Earnings release
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– 1 – Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. SUNSHINE LAKE PHARMA CO., LT D. ʮ̡ (A joint stock company incorporated in the People’ s Republic of China with limited liability) (Stock Code: 6887) INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2026 FINANCIAL HIGHLIGHTS For the six months ended 30 June 2026, the Group recorded: • Revenue of RMB 1,075.31 million, representing a decrease of 44.50% as compared with RMB 1,937.67 million for the six months ended 30 June 2025. • Gross profit of RMB 578.17 million, representing a decrease of 60.60% as compared with RMB 1,467.61 million for the six months ended 30 June 2025. • Loss before interest, tax, depreciation and amortisation of RMB 227.30 million, representing an decrease of RMB 657.35 million as compared to profit before interest, tax, depreciation and amortisation of RMB 430.05 million for the six months ended 30 June 2025. • Loss and total comprehensive income attributable to equity shareholders of the Company of RMB 596.42 million, representing an increase in loss of RMB 542.15 million as compared to the loss and total comprehensive income attributable to equity shareholders of the Company of RMB 54.27 million for the six months ended 30 June 2025. • Both basic and diluted losses per share of RMB 1.09. INTERIM DIVIDEND • The Board resolved not to declare the payment of an interim dividend for the six months ended 30 June 2026 (six months ended 30 June 2025: nil).
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– 2 – MANAGEMENT DISCUSSION AND ANALYSIS I. INDUSTRY REVIEW In the first half of 2026, under the combined policy tailwinds of an accelerated drug review and approval system, support for Artificial Intelligence (“ AI”)-powered drug development, reform of drug pricing mechanisms, and continued optimisation of medical and commercial insurance mechanisms, the pharmaceutical industry’s development focus officially shifted from price competition in a saturated market to competition based on clinical value-orientated innovation value. The three major segments of essential medicines, namely anti-infective, chronic disease and oncology treatments, continued to expand steadily, while domestically produced innovative drugs in China gradually moved towards the forefront of global innovation. AI-powered drug development became deeply integrated into the entire drug Research and Development (“ R&D ”) process, entering a critical stage of clinical implementation and commercialisation validation. Driven by global economic recovery and domestic policy support in China, China’s pharmaceutical industry as a whole stabilised and recovered in the first half of 2026, with the pace of high-quality industry development continuing to accelerate. 1. Policy Level (1) Accelerated drug review and approval system, facilitating the commercialisation of innovative drug pipelines The revised Regulations for Implementation of the Drug Administration Law of the People’s Republic of China (“ PRC”), officially promulgated in January 2026 and taking effect in May, established a clinical value-oriented drug review and approval pathway. It clarified the mechanisms for expediting the marketing registration of breakthrough therapies, drugs subject to special approval and other categories of drugs. This is highly aligned with the focus of Sunshine Lake Pharma Co., Ltd. (the “Company ”) and its subsidiaries (collectively, the “ Group ” or “ we” or “our ” or “ us ”) on core therapeutic areas and its R&D strategy of independent innovation. (2) National-level policy documents, providing systematic support for AI-powered drug development In January 2026, eight government departments jointly issued the Implementation Guidelines for the AI plus Manufacturing Special Initiative ( ɛʈ౽ঐ+จԈ ), which explicitly proposed the development of AI-driven platforms for new drug discovery and virtual screening, promoting the in-depth application of AI technology throughout the new drug R&D process. The launch of the National AI-powered Drug Development Innovation Action Plan marks the establishment of systematic policy support for the application of AI technology in new drug R&D, providing AI-powered drug development companies with support in computing infrastructure and data access.
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– 3 – (3) Implementation of a value-based pricing mechanism for innovative drugs, ensuring reasonable returns on R&D investment In April 2026, the General Office of the State Council of the PRC issued the Several Opinions on Improving the Drug Pricing Formation Mechanism (Guobanfa [2026] No. 9) (ʍจԈ ), setting out a market-oriented reform direction and introducing a self-assessment mechanism for newly launched drugs, under which pharmaceutical companies may independently determine reasonable prices. For the first time at the national level, it was explicitly recognised that the prices of high-quality innovative drugs should be commensurate with their high investment and high-risk characteristics, providing institutional support for the realisation of value from the Group’s innovative drug pipeline. (4) Integration of basic medical insurance and commercial health insurance, expanding payment coverage for innovative drugs In May 2026, the China National Healthcare Security Administration issued the 2026 Adjustment Plan for China’s National Reimbursement Drug List for Basic Medical Insurance, Maternity Insurance and Work-Related Injury Insurance and Commercial Health Insurance Reimbursement List for Innovative Drugs (ᎈձ ), concurrently promoting coordinated adjustments to the basic medical insurance drug catalog and the commercial health insurance innovative drug catalog, and introducing a new pre-application mechanism for innovative drugs. These measures are expected to effectively shorten the period from approval of innovative drugs to their becoming accessible to patients, while providing diversified payment support for the commercialisation of innovative drugs. 2. Industry Trends (1) Continued breakthroughs in innovative drug R&D, with AI-powered drug development receiving policy support for standardised development The domestic innovative drug industry continued to make significant progress in R&D in key cutting-edge therapeutic areas such as oncology, infectious diseases and chronic diseases, which is highly aligned with the Group’s core pipeline strategy. Benefiting from favourable policies, including priority review and approval and adjustments to the National Reimbursement Drug List, a number of domestically developed Class I innovative drugs continued to receive marketing approvals throughout the year. The industry’s capabilities in original drug R&D continued to strengthen, and the industry as a whole steadily transitioned from a
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– 4 – combination of innovative development and imitation to a new stage of high-quality development characterised by original innovation and globalisation. In April 2026, the China National Medical Products Administration (“ NMPA ”) officially issued the implementation opinions on “Artificial Intelligence + Drug Regulation”, clarifying the standardised development of AI-powered drug development technologies and promoting the standardised and orderly application of this cutting-edge technology throughout the entire pharmaceutical R&D process. (2) Significant progress in the global expansion of innovative drugs, with overseas collaboration models continuing to evolve In the first half of 2026, operating data for China’s innovative drug sector recovered significantly, while overseas licensing transactions by pharmaceutical companies gained strong momentum. The number of innovative drug projects expanding overseas increased substantially, and the overall scale of outbound licensing transactions grew rapidly. Collaborative pipelines were concentrated in high-value core therapeutic areas such as oncology and metabolic diseases. Collaboration models across the industry continued to evolve, with Co-Co (Co-development + Co-commercialisation) gradually becoming a mainstream collaboration model. Meanwhile, the scale of pharmaceutical exports continued to expand steadily, with the export mix undergoing continuous optimisation and exports increasingly shifting towards higher value-added pharmaceutical formulations. (3) Accelerated pharmaceutical industry consolidation, optimising and reshaping the industry landscape Driven by innovation and guided by policies, consolidation in the pharmaceutical industry accelerated, with high-quality innovative resources continuing to be concentrated in enterprises with strong core R&D capabilities. Leveraging its diversified innovative drug pipeline and advantages in cutting-edge core technologies, the Group is well positioned to benefit from the reshaping of the industry landscape. Looking ahead, the overall pharmaceutical industry is expected to maintain its recovery and positive momentum. The reform of drug pricing mechanisms, adjustments to the two drug catalogs and optimisation of the drug review and approval system are expected to unlock policy benefits, while accelerated commercialisation of innovative drugs, deeper international expansion and the iterative application of AI-powered drug development technologies will continue to generate new engines of growth. The pharmaceutical industry will steadily advance towards high-quality development while balancing efficiency and compliance.
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– 5 – II. COMPANY OVERVIEW The Company is a vertically integrated pharmaceutical company engaging in the research and development, production and commercialization of pharmaceutical products. With over two decades of experience since our inception in 2003, driven by “innovation” and “internationalization”, we have formed comprehensive and integrated in-house research and development capabilities. Our R&D team consists of nearly 1,000 research and development personnels, including scientists with extensive work experience gained in multinational pharmaceutical companies and pharmaceutical talents with rich experience in research and development. We have received many national and provincial awards, including National Key Laboratory, National Model Enterprise of Intellectual Property, Postdoctoral Research Station, and the First Class Award for Science and Technology Progress in Guangdong Province. We focus on core therapeutic areas such as infectious diseases, chronic diseases and oncology, and adhere to a research and development strategy of independent innovation, establishing a highly competitive pipeline of innovative drugs. The Group has more than 150 approved drugs, 4 innovative drugs launched on the market and 1 new drug filed for registration, nearly 50 Class I innovative drug candidates, over 10 of which are in clinical research stages. In terms of internationalization, we have successfully achieved overseas authorization of an innovative drug candidate HEC88473 in 2024. Insulin Glargine Injection received an approval letter from the U.S. Food and Drug Administration (the “ FDA ”) in April 2026, making it the first domestically produced insulin product to be marketed in the United States. Diverse and robust pipeline of innovative drug candidates not only consolidates the Group’s leading position in the research and development in China’s pharmaceutical industry, but also provides sustained momentum for long- term quality development. Our research and development platforms cover the full cycle of the development of chemical drugs and biologics, with advanced technologies such as AI-driven Drug Design (“ AIDD ”), specific antibodies, small nucleic acid, antibody drug conjugates (“ ADC”), and proteolysis targeting chimera (“PROTAC ”). We are committed to applying AI technology across all stages of drug research and development, having established advanced AI-driven models to enhance our innovation capabilities.
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– 6 – Progress in the research and development of core pipeline Products Building on more than twenty years of profound drug R&D experience and leveraging its comprehensive technical platforms and systems, the Group has established a diversified pipeline of innovative candidates across the fields of infection, chronic diseases, and oncology, providing a core strategic reserve for the Group’s sustainable development. Market LaunchRegistrationPhase IIIPhase Ib/IIPhase IClinical Trial ApprovalPreclinicalDrug TypeIndicationTargetProduct/Drug Candidate Therapeutic Area Small MoleculeHepatitis C (genotype 1)NS5AEmitasivir Infection Small MoleculeHepatitis C (pangenotypic)NS5ANetanasvir Small MoleculeHepatitis C (pangenotypic)NS5BEncofosbuvir Small Nucleic AcidHepatitis BHBV RNAHECN30227 Small Nucleic AcidHepatitis BHBV RNAHECN002 Small MoleculeDiabetesSGLT2Olorigli/f_lozin Chronic Diseases (Metabolic, Respiratory) Recombinant Protein Recombinant Protein Recombinant Protein DiabetesINSRInsulin Glargine DiabetesINSRInsulin Degludec DiabetesINSRInsulin Degludec and Insulin Aspart Small MoleculePeptic Ulcer BleedingP-CABVonoprazan Fumarate Injection Small MoleculeIPFTGFβ pathwayYinfenidone Fusion ProteinDiabetes, MASH, etcGLP-1/FGF21HEC88473 Small MoleculePulmonary HypertensionsGCHEC95468 Small MoleculeMASHTHR-βHEC169584 polypeptideOverweight or ObesityGLP-1/GIP/GCGHEC-007 Recombinant ProteinDiabetesINSRHEC-151 Small MoleculeHypercholesterolemiaPCSK9HECS001 Small Nucleic AcidOverweight or ObesityALK7HECN003 Small Nucleic AcidHypertriglyceridemiaAPOC3HECN001 Small MoleculeAMLFLT3Clifutinib Oncology Small MoleculeChemotherapy-inducedHIF-PHDHEC53856 Bispeci/f_ic Antibody LY6G6D-positive Solid TumorsLY6G6D/4-1BBHEC-921 Trispeci/f_ic AntibodyOncologyPD-L1/VEGF/4-1BBHEC-901 Bispeci/f_ic Antibody CDH17-positive Solid TumorsCDH17/4-1BBHEC-922 Small MoleculeOncologyPD-L1HEC201625 Molecular GluePancreatic & Colorectal Cancer, etcPan RASHEC245565 License/Assignment/Co-development Application/conduct clinical trials overseas From January 2026 to the date of this announcement, the Group’s R&D product pipeline made significant progress. 1. Registration and approval progress 1 innovative drug of the Group was granted first marketing approval in China, the New Drug Application (“ NDA”) for 1 modified new drug was accepted by the NMPA of China, 2 biosimilars were approved for marketing, and Clinical Trial Application for 3 innovative drugs were approved.
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– 7 – China • In January 2026, Olorigliflozin Capsules, a sodium glucose cotransporter 2 inhibitor (SGLT-2 inhibitor) and Class I innovative drug developed in- house by the Group, was approved for marketing in China for use as monotherapy or in combination with metformin to improve glycemic control in adults with type 2 diabetes. • In April 2026, the New Drug Application for Vonoprazan Fumarate and Sodium Chloride Injection, an improved new drug developed in-house by the Group, has been accepted by the NMPA. • In April 2026, the clinical trial application for HEC-648 Injection, a monoclonal antibody targeting the G protein of Nipah Virus developed in- house by the Group, was approved by the NMPA. • In July 2026, Insulin Degludec Injection, developed in-house by the Group, was approved for marketing in China. • In August 2026, the clinical trial application for HEC-921 Injection, a novel LY6G6D/4-1BB-targeting bispecific antibody (“ TCE ”) developed in-house by the Group, was approved by the NMPA. The United States • In February 2026, the Group’s HEC-007 injection, a triple target innovative drug for the treatment of obesity, was approved for clinical trials by the FDA. • In April 2026, Insulin Glargine Injection developed in-house by the Group was approved for marketing by the FDA, and in July 2026, the first commercial shipment to the United States was successfully completed.
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– 8 – 2. Progress in major clinical research Clifutinib Besylate Tablets • In June 2026, the Group’s Phase III clinical trial in China for the treatment of relapsed or refractory acute myeloid leukemia (“ AML”) with FLT3-ITD mutation is actively enrolling patients. Yinfenidone Hydrochloride Tablets • In June 2026, the Group’s Phase III clinical trial in China for the treatment of Idiopathic Pulmonary Fibrosis (“ IPF”) is actively enrolling patients. HEC53856 Tablets • In April 2026, the Group completed a Phase II clinical trial for the treatment of chemotherapy-induced anemia in patients with non-myeloid malignancies in China. HECN30227 Injection • In June 2026, the Group’s Phase I clinical trial in China for healthy subjects and subjects with chronic hepatitis B is actively enrolling patients. HEC-007 Injection • In June 2026, the Group’s Phase I clinical trial in China for healthy subjects and overweight or obese patients is actively enrolling patients. HEC169584 Capsules • In June 2026, the Group’s Phase I clinical trial in healthy subjects in China is actively enrolling patients. HEC-151 Injection • In June 2026, the Group’s Phase I clinical trial in healthy subjects in China is actively enrolling patients.
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– 9 – 3. Overview of registration and Phase II and III clinical pipelines Drug Name Drug Classification Target Indication Stage Clifutinib Tablets New chemical drug FLT3 AML Phase III clinical Yinfenidone Tablets New chemical drug TGF-ƺ pathway IPF Phase III clinical Vonoprazan Fumarate Injection Improved new drug P-CAB Peptic ulcer bleeding Registration Application Insulin Degludec and Insulin Aspart Injection Biosimilar drug INSR Diabetes Registration Application Liraglutide Injection Biosimilar drug GLP–1 Diabetes Phase III clinical completed HEC88473 New biological drug GLP–1/FGF21 Diabetes, MASH, etc Phase II clinical completed HEC53856 New chemical drug HIF-PHD Tumor chemotherapy- related anemia Phase II clinical HEC95468 New chemical drug sGC Pulmonary hypertension Phase II clinical HEC–007 New chemical drug GLP-1/GIP/GCG Obesity, Type 2 Diabetes Phase I clinical HECN30227 New chemical drug HBV RNA Hepatitis B Phase I clinical HEC–151 New biological drug INSR Diabetes Phase I clinical HEC169584 New chemical drug THR-ƺ MASH Phase I clinical 4. Patents In the first half of 2026, the Group applied for a total of 113 invention patents, and total of 43 invention patents have been authorized. As at 30 June 2026, the Group had applied for a total of 2,064 invention patents, including 417 Patent Cooperation Treaty (“ PCT”) applications, 856 domestic invention patents and 791 overseas invention patents. Among them, a total of 1,016 invention patents have been authorized, including 420 domestic invention patents and 596 overseas invention patents. 5. The main research results are publicly published • At the 2026 Annual Meeting of the American Association for Cancer Research (“ AACR ”) held in San Diego, California, the United States, in April 2026, the Group presented the latest preclinical research results of three research pipeline programs in the field of oncology in three poster presentations. The programs showcased included a CDH17/4-1BB bispecific antibody, an oral, highly potent Pan-RAS molecular glue inhibitor, and an oral small molecule PD-L1 inhibitor. These presentations fully demonstrated the Group’s diversified technology platforms and continued innovation capabilities in TCE technology, precision targeting and small molecules for cancer immunotherapy. • In June 2026, the results of two Phase III clinical trials of Olorigliflozin of the Group were published in the Chinese Medical Journal , demonstrating its superior reduction in postprandial blood glucose levels and high safety profiles.
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– 10 – Overview of core pipeline products 1. Leading Domestic Anti-Infection Drug R&D Capabilities In the field of anti-infective treatment, the Group has further solidified its position by leveraging the platform advantages of the “State Key Laboratory of Anti-Infective Drug Development”. With a core focus on antiviral infections, the Group prioritizes addressing acute respiratory infections (Influenza and Respiratory Syncytial Virus) and chronic viral hepatitis. Hepatitis B Building on a deep understanding of the “functional cure” for hepatitis B, the Company is concurrently developing a “siRNA/ASO/Immunomodulator” double or triple therapy. This approach aims to comprehensively inhibit Hepatitis B Virus and surface antigen through multi-target synergy, and to initiate a new era of “functional cure” for Hepatitis B via immune reconstruction, bringing renewed hope to patients. Product Candidate — HECN30227 Injection HECN30227 Injection is a Class I new drug independently developed by the Group with global intellectual property rights. It is the Group’s first siRNA drug developed on its small nucleic acid technology platform and is capable of eliminating hepatitis B surface antigens (“ HBsAg”) derived from both cccDNA and integrated DNA. Preclinical data demonstrate that HECN30227 Injection exhibits pan- genotypic activity, effectively reduces HBsAg levels, and maintains strong efficacy against nucleoside- resistant strains. Its in vitro and in vivo potency surpasses that of clinical competitors. The injection employs the Company’s proprietary HEC-GalNova (N-acetylgalactosamine) liver- targeted delivery system, which achieves precise and efficient hepatic delivery while significantly minimizing off-target risks. HECN30227 Injection is currently enrolling patients with chronic hepatitis B for its Phase I clinical trials. Product Candidate — HECN002 Injection HEC-N002 Injection is a Class I new drug independently developed by the Group with global intellectual property rights. It is the Group’s first unconjugated ASO drug developed on the small nucleic acid technology platform. This drug eliminates HBsAg via a dual mechanism of RNA degradation and host immune activation. Preclinical data show pan-genotypic activity and effective reduction of HBsAg levels, with superior in vitro and in vivo efficacy compared to clinical competitors. HECN002 Injection is currently in preclinical development that support investigational new drug (“ IND ”) application.
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– 11 – 2. A Diversified and Mature Research Pipeline in Chronic Diseases to Build a Long-Term Core Competitive Track The Group’s innovative drug candidates for chronic disease treatment focus on chronic respiratory, metabolic, cardiovascular, and renal diseases. These conditions continue to present significant unmet medical needs, including better drug combinations, more convenient administration methods, and improved efficacy and safety. Consequently, demand for innovative treatment solutions is steadily increasing. Product Candidate — Yinfenidone Hydrochloride Tablets Yinfenidone Hydrochloride (HEC585) is a Class I innovative drug independently developed by the Group for the treatment of IPF. It has entered the pivotal Phase III clinical trial stage. It features a broader anti-fibrotic mechanism by synergistically inhibiting multiple pathways, including the suppression of various cellular inflammatory factors, fibroblast proliferation and activation, and collagen synthesis. In vitro efficacy studies show that Yinfenidone inhibits fibroblast proliferation and activation with an IC 50 200– 500 times lower than pirfenidone. In lung organoid fibrosis models and animal studies, Yinfenidone demonstrated significantly superior efficacy compared to pirfenidone and nintedanib. The Phase I clinical trials of Yinfenidone have been completed in China and the U.S., which showed that it has a long half- life and allows for once-daily dosing. Yinfenidone received Orphan Drug Designation from the FDA, qualifying it for preferential approval and pricing policies of the US. A Phase II clinical trial of Yinfenidone (with pirfenidone as the positive control) achieved positive interim results, meeting the study endpoints and demonstrating superior efficacy and good safety and tolerability compared to the control group. Based on these Phase II interim data, the Group has submitted and obtained approval from the Center for Drug Evaluation of NMPA (“ CDE”) for Phase III clinical trials. Key Phase II data were presented at the 9th IPF Summit 2025 in August 2025. The key trial results demonstrated that the 24-week forced vital capacity (“FVC ”)1 of the Yinfenidone 200mg group showed significant improvement compared with the baseline data of the placebo group and the Pirfenidone group, and the decline rate was delayed by 96% compared with the placebo group. We believe Yinfenidone has the potential to become a best-in- class treatment worldwide for IPF. In addition, preclinical studies have demonstrated that Yinfenidone possesses exceptional anti-hepatic fibrosis potential, with efficacy markedly superior to that of Pirfenidone. In the bleomycin-induced interstitial lung disease (“ ILD”) model, the drug can significantly reduce inflammatory cell infiltration around pulmonary vessels and bronchi- predominantly through macrophages, with a reduction rate of up to 70%, indicating promising therapeutic potential for interstitial lung disease.
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– 12 – Product Candidate — Vonoprazan Fumarate Injection Vonoprazan Fumarate Injection is a modified new drug, a potassium- competitive acid blocker (P-CAB) independently developed by our Group for the treatment of bleeding peptic ulcers. It reduces gastric acid secretion by inhibiting the H+/K+-ATPase on gastric parietal cells. Compared to the original tablet formulation Vocinti® (Vonoprazan Fumarate Tablets), this product could meet the clinical needs of patients with peptic ulcer bleeding that oral formulations cannot address, including high-risk patients who cannot take oral medications due to severe conditions, and patients who require a rapid increase in gastric pH for quick hemostasis. The results of a multicenter, randomized, double-blind, active-controlled Phase II/III clinical trial evaluating the safety and efficacy of Vonoprazan Fumarate and Sodium Chloride Injection in patients with bleeding peptic ulcers indicate that Vonoprazan Fumarate and Sodium Chloride Injection could effectively reduce the risk of re-bleeding in these patients and is well tolerated. Furthermore, this injection is a ready-to-use large-volume infusion that requires no clinical preparation, effectively reducing risks of bacterial and insoluble particulate contamination, while preventing preparation errors and enhancing medication safety and convenience. We submitted drug application for this product to the NMPA in March 2026. In April 2026, the application was accepted by the NMPA. Product Candidate — HEC88473 Injection The Group’s independently developed HEC88473 Injection is a novel GLP-1/ FGF21 dual-target long-acting fusion protein injection with potential applications in treating multiple metabolic diseases such as type 2 diabetes and metabolic dysfunction-associated steatohepatitis (“ MASH ”). It has completed Phase II clinical trials. In November 2024, the Group entered into an exclusive overseas licensing and commercialization agreement with Apollo Therapeutics, demonstrating HEC88473 Injection’s global development and commercialization capabilities. HEC88473 Injection can stably control blood glucose, promote weight loss, improve lipid profiles, and shows promising therapeutic potential for improving MASH and liver fibrosis, offering broad metabolic benefits.
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– 13 – Product Candidate — HEC–007 Injection HEC-007 Injection is a new fatty acid side-chain modified GLP-1/GCG/GIP triple-target peptide drug developed independently by the Group, intended for treating overweight or obesity and related metabolic diseases. In preclinical studies, HEC-007 Injection has demonstrated superior efficacy and higher safety compared to similar drugs, with the potential to achieve breakthroughs in both weight loss and glycemic control. The Group submitted an application for clinical trial of IND application for HEC-007 Injection in China in January 2025 and received clinical trial approval in April 2025, and are currently conducting Phase I clinical studies for healthy subjects and overweight/obese patients. We also obtained the clinical trial approval from the FDA in February 2026. Simultaneously, an oral dosage form is being developed based on a gastrointestinal permeation enhancement +special formulation design strategy, balancing drug absorption and tissue safety. Preclinical studies indicate that the efficacy of oral HEC-007 tablets in obese animal models is comparable to that of the injectable group, demonstrating better dose-dependency. This differentiated oral formulation, while ensuring therapeutic efficacy, will provide a new treatment option for patients. Product Candidate — HEC169584 Capsules HEC169584 is the Group’s first Class I innovative drug independently developed by the AIDD laboratory and is a THR- ƺ agonist for treating MASH. Using the HEC GEN model — a molecular fragment generation model based on sparse graph attention neural networks — the Group identified small molecule HEC169584. Preclinical results show HEC169584 has superior in vitro activity against THR- ƺ cells compared to the positive control Resmetirom (the first FDA-approved drug in 2024 for MASH treatment). It exhibits strong liver targeting and a high liver-to-blood ratio, reducing effects on the thyroid axis, heart, and other tissues. In a MASH mouse model with liver fibrosis, it improves liver function, blood lipids, hepatic lipids, liver inflammation, NAFLD activity score, and fibrosis. As of the date of this announcement, this candidate compound is currently undergoing Phase I clinical trials. Product Candidate — HEC–151 Injection HEC-151 Injection is an ultra-long-acting insulin molecule independently developed by the Group. Through site-specific amino acid mutations in human insulin, combined with chemical modification using a novel fatty acid side chain, the molecule achieves a long-acting profile that supports once-weekly dosing. Preclinical studies indicate that, compared to “Icodec” insulin, HEC- 151 Injection exhibits superior PK/PD characteristics and achieves stable and superior glucose control at lower dosing. The product is currently undergoing Phase I clinical studies.
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– 14 – Product Candidate — HECN003 Injection HECN003 Injection is the first small nucleic acid drug targeting adipose tissue and down-regulating the ALK7 target, built upon the Group’s independently developed adipose-targeted delivery platform. The product can efficiently inhibit the expression of ALK7 protein in adipose tissue, alleviate inflammatory responses induced by adipose dysfunction, and accelerate lipid catabolism, thereby improving the symptoms of metabolic syndrome. Preclinical studies indicate that following a single administration in cynomolgus monkeys, the maximum inhibitory activity exceeded 90%, with an efficacy duration of up to three months or longer. In vivo toxicological studies in rodents and cynomolgus monkeys confirmed that the compound demonstrated excellent overall tolerance and a favorable safety profile. Concurrently, HECN003 possesses the advantage of a simplified molecular structure, which can reduce the difficulty of chemistry, manufacturing, and control (“ CMC”) process development. As at the date of this announcement, the candidate drug is undergoing preclinical studies. Product Candidate — HECS001 HECS001 is an oral small molecule PCSK9 inhibitor, which is a Class I new drug independently developed by the Group with global intellectual property rights. By targeting the PCSK9 protein to inhibit its degradation of LDLR, the product accelerates the decompose of LDL-C, thereby reducing LDL-C concentrations in the blood for the treatment of patients with hypercholesterolemia and mixed dyslipidemia. Currently, no PCSK9 small molecule inhibitor has been approved for marketing globally. Preclinical study data of HECS001 indicate a significant LDL-C lowering effect and supports once-weekly oral dosing. In terms of both efficacy and drug compliance, it demonstrates best-in-class potential. As at the date of this announcement, the candidate drug is undergoing preclinical studies. Product Candidate — HECN001 Injection HECN001 Injection is a Class I new drug independently developed by the Group with global intellectual property rights. It is also the Group’s first siRNA drug in the cardiovascular therapeutic field developed based on its small nucleic acid technology platform, which achieves liver-targeted APOC3 and reduces triglycerides for the treatment of diseases such as hypertriglyceridemia. Preclinical data indicate that the in vivo and in vitro efficacy and safety profile of HECN001 Injection are superior to those of its clinical competitors. Furthermore, HECN001 Injection features a simplified structure and low difficulty in CMC development. As at the date of this announcement, the Group’s HECN001 Injection is undergoing preclinical studies.
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– 15 – 3. Deepening the Tumor Pipeline with Multiple Therapeutic Technologies The Group adheres to an R&D strategy centered on clinical value, focusing on unmet clinical needs in oncology. It has developed a trinity of innovative tumor therapies: “precision targeted therapy, breakthrough in drug resistance mechanisms, and optimization of treatment safety”. Leveraging cutting-edge platforms — including bispecific antibodies, ADC, molecular glue degraders, and CAR-T cell therapies — and employing multi- mechanism collaborative innovation, the Group has systematically built a comprehensive candidate product matrix spanning small molecules, biologics, and cell therapies, establishing a differentiated competitive advantage. Product Candidate — Clifutinib Besylate Tablets Clifutinib Besylate Tablets are a Class I innovative drug independently developed by the Group. It is a second-generation highly selective FLT3 inhibitor for treating patients with relapsed/refractory AML harboring FLT3- ITD mutations. This candidate boasts notable clinical efficacy and a low risk of cardiotoxicity. Phase I clinical results were presented at the 2022 European Hematology Association Annual Meeting and the 2023 American Society of Hematology Annual Meeting. According to a Frost & Sullivan report, Clifutinib is the first highly selective FLT3 inhibitor independently developed in China to enter Phase III clinical trials. On 25 November 2024, the Group signed an exclusive commercialization cooperation agreement with YiChang HEC ChangJiang Pharmaceutical Co., Ltd. and Shenyang Sansheng Pharmaceutical Co., Ltd. We are accelerating the Phase III clinical trial of Clifutinib. With the rapid expansion of China’s AML drug market, Clifutinib Besylate holds significant market potential. Product Candidate — HEC53856 Tablets HEC53856 is a Class I innovative HIF-PHD inhibitor independently developed by the Group, indicated for chemotherapy-induced anemia in patients with renal anemia and non-myeloid malignancies. Completed clinical and non- clinical trial data indicate that, based on non-head-to-head comparisons, HEC53856 exhibits superior safety to Roxadustat, a HIF-PHD-targeting drug for renal anemia. In healthy subjects, HEC53856 showed no adverse reactions associated with increased heart rate and a low risk of thrombosis. Additionally, HEC53856 offers cholesterol-lowering benefits. Its exposure is unaffected by food intake or renal impairment, making it a flexible and suitable treatment option for patients with renal insufficiency. As of the date of this announcement, the Group has currently completed Phase II clinical trials of HEC53856 for chemotherapy-related anemia. Both efficacy and safety parameters have met expectations.
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– 16 – Product Candidate — HEC-921 Injection HEC-921 Injection is a first-in-class bispecific antibody independently developed by the Group that targets G6D (LY6G6D), a member of the lymphocyte antigen 6 family, and tumor necrosis factor receptor superfamily member 9 (4-1BB). It is intended for the treatment of LY6G6D-positive solid tumors. Through the screening of specific 4-1BB epitopes and the engineering design of the bispecific antibody, we have enhanced tumor-killing activity while reducing toxic side effects. Preclinical study results indicate that HEC- 921 is highly effective, demonstrating superior tumor-killing activity in multiple colorectal tumor models, with a favorable safety profile and no evidence of 4-1BB-related hepatotoxicity. In August 2026, the clinical trial application for the HEC-921 injection was approved by the NMPA. Research findings on this drug candidate were presented as a poster at the 2025 AACR Annual Meeting, where they garnered widespread attention. Product Candidate — HEC-901 HEC-901 is a PD-L1/VEGF/4-1BB trispecific antibody independently developed by the Group, featuring an innovative “road paving + brake release + accelerator” triple-synergistic antitumor mechanism, and is primarily intended for use in the field of immunotherapy for solid tumors. By inhibiting VEGF to improve the abnormal tumor vascular microenvironment, blocking PD-L1 to relieve tumor immune suppression, and targeting the 4-1BB pathway to activate immune cells, HEC-901 comprehensively remodels the tumor immune microenvironment and potently activates tumor-infiltrating immune cells. Its optimized molecular structure is designed to fully leverage the synergistic antitumor effects of the three targets while effectively mitigating safety risks such as hepatotoxicity. Preclinical research data have demonstrated that HEC- 901 has excellent antitumor efficacy and a favorable safety profile, with the potential to effectively manage the risk of hepatotoxicity and become a backbone therapy in the field of cancer immunotherapy. As of the date of this announcement, the product has completed efficacy validation in multiple animal models and is undergoing formal preclinical studies.
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– 17 – Product Candidate — HEC–922 HEC–922 is a bispecific antibody independently developed by the Group, targeting both calcium-dependent adherens junction protein 17 (CDH17) and 4–1BB. It is primarily intended for CDH17-positive tumour patients, with a focus on gastrointestinal malignancies. By optimising the affinity differential between CDH17 and 4-1BB antibodies and refining the bispecific antibody structure, we ensured that the HEC-922 molecule can bind to 4-1BB and activates T cells only upon specifically binding to CDH17. This approach circumvents this hepatotoxicity associated with non-specific activation observed in clinical applications of 4-1BB monoclonal antibodies. As of the date of this announcement, the molecule’s significant pharmacological efficacy and capacity for immune cell reconstitution and activation have been validated across various animal models, demonstrating sustained antitumour effects even at low doses (0.3 mg/kg). Additionally, this bispecific antibody is a nanobody, featuring a simple structure that facilitates production; its low molecular weight enhances tumour infiltration, thereby improving therapeutic efficacy. The drug candidate was featured in a poster presentation at the 2026 AACR Annual Meeting, held in San Diego, California, the United States, in April 2026, showcasing the latest preclinical research results of HEC-922. Product Candidate — HEC201625 HEC201625 is a highly active, highly specific oral small molecule PD-L1 inhibitor independently developed by the Group. It binds specifically to PD-L1 on tumor cell surfaces, inducing dimerization and internalization, thereby effectively blocking PD-L1 interaction with PD-1 on immune T cells. This activates T cell recognition and killing of tumor cells. Preclinical data demonstrate that HEC201625 exhibits comparable or superior antitumor activity to PD-L1 antibodies across multiple humanized immune-reconstituted tumor models, including models resistant to PD-L1 monoclonal antibodies. It shows a high safety margin and favorable druggability. Combined use with chemotherapy, VEGF monoclonal antibodies, VEGFR inhibitor or KRAS G12C inhibitors yields synergistic effects. As of the date of this announcement, the non-clinical evaluations required for the IND application have been completed. Although multiple antibodies are approved globally, unmet clinical needs remain in the small molecule segment. HEC201625 is poised to develop into an all-oral tumor immunotherapy combination regimen, offering new options and treatment strategies for clinical tumor immunotherapy. The product was featured in a poster presentation at the 2026 AACR Annual Meeting, held in San Diego, California, the United States, in April 2026, showcasing the latest preclinical research results of HEC201625.
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– 18 – AI and R&D The Group is committed to applying AI technology to all stages of drug development and has established a number of advanced AI-driven models to improve R&D efficiency and innovation capabilities. HEC169584 is an investigational THR- ƺagonist for the treatment of MASH, the first new small molecule drug developed by our AIDD laboratory, and has entered Phase I clinical research. We efficiently support drug discovery by effectively integrating all aspects of the drug development process to achieve seamless operations. 1. Core Highlights of AI Powered R&D The Group has established a HEC drug intelligent discovery platform covering the entire drug development cycle. With six self-developed models as the core, the platform integrates large models and special tools in vertical fields to build a full-process intelligent drug development system from target prediction to AI protein structure prediction and molecular simulation, which systematically improves R&D efficiency and provides a core driving force for innovative drug research and development. (1) In terms of dedicated models, the Group, in collaboration with DP Technology, jointly released the world’s first pharmacokinetic (PK) prediction model based on the coupling of pre-training and neural ordinary differential equations. By deeply integrating mechanistic modeling with deep learning, this model establishes a closed-loop research paradigm of “experimental data — mechanistic model — intelligent prediction” for innovative drug development. It is expected to accelerate the pharmaceutical industry’s transformation from “trial-and-error development” to a “precision design” model. (2) In terms of large models, the Group has developed a full-process formulation model covering the entire workflow from dosage form design to quality prediction. Leveraging an innovative R&D system, the model delivers three core functions: intelligent prescription design, process risk early warning, and bioequivalence prediction. This reflects the Group’s cutting-edge exploration in AI-driven pharmaceutical R&D empowered by large language models. At present, relying on the HEC drug intelligent discovery platform, the number of synthetic compounds has been greatly reduced, and the Pre-clinical Candidate Compound (PCC) screening time has been reduced from 2-3 years to 1.5 years, steadily promoting the Group’s strategic goal of AI in biomedical research and development.
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– 19 – 2. Achievements of AI research and development Molecular Design Module (1) HEC-GEN Drug Molecule Generation Model HEC-GEN constructs a protein — molecule composite input matrix based on protein surface parameterization and small molecule atom/bond attributes encoded through molecular graphs. It employs a variant graph neural network combined with a sparse attention mechanism to dynamically learn target — molecule interaction features, and optimizes molecular binding affinity through autoregressive atom-by-atom generation. The Group has simultaneously implements druggability constraints to ensure the generated molecules exhibit both target specificity and favourable drug-like properties. This model has already been applied to the Thyroid Hormone Beta Receptor Agonist Development Project HEC169584. Using the core pharmacophores of known active compounds MGL-3196 and VK2809 as inputs, along with protein structural features, a library of candidate compounds was generated in batches. Following screening through a multi-dimensional evaluation system, lead compounds with significant advantages were ultimately identified. (2) HEC-3DQSAR Drug Molecule Design Model HEC-3DQSAR integrates Open3DQSAR, Open3DALIGN, and other software to enable a fully automated workflow covering molecular data preprocessing, molecular alignment, molecular interaction field calculation, and model construction. It can automatically process data, generate high- quality QSAR models, and present modeling results through graphical and data reports. By correlating 3D molecular structural features with activity data, the platform enables rapid analysis of compound structure — activity relationships, guiding lead compound optimization and improving drug design efficiency. Pharmacokinetics Module (1) HEC-PK Pharmacokinetic Time-Curve Prediction Model HEC-PK is an AI-driven physiological pharmacokinetic prediction model designed to address the high cost of traditional modeling parameters and the reliance on animal testing. It integrates compound structures with in vivo pharmacokinetic data to accurately predict time — concentration curves and key PK parameters. The model establishes a data-driven closed loop for drug design optimization — ultimately helping to shorten the clinical translation
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– 20 – cycle. Built upon the Group internally developed small molecule compounds over the past decade, the model incorporates real-world data including molecular structures, rat PK parameters, and time — concentration profiles. A standardized rat pharmacokinetics dataset has been constructed to ensure data consistency and training reliability. (2) HEC-CYPs Drug Interaction Prediction Model The Group’s R&D team leverages chemoinformatics and artificial intelligence technologies to rapidly and accurately assess CYPs-related drug interaction risks of candidate compounds. The model helps mitigate risks such as excessive drug concentration, increased side effects, accelerated metabolism, or treatment failure caused by the inhibition or induction of CYPs metabolic enzyme activity. The HEC-CYPs inhibition model adopts a pre-training and fine-tuning strategy — using a language model framework at the protein level and the 3D pre-training framework Uni-Mol at the small molecule level. For the induction model, a novel consensus learning strategy is applied, combining mechanistic and phenotypic data in a deep learning framework. (3) HEC-Transporters Drug Permeability/Transporter Interaction Prediction Model Our R&D team uses machine learning to model proprietary data, enabling rapid and accurate prediction of interactions between drugs, biological membranes, and transporters, thus facilitating early optimization of pharmacokinetic properties. The HEC-Transporters model employs an innovative multi-task learning strategy to jointly model membrane permeability and transporter functions at both the data and model levels. A unified message-passing network is trained to capture shared structural features of molecule-membrane interactions, while three independent feedforward neural networks enhance performance on specific proprietary tasks. (4) Vertical Large Model — The World’s First Domain-Specific Natural Language Model for Pharmaceutical Formulations The Group’s R&D team has launched the world’s first domain-specific natural language model for pharmaceutical formulations via a system incorporating processes from “multi-source heterogeneous data standardization through to reinforcement learning with expert feedback”. This model delivers three core functions: intelligent prescription design, process risk warning, and bioequivalence prediction. Its intelligent knowledge base incorporates the Group’s critical experimental data,
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– 21 – including over 210,000 formulation records, more than 12,000 pharmaceutics publications, over 2,000 core process patents, and pharmacopeias from China, the United States, Europe, and Japan. Using advanced retrieval- augmented generation technology, it reduces hallucinations common in large language models. This model enables intelligent integration across the entire chain from prescription design to production quality control, bridging technical gaps such as the cross-scale collaborative design of formulation components and process parameters, and provides an interactive, interpretable next-generation intelligent infrastructure for formulation R&D. 3. Future Plans and Strategies Going forward, with our established strategic development plan to deeply empower the entire drug research and development chain with AI technology, and leveraging our existing technological foundation, the Group will continue to strengthen the development and enhancement of the platform’s core capabilities. Our goal is to strategically elevate the “HEC Drug Intelligent Discovery Platform” from an efficient auxiliary R&D tool into the core engine driving new drug discovery and development, establishing the Group’s “new quality productivity” in the era of artificial intelligence. Our plan will focus on deepening, integrating, and innovating around the platform’s three key functional modules. By advancing drug molecule design capabilities, we aim to expand the boundaries of innovative molecules. We will construct a comprehensive pharmacokinetic evaluation matrix to proactively assess druggability risks. Finally, by creating a “pharmaceutical research large model” as the core engine, we will realize full-process intelligence across R&D. Strategic Cooperation In January 2026, the Group and Shenzhen XtalPi Technology Co., Ltd. (߅ ʮ̡) (“ Shenzhen XtalPi ”) entered into a strategic cooperation agreement to establish a joint venture for the co-development of an AI-driven drug R&D platform. The collaboration will focus in (1) the establishment of a joint laboratory to co- develop innovative drug pipelines; (2) the joint development and promotion of large- scale models; (3) the creation of a “Model as a Service” (MaaS) business model. The partnership between the Group and Shenzhen XtalPi not only leverages the complementary strengths of the two companies but also represents a significant milestone in the intelligent transformation of China’s pharmaceutical industry. By combining the Group’s expertise in pharmaceutical R&D with Shenzhen XtalPi’s intelligent capabilities, the collaboration aims to usher in a new era of pharmaceutical R&D.
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– 22 – In May 2026, the Group and JD Health officially signed a memorandum of understanding to deepen their cooperation. Leveraging their respective strengths and with a focus on the high-quality development of the pharmaceutical and healthcare industry as a whole, the parties reached a consensus on comprehensive and in-depth cooperation. The signing marked a milestone in the complementary strengths and strategic collaboration between the two parties, as well as a key step for the Group in accelerating the development of its digital healthcare ecosystem and deepening its presence in the digital and intelligent healthcare sector, injecting strong momentum into integrated innovation across the industry. In June 2026, the Group officially entered into an agreement with Accutar, a global leading AI-powered drug development company, to establish a NewCo company to jointly incubate an innovative drug pipeline based on RIPTAC (Regulated Induced Proximity Targeting Chimera) technology. The lead indication for the pipeline is metastatic castration-resistant prostate cancer (mCRPC), a disease area with significant unmet clinical needs globally, where there remains a lack of effective medicines and an urgent need to improve the treatment experience of patients. This collaboration represents a key strategic move by the Group in its global development of leading targets and technology platforms, marking the Group’s deep entry into a core segment of next-generation precision medicine globally. Meanwhile, the Group will be entitled, through the NewCo company, to all subsequent global development rights and will take the lead in the later-stage development and commercialisation of the collaborative project. III. SALES REVIEW In the PRC market, we have a nationwide product sales and distribution network. Our sales team has 1,869 sales professionals and our sales coverage spans 32 provinces, municipalities and autonomous regions across China, and nearly 300 prefecture-level cities in China. Our sales network covers over 3,100 Class III hospitals, over 9,600 Class II hospitals and over 89,000 Class I hospitals, numerous large-scale national or regional pharmacy chains and other medical institutions, allowing us to maximize our reach of the market in China. Leveraging our exceptional commercialization capabilities and extensive terminal market coverage, we continue to consolidate our leading position in China’s domestic pharmaceutical industry. In terms of the anti-viral pediatric business pipeline, the Group’s oseltamivir phosphate product achieved a revenue of RMB 501.05 million by leveraging its strong brand value and extensive market penetration, and maintained its leading position in the domestic anti-influenza market. The Group’s Kewei Granules invention patent “Oseltamivir Phosphate Granules and Preparation Method” won the 25th China Patent Gold Award, with its technological capabilities receiving authoritative national recognition. The Group continues to deepen its brand building efforts through precise marketing strategies and diversified academic promotion activities, continuously
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– 23 – consolidating the market share of its core product, Kewei. At the same time, the Group strategically developed a synergistic product portfolio. New products such as Pediatric Paracetamol and Phenylephrine Granules, Pediatric Faropenem Granules and Children’s Fever Reducing Patch were added to fully meet the medication needs of children and further strengthen the brand influence in the field of influenza treatment. In terms of the chronic disease business pipeline, the Group has independently developed six insulin products, including Recombinant Human Insulin Injection, Insulin Glargine Injection, Insulin Aspart Injection, Insulin Aspart 30 Injection, Mixed Protamine Human Insulin Injection (30R), and Insulin Degludec Injection, all of which have been approved for launching, establishing a comprehensive insulin product portfolio covering second- to fourth-generation insulin products and three major clinical application scenarios, namely basal, mealtime and premixed insulin. During the first half of 2026, the insulin series products achieved revenue of RMB 125.13 million, demonstrating steady business growth. In terms of the new drug business pipeline, the Group’s commercialized Class I innovative drug for the treatment of genotype-specific chronic hepatitis C, Emitasvir Phosphate Capsules, achieved a revenue of RMB 29.37 million. The Group’s invention patent “Bridged ring compounds as hepatitis C virus inhibitors and preparation method thereof” won the Second Hubei Patent Gold Award. In addition, the Group’s Class I innovative drugs for treating the Pan-genotypic chronic Hepatitis C, Encofosbuvir Tablets and Netanasvir Phosphate Capsules were officially approved for launching in February 2025 and March 2025, respectively. The approval for launching of the Pan-genotypic chronic Hepatitis C treatment portfolios will further consolidate the Group’s competitive edge in the field of Hepatitis C treatment. The Group has established a dedicated team for specialty medicine. Moving forward, we will further strengthen the academic promotion and market coverage for Hepatitis C and other innovative drugs. These efforts are pivotal to the sales ramp-up and the expansion of market share for our products. In January 2026, the Group’s self- developed sodium-glucose cotransporter 2 inhibitor (“ SGLT-2 inhibitor ”), the Class I innovative drug Ologliptin Capsules, was approved for marketing, further enriching the Group’s product portfolio in the diabetes treatment field. Leveraging its well- established production system and marketing network, the Group will accelerate the commercialisation of this product while continuing to explore its clinical applications in areas such as diabetic complications, thereby further expanding its indications and providing more comprehensive treatment solutions for patients with diabetes. Centralized procurement and new retail lines have become the Company’s core strategic business and stable source of cash flow. The centralized procurement business as a whole shows characteristics such as low sales expense ratio and steady increase in revenue. During the first half of 2026, the Group’s selected and centrally procured products showed steady business performance as a whole.
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– 24 – Sales, Marketing and Distribution In the domestic market, our approach to generating demand for our products is based on two central strategies: promotional activities and strengthening and optimizing our distribution network. On one hand, we promote our drugs primarily through in-house sales and marketing team, which interacts with healthcare professionals through educational promotion activities, enhancing healthcare professionals’ knowledge about the relevant therapeutic areas, as well as their understanding of the usage, clinical efficacy and other features of our products. On the other hand, we sell our products primarily to Good Supply Practice (“ GSP”) certified third-party offline distributors, which distribute our products to hospitals, other medical institutions and pharmacies in the PRC. Our GSP-certified third party distributors are located throughout the PRC, which enhances our market penetration and expands our coverage of hospitals, pharmacies and other medical institutions throughout the PRC. In overseas markets, we have extensive overseas experience in terms of research and development, commercialization and operation and have established a global sales network across major international markets. Our overseas sales network covers eight countries and regions including the United States, Germany and the United Kingdom. We plan to implement the following strategies to expand our overseas market. Firstly, we will boost international sales of our products in China, in particular, our drugs with EU and U.S. approvals. We can increase the overseas sales performance of our existing products by leveraging our existing drug production, quality management capabilities and supply chain systems that meet international standards. Secondly, we plan to build up our international capabilities in research and development, product registration, clinical trials, and commercialization with a focus on advancing clinical trials of drugs under development with clinical value and competitive advantages in the overseas markets. Thirdly, we will continue to strengthen technical exchanges and strategic collaboration with world-leading multinational pharmaceutical companies to enhance our position in the international pharmaceutical market. In terms of the international product portfolio, the Group’s self-developed Insulin Glargine Injection (trade name: Langlara) has commenced commercial shipments to the U.S. market. The initial shipment is planned to comprise a total of 1.152 million units, which will be shipped in batches in an orderly manner, with the shipments expected to be completed in mid to late August 2026. The commencement of commercial shipments of the insulin product to the U.S. market marks a significant milestone breakthrough in the Group’s internationalisation and overseas commercialisation strategy. Previously, the Company entered into an agreement with its U.S. partner for product orders of not less than 18 million units, and this shipment represents the first batch of commercial deliveries under such cooperation framework. The successful entry of Insulin Glargine Injection into the U.S. market represents an
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– 25 – important milestone in the expansion of domestically developed insulin biosimilars into major global pharmaceutical markets, marking the transition of the Company’s internationalisation strategy from exporting products and transferring technologies to a new stage of large-scale commercialisation. In addition, in terms of the international product portfolio, the Group is simultaneously advancing the overseas registration and marketing of several insulin products. Among them, Insulin Glargine Injection has been approved for marketing in the United Arab Emirates, Bahrain, Algeria, Mali and Niger; Insulin Aspart Injection has been approved for marketing in the United Arab Emirates, Bahrain, Algeria and Niger, while R&D activities for the U.S. market are progressing in an orderly manner; Insulin Aspart 30 Injection has been approved for marketing in the United Arab Emirates and Bahrain; and the Group plans to submit applications for biosimilar clinical trials for Insulin Degludec Injection in the United States and Europe, further enhancing its product pipeline for overseas markets. Currently, the Group’s insulin products have been commercialised in a number of overseas markets, including the Middle East and Southeast Asia, and the Group also plans to further advance its commercialisation efforts in regions including North Africa, West Africa and South America this year. IV. PRODUCTION REVIEW We have an advanced production and supply chain system in the PRC, with production bases fully compliant with international Good Manufacturing Practice (“GMP ”) standards. We currently have two production bases in Songshan Lake, Dongguan, Guangdong province, the PRC, and Yidu, Hubei province, the PRC, occupying a total area of more than 1,300 mu. These production bases cover the entire production chain of formulations. Our Songshan Lake production base is an advanced factory in China producing solid chemical formulation and biologics. It has obtained GMP certifications from the United States, the European Union and China, including passing EU GMP audit conducted by National Office for Health and Social Affairs of Germany in November 2023, GMP inspection by the U.S. FDA in March 2024, and a GMP compliance check by the Guangdong Provincial Drug Administration in January 2025. Its annual production capacity of chemical drugs reaches 1.8 billion tablets/capsules. A large-scale biologics facility that complies with international GMP standards is expected be completed in 2026, equipped with production lines for cell, E coli fermentation and yeast fermentation as planned, which will provide solid support for the commercialization of our biologics under development.
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– 26 – Our Yidu production base has obtained Chinese GMP certification, and it produces a wide range of insulin products, solid dosage forms and freeze-dried powder injections. As of the date of this announcement, our Yidu production base was the largest production base of oseltamivir phosphate formulation in the PRC and can also produce a wide range of insulin products ranging from the second to fourth generation, with an annual production capacity of over 15 million injections. As of the date of this announcement, the annual theoretical production capacity of the Yidu chemical solid formulation production facility had passed 3.5 billion tablets/ capsules, 1.6 billion granule packets and 4.5 million vials of freeze-dried powder injections. We provide a reliable supply of Kewei (oseltamivir phosphate) for the Chinese national drug reserve. Over the years, we have demonstrated strong and high- standard production capabilities in response to the influenza in China. Meanwhile, we have advanced facilities and high production standards that comply with stringent quality management systems such as GMP. Our team are experienced and able to swiftly align production plans to ensure the continuity and stability supply of oseltamivir phosphate, such that we can provide reliable supply for the national drug reserve. We have managed to create a virtuous circle in respect of our business model through our integrated capabilities in research and development, production and commercialization. Our strong research and development and production capabilities have facilitated the successful commercialization of our products. The strong operating cash flow generated by the sales of our products not only supports our daily operation, but also allows us to continue to invest in our research and development, production and marketing. Through this virtuous circle, we are able to continuously advance our innovative research and development capabilities, which is essential for us to further strengthen our product portfolio and expand our market shares, eventually leading to our sustainable business growth and maintaining long- term competitive advantage.
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– 27 – V. PERFORMANCE SUMMARY CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the six months ended 30 June 2026 — unaudited (Expressed in Renminbi) Six months ended 30 June 2026 2025 Note RMB’000 RMB’000 Revenue 3 1,075,308 1,937,667 Cost of sales (497,137) (470,055) Gross profit 578,171 1,467,612 Other (loss)/income 5(a) (13,821) 34,831 Distribution costs (491,433) (715,622) Administrative expenses (302,826) (309,060) Research and development cost (279,876) (348,216) Reversals of impairment loss on trade and other receivables 47,222 80,350 (Loss)/profit from operations (462,563) 209,895 Finance costs 5(b) (105,273) (114,291) Share of (loss)/profit of associates (1,036) 49 (Loss)/profit before taxation 5 (568,872) 95,653 Income tax 6 (35,126) (81,001) (Loss)/profit for the period (603,998) 14,652 Attributable to: Equity shareholders of the Company (603,718) (46,370) Non-controlling interests (280) 61,022 (Loss)/profit for the period (603,998) 14,652 Loss per share Basic and diluted (in RMB) 7 (1.09) (0.11)
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– 28 – CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued) for the six months ended 30 June 2026 — unaudited (Expressed in Renminbi) Six months ended 30 June 2026 2025 RMB’000 RMB’000 (Loss)/profit for the period (603,998) 14,652 Other comprehensive income for the period (after tax) Item that may be reclassified subsequently to profit or loss: Exchange differences on translation of financial statements of overseas subsidiaries 7,311 (8,236) 7,311 (8,236) Total comprehensive income for the period (596,687) 6,416 Attributable to: Equity shareholders of the Company (596,422) (54,266) Non-controlling interests (265) 60,682 Total comprehensive income for the period (596,687) 6,416
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– 29 – CONSOLIDATED STATEMENT OF FINANCIAL POSITION at 30 June 2026 — unaudited (Expressed in Renminbi) At 30 June 2026 At 31 December 2025 Note RMB’000 RMB’000 (Audited) Non-current assets Fixed assets 8 — Property, plant and equipment 3,772,606 3,845,685 — Right-of-use assets — Ownership interests in leasehold land held for own use 336,288 340,820 — Other properties leased for own use 101,439 123,265 4,210,333 4,309,770 Intangible assets 9 1,435,044 1,483,017 Interests in associates 48,980 26,014 Prepayments 11 1,221,947 1,245,270 Deferred tax assets 342,545 277,999 Total non-current assets 7,258,849 7,342,070 Current assets Inventories 12 893,387 783,491 Trade and other receivables 13 1,494,135 1,892,400 Prepayments 11 461,026 446,651 Financial assets measured at FVPL 10 10,136 15,827 Restricted cash 14 75,617 25,504 Cash and cash equivalents 14 1,479,038 1,486,796 Total current assets 4,413,339 4,650,669 Current liabilities Trade and other payables 15 2,124,663 2,596,774 Contract liabilities 162,366 152,216 Bank loans and other borrowings 16 3,459,296 3,197,746 Lease liabilities 44,995 47,174 Current taxation 2,587 43,940 Total current liabilities 5,793,907 6,037,850 Net current liabilities (1,380,568) (1,387,181)
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– 30 – At 30 June 2026 At 31 December 2025 Note RMB’000 RMB’000 (Audited) Total assets less current liabilities 5,878,281 5,954,889 Non-current liabilities Bank loans and other borrowings 16 1,763,612 1,368,991 Deferred income 197,080 181,983 Lease liabilities 45,167 65,940 Deferred tax liabilities 1,341 – Total non-current liabilities 2,007,200 1,616,914 Net assets 3,871,081 4,337,975 Capital and reserves 18 Share capital 576,656 576,656 Reserves 3,286,863 3,767,879 Total equity attributable to equity shareholders of the Company 3,863,519 4,344,535 Non-controlling interests 7,562 (6,560) Total equity 3,871,081 4,337,975 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued) at 30 June 2026 — unaudited (Expressed in Renminbi)
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– 31 – CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2026 — unaudited (Expressed in Renminbi) Attributable to equity shareholders of the Company Paid-in capital/share capital Capital reserve Merger reserve Treasury stock Shared- based payment reserve Exchange reserve Statutory reserve Accumulated loss Total Non- controlling interests Total equity Note RMB'000 RMB'000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1 January 2025 463,943 3,621,682 (3,722,790) (22,956) 331,175 5,585 226,198 (558,688) 344,149 4,123,351 4,467,500 Changes in equity for the six months ended 30 June 2025: (Loss)/profit for the period – – – – – – – (46,370) (46,370) 61,022 14,652 Exchanges differences on translation of financial statements of overseas subsidiaries – – – – – (7,896) – – (7,896) (340) (8,236) Total comprehensive income for the period – – – – – (7,896) – (46,370) (54,266) 60,682 6,416 Equity-settled share-based payments 17 – – – – 107,761 – – – 107,761 21,910 129,671 Acquisition of non-controlling interests – (6,461) – – – – – – (6,461) 6,461 – Balance at 30 June 2025 and 1 July 2025 463,943 3,615,221 (3,722,790) (22,956) 438,936 (2,311) 226,198 (605,058) 391,183 4,212,404 4,603,587 Changes in equity for the six months ended 31 December 2025: Profit/(loss) for the period – – – – – – – 318,812 318,812 (63,430) 255,382 Exchanges differences on translation of financial statements of overseas subsidiaries – – – – – 533 – – 533 36 569 Total comprehensive income for the period – – – – – 533 – 318,812 319,345 (63,394) 255,951 Acquisition of non-controlling interests through privatisation 112,713 3,995,907 – – – – – – 4,108,620 (4,155,570) (46,950) Special dividend – – – – – – – (584,431) (584,431) – (584,431) Share repurchase – (18,702) – (476) – – – – (19,178) – (19,178) Equity-settled share-based payments 17 – – – – 128,996 – – – 128,996 – 128,996 Balance at 31 December 2025 576,656 7,592,426 (3,722,790) (23,432) 567,932 (1,778) 226,198 (870,677) 4,344,535 (6,560) 4,337,975
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– 32 – CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued) for the six months ended 30 June 2026 — unaudited (Expressed in Renminbi) Attributable to equity shareholders of the Company Share capital Capital reserve Merger reserve Treasury stock Shared- based payment reserve Exchange reserve Statutory reserve Accumulated loss Total Non- controlling interests Total equity Note RMB'000 RMB'000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1 January 2026 576,656 7,592,426 (3,722,790) (23,432) 567,932 (1,778) 226,198 (870,677) 4,344,535 (6,560) 4,337,975 Changes in equity for the six months ended 30 June 2026: Loss for the period – – – – – – – (603,718) (603,718) (280) (603,998) Exchange differences on translation of financial statements of overseas subsidiaries – – – – – 7,296 – – 7,296 15 7,311 Total comprehensive income for the period – – – – – 7,296 – (603,718) (596,422) (265) (596,687) Share repurchase 18(d) – (7,740) – (201) – – – – (7,941) – (7,941) Equity-settled share-based payments 17 – – – – 129,334 – – – 129,334 – 129,334 Acquisition of a subsidiary 18(c) – – – – – – – – – 8,400 8,400 Injection of capital in a subsidiary – (5,987) – – – – – – (5,987) 5,987 – Balance at 30 June 2026 576,656 7,578,699 (3,722,790) (23,633) 697,266 5,518 226,198 (1,474,395) 3,863,519 7,562 3,871,081
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– 33 – NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORTS (Expressed in Renminbi unless otherwise indicated) 1 BASIS OF PREPARATION This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”), including compliance with International Accounting Standard (“ IAS”) 34 Interim Financial Reporting as issued by the International Accounting Standard Board (“ IASB”). It was authorised for issue on 31 August 2026. The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2025 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2026 annual financial statements. Details of any changes in accounting policies are set out in Note 2. The preparation of an interim financial report in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year-to-date basis. Actual results may differ from these estimates. This interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Company and its subsidiaries (together the “ Group ”) since the 2025 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for a full set of financial statements prepared in accordance with IFRS Accounting Standards. The interim financial report is unaudited, but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 Review of interim financial information performed by the independent auditor of the entity as issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”). 2 CHANGES IN ACCOUNTING POLICIES The Group has adopted Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7) from 1 January 2026. The amendments clarify when a financial asset or a financial liability is recognised and derecognised. They also introduce an exception that permits an entity to derecognise a financial liability before the settlement date when the financial liability is settled with cash, using an electronic payment system that meets specific criteria. Adopting the amendments resulted in a change in the accounting policy for the derecognition of trade payables settled with cash using qualifying electronic payment systems, for which the Group has elected to apply the exception. Previously, the Group derecognised trade payables settled with cash using an electronic payment system on the settlement date. Under the new policy, derecognition of these trade payables occurs on the date when the Group’s ability to withdraw, stop or cancel the payment instruction is surrendered and the other eligibility criteria are met. As a result, the Group derecognises certain trade payables and cash earlier.
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– 34 – The amendments apply retrospectively; however, the Group was not required to restate prior periods to reflect their application under the transitional provisions. In addition, the change in accounting policy did not have a material effect on the Group’s interim financial statements for the periods presented. The change in accounting policy will also be reflected in the Group’s consolidated financial statements as at and for the year ending 31 December 2026. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. 3 REVENUE AND SEGMENT REPORTING (a) Disaggregation of revenue The principal activities of the Group are research and development, manufacturing and sales of pharmaceuticals. Revenue represents the sales value of goods supplied to customers. Revenue is after deduction of any trade discounts. Disaggregation of revenue from contracts with customers by major products is as follows: Six months ended 30 June 2026 2025 RMB’000 RMB’000 Revenue from contracts with customers within the scope of IFRS 15 Sales of anti-infective drugs 582,364 1,411,631 Sales of chronic disease treatment drugs 463,681 473,020 Others 29,263 53,016 1,075,308 1,937,667
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– 35 – (b) Segment reporting (i) Segment information The Group manages its businesses as a whole by the most senior executive management for the purposes of resource allocation and performance assessment. The Group’s chief operating decision maker is the chief executive officer of the Group who reviews the Group’s consolidated results of operations in assessing performance of and making decisions about allocations to this segment. Accordingly, no reportable segment information is presented. (ii) Geographic information The following table sets out information about the geographical location of the Group’s revenue from external customers. The geographical location of customers is based on the location at which the customers are registered. Six months ended 30 June 2026 2025 RMB’000 RMB’000 The PRC 1,044,210 1,911,515 Overseas 31,098 26,152 1,075,308 1,937,667 4 SEASONALITY OF OPERATIONS The Group’s key product, Kewei, is a type of anti-viral drugs for the treatment and prevention of influenza. The Group experiences a higher sale in first and fourth quarter of a year. For the twelve months ended 30 June 2026, the Group reported revenue of RMB 3,952,706,000 (twelve months ended 30 June 2025: RMB 3,374,638,000), and gross profit of RMB 2,783,730,000 (twelve months ended 30 June 2025: RMB 2,464,183,000).
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– 36 – 5 (LOSS)/PROFIT BEFORE TAXATION (Loss)/profit before taxation is arrived at after charging/(crediting): (a) Other (loss)/income Six months ended 30 June 2026 2025 RMB’000 RMB’000 Government grants 14,580 12,556 Interest income from bank deposits and investment 16,094 17,525 Net loss on disposal of property, plant and equipment (286) (7,544) Fair value change on financial assets measured at FVPL (Note 10) 136 10,776 Impairment loss on intangible assets (39,658) – Net foreign exchange (loss)/gain (4,801) 4,517 Others 114 (2,999) (13,821) 34,831 (b) Finance costs Six months ended 30 June 2026 2025 RMB’000 RMB’000 Interest on bank loan and other borrowing costs 108,827 122,004 Interest on lease liabilities 2,356 2,710 111,183 124,714 Less: interest expense capitalised into construction in progress (5,910) (10,423) 105,273 114,291
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– 37 – 6 INCOME TAX Six months ended 30 June 2026 2025 RMB’000 RMB’000 Current tax Provision for CIT for the period 99,682 60,811 Under-provision for CIT in respect of prior periods – 51 99,682 60,862 Deferred tax Origination and reversal of temporary differences (64,556) 20,139 Total income tax expense 35,126 81,001 The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions in which members of the Group are domiciled and operate. 7 LOSS PER SHARE (a) Basic loss per share The calculation of basic loss per share is based on the loss attributable to equity shareholders of the Company of RMB 603,718,000 (six months ended 30 June 2025: losses of RMB 46,370,000) and the weighted average number of 553,083,000 ordinary shares (six months ended 30 June 2025: 440,987,000 ordinary shares) in issue during the six months ended 30 June 2026. (b) Diluted loss per share For the six months ended 30 June 2026 and 2025, the restricted shares of the Company under the 2023 Restricted Share Scheme (Note 17) were not included in the calculation of diluted loss per share because their inclusion would have been anti-dilutive. The Company does not have other potential ordinary shares and therefore diluted loss per share were the same as the basic loss per share.
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– 38 – 8 FIXED ASSETS Property, plant and equipment Right-of-use assets Plant and buildings Machinery Office equipment and others Motor vehicles Construction in progress Sub-total Ownership interests in leasehold land held for own use Other properties leased for own use Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Cost: At 1 January 2025 1,849,074 1,597,859 953,475 8,112 827,172 5,235,692 413,255 243,937 5,892,884 Additions 4,711 5,267 8,559 279 197,854 216,670 7,236 17,185 241,091 Transfer from construction in progress 285,442 73,563 50,350 – (409,355) – – – – Reclassification (3,944) 1,504 2,440 – – – – – – Disposals – (19,501) (18,832) – – (38,333) – (2,862) (41,195) At 31 December 2025 2,135,283 1,658,692 995,992 8,391 615,671 5,414,029 420,491 258,260 6,092,780 Additions 376 4,325 3,167 230 55,208 63,306 – 2,933 66,239 Transfer from construction in progress 67 187,824 8,260 – (196,151) – – – – Disposals – (2,348) (4,087) (623) – (7,058) – (1,080) (8,138) At 30 June 2026 2,135,726 1,848,493 1,003,332 7,998 474,728 5,470,277 420,491 260,113 6,150,881 Accumulated depreciation and amortisation: At 1 January 2025 (325,455) (562,940) (448,246) (2,488) – (1,339,129) (70,729) (92,036) (1,501,894) Charge for the year (58,495) (107,717) (95,125) (758) – (262,095) (8,942) (44,998) (316,035) Written-back on disposals – 18,815 14,065 – – 32,880 – 2,039 34,919 At 31 December 2025 (383,950) (651,842) (529,306) (3,246) – (1,568,344) (79,671) (134,995) (1,783,010) Charge for the period (33,725) (55,051) (46,093) (377) – (135,246) (4,532) (24,726) (164,504) Written-back on disposals – 1,796 3,585 538 – 5,919 – 1,047 6,966 At 30 June 2026 (417,675) (705,097) (571,814) (3,085) – (1,697,671) (84,203) (158,674) (1,940,548) Carrying amount: At 30 June 2026 1,718,051 1,143,396 431,518 4,913 474,728 3,772,606 336,288 101,439 4,210,333 At 31 December 2025 1,751,333 1,006,850 466,686 5,145 615,671 3,845,685 340,820 123,265 4,309,770
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– 39 – 9 INTANGIBLE ASSETS Hepatitis C Drugs Insulin Other Drugs Other Patent Capitalised development costs Insulin intellectual property rights Capitalised development costs Generic drug and other drug intellectual property rights Capitalised development costs Other intangible asset Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Cost: At 1 January 2025 431,644 330,593 356,930 135,224 1,334,962 434,557 – 3,023,910 Addition through internal development – – – 24,393 – 97,154 – 121,547 Addition through purchase – – – – – – 4,280 4,280 Transfer from development costs to patents 156,081 (156,081) – – – – – – At 31 December 2025 587,725 174,512 356,930 159,617 1,334,962 531,711 4,280 3,149,737 Addition through internal development – – – 942 189,337 61,921 – 252,200 Transfer from development costs to patents – – – – – (189,337) – (189,337) Addition through acquisition – – – – – – 5,365 5,365 At 30 June 2026 587,725 174,512 356,930 160,559 1,524,299 404,295 9,645 3,217,965 Accumulated amortisation: At 1 January 2025 (206,003) – (91,677) – (413,303) – – (710,983) Charged for the year (26,840) – (35,693) – (85,717) – (221) (148,471) At 31 December 2025 (232,843) – (127,370) – (499,020) – (221) (859,454) Charge for the period (14,631) – (17,847) – (43,954) – (111) (76,543) At 30 June 2026 (247,474) – (145,217) – (542,974) – (332) (935,997) Accumulated impairment losses: At 1 January 2025 (160,152) (174,512) – – (404,807) – – (739,471) Recognised in the year – – – – (67,795) – – (67,795) At 31 December 2025 (160,152) (174,512) – – (472,602) – – (807,266) Recognised in the period – – – – (39,658) – – (39,658) At 30 June 2026 (160,152) (174,512) – – (512,260) – – (846,924) Net book value: At 30 June 2026 180,099 – 211,713 160,559 469,065 404,295 9,313 1,435,044 At 31 December 2025 194,730 – 229,560 159,617 363,340 531,711 4,059 1,483,017
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– 40 – (i) As at 30 June 2026, the capitalised development costs were under development and not yet ready for use. (ii) Impairment review on the intangible assets of the Group has been conducted by the management as at 30 June 2026. RMB 39,658,000 of impairment was recognised for the six months ended 30 June 2026 (six months ended 30 June 2025: nil) based on the impairment evaluation result, which was recognised as impairment loss in the “other income” in the consolidated statement of profit or loss and other comprehensive income. 10 FINANCIAL ASSETS MEASURED AT FVPL At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Current asset — Investment in a partnership 10,136 10,000 — Investment in a private fund – 5,827 10,136 15,827 11 PREPAYMENTS At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Non-current Prepayments for intangible assets 6,031 6,501 Prepayments for property, plant and equipment 1,215,916 1,238,769 1,221,947 1,245,270 Current Prepayments for materials 35,555 29,486 Prepayments for services 425,471 417,165 461,026 446,651 1,682,973 1,691,921
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– 41 – 12 INVENTORIES At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Raw materials 420,939 483,437 Work in progress 173,280 123,173 Finished goods 291,796 171,900 Goods in transit 7,372 4,981 893,387 783,491 The analysis of the amount of inventories recognised as an expense and included in profit or loss is as follows: Six months ended 30 June 2026 2025 RMB’000 RMB’000 Carrying amount of inventories sold 507,248 350,046 (Reversal of write-down)/write-down of inventories (19,347) 8,628 Cost of inventories sold 487,901 358,674 13 TRADE AND OTHER RECEIVABLES As of the end of the reporting period, the aging analysis of trade debtors and bills receivable (which are included in trade and other receivables), based on the invoice date and net of allowance for doubtful debts, is as follows: At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Within 3 months 682,799 1,368,046 More than 3 months but within one year 609,877 337,481 More than 1 year 54,329 27,881 Trade and bills receivable, net of allowance for doubtful debts 1,347,005 1,733,408 Other receivables, net of allowance for doubtful debts 48,093 74,873 Prepaid tax and deductible value-added tax 99,037 84,119 1,494,135 1,892,400
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– 42 – 14 CASH AND CASH EQUIVALENTS At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Cash at bank 1,554,655 1,512,300 Less: restricted cash (i) (75,617) (25,504) Cash and cash equivalents in the cash flow statement 1,479,038 1,486,796 (i) As at 30 June 2026, restricted cash mainly represented as follows: (1) pledges to banks for issuance of bills payable, letters of credit and loans; (2) restricted accounts opened and held for the purpose of credit business and receiving investment funds; (3) funds borrowed for limited purposes of use. 15 TRADE AND OTHER PAYABLES At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Trade payables — Related parties 116,621 110,480 — Third parties 987,236 795,795 Bill payable 144,958 126,048 VAT and other taxes payable 11,712 142,545 Accrued payroll and benefits 120,804 303,839 Accrued expenses 382,269 762,642 Accrued royalty fee – 117,149 Receipts in advance 145,967 – Other payables for purchasing fixed assets 85,974 118,765 Other payables 129,122 119,511 2,124,663 2,596,774
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– 43 – As of the end of the reporting period, the aging analysis of trade creditors and bills payable (which are included in trade and other payables), based on the invoice date, is as follows: At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Within 1 month 120,908 364,029 1 to 3 months 365,858 126,019 Over 3 months but within 1 year 595,164 293,611 Over 1 year 166,885 248,664 1,248,815 1,032,323 16 BANK LOANS AND OTHER BORROWINGS At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Non-current Bank loans 1,484,608 1,277,541 Obligations arising from sale and leaseback transactions 279,004 91,450 1,763,612 1,368,991 Current Bank loans 3,074,513 2,784,668 Obligations arising from sale and leaseback transactions 384,783 413,078 3,459,296 3,197,746 5,222,908 4,566,737
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– 44 – (a) Bank loans The analysis of the repayment schedule of bank loans is as follows: At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Within 1 year or on demand 3,074,513 2,784,668 After 1 year but within 2 years 729,902 522,016 After 2 years but within 5 years 640,156 691,525 After 5 years 114,550 64,000 1,484,608 1,277,541 Total 4,559,121 4,062,209 At 30 June 2026, the bank loans were secured as follows: At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Unsecured 575,412 1,267,327 Secured 3,983,709 2,794,882 Total 4,559,121 4,062,209
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– 45 – (i) The Group’s bank loans were secured as follows: At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 — Ownership interests in leasehold land held for own use 122,941 312,621 — Construction in progress 201,373 477,354 — Plant and buildings 1,219,300 1,037,440 — Bills receivable (ii) 38,288 108,105 — Restricted cash 20,093 9,600 1,601,995 1,945,120 Apart from the above secured assets, the bank loans of RMB 3,717,449,000 (31 December 2025: RMB 2,507,984,000), was additionally guaranteed by Shenzhen HEC Industrial Development Co., Ltd. (“ Shenzhen HEC Industrial ”), Mr. Zhang Yushuai (the “ ultimate controlling party ”), Mrs. Guo Meilan and the companies owned by the ultimate controlling party of the Group. (ii) As at 30 June 2026, the bank loans of RMB 567,398,000 (31 December 2025: RMB 436,415,000) represented the bills discounted with recourse which were repayable within one year. (b) Obligations arising from sale and leaseback transactions Obligations arising from sale and leaseback transactions were repayable as below: At 30 June 2026 At 31 December 2025 RMB’000 RMB’000 Within 1 year 407,764 430,446 After 1 year but within 2 years 183,654 78,205 After 2 years but within 3 years 107,956 15,237 Total undiscounted obligations arising from sale and leaseback transactions 699,374 523,888 Less: total future interest expenses (35,587) (19,360) Total 663,787 504,528 All obligations arising from sale and leaseback transactions were secured by plant and buildings and machinery, and were guaranteed by Shenzhen HEC Industrial, Mr. Zhang Yushuai, Ms. Guo Meilan and the companies owned by the ultimate controlling party of the Group as of 30 June 2026 and 31 December 2025.
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– 46 – 17 EQUITY-SETTLED SHARE-BASED PAYMENTS The Company adopted a restricted share scheme in June 2023 (the “ 2023 Restricted Share Scheme ”) for the purpose of attracting and retaining the employees. Under the 2023 Restricted Share Scheme, a total of 22,924,768 shares of 22,955,784 restricted shares of the Company may be granted to the selected employees serving in the Group at a subscription price, of RMB 0.7738 per share. The weighted average grant date fair value of restricted shares per share was RMB 57.71. These restricted shares will vest after the 5th anniversary of the grant date, on the condition that the employees remain in service and have fulfilled certain performance requirements. If employees leave the Group before the vesting date or fail to fulfil the performance requirements, the restricted shares will be forfeited. The forfeited shares will be repurchased by a shareholder designated by the Group at the original subscription price and with an additional 3% per annum interest, and if applicable, and could be reallocated in the subsequent grants at the discretion of the Company. As at 30 June 2026, 22,924,768 restricted shares of the Company under the 2023 Restricted Share Scheme were granted to the selected employees serving in the Group. The fair value of restricted shares of Sunshine Lake Pharma at the grant date was determined by using the asset-based valuation method. During the six months ended 30 June 2026, total compensation expenses calculated based on the grant date fair value and the estimated forfeiture rate recognised in the consolidated statement of profit or loss for aforementioned restricted shares granted to the Group’s employees were RMB 129,334,000 (six months ended 30 June 2025: RMB 129,671,000). No restricted shares were forfeited or vested during the six months ended 30 June 2026 and 2025. 18 CAPITAL, RESERVES AND DIVIDENDS (a) Dividends (i) No dividend for the six months ended 30 June 2026 and 2025 were proposed. (ii) No final dividends in respect of the previous financial year approved during the six months ended 30 June 2026 and 2025. (b) Share capital Ordinary shares, issued and fully paid At 30 June 2026 At 31 December 2025 No. of shares RMB’000 No. of shares RMB’000 Ordinary shares, issued and fully paid: As at 30 June/31 December 576,656,047 576,656 576,656,047 576,656
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– 47 – (c) Acquisition of a subsidiary In January 2026, the Company acquired a subsidiary, Hubei Jiuzhou Tong Pharmaceutical Technology Co., Ltd., from a third party with consideration of RMB 15.6 million, which constituted 65% of the net assets of the subsidiary. As at 30 June 2026, all consideration was paid. At the date of acquisition RMB’000 Cash and cash equivalents 17 Property and equipment 23 Deferred tax assets 33 Trade and other receivables 20,073 Trade and other payables (170) Intangible assets 5,365 Deferred tax liabilities (1,341) Total identifiable net assets acquired 24,000 Non-controlling interest 8,400 Cash consideration 15,600 Cash consideration paid in current period (15,600) Less: Cash and cash balances acquired 17 Net cash outflow arising on acquisition of a subsidiary (15,583) (d) Treasury stock During the period ended 30 June 2026, the Company repurchased 201,600 Shares in total (six months ended 30 June 2025: nil), on the Stock Exchange for an aggregate price of approximately HK$8,876,000 (equivalent approximately to RMB 7,941,000) with highest price paid per share of HK$45.04 and lowest price paid per share of HK$41.08.
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– 48 – 19 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (a) Financial assets and liabilities measured at fair value Fair value hierarchy The following table presents the fair value of the Group’s financial instruments measured at the end of the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in IFRS 13, Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows: • Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date • Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available • Level 3 valuations: Fair value measured using significant unobservable inputs The Group has a team headed by the finance manager performing valuations for the financial instruments. The team reports directly to the chief financial officer and the audit committee. A valuation report with analysis of changes in fair value measurement is prepared by the team at each interim and annual reporting date, and is reviewed and approved by the chief financial officer. Discussion of the valuation process and results with the chief financial officer and the audit committee is held twice a year, to coincide with the reporting dates. Fair value at 30 June 2026 Fair value measurements as at 30 June 2026 categorised into Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 RMB’000 Recurring fair value measurement Financial assets measured at FVPL — Investment in a partnership 10,136 – – 10,136
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– 49 – Fair value at 31 December 2025 Fair value measurements as at 31 December 2025 categorised into Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 RMB’000 Recurring fair value measurement Financial assets measured at FVPL — Investment in a partnership 10,000 – – 10,000 — Investment in a private fund 5,827 – – 5,827 During the six months ended 30 June 2026 and 2025, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur. (b) Fair values of financial assets and liabilities carried at other than fair value The carrying amounts of the Group’s financial instruments carried at cost or amortised cost were not materially different from their fair values as at 30 June 2026. 20 ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027. The Group has not early adopted the new accounting standard in preparing these interim financial statements; however, earlier application is permitted. IFRS 18 requires a more structured statement of profit or loss and greater disaggregation of information. The Group is in the process of assessing the estimated impact that the initial application of IFRS 18 will have on its consolidated financial statements. The expected impacts in the period of initial application are described below. The actual impacts of adopting the accounting standard on 1 January 2027 may change because the Group has not finalised the assessment and implementation of changes to processes and controls; and the new accounting policies are subject to change until the Group presents its first consolidated financial statements that include the date of initial application.
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– 50 – (a) Structure of the statement of profit or loss IFRS 18 requires entities to classify all income and expenses into five categories in the statement of profit or loss — namely operating, investing, financing, income tax and discontinued operations Classification of income and expenses depends on the main business activities of an entity. The Group has determined that it does not have a specified main business activity of investing in assets and/or providing financing to customers. Neither net profit nor net assets will change as a result of the Group’s adoption of IFRS 18. However, the Group will be required to present two newly defined subtotals, which are ‘operating profit’ and ‘profit or loss before financing and income taxes’. The operating profit subtotal differs from the current operating profit subtotal presented by the Group. Based on the information currently available, the Group expects significant changes to the current structure of the statement of profit or loss to result from the following. • Share of profit (loss) of equity-accounted investees is currently presented below net finance costs and above profit before tax. Income and expenses from equity-accounted investments are always classified in the investing category under IFRS 18. Accordingly, the Group’s share of profit of equity-accounted investees will be classified and presented in the investing category. • Interest income and expenses are generally included in finance income and finance costs under the Group’s current accounting policy and are presented in the ‘net finance costs’ subtotal. IFRS 18 provides specific guidance on the income and expenses classified in the investing and financing categories. — Interest income on certain financial assets held by the Group (e.g. interest income on corporate debt securities and on cash and cash equivalents) will be classified and presented in the investing category. — Interest expense on certain liabilities will continue to be classified and presented in the financing category (e.g. interest expense on financial liabilities not measured at FVTPL and unwind of discount on site restoration provision).
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– 51 – • Net foreign exchange losses are currently included in finance costs and presented in net finance costs. Under IFRS 18, foreign exchange differences are required to be presented in the same category as the income and expenses from the items that gave rise to the differences. The Group has determined that it has foreign exchange differences to be classified in the operating, investing and financing categories. For example, foreign exchange differences on trade payables will be classified in the operating category. Gains and losses on certain designated cash flow hedging instruments are currently included in finance costs and presented in net finance costs. Under IFRS 18, gains and losses on designated hedging instruments are required to be classified in the same category as the income and expenses affected by the hedged risks. The Group has determined that gains or losses on these hedging instruments will be classified in the operating and financing categories. Under IFRS 18, operating expenses are classified and presented by nature, function or using a mixed presentation. The Group has determined that classification and presentation on a mixed basis will provide the most useful structured summary of operating expenses. (b) Principles of aggregation and disaggregation IFRS 18 provides enhanced principles on how to group information in the financial statements (i.e. the primary financial statements and the notes). It also introduces guidance on labelling and describing items presented in the primary financial statements or disclosed in the notes. The Group is assessing the grouping of items on the basis of similar and dissimilar characteristics. Based on this assessment, it will present line items in the primary financial statements that provide useful structured summaries and disclose additional material information in the notes. The Group is also assessing line items currently labelled as ‘other’ and will use more informative labels. (c) Consequential amendments IFRS 18 introduces consequential amendments to IAS 7, which require entities to use the newly defined operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method. The Group currently uses ‘profit or loss’ as the starting point of the reconciliation to cash flows from operating activities. Certain adjusting items included in the reconciliation will change as a result of the new starting point. For example, the Group’s share of profit (loss) of equity-accounted investees will no longer be an adjusting item, as this amount will not be included in the operating profit starting point. Cash distributions from these investees will be included in cash flows from investing activities. The consequential amendments also provide specific guidance on the classification of interest and dividend cash flows. The Group will classify cash flows from interest paid as financing activities rather than operating activities under this guidance. Cash flows from interest and dividends received and from dividends paid will continue to be classified as investing activities and financing activities, respectively.
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– 52 – VI. OPERATION RESULTS AND ANALYSIS 1. Revenue For the six months ended 30 June 2026 (the “ Reporting Period ”), the Group’s revenue was RMB 1,075.31 million, representing a decrease of 44.50% as compared to the revenue of RMB 1,937.67 million for the six months ended 30 June 2025 (the “ Corresponding Period Last Year ”), which was primarily attributable to the easing of the influenza epidemic in the first half of 2026, which resulted in a significant year-on-year decrease in the sales volume of Kewei, the Group’s core product and a primary drug for influenza treatment. The Group adopts a diversified market strategy to continuously enhance the competitiveness and commercial value of its core products through sustained academic promotion activities and optimized channel development. By increasing investments in advertising, marketing campaigns, and patient education programs, we continued to elevate brand awareness of our key products. By strengthening strategic collaborations with globally renowned enterprises, we accelerated the development and commercialization of innovative drugs and biologics in international markets. 2. Cost of Sales The Group’s cost of sales consists of (1) cost of raw materials, primarily including cost of raw materials, ancillary materials and packaging materials; (2) labour cost, primarily including salaries and benefits of our staff directly involved in manufacturing of our products; (3) manufacturing cost, primarily including depreciation of machinery, equipment and plant and cost of labour protection materials, fuel, machine oil and maintenance; and (4) patent fee paid to third parties in relation to patents and licences. For the Reporting Period, the cost of sales of the Group amounted to RMB 497.14 million, representing an increase of RMB 27.08 million as compared to RMB 470.06 million for the Corresponding Period Last Year, primarily due to adjustments to the Company’s product portfolios during the Reporting Period. During the Reporting Period, sales volume of Kewei, the Company’s core product, decreased year-on-year. However, as the Company actively promoted a diversified product portfolio, leading to the sales volume of other products which carried relatively higher costs of sales to increase year-on-year, resulting in the overall cost of sales to increase year-on-year.
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– 53 – 3. Gross Profit For the Reporting Period, gross profit of the Group was RMB 578.17 million, representing a decrease of 60.60% as compared to RMB 1,467.61 million for the Corresponding Period Last Year, which was mainly due to the decrease in the sales volume of Oseltamivir products during the Reporting Period. 4. Other Loss/income Other (loss)/income of the Group mainly included (1) interest income; (2) government subsidies; (3) net foreign exchange; (4) net profit or loss of disposal of fixed assets; and (5) impairment losses on intangible assets. For the Reporting Period, other loss of the Group amounted to RMB 13.82 million, representing a decrease of RMB 48.65 million as compared to other income of RMB 34.83 million for the Corresponding Period, which was mainly due to an increase in asset impairment losses of certain products. 5. Expenses Analysis For the Reporting Period, the Group’s expenses amounted to RMB 1,132.19 million in total, representing a decrease of RMB 274.65 million as compared to RMB 1,406.84 million for the Corresponding Period Last Year. The main components of the Group’s expenses are as follows: For the six months ended 30 June Change as compared with the Corresponding Period Last Year2026 2025 RMB’000 RMB’000 (%) Distribution costs 491,433 715,622 -31.33% Administrative expenses 302,826 309,060 -2.02% Research and development cost 279,876 348,216 -19.63% Reversal of impairment losses on trade and other receivables (47,222) (80,350) -41.23% Finance costs 105,273 114,291 -7.89% Total 1,132,186 1,406,839 -19.52% Distribution costs mainly consist of (1) marketing expenses relating to conducting academic promotion activities and other marketing activities; (2) travelling expenses for marketing purposes; (3) labour cost; and (4) other expenses. The decrease in distribution costs was mainly due to the decrease in the sales volume of Oseltamivir products during the Reporting Period by the Group.
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– 54 – Administrative expenses mainly consist of (1) salary and welfare benefits for the management and administrative personnel; (2) depreciation and amortisation costs relating to our office facilities and land use rights; and (3) taxes and surcharges and other miscellaneous expenses. For the Reporting Period, the Group’s investment in the research and development cost amounted to RMB 279.88 million in total and a decrease of 19.63% as compared to the Corresponding Period Last Year, which was mainly because certain drugs of the Group have entered the late stage of Phase II clinical trials or have entered Phase III clinical trials and commenced capitalization. Meanwhile, as new projects are still in the early stage of commencement, expenses during the Reporting Period remained relatively low. Finance costs mainly include interests on bank loans. 6. Loss/profit Before Taxation For the Reporting Period, the Group’s loss before taxation amounted to RMB 568.87 million in total, representing a decrease of RMB 664.52 million as compared to the profit before taxation of RMB 95.65 million for the Corresponding Period Last Year, which was mainly because sales of the Group’s core product Kewei recorded a year-on-year decrease during the Reporting Period. 7. Loss/profit for the Period For the Reporting Period, the Group recorded a loss of RMB 604.00 million, representing a decrease of RMB 618.65 million as compared to the profit of RMB 14.65 million for the Corresponding Period Last Year, which was mainly because sales of the Group’s core product Kewei recorded a year- on-year decrease during the Reporting Period. 8. Loss/profit and Total Comprehensive Income Attributable to Equity Shareholders of the Company For the Reporting Period, loss and total comprehensive income attributable to equity shareholders of the Company was RMB 596.42 million, representing the loss increased by RMB 542.15 million as compared to loss and total comprehensive income attributable to equity shareholders of the Company of RMB 54.27 million for the Corresponding Period Last Year, which was mainly because sales of the Group’s Oseltamivir products recorded a year-on-year decrease during the Reporting Period.
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– 55 – VII. FINANCIAL POSITION 1. Overview As of 30 June 2026, the Group’s total assets amounted to RMB 11,672.19 million, with total liabilities of RMB 7,801.11 million and shareholders’ equity of RMB 3,871.08 million. For the six months ended 30 June 2026, the Group’s capital is mainly derived from product sales and is used in production workshop construction, distribution and administrative management etc. The management has clear goals and records in budget, financial and operating performance, and actively monitors them and regularly evaluates internal control measures. 2. Net Current Assets The following table sets forth our current assets, current liabilities and net current assets for the dates indicated. As at 30 June 2026 As at 31 December 2025 RMB’000 RMB’000 Current assets Inventories 893,387 783,491 Trade and other receivables 1,494,135 1,892,400 Prepayments 461,026 446,651 Financial assets measured at FVPL 10,136 15,827 Restricted cash 75,617 25,504 Cash and cash equivalents 1,479,038 1,486,796 Total current assets 4,413,339 4,650,669 Current liabilities Trade and other payables 2,124,663 2,596,774 Contract liabilities 162,366 152,216 Bank loans and other borrowings 3,459,296 3,197,746 Lease liabilities 44,995 47,174 Current taxation 2,587 43,940 Total current liabilities 5,793,907 6,037,850 Net current (liabilities)/assets (1,380,568) (1,387,181)
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– 56 – As at 30 June 2026, the Group recorded the total current assets of RMB 4,413.34 million, as compared to the total current assets of RMB 4,650.67 million as at 31 December 2025. As at 30 June 2026, the net current liabilities of the Group decreased by RMB 6.61 million as compared to the net current liabilities of the Group as at 31 December 2025 due to the combined effect of the decrease in current assets by RMB 237.33 million mainly resulting from the decrease in sales volume of the Company’s Oseltamivir products during the Reporting Period, and the decrease in total current liabilities by RMB 243.94 million. 3. Gearing Ratio and Quick Ratio Gearing ratio represents the total interest-bearing loans as at a record date divided by total equity as at the same record date. Quick ratio represents current assets (excluding inventories) as at a record date divided by current liabilities as at the same record date. The Group’s gearing ratio increased from 105% as at 31 December 2025 to 135% as at 30 June 2026 and quick ratio decreased from 0.64 times as at 31 December 2025 to 0.61 times as at 30 June 2026. 4. Bank Loans and Other Borrowings As at 30 June 2026, the Group’s balance of its bank loans and other borrowings amounted to RMB 5,222.91 million, which included bank loans of RMB 4,559.12 million and obligations arising from sale and leaseback transactions of RMB 663.79 million, representing an increase of RMB 656.17 million as compared to RMB 4,566.74 million as at 31 December 2025. The Group’s bank loans were denominated in RMB for the six months ended 30 June 2026. 5. Capital Structure As at 30 June 2026, the Group’s total equity attributable to equity shareholders of the Company amounted to RMB 3,863.52 million, representing a decrease of RMB 481.02 million as compared to RMB 4,344.54 million as at 31 December 2025.
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– 57 – 6. Capital Expenditure In order to meet the production demand for our products, the Group constructed plants and buildings, machines and equipment and acquired relevant interests of drugs in progress for the six months ended 30 June 2026 with an aggregate capital expenditure of RMB 108.48 million, representing a decrease of RMB 665.10 million as compared to RMB 773.58 million for the Corresponding Period Last Year. 7. Contingent Liabilities For the six months ended 30 June 2026, The Group had no significant contingent liabilities, litigation or arbitration of material importance. 8. Pledge of Assets For the six months ended 30 June 2026, the Group’s land use rights amounting to RMB 122.94 million, construction in progress amounting to RMB 201.37 million, fixed assets amounting to RMB 1,219.30 million, bills receivable amounting to RMB 38.29 million and restricted cash amounting to RMB 20.09 million were pledged to banks for bank loans and other borrowings and issuing bills payables. 9. Foreign Exchange and Exchange Rate Risk The Group’s business mainly operates in the PRC. Almost all of the income and expenditure of the Group were denominated in RMB. Other than certain bank loans and bank deposits denominated in foreign currencies, the Group does not have any other material direct exposure to foreign exchange fluctuations.
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– 58 – 10. Employee and Remuneration Policies As at 30 June 2026, the Group has a total of 6,299 employees. The staff costs, including directors’ emoluments but excluding any contributions to pension scheme, were approximately RMB 543.30 million for the Reporting Period. The objective of the Group’s remuneration policy is to motivate and retain talented employees to achieve the Group’s long-term corporate goals and objectives. The Group’s employee remuneration policy is determined by taking into account factors such as the overall remuneration standard in the industry and employee’s performance. The management reviews the Group’s employee remuneration policy and arrangements on a regular basis. Moreover, social insurance contributions are made by the Group for its PRC employees in accordance with the relevant PRC regulations. 11. Hedging Activities For the six months ended 30 June 2026, the Group did not enter into any hedging transactions relating to foreign exchange risk or interest rate risk. 12. Significant Investments Held, and Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures For the six months ended 30 June 2026, the Group did not hold any significant investments representing 5% or more of the Group’s total assets, nor were there any significant acquisitions or disposals of subsidiaries, associates, or joint ventures. 13. Future Plans for Material Investment or Capital Assets As of the date of this announcement, the Group does not have any future plan for material investment or acquisition of material capital assets. VIII. OUR FUTURE STRATEGIC PLANS We are committed to becoming a vertically integrated world-class pharmaceutical company under the dual driving forces of innovation and internationalization, supported by our excellent commercialization capabilities. By adhering to the corporate mission of “scientific innovation of new drugs for high-quality of healthy life”, and focusing on research and development, production and commercialization of innovative drugs, modified new drugs, generic drugs and biosimilars, we are dedicated to developing products with breakthrough potential in both domestic and overseas markets. We will further to achieve structural optimization and business integration and enhance our market competitiveness, which will in turn maximize returns for the shareholders of the Company (“ Shareholders ”).
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– 59 – Clarify the direction of future development and enhance the ability to give back to Shareholders We will have a clear development direction to become a comprehensive pharmaceutical enterprise integrating research, production and sales. We will continuously improve the Group’s competitiveness to enhance its ability to give back to the Shareholders. Increase capital efficiency and expedite product innovation, continuously upgrading product technology to enhance market dominance We plan to invest our strong operating cash flow into our research and development activities, thus significantly improving the efficiency of our use of funds and providing sufficient support to our research and development pipeline. With ample funds available, we will continue to invest in the enhancement of our own research and development platform to provide patients with better healthcare solutions and high-quality and affordable pharmaceutical products, with a focus on drugs for fields of indications with huge market potential. Such strong research and development capabilities will also continue to enrich our range of long-term commercialized products in the future, allowing us to build a strong foundation for sustainable business growth and long-term value creation. Streamline decision-making processes and improve operational efficiency We will streamline the decision-making process and improve the efficiency of business decision-making. We promptly respond to market changes and various challenges, and flexibly adapt our various drug sales channels to facilitate the dual globalized development of market and technology. At the same time, we will accelerate the integration of the middle and back-end architecture and promote an intelligent middle and back-end system that integrates the entire process, including finance, R&D, sales, procurement, inventory, administrative office systems and digital infrastructure. In addition, we will optimize and adjust the previous related- party transaction arrangements to improve decision-making and capital allocation efficiency and reduce governance costs. Establish presence in the global capital market and enhance our corporate image As a listed company tapping into the international capital market, we can further enhance our business agility through flexible financing. With a view to becoming a leading listed pharmaceutical company, the Group will continuously enhance our image and market presence among our customers, suppliers and other business partners. At the same time, leveraging our newly gained listing status, we can take advantage of our new status as a listed company to widely attract talents through potential and diverse equity incentive schemes, which in turn will also benefit all the Shareholders.
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– 60 – Enhance our renowned brand image and establish an efficient distribution network We will continue to promote the presence of our brand in the market. Leveraging the leading market position and brand awareness of our core product Kewei and our rich product pipelines, we will be able to constantly enhance our brand image as a leading vertically integrated pharmaceutical company that integrates drug research and development, production and commercialization. At the same time, we will continue to foster our brand image as a PRC pharmaceutical company in the overseas market and boost our international reputation through cooperation with overseas partners. To facilitate the commercial development of our product pipelines, we will continue our efforts to develop a more transparent and efficient international distribution network, strengthen the digitalization of our marketing network and data analysis capabilities, enhance the efficiency of our sales process, and optimize our branding and marketing strategies. Optimizing the overall production system and improving systematic operational efficiency We will focus on improving all aspects of the production system, accelerating the integration of production facilities and capacity planning in various regions, strengthening production automation and information construction, coordinating supply chain resources and improving procurement and logistics plans, further optimizing the cost structure and product quality of the product pipeline portfolio, reducing costs, and helping us provide high-quality drugs to customers, thereby improving our systematic production and operation efficiency. PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY During the Reporting Period, the Company repurchased 201,600 H shares of the Company (“ Shares ”) for a total consideration of HK$8,875,582 (before deduction of various expenses) and held as treasury Shares, details of which are set out below: Month of Repurchase Number of Shares Repurchased Highest Price Paid Lowest Price Paid Total Consideration Paid (HK$) (HK$) (HK$) January 2026 147,800 45.04 42.38 6,518,174 April 2026 53,800 44.66 41.08 2,357,408 Total 201,600 8,875,582 As at 30 June 2026, the Company held 677,600 H treasury Shares.
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– 61 – The above H Share repurchases were carried out by the directors (“ Directors ”) of the Company pursuant to the mandate approved by Shareholders at the extraordinary general meeting held on 16 December 2025 and the annual general meeting held on 18 June 2026, with a view to demonstrating the confidence of the board (“Board ”) of directors and management team in the long-term business prospects and development of the Company. The board of directors considers that the proposed repurchases are in the best interests of the Company and the Shareholders as a whole. The Company intends to use such treasury shares for use in employee incentive programs, sale, or transfer to raise liquidity, among other purposes (subject to the actual decision of the Board). Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities (including treasury Shares) during the six months ended 30 June 2026. INTERIM DIVIDEND The Board resolved not to declare the payment of an interim dividend for the six months ended 30 June 2026 (six months ended 30 June 2025: nil). SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD Save as disclosed in this announcement, from 30 June 2026 and up to the date of this announcement, there were no significant events of the Group. COMPLIANCE WITH CORPORATE GOVERNANCE CODE As a company listed on the Stock Exchange, the Company always strives to maintain a high level of corporate governance and complied with all the applicable code provisions as set out in the Corporate Governance Code contained in Appendix C1 to the Listing Rules during the Reporting Period. COMPLIANCE WITH MODEL CODE FOR SECURITIES TRANSACTIONS The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) set out in Appendix C3 of the Listing Rules as the code of conduct regarding securities transactions of the Company by the Directors. The Company had made specific enquiries to all of the Directors, all Directors confirmed that each of them has complied with the Model Code during the Reporting Period. The Group’s employees, who are likely to be in possession of inside information of the Group, are subject to the Model Code. During the Reporting Period and up to the date of this announcement, the Company was not aware of any non-compliance with the Model Code by the relevant employees.
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– 62 – REVIEW OF RESULTS The audit committee of the Company has reviewed the Company’s 2026 interim results announcement, 2026 interim report and the Group’s unaudited financial statements for the six months ended 30 June 2026 prepared in accordance with the International Financial Reporting Standards (IFRS) Accounting Standards. PUBLICATION OF INTERIM RESULTS AND INTERIM REPORT This interim results announcement is published on the HKEXnews website of the Stock Exchange at www.hkexnews.hk and on the website of the Company at www.hecpharm.com . The Company’s 2026 interim report containing all the information required by the Listing Rules will be published on the websites of the Company and the Stock Exchange in due course. By order of the Board of Sunshine Lake Pharma Co., Ltd. Dr. ZHANG Yingjun Chairman Dongguan, the PRC 31 August 2026 As at the date of this announcement, the executive Directors are Dr. ZHANG Yingjun, Mr. JIANG Juncai and Mr. ZHANG Zhiyong (employee Director), the non-executive Directors are Mr. ZHANG Yushuai, Mr. TANG Xinfa, Mr. ZHU Yingwei and Dr. LI Wenjia, and the independent non-executive Directors are Dr. LI Xintian, Dr. MA Dawei, Dr. LIN Aimei and Dr. YE Tao. * For identification purpose only