whose individual performance assessment results for the
second restriction release period were unqualified and 1 reserved incentive recipient whose
individual performance assessment results for the first restriction release period were unqualified.The Board of Supervisors provided verification opinions on the relevant matters. with related
reports prepared by the lawyers and independent financial advisers. On November 27 2024 the
Company disclosed the relevant announcements on Cninfo (http://www.cninfo.com.cn).
(20) On December 13 2024 the Company disclosed the Hint on Circulation of Restricted
Stocks Released during the Second Restriction Release Period for First Grant of Restricted Stocks
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the second
restriction release period of the first grant under the Restricted Stock Incentive Plan in 2022 became
tradable on December 16 2024.
(21) On December 20 2024 the Company convened its 2nd Extraordinary General Meeting in
2024 where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and the
Proposal on Expanding the Business Scope Altering the Registered Capital and Amending the
"Articles of Association" were reviewed and approved. On the same day the Company disclosed
the Announcement on Reducing Registered Capital by Repurchasing and Canceling Some
Restricted Stocks and Notifying Creditors. As of February 5 2025 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.
207Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(22) On March 28 2025 the Company disclosed the Announcement on the Completion of the
Repurchase and Cancellation of Certain Restricted Stocks. On March 26 2025 the Company
completed the procedures for repurchase and cancellation of 185500 restricted stocks in Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(23) On June 27 2025 the Company convened the 34th Meeting of the 10th Board of
Directors and the 24th Meeting of the 10th Board of Supervisors where the Proposal on Adjusting
the Repurchase Price of the Restricted Stock Incentive Plan in 2022 and the Proposal on
Repurchase and Cancellation of Certain Restricted Stocks and Reduction of the Company's
Registered Capital were reviewed and approved. The Board of Directors agreed to repurchase and
cancel a total of 56000 restricted stocks that had been granted but not yet released from restrictions
corresponding to 6 incentive recipients who were no longer eligible due to resignation and to
reduce the Company's registered capital accordingly. The Board of Supervisors provided
verification opinions on the relevant matters. with related reports prepared by the lawyers and
independent financial advisers. On July 01 2025 the Company disclosed the relevant
announcement on CNINFO.
(24) On July 16 2025 the Company convened its 1st Extraordinary General Meeting in 2025
where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks and Reduction of
the Company's Registered Capital was reviewed and approved. On the same day the Company
disclosed the Announcement on Reducing Registered Capital by Repurchasing and Canceling Some
Restricted Stocks and Notifying Creditors. As of September 1 2025 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.
(25) On September 11 2025 the Company disclosed the Announcement on the Completion of
Repurchase and Cancellation of Certain Restricted Stocks. On September 9 2025 the Company
completed the procedures for repurchase and cancellation of 56000 restricted stocks at Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.
(26) On October 13 2025 the Company convened the 3rd Meeting of the 11th Board of
Directors where the Proposal on the Fulfillment of Conditions for the Second Restriction Release
Period of Reserved Restricted Stocks Granted under the Restricted Stock Incentive Plan in 2022
was reviewed and approved. The Board of Directors confirmed that the conditions for releasing
restrictions during the second restriction release period of the reserved restricted stocks granted
under the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to the authorization
granted by the Company's 1st Extraordinary General Meeting in 2022 the Board of Directors
208Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
approved the completion of the procedures for releasing the restrictions on 175000 restricted stocks
under the second restriction release period for 16 incentive recipients. The Remuneration and
Appraisal Committee of the Board of Directors issued verification opinions on relevant matters
while lawyers and independent financial advisors provided corresponding reports. On October 15
2025 the Company disclosed the relevant announcements on Cninfo (http://www.cninfo.com.cn).
(27) On October 25 2025 the Company disclosed the Hint on Circulation of Restricted Stocks
Released during the Second Restriction Release Period of Reserved Restricted Stocks Granted
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the second
restriction release period of the reserved restricted stocks granted under the Restricted Stock
Incentive Plan in 2022 became tradable on October 29 2025.
(28) On November 20 2025 the Company convened the 5th Meeting of the 11th Board of
Directors on which the following proposals were reviewed and approved: Proposal on the
Fulfillment of the Release Conditions during the Third Restriction Release Period for First Grant of
Reserved Restricted Stocks under the Restricted Stock Incentive Plan in 2022 the Proposal on
Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in 2022 and the Proposal on
Repurchase and Cancellation of Certain Restricted Stocks. The Board of Directors believed that the
conditions for releasing restrictions during the third restriction release period of the first grant of
restricted stocks under the Restricted Stock Incentive Plan in 2022 had been satisfied. Pursuant to
the authorization granted by the Company's 1st Extraordinary General Meeting in 2022 the Board
of Directors agreed to handle the releasing procedures for 1275120 restricted stocks for 77
incentive recipients during the third restriction release period and also approved the repurchase and
cancellation of a total of 284200 restricted stocks that had been granted but not yet released from
trading restrictions corresponding to 6 incentive recipients who were no longer eligible due to
resignation 16 incentive recipients whose individual performance assessment results for the third
restriction release period were unqualified 3 incentive recipients whose individual performance
assessment results for the restriction release period were qualified among the initially granted
incentive recipients 1 reserved incentive recipient who was no longer eligible due to resignation
and 2 incentive recipients whose individual performance evaluations for the second restriction
release period were unqualified among the incentive recipients of reserved grants. The
Remuneration and Appraisal Committee of the Board of Directors issued verification opinions on
relevant matters while lawyers and independent financial advisors provided corresponding reports.On November 22 2025 the Company disclosed the relevant announcements on Cninfo
(http://www.cninfo.com.cn).
209Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(29) On December 6 2025 the Company disclosed the Hint on Circulation of Restricted
Stocks Released during the Third Restriction Release Period for First Grant of Restricted Stocks
under the Restricted Stock Incentive Plan in 2022. The restricted stocks released from the third
restriction release period of the first grant under the Restricted Stock Incentive Plan in 2022 became
tradable on December 10 2025.
(30) On December 9 2025 the Company convened its 2nd Extraordinary Shareholders'
Meeting in 2025 where the Proposal on Repurchase and Cancellation of Certain Restricted Stocks
and the Proposal on Expanding the Business Scope Altering the Registered Capital and Amending
the "Articles of Association" were reviewed and approved. On the same day the Company
disclosed the Announcement on Reducing Registered Capital by Repurchasing and Canceling Some
Restricted Stocks and Notifying Creditors. As of January 23 2026 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.
(31) On March 7 2026 the Company disclosed the Announcement on the Completion of
Repurchase and Cancellation of Certain Restricted Stocks. On March 5 2026 the Company
completed the procedures for repurchase and cancellation of 284200 restricted stocks at Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited.Transfer of changed shares
□Applicable □Not applicable
In March 2025 the Company submitted the relevant registration materials to the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited for the repurchase and
cancellation of 185500 shares involved in the equity incentive plan. In the same month the
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited issued the
Confirmation for Registration of Securities Transfer to the Company and the total share capital of
the Company was reduced from 1754262548.00 shares to 1754077048.00 shares.In September 2025 the Company submitted the relevant registration materials to the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited for the repurchase and
cancellation of 56000 shares involved in the equity incentive plan. In the same month the
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited issued the
Confirmation for Registration of Securities Transfer to the Company and the total share capital of
the Company was reduced from 1754077048.00 shares to 1754021048.00 shares.In February 2026 the Company submitted the relevant registration materials to the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited for the repurchase and
210Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
cancellation of 284200 shares involved in the equity incentive plan. In the same month the
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited issued the
Confirmation for Registration of Securities Transfer to the Company and the total share capital of
the Company was reduced from 1754021048.00 shares to 1753736848.00 shares.Impact of share changes on financial indicators such as basic and diluted earnings per share and net assets per share attributable to
common shareholders of the Company in the last year and the latest period
□Applicable □Not applicable
Calculated based on the total number of stocks before the change in share capital
(1754262548 shares) the Company's basic earnings per share in 2025 were RMB 1.9463/share
diluted earnings/share were RMB 1.9463/share and net assets per share attributable to common
shareholders of the Company were RMB 14.12/share. Calculated based on the total number of
stocks after the change in share capital (1753736848 shares) the Company's basic earnings per
share for 2025 were RMB 1.9484/share diluted earnings per share were RMB 1.9465/share and net
assets per share attributable to common shareholders of the Company were RMB 14.15/share.Overall the aforementioned changes in share capital did not have a significant impact on the
Company's financial indicators for the first half of 2025 including basic and diluted earnings per
share as well as net assets per share attributable to common shareholders.Other contents deemed necessary by the Company or required to be disclosed by securities regulatory authorities
□Applicable□Not applicable
2. Changes in restricted stocks
□Applicable □Not applicable
Unit: Shares
Number of
Number of newly Number of Number of
restricted increased restricted restricted
Name of Reasons for Restriction
stocks at the restricted stocks released stocks at the
shareholder sale restriction release date
beginning of stocks during during the end of the
the period the current current period period
period
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Zhang Jianfei 52500 60000 0 112500
senior the
management management of
stocks held by
senior
management
Locked-up Release of
Zhang Jianfei 60000 0 0 60000
stocks for restrictions
211Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
senior according to
management relevant
regulations on
the
management of
stocks held by
senior
management
Release the
trading
Restricted restrictions
stocks under according to the
Zhang Jianfei 60000 0 60000 0
equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Lv Liang 70000 80000 0 150000
senior the
management management of
stocks held by
senior
management
Release the
trading
Restricted restrictions
stocks under according to the
Lv Liang 80000 0 80000 0
equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Zhu Li 22500 0 0 22500
senior the
management management of
stocks held by
senior
management
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Zhu Li 52500 60000 0 112500
senior the
management management of
stocks held by
senior
management
Restricted Release the
stocks under trading
Zhu Li 60000 0 60000 0
equity incentive restrictions
plan according to the
212Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Company's
Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Chen Bo 35000 40000 0 75000
senior the
management management of
stocks held by
senior
management
Release the
trading
Restricted restrictions
stocks under according to the
Chen Bo 40000 0 40000 0
equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Qiu Renbo 35000 40000 0 75000
senior the
management management of
stocks held by
senior
management
Release the
trading
Restricted restrictions
stocks under according to the
Qiu Renbo 40000 0 40000 0
equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Wu Hui 7500 60000 0 67500
senior the
management management of
stocks held by
senior
management
Release the
trading
Restricted restrictions
stocks under according to the
Wu Hui 105000 0 60000 0
equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
213Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Li Xiaomu 40000 0 0 40000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
stocks for regulations on
Zhu Liang 10500 12000 0 22500
senior the
management management of
stocks held by
senior
management
Release the
trading
Restricted restrictions
stocks under according to the
Zhu Liang 12000 0 12000 0
equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
Release the
trading
Restricted restrictions
Zhang stocks under according to the
100000100000
Zhongxing equity incentive Company's
plan Restricted
Stock Incentive
Plan in 2022
Release of
restrictions
according to
Locked-up relevant
Zhang stocks for regulations on
015000015000
Zhongxing senior the
management management of
stocks held by
senior
management
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Wang Changli 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Restricted Handle the
Yu Xi 40000 0 28000 12000
stocks under repurchase in
214Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
equity incentive accordance
plan with the
relevant
provisions of
the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Liu Jia 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Hu Qunyan 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Gong Wei 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Fang Jun 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Cheng Shaolin 21000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
215Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Wei Xuezhong 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Wang Song 12000 0 0 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
accordance
Restricted with the
stocks under relevant
Xin Lingbo 21000 0 9000 12000
equity incentive provisions of
plan the Company's
Restricted
Stock Incentive
Plan in 2022
Handle the
repurchase in
Other mid-level
accordance
management
Restricted with the
personnel and
stocks under relevant
core technical 1362820 0 1051120 124200
equity incentive provisions of
(business)
plan the Company's
personnel of the
Restricted
Company
Stock Incentive
Plan in 2022
Total 2321320 367000 1450120 996700 -- --
II. Issuance and listing of securities
1. Securities (excluding preferred shares) issued during the reporting period
□Applicable□Not applicable
2. Explanation of changes in the total number of shares the structure of shareholders and the structure of
assets and liabilities
□Applicable □Not applicable
During the reporting period the Company completed two separate repurchases and
cancellations of restricted stocks under the Restricted Stock Incentive Plan in 2022 involving
216Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
185500 shares and 56000 shares respectively. This resulted in the repurchase and cancellation of a
total of 241500 restricted stocks thereby reducing the Company's total stocks by 241500 shares;
such repurchase and cancellation of restricted stocks will not bring substantial impact on the
Company's financial position and operating results 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 or de facto controllers.
3. Existent shares held by internal employees
□Applicable□Not applicable
III. Particulars about shareholders and de facto controllers
1. Number of shareholders and their shareholdings
Unit: Shares
Total Total
number of number of
common preferred
Total Total number of preferred
shareholder shareholder
number of shareholders with
s at the end s with
common restored voting rights at
of the restored
shareholder the end of the previous
66656 previous 84304 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)
Number Pledged marked or locked-
Number of of shares Number of up status
Changes
shares held held shares held
Name of Nature of Sharehold during the
at the end of with without
shareholder shareholder ing ratio reporting
the reporting trading trading Status of
period Quantity
period restrictio restrictions shares
ns
China Domestic
Grand non-state-
41.67% 730938157 0 0 730938157 Pledged 142670000
Enterprises owned
Inc. corporation
Hangzhou
Huadong State-
Not
Medicine owned 16.42% 288000000 0 0 288000000 0
applicable
Group Co. corporation
Ltd.Hong Kong
Overseas Not
Securities 2.64% 46367991 -270637 0 46367991 0
corporation applicable
Clearing
217Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Company
Limited
New China
Life
Insurance
Co. Ltd. -
Dividend - Not
Others 1.99% 34965242 30331101 0 34965242 0
Individual applicable
Dividend -
018L-
FH002
Shenzhen
Industrial
and
Commercia
l Bank of
China
Limited -
Zhong Ou Not
Others 1.27% 22272929 3123286 0 22272929 0
AMC applicable
Medical
and Health
Hybrid
Securities
Investment
Fund
China
Domestic
Securities
non-state- Not
Finance 1.26% 22186818 0 0 22186818 0
owned applicable
Corporatio
corporation
n Limited
New China
Life
Insurance
Co. Ltd. -
Traditional
Not
- General Others 1.24% 21790814 16489672 0 21790814 0
applicable
Insurance
Products -
018L-
CT001
Shenzhen
National
Social
Security Not
Others 0.97% 16989744 16989744 0 16989744 0
Fund - applicable
Portfolio
112
Industrial
and
Commercia
l Bank of
China Not
Others 0.83% 14583030 -472815 0 14583030 0
Limited - applicable
Huatai-PB
CSI 300
Open-
ended
218Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Index Fund
China
Constructio
n Bank
Corporatio
n - E Fund
CSI 300
Not
Medical Others 0.67% 11712510 -4490622 0 11712510 0
applicable
and Health
Trading
Open Index
Securities
Investment
Fund
Strategic investors or
general corporations
become the top 10
Not applicable
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 concert parties with one another.mentioned shareholders
Explanation on the above
shareholders involved in
proxy/trusted voting rights Not applicable
and waiver of voting
rights
Special notes on the
existence of repurchase
special accounts among Not applicable
the top 10 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)
Number of shares held Type of shares
without trading restrictions at
Name of shareholder
the end of the reporting Type of shares Quantity
period
RMB common
China Grand Enterprises Inc. 730938157 730938157
shares
RMB common
Hangzhou Huadong Medicine Group Co. Ltd. 288000000 288000000
shares
RMB common
Hong Kong Securities Clearing Company Limited 46367991 46367991
shares
New China Life Insurance Co. Ltd. - Dividend - Individual RMB common
3496524234965242
Dividend - 018L-FH002 Shenzhen shares
Industrial and Commercial Bank of China Limited - Zhong
RMB common
Ou AMC Medical and Health Hybrid Securities Investment 22272929 22272929
shares
Fund
RMB common
China Securities Finance Corporation Limited 22186818 22186818
shares
New China Life Insurance Co. Ltd. - Traditional - General RMB common
2179081421790814
Insurance Products - 018L-CT001 Shenzhen shares
219Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
RMB common
National Social Security Fund - Portfolio 112 16989744 16989744
shares
Industrial and Commercial Bank of China Limited - Huatai- RMB common
1458303014583030
PB CSI 300 Open-ended Index Fund shares
China Construction Bank Corporation - E Fund CSI 300
RMB common
Medical and Health Trading Open Index Securities 11712510 11712510
shares
Investment Fund
Description for affiliated relationship or concerted action
The Company is unaware of whether the above-mentioned
among the top 10 shareholders with unrestricted circulating
shareholders are related parties or whether they are concert
shares and between the top 10 shareholders with unrestricted
parties with one another.circulating shares and the top 10 shareholders
As of the end of the current reporting period none of the top 10
Description of the top 10 common shareholders' participation
common shareholders of the Company held shares of the
in margin trading business (if any) (see Note 4)
Company through securities margin trading accounts.Participation in the lending of shares through refinancing business of shareholders holding more than 5% of shares top 10
shareholders and top 10 shareholders holding tradable shares without trading restriction
□Applicable□Not applicable
Change in top 10 shareholders and top 10 shareholders holding tradable shares without trading restriction due to lending/returning
of shares through refinancing as compared to the previous period
□Applicable□Not applicable
Whether the top 10 common shareholders and the top 10 common shareholders with unrestricted stocks in the Company engage in
the agreed repurchase transactions during the reporting period
□Yes□No
The top 10 common shareholders and the top 10 common shareholders with unrestricted stocks in the Company did not engage in
any agreed repurchase transactions during the reporting period.
2. Information on the controlling shareholder of the Company
Nature of controlling shareholder: Natural person holding
Type of controlling shareholder: Legal person
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
Equity holdings in
other domestic and
overseas listed
companies controlled The two additional listed entities under the control of China Grand Enterprises Inc. are Grand
or jointly participated Industrial Holding Co. Ltd. and Grand Pharmaceutical Group Limited.in by the controlling
shareholder during the
reporting period
Change in controlling shareholder during the reporting period
□Applicable□Not applicable
There was no change in the controlling shareholder of the Company during the reporting period.
3. De facto controller of the Company and its concerted parties
Nature of de facto controller: Domestic natural person
220Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Type of de facto controller: Natural person
Whether the right of abode in
Relationship with the de facto
Name of de facto controller Nationality other countries or regions is
controller
obtained
Hu Kaijun In person China Yes
Chairman and General Manager of China Grand Enterprises Inc.; Chairman and General
Main occupation and position
Manager of Beijing Grand Huachuang Investment Group Co. Ltd.Domestically and overseas
Three listed companies controlled are Huadong Medicine Co. Ltd. Grand Industrial Holdings
listed companies controlled in
Co. Ltd. and Grand Pharmaceutical Group Limited.the past 10 years
Change in the de facto controller during the reporting period
□Applicable□Not applicable
There was no change in the de facto controller of the Company during the reporting period.Block diagram of ownership and control relationship between the Company and the de facto controller
Hu Kaijun
Beijing Grand Huachuang Investment Beijing Yanhuang Real Estate Co. Ltd.Group Co. Ltd.China Grand Enterprises Inc.Huadong Medicine Co. Ltd.The de facto controller controls the Company through trust or other asset management arrangements
□Applicable□Not applicable
4. The number of shares pledged by the Company's controlling shareholder or the largest shareholder
and their concert parties represents 80% of their total shareholding in the Company
□Applicable□Not applicable
5. Other corporate shareholders with a shareholding ratio over 10%
□Applicable □Not applicable
Legal Main business
Name of corporate
representative/person Date of establishment Registered capital operations or
shareholder
in charge management activities
Hangzhou Huadong Dong Jiabo December 21 1992 RMB 60 million Production and
221Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Medicine Group Co. processing of
Ltd. integrated alcoholic
beverages bagged tea
and donkey-hide
gelatin products
(limited to branch
operations with
licenses); state-owned
asset management
within the scope
authorized by the
municipal government;
industrial investment;
wholesale and retail of
chemical raw materials
and products
(excluding hazardous
chemicals and
precursor chemicals)
packaging materials
and pharmaceutical
intermediates
(excluding hazardous
chemicals and
precursor chemicals);
All other lawful items
that submission for
approval is not
required.
6. Reduction of restricted stocks held by controlling shareholder de facto controller restructuring parties
and other commitment subjects
□Applicable□Not applicable
IV. Specific implementation of share repurchases during the reporting period
Progress of implementation of share repurchase
□Applicable □Not applicable
Proportion of
repurchased
Proposed Proposed shares to the
Disclosure Number of
number of repurchase Proposed underlying
date of the Proportion in Purpose of shares
shares to be amount repurchase shares
repurchase share capital repurchase repurchased
repurchased (RMB period involved in
plan (shares)
(shares) 10000) the Equity
Incentive
Plan (if any)
45 days after Repurchase
the and
Company's cancellation
July 1 2025 56000 0.003% 138.047288 Board of of restricted 56000 1.21%
Directors stocks under
discloses the equity
creditor incentive
222Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
notification
announceme
nt
45 days after
the
Repurchase
Company's
and
Board of
cancellation
November Directors
284200 0.02% 708.712535 of restricted 0 0.00%
22 2025 discloses the
stocks under
creditor
equity
notification
incentive
announceme
nt
Progress of the implementation of the reduction of repurchased shares through centralized bidding transactions
□Applicable□Not applicable
V. Information on preferred shares
□Applicable□Not applicable
The Company did not have preferred shares during the reporting period.
223Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Section VII. Information on Bonds
□Applicable□Not applicable
224Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Section VIII. Financial Reports
I. Audit report
Audit opinion Standard unqualified opinions
Signature date of Audit Report April 22 2026
Pan-China Certified Public Accountant LLP (Special General
Name of audit institution
Partnership)
Audit Report No. T.J.S. [2026] No. 8881
Names of Certified Public Accountants Hu Yanhua and Chen Xiaodong
Text of Audit Report
Audit Report
T.J.S. [2026] No. 8881
To all shareholders of Huadong Medicine Co. Ltd.I. Opinions
We have audited the financial statements of Huadong Medicine Co. Ltd. (hereinafter
referred to as "Huadong Medicine") which comprise the consolidated balance sheet and the
balance sheet of the parent company as of December 31 2025 the consolidated income statement
and income statement of the parent company consolidated cash flow statement and cash flow
statement of the parent company consolidated statement of changes in owners' equity and
statement of changes in owners' equity of the parent company and the accompanying notes to the
financial statements for 2025.In our opinion the accompanying financial statements have been prepared in accordance
with the Accounting Standards for Business Enterprises and in all material respects give a fair
view of the financial position of Huadong Medicine Co. Ltd. as of December 31 2025 and of the
consolidated and parent company operating results and cash flows for the year then ended.II. Basis for audit opinions
225Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
We have conducted our audit in accordance with the Auditing Standards for CPAs of China."CPA's Responsibilities for Audit of Financial Statements" in this Audit Report will further
describe our responsibility under these Standards. In accordance with No. 1 Chinese Standards on
Independence for Certified Public Accountants—Independence Requirements for Audits and
Reviews of Financial Statement and the Chinese Code of Ethics for Certified Public Accountants
we remain independent of Huadong Medicine Co. Ltd. and we have fulfilled other ethical
responsibilities. During the audit we adhered to the independence requirements applicable to
audits of public interest entities. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinions.III. Key audit matters
Key audit matters are those matters that in our professional judgment were of most
significance in our audit of the financial statements for the current period. These matters were
addressed in the context of our audit on the financial statements as a whole and in the formation
of our audit opinions. We do not express separate opinions on these matters.(I) Revenue recognition
1. Matter description
For detailed disclosure of relevant information please refer to Notes V(37) VII(61) and
XVIII(6) to the financial statements.Operating revenue of Huadong Medicine is primarily derived from the production and sale
of pharmaceuticals. In 2025 Huadong Medicine recorded its operating revenue in the amount of
RMB 43.612 billion.As the operating revenue is one of key performance indicators of Huadong Medicine there is
an inherent risk that the Management (hereinafter referred to as "the Management") may engage
in inappropriate revenue recognition to achieve specific targets or expectations. Accordingly we
identified revenue recognition as a key audit matter.
2. Audit response
The audit procedures we implemented in relation to revenue recognition primarily included:
226Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(1) Understanding the key internal controls related to revenue recognition evaluating the
design of these controls determining whether they were implemented and testing the operating
effectiveness of relevant internal controls;
(2) Reviewing sales contracts to understand key contractual terms and conditions and
assessing the appropriateness of the applied revenue recognition methods;
(3) Performing analytical procedures on operating revenue and gross profit margin by month
product and customer to detect significant or unusual fluctuations and investigating the
underlying causes;
(4) For domestic sales revenue selecting samples and checking supporting documents
including sales contracts purchase orders sales invoices delivery notes and receipts
transportation documents and payment vouchers; for export sales obtaining data from the
electronic customs clearance portal and reconciling it with accounting records and selecting
samples to check supporting documents such as sales contracts export declarations bills of lading
and sales invoices;
(5) Sending confirmations of sales amounts by selecting items in conjunction with
confirmations on accounts receivable;
(6) Performing cutoff tests to verify that revenue was recognized in the appropriate period;
(7) Obtaining records of sales returns after the balance sheet date to check for any instances
where revenue recognition conditions were not met as of the balance sheet date;
(8) Verifying whether information related to operating revenue was appropriately presented
in the financial statements.(II) Impairment of accounts receivable
1. Matter description
For detailed disclosure of relevant information please refer to Notes V(11) V(13) and VII(5)
to the financial statements.As of December 31 2025 the book balance of accounts receivable by Huadong Medicine
was RMB 9.519 billion with a provision for bad debts of RMB 533 million resulting in a book
value of RMB 8.986 billion.
227Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
The Management measures the loss provision for accounts receivable based on their credit
risk characteristics either individually or on a portfolio basis in an amount equivalent to the
expected credit losses over the entire remaining life. Given the significant amount of accounts
receivable and the significant management judgment involved in the impairment test we have
identified the impairment of accounts receivable as a key audit matter.
2. Audit response
Our audit procedures with respect to the impairment of accounts receivable primarily
included:
(1) Understanding key internal controls related to impairment assessment evaluating the
design of such controls determining whether they had been implemented and testing the
operating effectiveness of relevant controls;
(2) Reviewing the results of the Management's previous estimates towards the provision for
bad debts or subsequent re-estimates made by the Management;
(3) Reviewing the Management's considerations and objective evidence in assessing the
credit risks of accounts receivable and evaluating whether the Management appropriately
identified the credit risk characteristics of various accounts receivable;
(4) For accounts receivable measured for expected credit losses on an individual basis
reviewing the Management's forecasts of expected cash collections evaluating the
appropriateness of significant assumptions and the adequacy relevance and reliability of data
used in the forecasts and reconciling them with external evidence obtained;
(5) For accounts receivable measured for expected credit losses on a portfolio basis
evaluating the reasonableness of the Management's classification of portfolios based on credit risk
characteristics; evaluating the reasonableness of the expected credit loss rates determined by the
Management for accounts receivable including the appropriateness of significant assumptions
and the adequacy relevance and reliability of data used; testing the accuracy of the
Management's calculation of provision for bad debts;
(6) Evaluating the reasonableness of the Management's provision for bad debts in
conjunction with accounts receivable confirmations and subsequent collection status;
(7) Verifying whether information related to the impairment of accounts receivable was
appropriately presented in the financial statements.
228Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
(III) Goodwill impairment
1. Matter description
For detailed disclosure of relevant information please refer to Notes V(6) V(30) and VII(27)
to the financial statements.As of December 31 2025 the original cost of goodwill for Huadong Medicine was RMB
2.944 billion with an impairment provision of RMB 84 million resulting in a book value of RMB
2.860 billion.
The Management conducts impairment tests on goodwill in conjunction with the related
asset groups or portfolios of asset groups. The recoverable amount of the relevant asset groups or
portfolios of asset groups was determined based on the present value of expected future cash
flows or the net amount after deducting disposal expenses from fair value. Given the significant
amount of goodwill and the significant management judgment involved in impairment test we
have identified the impairment of goodwill as a key audit matter.
2. Audit response
The audit procedures we implemented in relation to the impairment of goodwill primarily
included:
(1) Understanding key internal controls related to goodwill impairment evaluating the
design of such controls determining whether they had been implemented and testing the
operating effectiveness of relevant controls;
(2) Reviewing the results of the Management's previous estimates towards the present value
of expected future cash flows or subsequent re-estimates made by the Management;
(3) Understanding and evaluating the competence professionalism and objectivity of
external valuation experts engaged by the Management;
(4) Evaluating the reasonableness and consistency of the methods used by the Management
in the impairment test;
(5) Evaluating the reasonableness of key assumptions used by the Management in the
impairment test and reviewing whether these assumptions are consistent with the overall
economic environment industry conditions operating performance historical experience
229Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
operational 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 data used by the Management in the
impairment test and reviewing the internal consistency of relevant information in the impairment
test;
(7) Testing the accuracy of the Management's calculation of the present value of expected
future cash flows;
(8) Verifying whether information related to the goodwill impairment was appropriately
presented in the financial statements.IV. Other information
The Management is responsible for other information. Additional information includes the
information covered in the Annual Report but excludes financial statements and our audit report.Our audit opinions on the financial statements do not cover other information. We do not
express any form of assurance conclusion on other information.In conjunction with our audit of the financial statements it is our responsibility to read other
information and in doing so it is our responsibility to consider whether other information is
materially inconsistent with the financial statements or with what we have learned in the course of
our audit or seems to be materially misstated.Based on the work we have performed we should make a report if we determine that other
information is materially misstated. We have nothing to report in this regard.V. Responsibilities of the Management and those charged with governance for the
financial statements
The Management is responsible for preparing and realizing fair presentation of the financial
statements in accordance with the Accounting Standards for Business Enterprises; and designing
implementing and maintaining necessary internal control to ensure that the financial statements
are free from material misstatement whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing Huadong
Medicine's ability to continue as a going concern disclosing matters related to going concern (if
230Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
applicable) and using the going concern basis of accounting unless the management either
intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.Those charged with governance of Huadong Medicine (hereinafter referred to as "Those
charged with governance") are responsible for overseeing the financial reporting process of
Huadong Medicine.VI. CPA's responsibilities for audit of 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 audit
report that includes our opinions. Reasonable assurance represents a high level of assurance but it
is not a guarantee that an audit conducted in accordance with the applicable auditing standards
will always detect a material misstatement if any. Misstatements can arise from fraud or error and
are considered material if individually or in the aggregate they could be reasonably expected to
influence the economic decisions of users made on the basis of these financial statements.As part of an audit in accordance with the audit standards we exercise professional judgment
and maintain professional skepticism throughout the audit. Meanwhile 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 to deal with those risks and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
failing to detect a material misstatement resulting from fraud is higher than that of failing to detect
a material misstatement resulting from error as fraud may involve collusion forgery omissions
misrepresentations or overriding the internal control.(II) Understand the internal control related to audit in order to design audit procedures that
are appropriate in the circumstances.(III) Evaluate the appropriateness of accounting policies the Management has used and the
reasonableness of accounting estimates and related disclosures the Management has made.(IV) Conclude on the appropriateness of using the going concern assumption by the
Management. Meanwhile we 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
231Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
we are required to draw attention in our audit report to the related disclosures in the financial
statements; if such disclosures are inadequate we should give a modified opinion. Our
conclusions are based on the audit evidence obtained up to the date of the 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 contents and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.(VI) To obtain sufficient and appropriate audit evidence regarding the financial information
of the entities or business activities of Huadong Medicine to express an opinion on the financial
statements. We are responsible for guiding supervising and implementing group audit and bear
full responsibility for the audit opinions.We communicate with those charged with the governance regarding among other matters
the planned audit scope time arrangement and significant audit findings including the internal
control defects of concern that we identify during our audit.We also provided those charged with governance with a written statement confirming our
compliance with the relevant ethical requirements regarding independence and communicated
with them about all relationships and other matters that may reasonably be considered to affect
our independence together with any related safeguards (where applicable).From the matters communicated with those charged with governance we determined those
that were of the most significance in our audit of the financial statements for the current period
and accordingly identified them as key audit matters. We described these matters in our auditor
report unless law or regulation precludes public disclosure of such matters or when in extremely
rare circumstances we conclude that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits.Pan-China Certified Public Accountant LLP (Special General Partnership) Chinese CPA: Hu
Yanhua
(Project Partner)
232Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Hangzhou China Chinese CPA: Chen Xiaodong
April 22 2026
II. Financial statements
The unit in the notes to financial statements is: RMB
1. Consolidated balance sheet
Prepared by: Huadong Medicine Co. Ltd.December 31 2025
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 4978052188.84 5276440245.36
Deposit reservation for balance
Lendings to banks and other financial
institutions
Trading financial assets
Derivative financial assets
Notes receivable 6213394.05 10696341.24
Accounts receivable 8985587945.31 8425358862.23
Receivables financing 460578206.16 1677636420.09
Prepayments 445803941.09 400291510.71
Premium receivable
Reinsurance accounts receivable
Reinsurance contract reserve
receivable
Other receivables 517535129.39 402870356.31
Incl.: Interest receivable
Dividends receivable 223608.84 223608.84
Financial assets purchased for resale
Inventory 5535765919.86 4776397278.01
Incl.: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year 75464880.54
Other current assets 222343329.23 82099747.34
Total current assets 21227344934.47 21051790761.29
Non-current assets:
Loans and advances issued
233Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Debt investments
Other debt investments
Long-term receivables
Long-term equity investment 1509122017.22 1543646404.76
Investment in other equity instruments 681006253.76 603232766.22
Other non-current financial assets
Investment property 10946776.47 11842042.67
Fixed assets 4470264264.88 4422300775.01
Construction in progress 832431516.18 836739481.60
Productive biological assets
Oil and gas assets
Right-of-use assets 170395474.59 149504562.99
Intangible assets 3849691624.59 3644956428.71
Incl.: Data resources
Development expenditure 1757196902.53 1033392377.69
Incl.: Data resources
Goodwill 2860135566.37 2913334523.63
Long-term deferred expenses 19541767.43 22601572.13
Deferred income tax assets 385084524.45 221848889.06
Other non-current assets 1264874697.98 1423855781.39
Total non-current assets 17810691386.45 16827255605.86
Total assets 39038036320.92 37879046367.15
Current liabilities:
Short-term borrowings 1621903523.77 2312339143.21
Borrowings from the central bank
Borrowings from other banks and
other financial institutions
Trading financial liabilities
Derivative financial liabilities
Notes payable 2910051094.08 2576685923.31
Accounts payable 5059850765.02 4467770810.96
Advance receipts 797358.84 1115173.00
Contract liabilities 188554462.61 173609109.58
Expense for financial assets sold for
repurchase
Deposits taken and interbank deposits
Receivings from vicariously traded
securities
Receivings from vicariously sold
securities
Employee compensation payable 411598841.94 417133101.11
Taxes and dues payable 563317023.92 645950867.22
Other payables 2215275211.55 2849833595.48
234Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Incl.: Interests payable
Dividends payable 102560219.60 125024219.60
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
108871732.55330528920.89
year
Other current liabilities 10443641.94 19268728.25
Total current liabilities 13090663656.22 13794235373.01
Non-current liabilities:
Provision for insurance contracts
Long-term borrowings 252034854.55 14262841.05
Bonds payable
Incl.: Preferred share
Perpetual bonds
Lease liabilities 88813504.20 71857938.46
Long-term payables 24715073.51
Long-term employee compensation
payable
Estimated liabilities 20617015.41 28985982.19
Deferred revenue 190942291.61 183855718.48
Deferred income tax liabilities 223959318.75 197378528.33
Other non-current liabilities
Total non-current liabilities 776366984.52 521056082.02
Total liabilities 13867030640.74 14315291455.03
Owners' equity:
Share capital 1753736848.00 1754262548.00
Other equity instruments
Incl.: Preferred share
Perpetual bonds
Capital reserve 2416358618.64 2550780602.69
Less: Treasury share 46804116.67
Other comprehensive income 5770687.07 -50598204.17
Special reserves
Surplus reserves 1616443486.39 1395568477.98
General risk reserves
Retained earnings 19019030352.89 17456842089.53
Total owners' equity attributable to the
24811339992.9923060051397.36
parent company
Minority interests 359665687.19 503703514.76
Total owners' equity 25171005680.18 23563754912.12
Total liabilities and owners' equity 39038036320.92 37879046367.15
Legal representative: Lv Liang Officer in charge of accounting: Lv Liang Head of Accounting Department: Qiu Renbo
2. Balance sheet of the parent company
Unit: RMB
235Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Item Closing balance Opening balance
Current assets:
Monetary funds 3564448718.56 3983448123.02
Trading financial assets
Derivative financial assets
Notes receivable 6213394.05 10696341.24
Accounts receivable 5391415855.65 4662202972.85
Receivables financing 244857205.35 541117016.27
Prepayments 245653821.11 188207568.34
Other receivables 3563354230.97 3038802968.09
Incl.: Interest receivable
Dividends receivable 67200000.00 83200000.00
Inventory 3288268422.10 2503932187.23
Incl.: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year 53905213.88
Other current assets 45575531.66
Total current assets 16403692393.33 14928407177.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investment 6201961896.83 6006736952.86
Investment in other equity instruments 10080000.00 10080000.00
Other non-current financial assets
Investment property 5794413.34 6260645.98
Fixed assets 131080028.79 145702063.07
Construction in progress 752212.39 1191031.68
Productive biological assets
Oil and gas assets
Right-of-use assets 1686359.56 5766631.35
Intangible assets 110137694.50 133847061.52
Incl.: Data resources
Development expenditure
Incl.: Data resources
Goodwill
Long-term deferred expenses 5542232.16 3873974.93
Deferred income tax assets 75065627.63 57148901.05
Other non-current assets 286664901.46 309896009.87
Total non-current assets 6828765366.66 6680503272.31
Total assets 23232457759.99 21608910449.35
236Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Current liabilities:
Short-term borrowings 710713926.42 1281604281.83
Trading financial liabilities
Derivative financial liabilities
Notes payable 1256135416.88 1017985699.91
Accounts payable 3549725618.44 2957801912.13
Advance receipts
Contract liabilities 36191247.19 74839113.94
Employee compensation payable 19904483.43 13536480.77
Taxes and dues payable 82180746.62 84182562.88
Other payables 5337446854.57 4502104700.45
Incl.: Interests payable
Dividends payable 224219.60 224219.60
Liabilities held for sale
Non-current liabilities due within one
193295.0151064784.14
year
Other current liabilities 4614684.54 9618803.23
Total current liabilities 10997106273.10 9992738339.28
Non-current liabilities:
Long-term borrowings
Bonds payable
Incl.: Preferred share
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee compensation
payable
Estimated liabilities
Deferred revenue 27869536.35 30435411.27
Deferred income tax liabilities 10075067.31
Other non-current liabilities
Total non-current liabilities 37944603.66 30435411.27
Total liabilities 11035050876.76 10023173750.55
Owners' equity:
Share capital 1753736848.00 1754262548.00
Other equity instruments
Incl.: Preferred share
Perpetual bonds
Capital reserve 2334357232.56 2346443494.22
Less: Treasury share 46804116.67
Other comprehensive income
Special reserves
Surplus reserves 1694299245.83 1473424237.42
Retained earnings 6415013556.84 6058410535.83
Total owners' equity 12197406883.23 11585736698.80
Total liabilities and owners' equity 23232457759.99 21608910449.35
237Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
3. Consolidated income statement
Unit: RMB
Item 2025 2024
I. Total operating revenue 43612009891.02 41905707385.91
Incl.: Operating revenue 43612009891.02 41905707385.91
Interest income
Premiums earned
Handling charges and
commissions revenue
II. Total operating costs 39388881033.06 37493020210.87
Incl.: Operating costs 29499479451.02 27988547185.82
Interest expenditure
Handling charges and
commissions expenditure
Surrender value
Net payments for insurance
claims
Net withdrawal of reserves for
insurance liability contracts
Expense for insurance policy
dividends
Reinsurance expenses
Taxes and surcharges 246544789.96 250638795.43
Selling expenses 6526826370.64 6408522136.28
Management expenses 1344109556.03 1397388188.96
R&D expenses 1753147744.43 1425659218.47
Financial expenses 18773120.98 22264685.91
Incl.: Interest expense 94734093.60 101203829.32
Interest income 82517322.89 103997474.21
Plus: Other incomes 245152017.73 199889752.54
Investment income (loss
-137842753.21-129190728.94
expressed with "-")
Incl.: Investment income in
-75923097.56-68453149.32
associates and joint ventures
Income from
derecognition of financial assets
measured on the basis of amortized costs
Exchange earnings (loss
expressed with "-")
Net income of exposure hedge
(loss expressed with "-")
Income from changes in fair
value (loss expressed with "-")
Credit impairment loss (loss
-136912856.00-112179415.60
expressed with "-")
238Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Asset impairment loss (loss
-87895771.71-41006057.96
expressed with "-")
Proceeds from disposal of assets
2263396.06-5463399.18
(loss expressed with "-")
III. Operating profit (loss expressed with
4107892890.834324737325.90
"-")
Plus: Non-operating revenue 34205807.33 88009280.04
Less: Non-operating expenses 125636387.92 111232726.47
IV. Total profit (total loss expressed with
4016462310.244301513879.47
"-")
Less: Income tax expense 605615537.79 807328247.71
V. Net profit (net loss expressed with "-") 3410846772.45 3494185631.76
(I) Classification by continuity of
operation
1. Net profits from continuing
3410846772.453494185631.76
operations (net loss expressed with "-")
2. Net profit from discontinued
operations (net loss expressed with "-")
(II) Classification by ownership
1. Net profit attributable to the
3414335326.413512104678.06
shareholders of the parent company
2. Minority interest income -3488553.96 -17919046.30
VI. Other comprehensive income (net of
56368891.24-10256659.99
tax)
Other comprehensive income
attributable to the owner of the parent 56368891.24 -10256659.99
company (net of tax)
(I) Other comprehensive income
that cannot be reclassified into the profits 11322446.85 -6719404.72
and losses
1. Change from re-measurement
of defined benefit plan
2. Other comprehensive income
that cannot be included in the profits and 6018792.15
losses under the equity method
3. Changes in fair value of
5303654.70-6719404.72
investment in other equity instruments
4. Changes in fair value by the
enterprise's credit risks
5. Others
(II) Other comprehensive income
that will be reclassified into the profits 45046444.39 -3537255.27
and losses
1. Other comprehensive income
that can be transferred to the profit and
loss under the equity method
2. Changes in fair value of
investments in other debt investments
3. Financial assets reclassified
into other comprehensive income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserves
6. Converted difference in foreign
45046444.39-3576433.56
currency financial statements
239Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
7. Others 39178.29
Other comprehensive income
attributable to minority shareholders (net
of tax)
VII. Total comprehensive income 3467215663.69 3483928971.77
Total comprehensive income
attributable to the owner of the parent 3470704217.65 3501848018.07
company
Total comprehensive income
-3488553.96-17919046.30
attributable to minority shareholders
VIII. Earnings per share
(I) Basic earnings per share 1.9484 2.0046
(II) Diluted earnings per share 1.9465 2.0034
If there is a business combination under common control in this period the net profit of the combined party before the
combination is RMB and the net profit of the combined party in the previous period is RMB .Legal representative: Lv Liang Officer in charge of accounting: Lv Liang Head of Accounting Department: Qiu Renbo
4. Income statement of the parent company
Unit: RMB
Item 2025 2024
I. Operating revenue 24671229162.54 22701692653.34
Less: Operating cost 23531246952.85 21468483836.91
Taxes and surcharges 26663332.08 34372824.18
Selling expenses 447868699.00 563448468.46
Management expenses 197436430.05 201553978.00
R&D expenses
Financial expenses -18984395.20 6960607.59
Incl.: Interest expense 95822098.21 79164895.14
Interest income 64855410.86 85371844.79
Plus: Other incomes 12177483.99 12712621.78
Investment income (loss
2264382496.691137666059.92
expressed with "-")
Incl.: Investment income in
-1064445.9657997379.26
associates and joint ventures
Income from
derecognition of financial assets
measured on the basis of amortization
costs (loss expressed with "-")
Net income of exposure hedge
(loss expressed with "-")
Income from changes in fair
value (loss expressed with "-")
Credit impairment loss (loss
-398670203.44-244452303.69
expressed with "-")
Asset impairment loss (loss
expressed with "-")
Proceeds from disposal of assets
33862.342112197.50
(loss expressed with "-")
240Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
II. Operating profit (loss expressed with
2364921783.341334911513.71
"-")
Plus: Non-operating revenue 452377.74 170142.55
Less: Non-operating expenses 30332536.48 29837635.14
III. Total profits (total loss expressed
2335041624.601305244021.12
with "-")
Less: Income tax expense 126291540.54 127358963.15
IV. Net profits (net loss expressed with "-
2208750084.061177885057.97
")
(I) Net profits from continuing
2208750084.061177885057.97
operations (net loss expressed with "-")
(II) Net profit from discontinued
operations (net loss expressed with "-")
V. Other comprehensive income (net of
tax)
(I) Other comprehensive income
that cannot be reclassified into the profits
and losses
1. Change from re-measurement
of defined benefit plan
2. Other comprehensive income
that cannot be included in the profits and
losses under the equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value by the
enterprise's credit risks
5. Others
(II) Other comprehensive income
that will be reclassified into the profits
and losses
1. Other comprehensive income
that can be transferred to the profit and
loss under the equity method
2. Changes in fair value of
investments in other debt investments
3. Financial assets reclassified
into other comprehensive income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserves
6. Converted difference in foreign
currency financial statements
7. Others
VI. Total comprehensive income 2208750084.06 1177885057.97
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2025 2024
I. Cash flows from operating activities:
241Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Cash received from selling goods and
47603508452.3543401956267.80
providing services
Net increase in deposits from
customers as well as banks and other
financial institutions
Net increase in borrowings from the
central bank
Net increase in borrowings from other
financial institutions
Cash received from the original
insurance contract premium
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interests handling
charges and commissions
Net increase in borrowings from banks
and other financial institutions
Net increase in funds from repurchase
business
Net cash received from securities
trading agency
Refund of taxes and fees received 16771253.59 11647283.25
Receipt of other cash relating to
853630530.931556579035.21
operating activities
Subtotal of cash inflows from operating
48473910236.8744970182586.26
activities
Cash paid for purchase of goods and
29990020022.0628195403709.51
receipt of labor services
Net increase in customer loans and
advance payments
Net increase in deposits with the
central bank and interbank
Cash for payment of the original
insurance contract
Net increase in lendings to banks and
other financial institutions
Cash paid for interests handling
charges and commissions
Cash for payment of dividends on
policies
Cash paid to and for employees 5380354732.47 4755191780.74
Various taxes and fees paid 2934697014.28 2574487192.25
Payment of other cash relating to
5923234096.895696171021.41
operating activities
Subtotal of cash outflows from operating
44228305865.7041221253703.91
activities
Net cash flow from operating activities 4245604371.17 3748928882.35
II. Cash flows from investing activities:
Cash received from investment
14700000.001000000.00
recovery
Cash received from obtaining 70463762.96 45230192.98
242Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
investment income
Net cash recovered from disposal of
fixed assets intangible assets and other 21100980.35 19759145.85
long-term assets
Net cash received from disposal of
subsidiaries and other business units
Receipt of other cash relating to
261016721.64
investing activities
Subtotal of cash inflows from investing
106264743.31327006060.47
activities
Cash paid for the purchase and
construction of fixed assets intangible 1574454008.41 1727864860.12
assets and other long-term assets
Cash paid for investment 127677933.86 69176613.40
Net increase in pledged loans
Net cash paid for acquisition of
461958981.61
subsidiaries and other business entities
Payments of other cash relating to
73905213.88238277274.34
investing activities
Subtotal of cash outflows from investing
1776037156.152497277729.47
activities
Net cash flows from investing activities -1669772412.84 -2170271669.00
III. Cash flows from financing activities:
Cash received by absorbing
investment
Incl.: Cash received by subsidiaries
from minority shareholders' investment
Cash received from obtaining
3251416517.564559775187.36
borrowings
Receipt of other cash relating to
988854695.83690739328.24
financing activities
Subtotal of cash inflows from financing
4240271213.395250514515.60
activities
Cash paid for debt repayment 3522627345.72 3571431254.37
Cash paid to distribute dividends
1735408728.321733453239.02
profits or pay interest
Incl.: Dividends and profits paid by
43280794.1731275554.96
subsidiaries to minority shareholders
Payment of other cash relating to
1804706799.29695294341.33
financing activities
Subtotal of cash outflows from financing
7062742873.336000178834.72
activities
Net cash flow from financing activities -2822471659.94 -749664319.12
IV. Effect of exchange rate changes on
-7589821.17-47001718.46
cash and cash equivalents
V. Net increase in cash and cash
-254229522.78781991175.77
equivalents
Plus: Opening balance of cash and
4990151186.684208160010.91
cash equivalents
VI. Closing balance of cash and cash
4735921663.904990151186.68
equivalents
6. Cash flow statement of the parent company
Unit: RMB
243Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Item 2025 2024
I. Cash flows from operating activities:
Cash received from selling goods and
25842236084.3423867991537.64
providing services
Refund of taxes and fees received
Receipt of other cash relating to
362731841.601137241351.43
operating activities
Subtotal of cash inflows from operating
26204967925.9425005232889.07
activities
Cash paid for purchase of goods and
24920600161.0523459850561.05
receipt of labor services
Cash paid to and for employees 335476532.34 337972950.15
Various taxes and fees paid 273138666.29 330934993.91
Payment of other cash relating to
582010580.431385309995.99
operating activities
Subtotal of cash outflows from operating
26111225940.1125514068501.10
activities
Net cash flow from operating activities 93741985.83 -508835612.03
II. Cash flows from investing activities:
Cash received from investment
14700000.00
recovery
Cash received from obtaining
254857942.311064716374.04
investment income
Net cash recovered from disposal of
fixed assets intangible assets and other 385842.45 2722222.40
long-term assets
Net cash received from disposal of
subsidiaries and other business units
Receipt of other cash relating to
1121578309.381433678028.27
investing activities
Subtotal of cash inflows from investing
1391522094.142501116624.71
activities
Cash paid for the purchase and
construction of fixed assets intangible 131444479.98 110849881.62
assets and other long-term assets
Cash paid for investment 216778258.86 35000000.00
Net cash paid for acquisition of
subsidiaries and other business entities
Payments of other cash relating to
1980947630.592546728071.36
investing activities
Subtotal of cash outflows from investing
2329170369.432692577952.98
activities
Net cash flows from investing activities -937648275.29 -191461328.27
III. Cash flows from financing activities:
Cash received by absorbing
investment
Cash received from obtaining
1559998846.922962976876.04
borrowings
Receipt of other cash relating to
16233396433.9412757177851.58
financing activities
Subtotal of cash inflows from financing
17793395280.8615720154727.62
activities
Cash paid for debt repayment 1889998846.92 2217976876.04
Cash paid to distribute dividends
1665183925.311661513723.84
profits or pay interest
Payment of other cash relating to
13834045807.8910147300140.31
financing activities
244Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Subtotal of cash outflows from financing
17389228580.1214026790740.19
activities
Net cash flow from financing activities 404166700.74 1693363987.43
IV. Effect of exchange rate changes on
cash and cash equivalents
V. Net increase in cash and cash
-439739588.72993067047.13
equivalents
Plus: Opening balance of cash and
3940066700.232946999653.10
cash equivalents
VI. Closing balance of cash and cash
3500327111.513940066700.23
equivalents
7. Consolidated statement of changes in owners' equity
Amount in the current period
Unit: RMB
2025
Owners' equity attributable to the parent company
Other equity Othe
instruments r Total
Gene Min
Item Shar Capi Less: com Spec Surp Retai ownral ority
e Perp tal Trea preh ial lus ned Othe Subt ers'
capit Prefe
risk inter
etual Othe reser sury ensiv reser reser earni rs otalreser ests
equit
al rred bond rs ve share e ves ves ngs y
share ves
s inco
me
I.Closi
ng - 174 230 235
175255468139503
bala 505 568 600 637
426078041556703
nce 982 420 513 549
25406016.6847514.
of 04.1 89.5 97.3 12.1
8.002.6977.9876
the 7 3 6 2
prior
year
P
lus:
Chan
ges
in
acco
untin
g
polic
ies
C
orrec
tion
of
prior
perio
d
error
s
245Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
O
thers
II.Ope
ning
-174230235
bala 175 255 468 139 503
505568600637
nce 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
year
III.Incre
ase
or
decr
ease
in
the - - -
-563220156175160
curre 134 468 144
525688875218128725
nt 421 041 037
700.91.2008.826859076
perio 984. 16.6 827.
004413.365.638.06
d 05 7 57
(decr
ease
expr
esse
d
with
"-")
(I)
Total
com 563 341 347 - 346
preh 688 433 070 348 721
ensiv 91.2 532 421 855 566
e 4 6.41 7.65 3.96 3.69
inco
me
(II)
Own
er's
inves - -
-342-341
tmen 120 468
525053131921
t and 730 041
700.40.785.755.0
redu 75.9 16.6
00211
ction 5 7
of
capit
al
1.
Com - - -
mon 525 525 525
stock 700. 700. 700.s 00 00 00
inves
246Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
ted
by
the
own
er
2.
Capi
tal
inves
ted
by
hold
ers
of
other
equit
y
instr
ume
nts
3.
Amo
unt
of
share
-
base
-
d 534 534 521
131
pay 299. 299. 113.
85.7
ment 05 05 34
1
inclu
ded
in
own
ers'
equit
y
--
341341
4.126468
967967
Othe 073 041
41.641.6
rs 75.0 16.6
77
07
(III)
----
Profi 220
185163205165
t 875
214127624183
distri 008.
70620585.8454
butio 41
3.054.6490.53
n
1.
Prov
-
ision 220
220
for 875
875
surpl 008.
008.
us 41
41
reser
ves
247Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
2.
Prov
ision
for
gene
ral
risk
reser
ves
3.
Distr
ibuti
----
on to
163163205165
own
127127624183
ers
20520585.8454
(or
4.644.6490.53
share
hold
ers)
4.
Othe
rs
(IV)
Inter
nal
carry
-over
of
own
ers'
equit
y
1.
Con
versi
on of
capit
al
reser
ve to
capit
al (or
share
capit
al)
2.
Con
versi
on of
surpl
us
reser
ve to
capit
al (or
share
248Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
capit
al)
3.
Loss
es
cove
red
by
surpl
us
reser
ve
4.
Chan
ges
in
the
defin
ed
bene
fit
plan
trans
ferre
d to
retai
ned
earni
ngs
5.
Othe
r
com
preh
ensiv
e
inco
me
carri
ed
forw
ard
to
retai
ned
earni
ngs
6.
Othe
rs
(V)
Spec
ial
reser
ves
1.
249Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Amo
unt
with
draw
n in
the
curre
nt
perio
d
2.
Amo
unt
utiliz
ed in
the
curre
nt
perio
d
----
(VI) 122 122 119 242
Othe 348 348 973 322
rs 908. 908. 602. 510.
10100111
IV.Closi
ng
bala 190 248 251
175241161359
nce 577 190 113 710
373635644665
in 068 303 399 056
684861348687.
the 7.07 52.8 92.9 80.1
8.008.646.3919
curre 9 9 8
nt
perio
d
Amount in the previous period
Unit: RMB
2024
Owners' equity attributable to the parent company
Other equity Othe
instruments r Total
Gene Min
Item Shar Capi Less: com Spec Surp Retai ownral ority
e Perp tal Trea preh ial lus ned Othe Subt ers'
Prefe risk intercapit etual Othe reser sury ensiv reser reser earni rs otal equitreser ests
al rred bond rs ve share e ves ves ngs y
share ves
s inco
me
I. - 156 210 215
Closi 175 244 845 127 534403 939 476 822
ng 442 631 193 777 654415 515 097 647
bala 534 377 69.0 997 969.44.1 74.9 56.6 26.1
nce 8.00 4.82 7 2.18 448 1 6 0
of
250Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
the
prior
year
P
lus:
Chan
ges
in
acco
untin
g
polic
ies
C
orrec
tion
of
prior
perio
d
error
s
O
thers
II.Ope
ning
-156210215
bala 175 244 845 127 534
403939476822
nce 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
year
III.Incre
ase
or
decr
ease
in
the - - -
-104117176201198
curre 377 102 309
162466788289244149
nt 152 566 514
800.827.505.051164018
perio 52.4 59.9 54.6
0087804.620.706.02
d 0 9 8
(decr
ease
expr
esse
d
with
"-")
(I) - 351 350 - 348
Total 102 210 184 179 392
com 566 467 801 190 897
251Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
preh 59.9 8.06 8.07 46.3 1.77
ensiv 9 0
e
inco
me
(II)
Own
er's
inves -
-168543546
tmen 377 243
162383908339
t and 152 146.
800.77.930.376.9
redu 52.4 58
00997
ction 0
of
capit
al
1.
Com
mon
stock
---
s
162162162
inves
800.800.800.
ted
000000
by
the
own
er
2.
Capi
tal
inves
ted
by
hold
ers
of
other
equit
y
instr
ume
nts
3.
Amo
unt
of
share
-207207209243
base 368 368 800146.d 77.9 77.9 24.558
pay 9 9 7
ment
inclu
ded
in
own
252Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
ers'
equit
y
-
-338338
4.377
389167167
Othe 152
85052.452.4
rs 52.4
0.0000
0
(III)
----
Profi 117
174163132164
t 788
921142755470
distri 505.
41656554.9121
butio 80
3.447.6462.60
n
1.
Prov
-
ision 117
117
for 788
788
surpl 505.
505.
us 80
80
reser
ves
2.
Prov
ision
for
gene
ral
risk
reser
ves
3.
Distr
ibuti
----
on to
163163132164
own
142142755470
ers
56556554.9121
(or
7.647.6462.60
share
hold
ers)
4.
Othe
rs
(IV)
Inter
nal
carry
-over
of
own
ers'
equit
y
1.
253Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Con
versi
on of
capit
al
reser
ve to
capit
al (or
share
capit
al)
2.
Con
versi
on of
surpl
us
reser
ve to
capit
al (or
share
capit
al)
3.
Loss
es
cove
red
by
surpl
us
reser
ve
4.
Chan
ges
in
the
defin
ed
bene
fit
plan
trans
ferre
d to
retai
ned
earni
ngs
5.
Othe
r
com
254Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
preh
ensiv
e
inco
me
carri
ed
forw
ard
to
retai
ned
earni
ngs
6.
Othe
rs
(V)
Spec
ial
reser
ves
1.
Amo
unt
with
draw
n in
the
curre
nt
perio
d
2.
Amo
unt
utiliz
ed in
the
curre
nt
perio
d
876876876
(VI)
284284284
Othe
49.849.849.8
rs
888
IV.Closi
ng - 174 230 235175 255 468 139 503
bala 505 568 600 637426 078 041 556 703
nce 982 420 513 549254 060 16.6 847 514.in 04.1 89.5 97.3 12.18.00 2.69 7 7.98 76
the 7 3 6 2
curre
nt
255Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
perio
d
8. Statement of changes in owners' equity of the parent company
Amount in the current period
Unit: RMB
2025
Other equity instruments Other
Less: compr Specia Surplu Retain
Item TotalShare Preferr Perpet Capital Treasu ehensi l s ed Others owners
capital ed ual Others reserve ry ve reserve reserve earnin ' equity
share bonds share incom s s gs
e
I.Closin
g
17542346468041473605811585
balanc
2625444349116.642423410537366
e of
8.004.2277.425.8398.80
the
prior
year
Pl
us:
Chang
es in
accoun
ting
policie
s
C
orrecti
on of
prior
period
errors
O
thers
II.Openi
ng
17542346468041473605811585
balanc
2625444349116.642423410537366
e of
8.004.2277.425.8398.80
the
current
year
III.Increas - -
e or - 22087 35660 6116712086 46804
decrea 52570 5008. 3021. 0184.261.6 116.6
se in 0.00 41 01 436 7
the
current
256Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
period
(decre
ase
expres
sed
with "-
")
(I)
Total
compr 2208 2208
ehensi 75008 75008
ve 4.06 4.06
incom
e
(II)
Owner'
s
--
invest - 34192
1208646804
ment 52570 155.0
261.6116.6
and 0.00 1
67
reducti
on of
capital
1.
Comm
on
--
stocks
5257052570
investe
0.000.00
d by
the
owner
2.
Capital
investe
d by
holder
s of
other
equity
instru
ments
3.
Amou
nt of
share-
based
payme 52111 52111
nt 3.34 3.34
includ
ed in
owners
'
equity
--34196
4.
1260746804741.6
Others
375.0116.67
257Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
07
(III) - -
22087
Profit 1852 1631
5008.
distrib 14706 27205
41
ution 3.05 4.64
1.
Provisi -
22087
on for 22087
5008.
surplus 5008.
41
reserve 41
s
2.
Distrib
ution - -
to 1631 1631
owners 27205 27205
(or 4.64 4.64
shareh
olders)
3.
Others
(IV)
Interna
l carry-
over of
owners
'
equity
1.
Conve
rsion
of
capital
reserve
to
capital
(or
share
capital
)
2.
Conve
rsion
of
surplus
reserve
to
capital
(or
share
capital
)
3.
Losses
covere
258Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
d by
surplus
reserve
4.
Chang
es in
the
define
d
benefit
plan
transfe
rred to
retaine
d
earnin
gs
5.
Other
compr
ehensi
ve
incom
e
carried
forwar
d to
retaine
d
earnin
gs
6.
Others
(V)
Specia
l
reserve
s
1.
Amou
nt
withdr
awn in
the
current
period
2.
Amou
nt
utilize
d in
the
current
period
(VI)
259Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
Others
IV.Closin
g
175323341694641512197
balanc
736843572329924013554068
e in
8.002.565.836.8483.23
the
current
period
Amount in the previous period
Unit: RMB
2024
Other equity instruments Other
Less: compr Specia Surplu Retain
Item TotalShare Preferr Perpet Capital Treasu ehensi l s ed Others owners
capital ed ual Others reserve ry ve reserve reserve earnin ' equity
share bonds share incom s s gs
e
I.Closin
g
17542329845191355662911984
balanc
4253436196369.063573739646433
e of
8.009.6671.621.3021.51
the
prior
year
Pl
us:
Chang
es in
accoun
ting
policie
s
C
orrecti
on of
prior
period
errors
O
thers
II.Openi
ng
17542329845191355662911984
balanc
4253436196369.063573739646433
e of
8.009.6671.621.3021.51
the
current
year
III. - 17081 - 11778 - -
Increas 16280 524.5 37715 8505. 57132 39890
e or 0.00 6 252.4 80 9105. 6622.
260Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
decrea 0 47 71
se in
the
current
period
(decre
ase
expres
sed
with "-
")
(I)
Total
compr 1177 1177
ehensi 88505 88505
ve 7.97 7.97
incom
e
(II)
Owner'
s
-
invest - 17081 54633
37715
ment 16280 524.5 976.9
252.4
and 0.00 6 6
0
reducti
on of
capital
1.
Comm
on
--
stocks
1628016280
investe
0.000.00
d by
the
owner
2.
Capital
investe
d by
holder
s of
other
equity
instru
ments
3.
Amou
nt of
share-
based 20980 20980
payme 024.5 024.5
nt 6 6
includ
ed in
owners
'
261Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
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.
Provisi -
11778
on for 11778
8505.
surplus 8505.
80
reserve 80
s
2.
Distrib
ution - -
to 1631 1631
owners 42565 42565
(or 7.64 7.64
shareh
olders)
3.
Others
(IV)
Interna
l carry-
over of
owners
'
equity
1.
Conve
rsion
of
capital
reserve
to
capital
(or
share
capital
)
2.
Conve
rsion
of
surplus
reserve
to
capital
(or
share
capital
262Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
)
3.
Losses
covere
d by
surplus
reserve
4.
Chang
es in
the
define
d
benefit
plan
transfe
rred to
retaine
d
earnin
gs
5.
Other
compr
ehensi
ve
incom
e
carried
forwar
d to
retaine
d
earnin
gs
6.
Others
(V)
Specia
l
reserve
s
1.
Amou
nt
withdr
awn in
the
current
period
2.
Amou
nt
utilize
d in
263Full Text of the 2025 Annual Report of Huadong Medicine Co. Ltd.
the
current
period
(VI)
Others
IV.Closin
g
17542346468041473605811585
balanc
2625444349116.642423410537366
e in
8.004.2277.425.8398.80
the
current
period
264
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