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Stock Code : 2659
(A joint stock company established in the People’s Republic of China with limited liability)
GLOBAL
OFFERING
上海寶濟藥業股份有限公司
Shanghai Bao Pharmaceuticals Co., Ltd.
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
Shanghai Bao Pharmaceuticals Co., Ltd.
ʮ̡
(A joint stock company established in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the Global
Offering
: 37,911,700 H Shares
Number of Hong Kong Offer Shares : 3,791,200 H Shares (subject to reallocation)
Number of International Offer Shares : 34,120,500 H Shares (subject to reallocation)
Offer Price : HK$26.38 per H Share, plus brokerage of
1.0%, AFRC transaction levy of 0.00015%,
SFC transaction levy of 0.0027% and Stock
Exchange trading fee of 0.00565% (payable
in full on application in Hong Kong dollars
and subject to refund)
Nominal value : RMB0.20 per H Share
Stock code : 2659
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Lead Managers
(in alphabetical order)
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this
prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arisin g from or in reliance upon the whole or any part
of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies in Hong Kong and Avai lable on Display” in Appendix VIII, has
been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordi nance (Chapter 32 of the Laws of Hong
Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus o r any other documents referred to above.
The Offer Price will be HK$26.38 per Offer Share. The Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares
being offered under the Global Offering and/or the Offer Price below that stated in this prospectus at any time on or prior to the morning of the last day f or lodging applications under
the Hong Kong Public Offering. In such case, an announcement will be published on the websites of the Stock Exchange at www.hkexnews.hk and the Company at www.baopharma.com
and the offer will be canceled and relaunched at the revised number of Offer Shares and/or the revised Offer Price and the requirements under Rule 11.13 of the Listing Rules (which include
the issue of a supplemental or a new prospectus (as appropriate)), as soon as practicable following the decision to make such reduction, and in any even t not later than the morning of
the day which is the last day for lodging applications under the Hong Kong Public Offering. Further details are set forth in the sections headed “Struct ure of the Global Offering” and
“How to Apply for Hong Kong Offer Shares” in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. See “Underwriting — Underwriting Arrangements and Expenses — Hong K ong Public Offering — Grounds for
Termination” for further details.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in the section headed “Risk
Factors”.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold, pledged or transferred within
the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S), except in transactions exempt from, or not subject to , the registration requirements of the U.S.
Securities Act. The Offer Shares may be offered, sold or delivered outside the United States to non-U.S. persons in offshore transactions in accordan ce with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic in relation to the Hong Kong Public
Offering. This prospectus is available on the websites of the Stock Exchange ( www.hkexnews.hk ) and our Company ( www.baopharma.com ). If you require a printed copy of this prospectus,
you may download and print from the website addresses above.
IMPORTANT
December 2, 2025


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide any printed copies of this prospectus to the
public in relation to the Hong Kong Public Offering.
This prospectus is available on the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing
Information ” section, and the website of our Company at www.baopharma.com. If
you require a printed copy of this prospectus, you may download and print from the
website addresses above.
To apply for Hong Kong Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO service /H1118 www.eipo.com.hk Applicant who would like to
receive a physical H
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and
issued in your own name.
From 9:00 a.m. on Tuesday,
December 2, 2025 to
11:30 a.m. on Friday,
December 5, 2025. The
latest time for completing
full payment of
application monies will
be 12:00 noon on Friday,
December 5, 2025.
HKSCC EIPO channel /H1118/H1118/H1118Y our broker or custodian
who is a HKSCC
Participant will submit
electronic application
instructions on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction.
Applicant who would not
like to receive a physical
H Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and
issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to
your designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the earliest
and latest time for giving
such instructions, as this
may vary by broker or
custodian .
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
If you are an intermediary , broker or agent , please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website
addresses above.
Please refer to “How to Apply for Hong Kong Offer Shares” in this prospectus for
further details of the procedures through which you can apply for the Hong Kong Offer
Shares electronically.
IMPORTANT
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Y our application through the White Form eIPO service or the HKSCC EIPO service
must be for a minimum of 100 Hong Kong Offer Shares and in one of the numbers set out in
the table below. If you are applying through the White Form eIPO service, you may refer to
the table below for the amount payable for the number of Shares you have selected. Y ou must
pay the respective maximum amount payable on application in full upon application for Hong
Kong Offer Shares. If you are applying through the HKSCC EIPO channel, you are required
to prefund your application based on the amount specified by your broker or custodian, as
determined based on the applicable laws and regulations in Hong Kong.
Shanghai Bao Pharmaceuticals Co., Ltd.
(HK$26.38 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES
THAT MAY BE APPLIED FOR AND PAYMENTS
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
100 2,664.60 2,000 53,292.08 10,000 266,460.42 300,000 7,993,812.69
200 5,329.21 2,500 66,615.11 20,000 532,920.85 400,000 10,658,416.92
300 7,993.81 3,000 79,938.13 30,000 799,381.27 500,000 13,323,021.16
400 10,658.42 3,500 93,261.15 40,000 1,065,841.69 600,000 15,987,625.38
500 13,323.03 4,000 106,584.17 50,000 1,332,302.11 700,000 18,652,229.61
600 15,987.62 4,500 119,907.20 60,000 1,598,762.54 800,000 21,316,833.85
700 18,652.23 5,000 133,230.21 70,000 1,865,222.96 900,000 23,981,438.06
800 21,316.83 6,000 159,876.25 80,000 2,131,683.39 1,000,000 26,646,042.30
900 23,981.44 7,000 186,522.30 90,000 2,398,143.80 1,250,000 33,307,552.88
1,000 26,646.04 8,000 213,168.34 100,000 2,664,604.24 1,500,000 39,969,063.46
1,500 39,969.07 9,000 239,814.38 200,000 5,329,208.45 1,895,600
(1) 50,510,237.78
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
No application for any other number of the Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable of the Hong Kong Public
Offering, our Company will issue an announcement to be published on the website of the
Stock Exchange at www.hkexnews.hk and the website of our Company at
www.baopharma.com .
Date (1)
Hong Kong Public Offering commences ............................. .9:00 a.m. on
Tuesday, December 2, 2025
Latest time to complete electronic applications under
White Form eIPO service through the designated
website at www.eipo.com.hk (2) .................................. 1 1:30 a.m. on
Friday, December 5, 2025
Application lists of the Hong Kong Public Offering open (3) .............. 1 1:45 a.m. on
Friday, December 5, 2025
Latest time to (a) complete payment of
White Form eIPO applications by effecting internet
banking transfer(s) or PPS payment transfer(s) and
(b) give electronic application instructions to
HKSCC
(4) ................................................. .12:00 noon on
Friday, December 5, 2025
If you are instructing your broker or custodian who is a HKSCC Participant will submit
electronic application instructions on your behalf through HKSCC’s FINI system in
accordance with your instruction, you are advised to contact your broker or custodian for the
earliest and latest time for giving such instructions, as this may vary by broker or custodian .
Application lists of the Hong Kong Public Offering close
(3) ............. .12:00 noon on
Friday, December 5, 2025
Announcement of the results of
applications in the Hong Kong Public Offering, the level
of indications of interest in the International Offering and
the basis of allocation of the Hong Kong Offer Shares under
the Hong Kong Public Offering to be published on the
website of the Stock Exchange at www.hkexnews.hk and
the website of our Company at www.baopharma.com (5) ....... n o later than 11:00 p.m.
on Tuesday, December 9, 2025
EXPECTED TIMETABLE (1)
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Results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
(1) A full announcement of the Hong Kong
Public Offering to be published on the website of the
Stock Exchange at www.hkexnews.hk and the
website of our Company at www.baopharma.com (5) ........ n o later than 11:00 p.m.
on Tuesday, December 9, 2025
(2) Results of allocations in the Hong Kong
Public Offering will be available
at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function on a
24-hour basis from .......................................... 1 1:00 p.m. on
Tuesday, December 9, 2025 to 12:00
midnight on Monday, December 15, 2025
(3) Allocation results telephone enquiry by
calling +852 2862 8555 .................................. .between 9:00 a.m.
and 6:00 p.m. on
Wednesday, December 10, 2025
to Monday, December 15, 2025
(excluding Saturday, Sunday and
public holidays in Hong Kong)
Despatch of H Share certificates in respect of
wholly or partially successful applications, or deposit
of H Share certificate into CCASS pursuant to
Hong Kong Public Offering, on or before
(6)(8) ............ T uesday, December 9, 2025
Dispatch/collection of refund cheques and White Form
e-Refund payment instructions in respect of (i) wholly or
partially successful applications (if applicable) and
(ii) wholly or partially unsuccessful applications pursuant
to the Hong Kong Public Offering on or before
(7)(8) .... W ednesday, December 10, 2025
Dealings in H Shares on the Stock Exchange
expected to commence at 9:00 a.m. on ..............W ednesday, December 10, 2025
EXPECTED TIMETABLE (1)
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Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
(2) Y ou will not be permitted to submit your application to the White Form eIPO Service Provider through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you
have already submitted your application and obtained an application reference number from the designated
website on or before 11:30 a.m., you will be permitted to continue the application process (by completing
payment of application monies) until 12:00 noon on the last day for submitting applications, when the
application lists close.
(3) If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme
Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, December 5, 2025,
the application lists will not open or close on that day. See “How to Apply for Hong Kong Offer Shares — E.
Severe Weather Arrangements” in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by instructing your broker or custodian to give electronic
application instructions to HKSCC on your behalf via HKSCC EIPO channel should see “How to Apply for
Hong Kong Offer Shares — A. Application for Hong Kong Offer Shares — 2. Application Channels” in this
prospectus.
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) H Share certificates for the Offer Shares will become valid evidence of title at 8:00 a.m. on Wednesday,
December 10, 2025 provided that (i) the Global Offering has become unconditional in all respects and (ii) none
of the Underwriting Agreements have been terminated in accordance with its terms.
(7) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong
identity card number or passport number, or, if the application is made by joint applicants, part of the Hong
Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may
be printed on the refund cheque, if any. Such data would also be transferred to a third party for refund purposes.
Banks may require verification of an applicant’s Hong Kong identity card number or passport number before
encashment of the refund cheque. Inaccurate completion of an applicant’s Hong Kong identity card number or
passport number may invalidate or delay encashment of the refund cheque.
(8) Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of Share Certificates
and Refund of Application Monies” in this prospectus for details.
For applicants who apply through the White Form eIPO service and paid the application monies from a single
bank account, White Form e-Refund payment instructions (if any) may be dispatched to their application
payment bank account. For applicants who apply through the White Form eIPO service and used multi-bank
accounts to pay the application monies, refund cheque (if any) will be dispatched to the address specified in
their electronic application instruction to the White Form eIPO Service Provider at their own risk.
Any uncollected H Share certificates and/or refund cheques will be dispatched by ordinary post, at the
applicants’ risk, to the addresses specified in the relevant applications.
Further information is set out in the sections headed “How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of Share Certificates and Refund of Application Monies” in this prospectus.
The above expected timetable is a summary only. See the sections headed “Structure of
the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this prospectus for
details of the structure and conditions of the Global Offering, as well as the application
procedures for Hong Kong Public Offering.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong
Public Offering and the Hong Kong Offer Shares and does not constitute an offer to sell
or a solicitation of an offer to buy any security other than the Hong Kong Offer Shares
offered by this prospectus pursuant to the Hong Kong Public Offering. This prospectus
may not be used for the purpose of making, and does not constitute, an offer or invitation
in any other jurisdiction or in any other circumstances. No action has been taken to
permit a public offering of the Hong Kong Offer Shares in any jurisdiction other than
Hong Kong and no action has been taken to permit the publication of this prospectus in
any jurisdiction other than Hong Kong. The distribution of this prospectus for purposes
of a public offering and the offering and sale of the Hong Kong Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this prospectus. Any information or representation not contained nor made
in this prospectus must not be relied on by you as having been authorized by the
Company, the Joint sponsors, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, any of the Underwriters and the Capital
Market Intermediaries, any of our or their respective directors, officers, employees,
agents, or representatives of any of them or any other parties involved in the Global
Offering. Information contained on our website ( www.baopharma.com ) does not form
part of this prospectus.
Page
Expected Timetable ................................................. i v
Contents .......................................................... v i i
Summary ......................................................... 1
Definitions ........................................................ 3 6
Glossary of Technical Terms .......................................... 5 0
Forward-looking Statements .......................................... 6 3
Risk Factors ....................................................... 6 5
Waivers from Strict Compliance with the Listing Rules and Exemption from
Strict Compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance ............................................. 1 4 0
CONTENTS
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Information about this Prospectus and the Global Offering ................. 1 5 0
Directors, Supervisors and Parties Involved in the Global Offering ........... 1 5 7
Corporate Information .............................................. 1 6 8
Industry Overview .................................................. 1 7 0
Regulatory Overview ................................................ 2 0 9
History, Development and Corporate Structure ........................... 2 3 1
Business .......................................................... 2 7 3
Connected Transaction .............................................. 4 0 2
Relationship with the Controlling Shareholders ........................... 4 0 4
Financial Information ............................................... 4 0 8
Share Capital ...................................................... 4 6 0
Substantial Shareholders ............................................. 4 6 4
Directors, Supervisors and Senior Management ........................... 4 6 9
Cornerstone Investors ............................................... 4 9 2
Future Plans and Use of Proceeds ...................................... 4 9 9
Underwriting ...................................................... 5 0 4
Structure of the Global Offering ....................................... 5 1 7
How to Apply for Hong Kong Offer Shares .............................. 5 2 6
Appendix I – Accountants’ Report ............................... I - 1
Appendix II – Unaudited Pro Forma Financial Information ............ II-1
Appendix III – Valuation Report .................................. III-1
Appendix IV – Taxation and Foreign Exchange ...................... I V - 1
Appendix V – Summary of Principal Legal and Regulatory Provisions ... V - 1
Appendix VI – Summary of Articles of Association ................... VI-1
Appendix VII – Statutory and General Information ................... VII-1
Appendix VIII – Documents Delivered to the Registrar of Companies in
Hong Kong and Available on Display ................ VIII-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read the whole document before you decide to invest in the
Hong Kong Offer Shares. There are risks associated with any investment. Some of the
particular risks in investing in the Hong Kong Offer Shares are set out in the section
headed “Risk Factors” in this prospectus. You should read that section carefully before
you decide to invest in the Hong Kong Offer Shares. In particular, we are a
biopharmaceutical company seeking a listing on the Main Board of the Stock
Exchange under Chapter 18A of the Listing Rules on the basis that we are unable to
meet the requirements under Rule 8.05(1), (2) or (3) of the Listing Rules. There are
unique challenges, risks and uncertainties associated with investing in companies such as
ours. In addition, the Core Products (KJ017, KJ103 and SJ02) are the products for the
purpose of satisfying the eligibility requirements under Chapter 18A of the Listing Rules
and Chapter 2.3 of the Guide for the New Listing Applicants, and we may continue to
incur substantial costs and expenses in relation to R&D activities for the Core Products,
and the Core Products may not be successfully developed or marketed. Your investment
decision should be made in light of these considerations.
OVERVIEW
Founded in 2019, we are a biotechnology company strategically focused on four areas: (i)
large-volume subcutaneous (SC) drug delivery; (ii) antibody-mediated autoimmune conditions;
(iii) assisted reproduction; and (iv) recombinant biologic products. Our pipeline primarily
consists of 12 self-developed product candidates, comprising three Core Products (KJ017,
KJ103 and SJ02 (Slonva
® (۹®)), four other clinical-stage candidates (BJ007, KJ015,
SJ04, and KJ101), and five preclinical assets (BJ008, BJ009, BJ045, BJ047, and BJ044). Our
Core Products comprise: (i) SJ02 (Slonva
® (۹®)), a long-acting recombinant human
follicle-stimulating hormone carboxyl-terminal peptide fusion protein (FSH-CTP) for assisted
reproduction, intended for controlled ovarian stimulation, stimulation of multiple follicular
development, and promotion of ovulation, received NDA approval from the NMPA in August
2025; (ii) KJ017, a recombinant human hyaluronidase at NDA stage intended for large-volume
SC delivery (as combination therapy), treatment of body fluid loss due to various causes (as
monotherapy), and facilitation of SC fluid administration (as combination therapy); and (iii)
KJ103, an innovative recombinant immunoglobulin G (IgG)-degrading enzyme in Phase III
development, intended for desensitization before kidney transplantation and pathological
IgG-mediated autoimmune diseases. There is no assurance that we will ultimately be able
to develop and market our Core Products successfully.
SUMMARY
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According to Frost & Sullivan, by 2033, our four strategic therapeutic areas are expected
to have a combined clinically addressable market size of approximately RMB50 billion in
China, comprising: (i) large-volume SC drug delivery, which includes approximately RMB7.0
billion for recombinant hyaluronidase; (ii) antibody-mediated autoimmune conditions, driven
by the RMB26.7 billion market for IgG-related autoimmune diseases; (iii) assisted
reproduction of RMB14.9 billion; and (iv) recombinant biologic products of over RMB5.3
billion, including ulinastatin and chymotrypsin.
With respect to each of our Core Products, (i) KJ017 is a highly glycosylated recombinant
human hyaluronidase, an engineered enzyme modified with sugar molecules to break down
hyaluronic acid in the skin and enabling faster absorption of injected drugs, being developed
to enable rapid and large-volume SC delivery of co-administered drugs; (ii) KJ103 is an
innovative recombinant immunoglobulin G (IgG)-degrading enzyme, a genetically engineered
enzyme that breaks down disease-causing IgG antibodies which recognized as a key driver of
autoimmune disorders, for the treatment of a multitude of immunological diseases and
conditions driven by the pathogenic activity of IgG. We are currently evaluating KJ103 in
kidney transplantation desensitization (a procedure aimed at reducing or eliminating pre-
existing antibodies in transplant recipients to prevent rejection of the donor organ),
anti-glomerular basement membrane disease (anti-GBM disease), an autoimmune condition
where antibodies attack kidney structures causing severe damage, as well as Guillain-Barré
syndrome (GBS), an autoimmune disorder where the immune system attacks nerves leading to
muscle weakness and paralysis, across different stages of clinical trials; and (iii) SJ02 is a
long-acting recombinant human follicle-stimulating hormone carboxyl-terminal peptide fusion
protein (FSH-CTP), a bioengineered hormone fused with a stabilizing peptide to extend its
duration of action, designed for controlled ovarian stimulation (COS) in combination with a
gonadotropin-releasing hormone (GnRH) antagonist. As of the Latest Practicable Date, our
Core Product, SJ02 has received NDA approval from the NMPA in August 2025 and two of our
drug candidates have progressed into advanced trial- or NDA registration-stage in China,
namely our Core Products KJ103 and KJ017. Moreover, we are actively advancing a diverse
range of other pipeline assets, particularly those innovative recombinant biologics as
transformative alternatives to traditional biochemically extracted drugs, including KJ101 and
BJ044.
Our drug development centers on efficiently optimizing validated therapeutics with
substantial market value or underutilized opportunities, which differentiates us in the
biopharmaceutical industry. By targeting the upgrades of existing therapeutics that have
already achieved widespread clinical adoption, we ensure our innovations directly benefit
established and expanding patient populations. We have strategically positioned our pipeline to
address critical limitations of these products through our proprietary synthetic biology
technology capabilities, with development priorities closely aligned with real-world clinical
demands. Such drug development strategy also enables us to swiftly translate our scientific
discoveries into tangible commercial success. Further, approach is evidenced by notable
clinical-stage success rates, as we focus on enhancing clinically validated therapeutics. This
value-oriented approach empowers us to consistently achieve accelerated drug development
timeframe with reduced costs.
SUMMARY
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We have established commercial-scale manufacturing capabilities that enable
cost-effective and standardized production, while achieving cost advantages that allows us to
extend our reach into additional therapeutic areas and unlock new market opportunities. For
example, in the field of large-volume SC delivery, we are pursuing a “Two-Anti (referring to
antibody drugs and antibiotics)” strategy to develop SC formulations for both antibody drugs
and chemicals especially antibiotics, demonstrating our ability to produce not only high-end
biologics but also affordable conventional medicines in wide use through SC administration.
Leveraging the early-mover advantages, clinical versatility and scalable cost-efficient
production of our drug candidates, we have adopted a balanced business model that integrates
in-house R&D with external collaborations and excipient supply. Tailoring our approach to the
unique strengths of each drug candidate, we aim to deliver consistent long-term value while
effectively managing risks and costs.
SUMMARY
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The following chart illustrates our pipeline and summarizes the development status of our approved drug, SJ02 (Slonva ® (۹®)), our six
clinical-stage drug candidates and five selected preclinical-stage candidates as of the Latest Practicable Date:
Candidate Drugs Key Component Regimen
Mono/Combo
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Indications Line(s) of
treatment Preclinical IND Phase I Phase II Phase III NDA Current Status/Milestone
KJ0171 Recombinant Human
Hyaluronidase2
Large-volume SC Delivery
(Combo), Body Fluid Loss due
to Various Causes (Mono),
Facilitation of SC fluid
administration (Combo)
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
Submitted NDA in June 2024;
Expect to receive NDA approval in Q1 2026
BJ007
3 Ceftriaxone Sodium
(SC Formulations) Bacterial Infection
Phase I trial stage;
Expect to complete Phase I trial in 2026 H1
Prepare for IND application;
Expect to submit IND application in 2026 H1
BJ0083
Cefoperazone Sodium
and Sulbactam
Sodium
(SC Formulations)
Bacterial Infection Preclinical stage;
Expect to submit IND application in 2026 H1
BJ0093 Cefazolin Sodium
(SC Formulations) Bacterial Infection
KJ015
Bispecific Anti-HER2
Antibody
(SC Formulations)
Solid Tumors
Phase I trial stage

Expect to complete Phase I trial in 2026 H2
Prepare for IND application;
Expect to submit IND application in 2026 H1
KJ1034
Recombinant
IgG-Degrading
Enzyme
Phase III trial stage;
Expect to complete the Phase III trial in 2026 H1;
Received BTD from the NMPA in November 2024
Prepare for Phase II trial application;
Expect to submit Phase II trial application in 2026 H1
Completed Phase II trial in October 2025
Expect to initiate Phase III trial in 2026 H1
IND approved in April 2025
Expect to initiate Phase II trial in November 2025
BJ045
Anti-CD20 Antibody Resistant
to Enzyme Degradation
(SC Formulations)
Moderate-to-Severe
Autoimmune Diseases
Preclinical stage;
Expect to submit IND application in 2026 H1
BJ047
Anti-CD154 Antibody Resistant
to Enzyme Degradation
(SC Formulations)
Solid organ transplantation,
Xenotransplantation,
Autoimmune Disease
(Lupus Nephritis and
Multiple Sclerosis)
Preclinical stage;
Expect to submit IND application in 2026 H1
SJ02
(Slonva
®
(۹®))5,7
Recombinant
Human FSH-CTP
Controlled Ovarian Stimulation,
Stimulating Multiple Follicular
Development, Promoting
Ovulation
Received NDA approval in August 2025
SJ04 Recombinant Human
Chorionic Gonadotropin
Stimulating Follicular Maturation,
Inducing Ovulation and Luteinization
Completed the Phase I trial in September 2025
KJ101 Recombinant Human
Chymotrypsin
Wound Healing for Burn Injuries,
Traumatic Injuries, Surgical
Incision, Pressure Sores and
Diabetic Foot Ulcers, etc.
Phase II trial stage;
Expect to complete Phase II trial in 2026 H1
BJ044 Recombinant Ulinastatin
Acute Pancreatitis, Chronic
Recurrent Pancreatitis and
Acute Circulatory Failure
Preclinical stage;
Expect to submit IND application in 2026 H1
Commercial
RightsSourceIND/NDA
Application Number
GlobalSelf-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Drug Classification
Biologics
Improved Formulation of
Innovative Drug8
Chemical Drug
Improved Formulation of
Chemical Drug8
Chemical Drug
Chemical Drug
Biologics
Innovative Biologics9
Biologics
Innovative Biologics9
Biologics
Biologics
Biologics
Biologics
Biologics
Biosimilar
Biologics
Biologics
Biologics
CXSS2400095;
CXSS2400096
CXSL2200266
IND 160657
CXSL2400378
CXSL2500128
CXSS2400011;
CXSS2400012
Global
Global
Global
Global
Global
Global
Global
Global
Global
Global
Global
Core Product Lead IndicationBreakthrough Designation from the NMPA
Anti-GBM Diseases
GBS
Desensitization before
kidney transplantation
Pathological IgG-mediated
Autoimmune Diseases6
Preclinical stage;
Expect to submit an IND application in 2026 H1
Preclinical stage;
Expect to submit IND application in 2026 H1
Subcutaneous
Delivery
Antibody-mediated
Auto-immune
Diseases
Assisted Reproduction
Synthetic Biology
Upgrading Platform
NMPA
FDA
EMA/FDA
EMA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
FDA
NMPA
NMPA
NMPA
NMPA
FDA
NMPA
CXHL2401399
CXSL2400672
CXHL2500565
CXSL2400176
CXSL2400781
Received IND approval from the NMPA in September 2025
Expect to initiate Phase I trial in December 2025
Abbreviations: BTD = Breakthrough Therapy Designation; FSH-CTP = Follicle-stimulating hormone-carboxyl-terminal peptide; GBM = Glomerular Bas ement Membrane; GBS =
Guillain-Barré syndrome; H1 = First Half; H2 = Second Half; Q1 = First Quarter; IgG = Immunoglobulin G; SC = Subcutaneous.
SUMMARY
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--- page 14 ---
Notes:
(1) We have completed KJ017 monotherapy’s Phase I clinical trial (CTR20191671) in September 2019, Phase IIIa trial (CTR20210453) in October 2021, an d Phase IIIb trial
(CTR20241071) in May 2024 in China. We have remained the role as the sole sponsor responsible for funding each phase of KJ017’s clinical development in China and expect
to remain such role as the sole sponsor for KJ017’s future clinical development in Europe and U.S.
(2) We have completed the pharmaceutical excipient registration in China and are advancing the registration progress globally. The DMF for KJ017 was successfully filed with the
FDA in May 2025.
(3) The subcutaneous antibiotic formulation is developed based on the Chemical Drug Modification (Category 2.2) new administration route, with sub sequent studies on area under
the curve (AUC) equivalent and PK/PD.
(4) We have completed a Phase I clinical trial for KJ103 in China (CTR20222595) in March 2023. We have received approval from the NMPA for a Phase II clini cal trial
(CTR20234137) design in desensitization therapy in highly sensitized patients awaiting kidney transplantation (a procedure aimed at reducing or e liminating pre-existing
antibodies in transplant recipients to prevent rejection of the donor organ), as well as approval for a Phase II clinical trial (CTR20243543) in anti- GBM diseases and a Phase
II clinical trial (CTR20253992) in GBS in China. In line with standard regulatory practice, and in the absence of objections from the regulatory autho rities, it is not necessary
to repeat initial Phase I studies primarily designed to assess basic safety, tolerability, and pharmacokinetics for new indications. These IND appr ovals were approved by the
NMPA based on the data of our CTR20222595 Phase I trial in China. The Phase II clinical trial (CTR20234137) was completed in September 2024, and we initi ated the Phase
III clinical trial (CTR20252973) in August 2025 in this indication with the CDE’s approval of our trial design. The CTR20243543 Phase II trial is compl eted in October 2025.
We have also completed a Phase I clinical trial for KJ103 in New Zealand (NCT05274659) in March 2023. We plan to use the data from this New Zealand trial (N CT05274659)
to support our subsequent clinical development in the U.S., namely the planned Phase II trial for pathological IgG-mediated autoimmune diseases. We plan to communicate with
the FDA related to the application for a Phase II clinical trial in the first half of 2026. We have remained the role as the sole sponsor responsible for fu nding each phase of
KJ103’s clinical development in China and expect to remain such role as the sole sponsor for KJ103’s future clinical development in U.S.
(5) We have completed a Phase I clinical trial (CTR20181339) in March 2020 and a Phase II/III clinical trial (CTR20201374) for SJ02 in December 2022 in C hina. We have remained
the role as the sole sponsor responsible for funding each phase of SJ02’s clinical development in China and expect to remain such role as the sole sponso r for SJ02’s future
clinical development in Europe.
(6) Pathological IgG-mediated Autoimmune Diseases refer to a group of disorders in which the immune system produces abnormal IgG antibodies that tar get the body’s own cells,
tissues, or organs.
(7) In anticipation of the commercial launch of SJ02 in China market following the receipt of the NDA approval in 2025, we entered into an exclusive sale s agency agreement with
ANKE BIO in July 2025, pursuant to which ANKE BIO acts as an exclusive CSO responsible for the commercialization of SJ02 in Greater China. Previously, w e had entered
into a license and commercialization agreement with Organon in September 2024 for an exclusive license to develop, manufacture and commercialize SJ 02 for the fertility
treatment to stimulate the development of eggs in the ovaries in humans in China, as well as an ancillary separate manufacturing and supply agreement f or SJ02. The Organon
Agreement, along with the ancillary manufacturing and supply agreement for SJ02, were terminated on the date of July 28, 2025 as specified in a termina tion notice provided
by Organon on April 11, 2025. Following this termination, we regained full, global rights to develop, manufacture and commercialize SJ02. We are not o bliged to return any
payments received (including the first tranche of upfront payments received in 2024) or make any payments to Organon in respect of the termination of t his agreement. Organon
is not obliged to pay any termination fee or required to pay any future upfront, milestone or royalty payments to us under the agreement. No disputes or c laims arose between
Organon and us related to this termination. See “Business – Collaboration Agreement – License and Commercialization Agreement with Organon” for mor e information.
(8) This definition is established under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act.
(9) This definition is established under Section 351(a) of the Public Health Service Act.
SUMMARY
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--- page 15 ---
Our core business model is to in-house discover, develop and commercialize recombinant
biologic drugs, which are strategically built across the following four core therapeutic areas,
each with broad therapeutic applications:
Large-volume SC drug delivery
The trend towards large-volume SC drug delivery has gained widespread recognition in
the pharmaceutical industry, as exemplified by the SC Drug Development & Delivery
Consortium established in 2018 by over a dozen renowned multinational companies, which has
been actively sharing expertise and publishing research findings in academic journals. In this
field, our R&D efforts are represented by our recombinant human hyaluronidase with the
potential to become the first to be approved in China, according to Frost & Sullivan. One of
our Core Products, KJ017, a recombinant human hyaluronidase, enables rapid, large-volume
SC delivery of various therapeutics traditionally administered intravenously (IV), improving
the safety, patient convenience and potentially efficacy. To sustainably maximize clinical and
commercial value of our recombinant human hyaluronidase products, we have implemented a
multi-pronged strategy:
(i) Launch of KJ017 monotherapy . We are advancing KJ017 as a single drug towards
commercial launch in China, for the facilitation of large-volume SC delivery of
crystalloid solution as an alternative to IV infusion, body fluid loss due to various
causes, and facilitation of SC fluid administration. The Phase I trial of KJ017
monotherapy (CTR20191671) was completed in September 2019. In August 2020,
the Company submitted the Phase I clinical results to the CDE, and communicated
with the CDE related to subsequent clinical trials. In our consultations with the
CDE, we referenced the approval pathway of a comparable recombinant human
hyaluronidase product in the U.S. that received marketing authorization from the
FDA based solely on safety-focused clinical trials, to explore the possibility of a
similar safety data-based approval for our product. The CDE then advised the
Company to conduct a registrational clinical trial. As advised by Frost & Sullivan,
according to the industry practices, a registrational clinical trial is clinical study that
supports a drug’s marketing application and authorization, with the primary
objective of confirming the drug’s safety and efficacy. Such trials must meet certain
regulatory requirements, which in KJ017’s case involves an efficacy trial with
randomized, controlled, blinded design. According to Frost & Sullivan, in industry
practice of drug development, Phase III clinical trials typically constitute the main
form of registrational studies, except for breakthrough therapies or treatments for
rare diseases. As KJ017 is not categorized as a breakthrough therapy or a treatment
for a rare disease, we designated its Phase III trial as the registrational trial.
Our KJ017 monotherapy was able to proceed directly to Phase III clinical trials
without conducting Phase II trials due to its unique characteristics. As KJ017 acts
exclusively locally with minimal systemic exposure, a traditional Phase II dose-
exposure study would lack clinical significance. Its Phase I PK studies have
demonstrated no systemic exposure even at doses ten times the intended clinical
dose. Consequently, with the Phase III trials incorporating not only efficacy
endpoints but also studies on dose-ranging and exposure-effect relationships
typically included in Phase II trials to confirm the optimal clinical dose, KJ017
SUMMARY
–6–


--- page 16 ---
could bypass Phase II clinical trials and proceed directly to Phase III clinical trials.
This scientifically-grounded clinical design has satisfied both scientific and
regulatory requirements, with no objections raised by the NMPA regarding the direct
progression to Phase III trials. Thus, we initiated the registrational trials and
designated such trials as Phase III trials rather than a Phase II trial. The primary
efficacy endpoint is the SC infusion rate, and the secondary efficacy endpoint
involves measurement of the limb circumference after the infusion. The CDE has
not imposed any specific condition for this trial.
We thus proceeded to the Phase IIIa trial (CTR20210453) in August 2021 and Phase
IIIb trial (CTR20241071) in March 2024, which were completed in October 2021
and May 2024, respectively. The extended interval between KJ017’s Phase IIIa
clinical trial and Phase IIIb trial was primarily due to our manufacturing site
changes. Following the completion of Phase IIIa, we relocated KJ017’s clinical
sample production to another dedicated manufacturing line, which necessitated a
significant transition period. This production transfer was implemented to optimize
manufacturing conditions for KJ017’s specific properties. Once this site change was
successfully completed, we proceeded with the Phase IIIb clinical trial. This
manufacturing transition, while extending the clinical development timeline, did not
impact other aspects of KJ017’s development or registration process. We have not
received any objections from the NMPA related to these Phase III trials
(CTR20210453 and CTR20241071).
KJ017 has demonstrated encouraging efficacy signals with a favorable safety profile
in our Phase III clinical trials (CTR20210453 and CTR20241071) in China. The
trials have demonstrated high drug delivery efficiency facilitated by KJ017 by
reaching a greater subcutaneous infusion rate of 545.09~775.00 mL/h, compared to
164.68 mL/h for placebo among 48 healthy subjects aged 18 to 60 years old. No
significant arm swelling, injection-site related reactions, or allergic reaction has
been observed among the subjects. Most adverse events are Grade 1 and are
manageable with no TEAE ( /H11350Grade 3) observed. We have submitted an NDA for
KJ017 as a single drug to the National Medical Products Administration (NMPA) in
2024 following completion of its Phase III clinical trials (CTR20210453 and
CTR20241071). We plan to submit IND applications for KJ017 to the European
Medicines Agency (EMA) in Europe and the Food and Drug Administration (FDA)
in the U.S., and are in the process of simultaneously preparing both EMA and FDA
IND filings. We anticipate submitting one of the applications in the first half of 2026
and will subsequently complete the IND application for the other region.
(ii) In-house development of SC antibody formulation . We are also internally developing
SC formulations of antibody drugs with large market potential, such as our
innovative HER2-targeted bispecific antibody KJ015, anti-CD20 monoclonal
antibody BJ045, and anti-CD154 monoclonal antibody BJ047.
SUMMARY
–7–


--- page 17 ---
(iii) Partnerships with antibody drug developers . We have established formal
partnerships with multiple pharmaceutical or biotechnology companies for the
development of SC antibody formulations, such as Qyuns and Sumgen. We continue
to actively expand our collaboration ecosystem, with business development
initiatives underway with over a dozen potential partners at various negotiation
stages. Our typical collaboration model is that we continuously provide our
recombinant human hyaluronidase products as excipients and technical services
while our partners advance the development of SC formulation in combination with
their antibody drug candidates at their costs.
(iv) Commitment to SC antibiotics . We are committed to developing SC formulations of
widely used antibiotics. We have received an IND approval for SC ceftriaxone
sodium BJ007 from the NMPA in February 2025 and initiated the Phase I trial of
BJ007 (CTR20253085) in August 2025. We also submitted IND application for SC
cefazolin sodium BJ009 in May 2025 and have received the IND approval from the
NMPA in September 2025. Further, we are actively exploring SC cefoperazone
sodium and sulbactam sodium BJ008 in preclinical studies.
As of the Latest Practicable Date, KJ017 is the first and only recombinant human
hyaluronidase to reach NDA stage in China, securing a clear first-mover advantage with its
excellent clinical results. Globally, the market of recombinant human hyaluronidase is
expected to grow from US$799.0 million in 2024 to US$1,056.3 million in 2025, US$3,574.2
million in 2029 and further to reach US$9,093.7 million by 2033, while the market in China
is estimated to increase from RMB1.2 million in 2021 to RMB186.0 million in 2024 and is
estimated to RMB417.2 million in 2025, RMB3,189.5 million in 2029 and RMB6,980.2 million
in 2033. For recombinant human hyaluronidase monotherapy, the global market is expected to
increase from US$141.6 million in 2024 to RMB230.2 million in 2025, US$676.0 million in
2029 and US$1,097.5 million in 2033, while China’s market is expected to emerge in 2026 with
estimated market value of RMB124.8 million and expect to reach RMB948.6 million in 2029
and further increase to RMB1,506.9 million in 2033. For recombinant human hyaluronidase
combined with antibodies, the market size increased from US$657.4 million in 2024 to
US$826.2 million in 2025, US$2,831.1 million by 2029 and US$7,677.6 million by 2033
globally. For recombinant human hyaluronidase combined with antibiotics, the market size is
projected to grow from RMB474.5 million in 2029 to RMB2,254.7 million in 2033 in China.
For more information related to the market opportunities and competitive landscape of
recombinant human hyaluronidase, see “Industry Overview — Analysis of the Subcutaneous
Drug Delivery System Market.”
Antibody-mediated autoimmune conditions
To address unmet clinical demands related to a variety of antibody-mediated autoimmune
conditions in which the immune system produces antibodies that mistakenly attack the body’s
own tissues, leading to inflammation and tissue damage, we have in-house developed KJ103,
an innovative IgG-degrading enzyme. It is the first and only low-immunogenic IgG-degrading
enzyme to reach the registrational clinical stage globally, and has obtained Breakthrough
SUMMARY
–8–


--- page 18 ---
Therapy Designation (“ BTD”) from the NMPA both as a desensitization therapy in kidney
transplantation and for the treatment of anti-GBM disease. KJ103 is designed to target and
degrade IgG antibodies in the blood and tissues, thereby inhibiting pathogenic IgG-mediated
immune responses that cause various immunological conditions. We are also actively exploring
other drug candidates with synergistic effects within this area, including proprietary SC
antibodies resistant to enzymatic degradation and IgM-degrading enzyme. We have completed
a Phase I clinical trial for KJ103 in China (CTR20222595) and a Phase I clinical trial for KJ103
in New Zealand (NCT05274659), both in healthy subjects and completed in March 2023. The
Phase I clinical trial in China (CTR20222595) has demonstrated favorable safety and
tolerability in KJ103 with none of the 34 subjects experiencing any events meeting the
dose-escalation stopping criteria during the DLT observation period. Most of the adverse
events are Grade 1 and manageable with no DLT, TEAEs ( /H11350Grade 3), or severe infections were
reported. The administration of KJ103 results in a dose-dependent reduction in IgG levels with
IgG levels decreasing by 91% within 1 hour and 95% within 6 hours post-dose and maintaining
an average reduction of over 70% for up to one week, exhibiting KJ103’s robust capability to
degrade human IgG antibodies. The data and conclusions from the New Zealand Phase I
clinical trial (NCT05274659) are consistent with those from the China Phase I clinical trial
(CTR20222595), showing no ethnic differences in safety, and PK/PD characteristics.
Specifically, we are systematically exploring KJ103’s therapeutic potential across
multiple immune-related applications:
(i) Organ transplantation. Based on the CDE’s approval of our trial design in October
2023, KJ103 entered into a Phase II trial in China (CTR20234137) for desensitizing
highly human leukocyte antigen (HLA)-sensitized patients to enable kidney
transplantation in December 2023, exhibiting the potential to be the first IgG-
degrading enzyme in China to fill this critical gap in transplant medicine. This trial
was completed in September 2024. Following our end of Phase II (“ EOP2 ”) meeting
with the NMPA in May 2025, we initiated the Phase III study of KJ103 in this
indication with the CDE’s approval of our trial design in a separate trial
(CTR20252973) in August 2025. In November 2024, KJ103 received BTD from the
NMPA for the treatment of this indication. We have not received any objections from
the NMPA related to our clinical development plan for KJ103 in this indication as
of the Latest Practicable Date.
(ii) Hundreds of pathogenic antibody-mediated acute autoimmune diseases . KJ103
emerges as a promising option for treating a large number of acute autoimmune
diseases caused by pathogenic autoantibodies. Based on the Phase I trial in New
Zealand (NCT05274659), we may proceed with a subsequent clinical trial in the
U.S. targeting acute autoimmune diseases caused by pathogenic IgG, as well as
desensitizing highly HLA-sensitized patients.
SUMMARY
–9–


--- page 19 ---
In line with standard regulatory practice, and in the absence of objections from the
regulatory authorities, it is not necessary to repeat initial Phase I studies primarily
designed to assess basic safety, tolerability, and pharmacokinetics for new
indications. Leveraging the clinical data from the Phase I trial in China
(CTR20222595), we proceeded with the Phase II clinical trial of KJ103 for
anti-GBM disease (CTR20243543) in China and completed the trial in October
2025. We have not received any objections from the NMPA related to this Phase II
trial (CTR20243543) as of the Latest Practicable Date. Notably, KJ103 has received
BTD from the NMPA for anti-GBM disease in July 2025, which allows for an
expedited regulatory review. We are also actively exploring its therapeutic potential
in other antibody-mediated acute autoimmune diseases. For instance, in GBS, we
have submitted an IND application for the Phase II trial of KJ103 to NMPA in
January 2025 based on the clinical data from the Phase I trial in China
(CTR20222595), received the IND approval in April 2025 and expect to initiate this
trial (CTR20253992) in November 2025. Further, we plan to submit an application
for the Phase II trial to the FDA in the first half of 2026. KJ103 is expected to
provide a safer treatment for patients with acute autoimmune disorders due to its low
percentage and titer of pre-existing antibodies than the approved IgG-degrading
enzyme on the market according to publicly available data.
(iii) Combination therapy with recombinant antibodies resistant to enzymatic
degradation . Building on insights from our clinical research into KJ103, preclinical
findings suggest its synergistic potential in combination use with certain antibody
drugs for the treatment of various immune-related diseases. We are developing
several proprietary SC recombinant antibodies resistant to enzymatic degradation
based on our Robust-Hinge platform, such as our proprietary anti-CD20 and
anti-CD154 antibodies BJ045 and BJ047, both of which completed preclinical
proof-of-concept, aiming to provide enhanced efficiency and accelerate onset of
action.
The global market of IgG-degrading enzyme reached US$13.2 million in 2024 and is
estimated to reach US$19.1 million in 2025, US$3,106.0 million in 2029 and US$16,618.0
million in 2033. Meanwhile, the IgG-degrading enzyme market in China is expected to gain
momentum slightly later from RMB1,338.9 million in 2029 to RMB6,386.1 million in 2033.
As of the Latest Practicable Date, there are no IgG-degrading enzyme products targeting
kidney transplantation available in China, which opens opportunities for KJ103. The market of
IgG-degrading enzyme targeting kidney transplantation in China is projected to reach
RMB408.3 million in 2029 and RMB1,113.6 million in 2033. However, the rare nature of
IgG-mediated autoimmune diseases could also limit the patient pool of KJ103. The global
incidence of antibody-mediated diseases continues to rise, with incidence of anti-GBM disease
projected to increase from 9.8 thousand in 2024 to 12.1 thousand in 2033, while in China, cases
are expected to grow from 1.3 thousand to 1.4 thousand during the same period. Similarly, GBS
cases globally are forecasted to rise from 108.7 thousand in 2024 to 134.1 thousand in 2033,
with incidence in China increasing from 10.3 thousand in 2024 to 11.3 thousand in 2033. For
more information related to the market opportunities and competitive landscape of IgG-
mediated autoimmune diseases, see “Industry Overview — Analysis of Antibody-Mediated
Autoimmune Diseases Market.”
SUMMARY
–1 0–


--- page 20 ---
Overall, our product portfolio in addressing antibody-mediated autoimmune conditions,
including KJ103, antibodies resistant to enzyme degradation and any potential immunoglobulin
M (IgM)-degrading enzyme, is well-positioned to tap into the emerging therapeutic fields such
as xenotransplantation. In recent years, there has been significant advancement of
xenotransplantation technology globally, as driven by the increasing prevalence of organ
failure and shortage of human organs. Our proprietary product candidates can notably
overcome the challenges of immune rejection in xenotransplantation, a key factor in the
success of these procedures. Leveraging our expertise in enzyme technology and antibody
development, we believe we are poised to capture a significant share of this growing market,
contributing to the advancement of xenotransplantation and fulfilling underserved medical
needs.
Drugs in assisted reproduction
We are developing a portfolio of innovative products designed to address key limitations
of existing treatments in assisted reproduction, including SJ02 and SJ04. Our SJ02 an
long-acting recombinant human follicle-stimulating hormone (FSH) products, which is the first
approved long-acting FSH-CTP product in China, according to Frost & Sullivan. Our SJ02 can
significantly reduce the treatment burden for users by reducing multiple injections to a single
dose, offering enhanced convenience and compliance.
We have received the NDA approval for SJ02 in August 2025. Pursuant to an IND
approval for SJ02 from the NMPA in February 2018, the Phase I clinical trial of SJ02 in healthy
female (CTR20181339) was completed in March 2020. We then initiated the Phase II/III trial
in female subjects undergoing assisted reproductive technology (ART) (CTR20201374) and
completed the Phase II portion in April 2021. The IND approval for SJ02 is an umbrella
approval and therefore we are not required to seek additional approval from the CDE before
commencing next phases of clinical trial. Based on the industry practice of communicating
with CDE prior to Phase III study, we submitted the Phase I and Phase II clinical results of
SJ02 to the CDE in August 2021. The CDE agreed with our trial design of the Phase III clinical
trial in the same month. We completed this Phase III portion of the Phase II/III clinical trial
of SJ02 (CTR20201374) in China in December 2022. Since the initiation upon the approval of
ethics committees, we have not received any objections from the NMPA related to this study.
We submitted the NDA for SJ02 to the NMPA in December 2023. SJ02 has demonstrated
promising efficacy signals with a favorable safety profile in subjects undergoing ART.
Single-dose SJ02 has exhibited non-inferior efficacy on the primary endpoint of the number of
oocytes retrieved in comparison with Gonal-f
®. The majority of adverse events reported are
Grade 1 or 2 and are manageable, which is line with the type and frequency observed with
Gonal-f
®. In Europe, we plan to submit an IND application for SJ02 to the EMA in the first
half of 2026.
We have also developed SJ04, a recombinant human chorionic gonadotropin (hCG), for
the use in assisted reproductive procedures to accelerate follicle maturation and induce
ovulation. We obtained IND approval from the NMPA for SJ04 in May 2024. Subsequently, we
commenced a Phase I clinical trial for SJ04 (CTR20242399) in August 2024 in China and have
completed this trial in September 2025.
SUMMARY
–1 1–


--- page 21 ---
In recent years, the market for drugs used in assisted reproduction has demonstrated
consistent growth. The global assisted reproductive drug market increased from US$3.6 billion
in 2019 to US$5.4 billion in 2024 and is projected to reach a value of US$5.7 billion in 2025
and US$7.1 billion in 2029 and further reach to US$8.2 billion by 2033. In China, the market
size of RMB5.7 billion in 2024, and forecasted to reach RMB6.3 billion by 2025, RMB10.3
billion by 2029 and RMB14.9 billion by 2033. As the first approved long-acting FSH-CTP
product in China, SJ02 is expected to address a projected large FSH market of RMB7.3 billion
in 2029 and RMB10.2 billion in 2033 in China. For more information related to the market
opportunities and competitive landscape of assisted reproduction and FSH-CTP , see “Industry
Overview — Analysis of Assisted Reproduction Drugs Market.”
Recombinant biologic products as transformative alternatives to traditional biochemical
production
We are leveraging our synthetic biology expertise to develop innovative recombinant
biologics. Our advanced biotechnology platform enables us to engineer chassis cells for the
production of complex proteins that have traditionally been challenging to manufacture using
conventional biochemical methods. In particular, our synthetic biology-driven processes
address inefficiencies, impurities and safety risks including allergies and unknown virus
contamination associated with traditional biochemical extraction methods in producing
biologics. Our notable achievements in this area include KJ101, a leading recombinant human
chymotrypsin created using synthetic biology in China, for which we have received the IND
approval from the NMPA in February 2025 and initiated its Phase II clinical trial
(CTR20252263) in July 2025, and BJ044, potentially the world’s first recombinant ulinastatin
developed through synthetic biology, with plans to submit an IND application for its Phase I
trial to the NMPA in the first half of 2026. These recombinant biologic products offer notable
advantages in safety, supply stability, and cost-efficiency, which position them to progressively
replace their biochemically extracted counterparts, transforming the market landscape and
capturing significant market share in China.
The recombinant nature of KJ101 and BJ044 highlights their potential to replace
biochemically extracted chymotrypsin and ulinastatin, addressing market demand for these
products. For KJ101, the chymotrypsin market in China increased from RMB1.8 billion in
2024 to RMB2.0 billion in 2025, RMB2.7 billion in 2029 and RMB3.2 billion by 2033. For
BJ044, the market of ulinastatin in China was RMB1,011.9 million in 2024, and further expand
to RMB1,432.3 million in 2029 and to RMB2,018.5 million in 2033. For more information
related to the market opportunities and competitive landscape of recombinant human
chymotrypsin and recombinant ulinastatin, see “Industry Overview — Analysis of
Recombinant Biologic Products as Alternatives to Biochemical Drugs.”
Our pipeline demonstrate strong synergistic potential both within and across our core
therapeutic areas. For instance, in the field of antibody-mediated autoimmune conditions, we
are actively developing IgG-degrading enzyme and degradation-resistant antibodies, and
exploring IgM-degrading enzyme, which can be integrated to develop potential combination
therapies to unlock their clinical potential in emerging areas, such as xenotransplantation.
Another example is our BJ045 and BJ047 in SC formulations, which have linked our expertise
in both large-volume SC drug delivery and addressing antibody-mediated autoimmune
diseases.
SUMMARY
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We are implementing an overall “China-US/Europe” development strategy for our Core
Products, under which we (i) prioritize and accelerate product development and
commercialization in China to establish first-mover advantages, (ii) generate stable revenue
through product sales and various collaborations in China to sustain the Company’s continuous
R&D and commercialization efforts, and (iii) then further expand indications and enter major
overseas markets following the commercialization in China.
We are also actively advancing the development of other new drug candidates to further
enrich our pipeline utilizing our Robust-Hinge technology platforms. In addition, we are
employing AI-driven drug discovery techniques to design and develop innovative therapies.
Through bioinformatics tracing, we have reconstructed a uricase sequence lost during human
evolution dating approximately tens of millions of years ago. Based on this sequence, we are
developing a novel recombinant human uricase with low immunogenicity and suitability for
repeated administration. This novel therapy is aimed to offer a more effective and sustainable
treatment option for patients with severe gout, a condition with substantial treatment gaps. Our
research and development capabilities are evidenced by our publications in scientific journals
and our intellectual property portfolio, which includes 21 granted patents and 73 patent
applications worldwide.
We have built Good Manufacturing Practice (GMP)-compliant manufacturing
infrastructure in Shanghai encompassing a site area of approximately 63,000 sq.m. Our
existing manufacturing facilities feature production lines specifically designed for the
manufacture of complex biological products, with specialized capabilities in recombinant
protein drugs. To further expand our commercial-scale manufacturing capacity, we are
constructing additional facilities in Shanghai, spanning a site area of approximately 37,000
sq.m., with completion of construction and commencement of operations anticipated by June
2026. Upon completion and operation of these new facilities, our projected total reactor
volume will reach approximately 26,100L and our annual production capacity will be expanded
to approximately 22.5 million formulations, positioning us with integrated and scalable
capacity to fully support end-to-end production of our self-developed drugs.
With the medical and commercial prospects of our pipeline assets, we are executing a
global strategy and aspire to treat patients worldwide. Building on KJ017’s clinical results from
China trials, we plan to initiate clinical studies overseas to evaluate its effects in facilitating
liquid and drug absorption by expecting to submit IND applications to both EMA and FDA.
This initiative not only aims to pave the way for KJ017’s entry into international markets, but
also to strengthen our collaborations with global partners in developing SC formulations
incorporating KJ017. We are also considering conducting clinical studies for KJ103 overseas,
further broadening its market potential in acute autoimmune diseases caused by autoantibodies.
Moreover, we plan to submit the IND application for SJ02 to the EMA in Europe in the first
half of 2026. In parallel, we are actively pursuing collaboration opportunities with
multinational pharmaceutical companies across a range of our pipeline assets, including
KJ017, KJ103, KJ015, BJ045, BJ047, BJ007, KJ101, and novel recombinant human uricase.
These efforts aim to leverage the strengths of international partners to accelerate the global
development and commercialization of our pipeline assets while generating sustainable
revenue streams. With a diverse pipeline, specialized technology platforms, and extensive
experience in forging strategic partnerships, we are well-positioned to address the global
markets and deliver sustainable growth and long-term values.
SUMMARY
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OUR COMPETITIVE STRENGTHS
We believe the following strengths have contributed to our success and differentiated us
from our competitors:
 Advancing the transition from intravenous to subcutaneous drug delivery with
potentially first recombinant human hyaluronidase in China;
 Focused autoimmune pipeline anchored by world’s first low-immunogenic IgG-
degrading enzyme to reach registrational stage, addressing hundreds of antibody-
mediated acute autoimmune conditions caused by pathogenic IgG autoantibodies;
 Assisted reproductive portfolio features potentially first recombinant long-acting
human follicle-stimulating hormone in China;
 Breakthroughs in recombinant biologic drug development using synthetic biology,
offering a potential transformative alternative to biochemically extracted products
and unlocking market potential;
 Advanced technology platforms with commercial-scale manufacturing capabilities,
ensuring cost efficiency and reinforcing our early-mover advantage; and
 A seasoned management team with extensive industry experience and
multidisciplinary expertise.
OUR STRATEGIES
We intend to capitalize on our competitive strengths by pursuing the following strategies:
 Accelerate development of our pipeline candidates in core therapeutic areas,
unleashing clinical and commercial value;
 Continue to expand our pipeline addressing therapeutic areas with strong potential;
 Advance our diversified business model combining self-development, collaboration
and excipient supply, and pursue and strengthen strategic partnership with
pharmaceutical companies over the world;
 Enhance industrial commercial-scale manufacturing capabilities and quality
management; and
 Attract, train and retain high-caliber talent.
SUMMARY
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RESEARCH AND DEVELOPMENT
Research and development is a fundamental pillar of our business and will continue to be
critical to our future growth and our ability to remain competitive in the global markets of
different fields. As of September 30, 2025, our broader in-house R&D team, which comprised
drug discovery and preclinical development, medical and clinical development, CMC, quality
management, and regulatory affairs personnel, consisted of an aggregate of 251 personnel,
accounting for approximately 72.1% of our total workforce. This R&D team includes 65
professionals in drug discovery, preclinical development and related regulatory affairs, 86 in
CMC and manufacturing, 83 in quality control, quality assurance, validation and
pharmacovigilance, and 17 in clinical development. Different functional groups contribute to
various stages of the R&D lifecycle, from early discovery to regulatory submission.
Specifically, our clinical team of 17 members serves as the R&D function for three Core
Products, each led by a designated R&D head with deep technical expertise and supported by
a dedicated execution team responsible for end-to-end clinical development. In particular, Mr.
Zhu Zhen, our Clinical Director with extensive experience in multinational trial management
and a track record of successful NDA/BLA submissions, acts as the R&D lead for KJ103 and
SJ02, overseeing end-to-end clinical strategy, cross-functional coordination, and compliance
with all applicable regulatory requirements. Mr. Zeng Min, our Project Manager with rich
experience in clinical trial management and a track record of advancing multiple drug assets
to market, acts as the R&D lead for KJ017 and is primarily responsible for coordination with
CRO and other third-party suppliers, as well as managing the trial budget throughout the study
cycle. In 2023, 2024 and the six months ended June 30, 2024 and 2025, we incurred research
and development expenses of RMB132.5 million, RMB250.7 million, RMB116.3 million and
RMB111.0 million, respectively. Our research and development expenses attributable to our
Core Products were RMB79.9 million, RMB127.1 million, RMB69.1 million and RMB57.7
million in 2023, 2024 and the six months ended June 30, 2024 and 2025, respectively,
accounting for 44.4%, 34.7%, 40.9% and 36.0% of our total operating expenses in the same
periods, respectively. The proportion of research and development expenses for Core Products
to total operating expenses decreased from 44.4% in 2023 to 34.7% in 2024, due to the
significant growth in our total operating expenses which outpaced the growth in research and
development expenses for Core Products during the same years. The significant growth in our
total operating expenses was primarily driven by (i) an increase by 134.9% (RMB71.0 million)
in research and development expenses for pipeline products other than Core Products, in line
with our continued research and development endeavors to advance these candidates, and (ii)
an increase by 132.2% (RMB61.3 million) in administrative expenses, largely attributable to
share-based payments incurred from our grant of share incentives to management and
administrative personnel. The proportion of research and development expenses for Core
Products to total operating expenses decreased from 40.9% in the six months ended June 30,
2024 to 36.0% in the six months ended June 30, 2025, primarily due to a decrease by 57.5%
(RMB35.5 million) in research and development expenses attributable to KJ017 and SJ02, as
they advanced into the NDA registration-stage in the first half of 2025 and incurred less
research and development expenses compared to the clinical stage.
SUMMARY
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Our in-house R&D capabilities revolve around three core technology platforms: drug
design platform, chassis cell engineering platform, and comprehensive bioprocessing platform,
which in turn serve as the foundation for our continued drug innovation and underpin our
capabilities in transformative recombinant protein drugs. These platforms are complemented
by AI-driven protein drug design capabilities, which we have been implementing for over two
years with demonstrable success in protein mutation and restructuring. For details regarding
our technology platforms, please see “Business – Our Platforms.”
By integrating scientific evaluation, independent literature analysis, and market
intelligence, we carefully assess potential projects based on their scientific rationale, clinical
feasibility, commercial viability, and strategic fit with our existing product pipeline. This
disciplined approach ensures that we focus on projects with the highest potential to address
areas with limited treatment options while maintaining a balanced and diversified portfolio that
mitigates risks associated with clinical and regulatory development. By continuously refining
our selection criteria to incorporate emerging trends in science and medicine, we have built a
diversified portfolio of candidates targeting a broad range of therapeutic areas, enabling us to
deliver transformative treatments while maintaining operational efficiency, cost-effectiveness,
and effective risk management. For more details, please see “Business – Research and
Development.”
COMMERCIALIZATION
We have been strategically developing our commercial planning and portfolio
management capabilities as our core pipeline drug candidates advance through clinical trials.
Our strategy focuses on establishing partnerships with leading multinational and domestic
pharmaceutical companies, leveraging their established sales and marketing capabilities and
distribution channel to achieve rapid market entry and increase market penetration.
In anticipation of the commercial launch of SJ02 in China market following the NDA
approval in 2025, we collaborate with industry-recognized CSO with expertise in promoting
assisted reproductive therapies, capitalizing on its extensive sales networks, established
distribution channels and in-market insights to accelerate market entry and expand market
coverage for SJ02. In July 2025, we entered into an exclusive sales agency agreement with
Anhui Anke Biotechnology (Group) Co., Ltd. (“ ANKE BIO ”, SZSE: 300009), an Independent
Third Party, pursuant to which we granted ANKE BIO an exclusive right to market, sell,
distribute, and promote SJ02 in Mainland China, Hong Kong, Macau, and Taiwan (“ Greater
China ”), and accordingly, ANKE BIO acts as an exclusive CSO responsible for the
commercialization of SJ02 in the same region. For further details, please see “Business —
Commercialization.”
SUMMARY
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COLLABORATION AGREEMENT
License and Commercialization Agreement with Organon
We had entered into a license and commercialization agreement (the “ Organon
Agreement ”) with Organon (Shanghai) Pharmaceutical Trading Co., Ltd., a wholly-owned
subsidiary of Organon & Co. (NYSE: OGN), in September 2024, which, along with the
ancillary manufacturing and supply agreement for SJ02, were terminated on the date of July 28,
2025 pursuant to a termination notice provided by Organon on April 11, 2025. This
termination, to the best knowledge of our Company having made reasonable enquiries with
Organon, was driven by Organon’s internal reassessment of business strategies and not relating
to any safety and/or efficacy concerns over SJ02. No disagreements, disputes or claims arose
between Organon and us related to this termination as of the Latest Practicable Date. In view
of the anticipated commercial launch of SJ02 in China market upon the NDA approval in 2025
following receipt of such termination notice, we commenced negotiations with Anhui Anke
Biotechnology (Group) Co., Ltd. (“ ANKE BIO ”, SZSE: 300009) as a replacement commercial
partner for SJ02 and entered into an exclusive sales agency agreement on July 9, 2025,
pursuant to which ANKE BIO acts as an exclusive CSO responsible for the commercialization
of SJ02 in Greater China. This agreement stipulates that ANKE BIO’s exclusive sales agency
term only commences from the date on which SJ02 obtains its drug registration certificate,
which occurred on August 19, 2025, i.e. after the Organon Agreement had been formally
terminated on July 28, 2025. We believe such collaboration will synergize our manufacturing
strengths with ANKE BIO’s commercial infrastructure and field-force capabilities, thereby
fully unlocking SJ02’s commercial potential in the China market.
Prior to the termination of the Organon Agreement, we granted Organon a license to
develop, manufacture, and commercialize SJ02 in China for fertility treatment, specifically to
stimulate the development of ovarian follicles in humans. Notwithstanding the exclusive nature
of the license, we retained the right to manufacture or have manufactured SJ02 in China, solely
for or in support of its development, manufacture and commercialization outside China.
Organon and we also entered into a separate manufacturing and supply agreement for SJ02.
Following this termination, we regained full, global rights to develop, manufacture and
commercialize SJ02. We are not obliged to return any payments received (including the first
tranche of upfront payments received in 2024) or make any payments to Organon in respect of
the termination of this agreement. Organon is not obliged to pay any termination fee or
required to pay any future upfront, milestone or royalty payments to us under the agreement.
No disputes or claims arose between Organon and us related to this termination. For further
details, please see “Business – Collaboration Agreement – License and Commercialization
Agreement with Organon.”
SUMMARY
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Technology Services and Supply Agreement with Qyuns
In August 2024, we entered into a technology services and supply agreement with Qyuns
Therapeutics Co., Ltd. (ʮ̡, HKEX: 2509) (“ Qyuns ”), for the
joint development of innovative SC formulations of original biologic products selected by
Qyuns owned, being developed, or that will be developed by it in combination with our
recombinant human hyaluronidase. Qyuns, an Independent Third Party to us, is a leading
biotechnology company exclusively focused on biologic therapies for autoimmune and allergic
diseases. Pursuant to this agreement, Qyuns will be the marketing authorization holder for the
SC formulations developed under this agreement and enjoy exclusive rights to development,
manufacturing and commercialization thereof with bearing all related costs. We agreed to
supply recombinant human hyaluronidase for product development, provide necessary
technical support, and assist in regulatory filings. Our comprehensive technical support
services include, among others, transfer of essential technical documentation and data related
to recombinant human hyaluronidase, assisting in transferring analytical methods to ensure that
the excipient can be integrated into antibody SC formulations, supporting Qyuns in preparing
and submitting regulatory filings, including IND applications and NDAs, to ensure compliance
with regulatory requirements, and timely responding to inquiries or requirements from
regulatory authorities regarding the excipient during the review process. For further details,
please see “Business – Collaboration Agreement – Technology Services and Supply Agreement
with Qyuns.”
Technology Services and Supply Agreement with Sumgen
In March 2022, we entered into a technology services and supply agreement with
Hangzhou Sumgen Biotech Co., Ltd. (ʮ̡)( “ Sumgen ”), for the joint
development of SC formulations of an anti-CD38 mAb in combination with our recombinant
human hyaluronidase. Sumgen, an Independent Third Party to us, is a leading biotechnology
company dedicated to advancing scientific innovation in the field of antibody-based
therapeutics. Pursuant to this agreement, Sumgen will be the marketing authorization holder
and take the lead in the development, regulatory filings, manufacturing and commercialization
of the SC formulations developed under this agreement. We agreed to supply recombinant
human hyaluronidase for product development, provide necessary technical support, and assist
in regulatory filings. Our comprehensive technical support services include, among others,
provision of essential documentation for biological activity testing methods related to
recombinant human hyaluronidase, offering technical assistance in the transfer of such testing
methods, and supporting Sumgen in preparing and submitting regulatory filings, including IND
applications and NDAs, based on the available technical data of recombinant human
hyaluronidase. For further details, please see “Business – Collaboration Agreement –
Technology Services and Supply Agreement with Sumgen.”
SUMMARY
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RELATIONSHIP WITH CROs AND CDMOs
In alignment with industry standards, we engage contract research organizations (CROs)
to conduct and support our preclinical studies and clinical trials under our close supervision
and overall management. We engaged four, three and two CROs in 2023, 2024 and the six
months ended June 30, 2025, respectively. During the Track Record Period, we observed an
overall downward trend in our CRO expenses. This was primarily attributable to: (i) the
expansion of our in-house clinical team, which grew from 7 members at the beginning of 2023
to 19 members as of June 30, 2025, allowing us to gradually assume more clinical R&D
responsibilities internally and reduce our reliance on external CROs; and (ii) the clinical
advancement of our Core Products, KJ017 and SJ02, both of which have completed Phase III
clinical trials in China and are approaching the commercialization stage. Our CRO expenses
decreased from RMB21.2 million in 2023 to RMB12.7 million in 2024, primarily because (i)
KJ103 required two CROs for its Phase I clinical trials in China and New Zealand in 2023,
compared to only one CRO for its Phase II clinical trial for kidney transplantation
desensitization in China in 2024, and (ii) other pipeline candidates advanced to subsequent
development stages that required fewer CRO services. Our CROs expenses for the six months
ended June 30, 2025 amounted to RMB2.4 million, representing a decrease in RMB3.2 million
compared to RMB5.6 million for the six months ended June 30, 2024, primarily due to the
progression of certain product candidates from the preclinical stage in the first half of 2024 to
the clinical stage in the first half of 2025, which resulted in a significant reduction of RMB4.1
million in preclinical CRO expenditures and was partially offset by an increase of RMB0.9
million in clinical CRO expenses attributable to the Phase II clinical trial for KJ103 in GBM
during the first half of 2025. Following the receipt of multiple IND approvals in the first half
of 2025, we have entered into several new CRO agreements to support the corresponding
clinical trials. As these trials progress, we anticipate incurring more CRO-related expenses in
the second half of 2025. We have also collaborated with a third-party industry-recognized
contract development and manufacturing organization (CDMO) outside the PRC for the
potential preparation of overseas supply in the future. We engaged two, three and four CDMOs
in 2023, 2024 and the six months ended June 30, 2025, respectively. Our CDMO expenses
incurred for the CDMOs increased from RMB2.9 million in 2023 to RMB10.2 million in 2024,
which aligned with the advancement of our product pipeline as more candidates progressed to
manufacturing-related R&D activities in 2024. Our CDMOs expenses for the six months ended
June 30, 2025 amounted to RMB7.1 million, representing an increase in RMB2.5 million
compared to RMB4.6 million for the six months ended June 30, 2024, primarily due to our
product pipeline as more candidates progressed to manufacturing-related R&D activities in the
first half of 2025, which resulted in an increase of RMB6.4 million and was partially offset by
a decrease of RMB3.9 million due to one product candidate having completed the scale-up
manufacturing process in the first half of 2025. During the Track Record Period and up to the
Latest Practicable Date, all the CROs and CDMO that we collaborate with were Independent
Third Parties. For further details, please see “Business – Research and Development –
Collaboration with CROs” and “Business – Manufacturing – Manufacturing Facilities.”
SUMMARY
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INTELLECTUAL PROPERTY
We have a global portfolio of patents to protect our drug candidates and technologies. As
of the Latest Practicable Date, we had (i) 19 patents in the PRC, one in U.S. and one in Japan;
(ii) 73 pending patent applications, consisting of 36 in the PRC, 30 in other jurisdictions
including the U.S., Europe, Japan, South Korea, Hong Kong and Taiwan, and seven under the
Patent Cooperation Treaty (“ PCT”). As of the Latest Practicable Date, with respect to our three
Core Products, KJ017, SJ02, and KJ103, we had nine issued patents in the PRC and one issued
patent in U.S., and also nine pending patent applications, including five in the PRC, and four
in other jurisdictions. For further details, please see “Business – Intellectual Property.”
MANUFACTURING
We have established our own GMP-compliant manufacturing facilities in Shanghai, with
a total site area of approximately 63,000 sq.m., which meet the commercial production
demands for SJ02 and the clinical production demands of our drug candidates, including
KJ017, KJ103, SJ04, BJ007, KJ015 and KJ101. We are one of the few domestic companies that
possess commercial-scale production lines for mammalian engineered cells (CHO), yeast cells,
and E. coli fermentation. As of the Latest Practicable Date, we maintained a reactor volume of
up to 5,100L and an annual production capacity of approximately 2 million formulations. In
December 2022, our Company received Drug Production License from Shanghai Medical
Products Administration (Type A) for the production of KJ017. In May 2023, our Company
received Drug Production License (Type C) from Shanghai Medical Products Administration
for the production of SJ02 at our established facilities in Shanghai. In January 2024, Suzhou
Centergene, our wholly-owned subsidiary, received Drug Production License (Type B) from
Jiangsu Medical Products Administration for SJ02 production at the same facilities. For further
details, please see “Business – Licenses, Permits and Approvals.”
Looking ahead, upon regulatory approval of our drug candidates, we intend to
independently manufacture all of our drug candidates, except that the manufacturing of
anti-biotics related products will be outsourced to CDMO partners. To further upgrade our
pilot- and commercial-scale manufacturing capabilities, we are constructing our second
GMP-compliant facilities in Shanghai, with a site area of approximately 37,000 sq.m. This
expansion is strategically designed to support the research, pilot production, and commercial
production of our recombinant protein drugs, particularly KJ101 and BJ044. Upon completion
and operation of such new manufacturing facilities, we anticipate that total reactor volume will
be elevated to approximately 26,100L and our annual production capacity will reach
approximately 22.5 million formulations. For further details, please see “Business –
Manufacturing.”
SUMMARY
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OUR CUSTOMERS AND SUPPLIERS
Customers
During the Track Record Period, our revenue was derived from (i) sales of materials,
including recombinant human hyaluronidase as a pharmaceutical excipient, IgG-degrading
enzyme and antibodies, (ii) provision of technical services, mainly representing certain service
fees, milestone payments, or other considerations we received under respective collaboration
agreements with our business partners, and (iii) recognition of upfront payments received
under a license and commercialization agreement. We had only four customers in 2023 and all
of our revenue in 2023 were generated from these four customers. For the year ended
December 31, 2024 and the six months ended June 30, 2025, revenue generated from our five
largest customers, calculated on the group level with entities controlled by the same group
combined together, were RMB5.8 million and RMB41.7 million, respectively, representing
94.8% and 99.4% of our total revenue for the same year/period. Revenue generated from our
single largest customer in each year/period during the Track Record Period were RMB2.8
million, RMB2.8 million and RMB40.0 million, respectively, representing 40.9%, 45.9% and
95.3% of our total revenue for the same years/period. Save for ABLINK Biotech, all of our five
largest customers in each year/period during the Track Record Period were Independent Third
Parties. For further details, please see “Business – Customers.”
Suppliers
During the Track Record Period, our suppliers primarily consisted of (i) construction
service providers for our manufacturing facilities, (ii) suppliers of the raw materials and
equipment for our drug development, (iii) a CDMO outside the PRC, who provides third party
contracting services for our future large-scale supply to overseas customers and (iv) CROs
engaged for our drug development. Purchases from our five largest suppliers in each
year/period during the Track Record Period were RMB123.2 million, RMB108.6 million and
RMB74.5 million, respectively, representing 48.0%, 52.2% and 63.3% of our total purchases
for the same years/period, respectively. Purchases from our single largest supplier in each
year/period during the Track Record Period were RMB72.9 million, RMB76.0 million and
RMB61.9 million, respectively, representing 28.4%, 36.5% and 52.6% of our purchases for the
same years/period, respectively. We believe that we maintain strong and stable relationships
with our major suppliers. All of our five largest suppliers in each year/period during the Track
Record Period were Independent Third Parties. For further details, please see “Business –
Suppliers and Raw Materials – Suppliers.”
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
This summary historical data of financial information set forth below have been derived
from, and should be read in conjunction with our consolidated financial statements, including
the accompanying notes, set forth in the Accountants’ Report set out in Appendix I to this
prospectus, as well as the information set forth in the section headed “Financial Information.”
Our historical financial information was prepared in accordance with IFRSs.
SUMMARY
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Summary Data of Consolidated Statements of Profit or Loss
The following table sets forth summary data of our consolidated statements of profit or
loss and other comprehensive income for the periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,930 6,160 1,491 41,990
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(149) (1,140) (451) (265)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,781 5,020 1,040 41,725
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H111817,597 7,604 2,859 5,899
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(132,545) (250,727) (116,292) (111,045)
Business development expenses /H1118/H1118 (1,227) (7,908) (3,465) (2,942)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(46,351) (107,636) (49,208) (46,153)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,566) – (12,435)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,655) (4,556) (2,006) (2,666)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(81) (78) – (55,365)
Share of loss of an associate /H1118/H1118/H1118/H1118 (915) (609) (240) (114)
Loss before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(160,396) (364,456) (167,312) (183,096)
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 32 3 –
Loss and total comprehensive
loss for the year/period /H1118/H1118/H1118/H1118/H1118(160,395) (364,433) (167,289) (183,096)
For details on the accounting treatment of redemption rights, anti-dilution rights and
liquidation preferences rights granted to Pre-IPO Investors, see “— Our Pre-IPO Investors”
below and Note 27 to the Accountants’ Report set out in Appendix I to this prospectus.
Non-IFRS Measure
To supplement our consolidated statements of profit or loss and other comprehensive
income which are presented in accordance with IFRSs, we also use adjusted loss as a non-IFRS
measure, which is not required by, or presented in accordance with, IFRSs.
We define adjusted loss (non-IFRS measure) as loss for the year/period adjusted by
adding back (i) share-based payments, and (ii) listing expenses. Share-based payments
represent expenses arising from our grant of share incentives to eligible individuals and are
non-cash in nature. Listing expenses are the expenses arising from activities in relation to the
proposed Listing and Global Offering. The use of the non-IFRS measure has limitations as an
analytical tool, and you should not consider it in isolation from, or as a substitute for, or
SUMMARY
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superior to, analysis of our results of operations or financial condition as reported under IFRSs.
In addition, the non-IFRS financial measure may be defined differently from similar terms used
by other companies and therefore may not be comparable to similar measures presented by
other companies.
The following table reconciles our adjusted loss (non-IFRS measure) for the year/period
presented in accordance with IFRSs:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Loss for the year/period /H1118/H1118/H1118/H1118/H1118/H1118(160,395) (364,433) (167,289) (183,096)
Add:
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 153,152 70,097 46,805
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,566 – 12,435
Adjusted loss (non-IFRS
measure) for the year/period /H1118/H1118 (160,395) (205,715) (97,192) (123,856)
In 2023, 2024 and the six months ended June 30, 2024 and 2025, we recorded revenue of
RMB6.9 million, RMB6.2 million, RMB1.5 million and RMB42.0 million, respectively, which
was derived from our sales of materials, provision of technical services, as well as upfront
payments received under a license and commercialization agreement. We currently have no
products approved for commercial sale and were loss-making during the Track Record Period.
In 2023, 2024 and the six months ended June 30, 2024 and 2025, we incurred net losses of
RMB160.4 million, RMB364.4 million, RMB167.3 million and RMB183.1 million,
respectively. Substantially all of our net losses resulted from research and development
expenses and administrative expenses.
The increase of our net losses from the six months ended June 30, 2024 to the six months
ended June 30, 2025 was primarily due to (i) an increase of RMB55.4 million in other expense,
mainly attributable to the provision for losses on an ongoing litigation associated with a
technology transfer agreement with a biotechnology company, and (ii) an increase of RMB12.4
million in listing expenses; partially offset by an increase of RMB40.5 million in revenue,
mainly due to the recognition of upfront payments received under a license and
commercialization agreement.
The increase of our net losses from 2023 to 2024 was primarily due to (i) an increase of
RMB118.2 million in research and development expenses, mainly attributable to (a) an
increase of RMB93.6 million in share-based payments, arising from our grant of share
incentives to research and development personnel in 2024, and (b) an increase of RMB13.1
million in staff costs, resulting from the expansion of our research and development team; and
SUMMARY
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(ii) an increase of RMB61.3 million in administrative expenses, mainly attributable to (a) an
increase of RMB54.2 million in share-based payments, arising from our grant of share
incentives to management and administrative personnel in 2024, and (b) an increase of
RMB3.8 million in staff costs, resulting from the expansion of our management and
administrative team. For a detailed discussion of the fluctuation of our net losses during the
Track Record Period, see “Financial Information – Description of Selected Components of
Consolidated Statements of Profit or Loss and Other Comprehensive Income” in this
prospectus.
Summary Data from Consolidated Statements of Financial Position
The following table sets forth summary data from our consolidated statements of financial
position as of the dates indicated.
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118607,735 697,687 788,450
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118366,145 665,580 600,237
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,821 196,231 287,870
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,324 469,349 312,367
Total assets less current liabilities /H1118/H1118/H1118/H1118/H1118827,059 1,167,036 1,100,817
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,933 171,160 211,232
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,126 995,876 889,585
For details on the accounting treatment of redemption rights, anti-dilution rights and
liquidation preferences rights granted to Pre-IPO Investors, see “— Our Pre-IPO Investors”
below and Note 27 to the Accountants’ Report set out in Appendix I to this prospectus.
Our net current assets decreased from RMB469.3 million as of December 31, 2024 to
RMB312.4 million as of June 30, 2025, primarily attributable to (i) an increase of RMB87.8
million in other payables and accruals, mainly due to the provision for losses on an ongoing
litigation associated with a technology transfer agreement with a biotechnology company, as
well as increased payables for purchase of property, plant and equipment; and (ii) a decrease
of RMB70.8 million in cash and cash equivalents, mainly due to our net cash used in operating
and investing activities in the six months ended June 30, 2025.
Our net current assets increased from RMB219.3 million as of December 31, 2023 to
RMB469.3 million as of December 31, 2024, primarily attributable to (i) an increase of
RMB202.5 million in cash and cash equivalents, mainly due to the cash inflows from our Series
C Financing and Series C+ Financing, and (ii) an increase of RMB85.2 million in restricted
deposits; partially offset by an increase of RMB44.3 million in other payables and accruals,
mainly because we received the first tranche of upfront payments under the Organon
Agreement in 2024 and recorded such payments as contract liabilities as of December 31, 2024.
SUMMARY
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Our net assets decreased from RMB995.9 million as of December 31, 2024 to RMB889.6
million as of June 30, 2025, attribute to our loss and total comprehensive loss for the period
of RMB183.1 million; offset by (i) capital injection of RMB30.0 million in connection with our
Series C+ Financing, and (ii) equity-settled share-based payment expense of RMB46.8 million
arising from the implementation of the Pre-IPO Share Incentive Plans. Our net assets increased
from RMB749.1 million as of December 31, 2023 to RMB995.9 million as of December 31,
2024, attribute to (i) capital injection of RMB458.0 million mainly in connection with Series
C Financing and Series C+ Financing, and (ii) equity-settled share-based payment expense of
RMB153.2 million arising from the implementation of the Pre-IPO Share Incentive Plans;
offset by our loss and total comprehensive loss for the year of RMB364.4 million.
For details of our financial position, see “Financial Information – Discussion of Certain
Selected Items from the Consolidated Statements of Financial Position” in this prospectus.
Summary Data from Consolidated Statements of Cash Flows
The following table sets forth summary data from our consolidated statements of cash
flows for the periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Operating cash flows before
movements in working capital /H1118 (144,230) (179,763) (81,509) (119,823)
Changes in working capital /H1118/H1118/H1118/H1118/H1118(3,879) (44,664) (93,158) 11,042
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,896 4,646 1,796 3,591
Net cash used in operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(140,213) (219,781) (172,871) (105,190)
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(136,365) (122,120) (59,363) (29,820)
Net cash generated from financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,933 543,196 45,625 64,526
Net (decrease)/increase in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(153,645) 201,295 (186,609) (70,484)
Cash and cash equivalents at
beginning of year/period /H1118/H1118/H1118/H1118/H1118472,347 321,671 321,671 524,158
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,969 1,192 470 (282)
Cash and cash equivalents at
end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 524,158 135,532 453,392
SUMMARY
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For details of our cash flows, see “Financial Information – Liquidity and Capital
Resources – Cash Flows.”
Our primary use of cash during the Track Record Period was to fund our research and
development activities and administrative expenses. We recorded net cash used in operating
activities of RMB140.2 million, RMB219.8 million and RMB105.2 million in 2023, 2024 and
the six months ended June 30, 2025, respectively. During the Track Record Period, we
primarily funded our working capital requirements through equity and debt financings. Our
management closely monitors use of cash and cash equivalents and strives to maintain a
healthy liquidity for our operations. Going forward, we expect our liquidity requirements will
be satisfied by a combination of existing cash and cash equivalents, bank loans, net proceeds
from the Global Offering, considerations received under respective license and collaboration
agreements, as well as revenue generated from sales of our successfully commercialized drugs.
With the continuing expansion of our business, we may require further funding through public
or private offerings, debt financing, license and collaboration arrangements, or other sources.
Our Directors are of the opinion that, taking into account the financial resources available
to us, including cash and cash equivalents, unutilized bank facilities and the estimated net
proceeds from the Global Offering, and considering our cash burn rate, we have available
sufficient working capital to cover at least 125% of our costs, including research and
development expenses, administrative expenses, business development expenses and other
operating costs, for at least the next 12 months from the date of this prospectus.
Our cash burn rate refers to the average monthly amount of net cash used in operating
activities, interest paid, capital expenditures and lease payments. We had cash and cash
equivalents of RMB453.4 million as of June 30, 2025. At the Offer Price of HK$26.38 per H
Share, we estimate that we will receive net proceeds of approximately HK$921.5 million in the
Global Offering. Assuming an average cash burn rate going forward of 1.7 times the level
during the Track Record Period, we estimate that our cash and cash equivalents as of June 30,
2025 will be able to maintain our financial viability for 29 months, taking into account the
estimated net proceeds from the Global Offering. We will continue to monitor our cash flows
from operations closely and expect to raise our next round of financing no earlier than six
months after the completion of the Global Offering.
For more information related to our working capital sufficiency, see “Financial
Information – Working Capital Confirmation.”
SUMMARY
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Key Financial Ratios
The following table sets forth our key financial ratios as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
Current ratio (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.5 3.4 2.1
Note:
(1) Current ratio is calculated as current assets divided by current liabilities as of the end of the year/period.
For details, see “Financial Information – Key Financial Ratios.”
DIVIDENDS
We did not declare or pay any dividend during the Track Record Period. We do not
currently have a formal dividend policy or a fixed dividend payout ratio. We currently intend
to retain all available funds and earnings, if any, to fund the development and expansion of our
business and we do not anticipate paying any cash dividends in the foreseeable future.
Investors should not purchase our ordinary shares with the expectation of receiving cash
dividends. Any future determination to pay dividends will be made at the discretion of our
Directors and may be based on a number of factors, including our future operations and
earnings, capital requirements and surplus, general financial condition, contractual restrictions,
and other factors that our Directors may deem relevant. Regulations in the PRC currently
permit payment of dividends of a PRC company only out of accumulated distributable after-tax
profits less any recovery of accumulated losses and appropriations to statutory and other
reserves that we are required to make, as determined in accordance with its articles of
association and the accounting standards and regulations in China. As a result, we may not have
sufficient or any distributable profits to make dividend contributions to our Shareholders, even
if we become profitable.
SUMMARY
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RISK FACTORS
Our business and the Global Offering involve certain risks including those set out in the
section headed “Risk Factors” in this prospectus. As different investors may have different
interpretations and criteria when determining the significance of a risk, you should read the
“Risk Factors” section in its entirety before you decide to invest in our Offer Shares. Some of
the major risks that we face include:
 We depend substantially on the success of our drug candidates. If we are unable to
successfully complete clinical development, obtain regulatory approvals or achieve
commercialization for our drug candidates, or if we experience significant delays or
cost overruns in doing any of the foregoing, our business and prospects could be
materially and adversely affected.
 We face intense competition and rapid technological change and the possibility that
our competitors may develop therapies that are similar, more advanced, or more
effective than ours, which may adversely affect our financial condition and our
ability to successfully commercialize our drug candidates.
 If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the
satisfaction of regulatory authorities or do not otherwise produce positive results,
we may incur additional costs or experience delays in completing, or may ultimately
be unable to complete, the development and commercialization of our drug
candidates.
 We have submitted NDAs for several of our drug candidates. If we are not able to
obtain, or experience delays in obtaining required regulatory approvals, we will not
be able to commercialize our drug candidates, and our ability to generate revenue
will be materially impaired.
 We have no experience in the commercialization of drugs. If we are unable to build
and manage sales network, or maintain sufficient sales and marketing capabilities,
either by ourselves or through third parties, we may not be able to successfully
create or increase market awareness of our products or sell our products, which will
materially affect our ability to generate sales revenue.
 We have entered into license and collaboration agreements with our partners, and
may form or seek additional collaborations or strategic alliances or enter into
additional licensing arrangements in the future. We may not realize any or all
benefits of such alliances or licensing arrangements, and disputes may arise between
us and our collaboration partners.
SUMMARY
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 Any delays in commencing and completing construction of, and receiving regulatory
approvals for our manufacturing facilities, or any damage to, destruction of, or
interruption of production at such facilities, could reduce or restrict our production
capacity or our ability to develop or sell products, which could have a material and
adverse effect on our business, financial condition and results of operations.
 We have incurred net losses since inception. We anticipate that we will continue to
incur net losses for the foreseeable future and may not be able to generate sufficient
revenue to achieve or maintain profitability. Potential investors are at risk of losing
substantially all of their investments in our H Shares.
OUR CONTROLLING SHAREHOLDERS
Pursuant to the AIC Agreement dated March 10, 2021, entered into by and amongst the
Concert Parties, namely Dr. Liu, Ms. Wang and Mr. Tan, the Concert Parties agreed to reach
consensus on all matters requiring approval by the Board and/or Shareholders, and to vote in
the same manner on such matters in meetings of the Board and Shareholders. The Concert
Parties further agreed that if they are unable to reach consensus on any such matters, Dr. Liu
shall make the final decision. The Concert Parties entered into the AIC Agreement principally
to consolidate their control over our Company’s management and to maintain stability in our
Company’s governance structure, ensuring a consistent and coordinated approach to decision-
making in our Company’s interests. For details, see “History, Development and Corporate
Structure – Acting In Concert Agreement.”
As of the Latest Practicable Date, the Concert Parties were collectively interested in
approximately 45.91% of our total issued share capital, comprising: (i) 21.21% of our total
issued share capital directly held by Dr. Liu; (ii) 11.69% of our total issued share capital
controlled by Dr. Liu indirectly through the Share Incentive Platforms (i.e., Shanghai Luoxu,
Ningbo Hongsheng and Shanghai Luojun), of which the executive partner is Dr. Liu; (iii)
7.81% of our total issued share capital directly held by Ms. Wang; and (iv) 5.21% of our total
issued share capital directly held by Mr. Tan. Therefore, the Concert Parties, Shanghai Luoxu,
Ningbo Hongsheng and Shanghai Luojun are considered as a group of Controlling
Shareholders of our Company, in aggregate holding approximately 40.57% of our total issued
share capital immediately upon completion of the Global Offering. For details, see
“Relationship with the Controlling Shareholders”, “History, Development and Corporate
Structure – Acting In Concert Agreement” and “Substantial Shareholders.”
SUMMARY
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OUR PRE-IPO INVESTORS
Since its establishment, our Company has undertaken six rounds of capital increases and
equity financings to raise funds for the development of our business and to bring in new
shareholders. As of the Latest Practicable Date, we raised a total of approximately
RMB1,530.60 million from the Pre-IPO Investments and 73% of the proceeds from the Pre-IPO
Investments have been utilized. Our Pre-IPO Investors will be subject to lock-up arrangements
at the time of the Global Offering pursuant to the PRC Company Law. Generally, under these
lock-up arrangements, each Pre-IPO Investor will not, at any time during the period
commencing on the Listing Date and ending on a date which is 12 months from the Listing
Date, offer, pledge, sell, transfer or otherwise dispose of their Shares. For details, see “History,
Development and Corporate Structure – Pre-IPO Investments – Principal Terms of the Pre-IPO
Investments.” Our Pre-IPO Investors consist of private equity funds, private limited liabilities
companies and public companies, among which some have a specific focus on the healthcare
industry. Center Laboratories, Fangyuan Capital and Findowin Capital are our Sophisticated
Investors pursuant to Chapter 2.3 of the Guide for New Listing Applicants, in aggregate
holding approximately 24.43% of the total issued share capital of our Company as of the Latest
Practicable Date. For details, see “History, Development and Corporate Structure – Pre-IPO
Investments – Information about Our Pre-IPO Investors.”
Prior to the Track Record Period, our Company entered into respective shareholders’
agreements and share subscription agreements with the Pre-IPO Investors and issued ordinary
Shares thereto with a total consideration of approximately RMB1,530.6 million with the
respective par value being recorded as share capital and the remainder as reserves. Pursuant to
these agreements, the Pre-IPO Investors were granted by our Company with special rights
which included but not limited to redemption rights, anti-dilution rights and liquidation
preferences rights. There was no exercise of special rights granted by our Company throughout
the Track Record Period.
Our Company and the relevant Shareholders subsequently entered into a supplemental
agreement on April 28, 2023, and the Series C Financing and Series C+ Financing
shareholders’ agreements on July 18, 2024 and December 18, 2024, respectively, agreeing that
certain of the special rights granted by our Company to Pre-IPO Investors, including
redemption rights, anti-dilution rights and liquidation preferences rights have been
irrecoverably terminated and shall be deemed void ab initio . Specifically, (i) the redemption
rights, anti-dilution rights and liquidation preference rights granted by our Company under
Series A Financing, Series A1 Financing and Series B Financing shareholders’ agreements have
been irrecoverably terminated according to the supplemental agreement dated April 28, 2023
and shall be deemed void ab initio , and (ii) both the Series C Financing shareholders’
agreement and the Series C+ Financing shareholders’ agreement contain a listing application-
triggered termination provision, which provides that, if and when the Company submits a
listing application to the Stock Exchange, the above special rights shall be deemed as
automatically and irrecoverably terminated on September 30, 2024 and shall be deemed void
ab initio . Following execution of Series C+ Financing shareholders’ agreement, such
agreement has superseded and replaced the Series C Financing shareholders’ agreement on
SUMMARY
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December 18, 2024 in their entirety, including the provisions in relation to the special rights.
On January 21, 2025, the Company submitted the listing application to the Stock Exchange. As
such, the special rights granted by the Company to Pre-IPO Investors contained in the Series
C+ Financing shareholders’ agreement were deemed to be terminated on September 30, 2024
and void ab initio . Taking into account the legal and regulatory framework of our Company’s
jurisdiction and the governing law of the relevant supplemental agreement and shareholders’
agreements, our Directors considered that it is appropriate to present the Pre-IPO Investments
as equity throughout the Track Record Period.
Had the special rights granted by our Company to the Pre-IPO Investors been accounted
for as financial liabilities measured at present value of the redemption amount prior to entering
into the relevant supplemental agreement and shareholders’ agreements, (i) the redemption
financial liabilities, total current liabilities, net current assets and net assets of our Company
would have been:
As of
December 31,
2024
RMB’000
Redemption financial liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,806,280
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,002,511
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,336,931)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(810,404)
; and (ii) our Company’s finance costs associated with the redemption financial liabilities, the
net loss for the year/period, basic and diluted loss per Share for the year/period would have
been:
For the year ended December 31,
For the six
months ended
June 30,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial costs associated with the
redemption financial liabilities /H1118/H1118/H1118/H1118/H111827,101 65,638 9,526
Total net loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(187,496) (430,071) (192,622)
Basic and diluted loss per Share
(expressed in RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3.71) (8.03) (3.34)
For further details of the financial impacts, see note 27 to the Accountants’ Report.
SUMMARY
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OFFERING STATISTICS
The statistics in the following table are based on the assumptions that 37,911,700 H
Shares will be issued pursuant to the Global Offering, 116,415,550 Unlisted Shares will be
converted into H Shares:
Based on the Offer
Price of HK$26.38
per H Share
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$8,599 million
Market capitalization of our H Shares (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$4,071 million
Unaudited pro forma adjusted consolidated net tangible assets
per Share (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$5.85
Notes:
(1) The calculation of market capitalization is based on 37,911,700 H Shares expected to be in issue
immediately upon completion of the Global Offering and totally 325,981,465 Shares in issue
immediately upon completion of the Global Offering presuming the conversion of Unlisted Shares into
H Shares.
(2) The calculation of the market capitalization of our H Shares is based on the 154,327,250 H Shares,
comprising 37,911,700 H Shares to be issued under the Global Offering and 116,415,550 H Shares to
be converted from Unlisted Shares, expected to be in issue immediately upon completion of the Global
Offering.
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after making
the adjustments referred to in “Appendix II – Unaudited Pro Forma Financial Information” and on the
basis that 325,981,465 Shares were in issue assuming that the Global Offering had been completed on
June 30, 2025, without taking into account of any Share which may be allotted and issued under the
general mandates for the allotment and issue of Shares granted to the Directors of our Company.
(4) No adjustment has been made to reflect any trading results or open transactions of our Group entered
into subsequent to June 30, 2025.
LISTING EXPENSES
Listing expenses to be borne by us are estimated to be approximately HK$78.6 million
(including underwriting commission), at the Offer Price of HK$26.38 per H Share, which
represent 7.9% of the gross proceeds from the Global Offering. The above listing expenses are
comprised of (i) underwriting-related expenses of HK$33.8 million, and (ii) non-underwriting-
related expenses of HK$44.8 million, including (a) the legal advisors and the reporting
accountants expenses of HK$27.1 million, and (b) other fees and expenses of HK$17.7 million.
During the Track Record Period, we incurred listing expenses of HK$24.8 million, HK$19.8
million of which was charged to our consolidated statements of profit or loss, and HK$5.0
million of which was attributable to the issue of Shares and will be deducted from equity. We
expect to incur additional listing expenses of approximately HK$53.8 million after the Track
Record Period, approximately HK$15.6 million of which is expected to be charged to our
SUMMARY
–3 2–


--- page 42 ---
consolidated statements of profit or loss, and approximately HK$38.2 million of which is
attributable to the issue of Shares and will be deducted from equity upon Listing. The listing
expenses above are the latest practicable estimate for reference only, and the actual amount
may differ from this estimate.
FUTURE PLANS AND USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$921.5 million, after deducting underwriting commissions, fees and other estimated
expenses paid and payable by us in connection with the Global Offering, at the Offer Price of
HK$26.38 per H Share. We currently intend to use the net proceeds from the Global Offering
for the following purposes, subject to changes in light of our evolving business needs and
changing market conditions:
 Approximately 53.5%, or HK$493.2 million, will be allocated to the research and
development and commercialization of our Core Products, including KJ017, KJ103
and SJ02. Specifically, we expect that:
o Approximately 13.8%, or HK$127.4 million, will be used for the planned
clinical trials and preparation for registration filings of KJ017 in Europe and
the U.S.;
o Approximately 24.3%, or HK$223.8 million, will be used for the ongoing and
planned clinical trials, other research and development activities, and
preparation for registration filings of KJ103 in China, the U.S., Hong Kong and
Europe;
o Approximately 9.4%, or HK$87.1 million, will be used for the planned
multicenter clinical trials and preparation for registration filings of SJ02 in
Europe, Hong Kong and Australia; and
o Approximately 6.0%, or HK$54.9 million, will be used for the anticipated
commercialization of our Core Products, including KJ017, KJ103 and SJ02.
 Approximately 17.7%, or HK$162.8 million, will be allocated to the advancement
of our other existing pipeline assets and preparation for any related registration
filings, including:
o Approximately 6.0%, or HK$55.6 million, will be used to fund the planned
clinical trials for our antibiotics SC formulation candidates, including BJ007,
BJ008 and BJ009, in China and the U.S.;
o Approximately 6.9%, or HK$63.3 million, will be used to fund the planned
clinical trials for KJ015 in China, the U.S. and certain other jurisdictions;
SUMMARY
–3 3–


--- page 43 ---
o Approximately 4.1%, or HK$37.6 million, will be used to fund the ongoing
clinical trial and any future clinical development for SJ04 in China; and
o Approximately 0.7%, or HK$6.3 million, will be used to fund the planned
clinical trials for KJ101 in China.
 Approximately 8.4%, or HK$77.4 million, will be allocated to the continued
optimization of our proprietary synthetic biology technology platforms, as well as
exploration and development of new drug candidates;
 Approximately 10.4%, or HK$95.9 million, will be used to enhance and scale up our
manufacturing capabilities;
 Approximately 10.0% or HK$92.2 million, will be used for working capital and
general corporate purposes.
For more details, please see “Future Plans and Use of Proceeds.”
RECENT DEVELOPMENTS
Since the end of the Track Record Period, we have been consistently advancing our
pipeline and developing our business. We have achieved a series of clinical and regulatory
progress in pipeline development. In July 2025, we received the BTD from the NMPA for
KJ103 for the treatment of anti-GBM disease and initiated Phase II trial for KJ101 in China.
In August 2025, we initiated Phase III trial for KJ103 in highly HLA-sensitized patients
awaiting kidney transplantation and Phase I trial for BJ007 in China. We also received NDA
approval from the NMPA for SJ02 in August 2025, and we completed delivery of the first SJ02
order in November 2025. Furthermore, we entered into an exclusive sales agency agreement
with ANKE BIO, pursuant to which a minimum annual purchase quantity for each year of the
contract period shall be fulfilled by purchases from ANKE BIO. In September 2025, we
obtained IND approval from the NMPA for BJ009 and completed the Phase I clinical trial of
SJ04 in China. Furthermore, in October 2025, we completed the Phase II clinical trial of KJ103
for anti-GBM disease in China.
In July 2025, we entered into an exclusive sales agency agreement with Anhui Anke
Biotechnology (Group) Co., Ltd. (“ ANKE BIO ”, SZSE: 300009), pursuant to which we
granted ANKE BIO an exclusive right to market, sell, distribute, and promote SJ02 in Greater
China.
On November 27, 2025, we initiated the Phase II trial of KJ103 for the treatment of GBS
(CTR20253992) in China.
SUMMARY
–3 4–


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We expect that we will continue to record net losses for the year ending December 31,
2025, primarily because (i) we incurred other expenses for the six months ended June 30, 2025
arising from provision for losses on an ongoing litigation associated with a technology transfer
agreement, which is not related to any of our Core Products or any drug candidates included
in our pipeline chart; (ii) we expect to incur significant research and development expenses as
we continue to advance and expand our pipeline and enhance our proprietary technology
platforms; and (iii) we expect to incur listing expenses in connection with our proposed
Listing.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, there has been no material adverse change in our financial or
trading position or prospects since June 30, 2025 and up to the date of this prospectus and there
is no event since June 30, 2025 which would materially affect the information shown in our
consolidated financial statements included in the Accountants’ Report set out in Appendix I to
this prospectus.
SUMMARY
–3 5–


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In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below. Certain other terms are explained in
“Glossary of Technical Terms.”
“Accountants’ Report” the accountants’ report of our Company, the text of which
is set out in Appendix I to this prospectus
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” Accounting and Financial Reporting Council of Hong
Kong
“AIC Agreement” an acting-in-concert agreement dated March 10, 2021,
entered into by and amongst Dr. Liu, Ms. Wang and Mr.
Tan, as further described in “History, Development and
Corporate Structure — Acting In Concert Agreement”
“Articles of Association”
or “Articles”
the articles of association of our Company adopted by
special resolution on January 21, 2025 with effect from
the Listing Date, as amended, supplemented or otherwise
modified from time to time, a summary of which is set
out in Appendix VI to this prospectus
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Audit Committee” the audit committee of our Board
“A VISTA” A VISTA V aluation Advisory Limited, an independent
property valuer
“Hong Kong Bao Pharma” Bao Pharmaceuticals Hong Kong Limited (ಥ
ʮ̡), a limited liability company established in
Hong Kong on April 17, 2025, one of our subsidiaries
“Board” or “Board of Directors” the board of Directors of our Company
“Business Day” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
DEFINITIONS
–3 6–


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“Capital Market
Intermediary(ies)”
the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners and the Joint Lead Managers,
being the syndicate capital market intermediaries (within
the meaning ascribed thereto under the Listing Rules)
participating in the Global Offering
“CCASS” Central Clearing and Settlement System established and
operated by HKSCC
“Center Lab” a limited liability company incorporated in Hong Kong
and is wholly owned by Center Laboratories, one of our
Substantial Shareholders
“Center Laboratories” Center Laboratories, Inc. (ʮ̡), a
joint stock limited liability company incorporated in
Taiwan in 1959 (TWO: 4123)
“China” or “mainland China”
or “PRC”
the People’s Republic of China and for the purpose of this
prospectus only, unless the context otherwise requires,
excludes Hong Kong, Macau and Taiwan
“close associate(s)” has the meaning ascribed to it under the Listing Rules
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, supplemented or otherwise modified from time
to time
“Companies Ordinance” Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time
“Company,” “our Company” or
“the Company”
Shanghai Bao Pharmaceuticals Co., Ltd. ( ɪऎᘒ᏶ᖹุ
ʮ̡), a joint stock company incorporated in the
PRC with limited liability on July 26, 2023, or, where the
context requires (as the case may be), its predecessor,
Shanghai Bao Pharmaceuticals Co., Ltd. ( ɪऎᘒ᏶ᖹุ
ʮ̡), a limited liability company established under
the laws of the PRC on December 16, 2019
“Compliance Adviser” Rainbow Capital (HK) Limited
DEFINITIONS
–3 7–


--- page 47 ---
“Concert Party(ies)” Dr. Liu, Ms. Wang and Mr. Tan, the details of which are
set out in “History, Development and Corporate Structure
— Acting In Concert Agreement”
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“connected transaction(s)” has the meaning ascribed to it under the Listing Rules
“Controlling Shareholders” has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, refers to Dr. Liu,
Ms. Wang, Mr. Tan and the Share Incentive Platforms,
further details of which are set out in “Relationship with
the Controlling Shareholders”
“core connected person(s)” has the meaning ascribed to it under the Listing Rules
“Core Product(s)” has the meaning ascribed thereto in Chapter 18A of the
Listing Rules and refers to the product for the purpose of
satisfying the eligibility requirements under Chapter 18A
of the Listing Rules and Chapter 2.3 of the Guide for
New Listing Applicants; for the purpose of this
prospectus, our Core Products refer to KJ017, KJ103, and
SJ02
“Corporate Governance Code” Corporate Governance Code set out in Appendix C1 to
the Listing Rules
“CSDC” China Securities Depositary and Clearing Corporation
Limited (ப΂ʮ̡)
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“Director(s)” or “our Director(s)” the director(s) of our Company
“Dr. Liu” Dr. Liu Y anjun (ё), the co-founder of the Group, an
executive Director, chairman of the Board and one of our
Controlling Shareholders
“EIT” PRC enterprise income tax
“EIT Law” Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍ձ
), as amended, supplemented or
otherwise modified from time to time
DEFINITIONS
–3 8–


--- page 48 ---
“Exchange Participant” a person (a) who, in accordance with the Rules of the
Stock Exchange, may trade on or through the Stock
Exchange; and (b) whose name is entered in a list,
register or roll kept by the Stock Exchange as a person
who may trade on or through the Stock Exchange
“Extreme Conditions” extreme conditions caused by a super typhoon as
announced by the Government of Hong Kong
“FINI” or “Fast Interface for
New Issuance”
the online platform operated by HKSCC that is
mandatory for admission to trading and, where
applicable, the collection and processing of specified
information on subscription in and settlement for the
Listing
“Frost & Sullivan” or
“Industry Consultant”
Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., our
industry consultant, an independent market research and
consulting company
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or
modified from time to time and where the context so
permits, shall include the HKSCC Operational
Procedures
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group,” “our Group,”
“we” or “us”
our Company and our subsidiaries from time to time, or
any one of them as the context may require or, where the
context refers to any time prior to its incorporation, the
business which its predecessors or the predecessors of its
present subsidiaries, or any one of them as the context
may require, were or was engaged in and which were
subsequently assumed by it
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Stock
Exchange, as amended, supplemented or otherwise
modified from time to time
“H Share(s)” ordinary share(s) in the share capital of our Company,
with a nominal value of RMB0.20 each, which will be
subscribed for and traded in Hong Kong dollars and listed
on the Stock Exchange
DEFINITIONS
–3 9–


--- page 49 ---
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“Hainan Baoji” Hainan Baoji Biotechnology Co., Ltd. (߅ي
ʮ̡), a limited liability company established in
the PRC on February 8, 2022, one of our subsidiaries
“HK$” or “Hong Kong dollars”
or “HK Dollars”
Hong Kong dollars, the lawful currency of Hong Kong
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your or a
designated HKSCC Participant’s stock account through
causing HKSCC Nominees to apply on your behalf,
including by instructing your broker or custodian who is
a HKSCC Participant to give electronic application
instructions via HKSCC’s FINI system to apply for the
Hong Kong Offer Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant, a
custodian participant or an investor participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
DEFINITIONS
–4 0–


--- page 50 ---
“Hong Kong Offer Shares” the 3,791,200 H Shares offered by us for subscription at
the Offer Price pursuant to the Hong Kong Public
Offering (subject to adjustments as described in
“Structure of the Global Offering”)
“Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for
subscription by the public in Hong Kong (subject to
adjustments as described in “Structure of the Global
Offering”) at the Offer Price (plus brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC
transaction levy), on and subject to the terms and
conditions described in “Structure of the Global
Offering”
“Hong Kong Underwriters” the underwriters listed in “Underwriting — Hong Kong
Underwriters,” being the underwriters of the Hong Kong
Public Offering
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated November 30, 2025
relating to the Hong Kong Public Offering entered into
by, among others, our Company, the Controlling
Shareholders, the Joint Sponsors, the Overall
Coordinators and the Hong Kong Underwriters, as further
described in “Underwriting — Underwriting
Arrangements — Hong Kong Public Offering — Hong
Kong Underwriting Agreement”
“Independent Third Party(ies)” entity(ies) or person(s) which, to the best of our
Directors’ knowledge, information and belief having
made all reasonable enquiries, is/are not connected
person(s) of our Company within the meaning of the
Listing Rules
“International Offer Shares” 34,120,500 H Shares initially offered by our Company
pursuant to the International Offering, subject to
reallocation as described in “Structure of the Global
Offering”
DEFINITIONS
–4 1–


--- page 51 ---
“International Offering” the conditional placing of the International Offer Shares
by the International Underwriters at the Offer Price
outside the United States in offshore transactions in
reliance on Regulation S or any other available
exemptions from the registration requirements under the
U.S. Securities Act, in each case on and subject to the
terms and conditions of the International Underwriting
Agreement, as further described in “Structure of the
Global Offering — The International Offering”
“International Underwriters” the international underwriters who are expected to enter
into the International Underwriting Agreement to
underwrite the International Offering
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering expected to be entered into on or around
December 5, 2025 by, among others, our Company, the
Controlling Shareholders, the Overall Coordinators and
the International Underwriters, as further described in
“Underwriting — Underwriting Arrangements — The
International Offering — International Underwriting
Agreement”
“Joint Bookrunners” the joint bookrunners as named in “Directors,
Supervisors and Parties Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators as named in “Directors,
Supervisors and Parties Involved in the Global Offering”
“Joint Lead Managers” the joint lead managers as named in “Directors,
Supervisors and Parties Involved in the Global Offering”
“Joint Sponsors” the joint sponsors as named in “Directors, Supervisors
and Parties Involved in the Global Offering”
“Latest Practicable Date” November 22, 2025, being the latest practicable date for
the purpose of ascertaining certain information contained
in this prospectus prior to its publication
“Listing” the listing of the H Shares on the Main Board of the Stock
Exchange
“Listing Committee” the listing committee of the Stock Exchange
DEFINITIONS
–4 2–


--- page 52 ---
“Listing Date” the date expected to be on or about December 10, 2025,
on which the H Shares become listed and from which
dealings therein are permitted to take place on the Main
Board of the Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Macau” the Macau Special Administrative Region of the People’s
Republic of China
“Main Board” the stock exchange (excluding the option market)
operated by the Stock Exchange which is independent
from and operated in parallel with the GEM of the Stock
Exchange
“MOF” Ministry of Finance of the PRC (௅)
“MOFCOM” or
“Ministry of Commerce”
the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅) (formerly known as the Ministry of Foreign
Trade and Economic Cooperation of the PRC ( ʕശɛ͏
௅))
“Mr. Tan” Mr. Tan Jingwei ( ᗈཨਃ), an executive Director, director
of internal control of the Company and one of the
Controlling Shareholders
“Ms. Wang” Ms. Wang Zheng ( ˮᅄ), the co-founder of the Group, an
executive Director and Chief Executive Officer of the
Company and one of the Controlling Shareholders
“NDRC” National Development and Reform Commission of the
PRC (ึ)
“Ningbo Hongsheng” Ningbo Hongsheng Enterprise Management Partnership
(Limited Partnership) (ᒿ᳅Άุ၍ଣΥྫΆุ(ࠢ
Υྫ)), a limited liability partnership established in the
PRC on December 8, 2020, one of our Share Incentive
Platforms
“Nomination Committee” the nomination committee of our Board
DEFINITIONS
–4 3–


--- page 53 ---
“Offer Price” the price per Offer Share in Hong Kong dollars (exclusive
of brokerage of 1.0%, AFRC transaction levy of
0.00015%, SFC transaction levy of 0.0027% and Stock
Exchange trading fee of 0.00565%) at which the Offer
Shares are to be subscribed for or purchased pursuant to
the Global Offering, to be determined as described in
“Structure of the Global Offering — Pricing and
Allocation”
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares
“Overall Coordinators” the overall coordinators as named in “Directors,
Supervisors and parties involved in the Global Offering”
“PBOC” People’s Bank of China ( ʕ਷ɛ͏ვБ), the central bank
of the PRC
“PRC Company Law” Company Law of the PRC (),
as amended, supplemented or otherwise modified from
time to time
“PRC Government” or “State” the central government of the PRC, including all
governmental subdivisions (including principal,
municipal and other regional or local government
entities) and instrumentalities
“PRC Legal Advisor” Beijing DeHeng Law Offices, our legal advisor as to PRC
law
“Pre-IPO Investment(s)” the pre-IPO investment(s) in our Company undertaken by
the Pre-IPO Investors, the details of which are set out in
“History, Development and Corporate Structure”
“Pre-IPO Investor(s)” the investor(s) making investments in our Group prior to
this initial public offering as set out in “History,
Development and Corporate Structure — Pre-IPO
Investments”
DEFINITIONS
–4 4–


--- page 54 ---
“Pre-IPO Share Incentive Plans” the pre-IPO share incentive plans of our Company
adopted on August 16, 2023, a summary of the principal
terms of which is set forth in “Appendix VII — Statutory
and General Information — C. Further Information about
the Directors, Supervisors, Senior Management and
Substantial Shareholders — 5. Pre-IPO Share Incentive
Plans”
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration Committee” the remuneration committee of our Board
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAFE” State Administration of Foreign Exchange of the PRC ( ʕ
̮ි၍ଣ҅)
“SAMR” State Administration for Market Regulation of the PRC
(̹ఙ္ຖ၍ଣᐼ҅)
“SA T” State Administration of Taxation of the PRC ( ʕശɛ͏΍
೼ਕᐼ҅)
“Series A Financing” one of the Pre-IPO Investments in our Company, the
details of which are set out in “History, Development and
Corporate Structure — Establishment and Major
Shareholding Changes of our Company — (d) Equity
Transfers in 2021 and Series A Financing”
“Series B Financing” one of the Pre-IPO Investments in our Company, the
details of which are set out in “History, Development and
Corporate Structure — Establishment and Major
Shareholding Changes of our Company — (f) Series B
Financing”
“Series C Financing” one of the Pre-IPO Investments in our Company, the
details of which are set out in “History, Development and
Corporate Structure — Establishment and Major
Shareholding Changes of our Company — (j) Series C
Financing”
DEFINITIONS
–4 5–


--- page 55 ---
“Series C+ Financing” one of the Pre-IPO Investments in our Company, the
details of which are set out in “History, Development and
Corporate Structure — Establishment and Major
Shareholding Changes of our Company — (k) Series C+
Financing”
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Shanghai Luojun” Shanghai Luojun Management Consulting Partnership
(Limited Partnership) ( ɪऎᖯё၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), a limited liability partnership established in the
PRC on August 9, 2023, one of our Share Incentive
Platforms
“Shanghai Luoxu” Shanghai Luoxu Management Consulting Partnership
(Limited Partnership) ( ɪऎᖯϛ၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), a limited liability partnership established in the
PRC on September 2, 2020, one of our Share Incentive
Platforms
“Shanghai-Hong Kong
Stock Connect”
a securities trading and clearing links program developed
by the Stock Exchange, Shanghai Stock Exchange,
HKSCC and CSDC for mutual market access between
Hong Kong and Shanghai
“Share(s)” ordinary share(s) in the share capital of our Company
with a nominal value of RMB0.20 each upon the
completion of the Share Subdivision, comprising
Unlisted Share(s) and H Share(s); before the completion
of the Share Subdivision, ordinary share(s) in the share
capital of our Company with a nominal value of
RMB1.00 each
“Share Incentive Platforms” Shanghai Luojun, Shanghai Luoxu and Ningbo
Hongsheng, or any one of them as the context may
require
DEFINITIONS
–4 6–


--- page 56 ---
“Share Subdivision” the Share Subdivision immediately prior to the Listing,
pursuant to which each of our Share with par value of
RMB1.00 will be subdivided into five Shares with par
value of RMB0.20 each
“Shareholder(s)” holder(s) of the Share(s)
“Shenzhen-Hong Kong
Stock Connect”
a securities trading and clearing links program to be
developed by the Stock Exchange, Shenzhen Stock
Exchange, HKSCC and CSDC for mutual market access
between Hong Kong and Shenzhen
“Sophisticated Investor(s)” has the meaning ascribed to it under the Chapter 2.3 of
the Guide for the New Listing Applicants
“Sponsor-Overall Coordinators” the sponsor-overall coordinators as named in “Directors,
Supervisors and parties involved in the Global Offering”
“SSE” Shanghai Stock Exchange
“State Council” State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Stock Exchange” or “HKEX” The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“subsidiary(ies)” has the meaning ascribed to it under the Listing Rules
“substantial Shareholder(s)” has the meaning ascribed to it under the Listing Rules
“Supervisor(s)” member(s) of our Supervisory Committee
“Supervisory Committee” the supervisory committee of our Company
“Suzhou Centergene” Suzhou Centergene Pharmaceuticals Co., Ltd. ( ᘽψ᳅᏶
ʮ̡), a limited liability company established in
the PRC on July 24, 2014, one of our subsidiaries
“Suzhou Kangju” Suzhou Kangju Biotechnology Co., Ltd. (ي
ʮ̡), a limited liability company established in
the PRC on August 15, 2011, one of our subsidiaries
“SZSE” Shenzhen Stock Exchange
DEFINITIONS
–4 7–


--- page 57 ---
“Takeovers Code” the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Track Record Period” the period comprising the years ended December 31,
2023 and 2024 and six months ended June 30, 2025
“treasury shares” has the meaning ascribed to it under the Listing Rules
“Trial Measures for Overseas
Listing”
Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆ
), as amended,
supplemented or otherwise modified from time to time
“TWO” Taipei Exchange, an over-the-counter market in Taiwan
“U.S.” or “United States” the United States of America, its territories and
possessions, any State of the United States, and the
District of Columbia
“U.S. dollar” or “US$” United States dollar, the lawful currency of the United
States
“U.S. persons” U.S. persons as defined in Regulation S
“U.S. Securities Act” United States Securities Act of 1933 and the rules and
regulations promulgated thereunder, as amended,
supplemented or otherwise modified from time to time
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“Unlisted Share(s)” ordinary share(s) issued by our Company with a nominal
value of RMB0.2 each which is/are not listed on any
stock exchange
“White Form eIPO ” the application for the Hong Kong Offer Shares to be
issued in the applicant’s own name by submitting
applications online through the designated website
of White Form eIPO Service Provider at
www.eipo.com.hk
DEFINITIONS
–4 8–


--- page 58 ---
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“%” per cent
For ease of reference, the names of Chinese laws and regulations, governmental
authorities, institutions, natural persons or other entities (including our subsidiary) have been
included in this prospectus in both the Chinese and English languages and in the event of any
inconsistency, the Chinese versions shall prevail.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any discrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
DEFINITIONS
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This glossary contains definitions of certain technical terms used in this prospectus
in connection with us and our business. These may not correspond to standard industry
definitions and may not be comparable to similarly terms adopted by other companies.
“absorption kinetics” a process describing the rate and mechanism by which a
substance is absorbed into a system or organism
“acute respiratory distress
syndrome” or “ARDS”
a severe lung condition causing fluid buildup in alveoli,
leading to breathing difficulties and low oxygen levels in
blood
“ADCs” antibody-drug conjugates, a substance made up of a
monoclonal antibody chemically linked to a cytotoxic
drug
“AE(s)” adverse event(s), any untoward medical occurrence in a
patient or clinical investigation subject administered a
drug or other pharmaceutical product during clinical
trials. AEs do not necessarily have a causal relationship
with the treatment
“antibody-mediated rejection” or
“AMR”
a form of allograft rejection caused by donor-specific
antibodies leading to complement activation, endothelial
injury, and microvascular inflammation, compromising
graft survival
“ankylosing spondylitis” a chronic inflammatory disease primarily affecting the
axial skeleton, leading to progressive spinal stiffness,
sacroiliitis, and potential spinal fusion
“anti-glomerular basement
membrane” or “Anti-GBM”
a rare autoimmune condition where antibodies target the
glomerular basement membrane, causing rapidly
progressive glomerulonephritis and, in some cases,
pulmonary hemorrhage
“anti-xenograft antibodies” antibodies that target antigens on xenogeneic tissues or
organs, triggering immune responses such as complement
activation, inflammation, and graft rejection, thereby
posing a significant barrier to successful
xenotransplantation
GLOSSARY OF TECHNICAL TERMS
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“antibody-mediated rejection” or
“AMR”
a form of transplant rejection caused by antibodies
targeting antigens on the graft, leading to complement
activation, endothelial injury, inflammation, and eventual
graft dysfunction or loss. It is a significant challenge in
transplant immunology and requires targeted
immunosuppressive therapies
“autoimmune diseases” a group of disorders in which the immune system
mistakenly attacks the body’s own tissues, failing to
distinguish self from non-self. This leads to
inflammation, tissue damage, and impaired organ
function. Examples include rheumatoid arthritis, type 1
diabetes, systemic lupus erythematosus, and multiple
sclerosis. These diseases can affect specific organs or
have systemic effects and often require long-term
immunosuppressive or immunomodulatory treatments
“/H9252-lactam antibiotics” a class of broad-spectrum antibiotics characterized by the
presence of a /H9252-lactam ring in their molecular structure.
They inhibit bacterial cell wall synthesis by targeting
penicillin-binding proteins (PBPs), leading to cell lysis
and death. /H9252-lactam antibiotics include penicillins,
cephalosporins, carbapenems, and monobactams. They
are widely used to treat bacterial infections but can be
inactivated by /H9252-lactamase enzymes produced by
resistant bacteria, often requiring combination with
/H9252-lactamase inhibitors
“bioequivalence” a condition where two drug formulations show
comparable bioavailability, including rate and extent of
absorption, under similar conditions
“BTD” Breakthrough Therapy Designation
“carboxyl-terminal peptide” or
“CTP”
a peptide sequence added to therapy proteins to extend
their half-life by reducing clearance and avoiding rapid
degradation, often used in drug design
“cathepsin” a family of proteolytic enzymes involved in protein
degradation, antigen processing, and various pathological
processes such as cancer and arthritis
“CAGR” compound annual growth rate
GLOSSARY OF TECHNICAL TERMS
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“CDE” the Center for Drug Evaluation of the NMPA
“CD20” cluster of differentiation 20, a protein that is expressed on
the surface of B cells, starting at the pre-B cell stage and
also on mature B cells in the bone marrow and in the
periphery
“CD22” a protein found on the surface of mature B cells and to a
lesser extent on some immature B cells
“CD28” a protein expressed on T-cell that provides co-stimulatory
signals required for T-cell activation and survival
“CD154” a protein expressed on activated T cells that binds to
CD40, playing a key role in immune responses and B cell
activation
“ceftriaxone sodium” a broad-spectrum, third-generation cephalosporin
antibiotic used to treat bacterial infections, including
respiratory, urinary, and central nervous system
infections
“CHO cell” Chinese Hamsters Ovary Cell, which is widely used in
biopharmaceutical industry to produce recombinant
proteins
“chondroitin sulfate” a compound present naturally in cartilage and connective
tissues, commonly used as a supplement to support joint
health and treat osteoarthritis
“chymotrypsin” a digestive enzyme produced in the pancreas that breaks
down proteins in the small intestine by cleaving peptide
bonds, specifically targeting aromatic amino acids like
tyrosine, tryptophan, and phenylalanine
“CMC” chemistry, manufacturing and controls, processes used in
preclinical and clinical development stages to ensure that
pharmaceutical and biopharmaceutical drug products are
consistently effective, safe and high quality for
consumers
GLOSSARY OF TECHNICAL TERMS
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“coagulation factor” a group of proteins in blood plasma responsible for blood
clotting
“collagen” a structural protein found in skin, bones, and connective
tissues, providing strength and elasticity
“controlled ovarian stimulation”
or “COS”
a medical procedure using hormones to stimulate the
ovaries to produce multiple eggs for assisted
reproduction
“corticosteroid” a class of steroid hormones that reduce inflammation and
regulate immune response and metabolism
“CRO” contract research organization, a company that provides
support to the pharmaceutical, biotechnology, and
medical device industries in the form of research services
outsourced on a contract basis
“CSO” contract sales organization, a company that provides
outsourced sales and marketing services to another
company on a contractual basis
“cytokines” a group of small proteins that mediate and regulate
immune and inflammatory responses
“dendritic cell” a type of immune cell that processes and presents
antigens to T cells, initiating an immune response
“difficult venous access” or
“DIV A”
a condition where it is challenging to locate or access
veins for medical procedures like blood draws or
intravenous cannulation insertion
“DLT” dose-limiting toxicity, side effects of a drug that are
serious enough to prevent an increase in dose
“DMF” drug master files, submissions to FDA used to provide
confidential, detailed information about facilities,
processes, or articles used in the manufacturing,
processing, packaging, and storing of human drug
products
GLOSSARY OF TECHNICAL TERMS
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“DNA synthesis” a process by which a cell replicates its DNA during cell
division, involving complementary base pairing and
catalyzed by DNA polymerase enzymes within the
nucleus
“donor-specific antibodies” or
“DSA”
antibodies produced by a transplant recipient that target
the donor’s organ or tissue, potentially causing rejection
“EMA” European Medicines Agency
“ERBB” refers to a group of receptor tyrosine kinases, including
EGFR (ERBB1), HER2 (ERBB2), HER3 (ERBB3), and
HER4 (ERBB4), which play critical roles in cell
signaling pathways regulating cell proliferation,
differentiation, migration, and survival. Dysregulation or
mutations in ERBB receptors are frequently implicated in
various cancers, particularly breast, lung, and colorectal
cancers, often serving as therapeutic targets in oncology
“Escherichia coli” or “ E. coli ” a gram-negative, rod-shaped bacterium commonly found
in the intestines of humans and animals, with pathogenic
strains causing illnesses like diarrhea, urinary tract
infections, and hemolytic uremic syndrome
“extracellular matrix” or “ECM” an intricate network of macromolecules, including
proteins such as collagen, elastin, and fibronectin, as well
as glycosaminoglycans, that provides structural support
and biochemical signaling to surrounding cells, playing a
critical role in tissue development, repair, and
homeostasis
“F(ab)
2” a fragment of an antibody created by enzymatic digestion
with pepsin, consisting of two antigen-binding Fab
regions linked by disulfide bonds, but lacking the Fc
region; it retains the ability to bind antigens but cannot
engage Fc receptors or activate complement, making it
useful in therapeutic and diagnostic applications where
Fc-mediated effects are undesirable
GLOSSARY OF TECHNICAL TERMS
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“factor VIII for hemophilia” a vital blood-clotting protein, factor VIII is deficient in
individuals with hemophilia A, and its replacement
through recombinant or plasma-derived products is
essential for preventing or controlling bleeding episodes,
with newer therapies focusing on extended half-life
products and gene therapy for improved management
“Fc fragment” a portion of an antibody molecule that is generated by
enzymatic digestion and consists of the constant region of
the heavy chains, responsible for mediating effector
functions such as binding to Fc receptors on immune
cells and activating the complement system
“FDA” U.S. Food and Drug Administration
“FSH /H9252-chain gene” a gene that encodes the beta subunit of follicle-
stimulating hormone, a key glycoprotein involved in
reproductive functions such as gametogenesis and
ovarian follicle maturation
“Follicle Stimulating Hormone”
or “FSH”
a glycoprotein hormone secreted by the anterior pituitary
gland, essential for regulating reproductive processes like
ovarian follicle development and spermatogenesis in
mammals
“GCP” Good Clinical Practice
“GFA” Gross Floor Area
“glycosylation” A biochemical process where a glycan attaches to a
protein, a lipid, or other organic molecule, especially
through the catalytic action of certain enzymes
“glomerular basement membrane”
or “GBM”
a specialized extracellular matrix structure in the
kidney’s glomerulus that acts as a filtration barrier,
preventing large molecules and cells from passing into
urine
“GMP” Good Manufacturing Practice
“gonadotropin-releasing
hormone” or “GnRH”
a hormone produced by the hypothalamus that regulates
the release of FSH and LH from the pituitary gland
GLOSSARY OF TECHNICAL TERMS
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“Guillain-Barré Syndrome” or
“GBS”
a rare autoimmune disorder in which the immune system
attacks peripheral nerves, causing muscle weakness,
tingling, and, in severe cases, paralysis. It is often
triggered by infections
“head-to-head analysis” a direct comparison of two or more interventions,
treatments, or strategies, typically in clinical trials or
studies, to determine their relative efficacy, safety, or
cost-effectiveness under similar conditions
“HER2” human epidermal growth factor receptor 2
“Human Chorionic
Gonadotropin” or “hCG”
a hormone produced by the placenta during pregnancy
that supports the corpus luteum to maintain progesterone
production, critical for sustaining the early stages of
pregnancy
“human leukocyte antigen” or
“HLA”
a type of proteins found on the surface of most cells in the
body that play a critical role in the immune system by
helping it distinguish between self and non-self, crucial
for organ transplantation, immune response, and disease
susceptibility
“hyaluronic acid” or “HA” a naturally occurring polysaccharide found in connective
tissues, skin, and synovial fluid, known for its ability to
retain moisture, promote tissue repair, and provide
lubrication in joints
“hyaluronidase” an enzyme that breaks down hyaluronic acid in
connective tissue, increasing tissue permeability and
promoting the diffusion of fluids or drugs
“hyperacute rejection” a rapid and severe immune response occurring minutes to
hours after transplantation, caused by pre-existing
antibodies in the recipient attacking the donor organ,
leading to immediate graft failure
“IgE-mediated allergic reaction” a type I hypersensitivity reaction triggered by the binding
of allergens to immunoglobulin E (IgE) antibodies on the
surface of mast cells and basophils, causing the release of
histamine and other inflammatory mediators
GLOSSARY OF TECHNICAL TERMS
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“IgG-degrading enzyme” an enzyme that cleaves IgG antibodies, reducing immune
responses and often used by pathogens to evade host
immunity
“IL-1” a group of 11 cytokines that plays a central role in the
regulation of immune and inflammatory responses to
infections or sterile insults
“IL-6” an interleukin that acts as both a pro-inflammatory
cytokine and an anti-inflammatory myokine
“IL-17” a pro-inflammatory cytokine produced primarily by Th17
cells, crucial for host defense against extracellular
pathogens and involved in autoimmune inflammation
“IL-23” a pro-inflammatory cytokine produced by antigen-
presenting cells, promoting Th17 cell differentiation and
survival, and playing a key role in autoimmune and
inflammatory diseases
“immunogenicity” the ability of a substance, such as an antigen or vaccine,
to provoke an immune response in the body, including the
activation of T cells, B cells, and the production of
antibodies
“immunoglobulin G” or “IgG” the most abundant antibody in the blood and extracellular
fluid, playing a key role in long-term immunity by
neutralizing pathogens, promoting phagocytosis, and
activating the complement system. It is divided into four
subclasses (IgG1, IgG2, IgG3, IgG4) with distinct
biological functions
“immunoglobulin M” or “IgM” one of several isotypes of antibody (also known as
immunoglobulin) that are produced by vertebrates
“immunosuppressive treatment” a therapeutic intervention that deliberately inhibits or
prevents immune system responses through
pharmacological agents, primarily used to prevent organ
rejection in transplant recipients and manage
autoimmune disorders
“IND” Investigational New Drug
GLOSSARY OF TECHNICAL TERMS
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“interferon” a group of naturally occurring proteins produced by
immune cells that help regulate the body’s immune
response and interfere with viral replication, used
therapeutically to treat various diseases including cancer
and viral infections
“intravenous administration” a method of delivering medications or fluids directly into
a patient’s bloodstream through a vein using a needle or
catheter, allowing for rapid absorption and precise dosing
control of therapeutic agents
“ischemic stroke” a medical emergency that occurs when blood flow to the
brain is blocked by a clot or narrowed artery, causing
oxygen deprivation and potential death of brain tissue in
the affected area
“kallikrein” a group of serine proteases found in blood and tissues that
play crucial roles in blood pressure regulation,
inflammation and blood coagulation through the
production of kinins
“L-asparaginase” an enzyme used as a chemotherapy drug to treat certain
blood cancers by breaking down asparagine, an amino
acid that cancer cells need to survive but cannot make on
their own
“MAPK” mitogen activated protein kinase, a type of protein kinase
that is specific to the amino acids serine and threonine
“MEDSAFE” the New Zealand Medicines and Medical Devices Safety
Authority
“minimum inhibitory
concentration” or “MIC”
the lowest concentration of an antimicrobial agent that
prevents visible growth of a microorganism after
overnight incubation
“monocytes” white blood cells that circulate in the blood and can
differentiate into macrophages and dendritic cells when
they enter tissues
“monoclonal antibody” or “mAb” an antibody produced from a cell lineage made by
cloning a unique white blood cell
GLOSSARY OF TECHNICAL TERMS
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“MTD” maximum tolerated dose, the highest dose of a drug or
treatment that does not cause unacceptable side effects
“myasthenia gravis” an autoimmune disease causing muscle weakness and
fatigue, where antibodies attack acetylcholine receptors
at the neuromuscular junction, disrupting nerve-muscle
communication
“NDA” new drug application
“neutrophil elastase” an enzyme released by neutrophils that breaks down
elastin and other proteins, important in fighting
pathogens but can damage tissue when overactive in
inflammatory conditions
“NMPA” National Medical Products Administration
“non-pathogenic strain” a strain of microorganism that does not cause disease in
a specific host under normal circumstances
“PD-1” programmed death-1, an immune checkpoint receptor
expressed on T cells, B cells and macrophages, acting to
turn off the T cell mediated immune response as part of
the process that stops a healthy immune system from
attacking other pathogenic cells in the body
“peptide” a short chain of amino acids linked by peptide bonds,
shorter than proteins (typically 2-50 amino acids), that
can serve various biological functions including
hormones, neurotransmitters, and antimicrobial agents
“phase I clinical trial(s)” a study in which a drug is introduced into healthy human
subjects or patients with the target disease or condition
and tested for safety, dosage tolerance, absorption,
metabolism, distribution, excretion, and if possible, to
gain an early indication of its effectiveness
“phase II clinical trial(s)” a study in which a drug is administered to a limited
patient population to identify possible adverse effects and
safety risks, to preliminarily evaluate the efficacy of the
product for specific targeted diseases, and to determine
dosage tolerance and optimal dosage
GLOSSARY OF TECHNICAL TERMS
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“phase III clinical trial(s)” a study in which a drug is administered to an expanded
patient population generally at geographically dispersed
clinical trial sites, in well-controlled clinical trials to
generate enough data to statistically evaluate the efficacy
and safety of the product for approval, to provide
adequate information for the labeling of the product
“pharmacodynamics” or “PD” the study of how drugs affect the body, including their
biochemical and physiological effects, mechanisms of
action, relationship between drug concentration and
response, and the time course of therapeutic and adverse
effects
“pharmacokinetics” or “PK” the study of how the body handles drugs, focusing on the
movement of drugs through the body including
absorption, distribution, metabolism, and excretion, and
how these processes affect drug concentration over time
“PI3K/Akt” a critical intracellular signaling pathway that regulates
cell survival, proliferation, growth, and metabolism
through the activation of phosphatidylinositol 3-kinase
(PI3K) and its downstream effector protein kinase B
(Akt)
“PK-BA” pharmacokinetics and bioavailability analysis, the study
of drug absorption and distribution in the body, including
measurements of how much drug reaches systemic
circulation and becomes available at target sites after
administration
“plasmin” a fibrinolytic enzyme that breaks down blood clots by
degrading fibrin. It is formed from the activation of
plasminogen by tissue plasminogen activator or
urokinase and plays a key role in preventing excessive
blood clotting and maintaining vascular homeostasis
“R&D” Research and development
“rheumatoid arthritis” a chronic autoimmune disease that primarily affects
synovial joints causing symmetric inflammation,
progressive joint destruction, persistent pain and
stiffness, characterized by the presence of autoantibodies
like rheumatoid factor and anti-CCP antibodies in most
patients
GLOSSARY OF TECHNICAL TERMS
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“SAE(s)” severe adverse event(s)
“SARS-CoV-2” a highly transmissible betacoronavirus that causes
COVID-19 disease through binding of its spike protein to
ACE2 receptors on human cells, leading to respiratory
illness and potential systemic complications, with
multiple variants emerging since its initial identification
in 2019
“Streptococcus equi subsp. Equi ” a highly contagious gram-positive beta-hemolytic
bacterium that causes strangles in horses, characterized
by severe inflammation of the upper respiratory tract,
abscess formation in lymph nodes, and purulent nasal
discharge, transmitted through direct contact or
contaminated materials
“subcutaneous delivery” a route of drug administration where medication is
injected into the subcutaneous tissue between the skin
and muscle
“T cell-APC” a critical immunological interaction between T
lymphocytes and antigen-presenting cells that involves
MHC molecule presentation of processed antigens to T
cell receptors, leading to T cell activation, cytokine
production, and initiation of adaptive immune responses
“TEAE(s)” treatment emergent adverse events, adverse events not
present prior to medical treatment, or an already present
event that worsens either in intensity or frequency
following the treatment
“thrombin” a multifunctional serine protease enzyme central to blood
coagulation that converts soluble fibrinogen into
insoluble fibrin strands, activates multiple coagulation
factors, and promotes platelet aggregation through
protease-activated receptor signaling pathways
“thrombotic thrombocytopenic
purpura”
a rare blood disorder characterized by widespread
formation of blood clots in small vessels, low platelet
count, hemolytic anemia, and reduced ADAMTS13
enzyme activity, leading to organ damage, neurological
symptoms, fever, and kidney problems. Requires urgent
plasma exchange treatment
GLOSSARY OF TECHNICAL TERMS
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“tissue plasminogen activator” or
“tPA”
a highly specific fibrinolytic enzyme produced primarily
by endothelial cells that converts plasminogen to active
plasmin through proteolytic cleavage, leading to
dissolution of fibrin-based blood clots and serving as a
critical endogenous regulator of hemostasis and
thrombosis
“TNF” tumor necrosis factor, a potent proinflammatory cytokine
primarily produced by activated macrophages and other
immune cells that mediates acute phase reactions,
induces apoptosis in tumor cells, regulates immune cell
function, and plays key roles in systemic inflammation,
autoimmune conditions, and host defense against
pathogens
“TRAE(s)” treatment related adverse events, TEAE determined to be
related to the study medication
“trypsin” a pancreatic serine protease that hydrolyzes peptide
bonds specifically after lysine and arginine residues,
playing essential roles in protein digestion within the
small intestine and serving as a crucial enzyme for
protein analysis in biochemical research and industrial
applications
“tumor necrosis factor” a potent proinflammatory cytokine released primarily by
activated macrophages that mediates systemic
inflammation, triggers fever and acute phase response,
stimulates immune cell recruitment and activation,
induces apoptotic cell death, and plays key roles in
autoimmune diseases and cancer pathogenesis
“ulinastatin” a glycoprotein serine protease inhibitor extracted from
human urine that suppresses the activity of multiple
proteolytic enzymes including trypsin, neutrophil
elastase and thrombin
“xenotransplantation” a surgical procedure involving the transplantation of
living cells, tissues, or organs from one species to
another, typically from pigs to humans, requiring
extensive genetic modification and immunological
manipulation to prevent hyperacute rejection and ensure
functional compatibility between donor and recipient
GLOSSARY OF TECHNICAL TERMS
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This prospectus contains forward-looking statements and information that relate to our
current expectations and views of future events. These forward-looking statements are
contained principally in “Summary,” “Risk Factors,” “Industry Overview,” “Business,”
“Financial Information” and “Future Plans and Use of Proceeds.” These statements relate to
events that involve known and unknown risks, uncertainties and other factors, including those
listed in “Risk Factors,” which may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or
implied by the forward-looking statements.
This prospectus contains forward-looking statements and information relating to us and
our subsidiaries that are based on the beliefs of our management as well as assumptions made
by and information currently available to our management. When used in this prospectus, the
words “aim,” “anticipate,” “aspire,” “believe,” “could,” “expect,” “going forward,” “intend,”
“may,” “ought to,” “plan,” “project,” “schedule,” “seek,” “should,” “target,” “vision,” “will,”
“would,” and the negative of these words and other similar expressions, as they relate to us or
our management, are intended to identify forward-looking statements. Such statements reflect
the current views of our management with respect to future events, operations, liquidity and
capital resources, some of which may not materialize or may change. These statements are
subject to certain risks, uncertainties and assumptions, including the risk factors as described
in “Risk Factors” and elsewhere in this prospectus, some of which are beyond our control and
may cause our actual results, performance or achievements, or industry results, to be materially
different from any future results, performance or achievements expressed or implied by the
forward-looking statements. Y ou are strongly cautioned that reliance on any forward-looking
statements involves known and unknown risks and uncertainties. The risks and uncertainties
facing us which could affect the accuracy of forward-looking statements include, but are not
limited to, the following:
 our operations and business prospects;
 our financial condition and performance;
 our capital expenditure plan;
 our ability to maintain good relationships with our business partners;
 future developments, trends and conditions (including economic, political and
business conditions) in the industries and markets in which we operate or plan to
operate;
 changes to the regulatory environment in the industries and markets in which we
operate;
 the actions and developments of our competitors;
FORW ARD-LOOKING STATEMENTS
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 the ability of third parties to perform in accordance with contractual terms and
specifications;
 our ability to retain senior management and key personnel and recruit qualified staff;
 our ability to control or reduce costs;
 our ability to control our risks;
 our financial condition and performance, debt levels and capital needs;
 various business opportunities that we may pursue;
 our business strategies, objectives and plans and our ability to achieve these
strategies;
 changes or volatility in interest rates, foreign exchange rates, equity prices or other
rates or prices, including those pertaining to the PRC and the industry and markets
in which we operate; and
 capital market developments.
These forward-looking statements are subject to risks, uncertainties and assumptions,
some of which are beyond our control. In addition, these forward-looking statements reflect
our current views with respect to future events and are not a guarantee of future performance.
Actual outcomes may differ materially from the information contained in the forward-looking
statements as a result of a number of factors, including, without limitation, the risk factors set
out in “Risk Factors.”
The forward-looking statements made in this prospectus relate only to events or
information as of the date on which the statements are made in this prospectus. Except as
required by law, we undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise, after the date
on which the statements are made or to reflect the occurrence of unanticipated events. Y ou
should read this prospectus completely and with the understanding that our actual future results
or performance may be materially different from what we expect.
In this prospectus, statements of, or references to, our intentions or those of any of our
Directors are made as of the date of this prospectus. Any of these intentions may change in light
of future development.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares involves significant risks. You should carefully
consider all of the information in this prospectus, including the risks and uncertainties
described below, as well as our financial statements and the related notes, and the
“Financial Information” section, before making an investment in our H Shares.
Particularly, we are a biotech company seeking to list on the Main Board of the Stock
Exchange under Chapter 18A of the Listing Rules. The following is a description of what
we consider to be our material risks. Any of the following risks could have a material
adverse effect on our business, financial condition and results of operations. In any such
case, the market price of our H Shares could decline, and you may lose all or part of your
investment given the nature of biotech industry.
These factors are contingencies that may or may not occur , and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given will not be updated after the date hereof, and is subject to the
cautionary statements in “Forward-looking Statements” in this prospectus.
We believe there are certain risks and uncertainties involved in our operations, some of
which are beyond our control. We have categorized these risks and uncertainties into: (i) key
risks relating to our business, business operations, intellectual property rights and financial
prospects; (ii) other risks relating to our business, comprising (a) risks relating to the
development of our drug candidates, (b) risks relating to the manufacturing of our drug
candidates, (c) risks relating to the commercialization of our drug candidates, (d) risks relating
to our reliance on third parties, (e) risks relating to our intellectual property rights, and (f) risks
relating to extensive government regulation; (iii) other risks relating to our financial position
and need for additional capital; (iv) other risks relating to our operations; (v) risks relating to
doing business in the jurisdictions where we operate; and (vi) risks relating to the Global
Offering.
Additional risks and uncertainties that are presently not known to us or not expressed or
implied below or that we currently deem immaterial could also harm our business, financial
condition, results of operations and prospects. Y ou should consider our business and prospects
in light of the challenges we face, including the ones discussed in this section.
RISK FACTORS
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KEY RISKS RELATING TO OUR BUSINESS, BUSINESS OPERATIONS,
INTELLECTUAL PROPERTY RIGHTS AND FINANCIAL PROSPECTS
We depend substantially on the success of our drug candidates. If we are unable to
successfully complete clinical development, obtain regulatory approvals or achieve
commercialization for our drug candidates, or if we experience significant delays or cost
overruns in doing any of the foregoing, our business and prospects could be materially
and adversely affected.
All of our drug candidates are still in development. Our ability to generate revenue and
realize profitability depends on our ability to successfully complete the development of our
drug candidates, obtain necessary regulatory approvals, and manufacture and commercialize
our drug candidates. We have invested a significant portion of our efforts and financial
resources in the development of our existing drug candidates, and we expect to continue to
incur substantial and increasing expenditures for the development, manufacturing and
commercialization of our drug candidates. The success of our drug candidates will depend on
several factors, including but not limited to:
 successful completion of preclinical and clinical studies;
 obtaining positive results in our clinical trials demonstrating efficacy, safety and
durability of effect of our drug candidates;
 receipt of regulatory approvals for planned clinical trials, future clinical trials or
drug registrations, manufacturing and commercialization;
 successful identification of potential drug candidates based on our research and
development methodology or program selection criteria and process;
 sufficient resources to discover or acquire additional drug candidates;
 establishing sufficient commercial manufacturing capabilities, by expanding our
existing facilities, building new facilities, and collaborating with CROs and
CDMOs;
 successful collaboration on the development and commercialization efforts of our
drug candidates with our strategic partners;
 the performance by CROs, CDMOs or other third parties we may retain to conduct
research and development, of their duties to us in a manner that complies with our
protocols and applicable laws and that protects the integrity of the resulting data;
 continued acceptable safety profile of our drug candidates following regulatory
approval;
RISK FACTORS
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 obtaining, maintaining and enforcing patent, trademark, trade secret and other
intellectual property protection and regulatory exclusivity for our drug candidates;
 ensuring we do not infringe, misappropriate or otherwise violate the patents,
trademarks, trade secrets or other intellectual property rights of third parties;
 successfully launching commercial sales of our drug candidates, if and when
approved;
 obtaining and maintaining favorable governmental and private reimbursement from
third-party payers, if any, for drugs, if and when approved; and
 competition with other drug products.
Some of our drug candidates represent a novel approach to therapeutic needs compared
with more commonly used medical methods, which carries inherent development risks and
could result in delays or failures in clinical development, regulatory approval or
commercialization. Any modification to the protocols related to the demonstration of safety or
efficacy of our drug candidates may delay the clinical program, regulatory approval and/or
commercialization, and we may be required to supplement, modify, or withdraw and refile our
applications for the regulatory approval.
As of the Latest Practicable Date, our Core Product, SJ02 has received NDA approval
from the NMPA in August 2025 and two of our drug candidates have progressed into advanced
trial- or NDA registration-stage in China, namely our Core Products KJ103 and KJ017, and the
rest of our drug candidates were in various phases of clinical trials and preclinical studies. If
we fail to achieve drug development milestones as disclosed in this prospectus, our business
prospects could be adversely affected. Our costs will also increase if we experience delays in
the development of drug candidates or in obtaining regulatory approvals, which could result in
us having to delay or suspend the trial until sufficient funding is procured, or we would have
to abandon developing of the drug candidate completely. Significant preclinical study or
clinical trial delays also could allow our competitors to bring products to market before we do
and impair our ability to successfully commercialize our drug candidates. Any of the above
negative developments could have a material and adverse effect on our business, financial
condition and results of operation.
We face intense competition and rapid technological change and the possibility that our
competitors may develop therapies that are similar, more advanced, or more effective
than ours, which may adversely affect our financial condition and our ability to
successfully commercialize our drug candidates.
The biopharmaceutical industry in which we operate is highly competitive and subject to
rapid and significant technological changes. While our principal focus is to develop drug
candidates with the potential to become novel or highly differentiated drugs, we face
competition with respect to our current drug candidates and will face competition with respect
to any drug candidates that we may seek to develop or commercialize in the future. We are
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developing our recombinant biologic drugs in competition with a number of well-established
multinational pharmaceutical companies, biotechnology companies and research institutions
worldwide that have commercialized, are in the process of commercialization, or are pursuing
the development of biologic drugs for the same target indications as ours. Some of these
competitive drugs and therapies are based on scientific approaches that are the same as or
similar to our approach, and others are based on entirely different approaches. See “Business
— Our Drug Candidates.” Potential competitors also include academic institutions,
government agencies and other public and private research organizations that conduct research,
seek patent protection and establish collaborative arrangements for research, development,
manufacturing and commercialization.
Even if successfully developed and subsequently approved by the NMPA, the FDA or
other comparable regulatory authorities, our drug candidates may still face competition in
various aspects, including safety and efficacy, the timing and scope of the regulatory approvals,
the availability and cost of supply, sales and marketing capabilities, price and patent status.
Many of our competitors have substantially greater financial, technical and other resources,
such as more advanced commercial infrastructure, more drug candidates in late-stage clinical
development, more seasoned research and development staff and more established marketing
and manufacturing teams than us. Smaller or early-stage companies may also prove to be
significant competitors, particularly through collaborative arrangements with large and
established companies. Additional mergers and acquisitions in the biopharmaceutical industry
may result in even more resources being concentrated in our competitors. Our competitors may
succeed in developing competing drugs and obtaining regulatory approvals before us or
achieve better acceptance in the markets in which we operate or have established a competitive
position. For example, the NMPA has recently accelerated marketing approvals of drugs for
life-threatening diseases, diseases without effective treatment options or rare diseases. Also,
the NMPA may review and approve drugs that have gained regulatory marketing approvals in
the U.S., the EU or Japan in the past ten years without requiring further clinical trials in the
PRC. This may lead potential increased competition from drugs that have already obtained
approvals in other jurisdictions.
Competition may further intensify as a result of advances in the commercial applicability
of technologies and availability of capital for investment in the industry. Our competitors may
succeed in developing, acquiring, or licensing on an exclusive basis, products that are more
effective with a lower cost than our drug candidates, or achieve earlier patent protection,
regulatory approvals, product commercialization and market penetration than we do.
Specifically, certain of our drug candidates may face direct competition with established
therapies in overseas markets upon commercialization, for instance, SJ02 could potentially
compete with Elonva
® in the European market. In addition, any new product that competes
with an approved product must demonstrate compelling advantages in efficacy, convenience,
tolerability or safety in order to overcome price competition and to be commercially
successful. Furthermore, disruptive technologies and medical breakthroughs may further
intensify the competition and render our drug candidates obsolete or noncompetitive.
Technologies developed by our competitors may render our potential drug candidates
uneconomical or obsolete, and we may not be successful in marketing our drug candidates
against competitors.
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Clinical development involves a lengthy and expensive process with an uncertain
outcome, and results of preclinical studies and early phases of clinical trials may not be
predictive of future trial results.
To obtain regulatory approval for the sales of our drug candidates, we are required to
conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates
in humans. Clinical trials are expensive, difficult to design and implement, and can take years
to complete, with uncertainty as to the outcomes. We have invested a significant portion of our
efforts and financial resources in the development, and particularly clinical development, of
our drug candidates. In 2023, 2024 and the six months ended June 30, 2025, we incurred
research and development expenses of RMB132.5 million, RMB250.7 million and RMB111.0
million, respectively. Our current drug candidates and any future drug candidates are
susceptible to the risks of failure inherent at any stage of drug development, including the
occurrence of unexpected or unacceptable adverse events or the failure to demonstrate efficacy
in clinical trials. While we believe some of our drug candidates have the potential to be
innovative and differentiated globally, we cannot guarantee that we will be able to realize such
potential for any of our drug candidates. Failure can occur at any time during the clinical
development process.
The results of earlier studies and trials and non-head-to-head analyses of our drug
candidates may not be predictive of the results of later-stage clinical trials. Drug candidates
during later stages of clinical trials may fail to show the desired results in safety and efficacy
despite having progressed through preclinical studies and initial clinical trials, and despite the
level of scientific rigor in the design of such studies and trials and the adequacy of their
execution. A number of companies in the pharmaceutical and biopharmaceutical industries
have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse
safety profiles, notwithstanding promising results in earlier trials. In some instances, there can
be significant variability in safety and/or efficacy results among different trials of the same
drug candidate due to numerous factors, including, but not limited to, differences in individual
patient conditions, including genetic differences, and other compounding factors, such as other
medications or pre-existing medical conditions, patient adherence to the dosing regimen, other
trial protocol elements and the rate of dropout among clinical trial participants. Furthermore,
as our drug candidates are developed through preclinical and clinical trials towards approval
and commercialization, it is customary that various aspects of the development programs, such
as manufacturing and formulation, are altered along the way in an effort to optimize processes
and results. Such changes carry the inherent risks that they may not necessarily achieve the
intended objectives. Also, for non-head-to-head analyses, the results from clinical trials of one
drug cannot be directly compared to those of another. Consequently, such findings may not
accurately reflect the overall data.
Any disruptions, changes and delays in completing our clinical trials may increase our
costs, slow down our drug candidate development and approval process, and jeopardize our
ability to commence product sales and generate revenue for that drug candidate. Any of these
occurrences may harm our business, financial condition and prospects significantly. We may
adjust our clinical development strategy from time to time based on our evaluation of emerging
data to maximize the value of our entire product portfolio. However, we cannot guarantee that
our specific plans will always efficiently anticipate regulatory and market trend shifts or be
successfully implemented.
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If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the
satisfaction of regulatory authorities or do not otherwise produce positive results, we may
incur additional costs or experience delays in completing, or may ultimately be unable to
complete, the development and commercialization of our drug candidates.
Before obtaining regulatory approval for the commercial sale of our drug candidates, we
must conduct extensive clinical trials to demonstrate the safety and efficacy of our drug
candidates for their proposed indications. Results of our clinical trials could reveal limited
efficacy or unacceptable severity or prevalence of adverse events. In such an event, our clinical
trials could be suspended or terminated and the NMPA, the FDA or other comparable
regulatory authorities may order us to cease further development of, or deny approval of, our
drug candidates for any or all targeted indications.
Even if we could obtain regulatory approval for our drug candidates, in the event that the
results of our clinical trials are only modestly positive, or if they raise safety concerns
regarding our drug candidates, we may still be subject to unfavorable circumstances, including:
 obtain approval for indications that are not as broad as intended;
 be required to market our drugs under more restrictive labels, such as adding
additional warnings and cautionary statements;
 we may suspend, delay or alter the development or marketing of our drug
candidates;
 regulatory authorities may withdraw approvals or revoke licenses of an approved
drug candidate, or we may determine to do so even if not required;
 be required to suspend the sales and marketing of our drugs if they had been
approved and commercialized;
 be subject to additional post-marketing testing requirements;
 be held liable for harm caused to our patients and be subject to litigation and product
liability claims;
 the costs of clinical trials of our drug candidates may be substantially higher than
anticipated; and
 be unable to obtain adequate insurance coverage or reimbursement for our drugs
from the government or commercial insurers.
If we experience any of the above undesirable conditions, our business may be materially
harmed, and we may not be able to generate sufficient revenues and cash flows to continue our
operations and may experience a decline in the market price of our H Shares.
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We may not be able to discover, identify or develop new drug candidates, or to expand the
therapeutic opportunities for our drug candidates.
We cannot guarantee that we will be successful in discovering, identifying or developing
potential drug candidates. Although we have developed proprietary synthetic biology
technology platforms which we believe enables us to design, evaluate and select optimal
candidates and continue to enrich our pipeline, some drug candidates are technically
challenging to develop and manufacture. We may also pursue collaboration with third parties
in the discovery and development of potential drug candidates, but we cannot assure you that
such collaboration will be able to deliver the intended results.
Research programs to pursue the development of our drug candidates for additional
indications and to identify new drug candidates and drug targets require substantial technical,
financial and human resources. Our research programs may initially show promising results in
identifying potential indications and/or drug candidates, yet fail to yield results for clinical
development for a number of reasons, including but not limited to the following factors, among
others, (i) the research methodology used may not be successful in identifying potential
indications and/or new drug candidates; and (ii) it may take greater resources to identify
additional therapeutic opportunities for our drug candidates or to develop suitable potential
drug candidates, thereby limiting our ability to diversify and expand our drug portfolio.
Accordingly, we have limited experience in the expansion and development in therapeutic
potentials of other clinical indications for our drug candidates, and we cannot assure you that
we will be able to identify new drug candidates or develop additional indications for our drug
candidates, which could materially adversely affect our future growth and prospects. We may
focus our efforts and resources on potential drug candidates or other potential programs that
ultimately prove to be unsuccessful.
We have submitted NDAs for several of our drug candidates. If we are not able to obtain,
or experience delays in obtaining required regulatory approvals, we will not be able to
commercialize our drug candidates, and our ability to generate revenue will be materially
impaired.
To obtain regulatory approvals for the commercial sale of any product candidate for a
target indication, we must demonstrate in preclinical studies and well-controlled clinical trials,
and to the satisfaction of the NMPA, the FDA and other applicable regulatory authorities, that
the product candidate is safe and effective for use for that target indication and that the
manufacturing facilities, processes and controls are adequate. In addition to preclinical and
clinical data, the NDA must include significant information regarding the chemistry,
manufacturing and controls for the product candidate. Obtaining regulatory approval is a
lengthy, expensive and uncertain process, and approval may not be obtained. When an NDA is
submitted, the NMPA has discretion whether to accept or reject a submission for filing. We
cannot be certain that future submissions for our drug candidates will be accepted for filing and
review by the NMPA.
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Regulatory authorities outside China, such as the FDA, also have requirements for
approval of therapeutic products for commercial sale with which we must comply prior to
marketing in those areas. Regulatory requirements and approval processes can vary widely
from country to country and could delay or prevent the introduction of our drug candidates.
Clinical trials conducted in one country may not be accepted by regulatory authorities in other
countries, and obtaining regulatory approval in one country does not mean that regulatory
approval will be obtained in any other country. Seeking foreign regulatory approval could
require additional nonclinical studies or clinical trials, which could be costly and time-
consuming. The foreign regulatory approval process may include all of the risks associated
with obtaining approvals from the NMPA. For all of these reasons, we may not obtain foreign
regulatory approvals on a timely basis, if at all.
Following any approval for commercial sale of our drug candidates, certain changes to the
product, such as changes in manufacturing processes and additional labeling claims, may be
subject to additional review and approval by the NMPA, the FDA and other comparable
regulatory authorities. Also, regulatory approval for any of our drug candidates may be
withdrawn.
We have limited experience in filing for regulatory approval for our drug candidates, and
we have not yet received regulatory approval for any of our drug candidates. As of the Latest
Practicable Date, we have received the NDA approval from the NMPA in August for our Core
Product, SJ02, and we have submitted NDA for our another Core Product, KJ017 and is
currently under review by the NMPA. However, we cannot guarantee that we can successfully
obtain the relevant regulatory approval for commercial sales of KJ017, or any of our additional
drug candidates in a timely manner, or at all.
If we are unable to obtain regulatory approvals for our drug candidates in one or more
jurisdictions, or any approval contains significant limitations, our target market will be reduced
and our ability to realize the full market potential for our drug candidates will be harmed.
Furthermore, we may not be able to obtain sufficient funding or generate sufficient revenue and
cash flows to continue the development of any other product candidate in the future.
We have no experience in the commercialization of drugs. If we are unable to build and
manage sales network, or maintain sufficient sales and marketing capabilities, either by
ourselves or through third parties, we may not be able to successfully create or increase
market awareness of our products or sell our products, which will materially affect our
ability to generate sales revenue.
Our operations to date have been largely focused on developing our drug candidates,
primarily undertaking preclinical studies and conducting clinical trials. To date, we have no
experience in the commercialization of drugs, and we have not yet demonstrated that we have
the ability to launch and commercialize any of our drug candidates. Our ability to successfully
commercialize our drug candidates may involve more inherent risks, take longer, and cost more
than it would if we were a company with substantial experience launching and marketing drug
candidates.
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In the short run, we plan to pursue collaborative arrangements with leading
pharmaceutical companies to leverage their sales and marketing capabilities and distribution
channels for the promotion and commercialization of our drug candidates. However, there can
be no assurance that we will be able to establish or maintain such collaborative arrangements,
or if we are able to do so, that effective sales forces and network of our potential partners will
be established. Any revenue we receive will partially depend upon the efforts of such third
parties, which may not be successful. We may have little or no control over the marketing and
sales efforts of such third parties, and our revenue from product sales may be lower than if we
had commercialized our drug candidates ourselves. We may also in the future develop a
dedicated in-house sales and marketing team, which will require significant capital
expenditures, management resources and time. We will have to compete with other
pharmaceutical companies to recruit, hire, train and retain marketing and sales personnel, but
may be unable to, or decide not to, further develop internal sales, marketing and commercial
distribution capabilities for any or all of our drug candidates. We also face competition in our
search for third parties to assist us with the sales and marketing efforts for our drug candidates.
This competition arises from numerous companies vying for the resources of third-party
entities, including distribution networks. Faced with constraints such as limited capacity and
strategic priorities, these third parties may carefully evaluate potential partnerships. There can
be no assurance that we will be able to develop and successfully maintain in-house sales and
commercial distribution capabilities or establish or maintain relationships with third-party
collaborators to successfully commercialize any product, and as a result, we may not be able
to generate product sales revenue.
We have entered into license and collaboration agreements with our partners, and may
form or seek additional collaborations or strategic alliances or enter into additional
licensing arrangements in the future. We may not realize any or all benefits of such
alliances or licensing arrangements, and disputes may arise between us and our
collaboration partners.
We have in the past formed, and may in the future seek and form, strategic alliances, joint
ventures or other collaborations, including entering into licensing arrangements with third
parties that we believe will complement or augment our development and commercialization
efforts with respect to our drug candidates and any future drug candidates that we may develop.
Some of these are important to the business and performance of our Group. See “Business —
Collaboration Agreements.” Any of these relationships may require us to incur nonrecurring
and other charges, increase our near- and long-term expenditures, issue securities that dilute
our existing shareholders, or disrupt our management and business.
Our strategic collaboration with partners involves various risks, including that we may
not achieve the revenue and cost synergies expected from the transaction. These synergies are
inherently uncertain, and are subject to significant business, economic and competitive
uncertainties and contingencies, many of which are difficult to predict and beyond our control.
Also, the synergies from our collaboration with partners may be offset by other costs incurred
in the collaboration, increases in other expenses, operating losses or problems in the business
unrelated to our collaboration. As a result, there can be no assurance that expected synergies
will be achieved in due course, or at all.
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We face significant competition in seeking appropriate strategic partners and the
negotiation process is time-consuming and complex. Moreover, we may not be successful in
our efforts to establish a strategic partnership or other alternative arrangements for our drug
candidates because they may be deemed to be at too early a stage of development for
collaborative effort and third parties may not view our drug candidates as having the requisite
potential to demonstrate safety and efficacy or commercial viability. If and when we
collaborate with a third party for the development and commercialization of a drug candidate,
we can expect to relinquish some or all of the control over the future success of that drug
candidate to the third party. For any drug candidates that we may seek to in-license from third
parties, we may face significant competition from other pharmaceutical or biopharmaceutical
companies with greater resources or capabilities than us, and any agreement that we do enter
into may not result in the anticipated benefits.
Disputes or disagreements may arise between us and our current or future collaboration
partners in connection with various reasons. Such disputes or disagreements may cause delays
in or termination of the research, development or commercialization of our drug candidates,
termination of the collaborations, or may result in costly litigation or arbitration that diverts
management’s attention and resources or otherwise adversely affect our relationships with our
collaboration partners. In the event we are not able to manage the aforementioned risks,
whether individually or collectively, partly or at all, our business, financial condition and
results of operations may be materially and adversely affected.
Global markets are an important component of our growth strategy. We have retained
rights for the development and commercialization of certain of our drug candidates globally.
If we fail to obtain licenses or enter into collaboration arrangements with third parties in other
markets, or if any third-party collaborator is not successful, our revenue-generating growth
potential will be adversely affected.
Moreover, international business relationships subject us to additional risks that may
materially adversely affect our ability to attain or sustain profitable operations, including:
 efforts to enter into collaboration or licensing arrangements with third parties in
connection with our international sales, marketing and distribution efforts may
increase our expenses or divert our management’s attention from the development or
acquisition of drug candidates;
 difficulty of effective enforcement of contractual provisions in local jurisdictions;
 third parties obtaining and maintaining patent, trade secret and other intellectual
property protection and regulatory exclusivity for our drug candidates;
 difficulty of ensuring that third-party partners do not infringe, misappropriate, or
otherwise violate the patent, trade secret, or other intellectual property rights of
others;
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 unexpected changes in or imposition of trade restrictions, such as tariffs, sanctions
or other trade controls, and similar regulatory requirements;
 unsatisfactory performance in overseas markets;
 economic weakness, including inflation;
 compliance with tax, employment, immigration and labor laws for employees
traveling abroad;
 the effects of applicable foreign tax structures and potentially adverse tax
consequences;
 currency fluctuations, which could result in increased operating expenses and
reduced revenue;
 workforce uncertainty and labor unrest;
 failure of our employees and contracted third parties to comply with the U.S.
Department of the Treasury’s Office of Foreign Assets Control rules and regulations,
the U.S. Foreign Corrupt Practices Act of 1977, as amended (“ FCPA”) and other
applicable laws and regulations; and
 business interruptions resulting from geopolitical actions, including war and acts of
terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods,
hurricanes and fires.
Any delays in commencing and completing construction of, and receiving regulatory
approvals for our manufacturing facilities, or any damage to, destruction of, or
interruption of production at such facilities, could reduce or restrict our production
capacity or our ability to develop or sell products, which could have a material and
adverse effect on our business, financial condition and results of operations.
We have established GMP-compliant manufacturing facilities in Shanghai capable of
supplying the commercial production demands for our approved drug, SJ02 (Slonva
® (۹
®)) and the clinical production demands of our selected drug candidates, including KJ017,
KJ103, SJ04, BJ007, KJ015 and KJ101. To further scale up our manufacturing capacity, we are
constructing additional manufacturing facilities in Shanghai, which we expect to complete and
put into operation by June 2026. Construction of such manufacturing facilities may encounter
delays or interruptions due to a number of factors, some of which are beyond our control, such
as regulatory requirements. Such delays and interruptions could reduce or restrict our
production capacity, slow down our drug development and commercialization efforts,
especially if we could not source manufacturing to a third party in a timely or cost-effective
manner. Even if collaboration with a third party is feasible, we will incur additional
manufacturing costs. For example, following the completion of Phase IIIa, we switched
KJ017’s clinical sample production to another dedicated manufacturing line within the same
RISK FACTORS
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--- page 85 ---
manufacturing site, which necessitated a significant transition period. This switch was
undertaken for strategic operational reasons during the relevant period. While the original
production line maintained full GMP compliance throughout the Track Record Period and up
to the Latest Practicable Date, and possessed the capability to manufacture both enzyme
products (such as KJ017) and hormone products (such as SJ02) for not only clinical trial but
also commercial scale production, we made the strategic decision to dedicate this line
exclusively to hormone product manufacturing. Although potential cross-contamination risks
through the same production line could be avoided through proper scheduling and technical
measures on that original shared production line, and no cross-contamination incidents had
ever occurred when both candidates utilized the same production line, we chose to separate the
production lines for the two categories of products as a long-term strategic consideration,
thereby establishing optimal manufacturing arrangements for the future production and
commercialization of both products. This dedicated approach would support SJ02, which was
prioritized for accelerated development at that time, as well as SJ04, another hormone product.
Concurrently, KJ017, being an enzyme product, would be manufactured on a separate
production line to optimize operational efficiency and product-specific manufacturing
protocols. Once this site change was successfully completed, we proceeded with the Phase IIIb
clinical trial. This manufacturing transition, while extending the clinical development timeline,
did not impact other aspects of KJ017’s development or registration process. All could have a
material and adverse effect on our business operations, financial condition and results of
operations.
Cost overruns associated with constructing or maintaining our new facilities could require
us to raise additional funds from other sources. Our manufacturing facilities are required to
obtain and maintain regulatory approvals, including being subject to ongoing, periodic
inspection by the NMPA, FDA or other comparable regulatory authorities to ensure compliance
with GMP regulations. Further, we will be subject to continued review and site inspections to
assess compliance with GMP and adherence to commitments made in any biologics license
application, other marketing application and previous responses to any inspection observations.
Accordingly, we and others with whom we work must continue to spend time, money and
efforts in all areas of regulatory compliance, including manufacturing, production and quality
control. In addition, to obtain FDA approval for our products in the U.S., we would need to
undergo strict pre-approval inspections of our manufacturing facilities. Historically,
manufacturing facilities in China have had difficulty meeting FDA standards. When inspecting
our manufacturing facilities, the FDA may cite GMP deficiencies. Remediating deficiencies
can be laborious, time consuming and costly. Moreover, the FDA will generally re-inspect the
facilities to determine whether the deficiency was remediated to its satisfaction and may note
further deficiencies during re-inspection.
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Our failure to follow and document our adherence to such GMP regulations or other
regulatory requirements may lead to significant delays in the availability of products for
clinical or, in the future, commercial use, may result in the termination of or a hold on a clinical
trial, or may delay or prevent filing or approval of marketing applications for our drug
candidates or their commercialization, if approved. Regulatory authority may also impose
fines, injunctions, civil penalties, suspension or withdrawal of approvals, seizures or recalls of
our drug candidates, operating restrictions and criminal prosecutions, any of which could harm
our business. Furthermore, if the interpretation or implementation of existing laws and
regulations changes or new regulations come into effect, we may be required to obtain
additional approvals, permits, licenses or certificates and we cannot assure you that we will be
able to do so.
Furthermore, if our manufacturing facilities or the equipment in them is damaged or
destroyed, we may not be able to replace our manufacturing capacity quickly or inexpensively,
or at all. In the event of a temporary or protracted loss of the facilities or equipment, we might
not be able to transfer manufacturing to a third party. Even if we could transfer manufacturing
to a third party, the shift would likely be expensive and time consuming, particularly since the
new facilities would need to comply with the necessary regulatory requirements and we would
need regulatory agency approval before selling any drug candidates manufactured at those
facilities. Such an event could delay our clinical trials or reduce our product sales if and when
we are able to successfully commercialize one or more of our drug candidates. Any interruption
in manufacturing operations at our manufacturing facilities could result in our inability to
satisfy the demands of our clinical trials or commercialization. Any disruption that impedes our
ability to manufacture our drug candidates in a timely manner could materially and adversely
our business, financial condition and operating results.
We have incurred net losses since inception. We anticipate that we will continue to incur
net losses for the foreseeable future and may not be able to generate sufficient revenue to
achieve or maintain profitability. Potential investors are at risk of losing substantially all
of their investments in our H Shares.
Investment in pharmaceutical companies is highly speculative. We have incurred
substantial R&D expenses to date, and expect to continue to incur significant expenses related
to clinical trials and preclinical studies. However, we cannot assure you that our drug
candidates will obtain regulatory approvals and/or become commercially viable. Our ability to
generate significant revenue from our drug candidates will depend primarily on the success of
the regulatory approval, manufacturing and commercialization of the drug candidates, which
is subject to significant uncertainty. Even if we obtain regulatory approval to market our drug
candidates, our future revenue will depend upon other factors such as the market size for the
proposed indications of our drug candidates, and our ability to achieve sufficient market
acceptance.
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In 2023, 2024 and the six months ended June 30, 2025, we incurred net losses of
RMB160.4 million, RMB364.4 million and RMB183.1 million, respectively. A substantial
portion of our net losses resulted from research and development expenses and administrative
expenses. The amount of our future net losses will depend, in part, on our future expenditures
resulted from costs and expenses incurred by our research and development programs and in
relation to our operations, the cost of commercializing any approved products, our ability to
generate revenues, and the timing and amount of milestone and other payments we make or
receive with or through arrangements with third parties. We expect to continue to incur
significant expenses for the foreseeable future. We anticipate that our expenses will increase
if and as we:
 continue to advance the clinical trials and preclinical studies of our product pipeline;
 initiate preclinical, clinical or other studies for new drug candidates;
 seek regulatory approvals for our drug candidates to complete clinical development
and commence commercialization;
 manufacture our drug candidates for clinical trials and for commercial sale;
 develop and expand our commercialization team to commercialize any drug
candidates in our pipeline for which we may obtain regulatory approval;
 construct and expand manufacturing facilities;
 acquire or in-license other drug candidates, intellectual property assets and
technologies;
 incur costs to develop or manufacture drug candidates under any collaboration or
in-license agreements;
 maintain, protect, expand and enforce our intellectual property portfolio;
 attract and retain skilled personnel, and grant share incentives to our employees
under our share incentive schemes; and
 create additional infrastructure to support our operations as a public company and
our product development and planned future commercialization efforts.
In addition, considering the numerous risks and uncertainties associated with regulatory
approval, we are unable to accurately predict the timing or amount of additional expenses, or
when, or if, we will be able to achieve or maintain profitability. Our expenses could increase
beyond expectations if we are required by the NMPA, FDA or other similar authorities to
perform studies in addition to those that we currently anticipate. Even if our drug candidates
are approved for commercial sale, we expect to continue incurring significant costs associated
with the manufacturing and the commercial launch of the drug candidates.
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Even if we are able to generate revenue from the sale of our approved drug candidates,
we may not become profitable and may need to obtain additional funding to continue
operations. Moreover, even if we manage to achieve profitability, we may not be able to sustain
or increase profitability on an ongoing basis. Our failure to become and remain profitable may
also impact investors’ perception of the potential value of our company and could impair our
ability to raise additional capital, expand our business or continue our operations. Failure to
become and remain profitable may also adversely affect the market price of our H Shares. A
decline in the market price of our H Shares could cause potential investors to lose all or part
of their investment in our business.
If we are unable to obtain and maintain adequate patent and other intellectual property
protection for our drug candidates throughout the world, or if the scope of such
intellectual property rights obtained is not sufficiently broad, third parties could develop
and commercialize products and technologies similar or identical to ours and compete
directly against us, and our ability to successfully commercialize our drug candidates may
be materially adversely affected.
Our success depends in large part on our ability to protect our proprietary technologies
and drug candidates from competition by obtaining, maintaining, defending and enforcing our
intellectual property rights, including patent rights. We seek to protect the drug candidates and
technology that we consider commercially important by filing patent applications in the PRC,
the U.S. and other jurisdictions, relying on patent rights, trade secrets or pharmaceutical
regulatory protection or employing a combination of these methods. As of the Latest
Practicable Date, we owned (i) 19 patents in the PRC, one in U.S. and one in Japan; (ii) 73
patent applications, consisting of 36 in the PRC, 30 in other jurisdictions including the U.S.,
Europe, Japan, South Korea, Hong Kong and Taiwan, and seven the Patent Cooperation Treaty
(“PCT”). For further information on our patent portfolio, see “Business — Intellectual
Property.” We also plan to apply for extensions of the terms of certain eligible patents with
respect to our drug candidates upon the expiration of such patents. Whether we can obtain the
approval for each pending patent application or future extension application is subject to the
examination opinions from the applicable patent examination authorities during the ordinary
pendency and examination of such applications. If we or our collaborators are unable to obtain
and maintain patent and other intellectual property protection with respect to our drug
candidates and technologies, our business, financial condition, results of operations and
prospects could be materially harmed.
The patent prosecution process is expensive, time-consuming and complex, and we may
not be able to file, prosecute, maintain, defend, enforce or license all necessary or desirable
patents at a reasonable cost or in a timely manner in all desirable jurisdictions. As a result, we
may not be able to prevent competitors or other third parties from developing and
commercializing competitive drugs in all such fields and jurisdictions. Moreover, some of our
patent applications may in the future be co-owned with third parties. If we are unable to obtain
an exclusive license to any such third-party co-owners’ interest in such patents or patent
applications, such co-owners may be able to license their rights to other third parties, including
our competitors, and our competitors could market competing products and technology. In
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addition, we may need the cooperation of any such co-owners of our patents in order to enforce
such patents against third parties, and such cooperation may not be provided to us.
Furthermore, the patent position of pharmaceutical companies generally is highly uncertain,
involves complex legal and factual questions, and has been the subject of much litigation in
recent years. As a result, the issuance, scope, validity, enforceability and commercial value of
our patent rights are highly uncertain.
The requirements for patentability differ in certain jurisdictions. For example, many
jurisdictions have compulsory licensing laws under which a patent owner may be compelled to
grant licenses to third parties. In addition, many jurisdictions limit the enforceability of patents
against government agencies or government contractors. In these jurisdictions, the patent
owner may have limited remedies, which could materially diminish the value of such patents.
If we or any of our collaborators are forced to grant a license to third parties with respect to
any patents relevant to our business, our competitive position may be materially impaired and
our business, financial condition, results of operations, and prospects may be adversely
affected.
We are focused on protecting our intellectual property rights in the PRC, the U.S., and
other jurisdictions. Filing, prosecuting, maintaining, defending and enforcing patents and other
intellectual property rights with respect to our drug candidates in all other jurisdictions
throughout the world would be prohibitively expensive for us. Our intellectual property rights
in certain jurisdictions may have a lessor or different scope and strength compared to those in
our target markets. In addition, the laws of certain jurisdictions do not protect intellectual
property rights to the same extent as the laws of our target markets. Consequently, in some
cases, we may not be able to obtain issued patents or other intellectual property rights covering
our drug candidates in jurisdictions outside our target markets and, as a result, we may not be
able to prevent third parties from using our inventions in all jurisdictions outside our target
markets, or from selling or importing drugs made using our inventions in and into our target
markets or other jurisdictions. Competitors and other third parties may use our technologies in
jurisdictions where we have not pursued and obtained patent and other intellectual property
protection to develop their own drugs and further, may export otherwise infringing drugs to
jurisdictions where we have patent or other intellectual property protection, but where
enforcement rights are not as strong as those in markets such as the U.S. These drugs may
compete with our drug candidates and our patent rights or other intellectual property rights may
not be effective or adequate to prevent them from competing.
Many companies have encountered significant problems in protecting and defending
intellectual property rights in some jurisdictions. The legal system in these jurisdictions,
particularly those in certain developing countries, do not favor the enforcement of patents,
trade secrets and other intellectual property protection, particularly those relating to
biotechnology products, which could make it difficult for us to stop the infringement,
misappropriation or other violation of our patents or other intellectual property rights, or the
marketing of competing drugs in violation of our proprietary rights in these jurisdictions.
Proceedings to enforce our patent and other intellectual property rights in foreign jurisdictions
could result in substantial costs and divert our efforts and attention from other aspects of our
business, could put our patents and other intellectual property rights at risk of being invalidated
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or interpreted narrowly and our patent applications at risk of not issuing and could provoke
third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and
the damages or other remedies awarded, if any, may not be commercially meaningful.
Accordingly, our efforts to enforce our intellectual property rights around the world may be
inadequate to obtain a commercial advantage from the intellectual property that we develop or
license. In addition, under the PRC patent law, any organization or individual that applies for
a patent in a foreign country for an invention or utility model accomplished in China is required
to report to the China National Intellectual Property Administration (the “ CNIPA”), for
confidentiality examination. Otherwise, if an application is later filed in China, the patent right
will not be granted. Any of the foregoing could have a material adverse effect on our
competitive position, business, financial conditions, results of operations and prospects.
Even if we are able to commercialize any approved drug candidates, reimbursement may
be limited or unavailable in certain market segments for our drug candidates, and we may
face uncertainties from national, provincial or other third-party drug reimbursement
practices and unfavorable drug pricing policies or regulations, which could harm our
business.
The regulations that govern regulatory approvals, pricing and reimbursement for new
therapeutic products vary widely from country to country. We intend to seek approval to market
our drug candidates in China, the U.S., and other jurisdictions. In China, the pricing of drugs
and biologics is subject to governmental control, which can take considerable time even after
obtaining regulatory approval. Our ability to commercialize any approved drug candidates
successfully also will depend in part on the extent to which reimbursement for these drugs and
related treatments will be available from government health administration authorities, private
health insurers and other organizations.
A primary trend in the global healthcare industry is cost containment. Government
authorities and these third-party payers have attempted to control costs by limiting coverage
and the amount of reimbursement for particular medications.
In China, the National Healthcare Security Administration of China, the Ministry of
Human Resources and Social Security of China or provincial or local human resources and
social security authorities, together with other government authorities, review the inclusion or
removal of drugs from China’s National Drug Catalog for Basic Medical Insurance,
Work-related Injury Insurance and Maternity Insurance (ᎈձ͛
ͦ፽), or the National Reimbursement Drug List (the “ NRDL ”), or provincial or
local medical insurance catalogues for the National Medical Insurance Program (the “ PRDL ”)
regularly, and the tier under which a drug will be classified, both of which affect the amounts
reimbursable to program participants for their purchases of those drugs. There can be no
assurance that any of our future approved drug candidates will be included in the NRDL or the
PRDL. Products included in the NRDL or the PRDL are typically generic and essential drugs.
Innovative drugs similar to our drug candidates have historically been more limited on their
inclusion in the NRDL or the PRDL due to the affordability of the government’s Basis Medical
Insurance.
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In the U.S., there is no uniform policy of medical insurance coverage and reimbursement
for drugs. In China, the average period for innovative drugs to be included in the NRDL or the
PRDL has shortened from five to two years. During the Track Record Period and up to the
Latest Practicable Date, we had not experienced, and do not currently expect to experience any
inability or impediments to enlist or obtain reimbursement coverage for any of our drug
candidates. Nevertheless, obtaining coverage and reimbursement approval of a drug from a
government or other third-party payer is a time-consuming and costly process that could
require us to provide to each payer supporting scientific, clinical and cost-effectiveness data
for the use of our future approved drugs on a payer-by-payer basis, with no assurance that
coverage and adequate reimbursement will be obtained. Even if we obtain coverage for a given
drug, the resulting reimbursement rates might not be adequate for us to achieve or sustain
profitability or may require co-payments that patients find unacceptably high. Additionally,
third-party payers may not cover, or provide adequate reimbursement for, long-term follow-up
evaluations required following the use of our future approved drug candidates. Patients are
unlikely to use any of our future approved drug candidates unless coverage is provided and
reimbursement is adequate to cover a significant portion of the cost of the drugs. Because some
of our drug candidates have a higher cost of goods than conventional therapies, and may
require long-term follow-up evaluations, the risk that coverage and reimbursement rates may
be inadequate for us to achieve profitability may be greater.
Increasingly, third-party payers are requiring that biopharmaceutical companies provide
them with predetermined discounts from list prices and are challenging the prices charged for
medical products. We cannot be sure that reimbursement will be available for any approved
drug candidates that we commercialize and, if reimbursement is available, what the level of
reimbursement will be. Reimbursement may impact the demand for, or the price of, any
approved drug candidates that we commercialize. Obtaining or maintaining reimbursement for
our future approved drug candidates may be particularly difficult because of the higher prices
often associated with drugs administered under the supervision of a physician. If
reimbursement is not available or is available only to limited levels, we may not be able to
successfully commercialize any drug candidates that we have successfully developed.
There may be significant delays in obtaining reimbursement for approved drug
candidates, and coverage may be more limited than the purposes for which the drug candidates
are approved by the NMPA, FDA or other comparable regulatory authorities. Moreover,
eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a
rate that covers our costs, including research, development, manufacture, sale and distribution.
Interim payments for new drugs, if applicable, may also not be sufficient to cover our costs and
may not be made permanent. Payment rates may vary according to the use of the drug and the
clinical setting in which it is used, may be based on payments allowed for lower cost drugs that
are already reimbursed, and may be incorporated into existing payments for other services. Net
prices for drugs may be reduced by mandatory discounts or rebates required by government
healthcare programs or private payers and by any future weakening of laws that presently
restrict imports of drugs from countries where they may be sold at lower prices than in the U.S.
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Our inability to promptly obtain coverage and profitable payment rates from both government-
funded and private payers for any future approved drug candidates and any new drugs that we
develop could have a material adverse effect on our business, our operating results, and our
overall financial condition.
Historically, we have been funding our operations primarily through equity and debt
financings. We recorded net operating cash outflows during the Track Record Period and
will need to obtain additional financing to fund our operations. If we are unable to obtain
sufficient financing on terms acceptable to us or at all, we may be unable to complete the
development and commercialization of our drug candidates.
Our drug candidates require substantial investments for the completion of clinical
development, regulatory review, drug manufacturing, marketing and launch before they can
generate product sales revenue. Our operations have consumed substantial amounts of cash
since our inception. We will need to expend substantial resources on the research and
development and commercialization of our product pipelines. Our future funding requirements
will depend on many factors, including but not limited to:
 the progress, timing, scope and costs of our clinical trials, including the ability to
timely identify and enroll patients in our planned and potential future clinical trials;
 the outcome, timing and cost of regulatory approvals of our drug candidates;
 the progress, timing, scope and costs related to discovery and early development of
additional drug candidates;
 the preparation required for anticipated commercialization of our drug candidates,
and if regulatory approvals are obtained, to fund the product launch;
 the manufacturing requirements and capabilities related to clinical development and
future commercialization for any approved drug candidates;
 the level of market interest in our drug candidates and the therapeutic targets we are
pursuing;
 selling and marketing costs associated with any future drug candidates that may be
approved, including the cost and timing of expanding our marketing and sales
capabilities;
 the amount and timing of any profit sharing, milestone and royalty payments we
receive from our current or future collaborators;
 cash requirements of any future development of our pipeline drug candidates; and
 our headcount growth and associated costs.
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We had net cash used in operating activities of RMB140.2 million, RMB219.8 million and
RMB105.2 million in 2023, 2024 and the six months ended June 30, 2025, respectively. To
date, we have funded our operations primarily through equity and debt financings. We expect
to continue to spend substantial amounts on drug discovery, advancing the clinical
development of our drug candidates, and launching and commercializing any drug candidates
for which we receive regulatory approvals. However, if the commercialization of our drug
candidates is delayed or terminated, or if the expenses associated with drug development and
commercialization increase substantially, we may need to obtain additional financing to fund
our operations. Additional funds may not be available when we need them on terms that are
acceptable to us, or at all. Our ability to raise funds will depend on financial, economic and
market conditions and other factors, many of which are beyond our control. If adequate funds
are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate
pre-clinical studies, clinical trials or other research and development activities or
commercialization for one or more of our drug candidates, and in turn will adversely affect our
business prospects.
OTHER RISKS RELATING TO OUR BUSINESS
RISKS RELATING TO THE DEVELOPMENT OF OUR DRUG CANDIDATES
If we encounter delays or difficulties enrolling subjects in our clinical trials, our clinical
development progress could be delayed or otherwise adversely affected.
The timely completion of clinical trials depends on, among others, our ability to enroll a
sufficient number of subjects who will remain in the clinical trials until their conclusion.
During the Track Record Period, we did not encounter any material difficulties in enrolling
suitable subjects in our clinical trials. However, in any foreseeable future, if we are unable to
locate and enroll a sufficient number of eligible subjects, or if there are delays in the
enrollment of eligible subjects, we may not be able to initiate or continue clinical trials for our
drug candidates. We may encounter challenges with enrolling subjects in our clinical trials for
various reasons beyond our control, such as:
 difficulties with recruiting a sufficient number of subjects that possess the traits and
characteristics we seek;
 the subjects’ perceptions as to the potential advantages and risks of the drug
candidates being studied in relation to other available drugs or drug candidates;
 the resources we have to facilitate timely subject enrollment in our clinical trials;
 the efforts made by trial executing personnel, including our CROs, to screen and
recruit eligible subjects; and
 the proximity and availability of clinical trial sites for prospective subjects.
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Our clinical trials will likely compete with other clinical trials for drug candidates that are
in the same therapeutic areas as our drug candidates. This competition will reduce the number
and types of patients available to us as some patients might choose to enroll in a trial being
conducted by one of our competitors instead of ours.
Even if we are able to enroll a sufficient number of subjects in our clinical trials, delays
in subject enrollment may result in increased costs or may affect the timing or outcome of the
planned clinical trials, which could delay or prevent the completion of these trials and
adversely affect our ability to advance the development of our drug candidates.
We may allocate our limited resources to pursue a particular drug candidate or indication
and fail to capitalize on drug candidates or indications that may later prove to be more
profitable or for which there is a greater likelihood of success.
As we have limited financial and managerial resources, we focus our product pipeline on
research programs and drug candidates that we identify for specific indications. As a result, we
may forgo or delay pursuit of opportunities with other drug candidates or for other indications
that may later prove to have greater commercial potential or a greater likelihood of success.
Our spending on current and future research and development programs and drug candidates
for specific indications may not yield any commercially viable products. If we do not
accurately evaluate the commercial potential or target market for a particular drug candidate,
we may relinquish valuable rights to that drug candidate through collaboration, licensing or
other royalty arrangements in cases in which it would have been more advantageous for us to
retain sole development and commercialization rights to such drug candidate, or we may
allocate internal resources to a product candidate in a therapeutic area in which it would have
been more advantageous to enter into a partnering arrangement.
Adverse events or undesirable side effects caused by our drug candidates could interrupt
or halt clinical trials, delay or prevent regulatory approval, limit the commercial profile
of an approved label, or result in significant negative consequences following any
regulatory approval.
AEs and undesirable side effects caused by our drug candidates could cause us or
regulatory authorities to interrupt, delay or halt clinical trials and may result in a more
restrictive label, a delay or denial of regulatory approval by the NMPA, FDA or other
comparable regulatory authorities, or a significant change in our clinical protocol or even our
development plan. Results of our trials may reveal a high and unacceptable severity or
prevalence of certain adverse events. In such an event, our trials could be suspended or
terminated and the NMPA, FDA or other comparable regulatory authorities could order us to
cease further development of, or deny approval of, our drug candidates for any or all targeted
indications. Adverse events related to our drug candidates may affect patient recruitment or the
ability of enrolled subjects to complete the trial, and could result in potential liability claims.
Any of these occurrences may significantly harm our reputation, business, financial condition
and prospects.
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Additionally, if we or others identify undesirable side effects caused by those of our other
drug candidates after having received regulatory approval, this may lead to potentially
significant negative consequences which include, but are not limited to, the following:
 we may suspend marketing of the drug candidate;
 regulatory authorities may withdraw their approvals of or revoke the licenses for the
drug candidate;
 regulatory authorities may require additional warnings on the label;
 the FDA may require the establishment of a Risk Evaluation and Mitigation Strategy
(“REMS ”) or the NMPA or a comparable regulatory authority may require the
establishment of a similar strategy that may, for instance, restrict distribution of our
drugs and impose burdensome implementation requirements on us;
 we may be required to conduct specific post-marketing studies;
 we could be subjected to litigation proceedings and held liable for harm caused to
subjects or patients; and
 our reputation may suffer.
Any of these events could prevent us from achieving or maintaining market acceptance
of any particular drug candidate that is approved and could significantly harm our business,
results of operations and prospects.
The data and information we gather or otherwise rely on in our research and development
process could be inaccurate or incomplete, which could harm our trial results, reputation
and prospect.
We collect, aggregate, process, and analyze data and information from our preclinical
studies and clinical programs. We also engage in substantial information gathering following
the identification of a promising drug candidate. Because data in the pharmaceutical industry
is fragmented in origin, inconsistent in format, and often incomplete, the overall quality of data
collected or accessed in the pharmaceutical industry is often subject to challenge, the degree
or amount of data which is knowingly or unknowingly absent or omitted can be material, and
we often discover data issues and errors when monitoring and auditing the quality of our data.
If we make mistakes in the capture, input, or analysis of these data, our ability to advance the
development of our drug candidates may be materially harmed and our business, prospects and
reputation may suffer.
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We also engage in the procurement of regulatory approvals necessary for the development
and commercialization of our drug candidates, for which we manage and submit data to
governmental entities. These processes and submissions are governed by complex data
processing and validation policies and regulations. Notwithstanding such policies and
regulations, interim, top-line or preliminary data from our clinical trials that we announce or
publish from time to time may change as more patient data become available and are subject
to audit and verification procedures that could result in material changes in the final data, in
which case we may be exposed to liability to a customer, court or government agency that
concludes that our storage, handling, submission, delivery, or display of health information or
other data was wrongful or erroneous. Even unsuccessful claims could result in substantial
costs and diversion of management time, attention, and resources. A claim brought against us
that is uninsured or under-insured could harm our business, financial condition and results of
operations.
In addition, we rely on third parties, such as CROs, to monitor and manage data for some
of our ongoing preclinical and clinical programs and control only certain aspects of their
activities. If any of our CROs or other third parties do not perform to our standards in terms
of data accuracy or completeness, data from those preclinical and clinical studies may be
compromised as a result, and our reliance on these parties does not relieve us of our regulatory
responsibilities. For a detailed discussion, see “— Risks Relating to our Reliance on Third
Parties — We rely on third parties to monitor, support and/or conduct clinical trials and
preclinical studies of our drug candidates. If these third parties do not successfully carry out
their contractual duties or meet expected timelines, we may not be able to obtain regulatory
approval for, or commercialize, our drug candidates, and our business could be materially
harmed.” in this section.
We invest substantial human and capital resources in research and development in order
to develop our drug candidates and enhance our technologies, but we cannot guarantee
that such efforts will lead to successful outcomes.
The global biopharmaceutical market is constantly evolving, and we must keep pace with
new technologies and methodologies to maintain our competitive position. For example, we
have made significant efforts to develop our proprietary synthetic biology technology
platforms, including drug design platform, chassis cell engineering platform, and
comprehensive bioprocessing platform, which allow us to continuously develop a strong
pipeline of drug candidates. For details, see “Business — Our Platforms.” In 2023, 2024 and
the six months ended June 30, 2025, we incurred research and development expenses of
RMB132.5 million, RMB250.7 million and RMB111.0 million, respectively. We intend to
continue to strengthen our technical capabilities in the development of our drug candidates,
which requires substantial capital and time. We cannot assure you that we will be able to
develop, improve or adapt to new technologies and methodologies, successfully identify new
technological opportunities, develop and bring new or enhanced products to market, or obtain
sufficient or any patent or other intellectual property protection for such new or enhanced
products in a timely and cost-effective manner. Any failure to do so may render our previous
efforts obsolete, which could significantly reduce the competitiveness of our technology
platforms and drug candidates, and harm our business and prospects.
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RISKS RELATING TO THE MANUFACTURING OF OUR DRUG CANDIDATES
The manufacturing process of our biologic products is highly complex, and our business
could be materially and adversely affected if we encounter problems in manufacturing
our drug candidates or fail to comply with regulatory requirements.
The manufacturing of biologic products is a highly complex process, due in part to strict
regulatory requirements. Problems may arise during manufacturing for a variety of reasons,
including equipment malfunction, failure to follow specific protocols and procedures, changes
in product specification, low quality or insufficient supply of raw materials or our future
expansion of our manufacturing facilities as a result of changes in manufacturing production
sites and limits to manufacturing capacity due to regulatory requirements, changes in the types
of products produced, advances in manufacturing techniques, physical limitations that could
inhibit continuous supply and man-made or natural disasters and other environmental factors.
If problems arise during the production of a batch of product, that batch of product may have
to be discarded and we may experience product shortages or incur added expenses. This could,
among other things, lead to increased costs, lost revenue, damage to customer relationships,
time and expense spent investigating the cause and, depending on the cause, similar losses with
respect to other batches or products. If problems are not discovered before the product is
released to the market, recall and product liability costs may also be incurred.
In addition, we face additional manufacturing risks in relation to the CDMOs we engage
from time to time. We cannot assure you that any stability failures or other issues relating to
the manufacture of our drug candidates will not occur in the future, either relating to our
third-party CDMOs or on our manufacturing facilities we plan to build in the future. Please
refer to the paragraphs headed “— We may from time to time engage third parties to
manufacture our selected drug candidates for clinical development. If these third-party
manufacturers fail to deliver sufficient quantities of product or fail to do so at acceptable
quality levels or prices, our business could be harmed.”
Manufacturing methods and formulation are sometimes altered through the development
of drug candidates from clinical trials to approval, and further to commercialization, in an
effort to optimize manufacturing processes and results. Such alterations carry the risk that they
will not achieve these intended objectives. Any of these alterations could cause the drug
candidates to perform differently and affect the results of planned clinical trials or other future
clinical trials conducted with the altered materials. This could delay the commercialization of
drug candidates and require bridging studies or the repetition of one or more clinical trials,
which may result in increases in clinical trial costs, delays in drug approvals and jeopardize our
ability to commence product sales and generate revenue.
We may also encounter problems with achieving adequate or clinical-grade products that
meet the NMPA, FDA, or other comparable regulatory authorities standards or specifications,
maintaining consistent and acceptable production costs, and experience shortages of qualified
personnel, raw materials or key contractors, and experience unexpected damage to our
facilities or the equipment in them. In these cases, we may be required to delay or suspend our
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manufacturing activities. We may be unable to secure temporary, alternative manufacturers for
our drugs with the terms, quality and costs acceptable to us, or at all. Such an event could delay
our clinical trials and/or the availability of our future drug products for commercial sale.
Moreover, we may spend significant time and costs to remedy these deficiencies before we can
continue production at our manufacturing facilities.
Furthermore, the quality of our future drug products, including drug candidates
manufactured by us leveraging our existing and future manufacturing facilities or by the
CDMOs for research and development purposes and for commercial use in the future, depends
significantly on the effectiveness of our quality control and quality assurance, which in turn
depends on factors such as the production processes used in the CDMOs or in our existing and
future manufacturing facilities, the quality and reliability of equipment used, the quality of
manufacturing staff and related training programs and our ability to ensure that our employees,
CDMOs adhere to our quality control and quality assurance protocol. However, we cannot
assure you that the quality control and quality assurance procedures of our Company, CDMOs
will be effective in consistently preventing and resolving deviations from our quality standards.
We are, however, working with CDMOs on improving our documentation procedures for
quality control and quality assurance activities. Any significant failure or deterioration of our
quality control and quality assurance protocol could render our future drug products unsuitable
for use, jeopardize any GMP certifications we may have and/or harm our market reputation and
relationship with business partners. Any such developments may have a material adverse effect
on our business, financial condition and results of operations.
We may face damage to, destruction of or interruption of production at our facilities,
which could impede the development plans for any subsequent commercialization efforts
towards our drug candidates.
We have established GMP-compliant manufacturing facilities in Shanghai which meet
both pilot- and commercial-scale production demands for our selected drug candidates. Our
facilities may be harmed or rendered inoperable by physical damage from fire, floods,
earthquakes, typhoons, tornadoes, power loss, telecommunications failures, break-ins and
similar events. Any interruption in manufacturing operations at our manufacturing facilities
could result in our inability to satisfy the demands of our clinical trials or future
commercialization. There can be no assurance that our existing manufacturing facilities will
produce products in sufficient volumes in the event of any significant change in market
demand. Additionally, we have also collaborated with a third-party qualified CDMO outside
the PRC to support our potential overseas supply in the future. As such, we are exposed to the
risks of increased pricing for our sub-contracted production and that the third parties may not
manufacture products meeting our specifications or in sufficient volumes to meet market
demand. Consequently, our sales volumes and margins for the relevant products could be
materially and adversely affected.
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Advances in manufacturing techniques may render our facilities and equipment
inadequate or obsolete, and therefore we may also need to develop advanced manufacturing
techniques and process controls in order to fully utilize our facilities. If we are unable to do
so, or if the process to do so is delayed, or if the cost of this scale up is not economically
feasible for us or we cannot find a third-party supplier, we may not be able to supply our
products in a sufficient quantity to meet future demand, which would limit our development
and commercialization activities and our opportunities for growth.
Manufacturing of our products depends on the continued service of qualified
manufacturing personnel. Competition for qualified manufacturing personnel in the
pharmaceutical industry is intense and the pool of qualified candidates is limited. Although we
have not historically experienced unique difficulties attracting and retaining qualified
manufacturing personnel, we could experience such problems in the future. If we are unable
to maintain a sufficient number of qualified manufacturing personnel to support our products
manufacture, production capacity may be adversely affected.
To further upgrade our manufacturing capacity, we are constructing new manufacturing
facilities in Shanghai, strategically designed to complement the pilot- and commercial-scale
production of our recombinant protein drugs, particularly KJ101 and BJ044. Such new
manufacturing facilities requires prior and ongoing review by regulatory authorities and/or
approval of the manufacturing process and procedures in accordance with applicable
requirements. This review may be costly and time-consuming and could delay or halt the
launch of our products. The new facilities will also be subject to pre-approval inspection. In
addition, we have to demonstrate that the products made at the new facilities are equivalent to
the products made at the former facilities by physical and chemical methods, which are costly
and time consuming. Regulatory authorities may also require clinical testing as a way to prove
equivalency, which would result in additional costs and delay. In the event we fail to increase
our production capacity or develop the new manufacturing facilities, we may not capture the
expected growth in demand for our products, or to successfully commercialize new products,
each of which could materially and adversely affect our business prospects.
Our therapeutic biologics products, like any other biologic product, may involve risks of
contamination.
Therapeutic biologics products manufacturing usually requires cultivation steps,
including growth of the appropriate organism and the use of substances of animal origin, which
makes it easy to introduce a contaminant and to amplify low levels of contamination. In
addition, cross-contamination could result from manufacturing activities at shared equipment
and facilities, which are common. Other activities such as diagnosis and research are frequently
linked to manufacturing, which may create opportunities for cross-contamination.
Furthermore, improper actions during the long-distance transportation, storage and delivery
services may also result in contamination.
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In the event of contamination or injury resulting from such contamination, we could be
subject to liabilities for any resulting damages to patients, product recalls, confiscation and/or
destroy. We also could incur significant costs associated with civil or criminal fines and
penalties for failure to comply with laws and regulations. In addition, contamination of our
products could cause customers or other third parties with whom we conduct business to lose
confidence in our products’ quality and the reliability of our manufacturing procedures, which
could adversely affect our sales and profits. In addition, contaminated products that are
unknowingly distributed could result in harm on patients, threaten the reputation of our
products and expose us to product liability claims, criminal charges and administrative
sanctions.
Any failure to perform proper quality control and quality assurance would have a
material adverse effect on our business and financial results.
Manufacturing of pharmaceutical products for commercial sale are subject to applicable
laws, regulations and GMP requirements. These regulations and laws govern the manufacturing
processes and procedures, such as record keeping, operating and implementing the quality
management systems to control and assure the quality of investigational products and products
approved for sale. We have established a experienced quality management team consisting of
quality control, quality assurance, validation and pharmacovigilance specialists, and adopted
stringent quality control standards at every stage of our manufacturing process not only to fulfil
the legal requirements but to ensure a high-quality output. Further, we perform extensive tests
throughout the manufacturing processes to ensure the safety and effectiveness of our products.
However, there can be no assurance that such standards or tests will be effective. We may,
however, detect instances in which an unreleased product was produced without adherence to
our manufacturing procedures or the raw material used in our manufacturing process was not
collected to store in accordance with the GMP standards or other regulations, resulting in a
determination that the implicated products should be destroyed. In addition, if we fail to
comply with relevant quality control requirements under the GMP standards, we could
experience disruptions in manufacturing of our products, which could delay or prevent further
sales of such products, and may result in material adverse effect on our business and financial
results.
Quality issues may also arise during the large volume manufacturing process. If we are
unable to maintain the consistent and high-quality manufacturing of our products during
large-volume manufacturing, the sales of our products may be unencouraged and interrupted.
These could have a material adverse effect on our business and financial results.
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RISKS RELATING TO THE COMMERCIALIZATION OF OUR DRUG CANDIDATES
The size of the potential market for our current or future drug candidates is difficult to
estimate and, if any of our assumptions are inaccurate, the actual markets for our current
or future drug candidates may be smaller than our estimates.
Our projections of the number of patients who have the potential to benefit from treatment
with our drug candidates are based on our beliefs and estimates. These estimates have been
derived from a variety of sources, including scientific literature, surveys of clinics, patient
foundations, or market research and may prove to be incorrect. Additionally, new studies may
change the estimated incidence or prevalence of these diseases. The number of patients may
turn out to be fewer than expected. As a result, the potentially addressable patient population
and market size for our drug candidates may be smaller than our estimates. Furthermore, there
is no guarantee that any of our drug candidates, even if approved, would be approved for the
line of therapy we are aiming for. For indications with well-established standard of care
therapies, the NMPA, the FDA and other comparable regulatory authorities may approve new
therapies initially only for later lines of therapy. While we may seek approval for our drug
candidates as an early-line therapy for certain indications, there is no guarantee that they will
be approved as such. As a result, even if we obtain market approval for our drug candidates,
we may not achieve the anticipated market size and revenue unless such market approval is for
the intended lines of therapy or for additional indications.
Our drug candidates, once approved, may fail to achieve the degree of market acceptance
by physicians, hospitals, patients, third-party payers and others in the medical
community that would be necessary for their commercial success, and the actual market
size of our drug candidates might be smaller than expected.
The commercial success of our drug candidates, upon regulatory approval, depends upon
the degree of market acceptance each of such products achieves. Our drug candidates, once
approved, may fail to gain sufficient market acceptance by physicians, patients, third-party
payers and others in the medical community. In addition, physicians, patients and third-party
payers may prefer other products to ours. If our approved drug candidates do not achieve an
adequate level of acceptance, the sales of our future drug products will be adversely affected,
and we may fail to effectively market our drug candidates. The degree of market acceptance
of our drug candidates, if approved for commercial sale, will depend on a number of factors,
including, but not limited to:
 the clinical indications for which our drug candidates are approved;
 physicians, hospitals, medical treatment centers and patients considering our drug;
 efficacy and safety of our drug candidates;
 the potential and perceived advantages of our drug candidates over alternative
treatments;
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 the prevalence and severity of any side effects;
 product labelling or product insert requirements of regulatory authorities;
 limitations or warnings contained in the labelling approved by regulatory
authorities;
 the timing of market introduction of our drug candidates as well as competitive
drugs;
 the cost of treatment in relation to alternative treatments;
 the availability of adequate coverage, reimbursement and pricing by third-party
payers and government authorities;
 the willingness of patients to pay out-of-pocket in the absence of coverage and
reimbursement by third-party payers and government authorities; and
 the effectiveness of our sales and marketing efforts.
If any of our drug candidates are approved but fail to achieve market acceptance among
physicians, patients, hospitals, medical treatment centers or others in the medical community,
we will not be able to generate significant revenue. Even if our future approved drugs achieve
market acceptance, we may not be able to maintain such market acceptance over time if new
products or technologies are introduced that are more favorably received than our drug
candidates, are more cost-effective or render our drug candidates obsolete. Our failure to
achieve or maintain market acceptance for our future approved drugs would materially
adversely affect our business, financial condition, results of operations and prospects.
Illegal and/or parallel imports and counterfeit pharmaceutical products may reduce
demand for our future approved drug candidates and could have a negative impact on our
reputation and business.
The illegal importation of competing products from countries where government price
controls or other market dynamics result in lower prices may adversely affect the demand for
our future approved drug candidates and, in turn, may adversely affect our sales and
profitability in China, the U.S. and other countries and regions where we commercialize our
products in the future. Illegal imports may continue to occur or even increase as the ability of
patients and other customers to obtain these lower priced imports continues to grow. In
addition, governmental authorities may expand consumers’ ability to import lower priced
versions of our future approved products or competing products. Cross-border imports from
lower-priced markets (which are known as parallel imports) into higher-priced markets could
harm sales of our future drug products and exert commercial pressure on pricing within one or
more markets. Any future legislation or regulations that increase consumer access to lower
priced medicines could have a material adverse effect on our business.
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Furthermore, certain products distributed or sold in the pharmaceutical market may be
manufactured without proper licenses or approvals, or be fraudulently mislabeled with respect
to their content or manufacturers. These products are generally referred to as counterfeit
pharmaceutical products. The counterfeit pharmaceutical product control and enforcement
system, particularly in developing markets such as China, may be inadequate to discourage or
eliminate the manufacturing and sale of counterfeit pharmaceutical products imitating our
products. Since counterfeit pharmaceutical products in many cases have similar appearances
compared with the authentic pharmaceutical products but are generally sold at lower prices,
counterfeits could quickly erode the demand for our drug candidates approved in the future. In
addition, thefts of our inventory at warehouses, plants or while in-transit could lead to our
products being wrongfully stored and handled, and eventually sold through unauthorized
channels. A patient who receives a counterfeit or unauthorized pharmaceutical product may be
at risk for a number of dangerous health consequences, which potentially exposes us to product
liability claims, government investigations, and other disputes and negative consequences. Our
reputation and business could suffer harm as a result of counterfeit or unauthorized
pharmaceutical products sold under our or our collaborators’ brand name(s).
Negative results from off-label use of our future marketed drug products could harm our
reputation, product brand, business operations and financial condition and expose us to
liability.
Off-label drug use is the prescription of a product for an indication, dosage or in a dosage
form that is not in accordance with regulatory approved usage and labeling. Even though the
NMPA, FDA and other comparable regulatory authorities actively enforce the laws and
regulations prohibiting the promotion of off-label use, there remains the risk that our product
is subject to off-label drug use and is prescribed in a patient population, dosage or dosage form
that has not been approved by competent authorities. This occurrence may render our products
less effective or entirely ineffective and may cause adverse drug reactions or AEs. Any of these
occurrences can create negative publicity and materially and adversely affect our business
reputation, product brand, business operations and financial conditions. These occurrences may
also expose us to liability and cause a delay in the progress of our clinical trials and may
ultimately result in failure to obtain regulatory approval for our drug candidates.
RISKS RELATING TO OUR RELIANCE ON THIRD PARTIES
We rely on third parties to monitor, support and/or conduct clinical trials and preclinical
studies of our drug candidates. If these third parties do not successfully carry out their
contractual duties or meet expected timelines, we may not be able to obtain regulatory
approval for, or commercialize, our drug candidates, and our business could be materially
harmed.
We have worked with and plan to continue to work with third-party collaborators, such
as CROs, to assist in the execution of our preclinical studies and clinical trials. We control only
certain aspects of their activities and we cannot ensure that these collaborators will adequately
and timely perform all of their obligations to us. Nevertheless, we are responsible for ensuring
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that each of our studies is conducted in accordance with the applicable protocol, legal and
regulatory requirements and scientific standards, and our collaboration with the CROs does not
relieve us of our regulatory responsibilities. We, our CROs for our clinical programs and our
clinical investigators are required to comply with GCP , which are regulations and guidelines
enforced by the NMPA, FDA and other comparable regulatory authorities for all of our drug
candidates in clinical development. If we or any of our CROs or clinical investigators fail to
comply with applicable GCP , the clinical data generated in our clinical trials may be deemed
unreliable and the NMPA, FDA or comparable regulatory authorities may require us to perform
additional clinical trials before approving our marketing applications. Our failure to comply
with these regulations may require us to repeat clinical trials, which would delay the regulatory
approval process.
If any of our relationships with these CROs terminate, we may not be able to enter into
arrangements with alternative CROs or to do so on commercially reasonable terms. In addition,
our CROs are not our employees, and except for remedies available to us under our agreements
with such CROs, we cannot control whether or not they devote sufficient time and resources
to our ongoing pre-clinical studies, and clinical and non-clinical programs. If CROs do not
successfully carry out their contractual duties or obligations or meet expected deadlines, if they
need to be replaced or if the quality or accuracy of the clinical data they or our clinical
investigators obtain is compromised due to failure to adhere to our clinical protocols,
regulatory requirements or for other reasons, our clinical trials may be extended, delayed or
terminated and we may not be able to obtain regulatory approval for or successfully
commercialize our drug candidates. As a result, our results of operations and the commercial
prospects for our drug candidates would be harmed, our costs could increase and our ability to
generate revenues could be delayed.
Switching or adding additional CROs involves additional cost and delays, which can
materially influence our ability to meet our desired clinical development timelines. There can
be no assurance that we will not encounter similar challenges or delays in the future or that
these delays or challenges will not have a material adverse effect on our business, financial
condition and prospects.
Furthermore, we might engage third parties to perform certain specification tests on our
drug candidates prior to delivery to patients. If these tests are not appropriately done and test
data are not reliable, patients could be put at risk of serious harm and regulatory authorities
could place significant restrictions on our Company until deficiencies are remedied or related
actions are taken.
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We may from time to time engage third parties to manufacture our selected drug
candidates for clinical development. If these third-party manufacturers fail to deliver
sufficient quantities of product or fail to do so at acceptable quality levels or prices, our
business could be harmed.
We have in the past engaged third parties to manufacture certain of our drug candidates
for clinical development, and may continue to do so periodically in the future. Our anticipated
reliance on contract manufacturers exposes us to certain risks, such as:
 we or our licensees may be unable to identify manufacturers on acceptable terms or
at all because the number of potential manufacturers is limited and the NMPA, FDA
or other comparable regulatory authorities must approve any manufacturers as part
of their regulatory oversight of our drug candidates. This approval would require
new testing and GMP-compliance inspections by the NMPA, FDA or other
comparable regulatory authorities. In addition, a new manufacturer would have to be
educated in, or develop substantially equivalent processes for, production of our
drugs;
 the contract manufacturers may have little or no experience with manufacturing our
drug candidates, and therefore may require a significant amount of support from us
or our licensees in order to implement and maintain the infrastructure and processes
required to manufacture our drug candidates;
 the contract manufacturers may have limited capacity or limited manufacturing
slots, which may affect the timeline for the production of our drugs;
 the contract manufacturers might be unable to timely manufacture our drug
candidates or produce the quantity and quality required to meet our clinical and
commercial needs, if any;
 the contract manufacturers may not be able to execute our or our licensees’
manufacturing procedures and other logistical support requirements appropriately;
 our or our licensees’ future contract manufacturers may not perform as agreed, may
not devote sufficient resources to our drugs, or may not remain in the contract
manufacturing business for the time required to supply our clinical trials or to
successfully produce, store and distribute our drugs;
 the contract manufacturers are subject to ongoing periodic unannounced inspections
by the NMPA and the FDA to ensure strict compliance with GMP and other
government regulations in the PRC and the United States, respectively, and by other
comparable regulatory authorities for corresponding regulatory requirements. We or
our licensees do not have control over contract manufacturers’ compliance with
these regulations and requirements;
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 we may not own, or may have to share, the intellectual property rights to any
improvements made by contract manufacturers in the manufacturing process for our
drugs;
 the contract manufacturers could breach or terminate their agreements with us or our
licensees;
 the contract manufacturers may be unable to sustain their business and become
bankrupt as a result;
 raw materials and components used in the manufacturing process, particularly those
for which we or licensees have no other source or supplier, may not be available or
may not be suitable or acceptable for use due to material or component defects;
 products and components from our or our licensees’ contract manufacturers may be
subject to additional customs and import charges, which may cause us to incur
delays or additional costs as a result;
 the contract manufacturers and critical reagent suppliers may be subject to inclement
weather, as well as natural or man-made disasters; and
 the contract manufacturers may have unacceptable or inconsistent product quality
success rates and yields.
Each of these risks could delay or prevent the completion of our clinical trials or the
approval of any of our drug candidates by the NMPA, FDA or other comparable regulatory
authorities, result in higher costs or adversely impact the commercialization of our drug
candidates.
We depend on a stable and adequate supply of quality raw materials, including
consumables, devices and equipment from our suppliers, and price increases or
interruptions of such supply could have an adverse impact on our business.
During our business operations, we require a substantial amount of raw materials and
consumables, such as chromatography resins, filters, disposable bags and cell culture media.
In 2023, 2024 and the six months ended June 30, 2025, our cost of raw materials amounted to
RMB15.7 million, RMB18.7 million and RMB7.5 million, respectively. In the event of
significant price increases for raw materials, consumables and equipment, we cannot assure
you that we will be able to raise the prices of our drug candidates upon commercialization
sufficiently to cover such increased costs. As a result, our profitability could be adversely
affected.
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Additionally, we cannot assure you that we will be able to secure a stable supply of raw
materials, consumables and research and development services going forward. Our suppliers
may not be able to keep up with our fast growth or may reduce or cease their supply of raw
materials to us at any time. In addition, we cannot assure you that our suppliers have obtained
and will be able to renew all licenses, permits and approvals necessary for their operations or
comply with all applicable laws and regulations, and failure to do so by them may lead to
interruption in their business operation, which in turn may result in shortage of raw materials,
consumables and services provided to us. Some of our suppliers are based overseas and
therefore may need to maintain export or import licenses. If the supply of these raw materials,
consumables and services is interrupted, our business operation and financial position may be
adversely affected.
If we cannot maintain or develop clinical collaborations and relationships with PIs,
KOLs, physicians and other industry experts, our results of operations and prospects
could be adversely affected.
Our relationships with principal investigators (“ PIs”), key opinion leaders (“ KOLs ”),
physicians and other industry experts play an important role in our research and development
and marketing activities. We have established extensive interaction channels with PIs, KOLs,
physicians and experts to gain first-hand knowledge of unmet clinical needs and clinical
practice trends, which is critical to our ability to develop market-responsive drugs. However,
we cannot assure you that we will be able to maintain or strengthen our clinical collaborations
and relationships with PIs, KOLs, physicians and other industry experts, or that our efforts to
maintain or strengthen such relationships will lead to the successful development and
marketing of new products.
These industry participants may leave their roles, change their business or practice focus,
choose to no longer cooperate with us or cooperate with our competitors instead. Even if they
continue to cooperate with us, their market insights and perceptions, which we take into
account in our research and development process, may be inaccurate and lead us to develop
drugs that do not have significant market potential. Even if their insights and perceptions are
correct, we may fail to develop commercially viable products. Industry participants may no
longer want to collaborate with us or attend our conferences, and our marketing strategy may
no longer be able to yield results that are commensurate to our efforts spent. If we are unable
to develop and maintain our relationships with industry participants as anticipated, our
business, financial condition and results of operations may be materially and adversely
affected.
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Our employees, PIs, consultants, commercial partners and independent contractors may
engage in misconduct or other improper activities, which could harm our reputation and
subject us to penalties and significant expenses that have a material and adverse effect on
our business, financial condition and results of operations.
Despite our compliance program, which includes internal controls and third-party
compliance training, we are exposed to the risk of employee fraud or other misconduct or
failure to comply with applicable regulatory requirements by our employees or independent
contractors. Misconduct by our employees and independent contractors, such as PIs,
consultants, commercial partners, and vendors, could include failures to comply with
regulations of the NMPA, FDA or other regulatory authorities, to provide accurate information
to such regulators, to comply with manufacturing standards we have established, to comply
with healthcare fraud and abuse laws, to report financial information or data accurately or to
disclose unauthorized activities to us. In particular, sales, marketing and other business
arrangements in the healthcare industry are subject to extensive laws and regulations intended
to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws
and regulations may restrict or prohibit a wide range of business activities, including, but not
limited to, research, manufacturing, distribution, pricing, discounting, marketing and
promotion, sales commission, customer incentive programs and other business arrangements.
Employee and independent contractor misconduct could also involve the improper use of
individually identifiable information, including, without limitation, information obtained in the
course of clinical trials, which could result in regulatory sanctions and serious harm to our
reputation.
To the best of our knowledge, there had been no incidents of employee fraud or related
misconducts during the Track Record Period and up to the Latest Practicable Date. However,
it is not always possible to identify and deter employee and independent contractor misconduct,
and any precautions we take to detect and prevent improper activities may not be effective in
controlling unknown or unmanaged risks or losses or in protecting us from governmental
investigations or other actions or lawsuits stemming from a failure to be in compliance with
such laws by our employees or independent contractors. If any such actions are instituted
against us, those actions could have a significant impact on our business, including the
imposition of significant civil, criminal and administrative penalties, damages, monetary fines,
disgorgement of profits, imprisonment, possible exclusion from participation in government
healthcare programs, contractual damages, reputational harm, diminished profits and future
earnings, additional reporting or oversight obligations and curtailment or restructuring of our
operations, any of which could adversely affect our ability to operate.
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RISKS RELATING TO OUR INTELLECTUAL PROPERTY RIGHTS
Patent protection depends on compliance with various procedural, regulatory and other
requirements, and our patent protection could be reduced or eliminated for non-
compliance with these requirements.
The China National Intellectual Property Administration (the “ CNIPA”), the United
States Patent and Trademark Office (the “ USPTO ”) and other applicable patent agencies
require compliance with a number of procedural, documentary, fee payment, and other similar
provisions during the patent application process. For instance, periodic maintenance fees on
any issued patent are due to be paid to the CNIPA, the USPTO and other patent agencies in
several stages over the lifetime of the patent. Although an inadvertent lapse can in many cases
be cured by payment of a late fee or by other means in accordance with the applicable rules,
there are situations in which such non-compliance can result in abandonment or lapse of the
patent or patent application, resulting in partial or complete loss of patent rights in the relevant
jurisdiction. Such non-compliance events may include failure to respond to official actions
within prescribed time limits, non-payment of fees, and failure to properly legalize and submit
formal documents. If we or our collaboration partners fail to maintain the patents and patent
applications covering our drug candidates or if we or our collaboration partners otherwise
allow our patents or patent applications to be abandoned or lapse, our competitors might be
able to enter the market, which would hurt our competitive position and could impair our
ability to successfully commercialize our drug candidates in any indication for which they are
approved. In addition, under the PRC patent law, any organization or individual that applies for
a patent in a foreign country for an invention or utility model accomplished in China is required
to report to the CNIPA for confidentiality examination; otherwise the patent right will not be
granted, if an application is later filed in China.
Issued patents covering one or more of our drug candidates or technologies could be
found invalid or unenforceable if challenged in court.
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, there had been no patent infringement or other intellectual property rights
misappropriation by our competitors or other third parties. However, we cannot assure you that
our competitors or other third parties will not infringe our patent rights or misappropriate or
otherwise violate our intellectual property rights in the future. To counter infringement or
unauthorized use, litigation may be necessary in the future to enforce or defend our intellectual
property rights, to protect our trade secrets or to determine the validity and scope of our own
intellectual property rights or the proprietary rights of others. This can be expensive and time
consuming. Any claims that we assert against perceived infringers could also provoke these
parties to assert counterclaims against us alleging that we infringe their intellectual property
rights. Many of our current and potential competitors have the ability to dedicate substantially
greater resources to enforce and/or defend their intellectual property rights than we can.
Accordingly, despite our efforts, we may not be able to prevent third parties from infringing
upon or misappropriating our intellectual property. An adverse result in any litigation
proceeding could put our patents, as well as any patents that may issue in the future from our
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pending patent applications, at risk of being invalidated, held unenforceable or interpreted
narrowly. Furthermore, because of the substantial amount of discovery required in connection
with intellectual property litigation, some of our confidential information could be
compromised by disclosure during this type of litigation.
Defendant counterclaims alleging invalidity or unenforceability are commonplace, a third
party can assert invalidity or unenforceability of a patent on numerous grounds. Third parties
may also raise similar claims before administrative bodies in China or abroad, even outside the
context of litigation. Such proceedings could result in revocation or amendment to our patents
in such a way that they no longer cover and protect our products or product candidates. The
outcome following legal assertions of invalidity and unenforceability is unpredictable. With
respect to the validity of our patents, for example, we, our patent counsel, and the patent
examiner could be unaware of invalidating prior art during prosecution. If a defendant were to
prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part,
and perhaps all, of the patent protection on our products or product candidates. Such a loss of
patent protection could have a material adverse impact on our business.
If our patent terms expire before or soon after our drug candidates are approved, or if
competitors successfully challenge our patents, our business may be materially harmed.
Lack of protection under the applicable patent linkage and patent term extension laws
and regulations could increase the risk of early generic competition.
Depending on the jurisdiction, various extensions may be available, but the life of a
patent, and the protection it affords, is limited. For example, the expiration of a patent is
generally 20 years for inventions in China and generally 20 years from the earliest date of filing
of the first non-provisional patent application to which the patent claims priority in the U.S.
Even if patents covering our drug candidates, their manufacture, or use are obtained, once the
patent life has expired, we may be open to competition from competitive medications,
including biosimilar medications. Manufacturers of generic or biosimilar drugs may challenge
the scope, validity, or enforceability of our patents in court or before a patent office, and we
may not be successful in enforcing or defending those intellectual property rights and, as a
result, may not be able to develop or market the relevant product exclusively, which would
have a material adverse effect on any potential sales of that product. Upon the expiration of our
issued patents or patents that may issue from our patent applications, we will not be able to
assert such patent rights against potential competitors and our business and results of
operations may be adversely affected.
Given the amount of time required for the development, testing and regulatory review of
new drug candidates, patents protecting such drug candidates might expire before or shortly
after such drug candidates are commercialized. As a result, our owned and in-licensed patents
and patent applications may not provide us with sufficient rights to exclude others from
commercializing products similar or identical to ours. Even if we believe that we are eligible
for certain patent term extensions, there can be no assurance that the applicable authorities,
including the FDA and the USPTO in the U.S., and any equivalent regulatory authority in other
countries, will agree with our assessment of whether such extensions are available, and such
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authorities may refuse to grant extensions to our patents, or may grant more limited extensions
than we request. For example, depending upon the timing, duration and specifics of any FDA
marketing approval of any drug candidates we may develop, one or more of our U.S. patents
may be eligible for limited patent term extension under the Drug Price Competition and Patent
Term Restoration Action of 1984, or Hatch-Waxman Amendments. The Hatch-Waxman
Amendments permit a patent extension term of up to five years as compensation for the patent
term lost during the FDA regulatory review process. A patent term extension cannot extend the
remaining term of a patent beyond a total of 14 years from the date of product approval, only
one patent may be extended, and only those claims covering the approved drug, a method for
using it, or a method for manufacturing it, may be extended. Similarly, the amendment to the
PRC Patent Law which was promulgated in October 2020 introduces patent extensions to
patents of new drugs that launched in the PRC, which may enable the patent owner to submit
applications for a patent term extension of up to a maximum length of five years. However, we
may not be granted an extension because of, for example, failing to exercise due diligence
during the testing phase or regulatory review process, failing to apply within applicable
deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy
applicable requirements.
Moreover, the applicable time period or the scope of patent protection afforded could be
less than we request. If we are unable to obtain a patent term extension or the term of any such
extension is less than we request, our competitors may obtain approval of competing products
following our patent expiration, and our business could be harmed.
In addition, some of our patents and patent applications are, and may in the future be,
co-owned with third parties. If we are unable to obtain an exclusive license to any such
third-party co-owners’ interest in such patents or patent applications, such co-owners may be
able to license their rights to other third parties, including our competitors, and our competitors
could market competing products and technology. Besides this, we may need the cooperation
of any such co-owners of our patents in order to enforce such patents against third parties, and
such cooperation may not be provided to us. Any of the foregoing could have a material
adverse effect on our competitive position, business, financial condition, results of operations
and prospects.
We may from time to time be involved in legal proceedings and disputes to protect or
enforce our intellectual property rights, or defend against infringement and other claims
alleged by third parties, which could be expensive, time consuming and unsuccessful.
Despite measures we take to obtain and maintain patent and other intellectual property
rights with respect to our drug candidates, our intellectual property rights (including those
transferred or licensed from third parties, if any) could be challenged or invalidated. For
example, although we believe that we have conducted our patent prosecution in accordance
with a duty of candor and in good faith, the outcome following legal assertions of invalidity
and unenforceability during patent litigation is unpredictable. On the other hand, competitors
or other third parties may infringe or misappropriate our patents and other intellectual property
rights. Although to the best of our knowledge, there had been no actual patent infringement or
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other intellectual property rights misappropriation by our competitors or other third parties
during the Track Record Period and up to the Latest Practicable Date, in the event of any
potential infringement or unauthorized use, we may be required to file infringement claims,
which can be expensive and time consuming. In any infringement proceeding, a court may
decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other
party from using the technology at issue on the grounds that our patents do not cover the
technology in question.
Even if we establish infringement, the court may decide not to grant an injunction against
further infringing activity and instead award only monetary damages, which may not be an
adequate remedy. Enforcing our intellectual property rights against third parties may also cause
such third parties to file other counterclaims against us, which could be costly to defend and
could require us to pay substantial damages. In addition, if the breadth or strength of protection
provided by our patents and other intellectual property rights is threatened, it could dissuade
companies from collaborating with us to license, develop, or commercialize our current or
future drug candidates. Any loss of intellectual property protection could have a material
adverse impact on one or more of our drug candidates and our business.
An adverse result in any litigation or defense proceedings could put one or more of our
intellectual property rights at risk of being invalidated or interpreted narrowly. Even if
successful, litigation may result in substantial costs and distraction of our management and
other employees. Furthermore, because of the substantial amount of discovery required in
connection with intellectual property litigation, there is a risk that some of our confidential
information could be compromised by disclosure during this type of litigation.
In addition, there could be public announcements of the results of hearings, motions or
other interim proceedings or developments. If the public, securities analysts or investors
perceive these results to be negative, or perceive that the presence or continuation of these
cases creates a level of uncertainty regarding our ability to increase or sustain products sales,
it could have a substantial adverse effect on the price of our H Shares. There is no assurance
that our drug candidates will not be subject to the same risks.
If we are unable to protect the confidentiality of our trade secrets, our business and
competitive position would be harmed. We may be subject to claims that our employees,
consultants or advisers have wrongfully used or disclosed alleged trade secrets of their
former employers, and we may be subject to claims asserting ownership of what we
regard as our own intellectual property.
In addition to our issued patent and pending patent applications, we rely on trade secrets,
including unpatented know-how, technology and other proprietary information, to maintain our
competitive position and to protect our drug candidates. We seek to protect these trade secrets,
in part, by entering into non-disclosure and confidentiality agreements or including such
undertakings in agreements with parties that have access to them, such as our employees,
consultants, and other third-party corporate partners. We cannot guarantee that we have entered
into such agreements with each party that may have or have had access to our trade secrets or
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proprietary technology and processes. Despite our efforts, any of these parties may breach such
agreements and disclose our proprietary information, and we may not be able to obtain
adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or
misappropriated a trade secret can be difficult, expensive and time consuming, and the outcome
is unpredictable. If any of our trade secrets were lawfully obtained or independently developed
by a competitor, we would have no right to prevent them from using that technology or
information to compete with us and our competitive position would be harmed.
Furthermore, certain of our employees were previously employed at other pharmaceutical
companies, including our competitors or potential competitors. Some of these employees might
have executed proprietary rights, non-disclosure and non-competition agreements in
connection with such previous employment. Although we try to ensure that our employees do
not use the proprietary information or know-how of others in their work for us, we may be
subject to claims that we or these employees or consultants have used or disclosed intellectual
property, including trade secrets or other proprietary information, of any such individuals’
former employer. We are not aware of any material threatened or pending claims related to
these matters or concerning our senior management as of the Latest Practicable Date, but in the
future litigation may be necessary to defend against such claims. If we fail in defending any
such claims, in addition to paying monetary damages, we may lose valuable intellectual
property rights or personnel. Even if we are successful in defending against such claims,
litigation could result in substantial costs and be a distraction to management.
In addition, while we typically require our employees involved in the development of
intellectual property to execute agreements assigning such intellectual property to us, we may
be unsuccessful in executing such an agreement with each party who in fact develops
intellectual property that we regard as our own. The assignment of intellectual property rights
may not be self-executing, or the assignment agreements may be breached, which may result
in claims by or against us related to the ownership of such intellectual property. If we fail in
prosecuting or defending any such claims, in addition to paying monetary damages, we may
lose valuable intellectual property rights. Even if we are successful in prosecuting or defending
against such claims, litigation could result in substantial costs and be a distraction to our
management and scientific personnel.
If our trademarks and trade names are not adequately protected, we may not be able to
build name recognition in our markets of interest and our business may be adversely
affected.
We currently own issued trademark registrations and have pending trademark
applications, any of which may be the subject of a governmental or third-party objection, which
could prevent the registration or maintenance of the same. We cannot assure you that any
currently pending trademark applications or any trademark applications we may file in the
future will be approved. During trademark registration proceedings, we may receive rejections
and although we are given an opportunity to respond to those rejections, we may be unable to
overcome such rejections. In addition, in proceedings before the USPTO and in proceedings
before comparable agencies in many foreign jurisdictions, third parties are given an
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opportunity to oppose pending trademark applications and to seek to cancel registered
trademarks. Opposition or cancellation proceeding may be filed against our trademarks and our
trademarks may not survive such proceedings. If we are unsuccessful in obtaining trademark
protection for our primary brands, we may be required to change our brand names, which could
materially adversely affect our business. Moreover, as our drug candidates mature in the future,
upon regulatory approval, our reliance on our trademarks to differentiate us from our
competitors will increase, and as a result, if we are unable to prevent third parties from
adopting, registering or using trademarks and trade dress that infringe, dilute or otherwise
violate our trademark rights, or engaging in conduct that constitutes unfair competition,
defamation or other violation of our rights, our business could be materially adversely affected.
Our trademarks or trade names may be challenged, infringed, circumvented or declared
generic or determined to be infringing on other marks. We may be unsuccessful to protect our
rights to these trademarks and trade names, which we need to build name recognition among
potential partners or customers in our markets of interest. At times, competitors or other third
parties may adopt trade names or trademarks similar to ours, and impede our ability to build
brand identity and possibly leading to market confusion. In addition, there could be potential
trade name or trademark infringement claims brought by owners of other registered trademarks
or trademarks that incorporate variations of our registered or unregistered trademarks or trade
names. Over the long term, if we are unable to establish name recognition based on our
trademarks and trade names, then we may not be able to compete effectively and our business
may be adversely affected. Our efforts to enforce or protect our proprietary rights related to
trademarks, trade secrets, domain names, copyrights or other intellectual property may be
ineffective and could result in substantial costs and diversion of resources. Any of the
foregoing could have a material adverse effect on our competitive position, business, financial
condition, results of operations and prospects.
Intellectual property and other laws and regulations are subject to change, which could
diminish the value of our intellectual property in general, thereby impairing our ability
to protect our current and any future drug candidates.
As is the case with other pharmaceutical companies, our success is heavily dependent on
obtaining, maintaining, enforcing and defending intellectual property, particularly patents.
Obtaining and enforcing patents in the pharmaceutical industry involves technological and
legal complexity, and obtaining and enforcing pharmaceutical patents is costly, time-
consuming and inherently uncertain. Changes in either the patent laws or their interpretation
in China, the U.S. or other jurisdictions may increase the uncertainties and costs surrounding
the prosecution of our patents, diminish our ability to protect our inventions, obtain, maintain,
defend, and enforce our intellectual property rights and, more generally, affect the value of our
intellectual property or narrow the scope of our patent rights.
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In China, intellectual property laws are constantly evolving, with efforts being made to
improve intellectual property protection in China. For example, the fourth Amendments to the
PRC Patent Law was put into effect on June 1, 2021, provides a patent term extension and
patent term adjustment. Patent term extension of up to five years is available to invention
patents claiming new drugs, to compensate for the time occupied by review and approval for
marketing the new drugs. Patent term adjustment is available to all invention patents, to
compensate unreasonable delays caused by CNIPA during the patent examination procedures.
The third Amendments to Implementing Rules of the Patent Law of the People’s Republic of
China put into effect on January 20, 2024, and stipulated detailed implementation rules for
patent term extension and adjustment, including for example, the eligible type of patents,
requirements for the application for patent term extension and adjustment, how to calculate the
extension, and limitations during the extended patent term. As a result, patents owned by third
parties eligible for submitting applications for a patent term extension or adjustment may be
extended, which may in turn affect our ability to commercialize our drug candidates without
facing infringement risks. If we are required to delay commercialization for an extended period
of time, technological advances may develop and new products may be launched, which may
in turn render our drug candidates non-competitive. We cannot guarantee that any other future
changes to PRC intellectual property laws would not have a negative impact on our intellectual
property protection.
Under the America Invents Act, enacted in 2011, the U.S. moved to First Inventor to File
system under which the first to make the claimed invention was entitled to the patent.
Assuming the other requirements for patentability are met, the first to file a patent application
is entitled to the patent. Publications of discoveries in the scientific literatures often lag behind
the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically
not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be
certain that we were the first to make the inventions claimed in our patents or pending patent
applications, or that we were the first to file for patent protection of such inventions.
In addition to increasing uncertainty with regard to our ability to obtain patents in the
future, this combination of events has created uncertainty with respect to the value of patents
once obtained, if any. Depending on decisions by the U.S. Congress, the federal courts and the
USPTO, the laws and regulations governing patents could change in unpredictable ways that
could weaken our ability to obtain new patents or to enforce our existing patents and patents
that we might obtain in the future. There could be similar changes in the laws of foreign
jurisdictions that may impact the value of our patent rights or our other intellectual property
rights. Any of the foregoing could have a material adverse effect on our patent rights and our
ability to protect, defend and enforce our patent rights in the future, as well as on our
competitive position, business, financial condition, results of operations and prospects.
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RISKS RELATING TO EXTENSIVE GOVERNMENT REGULATIONS
All material aspects of the research, development, manufacturing and commercialization
of pharmaceutical products are heavily regulated. Any failure to comply with industry
standards or any adverse actions by the regulatory authorities against us could negatively
impact our reputation and our business, financial condition, results of operations and
prospects.
All jurisdictions in which we intend to conduct our pharmaceutical-industry activities
regulate these activities in great depth and detail. We intend to implement a global development
strategy, with a focus on China, the U.S. and Europe, the major pharmaceutical markets in the
world. These jurisdictions strictly regulate the pharmaceutical industry, and in doing so they
employ a broad range of strategies, including regulation of product development and approval,
manufacturing, and marketing, sales and distribution of products. Evolutions and differences
in these regulatory regimes could lead to an increased and costly regulatory compliance
burden.
We are required to obtained and maintain certain licenses and permits for conducting our
business. The process of obtaining regulatory approvals and compliance with appropriate laws,
regulations and guidance requires the expenditure of substantial time and financial resources.
If any regulatory authorities consider that we were operating without the requisite approvals,
licenses or permits or promulgates new laws and regulations that require additional approvals
or licenses or imposes additional restrictions on the operation of any part of our business, it has
the power, among other things, to levy fines, confiscate our income, revoke our business
licenses, and require us to discontinue our relevant business or impose restrictions on the
affected portion of our business. In particular, failure to comply with the applicable
requirements at any time during the product development process and approval process, or
after approval, may subject an applicant to administrative or judicial sanctions. These sanctions
could include refusal to approve pending applications, withdrawal of an approval, license
revocation; clinical hold, voluntary or mandatory product recalls, product seizures; total or
partial suspension of production or distribution, injunctions, fines, refusals of government
contracts, restitution and disgorgement, or other civil or criminal penalties. Failure to comply
with these applicable guidance could have a material and adverse effect on our business and
prospects.
In many countries or regions where a drug is intended to be ultimately sold, including
without limitation, China, the U.S. and Europe, the relevant government agencies and industry
regulatory bodies impose high standards on the efficacy of such drug, as well as strict rules,
regulations and industry standards on how we develop such drug. For example, we may need
to obtain clearance from the NMPA, the FDA or other regulatory authorities as part of an IND
application to seek authorization to begin clinical trials, and file an NDA or other similar
applications to seek marketing approval. Any failure to comply with existing laws, regulations
and industry standards could result in fines or other punitive actions against us, the termination
of ongoing research and the disqualification of data for submission to regulatory authorities,
or a ban on the future sales of our drugs, each of which could have a material adverse impact
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on our reputation, business, financial condition, results of operations and prospects. In
addition, any action against us for violation of the relevant laws, regulations or industry
standards, even if we successfully defend against it, could cause us to incur significant legal
expenses, divert our management’s attention from the operation of our business, and adversely
affect our reputation and financial results.
The regulatory approval processes of the NMPA, the FDA and other comparable
regulatory authorities are time-consuming and may evolve over time. If we are unable to
obtain without undue delay any regulatory approvals for our drug candidates in our
target markets, our business may be subject to actual or perceived harm.
The time required to obtain the approval of the NMPA, FDA and other comparable
regulatory authorities is uncertain and depends on numerous factors, including the substantial
discretion of the regulatory authorities. Generally, such approvals take years to be obtained
following the commencement of preclinical studies and clinical trials. In addition, approval
policies, regulations or the type and amount of clinical data necessary to gain approval may
change during the course of a drug candidate’s clinical development and may vary among
jurisdictions. We cannot guarantee that we will be able to obtain regulatory approvals for our
other existing drug candidates or any drug candidates we may discover, in-license or acquire
and seek to develop in the future. Our drug candidates could fail to receive the regulatory
approval of the NMPA, FDA or a comparable regulatory authority for many reasons, including
but not limited to:
 disagreement with the design or implementation of our clinical trials;
 failure to demonstrate that a drug candidate is safe and effective and potent for its
proposed indication;
 failure of our clinical trial results to meet the level of statistical significance
required for approval;
 failure of our clinical trial process to pass relevant GCP inspections;
 disagreement with our interpretation of data from preclinical studies or clinical
trials;
 insufficient data collected from the clinical trials of our drug candidates to support
the submission and filing of an NDA or other submissions or to obtain regulatory
approval;
 failure of our drug candidates to pass GMP , inspections during the regulatory review
process or across the production cycle of our drug candidates;
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 failure of our clinical sites to pass audits carried out by the NMPA, FDA or other
comparable regulatory authorities, resulting in a potential invalidation of our
research data;
 changes in approval policies or regulations that render our preclinical and clinical
data insufficient for obtaining approvals; or
 failure of our clinical trial process to keep up with any scientific or technological
advancements required by approval policies or regulations.
The NMPA, FDA or a comparable regulatory authority may require more information,
including additional preclinical or clinical data, to support approval, which may delay or
prevent approval and our commercialization plans. Even if we were to obtain approval,
regulatory authorities may approve any of our drug candidates for fewer or more limited
indications than we request, grant approval contingent on the performance of costly
post-marketing clinical trials, or approve a drug candidate with an indication that is not
desirable for the successful commercialization of that drug candidate. Legislative and
regulatory proposals may also, from time to time, be made to expand existing requirements. For
example, increased scrutiny by the United States Congress of the FDA ’s approval process may
significantly delay or prevent marketing approval, and potentially introduce more stringent
product labeling and post-marketing conditions. Any of the foregoing scenarios could
materially harm the commercial prospects of our drug candidates.
If we are unable to obtain or maintain approval from the NMPA, the FDA and other
comparable regulatory authorities for our drug candidates to be eligible for an expedited
registration pathway as innovative or breakthrough therapy, the time and cost we incur
to obtain regulatory approvals may increase.
The NMPA, the FDA and the comparable regulatory authorities in other jurisdictions may
have implemented expedited review programs for drug candidates, among others, which are
innovative drug applications, or which treat a serious or life-threatening condition and provide
meaningful therapeutic benefit over available therapies. The NMPA ’s Breakthrough Therapy
Designation (“ BTD”), for example, is intended to facilitate and expedite the development and
review of an investigational drug to treat a serious disease or condition when preliminary
clinical evidence indicates that the drug has demonstrated substantial improvement over
current therapies. Similarly, the FDA may facilitate the development and expedite the review
of pharmaceutical products that are intended for the treatment of a serious or life-threatening
condition for which there is no effective treatment and which demonstrate the potential to
address medical need for the condition.
As of the Latest Practicable Date, KJ103, one of our Core Products, has received the
Breakthrough Therapy Designation from the NMPA. For details, see “Business — Our Drug
Candidates.” There can be no assurance, however, that the regulatory authorities will consider
granting BTD or other expedited review programs for our other or future drug candidates, or
that we will decide to pursue or submit any applications for accelerated approvals or any other
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form of expedited development, review or approvals. Similarly, there can be no assurance that,
after receiving feedback from the regulatory authorities, we will continue to pursue or apply
for accelerated approvals or any other form of expedited development, review or approvals,
even if we initially decide to do so. Furthermore, there can be no assurance that such a
submission or application will be accepted for filing, or that any expedited development,
review or approvals will be granted on a timely basis, or at all. Any failure to obtain accelerated
approvals or any other form of expedited development, review or approvals for our drug
candidates could result in a longer period of time prior to the commercialization of such drug
candidate, an increase in the development expenses for such drug candidate and an adverse
impact on our competitive position in the market.
Even if we receive regulatory approval for our drug candidates, we will be subject to
ongoing regulatory obligations and continued regulatory review, which may result in
significant additional expenses.
If the NMPA, FDA or a comparable regulatory authority approves any of our drug
candidates, the manufacturing processes, labeling, packaging, distribution, adverse event
reporting, storage, advertising, promotion and record-keeping for the drug will be subject to
extensive and ongoing regulatory requirements on pharmacovigilance. These requirements
include submissions of safety and other post-marketing information and reports, registration,
random quality control testing, adherence to any chemistry, manufacturing, and controls, or
CMC, specifications, continued compliance with GMP , and GCP and potential post-approval
studies for the purposes of license renewal.
Any approvals that we receive for our drug candidates may be subject to limitations on
the approved indicated uses for which the drug may be marketed or to the conditions of
approval, which could adversely affect the drug’s commercial potential or contain requirements
for potentially costly post-marketing testing and surveillance to monitor the safety and efficacy
of the drug candidates. The NMPA, FDA or a comparable regulatory authority may also require
a risk evaluation mitigation strategy program as a condition of approval of our drug candidates
or following approval. In addition, if the NMPA, FDA or a comparable regulatory authority
approves our drug candidates, we will have to comply with requirements, including, for
example, submissions of safety and other post-marketing information and reports, registration,
as well as continued compliance with GMP and GCP , for any clinical trials that we conduct
post-approval.
A conditional marketing approval achieved through single-arm study design will typically
have conditions that require the drug developer to obtain and report additional clinical data
after the commercial launch of the approved drug to further confirm its efficacy and safety. The
NMPA will grant a full marketing approval if the additional clinical data fulfills the
requirements for a normal marketing approval. If our drug candidate is conditionally approved
through single-arm trial design for accelerated marketing, we will need to discuss and reach
consensus with the NMPA on details of the post-approval research pursuant to the relevant laws
in China.
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Moreover, regulatory policies may change or additional government regulations may be
enacted that could prevent, limit or delay regulatory approval of our drug candidates. If we are
not able to maintain regulatory compliance, we may lose the regulatory approvals that we have
already obtained and may not achieve or sustain profitability, which in turn could significantly
harm our business, financial condition and prospects. The NMPA, FDA and other regulatory
authorities strictly regulate the marketing, labelling, advertising and promotion of products that
are placed on the market. Drugs may be promoted only for their approved indications and for
use in accordance with the provisions of the approved label. The NMPA, FDA and other
regulatory authorities actively enforce the laws and regulations prohibiting the promotion of
off-label uses, and a company that is found to have improperly promoted off-label uses may
be subject to significant liability.
We may be directly or indirectly subject to applicable anti-kickback, false claims laws,
doctor payment transparency laws, fraud and abuse laws or similar healthcare and
security laws and regulations in China and other jurisdictions, which could expose us to
administrative sanctions, criminal sanctions, civil penalties, contractual damages,
reputational damage and diminished profits and future earnings.
If we obtain approval from the NMPA or other comparable regulatory authorities approval
for any of our drug candidates and begin commercializing those drug candidates in China and
our other target markets, our operations may be subject to various fraud and abuse laws of
various jurisdictions, including but not limited to, the PRC Anti-Unfair Competition Law ( ʕ
), the PRC Criminal Law (), the
Federal Anti-Kickback Statute and the Federal False Claims Act, and the physician payment
sunshine laws and regulations. There are ambiguities as to what is required to comply with any
of these requirements, and violations of such fraud and abuse laws may be punishable by
criminal and/or civil sanctions, including penalties, fines and/or exclusion or suspension from
governmental healthcare programs and debarment from contracting with the relevant
government. Moreover, as law enforcement authorities have been increasingly focused on
enforcing these laws, efforts to ensure that our business arrangements with third parties comply
with applicable healthcare laws and regulations will involve substantial costs.
We are subject to environmental protection, health and safety laws and regulations, and
if we or our CROs, CDMOs and other business partners fail to comply with these laws and
regulations, we could be subject to fines or penalties or incur costs that could have a
material adverse effect on our business.
We are subject to numerous environmental, health and safety laws and regulations,
including but not limited to the treatment and discharge of pollutants into the environment, the
use of toxic and hazardous chemicals in the process of our business operations and fire
prevention. Our operations involve the use of hazardous and flammable materials, including
chemicals and biological materials. Our operations also produce hazardous waste products. We
contract with third parties for the disposal of these materials and wastes. We cannot fully
eliminate the risk of accidental contamination, biological or chemical hazards or personal
injury at our facilities during the process of discovery, testing, development and manufacturing
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of our drug candidates. In the event of such accident, we could be held liable for damages and
clean-up costs which, to the extent not covered by existing insurance or indemnification, could
harm our business. We may also be forced to close or suspend operations at certain of our
affected facilities temporarily or permanently. As a result, any accidental contamination,
biological or chemical hazards or personal injury could have a material and adverse impact on
our business, financial condition, results of operations and prospects.
We also could incur significant costs associated with civil or criminal fines and penalties
for failure to comply with such laws and regulations. In addition, we may incur substantial
costs in order to comply with current or future environmental, health, and safety laws and
regulations. These current or future laws and regulations may impair our drug candidate R&D
program efforts. Moreover, there is increasing stakeholder pressure on companies to diligence
environmental, social, and governance matters in the supply chain. Negative publicity
regarding production methods, alleged practices or workplace or related conditions of any of
our suppliers, CROs, CDMOs or other third parties who perform services for us could
adversely affect our reputation and force us to locate alternatives, which could increase our
costs and result in delayed supply of components for, and manufacturing of, our drug
candidates, or other disruptions to our operations.
In terms of the construction of our R&D, manufacturing or other facilities, they can be
put into operation after the relevant administrative authorities in charge of environmental
protection and health and safety examine and approve such facilities. We cannot assure you that
we will be able to obtain all the regulatory approvals for our construction projects in a timely
manner, or at all. Delays or failures in obtaining all the requisite regulatory approvals for our
construction projects may affect our abilities to develop, manufacture and commercialize our
drug candidates as we plan.
We face regulation and potential liability related to privacy, data protection and
information security which may require significant resources and may adversely affect
our business, operations and financial performance.
We and the CROs we engage may routinely receive, collect, generate, store, process,
transmit and maintain medical data, treatment records and other personal details of subjects
enrolled in our clinical trials, along with other personal or potentially sensitive information. As
such, we are subject to the relevant local, state or provincial, national and international data
protection and privacy laws, directives, regulations and standards that apply to the collection,
use, retention, protection, disclosure, transfer and other processing of personal information in
the various jurisdictions in which we operate and conduct our clinical trials, as well as
contractual obligations. These data protection and privacy law regimes continue to evolve and
may result in ever-increasing public scrutiny and escalating levels of enforcement and
sanctions and increased costs of compliance including, for example, substantial operational
costs associated with changes to our data processing practices. Failure to comply with any of
these laws could result in enforcement action against us, including and without limitation to
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fines, imprisonment of company officials and public censure, claims for damages by customers
and other affected individuals, damage to our reputation and loss of goodwill, any of which
could have a material and adverse effect on our business, financial condition, and results of
operations or prospects.
The personal information of patients or subjects which might be involved in our clinical
trials could be highly sensitive and we are subject to strict requirements under the applicable
privacy protection regulations in the relevant jurisdictions. Our security policies and measures
to protect our proprietary data and patients’ privacy might not satisfy all the requirements in
every respect under the applicable laws and regulations. Data leakage and abuse and other
misconduct related to data and personal information protection might not be completely
avoided, due to hacking activities, human error, employee misconduct or negligence or system
breakdown, among other reasons. We also cooperate with hospitals, CROs and other business
partners, licensees, contractors and consultants for our clinical trials and operations. Any
leakage or abuse of patient data by our third-party partners may be perceived by the patients
as a result of our failure. Any failure or perceived failure by us to prevent information security
breaches or to comply with data/privacy policies or data/privacy-related legal obligations, or
any compromise of information security that results in the unauthorized release or transfer of
personal information or other patient data, could cause our customers to lose trust in us and
could expose us to legal claims.
Changes in laws and regulations relating to the pharmaceutical industry may result in
additional compliance risks and costs.
In China, the U.S. and other jurisdictions, there have been, and we expect there will
continue to be, a number of legislative and regulatory changes relating to the pharmaceutical
industry and the healthcare system, including cost-containment measures that may reduce or
limit coverage and reimbursement for newly approved drugs and affect our ability to profitably
sell any drug candidates for which we obtain marketing approval. See “— Even if we are able
to commercialize any approved drug candidates, reimbursement may be limited or unavailable
in certain market segments for our drug candidates, and we may face uncertainties from
national, provincial or other third-party drug reimbursement practices and unfavorable drug
pricing policies or regulations, which could harm our business.” in this section.
We have limited experience in commercial sales of drug, and do not currently expect to
experience any inability or impediments to enlist or obtain reimbursement coverage for any of
our drug candidates as of the Latest Practicable Date, these legislative trends and regulatory
measures can potentially affect the sales, profitability and prospects of our drug candidates in
the future. Moreover, these laws and regulations may evolve over time as new guidance
becomes available. This evolution may result in continuing uncertainty regarding compliance
matters and additional costs necessitated by ongoing revisions to our disclosure and
governance practices. If we fail to address and comply with these laws and regulations and any
subsequent changes, we may be subject to penalty and our business may be harmed.
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OTHER RISKS RELATING TO OUR FINANCIAL POSITION AND NEED FOR
ADDITIONAL CAPITAL
We are a clinical-stage biopharmaceutical company with a limited operating history,
which may make it difficult to evaluate our current business and predict our future
performance.
We are a clinical-stage biopharmaceutical company with a relatively short operating
history. Our operations to date have focused on business planning, raising capital, establishing
our drug portfolio and conducting clinical trials of our drug candidates. Apart from SJ02, most
of our drug candidates were still at various stages of development and we had limited
experience in commercialization of our drug candidates as of the Latest Practicable Date. Our
limited operating history, particularly in the rapidly evolving pharmaceutical industry, may
make it difficult to evaluate our current business and reliably predict our future performance.
Our future financial performance will depend, in part, on our ability to effectively manage our
recent growth and any future growth. We might not be able to effectively manage the expansion
of our operations, which may result in weaknesses in our infrastructure, operational
inefficiencies, loss of business opportunities, loss of employees and reduced productivity
among remaining employees. We may encounter unforeseen expenses, difficulties,
complications, delays and other known and unknown factors. If we do not address these risks
and difficulties successfully, our business will suffer. These risks may cause potential investors
to lose substantially all of their investment in us.
We have indebtedness and may incur additional indebtedness in the future, which may
materially and adversely affect our financial condition and results of operations.
We generally maintain bank borrowings to finance our operations. As of December 31,
2023 and 2024 and June 30, 2025, we had interest-bearing bank borrowings of RMB110.1
million, RMB201.9 million and RMB243.4 million, respectively. We also had lease liabilities
of RMB1.0 million, RMB3.4 million and RMB2.8 million, respectively, as of the same dates.
We may incur additional indebtedness in the future, and may not be able to generate sufficient
cash to satisfy our existing and future debt obligations.
Our indebtedness could have a material adverse effect on us by, among others, increasing
our vulnerability to adverse developments in general economic or industry conditions, such as
significant increases in interest rates, and limiting our flexibility in making changes in our
business and operations. Our borrowings may subject us to certain restrictive covenants which
may restrict or otherwise adversely affect our operations. These covenants may restrict our
ability to, among others, incur additional debt, provide loans or guarantees, provide security
and quasi-security, incur liens, dispose of material assets through sale, lease or other methods,
pay dividends or distributions on certain of our subsidiaries’ capital stock, repay or transfer
certain indebtedness, reduce registered capital, make investments and acquisitions, establish
joint ventures, conduct mergers, consolidation and other change-of-control transactions, and
file for bankruptcy or dissolution. In addition, some of the loans may have restrictive covenants
linked to our financial performance, such as maintaining a prescribed maximum debt-to-asset
ratio or minimum profitability levels during the term of the loans.
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The discontinuation of any government grants or preferential tax treatment currently
available to us may adversely affect our business, financial condition and results of
operations.
We benefited from government grants and preferential tax treatment during the Track
Record Period. We recorded government grants of RMB6.3 million, RMB1.8 million and
RMB1.9 million in 2023, 2024 and the six months ended June 30, 2025, respectively. Such
government grants included a variety of subsidies in support of our research and development
activities and business operations. Additionally, our Company and certain PRC subsidiaries
were accredited as “high and new technology enterprises” and subject to a preferential income
tax rate of 15% during the Track Record Period.
We cannot assure you that we will continue to receive government grants or preferential
tax treatment at the existing levels, or at all. The relevant authorities may issue administrative
decisions or modify government policies that reduce the amount of government grants and
preferential tax treatment that has been available to us, or end our eligibility to receive such
financial subsidies. The discontinuation of government grants or preferential tax treatment
currently available to us may adversely affect our results of operations and prospects. Further,
prospective investors should note that should there be any changes in the amounts of our
government grants and preferential tax treatment in a given year, our financial performance for
that period may not be directly comparable to our historical financial results.
We are subject to credit risks arising from trade receivables and prepayments, other
receivables and other assets.
As of December 31, 2023 and 2024 and June 30, 2025, we recorded trade receivables of
RMB2.0 million, RMB0.1 million and RMB0.1 million, respectively. As of the same dates, we
had prepayments, other receivables and other assets of RMB35.7 million, RMB51.8 million
and RMB94.0 million, respectively. We may be exposed to credit risk with our counterparties
and may not be able to collect all of such receivables due to a variety of factors that are outside
of our control. If the relationship between us and any of our counterparties is terminated or
deteriorated, or if our counterparties experience financial or operational difficulties, the
recoverability of our receives may be negatively affected, which may have a material and
adverse effect on our business, financial condition and results of operations.
Share-based payments may impact our financial performance and cause shareholding
dilution to our existing Shareholders.
We operate Pre-IPO Share Incentive Plans for the benefit of our Directors, senior
management and core employees as remuneration for their services provided to us and to
incentivize and reward the eligible persons who have contributed to the success of our
Company. For further details, see “History, Development and Corporate Structure — Share
Incentive Platforms” and “Appendix VII — Statutory and General Information — C. Further
Information about the Directors, Supervisors, Senior Management and Substantial
Shareholders — 5. Pre-IPO Share Incentive Plans.” We recorded share-based payments of nil,
RMB153.2 million and RMB46.8 million in 2023, 2024 and the six months ended June 30,
2025, respectively.
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To further incentivize our Directors, senior management and core employees, we may
incur additional share-based payments in the future. Expenses incurred with respect to such
share-based payments may also increase our operating expenses and therefore have a negative
effect on our financial performance. Issuance of additional H Shares with respect to such
share-based payments may dilute the shareholding of our Shareholders and could result in a
decline in the value of our H Shares.
Our property valuation is based on certain assumptions which, by their nature, are
subjective and uncertain and may materially differ from actual results.
V aluations of our properties as of September 30, 2025 prepared by A VISTA, an
independent property valuer, are set forth in the Report set out as Appendix III to this
Prospectus. The valuations are made based on assumptions which, by their nature, are
subjective and uncertain and may differ from actual results. In addition, unforeseeable changes
in general and local economic conditions or other factors beyond our control may affect the
value of our properties. As a result, the valuation of our properties may differ materially from
the price we could receive in an actual sale of the properties in the market and should not be
taken as their actual realizable value or an estimation of their realizable value.
Fluctuations in exchange rates of the Renminbi could result in foreign currency exchange
losses.
Certain of our cash and cash equivalents are denominated in foreign currencies.
Therefore, we are exposed to foreign currency risk. The proceeds from the Global Offering will
be received in HKD. As a result, any appreciation of RMB against HKD may result in the
decrease in the value of our proceeds from the Global Offering. The exchange rate of RMB
against HKD and other foreign currencies is affected by, among other things, the policies of the
PRC Government and changes in China’s and international political and economic conditions,
as well as supply and demand in the local market. It is difficult to predict how market forces
or government policies may impact the exchange rate between RMB, USD, HKD or other
currencies in the future. There remains significant international pressure on the PRC
Government to adopt a more flexible currency policy, which, together with domestic policy
considerations, could result in a significant appreciation of RMB against USD, HKD or other
foreign currencies.
In addition, there are limited instruments available for us to reduce our foreign currency
risk exposure at reasonable costs. Any of these factors could materially and adversely affect
our business, financial condition, results of operations and prospects, and could reduce the
value of, and dividends payable on, our H Shares in foreign currency terms.
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Disruptions in the financial markets and economic conditions could affect our ability to
raise capital.
Global economies could suffer dramatic downturns as the result of a deterioration in the
credit markets and related financial crisis as well as a variety of other factors including,
extreme volatility in security prices, severely diminished liquidity and credit availability,
ratings downgrades of certain investments and declining valuations of others. In the past,
governments have taken actions in an attempt to address and rectify these market and economic
conditions by providing liquidity and stability to the financial markets. If these actions are not
successful, the return of adverse economic conditions may cause a significant impact on our
ability to raise capital, if needed, on a timely basis and on acceptable terms.
In addition, concerns over the recent conflicts in the Middle East, Russian-Ukraine
conflicts, and unrest and terrorist threats in other territories, among others, add uncertainties
to the financial markets worldwide. It is unclear whether these challenges and uncertainties
will be contained or resolved, and what effects they may have on the global political and
economic conditions in the long term. See also “— We may be exposed to risks of conducting
our business and operations in international markets.”
OTHER RISKS RELATING TO OUR OPERATIONS
The loss of any key members of our senior management team or our inability to attract,
hire and retain highly skilled scientists, clinical and sales personnel could delay or prevent
the successful development of our drug candidates and result to a material and adverse
effect on our business and results of operations.
Our commercial success depends significantly on the continued service of our senior
management. For more details of our senior management, see the paragraphs headed
“Directors, Supervisors and Senior Management” in the Prospectus. The loss of any of our
senior management could have a material adverse effect on our business and operations.
Although we have formal employment agreements with each of our executive officers, these
agreements do not prevent our executives from terminating their employment with us at any
time.
Recruiting and retaining qualified scientific, technical, clinical, sales and marketing
personnel in the future will also be critical to our success. To retain valuable employees, in
addition to salary and cash incentives, we have provided share incentives that vest over time.
The value to employees of these equity grants that vest over time may be significantly affected
by movements in the market price of our H Shares that are beyond our control and may, at any
time, be insufficient to counteract more lucrative offers from other companies. The loss of the
services of our executive officers or other key employees and consultants could impede the
achievement of our research, development and commercialization objectives and seriously
harm our ability to successfully implement our business strategy.
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Although we have not historically experienced unique difficulties attracting and retaining
qualified employees, we could experience such problems in the future. Competition for
qualified employees in the pharmaceutical industry is intense and the pool of qualified
candidates is limited. We may not be able to retain the services of, or attract and retain,
experienced senior management or key scientific and clinical personnel in the future. The
departure of one or more of our senior management or key scientific and clinical personnel,
regardless of whether or not they join a competitor or form a competing company, may subject
us to risks relating to replacing them in a timely manner or at all, which may disrupt our drug
development progress and have a material and adverse effect on our business and results of
operations.
Furthermore, replacing executive officers, key employees or consultants may be difficult
and may take an extended period of time because of the limited number of individuals in our
industry with the breadth of skills and experience required to successfully develop, gain
regulatory approval of and commercialize products like those we develop. Competition to hire
from this limited pool is intense, and we may be unable to hire, train, retain or motivate these
key personnel or consultants on acceptable terms given the competition among numerous
pharmaceutical and biopharmaceutical companies for similar personnel. To compete
effectively, we may need to offer higher compensation and other benefits, which could
materially and adversely affect our financial condition and results of operations. In addition,
we may not be successful in training our professionals to keep pace with technological and
regulatory standards. Any inability to attract, motivate, train or retain qualified scientists or
other technical personnel may have a material adverse effect on our business, financial
condition, results of operations, cash flows and prospects.
We have significantly increased, and may need to keep increasing, the size and capabilities
of our organization, and we may experience difficulties in managing our growth. If we fail
to effectively manage our anticipated growth or execute on our growth strategies, our
business, financial condition, results of operations and prospects could suffer.
Since our inception in 2019, we have made significant strides in expanding our
organization and enhancing our operational capabilities. As of September 30, 2025, we had a
total of 348 full-time employees. Our future financial performance and our ability to
commercialize our drug candidates will depend, in part, on our ability to effectively manage
our recent growth and any future growth. We might not be able to effectively manage the
expansion of our operations, which may result in weaknesses in our infrastructure, operational
inefficiencies, loss of business opportunities, loss of employees and reduced productivity
among remaining employees. Our management may also have to divert a disproportionate
amount of its attention away from day-to-day activities in order to devote a substantial amount
of time to managing these growth activities.
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As our development and commercialization plans and strategies evolve, we must add a
significant number of additional managerial, operational, manufacturing, sales, marketing,
financial and other personnel. Our recent growth and any future growth will impose significant
added responsibilities on our management, including but not limited to:
 identifying, recruiting, integrating, maintaining and motivating additional
employees;
 continuing to innovate and develop advanced technology in the highly competitive
pharmaceutical industry;
 managing our relationships with third parties, including suppliers and partners;
 managing our internal development efforts effectively, including the clinical and
regulatory authority review process for our drug candidates, while complying with
our contractual obligations to contractors and other third parties; and
 improving our operational, financial and management controls, reporting systems
and procedures.
If we are not able to effectively manage our growth and further expand our organization
by hiring new employees and expanding our groups of consultants and contractors as needed,
we may not be able to successfully implement the tasks necessary to further develop and
commercialize our drug candidates and, accordingly, may not achieve our research,
development and commercialization goals. Our failure to do so could materially adversely
affect our business, financial condition, results of operations and prospects.
We may engage in acquisitions or strategic partnerships in the future, which may increase
our capital requirements, cause dilution for our Shareholders, cause us to incur debt or
assume contingent liabilities or subject us to other risks.
From time to time, we may evaluate various acquisitions and strategic partnerships,
including licensing or acquiring complementary products, intellectual property rights,
technologies or businesses. Any completed, in-process or potential acquisition or strategic
partnership may entail numerous risks, including:
 increased operating expenses and cash requirements;
 the assumption of additional indebtedness or contingent or unforeseen liabilities;
 the issuance of our equity securities;
 assimilation of operations, intellectual property and products of an acquired
company, including difficulties associated with integrating new personnel;
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 the diversion of our management’s attention from our existing product programs and
initiatives in pursuing such a strategic merger or acquisition;
 retention of key employees, the loss of key personnel, and uncertainties in our
ability to maintain key business relationships;
 risks and uncertainties associated with the other party to such a transaction,
including the prospects of that party and their existing drugs or drug candidates and
regulatory approvals; and
 our inability to generate revenue from acquired technology or products sufficient to
meet our objectives in undertaking the acquisition or even to offset the associated
acquisition and maintenance costs.
In addition, if we undertake acquisitions, we may issue dilutive securities, assume or
incur debt obligations, incur large one-time expenses, and acquire intangible assets that could
result in significant future amortization expense.
According to the Anti-Monopoly Law of PRC () and the
Provisions of the State Council on Thresholds for Prior Notification of Concentrations of
Undertakings (), issued by the State Council, the
concentration of business undertakings by way of mergers, acquisitions or contractual
arrangements that allow one market player to take control of or to exert decisive impact on
another market player must also be filed in advance to the SAMR when the threshold is crossed
and such concentration shall not be implemented without the clearance of prior filing.
We may be exposed to risks of conducting our business and operations in international
markets.
International markets are an important component of our growth strategy. We plan to
advance our balanced business model combining self-development, collaboration and excipient
supply, and pursue and strengthen strategic partnership with pharmaceutical companies over
the world. We actively seek to reach and expand strategic relationships with international and
domestic leading pharmaceutical companies to advance the global development and
commercialization of our pipeline assets.
However, such activities may subject us to additional risks that may materially adversely
affect our ability to attain or sustain profitable operations, including but not limited to:
 efforts to enter into collaboration or licensing arrangements with third parties may
increase our expenses or divert our management’s attention from the development of
drug candidates;
 changes in a specific country’s or region’s political and cultural climate or economic
condition;
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 differing regulatory requirements for drug approvals and marketing internationally;
 difficulty of effective enforcement of contractual provisions in local jurisdictions;
 potentially reduced protection for intellectual property rights;
 unexpected changes in tariffs, trade barriers and regulatory requirements;
 compliance with tax, employment, immigration and labor laws for employees
traveling abroad; and
 business interruptions resulting from geo-political actions, including war and
terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods,
hurricanes and fires.
These and other risks may materially adversely affect our ability to attain or sustain
revenue and profits from international markets.
We have been, and may from time to time become, involved in claims, disputes, litigation,
arbitration or other legal proceedings in the ordinary course of business, which could
adversely affect our business, financial conditions, results of operations and reputation.
We have been, and may from time to time become, involved in claims, disputes, litigation,
arbitration or other legal proceedings in our ordinary course of business. These may concern
issues relating to, among others, product liability, privacy protection, environmental and safety
matters, ownership disputes, breach of contract, employment or labor disputes and intellectual
property rights. For example, we are currently involved in certain pending litigations arising
from the performance of certain contracts which would not have any material adverse effect on
our business, financial condition or results of operations. Specifically, one of the ongoing
litigations is associated with our transaction with a GMP-certified pharmaceutical enterprise
regarding a construction project. We initially became acquainted with this enterprise as we
were seeking collaboration on manufacturing for our products approaching Phase III clinical
trials while our own facilities were still under construction. This enterprise later transferred
certain properties and facilities to us in 2021. In 2022, it entered into a tripartite agreement
with us and a construction company related to a construction project, which stipulated that we
would acquire this project and settle remaining construction fees as part of the consideration
for the acquisition only on the condition that it passed all final acceptance procedures and
completed appraisal process. This construction project is immaterial to our business, as our
current properties are sufficient to meet the needs of our daily operation, including research
and development, manufacturing, and office functions. Furthermore, our new facilities with the
site area of 37,000 sq.m. currently under construction is expected to be completed and
commence operations by June 2026, which will further support all of our daily operations. The
dispute arose from the tripartite agreement and was initiated in 2024, where we are being
claimed, as one of the defendants, for unpaid construction fees of RMB27.9 million and
interest of RMB3.5 million. As of the Latest Practicable Date, this construction project had not
yet passed the final acceptable procedures by the government authorities, thus payment
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conditions under the tripartite agreement are not yet satisfied. In August 2025, the court of first
instance rendered a judgment in favor of the construction company, affirming the validity of
the tripartite agreement and ordering the GMP-certified pharmaceutical enterprise to pay the
outstanding construction fees of RMB25.6 million, along with applicable interest, for which
the Company was held jointly and severally liable. However, the total amount payable by us
will not exceed RMB35.8 million, which is the appraised value of this construction project in
the judgment. The construction fees and interest paid by us will serve as consideration for our
acquisition of ownership of the construction project. We have filed an appeal and have
submitted the necessary materials for the appellate proceedings. On the basis that (i) we did
not, in fact, occupy or utilize this construction project, and this construction project itself is
neither integral nor essential to our normal business operations. and (ii) the amount of
RMB25.6 million upheld by the court of first instance is immaterial to our financial condition,
and we maintain adequate working capital and sufficient cash balance to support our business
operations and drug development activities, our Directors are of the view that this litigation
would not have a material impact on our business, results of operations or financial condition.
In addition, another ongoing litigation is associated with a technology transfer agreement
with a biotechnology company. This agreement and related dispute only involves a drug asset
that falls outside our current and future pipeline with no overlap to our existing products and
indications. In 2023, this biotechnology company filed a lawsuit against us seeking termination
of this agreement and claiming refund of payment and damages totalling RMB80.2 million. In
2024, we filed a counterclaim, asserting breach of contract by this counterparty and requesting
payment of RMB117.3 million for our services provided and assets transferred under this
agreement, as well as additional liquidated damages of RMB13.5 million. As of the Latest
Practicable Date, we had fully performed all major contractual obligations under this
technology transfer agreement, and we therefore believe there is no legitimate basis for
termination of the agreement. In May 2025, the court of first instance for this case rendered a
ruling in favor of this biotechnology company, determining that the agreement should be
terminated and ordering us to repay the technology transfer fee of RMB18.4 million, liquidated
damages of RMB55.1 million, as well as related trial fees of RMB0.4 million (collectively, the
“Disputed Amount ”). We have since filed an appeal and submitted all necessary appellate
materials for the second instance proceedings. Currently, no final binding judgment has been
issued, and the litigation remains ongoing. We are actively defending our contractual rights
throughout the appeal process. Our litigation counsel is of the view that (i) there is no factual
or contractual basis to support the court’s finding that our non-performance constitutes a
fundamental breach of the agreement; (ii) we have fulfilled our obligations to transfer the
relevant data under the agreement; and (iii) even if the agreement is terminated, the court’s
ruling ordering us to return the amounts paid is inappropriate given the special nature of
technology transfer disputes. On the basis (i) that the Disputed Amount will not have a material
adverse effect on our financial position; (ii) that the drug asset involved in this lawsuit is not
material to us, as it falls outside both our current or future pipeline; (iii) that this lawsuit is
merely a contractual dispute and does not indicate any non-compliance or internal control
deficiency on our part; and (iv) our litigation counsel’s view in support of our position, our
Directors are of the view that this litigation would not have a material impact on our business,
results of operations or financial condition.
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Litigation to which we have or subsequently become a party might result in substantial
costs and divert management’s attention and resources. Furthermore, any litigations, legal
disputes, claims or administrative proceedings that may initially not appear to be of material
importance may escalate and become important to us due to a variety of factors, such as the
facts and circumstances of the cases, the likelihood of winning or losing, the monetary amount
at stake and the parties involved. Additionally, it is possible that our liabilities could exceed
our insurance coverage or that our insurance will not cover all situations in which a claim
against us could be made. We may not be able to maintain insurance coverage at a reasonable
cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise.
A claim brought against us that is uninsured or underinsured could result in unanticipated costs
and could have a material and adverse effect on our financial condition, results of operations
or reputation.
We are subject to risks associated with our owned or leased properties.
We have owned properties in connection with our business operations. We have obtained
the land use right certificate and building ownership certificate for our existing manufacturing
facilities located in Shanghai. Moreover, we have obtained the land use right certificate for our
new manufacturing facilities under development, and expect to obtain the relevant building
ownership certificate upon completion of construction and inspection. See “Business — Land
and Properties — Owned Properties.” However, we cannot guarantee that our construction
project will be completed or that the relevant certificates will be obtained as planned, or at all.
There can be no assurance that we will not be subject to any punishment, challenges, lawsuits
or other actions taken against us with respect to these properties.
We have also leased certain properties used as office premises, laboratories, and employee
dormitories in the PRC. Pursuant to PRC laws, both lessors and lessees are required to file the
lease agreements with relevant authorities for record and obtain property leasing filing
certificates for their leases. The failure to file and obtain property leasing filing certificates for
such leases within the prescribed time period, as required under PRC laws, may subject us to
a fine ranging from RMB1,000 to RMB10,000 for each agreement not filed. As of the Latest
Practicable Date, all of our leases have been filed with the relevant PRC authorities. For any
future leases, however, we cannot guarantee that the lessors of the leased properties will have
valid title or the legal rights to such leased properties or will have complied with all the
necessary property leasing procedures. In addition, as our leases expire, we may fail to obtain
renewals, either on commercially acceptable terms or at all, which could compel us to close
such office premises, laboratories, and employee dormitories. Our inability to enter into new
leases or renew existing leases on terms acceptable to us could materially and adversely affect
our business, results of operations or financial condition.
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We are subject to extensive PRC regulations regarding mandatory social insurance and
housing provident fund contributions.
According to the Social Insurance Law of the PRC ()
which was last amended on December 29, 2018 and other applicable PRC regulations, any
employer operating in China must open social insurance registration accounts and contribute
social insurance premium for its employees. Any failure to open social insurance registration
account may trigger an order of correction where correction is not made within a specified
period of time, the competent authority may further impose fines. Any failure to make timely
and adequate contribution of social insurance premium for its employees may trigger an order
of correction from competent authority requiring the employer to make up the full contribution
of such overdue social insurance premium within a specified period of time, and the competent
authority may further impose fines or penalties. According to the Regulations on the
Administration of Housing Provident Funds (၍ଣૢԷ), as amended in 2002
and 2019, the relevant housing fund authority may order an enterprise to pay outstanding
contributions within a prescribed time limit.
During the Track Record Period, we made full contributions to mandatory social
insurance and housing provident fund for our employees in accordance with relevant PRC laws
and regulations. As of the Latest Practicable Date, no competent government authorities had
imposed administrative action, fine or penalty to us with respect to mandatory social insurance
and housing provident fund contributions. While we are committed to being law-abiding and
compliant with applicable regulations, we cannot assure you that we will not face any penalty,
or order to rectify potential non-compliance in this regard in the future. Any such developments
could result in additional expenses or operational adjustments necessary to ensure continued
compliance with applicable laws and regulations.
Increased labor costs could result in exceeding expenses, slow our growth and affect our
profitability.
Our success depends in part upon our ability to attract, motivate and retain a sufficient
number of qualified employees, including management, technical, research and development,
production, quality control and other personnel. We face intense competition in recruiting and
retaining qualified personnel, as competitors are competing for the same pool of qualified
personnel and our remuneration packages may not be as competitive as those of our
competitors. Increasing market competition may cause market demand and competition for
qualified employees to intensify. If we face labor shortages or significant increases in labor
costs, higher employee turnover rates or changes to labor laws and regulations, our operating
costs could increase significantly, which could materially adversely affect our results of
operations. In addition, we could face labor disputes with our employees, which could lead to
fines by governmental authorities and settlement costs to resolve the disputes. Labor disputes
could also make it more difficult to recruit new employees due to the reputational damage
caused by labor disputes.
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We have limited insurance coverage, and any claims beyond our insurance coverage may
result in our incurring substantial costs and a diversion of resources.
We maintain insurance policies that are required under the PRC laws and regulations and
that we believe are in line with market practice and adequate for our business to safeguard
against risks and unexpected events. Our insurance policies cover adverse events in our clinical
trials. We maintain social welfare insurance for our employees in accordance with applicable
laws and regulations. In line with general market practice, we have elected not to maintain
certain types of insurances, such as business interruption insurance or key man insurance. Our
insurance coverage may be insufficient to cover any claims that we may have. Any liability or
damage to, or caused by, our facilities or our personnel beyond our insurance coverage may
result in our incurring substantial costs and a diversion of resources, and may adversely impact
our drug development and overall operations.
Product liability claims or lawsuits against us could result in expensive and time-
consuming litigation, payment of substantial damages and increases in our insurance
rates.
We face inherent risks related to product and professional liability as a result of the
clinical testing and any future commercialization of our drug candidates inside and outside
China. For example, we may be sued if our drug candidates cause or are perceived to cause
injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing
or sale. Any such product liability claims may include allegations of defects in manufacturing,
defects in design, a failure to warn of dangers inherent in the drug, negligence, strict liability
or a breach of warranties. Claims could also be asserted under applicable consumer protection
laws. If we cannot successfully defend ourselves against the claims, we may incur substantial
liabilities or be required to limit commercialization of our drug candidates. Even successful
defense would require significant financial and management resources. Regardless of the
merits or eventual outcome, liability claims may result in:
 decreased demand for our drug candidates;
 injury to our reputation;
 withdrawal of clinical trial participants and inability to continue clinical trials;
 initiation of investigations by regulatory authorities;
 costs to defend the related litigation;
 a diversion of management’s time and our resources;
 substantial monetary awards to trial participants or patients;
 product recalls, withdrawals or labelling, marketing or promotional restrictions;
 loss of revenue;
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 exhaustion of any available insurance and our capital resources;
 the inability to commercialize any approved drug candidate; and
 a decline in the market price of our H Shares.
To cover such liability claims arising from clinical studies, we purchase clinical trial
insurance to cover adverse events in our clinical trials. It is possible that our liabilities could
exceed our insurance coverage or that our insurance will not cover all situations in which a
claim against us could be made. We may not be able to maintain insurance coverage at a
reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that
may arise. If a successful product liability claim or series of claims is brought against us for
uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover
such claims and our business operations could be impaired. Should any of these events occur,
it could have a material adverse effect on our business, financial condition and results of
operations.
We may be unable to detect, deter and prevent all instances of bribery, fraud or other
misconduct committed by our employees or third parties.
We may be exposed to fraud, bribery or other misconduct committed by our employees
or third parties that could subject us to financial losses and sanctions imposed by governmental
authorities, which may adversely affect our reputation. During the Track Record Period and up
to the Latest Practicable Date, we were not aware of any instances of fraud, bribery, or other
misconduct involving employees and other third parties that had any material and adverse
impact on our business and results of operations. However, we cannot assure you that there will
not be any such instances in future. Although we consider our internal control policies and
procedures to be adequate, we may be unable to prevent, detect or deter all such instances of
misconduct by our employees or third parties. Any such misconduct committed against our
interests, which may include past acts that have gone undetected or future acts, may have a
material adverse effect on our business, results of operations and reputation.
Our internal information technology systems, or those used by our business partners, may
fail or suffer security breaches.
Despite the implementation of security measures, our information technology systems
and those of our CROs, CDMOs, partners, consultants and other service providers are
vulnerable to damage from computer viruses, unauthorized access, cyber-attacks, natural
disasters, terrorism, war and telecommunication and electrical failures. If such an event were
to occur and cause interruptions in our operations, it could result in a material disruption of our
research and development programs. For example, our data may not be backed up in a timely
manner and the loss of clinical trial data from ongoing or future clinical trials for any of our
drug candidates could result in delays in regulatory approval efforts and significantly increase
costs to recover or reproduce the data. To the extent that any disruption or security breach were
to result in a loss of or damage to data or applications, or inappropriate disclosure of
confidential or proprietary information, we could incur liability and the further development of
our drug candidates could be delayed.
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Our reputation is important to our business success. Negative publicity and allegations
involving us, our Shareholders, Directors, officers, employees and business partners may
affect our reputation and may, as a result, negatively affect our business, financial
condition and results of operations.
Any negative publicity concerning us, our affiliates, our Shareholders, Directors, officers,
employees and business partners, management, even if untrue, could adversely affect our
reputation and business prospects. Such negative coverage in the media and publicity could
threaten the perception of our reputation. In addition, to the extent our Shareholders, Directors,
officers, employees and business partners were incompliant with any laws or regulations or
involved in lawsuits, disputes, or other legal proceedings or became subject to administrative
measures, penalties or investigations by regulatory authorities, we may also suffer negative
publicity or harm to our reputation. As a result, we may be required to spend significant time
and incur substantial costs in response to allegations and negative publicity. In addition, any
negative publicity about us could adversely affect our ability to maintain our existing
collaboration arrangements or attract new collaboration partners, and we may not be able to
diffuse such negative publicity to the satisfaction of our investors.
Our risk management and internal control systems may not fully protect us against
various risks inherent in our business.
We seek to establish risk management and internal control systems consisting of an
organizational framework, policies, procedures and risk management methods that are
appropriate for our business operations, and seek to continue to improve these systems. See
“Business — Risk Management and Internal Control” for further details. However, due to the
inherent limitations in the design and implementation of risk management and internal control
systems, we cannot assure that our risk management and internal control systems will be able
to identify, prevent and manage all risks. Our internal procedures are designed to monitor our
operations and ensure their overall compliance. However, our internal control procedures may
be unable to identify all non-compliance incidents in a timely manner or at all. It is not always
possible to timely detect and prevent fraud and other misconduct committed by our employees
or third parties, and the precautions we take to prevent and detect such activities may not be
effective.
Furthermore, we cannot assure you that our risk management and internal control systems
will be effectively implemented. Since our risk management and internal control systems
depend on their implementation by our employees, we cannot assure you that all of our
employees will adhere to such policies and procedures, and the implementation of such policies
and procedures may involve human errors or mistakes, which may materially and adversely
affect our business and results of operations. Moreover, as we are likely to offer a broader and
more diverse range of services and solutions in the future, the expansion and diversification of
our service offerings will require us to continue to enhance our risk management capabilities.
If we fail to adapt our risk management policies and procedures to our evolving business in a
timely manner, our business, financial condition and results of operations could be materially
and adversely affected.
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We may be subject to natural disasters, acts of war or terrorism, epidemics or other
factors beyond our control.
Natural disasters, acts of war, terrorism or other factors beyond our control may adversely
affect the economy, infrastructure and livelihood of the people in the regions where we conduct
our business. Our operations may be under the threat of floods, earthquakes, sandstorms,
snowstorms, fire or drought, power, water or fuel shortages, failures, malfunction and
breakdown of information management systems, unexpected maintenance or technical
problems, or are susceptible to potential wars or terrorist attacks. Serious natural disasters may
result in loss of lives, injury, destruction of assets and disruption of our business and
operations. Acts of war or terrorism may also injure our employees, cause loss of lives, disrupt
our business network and destroy our markets.
Our business could be adversely affected by the effects of epidemics, including
COVID-19, avian influenza, severe acute respiratory syndrome (SARS), influenza A (H1N1),
Ebola or another epidemic. Any such occurrences could cause severe disruption to our daily
operations and may even require a temporary closure of our offices and laboratories. In recent
years, there have been outbreaks of epidemics in China and globally.
Any of these factors and other factors beyond our control could have an adverse effect on
the overall business sentiment and environment, cause uncertainties in the regions where we
conduct business, cause our business to suffer in ways that we cannot predict and materially
and adversely impact our business, financial conditions and results of operations.
Difficult conditions and turbulence in the global economic, political and financial
environment may adversely affect our business.
Geopolitical, economic and market conditions, including factors such as the liquidity of
the global financial markets, the level and volatility of debt and equity prices, interest rates,
currency and commodities prices, investor sentiment, inflation and the availability and cost of
capital and credit have been and will continue to affect the countries where we operate. The
stress experienced by the global financial markets since 2020 due to the COVID-19 pandemic,
the series of measures taken by major economies in response and the consequences of such
measures continue to impact the global economy in varying degrees in different regions over
the years. The financial markets continue to be impacted by general uncertainty, and growth
rates have declined recently. The slow economic recoveries around the world, the geopolitical
conflicts, and the high inflation, high interest environment have contributed to higher global
volatility. These developments may adversely impact global liquidity, heighten market
volatility and increase funding costs resulting in tightened global financial conditions and fears
of a recession. A prolonged period of extremely volatile and unstable market conditions would
likely increase our funding costs and could also adversely affect the countries where we
operate, which could in turn affect our business.
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RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE
OPERATE
The pharmaceutical industry in China is highly regulated and such regulations are
subject to change which may affect approval and commercialization of our drug
candidates.
We currently conduct most of our operations in China. The pharmaceutical industry in
China is subject to comprehensive government regulation and supervision, encompassing the
approval, registration, manufacturing, packaging, licensing and marketing of new drugs. In
recent years, the regulatory framework in China regarding the pharmaceutical industry has
been constantly developing. Relevant changes or amendments may result in increased
compliance costs on our business or cause delays in or prevent the successful development or
commercialization of our drug candidates in China and reduce the benefits we believe are
available to us from developing and manufacturing drugs in China.
Changes in political and economic policies, as well as the interpretation and
implementation of the relevant laws, rules and regulations, may affect our business,
financial condition, results of operations and prospects.
A substantial portion of our operations are based in the PRC, our business, financial
condition, results of operations and prospects may be affected by economic, political, social
and legal developments in China. The Chinese government has implemented various measures
to encourage economic growth and guide the allocation of resources. However, we cannot
guarantee the extent to which our business operations will be able to benefit from such
measures, if at all.
In addition, laws, rules and regulations in relation to economic matters are promulgated
from time to time, including those related to such as foreign investment, corporate organization
and governance, commerce, taxation, finance, foreign exchange and trade, so as to develop a
comprehensive system of commercial law. Furthermore, the interpretation and implementation
of the laws and regulations relating to pharmaceutical industry are subject to possible changes.
Any of the foregoing may have a material and adverse effect on our business, financial
condition, results of operations and prospects.
Recent reform in the regulatory regime of marketed drugs in the PRC could have impacts
on our commercialization of drug candidates. For example, the Drug Administration Law of the
PRC () and the Implementation Regulations of the Drug
Administration Law of the PRC (ૢԷ), as last amended
in 2019, introduced certain adjustments as compared to the previous regulatory framework, and
may be subject to further changes in the future. We currently do not experience or foresee any
potential material adverse impact of these laws and regulations on our business operations.
However, as such laws and regulations are newly released and relevant measures are subject
to possible changes, we cannot assure you if our business operations will not be adversely
affected in the future.
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Changes in U.S. and international trade policies, including tariffs and trade barriers, and
in relationships between the PRC and other countries, may adversely impact our business
and operating results.
We are susceptible to constantly changing international economic, regulatory, social and
political conditions, and local conditions in foreign countries and regions. Rising trade and
political tensions, including tariffs and trade barriers, as well as changes in relevant
government policies could reduce levels of trades, investments, technological exchanges and
other economic activities between China, the U.S., and other countries and regions. For
example, the U.S. government has made significant changes in recent years in its trade policy
and has taken certain actions that may materially impact international trade, such as imposing
several rounds of tariffs affecting certain products manufactured in the PRC. In March 2018,
the U.S. President Donald J. Trump announced the imposition of tariffs on steel and aluminum
entering the U.S. and in June 2018 announced further tariffs targeting goods imported from the
PRC. Recently, the U.S. government has announced substantial new tariffs affecting a wide
range of products and jurisdictions and has indicated an intention to continue developing new
trade policies, including with respect to the pharmaceutical industry. In response, certain other
governments have announced or implemented retaliatory tariffs and other protectionist
measures. These developments have created a dynamic and unpredictable trade landscape,
which may adversely impact our business, results of operations, financial condition and
prospects. Trade disputes, tariffs, restrictions and other political tensions between the U.S. and
other countries may also exacerbate unfavorable macroeconomic conditions including
inflationary pressures, foreign exchange volatility, financial market instability, and economic
recessions or downturns. While we actively monitor these risks, any prolonged economic
downturn or escalation in trade tensions could materially and adversely affect our business,
ability to access the capital markets or other financing sources, results of operations, financial
condition and prospects.
While we have not started commercialization of any of our drug candidates, any rising
trade and political tensions or unfavorable government policies on international trade, such as
capital controls or tariffs, may affect the competitive position and the future commercialization
of our drug candidates, the demand for our future drug products, our existing and future
relationships with our business partners, the provision of technical and other services, the
supplies of materials and products, the hiring of scientists and other R&D personnel, and
import or export of raw materials in relation to drug development, or may prevent us from
selling our future drug products in certain countries. If any new tariffs, legislation and
regulations are implemented, or if existing trade agreements are renegotiated or, in particular,
if the U.S. government takes further retaliatory trade actions, such changes could limit our
ability to expand into the U.S. or other markets and have an adverse effect on our business,
financial condition and results of operations.
In Particular, the United States government’s attitude towards Chinese service providers
in pharmaceutical and biotechnology industries may directly or indirectly affect our business
operations. Recently, members of the U.S. House of Representatives proposed pending
legislation, namely the BIOSECURE Act (the “ Act”). If the Act is enacted in its proposed form,
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it would prohibit U.S. federal executive agencies from: (1) procuring or obtaining any
biotechnology equipment or service produced or provided by a “biotechnology company of
concern”, (2) entering into or renewing a contract with an entity that uses such biotechnology
equipment or enters into a contract requiring the use of such biotechnology equipment after the
applicable effective date of the prohibition, or (3) providing loan or grant funds to perform
either of these functions. Specifically, although the Act did not become law in the 118th
Congress the House passed its version on September 9, 2024, and substantially similar
provisions could be reintroduced in a subsequent Congress. If it is reintroduced and
subsequently enacted in the proposed form, it could prohibit the U.S. government and
recipients of federal funds from entering into contracts with us or with our customers if, in
performing customer contracts, we supply equipment or services provided by a “biotechnology
company of concern” under the Act. For example, such a law, if enacted in that form, could
apply to some of the biotechnology equipment and services provided or produced we procure.
As a result, continued use of these biotechnology equipment and services provided or produced
could affect not only our ability to enter into contracts with the U.S. government, but also our
customers’ ability to enter into contracts with, obtain loans or grants from, or participate in
other assistance or joint research and development opportunities with the U.S. government.
The existing trade disputes, tariffs, restrictions and other political tensions may escalate
going forward and may result in certain types of goods, such as advanced R&D equipment and
materials, becoming significantly more expensive to procure from overseas suppliers or even
becoming illegal to export. Furthermore, there can be no assurance that our existing or
potential service providers or collaboration partners will not alter their perception of us or their
preferences as a result of adverse changes to the state of relationships between China and the
relevant foreign countries or regions. Relationships between the PRC and the relevant foreign
countries or regions may therefore adversely affect our business, financial condition, results of
operations, cash flows and prospects.
We may face risks from transferring our scientific data abroad.
On March 17, 2018, the General Office of the State Council promulgated the Measures
for the Management of Scientific Data (), or the Scientific Data
Measures, which provided a broad definition of scientific data and relevant rules for the
management of scientific data. According to the Scientific Data Measures, if the provision of
scientific data involving “state secrets” is required in foreign exchanges and cooperation,
Chinese enterprises should clarify the type, scope and purpose of the data to be used, and report
to the competent authority for approval in accordance with relevant procedures of
confidentiality management regulations. When publishing a paper in a foreign academic
journal requires the author to submit the relevant scientific data, the author should, prior to the
publication, submit such scientific data to the belonged institution for unified management if
such scientific data are generated with the government funding. Given the term “state secret”
is not clearly defined in the Measures for the Management of Scientific Data, we cannot assure
you that we can always obtain relevant approvals for sending scientific data, such as the results
of our preclinical studies or clinical trials conducted within the PRC, abroad or to our foreign
partners in the PRC. If we are unable to obtain necessary approvals in a timely manner, or at
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all, our R&D of drug candidates may be hindered, which could materially and adversely affect
our business, financial condition, results of operations and prospects. If the relevant
government authorities consider the transmission of our scientific data to be in violation of the
requirements under the Scientific Data Measures, we may be subject to rectification and other
administrative penalties imposed by those government authorities.
There might be uncertainties in effecting service of legal process, enforcing foreign
judgments against us or our Directors and senior management personnel in the PRC.
We are a joint stock company with limited liabilities incorporated in China. A majority of
our Directors and senior management personnel reside within mainland China, and
substantially all of their assets are located within the PRC. Therefore, it may be difficult for
investors to directly effect service of legal process upon us or our Directors and senior
management personnel in the PRC.
On July 14, 2006, the Supreme People’s Court of the PRC and the government of Hong
Kong Special Administrative Region entered into the Arrangement on Reciprocal Recognition
and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland
and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements
between Parties Concerned, or the Arrangement, which was taken into effect on August 1,
2008.
Pursuant to the Arrangement, where any designated PRC court or any designated Hong
Kong court has made an enforceable final judgment requiring payment of money in a civil or
commercial case under a choice of court agreement in writing, any party concerned may apply
to the relevant PRC court or Hong Kong court for recognition and enforcement of the
judgment. A choice of court agreement in writing is defined as any agreement in writing
entered into between parties after the effective date of the Arrangement in which a Hong Kong
court or a mainland court is expressly selected as the court having sole jurisdiction for the
dispute.
On January 18, 2019, the Supreme People’s Court and the Hong Kong SAR Government
signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region, or the New Arrangement, which seeks to establish a mechanism with
greater clarity and certainty for recognition and enforcement of judgments in wider range of
civil and commercial matters between Hong Kong SAR and the mainland China. The New
Arrangement does not include the requirement for a choice of court agreement in writing by
the parties. The New Arrangement, which came into effect on January 29, 2024, supersedes the
Arrangement. Under the New Arrangement, judgments rendered by Hong Kong courts can
generally be recognized and enforced in the PRC even if the parties in the dispute have not
entered into a written choice of court agreement. However, we cannot guarantee that all
judgments from Hong Kong courts will be recognized and enforced in the PRC. The
recognition and enforcement of a specific judgment are subject to a case-by-case examination
by the relevant court in accordance with the New Arrangement.
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Restrictions on the remittance of Renminbi into and out of the PRC may limit our ability
to pay dividends and other obligations and affect the value of your investment.
A substantial majority of our future revenue is expected to be denominated in Renminbi
and we will need to convert Renminbi into foreign currencies for the payment of dividends, if
any, to holders of our H Shares. Shortages in the availability of foreign currency may restrict
our ability to remit sufficient foreign currency to pay dividends or other payments, or otherwise
satisfy our foreign currency denominated obligations.
Under China’s current foreign exchange regulatory system, foreign exchange transactions
under the current account conducted by us do not require advance approval from SAFE, but we
are required to present relevant documentary evidence of such transactions and conduct such
transactions at designated foreign exchange banks within China that have the licenses to carry
out foreign exchange business. Approval from appropriate government authorities is required
where Renminbi is to be converted into foreign currency and remitted out of China to pay
capital expenses such as the repayment of loans denominated in foreign currencies. If the
foreign exchange regulatory system prevents us from obtaining sufficient foreign currencies to
satisfy our foreign currency demands, we may not be able to pay dividends in foreign
currencies to our Shareholders. Further, there is no assurance that new regulations will not be
promulgated in the future that would have the effect of further restricting the remittance of
Renminbi into or out of China.
Holders of H Shares and dividends on the H Shares may be subject to PRC income taxes.
Holders of H Shares, being non-PRC resident individuals or non-PRC resident
enterprises, whose names appear on the register of members of H Shares of our Company, are
subject to PRC income tax in accordance with the applicable tax laws and regulations, on
dividends received from us and gains realized through the sale or transfer by other means of
H shares by such shareholders.
According to the Individual Income Tax Law of the PRC and the Implementation
Regulations for the Individual Income Tax Law of the PRC, both came into effect on January
1, 2019, the tax applicable to non-PRC resident individuals is proportionate at a rate of 20%
for any dividends obtained from within China or gains on transfer of shares and shall be
withheld and paid by the withholding agent. Pursuant to the Arrangement between the
Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the
“Arrangements ”) executed on August 21, 2006, the PRC Government may levy taxes on the
dividends paid by PRC companies to Hong Kong residents in accordance with the PRC laws,
but the levied tax (in the case the beneficial owner of the dividends are not companies directly
holding at least 25% of the equity interest in the company paying the dividends) shall not
exceed 10% of the total dividends.
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According to the Enterprise Income Tax Law of the PRC, which was newly revised and
implemented on December 29, 2018, and the Implementation Regulations for the Enterprise
Income Tax Law of the PRC, which was newly revised on December 6, 2024 and implemented
on January 20, 2025, if a non-resident enterprise has no presence or establishment within
China, or if it has established a presence or establishment but the income obtained has no actual
connection with such presence or establishment, it shall pay an enterprise income tax on its
income derived from within China with a reduced rate of 10%. Pursuant to the Arrangements,
dividends paid by PRC resident enterprises to Hong Kong residents can be taxed either in Hong
Kong or in accordance with the PRC laws. However, if the beneficial owner of the dividends
is a Hong Kong resident, the tax charged shall not exceed: (i) 5% of the total amount of
dividends if the Hong Kong resident is a company that directly owns at least 25% of the capital
of the PRC resident enterprise paying dividends; (ii) otherwise, 10% of the total amount of
dividends.
Considering the above, non-PRC resident holders of our H Shares should be aware that
they may be obligated to pay PRC income tax on the dividends and gains realized through sales
or transfers by other means of the H Shares.
RISKS RELATING TO THE GLOBAL OFFERING
No public market currently exists for our H Shares, and an active trading market for our
H Shares may not develop, especially taking into account that certain of our existing
shareholders may be subject to a lock-up period.
No public market currently exists for our H Shares. The initial Offer Price for our H
Shares to the public will be the result of our negotiations with the Overall Coordinators (for
themselves and on behalf of the Underwriters) and the Offer Price may differ significantly from
the market price of the H Shares following the Global Offering. We have applied to the Stock
Exchange for listing of, and permission to deal in, our Offer Shares. A listing on the Stock
Exchange, however, does not guarantee that an active and liquid trading market for our H
Shares will develop, or if it does develop, that it will be sustained following the Global
Offering, or that the market price of the H Shares will not decline following the Global
Offering.
In particular, certain part of the H Shares in issue as of the date of this Prospectus will
be subject to a lock-up period from the Listing Date, which may significantly affect the
liquidity and trade volume of our H Shares in the short term following the Global Offering. A
listing on the Stock Exchange does not guarantee that an active and liquid trading market for
our H Shares will develop, especially during the period when certain portion of our H Shares
may be subjected to lock-up, or if it does develop, that it will sustained following the Global
Offering, or that market price of the H Shares will rise following the Global Offering.
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The market price and trading volume of our H Shares may be volatile, which could result
in substantial losses for investors who purchase our H Shares in the Global Offering.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions of the
securities in Hong Kong and elsewhere in the world. In particular, the business and
performance and the market price of the shares of other companies engaging in similar business
may affect the price and trading volume of our H Shares. In addition to market and industry
factors, the price and trading volume of our H Shares may be highly volatile for specific
business reasons, including the following:
 the results of clinical trials of our drug candidates;
 the results of our applications for regulatory approvals of our drug candidates;
 regulatory developments affecting the pharmaceutical industry, healthcare, health
insurance and other related matters;
 fluctuations in our revenue, earnings, cash flows, investments and expenditures;
 relationships with our suppliers and customers;
 movements or activities of key personnel; and
 actions taken by competitors.
Moreover, shares of other companies listed on the Stock Exchange have experienced price
volatility in the past, and it is possible that our H Shares may be subject to changes in price
not directly related to our performance.
Future sales or perceived sales of our H Shares in the public market by major
Shareholders, or any possible conversion of our Unlisted Shares into H Shares, following
the Global Offering may adversely affect the price of our H Shares.
Prior to the Global Offering, there has not been a public market for our H Shares. Future
sales or perceived sales by our existing Shareholders of our H Shares after the Global Offering
could result in a significant decrease in the prevailing market price of our H Shares. Only a
limited number of the H Shares currently outstanding will be available for sale or issuance
immediately after the Global Offering due to contractual and regulatory restrictions on disposal
and new issuance. Nevertheless, after these restrictions lapse or if they are waived, future sales
of significant amounts of our H Shares in the public market or the perception that these sales
may occur could significantly decrease the prevailing market price of our H Shares and our
ability to raise equity capital in the future.
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Potential conversion of Unlisted Shares into H Shares may result in an increase in the
number of our H Shares available in the market, which could, in turn, affect the price of our
H Shares. Our remaining Unlisted Shares may also be converted into H Shares upon
completion of required procedures in the future, and such converted shares may be listed or
traded on an overseas stock exchange, provided that, prior to the conversion and trading of
such converted shares, any requisite filings with relevant PRC regulatory authorities shall be
completed. However, the PRC Company Law provides that in relation to the public offering of
a company, the shares of that company which are issued prior to the public offering shall not
be transferred within one year from the date of listing of the public offering. Therefore, upon
obtaining the requisite approval, our Unlisted Shares may be traded, after the conversion, in the
form of H Shares on the Stock Exchange one year after this Global Offering, which at that time
could further increase the number of our H Shares available in the market and may negatively
impact the market price of our H Shares.
Should the Offer Price be higher than the net tangible book value per H Share, subject
to pricing, you may experience an immediate dilution in the book value of the Offer
Shares you purchased in the Global Offering.
Potential investors will pay a price per H Share in the Global Offering that substantially
exceeds the per H Share value of our tangible assets after subtracting our total liabilities as of
June 30, 2025. Therefore, purchasers of our H Shares in the Global Offering will experience
a substantial immediate dilution in pro forma net tangible assets, and our existing Shareholders
will receive an increase in the pro forma adjusted net tangible assets per Share on their Shares.
As a result, if we were to distribute our net tangible assets to the Shareholders immediately
following the Global Offering, potential investors would receive less than the amount they paid
for their H Shares. For more details, please refer to “Appendix II — Unaudited Pro Forma
Financial Information” to this prospectus.
Raising additional capital may cause dilution to our Shareholders, restrict our operations
or require us to relinquish rights to our technologies or drug candidates.
We may finance our future cash needs through equity offerings, licensing arrangements
or other collaborations, government funding arrangements, debt financings, or any
combination thereof. If we fail to become profitable or obtain sufficient equity or other
financings, we may be unable to continue our operations according to our plans and be forced
to scale back our operations. In addition, we may seek additional capital due to favorable
market conditions or strategic considerations even if we believe that we have sufficient funds
for our current or future operating plans. To the extent that we raise additional capital through
the sale of equity or convertible debt securities, your ownership interest will be diluted, and the
terms may include liquidation or other preferences that adversely affect your rights as a holder
of our H Shares. The incurrence of additional indebtedness or the issuance of certain equity
securities could result in increased fixed payment obligations and could also result in certain
additional restrictive covenants, such as limitations on our ability to incur additional debt or
issue additional equity, limitations on our ability to acquire or license intellectual property
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rights and other operating restrictions that could adversely impact our ability to conduct our
business. In addition, issuance of additional equity securities, or the possibility of such
issuance, may cause the market price of our H Shares to decline.
Because we do not expect to pay dividends in the foreseeable future after the Global
Offering, you must rely on price appreciation of our H Shares for a return on your
investment.
We currently intend to retain most, if not all, of our available funds and any future
earnings after the Global Offering to fund the development and commercialization of our
pipeline drug candidates. As a result, we do not expect to pay any cash dividends in the
foreseeable future. Therefore, you should not rely on an investment in our H Shares as a source
for any future dividend income.
Our Board has complete discretion as to whether to distribute dividends. Even if our
Board decides to declare and pay dividends, the timing, amount and form of future dividends,
if any, will depend on our future results of operations and cash flow, our capital requirements
and surplus, the amount of distributions received by us from our subsidiaries, our financial
condition, contractual restrictions and other factors deemed relevant by our Board.
Accordingly, the return on your investment in our H Shares will likely depend entirely upon
any future price appreciation of our H Shares. There is no guarantee that our H Shares will
appreciate in value after the Global Offering or even maintain the price at which you purchased
the H Shares. Y ou may not realize a return on your investment in our H Shares and you may
even lose your entire investment in our H Shares.
We cannot make fundamental changes to our business without the consent of the Stock
Exchange.
On April 30, 2018, the Stock Exchange adopted rules under Chapter 18A of its Rules
Governing the Listing of Securities on the Stock Exchange. Under these rules, without the prior
consent of the Stock Exchange, we will not be able to effect any acquisition, disposal or other
transaction or arrangement or a series of acquisitions, disposals or other transactions or
arrangements, which would result in a fundamental change in our principal business activities
as set forth in this prospectus. As a result, we may be unable to take advantage of certain
strategic transactions that we might otherwise choose to pursue in the absence of Chapter 18A.
Were any of our competitors that are not listed on the Stock Exchange to take advantage of such
opportunities in our place, we may be placed at a competitive disadvantage, which could have
a material adverse effect on our business, financial condition and results of operations.
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We have significant discretion as to how we will use the net proceeds of the Global
Offering, and you may not necessarily agree with how we use them.
Our management may spend the net proceeds from the Global Offering in ways you may
not agree with or that do not yield a favorable return to our Shareholders. For details of our
intended use of proceeds, see the section headed “Future Plans and Use of Proceeds.” However,
our management will have discretion as to the actual application of the net proceeds received
by us from the Global Offering. Y ou are entrusting your funds to our management, whose
judgment you must depend on, for the specific uses we will make of the net proceeds from the
Global Offering.
We cannot guarantee the accuracy of facts, forecasts and other statistics obtained from
official government sources contained in this prospectus.
Certain facts, statistics and data contained in this prospectus relating to the
pharmaceutical industry in and outside China have been derived from various official
government publications, industry associations, independent research institutions, third party
reports and/or other publicly available sources we generally believe to be reliable, as well as
a report prepared by Frost & Sullivan that we commissioned. We believe that the sources of
such information are appropriate sources for such information, but the information obtained
from official governmental sources has not been independently verified by us or any other
party involved in the Global Offering and no representation is given as to its accuracy.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties.
This prospectus contains certain forward-looking statements and information relating to
us that are based on the beliefs of our management as well as assumptions made by and
information currently available to our management. When used in this prospectus, the words
“aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “going
forward,” “intend,” “ought to,” “may,” “might,” “plan,” “potential,” “predict,” “project,”
“seek,” “should,” “will,” “would” and similar expressions, as they relate to us or our business,
are intended to identify forward-looking statements. Such statements reflect the current views
of our management with respect to future events, business operations, liquidity and capital
resources, some of which may not materialize or may change. These statements are subject to
certain risks, uncertainties and assumptions, including the other risk factors as described in this
prospectus. Should one or more of these risks or uncertainties materialize, or if any of the
underlying assumptions prove incorrect, actual results may diverge significantly from the
forward-looking statements in this prospectus. Whether actual results will conform to our
expectations and predictions is subject to a number of risks and uncertainties, many of which
are beyond our control, and reflect future business decisions that are subject to change. In light
of these and other uncertainties, the inclusion of forward-looking statements in this prospectus
should not be regarded as representations that our plans or objectives will be achieved, and
investors should not place undue reliance on such forward-looking statements. All forward-
looking statements contained in this prospectus are qualified by reference to the cautionary
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statements set out in this section. Subject to the ongoing disclosure obligations of the Listing
Rules or other requirements of the Stock Exchange, we do not intend publicly to update or
otherwise revise the forward-looking statements in this prospectus, whether as a result of new
information, future events or otherwise.
Y ou should read this entire prospectus carefully and should not consider or rely on any
particular statements in published media reports without carefully considering the risks
and other information contained in this prospectus.
Prior to the publication of this prospectus, and subsequent to the date of this prospectus
but prior to the completion of the Global Offering, there may have been or may be press and
media coverage regarding us, our business, our industry and the Global Offering. Such press
and media coverage may include references to information that do not appear in this prospectus
or is inaccurate. We have not authorized the publication of any such information contained in
such press and media coverage. Therefore, we make no representation as to the
appropriateness, accuracy, completeness or reliability of any information disseminated in the
press or media and do not accept any responsibility for the accuracy or completeness of any
financial information or forward-looking statements contained therein. To the extent that any
of such information is inconsistent or conflicts with the contents of this prospectus, we
expressly disclaim responsibility for them. Accordingly, prospective investors should only rely
on information included in this prospectus and not on any of the information in press articles
or other media coverage in deciding whether or not to invest in our Global Offering. By
applying to purchase our H Shares in the Global Offering, you will be deemed to have agreed
that you have not and will not rely on any information other than that contained in this
prospectus, the Global Offering, and any formal announcements made by us in Hong Kong in
relation to our Global Offering.
RISK FACTORS
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In preparation for the Global Offering, we have sought the following waivers from strict
compliance with the relevant provisions of the Listing Rules and exemption from strict
compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance:
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, an issuer must have sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong.
Since (i) the business operations of our Group are principally managed and conducted in
the PRC and the Company’s head office is situated in the PRC, (ii) all of our executive
Directors and senior management ordinarily reside in the PRC and (iii) the management and
operations of our Group have mainly been under the supervision of our executive Directors and
senior management, it is important for them to remain in close proximity to the place of the
Group’s operations. Therefore, our Directors consider that it would be practically difficult and
commercially unreasonable for us to arrange for two executive Directors to be ordinarily
resident in Hong Kong, either by means of relocation of our existing executive Directors or
appointment of additional executive Directors. We do not have, and does not contemplate in the
foreseeable future that we will have sufficient management presence in Hong Kong for the
purpose of satisfying the requirements under Rule 8.12 and Rule 19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Rules 8.12 and 19A.15 of the Listing Rules.
We will ensure that there is an effective channel of communication between us and the Stock
Exchange by way of the following arrangements:
(a) Authorized Representatives : pursuant to Rule 3.05 of the Listing Rules, we have
appointed Dr. Liu, the co-founder of our Group, chairman of our Board and
executive Director, and Ms. Fong Christine Haiman ( ˙Ҏ೙)( “ Ms. Fong ”), our
joint company secretary as our authorized representatives and will continue to
maintain two authorized representatives to be our principal channel of
communication at all times with the Stock Exchange (the “ Authorized
Representatives ”). Each of them will be readily contactable by phone and email to
deal promptly with enquiries from the Stock Exchange. In addition, Ms. Fong
ordinarily resides in Hong Kong. Accordingly, each of the Authorized
Representatives will be able to meet with the relevant members of the Stock
Exchange to discuss any matters in relation to our Company within a reasonable
period as and when required. Our Company will also inform the Stock Exchange
promptly in respect of any change in the Authorized Representatives. See
“Directors, Supervisors and Senior Management” for more information about our
Authorized Representatives;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(b) Directors : to facilitate communication with the Stock Exchange, the mobile phone
numbers, office phone numbers, e-mail addresses and fax numbers of each Director
have been provided to each of our Authorized Representatives, the Compliance
Adviser (as defined below) and the Stock Exchange who have the means of
contacting all Directors promptly at all times as and when the Stock Exchange
wishes to contact our Directors on any matters. Furthermore, to the best of our
knowledge and information, our Directors who are not ordinarily resident in Hong
Kong possess or can apply for valid travel documents to visit Hong Kong and will
be able to come to Hong Kong to meet with the Stock Exchange within a reasonable
period as and when required; and
(c) Compliance Adviser : pursuant to Rule 3A.19 of the Listing Rules, our Company
has appointed Rainbow Capital (HK) Limited as our Compliance Adviser for the
period commencing from the Listing Date until the date on which our Company
announces our financial results and distributes our annual report for the first full
financial year after the Listing Date. The Compliance Adviser will provide us with
professional advice on ongoing compliance with the Listing Rules and will act as
our Company’s additional channel of communication with the Stock Exchange. The
Compliance Adviser and its representatives will be readily available to answer
enquiries from the Stock Exchange. We will ensure that the Compliance Adviser has
prompt access to our Authorized Representatives and our Directors who will provide
to the Compliance Adviser such information and assistance as the Compliance
Adviser may need or reasonably request in connection with the performance of the
Compliance Adviser’s duties. We shall ensure that there are adequate and efficient
means of communication among our Company, our Authorized Representatives, our
Directors, and other officers and the Compliance Adviser, and will keep the
Compliance Adviser fully informed of all communications and dealings between the
Stock Exchange and us.
W AIVER IN RELATION TO APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules and Chapter 3.10 of the Guide for
New Listing Applicants, we must appoint a company secretary who, by virtue of his or her
academic or professional qualifications or relevant experience, is, in the opinion of the Stock
Exchange, capable of discharging the functions of the company secretary.
Note 1 to Rule 3.28 of the Listing Rules further provides that the Stock Exchange
considers the following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong); and
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further sets out the factors that the Stock
Exchange will consider in assessing an individual’s “relevant experience”:
(a) length of employment with the issuer and other issuers and the roles he or she
played;
(b) familiarity with the Listing Rules and other relevant law and regulations including
the Securities and Futures Ordinance, the Companies Ordinance, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
Since the business operations of our Group are principally managed and conducted in the
PRC and the Company’s executive Directors and senior management ordinarily reside in the
PRC, our Company considers that while it is important for the company secretary to be familiar
with the relevant securities regulations in Hong Kong, he or she also needs to have experience
relevant to our Company’s operations, a nexus to our Board and a close working relationship
with the management of our Company in order to perform the function of a company secretary
and to take the necessary actions in the most effective and efficient manner. It is for the benefit
of our Company to appoint a person who has been a member of the senior management for a
period of time and is familiar with our Company’s business and affairs as company secretary.
We have appointed Ms. Li Cui ( ҽၯ)( “ Ms. Li ”), our executive Director, Chief Financial
Officer and secretary of the Board, and Ms. Fong as our joint company secretaries. Ms. Fong
is a member of The Hong Kong Chartered Governance Institute and therefore meets the
qualification requirements under Note 1 to Rule 3.28 of the Listing Rules and is in compliance
with Rule 8.17 of the Listing Rules. Ms. Li, however, does not possess the qualifications set
out in Rule 3.28 of the Listing Rules. We believe that Ms. Li, by virtue of her knowledge and
experience in handling financial management, corporate governance, investor relations, and
capital markets activities of the Group and her close proximity to the place of the Group’s
operations, the Board and the senior management of the Company, is capable of discharging
her functions as a joint company secretary. We therefore believe that it would be in the best
interests of our Company to appoint Ms. Li as a joint company secretary. For the biographical
information of Ms. Li and Ms. Fong, see “Directors, Supervisors and Senior Management.”
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with the requirements under Rules 3.28 and 8.17
of the Listing Rules in relation to the appointment of Ms. Li as our joint company secretary.
Pursuant to paragraphs 13, 15 and 16 of Chapter 3.10 of the Guide for New Listing Applicants,
the waiver will be for a three-year period from the Listing Date (the “ Waiver Period ”) and on
the following conditions: (i) the proposed company secretary must be assisted by a person who
possesses the qualifications or experience as required under Rule 3.28 of the Listing Rules (the
“Qualified Person ”) and is appointed as a joint company secretary throughout the Waiver
Period; and (ii) the waiver will be revoked if there are material breaches of the Listing Rules
by the issuer.
We have appointed Ms. Fong, who is a Qualified Person, as a joint company secretary to
provide assistance to Ms. Li during the Waiver Period so as to enable Ms. Li to acquire the
relevant experience (as required under Note 2 to Rule 3.28 of the Listing Rules) to duly
discharge her duties. Given Ms. Fong’s professional qualifications and experience, she will be
able to explain to both Ms. Li and our Company the relevant requirements under the Listing
Rules. Ms. Fong will also assist Ms. Li in organizing Board meetings and Shareholders’
meetings as well as other matters of our Company which are incidental to the duties of a
company secretary. She is expected to work closely with Ms. Li, and will maintain regular
contact with Ms. Li, our Directors, Supervisors and senior management. In addition, Ms. Li
will comply with the annual professional training requirement under Rule 3.29 of the Listing
Rules and will enhance her knowledge of the Listing Rules during the Waiver Period. Ms. Li
will also be assisted by (a) the Compliance Adviser, particularly in relation to compliance with
the Listing Rules; and (b) the Hong Kong legal advisor of our Company on matters concerning
our Company’s ongoing compliance with the Listing Rules and the applicable laws and
regulations. If and when Ms. Fong ceases to be a joint company secretary before the end of the
Waiver Period, our Company will appoint another Qualified Person as a replacement. Such a
waiver will be revoked if there are material breaches of the Listing Rules by our Company.
We will demonstrate and seek the Stock Exchange’s confirmation before the end of the
Waiver Period to enable it to assess whether Ms. Li, having had the benefit of Ms. Fong’s and,
if applicable, another Qualified Person’s assistance for three years, has acquired relevant
experience within the meaning of Rule 3.28 of the Listing Rules so that a further waiver will
not be necessary.
EXEMPTION IN RELATION TO FINANCIAL STATEMENTS IN THIS PROSPECTUS
Section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance requires all prospectuses to include matters specified in Part I of the Third Schedule
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and set out the
reports specified in Part II of the Third Schedule to the Company (Winding Up and
Miscellaneous Provisions) Ordinance.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires a company to include in its prospectus a
statement as to the gross trading income or sales turnover (as the case may be) of the company
during each of the three financial years immediately preceding the issue of the prospectus,
including an explanation of the method used for the computation of such income or turnover
and a reasonable breakdown between the more important trading activities.
Paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance further requires a company to include in its prospectus
a report by the auditors of the company with respect to (i) the profits and losses of the company
for each of three financial years immediately preceding the issue of the prospectus and (ii) the
assets and liabilities of the company of each of the three financial years immediately preceding
the issue of the prospectus.
Section 342A(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance provides that the SFC may issue, subject to such conditions (if any) as the SFC
thinks fit, a certificate of exemption from the compliance with the relevant requirements under
the Companies (Winding Up and Miscellaneous Provisions) Ordinance if, having regard to the
circumstances, the SFC considers that the exemption will not prejudice the interest of the
investing public and compliance with any or all of such requirements would be irrelevant or
unduly burdensome, or is otherwise unnecessary or inappropriate.
Rule 4.04(1) of the Listing Rules requires that the consolidated results of the issuer and
its subsidiaries in respect of each of the three financial years immediately preceding the issue
of the listing document be included in the accountants’ report to its prospectus.
Our Company is a Biotech Company as defined under Chapter 18A of the Listing Rules
and is seeking a listing under Chapter 18A of the Listing Rules. Rule 18A.03(3) of the Listing
Rules requires that a Biotech Company must have been in operation in its current line of
business for at least two financial years prior to listing under substantially the same
management. Rule 18A.06 of the Listing Rules requires that a Biotech Company must comply
with Rule 4.04 of the Listing Rules modified so that references to “three financial years” or
“three years” in Rule 4.04 shall instead be references to “two financial years” or “two years”,
as the case may be. Further, pursuant to Rule 8.06 of the Listing Rules, the latest financial
period reported on by the reporting accountants for a new applicant must not have ended more
than six months from the date of the listing document.
In compliance with the abovementioned requirements under the Listing Rules, the
Accountants’ Report of our Company set out in Appendix I to this prospectus is currently
prepared to cover the two financial years ended December 31, 2024 and the six months ended
June 30, 2025.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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As such, the Joint Sponsors have applied, on behalf of our Company, to the SFC for a
certificate of exemption from strict compliance with section 342(1)(b) of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance in relation to the requirements of
paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance regarding the inclusion of the
accountants’ report covering the full three financial years immediately preceding the issue of
this prospectus on the following grounds:
(a) our Company is a clinical-stage biotechnology company in China leveraging
synthetic biology technology to develop and deliver recombinant biologic drugs,
targeting conditions with limited treatment options and complex manufacturing
challenges, and falls within the scope of biotech company as defined under Chapter
18A of the Listing Rules. Our Company will fulfill the additional conditions for
listing required under Chapter 18A of the Listing Rules;
(b) the Accountants’ Report for the two financial years ended December 31, 2024 and
the six months ended June 30, 2025 will be disclosed in the final prospectus of the
Company and set out in Appendix I to this prospectus in accordance with Rule
18A.06 of the Listing Rules;
(c) as Chapter 18A of the Listing Rules provides a track record period of two years for
biotech companies in terms of financial disclosure, strict compliance with section
342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance
in relation to the requirements of paragraph 27 of Part I and paragraph 31 of Part II
of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance would be unduly burdensome for our Company;
(d) notwithstanding that the financial results set out in this prospectus are only for the
two financial years ended December 31, 2024 and the six months ended June 30,
2025 in accordance with Chapter 18A of the Listing Rules, other information
required to be disclosed under the Listing Rules and the Companies (Winding Up
and Miscellaneous Provisions) Ordinance has been adequately disclosed in this
prospectus pursuant to the relevant requirements; and
(e) our Directors are of the view that the Accountants’ Report covering the two financial
years ended December 31, 2024 and the six months ended June 30, 2025, together
with other disclosures in this prospectus, have already provided adequate and
reasonable up-to-date information in the circumstances for the potential investors to
make an informed assessment of the business, assets and liabilities, financial
position, management and prospects and to form a view on the track record of our
Company. Therefore, the exemption would not prejudice the interest of the investing
public.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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The SFC has granted a certificate of exemption under section 342A of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance exempting our Company from strict
compliance with section 342(1)(b) in relation to paragraph 27 of Part I and paragraph 31 of Part
II of the Third Schedule on the condition that particulars of the exemption are set out in this
prospectus and that this prospectus will be issued on or before December 2, 2025.
CONSENT IN RESPECT OF THE PROPOSED SUBSCRIPTION OF OFFER SHARES
BY A CORNERSTONE INVESTOR AS A CONNECTED CLIENT AND CLOSE
ASSOCIATE OF AN EXISTING MINORITY SHAREHOLDER
(i) Consent in Respect of the Proposed Subscription of Offer Shares by a Cornerstone
Investor as a Connected Client
Paragraph 1C(1) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s)), without
the prior written consent of the Stock Exchange.
Paragraph 1B(7) of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
Chapter 4.15 of the Guide for New Listing Applicants provides that the Stock Exchange
will ordinarily give its consent for allocation to connected clients if it is satisfied that: (i) the
allocation to a connected client represents genuine demand for securities of an applicant; and
(ii) the connected client has not taken and will not take advantage of its position to receive an
allocation for its own benefit at the expense of other placees or the public (i.e., no actual or
perceived preferential treatment has been given to such connected client).
Guotai Junan Investments (Hong Kong) Limited (“ GTINV ”) has entered into a
cornerstone investment agreement with the Company, CITIC Securities (Hong Kong) Limited,
CLSA Limited, Haitong International Capital Limited, and Haitong International Securities
Company Limited.
GTINV and Guotai Haitong Securities Co., Ltd. (HKEX: 2611; SSE: 601211) (“ GTHT ”)
will enter into a series of cross border delta-one over-the-counter (“ OTC”) swap transactions
(the “ Zhonghe OTC Swaps ”) with each other and with Zhonghe Capital Cultivation No. 811
Private Equity Investment Fund ( ʕձ༟͉ঁঀ811ږ“() Cultivation No.
811”, or the “ GTHT Ultimate Client (Zhonghe) ”), an investment fund managed by Splendid
Zhonghe (Tianjin) Investment Management Co., Ltd. ( ᎀᔐʕձ(ݵ)ʮ̡)
(“Zhonghe Investment ”), pursuant to which GTINV will hold the Offer Shares on a
non-discretionary basis to hedge the Zhonghe OTC Swaps while the economic risks and returns
of the underlying Offer Shares are passed to the GTHT Ultimate Client (Zhonghe), subject to
customary fees and commissions. The Zhonghe OTC Swaps will be fully funded by the GTHT
Ultimate Client (Zhonghe). During the terms of the Zhonghe OTC Swaps, all economic returns
of the Offer Shares subscribed by GTINV will be passed to the GTHT Ultimate Client
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(Zhonghe) and all economic loss shall be borne by the GTHT Ultimate Client (Zhonghe)
through the Zhonghe OTC Swaps, and GTINV will not take part in any economic return or bear
any economic loss in relation to the Offer Shares.
Haitong International Securities Company Limited (“ Haitong International Securities ”,
or the “ Connected Distributor ”) is an Overall Coordinator, Joint Global Coordinator, Joint
Bookrunner and Joint Lead Manager in connection with the Global Offering. Haitong
International Securities is indirectly wholly owned by GTHT. GTINV is also indirectly wholly
owned by GTHT. Therefore, GTINV is a member of the same group of companies as Haitong
International Securities. Accordingly, GTINV is considered a “connected client” of Haitong
International Securities pursuant to paragraph 1B(7) of Appendix F1 of the Listing Rules.
We have applied for, and the Stock Exchange has granted, a consent under paragraph
1C(1) of Appendix F1 to the Listing Rules to permit GTINV (as a connected client cornerstone
investor) (in connection with Zhonghe OTC Swaps) to participate in the Global Offering as a
cornerstone investor on the following basis and conditions as set out in Paragraph 6 of Chapter
4.15 of the Guide for New Listing Applicants:
(a) any Offer Shares to be allocated to GTINV (as a connected client cornerstone
investor) will be held on behalf of independent third parties;
(b) the cornerstone investment agreement of GTINV (as a connected client cornerstone
investor) does not contain any material terms which are more favorable to it than
those in other cornerstone investment agreements;
(c) other than the preferential treatment of assured entitlement under the relevant
cornerstone investment agreement, no preferential treatment has been, nor will be,
given to GTINV (as a connected client cornerstone investor) by virtue of its
relationship with Haitong International Securities, in any allocation of Offer Shares
in the International Offering;
(d) GTINV (as a connected client cornerstone investor) confirms that to the best of its
knowledge and belief, other than the preferential treatment of assured entitlement
under the relevant cornerstone investment agreement, it has not received and will
not receive preferential treatment in the allocation of Offer Shares in the Global
Offering as a cornerstone investor by virtue of its relationship with Haitong
International Securities;
(e) each of the Company, the Overall Coordinators, the Connected Distributor and
GTINV (as a connected client cornerstone investor) has provided the Stock
Exchange with written confirmations in accordance with Chapter 4.15 of the Guide
for New Listing Applicants; and
(f) details of the cornerstone investment and details of the allocation will be disclosed
in this prospectus and the allotment results announcement.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(ii) Consent in Respect of the Proposed Subscription of Offer Shares by a Cornerstone
Investor as a Close Associate of an Existing Minority Shareholder
Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to directors or existing shareholders of the applicant or their close associates,
whether in their own names or through nominees unless the conditions set out in Rules 10.03
and 10.04 of the Listing Rules are fulfilled, without the prior written consent of the Stock
Exchange.
Paragraph 18 of Chapter 2.3 of the Guide for New Listing Applicants provides that the
Stock Exchange permits an existing shareholder and/or its close associates to participate in the
initial public offering of a Biotech Company (as defined under Chapter 18A the Listing Rules)
provided that the applicant, in case of a PRC issuer, complies with Rules 19A.13A and
19A.13C of the Listing Rules in relation to the public float and free float. Further, pursuant to
paragraph 18 of Chapter 2.3 of the Guide for New Listing Applicants, an existing shareholder
must subscribe for shares in the initial public offering as a cornerstone investor if it holds 10%
or more of the shares in the applicant prior to the initial public offering, and an existing
shareholder holding less than 10% of shares in the applicant prior to the initial public offering
may subscribe either as a cornerstone investor or placee.
Rule 19A.13A of the Listing Rules requires that, where a new applicant is a PRC issuer
with no other listed shares at the time of listing, at least a minimum prescribed percentage of
shares in the class to which H shares belong must be H shares held by the public at the time
of listing, determined by reference to the expected market value of the class of shares to which
H shares belong at the time of listing.
Rule 19A.13C of the Listing Rules further requires that, where a new applicant is a PRC
issuer with no other listed shares at the time of listing, the portion of H shares for which listing
is sought that are held by the public and not subject to any disposal restrictions (whether under
contract, the Listing Rules, applicable laws or otherwise), at the time of listing, must: (a)
represent at least 10% of the total number of issued shares in the class to which H shares belong
at the time of listing (excluding treasury shares), with an expected market value at the time of
listing of not less than HK$50,000,000; or (b) have an expected market value at the time of
listing of not less than HK$600,000,000.
GTINV is a close associate of Haitong Innovation Securities, an existing minority
Shareholder of the Company, holding approximately 1.52% voting rights in the Company as of
the Latest Practicable Date.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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--- page 158 ---
We have applied for, and the Stock Exchange has granted, a consent under Paragraph
1C(2) of Appendix F1 to the Listing Rules to permit GTINV (as close associate of an existing
minority Shareholder) (in connection with Zhonghe OTC Swaps) to participate in the Global
Offering as a cornerstone investor on the following basis as set out in Paragraph 18 of Chapter
2.3 of the Guide for New Listing Applicants and subject to the conditions that:
(a) the Company will comply with the public float requirement under Rule 19A.13A of
the Listing Rules and the free float requirement under Rule 19A.13C of the Listing
Rules;
(b) the Shares to be subscribed by and allocated to GTINV (as close associate of an
existing minority Shareholder) under the Global Offering will be at the same Offer
Price and on substantially the same terms, or no more favorable than, the terms of
the other cornerstone investors (including being subject to a lock-up period of six
months from the Listing Date) and GTINV shall pay and settle in full the
consideration for the relevant Offer Shares before dealings commence on the Listing
Date;
(c) no preference in allocation has been, nor will be, given to GTINV (as a close
associate of an existing Shareholder) or its respective close associate(s) by virtue of
their relationship with the Company other than the preferential treatment of assured
entitlement at the Offer Price under a cornerstone investment and the terms of the
cornerstone investment agreement with GTINV are substantially the same as the
other cornerstone investment agreements following the principles set out in
Chapters 2.3 and 4.15 of the Guide for New Listing Applicants;
(d) each of the Company and the Joint Sponsors has provided the Stock Exchange with
written confirmations in accordance with Chapters 2.3 and 4.15 of the Guide for
New Listing Applicants; and
(e) the relevant information in respect of the allocation to GTINV (as a close associate
of an existing Shareholder) as Cornerstone Investors are disclosed in this Prospectus
and will be disclosed in the allotment results announcement.
For further information about the proposed cornerstone investments by GTINV , please
refer to the section headed “Cornerstone Investors” in this Prospectus.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (Winding up and
Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules
(Chapter 571V of the Laws of Hong Kong) and the Listing Rules for the purpose of giving
information to the public with regard to us. Our Directors, having made all reasonable
enquiries, confirm that, to the best of their knowledge and belief, the information contained in
this prospectus is accurate and complete in all material respects and not misleading or
deceptive, and there are no other facts, the omission of which would make this prospectus or
any statement in this prospectus misleading.
CSRC FILING REQUIREMENT
We have filed the required documents with the CSRC, and the CSRC has issued the filing
notice dated October 29, 2025, confirming our completion of the filing pursuant to the new
filing regime introduced by the Trial Measures for Overseas Listing for the Global Offering,
the conversion of certain Unlisted Shares into H Shares and the listing of the H Shares on the
Stock Exchange. The notice of filing only confirms the filing information of our Company’s
overseas offering and listing, and does not represent that the CSRC makes any substantial
judgment or guarantee about the investment value of our Company’s securities or the proceeds
of investors, nor does it indicate that the CSRC makes any guarantee or affirmation about the
authenticity, accuracy and completeness of this prospectus.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering,
this prospectus contain the terms and conditions of the Hong Kong Public Offering. The Global
Offering comprises the Hong Kong Public Offering of initially 3,791,200 Hong Kong Offer
Shares and the International Offering of initially 34,120,500 International Offer Shares (subject
to reallocation on the basis as set out in “Structure of the Global Offering” in this prospectus).
The Hong Kong Offer Shares are offered solely on the basis of the information contained
and representations made in this prospectus and on the terms and subject to the conditions set
out herein and therein. No person is authorized to give any information in connection with the
Global Offering or to make any representation not contained in this prospectus, and any
information or representation not contained herein and therein must not be relied upon as
having been authorized by our Company, the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, any of the
Underwriters or Capital Market Intermediaries, any of their respective directors, agents,
employees or advisors or any other party involved in the Global Offering. Neither the delivery
of this prospectus nor any offering, sale or delivery made in connection with the Offer Shares
should, under any circumstances, constitute a representation that there has been no change or
development reasonably likely to involve a change in our affairs since the date of this
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prospectus or imply that the information contained in this prospectus is correct as at any date
subsequent to the date of this prospectus. For further details of the structure of the Global
Offering, including its conditions, and the procedures for applying for Hong Kong Offer
Shares, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer
Shares”.
UNDERWRITING
The listing of the Offer Shares on the Stock Exchange is sponsored by the Joint Sponsors
and the Global Offering is managed by the Overall Coordinators. Pursuant to the Hong Kong
Underwriting Agreement, the Hong Kong Public Offering is fully underwritten by the Hong
Kong Underwriters on a conditional basis. The International Offering is managed by the
Overall Coordinators and is expected to be fully underwritten by the International
Underwriters. See “Underwriting” for details about the Underwriters and the underwriting
arrangements.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his/her acquisition of Hong Kong Offer Shares to, confirm
that he or she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares
described in this prospectus.
No action has been taken to permit a Hong Kong Public Offering of the Offer Shares or
the general distribution of this prospectus in any jurisdiction other than Hong Kong.
Accordingly, this prospectus may not be used for the purposes of, and does not constitute, an
offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation. The distribution of this prospectus and the offering and sales of the Offer Shares in
other jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom. Each
person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering will be
required to confirm, or be deemed by his or her acquisition of Hong Kong Offer Shares to
confirm, that he or she is aware of the restrictions on offers and sales of the Offer Shares
described in this prospectus. In particular, the Offer Shares have not been offered or sold, and
will not be offered or sold, directly or indirectly, in the PRC and the United States.
Persons applying for or purchasing Offer Shares under the Global Offering are deemed,
by their making an application or purchase, to have represented that they are not associates of
any of our Directors or existing Shareholders or a nominee of any of the foregoing.
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APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the granting of the listing of, and
permission to deal in, our H Shares to be converted from the Unlisted Shares, our H Shares to
be issued pursuant to the Global Offering. Save as otherwise disclosed in this prospectus, no
other part of our Shares is listed on or dealt in on any other stock exchange, and no such listing
or permission to list is being or proposed to be sought in the near future.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotments made in respect of any applications will be invalid if the listing of,
and permission to deal in, the Offer Shares on the Stock Exchange is refused before the
expiration of three weeks from the date of the closing of the application lists, or such longer
period (not exceeding six weeks) as may, within the said three weeks, be notified to the
Company by or on behalf of the Stock Exchange.
COMMENCEMENT OF DEALINGS IN THE H SHARES
Dealings in the H Shares on the Stock Exchange are expected to commence on
Wednesday, December 10, 2025. The H Shares will be traded in board lot of 100 H Shares. The
stock code of the H Shares is 2659.
COMPLIANCE WITH LISTING RULES
We will comply with applicable laws and regulations in Hong Kong (including the Listing
Rules) and any other undertakings which have been given in favor of the Stock Exchange from
time to time. If the Listing Committee finds that there has been a breach by us of the Listing
Rules or such other undertakings which may have been given by us in favor of the Stock
Exchange from time to time, the Listing Committee may instigate cancellation or disciplinary
proceedings in accordance with the Listing Rules.
H SHARE REGISTER AND STAMP DUTY
All H Shares issued pursuant to applications made in the Hong Kong Public Offering and
the International Offering will be registered on the Company’s H Share register of members to
be maintained by our H Share Registrar, Computershare Hong Kong Investor Services Limited.
We will maintain the Company’s principal register of members at our current registered office
in the PRC.
Dealings in the H Shares registered in our H Share register of members will be subject
to the Hong Kong stamp duty. See “Appendix VII — Statutory and General Information — D.
Other Information — 10. Taxation of Holders of H Shares.” Investors should seek professional
tax advice for further details of Hong Kong stamp duty.
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Unless otherwise determined by our Board, dividends will be paid to Shareholders whose
names are listed on our H Share register of members in Hong Kong, by ordinary post, at the
Shareholders’ risk in Hong Kong dollars to the registered address of each Shareholder.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to
register the subscription, purchase or transfer of any H Shares in the name of any particular
holder unless and until such holder delivers a signed form to our H Share Registrar in respect
of those H Shares bearing statements to the effect that the holders:
 agrees with us and each of our Shareholders, and we agree with each Shareholder,
to observe and comply with the PRC Company Law, the Trial Measures for Overseas
Listing and our Articles of Association;
 agrees with us, each of our Shareholders, Directors, Supervisors, managers and
officers, and we, acting for ourselves and for each of our Directors, Supervisors,
managers and officers agree with each of our Shareholders, to refer all differences
and claims arising from our Articles of Association or any rights or obligations
conferred or imposed by the PRC Company Law or other relevant laws and
administrative regulations concerning our affairs to arbitration, and any reference to
arbitration shall be deemed to authorize the arbitration tribunal to conduct hearings
in open session and to publish its award, which arbitration shall be final and
conclusive;
 agrees with us and each of our Shareholders that the H Shares are freely transferable
by the holders thereof; and
 authorizes us to enter into a contract on his or her behalf with each of our Directors,
Supervisors, managers and officers whereby such Directors, Supervisors, managers
and officers undertake to observe and comply with their obligations to our
Shareholders as stipulated in our Articles of Association. Persons applying for or
purchasing H Shares under the Global Offering are deemed, by their making an
application or purchase, to have represented that they are not associates of any of
our Directors, Supervisors or existing Shareholder or a nominee of any of the
foregoing.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars
in respect of the H Shares will be paid to the Shareholders as recorded on the H Share register
of members of our Company in Hong Kong and sent by ordinary post, at the Shareholders’ risk,
to the registered address of each Shareholder.
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According to the Guide to the Program for “Full Circulation” of H-shares of the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited promulgated by the
Shenzhen Branch of CSDC on September 20, 2024, cash dividends to domestic investors of
H-share “full circulation” shall be distributed through Shenzhen Branch of CSDC. An H-share
listed company shall transfer RMB cash dividends to the designated bank account of the
Shenzhen Branch of CSDC, who shall complete the clearing of cash dividends by distributing
the cash dividends to investors through domestic securities companies.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, the Offer Shares on the
Stock Exchange and our compliance with the stock admission requirements of HKSCC, our H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in our H Shares on the Stock
Exchange or any other date as determined by HKSCC. Settlement of any transactions between
participants of the Stock Exchange is required to take place in CCASS on the second settlement
day after any trading day. All activities under CCASS are subject to the General Rules of
HKSCC and HKSCC Operational Procedures in effect from time to time. Investors should seek
the advice of their stockbroker or other professional advisers for details of the settlement
arrangements as such arrangements may affect their rights and interests. All necessary
arrangements have been made for our H Shares to be admitted into CCASS.
PROFESSIONAL TAX ADVICE RECOMMENDED
Applicants for the Offer Shares are recommended to consult their professional advisers if
they are in any doubt as to the tax implications of subscribing for, purchasing, holding,
disposing of and dealing in our H Shares or exercising rights attached to them. None of the
Company, the Underwriters, the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, any of their respective directors, supervisors, officers, employees, agents or
advisers or any other persons involved in the Global Offering accepts responsibility for any tax
effects or liabilities of holders of Shares resulting from the subscription, purchase, holding or
disposal of, or dealing in, our H Shares or exercising any rights attached to them.
INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES
Our Company has applied for conversion of Unlisted Shares (immediately following the
Share Subdivision) into H Shares, which involves 116,415,550 Unlisted Shares held by the
existing Shareholders. See the sections headed “History, Development and Corporate
Structure” and “Share Capital” for details of our existing Shareholders and their respective
interests in our Company and relevant procedures for the conversion of Unlisted Shares into
H Shares. Such H Shares to be converted from Unlisted Shares are restricted from trading for
a period of one year after the Listing. The relevant filing procedure in relation to the conversion
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of certain Unlisted Shares into H Shares has been completed on October 29, 2025 and the
listing and trading of the H shares converted on the Stock Exchange is still subject to the
approval by the Stock Exchange.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for the Hong Kong Offer Shares are set out in the section
headed “How to Apply for Hong Kong Offer Shares.”
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail. The English names of the PRC nationals, entities, departments,
facilities, certificates, titles, laws, regulations and the like are translations of their Chinese
names and are included herein for identification purposes only. If there is any inconsistency,
the Chinese name prevails.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments, or have been rounded to one or two decimal places. Any discrepancies
in any tables or charts between the total shown and the sums of the amounts listed are due to
rounding.
MARKET SHARE DATA
The statistical and market share information contained in this prospectus has been derived
from official government publications, market data providers and other independent third-party
sources. Unless otherwise indicated, the information has not been verified by us independently.
This statistical information may not be consistent with other statistical information from other
sources within or outside the PRC. While reasonable caution has been made in the process of
reproducing the data and statistics extracted from such official government publications or
other sources, the Joint Sponsors and our Company, or any of their directors, employees,
agents, and representatives make no representation to the appropriateness, accuracy,
completeness or reliability of any such statistical and market share information.
EXCHANGE RATE CONVERSION
Solely for your convenience, certain translations among amounts in Renminbi, HK dollars
or US dollars are contained in this prospectus. None should be regarded as and be interpreted
as an amount in one currency that can be on the relevant dates or any other dates actually
converted into that in another currency at the rates below or cannot be converted at all. Unless
otherwise specified:
(i) all amounts in Renminbi are translated into HK dollars at an exchange rate of
RMB0.9103 to HK$1.00, being the middle exchange rate set by the PBOC
prevailing on the Latest Practicable Date;
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(ii) all amounts in Renminbi are translated into US dollars at an exchange rate of
RMB7.0875 to US$1.00, being the middle exchange rate set by the PBOC prevailing
on the Latest Practicable Date; and
(iii) all amounts in HK dollars are translated into US dollars at an exchange rate of
HK$7.7859 to US$1.00 (calculated based on (i) and (ii) above).
Any discrepancies in any table between totals and sums of amounts listed therein are due
to rounding.
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DIRECTORS
Name Address Nationality
Executive Directors
Dr. Liu Y anjun (ё) Room 601, No. 1, Lane 873
Xiangyin Road, Y angpu District
Shanghai
PRC
Chinese
Ms. Wang Zheng ( ˮᅄ) Room 102, No. 10, Lane 198
Ziwei Road, Pudong New Area
Shanghai
PRC
Chinese
Mr. Tan Jingwei ( ᗈཨਃ) Room 201, No. 37, No. 2 Village
Huicheng Y uan, Xuhui District
Shanghai
PRC
Chinese
Ms. Li Cui ( ҽၯ) Room 1402, No. 7, Lane 399
Chuanhe Road, Sunqiao Town
Pudong New Area
Shanghai
PRC
Chinese
Non-executive Directors
Ms. Lin, Chia-ling (Գ௒) 4/F, No. 96, Alley 36, Lane 157
Jingmao 2nd Road
Neighborhood 35, Sanchong Li
Nangang District
Taipei
Taiwan
Chinese
(Taiwan)
Mr. Diao Juanhuan (࣫17A, Building 7
Fulu Ju, Donghai Garden
No. 2 Xianglin Road, Futian District
Shenzhen
Guangdong
PRC
Chinese
Mr. Li Chen 16408 SE 64th PL, Bellevue
W A 98006
United States
American
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Name Address Nationality
Independent Non-executive Directors
Mr. Cai Zhongxi ( ᇹ΀ᘙ) No. 45, Ansheng Villa
No. 1551 Huqingping Highway
Qingpu District
Shanghai
PRC
Chinese
Dr. Zeng Fanyi ( ಀɭɓ) Room 1501-1504, No. 3, Lane 1344
Changde Road, Putuo District
Shanghai
PRC
Chinese
Dr. Ju Dianwen ( ᒴХ˖) Room 505, No. 13, Lane 871
Xiangyin Road, Y angpu District
Shanghai
PRC
Chinese
Mr. Zhang Senquan (ݰRoom C&D, 37th Floor
South Horizons Phase 2
Y ee Lai Court Block 10
No. 10 South Horizon Drive
Hong Kong
Chinese (Hong
Kong)
SUPERVISORS
Name Address Nationality
Mr. Lou Junwen (˖) No. 39 Y unhe Road, Huqiu District
Suzhou
Jiangsu
PRC
Chinese
Mr. Cheng Y u ( ϓ༃) Room 803, Building 10
No. 9 Qingcheng Road
Suzhou Industrial Park
Suzhou
Jiangsu
PRC
Chinese
Ms. Cai Qingqing ( ᇹ૶૶) No. 14, Group 19
Kua’an Village, Caobu Town
Rudong County
Jiangsu
PRC
Chinese
For further details on our Directors and Supervisors, see “Directors, Supervisors and
Senior Management.”
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors CITIC Securities (Hong Kong) Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Haitong International Capital Limited
Suites 3001-3006 and 3015-3016
One International Finance Centre
No. 1 Harbour View Street
Central
Hong Kong
Sponsor-Overall Coordinators
and Overall Coordinators
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Haitong International Securities Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
Joint Global Coordinators CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Haitong International Securities Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
West Bull Securities Limited
2701-2703, 27/F, Infinitus Plaza
199 Des V oeux Rd Central
Sheung Wan
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
Joint Bookrunners CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Haitong International Securities Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
West Bull Securities Limited
2701-2703, 27/F, Infinitus Plaza
199 Des V oeux Rd Central
Sheung Wan
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central, Hong Kong
Guoyuan Securities Brokerage (Hong Kong)
Limited
17/F, Exchange Square 3
8 Connaught Place
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Livermore Holdings Limited
Unit 1214A, 12/F
Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Phillip Securities (Hong Kong) Limited
11/F, United Centre
95 Queensway
Hong Kong
SDIC Securities (Hong Kong) Limited
39/F, One Exchange Square
Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
SPDB International Capital Limited
33/F, SPD Bank Tower
One Hennessy
1 Hennessy Road
Hong Kong
Valuable Capital Limited
RM 3601-06 & 3617-19
36/F, China Merchants Tower
Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Joint Lead Managers CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Haitong International Securities Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
West Bull Securities Limited
2701-2703, 27/F, Infinitus Plaza
199 Des V oeux Rd Central
Sheung Wan
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central, Hong Kong
Guoyuan Securities Brokerage (Hong Kong)
Limited
17/F, Exchange Square 3
8 Connaught Place
Central
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F
Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Phillip Securities (Hong Kong) Limited
11/F, United Centre
95 Queensway
Hong Kong
SDIC Securities (Hong Kong) Limited
39/F, One Exchange Square
Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
SPDB International Capital Limited
33/F, SPD Bank Tower
One Hennessy
1 Hennessy Road
Hong Kong
Valuable Capital Limited
RM 3601-06 & 3617-19
36/F, China Merchants Tower
Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre, 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Capital Market Intermediaries CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Haitong International Securities Company Limited
28/F, 30/F Suites 3001-10 and 3015-16
One International Finance Centre
No.1 Harbour View Street
Central
Hong Kong
West Bull Securities Limited
2701-2703, 27/F, Infinitus Plaza
199 Des V oeux Rd Central
Sheung Wan
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central, Hong Kong
Guoyuan Securities Brokerage (Hong Kong)
Limited
17/F, Exchange Square 3
8 Connaught Place
Central
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F
Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Phillip Securities (Hong Kong) Limited
11/F, United Centre
95 Queensway
Hong Kong
SDIC Securities (Hong Kong) Limited
39/F, One Exchange Square
Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
SPDB International Capital Limited
33/F, SPD Bank Tower
One Hennessy
1 Hennessy Road
Hong Kong
Valuable Capital Limited
RM 3601-06 & 3617-19
36/F, China Merchants Tower
Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre, 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Legal Advisors to our Company As to Hong Kong and United States law:
Cooley HK
35/F, Two Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law:
Beijing DeHeng Law Offices
12/F Tower B, Focus Place
19 Finance Street
Beijing
PRC
Legal Advisors to the Joint
Sponsors and the
Underwriters
As to Hong Kong and United States law:
Kirkland & Ellis
26/F, Gloucester Tower
The Landmark
15 Queen’s Road
Central
Hong Kong
As to PRC law:
Commerce & Finance Law Offices
12-14th Floor, China World Office 2
No. 1 Jianguomenwai Avenue
Beijing
PRC
Reporting Accountants and
Independent Auditor
Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Independent Property Valuer A VISTA Valuation Advisory Limited
Suites 2401-06, 24/F Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Room 2504, Wheelock Square
No. 1717 West Nanjing Road
Shanghai
PRC
Receiving Bank China CITIC Bank International Limited
80 Floor, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Registered Office, Head Office and
Principal Place of Business in the PRC
No. 28 Luoxin Road, Baoshan District
Shanghai
PRC
Principal Place of Business in Hong Kong Room 1919, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company’s Website www.baopharma.com
(The information contained on this website
does not form part of this prospectus)
Joint Company Secretaries Ms. Li Cui ( ҽၯ)
Room 1402, No. 7, Lane 399
Chuanhe Road, Sunqiao Town
Pudong New Area
Shanghai
PRC
Ms. Fong Christine Haiman ( ˙Ҏ೙)
(an associate member of both The Hong
Kong Chartered Governance Institute and
The Chartered Governance Institute in the
United Kingdom)
Room 1919, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized Representatives Dr. Liu Y anjun (ё)
Room 601, No. 1, Lane 873
Xiangyin Road, Y angpu District
Shanghai
PRC
Ms. Fong Christine Haiman ( ˙Ҏ೙)
Room 1919, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
CORPORATE INFORMATION
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Audit Committee Mr. Zhang Senquan (ݰ)Chairperson)
Dr. Ju Dianwen ( ᒴХ˖)
Mr. Diao Juanhuan (࣫)
Nomination Committee Dr. Liu Y anjun (ё) (Chairperson)
Dr. Zeng Fanyi ( ಀɭɓ)
Mr. Cai Zhongxi ( ᇹ΀ᘙ)
Remuneration Committee Dr. Ju Dianwen ( ᒴХ˖) (Chairperson)
Ms. Wang Zheng ( ˮᅄ)
Mr. Zhang Senquan (ݰ)
Strategy Committee Dr. Liu Y anjun (ё) (Chairperson)
Ms. Li Cui ( ҽၯ)
Ms. Lin Chia-Ling (Գ௒)
Mr. Li Chen
Mr. Cai Zhongxi ( ᇹ΀ᘙ)
Compliance Adviser Rainbow Capital (HK) Limited
Office No. 710, 7/F, Wing On House
71 Des V oeux Road Central
Hong Kong
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716
17/F, Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Principal Banks Shanghai Rural Commercial Bank
(Songjiang Science and Technology City
Sub-branch)
Room 103-2, Building 31
No. 258 Xinzhuan Highway, Songjiang District
Shanghai
PRC
Shanghai Pudong Development Bank
(Baoshan Sub-branch)
No. 1283 Mudanjiang Road, Baoshan District
Shanghai
PRC
CORPORATE INFORMATION
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--- page 179 ---
Certain information and statistics set out in this section have been extracted from
various official government publications, available sources from public market data
providers and an independent third-party source, Frost & Sullivan. The report prepared
by Frost & Sullivan and cited in this prospectus was commissioned by us. The information
from official government sources has not been independently verified by our Company,
the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, the Capital Market Intermediaries, any of our or their respective directors,
officers, employees, agents or advisers or any other person or party involved in the
Global Offering, and no representation is given as to its accuracy, fairness and
completeness. For discussion of the risks relating to our industry, see “Risk Factors” in
this prospectus.
ANALYSIS OF THE SUBCUTANEOUS DRUG DELIVERY SYSTEM MARKET
Subcutaneous Drug Delivery System
Overview of Subcutaneous Drug Delivery System
The upper muscular layer of human body is covered by the subcutaneous (SC) tissue,
dermis, and epidermis. The SC drug delivery system refers to the administration of drugs
directly into the SC layer, which lies just beneath the epidermis and dermis. Low
vascularization SC layer enables gradual drug absorption, forming a localized depot at the
injection site. This depot effect allows slow drug release into the bloodstream, prolonging
therapeutic effects and reducing dosing frequency. This delivery method has been in use since
the 1850s, following the invention of hollow needles and hypodermic syringes, with its early
applications including the delivery of morphine, insulin, and heparin in the 1960s. Earlier
applications of SC injection faced limited adoption due to challenges in absorption variability
and biologic formulation, but advances in drug formulation technologies and a better
understanding of SC tissue dynamics have now enabled the broader application of SC delivery
systems.
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SC Administration and Other Injective Administration
Source: Frost & Sullivan analysis
In recent years, SC drug delivery system has emerged as a preferred method for
administering biologics, such as peptides, proteins, cytokines, replacement enzymes, and
monoclonal antibodies (mAbs), which are traditionally delivered intravenously. This represents
a superior alternative to intravenous (IV) administration in numerous therapeutic areas, with
notable advantages such as enhanced safety, greater convenience, broader applicability, and
improved cost-effectiveness. SC injection eliminates the risks of infusion reactions and
intolerance commonly associated with IV administration, benefiting a large population. For
antibody drug administration, SC injections are significantly faster, typically requiring only 2
to 5 minutes, therefore, providing superior safety profile with shorter administration time. In
comparison, IV infusion of antibody drugs typically requires 30 minutes to 3 hours and in some
cases may extend up to 7 hours. This efficiency allows SC injections to be administered in
diverse settings, including county-level hospitals, clinics, or even at home, thereby greatly
improving patient comfort and compliance. Additionally, SC injection is more cost-efficient,
with lower direct drug administration costs and reduced indirect expenses, such as travel and
accommodation for site-off medical treatment patients.
The SC drug delivery market is evolving, driven by the demand for patient-friendly
methods and the growth of biologic therapies like antibodies, insulin analogues, and vaccines.
Traditional SC delivery is limited by small injection volumes and slower absorption, reducing
efficacy and requiring multiple doses. Recombinant human hyaluronidase facilitates drug
administration by temporarily degrading hyaluronic acid in the extracellular matrix, thereby
increasing tissue permeability, enabling larger injection volumes, enhancing bioavailability,
and reducing injection frequency. Compared to animal-derived hyaluronidase, recombinant
human hyaluronidase exhibits higher purity, lower immunogenicity, and improved safety and
stability due to its synthetic production through genetic engineering. This innovation benefits
mAbs and fusion proteins, while also improving the delivery of advanced therapies like
antibody-drug conjugates (ADCs). Traditional SC remains effective for small-dose insulin and
standard vaccines, but recombinant human hyaluronidase shows potential for high-dose
formulations or novel formulations. It may further enhance SC delivery for other chemical
drugs and large molecules, by improving permeability and absorption. By overcoming
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traditional limitations, recombinant human hyaluronidase expands SC drug delivery’s scope
and improves therapeutic outcomes, driving rapid and sustained growth in subcutaneous
large-volume infusion administrations across China. The total number of administrations is
projected to surge from 1.6 million in 2026 to 5.1 million in 2027 and further increase to 9.4
million in 2028, followed by robust expansion at a CAGR of 25.8% from 2028 to 2033 and is
expected to reach 29.5 million by 2033, reflecting both the technology’s transformative impact
and its accelerating clinical adoption. The following chart describes the number of
administrations in China from 2026 to 2033:
The Number of SC Infusion Administrations in China, 2026E-2033E
2027E2026E
Period CAGR
2028E-2033E 25.8%
2028E 2029E 2030E 2031E
1.6
9.4
14.5
5.1
22.8
18.5
26.1
29.5
2032E 2033E
Million
Source: Annual Reports, NMP A, CDE, Literature review, Frost & Sullivan analysis
Recombinant Human Hyaluronidase
Overview of Hyaluronidase
The SC tissue primarily consists of fat, interspersed with capillaries and lymphatic
capillaries, and is supported by the extracellular matrix (ECM), which acts as a barrier to drug
delivery due to its proteins and polysaccharides, such as collagen, hyaluronic acid (HA), and
chondroitin sulfate. The ECM limits SC injection volumes to approximately 2 ml, which poses
significant challenges for high-dose biologics delivery, particularly for anti-tumor mAbs,
where traditional solutions such as high-concentration formulations and multiple small-dose
injections present considerable drawbacks, including increased protein aggregation, reduced
efficacy, heightened immunogenicity risks, and substantial patient burden. Hyaluronidase has
emerged as a superior alternative by breaking down HA, improving tissue permeability, and
enabling the diffusion of larger drug volumes. Its enzymatic action facilitates drug absorption,
reduces hematomas and edema, and prevents visible bulging during SC injections.
Hyaluronidase overcomes the ECM barrier to enhance local drug delivery. HA around the
injection site recovers within 24 to 48 hours without causing tissue damage or inflammation.
Hyaluronidase’s substrate specificity ensures it does not interfere with co-administered drugs
or proteins, making it a clinically safe and effective solution for addressing the limitations of
SC drug delivery.
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The evolution of hyaluronidase technology represents a significant breakthrough in drug
delivery systems. Originally discovered in 1929 using animal-derived sources, the field
underwent a transformative advancement in 2005 when the introduction of ENHANZE
®,a
drug delivery platform utilizing recombinant human hyaluronidase PH20 (rHuPH20). This
technology marked a clear departure from traditional animal-derived preparations, which were
limited by safety concerns and variable efficacy. Recombinant human hyaluronidase has seen
high demand and preference of patients due to its ability to enhance patient comfort, improve
drug delivery, reduce risks, decrease infusion time and improve treatment efficiency. For
example, compared to IV routes, SC injections enabled by recombinant human hyaluronidase
carry a lower risk of bloodstream infections, while also eliminating the vein damage that can
occur with repeated IV injection.
IV therapy is common in China, serving as a standard medical procedure across hospitals,
clinics, and community health centers. This treatment modality has become deeply integrated
into the healthcare system, with providers routinely administering IV fluids to address a wide
range of medical conditions. Due to the widespread application of IV therapy in treating
various illnesses, the number of patients receiving such treatments is remarkably high
throughout the country. KJ017 monotherapy, as a product expected to receive approval for
large-volume SC infusion as an alternative to IV infusions, demonstrates considerable market
potential.
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Market Size of the Recombinant Human Hyaluronidase
Recombinant human hyaluronidase is a relatively new drug application field with
promising market potential, primarily centered on three strategic applications: monotherapy,
combined use with antibodies, and prospective combined use with conventional chemicals,
particularly antibiotics. Globally, the market of recombinant human hyaluronidase for all
applications (including monotherapy, combination with antibodies, and combination with
conventional chemicals especially antibiotics) grew from US$135.9 million in 2019 to
US$799.0 million in 2024, with a CAGR of 42.5%, anticipated to reach US$1,056.3 million by
2025 and US$3,574.2 million by 2029 with a forecasted CAGR of 35.6% from 2025 to 2029,
and is further expected to reach US$9,093.7 million by 2033 with a CAGR of 26.3% from 2029
to 2033. The market of recombinant human hyaluronidase in China is estimated to increase
from RMB3,189.5 million in 2029 to RMB6,980.2 million in 2033, representing a CAGR of
21.6%. The following charts describe the market of recombinant human hyaluronidase globally
and in China from 2019 to 2033 and from 2021 to 2033, respectively:
Global Recombinant Human Hyaluronidase Market Size, 2019-2033E
Million USD
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
42.5%
35.6%
26.3%
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
135.9 144.6 308.1 508.1 674.6 799.0 1,056.3 1,413.7
1,915.8
2,609.8
3,574.2
4,868.5
6,062.6
7,500.9
9,093.7
Recombinant Human Hyaluronidase Market in China, 2021-2033E
Million RMB
Period CAGR
2025E-2029E
2029E-2033E
66.3%
21.6%
2021(1) 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
1.2 27.0 76.3 186.0 417.2
803.4
1,312.9
2,267.5
3,189.5
4,001.0
4,973.7
5,936.6
6,980.2
Source: Annual Reports, NMP A, CDE, Literature review, Frost & Sullivan analysis
Note: The first approved drug in this class was approved in 2021.
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Recombinant human hyaluronidase demonstrates significant clinical value both as a
monotherapy and in combination with other drugs. As a standalone treatment, its indications
may include SC infusion of crystalloid solution as an alternative to IV infusion, fluid loss due
to various causes, as well as facilitation of SC fluid administration. Under infusion
circumstances, recombinant human hyaluronidase as a monotherapy enhances tissue
permeability, facilitating rapid absorption and dispersion of infused fluids, making SC infusion
a more efficient and less invasive option. While combination therapies may further expand its
clinical applications, recombinant human hyaluronidase products independently possess
inherent therapeutic value and market value.
The market of recombinant human hyaluronidase monotherapy globally increased from
US$17.0 million in 2019 to US$141.6 million in 2024 with a CAGR of 52.8%, and expected
to reach US$230.2 million by 2025 and US$676.0 million in 2029 with a CAGR of 30.9% from
2025 to 2029 and US$1,097.5 million in 2033, representing CAGR of 12.9% from 2029 to
2033. In China, the market of recombinant human hyaluronidase monotherapy is expected to
emerge in 2026 upon the NDA approval of KJ017 in the first quarter of 2026 with a market size
of RMB124.8 million and rapidly increased to RMB948.6 million in 2029, representing a
CAGR of 96.6% from 2026 to 2029 and is estimated to reach RMB1,506.9 million in 2033 with
a CAGR of 12.3% from 2029 to 2033. The following chart describes the market of recombinant
human hyaluronidase monotherapy globally from 2019 to 2033:
Global Recombinant Human Hyaluronidase Monotherapy Market, 2019-2033E
2019
Million USD
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
52.8%
30.9%
12.9%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
17.0 17.0 23.3 65.6 111.2 141.6
230.2
355.2
456.1
560.4
676.0
786.7
898.9
1,001.1
1,097.5
Source: Annual Reports, NMP A, CDE, Literature review, Frost & Sullivan analysis
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Competitive Landscape of the Recombinant Human Hyaluronidase Market
Recombinant human hyaluronidase as a monotherapy is not currently available in the
China market mainly due to strict regulatory requirements and the lack of approved domestic
or imported products. HYLENEX
®, approved in 2005, is the first FDA approved recombinant
human hyaluronidase and has established an exclusive collaboration model under which
leading pharmaceutical companies secure exclusive rights to specific collaborative targets with
HYLENEX
®. Our Company has established the first-mover advantage in China with our
proprietary KJ017. As of the Latest Practicable Date, KJ017 is the first and only recombinant
human hyaluronidase to reach NDA stage in China, securing a clear first-mover advantage with
its excellent clinical results. The table below provides a summary of globally approved or
clinical-stage recombinant human hyaluronidase products:
Drug Name Company R&D Progress Approval Date/
First Post Date Indication
rHuPH20
(Hylenex)
Halozyme Therapeutic
(NASDAQ: HALO) Approved by FDA 2005 Subcutaneous infusion vehicle
Subcutaneous infusion vehicle
Subcutaneous infusion vehicle
Subcutaneous infusion vehicle
Tergase Alteogen (XKRX: 196170) Approved by MFDS 2024
KJ017 Our Company NDA (NMPA) 2024
BMl2004 BMI Korea Phase l (MFDS) 2023
Subcutaneous injection
Treatment Cost
$242 for 4mL, 150 units/mL
N/A
N/A
N/A
N/AHLB3-002 Huons Korea Phase I (MFDS) 2024
Recombinant human
hyaluronidase Aimeike Biotech Phase I (NMPA) 2025.05 Subcutaneous infusion vehicle N/A
Source: NMP A, FDA, Frost & Sullivan analysis
Note: As of November 22, 2025
Market Opportunities of the Recombinant Human Hyaluronidase
Recombinant human hyaluronidase demonstrates significant potential across various
therapeutic and medical applications due to its ability to locally and temporarily degrade
hyaluronic acid, enhancing tissue permeability and drug dispersion. In SC drug delivery, it
facilitates the conversion of IV therapies, such as monoclonal antibodies, to SC administration,
optimizing dosage and improving patient compliance, thus reducing patients’ treatment time
and overall costs. Recombinant human hyaluronidase demonstrates versatile applications
across various medical and therapeutic fields, and enabling SC delivery of drugs such as
antibiotics and antibody drugs, highlighting its value as a multifunctional tool in diverse
applications.
The current global business model for recombinant human hyaluronidase is characterized
by exclusivity in collaborations, where leading pharmaceutical companies secure exclusive
rights to specific collaborative targets. While this model has successfully facilitated the
commercialization of several blockbuster products, it has also created unmet demand for
non-exclusive SC delivery solutions. Beyond its traditional application areas, recombinant
human hyaluronidase also holds the potential for integration with other novel products, further
expanding its utility in combination therapies.
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Recombinant Human Hyaluronidase Combined with Antibodies
Overview of Recombinant Human Hyaluronidase Combined with Antibodies
Recombinant human hyaluronidase has emerged as an innovative technology for enabling
SC drug delivery in combination with antibodies. While recombinant human hyaluronidase
itself is not therapeutically active, its pharmacodynamics advantage lies in its ability to
enhance the absorption of co-administered drugs. By temporarily degrading hyaluronic acid in
the extracellular matrix, recombinant human hyaluronidase improves tissue permeability,
increases bioavailability, accelerates drug absorption. Clinical studies have further
demonstrated that co-administration of recombinant human hyaluronidase reduces intra-
individual and inter-individual pharmacokinetics variability, ensuring more consistent
therapeutic outcomes. Recombinant human hyaluronidase combined with antibodies thus offers
multiple advantages over traditional IV administration, including comparable efficacy, and
superior safety and tolerability profile.
Market Opportunities and Market Size of Recombinant Human Hyaluronidase Combined
with Antibodies
The market of recombinant human hyaluronidase combined with antibodies in China
shows substantial growth potential, driven by unmet clinical needs and demand for innovative
drugs. The global recombinant human hyaluronidase market operates through exclusive
partnerships, creating a notable gap in availability for non-exclusive SC delivery solutions,
particularly in established therapeutic pathways. In the HER2 antibody market, challenges
including high costs, cardiotoxicity, and inconvenient intravenous administration limit
accessibility and compliance. Recombinant human hyaluronidase SC delivery technology
addresses these issues by optimizing drug utilization efficiency, reducing systemic toxicity, and
improving the convenience of administration. Furthermore, it facilitates the development of
innovative combination therapies, including mAbs, bispecific antibodies, immunotherapies
such as T-cell engagers, and ADCs, offering the potential to enhance therapeutic outcomes
while addressing current limitations in the market. The potential to mitigate adverse effects
makes it valuable for enhancing safety in HER2 therapies, particularly in first-line treatment
settings.
The antibody market in China has demonstrated consistent growth, with market size
reaching RMB640.1 billion in 2033 with the rapid adoption of SC formulations exemplified by
daratumumab SC, which was launched in 2020 and the market share of daratumumab SC
formulation in the US increased from approximately 76% in 2021 to approximately 92% in
2023 of annual sales. In recent years, the market of recombinant human hyaluronidase
combined with antibodies market has been pictured with promising future. The global market
size of recombinant human hyaluronidase combined with antibodies grew from US$119.0
million in 2019 to US$657.4 million in 2024 at a CAGR of 40.8%, it is expected to reach
US$826.2 million in 2025 and US$2,831.1 million in 2029 with a CAGR of 36.1% from 2025
to 2029, and further increase to US$7,677.6 million in 2033, representing a CAGR of 28.3%.
The market of recombinant human hyaluronidase combined with antibodies in China emerged
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in 2021 with a market size of RMB1.2 million and rapidly increased to RMB186.0 million in
2024, representing a CAGR of 437.2% from 2021 to 2024 and is expected to increase from
RMB417.2 million by 2025 and RMB1,766.3 million in 2029 representing a CAGR of 43.4%
from 2025 to 2029 and further increase to RMB3,218.6 million by 2033, indicating a CAGR
of 16.2% from 2029 to 2033. The following chart describes the market of recombinant human
hyaluronidase combined with antibodies globally for the indicated periods:
Global Recombinant Human Hyaluronidase Combined with
Antibodies Market, 2019-2033E
Million USD
Period CAGR
2025E-2029E
2029E-2033E
36.1%
2019-2024 40.8%
28.3%
119.0 127.6 442.6284.9 563.3 657.4 826.2 1,058.5
1,459.7
2,016.5
2,831.1
3,962.4
4,992.4
6,260.8
7,677.6
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Source: Annual Reports, NMP A, CDE, Literature review, Frost & Sullivan analysis
Competitive Landscape of Recombinant Human Hyaluronidase Combined with Antibodies
Market
As of the Latest Practicable Date, ENHANZE ® remains the only FDA-approved platform
enabling SC administration of biopharmaceuticals, including combination antibody therapies,
making it a leader in this innovative drug delivery approach, according to Frost & Sullivan.
Our Company is actively collaborating with other biopharmaceutical enterprises to advance the
development of SC-administered antibody drugs utilizing recombinant human hyaluronidase-
based technologies. As the first approved platform in this domain, ENHANZE
® has forged
early partnerships with prominent pharmaceutical companies to develop SC drug delivery
products based on rHuPH20 and many of these collaborative products have already achieved
market approval, contributing substantial revenue through royalties. In December 2024, the
FDA approved Opdivo Qvantig
TM (nivolumab with hyaluronidase) SC injection by Bristol
Myers Squibb for almost all (9/11) approved Opdivo indications. This approval validates that
bridging study could potentially support conversion from intravenous to SC administration
across all approved indications. The streamlined regulatory pathway significantly de-risks
development, accelerates timelines, and unlocks substantial commercial opportunities for SC
administration conversion of established IV administration therapies.
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Although a late entrant, Alteogen has established extensive collaborations with leading
pharmaceutical companies to develop SC antibody drugs based on rHuPH20 variant in recent
years. Notable partnerships include working with Merck Sharp & Dohme on the SC
formulation of KEYTRUDA
®, the top-selling drug globally in 2023, and with Daiichi Sankyo
on the SC formulation of ENHERTU ®, the leading global ADC product by sales in 2023.
The competitive landscape of approved biologics utilizing SC drug delivery systems in
China has seen significant advancements, particularly with the integration of recombinant
human hyaluronidase technology. The following diagram illustrates the details of the approved
biologics based on SC drug delivery system with the integration of recombinant human
hyaluronidase technology:
Generic Name Approved Indications
SC Drug Delivery
Daratumumab
Subcutaneous
Injection
2021/09/30 457,600 203,394
Roche
(OTCQX:
RHHBY)
2022/09/30 76,800 77,000
Roche
(OTCQX:
RHHBY)
2023/12/26 HER2+ Breast Cancer 235,314
Roche
(OTCQX:
RHHBY)
2024/04/02 5min − 123,900
Efgartigimod PH20
SC
Argenx
(NASDAQ:
ARGX)
2024/07/19 1h
Company Approval
Date Subcutaneous
Drug Delivery
 System
SC Single
Dose
Duration
IV Single
Dose
Duration
Treatment
Cost of SC
(RMB/Year)
Treatment
Cost of IV
(RMB/Year)
Trastuzumab+
hyaluronidase
Pertuzumab
Trastuzumab and
Hyaluronidase-zzxf
Rituximab+
hyaluronidase
Johnson
&
Johnson
(NYSE: JNJ)
AL amyloidosis,
multiple myeloma
HER2-positive breast
cancer
Diffuse large B-cell
lymphoma, follicular
lymphoma
Chronic inflammatory
demyelinating
polyneuropathy,
myasthenia gravis
PH20
(Enhanze®)
PH20
(Enhanze®)
PH20
(Enhanze®)
PH20
(Enhanze®)
PH20
(Enhanze®)
3-5min
2-5min
5-8min
0.5-1.5min
3-7h
30-90min
30-90min
2-3h
83,088/
treatment
cycle2
No IV
dosage form
82,400/
treatment
cycle2
Source: NMP A, Frost & Sullivan analysis
Notes:
1. As of November 22, 2025
2. Clinical assessment of whether a subsequent treatment cycle is needed
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Recombinant Human Hyaluronidase Combined with Antibiotics for SC Delivery
Overview of Recombinant Human Hyaluronidase Combined with Antibiotics
/H9252-lactam antibiotics, exemplified by ceftriaxone, remain fundamental in antimicrobial
therapy due to their broad-spectrum bactericidal activity and cell wall synthesis inhibition
mechanism. While their time-dependent efficacy traditionally necessitates prolonged IV
infusion to maintain therapeutic concentrations above the minimum inhibitory concentration,
this approach introduces challenges including extended administration times and reduced
patient compliance. The synergistic application of recombinant human hyaluronidase and SC
delivery system represents a significant advancement in antibiotics drug, particularly for
/H9252-lactam antibiotics. This innovative delivery method addresses the limitations of conventional
IV administration while maintaining therapeutic efficacy against both Gram-positive and
Gram-negative pathogens, representing a significant advancement in antibiotic delivery that
optimizes both pharmacokinetic properties and patient experience.
According to Frost & Sullivan, clinical studies have shown that SC administration of
antibiotics such as ceftriaxone achieves similar AUC, drug half-life (t1/2), and lower Cmax
compared to IV administration, thereby improving clinical safety while maintaining the same
efficacy. However, SC administration of ceftriaxone necessitates higher concentrations due to
the limitations of the administered volume, and high concentrations of ceftriaxone can lead to
toxic reactions at the injection site and even tissue damage. The ability of hyaluronidase to
facilitate subcutaneous absorption of large volumes of drug makes it possible to administer
large volumes of ceftriaxone at low concentrations via subcutaneous administration. Through
enhanced drug absorption, recombinant human hyaluronidase not only promotes the
antibiotic’s entry into the human body through the subcutaneous route but also enables rapid
drug entry into the bloodstream, and improving patient compliance.
Market Opportunities and Market Size of Recombinant Human Hyaluronidase Combined
with Antibiotics
As of the Latest Practicable Date, there is no recombinant human hyaluronidase-based
combination antibiotic drug was approved or entered clinical trials globally. The advantages of
SC administration, such as its ability to be performed outside hospital settings, improved
adherence to treatment regimens, and alignment with the growing focus on community-based
care models, are particularly relevant given the large patient population requiring antibiotic
interventions, the increasing emphasis on patient-centric therapeutic approaches, and the rising
use of recombinant human hyaluronidase products. These factors collectively contribute to a
clear trend toward broader adoption of SC antibiotic administration supported by recombinant
human hyaluronidase, which offers both clinical and logistical benefits. The expansion of
traditional antibiotics market further creates opportunities for novel combination approaches
with recombinant human hyaluronidase globally.
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The antibiotic drugs market in China experienced a contraction from 2019 to 2033 due to
the impact of centralized procurement policies. In 2019, the market size was RMB166.2 billion
and declined to RMB122.9 billion in 2024 and is anticipated to be RMB109.2 billion in 2029
and RMB104.7 billion by 2033. Within the market of recombinant human hyaluronidase
combined with antibiotics, the market of recombinant human hyaluronidase in China is
projected to emerge as a significant market segment, with growth forecasted to grow from
RMB474.5 million in 2029 to RMB2,254.7 million in 2033 with a CAGR of 47.6%.
Market Drivers and Future Trends of the SC Drug Delivery System Market
According to Frost & Sullivan, the primary growth drivers and market trends for SC drug
delivery system market in China include:
 Improving Patient Compliance. SC formulations transformed from IV
administration significantly reduce treatment time from hours to minutes,
particularly benefiting cancer and chronic disease patients. The convenience of
self-administration at home or outpatient settings enhances patient comfort and
treatment adherence, resulting in improved quality of life and healthcare outcomes,
thus driving the increasing demand.
 Broad Applicability Across Clinical Settings. KJ017 demonstrates significant
potential as a single drug across various clinical applications, independent of SC
formulations of other use in combination with biologic products. With its unique
mechanism of action that enhances fluid absorption and distribution, KJ017
effectively addresses critical medical needs, such as managing body fluid loss due
to various causes and facilitating subcutaneous fluid administration in situations
where intravenous access is challenging or impractical. These features make KJ017
a valuable therapeutic option in emergency care, dehydration treatment, and
enhanced SC fluid delivery.
 Broadening Applications of Drugs. The introduction of recombinant human
hyaluronidase has expanded SC delivery beyond traditional small molecules to
include antibodies, proteins, and biologics. While currently focused on antibody and
protein drugs, the technology is expanding into ADCs and exploring new areas like
antibiotics.
 Continuous Innovation of Technology Platforms. Evolution from animal-derived to
recombinant human hyaluronidase through genetic engineering has improved
product quality while reducing costs. Emerging technologies like synthetic biology
are expected to optimize manufacturing processes, ensuring sustainable and
cost-effective large-scale production.
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 Deepening Cooperation with Pharmaceutical Companies. Rising global demand has
fostered partnerships between biopharmaceutical companies and hyaluronidase
developers. Leading players in the industry are dedicated to exploit regional
partnerships for their candidates, accelerating innovation in biologics and
biosimilars development.
ANALYSIS OF ANTIBODY-MEDIATED AUTOIMMUNE DISEASES MARKET
Overview of Antibody-mediated Autoimmune Diseases
Antibody-mediated autoimmune diseases constitute a heterogeneous group of disorders
caused by the aberrant hyperactivity of B cells, which produce antibodies targeting the body’s
own organs. These diseases exhibit diverse clinical manifestations and may involve multiple
organ systems. In antibody-mediated autoimmune diseases, pathogenic antibodies attack or
damage self-proteins, cells, and tissues, often leading to serious consequences. The scope of
antibody-driven autoimmune diseases spans dermatological, rheumatological, neurological,
hematological, and renal disorders. It is estimated that 2.5% of the global population,
approximately 195 million people, suffer from some form of autoantibody-driven disease,
many of which are classified as rare diseases. Current mainstay therapeutic approaches for
these conditions include glucocorticoids, immunosuppressants, intravenous immunoglobulin,
plasmapheresis, immunoadsorption, and targeted therapies.
The acute exacerbation of autoimmune diseases varies in presentation depending on the
specific disorder but is commonly characterized by a rapid worsening of clinical symptoms in
the target organs over a short period. These acute episodes often result in severe clinical
outcomes. For instance, acute attacks in neuromyelitis optica spectrum disorder can lead to
blindness, while acute exacerbations of Guillain-Barré syndrome may cause respiratory muscle
paralysis, potentially resulting in death. Similarly, during acute phases of other autoimmune
diseases such as myasthenia gravis, hemolytic disease of the fetus and newborn, systemic lupus
erythematosus, pemphigus, and immune idiopathic thrombocytopenia, the rapid clearance of
autoantibodies and prompt control of inflammation are critical for improving patient outcomes.
Following the remarkable success of therapeutic macromolecules, particularly antibody-
based drugs, in the field of oncology, the application of macromolecular therapies to treat
autoantibody-driven autoimmune diseases represents a promising new frontier for significantly
improving patient health. Although plasmapheresis and targeted therapies are already widely
used in this area, their slow onset of action and inability to rapidly remove pathogenic IgG
antibodies from the bloodstream render them suboptimal for the treatment of patients with
acute life-threatening conditions patients. There is an urgent need for new therapeutic
strategies. One particularly exciting advancement is the development of IgG-degrading
enzymes, which can precisely cleave pathogenic IgG antibodies, offering rapid and targeted
treatment with minimal side effects. This approach addresses existing limitations in the
management of severe IgG-mediated autoimmune diseases. The prevalence of IgG-mediated
autoimmune diseases in China rose gradually from 72.3 million in 2019 to 74.0 million in 2024
at a CAGR of 0.5%. Growth is expected to decelerate to a 0.2% CAGR between 2025 and 2029,
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reaching 74.9 million and further expanded to 75.4 million patients with a 0.1% CAGR from
2029 to 2033. The following chart describes the prevalence of IgG-mediated autoimmune
diseases in China from 2019 to 2033:
Prevalence of IgG-Mediated Autoimmune Diseases in China, 2019-2033E
2019
Million
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
0.5%
0.2%
0.1%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
72.3 72.7 73.1 73.5 73.7 74.0 74.2 74.4 74.6 74.8 74.9 75.1 75.2 75.3 75.4
Source: Annual Reports, NMP A, CDE, Literature review, Frost & Sullivan analysis
IgG-Degrading Enzymes
Overview of IgG-Degrading Enzymes
IgG is the most abundant class of antibodies in the bloodstream and extracellular fluid,
comprising approximately 75% of serum immunoglobulin and playing a pivotal role in the
immune response by recognizing and neutralizing pathogens such as bacteria, viruses, and
toxins. IgG-degrading enzymes are specialized proteolytic enzymes that rapidly and precisely
cleave IgG antibodies, which typically target and break down IgG into F(ab’)
2 and Fc
fragments at specific site, thereby targeting the root cause of pathogenic IgG activity. By
cleaving the Fc region of IgG, these enzymes neutralize pathogenic antibodies and rapidly
control excessive immune activation, reducing the risk of inflammatory complications such as
cytokine storms, organ damage, and chronic inflammation. This modulation of the immune
response enables prompt recovery and makes IgG-degrading enzymes a promising therapeutic
strategy for managing acute flares in autoimmune diseases, antibody-mediated rejection in
transplantation, and other hyperinflammatory conditions. IgG-degrading enzymes are also
effective in reducing donor-specific antibodies (DSA) to prevent antibody-mediated rejection
(AMR) in kidney and heart transplantation.
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IgG-degrading enzymes have been explored for its potential in treating a range of rare and
acute autoimmune diseases including anti-glomerular basement membrane (anti-GBM),
Guillain-Barré Syndrome (GBS) and other autoimmune diseases, where they mitigate
antibody-mediated tissue damage and disease severity by degrading pathogenic IgG antibodies.
The global IgG-degrading enzyme market is poised for remarkable growth, the market size
increased from US$1.7 million in 2021 to US$13.2 million in 2024 and is projected to reach
a value of US$19.1 million in 2025 and US$3,106.0 million in 2029 and further reach to
US$16,618.0 million by 2033 with a forecasted CAGR of 257.3% from 2025 to 2029 and a
CAGR of 52.1% from 2029 to 2033. This accelerated growth is driven by a low historical base,
reflecting the previously narrow set of approved options globally, which mathematically
elevates near term CAGR, by the imminent broadening of clinical use beyond pretransplant
desensitization as products such as KJ103 expand into all kidney transplant patients and
numerous acute autoimmune indications, and by improved accessibility and pricing versus
legacy agents. Meanwhile, the IgG-degrading enzyme market in China is expected to gain
momentum slightly later, is projected to grow at a robust CAGR of 47.8% from 2029 to 2033,
expanding from RMB1,338.9 million in 2029 to RMB6,386.1 million in 2033. In China
specifically, historical uptake was constrained by high prices and a lack of local approvals.
With the anticipated launch of KJ103, which offers better affordability and availability, rapid
volume ramp-up and steady penetration gains are expected to underpin the forecast growth.
The following table describes the market of IgG-degrading enzymes globally for the indicated
periods:
Global IgG-Degrading Enzyme Market Size, 2021-2033E
Million USD
Period CAGR
2025E-2029E
2029E-2033E
257.3%
52.1%
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
1.7 8.6 9.8 13.2 19.1 137.6 536.7
1,434.2
3,106.0
6,298.0
10,412.9
13,839.8
16,618.0
Source: Frost & Sullivan analysis
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Global Competitive Landscape and Market Size of IgG-Degrading Enzymes
As of the Latest Practicable Date, around the globe, there were four IgG-degrading
enzymes candidates under clinical development. These include KJ103 and Idefirix ®, both of
which have reached Phase III clinical trials, with KJ103 targeting desensitization before kidney
transplantation and Idefirix
® targeting Anti-GBM disease. Additionally, HNSA-5487 and
S-1117 are currently in the Phase I stage. Notably, Idefirix ® has been approved for
desensitization before kidney transplantation and is marketed in Europe and remain as the only
marketed product globally as of the Latest Practicable Date. Our KJ103 is under Phase III for
kidney transplantation rejection, Phase II for anti-GBM disease and obtained IND approval for
GBS from the NMPA in April 2025, with no other IgG-degrading enzyme product in clinical
stage or approved in China. Notably, KJ103 is the first low immunogenicity IgG-degrading
enzyme capable of lowering pre-existing antibodies to enter clinical stage globally, allowing
lower baseline prevalence and titers of pre-existing anti-drug antibodies (ADAs) in human
populations with rapid post-administration ADA recovery to baseline levels compared to
conventional IgG-degrading enzymes. Low immunogenicity profile not only minimizes
hypersensitivity risks and infusion-related reactions but also extends therapeutic durability
through prolonged enzymatic activity maintenance, thereby enhancing treatment stability and
long-term patient compliance, further expands clinical applicability to immunocompromised
populations and immunogenicity-sensitive patient subsets, broadening therapeutic accessibility
while improving global regulatory acceptance prospects. Notably, in emerging gene therapy
applications, low immunogenicity profile demonstrates unique capacity to reduce Adeno-
associated Virus-neutralizing antibody levels, potentially enabling treatment for patients
previously excluded due to high antibody titers.
The global estimated prevalence of chronic kidney disease is 13.4% (11.7-15.1%), and
patients with end-stage kidney disease needing renal replacement therapy is estimated between
4.9 and 7.1 million. Kidney transplantation is widely recognized as the preferred treatment
over dialysis, offering improved survival rates, better quality of life, and notable long-term cost
savings. However, a significant challenge in kidney transplantation is the high prevalence of
anti-HLA antibodies among patients on the transplant waitlist and approximately 40% of these
patients are sensitized to HLA antigens, which greatly complicates donor matching and
increases the risk of transplant rejection. KJ103, as an IgG-degrading enzyme, is specifically
designed to address the needs of this sensitized population by effectively reducing anti-HLA
antibody levels and enabling successful transplantation in patients who would otherwise face
significant immunological barriers. Clinical studies with similar agents, such as Idefirix
®, have
demonstrated that IgG-degrading enzyme therapy can provide meaningful benefit for highly
sensitized patients who have failed conventional desensitization regimens. The use of these
therapies is determined by clinical need rather than transplant waiting list position, with dosing
tailored to individual immunological profiles. Therefore, the escalating prevalence of
sensitized patients directly correlates with greater demand for innovative solutions like KJ103,
as they offer a viable path to transplantation for a substantial and underserved segment of the
patient population.
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Typically, the enzyme is administered to patients scheduled for kidney transplantation
within 24 hours prior to the surgery. If the initial infusion does not achieve the desired
desensitization effect and is deemed safe by the treating physician, a second infusion may be
considered within 24 hours after the first dose, but still prior to transplantation. This targeted
approach ensures that IgG-degrading enzymes are used efficiently and appropriately, based on
the specific immunological needs and timing of matched transplantation for each patient
sensitized to HLA antigens, rather than as a routine or indiscriminate pre-emptive treatment
across the entire waitlist population.
The following diagram illustrates the details of marketed product of IgG-degrading
enzymes globally:
Drug Name Generic name Company Target Indications Approved
Region Approved Date
Idefirix® Imlifidase
Hansa Biopharma
(LSE: 0RC7)
(XSTO: HNSA)
IgG Desensitization treatment of highly
sensitized adult kidney transplant patients EMA 2020/08/25
Treatment Cost
£135,000
per 11 mg vial
Source: EMA, National Institute for Health and Care Excellence, Frost & Sullivan analysis
Note: As of November 22, 2025
The following diagram illustrates the details of IgG-degrading enzymes pipeline globally:
First Posted
Date
Clinical
Regulatory
Authorities
AreaStageIndicationsTargetCompanyDrug Name
2025/07/30NMPAChinaIIIDesensitization treatment of highly sensitized
adult kidney transplant patients
IgGOur CompanyKJ103 2024/09/23NMPAChinaIIAnti Glomerular Basement Membrane (GBM)
2022/05/19MedsafeNew ZealandIAcute severe autoimmune diseases mediated by
pathogenic lgG autoantibodies
2023/01/11EMA/FDA/
MHRAEU/US/UKIIIAnti Glomerular Basement Membrane (GBM)
IgGHansa BiopharmaIdefirix®
2018/12/19EMA/MHRAEU/UKIIGuillain-Barré syndrome (GBS)
2024/07/24EMAEUIICrigler–Najjar syndrome
2023/01/31EMAEUIMuscular dystrophy
2023/04/20EMAEUIAutoimmune diseasesIgGHansa BiopharmaHNSA-5487
2025/02/14TGAAustraliaI
Chronic inflammatory demyelinating
polyneuropathy, Myasthenia gravis, Immune
thrombocytopenia
IgGSeismic TherapeuticS-1117
2023/09/28EMAEUIAdeno-associated virus infectionIgGVivet TherapeuticsVTX-PID
Source: Clinicaltrials.gov, EMA, FDA, MHRA, TGA, Frost & Sullivan Analysis
Note: 1. As of November 22, 2025; 2. FDA: Food and Drug Administration (US); 3. EMA: European Medicines
Agency (EU); 4. MHRA: Medicines and Healthcare products Regulatory Agency (UK); 5. TGA: Therapeutic
Goods Administration (Australia); 5. NMP A: National Medical Products Administration (China); 6.
Medsafe: New Zealand Medicines and Medical Devices Safety Authority
Area = Clinical trial locations per official records. Each area maps to its clinical regulatory authorities
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Selected Indications targeted by IgG-Degrading Enzymes
Organ Transplantation Rejection
Allograft
As success of organ transplantation improves and indications expand, organ
transplantation has become a widely accepted treatment. The number of organ transplantation
operations globally operations rose from 139,024 in 2017 to 172,397 in 2023, with the number
of operations in China increasing from 16,687 to 23,905.0 in the same period. Specifically, the
number of kidney transplantation operations globally increased from 100,097 in 2019 to
111,135 in 2023, and expected to reach 119,997 in 2024, 127,651 in 2025, 151,565 in 2029 and
169,782 in 2033 with the number of operations in China rising from 12,124 in 2019, 14,968
in 2023 and expected to reach 16,562 in 2024, 17,796 in 2025, 21,735 in 2029 and 24,809 in
2033. As transplant efficacy improves and indications expand, kidney transplantation is
increasingly accepted by patients with end-stage kidney disease as a standard treatment option.
The following chart describes the historical number of kidney transplantation operations in
China and globally from 2019 to 2033:
Kidney Transplantation Operations in China and Globally, 2019-2033E
Unit
Period CAGR
2019-2024E
2025E-2029E
2029E-2033E
6.4%
5.1%
3.4%
China Global
3.7%
4.4%
2.9%
12,124 11,037 12,039 12,712 14,968 16,562 17,796 18,857 19,870 20,829 21,735 22,585 23,380 24,121 24,809
87,973
69,889 80,493 89,378 96,167 103,435 109,855 115,308 120,458 125,299 129,830 134,055 137,980 141,615 144,973
100,097
80,926
92,532
102,090
111,135
119,997
127,651 134,166 140,328 146,129 151,565 156,640 161,360 165,736 169,782
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
China Other
Source: Global Observatory on Donation and Transplantation, 2023 National Report on the Service, Quality and
Safety in Medical Care System, Frost & Sullivan Analysis
Organ transplant rejection occurs when the recipient’s immune system recognizes the
transplanted organ as foreign and mounts an immune response against it. This immune reaction
is a significant complication in organ transplantation, as the body attempts to eliminate what
it perceives as a threat. In kidney transplantation, the treatment paradigm follows staged
immunosuppressive protocols based on immune risk stratification. During the maintenance
phase, triple therapy combining calcineurin inhibitors with mycophenolic acid (MPA) or
mTOR inhibitors (mTORi) plus glucocorticoids is recommended. For perioperative induction,
interleukin-2 receptor alpha antagonists or lymphocyte-depleting antibodies are prioritized,
while rA TG and p-A TG serve alternative roles. Specific patient subsets including highly
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sensitized recipients require targeted interventions: plasma exchange or immunoadsorption,
high-dose intravenous immunoglobulin (IVIG), or B-cell depletion regimens with rituximab.
Alternative maintenance options include mizoribine substitution for MPA or mTORi-based
regimens to minimize nephrotoxicity. However, conventional approaches exhibit inherent
limitations: nonspecific immunosuppression increases infection or malignancy risks, plasma
exchange requires repetitive invasive procedures with transient efficacy, and IVIG or rituximab
primarily modulates antibody production rather than eliminating existing pathogenic IgG.
In contrast, IgG-degrading enzymes directly neutralize circulating DSAs and pathogenic
autoantibodies within hours through enzymatic cleavage, achieving rapid immunomodulation
without compromising broader immune functions which is a critical advantage in acute
rejection episodes or hyperinflammatory crises where timely intervention determines clinical
outcomes. The following diagrams discuss the treatment paradigm of kidney transplantation
rejection in China:
Kidney Transplantation Rejection Treatment Paradigm in China
There are a variety of combined treatment options for immunosuppressive therapy during the
postoperative maintenance period, which are classified according to the strength of
recommendation and level of evidence as follows:
• CNI (Tac/CsA) + MPA + glucocorticoids (A, 1a)
• CNI (Tac/CsA) + MZR + glucocorticoids, CNI (Tac/CsA) + mTORi + glucocorticoids (A, 1b)
Immunosuppressive induction therapy refers to the short-term use of monoclonal or polyclonal
antibody-based immunosuppressive drugs in kidney transplant recipients during the perioperative
period. Based on the immune risk stratification of kidney transplant recipients, the following drugs
are recommended for the prevention of acute rejection:
• Interleukin-2 receptor alpha (IL-2RA) or lymphocyte-depleting antibodies (ATG, ALG) (A, 1a)
• Rabbit anti-humanthymocyte globulin (rATG) (B, 2c)
• Anti-human T lymphocyte porcine immunoglobulin (p-ATG) (D, 5)
For highly sensitized kidney transplant recipients:
• Plasma exchange/Immunoadsorption
• High-dose intravenous immunoglobulin (IVIG)
• B cell depletion regimen (rituximab or combination regimen)
Maintenance Period of Kidney Transplantation
Preoperative Prevention
Perioperative Period of Kidney Transplantation
Strength of
Recommendations
Evidence
Quality
Description
A 1a Systematic review of
RCTs
1b RCTs with small
confidence intervals
Any evidence of “all or
no effect” in RCTs
Systematic review of
cohort studies
2b Single cohort studies
2c Patient outcomes-based
studies
3a Systematic review of
case-control studies
3b Single case-control
studies
C 4 Case series reports,
low-quality cohort studies,
and low-quality
case-control studies
D 5 Expert opinion
1c
2aB
Abbreviations: Interleukin-2 receptor alpha = IL-2RA; Anti-thymocyte globulin = A TG; Anti-human T lymphocyte
immunoglobulin = ALG; Calcineurin inhibitor = CNI; Cyclosporin A = CsA; Tacrolimus = Tac;
Mycophenolic acid = MPA; Mizoribine = MZR; Mammalian target of rapamycin inhibitors = mTORi
Source: Technical Specification for the Diagnosis and Treatment on Rejection of Renal Transplantation
(2019 edition) (
ഥ୅ಔર͆ˀᏐᑗґൢᐕҦஔ஝ᇍ(2019و)), Chinese Clinical Practice Guidelines for
Immunosuppressive Therapy in Kidney Transplant Recipients (2023 edition) (یܸ
2023و)), Frost & Sullivan analysis
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As of the Latest Practicable Date, only one IgG-degrading enzyme product targeting
kidney transplantation rejection is available globally, Idefirix ®, was marketed in Europe.
KJ103 is currently in Phase III for desensitization before kidney transplantation, being the most
clinical advanced low immunogenicity product globally with no other IgG-degrading enzyme
product in clinical stage or approved in China or globally.
The market of IgG-degrading enzyme targeting kidney transplantation globally reached US$1.7
million in 2021 and US$13.2 million in 2024 driven by the fact that the first approved product in this
market only began recording sales in 2021, and is estimated to reach US$19.1 million in 2025,
US$156.0 million in 2029 and US$708.6 million in 2033, with a projected CAGR of 69.1% from
2025 to 2033 and a CAGR of 46.0% from 2029 to 2033. As of the Latest Practicable Date, there is
no IgG-degrading enzyme products targeting kidney transplantation available in China. However, the
market of IgG-degrading enzyme targeting kidney transplantation in China is projected to show
robust growth with no approved drug in 2025, the market size of RMB408.3 million in 2029
and RMB1,113.6 million in 2033, representing CAGR of 28.5% from 2029 to 2033. The
following chart describes the market of IgG-degrading enzyme targeting kidney transplantation
globally for the indicated periods:
Global IgG-Degrading Enzyme Targets Kidney Transplantation Market Size,
2021-2033E
Million US$
Period CAGR
2025E-2029E
2029E-2033E
69.1%
46.0%
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
1.7 8.6 9.8 13.2 19.1 29.6 51.7
90.1
156.0
252.8
383.1
541.1
708.6
Source: Frost & Sullivan analysis
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Xenotransplantation
Xenotransplantation, the transplantation of organs, tissues, or cells from non-human
species into humans, is a groundbreaking approach aimed at addressing the severe shortage of
human organs and offering timely solutions for patients with end-stage organ failure or other
critical conditions. Pigs are the primary donor species due to their anatomical and
physiological similarities to humans, rapid breeding, and the feasibility of genetic
modifications to enhance compatibility. Applications include solid organ transplants (e.g.,
hearts, kidneys, livers), tissue use (e.g., pig skin for burn victims), and cellular therapies (e.g.,
porcine neural cells for neurodegenerative diseases).
However, xenotransplantation faces significant challenges, with immune rejection being
one of the main issues. The human immune system often attacks animal-derived transplants,
resulting in hyperacute, acute, or chronic rejection. While immunosuppressive drugs provide
some relief, they carry risks of infections and have limited long-term efficacy. Advances in
gene-editing technologies like CRISPR-Cas9 have reduced immune rejection, but further
innovations are needed to improve xenograft longevity and eliminate immunological
mismatches. Regulatory and societal barriers, including the lack of global guidelines and
public misconceptions, also hinder progress. However, recent developments, such as successful
pig kidney transplants lasting over 60 days and genetically modified pig heart transplants,
demonstrated tangible progress toward resolving compatibility challenges.
Xenotransplantation holds promise in addressing the critical global organ shortage, and the
ability to genetically modify donor animals could potentially create organs with enhanced
functionality and lower immunogenicity, leading to better transplant outcomes than traditional
allografts.
IgG-mediated acute autoimmune diseases
IgG-mediated autoimmune diseases arise when the immune system mistakenly attacks the
body’s tissues through IgG autoantibodies, triggering mechanisms such as complement
activation, Fc receptor signaling, and immune complex deposition. These processes vary
depending on the disease and environmental factors. Research on the four IgG subclasses
remains limited, leaving gaps in understanding their unique roles in disease. Current therapies
rely on broad immunosuppression, increasing infection risks and failing to specifically target
pathogenic IgG. Diagnostic tools also lack specificity, as IgG antibodies can appear in healthy
individuals, leading to false positives. Emerging therapies, such as FcRn antagonists, such as
efgartigimod, and bispecific antibodies, hold promise for targeting pathogenic IgG more
effectively while minimizing side effects. Notably, IgG-degrading enzymes offer a novel
approach by cleaving IgG to reduce pathogenic antibodies, shown promising potential in
treating acute autoimmune disorders like Myasthenia Gravis, GBS, anti-GBM disease and
antibody-mediated rejection in transplantation, providing a targeted therapeutic option for
IgG-driven diseases.
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Anti-GBM Diseases
Anti-GBM disease is an organ-specific autoimmune disorder characterized by the
presence of autoantibodies targeting the glomerular and alveolar basement membranes, leading
to rapidly progressive glomerulonephritis and severe alveolar hemorrhage. The global
incidence of anti-GBM disease increased from 8.8 thousand in 2019 to 9.8 thousand in 2024,
and is expected to reach 10.0 thousand in 2025, 11.0 thousand in 2029 and 12.1 thousand in
2033. Specifically, the incidence of anti-GBM disease in China increased from 1.2 thousand in
2019 to 1.3 thousand in 2024, and is expected to reach 1.3 thousand in 2025, 1.3 thousand in
2029 and 1.4 thousand in 2033. The following chart describe the incidence of anti-GBM in
China and globally from 2019 to 2033:
Incidence of anti-GBM in China and Globally, 2019-2033E
1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.4 1.4 1.4 1.4
7.6 7.8 8.0 8.1 8.3 8.6 8.7 9.0 9.2 9.4 9.7 9.9 10.2 10.4 10.7
8.8 9.0 9.2 9.4 9.6 9.8 10.0 10.3 10.5 10.8 11.0 11.3 11.6 11.8 12.1
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
China Other
CA GRPeriod GlobalChina
2.2%1.1%2019-2024
2.4%1.0%2025E-2029E
2.5%1.1%2029E-2033EThousand
Source: Frost & Sullivan Analysis
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Currently, the primary treatment applied for anti-GBM diseases prioritizes rapid
pathogenic autoantibody removal through plasma exchange combined with glucocorticoids and
cytotoxic agents to suppress ongoing antibody production and tissue inflammation. Kidney
transplantation is a viable option for patients with end-stage renal disease secondary to
anti-GBM disease. The IgG-degrading enzyme serves as a novel therapeutic proteinase that
cleaves human IgG preventing subsequent complement and neutrophil-induced injury.
Compared to conventional therapies, IgG-degrading enzymes demonstrate remarkable efficacy
and efficiency, rapidly decreasing anti-GBM antibody titers to undetectable or non-toxic levels
within hours. By rapidly degrading pre-existing pathogenic antibodies, IgG-degrading enzyme
effectively complements immunosuppressive therapy, which primarily inhibits the production
of new antibodies but does not directly address the pathological antibodies already circulating
in the body. The following diagram discuss the treatment paradigm of anti-GBM diseases:
Anti-GBM Disease Treatment Paradigm
Illustration
Plasmapheresis
Immunosuppressive
Therapy
• Plasmapheresis is generally inst ituted after the diagnosis of anti-GBM disease is established
either by kidney biopsy or by detection of anti-GBM antibodies.
• 4-liter plasma exchanges daily or every other day is usually performed.
Plasmapheresis is continued for 2-3 weeks or until the patient's clinical course has improved
and serum anti-GBM antibodies are not detected.
• Immunosuppressive therapy is required to inhibit antibody production and rebound hyper
synthesis, which may occur following discontinuation of plasma exchange.
• Cyclophosphamide, Corticosteroids, Azathi oprine and Rituximab (a chimeric monoclonal
antibody) can be applied to the immunosuppressive treatment of anti-GBM disease.
Treatment
Kidney
Transplantation
• Kidney transplantation has been used for end- stage renal disease secondary to anti-GBM
disease. It is optimal to delay kidney transplantation until anti-GBM antibodies are undetectable
in the serum for 12 months and the disease has been in remission for at least 6 months without
the use of cytotoxic agents.
Source: Literature Review, Frost & Sullivan analysis
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Guillain-Barré Syndrome
GBS is an immune-mediated peripheral neuropathy characterized by acute, symmetrical
weakness and reduced or absent reflexes. It presents with a wide range of motor impairments,
including flaccidity, hyporeflexia, and progressive ascending paralysis. The global incidence of
GBS increased from 97.7 thousand in 2019 to 108.7 thousand in 2024, and is expected to reach
111.0 thousand in 2025, 121.7 thousand in 2029 and 134.1 thousand in 2033. The incidence of
GBS in China increased from 9.8 thousand in 2019 to 10.3 thousand in 2024, and expected to
reach 10.4 thousand in 2025, 10.8 thousand in 2029 and 11.3 thousand in 2033. The following
chart describe the incidence of GBS in China and globally from 2019 to 2033:
Incidence of GBS in China and Globally, 2019-2033E
9.8 9.9 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 11.1 11.2 11.3
88.0 89.8 91.8 93.8 95.8 98.5 100.6 103.1 105.7 108.3 110.9 113.8 116.7 119.7 122.8
97.7 99.7 101.8 103.8 106.0 108.7 111.0 113.6 116.3 119.0 121.7 124.7 127.8 130.9 134.1
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
China Other
CA GRPeriod GlobalChina
2.2%1.1%2019-2024
2.3%1.0%2025E-2029E
2.5%1.1%2029E-2033E
Thousand
Source: Frost & Sullivan Analysis
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While there is no known cure for GBS, treatments can help alleviate symptoms and
shorten its duration. Given the autoimmune nature of the disease, the acute phase is primarily
treated with first-line IVIG, valued for its convenience, or alternatively with plasma exchange
to remove pathogenic antibodies and inflammatory mediators. During the recovery phase,
patients with persistent muscle weakness require rehabilitation services to strengthen their
muscles and restore movement. IgG-degrading enzymes emerges as a novel alternative, which
break down IgG antibodies, offer a promising new treatment for GBS, rapidly mitigating
pathological damage and relieving symptoms, while minimizing significant side effects. The
following diagram discuss the treatment options of GBS:
Treatment Options of GBS
Treatment Options
Plasma Exchange
• Remove neurotoxic antibodies
• Remove complement factors
• Remove other humoral mediators of
inflammation
Reduces inflammation and immune-mediated
damage of nerve roots and peripheral nerves
Intravenous Immunoglobulin (IVIG)
• Inhibit Fc-mediated activation of immune cells.
• Inhibit  bind of antiganglioside antibodies to
their neural targets
• Inhibit local complement activation
Lower serum inflammatory factors, reduce the
long-term incidence of GBS and reduce the risk
of disability in patients
Source: Chinese Guideline on Diagnosis and Treatment of Guillain-Barré Syndrome Disease ( ʕ਷Λᚆ-ˋཤၝΥ
یܸط2024 ), Literature review, WHO, Frost & Sullivan analysis
Market Drivers and Future Trends of IgG-Degrading Enzyme Therapies
According to Frost & Sullivan, the primary growth driver and market trends for
IgG-degrading enzyme market and KJ103 globally and in China include:
 IgG antibodies play a central role in disease pathogenesis. In acute autoimmune
diseases, pathogenic IgG antibodies are key drivers of tissue damage. By binding to
self-antigens, these antibodies trigger complement activation or immune cell
recruitment, leading to acute inflammation and rapid disease progression. As the
prevalence of these IgG-mediated conditions increases — such as glomerular
basement membrane, GuillainBarré syndrom e — a growing number of patients
experience acute, antibody-driven pathology. These diseases often have a sudden
onset and can progress rapidly, making timely removal of pathogenic IgG critical to
preventing severe complications or mortality. Consequently, the rising incidence of
IgG-mediated autoimmune diseases directly increases the need for therapies that can
rapidly and specifically clear circulating IgG, a need that KJ103 is well-positioned
to address.
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 Current treatment options are limited. Existing treatments for acute autoimmune
diseases, mainly including plasma exchange, and intravenous immunoglobulin
(IVIG), are associated with significant limitations. Conventional
immunosuppressants act slowly and non-specifically, often resulting in broad
immune suppression and heightened infection risk. Plasma exchange, while
effective at temporarily reducing antibody levels, is invasive, resource-intensive,
and requires repeated procedures. IVIG relies on competitive inhibition of
pathogenic antibodies but has variable efficacy and delayed onset in some patients.
As the patient population grows, these limitations become more pronounced,
highlighting the unmet need for a fast-acting, targeted approach to antibody
removal. This therapeutic gap creates an opportunity for KJ103, and the increasing
prevalence of acute autoimmune diseases further amplifies the demand for such
innovative treatments.
 KJ103’ s advantages and strong market alignment. KJ103, a next-generation
IgG-degrading enzyme, specifically cleaves IgG at the hinge region, rapidly
reducing circulating pathogenic antibody levels and halting disease progression
within hours. Compared to traditional IgG-degrading enzymes, KJ103 has
significantly lower immunogenicity, minimizing the risk of pre-existing anti-drug
antibodies that could compromise efficacy or trigger hypersensitivity reactions. This
makes KJ103 suitable for a broader patient population, particularly in acute settings
where rapid and safe antibody clearance is critical. As the prevalence of acute
autoimmune diseases continues to rise, the demand for fast, targeted, and safer
therapeutic options grows accordingly — an area where KJ103’s unique mechanism
and safety profile align closely with market needs. Additionally, KJ103’s
applicability across various IgG-mediated acute diseases not only fills existing
treatment gaps but also improves overall treatment outcomes, driving increased
market demand in parallel with the expanding patient base.
 Expanding Indications and Application . IgG-degrading enzymes show promise in
treating autoimmune diseases like systemic lupus erythematosus by targeting
pathogenic IgG. Their integration with immunomodulatory therapies, such as
monoclonal antibodies, offers potential for enhanced efficacy, reduced side effects,
and personalized therapeutic approaches.
 Enhanced Safety and Specificity . Advancement in protein engineering could expand
their use to a wider range of complex autoimmune disorders, positioning IgG-
degrading enzymes as transformative agents in the treatment landscape.
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Antibodies Resistant to Enzymatic Degradation Combined with IgG-Degrading Enzyme
The combination of antibodies resistant to enzymatic degradation and IgG-degrading
enzymes represents a significant advancement addressing key limitations of traditional
antibody-based therapies. This dual approach employs IgG-degrading enzymes to selectively
reduce circulating IgG levels, mitigating immunoglobulin interference and creating a more
favorable therapeutic environment for antibodies targeting tumor-specific antigens. At the
same time, therapeutic antibodies engineered for resistance to enzymatic degradation maintain
their stability in plasma and improve their half-life. This strategy not only improves treatment
efficacy but also lowers the required antibody dosage, offering a safer and more cost-effective
option.
ANALYSIS OF ASSISTED REPRODUCTION DRUGS MARKET
Assisted Reproduction Drugs Market
Infertility refers to a disease of the reproductive system characterized by the failure to
achieve clinical pregnancy after 12 months or more of regular unprotected sexual intercourse.
Infertility is becoming increasingly prevalent globally, primarily driven by increasing average
age of first birth, as well as unhealthy lifestyle and environmental factors. The incidence of
infertility among couples in China increased from 56.1 million in 2019 to 59.2 million in 2024,
and is expected to reach 66.8 million in 2029 and is further expected to reach 73.3 million in
2033.
In response to such increase in the global infertility rate, a number of treatments has
emerged, including medication, surgery and assisted reproductive technology (ART). Among
them, ART has become the primary treatment option for infertility due to its relatively high
success rate and application to multiple complicated infertility. Drugs used in assisted
reproduction mainly treat infertility by solving ovulation problems for infertile female people.
Among drugs used in assisted reproduction, ovulation induction drugs become one of the most
commonly used in clinical practice, which can induce ovulation and control ovarian
stimulation.
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In recent years, the market for drugs used in assisted reproduction has demonstrated
consistent growth. The global assisted reproductive drug market increased from US$3.6 billion
in 2019 to US$5.4 billion in 2024 and is projected to reach a value of US$5.7 billion in 2025
and US$7.1 billion in 2029 and further reach to US$8.2 billion by 2033 with CAGRs of 8.3%
from 2019 to 2024, 5.7% from 2025 to 2029 and a CAGR of 3.6% from 2029 to 2033. In China,
the market size reaching RMB4.2 billion in 2019 and RMB5.7 billion in 2024, with the CAGR
of 6.0% from 2019 to 2024. The market is forecasted to reach RMB6.3 billion in 2025,
RMB10.3 billion by 2029 and is expected to reach RMB14.9 billion by 2033 with a forecasted
CAGR of 13.1% from 2025 to 2029 and a CAGR of 9.6% from 2029 to 2033. The following
tables describe the market for drugs used in assisted reproduction globally and in China from
2019 to 2033:
Global Market size and forecast of Assisted Reproductive Drugs, 2019-2033E
Billion USD
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
8.3%
5.7%
3.6%
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
3.6 3.5
4.5 4.7
5.3 5.4 5.7
6.1 6.4
6.8 7.1 7.4 7.7 8.0 8.2
Source: Literature review, Frost & Sullivan analysis
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Market Size of Drugs Used in Assisted Reproduction in China, 2019-2033E
Billion RMB
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
6.0%
13.1%
9.6%
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
4.2 3.7
4.9 4.8
5.7 5.7 6.3
7.1
8.0
9.0
10.3
11.9
13.1
14.0
14.9
Source: Literature review, Frost & Sullivan analysis
Recombinant Human Follicle Stimulating Hormone Market
Follicle Stimulating Hormone (FSH) is a glycoprotein hormone produced and secreted by
the pituitary gland, playing a vital role in human reproduction. It functions as a stimulator of
the ovarian follicles maturation in women and spermatogenesis in men, thus widely used in
infertility treatment and has become one of the important drugs in assisted reproduction. FSH
being developed as a drug can be categorized into two types: urinary FSH and recombinant
FSH. Recombinant human FSH, produced through genetic recombination techniques, offers
superior quality and efficacy compared to urinary FSH. Its long-acting FSH variant, a modified
form of FSH with an extended half-life, achieved through structural alterations such as
glycosylation, requires just one single injection versus daily shots, improving treatment
compliance and reducing patient burden.
Overview of FSH Market
Currently, there are two main forms of recombinant human FSH available on the market:
short-acting FSH and long-acting FSH (predominantly represented by FSH-CTP). While they
share similar therapeutic efficacy and safety profiles, these two forms differ in various aspects
such as cost and duration of efficacy. The innovative long-acting FSH-CTP formulation, which
incorporates a CTP sequence, extending its half-life, enabling reduced injection frequency and
improving patient compliance. This improved administration profile of long-acting FSH-CTP
is particularly valuable in regions with restrained healthcare resources and for patients with
limited self-injection experience or those requiring long-distance travel for treatment.
Moreover, while short-acting FSH use both liquid and powder formulations, long-acting
FSH-CTP is exclusively provided as a liquid injection due to the requirement for sustained
efficacy over extended periods. This liquid formulation eliminates reconstitution needs,
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offering greater convenience and avoiding potential dosage errors or incomplete dissolution
issues which are more likely to occur with short-acting formulations requiring multiple precise
injections and manual reconstitution, while ensuring enhanced bioavailability and stability.
Consequently, there is a significant demand in China for transitioning from short-acting to
long-acting FSH products. As production technologies advance, the cost of FSH-CTP is
expected to decline, further enhancing its market prospects.
In China, the FSH market increased from RMB2.4 billion in 2019 to RMB3.2 billion in
2024 with a CAGR of 5.7%, and is further expected to RMB3.8 billion in 2025, RMB7.3 billion
in 2029 and RMB10.2 billion in 2033 at a forecasted CAGR of 17.3% from 2025 to 2029 and
a CAGR of 10.2% from 2029 to 2033. Long-acting FSH’s market entry was delayed until 2025
due to complex technical requirements. For instance, FSH-CTP demands precise control of
binding sites and expression processes, while glycosylation patterns and cell culture
parameters necessitate sophisticated manufacturing controls to ensure consistent product
quality. The market size of long-acting FSH in China is estimated to account for RMB0.1
billion in 2025, RMB1.2 billion in 2029 and RMB3.6 billion of the market in 2033 with a
CAGR of 86.1% from 2025 to 2029 and a CAGR of 30.8% from 2029 to 2033. Meanwhile, the
short-acting FSH market segment reached RMB2.4 billion in 2019 and RMB3.2 billion in
2024, representing a CAGR of 5.7% from 2019 to 2024, and is expected to reach RMB3.8
billion in 2025 and RMB6.1 billion by 2029, indicating a CAGR of 12.0% from 2025 to 2029
and is estimated to account for RMB6.6 billion in 2033, representing a CAGR of 2.0% from
2029 to 2033. The following table describes the FSH market in China from 2019 to 2033:
Market size of FSH in China, 2019-2033E
2033E2032E2031E2030E2029E2028E2027E2026E2025E202420232022202120202019
3.62.92.31.71.20.80.50.30.1
6.6
6.6
6.7
6.5
6.1
5.5
4.94.4
3.83.23.22.62.72.02.4
10.2
9.5
8.9
8.2
7.3
6.3
5.4
4.6
3.8
3.23.2
2.62.7
2.02.4
Period
CAGR
2019-2024
2025E-2029E
Long-acting Short-acting
Billion RMB
2029E-2033E
Long-acting
–
86.1%
30.8%
Short-acting
5.7%
12.0%
2.0%
Total
5.7%
17.3%
10.2%
Source: Literature review, Frost & Sullivan analysis
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Competitive Landscape of Recombinant Human FSH in China
The clinical demand for long-acting FSH drugs in assisted reproduction has persisted for
years, yet no such products are currently approved for use in China. Notably, the first
long-acting FSH formulation, Elonva
®, was approved in the EU market in 2010. This
innovative drug allows for a single injection to stimulate follicular development over an
extended period, reducing the frequency of administration and potentially improving patient
compliance and convenience. Despite its approval and clinical use in the EU, Elonva has yet
to be made available in China, leaving a significant gap in the therapeutic options for patients
undergoing assisted reproductive treatments within the country.
As of the Latest Practicable Date, two long acting FSH-CTP products were available in
China, including our Core Product, SJ02. The table below sets forth details of marketed long
acting FSH-CTP in China.
FormulationIndicationsStrengthFirst approval dateCompany Generic nameDrug name
Liquid form
• Used in combination with gonadotropin-releasing hormone
antagonists for controlled ovarian stimulation to promote
the development of multiple follicles
100μg (0.5ml)
150μg (0.5ml)2025/08/19Our CompanyCorifollitropin alfa
N01 injection
SJ02 (Slonva®
(᳅䈪۹®))
Liquid form
 Used in combination with gonadotropin-releasing hormone
antagonists for controlled ovarian stimulation to promote
the development of multiple follicles
100μg (0.5ml)2025/09/23GenSci
(000661)
Corifollitropin alfa
N02 injection
+JOTBJKJB
ᒄԳ
®)
Note: As of November 22, 2025
Source: NMP A, Frost & Sullivan analysis
As of the Latest Practicable Date, there are seven marketed short-acting recombinant
human FSH products and four short-acting recombinant human FSH candidates in clinical
development in China. In overseas market, three short-acting recombinant human FSH
candidates have entered the clinical stage, with seven approved products available. The table
below sets forth details of marketed short-acting recombinant human FSH in China:
Drug Name Generic Name Company First Approval Date
GONAL-f® Recombinant Human Follitropin Injection Merck
(NYSE: MRK) 5,544
9,402
5,424
5,387
5,424
N/A
2000/04/26
PUREGON® Organon
(NYSE: OGN) 2005/10/28
Jinsaiheng® GenSci 2015/05/27
Follitrope® LG Chem
(XKRX: 051910) 2021/04/07
Anxinbao® Qilu Pharmaceutical 2021/12/14
Rekovelle® Ferring Pharma 2024/05/09
Recombinant Follitropin Beta Injection
Recombinant Human Follitropin for Injection
Recombinant Human Follitropin Prefilled Syringe
Recombinant Human Follitropin for Injection
Human Follitropin delta injection
Treatment
Cost (RMB)
National
Reimbursement
Drug List
Not included
Not included
Not included
Not included
Not included
Not included
N/AZe Pan Xi
(ః®)
Jingze Biopharmaceutical
(Hefei) Co., Ltd 2025/05/09Recombinant Human Follitropin
for Injection Not included
Source: NMP A, Frost & Sullivan analysis
Note: As of November 22, 2025
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The following diagram illustrates the details of marketed FSH-CTP product in overseas
market:
Generic Name Drug Name Company Target Indications Approved Date
Corifollitropin alfa Elonva®
Organon
(NYSE:
OGN)(1)
FSHR Hypogonadotropic hypogonadism, ovulation induction 2010/01/25
Source: EMA, Frost & Sullivan analysis
Notes:
(1) Organon spun off from MSD (NYSE: MRK) in 2021. Organon is now the Marketing Authorization Holder of
Elonva
®
(2) As of November 22, 2025
The following diagram illustrates the details of marketed short-acting FSH product in
overseas market:
Drug name Generic name Company Approval Area Target IndicationsFirst approval
date
Merck 1995/10/20 FSHR
• Ovulation induction
• Polycystic ovary syndrome
• Hypogonadotropic hypogonadism
• Follicle stimulating hormone deficiency
• Luteinizing hormone deficiency
• Oligospermia
FOLLISTIM
® Organon 1996/05/02 FSHR
• Ovulation induction
• Polycystic ovary syndrome
• Male infertility
• Hypogonadotropic hypogonadism
• Infertility
Overleap® Theramex 2013/09/27 EU FSHR
• Ovulation induction
• Hypogonadotropic hypogonadism
• Luteinizing hormone deficiency
• Follicle stimulating hormone deficiency
• Polycystic ovary syndrome
Bemfola® Gedeon Richter 2014/03/26 EU FSHR
• Ovulation induction
• Hypogonadotropic hypogonadism
• Luteinizing hormone deficiency
• Follicle stimulating hormone deficiency
• Polycystic ovary syndrome
Rekovelle® Human Follitropin
delta injection Ferring Pharma 2016/12/12 EU, Japan FSHR • Ovulation induction
CinnaGen 2013/12/31 Iran FSHR • Ovulation induction
FostiRel® 2021/01/01 India FSHR
• Ovulation induction
• Polycystic ovary syndrome
• Hypogonadism
• Male sexual dysfunction
GONAL-f®
Cinnal-f®
Recombinant Human
Follitropin Injection
follitropin beta
Recombinant
Follitropin alfa
Recombinant Human
Follitropin alfa
Recombinant Human
Follitropin alfa
Recombinant Human
Follitropin beta
US, EU
US, EU
Reliance Life
Science
Note: As of November 22, 2025
Source:FDA,EMA,PDMA, Frost & Sullivan analysis
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The following diagram illustrates the details of clinical-stage FSH-CTP candidate
globally:
Drug Name Company Target Indications Stage Area
Clinical
Regulatory
Authorities
Approved Date
Follitropin SL Pharm FSHR For patients undergoing superovulation or
assisted reproductive technology (ART) NDA China NMPA 2025-01-24
Note: As of November 22, 2025; The pipeline includes only Phase I clinical trials and above.
Area = Clinical trial locations per official records. Each area maps to its clinical regulatory authorities
Source: CDE, NMP A, Frost & Sullivan Analysis
The following diagram illustrates the details of clinical-stage short-acting recombinant
human FSH candidates overseas:
Drug
name
Drug
category Original drug Generic
name Company Indication Stage Area
Clinical
Regulatory
Authorities
First
approval date
1 DA-3801 Biosimilars rhFSH rhFSH
injection Dong-A ST • Ovulation induction III Korea MFDS 2013/03/29
2 Primapur Biosimilars Follitropin alfa rhFSH
injection IVFarma • Ovulation induction III Russia
Ministry of Health
of the Russian
Federation
2017/03/22
3 FSH-GEX New drug Follitropin
Epsilon
rhFSH
injection
Biosilu Healthcare
Glycotope GmbH • Infertility II EU EMA 2012/11/28
Note: As of November 22, 2025; All these products have not made any progress in 3-5 years .
Area = Clinical trial locations per official records. Each area maps to its clinical regulatory authorities
Source: Clinical trials, Frost & Sullivan analysis
The following diagram illustrates the details of clinical-stage short-acting recombinant
human FSH candidates in China:
First approval
dateStageIndicationCompanyGeneric nameOriginal drugDrug
categoryDrug name
2025/01/25NDA
 Women who do not ovulate and do not respond to clomiphene
treatment;
 For patients undergoing superovulation or Assisted
Reproductive Technology (ART);
 For patients with severe LH and FSH deficiency
LivzonrhFSH injectionFollitropin
alfaBiosimilarsFollitropin
alfa1
2021/12/23NDA For patients undergoing superovulation or Assisted
Reproductive Technology (ART);AlphamabrhFSH injectionFollitropin
alfaBiosimilarsLM0012
3 2025/06/27NDA
 Women who do not ovulate and do not respond to clomiphene
treatment;
 For patients undergoing superovulation or Assisted
Reproductive Technology (ART);
 For patients with severe LH and FSH deficiency
JingzerhFSH injectionFollitropin
alfaBiosimilarsJZB33
4 2025/02/05I
 Women who do not ovulate and do not respond to clomiphene
treatment;
 For patients undergoing superovulation or Assisted
Reproductive Technology (ART);
 For patients with severe LH and FSH deficiency
QilurhFSH injectionFollitropin
alfaBiosimilarsQL-1012D
rhFSH
Note: As of November 22, 2025. SL Pharm’ s Follitropin alfa was withdrawn by company itself. TWP-201 of
Therawisdom and KN015 of Alphamab were inactive for over 3 years in clinical phase I; According to the
NMP A, 3 FSH-CTP pipelines are classified as Category 3.2 biological products. Since the original innovator
drug has not been approved for marketing in China, they are categorized as new drugs in China.
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Market Drivers and Future Trends of Recombinant Human FSH
According to Frost & Sullivan, the primary growth driver and market trends for
recombinant human FSH market globally and in China include:
 Increasing infertility incidence. Rising infertility rates globally and in China,
coupled with delayed childbirth, are driving increased demand for ART treatments
and Meta-analysis shows significant sperm count drops from 1973 to 2018. The
proven efficacy of recombinant human FSH for both genders further propels fertility
treatment market growth.
 Growing acceptance for assisted reproduction. The regulatory frameworks for
assisted reproductive services, particularly the 2015 National Health Commission
guidelines, have catalyzed increased societal acceptance and demand for fertility
treatments, consequently driving the utilization of reproductive pharmaceuticals,
including recombinant human FSH preparations.
 Improved affordability and payment capabilities. In March 2022, Beijing expanded
the reimbursement scope of Class A medical insurance coverage to encompass ART
procedures, coupled with rising per capita disposable income in China, has enhanced
healthcare expenditure propensity, forecasting improved accessibility and market
growth for ovulation-inducing pharmaceuticals.
 Increasing licenses for assisted reproductive institutions. National Health
Commission’s demographic-based institutional licensing framework has catalyzed
provincial expansion of assisted reproductive facilities, amplifying market demand
for recombinant human FSH therapeutics.
ANALYSIS OF RECOMBINANT BIOLOGIC PRODUCTS AS ALTERNATIVES TO
BIOCHEMICAL DRUGS
Overview of the Recombinant Biologic Drugs Produced using Synthetic Biology
Synthetic biology represents a revolutionary paradigm in biopharmaceutical
development, fundamentally transforming the production of recombinant biologic drugs
through precise genetic engineering and cellular programming. This cutting-edge approach
harnesses living organisms as sophisticated “cellular factories” to synthesize complex
therapeutic molecules with unprecedented precision and efficiency. By engineering host
organisms manufacturers can produce human-compatible proteins and enzymes at commercial
scale with superior quality and consistency. This technological advancement has overcome
critical limitations of traditional biochemical extraction methods, including inconsistent
quality, supply chain instability, and environmental sustainability concerns. The contained
nature of these bioprocesses significantly enhances operational safety while ensuring product
purity, leading to more reliable therapeutic outcomes.
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The impact of synthetic biology in recombinant biologics spans across multiple
therapeutic areas, exemplified by breakthrough treatments such as recombinant factor VIII for
hemophilia A, tissue plasminogen activator (tPA) for acute ischemic stroke, recombinant
human hyaluronidase for large volume SC administration. The manufacturing process involves
sophisticated bioengineering techniques, including codon optimization, promoter engineering,
and post-translational modification control, ensuring the produced proteins maintain proper
folding, glycosylation, and biological activity. However, the development and
commercialization of these advanced therapeutics present substantial challenges, requiring
specialized expertise in molecular biology, protein engineering, and bioprocess development.
Companies must navigate complex regulatory frameworks established by authorities such as
the FDA and NMPA, involving extensive clinical trials and stringent GMP compliance. Success
in this field demands state-of-the-art facilities equipped with advanced bioreactors and
purification systems, alongside significant investment in research and development to optimize
production yields and product quality while maintaining cost-effectiveness.
Market Size of Recombinant Enzyme Drugs
Recombinant enzyme drugs are predominantly utilized in multiple therapeutic areas and
other medical fields and positioned as an ideal alternative to animal-derived enzyme and
further reaching border application scenarios due to its recombinant nature. In 2019, the
recombinant enzymes market was valued at RMB1.5 billion in China and increased to RMB3.2
billion in 2024 with a CAGR of 16.8%, and is projected to reach RMB3.4 billion by 2025,
RMB7.7 billion by 2029, and is expected to reach RMB17.1 billion by 2033, with a forecasted
CAGR of 22.7% from 2025 to 2029 and a CAGR of 22.0% from 2029 to 2033. The following
table describes the recombinant enzymes market in China from 2019 to 2033:
Recombinant Enzymes Market in China, 2019-2033E
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
16.8%
22.7%
22.0%
2019
Billion RMB
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
17.1
15.1
13.2
10.1
7.7
5.6
4.5
3.83.43.23.02.82.7
1.81.5
Source: Literature review, Frost & Sullivan analysis
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Market Drivers and Future Trends of Recombinant Biologic Drugs
According to Frost & Sullivan, the primary growth driver and market trends for
recombinant biologic drugs globally and in China include:
 Regulatory Trend in Favor of Recombinant Biologic Drugs. Stricter GMP
regulations for traditional biochemical products drive up manufacturing costs,
creating opportunities for recombinant alternatives that offer better safety profiles
and lower risks of zoonotic disease transmission.
 Increasing Demand for Advanced Therapies. Precision medicine advancement
drives demand for recombinant biologics. These therapeutics target specific
molecular pathways with minimal off-target effects, showing promising efficacy and
safety.
 Rising Prevalence of Chronic and Rare Diseases. Aging population and lifestyle
changes of China have increased chronic disease burden, particularly metabolic
diseases, autoimmune disorders, and cardiovascular diseases. Recombinant
biologics like cytokines, and enzyme therapies address these conditions with higher
specificity than traditional pharmaceuticals.
 Advancements in Bioprocessing Technologies. Implementation of advanced
bioprocessing platforms, including innovative culture systems and automated
purification processes, has enhanced production efficiency. Chinese manufacturers
are leveraging their superior supply chain networks and large-scale production cost
advantages, reducing production costs while maintaining product quality.
Chymotrypsin Market
Chymotrypsin, distinct from other mammalian variants, is a specialized serine protease
uniquely adapted to the human digestive system. Among variants, human chymotrypsin has
emerged as a valuable therapeutic enzyme, known for its anti-inflammatory and proteolytic
effects, particularly in reducing post-surgical inflammation, promoting wound healing, and
removing necrotic tissue. The recombinant human chymotrypsin technology involves
expressing the corresponding enzyme’s gene in a Pichia pastoris after the sequence is
obtained, followed by large-scale fermentation for cultivation. Recombinant human
chymotrypsin is well-positioned as an ideal alternative to traditional animal-derived products.
It offers several superior advantages, including higher purity, improved expression efficiency,
simplified production processes, and eliminated risk of animal-derived contaminants.
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The chymotrypsin market in China increased from RMB0.7 billion in 2019 to RMB1.8
billion in 2024 with a CAGR of 21.3%, and is projected to reach RMB2.0 billion by 2025,
RMB2.7 billion in 2029 and is estimated to further increase to RMB3.2 billion by 2033,
indicating a forecasted CAGR of 7.8% from 2025 to 2029 and a CAGR of 5.1% from 2029 to
2033. The following table describes the chymotrypsin market in China from 2019 to 2033:
Chymotrypsin Market in China, 2019-2033E
Billion RMB
Period CAGR
2025E-2029E
2029E-2033E
7.8%
2019-2024 21.3%
5.1%
0.7
0.5
0.7
1.2
1.6
1.8
2.0
2.2 2.3
2.5
2.82.7
3.13.0
3.2
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E2019
Source: Literature review, Frost & Sullivan analysis
As of the Latest Practicable Date, there is no recombinant human chymotrypsin
pharmaceutical products available on the market in China. The following diagram sets forth
details of the pipeline of recombinant human chymotrypsin candidates in China:
Drug Code Company Status First Posted Date
HY1005-Oral
Wuhan Healthgen Biotechnology
(SSE: 688526)
Phase II 2024/12/12
HY1005-Injection Phase I 2024/05/29
KJ101 Our Company Phase II 2025/06/17
Source: CDE, Frost & Sullivan analysis
Note: As of November 22, 2025
According to Frost & Sullivan, the human chymotrypsin market is driven by
advancements in recombinant technology, offering improved purity, stability, and safety over
animal-derived alternatives. Expanding therapeutic applications, such as in inflammation
resolution and wound healing, further fuel growth. The industry’s shift to recombinant methods
addresses safety, consistency, and ethical concerns while meeting stricter global standards.
Additionally, synthetic biology innovations reduce production costs, enhance accessibility, and
improve international competitiveness, aligning with evolving regulatory and quality
requirements.
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Ulinastatin Market
Ulinastatin, a serine protease inhibitor derived from human urine or serum, is a critical
multifaceted therapeutic agent with broad anti-inflammatory and cytoprotective properties.
Clinically, it is utilized to manage acute inflammatory conditions, including acute pancreatitis,
sepsis, and post-operative systemic inflammatory responses, by inhibiting proteolytic enzymes
such as trypsin, elastase, and kallikrein. Traditionally, ulinastatin has been biochemically
extracted from human biological fluids; however, this method faces challenges such as limited
yield, high production costs, and potential contamination risks. Recombinant ulinastatin, by
employing recombinant mammalian cells, recombinant ulinastatin retains its functional
integrity and physiological activity, effectively suppressing excessive protease activity and
mitigating inflammatory cascades. This innovation represents a pivotal step toward safer and
more efficient anti-inflammatory therapies, recombinant human ulinastatin is poised to replace
the market for traditionally extracted ulinastatin, while potentially reaching even broader
applications.
The market ulinastatin in China experienced fluctuations from 2019 to 2023 due to the
disruptions in raw material supply chains during the COVID-19 pandemic, market size was
RMB1,165.8 million in 2019 and RMB1,011.9 million in 2024 and is expected to increase to
RMB1,077.8 million in 2025, RMB1,432.3 million in 2029 and RMB2,018.5 million in 2033.
Despite its promising therapeutic potential and manufacturing advantages, recombinant
ulinastatin remains under development, with no globally approved recombinant ulinastatin
available, as of the Latest Practicable Date. The following table describes the ulinastatin
market in China from 2019 to 2033.
Ulinastatin Market in China, 2019-2033E
2019
Million RMB
Period CAGR
2019-2024
2025E-2029E
2029E-2033E
-2.8%
7.4%
9.0%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
1,165.8
869.6 933.2 960.6
1,156.4
1,011.9 1,077.8 1,151.5
1,234.2
1,327.3
1,432.3
1,551.4
1,686.8
1,841.3
2,018.5
Source: Literature review, Frost & Sullivan analysis
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According to Frost & Sullivan, the global ulinastatin market is driven by increasing aging
populations and rising incidence of immune-related conditions like acute and chronic
pancreatitis. Its applications have expanded beyond pancreatitis to post-surgical inflammation,
reperfusion injury, and ongoing clinical trials for multiple organ dysfunction syndrome, acute
respiratory distress syndrome (ARDS), actually considered a less severe form of ARDS, and
systemic inflammatory response syndrome. Additionally, advances in pharmaceutical
technology toward recombinant human sources are expected to reduce production costs and
enhance product accessibility.
SOURCE OF INFORMATION
We engaged Frost & Sullivan, a market research consultant, to prepare the Frost &
Sullivan Report for use in this prospectus. The information from Frost & Sullivan disclosed in
this prospectus is extracted from the Frost & Sullivan Report and is disclosed with the consent
of Frost & Sullivan. In preparing the Frost & Sullivan Report, Frost & Sullivan collected and
reviewed publicly available data such as government-derived information, annual reports, trade
and medical journals, industry reports and other available information gathered by not-for-
profit organizations as well as market data collected by conducting interviews with industry
key opinion leaders.
Frost & Sullivan has exercised due care in collecting and reviewing the information so
collected and independently analyzed the information, but the accuracy of the conclusions of
its review largely relies on the accuracy of the information collected. We agreed to pay Frost
& Sullivan a fee of RMB800,000 for the preparation and update of the Frost & Sullivan Report,
which is not contingent on the Global Offering proceeding.
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OVERVIEW OF LA WS AND REGULATIONS IN THE PRC
Information disclosed in this section is relevant PRC laws, regulations and regulatory
documents in effect which have a significant impact on our operations in the PRC as of the date
of this Document, which are subject to change in the future, but it does not include a detailed
analysis of PRC Laws related to our business activities and operations in the PRC, or serve as
all PRC Laws applicable to our operations in the PRC.
Laws and Regulations in Relation to New Drugs
Regulatory Authorities
The regulatory authorities of the drug industry in the PRC include: the NMPA, the CDE,
the National Health Commission of the PRC (ึ)
(the “ NHC”) and the National Healthcare Security Administration (ღ҅)
(the “ NHSA ”).
The NMPA is an authority under the SAMR and is the primary regulator for medical
products. It is primarily responsible for supervising and managing drugs, medical devices and
cosmetics, including drafting of relevant regulations and policies; undertaking standard
management, registration regulation, quality management and post-market risk management
for drugs, medical devices and cosmetics; and organizing and guiding the supervision and
inspection of drugs, medical devices and cosmetics; undertaking management of qualifications
for licensed pharmacists.
The CDE is the technical evaluation unit for drug registration with NMPA. It is mainly
responsible for conducting technical evaluation on the drugs applying for registration and
verifying the relevant drug registrations.
The NHC is the primary national regulator for public health. It is primarily responsible
for drafting national health policies, supervising and regulating public health, healthcare
services, and health emergency systems, coordinating the reform of medical and health system,
organizing the formulation of national drug policies and national essential medicine system,
launching an early warning mechanism for the monitoring of the use and clinical
comprehensive evaluation of medicine as well as the drug shortage, giving suggestions on the
pricing policy of national essential medicine, and regulating the operation of medical
institutions and practicing of medical personnel.
The NHSA is an authority directly under the State Council responsible for the
management of the healthcare security system. It is primarily responsible for drafting and
implementing policies and standards on medical insurance, maternity insurance and medical
assistance; supervising and administering the healthcare security funds; organizing the
formulation of a uniform medical insurance catalogue and payment standards on drugs,
medical disposables and healthcare services; and formulating and supervising the
implementation of the bidding and tendering policies for drugs and medical disposables.
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Non-clinical Research and Animal Testing
The non-clinical safety assessment of drugs for marketing approval shall be conducted in
accordance with the Good Laboratory Practices for Non-clinical Laboratory Studies (ڢي
Ӻሯඎ၍ଣ஝ᇍ) promulgated by the former State Food and Drug Administration ( ਷
္ຖ၍ଣ҅) (the “ former SFDA ”) in August 2003 and latest amended by the
China Food and Drug Administration (္ຖ၍ଣᐼ҅) (the “ CFDA ”) in July 2017
and came into effect on September 1, 2017. The former SFDA promulgated the Administrative
Measures for the Certification of Good Laboratory Practices for Non-clinical Laboratory
Studies () in April 2007, which specifies the
requirements for institutions applying for Good Laboratory Practices (GLP) certification of
non-clinical laboratory studies. On January 19, 2023, the NMPA amended the Administrative
Measures for the Certification of Good Laboratory Practices for Non-clinical Laboratory
Studies (), which came into effect on July 1,
2023.
According to the Regulations for the Administration of Affairs Concerning Experimental
Animals (၍ଣૢԷ) promulgated by the former State Science and Technology
Commission (ึ) in November 1988 and lastly amended in March 2017 by
the State Council, the Administration Measures on Good Practice of Experimental Animals
() jointly promulgated by the former State Science and Technology
Commission and the former State Bureau of Quality and Technical Supervision (ሯඎҦஔ
္ຖ҅) in December 1997, and the Administrative Measures on the Certificate for
Experimental Animals (Trial) (ج(༊Б)) promulgated by the
Ministry of Science and Technology of the PRC (ኪҦஔ௅) (the “ MOST ”)
and other regulatory authorities in December 2001 and came into effect in January 2002, using
experimental animals and related products requires a Certificate for Utilization of Laboratory
Animals. A Certificate for Utilization of Laboratory Animals shall be valid for five years, and
the holder shall apply for renewal six months prior to the expiry of the validity period. A
Certificate for Utilization of Laboratory Animals shall be inspected annually by the local
Science and Technology Bureau.
Application for Clinical Trial
After completing the preclinical studies, the applicant must obtain approval for clinical
trials of drugs from the NMPA before the conduction of new clinical drug trials. According to
the Decision on Adjusting the Approval Procedures of Certain Administrative Approval Items
for Drugs () promulgated by the CFDA
on March 17, 2017 and came into effect on May 1, 2017, the decision on the approval of
clinical trials of drugs enacted by the CFDA can be made by the CDE from May 1, 2017.
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According to the Announcement of Several Policies on the Evaluation and Examination
for Drug Registration (ʮѓ) promulgated by the
CFDA on November 11, 2015, an umbrella approval would be issued by CFDA for all phases
of a new drug clinical trial, instead of obtaining approvals phase by phase. Provided by the
Announcement of the Adjustment of Procedures of the Evaluation and Examination for Drug
Clinical Trial (ʮѓ) issued by the NMPA on July
24, 2018, applicants could proceed with their clinical trials if they have not received any denial
or query from the CDE within 60 business days after the application has been accepted and the
relevant application fees have been paid.
Before conducting the clinical trial, the applicant shall file a series of detailed documents
with the NMPA. According to the Announcement on Drug Clinical Trial Information Platform
(ʮѓ), which came into effect in September 2013, and the
Standard for the Management of Drug Clinical Trial Registration and Information Disclosure
(Trial) (ʮͪ၍ଣ஝ᇍ(༊Б)), which came into effect in July
2020, all clinical trials approved by the NMPA and conducted in the PRC shall complete the
clinical trial registration and information disclosure on the Drug Clinical Trial Registration and
Information Disclosure Platform.
The Drug Administration Law of the PRC () (the “ Drug
Administration Law ”) was promulgated by the Standing Committee of the National People’s
Congress (ึ) (the “ SCNPC ”) in September 1984, last amended on
August 26, 2019, and came into effect on December 1, 2019. Pursuant to the Drug
Administration Law, the dossier on a new drug research and development, including the
manufacturing method, quality specifications, results of pharmacological and toxicological
tests and the relevant data, files and samples, shall, in accordance with the regulations of the
drug regulatory authority under the State Council be truthfully submitted to the said department
for approval before clinical drug trial is conducted. The drug regulatory authority of under
State Council shall decide whether to approve the clinical trial application and notify the
decision to the clinical trial applicant within sixty (60) business days from the date of accepting
the clinical trial application. If the drug regulatory authority under the State Council fails to
do so, the clinical trial application shall be deemed as approval, and if the bioequivalence test
is conducted, it is required to report it to the drug regulatory authority under State Council for
filing.
Pursuant to the Administrative Regulations for Drug Clinical Trial Institutions (ᑗ
), which came into effect in December 2019, if engaging in drug
development activities and conducting clinical trials of drugs (including bioequivalence test
conducted after filing) approved by the NMPA within the territory of the PRC, they shall be
conducted in the Drug Clinical Trial Institutions. Drug clinical trial institutions shall be subject
to filing administration. Institutions that only engage in analysis of biological samples related
to drug clinical trials shall not be subject to filing. The national drug regulatory authority is
responsible for setting up a filing management information platform for drug clinical trial
institutions for registration, filing and operation management of drug clinical trial institutions,
as well as the entry, sharing and disclosure of information on supervision and inspection of the
drug regulatory authority and competent healthcare authority.
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Conducting Clinical Trial
In compliance with the Measures for the Administration of Drug Registration (2020)
(ج2020) ), promulgated by the SAMR on January 22, 2020 and came into
effect on July 1, 2020, clinical trials are divided into Phase 1, Phase 2, Phase 3, Phase 4 and
bioequivalence trial. A clinical drug trial to be carried out shall be examined and approved by
the ethics committee.
Clinical trials shall be conducted for the application of new drug registration and shall be
implemented in accordance with the Good Clinical Practice for Drug Trials (ᑗґ༊᜕
ሯඎ၍ଣ஝ᇍ), promulgated by the NMPA and NHC and came into effect on July 1, 2020.
The Good Clinical Practice for Drug Trials stipulates the criteria for the entire procedure of the
clinical trial including preclinical trial preparation and the necessary conditions, protection of
testees’ rights and interests, trial protocols, duties of researchers, duties of sponsors, duties of
monitors, trial record and report, data management and statistical analysis, administration of
drug products for trial, guarantee for quality, polycentric trials, with reference to the
internationally recognized principles.
The management of drugs used in a clinical drug trial shall satisfy the relevant
requirements of the GCP . A sponsor approved to carry out clinical drug trial shall, before
carrying out subsequent clinical drug trial by stages, develop corresponding plan for clinical
drug trial, carry out clinical drug trial upon examination and with consent of the ethics
committee, and submit corresponding plan for clinical drug trial and supporting materials on
the website of the CDE.
According to the Announcement of the Adjustment of Procedures of the Evaluation and
Examination for Drug Clinical Trial, if a new drug clinical trial has been approved to be carried
out, after the completion of Phase 1 and Phase 2 clinical trials and before the implementation
of Phase 3 clinical trials, the applicant shall submit an application for a communication
meeting to the CDE to discuss with the CDE on key technical issues including the design of
the phase 3 clinical trial design. The applicant can also apply for communication on key
technical issues at different stages of clinical research and development.
According to the Measures for the Administration of Drug Registration (2020), applicants
may communicate with CDE on major issues at critical stages such as prior to application for
clinical trial of a drug, during the process of clinical trial of a drug, and prior to application
for marketing authorization of a drug. According to the Measures for the Administration of
Communication and Exchange in Drug Development and Technology Review (೯ၾ
) promulgated by the CDE on December 10, 2020, an applicant
may propose to convene a communication meeting with the CDE during the process of drug
research and development and registration application. There are three types of communication
and exchange meetings: Type I meetings are held to resolve major safety issues encountered
in the course of clinical trials of drugs and major technical issues in the course of R&D of
breakthrough therapeutic drugs; Type II meetings are held for drugs at critical stages of R&D,
which mainly include pre-application meetings for new drugs, meetings after the conclusion of
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Phase II clinical trials and before the commencement of Phase III clinical trials, meetings
before application for marketing authorization of new drugs, and meetings for risk assessment
and evaluation of new drugs. Type III meetings shall refer to meetings other than Type I and
Type II meetings.
New Drug Application
Pursuant to the provisions of the Measures for the Administration of Drug Registration
(2020), drugs registration refers to activities that a drug registration applicant files an
application and other supplementary applications for clinical drug trial, approval for drug
marketing, and re-registration, among others, under the legal procedures and according to the
relevant requirements, and that the medical products administrative department examines the
safety, effectiveness, and quality controllability based on the laws and regulations, and the
existing scientific cognitions, to decide whether to agree with the activities applied for. A drug
registration certificate shall be valid for five years. During the validity period, a holder of a
drug registration certificate shall continue to ensure the safety, effectiveness and quality
controllability of the marketed drug, and apply for re-registration of the drug six months prior
to the expiry of the validity period.
According to the Measures for the Administration of Drug Registration (2020), an
applicant may file an application for drug marketing authorization, after the completion of
pharmaceutical, pharmacological and toxicological studies, clinical trials of drugs and other
studies, determination of quality standards, the verification of commercial scale production
process, and preparations to receive the check and inspection for drug registration. According
to the Measures for the Administration of Drug Registration (2020), drug marketing
registration applications shall be subject to three categories, namely traditional Chinese drugs,
chemical drugs and biological products. The CDE shall organize pharmacist, medical and other
technical personnel to comprehensively review the application regarding the safety,
effectiveness and quality control of the drug. Where the application is cleared by the
comprehensive review, the drug shall be approved for marketing and a drug registration
certificate shall be issued.
According to the Drug Administration Law, an applicant who has obtained a drug
registration certificate shall be recognized as a drug marketing authorization holder,
responsible for non-clinical laboratory studies, clinical trials, production and distribution,
post-market studies, and the monitoring, reporting, and handling of adverse reactions in
connection with pharmaceuticals. The drug marketing authorization holder may engage in
manufacturing or distribution on its own or to entrust a licensed third party.
Gathering, Collection and Filing of Human Genetic Resources
Pursuant to the Service Guide for Administrative Licensing of Gathering, Collection,
Deal, Export and Exit Approval of Human Genetic Resources of Human genetic resources
() promulgated
by the MOST in July 2015 and the Notice on the Implementation of the Administrative License
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for the Gathering, Collection, Deal, Export and Exit of Human Genetic Resources (ྼ
) promulgated by the
MOST in August 2015, the gathering and collection of human genetic resources though clinical
trials by a foreign-invested sponsor shall be approved by the China Human Genetic Resources
Management Office.
Pursuant to the Regulations on the Management of Human Genetic Resources of the
People’s Republic of China ( ʕശɛ͏΍ձ਷ɛᗳ፲ෂ༟๕၍ଣૢԷ) promulgated by the
State Council in May 2019 and came into effect on July 1, 2019, and the last amendment
became effective on May 1, 2024, the state supports the rational use of human genetic
resources for scientific research, development of the biomedical industry, improvement of
diagnosis and treatment technology, improvement of China’s ability to guarantee biosafety and
improvement of the level of people’s health. Foreign organizations, individuals and institutions
established or actually controlled by them shall not gather or preserve Chinese genetic
resources in China, or provide Chinese genetic resources to foreign countries. In addition, the
gathering, preservation, utilization and external provision of Chinese genetic resources shall
conform to ethical principles and conduct ethical review in accordance with relevant
regulations. On May 26, 2023, the MOST issued the Implementing Rules of the Administrative
Regulations on Human Genetic Resources (), effective
from July 1, 2023, which further provided specific provisions on the collection, preservation,
utilization and external provision of human genetic resources of the PRC.
On October 17, 2020, the Biosecurity Law of the People’s Republic of China ( ʕശɛ
) (the “ Biosecurity Law ”) was promulgated by the SCNPC, taking
effect from April 15, 2021 and latest amended on April 26, 2024. The Biosecurity Law
establishes a comprehensive legislative framework for the pre-existing regulations in such
areas as epidemic control of infectious diseases for humans, animals and plants; research,
development, and application of biology technology; biosecurity management of pathogenic
microbials laboratories; security management of human genetic resources and biological
resources; countermeasures for microbial resistance; and prevention of bioterrorism and
defending threats of biological weapons.
Drug Manufacturing Permit
Pursuant to the Drug Administration Law, the state adopts an industry entry permit system
for drug manufacturers. The conduct of drug manufacturing activities shall be approved and
granted with a Drug Manufacturing License (͛ପ஢̙ᗇ) by the drug regulatory authority
of the people’s government at provincial, autonomous regional or municipal level. The Drug
Manufacturing License shall indicate the validity period and the scope of production, and shall
be reviewed for renewing upon expiration.
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Good Manufacturing Practices
The Good Manufacturing Practices (͛ପሯඎ၍ଣ஝ᇍ), promulgated by the
Ministry of Health of the PRC (the “ MOH”, now known as the NHC) in March 1988, newly
amended in January 2011 and came into effect on March 1, 2011, provided guidance for the
quality management, organization and staffing, production premises and facilities, equipments,
material and products, recognition and inspection, documentation maintenance, manufacture
management, quality control and quality assurance, contractual manufacture and contractual
inspection for the products, product delivery and recalls of a manufacturer in a systematical
manner.
Prior to December 1, 2019, establishment of a new drug manufacturer, construction of
new production premise for a drug manufacturer or production of new dosage form are required
to submit application for good manufacturing practice certification (GMP certification) with
the drug regulatory authority in accordance with relevant provisions. If the Good
Manufacturing Practices are satisfied, a GMP certificate will be issued. Pursuant to the
Announcement on the Relevant Issues Concerning the Implementation of the Drug
Administration Law of the PRC (݄<ج>ʮ
ѓ), promulgated by the NMPA on November 29, 2019, and the Drug Administration Law,
the GMP and Good Supply Practice (GSP) certifications have been cancelled, applications for
GMP and GSP certifications are no longer accepted, and GMP and GSP certificates are no
longer issued. When engaging in drug manufacturing activities, a manufacturer shall comply
with the GMP and establish a sound GMP management system, to ensure that the entire process
of drug manufacturing maintain to meet the statutory requirements, and meet the GMP
requirements enacted by the drug regulatory authority under the State Council in accordance
with the law. The legal representative of and principal person in charge of a drug manufacturer
are fully responsible for the drug manufacturing activities of the enterprise.
On May 24, 2021, the NMPA promulgated the Administrative Measures for Drug
Inspection (For Trial Implementation) (ج(༊Б)) which was amended on
July 19, 2023, and the Administrative Measures for the Certification of Good Manufacturing
Practice for Drugs () was repealed concurrently. The
Administrative Measures for Drug Inspection (For Trial Implementation) provide that if a drug
manufacturer applies for a drug manufacturing license for the first time, onsite inspections to
be conducted in accordance with the GMP requirements is required, while for a drug
manufacturer applying for the reissue of a drug manufacturing license, the review will be
conducted based on the risk management principles, taking into account certain factors,
including the drug manufacturer’s compliance with the laws and regulations of drug
administration, the drug manufacturer’s operation of the GMP system and quality management
system, and inspections on the drug manufacturer’s conformity to the GMP requirements may
be conducted where necessary.
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Marketing Authorization Holder System
Under the authorization of the SCNPC, the General Office of the State Council issued the
Pilot Plan for the Drug Marketing Authorization Holder System (ܓ
) on May 26, 2016, which provides a detailed pilot plan for the marketing
authorization holder system, or MAH System, for drugs in 10 provinces (cities) in China and
the plan ended on November 4, 2018. The pilot period was later extended to November 4, 2019
by the SCNPC.
Pursuant to the Drug Administration Law, China implements the marketing authorization
holder mechanism for management of the drug industry. The drug marketing authorization
holder refers to an enterprise or a drug research and development institution that has obtained
the drug registration certificate. The drug marketing authorization holder shall be responsible
for non-clinical research, clinical trials, production and operation, post-marketing research,
adverse reaction monitoring, reporting and processing of drugs in accordance with the
provisions of the law.
Transfer of Drug Marketing Authorization
Pursuant to the Drug Administration Law, upon approval by the drug administrative
department of the State Council, a drug marketing authorization holder may transfer its drug
marketing authorization. The transferee shall possess the quality management, risk control and
liability compensation competence to ensure drug safety, effectiveness and quality
controllability, and perform the obligations of the drug marketing permit holder.
According to the Measures for the Administration of Drug Registration (2020), transfer
of drug marketing authorization by the holder shall declare by way of supplementary
application, and implement upon approval.
Pursuant to the Administrative Measures for Drug Post-marketing Changes (for Trial
Implementation) (ج(༊Б)), drug post-marketing changes shall not
have any adverse impact on the safety, effectiveness and quality controllability of drugs. In the
case of an application for the change to a drug holder, the production site, prescription,
production techniques and quality standards of the drugs shall be consistent with those of the
original drugs. In the case of any change, after the change of the holder has been approved, the
holder after the change shall conduct full study, evaluation and necessary verification and shall
implement or report such changes upon approval or filing as required.
In the case of an application for the change of a holder of domestically manufactured
drugs, the transferee shall, after obtaining the drug manufacturing permit for the corresponding
production scope, submit a supplementary application to the CDE. In particular, in the case of
an application for the change of a holder of narcotic drugs or psychotropic drugs, the transferee
shall also meet the requirements for the quantity and layout of the designated manufacturers
of narcotic drugs and psychotropic drugs as determined by the NMPA.
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The CDE shall make a decision on whether to approve the change within the prescribed
time limit. If the change is approved, the CDE shall issue a supplementary drug application
notice with the drug approval number and the valid period of the certificate remains
unchanged. The CDE shall also send a copy thereof to the provincial drug regulatory authority
at the place where the transferor, the transferee and the manufacturer are located.
The holder after the change shall have a production quality management system that
meets the requirements specified in the GMP , undertake the obligations for the management of
the drug in the whole life cycle, complete the continuous research work of the drug, ensure that
the existing technical requirements are met after the drug is manufactured and marketed, and
emphasis the situation of the transferred drug in its initial annual report.
The transferred drug may be sold on the market after passing the inspection for
compliance with the GMP and fulfilling the product release requirements.
The provincial drug regulatory authority at the place where the transferee is located shall
focus on strengthening the supervision and inspection of the transferred drugs and timely
incorporate such supervision and inspection into the daily supervision plan.
Contract Manufacturing of Drugs
Pursuant to the Administrative Regulations for the Contract Manufacturing of Drugs
() issued by the CFDA in August 2014 and effective from
October 1, 2014, only when a drug manufacturer temporarily lacks manufacturing conditions
due to technology upgrade or is unable to ensure market supply due to insufficient
manufacturing capabilities, can such drug manufacturer entrust the manufacturing of the drug
to another domestic drug manufacturer. Such contract manufacturing arrangements shall be
approved by the provincial branch of the NMPA.
The Administrative Measures on Supervision of Drug Manufacturing (͛ପ္ຖ၍
) promulgated by the SAMR on January 22, 2020 and effective on July 1, 2020,
further implements the drug marketing authorization holder system as stipulated in the Drug
Administration Law. Drug marketing authorization holders entrusting others to manufacture
drugs shall enter into outsourcing agreements and quality agreements with qualified drug
manufacturing enterprises and submit the relevant agreements together with the actual
manufacturing site application materials to the competent drug administrative authority in
order to apply for the Drug Manufacturing Certificate.
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Other Laws and Regulations in Relation to Medical Industry
Basic Medical Insurance Policy
Pursuant to the Decision on the Establishment of the Urban Employee Basic Medical
Insurance Programme () promulgated by the
State Council on December 14, 1998 and the Tentative Measures for the Administration of the
Scope of Medical Insurance Coverage for Pharmaceutical Products for Urban Employee (۬
) promulgated by the NDRC and other
authorities, came into effect on May 12, 1999, all employers in cities and towns, including
enterprises (state-owned enterprises, collective enterprises, foreign-invested enterprises,
private enterprises, etc.), institutions, public institutions, social organizations, private non-
enterprise units and their employees are required to participate in basic medical insurance.
Pursuant to the Guiding Opinions on the Pilot of Basic Medical Insurance for Urban Residents
(ኬจԈ) promulgated by the State Council on
July 10, 2007, urban residents (not urban employees) in the pilot areas can voluntarily
participate in the basic medical insurance for urban residents. Pursuant to the Opinions of the
State Council on the Integration of the Basic Medical Insurance System for Urban and Rural
Residents (จԈ) promulgated by the State
Council on January 3, 2016, a unified basic medical insurance system for urban and rural
residents was established, including the existing urban residents’ medical insurance and all the
insured personnel of New Rural Cooperative Medical System, covering all urban and rural
residents except those who should be covered by the employee’s basic medical insurance.
Medical Insurance Catalogue
Pursuant to the Tentative Measures for the Administration of the Scope of Medical
Insurance Coverage for Pharmaceutical Products for Urban Employee (ڭ
), the scope of medical insurance coverage for pharmaceutical
products needs to be managed through the formulation of the Medical Insurance Catalogue. A
pharmaceutical product listed in the Medical Insurance Catalogue must be clinically needed,
safe, effective, reasonably priced, easy to use, available in sufficient quantity, and must meet
the following requirements: it is set forth in the Pharmacopoeia of the PRC (current edition)
(ʕശɛ͏΍ձ਷ᖹՊ(و)); it meets the standards promulgated by the NMPA; and if
imported, it is approved by the NMPA for import. According to the Opinions of the NHSA and
the MOF on Establishing a List-Based System for Healthcare Security Benefits (ڭ
จԈ), which came into effect in January,
2021, all provinces not have the discretion to formulate the catalogue or increase the drugs in
any form, or adjust the scope of limited payment unless explicitly stipulated. After several
adjustments, the currently effective one is the National Insurance Drug List for Basic Medical
Insurance, Work-related Injury Insurance and Maternity Insurance (2024) (ڭ
ͦ፽(2024 ϋ)) came into effect since November 27, 2024.
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Drug Price
Pursuant to the Drug Administration Law, for drug products with market-regulated prices
in accordance with the law, the drug marketing authorization holder, the drug manufacturer, the
drug distributor and medical institution shall determine the price pursuant to the principles of
fairness, reasonableness, integrity and trustworthiness as well as quality for value in order to
supply drug users with reasonably priced drug products; and shall comply with the
requirements relating to drug price administration promulgated by the State Council’s pricing
authorities, determine and clearly mark the retail prices of drug products. Pursuant to the
Notice on Issuing Opinions on Promoting Drug Price Reform (Ι೯<ࠧ
จԈ>) jointly promulgated by NDRC, NHC, the Ministry of Human Resources and
Social Security of the PRC (ღ௅), the Ministry of Industry
and Information Technology of the PRC (ʷ௅) (the “ MIIT ”), the
MOF, the MOFCOM and the CFDA on May 4, 2015 and came into effect on June 1, 2015. From
June 1, 2015, except for narcotic drugs and first-class psychotropic drugs, the price of drugs
set by the government will be cancelled.
Advertising of Pharmaceutical Products
Pursuant to the Interim Administrative Measures for the Review of Advertisements for
Drugs, Medical Devices, Health Food and Formula Food for Special Medical Purposes
(), which
promulgated by SAMR in December 2019 and came into effect on March 1, 2020,
advertisements for drugs, medical devices, health food and formula food for special medical
purposes shall be true and legitimate, and shall not contain any false or misleading contents.
Holders of registration certificates or filing certificates of drugs, medical devices, health food
and formula food for special medical purposes as well as the production enterprises and
operating enterprises authorized by such holders of certificates shall be applicants for
advertising (the “ Applicants ”).
Applicants may entrust agents to apply for the review of advertisements for drugs,
medical devices, health food and formula food for special medical purposes. Applicants may
submit their applications at the acceptance windows of advertisement review authorities, or
may submit their applications for advertisements for drugs, medical devices, health food and
formula food for special medical purposes via letters, faxes, e-mails or e-government
platforms. The advertisement review authorities shall review the materials submitted by the
applicant and shall complete the review within ten business days from the date of acceptance.
After review, for that advertisements that are in line with laws, administrative regulations
and these Measures, approval decisions of review shall be made and advertisement approval
numbers shall be issued. The validity period of the advertisement approval number for drugs,
medical devices, health food and formula food for special medical purposes shall be consistent
with the shortest validity period of the product registration certificate, filing certificate or
production license. If no valid period is prescribed in the product registration certificate, filing
certificate or production license, the valid period of the advertisement approval number shall
be two years.
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Insert Sheet, Labels and Packaging of Pharmaceutical Products
Pursuant to the Measures for the Administration of the Insert Sheets and Labels of Drugs
(), which promulgated by the former SFDA and came effective
on June 1, 2006, the insert sheets and labels of drugs should be reviewed and approved by the
former SFDA. A drug insert sheet should include the important scientific data, conclusions and
information concerning drug safety and efficacy in order to direct the safe and rational use of
drugs. The inner label of a drug should bear such information as the drug’s name, indication
or function, strength, dose and usage, production date, batch number, expiry date and drug
manufacturer, and the outer label of a drug should indicate such information as the drug’s
name, ingredients, description, indication or function, strength, dose and usage, adverse
reaction, contraindications, precautions, storage, production date, batch number, expiry date,
approval number and drug manufacturer. Pursuant to the Measures for The Administration of
Pharmaceutical Packaging () which came effective on September 1,
1988, pharmaceutical packaging must comply with the national and professional standards. If
no national or professional standards are available, the enterprise can formulate its standards
and put into implementation after obtaining the approval of the food and drug administration
and bureau of standards at provincial level. The enterprise shall reapply with the relevant
authorities if it needs to change its packaging standard. Drugs that without packing standards
must not be sold or traded (except for drugs for the military).
Drug Technology Transfer
Drug technology transfer refers to the transfer of drug production technology by the
owner to a drug manufacturer as the transferee and the application for drug registration by the
drug manufacturer as the transferee pursuant to the laws and regulations in relation to drug
technology transfer. The registration process of drug technology transfer, which includes
application for, evaluation, review, approval and supervision of drug technology transfer
registration, is regulated by the Measures for the Administration of Drug Registration (2020)
and the Administrative Regulation for Technology Transfer Registration of Drugs (Ҧஔ
) which was promulgated by the former SFDA on August 19, 2009.
According to the above regulations, drug technology transfer includes new drug technology
transfer and drug production technology transfer. An application for drug technology transfer
must be submitted to the provincial drug regulatory authority, and the former SFDA will
ultimately make an approval decision based on the comprehensive opinions of the drug review
center. Eligible applications will receive a letter of approval and a drug approval number for
the supplementary application.
Administration of Pathogenic Microorganism Laboratories
According to the Regulations on the Bio-safety Management of Pathogenic Microbe
Laboratories (τΌ၍ଣૢԷ) promulgated by State Council and
latest amended in December 2024, the pathogenic microorganism laboratories are classified
into Level I, Level II, Level III and Level IV in accordance with its biosafety level for
pathogenic microorganisms and the national standards for the bio-safety. Experimental
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activities with pathogenic microorganisms should be conducted in laboratories of the
appropriate level. Laboratories engaged in experimental activities with pathogenic
microorganisms shall be of a level not lower than the level of the laboratory required for such
experimental activities as specified in the catalog of pathogenic microorganisms. Level I and
II laboratories can only engage in pathogenic microorganisms catalog can be carried out in the
Level I and II laboratory experimental activities of highly pathogenic pathogenic
microorganisms. Level III and IV laboratories may engage in highly pathogenic pathogenic
microorganism experimental activities under certain conditions.
Regulations on Company Establishment and Foreign Investment
The establishment, operation and management of corporate entities in China are governed
by the PRC Company Law, which was promulgated by the SCNPC in December 1993 and
further amended in December 1999, August 2004, October 2005, December 2013, October
2018 and December 2023, respectively. The PRC Company Law also applies to foreign-
invested joint stock limited companies.
Investment activities in the PRC by foreign investors are governed by the Provisions on
Guiding Foreign Investment Direction (), which was promulgated
by the State Council in February 2002 and came into effect in April 2002, the Special
Administrative Measures for the Access of Foreign Investment (Negative List) (2024 V ersion)
(݄(૶ఊ)(2024و)) (the “ Negative List ”), which was
promulgated by the MOFCOM and the NDRC in September 2024 and came into effect on
November 1, 2024, and the Catalogue of Encouraged Industries for Foreign Investment
(2022 V ersion) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و)) (the “ Encouraged Catalogue ”),
which was promulgated by the MOFCOM and the NDRC in October 2022 and came into effect
in January 2023. The Provisions on Guiding Foreign Investment Direction divides foreign
investment projects into four categories, namely “encouraged”, “permitted”, “restricted” and
“prohibited” categories. The Encouraged Catalogue lists the foreign investment projects of the
encouraged category, while the Negative List sets out the foreign investment projects of the
restricted and prohibited categories, and foreign investment projects which fall outside the
encouraged, restricted and prohibited categories belong to the permitted category. The
Negative List sets out the restrictive measures in a unified manner, such as the requirements
on shareholding percentages and corporate governance, for the access of foreign investments,
and the industries that are prohibited from receiving foreign investment. The Negative List
covers 11 industries, and any field not falling under the Negative List shall be administered
under the principle of equal treatment to domestic and foreign investment.
The Foreign Investment Law of the PRC () (the “ Foreign
Investment Law ”) was promulgated by the National People’s Congress of the PRC (the
“NPC”) in March 2019 and came into effect in January 1, 2020. The Law on Wholly
Foreign-owned Enterprises of the PRC (), the Law on Sino-
foreign Equity Joint V entures of the PRC () and the
Law on Sino-foreign Cooperative Joint V entures of the PRC ( ʕശɛ͏΍ձ਷ʕ̮ΥЪ຾ᐄ
) were repealed upon the Foreign Investment Law coming into effect. The investment
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activities of foreign natural persons, enterprises or other organizations (collectively, the
“Foreign Investors ”) directly or indirectly within the territory of China shall comply with and
be governed by the Foreign Investment Law. Such activities include establishments by Foreign
Investors of foreign invested enterprises in China alone or jointly with other investors;
acquisitions by Foreign Investors of shares, equity, property shares, or other similar interests
of Chinese domestic enterprises; investments by Foreign Investors in new projects in China
alone or jointly with other investors; and other forms of investment prescribed by laws,
administrative regulations or the State Council.
While strengthening investment promotion and protection, the Foreign Investment Law
further regulates foreign investment management and proposes the establishment of a foreign
investment information reporting system that replaces the original foreign investment
enterprise approval and filing system of the MOFCOM. The foreign investment information
reporting is subject to the Measures on Reporting of Foreign Investment Information ( ̮ਠ
) jointly developed by the MOFCOM and the SAMR, which came into
effect on January 1, 2020. Since January 1, 2020, for foreign investors carrying out investment
activities directly or indirectly in China, the foreign investors or foreign-invested enterprises
shall submit investment information to the relevant commerce administrative authorities in
accordance with the Measures on Reporting of Foreign Investment Information.
The Measures on the Security Review of Foreign Investment (፬
) promulgated by the NDRC and MOFCOM on December 19, 2020 and taking effect on
January 18, 2021 set forth provisions concerning the security review mechanism on foreign
investment, including the types of investments subject to review, the scopes of review and
procedures to review, among others.
Regulations in Relation to Information Security and Data Privacy
Data Security and Export
The SCNPC promulgated the Data Security Law of the People’s Republic of China ( ʕ
), on June 10, 2021 (effective from September 1, 2021), for the
establishment of a data classification and grading protection system to conduct classified and
hierarchical protection of data. Entities engaged in data processing activities shall, in
accordance with laws and regulations, establish a sound full-process data security management
system, organize data security education and training, and take corresponding technical
measures and other necessary measures to ensure data security.
According to the Measures for Security Assessment of Data Export ( ᅰኽ̈ྤτΌ൙
) issued by the Cyberspace Administration of China (ࢹڦ
܃the “ CAC”) on July 7, 2022 and came into effect on September 1, 2022, a data
processor that provides data overseas under any of the following circumstances shall apply to
the national cyberspace administration for the security assessment of the outbound data transfer
through local provincial cyberspace administration: (i) a data processor provides important
data abroad; (ii) the critical information infrastructure operator or the data processor that has
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processed the personal information of more than 1 million people provides personal
information abroad; (iii) the data processor that has provided the personal information of over
100,000 people or the sensitive personal information of over 10,000 people cumulatively since
January 1 of the previous year provides personal information abroad; and (iv) any other
circumstance where an application for the security assessment of outbound data transfer is
required by the national cyberspace administration.
According to the Measures for Standard Contract for Outbound Transfer of Personal
Information () issued by the CAC on February 22, 2023 and
effective from June 1, 2023, to provide personal information to an overseas recipient through
the conclusion of the standard contract, a personal information processor shall meet all of the
following circumstances: (i) it is not a critical information infrastructure operator; (ii) it has
processed the personal information of less than one million individuals; (iii) it has
cumulatively provided the personal information of less than 100,000 individuals to overseas
recipients since January 1 of the previous year; and (iv) it has cumulatively provided the
sensitive personal information of less than 10,000 individuals since January 1 of the previous
year.
According to the Provisions on Facilitating and Regulating Cross-border Data Flows
(), a data handler that is not a critical information
infrastructure operator, will be exempted from declaring for security assessment for outbound
data transfer, signing a standard contract with overseas recipient or passing the personal
protection certification, if such data handler accumulatively transfers overseas the personal
information (excluding sensitive personal information) of not less than 100,000 individuals but
less than 1 million individuals or the sensitive personal information of less than 10,000
individuals since the January 1 of the current year.
Personal Information Protection
According to the Civil Code of the PRC (Պ) (the “ Civil
Code ”), which was promulgated by the NPC on May 28, 2020 and became effective from
January 1, 2021, personal information of natural persons is protected by law. If any
organization or individual needs to obtain other people’s personal information, they should
obtain it in accordance with the law and ensure the security of the information. They must not
illegally collect, use, process, or transmit other people’s personal information, and must not
illegally buy, sell, provide, or disclose the information. The Personal Information Protection
Law of the People’s Republic of China () promulgated by
the SCNPC on August 20, 2021 and implemented on November 1, 2021, further emphasizes the
obligations and responsibilities of processors for the protection of personal information, and
requests higher level of protective measures on the processing of sensitive personal
information.
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According to the Cybersecurity Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) promulgated by the SCNPC on November 7, 2016 and effective on June 1,
2017, network operators must follow the principles of legality, legitimacy and necessity when
collecting and using personal information, and publicly disclose the rules for collection and
use, clearly state the purpose, method and scope of collecting and using information, and obtain
the consent of the person whose data is being collected. Network operators shall not collect
personal information unrelated to the services they provide. Network operators are not allowed
to leak, tamper with, or damage the personal information they collect; they are not allowed to
provide personal information to others without the consent of the person whose data is being
collected. However, this does not apply to cases where a specific individual cannot be
identified and the identity cannot be recovered after processing. Network operators should take
technical measures and other necessary measures to ensure the security of the personal
information they collect and prevent leakage, damage and loss of information.
Regulations on Self-Owned Real Properties
According to the Civil Code, the creation, alteration, alienation, or extinguishment of the
property right of a real property shall become effective upon registration in accordance with
law. The certificate of ownership of real property shall be an evidence of the right holder’s
entitlement in the real property.
According to the Land Administration Law of the PRC ()
promulgated by the SCNPC on June 25, 1986, last amended on August 26, 2019 and taking
effect from January 1, 2020, China implements socialist public ownership of land, that is,
ownership by the whole people or collective ownership by the working masses. The State
formulates an overall land utilization plan to stipulate land use, classifying land into
agricultural land, construction land, or unused land. Entities or individuals using land must use
the land strictly in accordance with the purposes of land use determined in the overall land
utilization plan.
Regulations on Lease of Real Property
According to the Civil Code, a lease contract generally shall contain clauses specifying
the name, quantity and purpose of use of the leased object, the term of the lease, rent, the
schedule and method of its payment, the maintenance and repair of the leased object, etc. The
lessee of a lease may, with the consent of the lessor, sublease the leased object to a third party.
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According to the Administrative Measures for Leasing of Commodity Housing (גۜ
) promulgated by the Ministry of Housing and Urban-Rural Development of
the PRC (ண௅) (the “ MOHURD ”) on December 1, 2010 and
became effective on February 1, 2011, a commodity housing lease contract should be registered
and filed with the competent construction (real estate) departments of the municipalities
directly under the central government, cities and counties where the house is located within 30
days after the execution of the lease contract. Those who fail to comply with the
aforementioned filing regulations may be ordered by the competent authority to correct within
a time limit. If the entity does not correct within the specified period, it may be subject to a
fine ranging from 1,000 yuan to 10,000 yuan.
Regulations on Construction
Construction Work Planning Permit
In accordance with the Urban and Rural Planning Law of the PRC (۬
) promulgated by the SCNPC on October 28, 2007 and last amended with effect
from April 23, 2019, where construction work is conducted in a city or town planning area, the
relevant construction entity shall apply for a construction work planning permit (ணʈ೻஝
ྌ஢̙ᗇ) from the competent administrative authority in charge of urban and rural planning.
Construction Work Commencement Permit
According to the Construction Law of the PRC ()
promulgated by the SCNPC on November 1, 1997 and last amended with effect from April 23,
2019, a construction entity shall, prior to the commencement of a construction work, apply for
a construction permit (ʈ஢̙ᗇ) from the competent construction administrative authority,
except that certain small-scale projects that meet the requirements and conditions set by the
competent construction administrative authority are exempted from obtaining a construction
permit.
According to the Administrative Measures for Construction Permits of Building Projects
() promulgated by the MOHURD on October 15, 1999 and last
amended with effect from March 30, 2021, any entity in China that carries out construction,
fitting-out or decoration of a building and its ancillary facilities, installation of supporting
lines, pipelines or equipment, as well as the construction of municipal infrastructure projects
shall, prior to the commencement of the construction, apply for a construction permit.
Construction works with a construction investment amount of less than RMB300,000 or a
construction area of less than 300 square meters are not required for construction permits.
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Acceptance on Completion of Construction
According to the Measures for the Administration of Completion Acceptance and Filing
of Housing Construction and Municipal Infrastructure Projects (ʈ
) promulgated by the MOHURD and taking effect from October
19, 2009, any entity in China that carries out construction works to build, expand or re-build
real properties or municipal infrastructure projects shall, within 15 days after the acceptance
of the relevant construction work, make a record-filing with the competent construction
administration authority.
Laws and Regulations in Relation to Intellectual Property
Patent
Patents in the PRC are mainly protected by the Patent Law of the PRC ( ʕശɛ͏΍ձ
) (the “ Patent Law ”), which was promulgated by the SCNPC on March 12, 1984
and latest amended on October 17, 2020 and came into effect on June 1, 2021, and the
Implementation Rules of the Patent Law of the PRC ()
(the “ Implementation Rules of the Patent Law ”), promulgated by the State Council on June
15, 2001 and latest amended on December 11, 2023 and came into effect on January 20, 2024.
The Patent Law and the Implementation Rules of the Patent Law provide for three types of
patents, namely “invention,” “utility model” and “design.” “Invention” refers to any new
technical solution relating to a product, a process or improvement thereof; “utility model”
refers to any new technical solution relating to the shape, structure, or their combination, of a
product, which is suitable for practical use; and “design” refers to any new design of the shape,
pattern, color or the combination of any two of them, of a product, which creates an aesthetic
feeling and is suitable for industrial application. The duration of a patent right for “invention”
is twenty (20) years; the duration of a patent right for “utility model” is ten (10) years; and the
duration of a patent right for “design” is fifteen (15) years, all of which duration are from the
date of application. According to the Patent Law, for the purpose of public health, the patent
administrative department of the State Council may grant mandatory licensing for patented
drugs manufactured and exported to countries or regions which comply with the provisions of
the relevant international treaty participated by the PRC.
The newly amended Patent Law introduces patent extensions to patents of new drugs that
launched in the PRC, and stipulates that the Patent Administration Department under the State
Council shall, upon request of the patentee, extend the patent term of relevant invention patents
of the new drug that is approved to be listed on the market in China, to compensate for the time
spent for the review and examination and approval of the listing of a new drug on the market.
The compensated extension shall not exceed five (5) years, and the total valid patent term after
the new drug is approved for the market shall not exceed fourteen (14) years. Such newly
adopted patent term extension rule benefits the Company through providing longer protection
terms of patents applied or registered in the PRC and related to our product candidates. This
rule needs to be further elaborated by the competent authority, and the benefits we could enjoy
are subject to the relevant clarifications and explanations.
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Trademarks
Registered trademarks in the PRC are mainly protected by the Trademark Law of the PRC
(), which was promulgated by the SCNPC on August 23, 1982 and
latest amended on April 23, 2019 and came into effect on November 1, 2019, and the
Implementation Rules of the Trademark Law of the PRC (ૢ
Է), which were promulgated by the State Council on August 3, 2002 and latest amended on
April 29, 2014 and came into effect on May 1, 2014. The Trademark Office is responsible for
the registration and administration of trademarks throughout China and grants a term of ten
(10) years to registered trademarks. When it is necessary to continue using the registered
trademark upon expiration of period of validity, a trademark registrant shall make an
application for renewal within twelve (12) months before the expiration in accordance with the
requirements. If such an application cannot be filed within that period, an extension period of
six months may be granted. The period of validity for each renewal of registration shall be ten
(10) years as of the next day of the previous period of validity. If the formalities for renewal
have not been handled upon expiration of period of validity, the registered trademarks will be
deregistered.
Copyright
Copyright in the PRC is primarily protected by the Copyright Law of the PRC ( ʕശ
), which was promulgated by the SCNPC on September 7, 1990, last
amended on November 11, 2020 and became effective on June 1, 2021, and the Implementation
Regulations of the Copyright Law of PRC (ૢԷ), which
was promulgated by the State Council on August 2, 2002 last amended on January 30, 2013,
and became effective on March 1, 2013. These law and regulation provide provisions on the
classification of works and the obtaining and protection of copyright.
Domain Names
Domain names are regulated under the Administrative Measures on the Internet Domain
Names () issued by the MIIT, on August 24, 2017 and effective from
November 1, 2017. The MIIT is the main regulatory authority responsible for the
administration of the PRC internet domain names. Domain names registrations are handled
through domain name service agencies established under the relevant regulations, and the
applicants become domain name holders upon successful registration.
Trade Secret
According to the Anti-Unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍຅
) promulgated by SCNPC, as amended and effective as of April 23, 2019, the term
“trade secrets” refers to technical and business information that is unknown to the public, has
utility, may create business interests or profits for its legal owners or holders, and is maintained
as a secret by its legal owners or holders. Under the Anti-Unfair Competition Law of the PRC,
business persons are prohibited from infringing others’ trade secrets by: (i) acquiring a trade
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secret from the right holder by theft, bribery, fraud, coercion, electronic intrusion, or any other
means; (ii) disclosing, using, or allowing another person to use a trade secret acquired from the
right holder by any means as specified in the item (i) above; (iii) disclosing, using, or allowing
another person use a trade secret in its possession, in violation of its confidentiality obligation
or the requirements of the right holder for keeping the trade secret confidential; (iv) abetting
a person, or tempting another person into or in acquiring, disclosing, using, or allowing another
person to use the trade secret of the right holder in violation of his or her non-disclosure
obligation of the requirements of the right holder for keeping the trade secret confidential. If
a third party knows or should have known of the above-mentioned illegal conduct but
nevertheless obtains, uses or discloses trade secrets of others, the third party may be deemed
to have committed a misappropriation of the others’ trade secrets. The parties whose trade
secrets are being misappropriated may petition for administrative corrections, and regulatory
authorities may stop any illegal activities and impose fine on the infringing parties.
Regulations in Relation to Production Safety
The Production Safety Law of the PRC (), promulgated
by the SCNPC on June 29, 2002 and latest amended on June 10, 2021 and came into effect on
September 1, 2021, is the basic law for governing production safety. It provides that, any entity
whose production safety conditions do not meet the requirements may not engage in production
and business operation activities. The production and business operation entities shall educate
and train employees regarding production safety so as to ensure that the employees have the
necessary knowledge of production safety, are familiar with the relevant regulations and rules
for safe production and the rules for safe operation, master the skills of safe operation in their
own positions, understand the emergency measures, and know their own rights and duties in
terms of production safety. Employees who fail the education and training programs on
production safety may not commence working in their positions. Safety facilities of new
building, rebuilding or expanding project (the “ construction project ”) shall be designed,
constructed and put into operation simultaneously with the main body of the project.
Investment in safety facilities shall be included in the budget of the construction project.
Regulations in Relation to Environmental Protection
According to the Environmental Protection Law of the PRC (ᚐ
), promulgated by the SCNPC on December 26, 1989 and latest amended on April 24, 2014
and came into effect on January 1, 2015, the Environmental Impact Assessment Law of the
PRC (), promulgated by the SCNPC on October 28, 2002
and latest amended on December 29, 2018, and the Administrative Regulations on the
Environmental Protection of Construction Project (ᚐ၍ଣૢԷ),
promulgated by the State Council on November 29, 1998 and latest amended on July 16, 2017
and came into effect on October 1, 2017, enterprises which plan to construct projects shall
engage qualified professionals to provide the assessment reports, assessment form, or
registration form on the environmental impact of such projects. The assessment reports,
assessment form, or registration form shall be filed with or approved by the relevant
environmental protection bureau prior to the commencement of any construction work.
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According to the Administrative Measures on Pollutant Discharge Permit ( રϮ஢̙၍
) issued by the Ministry of Ecology and Environment on April 1, 2024 and came into
effect on July 1, 2024, enterprises, public institutions and other producers and operators that
are subject to the administration of pollutant discharge permits shall apply for pollutant
discharge permit and discharge pollutants in accordance with the requirements of the pollutant
discharge permit; and those who have not obtained the pollutant discharge permits shall not
discharge pollutants. According to the Classification Management List for Fixed Source
Pollution Permits (2019 Edition) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019و)), the
manufacturing of biological drugs and products falls into the classification management scope
for fixed source pollution permits.
Regulations in Relation to Labor, Social Insurance and Housing Provident Funds
According to the Labor Law of the PRC (), which was
promulgated by the SCNPC in July 1994 and last amended and came into effect in December
2018, the Labor Contract Law of the PRC (), which was
promulgated by the SCNPC in June 2007 and amended in December 2012 and came into effect
in July 2013, and the Implementing Regulations of the Labor Contracts Law of the PRC ( ʕ
ૢԷ), which was promulgated by the State Council and came
into effect in September 2008, labor contracts in written form shall be executed to establish
labor relationships between employers and employees. In addition, wages shall not be lower
than local minimum wages. The employers must establish a system for labor safety and
sanitation, strictly comply with national rules and standards, provide education regarding labor
safety and sanitation to its employees, provide employees with labor safety and sanitation
conditions and necessary protection materials in compliance with national rules, and carry out
regular health examinations for employees engaged in work involving occupational hazards.
According to the Social Insurance Law of the PRC (),
which was promulgated by the SCNPC in October 2010 and last amended and came into effect
in December 2018, and the Interim Regulations on the Collection and Payment of Social
Security Funds (ᎈ൬ᅄᖮᅲБૢԷ), which was promulgated by the State Council
in January 1999 and last amended in March 2019, and the Regulations on the Administration
of Housing Provident Funds (၍ଣૢԷ), which was promulgated by the State
Council in April 1999 and last amended in March 2019, employers are required to contribute,
on behalf of their employees, to a number of social security funds, including funds for basic
pension insurance, unemployment insurance, basic medical insurance, occupational injury
insurance and maternity insurance and to housing provident funds. Any employer who fails to
make the required contributions may be fined and ordered to compensate the deficit within a
stipulated time limit.
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Regulations in Relation to Overseas Securities Offering and Listing by Domestic
Companies
According to the Trial Administrative Measures of Overseas Securities Offering and
Listing by Domestic Enterprises () issued by
the CSRC on February 17, 2023 and effective from March 31, 2023, where a domestic company
seeks overseas securities issuance and listing, the issuer shall file with the CSRC in accordance
with the Trial Measures for Overseas Listing. If an issuer procures an overseas initial public
offering or listing, it shall file with the CSRC within three (3) business days after submitting
application documents for overseas securities issuance and listing.
According to the Provisions on Strengthening Confidentiality and Archives
Administration of Overseas Securities Offering and Listing by Domestic Companies (׵
) jointly issued by the
CSRC and other departments on February 24, 2023 and effective on March 31, 2023, in the
overseas offering and listing activities of domestic enterprises, domestic enterprises, and
securities companies and securities service institutions that provide corresponding services
shall strictly comply with the applicable laws and regulations of the People’s Republic of China
and satisfy the requirements of these Provisions, enhance the legal awareness of safeguarding
state secrets and strengthening archives administration, establish and improve the
confidentiality and archives work system, and take necessary measures to fulfill the
confidentiality and archives administration obligations, and shall not divulge state secrets or
work secrets of state organs, or harm the interests of the state or the public. A domestic
enterprise that, either directly or through its overseas listed entity, publicly discloses or
provides to relevant securities companies, securities service institutions, overseas regulators,
and other entities and individuals, any documents and materials that involve state secrets or
work secrets of state organs, shall obtain approval from the competent department with the
power of examination and approval according to the law, and report to the administrative
department of confidentiality at the same level for filing. A domestic enterprise that, either
directly or through its overseas listed entity, publicly discloses or provides to relevant
securities companies, securities service institutions, overseas regulators, and other entities and
individuals, other documents and materials whose divulgence will have adverse impact on
national security or public interest, shall strictly undergo the relevant procedures in accordance
with the relevant regulations of the state.
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OVERVIEW
Our Company was established in the PRC on December 16, 2019. In 2020, we completed
the acquisitions of Suzhou Kangju and Suzhou Centergene as part of the business
reorganization of our Group, details of which are set out in “— Establishment and Major
Shareholding Changes of our Company — (c) Business Reorganization of our Group and
November 2020 Capital Increase” below. In July 2023, our Company was converted from a
limited liability company into a joint stock limited liability company.
Under the leadership of Dr. Liu and Ms. Wang, the co-founders of our business, we have
developed into a clinical-stage biotechnology company in China leveraging synthetic biology
technology to develop and deliver recombinant biologic drugs, targeting conditions with
limited treatment options and complex manufacturing challenges. For more details of the
experience and qualifications of Dr. Liu and Ms. Wang, see “Directors, Supervisors and Senior
Management.”
MILESTONES
The following is a summary of our key development milestones since our inception:
Y ear Milestone(s)
December 2019 /H1118/H1118/H1118Our Company was established in the PRC with limited liability
August 2020 /H1118/H1118/H1118/H1118/H1118We obtained the land use rights of our industrialization base
September 2020 /H1118/H1118We completed the acquisitions of Suzhou Kangju and Suzhou
Centergene
We initiated the Phase II portion of Phase II/III clinical trial of
SJ02 (CTR20201374) in China
February 2021 /H1118/H1118/H1118We conducted the Series A Financing of RMB319.0 million (1)
April 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We conducted the financing of Suzhou Centergene of RMB155.9
million
August 2021 /H1118/H1118/H1118/H1118/H1118We initiated the Phase IIIa clinical trial of KJ017 (CTR20210453)
in China
October 2021 /H1118/H1118/H1118/H1118/H1118We initiated the Phase III portion of Phase II/III clinical trial of
SJ02 (CTR20201374) in China
March 2022 /H1118/H1118/H1118/H1118/H1118/H1118We conducted the Series A1 Financing at consideration of the
equity interest in Suzhou Centergene (1)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Y ear Milestone(s)
May 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We received FDA clinical approval and initiated Phase I clinical
trial in New Zealand for KJ103 (NCT05274659)
August 2022 /H1118/H1118/H1118/H1118/H1118We conducted the Series B Financing of RMB585.0 million (1)
We received IND approval from the NMPA for desensitization
before kidney transplantation
October 2022 /H1118/H1118/H1118/H1118We initiated the Phase I clinical trial of KJ103 (CTR20222595) in
China
December 2022 /H1118/H1118/H1118We obtained the Drug Manufacturing License Type A (͛ପ஢
̙ᗇAᗇ) issued by Shanghai Administration of Pharmaceuticals
and Medical Devices (္ຖ၍ଣ҅) for the manufacture
of KJ017
We completed the Phase III portion of Phase II/III clinical trial of
SJ02 (CTR20201374) in subjects undergoing ART in China
March 2023 /H1118/H1118/H1118/H1118/H1118/H1118We completed the Phase I clinical trial for KJ103 in New Zealand
and China (NCT05274659 and CTR20222595)
May 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We obtained the Drug Manufacturing License Type C (͛ପ஢
̙ᗇCᗇ) issued by Shanghai Medical Products Administration ( ɪ
္ຖ၍ଣ҅) for the manufacture of SJ02
December 2023 /H1118/H1118/H1118We submitted the NDA to NMPA for SJ02 in China
We entered into the Phase II trial of KJ103 (CTR20234137) in
China for desensitizing highly human leukocyte antigen (HLA)-
sensitized patients to enable kidney transplantation
January 2024 /H1118/H1118/H1118/H1118/H1118We obtained the Drug Manufacturing License Type B (͛ପ஢
̙ᗇBᗇ) issued by Jiangsu Medical Products Administration ( Ϫ
္ຖ၍ଣ҅) for the manufacture of SJ02
March 2024 /H1118/H1118/H1118/H1118/H1118We initiated the Phase IIIb clinical trial of KJ017 (CTR20241071)
in China
May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We obtained the clinical trial approval for SJ04 in China
June 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We submitted the NDA to NMPA for KJ017 in China
July 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We conducted the Series C Financing of RMB425.7 million
(1)
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Y ear Milestone(s)
August 2024 /H1118/H1118/H1118/H1118/H1118We obtained the Phase II clinical trial approval for KJ103 for
patients with anti-GBM disease in China
September 2024 /H1118/H1118We completed the Phase II trial of KJ103 for highly HLA-
sensitized patients awaiting kidney transplantation
(CTR20234137)
October 2024 /H1118/H1118/H1118/H1118We initiated the Phase II clinical trial of KJ103 for anti-GBM
disease (CTR20243543) in China
November 2024 /H1118/H1118/H1118We received the BTD from the NMPA for KJ103 as a potential
desensitization therapy in kidney transplantation
We submitted an IND application for KJ101 to the NMPA
December 2024 /H1118/H1118/H1118We obtained the clinical trial approval for KJ015 in China
We conducted the Series C+ Financing of RMB45.0 million
(1)
We submitted an IND application for BJ007 to the NMPA
January 2025 /H1118/H1118/H1118/H1118We submitted an IND application for KJ103, targeting the
treatment of GBS, to the NMPA
February 2025 /H1118/H1118/H1118We have received IND approvals for BJ007 and KJ101 from
NMPA
April 2025 /H1118/H1118/H1118/H1118/H1118/H1118We received the IND approval for the Phase II trial of KJ103 in
treating GBS from the NMPA
May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We submitted an IND application for BJ009 to the NMPA
June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We initiated the Phase I trial for KJ015 in China
July 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We entered into an exclusive sales agency agreement with ANKE
BIO, pursuant to which ANKE BIO acts as an exclusive CSO
responsible for the commercialization of SJ02 in Greater China
We received the BTD from the NMPA for KJ103 for the treatment
of anti-GBM disease
We initiated the Phase II trial for KJ101 in China (CTR20252263)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Y ear Milestone(s)
August 2025 /H1118/H1118/H1118/H1118/H1118We initiated the Phase III trial for KJ103 in highly HLA-sensitized
patients awaiting kidney transplantation in China (CTR20252973)
We initiated the Phase I trial for BJ007 in China (CTR20253085)
We received the NDA approval for SJ02 from the NMPA
September 2025 /H1118/H1118/H1118We received the IND approval for BJ009 from the NMPA
We completed the Phase I trial of SJ04 (CTR20242399) in China
October 2025 /H1118/H1118/H1118/H1118/H1118We completed the clinical trial of KJ103 for anti-GBM disease
(CTR20243543) in China
November 2025 /H1118/H1118We initiated the Phase II trial of KJ103 in GBS treatment
(CTR20253992) in China
Note:
(1) For the purpose of clarification, the dates mentioned herein refer to the date of the agreement.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OUR SUBSIDIARIES
As of the Latest Practicable Date, we had four wholly-owned subsidiaries, and their
details are set forth below:
Subsidiary
Date and
place of
establishment Registered capital
Equity
interest
attributable
to our Group
Principal business
activities
Suzhou Kangju (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118August 15, 2011;
PRC
RMB10,000,000 100.0% Biopharmaceutical
R&D
Suzhou Centergene (1) /H1118/H1118/H1118/H1118/H1118July 24, 2014;
PRC
RMB64,575,476 100.0% Biopharmaceutical
R&D
Hainan Baoji (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118February 8,
2022; PRC
RMB1,000,000 100.0% Biopharmaceutical
R&D
Hong Kong Bao Pharma (2) /H1118/H1118April 17, 2025;
Hong Kong
HKD10,000 100.0% Biopharmaceutical
R&D
Notes:
(1) On September 24, 2020, we completed the acquisitions of Suzhou Kangju and Suzhou Centergene, both
of which had become our subsidiaries since the completion of the acquisitions. For details of the
acquisitions of Suzhou Kangju and Suzhou Centergene, see “— Establishment and Major Shareholding
Changes of Our Company — (c) Business Reorganization of our Group and November 2020 Capital
Increase” in this section.
(2) As of the Latest Practicable Date, Hainan Baoji and Hong Kong Bao Pharma had been wholly-owned
by our Company since their establishment. During the Track Record Period, neither Hainan Baoji nor
Hong Kong Bao Pharma has substantial business operations.
ESTABLISHMENT AND MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
(a) Establishment of our Company in 2019
Our Company was established as a limited liability company in the PRC on December 16,
2019, with an initial registered capital of RMB1,000,000, of which RMB950,000 have been
fully paid up by Dr. Liu using his personal funds. At the time of the establishment, our
Company was owned as to 95.0% by Dr. Liu and 5.0% by Mr. Lou Junwen (˖)( “ Mr.
Lou”), our Supervisor, respectively.
Since its establishment, our Company has undertaken a series of capital increases to raise
funds for the development of our business and to bring in new Shareholders. The major
shareholding changes of our Company are set out below.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(b) Equity Transfer to Shanghai Luoxu and Initial Capital Increase
Pursuant to an equity transfer agreement and a supplemental agreement to the equity
transfer agreement dated September 2, 2020, entered into by Mr. Lou and Shanghai Luoxu, Mr.
Lou shall transfer 5.0% shareholding interest in the Company to Shanghai Luoxu at nil
consideration since the relevant registered capital was not paid up at the time of the transfer.
The equity transfer was completed on September 11, 2020.
On the same date, the then Shareholders resolved to increase the registered capital of our
Company from RMB1,000,000 to RMB16,950,000, pursuant to which (i) Dr. Liu subscribed
for the increased registered capital of RMB12,250,000 by transferring a certain intellectual
property right to our Company, which was determined with reference to a valuation report of
such intellectual property rights issued by an independent valuer; and (ii) Shanghai Luoxu
subscribed for the increased registered capital of RMB3,700,000 at a consideration equaling to
the amount of registered capital subscribed. The capital increase was completed on December
28, 2020.
Upon completion of the aforementioned equity transfer and capital increase, the
shareholding structure of our Company was as follows:
Shareholders
Registered capital
subscribed for Equity interest
(RMB) (%)
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,200,000 77.88
Shanghai Luoxu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,750,000 22.12
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,950,000 100.00
(c) Business Reorganization of our Group and November 2020 Capital Increase
In 2020, Center Lab and PCJ Bao Holdings Limited (“ PCJ Bao ”) recognized Dr. Liu’s
extensive experience in the pharmaceutical industry and commercialization capabilities,
expressing their intent to invest in the Company. Impressed by his strong technical expertise
and effective management, both Center Lab and PCJ Bao, having previously invested in
Suzhou Centergene, a non-wholly owned subsidiary of Suzhou Kangju, proposed a strategic
restructuring of the Company, Suzhou Kangju, and Suzhou Centergene (the “ Business
Restructuring ”). They recommended Dr. Liu for the position of chairman of the Board of the
Company, convinced that his leadership would enhance business integration of the Company,
Suzhou Kangju, and Suzhou Centergene, drive growth, and stimulate innovation of business.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Pursuant to a framework restructuring agreement regarding the Business Restructuring
dated June 2020 (the “ Framework Restructuring Agreement ”) entered into by, among the
others, Company, Dr. Liu, Ms. Wang, Mr. Tan, Center Lab, and PCJ Bao, the Company shall
acquire the entire equity interests of Suzhou Kangju and the minority equity interests of
Suzhou Centergene through an equity swap arrangement (the “ Equity Swap ”). In the Equity
Swap, Ms. Wang and Mr. Tan shall transfer their equity interests in Suzhou Kangju to the
Company in exchange for increased registered capital of the Company, and Center Lab and PCJ
Bao shall transfer their equity interests in Suzhou Centergene to the Company in exchange for
increased registered capital of the Company.
Immediately prior to the Equity Swap, Suzhou Kangju was owned as to 60% by Ms. Wang
and as to 40% by Mr. Tan, and Suzhou Centergene was owed as to 50.09% by Suzhou Kangju,
39.93% by Center Lab and as to 9.98% by PCJ Bao. The Business Restructuring sought to
synergize the diverse assets, talent, and product pipelines of the Company, Suzhou Kangju and
Suzhou Centergene, thereby facilitating a unified approach to advancing the development and
commercialization of our innovative biopharmaceutical products. Immediately after the Equity
Swap, each of Suzhou Kangju and Suzhou Centergene became a wholly owned subsidiary of
the Company.
To facilitate the Equity Swap under Framework Restructuring Agreement, the then
Shareholders resolved to increase the registered capital of our Company from RMB16,950,000
to RMB30,000,000, pursuant to which (i) Center Lab subscribed for the increased registered
capital of RMB4,440,000 at a consideration of equity interest in Suzhou Centergene with the
value of RMB30,640,000; (ii) PCJ Bao subscribed for the increased registered capital of
RMB1,110,000 at a consideration of equity interest in Suzhou Centergene with the value of
RMB7,650,000; (iii) Ms. Wang subscribed for the increased registered capital of
RMB4,500,000 at a consideration of equity interest in Suzhou Kangju with the value of
RMB31,100,000; and (iv) Mr. Tan subscribed for the increased registered capital of
RMB3,000,000 at a consideration of equity interest in Suzhou Kangju with the value of
RMB20,730,000. The terms of the Equity Swap were determined based on arm’s length
negotiation among relevant parties, with reference to a valuation report on the equity interest
of Suzhou Kangju and Suzhou Centergene prepared by an independent valuer at the time of the
Equity Swap. On September 24, 2020, both of Suzhou Kangju and Suzhou Centergene became
our subsidiaries, and the aforementioned capital increase was completed on November 13,
2020.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Upon completion of the Equity Swap and aforementioned capital increase, the
shareholding structure of our Company was as follows:
Shareholders
Registered capital
subscribed for Equity interest
(RMB) (%)
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,200,000 44.00
Ms. Wang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,500,000 15.00
Center Lab /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,440,000 14.80
Shanghai Luoxu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,750,000 12.50
Mr. Tan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,000,000 10.00
PCJ Bao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,110,000 3.70
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,000,000 100.00
(d) Equity Transfers in 2021 and Series A Financing
(1) Equity Transfers in 2021
Pursuant to an equity transfer agreement dated January 8, 2021, entered into by Dr. Liu
and ROSY ELEGANT COMPANY LIMITED (“ ROSY ELEGANT ”), Dr. Liu agreed to
transfer RMB250,000 of equity interest in the Company to ROSY ELEGANT, at a
consideration in Hong Kong dollars equivalent to RMB10 million, which was determined
based on arm’s length negotiation with reference to our business prospects and the research and
development of our drug candidates at the time of the transfer. The equity transfer was
completed on April 29, 2021.
Pursuant to an equity transfer agreement dated January 19, 2021, entered into by Dr. Liu
and Shanghai Cixi V enture Capital Center (Limited Partnership) ( ɪऎฉဢ௴ุҳ༟ʕː(ࠢ
Υྫ)) (“ Shanghai Cixi ”), Dr. Liu agreed to transfer RMB500,000 of equity interest in the
Company to Shanghai Cixi, at a consideration of RMB20 million, which was determined based
on arm’s length negotiation with reference to our business prospects and the research and
development of our drug candidates at the time of the transfer. The equity transfer was
completed on June 10, 2021.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(2) Series A Financing
Pursuant to a capital increase agreement entered into by and amongst our Company,
Suzhou Kangju, Suzhou Centergene, Dr. Liu, Shanghai Luoxu, Ms. Wang, Mr. Tan, Center Lab,
V enus Capital HK Limited (“ Venus Capital ”), Shanghai Luohui Management Consulting
Partnership Enterprise (Limited Partnership) ( ɪऎᖯሾ၍ଣፔ༔ΥྫΆุ(Υྫ))
(“Shanghai Luohui ”), and Xiamen Y oulang Equity Investment Partnership Enterprise
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Xiamen Y oulang ”) on
February 8, 2021 (the “ Series A Investment Agreement ”), the registered capital of our
Company was increased by RMB7,088,888. According to the Series A Investment Agreement,
(i) V enus Capital subscribed for the increased registered capital of RMB3,222,222 at a
consideration in U.S. dollars equivalent to RMB145 million; (ii) Center Lab subscribed for the
increased registered capital of RMB2,222,222 at a consideration in U.S. dollars equivalent to
RMB100 million; (iii) Shanghai Luohui subscribed for the increased registered capital of
RMB1,200,000 at a consideration of RMB54 million; and (iv) Xiamen Y oulang subscribed for
the increased registered capital of RMB444,444 at a consideration of RMB20 million (the
“Series A Financing ”).
The Series A Financing were completed on March 31, 2021. For details of the Series A
Financing, see “— Pre-IPO Investments” below.
Upon completion of the aforementioned equity transfers and the Series A Financing, the
shareholding structure of our Company was as follows:
Shareholders
Registered capital
subscribed for Equity interest
(RMB) (%)
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,450,000 33.57
Center Lab /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,662,222 17.96
Ms. Wang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,500,000 12.13
Shanghai Luoxu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,750,000 10.11
V enus Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,222,222 8.69
Mr. Tan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,000,000 8.09
Shanghai Luohui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,200,000 3.24
PCJ Bao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,110,000 2.99
Shanghai Cixi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500,000 1.35
Xiamen Y oulang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,444 1.20
ROSY ELEGANT /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118250,000 0.67
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,088,888 100.00
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(e) Capital Increase in Suzhou Centergene and Series A1 Financing
On February 3, 2021, Ningbo Hongsheng, one of our Share Incentive Platforms,
subscribed for the increased capital of RMB4,360,000 of Suzhou Centergene at a total
consideration of RMB7,030,275 which was based on Suzhou Centergene’s net assets as of
September 30, 2020. As a result, the registered capital of Suzhou Centergene was increased to
RMB47,960,000.
On April 8, 2021, Suzhou Centergene, the Company, Suzhou Kangju, Ningbo Hongsheng,
Qingdao Y uanchuang Energy Conservation and Environmental Protection V enture Capital Fund
Partnership Enterprise (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)) (“ Qingdao Yuanchuang ”), Y antai Duoying New Kinetic Energy Investment Center
(L.P .) (อਗঐҳ༟ʕː(Υྫ)) (“ Y antai Duoying ”), Shanghai Luoqun
Management Consulting Partnership Enterprise (Limited Partnership) ( ɪऎᖯ໊၍ଣፔ༔Υྫ
Άุ(Υྫ)) (“ Shanghai Luoqun ”), Shanghai Guqing Enterprise Management Center ( ɪ
ऎᇅ౹Άุ၍ଣʕː)( “ Shanghai Guqing ”), Shanghai Luoyuan Management Consulting
Partnership Enterprise (Limited Partnership) ( ɪऎᖯ෤၍ଣፔ༔ΥྫΆุ(Υྫ))
(“Shanghai Luoyuan ”), Xiamen Y oulang, Nie Miao ( ᔗ↿) and Zheng Keqing (ڡ)
entered into a capital increase agreement (“ Centergene Capital Increase Agreement ”).
Pursuant to the Centergene Capital Increase Agreement, the relevant investors agreed to
subscribe for the increased registered capital of RMB16,615,476 of Suzhou Centergene at a
total consideration of RMB155,900,000, determined based on arm’s length negotiation among
relevant parties with reference to the status of business operations of Suzhou Centergene and
prevailing market condition.
On March 30, 2022, the then Shareholders resolved to increase the registered capital of
our Company from RMB37,088,888 to RMB41,462,379, pursuant to which the relevant
shareholders of Suzhou Centergene subscribed for the increased registered capital of our
Company at considerations of their respective equity interests in Suzhou Centergene (the
“Series A1 Financing ”). The considerations were determined based on arm’s length
negotiation among relevant parties, with reference to the valuation reports on Suzhou
Centergene and the Company prepared by an independent valuer at the time of the capital
increase. The aforementioned capital increase was completed on June 14, 2022. Upon
completion of the Series A1 Financing, Suzhou Centergene became our wholly-owned
subsidiary.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Upon completion of the aforementioned equity transfers and the Series A1 Financing, the
shareholding structure of our Company was as follows:
Shareholders
Registered capital
subscribed for Equity interest
(RMB) (%)
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,450,000 30.03
Center Lab /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,662,222 16.07
Ms. Wang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,500,000 10.85
Shanghai Luoxu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,750,000 9.04
V enus Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,222,222 7.77
Mr. Tan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,000,000 7.24
Shanghai Luohui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,200,000 2.89
PCJ Bao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,110,000 2.68
Ningbo Hongsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118909,081 2.19
Shanghai Luoqun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118686,660 1.66
Shanghai Guqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118666,660 1.61
Xiamen Y oulang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118666,664 1.61
Shanghai Cixi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500,000 1.21
Shanghai Luoyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,440 1.07
Zheng Keqing (ڡ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,440 1.07
Qingdao Y uanchuang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,330 0.80
Y antai Duoying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,330 0.80
Nie Miao ( ᔗ↿) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,330 0.80
ROSY ELEGANT /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118250,000 0.60
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,462,379 100.00
(f) Series B Financing
On August 25, 2022, the then Shareholders resolved to increase the registered capital of
our Company from RMB41,462,379 to RMB49,973,075. Pursuant to a capital increase
agreement entered into by and amongst our Company, Suzhou Kangju, Hainan Baoji, Suzhou
Centergene, Dr. Liu, Shanghai Luoxu, Ms. Wang, Mr. Tan, Center Lab and relevant Pre-IPO
Investors on the same date, relevant Pre-IPO Investors below agreed to subscribe for the
increased registered capital of RMB8,510,696 of our Company at a total consideration of
RMB585,000,000 (the “ Series B Financing ”).
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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The respective subscription amount and consideration paid by the relevant Pre-IPO
Investors in the Series B Financing were as follows:
Pre-IPO Investors
Registered capital
subscribed for Consideration
(RMB) (RMB)
Jiaxing Xiqi V enture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(ࠢ
Υྫ)) (“ Jiaxing Xiqi ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,163,856 80,000,000
Shenzhen Fuhai Junyong No. 6 V enture Capital
Enterprise (Limited Partnership) ( ଉέబऎཡ͑
ʬ໮௴ุҳ༟Άุ(Υྫ)) (“ Fuhai Junyong
No. 6 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118916,537 63,000,000
Haitong Innovation Securities Investment Co.,
Ltd. (ʮ̡)( “ Haitong
Innovation Securities ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118872,892 60,000,000
Jinan Chanfa Saixingyuanchuang V enture Capital
Partnership (Limited Partnership) (ପ೯ᒄ
๕௴௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Jinan
Chanfa ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118741,958 51,000,000
Center Lab /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118727,410 50,000,000
Shanghai Meidiya Hospital Investment Group Co.,
Ltd. (ʮ̡)
(“Meidiya Hospital ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118436,446 30,000,000
Y angtze River Delta Industrial Innovation Phase II
(Shanghai) Private Investment Fund Partnership
(Limited Partnership) (ɧԉପุ௴อɚಂ(ɪ
ऎ)ΥྫΆุ(Υྫ)) (“ Y angtze
River Delta Industrial ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118436,446 30,000,000
Ningbo Longhuahui Boyuan V enture Capital
Partnership (Limited Partnership) (ඤശි
௹๕௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Ningbo
Longhuahui ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118436,446 30,000,000
Zheng Xiaodong (؇ࣖ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118436,446 30,000,000
Shenzhen Fuhai Junyong No. 2 V enture Capital
Enterprise (Limited Partnership) ( ଉέబऎཡ͑
ɚ໮௴ุҳ༟Άุ(Υྫ)) (“ Fuhai Junyong
No. 2 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,801 27,000,000
Shenzhen Jiaxing No. 2 Investment Partnership
Enterprise (Limited Partnership) (ɚ
໮ҳ༟ΥྫΆุ(Υྫ)) (“ Jiaxing No. 2 ”) /H1118/H1118 392,801 27,000,000
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Pre-IPO Investors
Registered capital
subscribed for Consideration
(RMB) (RMB)
Fuhai Jingxuan No. 2 V enture Capital (Hangzhou)
Partnership (Limited Partnership) ( బऎၚ፯ɚ
໮௴ุҳ༟(ψ)ΥྫΆุ(Υྫ)) (“ Fuhai
Jingxuan No. 2 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,964 20,000,000
Shenzhen Fuhai Y ouxuan No. 2 High Tech
V enture Capital Partnership (Limited
Partnership) (Ҧ௴ุҳ
༟ΥྫΆุ(Υྫ)) (“ Fuhai Y ouxuan No.
2”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,964 20,000,000
North Shanghai Biomedical Industry Park
Development (Shanghai) Co., Ltd. (ي
ᔼᖹପุ෤ක೯(ɪऎ)ʮ̡)( “ North
Shanghai Biomedical ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,964 20,000,000
Shanghai Jifu Supply Chain Management
Partnership Enterprise (Limited Partnership)
(ɪऎ᏶၅ԶᏐᗡ၍ଣΥྫΆุ(Υྫ))
(“Shanghai Jifu ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,482 10,000,000
Wang Jufang (ٹ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,482 10,000,000
Cui Hongyan (ᜮ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,837 7,000,000
Liu Jintao (ᏹ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,837 7,000,000
Huang Haitao ( රऎᏹ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,741 5,000,000
Xu Sumin ( ஢९ઽ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,193 4,000,000
Chen Jichun (݆ߏ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,645 3,000,000
Li Jueping ( ҽ䊌റ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,548 1,000,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,510,696 585,000,000
The aforementioned Series B Financing was completed on April 20, 2023. For details of
the Series B Financing, see “— Pre-IPO Investments” below.
(g) Equity Transfers in 2023
In 2023, the following transfers of equity interest of our Company were effected. The
consideration for such transfers were determined based on arm’s length negotiation with
reference to the post-money valuation of the Company after the Series B Financing. All of the
following Share transfers have been completed by January 5, 2023.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Transferor Transferee
Registered capital
transferred Consideration
(RMB) (RMB)
Meidiya Hospital /H1118/H1118/H1118Nanjing United Future
Jianfeng Medical Industry
Investment Partnership
(Limited Partnership) (ԯ
ᔼᐕପุҳ༟
ΥྫΆุ(Υྫ))
(“Nanjing United Future ”)
436,446 30,000,000
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai Jifu 116,386 8,000,000
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tianjin Bo’ao Enterprise
Management Partnership
(Limited Partnership) (ݵ
௹ෳΆุ၍ଣΥྫΆุ(ࠢ
Υྫ)) (“ Tianjin Bo’ao ”)
72,740 5,000,000
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Luo Chun ( Ꭳॱ) 43,645 3,000,000
(h) Conversion into a Joint Stock Company
On July 26, 2023, the Company was converted into a joint stock company with its
corporate name changed to Shanghai Bao Pharmaceuticals Co., Ltd. (ʮ
̡). Upon the completion of the conversion, the registered capital of the Company became
RMB49,973,075 divided into 49,973,075 Shares with a nominal value of RMB1.00 each.
(i) August 2023 Capital Increase by Shanghai Luojun
On August 17, 2023, our Company’s registered capital was increased from
RMB49,973,075 to RMB52,046,194, which was subscribed by Shanghai Luojun, one of our
Share Incentive Platforms, at a consideration of RMB19,404,394 determined with reference to
the Company’s net assets as of June 30, 2022. Such capital increase was due to meeting
specific milestones outlined in the Series B Financing shareholder agreement to incentivize our
employees. The aforementioned capital increase was completed on December 31, 2024.
(j) Series C Financing
On July 18, 2024, the then Shareholders resolved to increase the registered capital of our
Company from RMB52,046,194 to RMB57,081,663. Pursuant to a capital increase agreement
entered into by and amongst our Company, Shanghai Healthcare Capital Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)) (“ SHC”), Zhang Y ahong
(ߎFan Hong (ߎCenter Lab, Shanghai Technology V enture Capital (Group) Co.,
Ltd. (Ҧ௴ุҳ༟(ණྠ)ʮ̡)( “ Shanghai STVC Group ”), Shanghai Baoshan
State-owned Capital Investment Management (Group) Co., Ltd. ( ɪऎᘒʆ਷Ϟ༟͉ҳ༟၍ଣ
(ණྠ)ʮ̡)( “ Baoshan Capital ”), Shanghai Jifu, Song Aihui ( ҂ฌฯ), Zhao Liping ( Ⴛ
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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஁റ), Dr. Liu, Shanghai Luoxu, Ms. Wang, and Mr. Tan on the same date, relevant Pre-IPO
Investors below agreed to subscribe for the increased registered capital of RMB5,035,469 of
our Company at a total consideration of RMB425,700,000 (the “ Series C Financing ”).
The respective subscription amount and consideration paid by the relevant Pre-IPO
Investors in the Series C Financing were as follows:
Pre-IPO Investors
Registered capital
subscribed for Consideration
(RMB) (RMB)
SHC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,365,736 200,000,000
Zhang Y ahong (ߎ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,721 60,000,000
Center Lab /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118591,434 50,000,000
Fan Hong (ߎ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118591,434 50,000,000
Shanghai STVC Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,969 31,700,000
Baoshan Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236,574 20,000,000
Shanghai Jifu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,629 8,000,000
Song Aihui ( ҂ฌฯ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,486 3,000,000
Zhao Liping ( Ⴛ஁റ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,486 3,000,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,035,469 425,700,000
The aforementioned Series C Financing was completed on October 23, 2024. For details
of the Series C Financing, see “— Pre-IPO Investments” below.
(k) Series C+ Financing
On December 18, 2024, the then Shareholders resolved to increase the registered capital
of our Company from RMB57,081,663 to RMB57,613,953. Pursuant to a capital increase
agreement entered into by and amongst our Company, Shandong Caixin Chantou No. 2
Y uanchuang Investment Partnership Enterprise (Limited Partnership) (ପҳɚ໮๕
௴ҳ༟ΥྫΆุ(Υྫ)) (“ Shandong Caixin ”), Y uanxiong Real Estate Development
(China) Co., Ltd. (ήପක೯ණྠ(ʕ਷)ʮ̡)( “ Yuanxiong Real Estate ”), Chen
Zhan (࢝Dr. Liu, Shanghai Luoxu, Ms. Wang, and Mr. Tan on the same date, relevant
Pre-IPO Investors below agreed to subscribe for the increased registered capital of
RMB532,290 of our Company at a total consideration of RMB45,000,000 (the “ Series C+
Financing ”).
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The respective subscription amount and consideration paid by the relevant Pre-IPO
Investors in the Series C+ Financing were as follows:
Pre-IPO Investors
Registered capital
subscribed for Consideration
(RMB) (RMB)
Shandong Caixin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118354,860 30,000,000
Y uanxiong Real Estate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,287 10,000,000
Chen Zhan (࢝)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,143 5,000,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118532,290 45,000,000
The aforementioned Series C+ Financing was completed on January 3, 2025. For details
of the Series C+ Financing, see “— Pre-IPO Investments” below.
PRC Legal Advisor’s Confirmation
Our PRC Legal Advisors have confirmed that the aforesaid changes regarding the
Business Restructuring and Equity Swap of our shareholding have been conducted in
accordance with the applicable PRC laws and regulations.
SHARE SUBDIVISION
We expect to conduct the Share Subdivision immediately prior to the Listing, pursuant to
which each of our Share with par value of RMB1.00 will be subdivided into five Shares with
par value of RMB0.20 each. Upon completion of such Share Subdivision, the registered capital
of our Company, which is RMB57,613,953, will be divided into 288,069,765 Shares with par
value of RMB0.20 per Share, which will be subscribed by all our then Shareholders in
proportion to their respective equity interests in our Company immediately before the Listing,
and the number of our issued Shares will be 288,069,765, without taking into consideration the
new Shares to be issued for the Global Offering.
MAJOR ACQUISITION, MERGER AND DISPOSAL
Throughout the Track Record Period and as of the Latest Practicable Date, we did not
conduct any major acquisitions, mergers or disposals.
REASONS FOR THE LISTING
Our Company is seeking a listing of its H Shares on the Stock Exchange in order to raise
further capital for the development of our business, to fund the ongoing and planned clinical
development of our product candidates and expand our global presence. For details of our
future plans, see “Future Plans and Use of Proceeds” in this prospectus.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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PRE-IPO INVESTMENTS
Our Company obtained several rounds of investments from the Pre-IPO Investors. For
details, see “— Establishment and Major Shareholding Changes of Our Company” above and
the table below.
Principal Terms of the Pre-IPO Investments
The following table summarizes the key terms of the Pre-IPO Investments to our
Company made by the Pre-IPO Investors:
November 2020
Capital Increase
Series A
Financing
Series A1
Financing
Series B
Financing
Series C
Financing
Series C+
Financing
Date of agreement /H1118/H1118/H1118/H1118/H1118September 25,
2020
February 8,
2021
March 30,
2022
August 25,
2022
July 18, 2024 December 18,
2024
Amount of registered
capital subscribed for
(RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,050,000 7,088,888 4,373,491 8,510,696 5,035,469 532,290
Number of Shares
subscribed/acquired as
adjusted by the Share
Subdivision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,250,000 35,444,440 21,867,455 42,553,480 25,177,345 2,661,450
Amount of consideration
paid (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,120,000
(1) 319,000,000 400,330,718 (2) 585,000,000 425,700,000 45,000,000
Date of payment of
consideration in full /H1118/H1118/H1118
September 24,
2020 (1)
March 31,
2021
June 7,
2022 (2)
April 20,
2023
October 23,
2024
January 3,
2025
Approximate cost per
Share (3) (RMB) /H1118/H1118/H1118/H1118/H1118/H11181.38 9.00 18.31 13.75 16.91 16.91
Approximate discount to
the Offer Price (4) /H1118/H1118/H1118/H111894.25% 62.52% 23.75% 42.74% 29.58% 29.58%
Post-money valuation of
our Company (RMB) (5) /H1118209,030,000 1,669,000,000 3,795,289,400 3,577,500,000 4,825,700,000 4,870,700,000
Basis of determination of
valuation and
consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The valuation and consideration for each round of Pre-IPO Investments were determined
based on arm’s length negotiation between the respective Pre-IPO Investors and our
Company after taking into account of the timing of the investments and the status of our
business operations and prospect.
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November 2020
Capital Increase
Series A
Financing
Series A1
Financing
Series B
Financing
Series C
Financing
Series C+
Financing
Lock-up period /H1118/H1118/H1118/H1118/H1118/H1118/H1118Under the applicable PRC laws, all existing Shareholders (including the Pre-IPO Investors)
are subject to a lock-up period of 12 months following the Listing Date.
Use of proceeds from the
Pre-IPO Investments /H1118/H1118/H1118
The proceeds have been used to support the research and development activities of our
Group, including the research and development activities conducted for our pipeline
products, as well as to support the establishment of our manufacturing facilities and the
working capital needs of our Group. As of the Latest Practicable Date, approximately
73% of the net proceeds from the Pre-IPO Investors were utilized. We intend to continue
utilizing the remaining net proceeds from the Pre-IPO Investments both before and after
the Global Offering.
Strategic benefits to our
Company brought by the
Pre-IPO Investors /H1118/H1118/H1118/H1118
At the time of the Pre-IPO Investments, the Directors were of the view that (i) the
Company would benefit from the additional capital provided by the Pre-IPO Investors
and their market influence, knowledge and experience and (ii) the Pre-IPO Investments
demonstrated the Pre-IPO Investors’ confidence in the operation and development of our
Group.
Notes:
(1) The total consideration for the November 2020 Capital Increase equals to the appraised value of the equity
interest of Suzhou Kangju and Suzhou Centergene subject to the Equity Swap as set out in the valuation report
prepared by an independent valuer at the time of the capital increase. See “— Establishment and Major
Shareholding Changes of Our Company — (c) Business Reorganization of our Group and November 2020
Capital Increase” above for further details. The consideration was considered settled on the date on which the
registration for the transfer of equity interest of Suzhou Kangju and Suzhou Centergene was completed.
(2) The total consideration for Series A1 Financing equals to the appraised value of the equity interest of Suzhou
Centergene transferred by the relevant Shareholders to the Company as consideration for their respective
interests in the Company, which was set out in the valuation report prepared by an independent valuer at the
time of the Series A1 Financing. See “— Establishment and Major Shareholding Changes of Our Company —
(e) Capital Increase in Suzhou Centergene and Series A1 Financing” above for further details. The
consideration was considered settled on the date on which the registration for the transfer of equity interest
of Suzhou Centergene was completed.
(3) The cost per Share is calculated based on dividing the consideration by the number of Shares subscribed or
acquired as adjusted by the Share Subdivision to be undertaken immediately prior to the Listing, to facilitate
the illustration of premium or discount to the Offer Price.
(4) The discount to the Offer Price is calculated based on the Offer Price of HK$26.38 per Offer Share.
(5) The primary reasons for the material increase in the valuation of our Company are set forth below:
(i) the increase in the valuation of our Company from November 2020 Capital Increase to Series A
Financing was primarily due to (a) the establishment of our manufacturing facilities through the
successful approval of the recombinant protein drug industrialization project, which significantly
enhances our production capacity; and (b) the advancement of clinical trials following the Business
Restructuring, which allows for effective integration of resources and strengths, facilitating
comprehensive oversight and targeted planning;
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(ii) the increase in the valuation of our Company from Series A Financing to Series A1 Financing was
primarily due to (a) completion of SJ02 Phase II clinical trial in April 2021, (b) initiation of the Phase
III clinical trial of SJ02 in China in October 2021, and (c) acquisition of our manufacturing facilities
at No. 28 Luoxin Road;
(iii) the decrease in the valuation of our Company from Series A1 Financing to Series B Financing was
primarily due to the declining market conditions as a result of the three-month lockdown in Shanghai
from April 2022 to June 2022 during the COVID-19 pandemic;
(iv) the increase in the valuation of our Company from Series B Financing to Series C was primarily due
to (a) completion of SJ02 Phase III clinical trial in December 2022, receipt of the Drug Manufacturing
License Type C (͛ପ஢̙ᗇCᗇ) in May 2023 and the Drug Manufacturing License Type B (ۜ
͛ପ஢̙ᗇBᗇ) in January 2024, and submission of an NDA with the NMPA in December 2023, (b)
receiving the Drug Manufacturing License Type A (͛ପ஢̙ᗇAᗇ) of KJ017 in December 2022
and filing of an NDA with the NMPA in June 2024, as well as its adoption as an excipient in
collaborations with several companies, (c) receiving SJ04 clinical trial approval in May 2024, and (d)
completion of KJ103 Phase I clinical trial in China and New Zealand in March 2023 and the subsequent
launch of Phase II clinical trial for desensitizing highly HLA-sensitized patients to enable kidney
transplantation in China in January 2024;
(v) there had been no change in the valuation of our Company from Series C to Series C+ Financing other
than the proceeds received from the Series C+ Financing; and
(vi) the increase in the valuation of our Company from Series C+ Financing to the Listing was primarily due
to the following progresses since the Company and the investors from Series C+ Financing reached
preliminary consensus on the investment terms in August 2024, including but not limited to (a) receiving
an IND approval for KJ015 from the NMPA in December 2024, and initiation of Phase I clinical trial
in June 2025, (b) receiving an IND approval of BJ007 from the NMPA in February 2025 and initiation
of Phase I clinical trial in August 2025, (c) receiving an IND approval of KJ101 from the NMPA in
February 2025 and initiation of Phase II clinical trial in July 2025, (d) initiation of the Phase III clinical
trial of KJ103 in highly sensitized patients awaiting kidney transplantation in August 2025, (e) receiving
the NDA approval for SJ02 from the NMPA in August 2025, (f) receiving the IND approval for BJ009
from the NMPA in September 2025, (g) completion of the Phase I clinical trial of SJ04 in September
2025, (h) receiving the IND approval for the Phase II trial of KJ103 in GBS treatment in April 2025,
with trial initiation in November 2025, (i) completion of the Phase II clinical trial of KJ103 in anti-GBM
disease in October 2025, and receiving the BTD from the NMPA in July 2025 in China, and (j) the
premium attached to the Shares of the Company as they become freely tradeable upon the Listing.
Special Rights of the Pre-IPO Investors
The Pre-IPO Investors were granted certain customary special rights, including but not
limited to redemption rights, pre-emptive and co-sale rights, anti-dilution rights, drag-along
rights, liquidation rights, and information right pursuant to the relevant shareholders’
agreements. Our Company and the relevant Shareholders subsequently entered into a
supplemental agreement on April 28, 2023, and the Series C Financing and Series C+
Financing shareholders’ agreements on July 18, 2024 and December 18, 2024, respectively,
agreeing that certain of the special rights granted by our Company to Pre-IPO Investors,
including redemption rights, anti-dilution rights and liquidation preferences rights have been
irrecoverably terminated and shall be deemed void ab initio . Specifically, (i) the redemption
rights, anti-dilution rights and liquidation preference rights granted by our Company under
Series A Financing, Series A1 Financing and Series B Financing shareholders’ agreements have
been irrecoverably terminated according to the supplemental agreement dated April 28, 2023
and shall be deemed void ab initio , and (ii) both the Series C Financing shareholders’
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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agreement and the Series C+ Financing shareholders’ agreement contain a listing application-
triggered termination provision, which provides that, among other things, if and when the
Company submits a listing application to the Stock Exchange, the above special rights shall be
deemed as automatically and irrecoverably terminated on September 30, 2024 and shall be
deemed void ab initio . Following execution of the Series C+ Financing shareholders’
agreement, such agreement has superseded and replaced the Series C Financing shareholders’
agreement on December 18, 2024 in their entirety. On January 21, 2025, our Company
submitted our first listing application to the Stock Exchange. According to the Series C+
Financing shareholders’ agreement, all shareholders’ special rights shall be deemed as
automatically terminated on September 30, 2024 upon our first submission of the listing
application form to the Stock Exchange in relation to the Listing, provided that (1) the
redemption right, liquidation preference right and anti-dilution right granted by the Company
were irrevocably terminated and shall be deemed void ab initio and (2) the rights in (1) above
granted by the Controlling Shareholders, together with other special rights, shall be reinstated
in the event that the Listing does not take place such as (i) the Company voluntarily withdraws
its listing application form, (ii) the Company’s listing application is rejected by the Stock
Exchange, or (iii) the Joint Sponsors withdraw from the Company’s listing application. No
Pre-IPO Investors had exercised their redemption rights during the Track Record Period. For
details, please refer to note 27 of the Accountants’ Report.
As confirmed by the Company, save as disclosed above, (i) there are no side arrangements
between the Company and the Pre-IPO Investors or between the Company and the Controlling
Shareholders regarding the redemption right granted by the Controlling Shareholders; and (ii)
the Company did not provide any guarantee on the redemption right granted by the Controlling
Shareholders in case of default by the Controlling Shareholders. As confirmed by the
Controlling Shareholders, there are no side agreements between the Controlling Shareholders
and the Pre-IPO Investors regarding the redemption right granted by the Controlling
Shareholders. Considering that the Company has no obligation to repurchase the Shares held
by the Pre-IPO Investors, no redemption liability was recorded during the Track Record Period.
For details, please refer to note 33 of the Accountants’ Report.
Article 143 of the Civil Code of the People’s Republic of China (Պ)
stipulates that a civil legal act is valid if it is conducted by parties with the requisite capacity
for civil conduct, is based on genuine intent, and does not contravene mandatory provisions of
laws, administrative regulations, or public order and morals. Adhering to the principle of
autonomy of will, the Company and the Pre-IPO Investors explicitly agreed that the redemption
right, liquidation preference right and anti-dilution right granted by the Company were
irrevocably terminated and shall be deemed void ab initio . Through the execution of the
investment agreement, while the clauses concerning the redemption right, liquidation
preference right and anti-dilution right granted by the Company have never been exercised,
both parties agreed to terminate these clauses and to treat them as having no legal effect from
the time of their execution, thereby restoring the rights and obligations of both parties to the
status quo ante as if such clauses had never been agreed upon. This arrangement does not
violate any mandatory provisions of laws, administrative regulations, or public order and
morals, and is thus legally valid. Based on the above, the PRC Legal Advisor is of the view
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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that the redemption right, liquidation preference right and anti-dilution right granted by the
Company agreed upon by the Company and the Pre-IPO Investors have been irrevocably
terminated and shall be deemed void ab initio .
Joint Sponsors’ Confirmation
On the basis that (i) the consideration for the Pre-IPO Investments was irrevocably settled
no less than 120 clear days before the Listing; and (ii) no special rights of our Pre-IPO
Investors will exist after the Listing, the Joint Sponsors confirm that the Pre-IPO Investments
are in compliance with Chapter 4.2 of the Guide for New Listing Applicants.
In particular, in confirming that the redemption right, liquidation preference right and
anti-dilution right granted by the Company to the Pre-IPO Investors had been irrecoverably
terminated and shall be deemed void ab initio , the Joint Sponsors have conducted due diligence
work including, among others: (i) reviewing the relevant supplemental agreement and
shareholders’ agreements entered into by our Company and the then Shareholders, (ii)
reviewing the legal opinion issued by the PRC Legal Advisor, and (iii) discussing with the PRC
Legal Advisor and the Joint Sponsors’ PRC legal advisor to understand the treatment of the
aforementioned special rights in the relevant supplemental agreement and shareholders’
agreements under PRC laws. Based on the due diligence work conducted, nothing has come to
the Joint Sponsors’ attention that would cause them to cast doubt on the Company’s and the
PRC Legal Advisor’s views above.
Information about Our Pre-IPO Investors
Our existing Pre-IPO Investors include Sophisticated Investors identified pursuant to
Chapter 2.3 of the Guide for New Listing Applicants issued by the Stock Exchange, such as
Center Laboratories, Fangyuan Capital and Findowin Capital. To the best knowledge of our
Directors, save as disclosed below, each of the Pre-IPO Investors and their respective ultimate
beneficial owners is an Independent Third Party.
The background information on our Pre-IPO Investors is as set out below.
1. Center Lab
Center Lab is a limited liability company incorporated in Hong Kong and is wholly owned
by Center Laboratories. Center Laboratories is a joint stock limited liability company
incorporated in Taiwan in 1959 (TWO: 4123). Center Lab serves as an investment holding
company of Center Laboratories and manages Center Laboratories’ overseas assets. Center
Laboratories is primarily engaged in developing, manufacturing and sales of oral solution
pharmaceuticals. In addition to developing generic and innovative new drugs, Center
Laboratories is also heavily investing in the biotechnology industry chain and establishing a
professional biotechnology incubator platform. As of September 30, 2025, Center Laboratories
had net assets of approximately 19.6 billion New Taiwan Dollars. It had invested in several
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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biotech and pharmaceutical companies, including Ausnutria Dairy Corporation Ltd ( ዦᎴԪุ
ʮ̡) (HKEX: 1717), Jacobio Pharmaceuticals Group Co., Ltd. (ࠢ
ʮ̡) (HKEX: 1167), and TOT Biopharm International Company Limited (ࠢ
ʮ̡) (HKEX: 1875).
2. Fangyuan Capital (through PCJ Bao and V enus Capital)
PCJ Bao
PCJ Bao is a limited liability company incorporated in Hong Kong and is primarily
engaged in investment holding. As of the Latest Practicable Date, PCJ Bao was wholly owned
by Fangyuan Growth SPC (“ Fangyuan Growth ”), an exempted segregated portfolio company
incorporated in Cayman Islands. As of the Latest Practicable Date, Fangyuan Growth was in
turn wholly owned by PCJ Capital Management Limited (“ PCJ Capital ”), an exempted
company incorporated in the Cayman Islands. As of the Latest Practicable Date, PCJ Capital,
in turn, was owned as to 50.0% by Fangyuan Capital Holdings (Cayman) Limited (“ Fangyuan
Capital Holdings ”), an associated entity of Fangyuan Capital, which was wholly owned by
Ms. Zheng Juan (ࢇ“() Ms. Zheng ”), one of Fangyuan Capital’s responsible officers. Ms.
Zheng also served as a non-executive director of the Company from February 8, 2021 to
January 21, 2025. During Ms. Zheng’s tenure, she was responsible for participating in major
decisions on our Group’s operations and development and did not engage in day-to-day
management and operations of the Company. Ms. Zheng resigned from her position as a
director of the Company due to personal reasons. None of the other shareholders of PCJ Capital
held more than 30.00% of equity interest. As of the Latest Practicable Date, Fangyuan Growth
is managed by Fangyuan Capital (Hong Kong) Limited ( ˙෥༟͉(ಥ)ʮ̡)
(“Fangyuan Capital ”), a limited liability company incorporated in Hong Kong, which is active
in healthcare investments.
V enus Capital
V enus Capital is a limited liability company incorporated in Hong Kong and is primarily
engaged in investment holding. As of the Latest Practicable Date, V enus Capital was wholly
owned by Fangyuan J Fund II (“ Fangyuan Fund ”), an exempted company incorporated in
Cayman Islands. As of the Latest Practicable Date, Fangyuan Fund was wholly owned by
Fangyuan Capital Holdings, which was in turn wholly owned by Ms. Zheng. Fangyuan Fund
is also managed by Fangyuan Capital.
Both PCJ Bao and V enus Capital are entities under management of Fangyuan Capital. As
investment arms of Fangyuan Capital, PCJ Bao and V enus Capital focus on developing venture
capital businesses specializing in healthcare industry investment. Fangyuan Capital is licensed
to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities
under the SFO. Fangyuan Capital has demonstrated a strong track record, investing in a number
of healthcare and biotech companies listed on the Stock Exchange including but not limited to
Jacobio Pharmaceuticals Group Co., Ltd. (ʮ̡) (HKEX: 1167), XtalPi
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Holdings Limited (ʮ̡) (HKEX: 2228) and Acotec Scientific Holdings Limited
(ʮ̡) (HKEX: 6669). Fangyuan Capital manages eight funds with
total assets under management of approximately US$154 million as of the Latest Practicable
Date.
3. Shanghai Luohui
Shanghai Luohui is a limited partnership established in the PRC and is primarily engaged
in corporate management consultation. The general partner of Shanghai Luohui is Zhong
Shunlin ( ᒤഭᎌ), holding approximately 55.56% of the partnership interest. As of the Latest
Practicable Date, Shanghai Luohui had 14 limited partners, the largest of whom was Zhang
Senlin (؍holding approximately 12.96% of the partnership interest.
4. Shanghai Dongxi (through Shanghai Cixi and Jiaxing Xiqi)
Shanghai Cixi
Shanghai Cixi is a limited partnership established in the PRC and is primarily engaged in
venture capital and investment management. The general partner of Shanghai Cixi is Shanghai
Xihao Investment Management Co., Ltd. (ʮ̡)( “ Shanghai Xihao ”),
holding approximately 0.10% of the partnership interest. As of the Latest Practicable Date,
Shanghai Xihao was owned as to 50.00% by Li Jiaqi ( ҽԳೡ), 30.00% by Shanghai Dongxi
Investment Development Co., Ltd. (ʮ̡)( “ Shanghai Dongxi ”), and
20.00% by Y uan Liangyong ( ঺Ԅ͑), respectively. Shanghai Dongxi was owned as to 99.00%
by Ling Chao (൴) and 1.00% by Shanghai Y u Hai Enterprise Development Group Co., Ltd.
(ʮ̡), a wholly owned subsidiary of Ling Chao (൴), as of the
Latest Practicable Date. As of the Latest Practicable Date, Shanghai Cixi had two limited
partners, namely Shanghai Naixi Technology Co., Ltd. (ʮ̡)( “ Shanghai
Naixi ”) and Shenzhen Yingsheng Investment Co., Ltd. (ʮ̡)( “Shenzhen
Yingsheng ”), each holding 49.95% of the partnership interest, respectively. Shanghai Naixi
was owned as to 99.00% by Qian Jincheng ( ፺ᎀ೻) and 1.00% by Shanghai Baifeite
Environmental Protection Technology Co., Ltd. (ʮ̡)a so ft h e
Latest Practicable Date. Shenzhen Yingsheng was owned as to approximately 87.44% by Li
Jiaqi ( ҽԳೡ) and 12.56% by Li Jie ( ҽ௫) as of the Latest Practicable Date.
Jiaxing Xiqi
Jiaxing Xiqi is a limited partnership established in the PRC and is primarily engaged in
venture capital and investment consulting. The general partner of Jiaxing Xiqi is Shanghai
Xihao, holding approximately 1.11% of the partnership interests. As of the Latest Practicable
Date, Jiaxing Xiqi had four limited partners, with the largest limited partner Xu Ren (΂)
holding approximately 44.44% of the partnership interest, and Shanghai Naixi holding
approximately 43.33% of the partnership interest. None of the other limited partners held
30.00% or more as of the Latest Practicable Date.
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Both Shanghai Cixi and Jiaxing Xiqi are investment arms of Shanghai Dongxi. Shanghai
Dongxi was founded in 2010 and strategically invests in industries including energy
conservation and environmental protection, cultural media, healthcare, TMT (technology,
media, and telecommunications), and intelligent manufacturing.
5. Xiamen Y oulang
Xiamen Y oulang is a limited partnership established in the PRC and is primarily engaged
in private equity investment, investment management, and asset management. The general
partner of Xiamen Y oulang is Shanghai Tiliang Investment Management Co., Ltd. ( ɪऎ౤૑
ʮ̡)( “ Shanghai Tiliang ”), holding approximately 0.001% of the partnership
interest. As of the Latest Practicable Date, Shanghai Tiliang was owned as to 80.00% by Zhang
Yi ( ੵ඀) and 20.00% by Xie Shihuang ( ᑽ˰๯). As of the Latest Practicable Date, Xiamen
Y oulang had two limited partners, namely Ding Lili ( ɕᘆᘆ) and Guo Zhongwu (؛׀,)
holding approximately 66.65% and 33.35% of the partnership interest, respectively.
6. ROSY ELEGANT
ROSY ELEGANT is a company limited by shares incorporated in Hong Kong and is
primarily engaged in investment holding. As of the Latest Practicable Date, ROSY ELEGANT
was wholly-owned by Zhang Min ( ੵઽ).
7. Shanghai Luoqun
Shanghai Luoqun is a limited partnership established in the PRC and is primarily engaged
in business management consulting. The general partner of Shanghai Luoqun is Li Y uping ( ҽ
䊌റ), holding approximately 7.12% of the partnership interest. As the Latest Practicable Date,
Shanghai Luoqun had 15 limited partners, with the two largest partners, namely Wang Ying ( ˮ
ᆦ) and Cui Kaixiang ( ੦௱ജ), each holding approximately 16.18% of partnership interests,
respectively.
8. Shanghai Guqing
Shanghai Guqing is a sole proprietorship established in the PRC and is primarily engaged
in business management consulting and business information consulting. As of the Latest
Practicable Date, Shanghai Guqing is wholly-owned by Cheng Y an (֧.)
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9. Shanghai Luoyuan
Shanghai Luoyuan is a limited partnership established in the PRC and is primarily
engaged in business management consulting and financial consulting. The general partner of
Shanghai Luoyuan is Shanghai Huiyuan Investment Co., Ltd. (ʮ̡)
(“Shanghai Huiyuan ”), holding 2.00% of the partnership interest. As of the Latest Practicable
Date, Shanghai Huiyuan was wholly-owned by Zhou Kai ( մ௱). As of the Latest Practicable
Date, Shanghai Luoyuan had two limited partners, namely Cheng Y an (֧and Tang
Chunshan (ʆ), each holding 49.00% of the partnership interest, respectively.
10. Findowin Capital (through Qingdao Yuanchuang, Yantai Duoying, Jinan Chanfa and
Shandong Caixin)
Qingdao Yuanchuang
Qingdao Y uanchuang is a limited partnership established in the PRC under the
management of Findowin Capital, and is primarily engaged in equity investment and venture
capital. The general partner of Qingdao Y uanchuang is Qingdao Y uanzhi Lifan Equity
Investment Management Co., Ltd. (ʮ̡)( “ Qingdao
Yuanzhi ”), holding approximately 2.33% of the partnership interest. As of the Latest
Practicable Date, Qingdao Y uanzhi was owned as to 45.00% by each of Beijing Finnova
Investment Management Co., Limited (ʮ̡)( “ Beijing Finnova ”
or “Findowin Capital ”) and Duoying Investment Management Co., Ltd. (΅Ϟ
ʮ̡)( “ Duoying Investment ”). Beijing Finnova was owned as to approximately 63.99% by
Shandong Rongdao Investment Co., Ltd. (ʮ̡), which was in turn owned as
to approximately 98.33% by Feng Zhuangzhi ( ඹѯқ). Duoying Investment was owned as to
50.00% by Shandong Saixing Holding Group Co., Ltd. (ʮ̡)
(“Shandong Saixing ”) and 23.00% by Beijing Finnova, as of the Latest Practicable Date.
Shangdong Saixing was owned as to approximately 77.26% by Shandong Saier Enterprise
Management Consulting Co., Ltd. (ʮ̡), which was in turn owned
as to approximately 98.53% by Zou Fangming (׼as of the Latest Practicable Date.
As of the Latest Practicable Date, Qingdao Y uanchuang had eight limited partners, the
largest of whom was Shandong New Energy Fund Management Co., Ltd. (ږ
ʮ̡)( “ Shandong New Energy ”), holding approximately 23.26% of the partnership
interest. None of the other limited partners held 30.00% or more as of the Latest Practicable
Date. Shandong New Energy was wholly owned by Shandong Caijin Investment Co., Ltd. ( ʆ
ʮ̡), which was in turn owned to 92.03% by Department of Finance
of Shandong Province (ᝂ). As of the Latest Practicable Date, Qingdao
Y uanchuang, an investment arm of Findowin Capital, had invested in several major biotech
companies, including MabPlex international (ʮ̡)
(“MabPlex ”), a CDMO specializing in biologics and antibody-drug conjugates, and CF
PharmTech, Inc. (ʮ̡)( “ CF PharmTech ”), a pharmaceutical company
engaged in the R&D, manufacturing and commercialization of quality respiratory drug
products.
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Yantai Duoying
Y antai Duoying is a limited partnership established in the PRC under the management of
Y antai Finnova Investment Management Co., Limited (ʮ̡), a
company owned as to 77.0% by Findowin Capital, and is primarily engaged in energy
conservation and environmental protection, service industry, advanced manufacturing,
biomedicine investment. The general partner of Y antai Duoying is Y antai Duoying Equity
Investment Management Co., Ltd. (ʮ̡)( “ Y antai Duoying
Investment ”), holding approximately 4.13% of the partnership interest. As of the Latest
Practicable Date, Y antai Duoying Investment had two largest shareholders, namely Shandong
Duoying Capital Ltd. (ʮ̡)( “ Shandong Duoying ”) and Beijing
Finnova, each holding 35.00% of shareholding, respectively. Shandong Duoying was owned as
to 51.00% by Shandong Saixing, as of the Latest Practicable Date.
As of the Latest Practicable Date, Y antai Duoying had six limited partners, the largest of
whom was Shandong New Energy, holding approximately 24.79% of the partnership interest.
As of the Latest Practicable Date, Y antai Duoying, an investment arm of Findowin Capital, had
invested in two biotech companies including MabPlex and CF PharmTech.
Jinan Chanfa
Jinan Chanfa is a limited partnership established in the PRC under the management of
Findowin Capital, and is primarily engaged in private equity fund management and venture
capital fund management. The general partner of Jinan Chanfa is Jinan Laiwu High Tech Zone
Y uanchuang Equity Investment Management Co., Ltd. (ᛆҳ༟၍ଣ
ʮ̡)( “ Laiwu Yuanchuang ”), holding approximately 2.94% of the partnership interest.
Laiwu Y uanchuang was owned as to approximately 40.63% by each of Tianjin Duoying Baotai
Investment Management Partnership Enterprise (Limited Partnership) (इҳ༟၍ଣ
ΥྫΆุ(Υྫ)) (“ Duoying Baotai ”) and Tianjin Y uanchuang Investment Management
Partnership Enterprise (Limited Partnership) (๕௴ҳ༟၍ଣΥྫΆุ(Υྫ))
(“Tianjin Yuanchuang ”), as of the Latest Practicable Date. The general partner of Duoying
Baotai is Huang Xiaolong ( රʃᎲ), holding 46.00% of the partnership interest. As of the
Latest Practicable Date, Duoying Baotai had two limited partners, the largest of whom was
Feng Zhuangzhi ( ඹѯқ), holding 49.00% of the partnership interest. The general partner of
Tianjin Y uanchuang is Beijing Finnova, holding 1.00% of the partnership interest.
As of the Latest Practicable Date, Jinan Chanfa had three limited partners, the largest of
whom was Shanghai Saixing Investment Management Co., Ltd. (ʮ̡)
(“Shanghai Saixing ”), holding approximately 52.94% of the partnership interest. None of the
other limited partners held 30.00% or more as of the Latest Practicable Date. Shanghai Saixing
was wholly owned by Shanghai Saixing Enterprise Management Co., Ltd. (Άุ၍ଣ
ʮ̡), which was owned as to approximately 99.19% by Zou Fangming (׼a so ft h e
Latest Practicable Date.
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Shandong Caixin
Shandong Caixin is a limited partnership established in the PRC and is primarily engaged
in investment activities. The general partner of Shandong Caixin is Beijing Finnova holding
approximately 6.29% of the partnership interest. As of the Latest Practicable Date, Shandong
Caixin had two limited partners, the largest of whom was Shandong Caixin Investment Co.,
Ltd. (ʮ̡)( “ Shandong Caixin Investment ”), holding approximately
84.12% of the partnership interest. Shandong Caixin Investment was indirectly wholly owned
by Shandong Provincial Department of Finance (ᝂ) as of the Latest Practicable
Date.
Each of Qingdao Y uanchuang, Y antai Duoying, Jinan Chanfa and Shandong Caixin is an
investment arm of Findowin Capital. Findowin Capital was founded in 2014 and strategically
invests in industries including carbon neutrality, semiconductors, new materials,
biotechnology, healthcare, and information technology innovation. Findowin Capital also
invested in a number of healthcare and biotech companies including MabPlex, uBriGene
Biosciences Inc. (׼֝(̏ԯ)ʮ̡), CF PharmTech, and Zhejiang Innoforce
Pharmaceuticals Co., Ltd. (ʮ̡), CDMOs that specialize in biologics
and advanced therapies, as well as biomaterials companies such as Suzhou Novoprotein
Scientific Co., Ltd. (ʮ̡) (SSE: 688137), and bioGenous
BIOTECH Inc, (Ҧ(ψ)ʮ̡). As of the Latest Practicable Date, Findowin
Capital had managed over 15 funds with total assets under management of approximately
RMB10 billion.
11. Oriental Fortune Capital (through Fuhai Junyong No. 6, Fuhai Junyong No. 2, Fuhai
Jingxuan No. 2, and Fuhai Y ouxuan No. 2)
Fuhai Junyong No. 6, Fuhai Junyong No. 2, Fuhai Jingxuan No. 2, and Fuhai Y ouxuan
No. 2 are limited partnerships established in the PRC and are funds managed by subsidiaries
of Shenzhen Oriental Fortune Capital Co., Ltd. (ʮ̡)
(“Oriental Fortune Capital ”). Oriental Fortune Capital is a joint stock company with limited
liability incorporated in the PRC and is a professional investment institution that makes equity
investment in high-quality enterprises through its managed funds. As of the Latest Practicable
Date, Oriental Fortune Capital was owned as to approximately 28.78% by Wuhu Fuhai Jiutai
Investment Consulting Partnership Enterprise (Limited Partnership) ( ጾಳ̹బऎɮइҳ༟ፔ༔
ΥྫΆุ(Υྫ)) (“ Fuhai Jiutai ”). None of the other shareholders of Oriental Fortune
Capital held more than 30.00% of equity interest. The general partner of Fuhai Jiutai is Chen
Wei ( ௓⒜), holding approximately 53.30% of the partnership interest. As of the Latest
Practicable Date, Fuhai Jiutai had 14 limited partners, the largest of whom was Cheng Houbo
(௹), holding approximately 9.52% of the partnership interest.
Fuhai Junyong No. 6
The executive and general partner of Fuhai Junyong No. 6 is Oriental Fortune (Wuhu)
Equity Investment Fund Management Enterprise (Limited Partnership) (˙బऎ(ጾಳ)ᛆҳ
၍ଣΆุ(Υྫ)) (“ Oriental Fortune (Wuhu) ”), holding approximately 1.49% of
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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the partnership interest. As of the Latest Practicable Date, the general partner of Oriental
Fortune (Wuhu) was Shenzhen Oriental Fortune Capital Entrepreneurship Investment
Management Co., Ltd. (ʮ̡)( “ Oriental Fortune Capital
Management ”), a wholly owned subsidiary of Oriental Fortune Capital, holding 5.00% of the
partnership interest. As of the Latest Practicable Date, the limited partner of Oriental Fortune
(Wuhu) was Oriental Fortune Capital, holding 95.00% of the partnership interest. As of the
Latest Practicable Date, Fuhai Junyong No. 6 had another general partner, Shenzhen Fuhai
Junyong Entrepreneurship Management Partnership (Limited Partnership) ( ଉέబऎཡ͑௴ุ
၍ଣΥྫΆุ(Υྫ)) (“ Fuhai Junyong ”), holding 11.92% of the partnership interest and
18 limited partners. As of the Latest Practicable Date, the general partner of Fuhai Junyong was
Ganzhou Hairongtong Investment Management Partnership Enterprise (Limited Partnership)
(ᜯψऎፄஷҳ༟၍ଣΥྫΆุ(Υྫ)) (“ Ganzhou Hairongtong ”), holding 66.10% of the
partnership interest and the general partner of Ganzhou Hairongtong was Diao Juanhuan ( ɡ
࣫“() Mr. Diao ”), a non-executive Director of our Company, holding 50.00% of the
partnership interest. The limited partner of Ganzhou Hairongtong was Diao Haitao ( ɡऎᏹ)
(“Ms. Diao ”), sister of Mr. Diao, holding 50.00% of the partnership interest. While Ms. Diao
and Mr. Diao are siblings, Ms. Diao is not considered as a close associate of Mr. Diao under
the Listing Rules. As of the Latest Practicable Date, Fuhai Junyong had one limited partner,
Oriental Fortune (Wuhu), holding 33.90% of the partnership interest. As of the Latest
Practicable Date, among the 18 limited partners of Fuhai Junyong No. 6, Ganzhou Hairongtong
was its largest limited partner, holding approximately 15.05% of its partnership interest.
Fuhai Junyong No. 2
The executive and general partner of Fuhai Junyong No. 2 is Oriental Fortune Capital
Management, holding approximately 0.68% of the partnership interest. As of the Latest
Practicable Date, Fuhai Junyong No. 2 had another general partner, Fuhai Junyong, holding
approximately 21.92% of the partnership interest. As of the Latest Practicable Date, Fuhai
Junyong No. 2 had 16 limited partners, and Huang Xiaomin ( රʃઽ), being its largest limited
partner, held approximately 15.07% of its partnership interest.
Fuhai Jingxuan No. 2
The general partner of Fuhai Jingxuan No. 2 is Oriental Fortune Capital Management,
holding approximately 1.00% of its partnership interest. As of the Latest Practicable Date,
Fuhai Jingxuan No. 2 had 20 limited partners, and Rugao Zhonggao Fuhai V enture Capital
Partnership (Limited Partnership) ( νी̹ʕीబऎ௴ุҳ༟ΥྫΆุ(Υྫ))
(“Zhonggao Fuhai ”), being its largest limited partner, held approximately 19.00% of its
partnership interest. None of the other limited partners held 30.00% or more as of the Latest
Practicable Date. The general partner of Zhonggao Fuhai is Oriental Fortune (Wuhu), holding
approximately 0.53% partnership interest. As of the Latest Practicable Date, Zhonggao Fuhai
had two limited partners, the largest of whom was Oriental Fortune Capital, holding
approximately 75.79% of the partnership interest.
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Fuhai Youxuan No. 2
The general partner of Fuhai Y ouxuan No. 2 is Oriental Fortune Capital Management,
holding approximately 2.51% of its partnership interest. As of the Latest Practicable Date,
Fuhai Y ouxuan No. 2 had 44 limited partners, and Jiaxing Dongjiashun Phase V Equity
Investment Partnership Enterprise (Limited Partnership) (ᛆҳ༟ΥྫΆุ
(Υྫ)) (“ Jiaxing Dongjiashun ”) being its largest limited partner, held approximately
13.83% of its partnership interest. The general partner of Jiaxing Dongjiashun is Shanghai
Jinshundong Investment Management Co., Ltd. (ʮ̡)( “ Shanghai
Jinshundong ”), holding approximately 0.17% of its partnership interest. As of the Latest
Practicable Date, Shanghai Jinshundong was indirectly wholly owned by JD Technology
Holdings Co., Ltd. (ʮ̡), which was owned as to approximately
41.73% by Suqian Juhe Digital Enterprise Management Co., Ltd. (ࠢ
ʮ̡)( “ Suqian Juhe ”). As of the Latest Practicable Date, Suqian Juhe was owned as to
90.00% by Suqian Hanyu Technology Co., Ltd. (ʮ̡), which in turn was
owned as to 45.00% by Miu Qin ( ᐷಝ) and 30.00% by Li Y ayun ( ҽẝථ). As of the Latest
Practicable Date, Jiaxing Dongjiashun had 47 limited partners, and Tian Fengxiang (࠰,)
being its largest limited partner, held approximately 8.74% of its partnership interest.
Each of Fuhai Junyong No. 6, Fuhai Junyong No. 2, Fuhai Jingxuan No. 2, and Fuhai
Y ouxuan No. 2 is a fund managed by subsidiaries of Oriental Fortune Capital. Oriental Fortune
Capital was founded in 2006 and strategically invests in industries including information and
technology, energy conservation and environmental protection, healthcare, new materials, and
culture consumption.
12. Haitong Innovation Securities
Haitong Innovation Securities is a limited liability company established in the PRC and
is primarily engaged in securities investment, financial products investment, and equity
investment. Haitong Innovation Securities is wholly owned by Guotai Haitong Securities Co.,
Ltd. (ʮ̡) (HKEX: 2611; SSE: 601211).
13. Yangtze River Delta Industrial
Y angtze River Delta Industrial is a limited partnership established in the PRC and is
primarily engaged in equity investment, investment management, and asset management. The
general partner of Y angtze River Delta Industrial is Shanghai Shengshi Jiayi Enterprise
Management Co., Ltd. (ʮ̡)( “ Shengshi Jiayi ”), holding
approximately 0.30% of the partnership interest. As of the Latest Practicable Date, Shengshi
Jiayi was owned as to 30.00% by Shanghai Sun Rock Capital Management Co., Ltd. ( ɪऎସ
ʮ̡)( “ Sun Rock Capital ”). As of the Latest Practicable Date, Sun Rock
Capital was owned as to 35.00% by Ningbo Guxin Lecheng Investment Management
Partnership (Limited Partnership) (ᆀϓҳ༟၍ଣΥྫΆุ(Υྫ)), which is
ultimately controlled by Zhou Daohong (ݳNone of the other shareholders of Sun Rock
Capital held more than 30.00% of equity interest.
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As of the Latest Practicable Date, Y angtze River Delta Industrial had six limited partners,
the largest of whom was Zhangjiagang Jiyang No. 1 Enterprise Management Partnership
Enterprise (Limited Partnership) (ಥ࿬ජఠ໮Άุ၍ଣΥྫΆุ(Υྫ)) (“ Jiyang
No. 1 ”), holding approximately 40.61% of the partnership interest. None of the other limited
partners held 30.00% or more as of the Latest Practicable Date. The general partner of Jiyang
No. 1 was Zhangjiagang Jiyang Jinmao Investment Partnership Enterprise (Limited
Partnership) (ҳ༟ΥྫΆุ(Υྫ)) (“ Jiyang Jinmao ”), holding
approximately 0.20% partnership interest. The general partner of Jiyang Jinmao is
Zhangjiagang Investment Promotion Industry Capital Investment Management Co., Ltd. (࢕
ʮ̡)( “ Zhangjiagang Investment ”), holding approximately
0.10% of the partnership interest. Zhangjiagang Investment is ultimately controlled by China
Merchants Capital Co., Ltd. (ப΂ʮ̡), a company indirectly owned as to
50.00% by the State-owned Assets Supervision and Administration Commission of the State
Council of the PRC (ึ) and directly owned as to 50.00% by
GLP Capital Investment 5 (HK) Limited, a company ultimately controlled by GLP Pte. Ltd. (a
company listed on the main board of Singapore Stock Exchange on 19 October 2010 and
completed privatization and delisted from the Singapore Stock Exchange in January 2018). As
of the Latest Practicable Date, Jiyang Jinmao had two limited partners, (i) Zhangjiagang
Jinmao Collective Asset Management Center (ණ᜗༟ପ຾ᐄ၍ଣʕː), holding
approximately 59.94% of the partnership interest, was an enterprise with collective ownership,
owned by more than 50 people, each holding less than 2% interest, and (ii) Zhangjiagang
Wenshang Travel Group Co., Ltd. (ʮ̡), holding 39.96% of the
partnership interest, was indirectly wholly owned by Zhangjiagang State-owned Assets
Management Center (ಥ̹਷Ϟ༟ପ၍ଣʕː).
As of the Latest Practicable Date, Jiyang No. 1 had five limited partners, the largest of
whom was Zhangjiagang Industrial Capital Investment Co., Ltd. (ʮ
̡)( “ Zhangjiagang Industrial Capital ”), holding approximately 39.92% of the partnership
interest. None of the other limited partners held 30.00% or more as of the Latest Practicable
Date. Zhangjiagang Industrial Capital was ultimately controlled by Zhangjiagang State-owned
Assets Management Center (ಥ̹਷Ϟ༟ପ၍ଣʕː) as of the Latest Practicable Date.
14. Ningbo Longhuahui
Ningbo Longhuahui is a limited partnership established in the PRC and is primarily
engaged in venture capital. The general partner of Ningbo Longhuahui is Ningbo Jintong Jiuge
Enterprise Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ
(Υྫ)) (“ Jintong Jiuge ”), holding 3.20% of the partnership interest. The general partner
of Jintong Jiuge is Ningbo Jiuge Equity Investment Management Partnership Enterprise
(Limited Partnership) (ᛆҳ༟၍ଣΥྫΆุ(Υྫ)) (“ Ningbo Jiuge ”), holding
51.00% of the partnership interest. The general partners of Ningbo Jiuge are Cao Y un ( ૎ᘾ)
and Hu Zhihui (౽ᅆ), each holding 18.73% and 22.24% of the partnership interest. As of the
Latest Practicable Date, Ningbo Jiuge had ten limited partners, the largest of whom was Jintong
Zhihui Investment Management Co., Ltd. (ʮ̡)( “ Jintong Zhihui ”),
holding approximately 26.03% of the partnership interest. None of the other limited partners
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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held 30.00% or more as of the Latest Practicable Date. Jintong Zhihui was ultimately
controlled by Y uan Y onggang (࡝as of the Latest Practicable Date. As of the Latest
Practicable Date, Jintong Jiuge had eight limited partners, the largest of whom was Jintong
Zhihui, holding 15.50% of the partnership interest.
As of the Latest Practicable Date, Ningbo Longhuahui had eight limited partners,
Huafang Group Co., Ltd. (ʮ̡)( “ Huafang Group ”), being the largest limited
partner, held 40.00% of the partnership interest. None of the other limited partners held 30.00%
or more as of the Latest Practicable Date. Huafang Group had 22 shareholders and none of
whom had more than 30.00% equity interest therein as of the Latest Practicable Date.
15. Jiaxing No. 2
Jiaxing No. 2 is a limited partnership established in the PRC and is primarily engaged in
venture capital. The general partner of Jiaxing No. 2 is Shenzhen Jiayuan Capital Management
Co., Ltd. (ʮ̡)( “ Jiayuan Capital ”), holding approximately 0.35%
of the partnership interest. Jiayuan Capital was ultimately controlled by Rao Y uan ( ᙘჃ)a so f
the Latest Practicable Date. As of the Latest Practicable Date, Jiaxing No. 2 had 17 limited
partners, the largest of whom was Shenzhen Jiaxin Investment Co., Ltd. (ࠢ
ʮ̡)( “ Shenzhen Jiaxin ”), holding approximately 17.70% of the partnership interest.
Shenzhen Jiaxin was wholly owned by Rao Y uan ( ᙘჃ) as of the Latest Practicable Date.
16. North Shanghai Biomedical
North Shanghai Biomedical is a limited liability company established in the PRC and is
primarily engaged in technology development, technical consultation and technology transfer
in the biomedical science and technology industry. North Shanghai Biomedical was wholly
owned by Shanghai Baoshan District Luodian Industrial Company (ʈุʮ
̡), which was ultimately controlled as to 98.00% by Baoshan District Luodian Economic
Association (ٟ.)
17. Shanghai Jifu
Shanghai Jifu is a limited partnership established in the PRC and is primarily engaged in
import and export of goods and technology. The general partner of Shanghai Jifu is Huang
Tiankai ( ර˂ක), holding 25.00% of the partnership interest. As of the Latest Practicable Date,
Shanghai Jifu had three limited partners, namely Huang Qifeng ( රփไ), Huang Baochong ( ර
ᘒਫ਼), and Huang Jiabao ( ර̋ᘒ), each holding 25.00% of the partnership interest.
18. Nanjing United Future
Nanjing United Future is a limited partnership established in the PRC and is primarily
engaged in business management, venture capital, and equity investment. The general partner
of Nanjing United Future is Nanjing United Future Enterprise Management Co., Ltd. (ԯᑌ
ʮ̡), holding approximately 3.33% of the partnership interest and
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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ultimately controlled by Chen Qingwei ( ௓ᅅਃ). As of the Latest Practicable Date, Nanjing
United Future had three limited partners, with the largest limited partner, Shanghai Hanguo
Industrial Group Co., Ltd. (ʮ̡)( “ Shanghai Hanguo ”), holding
70.00% of the partnership interest. None of the other limited partners held 30.00% or more as
of the Latest Practicable Date. Shanghai Hanguo was owned as to 90.00% by Chen Jiachao ( ௓
൴) and 10.00% by Zhuo Boao ( ՙ௹ᏹ) as of the Latest Practicable Date.
19. SHC
SHC is a limited partnership established in the PRC and is primarily engaged in equity
investment in the pharmaceutical industry. The general partner of SHC is Shanghai Healthcare
Capital Management Co., Ltd. (ʮ̡). None of the
limited partners of SHC holds more than 30.00% of the partnership interest in SHC.
20. Tianjin Bo’ao
Tianjin Bo’ao is a limited partnership established in the PRC and is primarily engaged in
business management and technical service. The general partner of Tianjin Bo’ao is Li Pan ( ҽ
ᖂ), holding 60.00% of the partnership interest. As of the Latest Practicable Date, Tianjin Boao
had one limited partner, namely Xu Peng (ᣥ), holding 40.00% of the partnership interest.
21. Shanghai STVC Group
Shanghai STVC Group is a limited liability company established in the PRC and is
primarily engaged in venture capital in technology industry. As of the Latest Practicable Date,
Shanghai STVC Group was wholly owned by Shanghai State-owned Capital Investment Co.,
Ltd. (ʮ̡), which was in turn wholly owned by Shanghai State-owned
Assets Supervision and Administration Commission (ึ).
22. Baoshan Capital
Baoshan Capital is a limited liability company established in the PRC and is primarily
engaged in investment management. As of the Latest Practicable Date, Baoshan Capital was
wholly owned by Shanghai Baoshan District State-owned Assets Supervision and
Administration Commission (ึ).
23. Yuanxiong Real Estate
Y uanxiong Real Estate is a limited liability company established in the PRC and is
primarily engaged in comprehensive real estate development and construction. As of the Latest
Practicable Date, Y uanxiong Real Estate was wholly owned by FSJ Trading Pte Ltd, which was
in turn owned as to 95.0% by Flagstone Trading Limited (“ Flagstone ”). As of the Latest
Practicable Date, Flagstone was owned as to 34.0% by Zhao Wenjia ( Ⴛ˖ྗ), and 33.0% by
each of Zhao Wenyu ( Ⴛ˖ຄ) and Zhao Xinqing (૶).
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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24. Individual Investors
Each of Zheng Keqing (ڡZheng Xiaodong (؇ࣖNie Miao ( ᔗ↿), Wang
Jufang (ٹCui Hongyan (ᝣ), Liu Jintao (ᏹ), Huang Haitao ( රऎᏹ), Xu
Sumin ( ஢९ઽ), Chen Jichun (݆ߏLuo Chun ( Ꭳॱ), Li Jueping ( ҽ䊌റ), Zhang Y ahong
(ߎFan Hong (ߎSong Aihui ( ҂ฌฯ), Zhao Liping ( Ⴛ஁റ), and Chen Zhan (࢝)
is an individual investor and an Independent Third Party.
ACTING IN CONCERT AGREEMENT
Pursuant to the AIC Agreement dated March 10, 2021, entered into by and amongst Dr.
Liu, Ms. Wang and Mr. Tan, the Concert Parties agreed to reach consensus on all matters
requiring approval by the Board and/or Shareholders, and to vote in the same manner on such
matters in meetings of the Board and Shareholders. The Concert Parties further agreed that if
they are unable to reach consensus on any such matters, Dr. Liu shall make the final decision.
The Concert Parties entered into the AIC Agreement principally to consolidate their control
over our Company’s management and to maintain stability in our Company’s governance
structure, ensuring a consistent and coordinated approach to decision-making in our
Company’s interests. As of the Latest Practicable Date, Dr. Liu had the largest shareholding
interest among the Concert Parties. Shanghai Luoxu, Shanghai Luojun and Ningbo Hongsheng
are Share Incentive Platforms of our Company of which the exercise of voting rights was
controlled by Dr. Liu. For further details of our Share Incentive Platforms, see “Appendix VII
— Statutory and General Information — C. Further Information about the Directors,
Supervisors, Senior Management and Substantial Shareholders — 5. Pre-IPO Share Incentive
Plans.”
As of the Latest Practicable Date, the Concert Parties, being members of the Controlling
Shareholders of our Company, were collectively entitled to exercise an aggregate of
approximately 45.91% voting rights in the Company, both directly and indirectly through the
Share Incentive Platforms. For further details of the Concert Parties, see “Relationship with the
Controlling Shareholders.”
PUBLIC FLOAT AND FREE FLOAT
Upon the completion of the Global Offering and the conversion of Unlisted Shares into
H Shares, the 171,654,215 Unlisted Shares (taking into account the Share Subdivision) held by
our Shareholders, representing approximately 52.66% of our total issued Shares upon the
completion of the Global Offering, will not be considered as part of the public float as the
Shares are Unlisted Shares which will not be converted into H Shares and listed on the Stock
Exchange following the completion of the Global Offering. In addition, the H Shares held by
certain of our Shareholders who are, our core connected persons or directly or indirectly
controlled by our core connected persons, will not be counted towards the public float. Details
of these Shareholders are set out below:
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(a) Since Dr. Liu, Ms. Wang and Mr. Tan are our executive Directors and have been
acting in concert pursuant to the AIC Agreement, the total of 25,956,915 H Shares
held by the Concert Parties and the Share Incentive Platforms (taking into account
the Share Subdivision), representing an aggregate of approximately 7.96% of our
total issued Shares upon the completion of the Global Offering, will not be counted
towards the public float.
(b) Since Center Lab is one of our substantial Shareholder, the total of 7,981,065 H
Shares held by the Center Lab (taking into account the Share Subdivision),
representing an aggregate of approximately 2.45% of our total issued Shares upon
the completion of the Global Offering, will not be counted towards the public float.
To clarify, the respective Shares held by Ms. Zheng and Mr. Diao in our Company through
PCJ Bao, V enus Capital, and Fuhai Junyong No. 6, should be counted towards the public float,
given that (i) Ms. Zheng, a former Director of our Company, does not fall under the definition
of a core connected person under Rule 1.01 of the Listing Rules; and (ii) the Shares held by
Mr. Diao through Fuhai Junyong No. 6 are considered to be in public hands (within the
meaning as defined under Rule 8.24 of the Listing Rules). Specifically, pursuant to the
partnership agreement of Fuhai Junyong No. 6, the executive partner, Oriental Fortune (Wuhu)
holds exclusive and sole authority over the operations of Fuhai Junyong No. 6. On the other
hand, the other general partner of Fuhai Junyong No. 6, Fuhai Junyong, which is ultimately
controlled by Mr. Diao, holds limited powers akin to those customarily exercised by a limited
partner. As confirmed by Mr. Diao, neither he nor Fuhai Junyong is involved in the day-to-day
business operations of Fuhai Junyong No. 6. Moreover, neither PCJ Bao, V enus Capital, nor
Fuhai Junyong No. 6’s acquisition of the Shares has been financed, directly or indirectly, by
any core connected person of our Company. Furthermore, neither PCJ Bao, V enus Capital, nor
Fuhai Junyong No. 6 is accustomed to take instructions from a core connected person in
relation to the acquisition, disposal, voting or other disposition of its Shares registered in its
name or otherwise held by it. Therefore, the respective Shares held by Ms. Zheng and Mr. Diao
in our Company, through PCJ Bao, V enus Capital, and Fuhai Junyong No. 6, should be counted
towards the public float.
Base on the Offer Price of HK$26.38 per H Share, the market capitalization of the
Company’s H Share upon Listing will be approximately HK$4,071 million. Under Rule
19A.13A(1) of the Listing Rules, in the event the expected market value of the Company’s H
Shares upon Listing does not exceed HK$6 billion, at least 25% of the total issued H Shares
must be held by the public upon Listing. To the best knowledge of our Directors, save as
disclosed above, immediately upon the completion of the Global Offering and conversion of
Unlisted Shares into H Shares, assuming 37,911,700 H Shares are issued to the public
Shareholders in the Global Offering and 82,477,570 Unlisted Shares (taking into account the
Share Subdivision) held or controlled by our Shareholders who are not our core connected
persons will be converted into H Shares, an aggregate of 120,389,270 H Shares (taking into
account the Share Subdivision) representing approximately 36.93% of our total issued Shares
will be counted towards the public float, which is in compliance with the requirement under
Rule 19A.13A(1) of the Listing Rules.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Rule 19A.13C(1) of the Listing Rules provides that, where a new applicant is a PRC
issuer with no other listed shares at the time of listing, this will normally mean that the portion
of H shares for which listing is sought that are held by the public and not subject to any
disposal restrictions (whether under contract, the Listing Rules, applicable laws or otherwise),
at the time of listing, must: (a) represent at least 10% of the total number of issued shares in
the class to which H shares belong at the time of listing (excluding treasury shares), with an
expected market value at the time of listing of not less than HK$50,000,000; or (b) have an
expected market value at the time of listing of not less than HK$600,000,000. Excluding the
Offer Shares to be allocated to the cornerstone investors that are subject to a lock-up period
of six months following the Listing Date, the Company’s H Shares to be counted towards the
free float upon Listing will be 30,307,600 Shares. Based on the Offer Price of HK$26.38 per
H Share, the Company will satisfy the free float requirement under Rule 19A.13C(1)(b) of the
Listing Rules.
SHARE INCENTIVE PLATFORMS
In recognition of the contributions of our employees and to incentivize them to further
promote our development, we adopted the Pre-IPO Share Incentive Plans. As of the Latest
Practicable Date, all the underlying Shares of the awards granted under the Pre-IPO Share
Incentive Plans have been issued to our Share Incentive Platforms as set forth below.
Shanghai Luoxu
As of the Latest Practicable Date, Shanghai Luoxu directly held approximately 6.51% of
the Shares of our Company. Shanghai Luoxu is a limited partnership established under the laws
of the PRC on September 2, 2020, and managed by its executive partner, Dr. Liu, holding
approximately 86.55% of the partnership interest. The partnership interest in Shanghai Luoxu
held by Dr. Liu is not associated with the Pre-IPO Share Incentive Plans and the corresponding
Shares held by Shanghai Luoxu are not included in the total incentive awards distributed under
the Pre-IPO Share Incentive Plan. As of the Latest Practicable Date, Shanghai Luoxu had 18
individual limited partners, all of whom are our current employees who were granted share
awards under the Pre-IPO Share Incentive Plans. As of the Latest Practicable Date, the largest
limited partner of Shanghai Luoxu was Mr. Tan (one of our executive Directors) holding
approximately 3.01% of the partnership interest.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Ningbo Hongsheng
As of the Latest Practicable Date, Ningbo Hongsheng directly held approximately 1.58%
of the Shares of our Company. Ningbo Hongsheng is a limited partnership established under
the laws of the PRC on December 8, 2020, and managed by its executive partner, Dr. Liu,
holding approximately 95.33% of the partnership interest for the incentive awards he was
granted under the Pre-IPO Incentive Plans. As of the Latest Practicable Date, Ningbo
Hongsheng had 19 individual limited partners, all of whom are our current employees who
were granted share awards under the Pre-IPO Share Incentive Plans. As of the Latest
Practicable Date, the largest limited partner of Ningbo Hongsheng was Zou Xiaodong ( ཅወ̆)
(quality officer of our Company) holding approximately 1.24% of the partnership interest.
Shanghai Luojun
As of the Latest Practicable Date, Shanghai Luojun directly held approximately 3.60% of
the Shares of our Company. Shanghai Luojun is a limited partnership established under the
laws of the PRC on August 9, 2023, and managed by its executive partner, Dr. Liu, holding
approximately 46.88% of the partnership interest for the incentive awards he was granted under
the Pre-IPO Incentive Plans. As of the Latest Practicable Date, Shanghai Luojun had 42
individual limited partners, all of whom are our current employees who were granted share
awards under the Pre-IPO Share Incentive Plans. As of the Latest Practicable Date, the largest
limited partner of Shanghai Luojun was Ms. Wang (one of our executive Directors) holding
approximately 14.37% of the partnership interest.
For details of our Pre-IPO Share Incentive Plans and awards granted thereunder, see
“Appendix VII — Statutory and General Information — C. Further Information About the
Directors, Supervisors, Senior Management and Substantial Shareholders — 5. Pre-IPO Share
Incentive Plans.”
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CAPITALIZATION
Our Company has applied for H-share full circulation to convert certain of the Unlisted
Shares into H Shares as per the instructions of the relevant Shareholders. The conversion of
Unlisted Shares into H Shares will involve an aggregate of 116,415,550 Unlisted Shares (taking
into account the Share Subdivision) held by 46 out of 53 existing Shareholders, representing
approximately 35.71% of total issued Share capital of the Company upon completion of the
conversion of Unlisted Shares into H Shares and the Global Offering.
Save as disclosed in this prospectus and to the best knowledge of our Directors, we are
not aware of the intention of any existing Shareholders to convert their Unlisted Shares into H
Shares. For further details, see “Share Capital.”
The table below is a summary of the capitalization of our Company upon completion of
the conversion of the Unlisted Shares into H Shares and the Global Offering:
Shareholder
As at the Latest Practicable
Date without taking into
account the Share Subdivision
Immediately following the completion of the
Global Offering (taking into account the Share
Subdivision) and conversion of the Unlisted
Shares into H Shares
Number of
Unlisted Shares
held
Ownership
percentage
Number of
Unlisted Shares
held
Number of
H Shares held
Ownership
percentage of
total issued
Shares
(approx.) (approx.)
Concert Parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,717,229 34.23% 82,727,530 15,858,615 30.24%
– Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,217,229 21.21% 54,977,530 6,108,615 18.74%
– Ms. Wang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,500,000 7.81% 20,250,000 2,250,000 6.90%
–M r .T a n/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,000,000 5.21% 7,500,000 7,500,000 4.60%
Shanghai Luoxu /H1118/H1118/H1118/H1118/H1118/H1118/H11183,750,000 6.51% 13,125,000 5,625,000 5.75%
Shanghai Luojun /H1118/H1118/H1118/H1118/H1118/H1118/H11182,073,119 3.60% 7,255,915 3,109,680 3.18%
Ningbo Hongsheng /H1118/H1118/H1118/H1118/H1118/H1118909,081 1.58% 3,181,785 1,363,620 1.39%
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,449,429 45.91% 106,290,230 25,956,915 40.57%
Center Lab /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,981,066 13.85% 31,924,265 7,981,065 12.24%
Fangyuan Capital /H1118/H1118/H1118/H1118/H1118/H11184,332,222 7.52% – 21,661,110 6.64%
– V enus Capital /H1118/H1118/H1118/H1118/H1118/H1118/H11183,222,222 5.59% – 16,111,110 4.94%
– PCJ Bao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,110,000 1.93% – 5,550,000 1.70%
SHC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,365,736 4.11% 2,957,170 8,871,510 3.63%
Oriental Fortune Capital /H1118/H1118 1,891,266 3.29% 4,728,170 4,728,160 2.90%
– Fuhai Junyong No. 6 /H1118/H1118 916,537 1.59% 2,291,345 2,291,340 1.41%
– Fuhai Junyong No. 2 /H1118/H1118 392,801 0.68% 982,005 982,000 0.60%
– Fuhai Jingxuan No. 2 /H1118/H1118 290,964 0.51% 727,410 727,410 0.45%
– Fuhai Y ouxuan No. 2 /H1118/H1118 290,964 0.51% 727,410 727,410 0.45%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 277 ---
Shareholder
As at the Latest Practicable
Date without taking into
account the Share Subdivision
Immediately following the completion of the
Global Offering (taking into account the Share
Subdivision) and conversion of the Unlisted
Shares into H Shares
Number of
Unlisted Shares
held
Ownership
percentage
Number of
Unlisted Shares
held
Number of
H Shares held
Ownership
percentage of
total issued
Shares
(approx.) (approx.)
Findowin Capital /H1118/H1118/H1118/H1118/H1118/H1118/H11181,763,478 3.07% 4,408,695 4,408,695 2.70%
– Jinan Chanfa /H1118/H1118/H1118/H1118/H1118/H1118/H1118741,958 1.29% 1,854,895 1,854,895 1.14%
– Shandong Caixin /H1118/H1118/H1118/H1118/H1118354,860 0.62% 887,150 887,150 0.54%
– Qingdao Y uanchuang /H1118/H1118 333,330 0.58% 833,325 833,325 0.51%
– Y antai Duoying /H1118/H1118/H1118/H1118/H1118/H1118333,330 0.58% 833,325 833,325 0.51%
Shanghai Dongxi /H1118/H1118/H1118/H1118/H1118/H1118/H11181,663,856 2.89% – 8,319,280 2.55%
– Jiaxing Xiqi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,163,856 2.02% – 5,819,280 1.79%
– Shanghai Cixi /H1118/H1118/H1118/H1118/H1118/H1118/H1118500,000 0.87% – 2,500,000 0.77%
Shanghai Luohui /H1118/H1118/H1118/H1118/H1118/H1118/H11181,200,000 2.08% 761,110 5,238,890 1.84%
Haitong Innovation
Securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118872,892 1.52% 4,364,460 – 1.34%
Zhang Y ahong (ߎ)H1118/H1118/H1118709,721 1.23% 2,838,885 709,720 1.09%
Shanghai Luoqun /H1118/H1118/H1118/H1118/H1118/H1118/H1118686,660 1.19% 1,316,655 2,116,645 1.05%
Xiamen Y oulang /H1118/H1118/H1118/H1118/H1118/H1118/H1118666,664 1.16% – 3,333,320 1.02%
Shanghai Guqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118666,660 1.16% 3,333,300 – 1.02%
Fan Hong (ߎ)H1118/H1118/H1118/H1118/H1118/H1118/H1118591,434 1.03% 2,365,735 591,435 0.91%
Shanghai Luoyuan /H1118/H1118/H1118/H1118/H1118/H1118444,440 0.77% – 2,222,200 0.68%
Zheng Keqing (ڡ)H1118/H1118/H1118444,440 0.77% 222,220 1,999,980 0.68%
Zheng Xiaodong (؇ࣖ)H1118/H1118 436,446 0.76% – 2,182,230 0.67%
Nanjing United Future /H1118/H1118/H1118436,446 0.76% – 2,182,230 0.67%
Y angtze River Delta
Industrial /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118436,446 0.76% – 2,182,230 0.67%
Ningbo Longhuahui /H1118/H1118/H1118/H1118/H1118436,446 0.76% – 2,182,230 0.67%
Jiaxing No. 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,801 0.68% 982,000 982,005 0.60%
Shanghai STVC Group /H1118/H1118/H1118374,969 0.65% – 1,874,845 0.58%
Shanghai Jifu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,497 0.62% – 1,782,485 0.55%
Nie Miao ( ᔗ↿) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,330 0.58% – 1,666,650 0.51%
North Shanghai
Biomedical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,964 0.51% 727,410 727,410 0.45%
ROSY ELEGANT /H1118/H1118/H1118/H1118/H1118/H1118250,000 0.43% 1,250,000 – 0.38%
Baoshan Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118236,574 0.41% 1,182,870 – 0.36%
Wang Jufang (ٹ)H1118/H1118/H1118/H1118145,482 0.25% 581,930 145,480 0.22%
Yuanxiong Real Estate /H1118/H1118/H1118118,287 0.21% 473,145 118,290 0.18%
Cui Hongyan (ᜮ) /H1118/H1118/H1118/H1118101,837 0.18% – 509,185 0.16%
Liu Jintao (ᏹ)/H1118/H1118/H1118/H1118/H1118/H1118101,837 0.18% – 509,185 0.16%
Huang Haitao ( රऎᏹ) /H1118/H1118/H1118 72,741 0.13% 181,855 181,850 0.11%
Tianjin Bo’ao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,740 0.13% – 363,700 0.11%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 278 ---
Shareholder
As at the Latest Practicable
Date without taking into
account the Share Subdivision
Immediately following the completion of the
Global Offering (taking into account the Share
Subdivision) and conversion of the Unlisted
Shares into H Shares
Number of
Unlisted Shares
held
Ownership
percentage
Number of
Unlisted Shares
held
Number of
H Shares held
Ownership
percentage of
total issued
Shares
(approx.) (approx.)
Chen Zhan (࢝)H1118/H1118/H1118/H1118/H1118/H111859,143 0.10% 295,715 – 0.09%
Xu Sumin ( ஢९ઽ) /H1118/H1118/H1118/H1118/H1118/H111858,193 0.10% – 290,965 0.09%
Chen Jichun (݆ߏ)H1118/H1118/H1118/H111843,645 0.08% – 218,225 0.07%
Luo Chun ( Ꭳॱ) /H1118/H1118/H1118/H1118/H1118/H1118/H111843,645 0.08% 218,225 – 0.07%
Song Aihui ( ҂ฌฯ) /H1118/H1118/H1118/H1118/H111835,486 0.06% 88,715 88,715 0.05%
Zhao Liping ( Ⴛ஁റ) /H1118/H1118/H1118/H111835,486 0.06% 88,715 88,715 0.05%
Li Jueping ( ҽ䊌റ) /H1118/H1118/H1118/H1118/H111814,548 0.03% 72,740 – 0.02%
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,613,953 100% 171,654,215 116,415,550 88.37%
Other public investors taking
part in the Global
Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 37,911,700 11.63%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,613,953 100% 171,654,215 154,327,250 100%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE IMMEDIATELY BEFORE THE COMPLETION OF THE GLOBAL OFFERING
The chart below sets out the corporate structure of our Company and subsidiaries and associated company immediately before the completion
of the Global Offering:
22.91%
Other
Shareholders(3)
13.85%
Center Lab
5.59%
Venus
Capital
4.11%
SHC
2.08% 2.02% 1.93% 1.59%
Shanghai
Luohui
Jiaxing
Xiqi PCJ Bao
Fuhai
Junyong
No. 6
6.51%
Shanghai
Luoxu(2)
3.60%
Shanghai
Luojun(2)
1.58%
Ningbo
Hongsheng(2)
21.21%
Dr. Liu(1)
7.81%
Ms. Wang(1)
5.21%
Mr. Tan(1)
Our Company
(PRC)
16.99% 100%
66.18% 33.82%
100% 100%
ABLINK Biotech(4)
(PRC)
(An associate of
the Company)
Suzhou Kangju
(PRC)
Hainan Baoji
(PRC)
Hong Kong
Bao Pharma
(Hong Kong)
Suzhou Centergene
(PRC)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 280 ---
Notes:
(1) Pursuant to the AIC Agreement, the Concert Parties including Dr. Liu, Ms. Wang and Mr. Tan had been and will continue to act in concert with respect to the matters relating
to the daily operations, key matters or any other matters required to be approved by the shareholders’ meetings or board meetings of the Company. For de tails, see “— Acting
in Concert Agreement” above.
(2) Shanghai Luoxu, Shanghai Luojun and Ningbo Hongsheng are our Share Incentive Platforms, each of which is a limited partnership established under the laws of the PRC. For
further details relating to our Share Incentive Platforms, see “— Share Incentive Platforms” in this section.
(3) Other Shareholders include Haitong Innovation Securities, Jinan Chanfa, Zhang Y ahong (ߎShanghai Luoqun, Xiamen Y oulang, Shanghai Guqing, Fan Hong (ߎ,)
Shanghai Cixi, Shanghai Luoyuan, Zheng Keqing (ڡNanjing United Future, Y angtze River Delta Industrial, Ningbo Longhuahui, Zheng Xiaodong (؇ࣖFuhai
Junyong No. 2, Jiaxing No. 2, Shanghai STVC Group, Shanghai Jifu, Shandong Caixin, Qingdao Y uanchuang, Y antai Duoying, Nie Miao ( ᔗ↿), Fuhai Jingxuan No. 2, Fuhai
Y ouxuan No. 2, North Shanghai Biomedical, ROSY ELEGANT, Baoshan Capital, Wang Jufang (ٹY uanxiong Real Estate, Cui Hongyan (ᜮ), Liu Jintao (ᏹ),
Huang Haitao ( රऎᏹ), Tianjin Bo’ao, Chen Zhan (࢝Xu Sumin ( ஢९ઽ), Chen Jichun (݆ߏLuo Chun ( Ꭳॱ), Song Aihui ( ҂ฌฯ), Zhao Liping ( Ⴛ஁റ), and Li
Jueping ( ҽ䊌റ). For background of the other Shareholders, see “— Pre-IPO Investments — Information about Our Pre-IPO Investors” above.
(4) ABLINK Biotechnology Co., Ltd. (ʮ̡)( “ABLINK Biotech” ) is a limited liability company established under the laws of the PRC and is mainly
engaged in discovery and optimization of macromolecular drugs. As of the Latest Practicable Date, ABLINK Biotech had nine shareholders, the other ei ght shareholders were
Liu Jianghai ( ᄎϪऎ), Chengdu High Tech Technology Achievement Transformation V enture Capital Partnership (Limited Partnership) (ᔷʷ௴ุҳ༟Υྫ
Άุ(Υྫ)), Chengdu Shengshi Taikang Biotechnology Co., Ltd. (ʮ̡), Chengdu Feiji Enterprise Management Partnership (Limited
Partnership) ( ϓேി᏶Άุ၍ଣΥྫΆุ(Υྫ)), Chengdu Hetong Yichuang Biotechnology Co., Ltd. (ʮ̡), Ma Jun ( ৵ᾗ), Zhao Qian (࠺)
and Lai Peng (؃holding 43.32%, 14.16%, 13.59%, 6.79%, 4.25%, 0.49%, 0.25% and 0.17% of the share interests, each an Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE IMMEDIATELY FOLLOWING THE COMPLETION OF THE GLOBAL OFFERING
The chart below sets out the corporate structure of our Company and subsidiaries and associated company immediately following the
completion of the Global Offering:
20.26%
Other
Shareholders(3)
12.24%
Center Lab Venus
Capital
4.94%
SHC
3.63% 1.84% 1.79% 1.70% 1.41%
Shanghai
Luohui
Jiaxing
Xiqi PCJ Bao
Fuhai
Junyong
No. 6
5.75%
Shanghai
Luoxu(2)
3.18%
Shanghai
Luojun(2)
1.39%
Ningbo
Hongsheng(2)
18.74%
Dr. Liu(1)
6.90%
Ms. Wang(1)
4.60%
Mr. Tan(1)
11.63%
Public
Investors
Our Company
(PRC)
16.99%
66.18% 33.82%
100%
ABLINK Biotech(4)
(PRC)
(An associate of
the Company)
Suzhou Kangju
(PRC)
Hainan Baoji
(PRC)
Suzhou Centergene
(PRC)
100% 100%
Hong Kong
Bao Pharma
(Hong Kong)
Note: See notes (1) to (4) to the chart in “— Corporate Structure Immediately Before the Completion of the Global Offering” above.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OVERVIEW
We are a biotechnology company with an approved product and a diverse clinical
pipeline, leveraging synthetic biology technology to develop and deliver recombinant biologic
drugs in China, targeting conditions with limited treatment options and complex manufacturing
challenges. From our inception, we have strategically focused on creating biologic drugs that
elevate treatment standards by replacing biochemically extracted products derived from animal
organs, blood or urine, or otherwise upgrading the current treatments. We have established
proprietary technology platforms, supported by our chassis cell engineering technology,
combining our drug design and bioprocessing capabilities. Our technology platforms enable us
to achieve a competitive position in developing drug candidates across four strategic
therapeutic areas with a combined clinically addressable market size of approximately RMB50
billion in total by 2033 according to Frost & Sullivan: (i) large-volume subcutaneous (SC) drug
delivery, (ii) antibody-mediated autoimmune conditions, (iii) drugs in assisted reproduction
and (iv) recombinant biologic products as transformative alternative to traditional biochemical
production.
Our drug development centers on efficiently optimizing validated therapeutics with
substantial market value or underutilized opportunities, which differentiates us in the
biopharmaceutical industry. By targeting the upgrades of existing therapeutics that have
already achieved widespread clinical adoption, we ensure our innovations directly benefit
established and expanding patient populations. We have strategically positioned our pipeline to
address critical limitations of these products through our synthetic biology technology
capabilities, with development priorities closely aligned with real-world clinical demands.
Such drug development strategy also enables us to swiftly translate our scientific discoveries
into tangible commercial success. Further, our approach is evidenced by notable clinical-stage
success rates, as we focus on enhancing clinically validated therapeutics. This value-oriented
approach empowers us to consistently achieve accelerated drug development timeframe with
reduced costs.
We have established commercial-scale manufacturing capabilities that enable
cost-effective and standardized production, while achieving cost advantages that allows us to
extend our reach into additional therapeutic areas and unlock new market opportunities. For
example, in the field of large-volume SC delivery, we are pursuing a “Two-Anti (referring to
antibody drugs and antibiotics)” strategy to develop SC formulations for both antibody drugs
and chemicals especially antibiotics, demonstrating our ability to produce not only high-end
biologics but also affordable conventional medicines in wide use through SC administration.
Leveraging the early-mover advantages, clinical versatility and scalable cost-efficient
production of our drug candidates, we have adopted a balanced business model that integrates
in-house R&D with external collaborations and excipient supply. Tailoring our approach to the
unique strengths of each drug candidate, we aim to deliver consistent long-term value while
effectively managing risks and costs.
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The following chart illustrates our pipeline and summarizes the development status of our approved drug, SJ02 (Slonva ® (۹®)), our six
clinical-stage drug candidates and five selected preclinical-stage candidates as of the Latest Practicable Date:
Candidate Drugs Key Component Regimen
Mono/Combo
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Indications Line(s) of
treatment Preclinical IND Phase I Phase II Phase III NDA Current Status/Milestone
KJ0171 Recombinant Human
Hyaluronidase2
Large-volume SC Delivery
(Combo), Body Fluid Loss due
to Various Causes (Mono),
Facilitation of SC fluid
administration (Combo)
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
Submitted NDA in June 2024;
Expect to receive NDA approval in Q1 2026
BJ007
3 Ceftriaxone Sodium
(SC Formulations) Bacterial Infection
Phase I trial stage;
Expect to complete Phase I trial in 2026 H1
Prepare for IND application;
Expect to submit IND application in 2026 H1
BJ0083
Cefoperazone Sodium
and Sulbactam
Sodium
(SC Formulations)
Bacterial Infection Preclinical stage;
Expect to submit IND application in 2026 H1
BJ0093 Cefazolin Sodium
(SC Formulations) Bacterial Infection
KJ015
Bispecific Anti-HER2
Antibody
(SC Formulations)
Solid Tumors
Phase I trial stage

Expect to complete Phase I trial in 2026 H2
Prepare for IND application;
Expect to submit IND application in 2026 H1
KJ1034
Recombinant
IgG-Degrading
Enzyme
Phase III trial stage;
Expect to complete the Phase III trial in 2026 H1;
Received BTD from the NMPA in November 2024
Prepare for Phase II trial application;
Expect to submit Phase II trial application in 2026 H1
Completed Phase II trial in October 2025
Expect to initiate Phase III trial in 2026 H1
IND approved in April 2025
Expect to initiate Phase II trial in November 2025
BJ045
Anti-CD20 Antibody Resistant
to Enzyme Degradation
(SC Formulations)
Moderate-to-Severe
Autoimmune Diseases
Preclinical stage;
Expect to submit IND application in 2026 H1
BJ047
Anti-CD154 Antibody Resistant
to Enzyme Degradation
(SC Formulations)
Solid organ transplantation,
Xenotransplantation,
Autoimmune Disease
(Lupus Nephritis and
Multiple Sclerosis)
Preclinical stage;
Expect to submit IND application in 2026 H1
SJ02
(Slonva
®
(۹®))5,7
Recombinant
Human FSH-CTP
Controlled Ovarian Stimulation,
Stimulating Multiple Follicular
Development, Promoting
Ovulation
Received NDA approval in August 2025
SJ04 Recombinant Human
Chorionic Gonadotropin
Stimulating Follicular Maturation,
Inducing Ovulation and Luteinization
Completed the Phase I trial in September 2025
KJ101 Recombinant Human
Chymotrypsin
Wound Healing for Burn Injuries,
Traumatic Injuries, Surgical
Incision, Pressure Sores and
Diabetic Foot Ulcers, etc.
Phase II trial stage;
Expect to complete Phase II trial in 2026 H1
BJ044 Recombinant Ulinastatin
Acute Pancreatitis, Chronic
Recurrent Pancreatitis and
Acute Circulatory Failure
Preclinical stage;
Expect to submit IND application in 2026 H1
Commercial
RightsSourceIND/NDA
Application Number
GlobalSelf-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Drug Classification
Biologics
Improved Formulation of
Innovative Drug8
Chemical Drug
Improved Formulation of
Chemical Drug8
Chemical Drug
Chemical Drug
Biologics
Innovative Biologics9
Biologics
Innovative Biologics9
Biologics
Biologics
Biologics
Biologics
Biologics
Biosimilar
Biologics
Biologics
Biologics
CXSS2400095;
CXSS2400096
CXSL2200266
IND 160657
CXSL2400378
CXSL2500128
CXSS2400011;
CXSS2400012
Global
Global
Global
Global
Global
Global
Global
Global
Global
Global
Global
Core Product Lead IndicationBreakthrough Designation from the NMPA
Anti-GBM Diseases
GBS
Desensitization before
kidney transplantation
Pathological IgG-mediated
Autoimmune Diseases6
Preclinical stage;
Expect to submit an IND application in 2026 H1
Preclinical stage;
Expect to submit IND application in 2026 H1
Subcutaneous
Delivery
Antibody-mediated
Auto-immune
Diseases
Assisted Reproduction
Synthetic Biology
Upgrading Platform
NMPA
FDA
EMA/FDA
EMA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
FDA
NMPA
NMPA
NMPA
NMPA
FDA
NMPA
CXHL2401399
CXSL2400672
CXHL2500565
CXSL2400176
CXSL2400781
Received IND approval from the NMPA in September 2025
Expect to initiate Phase I trial in December 2025
Abbreviations: BTD = Breakthrough Therapy Designation; FSH-CTP = Follicle-stimulating hormone-carboxyl-terminal peptide; GBM = Glomerular Bas ement Membrane; GBS =
Guillain-Barré syndrome; H1 = First Half; H2 = Second Half; Q1 = First Quarter; IgG = Immunoglobulin G; SC = Subcutaneous.
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Notes:
(1) We have completed KJ017 monotherapy’s Phase I clinical trial (CTR20191671) in September 2019, Phase IIIa trial (CTR20210453) in October 2021, an d Phase IIIb trial
(CTR20241071) in May 2024 in China. We have remained the role as the sole sponsor responsible for funding each phase of KJ017’s clinical development in China and expect
to remain such role as the sole sponsor for KJ017’s future clinical development in Europe and U.S.
(2) We have completed the pharmaceutical excipient registration in China and are advancing the registration progress globally. The DMF for KJ017 was successfully filed with the
FDA in May 2025.
(3) The subcutaneous antibiotic formulation is developed based on the Chemical Drug Modification (Category 2.2) new administration route, with sub sequent studies on area under
the curve (AUC) equivalent and PK/PD.
(4) We have completed a Phase I clinical trial for KJ103 in China (CTR20222595) in March 2023. We have received approval from the NMPA for a Phase II clini cal trial
(CTR20234137) design in desensitization therapy in highly sensitized patients awaiting kidney transplantation (a procedure aimed at reducing or e liminating pre-existing
antibodies in transplant recipients to prevent rejection of the donor organ), as well as approval for a Phase II clinical trial (CTR20243543) in anti- GBM diseases and a Phase
II clinical trial (CTR20253992) in GBS in China. In line with standard regulatory practice, and in the absence of objections from the regulatory autho rities, it is not necessary
to repeat initial Phase I studies primarily designed to assess basic safety, tolerability, and pharmacokinetics for new indications. These IND appr ovals were approved by the
NMPA based on the data of our CTR20222595 Phase I trial in China. The Phase II clinical trial (CTR20234137) was completed in September 2024, and we initi ated the Phase
III clinical trial (CTR20252973) in August 2025 in this indication with the CDE’s approval of our trial design. The CTR20243543 Phase II trial is compl eted in October 2025.
We have also completed a Phase I clinical trial for KJ103 in New Zealand (NCT05274659) in March 2023. We plan to use the data from this New Zealand trial (N CT05274659)
to support our subsequent clinical development in the U.S., namely the planned Phase II trial for pathological IgG-mediated autoimmune diseases. We plan to communicate with
the FDA related to the application for a Phase II clinical trial in the first half of 2026. We have remained the role as the sole sponsor responsible for fu nding each phase of
KJ103’s clinical development in China and expect to remain such role as the sole sponsor for KJ103’s future clinical development in U.S.
(5) We have completed a Phase I clinical trial (CTR20181339) in March 2020 and a Phase II/III clinical trial (CTR20201374) for SJ02 in December 2022 in C hina. We have remained
the role as the sole sponsor responsible for funding each phase of SJ02’s clinical development in China and expect to remain such role as the sole sponso r for SJ02’s future
clinical development in Europe.
(6) Pathological IgG-mediated Autoimmune Diseases refer to a group of disorders in which the immune system produces abnormal IgG antibodies that tar get the body’s own cells,
tissues, or organs.
(7) In anticipation of the commercial launch of SJ02 in China market following the receipt of the NDA approval in 2025, we entered into an exclusive sale s agency agreement with
ANKE BIO in July 2025, pursuant to which ANKE BIO acts as an exclusive CSO responsible for the commercialization of SJ02 in Greater China. Previously, w e had entered
into a license and commercialization agreement with Organon in September 2024 for an exclusive license to develop, manufacture and commercialize SJ 02 for the fertility
treatment to stimulate the development of eggs in the ovaries in humans in China, as well as an ancillary separate manufacturing and supply agreement f or SJ02. The Organon
Agreement, along with the ancillary manufacturing and supply agreement for SJ02, were terminated on the date of July 28, 2025 as specified in a termina tion notice provided
by Organon on April 11, 2025. Following this termination, we regained full, global rights to develop, manufacture and commercialize SJ02. We are not o bliged to return any
payments received (including the first tranche of upfront payments received in 2024) or make any payments to Organon in respect of the termination of t his agreement. Organon
is not obliged to pay any termination fee or required to pay any future upfront, milestone or royalty payments to us under the agreement. No disputes or c laims arose between
Organon and us related to this termination. See “Business – Collaboration Agreement – License and Commercialization Agreement with Organon” for mor e information.
(8) This definition is established under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act.
(9) This definition is established under Section 351(a) of the Public Health Service Act.
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Our Core Products and other major assets are built across the following four core
therapeutic areas, each with broad therapeutic applications:
Large-volume SC drug delivery
The trend towards large-volume SC drug delivery has gained widespread recognition in
the pharmaceutical industry, as exemplified by the SC Drug Development & Delivery
Consortium established in 2018 by over a dozen renowned multinational companies, which has
been actively sharing expertise and publishing research findings in academic journals. In this
field, our R&D efforts are represented by our recombinant human hyaluronidase with the
potential to become the first to be approved in China, according to Frost & Sullivan. One of
our Core Products, KJ017, a recombinant human hyaluronidase, enables rapid, large-volume
SC delivery of various therapeutics traditionally administered intravenously (IV), improving
the safety, patient convenience and potentially efficacy. To sustainably maximize clinical and
commercial value of our recombinant human hyaluronidase products, we have implemented a
multi-pronged strategy:
(i) Launch of KJ017 monotherapy . We are advancing KJ017 as a single drug towards
commercial launch in China, for the facilitation of large-volume SC delivery of
crystalloid solution as an alternative to IV infusion, body fluid loss due to various
causes, and facilitation of SC fluid administration. The Phase I trial of KJ017
monotherapy (CTR20191671) was initiated in August 2019 and completed in
September 2019. In August 2020, the Company submitted the Phase I clinical results
to the CDE. In our consultations with the CDE, we referenced the approval pathway
of a comparable recombinant human hyaluronidase product in the U.S. that received
marketing authorization from the FDA based solely on safety-focused clinical trials,
to explore the possibility of a similar safety data-based approval for our product.
The CDE then advised the Company to conduct a registrational clinical trial to
evaluate KJ017’s efficacy as well. As advised by Frost & Sullivan, according to the
industry practices, a registrational clinical trial is clinical trial that supports a drug’s
marketing application and authorization, with the primary objective of confirming
the drug’s safety and efficacy. Such trials must meet certain regulatory
requirements, which in KJ017’s case involves an efficacy trial with randomized,
controlled, blinded design. According to Frost & Sullivan, in industry practice of
drug development, Phase III clinical trials typically constitute the main form of
registrational studies, except for breakthrough therapies or treatments for rare
diseases. As KJ017 is not categorized as a breakthrough therapy or a treatment for
a rare disease, we designated its Phase III trial as the registrational trial.
Our KJ017 monotherapy was able to proceed directly to Phase III clinical trials
without conducting Phase II trials due to its unique characteristics. As KJ017 acts
exclusively locally with minimal systemic exposure, a traditional Phase II dose-
exposure study would lack clinical significance. Its Phase I PK studies have
demonstrated no systemic exposure even at doses ten times the intended clinical
dose. Consequently, with the Phase III trials incorporating not only efficacy
endpoints but also studies on dose-ranging and exposure-effect relationships
typically included in Phase II trials to confirm the optimal clinical dose, KJ017
could bypass Phase II clinical trials and proceed directly to Phase III clinical trials.
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This scientifically-grounded clinical design has satisfied both scientific and
regulatory requirements, with no objections raised by the NMPA regarding the direct
progression to Phase III trials. Thus, we initiated the registrational trials and
designated such trials as Phase III trials rather than a Phase II trial. The primary
efficacy endpoint is the SC infusion rate, and the secondary efficacy endpoint
involves measurement of the limb circumference after the infusion. The CDE has not
imposed any specific condition for this trial. We thus proceeded to the Phase IIIa
trial (CTR20210453) in August 2021 and Phase IIIb trial (CTR20241071) in March
2024, which were completed in October 2021 and May 2024, respectively. The
extended interval between KJ017’s Phase IIIa clinical trial and Phase IIIb trial was
primarily due to our manufacturing site changes. Following the completion of Phase
IIIa, we relocated KJ017’s clinical sample production to another dedicated
manufacturing line, which necessitated a significant transition period. This
relocation was undertaken for strategic operational reasons during the relevant
period. While the original production line maintained full GMP compliance
throughout the Track Record Period and up to the Latest Practicable Date, and
possessed the capability to manufacture both enzyme products (such as KJ017) and
hormone products (such as SJ02) for not only clinical trial but also commercial-
scale production, we made the strategic decision to dedicate this line exclusively to
hormone product manufacturing. Although potential cross-contamination risks
through the same production line could be avoided through proper scheduling and
technical measures on that original shared production line, and no cross-
contamination incidents had ever occurred when both candidates utilized the same
production line, we chose to separate the production lines for the two categories of
products as a long-term strategic consideration, thereby establishing optimal
manufacturing arrangements for the future production and commercialization of
both products. This dedicated approach would support SJ02, which was prioritized
for accelerated development at that time, as well as SJ04, another hormone product.
Concurrently, KJ017, being an enzyme product, would be manufactured on a
separate production line to optimize operational efficiency and product-specific
manufacturing protocols. Once this site change was successfully completed, we
proceeded with the Phase IIIb clinical trial. This manufacturing transition, while
extending the clinical development timeline, did not impact other aspects of KJ017’s
development or registration process. We have not received any objections from the
NMPA related to these Phase III trials (CTR20210453 and CTR20241071). KJ017
has demonstrated encouraging efficacy signals with a favorable safety profile in our
Phase III clinical trials (CTR20210453 and CTR20241071) in China. The trials have
demonstrated high drug delivery efficiency facilitated by KJ017 by reaching a
greater subcutaneous infusion rate of 545.09~775.00 mL/h, compared to 164.68
mL/h for placebo among 48 healthy subjects aged 18 to 60 years old. No significant
arm swelling, injection-site related reactions, or allergic reaction has been observed
among the subjects. Most adverse events are Grade 1 and are manageable with no
TEAE ( /H11350Grade 3) observed. We have submitted an NDA for KJ017 as a single drug
to the National Medical Products Administration (NMPA) in June 2024 following
completion of its Phase III clinical trials. We plan to submit IND applications for
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KJ017 to the European Medicines Agency (EMA) in Europe and the Food and Drug
Administration (FDA) in the U.S., and are in the process of simultaneously
preparing both EMA and FDA IND filings. We anticipate submitting one of the
applications in the first half of 2026 and will subsequently complete the IND
application for the other region.
(ii) In-house development of SC antibody formulation . We are also internally developing
SC formulations of antibody drugs with large market potential, such as our
innovative HER2-targeted bispecific antibody KJ015, anti-CD20 monoclonal
antibody BJ045, and anti-CD154 monoclonal antibody BJ047.
(iii) Partnerships with antibody drug developers . We have established formal
partnerships with multiple pharmaceutical or biotechnology companies for the
development of SC antibody formulations, such as Qyuns and Sumgen. We continue
to actively expand our collaboration ecosystem, with business development
initiatives underway with over a dozen potential partners at various negotiation
stages. Our typical collaboration model is that we continuously provide our
recombinant human hyaluronidase products as excipients and technical services
while our partners advance the development of SC formulation in combination with
their antibody drug candidates at their costs.
(iv) Commitment to SC antibiotics . We are committed to developing SC formulations of
widely used antibiotics. We have received an IND approval for SC ceftriaxone
sodium BJ007 from the NMPA in February 2025 and initiated the Phase I trial of
BJ007 (CTR20253085) in August 2025. We also submitted IND application for SC
cefazolin sodium BJ009 in May 2025 and have received the IND approval from the
NMPA in September 2025. Further, we actively exploring SC cefoperazone sodium
and sulbactam sodium BJ008 in preclinical studies.
Antibody-mediated autoimmune conditions
To address unmet clinical demands related to a variety of antibody-mediated autoimmune
conditions, we have in-house developed KJ103, an innovative IgG-degrading enzyme. It is the
first and only low-immunogenic immunoglobulin G (IgG)-degrading enzyme to reach the
registrational clinical stage globally. KJ103 is designed to target and degrade IgG antibodies
in the blood and tissues, thereby inhibiting pathogenic IgG-mediated immune responses that
cause various immunological conditions. We are also actively exploring other drug candidates
with synergistic effects within this area, including proprietary SC antibodies resistant to
enzymatic degradation and immunoglobulin M (IgM)-degrading enzyme. We have completed
a Phase I clinical trial for KJ103 in China (CTR20222595) and a Phase I clinical trial for KJ103
in New Zealand (NCT05274659), both in healthy subjects and completed in March 2023. The
Phase I clinical trial in China (CTR20222595) has demonstrated favorable safety and
tolerability in KJ103 with none of the 34 subjects experiencing any events meeting the
dose-escalation stopping criteria during the DLT observation period. Most of the adverse
events are Grade 1 and manageable with no DLT, TEAEs ( /H11350Grade 3), or severe infections were
reported. The administration of KJ103 results in a dose-dependent reduction in IgG levels with
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IgG levels decreasing by 91% within 1 hour and 95% within 6 hours post-dose and maintaining
an average reduction of over 70% for up to one week, exhibiting KJ103’s robust capability to
degrade human IgG antibodies. The data and conclusions from the New Zealand Phase I
clinical trial (NCT05274659) are consistent with those from the China Phase I clinical trial
(CTR20222595), showing no ethnic differences in safety, and PK/PD characteristics.
Specifically, we are systematically exploring KJ103’s therapeutic potential across
multiple immune-related applications:
(i) Organ transplantation. Based on the CDE’s approval of our trial design in October
2023, KJ103 entered into a Phase II (CTR20234137) trial in China for desensitizing
highly human leukocyte antigen (HLA)-sensitized patients to enable kidney
transplantation in December 2023, exhibiting the potential to be the first IgG-
degrading enzyme in China to fill this critical gap in transplant medicine. This trial
was completed in September 2024. Following our end of Phase II (“ EOP2 ”) meeting
with the NMPA in May 2025, we initiated the Phase III study of KJ103 in this
indication with the CDE’s approval of our trial design in a separate trial
(CTR20252973) in August 2025. In November 2024, KJ103 received the
Breakthrough Therapy Designation (BTD) from the NMPA for the treatment of this
indication. We have not received any objections from the NMPA related to our
clinical development plan for KJ103 in this indication as of the Latest Practicable
Date. With BTD status, KJ103 benefits from an expedited regulatory review,
reducing the standard review period and allowing for earlier market access in
response to urgent treatment gaps. This designation also facilitates rolling
submissions and more frequent, collaborative interactions with regulators,
streamlining feedback and accelerating decision-making. Reflecting strong
confidence in KJ103’s clinical data and innovative profile, the BTD enables a
flexible Phase III clinical trial strategy, including adaptive design elements. For
instance, the registrational trial of KJ103 is structured to take advantage of
single-arm designs with historical controls, which can reduce patient enrollment
requirements and potentially support conditional approval based on compelling
early efficacy signals. Through these mechanisms, the BTD directly supports the
accelerated development and potential approval of KJ103 for patients with limited
treatment options.
(ii) Hundreds of pathogenic antibody-mediated acute autoimmune diseases . KJ103
emerges as a promising option for treating a large number of acute autoimmune
diseases caused by pathogenic autoantibodies. Based on the Phase I trial in New
Zealand (NCT05274659), we may proceed with a subsequent clinical trial in the
U.S. targeting acute autoimmune diseases caused by pathogenic IgG, as well as
desensitizing highly HLA-sensitized patients.
In line with standard regulatory practice, and in the absence of objections from the
regulatory authorities, it is not necessary to repeat initial Phase I studies primarily
designed to assess basic safety, tolerability, and pharmacokinetics for new
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indications. Leveraging the clinical data from the Phase I trial in China
(CTR20222595), we proceeded with the Phase II clinical trial of KJ103 for
anti-glomerular basement membrane disease (anti-GBM disease) in China
(CTR20243543) in October 2024 and completed the Phase II trial ( CTR20243543)
in October 2025. Notably, KJ103 has received BTD from the NMPA for anti-GBM
disease in July 2025, which allows for an expedited regulatory review. We have not
received any objections from the NMPA related to this Phase II trial (CTR20243543)
as of the Latest Practicable Date. We are also actively exploring its therapeutic
potential in other antibody-mediated acute autoimmune diseases. For instance, in
Guillain-Barré syndrome (GBS), we have submitted an IND application for the
Phase II trial of KJ103 to NMPA based on the clinical data from the Phase I trial in
China (CTR20222595) in January 2025, received the IND approval in April 2025
and expect to initiate this trial (CTR20253992) in November 2025. Further, we plan
to submit the Phase II trial application for KJ103 to the U.S. Food and Drug
Administration (FDA) in the first half of 2026. KJ103 is expected to provide a safer
treatment for patients with acute autoimmune disorders due to its low percentage
and titer of pre-existing antibodies than the approved IgG-degrading enzyme on the
market according to publicly available data.
(iii) Combination therapy with recombinant antibodies resistant to enzymatic
degradation . Building on insights from our clinical research into KJ103, preclinical
findings suggest its synergistic potential in combination use with certain antibody
drugs for the treatment of various immune-related diseases. We are developing
several proprietary SC recombinant antibodies resistant to enzymatic degradation
based on our Robust-Hinge platform, such as our proprietary anti-CD20 and
anti-CD154 antibodies BJ045 and BJ047, both of which completed preclinical
proof-of-concept, aiming to provide enhanced efficiency and accelerate onset of
action.
Overall, our product portfolio in addressing antibody-mediated autoimmune conditions,
including KJ103, antibodies resistant to enzyme degradation and any potential IgM-degrading
enzyme, is well-positioned to tap into the emerging therapeutic fields such as
xenotransplantation. In recent years, there has been significant advancement of
xenotransplantation technology globally, as driven by the increasing prevalence of organ
failure and shortage of human organs. Our proprietary product candidates can notably
overcome the challenges of immune rejection in xenotransplantation, a key factor in the
success of these procedures. Leveraging our expertise in enzyme technology and antibody
development, we believe we are poised to capture a significant share of this growing market,
contributing to the advancement of xenotransplantation and fulfilling underserved medical
needs.
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Drugs in assisted reproduction
We are developing a portfolio of innovative products designed to address key limitations
of existing treatments in assisted reproduction, including SJ02 (Slonva ® (۹®)) and SJ04.
Our SJ02 an long-acting recombinant human follicle-stimulating hormone (FSH) products,
which is the first approved long-acting FSH-CTP product in China, according to Frost &
Sullivan. Our SJ02 can significantly reduce the treatment burden for users by reducing multiple
injections to a single dose, offering enhanced convenience and compliance.
We have received the NDA approval for SJ02 in August 2025. For the clinical
development of SJ02, pursuant to an IND approval for SJ02 from the NMPA in February 2018,
the Phase I clinical trial of SJ02 in healthy female (CTR20181339) was initiated in November
2018 and completed in March 2020. We then initiated the Phase II/III trial in female subjects
undergoing assisted reproductive technology (ART) (CTR20201374) in September 2020 and
completed the Phase II portion in April 2021. The IND approval for SJ02 is an umbrella
approval and therefore we are not required to seek additional approval from the CDE before
commencing next phases of clinical trial. Based on the industry practice of communicating
with CDE prior to Phase III study, we submitted the Phase I and Phase II clinical results of
SJ02 to the CDE in August 2021. The CDE agreed with our trial design of the Phase III clinical
trial in the same month. We initiated the Phase III portion of Phase II/III clinical trial of SJ02
(CTR20201374) in China in October 2021 and completed the Phase III portion in December
2022. Since the initiation upon the approval of ethics committees, we have not received any
objections from the NMPA related to this study. We submitted the NDA for SJ02 to the NMPA
in December 2023. SJ02 has demonstrated promising efficacy signals with a favorable safety
profile in subjects undergoing ART. Single-dose SJ02 has exhibited non-inferior efficacy on the
primary endpoint of the number of oocytes retrieved in comparison with Gonal-f
®. The
majority of adverse events reported are Grade 1 or 2 and are manageable, which is line with
the type and frequency observed with Gonal-f
®. In Europe, we plan to submit an IND
application for SJ02 to the EMA in the first half of 2026.
We have also developed SJ04, a recombinant human chorionic gonadotropin (hCG), for
the use in assisted reproductive procedures to accelerate follicle maturation and induce
ovulation. We obtained IND approval from the NMPA for SJ04 in May 2024. Subsequently, we
commenced a Phase I clinical trial for SJ04 in August 2024 in China and have completed this
trial in September 2025.
Recombinant biologic products as transformative alternatives to traditional biochemical
production
We are leveraging our synthetic biology expertise to develop innovative recombinant
biologics. Our advanced biotechnology platform enables us to engineer chassis cells for the
production of complex proteins that have traditionally been challenging to manufacture using
conventional biochemical methods. In particular, our synthetic biology-driven processes
address inefficiencies, impurities and safety risks including allergies and unknown virus
contamination associated with traditional biochemical extraction methods in producing
biologics. Our notable achievements in this area include KJ101, a leading recombinant human
chymotrypsin created using synthetic biology in China, for which we have received the IND
approval from the NMPA in February 2025 and initiated its Phase II clinical trial
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(CTR20252263) in July 2025, and BJ044, potentially the world’s first recombinant ulinastatin
developed through synthetic biology, with plans to submit an IND application for its Phase I
trial to the NMPA in the first half of 2026. These recombinant biologic products offer notable
advantages in safety, supply stability, and cost-efficiency, which position them to progressively
replace their biochemically extracted counterparts, transforming the market landscape and
capturing significant market share in China.
Our pipeline demonstrate strong synergistic potential both within and across our core
therapeutic areas. For instance, in the field of antibody-mediated autoimmune conditions, we
are actively developing IgG-degrading enzyme and degradation-resistant antibodies, and
exploring IgM-degrading enzyme, which can be integrated to develop potential combination
therapies to unlock their clinical potential in emerging areas, such as xenotransplantation.
Another example is our BJ045 and BJ047 in SC formulations, which have linked our expertise
in both large-volume SC drug delivery and addressing antibody-mediated autoimmune
diseases.
We are implementing an overall “China-US/Europe” development strategy for our Core
Products, under which we (i) prioritize and accelerate product development and
commercialization in China to establish first-mover advantages, (ii) generate stable revenue
through product sales and various collaborations in China to sustain the Company’s continuous
R&D and commercialization efforts, and (iii) then further expand indications and enter major
overseas markets following the commercialization in China.
We are also actively advancing the development of other new drug candidates to further
enrich our pipeline utilizing our technology platforms. In addition, we are employing AI-driven
drug discovery techniques to design and develop innovative therapies. Through bioinformatics
tracing, we have reconstructed a uricase sequence lost during human evolution dating
approximately tens of millions of years ago. Based on this sequence, we are developing a novel
recombinant human uricase with low immunogenicity and suitability for repeated
administration. This novel therapy is aimed to offer a more effective and sustainable treatment
option for patients with severe gout, a condition with substantial treatment gaps. Our research
and development capabilities are evidenced by our publications in scientific journals and our
intellectual property portfolio, which includes 21 patents and 73 patent applications
worldwide.
We have built Good Manufacturing Practice (GMP)-compliant manufacturing
infrastructure in Shanghai encompassing a site area of approximately 63,000 sq.m. Our
existing manufacturing facilities feature production lines specifically designed for the
manufacture of complex biological products, with specialized capabilities in recombinant
protein drugs. To further expand our commercial-scale manufacturing capacity, we are
constructing additional facilities in Shanghai, spanning a site area of approximately 37,000
sq.m., with completion of construction and commencement of operations anticipated by June
2026. Upon completion and operation of these new facilities, our projected total reactor
volume will reach approximately 26,100L and annual production capacity will be expanded to
approximately 22.5 million formulations, positioning us with integrated and scalable capacity
to fully support end-to-end production of our self-developed drugs.
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With the medical and commercial prospects of our pipeline assets, we are executing a
global strategy and aspire to treat patients worldwide. Building on KJ017’s clinical results from
China trials, we plan to initiate clinical studies overseas to evaluate its effects in facilitating
liquid and drug absorption by expecting to submit the IND applications to both EMA and FDA.
This initiative not only aims to pave the way for KJ017’s entry into international markets, but
also to strengthen our collaboration potential with global partners in developing SC
formulations incorporating KJ017. We are also considering conducting clinical studies for
KJ103 overseas, further broadening its market potential in acute autoimmune diseases caused
by autoantibodies. Moreover, we plan to submit the IND application for SJ02 to the EMA in
Europe in the first half of 2026. In parallel, we are actively pursuing collaboration
opportunities with multinational pharmaceutical companies across a range of our pipeline
assets, including KJ017, KJ103, KJ015, BJ045, BJ047, BJ007, KJ101, and novel recombinant
human uricase. These efforts aim to leverage the strengths of international partners to
accelerate the global development and commercialization of our pipeline assets while
generating sustainable revenue streams. With a diverse pipeline, specialized technology
platforms, and extensive experience in forging strategic partnerships, we are well-positioned to
address the global markets and deliver sustainable growth and long-term values.
OUR COMPETITIVE STRENGTHS
Advancing the transition from intravenous to subcutaneous drug delivery with potentially
first recombinant human hyaluronidase in China
In the field of large-volume SC drug delivery, we have developed China’s leading
portfolio featuring recombinant human hyaluronidase, with KJ017 being our most advanced
product, having reached NDA stage and anticipated to received NDA approval in the first
quarter of 2026. KJ017, one of our Core Products, is a highly glycosylated recombinant human
hyaluronidase that can enable rapid, large-volume SC delivery of co-administered drugs.
Unlike traditional animal-sourced hyaluronidase, which poses heightened immunogenicity
risks and suffers from quality variability, KJ017’s recombinant human design leverages
controlled production processes and extensive glycosylation to deliver consistent batch-to-
batch uniformity, safety assurance, and reproducibility, positioning KJ017 as an ideal excipient
for SC delivery systems. As of the Latest Practicable Date, it was the most advanced
recombinant human hyaluronidase in China and the third globally to have reached the NDA
stage or beyond, according to Frost & Sullivan. This technology offers the potential to
transform the delivery methods of a wide range of therapeutics to SC administration that
previously administered intravenously, thereby opening up significant new market
opportunities.
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IV administration, including injection and infusion, remains one of the most widely used
drug delivery methods globally. However, it presents significant drawbacks in terms of safety
and convenience. For instance, IV administration is associated with more than half of severe
drug-related adverse events, and its relatively long administration time often leads to
overcrowded outpatient and emergency clinics, increasing treatment costs for both patients and
the healthcare system. In contrast, large-volume SC delivery of antibody drugs, facilitated by
recombinant human hyaluronidase, could significantly reduce injection-related adverse events
and shorten administration time from approximately 30-180 minutes to 2-5 minutes, improving
such antibody drugs’ safety, patient convenience and potentially efficacy and reducing overall
treatment costs. Therefore, the transition from IV route to SC injections represents a clear and
transformative trend in drug delivery globally. In the China market, this trend is also
anticipated to gain momentum, as fueled by the rising prevalence of chronic diseases, cancer
and autoimmune diseases, as well as pursuit of more patient-centric therapies.
Currently, only two recombinant human hyaluronidase products have been approved
globally, and no recombinant human hyaluronidase has yet been approved in China.
ENHANZE
®, the globally first approved hyaluronidase in the U.S., has generated a significant
amount in sales revenue from the combination use with certain antibody drugs alone. However,
its originator typically grants exclusive rights for the co-administration of hyaluronidase
products with antibody drugs on a target-specific basis. This rules out a vast number of
pharmaceutical companies, including almost all in China, to develop SC formulations of their
antibody drugs using these hyaluronidase products.
KJ017 as a single drug demonstrated its ability in the Phase III clinical trials
(CTR20210453 and CTR20241071) to facilitate large-volume SC delivery of crystalloid
solutions at rates no less than IV infusion, with favorable safety and tolerability profiles. The
Phase III clinical results of KJ017 demonstrated that, at 150 international units (IU), it enabled
safe and rapid SC infusion of at least 1L fluid volume. Under gravity feed infusion without
pump assistance, 150 IU of KJ017 helped the crystalloid solution to achieve consistent flow
rates of 545.09 – 775.00 mL/h at a single infusion site on the upper arm, thigh, or torso,
maintaining relatively constant rates over time. This presents an effective alternative to IV
infusion, addressing clinical needs for large-volume SC infusion across different subcutaneous
sites, notably, market adoption of SC formulation has been demonstrated by marketed
daratumumab SC, launched in 2020, the market share of SC formulation in the US quickly
grew to approximately 76% in 2021 and further increased to approximately 92% of annual
sales of daratumumab in 2023, according to Frost & Sullivan. We are advancing KJ017 as a
single drug toward commercialization, with its NDA submission currently under review by the
NMPA.
Leveraging its first-mover advantage in China and our non-exclusive business model,
KJ017 offers a solution to the current market shortfall among Chinese drug manufacturers,
providing them with a viable option to develop SC-administered antibody drugs. Furthermore,
our proprietary synthetic biology platforms allow us to achieve cost-effective, large-scale
manufacturing of KJ017, ensuring broad accessibility for patients. We are actively exploring
the combination use of KJ017 with modalities beyond antibody drugs, such as chemicals
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especially antibiotics, further expanding its clinical and commercial value. This combination
of early-mover status, broad applicability, cost advantages, and an inclusive business model
positions KJ017 as a transformative player in the growing SC drug delivery market.
Within the expanding antibody drug market, the market of recombinant human
hyaluronidase combined with antibodies in China is expected to grow to RMB1,766.3 million
in 2029 and RMB3,218.6 million in 2033. We aim to capture this tremendous opportunity
through a dual strategy of partnerships and self-development:
 As one of the top three most clinically advanced recombinant human hyaluronidase
candidate worldwide, according to Frost & Sullivan, we have established formal
partnerships with multiple pharmaceutical companies to develop SC formulations of
antibody drugs, including Qyuns and Sumgen. Under these collaborations, we will
continuously provide our recombinant human hyaluronidase products and technical
services throughout the development and commercial stages, and our partners will
drive the development of the formulation in combination with their antibody drug
candidates and bear related costs. These collaborations amplify the clinical utility of
our recombinant human hyaluronidase across diverse therapeutic areas while
allowing us to manage risks effectively, and provide a steady and scalable revenue
stream for us through relevant income. As of the Latest Practicable Date, three
programs under our existing collaborations have advanced into clinical stage
(including Phase I, II and III stage). We anticipate additional milestone payments as
more programs progress, and expect to generate substantial revenue from supplying
our KJ017 to the collaborators once these partner-developed drugs receive approval.
Furthermore, we are actively pursuing additional partnerships to further expand our
reach and impact in China and international markets.
 In addition to our collaboration arrangements, we are also internally developing SC
formulations of antibody drugs with large market potential, such as our innovative
HER2-targeted bispecific antibody KJ015, anti-CD20 monoclonal antibody BJ045,
and anti-CD154 monoclonal antibody BJ047. These SC formulations are designed to
offer safer and more convenient alternatives to existing IV options, positioning us
to capture market opportunities in the huge and growing markets in those drugs that
have proven to be effective by IV administration.
Beyond antibody drugs, we are at the forefront of developing SC formulations of
chemicals especially antibiotics, addressing a long-standing challenge in the administration of
these essential and widely-used medicines. While over 200 antibiotic drugs are currently
available on the global market, IV or small-volume SC administration of antibiotics is often
associated with safety issues in relation to high possibility of site injection reactions. Given the
challenges associated with oral formulations, including their propensity to induce drug
resistance and disrupt the gut microbiome, large-volume SC delivery offers the potential to
provide a safer and more convenient delivery route for these widely used drugs. According to
Frost & Sullivan. China’s market for recombinant human hyaluronidase combined with
antibiotics is expected to reach to RMB474.5 million in 2029 and RMB2,254.7 million in 2033.
Recognizing this significant opportunity, we have received an IND approval for SC
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formulation of ceftriaxone sodium (BJ007) from the NMPA in February 2025 and initiated the
Phase I trial of BJ007 (CTR20253085) in August 2025. We also submitted IND application for
SC formulation of cefazolin sodium (BJ009) in May 2025 and have received the IND approval
from the NMPA in September 2025. In addition, we are also planning to develop SC
formulations for other widely used antibiotics, including cefoperazone sodium and sulbactam
sodium (BJ008) in preclinical studies. Given the significant cost advantages of our platforms,
we believe we are uniquely positioned to develop SC formulations for commonly used,
cost-effective chemicals especially antibiotics, ensuring broad accessibility while maintaining
commercial scalability.
Focused autoimmune pipeline anchored by world’s first low-immunogenic IgG-degrading
enzyme to reach registrational stage, addressing hundreds of antibody-mediated acute
autoimmune conditions caused by pathogenic IgG autoantibodies
KJ103, one of our Core Products, is an innovative IgG-degrading enzyme, specifically
designed for the treatment of a multitude of immunological diseases and conditions driven by
the activity of pathogenic IgG. According to Frost & Sullivan, KJ103 is the first and only
low-immunogenic IgG-degrading enzyme to reach registrational stage in the world. We have
initiated the Phase III study of KJ103 as desensitization therapy in highly HLA-sensitized
patients awaiting kidney transplantation (CTR20252973) in China. Notably, KJ103 has
received BTD from the NMPA both as a desensitization therapy in kidney transplantation and
for the treatment of anti-GBM disease.
KJ103 is engineered to efficiently cleave and degrade pathogenic IgG antibodies that are
responsible for various acute immune-mediated diseases. By targeting specific regions of the
IgG molecule, KJ103 effectively deactivates the antibody effector functions, thereby inhibiting
excessive or adverse immune reaction. This precise modulation of IgG levels gives KJ103 an
edge for its broad therapeutical applications associated with aberrant antibody activity,
particularly in terms of organ transplant desensitization, antibody-mediated acute autoimmune
diseases, and combination therapy with recombinant antibodies resistant to enzymatic
degradation.
 Desensitization in kidney transplantation and beyond : KJ103 represents a
promising drug candidate for desensitization therapy before kidney transplant,
especially in patients with high levels of sensitization and pre-existing human HLA
antibodies, the common immunological barriers to transplant success. By rapidly
degrading circulating IgG antibodies, KJ103 inhibits IgG-mediated immune
responses and reduces the risk of hyperacute rejection, a severe and immediate form
of rejection that occur when such antibodies are present. KJ103 entered into Phase
III clinical trial (CTR20252973) in China for desensitizing highly HLA-sensitized
patients to enable kidney transplantation in August 2025, and we expect to complete
this trial in the first half of 2026. Its Phase I clinical trial (CTR20222595) results
demonstrated that KJ103 is effective, safe and well-tolerated in healthy subjects,
providing a therapeutic window. Its Phase II trial results further reinforced the
promising efficacy and safety profiles of KJ103, where the candidate has shown to
rapidly and effectively reduce or eliminate both HLA-I and HLA-II antibodies
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following administration, achieving a 100% success rate in desensitization treatment
within 24 hours. No antibody-mediated rejection was reported at 6 to 12 months
post-transplantation, and the survival rate of transplant recipients remained at 100%
for over six months.
Given its ability to degrade all subclasses of IgG, KJ103 has the potential to expand
into other organ transplantation indications, including xenotransplantation. In an
investigator-initiated trial, following injection of KJ103 into a rhesus monkey (on
the day when this monkey was in life-threatening condition) who received a
xenogeneic pig kidney transplant, KJ103 was observed to rapidly address antibody-
mediated rejection and kidney function impairment. This monkey’s extended
survival ultimately reached a duration after the injection of KJ103 that surpassed all
previous records of xenotransplantation in China.
Overall, KJ103 holds great promise as an invaluable tool to improve transplant
compatibility and patient outcomes, particularly for highly sensitized individuals.
The numbers of kidney transplantation operations globally and in China were
approximately 88.0 thousand and 12.1 thousand in 2019, respectively, which
increased to 102.1 thousand and 12.7 thousand in 2022, respectively. According to
Frost & Sullivan, the market size of IgG-degrading enzyme targets kidney
transplantation is forecast to reach RMB1,113.6 million in China and US$708.6
million globally in 2033. As the first registrational stage therapy in China to bridge
this critical gap in transplant medicine, KJ103 has garnered strong endorsements
from KOLs in the field, underscoring its potential for commercial success.
 Hundreds of antibody-mediated acute autoimmune diseases : By degrading
pathogenic IgG autoantibodies in the blood and tissue, KJ103 can inhibit the
activation of immune responses and mitigating inflammation, potentially offering a
more targeted and less toxic alternative to traditional broad-spectrum
immunosuppressants in the treatment of autoimmune diseases. With its IgG-
degrading mechanism and low immunogenicity, KJ103 offers a versatile treatment
option across hundreds of antibody-mediated autoimmune indications. We believe
that we are well-positioned to address critical treatment gaps of antibody-mediated
acute autoimmune diseases.
We are currently investigating the therapeutic potential of KJ103 in a wide range of
pathological IgG-mediated autoimmune diseases across different stages of
preclinical studies and clinical trials. In particular, we initiated a Phase II trial for
KJ103 for the treatment of anti-GBM disease (CTR20243543) in China in October
2024 and completed the trial in October 2025. We also received BTD from the
NMPA for this indication July 2025, and there were no approved drugs addressing
this indication globally as of the Latest Practicable Date. Additionally, we initiated
the Phase I trial targeting a broad category of autoimmune diseases caused by
pathogenic IgG approved in New Zealand in May 2022 and completed the Phase I
trial in March 2023. For the treatment of GBS, we have submitted an IND
application for the Phase II trial of KJ103 to the NMPA in January 2025, received
the IND approval in April 2025 and expect to initiate this trial (CTR20253992) in
November 2025. Further, we plan to submit an application for the Phase II trial of
KJ103 to the FDA in the first half of 2026.
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The Phase I clinical results of KJ103 revealed its promising efficacy and safety
results compared to Hansa Biopharma’s Idefirix ®. The high pre-existing antibody
proportion and titer of Idefirix ® narrow its patient base and can trigger
hypersensitivity reactions. These factors restrict Idefirix ® to a single-dose
administration, while the pathogenic IgG levels associated with autoimmune
diseases will quickly rebound after treatment. In contrast, KJ103 exhibits lower
pre-existing antibody proportion and titer with no hypersensitivity reactions
observed during the trial. The trial results also revealed that KJ103 can rapidly
reduce IgG levels and maintain a sustained effect. For example, in treating
anti-GBM disease, Idefirix
® can maintain a low level of pathogenic IgG for 3 days,
whereas KJ103 can maintain such a low level for about two weeks, both in one
intervention. Although the foregoing clinical trial data were generated in
independent studies and do not come from head-to-head analysis, we believe
meaningful insight may be drawn that KJ103 demonstrates superior potential in
treating a number of antibody-mediated acute autoimmune diseases with rapid and
sustained reduction of IgG levels.
 Combination therapy with recombinant antibodies resistant to enzymatic
degradation : We are actively exploring the combination therapy integrating KJ103
and antibody drugs for the treatment of various autoimmune disorders driven by
pathogenic autoantibodies, such as pemphigus vulgaris and myasthenic crisis,
aiming to provide enhanced efficacy and accelerated onset of action. This approach
notably harnesses the combined strengths of different treatment modalities and
targets multiple layers of autoimmune pathology, potentially offering a novel, more
effective strategy for managing these chronic, progressive diseases. In this context,
we are developing several proprietary SC recombinant antibodies resistant to
enzymatic degradation by KJ103 with our Robust-Hinge platform, such as anti-
CD20 and anti-CD154 antibodies BJ045 and BJ047, both have achieved preclinical
proof-of-concept.
Assisted reproductive portfolio features potentially first recombinant long-acting human
follicle-stimulating hormone in China
We are advancing several innovative therapies designed to overcome current limitations
of existing treatments in assisted reproduction, with one of our Core Products, SJ02, at the
forefront. SJ02 is a long-acting recombinant human follicle-stimulating hormone carboxyl-
terminal peptide fusion protein (FSH-CTP) designed for controlled ovarian stimulation (COS)
in combination with a gonadotropin-releasing hormone (GnRH) antagonist. We made the NDA
submission for SJ02 to the NMPA in December 2023 and have received the corresponding
approval in August 2025. As the first long-acting FSH-CTP to reach this stage in China, SJ02
may potentially become the first long-acting FSH-CTP to be launched in China.
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According to Frost & Sullivan, the market size of FSH products in China reached
RMB3.2 billion in 2024, and is projected to reach RMB7.3 billion by 2029, reflecting a CAGR
of 17.9% from 2024 to 2029 and is further expected to RMB10.2 billion in 2033 at a CAGR
of 10.2% from 2029 to 2033. Currently, all available FSH products in China are short-acting,
requiring daily injections for 10-14 days during treatment cycles. In contrast, SJ02 provides
extended therapeutic coverage with a duration of action lasting seven days, significantly
reducing the treatment burden while improving convenience and compliance. Its pre-filled
syringe format further enhances patient experience by offering better convenience and hygiene.
Given these advantages, long-acting FSH, such as SJ02, is expected to partially replace
short-acting products in China.
With its advanced development stage and favorable product profile, SJ02 is well-
positioned to spearhead the shift from short-acting to long-acting FSH products in China and
capture a substantial share in this growing market. Leveraging this partnership with such a
well-established global pharmaceutical leader in women’s health, we are able to reinforce our
product credibility around the world and drive our potential international market penetration,
especially in overseas emerging markets.
Breakthroughs in recombinant biologic drug development using synthetic biology,
offering a potential transformative alternative to biochemically extracted products and
unlocking market potential
Synthetic biology is a transformative approach in the field of drug development that
allows for the targeted design and engineering of organisms to produce specific compounds in
a more controlled and efficient manner. The core idea of synthetic biology is to utilize
organisms as “cellular factories” to synthesize complex proteins with high biosafety profile in
a high-quality, low-cost, and sustainable manner that were previously extracted through
laborious or less sustainable methods. The contained nature of biosynthetic processes
significantly reduces exposure to hazardous reagents and byproducts, enhancing both
operational safety and product purity profiles. In addition, synthetic biology can facilitate the
production of entirely new therapeutic compounds that do not exist in nature, thereby
expanding the range of available drugs. The paradigm shift from biochemical extraction to
synthetic biology not only addresses the limitations typically associated with traditional
extraction methods, such as low purity, inconsistent quality, and unstable supply of raw
materials, but also provides a solution for green, low-carbon, and environmentally friendly
production of drugs that would otherwise be challenging to chemically synthesize or naturally
extract.
Utilizing our proprietary synthetic biology technology platform, we specialize in
engineering chassis cells, including mammalian, yeast, and Escherichia coli ( E. coli ) cells, to
produce complex proteins that are difficult to produce using genetic engineering methods. Over
the past three years, we have produced recombinant protein drugs using synthetic biology
techniques, namely SJ02, KJ017, SJ04 and KJ101. Our product pipeline also includes other
preclinical asset that utilize the same approach, namely BJ044.
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 KJ101 . KJ101 is a leading recombinant human chymotrypsin developed through
synthetic biology in China. We have received IND approval for KJ101 from the
NMPA in February 2025 and initiated its Phase II clinical trial (CTR20252263) in
July 2025. Chymotrypsin has exhibited a wide range of clinical applications,
particularly in wound healing for burn injuries, traumatic injuries, surgical incision,
pressure sores and diabetic foot ulcers, among others. Chymotrypsin, a proteolytic
enzyme, has historically been extracted from bovine pancreas tissue, which poses
challenges such as low yield, potential contamination and religious or ethical
concerns. Built upon our proprietary green recombinant yeast fermentation
technology, KJ101 provides a pure, safer and more scalable alternative with high
expression levels. Furthermore, KJ101 offers superior biosafety profile, effectively
addressing the viral contamination concerns inherent in biochemically extracted
counterparts. In consideration of its competitive advantages, we believe KJ101 can
potentially reshape the current therapeutic landscape and secure a substantial market
share in China.
 BJ044 . BJ044 is a recombinant ulinastatin developed through synthetic biology. To
date, there are no approved or clinical-stage recombinant ulinastatin developed
through synthetic biology globally, according to Frost & Sullivan. We expect to
submit an IND application for BJ044 to the NMPA in the first half of 2026.
Ulinastatin can be extensively used in clinical settings, including the management of
acute pancreatitis, sepsis, severe systemic inflammatory response syndrome (SIRS),
acute respiratory distress syndrome (ARDS), acute circulatory failure, and various
other conditions characterized by excessive inflammation or proteolytic activity.
The recombinant form of ulinastatin, such as BJ044, are designed to overcome
limitations typically associated with traditional animal-derived sources, offering a
more consistent and efficient production method. Recombinant technology utilized
by BJ044 also allows for larger-scale production, minimizing the risk of
contamination and improving safety profiles in clinical use.
Advanced technology platforms with commercial-scale manufacturing capabilities,
ensuring cost efficiency and reinforcing our early-mover advantage
Leveraging our strengths in synthetic biology technology, we have had the foresight to
build fully integrated in-house R&D and manufacturing capabilities. To date, we operate three
technology platforms spanning across drug design, chassis cell engineering, and
comprehensive bioprocessing, which allow us to navigate the intricate processes of bringing
our transformative recombinant protein drugs from bench to bedside. Our robust R&D
capabilities are validated by a well-structured global patent portfolio relating to our proprietary
products and/or technologies. See “— Intellectual Property” for details. Additionally, our
proprietary products and/or technologies have been featured in certain publications in
prominent scientific journals including, among others, mAbs and Gene Therapy. Our R&D
capabilities have been complemented by a scalable, commercial-scale manufacturing capacity,
which collectively contribute to the streamlined drug development process, reduced production
costs, and consistent, high-quality product output. We have built GMP-compliant
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manufacturing facilities in Shanghai which meet both pilot- and commercial-scale production
demands for our selected drug candidates, and we are constructing additional manufacturing
facilities to further upgrade our production capacity. Upon completion and operation of such
new manufacturing facilities, we anticipate that our annual production capacity will be
elevated to a level capable of fully supporting the production needs of our self-developed drugs
and excipients. We believe this seamless integration of established R&D and manufacturing
capabilities has positioned us to efficiently advance our drug candidates, maintain flexibility
in adapting to growing market demands, and further solidify our early-mover advantage in our
focused areas.
Specifically, our three technology platforms consist of:
 Drug Design Platform: Our approach to drug design centers on developing
customized delivery systems and formulations that align with the unique properties
of the drug and specific needs of the target patient population. We prioritize
immunogenicity, molecular stability, and cost-effective production in drug
development. Leveraging AI-powered models, we integrate advanced computational
simulations with rigorous experimental validation to achieve precise protein
engineering and functional optimization. Data generated from wet-lab experiments
is continuously fed back into our models to refine and enhance their performance,
thereby fostering an iterative and adaptive design process. As a result, KJ103, one
of our Core Products emerged from our drug design platform as a candidate
composed of complex enzymes with exceptional stability and functionality,
exemplifying its translational power.
 Chassis Cell Engineering Platform: Our chassis cell engineering platform focuses
on glycosylation modification and advanced expression technologies. Drawing on
our extensive expertise in enzyme engineering, glycoengineering, and synthetic
biology, we have achieved key breakthroughs in various fields, such as the
regulation of protein translation and post-translational modifications for
recombinant human hyaluronidase, Chinese Hamsters Ovary (CHO) cell
glycosylation engineering, and protein high-expression technologies.
We adopt a multidisciplinary approach across three major biopharmaceutical host
systems — including E. coli , Pichia pastoris , and CHO cell systems—to design
bioparts, engineer metabolic pathways, and screen drug proteins from modified
hosts. This approach allows us to express proteins in the most suitable host based on
the structural and functional requirements of specific drug protein, thereby
significantly shortening the development cycle for novel therapeutics.
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In particular, we have developed a CHO cell library with engineered
glycosyltransferases to produce humanized glycoproteins with enhanced structural
uniformity. This notably reduces immunogenicity, extends half-life, and improves
therapeutic efficacy. Additionally, our Pichia pastoris cell library features
expression chaperones and optimized hosts ready for immediate use in new project
process research, which streamlines our drug production and accelerates project
timelines.
 Comprehensive Bioprocessing Platform: Our comprehensive bioprocessing
platform integrates mammalian, yeast, and bacteria expression systems to support
large-scale, efficient, and sustainable production of our recombinant protein drugs.
We optimize production processes and equipment with a focus on environmental
sustainability. By integrating high-yield strains or cells, optimized culture processes,
and advanced purification technologies, we achieve scalable manufacturing
capabilities with a green manufacturing edge.
This platform tackles key technical challenges including, without limitation: (i)
enhancing recombinant protein expression and addressing protein degradation in
fermentation through synthetic biology and genetic engineering, thereby providing
an upstream solution for efficient recombinant protein production; (ii) employing
diverse fermentation strategies to overcome issues such as toxic byproduct
accumulation, protein misfolding, and low activity during rapid cell growth,
enabling stable, high-efficiency expression of target proteins using high-density
synthetic biology techniques; (iii) combining different chromatographic separation
techniques and utilizing customized resins to develop scalable, cost-effective
processes for high-purity recombinant protein preparation; and (iv) improving
volumetric productivity and developing resource-efficient, low-energy green
manufacturing solutions to meet the demands of commercial-scale recombinant
protein production.
Beyond our proprietary platform technologies, we boast commercial-scale
manufacturing capabilities and rigorous quality control and assurance systems,
which enable us to efficiently scale up production to accommodate the escalating
demands of our drug candidates upon commercialization, while ensuring
exceptional quality and cost-effectiveness.
We have established GMP-compliant manufacturing facilities in Shanghai capable of
supplying the commercial production demands for SJ02 and the clinical production demands
of our selected drug candidates, including KJ017, KJ103, SJ04, KJ015 and KJ101. The existing
manufacturing facilities span a site area of 63,000 sq.m. and are fully equipped with advanced
production lines capable of manufacturing complex biological products, particularly
recombinant enzymes. To further upgrade our pilot- and commercial-scale manufacturing
capacity, we are also constructing new manufacturing facilities in Shanghai with a site area of
approximately 37,000 sq.m., which we expect to complete and put into operation by June 2026.
Upon completion and operation of such new manufacturing facilities, we anticipate that our
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total reactor volume will be elevated to approximately 26,100L solutions and our annual
production capacity will reach approximately 22.5 million formulations. Our industrial-scale
manufacturing capabilities ensure a stable and consistent supply for our drug candidates once
commercialized, while enabling us to achieve cost advantages, expand market share and drive
profitability.
Despite the inherent challenges of recombinant protein expression and scale-up
production, we have established a comprehensive and robust quality control systems designed
for commercial-scale operations. These systems ensure the consistent production of high-
quality products at scale, meeting rigorous regulatory standards. For details, see “— Quality
Management.” With our established manufacturing capabilities and quality control systems, we
have obtained the requisite drug manufacturing licenses for producing our in-house developed
drug products near commercialization stage as well as providing contract manufacturing
services.
A seasoned management team with extensive industry experience and multidisciplinary
expertise
Guided by our co-founders, Dr. Liu Y anjun and Ms. Wang Zheng, we have built a
leadership team with multi-disciplinary expertise and abundant industry experiences. Their
collective knowledge and strategic vision enable us to adeptly navigate the intersection of
synthetic biology and biotechnology and consistently deliver results.
Dr. Liu Y anjun, our co-founder, chairman of the Board, and an executive Director, is a
highly respected scientist and serial entrepreneur with over 30 years of experience spanning the
pharmaceutical industry, academic research and clinical practice. Dr. Liu gained profound
insights into clinical needs through over a decade of medical practice as a physician
specializing in hepatobiliary surgery and tumor immunology. He conducted clinical research
under the guidance of Professor Mengchao Wu, a renowned hepatobiliary surgeon and
academician of the Chinese Academy of Sciences, and later served as a visiting scholar at the
Sidney Kimmel Cancer Center in California, the U.S. Transitioning to the pharmaceutical
industry, Dr. Liu became a recognized leader in biopharmaceutical research and development
in China. He has over 20 years of experience in the R&D of innovative drugs, holding senior
leadership roles, including vice president at Shanghai Pharmaceuticals Holding Co., Ltd.
(“Shanghai Pharma ”), a dual-listed company in Shanghai and Hong Kong, and president at
its Central Research Institution. Dr. Liu’s entrepreneurial ventures further demonstrate his
expertise. He served as the deputy general manager of Shanghai Fudan-Zhangjiang Bio-
Pharmaceutical Co., Ltd., and later founded and chaired Shanghai Jiaolian Medicine Research
and Development Co., Ltd., which was subsequently acquired by Shanghai Pharma.
Throughout his career, Dr. Liu has published over 30 articles in peer-reviewed journals, and is
the inventor or applicant of more than 50 patents and patent applications. His contributions to
the field have been recognized with the prestigious State Council Special Allowance.
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Ms. Wang Zheng, our co-founder, executive Director and Chief Executive Officer, brings
us over 20 years of experience in gene-engineering drug development, with deep expertise in
recombinant protein drug R&D. She has led numerous national, provincial, and municipal
scientific research projects and holds 14 invention patents. Her extensive R&D work has
resulted in nearly 10 commercialization or IND approvals for innovative drugs. During almost
10 years, she served as a new drug development project manager at Shanghai Fudan-
Zhangjiang Bio-Pharmaceutical Co, Ltd., and deeply involved in innovative drug design and
development. She contributed to breakthroughs in recombinant protein drug technologies,
successfully led the R&D of nearly ten monoclonal antibody drugs, and facilitated the transfer
of self-developed drug rights to a major pharmaceutical company. In 2011, Ms. Wang founded
Suzhou Kangju, which was later acquired by our Company. Under her leadership, Suzhou
Kangju developed three technology platforms that now play a critical role in our proprietary
technologies, producing multiple pipeline drug candidates. Additionally, Suzhou Kangju
provided contract research organization (CRO) services to leading domestic pharmaceutical
companies, further underscoring Ms. Wang’s R&D acumen and Suzhou Kangju’s capabilities.
We believe that our talent is critical for the continued success of our Company. Our
management team possesses rich industry experiences and complementary backgrounds,
spanning research and development, manufacturing, and business development. As of
September 30, 2025, our broader R&D team, which comprised drug discovery and preclinical
development, medical and clinical development, CMC, quality management, and regulatory
affairs personnel, consisted of an aggregate of 251 personnel, accounting for 72.1% of our total
workforce.
We are also backed by multiple leading healthcare institutional investors, such as SHC,
Shanghai STVC Group, Oriental Fortune Capital, and Fangyuan Capital. These shareholders
provide us with industry expertise and vital connections to the pharmaceutical sector in China
and worldwide.
OUR STRATEGIES
Accelerate development of our pipeline candidates in core therapeutic areas, unleashing
clinical and commercial value
We plan to accelerate the development of our pipeline candidates, with the goal to secure
regulatory approvals, expand indications and broaden application areas. We will continue to
advance our clinical and preclinical assets in the four core areas, namely (i) large-volume SC
drug delivery, (ii) antibody-mediated autoimmune conditions, (iii) drugs used in assisted
reproduction, and (iv) recombinant biologic products as transformative alternative to
traditional biochemical production.
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Expand the use of recombinant human hyaluronidase in diverse formulations
We are actively expanding the applications of our large-volume SC delivery system
anchored by our KJ017 across multiple therapeutic contexts. We have completed the Phase III
clinical trials (CTR20210453 and CTR20241071) and NDA submission for KJ017 in China,
with an anticipated commercial launch of KJ017 as a single drug in the first quarter of 2026.
With the positive efficacy and safety profile established in clinical studies, we are now
exploring our hyaluronidase products’ potential in developing SC formulations with antibody
drugs, chemicals especially antibiotics, and other currently IV administered drugs. We also
plan to conduct necessary clinical trials of KJ017 overseas to extend our market reach by
expecting to submit the IND applications to both EMA and FDA.
 SC formulation of antibody drugs : Based on our recombinant human hyaluronidase,
we are developing several proprietary antibody SC formulations, including an
innovative HER2-targeted bispecific antibody, KJ015, and two antibody drugs
resistant to enzymatic degradation, namely BJ045, an anti-CD20 antibody, and
BJ047, an anti-CD154 antibody. We received IND approval for KJ015 from the
NMPA in December 2024 and initiated the Phase I clinical trial in China in June
2025. In addition to in-house development, we have established formal partnerships
with multiple pharmaceutical and biotechnology companies to develop SC antibody
drug formulations, and will continue to pursue more collaboration opportunities for
KJ017 in this area.
 SC formulation of antibiotics : We are currently developing SC formulations of
ceftriaxone sodium (BJ007), cefoperazone sodium and sulbactam sodium (BJ008),
and cefazolin sodium (BJ009). We have received the IND approval from the NMPA
for BJ007 in February 2025 and initiated the Phase I trial (CTR20253085) in August
2025. Meanwhile, we plan to submit IND applications for BJ007 in the U.S. during
the first half of 2026. We also submitted IND application for BJ009 in May 2025 and
have received the IND approval from the NMPA in September 2025. Additionally,
we are preparing IND applications for BJ008. We aim to launch the world’s first SC
administered antibiotic drug within the next three years.
Unlock the clinical potential of IgG-degrading enzyme in various autoimmune conditions
We intend to also stay focused on treatment for antibody-mediated autoimmune
conditions by continually unlocking the cross-therapeutic clinical potential of our Core Product
KJ103, a recombinant IgG-degrading enzyme. We are strategically facilitating a range of
clinical programs for KJ103 in China and globally to expand its indications across organ
transplant immunosuppression and autoimmune diseases. Meanwhile, we are also developing
several recombinant antibodies resistant to enzymatic degradation with our Robust-Hinge
platform for combination use with KJ103.
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 Organ transplant immunosuppression : We are currently advancing the Phase III trial
of KJ103 in highly sensitized patients awaiting kidney transplantation in China, with
its Phase II study completed in September 2024. We expect to complete this Phase
III trial in the first half of 2026. We completed the Phase I trial in China and New
Zealand both in March 2023. We are also actively exploring the clinical potential of
our KJ103 into other organ transplantation indications, including for
xenotransplantation.
 Autoimmune conditions : We expect to further evaluate and develop KJ103 for the
treatment of various acute autoimmune conditions, including anti-GBM disease and
GBS. For anti-GBM disease, we will advance the Phase II and III clinical trials of
KJ103 towards NDA submission in China pursuant to the IND approval received in
August 2024. For GBS, we have submitted an IND application for the Phase II trial
of KJ103 to the NMPA in January 2025, received the IND approval in April 2025
and expect to initiate this trial in November 2025. Further, we plan to submit an
application for the Phase II trial to the FDA in the first half of 2026. In the field of
antibody-mediated autoimmune disorders, we will also actively pursue the
development of IgM-degrading enzymes.
 Recombinant antibodies resistant to enzymatic degradation . We are developing
several recombinant antibodies resistant to enzymatic degradation for combination
use with KJ103, such as anti-CD20 (BJ045) and anti-CD154 antibodies (BJ047).
Enhance assisted reproductive portfolio
We will continue to develop our clinical assets in the area of drugs used in assisted
reproduction. Following the completion of its Phase II/III clinical trial in China in December
2022, we filed the NDA for SJ02 with the NMPA in December 2023, which was accepted in
January 2024 and approved in August 2025. Furthermore, we plan to drive forward clinical
development of SJ02 in various overseas emerging markets. We intend to submit the IND
application for SJ02 to the EMA in Europe in the first half of 2026. For SJ04, we intend to
expedite its clinical development in China. We commenced the Phase I clinical trial for SJ04
in China in August 2024, and have completed this trial in September 2025.
Advance recombinant biologic products as transformative alternative to biochemical
production
As to our current portfolio of recombinant biologic drug candidates as transformative
alternatives to biochemically extracted drugs, for KJ101, we have received the IND approval
from the NMPA in February 2025 and initiated its Phase II clinical trial (CTR20252263) in July
2025. For BJ044, we plan to file the IND application to the NMPA in the first half of 2026.
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Continue to expand our pipeline addressing therapeutic areas with strong potential
We will continue to stay focused on the development of innovative drug candidates. We
plan to enrich our current pipeline, continuously rolling out high-value candidates primarily in
the current four focused areas and by exploring other therapeutic fields with strong potential,
underpinned by our advanced technology platforms and commercial-scale manufacturing
capabilities. To lay a solid foundation for our drug discovery, we will optimize our synthetic
biology technology platforms and deepen our own research into synthetic biology, specifically
its application in chassis cell engineering. We plan to further design and develop innovative
therapies by continuously incorporating AI-driven techniques into our technology platforms,
with the aim to deliver next-generation biologics on an industrial scale. For example, we will
continue the development of our novel recombinant human uricase with low immunogenicity,
the sequence of which was reconstructed through our bioinformatics tracing. Our integrated
capabilities allow us to rapidly bring these novel therapies to market and ensure a stable
large-scale supply to meet market demands, establishing our early-mover advantages.
Advance our diversified business model combining self-development, collaboration and
excipient supply, and pursue and strengthen strategic partnership with pharmaceutical
companies over the world
We adopt a balanced business model that integrates independent development,
collaborative partnerships, and excipient supply. This business model enables us to tailor our
development and commercialization strategies to specific clinical demands and product
candidates, driving efficient pipeline progression.
Leveraging the unique strengths of our pipeline candidates, we collaborate closely with
our partners to co-develop combination therapies incorporating our candidates under the
arrangements aligned with their needs and goals. By helping our partners to enhance the
therapeutic effects and expand the market potential of their therapies, we aim to foster
long-term collaboration with them, while maximizing the commercial values of our assets. In
addition, we actively seek to reach and expand strategic relationships with international and
domestic leading pharmaceutical companies to advance the global development and
commercialization of our pipeline assets.
In the long term, as our revenue continues to grow steadily and our market reach expands,
we may also opt to gradually establish in-house sales and marketing force in line with the
launch timelines of our products. For example, recognizing the specialized nature of KJ103, we
will adopt a focused commercialization strategy with an in-house specialty sales force targeting
fewer than 100 key hospitals.
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Enhance industrial commercial-scale manufacturing capabilities and quality management
We are committed to strengthening our large-scale manufacturing capabilities as our
pipeline products progress through development and commercialization. Specifically, we will
continue to scale up our manufacturing capacity and upgrade our production lines to ensure
sufficient supply of our products to meet the market demands. By optimizing our industrial-
scale manufacturing capabilities through the introduction and upgrade of manufacturing
platforms, we expect to maintain effective cost control, thereby maintaining pricing flexibility
and securing product competitiveness. In addition, the scale-up production of recombinant
proteins, with its high technical barriers, demands rigorous quality management. We will
continue to enhance our quality management systems for commercial-scale manufacturing to
align with international standards.
We are currently advancing the construction of our second manufacturing facility
financed through self-own funds and bank loans, with operations expected to commence by
June 2026. As planned and approved by the local authority, our second manufacturing facility
will cover a site area of 37,000 sq.m. Once completed, this new facility, alongside our existing
manufacturing site, will prepare us for the clinical and commercial-scale production of
multiple pipeline products, and will elevate our total reactor volume to approximately 26,100L
and will ramp up our annual production capacity to approximately 22.5 million formulations.
Attract, train and retain high-caliber talent
We will continue to implement a comprehensive talent strategy that integrates
recruitment, retention and development to maintain our competitive edge in the rapidly
evolving industry. We plan to continue actively recruiting outstanding professionals in drug
discovery, particularly those with expertise in drug design techniques. We also intend to attract
and develop top-tier talent with extensive overseas market knowledge in CMC, regulatory
affairs and business development, to drive our expansion into overseas markets and strengthen
our global presence. Through our training and career development programs, we plan to
continuously enhance our employees’ technical capabilities and industry expertise.
Additionally, we will continue to optimize our employee incentive policies and mechanisms to
drive the long-term growth of our business.
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OUR DRUG CANDIDATES
We currently focus on developing drug candidates across four strategic therapeutic areas: (i) large-volume SC drug delivery, (ii)
antibody-mediated autoimmune conditions, (iii) drugs used in assisted reproduction, and (iv) other recombinant biologic products as transformat ive
alternative to traditional biochemical production. As of the Latest Practicable Date, leveraging our proprietary synthetic biology technology
platforms, we have cultivated a self-developed pipeline spanning four therapeutic areas, consisting of one recently approved Core Product, SJ02,
six clinical-stage drug candidates, including KJ017, KJ103, KJ015, SJ04, BJ007 and KJ101, and five preclinical assets, including BJ008, BJ009,
BJ045, BJ047, and BJ044. The following pipeline chart summarizes the development status of our clinical-stage drug candidates and selected
pre-clinical drug candidates as of the Latest Practicable Date:
Candidate Drugs Key Component Regimen
Mono/Combo
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Mono
Indications Line(s) of
treatment Preclinical IND Phase I Phase II Phase III NDA Current Status/Milestone
KJ0171 Recombinant Human
Hyaluronidase2
Large-volume SC Delivery
(Combo), Body Fluid Loss due
to Various Causes (Mono),
Facilitation of SC fluid
administration (Combo)
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
1L
Submitted NDA in June 2024;
Expect to receive NDA approval in Q1 2026
BJ007
3 Ceftriaxone Sodium
(SC Formulations) Bacterial Infection
Phase I trial stage;
Expect to complete Phase I trial in 2026 H1
Prepare for IND application;
Expect to submit IND application in 2026 H1
BJ0083
Cefoperazone Sodium
and Sulbactam
Sodium
(SC Formulations)
Bacterial Infection Preclinical stage;
Expect to submit IND application in 2026 H1
BJ0093 Cefazolin Sodium
(SC Formulations) Bacterial Infection
KJ015
Bispecific Anti-HER2
Antibody
(SC Formulations)
Solid Tumors
Phase I trial stage

Expect to complete Phase I trial in 2026 H2
Prepare for IND application;
Expect to submit IND application in 2026 H1
KJ1034
Recombinant
IgG-Degrading
Enzyme
Phase III trial stage;
Expect to complete the Phase III trial in 2026 H1;
Received BTD from the NMPA in November 2024
Prepare for Phase II trial application;
Expect to submit Phase II trial application in 2026 H1
Completed Phase II trial in October 2025
Expect to initiate Phase III trial in 2026 H1
IND approved in April 2025
Expect to initiate Phase II trial in November 2025
BJ045
Anti-CD20 Antibody Resistant
to Enzyme Degradation
(SC Formulations)
Moderate-to-Severe
Autoimmune Diseases
Preclinical stage;
Expect to submit IND application in 2026 H1
BJ047
Anti-CD154 Antibody Resistant
to Enzyme Degradation
(SC Formulations)
Solid organ transplantation,
Xenotransplantation,
Autoimmune Disease
(Lupus Nephritis and
Multiple Sclerosis)
Preclinical stage;
Expect to submit IND application in 2026 H1
SJ02
(Slonva
®
(۹®))5,7
Recombinant
Human FSH-CTP
Controlled Ovarian Stimulation,
Stimulating Multiple Follicular
Development, Promoting
Ovulation
Received NDA approval in August 2025
SJ04 Recombinant Human
Chorionic Gonadotropin
Stimulating Follicular Maturation,
Inducing Ovulation and Luteinization
Completed the Phase I trial in September 2025
KJ101 Recombinant Human
Chymotrypsin
Wound Healing for Burn Injuries,
Traumatic Injuries, Surgical
Incision, Pressure Sores and
Diabetic Foot Ulcers, etc.
Phase II trial stage;
Expect to complete Phase II trial in 2026 H1
BJ044 Recombinant Ulinastatin
Acute Pancreatitis, Chronic
Recurrent Pancreatitis and
Acute Circulatory Failure
Preclinical stage;
Expect to submit IND application in 2026 H1
Commercial
RightsSourceIND/NDA
Application Number
GlobalSelf-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Self-developed
Drug Classification
Biologics
Improved Formulation of
Innovative Drug8
Chemical Drug
Improved Formulation of
Chemical Drug8
Chemical Drug
Chemical Drug
Biologics
Innovative Biologics9
Biologics
Innovative Biologics9
Biologics
Biologics
Biologics
Biologics
Biologics
Biosimilar
Biologics
Biologics
Biologics
CXSS2400095;
CXSS2400096
CXSL2200266
IND 160657
CXSL2400378
CXSL2500128
CXSS2400011;
CXSS2400012
Global
Global
Global
Global
Global
Global
Global
Global
Global
Global
Global
Core Product Lead IndicationBreakthrough Designation from the NMPA
Anti-GBM Diseases
GBS
Desensitization before
kidney transplantation
Pathological IgG-mediated
Autoimmune Diseases6
Preclinical stage;
Expect to submit an IND application in 2026 H1
Preclinical stage;
Expect to submit IND application in 2026 H1
Subcutaneous
Delivery
Antibody-mediated
Auto-immune
Diseases
Assisted Reproduction
Synthetic Biology
Upgrading Platform
NMPA
FDA
EMA/FDA
EMA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
NMPA
FDA
NMPA
NMPA
NMPA
NMPA
FDA
NMPA
CXHL2401399
CXSL2400672
CXHL2500565
CXSL2400176
CXSL2400781
Received IND approval from the NMPA in September 2025
Expect to initiate Phase I trial in December 2025
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Abbreviations: BTD = Breakthrough Therapy Designation; FSH-CTP = Follicle-stimulating hormone-carboxyl-terminal peptide; GBM = Glomerular Bas ement Membrane; GBS =
Guillain-Barré syndrome; H1 = First Half; H2 = Second Half; Q1 = First Quarter; IgG = Immunoglobulin G; SC = Subcutaneous.
Notes:
(1) We have completed KJ017 monotherapy’s Phase I clinical trial (CTR20191671) in September 2019, Phase IIIa trial (CTR20210453) in October 2021, an d Phase IIIb trial
(CTR20241071) in May 2024 in China. We have remained the role as the sole sponsor responsible for funding each phase of KJ017’s clinical development in China and expect
to remain such role as the sole sponsor for KJ017’s future clinical development in Europe and U.S.
(2) We have completed the pharmaceutical excipient registration in China and are advancing the registration progress globally. The DMF for KJ017 was successfully filed with the
FDA in May 2025.
(3) The subcutaneous antibiotic formulation is developed based on the Chemical Drug Modification (Category 2.2) new administration route, with sub sequent studies on area under
the curve (AUC) equivalent and PK/PD.
(4) We have completed a Phase I clinical trial for KJ103 in China (CTR20222595) in March 2023. We have received approval from the NMPA for a Phase II clini cal trial
(CTR20234137) design in desensitization therapy in highly sensitized patients awaiting kidney transplantation (a procedure aimed at reducing or e liminating pre-existing
antibodies in transplant recipients to prevent rejection of the donor organ), as well as approval for a Phase II clinical trial (CTR20243543) in anti- GBM diseases and a Phase
II clinical trial (CTR20253992) in GBS in China. In line with standard regulatory practice, and in the absence of objections from the regulatory autho rities, it is not necessary
to repeat initial Phase I studies primarily designed to assess basic safety, tolerability, and pharmacokinetics for new indications. These IND appr ovals were approved by the
NMPA based on the data of our CTR20222595 Phase I trial in China. The Phase II clinical trial (CTR20234137) was completed in September 2024, and we initi ated the Phase
III clinical trial (CTR20252973) in August 2025 in this indication with the CDE’s approval of our trial design. The CTR20243543 Phase II trial is compl eted in October 2025.
We have also completed a Phase I clinical trial for KJ103 in New Zealand (NCT05274659) in March 2023. We plan to use the data from this New Zealand trial (N CT05274659)
to support our subsequent clinical development in the U.S., namely the planned Phase II trial for pathological IgG-mediated autoimmune diseases. We plan to communicate with
the FDA related to the application for a Phase II clinical trial in the first half of 2026. We have remained the role as the sole sponsor responsible for fu nding each phase of
KJ103’s clinical development in China and expect to remain such role as the sole sponsor for KJ103’s future clinical development in U.S.
(5) We have completed a Phase I clinical trial (CTR20181339) in March 2020 and a Phase II/III clinical trial (CTR20201374) for SJ02 in December 2022 in C hina. We have remained
the role as the sole sponsor responsible for funding each phase of SJ02’s clinical development in China and expect to remain such role as the sole sponso r for SJ02’s future
clinical development in Europe.
(6) Pathological IgG-mediated Autoimmune Diseases refer to a group of disorders in which the immune system produces abnormal IgG antibodies that tar get the body’s own cells,
tissues, or organs.
(7) In anticipation of the commercial launch of SJ02 in China market following the receipt of the NDA approval in 2025, we entered into an exclusive sale s agency agreement with
ANKE BIO in July 2025, pursuant to which ANKE BIO acts as an exclusive CSO responsible for the commercialization of SJ02 in Greater China. Previously, w e had entered
into a license and commercialization agreement with Organon in September 2024 for an exclusive license to develop, manufacture and commercialize SJ 02 for the fertility
treatment to stimulate the development of eggs in the ovaries in humans in China, as well as an ancillary separate manufacturing and supply agreement f or SJ02. The Organon
Agreement, along with the ancillary manufacturing and supply agreement for SJ02, were terminated on the date of July 28, 2025 as specified in a termina tion notice provided
by Organon on April 11, 2025. Following this termination, we regained full, global rights to develop, manufacture and commercialize SJ02. We are not o bliged to return any
payments received (including the first tranche of upfront payments received in 2024) or make any payments to Organon in respect of the termination of t his agreement. Organon
is not obliged to pay any termination fee or required to pay any future upfront, milestone or royalty payments to us under the agreement. No disputes or c laims arose between
Organon and us related to this termination. See “Business – Collaboration Agreement – License and Commercialization Agreement with Organon” for mor e information.
(8) This definition is established under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act.
(9) This definition is established under Section 351(a) of the Public Health Service Act.
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Large-volume Subcutaneous Delivery
We are developing a number of leading products in the field of large-volume SC delivery.
Our SC delivery portfolio led by our near-commercialization stage Core Product KJ017, a
recombinant human hyaluronidase, for which we have submitted an NDA to the NMPA in 2024.
We are also advancing the development of multiple innovative SC antibiotic formulations,
including ceftriaxone sodium (BJ007), cefoperazone sodium and sulbactam sodium (BJ008),
and cefazolin sodium (BJ009), to address the substantial market potential in chemicals
especially antibiotics through SC delivery. Additionally, we have in-house developed KJ015,
a SC formulation of dual epitope-targeting HER2 bispecific antibody. Furthermore, we have
established formal partnerships with multiple pharmaceutical or biotechnology companies on
SC antibody formulation development, while actively seeking new partnership opportunities in
this field.
KJ01 7 — a recombinant human hyaluronidase, our Core Product
Overview
KJ017 is the most clinically advanced recombinant human hyaluronidase in China,
according to Frost & Sullivan. Through its mechanism of locally degrading subcutaneous
hyaluronic acid, it temporarily removes barriers to fluid flow, enabling rapid, large-volume SC
delivery of therapeutics traditionally IV administered.
As a single drug, it can address administration challenges of crystalloid solution for
patients with difficult IV access and lower the barrier for care. The indications targeted by
KJ017 monotherapy include large-volume SC infusion as an alternative to IV infusion, body
fluid loss due to various causes, as well as facilitation of SC fluid administration (including,
among others, SC administration of normal saline, lactated Ringer’s solution, glucose
solution). Specifically,
 For large-volume SC infusion of crystalloid solution as an alternative to IV infusion,
KJ017 enables large-volume SC administration of various crystalloid solutions.
Crystalloid solutions include multiple types, such as electrolyte solutions, dextrose
solutions, compound solutions, and hypotonic crystalloid solutions, with
components primarily consisting of water and small molecular solutes including
electrolytes, glucose, and others. Crystalloid solutions could serve multiple
therapeutic purposes, including fluid replenishment, maintenance of plasma
crystalloid osmotic pressure, correction of electrolyte imbalances, acid-base balance
restoration, and energy provision, thus being used in treating numerous conditions
such as shock, electrolyte imbalances, metabolic acidosis, and nutritional
deficiencies. Thus, through the use of KJ017, patients can achieve high-volume SC
infusion of crystalloid solutions, offering multiple advantages over IV infusion,
including streamlined administration protocols, shorter preparation times, simplified
handling requirements, reduced patient anxiety, and enhanced treatment adherence.
Furthermore, KJ017 minimizes the risk of infusion-related adverse events while
substantially reducing patient time commitments, travel expenses, and caregiver
burden.
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 For fluid loss due to various causes such as dehydration, hypovolemic
shock, electrolyte disorders, and diseases causing fluid loss including, among
others, heat stroke, hyperpyrexia, diabetes mellitus, diabetes insipidus,
hyponatremia/hypernatremia, diarrhea/vomiting-related diseases and
gastrointestinal malabsorption disorders, KJ017 can alleviate the accumulation of
interstitial fluid by degrading hyaluronan, thereby improving local fluid balance,
enhancing fluid distribution, and treating body fluid loss. KJ017 monotherapy will
be solely administered during treatment, without requiring combination therapy in
clinical practice. When treating fluid loss with KJ017, the benefits include (a)
accelerated fluid replenishment, preserving organ function, (b) increased blood
volume and improved microcirculation for blood pressure stabilization, (c)
enhanced local fluid balance, reducing tissue compression and damage while
promoting normal tissue function recovery, (d) decreased complication risks by
reducing infection opportunities, and (e) improved treatment efficiency and
convenience through shortening patient treatment duration.
 For facilitation of SC fluid administration, including, among others, SC
administration of normal saline, lactated Ringer’s solution, and glucose solution,
KJ017 facilitates and enhances the absorption of relevant fluids, offering multiple
benefits to patients, including (a) enhanced comfort through reduced injection
frequency and duration, (b) minimized risks associated with prolonged drug delivery
such as infection and extravasation, and (c) improved treatment efficiency through
rapid absorption of crystalloid solutions.
The Phase III clinical trial (CTR20210453 and CTR20241071) results for KJ017 support
its safe and rapid facilitation of at least 1L of large-volume fluid infusion subcutaneously.
Under gravity feed infusion without pump, without the use of an infusion pump, the infusion
rate at a single injection site reached a minimum of 545.09 mL/h, compared to 164.68 mL/h
for placebo, maintaining a relatively constant rate no less than the IV administration over time.
We have submitted an NDA for KJ017 as a single drug to the NMPA in 2024 following
completion of its Phase III clinical trials (CTR20210453 and CTR20241071). We have also
established KJ017’s high potential as a pharmaceutical excipient that enables large-volume SC
infusion. We completed the registration of pharmaceutical excipients for KJ017 in China in
September 2022 and are advancing the registration progress globally, expanding its clinical
potential in enabling SC delivery across multiple therapeutic contexts and different markets. In
May 2025, the DMF for KJ017 was successfully filed with the FDA. We plan to submit IND
applications for KJ017 to the European Medicines Agency (EMA) in Europe and the Food and
Drug Administration (FDA) in the U.S., and are in the process of simultaneously preparing
both EMA and FDA IND filings. We anticipate submitting one of the applications in the first
half of 2026 and will subsequently complete the IND application for the other region. Our
KJ017 exhibits broad applications across multiple therapeutic modalities to enable SC
administration, including antibodies and chemicals especially antibiotics, with the potential to
enhance drug safety profiles, patient convenience and efficacy.
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Mechanism of Action
Our KJ017, a highly glycosylated recombinant human hyaluronidase (hyaluronidase as its
generic name), addresses the limited permeability of the extracellular matrix (ECM) in the
hypodermis, a fundamental challenge in SC drug delivery. When administered subcutaneously,
medications must permeate the ECM to reach vascular compartment. However, these
SC-administered drugs face a natural barrier created by glycosaminoglycans, particularly
hyaluronan, in the ECM that typically restricts fluid flow. Glycosaminoglycans in the ECM
limit the volume of SC drug administration, cause hypodermal drug retention, contribute to
consequent injection-site reactions, and reduce bioavailability of injected therapeutics.
The core structure of KJ017 consists of the catalytic domain, which adopts the /H9252//H9251barrel,
the common fold among protease catalysts. The active site is located at the center of the
/H9252-barrel, where the conformation is open, extended, and deep, facilitating the binding of
hyaluronic acid in its polymeric form. The C-terminus is relatively extended, featuring an
EGF-like domain and a membrane-anchoring segment. Hyaluronidases are a family of
glycosaminoglycan-degrading enzymes that catalyze hyaluronan hydrolysis in the hypodermis.
Our recombinant human hyaluronidase KJ017 shares the same sequence and protein structure
with natural human enzymes and same mechanism of action and bioactivity with other
marketed biochemically extracted products. It specifically targets, hydrolyzes and
depolymerizes hyaluronan in the ECM as shown in the following diagram:
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Consequently, it lowers viscosity of hyaluronan, enhances tissue permeability, and thus
facilitates dispersion and absorption of large-volume co-administered drugs. This modification
of ECM is reversible within a short period of time normally in 24 to 48 hours, ensuring the
therapeutic benefit of enhanced drug delivery while allowing restoration of normal tissue
architecture. In addition, in certain pathological conditions such as local edema, KJ017 can
alleviate the accumulation of interstitial fluid by degrading hyaluronan, thereby improving
local fluid balance, enhancing fluid distribution, and treating body fluid loss. Thus, KJ017 can
treat body fluid loss caused by various reasons, such as dehydration, hypovolemic shock,
electrolyte disorders, and diseases causing fluid loss including diarrhea/vomiting-related
diseases and gastrointestinal malabsorption disorders. It can also be used for facilitation of SC
fluid administration, including among others, SC administration of normal saline, lactated
Ringer’s solution, glucose solution.
Market Opportunities and Competition
Recombinant human hyaluronidase demonstrates significant clinical value both as a
monotherapy and in combination with other drugs. As a standalone treatment, its indications
may include SC infusion of crystalloid solution as an alternative to IV infusion, fluid loss due
to various causes, as well as facilitation of SC fluid administration. Under infusion
circumstances, recombinant human hyaluronidase as a monotherapy enhances tissue
permeability, facilitating rapid absorption and dispersion of infused fluids, making SC infusion
a more efficient and less invasive option. While combination therapies may further expand its
clinical applications, recombinant human hyaluronidase products such as KJ017 independently
possess inherent therapeutic value and market value.
In recent years, the market for recombinant human hyaluronidase as monotherapy has
seen rapid growth globally, the size of which increased from US$17.0 million in 2019 to
US$141.6 million in 2024, which is expected to grow to US$676.0 million in 2029 and further
to US$1,097.5 million in 2033. In China, the market for recombinant human hyaluronidase as
monotherapy is expected to reach RMB948.6 million in 2029 and RMB1,506.9 million in 2033.
The table below provides a summary of globally approved or clinical-stage recombinant
human hyaluronidase products:
Competitive Landscape of Recombinant Human Hyaluronidase Globally
Drug Name Company Stage Approval Date/
First Post Date Indication
rHuPH20
(Hylenex)
Halozyme Therapeutic
(NASDAQ: HALO) Approved by FDA 2005.12 Subcutaneous infusion vehicle
Tergase Alteogen
(XKRX: 196170) Approved by MFDS 2024.07 Subcutaneous infusion vehicle
KJ017 Our Company NDA (NMPA) 2024.09 Subcutaneous infusion vehicle
BMI2004 BMI Korea Phase I (MFDS) 2023.06 Subcutaneous infusion vehicle
HLB3-002 Huons Korea Phase I (MFDS) 2024.12 Subcutaneous injection
Treatment cost
$242 for 4mL, 150 units/mL
N/A
N/A
N/A
N/A
Recombinant human
hyaluronidase Aimeike Biotech Phase I (NMPA) 2025.05 Subcutaneous infusion vehicle N/A
Source: NMP A, FDA, Frost & Sullivan analysis
Note: As of November 22, 2025
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In addition to being used as a single drug, recombinant human hyaluronidase
demonstrates significant potential across various therapeutic and medical applications due to
its ability to locally and temporarily degrade hyaluronic acid, enhancing tissue permeability
and drug dispersion. In SC drug delivery, it facilitates the conversion of IV therapies, such as
monoclonal antibodies and traditional small molecule medications, to SC administration,
optimizing dosage and improving patient compliance. Recombinant human hyaluronidase
demonstrates versatile applications and positions itself as a valuable tool in various medical
and therapeutic fields, including through combination use with other drugs such as the antibody
drugs and chemicals especially antibiotics to enable SC delivery.
Halozyme initially developed the first FDA approved recombinant human hyaluronidase
in 2005 through its HYLENEX
® and ENHANZE ® platforms. The current global business
model for recombinant human hyaluronidase is characterized by exclusivity in collaborations,
where leading pharmaceutical companies secure exclusive rights to specific collaborative
targets with Halozyme. While this model has successfully facilitated the commercialization of
several blockbuster products, it has also created market demand for non-exclusive SC delivery
solutions. Particularly, such restrictive model rules out a vast number of pharmaceutical
companies, including almost all in China, to develop SC formulations of their antibody drugs
using leading hyaluronidase products. Our Company has established the first-mover advantage
in China with our proprietary KJ017. KJ017 is the first recombinant human hyaluronidase to
reach NDA stage in China, which represents a significant commercial opportunity in
pharmaceutical market in China.
Recombinant human hyaluronidase has seen high demand and preference of patients due
to its ability to enhance patient comfort, improve drug delivery, reduce risks, decrease infusion
time and improve treatment efficiency. For example, compared to IV routes, SC injections
enabled by recombinant human hyaluronidase carry a lower risk of bloodstream infections,
while also eliminating the vein damage that can occur with repeated IV injection. IV therapy
is extremely common in China, serving as a standard medical procedure across hospitals,
clinics, and community health centers. This treatment modality has become deeply integrated
into the healthcare system, with providers routinely administering IV fluids to address a wide
range of medical conditions. Due to the widespread application of IV therapy in treating
various illnesses, the number of patients receiving such treatments is remarkably high
throughout the country. KJ017 monotherapy, as a product expected to receive approval for
large-volume SC infusion as an alternative to IV infusions, demonstrates considerable market
potential.
The global and China’s markets recombinant human hyaluronidase for all applications
(including monotherapy as well as combination use with antibodies and antibiotics) are
expected to grow rapidly. Globally, the recombinant human hyaluronidase market size is
expected to increase from US$135.9 million in 2019 to US$799.0 million in 2024, and is
anticipated to reach US$3,574.2 million in 2029 and US$9,093.7 million in 2033, according to
Frost & Sullivan. In China, the recombinant human hyaluronidase market size is expected to
grow to RMB3,189.5 million in 2029, and further to RMB6,980.2 million in 2033.
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For details, see “Industry Overview — Analysis of the Subcutaneous Drug Delivery
System Market.”
Competitive Advantages
Enhanced patient convenience and safety through rapid SC drug delivery
KJ017 achieves subcutaneous administration of large volumes of medication through its
targeted degradation of SC hyaluronic acid layer, offering a safer and more comfortable
treatment experience. Our KJ017 enables drugs, which traditionally required IV infusion, to be
administered subcutaneously in a rapid manner (approximately 5 minutes for those antibody
drugs). This enables patients to administer the treatment independently at home, demonstrating
enhanced convenience and safety compared to conventional IV therapies requiring clinical
infusion monitoring. The transition to self-administered outpatient care concurrently alleviates
strain on healthcare infrastructure by decreasing nursing workload and optimizing resource
allocation, thereby establishing KJ017 as a clinically practical alternative that improves both
treatment accessibility and patient-centered outcomes. Our preclinical studies demonstrated
KJ017’s ability to enhance rapid absorption of high-volume SC saline infusions in both nude
mice and miniature pigs, facilitating efficient fluid dispersion and absorption in SC tissue.
KJ017 facilitates the rapid administration of at least 1L of large-volume SC delivery, offering
an alternative to IV delivery and addressing clinical needs for large-volume administration
across various SC sites. In its completed Phase III trials (CTR20210453 and CTR20241071) in
China, we saw the rapid diffusion and absorption of large-volume fluid (250 ml, 500 ml, and
1,000 ml) in the SC tissue facilitated by KJ017. Under gravity feed infusion without pump,
KJ017 achieved a flow delivery rate of 545.09~775.00 mL/h, compared to 164.68 mL/h for
placebo (p-value <0.001).
Favorable safety profile in preclinical and clinical studies
The large-volume SC administration enabled by KJ017 can significantly reduce common
complications associated with IV delivery, including infusion reactions, phlebitis and
extravasation risks. In its completed Phase III trials (CTR20210453 and CTR20241071) in
China, clinical subjects demonstrated excellent tolerability with minimal arm swelling or
injection site-related reactions. No allergic reaction or adverse events over Grade 3 were
observed in the trials and the majority of adverse events observed in the trials were mild (Grade
1) and were manageable.
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Recombinant production with advanced manufacturing and consistent quality
As a recombinant human hyaluronidase, KJ017 demonstrates significant advantages in
manufacturing control and product safety. Our manufacturing through synthetic biology
technology eliminates raw material sourcing constraints and potential contamination risks
associated with exogenous pathogens such as prions, while enabling complete process control.
In contrast to biochemically extracted products, KJ017 exhibits superior batch-to-batch
consistency, enhanced product purity, and improved clinical safety profile. The recombinant
production method eliminates the heightened immunogenicity risks and quality variability
inherent to traditional animal-sourced hyaluronidase preparations, enabling KJ017 to serve as
excipient for SC delivery systems. The comprehensive control over the manufacturing process
translates into consistent product quality, as evidenced by our clinical trials where the
consistent product quality of KJ017 resulted in no allergic reactions were observed.
Additionally, our proprietary control over the end-to-end manufacturing process of KJ017
fundamentally differentiates it from competitor products such as HYLENEX
®, which primary
relies on CDMO for production. Our fully integrated synthetic biology platform ensures direct
governance of critical quality attributes from plasmid design to final formulation, operational
autonomy enables rapid scale-up or down responses to demand shifts without compromising
analytical comparability between batches which is a strategic advantage absent in outsourced
manufacturing models where technology transfer delays and third-party scheduling conflicts
frequently constrain supply chain agility. Moreover, continuous process verification embedded
in our captive facilities enhances failure mode prevention, contrasting with CDMO-produced
hyaluronidases that may exhibit latent variability risks from segmented quality oversight.
Capitalizing on its technological and operational advantages, KJ017 emerges as a
therapeutically versatile biologic demonstrating superior commercial scalability. This strategic
positioning is further amplified by predictable product performance and agile manufacturing
responsiveness, synergistically driving market penetration across diverse subcutaneous drug
delivery applications.
Broad therapeutic applications with extensive market potential
KJ017’s versatility as an enabling technology spans multiple therapeutic modalities,
being used in combination with various drugs to enable SC delivery, including antibodies,
chemicals especially antibiotics, and other currently IV medications. Leveraging our low-cost
manufacturing capabilities, the distinct advantage stems from its synthetic biology technology,
we are capable of successfully applying advanced SC drug delivery technologies (which are
historically reserved for premium applications) to improve the formulation of widely used
chemical drugs such as antibiotics. Repositioning KJ017, the first and only recombinant human
hyaluronidase to reach NDA stage in China, as a transformative solution for antibiotic
reformulation, this technological breakthrough addresses pharmaceutical needs within the
Chinese healthcare market. The substantial antibiotic market of China presents unique
opportunities, driven by two fundamental epidemiological and demographic factors. First, the
large population of China inherently sustains a high disease burden across diverse geographical
regions. Particularly in rural and peri-urban areas with decentralized healthcare infrastructure,
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antibiotics remain essential therapeutic agents for managing bacterial infections where
immediate clinical intervention is required. Second, the epidemiological profile highlights
persistent infectious disease challenges, with regional disparities in climate conditions and
public health resources driving varied prevalence patterns of respiratory infections such as
bacterial pneumonia, gastrointestinal disorders, and tuberculosis, while seasonal influenza
outbreaks and weather-related healthcare emergencies further exacerbate clinical demands for
antibiotic therapies to manage secondary bacterial complications.
The economic implications of synthetic biology technology nature of KJ017 prove
particularly consequential in the market context of China. Conventional recombinant
hyaluronidase-based SC formulations face commercial viability challenges, particularly
pronounced for antibiotics, which maintain relatively stable and low prices due to large-scale
manufacturing and their broad, routine application. KJ017 fundamentally alters this paradigm
through a production methodology delivering substantial cost reductions while preserving
promising efficacy, enabling competitively priced SC formulation antibiotics. Innovation
emerges through synergizing clinical advantages inherent to subcutaneous administration,
including enhanced patient compliance, reduced hospitalization demands, and optimized
outpatient care with pivotal pharmacological improvements. Optimized subcutaneous delivery
mechanisms enable sustained drug release kinetics especially beneficial for time-dependent
antibiotics, bypassing first-pass metabolism associated with oral routes while establishing
more predictable dose-response relationships. Such pharmacokinetic advantages diminish
therapeutic monitoring needs relative to intravenous alternatives, thereby simplifying clinical
protocols. By concurrently resolving economic accessibility barriers and advancing therapeutic
performance parameters, KJ017 creates a unique value proposition for modernizing infection
management within resource-conscious public health ecosystems than its competitors.
For our antibody and antibiotics SC formulation candidates under in-house and
collaborative development, please refer to the sections headed “— Our Drug Candidates —
BJ007, BJ008 and BJ009 — Antibiotic SC Formulation Candidates” “— Our Drug Candidates
— KJ015 — Antibody SC Formulation Candidate In-House Developed” and “— Our Drug
Candidates — Antibody SC Formulation Candidates through Collaborations.” SC formulations
combined with KJ017 can enable large-volume, low-concentration delivery while minimizing
complications, offering additional potential to reduce medical costs and resource consumption
in drug transportation and healthcare facility usage. The various applications of KJ017 create
substantial market opportunities across diverse therapeutic areas in numerous indications, with
potential for continued expansion into additional treatment categories. None of the current
collaborations such as those related to antibody SC formulations have affected or will affect
any of the Company’s independent development and marketing pathway for KJ017 as a
monotherapy.
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Furthermore, KJ017’s strategic positioning as a versatile enabling technology is
reinforced by the collaborative framework designed to maximize therapeutic accessibility.
Unlike Halozyme’s exclusivity-driven model requiring substantial licensing fees from large
pharmaceutical partners, our non-restrictive partnership architecture eliminates royalty
obligations while providing competitive pricing and formulation support. Lowering entry
barriers across therapeutic classes, this open innovation paradigm facilitates subcutaneous
delivery solutions for collaborators ranging from small-to-medium-sized biopharmaceutical
companies in the R&D phase to partners specializing in high-value biologics. The current
absence of HYLENEX
® in the drug market of China creates immediate clinical adoption
opportunities. Even against co-formulations in combination of HYLENEX ® such as
daratumumab and rituximab SC versions available in China, KJ017 demonstrates distinct
pharmacoeconomic advantages through manufacturing scalability and cross-modality
applicability, enables large-volume SC administration of both small molecules and biologics
and coupled with adaptable collaboration terms could establishes a unique value proposition
for healthcare systems prioritizing cost containment without compromising delivery
innovation. Solidifying KJ017’s foundational technology platform status through dual
technical-commercial differentiation simultaneously safeguards the potential of KJ017 in
single therapy and widen the opportunities for combination use with antibiotic and antibody
drugs.
Summary of Clinical Trial Results
Completed Phase III clinical trials of KJ017 in China (CTR20210453 and CTR20241071)
The two trials are randomized, double-blind, placebo-controlled and parallel-group.
Phase III studies to evaluate characteristics of KJ017 in healthy subjects for facilitating
subcutaneous infusion in China. We separated KJ017’s Phase III trial into a Phase IIIa
(CTR20210453) and a Phase IIIb (CTR20241071) based on differences in dosage and
administration site. The Phase IIIa trial was designed to evaluate the efficacy and safety of a
single SC infusion of 250ml in the arm. The Phase IIIb trial further evaluates the efficacy and
safety of multiple administrations of KJ017 across various sites (arm, thigh, torso) with
increasing volumes (250ml, 500ml, 1000ml).
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Trial design. CTR20210453 was designed to enroll, and actually enrolled, a total of 48
healthy subjects aged 18 to 60 years old, who were divided into three cohorts with each
consisting of one subject in the pre-trial and 15 subjects in the formal trial. Subjects in each
cohort received a single assigned dose of KJ017 in one arm and a placebo in the other arm
during the 250 ml SC infusion of large-volume fluid. To further explore the efficacy of KJ017,
CTR20241071 was designed to enroll, and actually enrolled, a total of 45 healthy subjects,
divided into three cohorts with each consisting of 15 subjects. Subjects enrolled in each cohort
in CTR20241071 received assigned doses on one side of the body and a placebo simultaneously
on the other side during the SC infusions of large-volume fluid. The subjects in the first group
received KJ017 in their thigh (500 ml) on Day 1, in their arm (250 ml) on Day 2, in their thigh
(500 ml) on Day 3 and in their torso (1,000 ml) on Day 4. The other two groups received a
single injection in their arm before the SC infusion of 250 ml fluid.
The primary endpoint of both studies is the subcutaneous infusion rate for PD
characteristics evaluation, with secondary endpoints including AE and SAE monitoring,
clinical laboratory examination results, vital sign results, electrocardiogram (ECG) results,
physical examination results and injection site reactions.
Trial status. We have completed CTR20210453 and CTR20241071 in October 2021 and
May 2024, respectively, with the clinical trial reports finalized in November, 2021 and June,
2024, respectively. We subsequently submitted these reports to the CDE in June 2024 for NDA.
Efficacy results. KJ017 facilitated the rapid diffusion and absorption of 250 ml, 500ml,
and 1,000ml fluid in the SC tissue, demonstrating high drug delivery efficiency. Under gravity
feed infusion without pump, KJ017 reached a greater subcutaneous infusion rate of
545.09~775.00 mL/h, compared to 164.68 mL/h for placebo (p-value <0.001).
Assisted subcutaneous infusion of large volumes of fluid (>500ml/h) in
areas such as the arms, thigh and torso is comparable in infusion rate to
intravenous administration and demonstrates good safety.
Thigh-840 ml/h
35min subcutaneous
infusion 490 ml
Arm-720 ml/h
20min subcutaneous
infusion 240 ml
Torso-691.8 ml/h
85min subcutaneous
infusion 980 ml
right arm-before
infusion
right arm-after
infusion 240 ml
left thigh-before
infusion
left thigh-after
infusion 490ml
torso-before infusion torso-after
infusion 980 ml
Safety results. The trial results suggested that KJ017 was generally safe and well-tolerated
by all subjects, with no subjects experiencing significant arm swelling, or injection-site related
reactions. There was no allergic reaction observed in the trials. The majority of adverse events
observed in the trials were mild (Grade 1) were manageable, with no TEAE ( /H11350Grade 3)
observed.
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The below table sets forth the combined safety data of the two trials.
Adverse reactions KJ017 (N=90) Placebo (N=90)
Injection site pain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873 (81.1%) 68 (75.6%)
Injection site erythema /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (5.6%) 4 (4.4%)
Injection site bruising /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (5.6%) 3 (3.3%)
Infusion site discomfort /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 (1.1%) 0 (0.0%)
Infusion site swelling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 (1.1%) 1 (1.1%)
Note: In the KJ017 group and the placebo group in the trials, only one subject in each group experienced
infusion site pain classified as a Grade 2 adverse event. All other adverse events in the trials were mild
(Grade 1). All adverse events in the trials were Grade 1 or 2 and manageable, indicating KJ017’s
favorable safety and tolerability.
Source: Company data
Conclusion. The trial results demonstrated KJ017’s positive efficacy and safety profile,
marking a significant advancement in treatment efficiency. KJ017 has shown its use in safely
and rapidly facilitating the SC infusion of at least 1,000 ml fluid across multiple body areas,
offering a viable alternative to intravenous infusion.
Completed Phase I clinical trial of KJ017 in China (CTR20191671)
This is a randomized, double-blind and placebo-controlled Phase I study designed to
evaluate the safety, tolerability, pharmacokinetics (PK) and immunogenicity of single injection
of KJ017 in healthy subjects in China.
Trial design. This study enrolled a total of 50 healthy subjects across six dose levels,
ranging from 12 IU to 1,540 IU, with 40 subjects receiving a single injection of KJ017 and 10
subjects receiving a placebo. The primary endpoints of the Phase I study are to evaluate the
safety and tolerability of KJ017 in healthy subjects. Additional endpoints include assessment
of the PK characteristics and immunogenicity.
Trial status. We have completed this study in September 2019, with the clinical trial
reports finalized in June, 2020. We subsequently submitted the clinical report for this study to
the CDE for communication related to later stage trials in August 2020.
Safety results. The trial results suggested that KJ017 was generally safe and well-tolerated
by all subjects with evaluation through monitoring of AE, SAE, changes in clinical laboratory
results (such as complete blood count (CBC), blood biochemistry, and urinalysis), vital signs,
12-lead ECG, and physical examination findings. 9 out of 40 subjects administered with KJ017
in the trial were reported to exhibit TEAEs. All TEAEs reported in the trial were mild (Grade
1), with no TEAE ( /H11350Grade 3) observed. TRAEs observed in the trials included total bilirubin
increased (7.5%), dizziness (5.0%), nasopharyngitis (5.0%), hyperuricemia (2.5%), injection
site itching (2.5%), and nausea (2.5%).
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Conclusion. The trial results demonstrated the positive safety profile of single injection
of KJ017.
Clinical Development Plan
Our clinical development for KJ017 as a single drug in China has achieved a significant
milestone with our NDA submission to the NMPA, currently under regulatory review. We plan
to submit IND applications for KJ017 to the EMA in Europe and the FDA in the U.S., and are
in the process of simultaneously preparing both EMA and FDA IND filings. We anticipate
submitting one of the applications in the first half of 2026 and will subsequently complete the
IND application for the other region.
License, Rights and Obligations
We have established formal partnerships with multiple pharmaceutical or biotechnology
companies to develop SC formulation for innovative antibody drugs. Among these
collaborations, two programs have advanced to Phase II or III clinical trials. We continue to
actively expand our collaboration ecosystem, with business development initiatives underway
with over a dozen potential partners at various negotiation stages — from initial due diligence
and material transfer to term sheet discussions. For details of these selected material
collaboration agreements, see “— Collaboration Agreements.”
Material Communications with Competent Authorities
We received the IND approval for KJ017 from the NMPA in December 2018, pursuant to
which we initiated a Phase I clinical trial (CTR20191671) in China in August 2019 and
completed this trial in September 2019. Following the completion of Phase I trial, we submitted
the Phase I clinical results to the CDE. In our consultations with the CDE, we referenced the
approval pathway of a comparable recombinant human hyaluronidase product in the U.S. that
received marketing authorization based solely on safety-focused clinical trials, to explore the
possibility of a similar safety data-based approval for our product. The CDE then advised the
Company to conduct a registrational clinical trial to evaluate the efficacy of KJ017 as well. As
advised by Frost & Sullivan, according to the industry practices, a registrational clinical trial
is clinical study that supports a drug’s marketing application and authorization, with the
primary objective of confirming the drug’s safety and efficacy. Such trials must meet certain
regulatory requirements, which in KJ017’s case involves an efficacy trial with randomized,
controlled, blinded design. According to Frost & Sullivan, in industry practice of drug
development, Phase III clinical trials typically constitute the main form of registrational
studies, except for breakthrough therapies or treatments for rare diseases. As KJ017 is not
categorized as a breakthrough therapy or a treatment for a rare disease, we designated its Phase
III trial as the registrational trial.
Our KJ017 monotherapy was able to proceed directly to Phase III clinical trials without
conducting Phase II trials due to its unique characteristics. As KJ017 acts exclusively locally
with minimal systemic exposure, a traditional Phase II dose-exposure study would lack clinical
significance. Its Phase I PK studies have demonstrated no systemic exposure even at doses ten
times the intended clinical dose. Consequently, with the Phase III trials incorporating not only
efficacy endpoints but also studies on dose-ranging and exposure-effect relationships typically
included in Phase II trials to confirm the optimal clinical dose, KJ017 could bypass Phase II
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clinical trials and proceed directly to Phase III clinical trials. This scientifically-grounded
clinical design has satisfied both scientific and regulatory requirements, with no objections
raised by the NMPA regarding the direct progression to Phase III trials. Thus, we initiated the
registrational trials and designated such trials as Phase III trials rather than a Phase II trial. The
primary efficacy endpoint is the SC infusion rate, and the secondary efficacy endpoint involves
measurement of the limb circumference after the infusion. The CDE has not imposed any
specific condition for this trial.
We thus proceeded to the Phase III registrational trials (CTR20210453 and
CTR20241071) for KJ017. We completed the registration of pharmaceutical excipients for
KJ017 in China in September 2022. We then completed the two Phase III trials (CTR20210453
and CTR20241071) in October 2021 and May 2024, respectively. The extended interval
between KJ017’s Phase IIIa clinical trial and Phase IIIb trial was primarily due to our
manufacturing site changes. Following the completion of Phase IIIa, we relocated KJ017’s
clinical sample production to another dedicated manufacturing line, which necessitated a
significant transition period. This relocation was undertaken for strategic operational reasons
during the relevant period. While the original production line maintained full GMP compliance
throughout the Track Record Period and up to the Latest Practicable Date, and possessed the
capability to manufacture both enzyme products (such as KJ017) and hormone products (such
as SJ02) for not only clinical trial but also commercial-scale production, we made the strategic
decision to dedicate this line exclusively to hormone product manufacturing. Although
potential cross-contamination risks through the same production line could be avoided through
proper scheduling and technical measures on that original shared production line, and no
cross-contamination incidents had ever occurred when both candidates utilized the same
production line, we chose to separate the production lines for the two categories of products
as a long-term strategic consideration, thereby establishing optimal manufacturing
arrangements for the future production and commercialization of both products. This dedicated
approach would support SJ02, which was prioritized for accelerated development at that time,
as well as SJ04, another hormone product in the pipeline. Concurrently, KJ017, being an
enzyme product, would be manufactured on a separate production line to optimize operational
efficiency and product-specific manufacturing protocols. Once this site change was
successfully completed, we proceeded with the Phase IIIb clinical trial. This manufacturing
transition, while extending the clinical development timeline, did not impact other aspects of
KJ017’s development or registration process. We submitted the NDA to the NMPA in June
2024 subsequently. In addition, the DMF for KJ017 was successfully filed with the FDA in
May 2025.
As advised by our PRC Legal Advisor, under relevant Chinese laws and regulations, a
pre-NDA meeting is not a mandatory procedural requirement. We have not engaged in any
pre-NDA communication with the NMPA regarding KJ017. From January 15 to January 17,
2025, the NMPA conducted GCP inspections at the hospitals where clinical trials of our KJ017
were performed, which were passed successfully. Additionally, from February 24 to February
28, 2025, the NMPA conducted pre-market GMP compliance inspections, which were also
passed successfully. Furthermore, from March 6 to March 8, 2025, the NMPA conducted GCP
inspections of the biological sample analysis laboratory involved in the clinical trials, which
were passed successfully as well. The NMPA did not provide any feedback regarding the
registration of KJ017 that included conditions or requirements. We had not received any
regulatory agency’s concerns or objections to our clinical development plans as of the Latest
Practicable Date.
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WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET KJ017
SUCCESSFULLY.
KJ015 — Antibody SC Formulation Candidate In-House Developed
We are internally developing SC formulations of antibody drugs with large market
potential, as exemplified by our KJ015. KJ015 is an SC administration formulation of
innovative bispecific anti-HER2 antibody derived from common light chain technology, which
is designed to have two Fab arms with the common light chain forming near-native IgG1
structure. With its ability to maintain high affinity for two epitopes simultaneously, KJ015 can
target the epitopes recognized and clinically validated by HERCEPTIN
® (trastuzumab) and
PERJETA ® (pertuzumab) at the same time, inhibiting both HER2 homodimerization and HER2
heterodimerization with EGFR, HER3 and HER4. The following diagram illustrates such
mechanism of action of KJ015:
KJ015 has reasonable affinity or structure refinement over existing anti-HER2 bispecific
antibodies. It can more effectively inhibit HER2 dimerization with ERBB-family members.
This inhibition leads to reduction in downstream signals such as MAPK and PI3K/Akt.
Additionally, such dual-binding results in antibody-antigen clustering that may facilitate the
internalization and recognition of tumor antigen, thereby distinguishing it from the
combination of monoclonal antibodies.
Our preclinical studies demonstrate KJ015’s overall preclinical enhancement in efficacy
compared to conventional anti-HER2 monoclonal combinations. Existing pharmacodynamic
evaluations indicate that KJ015 demonstrates significantly superior tumor inhibition on Calu-3,
N87, and BT474 xenografts compared to the combination of HERCEPTIN
® and PERJETA ®.
In the Calu-3 xenograft model, KJ015 showed good tolerability in tumor-bearing mice at doses
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of 15 to 60 mg/kg, indicating its potential as an effective anti-tumor drug with positive safety
profile. Moreover, the synergistic effect of KJ015 may further enhance its potential benefits for
combination therapy development.
KJ015’s near-native structure with deamidation design leads to stable physicochemical
properties and high productivity (> 7g/L) in large-scale manufacturing. Its stability at high
concentrations has also facilitated subcutaneous formulation with our recombinant human
hyaluronidase. KJ015 is designed to allow for easy subcutaneous administration, which will
reduce drug onset time, enhance patient convenience, and mitigate risks associated with IV
administration, offering a safer and more user-friendly alternative.
We are developing KJ015 in-house and own the global rights to develop and
commercialize KJ015.
We have received IND approval from NMPA for KJ015 in December 2024 and
commenced the Phase I clinical trial in June 2025. We expect to complete the Phase I clinical
trial in the second half of 2026. We had not received any regulatory agency’s concerns or
objections to our clinical development plans as of the Latest Practicable Date.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET KJ015
SUCCESSFULLY.
Antibody SC Formulation Candidates through Collaborations
According to Frost & Sullivan, in the antibody drug market in China, the market for the
recombinant human hyaluronidase combined with antibodies is expected to reach RMB1,766.3
million in 2029 and RMB3,218.6 million in 2033. Globally, the market size of recombinant
human hyaluronidase combined with antibodies is forecasted to reach US$2,831.1 million in
2029 and US$7,677.6 million by 2033. However, currently, global leading players in SC drug
delivery mainly employ an exclusive licensing model that grant licenses exclusively to only
one drug manufacturer per each class of antibody drugs for its target. This restrictive approach
has created substantial market opportunities, as many pharmaceutical companies, particularly
in China, are unable to develop SC formulations of their antibody drugs using these products.
To address this market demand, we are dedicated to establishing collaborative relationships
with various partners, to provide safer, more convenient and cost-effective large-volume
administration solutions for their antibody therapeutics. These collaborations not only amplify
the utility of KJ017 across diverse therapeutic areas but also establish steady and scalable
revenue streams through income from technical services and product supply.
As of the Latest Practicable Date, we have established formal partnerships with multiple
pharmaceutical or biotechnology companies for the development of SC antibody formulations,
such as Qyuns and Sumgen. Under our typical collaboration model, we continuously supply our
recombinant human hyaluronidase products as excipients throughout the research and
development, manufacturing and commercialization stages, and provide related technical
services. Our partners advance the development of SC formulation in combination with their
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antibody drug candidates at their costs, while compensating us through payments for our
ongoing excipient supply and services. Our partners will be the marketing authorization
holders and own all intellectual property rights related to the SC formulations developed under
the collaborations, while we will retain ownership of intellectual property rights for technology
related to hyaluronidase developed using our own funds and technology.
The following table summarizes the salient terms of our typical collaboration agreements
with partners for the development of SC antibody formulations:
Scope of Services We are primarily responsible for supplying
recombinant human hyaluronidase for product
development, providing necessary technical
support, and assisting in regulatory filings, and in
certain collaboration agreements, we will grant the
non-exclusive patent license to the partner. The
partner will take the lead in the development,
regulatory filings, manufacturing and
commercialization of the SC formulations
developed under the agreement.
Term The term of the agreement is typically long-term
without expiration date.
Pricing and Payments The partner typically pays us the price for
recombinant human hyaluronidase as stipulated in
the agreement. For technical support services, the
partner may pay us stipulated milestone-based fees
or compensation based on actual technical services
rendered, in consideration for technical support
services provided by us.
Intellectual property rights The partner will own exclusive intellectual property
rights related to the SC antibody formulations
developed under the agreement. We will retain
ownership of intellectual property rights for any
technology related to recombinant human
hyaluronidase developed using our own funds and
technology.
Confidentiality We are not allowed to disclose confidential
information, including but not limited to, the
identity of the partner, any technical materials,
clinical, utilization, or disease management data
related to the project specified in the agreement, and
such obligation generally survives for five years.
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As of the Latest Practicable Date, three programs under our existing collaborations have
advanced into clinical stage (including Phase I, II and III stage). For details of collaborations
with selected partners on novel antibody SC formulations, see “— Collaboration Agreements.”
Through these collaborations, we expect to generate stable revenue from the milestone
payments and product supply of our KJ017 products.
We are seeking and establishing these collaborations for antibody SC formulations to
expand our source of revenue from technical service fees and product supply, which
commercially will help us generate stable revenue, further broaden and realize KJ017’s
commercial potential, and achieve sustainable business development with strong reputation.
Our Core Product KJ017 as a standalone drug product does not require any further
development with such third party or combination with any other agents to obtain marketing
authorization pursuant to PRC laws and regulations. Additionally, we will maintain absolute
control over the research, development and commercialization for KJ017, and these
collaborations would not affect the Company’s ownership, independent control, or other
development plans for KJ017.
BJ007, BJ008 and BJ009 — Antibiotics SC Formulation Candidates
Leveraging the efficiency and scalability of our synthetic biology platforms, we are
among the early movers globally to develop SC formulations of widely used antibiotics to
capture new market opportunities in this therapeutic area. These innovative SC antibiotics
allow for the large-volume, low-concentration SC antibiotic infusions, and reduce associated
complications. Currently, we are developing SC formulations of ceftriaxone sodium (BJ007),
cefoperazone sodium and sulbactam sodium (BJ008), and cefazolin sodium (BJ009).
According to Frost & Sullivan, the antibiotics market size in China is expected to reach
RMB109.2 billion in 2029 and RMB104.7 billion in 2033, respectively. China’s market for
recombinant human hyaluronidase combination use of antibiotics is expected to reach
RMB474.5 million in 2029 and RMB2,254.7 million in 2033. We aim to launch the world’s
first SC administered antibiotic drug within the next three years.
BJ007
BJ007 is a SC administered ceftriaxone sodium for the treatment of bacterial infections.
To date, there are no approved SC administered ceftriaxone sodium globally, and BJ007 is the
first and only drug candidate of this class advanced into clinical stage according to Frost &
Sullivan. While ceftriaxone sodium, typically administered intravenously, has been marketed
globally for over 40 years with proven efficacy and safety in treating bacterial infections,
patients with difficult venous access (DIV A) face challenges in receiving IV administration.
Leveraging our large-volume SC delivery system powered by our Core Product KJ017, BJ007
is strategically developed to transform the IV infusion of currently available ceftriaxone
sodium products into subcutaneous injection. The innovation reduces the need for vascular
access and use of long-term IV catheters, providing a more convenient, safer and lower cost
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administration option. BJ007 can thus offer the non-inferior therapeutic benefits without the
risks, discomfort and costs associated with infusion lines that are routinely required for longer
courses of ceftriaxone treatment, while also overcoming key treatment challenges for DIV A
patients.
Ceftriaxone sodium is widely prescribed for a broad spectrum of bacterial infections,
including lower respiratory tract infections, urinary tract and biliary tract infections due to
susceptible bacteria, as well as gonorrhea, intra-abdominal infections, pelvic inflammatory
disease, skin and soft tissue infections, bone and joint infections, bacteria sepsis, meningitis,
and surgical prophylaxis. Ceftriaxone sodium, a third-generation cephalosporin beta-lactam
antibiotic, exerts bactericidal activity by binding to and inactivating penicillin-binding proteins
(PBPs) on the bacterial cell wall. This disrupts the cross-linkage of peptidoglycan chains
necessary for bacterial cell wall strength and rigidity, weakening bacterial cell wall and causing
cell lysis.
Ceftriaxone’s time-dependent killing properties means that its effectiveness is primarily
determined by the duration that the drug concentration remains above the minimum inhibitory
concentration (MIC) required to inhibit bacterial growth. By combining ceftriaxone sodium
with recombinant human hyaluronidase that facilitates subcutaneous absorption, BJ007 is
designed to provide non-inferior antimicrobial coverage, particularly in terms of time over the
MIC, when compared to the same dose given by IV infusion.
We received the IND approval from the NMPA in February 2025. Upon approval, we
initiated a Phase I clinical trial for BJ007 (CTR20253085) in August 2025. This is a Phase I,
randomized, double-blind, crossover trial consisting of three parts to evaluate the PK profile
and absolute bioavailability of BJ007 in healthy subjects, in a head-to-head comparison with
ceftriaxone sodium for intravenous injection (Rocephin
®). In addition, we are preparing the
IND application for BJ007 in the U.S. and expect to submit it to the FDA in the first half of
2026.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET BJ007
SUCCESSFULLY.
BJ008
We are currently developing BJ008 as an innovative SC formulation of cefoperazone
sodium and sulbactam sodium. Cefoperazone sodium and sulbactam sodium is a common
compound preparation for the treatment of bacterial infections spanning respiratory tract
infection, urinary tract infections, intra-abdominal infections, gynecological infections, skin
and soft tissue infections, bone and joint infections, bacterial sepsis, meningitis, endocarditis,
as well as surgical prophylaxis. Cefoperazone, a third-generation cephalosporin antibiotic,
demonstrates strong synergistic antibacterial activity against Gram-negative bacteria with good
stability when combined with sulbactam sodium, an irreversible beta-lactamase inhibitor. By
utilizing our large-volume SC delivery system, BJ008 may have the potential replace the IV
infusion of currently available cefoperazone sodium and sulbactam sodium with subcutaneous
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injection, with a reduced risk of complications and improved patient compliance. As of the
Latest Practicable Date, BJ008 was in the preclinical stage, and we expect to submit its IND
application to the NMPA in the first half of 2026. There is currently no approved or
clinical-stage SC administered cefoperazone sodium and sulbactam sodium globally.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET BJ008
SUCCESSFULLY.
BJ009
BJ009 is designed as an innovative SC formulation of cefazolin sodium, a first-generation
cephalosporin antibiotic that works by inhibiting bacterial cell wall synthesis, leading to cell
lysis. Similar to intravenous cefazolin sodium, BJ009 has the potential to treat a wide range of
infections caused by bacteria, including those affecting the skin, bone, joint, genital, blood,
heart valve, respiratory tract, biliary tract, and urinary tract infections. Moreover, the SC
administration of BJ009 may offer enhanced treatment experience, lower risks of
complications and reduced treatment costs, suggesting its market potential. We have submitted
IND application for BJ009 in May 2025 and have received the IND approval from the NMPA
in September 2025. There is currently no approved or clinical-stage SC administered cefazolin
sodium globally.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET BJ009
SUCCESSFULLY.
Antibody-mediated Autoimmune Conditions
KJ10 3 — a recombinant IgG-degrading enzyme, our Core Product
Overview
KJ103 is an innovative recombinant immunoglobulin G (IgG)-degrading enzyme for the
treatment of a multitude of immunological disease and conditions driven by the pathogenic
activity of IgG antibodies. According to Frost & Sullivan, KJ103 is the first and only
low-immunogenic IgG-degrading enzyme to reach the registrational clinical stage globally.
Additionally, KJ103 received the BTD from the NMPA as a potential desensitization therapy
in kidney transplantation in November 2024 and for the treatment of anti-GBM disease in July
2025, respectively. The BTD would accelerate KJ103’s regulatory review and approval
processes, facilitating faster market entry. According to relevant PRC laws and regulations, a
drug candidate obtained BTD status is entitled to priority review, rolling submission of
materials, and enhanced regulatory interactions with shortened feedback cycles. Moreover, this
BTD further enables a flexible Phase III clinical trial design for KJ103, leveraging adaptive
approaches when early evidence demonstrates substantial therapeutic advantage.
Derived from a non-pathogenic strain of Streptococcus equi subsp. Equi (SEE), KJ103 is
designed to efficiently cleave and degrade all subtypes of pathogenic IgG antibodies that are
responsible for various immune-mediated diseases. By binding specifically to the Fc region of
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IgG and enzymatically disrupting the hinge region, KJ103 can render the antibody functionally
inactive and inhibit adverse immune responses. This ability to modulate IgG levels makes
KJ103 a promising agent for treating a broad range of conditions associated with aberrant
antibody activity, such as autoimmune diseases, transplant rejections and other IgG-mediated
disorders.
We are currently evaluating the therapeutic potential of KJ103 in kidney transplantation
desensitization and pathological IgG-mediated autoimmune diseases across different stages of
clinical trials. Specifically, with respect to kidney transplantation desensitization, we initiated
a Phase II trial (CTR20234137) in China in December 2023 and completed the Phase II portion
in September 2024, following which we initiated the Phase III trial (CTR20252973) in August
2025 and expect to complete this trial in the first half of 2026. With respect to pathological
IgG-mediated autoimmune diseases, and particularly anti-GBM disease, we received the IND
approval for Phase II trial from the NMPA in August 2024, pursuant to which we initiated a
Phase II trial of KJ103 in patients with anti-GBM disease in China (CTR20243543) in October
2024 and completed the trial in October 2025. Prior to these trials, we completed two Phase
I safety and exploratory trials (NCT05274659 and CTR20222595) in healthy subjects for
KJ103 in New Zealand and China both in March 2023. Further, we have submitted an IND
application for the Phase II trial of KJ103 in treating GBS to the NMPA in January 2025,
received the IND approval in April 2025 and expect to initiate this trial (CTR20253992) in
November 2025. Subsequently, we plan to submit an application for the Phase II trial to the
FDA in the first half of 2026.
Mechanism of Action
IgG constitutes approximately 75% of serum immunoglobulins and plays a vital role in
immune system protection, effectively preventing infectious diseases. However, dysregulated
IgG activity can contribute to the development of various antibody-mediated autoimmune
conditions and may interfere with the efficacy of certain medications. In these scenarios,
removing pathogenic and other IgG antibodies from the bloodstream represents a rational
therapeutic strategy. IgG-degrading enzymes hold great promise as an effective approach for
eliminating pathogenic IgG in affected patients.
KJ103 is a modified version of the wild-type IgG-degrading enzyme of S. equi ssp. equi ,
or IdeE. IdeE, in its native form, is known for its ability to cleave IgG at the hinder region with
high specificity and efficiency. To enhance its properties for therapeutic use, KJ103 was
engineered by deleting the N-terminal amino acids and substituting key amino acids. These
modifications are intended to optimize the enzyme’s catalytic activity, stability and other
functional characteristics.
The mechanism of action of KJ103 involves binding to the IgG molecule and targeting a
specific site within the hinge region, which connects the antigen-binding F(ab’)
2 region to the
Fc region responsible for effector functions. Upon binding, KJ103 degrades IgG at this precise
location, resulting in two distinct fragments: the F(ab’)
2 fragment, which retains antigen-
binding capacity, and the Fc fragment, which contains the effector domains. By effectively
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degrading IgG into these components, KJ103 can render the antibody functionally inactive.
This specific cleavage mechanism makes KJ103 a promising therapeutic agent for conditions
where pathogenic IgG plays a central role. The following diagram illustrates such mechanism
of action of KJ103:
KJ103
IgG
F(ab’)2
Fc
Application of KJ103
KJ103’s ability to specifically and efficiently degrade IgG positions it as a versatile
therapeutic tool with broad applications across diverse clinical settings, including
desensitization protocols for kidney or other organ transplantations, as well as antibody-
mediated acute autoimmune diseases. Furthermore, when used in combination with
recombinant antibodies resistant to enzymatic degradation, KJ103 can enhance therapeutic
outcomes with synergistic effects.
Desensitization in kidney and other organ transplantations
In highly sensitized patients awaiting organ transplantation, the presence of donor-
specific antibodies (DSAs), including anti-HLA DSAs, poses a major risk for antibody-
mediated rejections. KJ103 can degrade circulating IgG, including pathogenic DSAs,
effectively lowering antibody titers prior to transplantations. This reduction in DSAs facilitates
successful organ acceptance and improves clinical outcomes, especially in patients with limited
donor compatibility, such as those undergoing kidney, heart, or lung transplantations.
KJ103 has entered into a Phase III trial in China for desensitizing highly HLA-sensitized
patients to enable kidney transplantation. Its Phase I trial results indicated that KJ103 is
effective, safe and well-tolerated in healthy subjects, providing a seven-day therapeutic
window. Its Phase II trial results further demonstrated that KJ103 can rapidly and effectively
reduce or eliminate both HLA-I and HLA-II antibodies following administration, achieving a
100% success rate in desensitization treatment within 24 hours. No antibody-mediated
rejection was reported at 6 to 12 months post-transplantation, and the survival rate of transplant
recipients remained at 100% for over six months. Such encouraging clinical trial results
underscore the significant potential of KJ103 for desensitization therapy in highly sensitized
patients awaiting kidney transplantation.
Given its ability to degrade all subclasses of IgG, KJ103 has the potential to expand into
other organ transplantation indications, including xenotransplantation. In an investigator-
initiated trial, following injection of KJ103 into a rhesus monkey (on the day when this monkey
was in life-threatening condition) who received a xenogeneic pig kidney transplant, KJ103 was
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observed to rapidly address antibody-mediated rejection and kidney function impairment in a
rhesus monkey who received a xenogeneic pig kidney transplant. This monkey’s extended
survival ultimately reached a duration after the injection of KJ103 that surpassed all previous
records of xenotransplantation in China.
Hundreds of antibody-mediated acute autoimmune diseases
IgG autoantibodies contribute to the disease progression in a variety of autoimmune
diseases by attacking the body’s own tissues. KJ103 can specifically target and degrade these
pathogenic IgG autoantibodies in the bloodstream, thereby mitigating the immediate effects of
acute symptoms, providing rapid relief from disease flare-up, and reducing tissue damage that
result from autoimmune reactions. This targeted approach not only diminishes the adverse
effects of the IgG autoantibodies but also potentially complements existing treatments such as
broad immunosuppressive therapies. KJ103’s ability to eliminate pathogenic IgG provides a
more precise and potentially safer alternative for managing hundreds of acute autoimmune
diseases mediated by these antibodies.
Anti-GBM disease, in particular, is a life-threatening autoimmune disorder in which the
immune system primarily produces IgG autoantibodies against the GBM in the kidneys,
leading to reduced kidney function and associated severe symptoms. As of the Latest
Practicable Date, there were no approved drugs addressing this indication globally. We initiated
a Phase II trial of KJ103 in subjects with anti-GBM disease in China in October 2024 and
completed this trial in October 2025. KJ103 received BTD from the NMPA for anti-GBM
disease in July 2025. Further, for the treatment of GBS, we have submitted an IND application
for a Phase II trial with the NMPA in January 2025, received the IND approval in April 2025,
and expect to initiate this trial in November 2025. We also plan to submit an application for
the Phase II trial to the FDA in the first half of 2026 for the treatment of GBS where Idefirix
®,
an IgG-degrading enzyme product under clinical stage for GBS treatment, has shown limited
efficacy by its rapid rebound of IgG levels post-treatment pursuant to publicly available data.
Combination therapy with recombinant antibodies resistant to enzymatic degradation
We are actively investigating the potential of combination therapies that integrate KJ103
with antibody drugs in treating a range of autoimmune disorders driven by pathogenic
autoantibodies, including, without limitation, pemphigus vulgaris and myasthenic crisis. This
approach leverages the complementary strengths of different therapeutic modalities, allowing
us to target multiple layers of autoimmune pathology simultaneously. By combining the potent
effects of KJ103 with specific antibodies responsible for B cell and plasma cell depletion, as
well as complement inhibitors and T-cell co-stimulation inhibitors, we aim to develop a more
comprehensive and effective treatment strategy for these severe conditions. As part of this
effort, we are advancing the development of several proprietary recombinant antibodies
resistant to enzymatic degradation by KJ103, such as anti-CD20 and anti-CD154 antibodies
BJ045 and BJ047. Notably, our novel anti-CD20 antibody, BJ045, and anti-CD154 antibody,
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BJ047, have already demonstrated preclinical proof-of-concept. These antibodies hold the
potential to significantly enhance treatment outcomes by improving antibody stability and
efficacy, offering a promising new direction for autoimmune disease management.
Market Opportunities and Competition
IgG-degrading enzymes have been explored for its potential in treating a range of acute
autoimmune diseases. The global IgG-degrading enzyme market expand with a CAGR of
301.0% projected from 2025 to 2029 and is expected to reach a value of US$16,618.0 million
in 2033. Meanwhile, the IgG-degrading enzyme market in China is expected to grow at a robust
from RMB1,338.9 million in 2029 to RMB6,386.1 million in 2033.
As of the Latest Practicable Date, around the globe, there were four IgG-degrading
enzymes candidates were under clinical development. These include KJ103 and Idefirix
®, both
of which have reached Phase III clinical trials, with KJ103 targeting desensitization before
kidney transplantation and Idefirix
® targeting Anti-GBM disease. Additionally, HNSA-5487
and S-1117 are currently in the Phase I stage. Notably, Idefirix ® has been approved for
desensitization before kidney transplantation and is marketed in Europe and remain as the only
marketed product globally as of the Latest Practicable Date. Our KJ103 is under Phase III for
desensitization treatment of highly sensitized adult kidney transplant patients, Phase II for
anti-GBM disease and obtained IND approval for GBS from the NMPA in April 2025, with no
other IgG-degrading enzyme product in clinical stage or approved in China. See “Industry
Overview — Analysis of Antibody-mediated Autoimmune Diseases Market — Selected
Indications targeted by IgG-Degrading Enzymes” for further details.
The following diagram illustrates the details of marketed product of IgG-degrading
enzymes globally:
Drug Name Generic name Company Target Indications Approved
Region Approved Date
Idefirix® Imlifidase
Hansa Biopharma
(XSTO: HNSA)
(LSE: 0RC7)
IgG Desensitization before kidney
transplantation EMA 2020/08/25
Treatment Cost
£135,000
per 11 mg vial
Source: EMA, National Institute for Health and Care Excellence, Frost & Sullivan analysis
Note: As of November 22, 2025
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The following diagram illustrates the details of IgG-degrading enzymes pipeline globally:
First Posted
Date
Clinical
Regulatory
Authorities
AreaStageIndicationsTargetCompanyDrug Name
2025/07/30NMPAChinaIIIDesensitization treatment of highly sensitized
adult kidney transplant patients
IgGOur CompanyKJ103 2024/09/23NMPAChinaIIAnti Glomerular Basement Membrane (GBM)
2022/05/19MedsafeNew ZealandIAcute severe autoimmune diseases mediated by
pathogenic lgG autoantibodies
2023/01/11EMA/FDA/
MHRAEU/US/UKIIIAnti Glomerular Basement Membrane (GBM)
IgGHansa BiopharmaIdefirix®
2018/12/19EMA/MHRAEU/UKIIGuillain-Barré syndrome (GBS)
2024/07/24EMAEUIICrigler–Najjar syndrome
2023/01/31EMAEUIMuscular dystrophy
2023/04/20EMAEUIAutoimmune diseasesIgGHansa BiopharmaHNSA-5487
2025/02/14TGAAustraliaI
Chronic inflammatory demyelinating
polyneuropathy, Myasthenia gravis, Immune
thrombocytopenia
IgGSeismic TherapeuticS-1117
2023/09/28EMAEUIAdeno-associated virus infectionIgGVivet TherapeuticsVTX-PID
Source: Clinicaltrials.gov, EMA, FDA, MHRA, TGA, Frost & Sullivan Analysis
Note: 1. As of November 22, 2025; 2. FDA: Food and Drug Administration (US); 3. EMA: European Medicines
Agency (EU); 4. MHRA: Medicines and Healthcare products Regulatory Agency (UK); 5. TGA: Therapeutic
Goods Administration (Australia); 5. NMP A: National Medical Products Administration (China); 6.
Medsafe: New Zealand Medicines and Medical Devices Safety Authority
Area = Clinical trial locations per official records. Each area maps to its clinical regulatory authorities
Competitive Advantages
Favorable safety and tolerability profile
KJ103’s low pre-existing antibody proportion and titers, along with its fast recovery to
baseline levels of induced anti-drug antibodies, collectively contribute to a superior safety and
tolerability profile.
KJ103 exhibits a lower risk of immunogenicity, due to the relatively low positive rates of
pre-existing antibodies against KJ103 in the population at approximately 29.4% in its Phase I
China trial, compared to that of Idefirix
® at 90%, according to its publicly reported clinical
data. These pre-existing anti-KJ103 antibodies are weakly positive and have very low titers,
significantly reducing the likelihood of infusion or hypersensitivity reactions commonly
associated with Idefirix
®. Notably, KJ103 exhibits a lower proportion and titer of pre-existing
antibodies, with a positive rate of 33.33% and low titers, whereas conventional IgG-degrading
enzymes show a 100% pre-existing antibody positive rate with high titers (exceeding 10 mg/L).
Furthermore, the proportion and titer of ADA induced by KJ103 are substantially lower.
Particularly, 33.33% of patients receiving KJ103 did not develop ADAs, while all patients
treated with conventional enzymes generated ADAs. KJ103-induced ADA titers peak around
Day 14 post-administration and gradually decline, with 88.9% of patients returning to baseline
levels by Day 64. In contrast, conventional enzymes induce ADAs as early as Day 2, reaching
a peak on Day 14 and maintaining high titers (exceeding 100 mg/L) without returning to
baseline. Importantly, KJ103 demonstrated excellent safety, with no infusion or
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hypersensitivity reactions reported, whereas conventional enzymes were associated with severe
adverse events, including infusion reactions that led to incomplete dosing and desensitization
failure in one case and temporary infusion interruptions in others. Lower immunogenicity
profile than that of the conventional IgG-degrading enzymes not only minimizes
hypersensitivity risks and infusion-related reactions but also extends therapeutic durability
through prolonged enzymatic activity maintenance, thereby enhancing treatment stability and
long-term patient compliance. The reduced immunogenic potential further expands clinical
applicability to immunocompromised populations and immunogenicity-sensitive patient
subsets, broadening therapeutic accessibility while improving global regulatory acceptance
prospects. Upon administration, KJ103 induces anti-drug antibodies that appear later and at
lower titers than Idefirix
®, and these antibody titers return to baseline more quickly, suggesting
the transient immune response of KJ103.
The following table sets forth the comparison between the safety profile of KJ103 its
Phase I clinical trial in China and Idefirix ® according to its public clinical data. Though these
clinical trial data were generated in independent studies and do not come from head-to-head
analysis, and there is no assurance that the data of KJ103 in later clinical trials will be as
favorable as that of its Phase I trials, we believe meaningful insight may be drawn that KJ103
could potentially offer a compelling treatment option with enhanced safety and tolerability.
KJ103 (N=34) Idefirix ® (N=54)
Pre-existing anti-
drug antibodies
proportion and
titer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
29.4% positive and evaluate as
weak positive
90% positive and evaluated as
strongly positive
Infusion related
reactions /H1118/H1118/H1118/H1118/H1118
No infusion related reactions or
hypersensitivity were
reported among subjects
receiving KJ103.
Infusion related reactions were
an important known risk in
the RMP of Idefirix
®. Among
all subjects using
antihistamine drugs or
glucocorticoids in advance, 3
of 54 subjects with chronic
kidney disease (CKD)
experienced infusion related
reactions associated with
Idefirix
®.
Source: Company data, literature review
Indeed, KJ103 has shown a favorable safety profile and is well-tolerated in healthy
subjects across all dose levels in its Phase I trials. AEs observed with KJ103 in the trials were
predominantly mild to moderate (grade 1 or 2).
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Rapid and sustained IgG cleavage leading to enhanced efficacy
In its Phase I trials in New Zealand and China (NCT05274659 and CTR20222595), KJ103
efficiently degrades 83% ~ 91% of IgG in one hour and 90% ~ 95% of IgG in six hour after
administration at a dose of 0.25 mg/kg. This rapid onset of action ensures effective degradation
of pathogenic IgG antibodies, making it highly effective in conditions requiring immediate IgG
reduction. Compared to the analog of Idefirix
®, KJ103 achieves faster IgG-degrading onset and
a higher cleavage rate at equivalent doses. This is primarily attributable to the lower prevalence
and titers of pre-existing anti-KJ103 antibodies, which allows KJ103 to maintain its enzymatic
activity without interference. Following KJ103 administration, IgG levels remain significantly
reduced for up to one week, with an average decrease exceeding 70%. This sustained reduction
provides a wider therapeutic window. The following diagram sets forth the changes in IgG
levels of the 0.25mg/kg dose group in its Phase I trial in China:
Changes of IgG levels in the 0.25 mg/kg dose group
in the Phase I clinical trial for KJ103 in China
IgG (g/L)
Time
48 hours post-infusion24 hours post-infusion6 hours post-infusion3 hours post-infusion2 hours post-infusion1.5 hours post-infusion1 hour post-infusion
Baseline
D4 D7 D14 D21 D28 D63
1 minute before the endof the infusion5 minutes post-infusion20 minutes post-infusion45 minutes post-infusion
20
18
16
14
12
10
8
6
4
2
0
Source: Company data
Broad indication and use expansion potential
On account of its highly specific and efficient IgG-cleaving activity, KJ103 is well-
positioned as a versatile therapeutic agent across a range of conditions where IgG plays a
pathological role. In organ transplantation, particularly in highly sensitized patients, KJ103 can
create an earlier transplant window by effectively eliminating DSAs and reducing the risk of
rejection. Given its ability to degrade all subclasses of IgG, KJ103 has the potential to expand
into other organ transplantation indications, including xenotransplantation. With a rapid onset
of action, KJ103 can also provide swift relief in diseases requiring immediate
immunomodulation, such as in acute flare-ups of autoimmune diseases. KJ103 holds great
promise in managing a spectrum of autoimmune diseases by inactivating pathogenic IgG
antibodies, including, without limitation, anti-GBM disease, GBS, and hundreds of other acute
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autoimmune disorders driven by autoantibodies. Moreover, we are actively exploring the
combination therapy integrating KJ103 and recombinant antibodies resistant to enzymatic
degradation, particularly our proprietary anti-CD20 and anti-CD154 antibodies, by utilizing
our Robust-Hinge platform. This approach aims to harness the complementary strengths of
different therapeutic modalities, targeting multiple layers of autoimmune pathology to provide
a more effective strategy. This broad therapeutic scope highlights KJ103’s potential as a
transformative alternative for managing immune-mediated conditions.
Summary of Clinical Trial Results
Completed Phase II clinical trial of KJ103 for desensitization therapy in highly sensitized
patients awaiting kidney transplantation in China (CTR20234137)
This is an open-label single-arm, multi-center Phase II study to evaluate the efficacy,
safety, PK and immunogenicity of KJ103 for desensitization therapy in highly sensitized
patients awaiting kidney transplantation in China.
Trial design . This study aims to evaluate the reduction of pre-existing DSA to an
acceptable level (from MFI > 3000 to an average MFI /H113493000) for transplantation within 24
hours following KJ103 administration in highly sensitized patients awaiting kidney
transplantation and the successful completion of transplantation (i.e., no acute rejection within
24 hours post-transplantation) as its primary endpoint. Additional doses may be administered
within 24 hours after the first dose if the desired desensitization effect is not achieved.
Secondary endpoints for the study involve assessing the safety outcomes, changes in PRA and
DSA levels, kidney function post-transplantation, as well as the PK, PD and immunogenicity
of KJ103. The Phase II trial was expected to enroll 8 to 10 subjects, and 9 subjects were
actually enrolled.
Trial status . The Phase II trial was initiated in December 2023 and completed in
September 2024.
Safety results . The Phase II trial suggested that KJ103 was generally safe and
well-tolerated by all subjects. Six out of nine subjects successfully underwent kidney
transplantation without experiencing hyperacute rejection and three subjects did not undergo
transplantation for lack of available kidney donors. No antibody-mediated rejection were
reported at 6 to 12 months post-transplantation.
Efficacy results . In its completed Phase II trial, KJ103 resulted in the rapid and efficient
reduction or clearance of HLA-I and HLA-II antibodies, with a 100% success rate in
desensitization within 24 hours of administration. There was no incidence of hyperacute
rejection following kidney transplantation, and KJ103 administration achieved 100% graft
survival rate at 6 to 12 months post-transplantation and 100% survival rate for transplant
recipients.
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Completed Phase II clinical trial of KJ103 in patients with anti-GBM disease in China
(CTR20243543)
This is an open-label, single-arm Phase II study to evaluate the preliminary efficacy,
safety, PK, PD and immunogenicity of KJ103 in patients with anti-GBM disease in China.
Trial design . The trial is expected to enroll ten to 16 subjects diagnosed with anti-GBM
disease. Subjects will receive an initial dose of 0.25 mg/kg KJ103, followed by a supplemental
0.15 mg/kg dose of KJ103 on Day 8 to prevent a rebound of anti-GBM antibodies. The levels
of anti-GBM antibodies in their bodies will be continuously monitored throughout the trial, and
the dosing interval may be adjusted accordingly. The primary endpoint of the trial is to assess
the need for dialysis after 3 and 6 months. Secondary endpoints include renal function as
estimated by estimated glomerular filtration rate (eGFR), safety, PK, PD and immunogenicity.
Trial status . The trial was initiated in October 2024 and is currently ongoing, with 12
patients enrolled. Enrollment of this trial was completed in April 2025. We completed this trial
in October 2025.
Completed Phase I clinical trial of KJ103 in healthy adults in New Zealand (NCT05274659)
This is a randomized, single-blinded, placebo controlled, single ascending dose Phase I
study to evaluate the safety, tolerability, PK and PD and immunogenicity of KJ103 in healthy
subjects in New Zealand.
Trial design . This study enrolled a total of 34 healthy subjects in five dose levels (0.01
mg/kg, 0.04 mg/kg, 0.12 mg/kg, 0.25 mg/kg and 0.40 mg/kg) based upon the actual body
weight of these participants. A total of 2 subjects were enrolled in the 0.01 mg/kg dose group,
while 8 subjects were enrolled in each of the other dose groups. In the 0.01 mg/kg group, the
two subjects were administered KJ103 sequentially with a minimum dosing interval of 48
hours. For each of the remaining dose groups, six subjects received KJ103, and two subjects
were administered placebo, following a sentinel dosing protocol. On Day 1, two subjects were
dosed with either KJ103 or placebo to monitor potential acute adverse reactions ( /H11350Grade 2).
The remaining six subjects were dosed with KJ103 ( /H1135048 hours after the sentinel dose) once a
satisfactory safety assessment of the first two subjects was obtained by the Investigator.
Sentinel dosing requirements may be modified based on emerging safety data. Safety and
tolerability were closely monitored during the first 14 days following the initial dose in all
subjects across each dose group. If none of the subjects in a dose group met the dose-escalation
stopping criteria, dosing for the next higher dose group was initiated. The primary endpoint of
this study is to evaluate the safety and tolerability of KJ103 in healthy subjects, and second
endpoints include PK, PD and immunogenicity analysis.
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Trial status . We initiated this study in May 2022 and completed this study in March 2023
with the clinical trial report finalized in August 2023.
Safety results . KJ103 demonstrated favorable safety and tolerability following a single
intravenous administration in healthy subjects. No DLT was observed, and the MTD was not
reached even at the highest dose level of 0.4 mg/kg. The positive rate of pre-existing anti-drug
antibodies for KJ103 was 38.2%, significantly lower than that of Idefirix
® at 90% according
to public clinical data. Most AEs reported during the study were grade 1 and only one subject
from 0.4 mg/kg group experienced grade 2 infusion related reaction without using
antihistamine drugs and glucocorticoids in advance in this Phase I study. All AEs in the trial
were manageable. No other related or severe infection events were reported.
PD: A dose of 0.25 mg/kg achieved optimal dose efficacy, efficiently, rapidly, and
specifically cleaving human IgG. At this dose, KJ103 degraded 83% IgG within 1 hour and
90% within 6 hours post-administration and maintained a low IgG level (with an average
reduction of over 70%) for up to one week.
Conclusion . The trial results indicated that KJ103 can rapidly reduce IgG and maintained
levels for one week. The 0.01 to 0.40 mg/kg dose range of KJ103 had a favorable safety and
tolerability profile in healthy subjects.
Completed Phase I clinical trial of KJ103 in healthy adults in China (CTR20222595)
This is a randomized, double-blinded, placebo controlled, single ascending dose Phase I
study to evaluate the safety, tolerability, PK, PD and immunogenicity of KJ103 in healthy
subjects in China.
Trial design . This study enrolled a total of 34 healthy subjects in five dose levels (0.01
mg/kg, 0.04 mg/kg, 0.12 mg/kg, 0.25 mg/kg and 0.40 mg/kg) based upon the actual body
weight of these participants. A total of 2 subjects were enrolled in the 0.01 mg/kg dose group,
while 8 subjects were enrolled in each of the other dose groups. In the 0.01 mg/kg group, the
two subjects were administered KJ103 sequentially with a minimum dosing interval of 24
hours. For each of the remaining dose groups, six subjects received KJ103, and two subjects
were administered placebo, following a sentinel dosing protocol. On Day 1, two subjects were
dosed with either KJ103 or placebo to monitor potential acute adverse reactions ( /H11350Grade 3).
Among the remaining six subjects, five subjects were dosed with KJ103 and one subject was
dosed with placebo on Day 2 ( /H1135024 ± 2 hours after the sentinel dose). Safety and tolerability
were closely monitored during the first 7 days following the initial dose in all subjects across
each dose group. If none of the subjects in a dose group met the dose-escalation stopping
criteria, dosing for the next higher dose group would be initiated. The primary endpoint of this
study is to evaluate the safety and tolerability of KJ103 in healthy subjects, and second
endpoints include PK, PD and immunogenicity analysis.
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Trial status . We initiated this study in October 2022 and completed this study in March
2023 with the clinical trial report finalized in June 2023 and subsequently submitted to the
CDE in October 2023.
Safety results . KJ103 demonstrated favorable safety and tolerability in the clinical results.
None of the 34 subjects experienced any events meeting the dose-escalation stopping criteria
during the DLT observation period. No DLT or TEAEs ( /H11350Grade 3) were observed. Among 9
out 34 subjects (26.5%) experiencing TRAEs in the trial, the majority experienced TRAEs of
Grade 1 and only one subject (2.9%) experienced lymphocyte count reduction as a Grade 2
TRAE, indicating a manageable safety and tolerability profile of KJ103. No severe infection
was reported. KJ103 also demonstrated low levels of pre-existing anti-drug antibodies with a
positive rate of 29.4%, significantly lower than that of Idefirix
® at 90% according to publicly
available data.
PD: The administration of KJ103 results in a dose-dependent reduction in IgG levels in
the subjects. Subjects in the 0.12 mg/kg, 0.25 mg/kg and 0.4 mg/kg dose groups exhibited
efficient IgG degradation in their bodies following KJ103 administration, with IgG levels
decreasing by 91% within 1 hour and 95% within 6 hours post-dose and maintaining sustained
low IgG levels (with an average reduction of over 70%) for up to one week.
Conclusion . The trial results indicated that KJ103 can degrade human IgG antibodies
efficiently, rapidly and specifically within a short period following the administration, while
maintaining a low IgG level for one week. The 0.01 to 0.40 mg/kg dose range of KJ103 had
a favorable safety and tolerability profile in healthy subjects.
Clinical Development Plan
To fully unlock the therapeutic potential of KJ103, we are actively advancing the clinical
development of this agent across a range of indications, particularly in kidney transplantation
desensitization and autoimmune diseases, both in China and globally. With respect to kidney
transplantation desensitization, we completed the Phase II study in highly sensitized patients
awaiting kidney transplantation (CTR20234137) in China in September 2024. Following our
EOP2 meeting with the NMPA in May 2025, we initiated the Phase III study of KJ103 in this
indication in a separate trial (CTR20252973) in August 2025. With respect to pathological
IgG-mediated autoimmune diseases, we completed the Phase II study in anti-GBM disease
(CTR20243543) in China in October 2025 and plan to initiate the Phase II study in GBS
(CTR20253992) in China in November 2025. Simultaneously, we are preparing for overseas
indication and market expansion of KJ103 and plan to communicate with the FDA related to
the approval for a Phase II clinical trial in the first half of 2026 (KJ103’s Phase II clinical trial
plan in the U.S. for pathological IgG-mediated autoimmune diseases would require a
communication with the FDA under the existing IND approval).
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License, Rights and Obligations
We are developing KJ103 in-house and own the global rights to develop and
commercialize KJ103.
Material Communications with Competent Authorities
Based on the IND approvals from the MEDSAFE in March 2022 and from the NMPA in
August 2022, we initiated Phase I clinical trials of KJ103 in New Zealand (NCT05274659) in
May 2022, and in China (CTR20222595) in October 2022, respectively. We also obtained an
IND approval from the FDA in May 2022 for a basket of acute severe autoimmune diseases
mediated by pathogenic IgG autoantibodies. Both Phase I clinical trials in New Zealand and
China were completed in March 2023 and have served as the basis for advancing KJ103 into
Phase II clinical development for specific indications such as desensitization before kidney
transplantation and pathological IgG-mediated autoimmune diseases such as anti-GBM disease
and GBS.
In China, the scope of our IND approval from the NMPA in August 2022 was limited to
desensitization before kidney transplantation. Following the completion of the Phase I study in
China (CTR20222595), we submitted our preclinical and Phase I trial results (CTR20222595)
of KJ103 to CDE and obtained its approval on the trial design of the Phase II clinical trial in
highly sensitized patients awaiting kidney transplantation (CTR20234137) in October 2023.
We completed the Phase II study in September 2024, following which we had an EOP2 meeting
with the NMPA regarding our planned Phase III study of KJ103 in this indication and obtained
its approval to proceed with Phase III in May 2025. We subsequently initiated the Phase III
study of KJ103 for kidney transplantation desensitization in a separate trial (CTR20252973) in
August 2025. As of the Latest Practicable Date, we had not received any objections from the
NMPA related to our clinical development plan for KJ103 in this indication. In addition, KJ103
received BTD from the NMPA in November 2024 as a potential desensitization therapy in
kidney transplantation.
Leveraging the Phase I clinical data in healthy subjects in New Zealand and China, we
are pursuing indication expansion of KJ103 into pathological IgG-mediated autoimmune
diseases in China and the United States. In the near term, our focus is to advance separate
clinical programs in China for specific indications, including anti-GBM disease and GBS. For
anti-GBM disease, we submitted IND application to the NMPA for Phase II clinical trial in June
2024 and received the approval in August 2024. Upon approval, we initiated a Phase II trial of
KJ103 in patients with anti-GBM disease in China (CTR20243543) in October 2024 and
completed the trial in October 2025. KJ103 also received BTD from the NMPA for anti-GBM
disease in July 2025. For GBS, we submitted the IND application for a Phase II trial of KJ103
in China in January 2025 and received the approval in April 2025. We expect to initiate the
Phase II trial of KJ103 in patients with GBS in China (CTR20253992) in November 2025.
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While the initiation of each program for anti-GBM disease and GBS requires a separate
IND under the NMPA ’s regulatory framework, in line with standard regulatory practice, we
were exempted from Phase I studies primarily designed to assess basic safety, tolerability, and
pharmacokinetics based on the Phase I trial results of KJ103 in healthy subjects in China
(CTR20222595). The NMPA agreed in their IND approvals that we could directly proceed with
Phase II development of KJ103 for anti-GBM disease and GBS.
In the United States, we plan to seek FDA approval in the first half of 2026 to initiate a
Phase II clinical trial of KJ103 for pathological IgG-mediated autoimmune diseases, in
particular, GBS. The FDA ’s IND approval for KJ103 covers a basket of acute severe
autoimmune diseases mediated by pathogenic IgG autoantibodies, including anti-GBM disease
and GBS. In preparation for the Phase II trial in the United States, we intend to submit data
from the completed Phase I trial in New Zealand (NCT05274659), which we believe can be
accepted as the foundation for the Phase II approval as the study was conducted in accordance
with the requirements for acceptance of foreign clinical data under the FDA ’s regulatory
framework.
As of the Latest Practicable Date, we had not received any regulatory agency’s concerns
or objections to our clinical development plans for KJ103.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET KJ103
SUCCESSFULLY.
Antibody Resistant to Enzymatic Degradation
As demonstrated by its clinical data, KJ103 can rapidly lower IgG levels, thereby
mitigating the pathogenic immune responses associated with antibody-mediated acute
autoimmune conditions. Based on the properties of KJ103 and its anticipated clinical
applications, we diversified our pipeline in the area of antibody-mediated acute auto-immune
diseases by developing BJ045 and BJ047, using our Robust-Hinge platform. BJ045 and BJ047
are recombinant antibodies resistant to enzymatic degradation, targeting CD20 and CD154,
respectively. They are expected to accelerate the onset of action when used in combination with
KJ103, offering a more effective treatment strategy compared to conventional anti-CD20 or
anti-CD154 antibodies.
Antibody therapies targeting B cells, such as CD20, are commonly used following the
onset of antibody-mediated acute autoimmune disorders or during transplantation. However,
these therapies often fail to effectively slow disease progression or prevent further
deterioration and typically require plasma exchange, as they primarily inhibit the production
of newly formed antibodies without eliminating pre-existing pathogenic antibodies in the
patient’s body. In contrast, when combined with IgG-degrading enzymes like KJ103, BJ045
produces a synergistic therapeutic effect by both depleting B cells that produce pre-existing
IgG antibodies and rapidly reducing IgG levels. Meanwhile, the inclusion of anti-CD154
antibodies resistant to enzymatic degradation, such as BJ047, is expected to block antigen
presentation to B cells during transplantation, inducing antigen-specific immune tolerance.
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BJ045
BJ045 is a SC administered anti-CD20 antibody resistant to enzyme degradation by
KJ103 with the potential in treatment of moderate-to-severe autoimmune diseases in
combination use with KJ103. Developed through our Robust-Hinge platform, BJ045 could
specifically bind to CD20 , a B cell-specific cell surface antigen that is expressed at main stages
of B cell development. Its combination use with KJ103 that introduces cleavage to the existing
pool of IgG antibodies such as anti-acetylcholine receptor (AChR) IgG will further produce
complementary benefits in reducing both the source and effect of the pathogenic antibodies in
myasthenic crisis. In addition, leveraging our competitiveness in SC drug delivery candidates,
the SC administration modality of BJ045 could potentially improve treatment experience and
patient compliance — key challenges in the current anti-CD20 antibody market.
We are currently developing BJ045 in the preclinical stage. We expect to submit its IND
application to the NMPA in the first half of 2026.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET BJ045
SUCCESSFULLY.
BJ047
BJ047 is a SC administered anti-CD154 antibody resistant to enzyme degradation by
KJ103 developed for solid organ transplantation, xenotransplantation, and autoimmune
diseases, including Lupus Nephritis and multiple sclerosis. Developed through our Robust-
Hinge platform, BJ047 works by inhibiting the interaction between CD154, a glycoprotein
(also known as CD40 ligand) expressed by activated T cells, and CD40 expressed on antigen
presenting cells (APC) including B cells, monocytes and dendritic cells. The inhibition of T
cell-APC cognate interactions helps prevent xenograft rejection and the production of
anti-xenograft antibodies, reducing antibody-mediated rejection (AMR). BJ047’s resistance to
enzyme degradation further leads to an increased stability against breakdown by enzymes in
the body, ensuring sustained immune suppression and promoting xenograft survival over time.
This contributes to a synergic effect in its target indications. For example, its combination use
with KJ103, which effectively degrades anti-xenograft antibodies, will further contribute to the
reduction of both the source and effect of the pathogenic antibodies in xenotransplantation.
Additionally, with superior convenience and treatment flexibility, BJ047 has the potential to
stand out in the market as an easy-to-use SC administration option.
We are currently developing BJ047 in the preclinical stage. We expect to submit its IND
application to the NMPA in the first half of 2026.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET BJ047
SUCCESSFULLY.
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Potential application in transplantation
In addition to KJ103’s clinical application in allograft, our pipeline in antibody-mediated
conditions reveals potential in xenotransplantation. Xenotransplantation is similar to highly
sensitized human transplantation. In xenotransplantation, the innate and adaptive immune
systems collaborate to generate a complex immune response. As part of the innate immune
system, pre-existing natural IgG antibodies in the recipient’s body interact with the donor
tissue, triggering a rapid and intense rejection response. The adaptive immune system, through
specific antigen recognition, initiates T-cell responses or activates B-cells to secrete IgG
antibodies. The interaction between these immune mechanisms contributes to the diversity and
complexity of xenograft rejection, posing a significant challenge to the survival of transplanted
organs. In pig-to-human organ transplantation, a severe antibody-mediated hyperacute graft
rejection can occur, where antibodies bind to the donor’s vascular endothelial cells, disrupting
vascular permeability, causing microvascular thrombosis and other forms of tissue damage, all
of which may result in graft loss.
Recent global advancements in xenotransplantation signal vast market potential and
opportunities for exploration. For example, in December 2024, NYU Langone Health
announced the discharge of the world’s third gene-edited pig kidney transplant recipient. Our
product portfolio, including KJ103, antibodies resistant to enzyme degradation as well as the
potential IgM-degrading enzymes, for antibody-mediated autoimmune conditions demonstrate
high potential in addressing this emerging market opportunity. Notably, in a recent study, 4
mg/kg of our KJ103 was injected into a rhesus monkey who received a xenogeneic pig kidney
transplant after the removal of its native bilateral kidneys, on the day when this monkey was
in life-threatening condition. Following the treatment of KJ103, IgG antibodies in the
monkey’s circulation were rapidly degraded through enzymatic activity, leading to significant
improvements in laboratory test parameters, as outlined in the table below. This monkey’s
extended survival ultimately surpassed all previous records for xenotransplantation of
gene-edited pig kidneys into macaques in China.
Parameters (Unit)
Day 179
(Pre-treatment)
Day 180
(Post-treatment)
SCr (µmol/L) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,998 2,189
UTP (mg/L) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,660 356
mAlb (mg/L) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,107.4 244.0
uACR (µg/mg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,493.4 984.6
uPCR (µg/mg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,955.38 1,439.22
Note: SCr refers to serum creatinine; UTP refers to urinary total protein; mAlb refers to urinary microalbumin;
uACR refers to urine albumin-creatinine ratio; uPCR refers to urine protein-creatinine ratio.
Source: Company data
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Drugs in Assisted Reproduction
SJ02 (Slonva ® (۹®)) — a long-acting recombinant human FSH-CTP , our Core Product
Overview
SJ02 is a long-acting recombinant human follicle-stimulating hormone carboxyl-terminal
peptide fusion protein (FSH-CTP) designed for controlled ovarian stimulation (COS) in
combination with a gonadotropin-releasing hormone (GnRH) antagonist approved in China.
This treatment regimen effectively stimulates multiple follicular development in female
undergoing superovulation or assisted reproductive technology (ART) procedures.
Built upon the traditional short-acting FSH, SJ02 has been structurally enhanced by
fusing the CTP sequence of human chorionic gonadotropin (hCG) /H9252subunit to the C-terminus
of the FSH /H9252subunit. This modification significantly prolongs the in vivo half-life of FSH by
two to three times without affecting its functionality. The long-acting nature of SJ02 enables
a single injection to replace up to seven days of daily injections required with short-acting
FSH. By extending the dosing interval from daily to weekly, SJ02 can offer greater
convenience, minimize injection-related discomfort, and enhance the overall treatment
experience and quality of life for patients.
We completed a Phase II/III clinical trial of SJ02 (CTR20201374) in subjects undergoing
ART in China in December 2022. We subsequently filed an NDA for the same indication with
the NMPA in December 2023, which was accepted in January 2024. We received the NDA
approval in August 2025. According to Frost & Sullivan, SJ02 is the first approved long-acting
FSH-CTP products in China. In Europe, we plan to submit the IND application for SJ02 to the
EMA in the first half of 2026.
Mechanism of Action
FSH is a glycoprotein hormone secreted by pituitary glands that is essential for human
reproduction. It functions as a stimulator of the ovarian follicles maturation in women and
spermatogenesis in men, and is thus widely used in infertility treatment, such as controlled
ovarian stimulation in ART.
Similar to other glycoprotein hormones, FSH consists of two polypeptide subunits,
namely (i) an alpha ( /H9251) unit, which is identical to those of other glycoprotein hormones, and
(ii) a beta ( /H9252) subunit, which determines its biological specificity and facilitates receptor
binding. The glycosylation of the beta subunit plays a critical role in regulating the half-life of
FSH and other glycoprotein hormones. Using recombinant DNA technology, additional
glycosylation can be introduced by fusing the FSH- /H9252subunit with the CTP sequence of the
hCG- /H9252subunit, which is heavily O-glycosylated and thus responsible for hCG’s extended
half-life.
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The mechanism of action of SJ02 involves such fusion of the CTP sequence to the FSH- /H9252
subunit. Composed of a native FSH- /H9251subunit and a hybrid FSH- /H9252subunit, SJ02 retains the
pharmacologic activity of FSH and its ability of receptor binding while offering slower
absorption and a longer elimination half-life, contributing to sustained activity. Since FSH
release is primarily triggered by GnRH, SJ02 can be used in combination with GnRH
antagonists for controlled ovarian stimulation, promoting the development of multiple follicles
and inducing ovulation with a sustained multimolecular stimulation. The following diagram
illustrates such mechanism of action of SJ02:
Market Opportunities and Competition
Currently, there are two main categories of recombinant human FSH available on the
market, namely short-acting FSH and long-acting FSH-CTP . Long-acting FSH-CTP
formulation exhibit substantial advantages over short-acting FSH including extended half-life
that enables reduced injection frequency and improved patient compliance. Long-acting
FSH-CTP is particularly valuable in regions with restrained healthcare resources and for
patients with limited self-injection experience or those requiring long-distance travel for
treatment. Moreover, while short-acting FSH use both liquid and powder formulations,
long-acting FSH-CTP is exclusively provided as a liquid injection due to the requirement for
sustained efficacy over extended periods. This liquid formulation eliminates reconstitution
needs, offering greater convenience and avoiding potential dosage errors or incomplete
dissolution issues, while ensuring enhanced bioavailability and stability.
In China, the FSH market was RMB3.2 billion in 2024, and is projected to reach RMB7.3
billion by 2029 and further expected to RMB10.2 billion in 2033. The clinical demand for
long-acting FSH drugs in assisted reproduction has persisted for years, yet no such products are
currently approved for use in China.
As of the Latest Practicable Date, Elonva
®, received approval in EU market, is the first
and only marketed long-acting FSH-CTP globally and has yet to be made available in China.
The likelihood of Elonva
® entering the Chinese market in the near future is considered low due
to its delayed entry into an already competitive landscape, where domestic pharmaceutical
companies are actively developing FSH-CTP products, as well as the significant time and cost
required to establish local production lines. Notably, SJ02 has submitted the NDA application
to the NMPA and received the approval, further diminishing the competitive advantage of
Elonva
® in China. Meanwhile, SJ02, benefited from cost efficiency, streamlined
manufacturing, or improved accessibility could provide a competitive edge in global markets.
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As of the Latest Practicable Date, there are seven marketed short-acting recombinant human
FSH products and four short-acting recombinant human FSH candidates in clinical
development in China. In overseas market, three short-acting recombinant human FSH
candidates have entered the clinical stage, with seven approved products available. Our
Company’s SJ02 is positioned the first approved long-acting FSH-CTP product in China.
The following diagram illustrates the details of marketed FSH-CTP product in overseas
market:
Generic Name Drug Name Company Target Indications Approved Date
Corifollitropin alfa Elonva®
Organon
(NYSE:
OGN)(1)
FSHR Hypogonadotropic hypogonadism, ovulation induction 2010/01/25
Source: EMA, Frost & Sullivan analysis
Notes:
(1) Organon spun off from MSD (NYSE: MRK) in 2021. Organon is now the Marketing Authorization Holder of
Elonva
®
(2) As of November 22, 2025
As of the Latest Practicable Date, two long acting FSH-CTP products were available in
China, including our Core Product, SJ02. The table below sets forth details of marketed long
acting FSH-CTP in China.
FormulationIndicationsStrengthFirst approval dateCompany Generic nameDrug name
Liquid form
 Used in combination with gonadotropin-releasing hormone
antagonists for controlled ovarian stimulation to promote
the development of multiple follicles
100μg (0.5ml)
150μg (0.5ml)2025/08/19Our CompanyCorifollitropin alfa
N01 injection
SJ02 (Slonva®
(᳅䈪۹®))
Liquid form
 Used in combination with gonadotropin-releasing hormone
antagonists for controlled ovarian stimulation to promote
the development of multiple follicles
100μg (0.5ml)2025/09/23GenSci
(000661)
Corifollitropin alfa
N02 injection
+JOTBJKJB
ᒄԳ
®)
Note: As of November 22, 2025
Source: NMP A, Frost & Sullivan analysis
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The table below sets forth details of marketed short-acting recombinant human FSH in
China:
Drug Name Generic Name Company First Approval Date
GONAL-f® Recombinant Human Follitropin Injection Merck
(NYSE: MRK) 5,544
9,402
5,424
5,387
5,424
N/A
2000/04/26
PUREGON® Organon
(NYSE: OGN) 2005/10/28
Jinsaiheng® GenSci 2015/05/27
Follitrope® LG Chem
(XKRX: 051910) 2021/04/07
Anxinbao® Qilu Pharmaceutical 2021/12/14
Rekovelle® Ferring Pharma 2024/05/09
Recombinant Follitropin Beta Injection
Recombinant Human Follitropin for Injection
Recombinant Human Follitropin Prefilled Syringe
Recombinant Human Follitropin for Injection
Human Follitropin delta injection
Treatment
Cost (RMB)
National
Reimbursement
Drug List
Not included
Not included
Not included
Not included
Not included
Not included
N/AZe Pan Xi
(ః®)
Jingze Biopharmaceutical
(Hefei) Co., Ltd 2025/05/09Recombinant Human Follitropin
for Injection Not included
Source: NMP A, Frost & Sullivan analysis
Note: As of August 13, 2025
The following diagram illustrates the details of marketed short-acting FSH product in
overseas market:
Drug name Generic name Company Approval Area Target IndicationsFirst approval
date
Merck 1995/10/20 FSHR
• Ovulation induction
• Polycystic ovary syndrome
• Hypogonadotropic hypogonadism
• Follicle stimulating hormone deficiency
• Luteinizing hormone deficiency
• Oligospermia
FOLLISTIM
® Organon 1996/05/02 FSHR
• Ovulation induction
• Polycystic ovary syndrome
• Male infertility
• Hypogonadotropic hypogonadism
• Infertility
Overleap® Theramex 2013/09/27 EU FSHR
• Ovulation induction
• Hypogonadotropic hypogonadism
• Luteinizing hormone deficiency
• Follicle stimulating hormone deficiency
• Polycystic ovary syndrome
Bemfola® Gedeon Richter 2014/03/26 EU FSHR
• Ovulation induction
• Hypogonadotropic hypogonadism
• Luteinizing hormone deficiency
• Follicle stimulating hormone deficiency
• Polycystic ovary syndrome
Rekovelle® Human Follitropin
delta injection Ferring Pharma 2016/12/12 EU, Japan FSHR • Ovulation induction
CinnaGen 2013/12/31 Iran FSHR • Ovulation induction
FostiRel® 2021/01/01 India FSHR
• Ovulation induction
• Polycystic ovary syndrome
• Hypogonadism
• Male sexual dysfunction
GONAL-f®
Cinnal-f®
Recombinant Human
Follitropin Injection
follitropin beta
Recombinant
Follitropin alfa
Recombinant Human
Follitropin alfa
Recombinant Human
Follitropin alfa
Recombinant Human
Follitropin beta
US, EU
US, EU
Reliance Life
Science
Note: As of November 22, 2025
Source:FDA,EMA,PDMA, Frost & Sullivan analysis
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The following diagram illustrates the details of clinical-stage FSH-CTP candidate
globally:
Drug Name Company Target Indications Stage Area
Clinical
Regulatory
Authorities
Approved Date
Follitropin SL Pharm FSHR For patients undergoing superovulation or
assisted reproductive technology (ART) NDA China NMPA 2025-01-24
Note: As of November 22, 2025; The pipeline includes only Phase I clinical trials and above.
Area = Clinical trial locations per official records. Each area maps to its clinical regulatory authorities
Source: CDE, NMP A, Frost & Sullivan Analysis
The following diagram illustrates the details of clinical-stage short-acting recombinant
human FSH candidates overseas:
Drug
name
Drug
category Original drug Generic
name Company Indication Stage Area
Clinical
Regulatory
Authorities
First
approval date
1 DA-3801 Biosimilars rhFSH rhFSH
injection Dong-A ST • Ovulation induction III Korea MFDS 2013/03/29
2 Primapur Biosimilars Follitropin alfa rhFSH
injection IVFarma • Ovulation induction III Russia
Ministry of Health
of the Russian
Federation
2017/03/22
3 FSH-GEX New drug Follitropin
Epsilon
rhFSH
injection
Biosilu Healthcare
Glycotope GmbH • Infertility II EU EMA 2012/11/28
Note: As of November 22, 2025; All these products have not made any progress in 3-5 years .
Area = Clinical trial locations per official records. Each area maps to its clinical regulatory authorities
Source: Clinical trials, Frost & Sullivan analysis
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The following diagram illustrates the details of clinical-stage short-acting recombinant
human FSH candidates in China:
First approval
dateStageIndicationCompanyGeneric nameOriginal drugDrug
categoryDrug name
2025/01/25NDA
 Women who do not ovulate and do not respond to clomiphene
treatment;
 For patients undergoing superovulation or Assisted
Reproductive Technology (ART);
 For patients with severe LH and FSH deficiency
LivzonrhFSH injectionFollitropin
alfaBiosimilarsFollitropin
alfa1
2021/12/23NDA For patients undergoing superovulation or Assisted
Reproductive Technology (ART);AlphamabrhFSH injectionFollitropin
alfaBiosimilarsLM0012
2025/06/27NDA
 Women who do not ovulate and do not respond to clomiphene
treatment;
 For patients undergoing superovulation or Assisted
Reproductive Technology (ART);
 For patients with severe LH and FSH deficiency
JingzerhFSH injectionFollitropin
alfaBiosimilarsJZB333
2025/02/05I
 Women who do not ovulate and do not respond to clomiphene
treatment;
 For patients undergoing superovulation or Assisted
Reproductive Technology (ART);
 For patients with severe LH and FSH deficiency
QilurhFSH injectionFollitropin
alfaBiosimilarsQL-1012D4
rhFSH
Note: As of November 22, 2025. SL Pharm’ s Follitropin alfa was withdrawn by company itself. TWP-201 of
Therawisdom and KN015 of Alphamab were inactive for over 3 years in clinical phase I; According to the
NMP A, 3 FSH-CTP pipelines are classified as Category 3.2 biological products. Since the original innovator
drug has not been approved for marketing in China, they are categorized as new drugs in China.
Competitive Advantages
Long-acting formulation leading to reduced injection frequency
Short-acting FSH products, though commonly used in fertility treatments, can be
burdensome for patients due to their daily injection schedule, leading to poor adherence,
discomfort, and an increased risk of missed doses, which ultimately results in suboptimal
therapeutic outcomes. Our SJ02, with its long-acting nature, is specifically designed to address
these limitations, by notably reducing injection frequency and providing a more convenient
treatment option in assisted reproduction.
Unlike traditional short-acting FSH, which requires daily injections for 10 to 14
consecutive days, SJ02 offers an alternative of a single subcutaneous injection that enables
sustained stimulation of multiple follicular development for up to one week. This superior
clinical performance of SJ02 is attributable to its innovative FSH-CTP structure that leads to
a two- to three-fold prolonged half-life compared to traditional short-acting FSH. Additionally,
SJ02 will be supplied in a pre-filled syringe, preloaded with the required dosage for ease of
administration. The optimized administration frequency decreases ancillary healthcare costs,
especially for site-off medical treatment patients, through reduced clinical monitoring
requirements and consumable utilization while streamlining care coordination workflows,
positioning SJ02 as a paradigm-shifting therapeutic alternative compared to short-acting FSH
by offering dual clinical utility and operational efficiency benefits to the healthcare system in
China.
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Favorable efficacy and safety profiles
In its Phase II/III trial (CTR20201374), SJ02 has demonstrated non-inferior clinical
efficacy compared to Gonal-f ®, a well-established product in the field of ART. As Elonva ® (a
FSH-CTP counterpart approved in the European markets) has not yet entered the China’s
market, our Phase III trial portion utilized the short-acting recombinant FSH product Gonal-f
®
as the control group medication. SJ02 has been proven to effectively induce multiple follicle
development during controlled ovarian hyperstimulation, delivering therapeutic outcomes
equivalent to existing trusted short-acting FSH treatments. This ensures that patients receive
reliable and effective support for their ART cycles.
In addition to its encouraging efficacy, SJ02 boasts a safety profile comparable to
Gonal-f
®, providing confidence in its use for COS. Primary AEs observed in the Phase II/III
trial of SJ02 (CTR20201374) were Grade 1 or 2 and were manageable. The treatment is
well-tolerated, with no significant differences in AEs observed between the two therapies. The
safety results of SJ02 were also consistent with the relevant description of AEs in the package
insert of Elonva
®. This combination of efficacy and safety positions SJ02 as a strong
alternative to traditional FSH therapies, meeting clinical needs while ensuring patient
well-being.
Summary of Clinical Trial Results
Completed Phase II/III clinical trial of SJ02 in subjects undergoing ART in China
(CTR20201374)
This trial is to evaluate the efficacy and safety of SJ02 in subjects undergoing ART in
China.
Trial design . The Phase II/III evaluated the efficacy and safety of SJ02 in subjects
undergoing ART. The SJ02 treatment was delivered via a single subcutaneous injection. The
primary endpoint of this study is the number of oocytes retrieved on the retrieval day to assess
the efficacy outcomes. Other study endpoints include further analysis of the safety profile.
Trial status . We have completed this study in December 2022, with a total of 374 female
subjects enrolled. The relevant clinical trial report was then finalized in September, 2023 and
subsequently submitted to the CDE in December 2023 for NDA.
Efficacy results . The trial results demonstrated that single-dose SJ02 was non-inferior to
Gonal-f
® on the primary endpoint of the number of oocytes retrieved, indicating that SJ02 had
a non-inferior efficacy compared to Gonal-f ®.
Safety results . The trial results demonstrated that SJ02 has a comparable safety profile to
Gonal-f ®. Primary reported AEs for SJ02 in the trial were Grade 1 or 2 and were manageable,
consistent with the type and frequency observed with Gonal-f ® and comparable between arms
of the trial.
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Conclusion . SJ02 has exhibited non-inferior clinical efficacy compared to Gonal-f ® and
has a comparable safety profile. SJ02 represents a promising alternative to short-acting FSH
products currently available on the market, by significantly streamlining the treatment process,
reducing injection-related discomfort, and enhancing patient compliance.
Clinical Development Plan
To broaden the clinical application and accessibility of this promising drug candidate in
international markets, we are strategically advancing the overseas development of SJ02. We
plan to develop SJ02 as a biosimilar in Europe and other jurisdictions, with plans to conduct
multicenter clinical trials and preparation for registration filings for SJ02. In particular, we
expect to submit the IND application for SJ02 to the EMA in the first half of 2026 in Europe.
License, Rights and Obligations
In anticipation of the commercial launch of SJ02 in China market following the NDA
approval in 2025, we entered into an exclusive sales agency agreement with ANKE BIO, in
July 2025, pursuant to which ANKE BIO acts as an exclusive CSO responsible for the
commercialization of SJ02 in Greater China. We had previously entered into a license and
commercialization agreement with Organon in September 2024, which, along with the
ancillary manufacturing and supply agreement for SJ02, were terminated on the date of July 28,
2025 pursuant to a termination notice provided by Organon on April 11, 2025. Prior to the
termination of the Organon Agreement, we granted Organon a license to develop, manufacture,
and commercialize SJ02 in China for fertility treatment, specifically to stimulate the
development of ovarian follicles in humans. Following this termination, we regained full,
global rights to develop, manufacture and commercialize SJ02. We are not obliged to return
any payments received (including the first tranche of upfront payments received in 2024) or
make any payments to Organon in respect of the termination of this agreement. Organon is not
obliged to pay any termination fee or required to pay any future upfront, milestone or royalty
payments to us under the agreement. No disputes or claims arose between Organon and us
related to this termination. For further details, please see “Business – Collaboration Agreement
– License and Commercialization Agreement with Organon.”
Material Communications with Competent Authorities
Pursuant to an IND approval for SJ02 from the NMPA in February 2018, we initiated the
Phase I clinical trial (CTR20181339) of SJ02 in healthy female, which was completed in March
2020. We then initiated the Phase II/III trial (CTR20201374) in female subjects undergoing
assisted reproductive technology (ART) and completed the Phase II portion in April 2021. The
IND approval for SJ02 is an umbrella approval and therefore we are not required to seek
additional approval from the CDE before commencing next phases of clinical trial. Based on
the industry practice of communicating with CDE prior to Phase III study, we submitted the
Phase I and Phase II clinical results of SJ02 to the CDE in August 2021. The CDE agreed with
our trial design for the Phase III clinical trial in the same month. We initiated the Phase III trial
in October 2021 and have completed this Phase II/III clinical trial of SJ02 (CTR20201374) in
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China in December 2022. Since the initiation upon the approval of ethics committees, we have
not received any objections from the NMPA related to this study. In addition to the clinical
development of SJ02 in China, we plan to further develop SJ02 in international market, with
an initial focus in the European market. Specifically, we intend to conduct pre-IND studies for
SJ02 in Europe in 2025 and complete them by the end of 2025. We plan to submit the IND
application to the EMA in March 2026 and initiate clinical trials as sponsor in Europe in the
fourth quarter of 2026, with the clinical trials expected to complete by the end of 2029.
We have filed an NDA for SJ02 with the NMPA in December 2023, which was accepted
by the NMPA in January 2024 and approved in August 2025.
As of the Latest Practicable Date, we had not received any regulatory agency’s concerns
or objections to our clinical development plans for SJ02.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET SJ02
SUCCESSFULLY.
SJ04 — a recombinant human chorionic gonadotropin
SJ04 is a recombinant human chorionic gonadotropin (hCG) and can be used in assisted
reproductive procedures to accelerate follicle maturation and induce ovulation. Additionally, it
is suitable for treating prepubertal cryptorchidism, male hypogonadotropic hypogonadism,
luteal phase deficiency, and dysfunctional uterine bleeding. It is a kind of glycoprotein
hormone that stimulates gonadal activity. In male, it stimulates seminiferous tubule function
and Leydig cell activity, resulting in increased androgen production, while promoting testicular
descent and supporting spermatogenesis, thereby treating certain diseases such as prepubertal
cryptorchidism or male hypogonadotropic hypogonadism. In female, SJ04 promotes follicular
maturation and triggers ovulation, while facilitating the transformation of ruptured follicles
into functional corpus luteum for enhanced progesterone secretion. Thus, it enhances
endometrial development for improved reproductive outcomes in people with luteal phase
deficiency and helps establish regular menstrual cycles through normalized hormonal patterns
for people with dysfunctional uterine bleeding. The following diagram illustrates such
mechanism of action of SJ04:
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SJ04 is a biosimilar of Ovidrel ®. Ovidrel ®, developed by Merck Serono S.A, is a
recombinant hCG injection known for its excellent efficacy and safety profile. We have
conducted comprehensive pharmaceutical comparison studies for SJ04 and Ovidrel
®, and
completed non-clinical comparative studies have demonstrated that SJ04 possesses
pharmaceutical properties highly similar to Ovidrel
®, with a favorable efficacy and safety
profile. Pharmaceutical and non-clinical data from these studies have already demonstrated
that SJ04 highly similar with that of Ovidrel
®, suggesting promising potential for its
development as a recombinant chorionic gonadotropin. In addition, leveraging our advanced
manufacturing platform and large-scale production capabilities, we are well-positioned to
achieve mass production of SJ04 in the future. By combining a comprehensive product
portfolio with our strong brand advantages, we are committed to driving significant growth in
SJ04’s market presence and achieving scalable expansion.
We are developing SJ04 in-house and own the global rights to develop and commercialize
SJ04. We obtained the IND approval from the NMPA for SJ04 in May 2024. Subsequently, we
commenced a Phase I clinical trial for SJ04 in August 2024 in China and completed the patient
enrollment in August 2025. We have completed the Phase I clinical trial in September 2025 and
will initiate Phase III trial after the completion of Phase I trial. SJ04 has been developed and
registered as a biosimilar under the classification of “therapeutic biological product 3.3 –
biosimilar” as per relevant regulatory guidelines. According to the Technical Guidelines for the
Development and Evaluation of Biosimilars (Trial) (ۆࡡ
(༊Б)) issued by the CDE and effective since February 2015, biosimilars are required to
conduct a clinical comparison study starting with a Phase I pharmacokinetic comparison trial,
followed by a Phase III safety and efficacy comparison trial. Biosimilars directly adopt the
validated dosing regimen of the reference product, thus requiring no repetitive dose exploration
that was typically conducted by the Phase II trials. In line with these guidelines, SJ04’s clinical
trial approval explicitly allows the Company to proceed directly to a Phase III clinical trial
upon completion of the Phase I study. Furthermore, the successful completion of the Phase III
trial will enable the extrapolation of safety and efficacy data to other indications of the
reference product. We had not received any regulatory agency’s concerns or objections to our
clinical development plans as of the Latest Practicable Date.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET SJ04
SUCCESSFULLY.
Recombinant Biologics Alternative to Biochemical Production
KJ10 1 — a recombinant human chymotrypsin
KJ101 is a leading recombinant human chymotrypsin in China, which is designed for
wound healing for burn injuries, traumatic injuries, surgical incision, pressure sores and
diabetic foot ulcers, among others. It acts by selectively hydrolyzing peptide bonds at the
carboxyl side of aromatic amino acids like tyrosine, phenylalanine, and tryptophan within
denatured proteins and necrotic tissue. This precise proteolytic activity enables KJ101 to
degrade fibrin, collagen fragments, and other proteinaceous debris that accumulate in chronic
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or acute wounds. By clearing necrotic debris, KJ101 facilitates the formation of granulation
tissue and accelerates wound healing. Additionally, KJ101 exhibits anti-inflammatory
properties, which can help reduce inflammation and promote tissue repair, making it useful in
the treatment of various conditions, including inflammatory diseases and certain types of
injuries. The following diagram illustrates the mechanism of action of KJ101:
Chymotrypsin is a proteolytic enzyme capable of rapidly breaking down proteins and
liquifying pus and necrotic tissues. This enzyme has historically been extracted from bovine or
porcine pancreas tissue, which poses challenges such as low yield, inconsistent quality and
potential contamination with pathogens. Built upon our proprietary green recombinant yeast
fermentation technology, KJ101 provides a purer, safer and more scalable alternative with high
expression levels, compared to its biochemically extracted counterparts. Unlike traditional
chymotrypsin extracted from animal materials, KJ101 is developed through synthetic biology,
which ensures a higher level of safety as it eliminates the risk of zoonotic and potential
pathogen contamination associated with animal-derived products. KJ101’s human recombinant
origin also significantly lowers the risk of immunogenic reactions, further enhancing its safety
profile for repeated use. Additionally, recombinant production ensures batch-to-batch
consistency in purity, activity and formulation, minimizing variability often seen in
biochemically extracted products.
In addition, leveraging our proprietary green recombinant yeast fermentation technology,
KJ101 boasts high expression levels, which could translate to lower production costs. This
efficiency in manufacturing makes it more economically viable compared to other
chymotrypsin products requiring extraction from animal tissues. Additionally, as a recombinant
product, KJ101 is not subject to the limitations of animal organ sourcing, which can be variable
and ethically contentious. Backboned by our commercial-scale manufacturing capabilities, we
believe that KJ101 is well-positioned to capitalize on this substantially underserved market
through a reliable and scalable supply.
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According to Frost & Sullivan, the chymotrypsin market in China reached RMB1.8
billion in 2024, and is projected to reach RMB2.7 billion in 2029, RMB3.2 billion in 2033.
KJ101 is a leading recombinant human chymotrypsin developed through synthetic biology
globally. We are developing KJ101 in-house and own the global rights to develop and
commercialize KJ101. We have received the IND for KJ101 in China from the NMPA in
February 2025 and initiated its Phase II clinical trial (CTR20252263) in July 2025. As of the
Latest Practicable Date, we had not received any regulatory agency’s concerns or objections to
our clinical development plans for KJ101.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET KJ101
SUCCESSFULLY.
BJ04 4 — a recombinant ulinastatin
Overview
BJ044 is potentially the only recombinant ulinastatin developed through synthetic biology
in China and globally, as currently no other recombinant ulinastatin products are known to be
commercially available or undergoing clinical trials. Ulinastatin, also known as bikunin, is a
glycoprotein with strong inhibitory activity, first discovered in human urine in 1909. It is
composed of two sequential Kunitz-type protease inhibitor domains, and functions as a serine
protease inhibitor. Ulinastatin can be extensively used in clinical settings, such as the treatment
of acute pancreatitis, chronic recurrent pancreatitis and acute circulatory failure. Derived from
its potent enzyme-inhibiting and anti-inflammatory properties, Ulinastatin has gained
widespread uses in the treatment of a range of critical and life-threatening conditions with
promising clinical outcomes, including sepsis, severe pneumonia, acute respiratory distress
syndrome (ARDS), acute poisoning, severe heatstroke, burns, and severe traumas. Further,
recombinant ulinastatin demonstrates significant advantages in high purity, consistency,
cost-efficiency, and eliminates ethical concerns associated with traditional methods of
biochemical extraction.
BJ044 is a small circulating proteoglycan found in urine as urinary trypsin inhibitor, and
also in amniotic fluid as serine protease inhibitor. BJ044 is engineered to simulate the effects
of urinary ulinastatin, which is secreted when inter- /H9251-trypsin inhibitors are degraded by
neutrophil elastase. It works by inhibiting the proteolytic activity of various serine proteases,
including trypsin, thrombin, kallikrein, neutrophil elastase, plasmin, cathepsin, and
coagulation factors IXa, Xa, Xia, and XIIa. These proteases can cause damage to tissues and
organs when overactive or released inappropriately, as seen in inflammatory or pathological
conditions. The multivalent nature of protease inhibition enables ulinastatin to help prevent
such organ injury. In addition, ulinastatin can attenuate the elevation of pro-inflammatory
cytokines and inhibit secretion of pro-inflammatory cytokines IL-6 and IL-8. As a result,
ulinastatin provides protections against tissues, organs and endothelial cell and generates
anti-inflammatory effects. The following diagram illustrates the mechanism of action of BJ044:
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Most currently marketed ulinastatin products are derived from human urine through
extraction and purification processes. The market size of ulinastatin in China was RMB1,165.8
million in 2019 and RMB1,011.9 million in 2024, and is expected to reach RMB1,432.3 million
in 2029 and RMB2,018.5 million in 2033. Currently marketed ulinastatin products derived
from human urine rely on an unstandardized production process involving collecting and
purifying urine, which introduces risks of viral contamination and batch-to-batch quality
inconsistencies. In contrast, recombinant form of ulinastatin, such as BJ044, are designed to
overcome these limitations, offering a more consistent and efficient production method.
Recombinant technology utilized by BJ044 also allows for larger-scale production, minimizing
the risk of contamination and improving safety profile in clinical use. As of the Latest
Practicable Date, there is no recombinant ulinastatin products marketed or under clinical stage
in China and globally, recombinant ulinastatin is poised to replace the market for traditionally
extracted ulinastatin, while potentially reaching even broader applications.
We are developing BJ044 in-house and own the global rights to develop and
commercialize BJ044. We expect to submit an IND application to the NMPA for the Phase I
clinical trial in the first half of 2026. We had not received any regulatory agency’s concerns
or objections to our clinical development plans as of the Latest Practicable Date.
WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET BJ044
SUCCESSFULLY.
OUR PLATFORMS
To date, we operate three technology platforms spanning across drug design, chassis cell
engineering, and comprehensive bioprocessing, which allow us to navigate the intricate
processes of bringing our transformative recombinant protein drugs from bench to bedside.
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Drug Design Platform
Our approach to drug design focuses on creating tailored delivery systems and
formulations that align with the unique properties of the drug and the specific requirements of
the target patient population. Our strategy incorporates a thorough assessment of market
potential, competitive landscape and clinical applications, enabling us to craft innovative
molecular designs that meet both therapeutic and commercial goals.
In drug development, we prioritize immunogenicity, molecular stability, and cost-
effective production. By harnessing AI-powered models, we integrate advanced computational
simulations with experimental validation to achieve precise protein engineering and functional
optimization. Data generated throughout wet-lab experiments is continuously used to refine
and enhance the performance of our models, fostering an iterative and adaptive design process.
This integrated strategy accelerates the drug development cycle while maintaining a
commitment to quality and innovation, ensuring we deliver effective solutions that address
clinical challenges and market needs.
Chassis Cell Engineering Platform
Our chassis cell engineering platform focuses on glycosylation modification and
advanced expression technologies. Drawing on our extensive expertise in enzyme engineering,
glycoengineering, and synthetic biology, we have achieved key breakthroughs in various fields,
such as the regulation of protein translation and post-translational modifications for
recombinant human hyaluronidase, Chinese Hamsters Ovary (CHO) cell glycosylation
engineering, and protein high-expression technologies.
We adopt a multidisciplinary approach across three major biopharmaceutical host systems
— including E. coli, Pichia pastoris , yeast, and CHO cell systems — to design bioparts,
engineer metabolic pathways, and screen drug proteins from modified hosts. This approach
allows us to express proteins in the most suitable host based on the structural and functional
requirements of specific drug molecules, thereby significantly shortening the development
cycle for novel therapeutics.
In particular, we have developed a CHO cell library with engineered glycosyltransferases
and glycosidases to produce humanized glycoproteins with enhanced structural uniformity.
This notably reduces immunogenicity, extends half-life, and improves therapeutic efficacy.
Additionally, our Pichia pastoris cell library features expression chaperones and optimized
hosts ready for immediate use in new project process research, which streamlines our drug
production and accelerates project timelines.
Comprehensive Bioprocessing Platform
Our comprehensive bioprocessing platform integrates mammalian cell, yeast, and E. coli
expression systems to support large-scale, efficient, and sustainable production of our
recombinant protein drugs. We optimize production processes and equipment with a focus on
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environmental sustainability. By integrating high-yield strains or cells, optimized culture
processes, and advanced purification technologies, we achieve scalable manufacturing
capabilities with a green manufacturing edge.
Mammalian Cell Platform
Our Mammalian cell platform offers a sophisticated technology for the expression and
purification of highly glycosylated recombinant proteins, effectively addressing the complex
challenges associated with glycosylation in protein production. Proteins like recombinant
human hyaluronidase and long-acting recombinant human FSH, which are heavily
glycosylated, require precise control of their glycan structures to ensure stability, low
immunogenicity, and a long half-life in vivo. This platform notably overcomes the technical
barriers of glycoprotein expression, purification, and analysis, enabling the consistent
production of target proteins with specific glycosylation profiles.
Our technological edge lies in the ability to introduce multiple glycosyltransferases into
mammalian engineered cell lines to prepare glycoprotein drugs with high glycosylation
modification. This process requires meticulous control over every step of the process to ensure
stable expression of target proteins with specific glycan structures. The Mammalian cell
platform employs genetic modification techniques, such as gene knock-out and knock-in, to
direct the glycosylation pathways of host cells. This enables the generation of cell lines with
specific glycosylation patterns, reducing the immunogenicity of therapeutic proteins and
meeting various drug design requirements, such as enhancing effector functions of antibodies
or extending half-life. The platform is also versatile, supporting the expression of monoclonal
antibodies, bispecific antibodies, and glycosylated proteins.
Leveraging the engineering capabilities of the Mammalian cell platform, we have
developed KJ017, one of our Core Products. KJ017 significantly outperforms conventional
biochemically extracted counterparts in enzyme activity and protein purity by offering
approximately 90,000 international units (IU) of activity per milligram, compared to
approximately 300 units from hyaluronidase meeting the China Pharmacopeia standard, while
maintaining robust gross margin. This advanced glycosylation control ensures product quality
and safety far exceeds that of conventional biochemical extraction methods.
Y east Fermentation Platform
Our yeast fermentation platform provides a technology known for its green, high-yield,
and scalable production capabilities, specifically designed to produce recombinant proteins
that were previously difficult to express or secrete. This platform overcomes the technical
barriers inherent in yeast-based expression systems, such as the abundance of host proteinases
that degrade target proteins, and the difficulty of expressing soluble proteins in high yields. By
employing advanced metabolic engineering, gene expression regulation, and chaperone protein
systems, we have developed proprietary strains of yeast that enable efficient secretion of
complex proteins, including KJ101, a recombinant human chymotrypsin with leading
development progress in China.
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Our significant technical advantage is marked by the creation of high-yield yeast strains
through multi-copy integration and chaperone protein libraries, which significantly enhance
protein expression and simplify the production process. This allows for large-scale
fermentation (up to 10 tons) and the cost-effective production of high-quality therapeutic
enzymes, antibody fusion proteins, and nanobodies. Additionally, this platform addresses the
challenge of enzyme degradation by designing production lines that express inactive precursor
enzymes, which are then activated during purification under strictly controlled conditions. This
process ensures stability and maximizes protein yields. Our platform has also achieved
substantial reduction in yeast fermentation cycle — from the industry standard of seven days
to three days — along with improvements in safety and cost-effectiveness, which enable us to
accelerate the scale-up of production.
Escherichia coli (E. coli) Platform
Our E. coli platform is a high-throughput, efficient system designed for the production of
soluble, stable recombinant proteins with simplified downstream processing. One of the main
challenges of using E. coli for protein expression is achieving soluble protein yields and
effective secretion, as many proteins tend to form insoluble aggregates in prokaryotic
expression systems. We notably overcome this by engineering E. coli strains to express
proteins intracellularly in soluble form, significantly enhancing production yields and avoiding
the need for refolding processes typically required for inclusion body proteins. Additionally,
through optimized fermentation conditions, including adjustments to fermentation cycles and
parameters, the platform ensures high protein expression efficiency and product solubility.
A key feature of our E. coli platform is its use of high-throughput screening to identify
mutants with enhanced activity and stability, based on structural and functional analyses. This
allows the generation of recombinant proteins with improved characteristics, such as higher
activity and lower immunogenicity. Additionally, the platform employs stable expression
plasmids that can replicate without antibiotics, ensuring a reliable production process. The use
of non-IPTG induction with a safe, non-toxic inducer also boosts expression levels while
meeting regulatory standards.
This combination of high-throughput screening, intracellular soluble expression, stable
plasmids, and non-IPTG induction results in a highly efficient, scalable production process that
delivers recombinant proteins with minimal processing requirements. A standout product from
this platform is KJ103, which demonstrates the platform’s ability to produce complex enzymes
at high yields with exceptional stability and functionality.
The comprehensive bioprocessing platform tackles key technical challenges including,
without limitation: (i) enhancing recombinant enzyme expression and addressing protein
degradation in fermentation through synthetic biology and genetic engineering, thereby
providing an upstream solution for efficient recombinant enzyme production; (ii) employing
diverse fermentation strategies to overcome issues such as toxic byproduct accumulation,
protein misfolding, and low activity during rapid cell growth, enabling stable, high-efficiency
expression of target proteins using high-density synthetic biology techniques; (iii) combining
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different chromatographic separation techniques and utilizing customized resins to develop
scalable, cost-effective processes for high-purity recombinant protein preparation; and (iv)
improving volumetric productivity and developing resource-efficient, low-energy green
manufacturing solutions to meet the demands of commercial-scale recombinant protein
production.
RESEARCH AND DEVELOPMENT
Research and development is a fundamental pillar of our business and will continue to be
critical to our future growth and our ability to remain competitive in the global markets of
different fields. In 2023, 2024 and the six months ended June 30, 2025, our research and
development expenses were RMB132.5 million, RMB250.7 million and RMB111.0 million,
respectively.
Our in-house R&D capabilities revolve around three core technology platforms: drug
design platform, chassis cell engineering platform, and comprehensive bioprocessing platform,
which in turn serve as the foundation for our continued drug innovation and underpin our
capabilities in transformative recombinant protein drugs. These platforms are complemented
by AI-driven protein drug design capabilities, which we have been implementing for over two
years with demonstrable success in protein mutation and restructuring. For details regarding
our technology platforms, please see “— Our Platforms.”
By integrating scientific evaluation, independent literature analysis, and market
intelligence, we carefully assess potential projects based on their scientific rationale, clinical
feasibility, commercial viability, and strategic fit with our existing product pipeline. This
disciplined approach ensures that we focus on projects with the highest potential to address
areas with limited treatment options while maintaining a balanced and diversified portfolio that
mitigates risks associated with clinical and regulatory development. By continuously refining
our selection criteria to incorporate emerging trends in science and medicine, we have built a
diversified portfolio of candidates targeting a broad range of therapeutic areas, enabling us to
deliver transformative treatments while maintaining operational efficiency, cost-effectiveness,
and effective risk management.
Our R&D Capabilities
Our R&D Team
As of September 30, 2025, our broader in-house R&D team consisted of 251 members,
which comprised of 65 members responsible for drug discovery, preclinical development and
related regulatory affairs; 17 members for medical and clinical development, 86 members for
CMC and manufacturing, 83 members for quality control, quality assurance, validation and
pharmacovigilance, accounting for approximately 72.1% of our total employees with expertise
spanning medical science, pharmacology, biology and chemistry. Within this team, different
functional groups contribute to various stages of the R&D lifecycle, from early discovery to
regulatory submission. Specifically, our clinical team of 17 members serves as the R&D
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function for three Core Products, each led by a designated R&D head with deep technical
expertise and supported by a dedicated execution team responsible for end-to-end clinical
development. In particular, Mr. Zhu Zhen, our Clinical Director with extensive experience in
multinational trial management and a track record of successful NDA/BLA submissions, acts
as the R&D lead for KJ103 and SJ02, overseeing end-to-end clinical strategy, cross-functional
coordination, and compliance with all applicable regulatory requirements. Mr. Zeng Min, our
Project Manager with rich experience in clinical trial management and a track record of
advancing multiple drug assets to market, acts as the R&D lead for KJ017 and is primarily
responsible for coordination with CRO and other third-party suppliers, as well as managing the
trial budget throughout the study cycle. We place a strong emphasis on academic qualifications,
industry experience and complementary expertise when building our R&D team. We have
established a comprehensive and systematic framework for R&D project management that
spans the entire development lifecycle from early-stage research and project initiation to proof
of concept, process development, preclinical studies, and clinical trials. This framework is
designed to optimize resource allocation, accelerate timelines, and enhance the probability of
success across our pipeline of innovative drug candidates. Many of them have years of
experience in driving drug discovery and development programs at leading MNCs and
domestic biopharmaceutical companies.
Notably, our R&D leadership are industry veterans with extensive experience in
leveraging synthetic biology technology and advancing recombinant biologic drugs. Mr. Liu
Y anjun, our Co-founder, Chairman of the Board, and Executive Director, who possesses over
30 years of experience spanning the pharmaceutical industry, academic research and clinical
practice, is primarily responsible for the overall R&D strategy of the Company, with strategic
oversight primarily encompassing research project initiation, proof-of-concept validation, and
critical guidance on clinical development pathways. The comprehensive implementation of
R&D initiatives are under the supervision by Ms. Wang Zheng, our Co-founder, executive
Director and Chief Executive Officer, who possesses over 20 years of experience in
gene-engineering drug development, with deep expertise in recombinant protein drug R&D.
During the Track Record Period and up to the Latest Practicable Date, substantially all key
R&D personnel involved in the research and development of our Core Products, KJ017, KJ103
and SJ02, remained employed by us.
Clinical Trials
Our clinical development capabilities encompass comprehensive trial management and
execution. As of September 30, 2025, our clinical team consisted of 17 members, including
research scientists, physicians and other seasoned professionals with expertise across various
areas, including clinical pharmacology, clinical operation, clinical statistics,
pharmacovigilance, data management and regulatory affairs. Our clinical development efforts
are currently guided by Dr. Liu, who brings extensive expertise in clinical development and
collaborating closely with CRO during the early clinical stages, providing in-depth guidance.
Our clinical operation personnels have played a key role in overseeing clinical-related
activities since its inception, including non-clinical animal studies and clinical research,
ensuring the efficient execution of our development programs.
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Our clinical trial management follows a systematic approach governed by standardized
procedures. Before initiating any clinical trial, we develop a detailed project management plan
that covers key aspects including project overview, research team organization, timelines,
budgets, communication protocols, site initiation strategies, enrolment plans, contract
management, personnel changes, clinical monitoring, document management, quality control,
quality assurance and auditing, progress tracking, vendor management, data management and
risk management. The project management plan remains a dynamic document that is regularly
updated throughout the project lifecycle. For site initialization, we follow a three-step process:
preliminary communication, preparation of application materials, including application forms,
regulatory approvals, qualification certificates, quality certifications, and final submission.
We maintain rigorous documentation standards through sponsor files and investigator
files. Investigator files must be retained for at least five years after trial completion, while
sponsor files are kept for five years after drug approval. Our clinical monitoring plans,
established before site selection, outline key elements such as monitoring scope, subject rights
protection, data integrity assurance, risk management, monitoring methods and strategies,
critical data verification, trial documentation, and training requirements. We conduct both
on-site and remote monitoring to ensure subject protection and data reliability, maintaining
complete documentation including visit confirmation letters, follow-up correspondence, and
monitoring reports. All clinical data and practices are designed to meet GCP standards, serving
as important evidence for regulatory approvals while continuously optimizing our products to
better serve physicians and patients.
Collaboration with CROs
In alignment with industry standards, we engage CROs to conduct and support our
preclinical studies and clinical trials under our close supervision and overall management. We
engaged four, three and two CROs in 2023, 2024 and the six months ended June 30, 2025,
respectively. During the Track Record Period, we observed an overall downward trend in our
CRO expenses. This was primarily attributable to: (i) the expansion of our in-house clinical
team, which grew from 7 members at the beginning of 2023 to 19 members as of June 30, 2025,
allowing us to gradually assume more clinical R&D responsibilities internally and reduce our
reliance on external CROs; and (ii) the clinical advancement of our Core Products, KJ017 and
SJ02, both of which have completed clinical Phase III trials in China and are approaching the
commercialization stage. Our CRO expenses decreased from RMB21.2 million in 2023 to
RMB12.7 million in 2024, primarily because (i) KJ103 required two CROs for its Phase I
clinical trials in China and New Zealand in 2023, compared to only one CRO for its Phase II
clinical trial for kidney transplantation desensitization in China in 2024, and (ii) other pipeline
candidates advanced to subsequent development stages that required fewer CRO services. Our
CROs expenses for the six months ended June 30, 2025 amounted to RMB2.4 million,
representing a decrease in RMB3.2 million compared to RMB5.6 million for the six months
ended June 30, 2024, primarily due to the progression of certain product candidates from the
preclinical stage in the first half of 2024 to the clinical stage in the first half of 2025, which
resulted in a significant reduction of RMB4.1 million in preclinical CRO expenditures and was
partially offset by an increase of RMB0.9 million in clinical CRO expenses attributable to the
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Phase II clinical trial for KJ103 in anti-GBM disease during the first half of 2025. Following
the receipt of multiple IND approvals in the first half of 2025, we have entered into several new
CRO agreements to support the corresponding clinical trials. As these trials progress, we
anticipate incurring more CRO-related expenses in the second half of 2025.
The following table sets forth details of the CROs we have engaged during the Track
Record Period:
CRO CRO background Role of the CRO
Length of
business
relationship Status
For the six months ended June 30, 2025
CRO C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 2005 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in clinical trials,
including clinical operations,
project management,
medical writing and medical
monitoring, as well as
regulatory affairs.
Since 2016 In collaboration
CRO A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 1998 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in trial sample
testing and analysis,
preclinical safety evaluation,
PK/PD exploratory studies,
reproductive toxicity and
tissue distribution studies.
Since 2014 In collaboration
For the year ended December 31, 2024
CRO A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 1998 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in trial sample
testing and analysis,
preclinical safety evaluation,
reproductive toxicity and
tissue distribution studies,
PK/PD exploratory studies,
toxicity exploratory studies,
pharmacokinetics
pre-studies, and local
irritation tests.
Since 2014 In collaboration
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CRO CRO background Role of the CRO
Length of
business
relationship Status
CRO B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 2014 and
headquartered in Suzhou,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in clinical trials,
including clinical operations,
project management,
medical writing, biostatistics
and data management, and
pharmacovigilance services.
Since 2021 In collaboration
CRO C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 2005 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in clinical trials,
including clinical operations,
project management,
medical writing and medical
monitoring, as well as
regulatory affairs.
Since 2016 In collaboration
For the year ended December 31, 2023
CRO A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 1998 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in trial sample
testing and analysis,
reproductive toxicity
prestudies, preclinical safety
evaluation, toxicity
exploratory studies,
and pharmacokinetics
pre-studies.
Since 2014 In collaboration
CRO B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 2014 and
headquartered in Suzhou,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in clinical trials,
including clinical operations,
project management,
medical writing, biostatistics
and data management, and
pharmacovigilance services.
Since 2021 In collaboration
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CRO CRO background Role of the CRO
Length of
business
relationship Status
CRO D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A specialist Australian and
U.S. CRO, incorporated in
the Australian in 2019,
delivers quality clinical
trials in Australia, New
Zealand and North America
for international
biotechnology companies
Assisted in conducting clinical
trials, including patient
enrollment, information
collection and filing, and
quality monitoring of Phase
I trial of KJ103 in New
Zealand.
From 2022 to
2023
Upon completion
of the KJ103
New Zealand
Phase I
Clinical Trial,
the
collaboration
has terminated
CRO C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CRO, incorporated
in the PRC in 2005 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Assisting in clinical trials,
including clinical operations,
project management,
medical writing and medical
monitoring, as well as
regulatory affairs.
Since 2016 In collaboration
We select CROs based on a variety of factors, including their qualifications, expertise,
experience, reputation, and cost-effectiveness. Our partnerships with CROs are project-
specific, ensuring tailored support for each initiative. The preclinical CROs typically provide
services related to preclinical toxicity and safety evaluations, such as animal studies, as well
as in vivo pharmacology and PK studies under our study design. The clinical CROs assist us
with various aspects of our clinical trials, including trial preparation, clinical monitoring,
medical monitoring, and project management. Leveraging the professional expertise of CROs,
we are able to optimize site selection, facilitate timely patient recruitment and ensure the
efficient conduct of complex clinical trials. We maintain rigorous oversight of CROs to ensure
that their performance adheres to our protocols and applicable laws, safeguarding data integrity
and the overall quality of our research, while our experienced clinical development team works
closely with CROs during the early clinical stages, providing in-depth guidance to draft and
finalize medical protocols.
Key terms of our agreements that we typically enter into with our CROs are set forth
below:
 Services. The CROs provide the high-quality services to us, including the
implementation and management of a preclinical or clinical research project as
specified in the agreement.
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 Term. The CROs are required to perform their services and complete the clinical
research project within the prescribed time limit set out in each work order, usually
on a project basis.
 Payments. We are required to make payments to the CROs in accordance with the
payment schedule agreed by the parties.
 Intellectual property rights. We own all intellectual property rights arising from the
clinical research projects conducted by the CROs within the stipulated work scope.
 Confidentiality. Our CROs are not allowed to disclose confidential information,
including but not limited to, any technical materials, research reports or trial data
related to the project specified in the agreement, and such obligation generally
survives for five years.
 Risk allocation. Each party should indemnify the other party for losses caused by
its fault or gross negligence. In the event that both parties have fulfilled their
respective obligations, any losses arising from causes not attributable to the CRO
shall be borne by us.
MANUFACTURING
We conduct manufacturing of our drug candidates in compliance with the current
effective GMP requirements. During the Track Record Period and up to the Latest Practicable
Date, most of our manufacturing activities for the production of our drug candidates were
carried out in our in-house facilities. We regularly provide training to our manufacturing
personnel to ensure they possess the skill sets and techniques required in the relevant
production process, and comply with our quality control requirements, as well as applicable
laws and regulations.
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Manufacturing Process
Our commercial-scale manufacturing capacity is demonstrated by the unique production
processes and techniques used for our selected drug candidates. The manufacturing process
chart that highlight the key steps in producing SJ02 and our drug candidates KJ017, KJ103,
SJ04, KJ101 and KJ015 is as follows:
Cell culture or fermentation Purification Formulation
Reactor or fermentation tank:
cell expansion
Cell culture or fermentation
Clarification of
harvested solution
Virus inactivation (CHO)
Multi-step chromatography
and ultrafiltration
Virus filtration (CHO)
Ultrafiltration concentration
and buffer exchange
Chromatography
Filtration and aliquoting
Cell recovery Preparation of
intermediate product
Sterilizing filtration
Filling
Freeze-drying
(freeze-dried product)
Capping (vial)
Visual inspection
Packaging
Storage
Shake flask: cell expansion
Manufacturing Facilities
We have established our own GMP-compliant manufacturing facilities in Shanghai, with
a total site area of approximately 63,000 sq.m., which meet the commercial production
demands for SJ02 and the clinical production demands of our drug candidates including KJ017,
KJ103, SJ04, BJ007, KJ015 and KJ101. We are one of the few domestic companies that possess
commercial-scale production lines for mammalian engineered cells (CHO), yeast cells, and E.
coli fermentation. Our existing manufacturing facilities houses multiple production lines,
including (i) one CHO production lines (exclusively for SJ02 and SJ04) featuring two 200L
reactors; two CHO production lines (for KJ015, KJ017 and BJ007), featuring three 200L
reactors, one 1,000L reactor and one 2,000L reactor, with two additional 2,000L reactors
reserved, (ii) a drug substance production line (exclusively for KJ103 and KJ101) for Pichia
pastoris solution and E. coli with equipped with one 1,000L reactor and one 100L reactor, (iii)
an aseptic filling and freeze-drying production line (including KJ017, KJ103, KJ101, KJ015),
and (iv) a pre-filled syringe production line (including SJ02 and SJ04). In our manufacturing
process, we produce the raw solution, the final, ready-to-use bulk drug substance obtained from
a single batch at the reactor. At this stage, the raw solution has fully met all required quality
standards and specifications for drug substance, and is considered the finished product in terms
of substance and quality. The only distinction from the final drug product is that the raw
solution has not yet been dispensed into its final packaging, such as vials or prefilled syringes.
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Following completion of the drug substance stage, the raw solution is transferred to the our
drug product manufacturing lines, where it is formulated, filled, and packaged into finished
dosage forms suitable for clinical or commercial use. This final packaging step does not alter
the nature or quality of the product; rather, it prepares the drug substance for distribution and
administration. As of the Latest Practicable Date, we maintained a reactor volume of up to
5,100L and an annual production capacity of approximately 2 million formulations. We have
also established capabilities from upstream design, cell cultivation, separation and purification,
quality research to drug industrialization, supported by a comprehensive manufacturing
platform equipped with aseptic freeze-drying and pre-filled formulation capabilities. During
the Track Record Period, our overall utilization rate of existing manufacturing facilities was
17.3%, 22.4% and 25.3% in 2023, 2024 and the six months ended June 30, 2025, respectively,
for the nine months ended September 30, 2025, our utilization rate was 22.0%. These
utilization rates include the production of the drug substance raw solution that has met all
required quality standards and specifications. The relatively low utilisation during the Track
Record Period reflects that our commercially capable lines were primarily prepared for future
commercialisation rather than solely for research and development purposes.
Our facilities feature an advanced quality analysis technology platform specialized
protein content and purity testing, in vitro and in vivo biological activity analysis, protein
identification, impurity analysis, glycotype analysis, heterogeneity analysis, and other quality
analyses. We have developed product-specific testing methods for various protein varieties
with reasonable validation, guiding early-stage seed screening and production process
research, implementing pilot production process control, establishing product quality
standards, and conducting product stability studies. Our facility is fully equipped with all
necessary software and hardware testing conditions. In December 2022, our Company received
Drug Production License from Shanghai Medical Products Administration (Type A) for the
production of KJ017. In May 2023, our Company received Drug Production License (Type C)
from Shanghai Medical Products Administration for the production of SJ02 at our established
facilities in Shanghai. In January 2024, Suzhou Centergene, our wholly-owned subsidiary,
received Drug Production License (Type B) from Jiangsu Medical Products Administration for
SJ02 production at the same facilities. To comply with regulatory requirements for drug
manufacturing and commissioning in China, our Company holds both Type A and Type C
licenses, while Suzhou Centergene, our wholly-owned subsidiary and the marketing
authorization holder of SJ02, holds the Type B license. Our Company holds the Type A license
for KJ017, as it is the marketing authorization holder and possesses in-house manufacturing
capabilities, thus production does not require outsourcing. For SJ02, Suzhou Centergene, as the
marketing authorization holder but lacking manufacturing capacity, must obtain the Type B
license to commission production to our Company, which accordingly holds the Type C license
to undertake such commissioned manufacturing. This dual-license arrangement is mandated by
PRC regulations and is not affected by the transfer of the drug registration certificate. As
advised by the Company’s PRC Legal Advisor, there are no impediments identified for the
Company to obtain renewals or updates of the relevant licenses, permits, or approvals as of the
Latest Practicable Date. For further details, please see “– Licenses, Permits and Approvals” in
this section.
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Our 200L and 1,000L drug substance production line for CHO
Our 1,000L drug substance production line for Pichia pastoris and E. Coli
Our 2,000L drug substance production line for CHO
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Looking ahead, upon regulatory approval of our drug candidates, we intend to
independently manufacture all of our drug candidates, except that the manufacturing of
anti-biotics related products will be outsourced to CDMO partners. To further upgrade our
pilot- and commercial-scale manufacturing capabilities, we are constructing our second
GMP-compliant facilities in Shanghai, with a site area of approximately 37,000 sq.m.. This
expansion is strategically designed to support the research, pilot production, and commercial
production of our recombinant protein drugs, particularly KJ101 and BJ044. According to Frost
& Sullivan, the annual market demand for chymotrypsin products in China is expected to reach
100 million vials within the next three years, but supply has been constrained to about 30
million vials annually due to shortages of animal-derived raw materials and stricter regulatory
requirements. Currently, the market is dominated by animal-derived chymotrypsin, whose
outdated production methods face quality and supply challenges. We expect our new
manufacturing facilities to house (i) a CHO production line equipped with three 2,000L
reactors, (ii) a drug substance production line for Pichia pastoris solution featuring a 1,000L
reactor and a 10,000L reactor, (iii) a pre-filled syringe production line, and (iv) a production
line for powder injection and water injection products. The facilities are expected to deliver an
additional reactor volume of up to 17,000L and an annual production capacity of approximately
20.5 million formulations. We expect to complete construction and commence operations for
our new manufacturing facilities by June 2026. Upon completion and operation of such new
manufacturing facilities, we anticipate that our total reactor volume will be elevated to
approximately 26,100L and our annual production capacity will reach approximately 22.5
million formulations. Upon commercialization and the completion of our production capacity
expansion, we expect that the all of our commercialized products will be self-manufactured
except for antibiotic products, which require dedicated production lines and separate facilities.
Specifically, we plan to establish a new 10,000 L drug substance production line; once
commissioned, this line will be integrated into our existing infrastructure with 10,000 L tanks
and reserved pipelines, thereby providing strong support for subsequent large-scale
commercialization. This expansion marks a significant step in our manufacturing strategy,
positioning us to meet future commercial demands while maintaining stringent quality controls
and operational efficiency. Approximately 81.6% of the capital expenditure for our new
manufacturing facilities will be funded by our internal resources, with the remainder to be
financed by the net proceeds from the Global Offering. For details of our manufacturing
facilities expansion plan, see “Future Plans and Use of Proceeds — Use of Proceeds.”
As of the Latest Practicable Date and during the Track Record Period, most of our
manufacturing activities were independently carried out by us using in-house facilities. We
engaged two, three and four CDMOs in 2023, 2024 and the six months ended June 30, 2025,
respectively. Our CDMO expenses incurred for the CDMOs increased from RMB2.9 million in
2023 to RMB10.2 million in 2024, which aligned with the advancement of our product pipeline
as more candidates progressed to manufacturing-related R&D activities in 2024. Our CDMOs
expenses for the six months ended June 30, 2025 amounted to RMB7.1 million, representing
an increase in RMB2.5 million compared to RMB4.6 million for the six months ended June 30,
2024, primarily due to our product pipeline as more candidates progressed to manufacturing-
related R&D activities in the first half of 2025, which resulted in an increase of RMB6.4
million and was partially offset by a decrease of RMB3.9 million due to one product candidate
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having completed the scale-up manufacturing process in the first half of 2025. Among which,
we have also collaborated with a third-party industry-recognized CDMO outside the PRC for
the potential preparation of overseas supply in the future. We are responsible for the
development of manufacturing process of our drug candidates, and this CDMO partner is
responsible for the process scale up and GMP production within the timelines set out in our
agreement. We are also entitled to conduct on-site audits to ensure our CDMO partner’s
compliance with the relevant GMP requirements. We own all intellectual property rights that
are particularly generated for and solely applicable to the deliverables arising from the
outsourced manufacturing process.
The following table sets forth details of the CDMOs we have engaged during the Track
Record Period:
CDMO CDMO background Role of the CDMO
Length of
business
relationship Status
For the six months ended June 30, 2025
CDMO D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A global biologics CRDMO
group incorporated in the
PRC in 2015, headquartered
in Shanghai, providing
comprehensive end-to-end
services to assist partners in
discovering, developing, and
manufacturing biologics,
enabling the entire process
from concept to commercial
production.
Technology Transfer, Process
Scale Up and GMP-
compliant clinical batch
manufacturing of drug
products
Since 2016 In collaboration
CDMO B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A global pharmaceutical group
incorporated in the PRC in
2009, headquartered in
Shenyang, focusing on
development, production,
wholesale and retail of
drugs.
Providing antibiotic products
for the development and
research
Since 2023 In collaboration
CDMO A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CDMO company
that provides
biopharmaceutical services
and solutions for drug
development and production
Technology Transfer, Process
Scale Up and GMP
Production of the
recombinant human
hyaluronidase as excipient,
aiming to serve as an
overseas CDMO supplier to
meet the supply demands of
international markets
Since 2016 In collaboration
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CDMO CDMO background Role of the CDMO
Length of
business
relationship Status
CDMO C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CDMO company,
incorporated in PRC in
2018, headquartered in
Suzhou, provides
biopharmaceutical services
and solutions for drug
development and production
Production of the recombinant
human hyaluronidase as
excipient for the
development and research of
antibiotic products
Since 2024 In collaboration
For the year ended December 31, 2024
CDMO A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CDMO company
that provides
biopharmaceutical services
and solutions for drug
development and production
Technology Transfer, Process
Scale Up and GMP
Production of the
recombinant human
hyaluronidase as excipient,
aiming to serve as an
overseas CDMO supplier to
meet the supply demands of
international markets
Since 2016 In collaboration
CDMO B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A global pharmaceutical group
incorporated in the PRC in
2009, headquartered in
Shenyang, focusing on
development, production,
wholesale and retail of
drugs
Providing antibiotic products
for the development and
research
Since 2023 In collaboration
CDMO C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CDMO company,
incorporated in PRC in
2018, headquartered in
Suzhou, provides
biopharmaceutical services
and solutions for drug
development and production
Production of the recombinant
human hyaluronidase as
excipient for the
development and research
of antibiotic products
Since 2024 In collaboration
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CDMO CDMO background Role of the CDMO
Length of
business
relationship Status
For the year ended December 31, 2023
CDMO A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A leading CDMO company
that provides
biopharmaceutical services
and solutions for drug
development and production
Technology Transfer, Process
Scale Up and GMP
Production of the
recombinant human
hyaluronidase as excipient,
aiming to serve as an
overseas CDMO supplier to
meet the supply demands of
international markets.
Since 2016 In collaboration
CDMO B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A global pharmaceutical group
incorporated in the PRC in
2009, headquartered in
Shenyang, focusing on
development, production,
wholesale and retail of
drugs
Providing antibiotic products
for the development and
research
Since 2023 In collaboration
Quality Management
Quality control (“ QC”) and quality assurance (“ QA”) are paramount to our continued
success. We operate a comprehensive quality management system (“ QMS”) that spans all key
stages of our R&D and manufacturing processes. This system is meticulously established and
refined in accordance with rigorous regulations and guidelines in China, the U.S., and Europe.
We closely monitor evolving GMP standards and regulatory developments in these markets,
continuously updating our internal procedures to meet the requirements of international
standards in patient safety and regulatory compliance.
As of the September 30, 2025, we have built an experienced quality management team
consisting of 83 quality control, quality assurance, validation and pharmacovigilance
personnel. Our quality management team ensures the quality systems cover every aspect of our
operations including research and development, production, warehousing, supply chain, sales,
drug traceability, pharmacovigilance, among others.
Quality Control: Our QC team are primarily responsible for sample inspection, stability
studies, sample retention, and commissioned testing. They develop quality standards for raw
materials, intermediates and finished products, maintain instruments, conduct analytical
method validation, and investigate and address deviations, out-of-specification results and
non-conformances in the laboratory environment.
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Quality Assurance: Our QA team are responsible for the quality assurance of our products
through established quality assurance management procedures. These procedures cover areas
such as documentation, deviation management, change control, corrective and preventive
actions (CAPA), risk management, training, supplier management, data integrity, product
release, and annual product inspections, among others. By adhering to these processes, we
ensure that all aspects related to quality assurance are properly controlled, thereby
safeguarding product quality, safety, efficacy and compliance with quality standards.
V alidation: Our validation specialists work closely with other departments to facilitate the
execution of validation activities. They develop validation protocols, monitor and implement
validation processes, and manage the design and execution of process validation and cleaning
validation. They are also responsible for developing and implementing validation activities for
plant facilities, production equipment, instruments, computerized systems, transportation and
other areas. Their core responsibility is to ensure that validation and verification results meet
both regulatory requirements and process specifications. review validation results and
document validation activities as their core responsibilities.
We have established comprehensive quality control and assurance procedures to ensure
compliance with relevant regulatory requirements and our internal quality standards. We select
qualified raw material suppliers and recruit manufacturing and quality management personnel
based on strict criteria. Our facilities and equipment undergo regular inspections to ensure
proper functioning. We closely monitor the manufacturing environment, focusing on key
parameters such as microbial levels, dust particles, temperature, humidity and pressure
difference. Generally, we perform overall inspections annually and engage external experts and
counsel to conduct quality audits. In line with national regulatory standards and customer
requirements, we are committed to continuously enhancing our quality control system to ensure
patient safety and regulatory compliance.
COMMERCIALIZATION
We currently have no drugs approved or at the commercial stage; however, we have been
strategically developing our commercial planning and portfolio management capabilities as our
core pipeline drug candidates advance through clinical trials. Our strategy focuses on
establishing partnerships with leading multinational and domestic pharmaceutical companies,
leveraging their established sales and marketing capabilities and distribution channel to
achieve rapid market entry and increase market penetration. We have established formal
partnerships with multiple pharmaceutical and biotechnology companies for the development
of SC antibody formulations, such as Qyuns and Sumgen. For details, see “— Collaboration
Agreements.” Additionally, in anticipation of the commercial launch of SJ02 in China market
by the end of 2025, we collaborate with industry-recognized CSO with expertise in promoting
assisted reproductive therapies, capitalizing on its extensive sales networks, established
distribution channels and in-market insights to accelerate market entry and expand market
coverage for SJ02.
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In July 2025, we entered into an exclusive sales agency agreement with Anhui Anke
Biotechnology (Group) Co., Ltd. (“ ANKE BIO ”, SZSE: 300009), an Independent Third Party,
pursuant to which we granted ANKE BIO an exclusive right to market, sell, distribute, and
promote SJ02 in Mainland China, Hong Kong, Macau, and Taiwan (“ Greater China ”), and
accordingly, ANKE BIO acts as an exclusive CSO responsible for the commercialization of
SJ02 in the same region.
Our business development team are currently responsible for the early-stage promotion of
our pipeline products and actively seeking global collaboration opportunities. In the long run,
as we identify favorable market opportunities, we plan to assemble a dedicated sales and
marketing force with extensive experience in our focused therapeutic areas. This sales and
marketing team shall be primarily responsible for marketing strategy, product positioning,
market access, market penetration, promotion activities and patient support. We expect this
team will work synergistically with our partners in ensuring the penetration of our products in
major markets. We will also devise differentiated strategies for each drug based on their
characteristics and clinical trial data.
COLLABORATION AGREEMENTS
License and Commercialization Agreement with Organon
We had entered into a license and commercialization agreement (the “ Organon
Agreement ”) with Organon (Shanghai) Pharmaceutical Trading Co., Ltd. (collectively with its
affiliates, “ Organon ”), a wholly-owned subsidiary of Organon & Co. (NYSE: OGN) and an
Independent Third Party, in September 2024, which, along with the ancillary manufacturing
and supply agreement for SJ02, were terminated on the date of July 28, 2025 pursuant to a
termination notice provided by Organon on April 11, 2025. This termination, to the best
knowledge of our Company having made reasonable enquiries with Organon, was driven by
Organon’s internal reassessment of business strategies and not relating to any safety and/or
efficacy concerns over SJ02. No disagreements, disputes or claims arose between Organon and
us related to this termination as of the Latest Practicable Date. In view of the anticipated
commercial launch of SJ02 in China market by the end of 2025 following receipt of such
termination notice, we commenced negotiations with Anhui Anke Biotechnology (Group) Co.,
Ltd. (“ ANKE BIO ”, SZSE: 300009) as a replacement commercial partner for SJ02 and entered
into an exclusive sales agency agreement on July 9, 2025, pursuant to which ANKE BIO acts
as an exclusive CSO responsible for the commercialization of SJ02 in in Mainland China, Hong
Kong, Macau, and Taiwan (“ Greater China ”). This agreement stipulates that ANKE BIO’s
exclusive sales agency term only commences from the date on which SJ02 obtains its drug
registration certificate, which occurred on August 19, 2025, i.e. after the Organon Agreement
had been formally terminated on July 28, 2025. We believe such collaboration will synergize
our manufacturing strengths with ANKE BIO’s commercial infrastructure and field-force
capabilities, thereby fully unlocking SJ02’s commercial potential in the China market.
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Prior to the termination of the Organon Agreement, we granted Organon an exclusive,
royalty-bearing and sublicensable license, under certain patents and know-how controlled by
us, to develop, manufacture and commercialize SJ02 for the fertility treatment to stimulate the
development of eggs in the ovaries in humans (the “ Field ”) in China, including to (i) obtain
the marketing authorization of SJ02 by way of the MA Transfer (as defined below), (ii) develop
SJ02 for the purpose of maintaining the marketing authorization after the MA Transfer, and (iii)
manufacture, have manufactured in China and commercialize SJ02, subject to the terms and
conditions in the Organon Agreement. Notwithstanding the exclusive nature of the license, we
retained the right to manufacture or have manufactured SJ02 in China, solely for or in support
of its development, manufacture and commercialization outside China. Organon and we
entered into a separate manufacturing and supply agreement regarding such manufacture and
purchase of SJ02. For clarity, we reserve the rights to develop, manufacture or commercialize
SJ02 outside the Field or outside China, and neither are we required to inform nor obtain
consent from Organon in respect of any of these activities. In partial consideration and
conditioned upon the achievement of the objectives of the Organon Agreement, we were
eligible to receive an upfront payment of US$12.0 million in two tranches from Organon. As
of the Latest Practicable Date, we received the first tranche of US$6.0 million.
Following this termination, we regained full, global rights to develop, manufacture and
commercialize SJ02. We are not obliged to return any payments received (including the first
tranche of upfront payments received in 2024) or make any payments to Organon in respect of
the termination of this agreement. Organon is not obliged to pay any termination fee or
required to pay any future upfront, milestone or royalty payments to us under the agreement.
No disputes or claims arose between Organon and us related to this termination.
Technology Services and Supply Agreement with Qyuns
In August 2024, we entered into a technology services and supply agreement with Qyuns
Therapeutics Co., Ltd. (ʮ̡, HKEX: 2509) (“ Qyuns ”), for the
joint development of innovative SC formulations of original biologic products selected by
Qyuns owned, being developed, or that will be developed by it in combination with our
recombinant human hyaluronidase. Qyuns, an Independent Third Party to us, is a leading
biotechnology company exclusively focused on biologic therapies for autoimmune and allergic
diseases.
Pursuant to this agreement, Qyuns will be the marketing authorization holder for the SC
formulations developed under this agreement and enjoy exclusive rights to development,
manufacturing and commercialization thereof with bearing all related costs. We agreed to
supply recombinant human hyaluronidase for product development, provide necessary
technical support, and assist in regulatory filings. Our comprehensive technical support
services include, among others, transfer of essential technical documentation and data related
to recombinant human hyaluronidase, assisting in transferring analytical methods to ensure that
the excipient can be integrated into antibody SC formulations, supporting Qyuns in preparing
and submitting regulatory filings, including IND applications and NDAs, to ensure compliance
with regulatory requirements, and timely responding to inquiries or requirements from
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regulatory authorities regarding the excipient during the review process. Our provision of such
technical support services extends throughout the development lifecycle of the specified SC
formulations and at least up to the submission of NDA for these SC formulations. Our technical
services play an indispensable role in advancing the development of, and securing regulatory
approvals for, the specified SC formulations under this agreement. We leverage our expertise
in SC drug delivery to support Qyuns to efficiently integrate recombinant human hyaluronidase
into its products while addressing technical and regulatory complexities faced by it along the
way. Qyuns agreed to pay us an aggregate milestone-based fees of RMB8.0 million in
consideration for our technical support services and the supply of certain quantities of
hyaluronidase products for technology transfer and early clinical trial purposes. We will supply
hyaluronidase products to Qyuns throughout the development, registration and
commercialization stages at prices not exceeding the specified price caps set forth in the
agreement. Parties will separately sign a sales agreement after the commercialization of such
combination drug developed under this agreement. As of the Latest Practicable Date, we have
received the milestone payments of RMB3.0 million for technical support fees. According to
this agreement, Qyuns is prohibited from engaging in hyaluronidase-related research and
development activities during the term of this agreement and for five years following its
termination.
Qyuns will own all intellectual property rights related to the SC formulations developed
under this agreement. We will retain ownership of intellectual property rights for any
technology related to hyaluronidase developed using our own funds and technology. The
parties will jointly own intellectual property rights related to the technology that are developed
under this agreement but not related to the SC formulations. This agreement will remain
effective from the execution date until its termination, which can be terminated upon mutual
written consent of both parties. Either party may terminate this agreement if the other party is
in breach of its obligations under this agreement and fails to cure such a breach in a certain
period, or in the event of certain material breach by the other party. For any disputes arising
under this agreement that cannot be resolved by negotiations or mediations, either party may
initiate legal proceedings in the local court where the plaintiff is domiciled.
Technology Services and Supply Agreement with Sumgen
In March 2022, we entered into a technology services and supply agreement with
Hangzhou Sumgen Biotech Co., Ltd. (ʮ̡)( “ Sumgen ”), for the joint
development of SC formulations of an anti-CD38 mAb in combination with our recombinant
human hyaluronidase. Sumgen, an Independent Third Party to us, is a leading biotechnology
company dedicated to advancing scientific innovation in the field of antibody-based
therapeutics.
Pursuant to this agreement, Sumgen will be the marketing authorization holder and take
the lead in the development, regulatory filings, manufacturing and commercialization of the SC
formulations developed under this agreement. We agreed to supply recombinant human
hyaluronidase for product development, provide necessary technical support, and assist in
regulatory filings. Our comprehensive technical support services include, among others,
provision of essential documentation for biological activity testing methods related to
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recombinant human hyaluronidase, offering technical assistance in the transfer of such testing
methods, and supporting Sumgen in preparing and submitting regulatory filings, including IND
applications and NDAs, based on the available technical data of recombinant human
hyaluronidase. Our provision of such technical support services extends throughout the
development lifecycle of the specified SC formulations and at least up to the submission of
NDA for these SC formulations. Our technical services are critical to the successful
development and regulatory approval of the SC formulations of anti-CD38 mAb by Sumgen.
We leverage our expertise in SC drug delivery to support Sumgen to navigate the complex
development and approval processes, ultimately bringing innovative SC therapies to market.
Sumgen agreed to pay us an aggregate milestone-based fees of RMB10.0 million in
consideration for our technical support services and the supply of certain quantities of
hyaluronidase products for early technology transfer and pilot production purposes. We will
also continuously supply hyaluronidase products to Sumgen for purposes of development and
production at prices set forth in the agreement upon their request. Parties will separately sign
a sales agreement after the commercialization of the combination drug developed under this
agreement. We will not share in any profits from Sumgen’s sales. As of the Latest Practicable
Date, we have received the milestone payments of RMB7.0 million for technical support fees,
and received RMB654.0 thousand for supply of our hyaluronidase products.
Sumgen will own all intellectual property rights related to the SC formulations developed
under this agreement. We will retain ownership of intellectual property rights for any
technology related to hyaluronidase developed using our own funds and technology. The
parties will jointly own intellectual property rights related to the technology that are developed
under this agreement but not related to the SC formulations. This agreement will remain
effective since its execution date, which can be terminated upon mutual written consent of both
parties. In the event of our unilateral termination of this agreement or failure to provide the
required materials and deliverables, we would be obligated to refund to Sumgen all fees paid
under this agreement. Any disputes arising under this agreement shall be resolved through good
faith negotiations. In the event that such negotiation fails, either party may initiate legal
proceedings in the local court where the defendant is domiciled.
INTELLECTUAL PROPERTY
Intellectual property rights are crucial to our business success. We rely on a combination
of patent and other intellectual property rights, as well as confidentiality procedures,
non-disclosure agreements, employee non-disclosure and invention assignment agreements,
and other contractual restrictions to establish and protect our commercially important
technologies, inventions and know-how related to our business.
We have a global portfolio of patents to protect our drug candidates and technologies. As
of the Latest Practicable Date, we had (i) 19 patents in the PRC, one in U.S., and one in Japan;
(ii) 73 pending patent applications, consisting of 36 in the PRC, 30 in other jurisdictions
including the U.S., Europe, Japan, South Korea, Hong Kong and Taiwan, and seven under the
Patent Cooperation Treaty (“ PCT”).
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As of the Latest Practicable Date, with respect to our three Core Products, KJ017, SJ02,
and KJ103, we had nine issued patents in the PRC and one issued patent in the U.S., and also
nine pending patent applications, including five the PRC, and four in other jurisdictions. In
particular:
 KJ017. As of the Latest Practicable Date, we owned two issued patents in the PRC
relating to KJ017, which are expected to expire in 2036 and 2039, separately; we
had three pending patent applications relating to KJ017, consisting of two in the
PRC, one in Europe. The patents that may be issued form the currently pending
patent application are expected to expire within the period from 2040 to 2043,
without taking into account any possible patent term adjustments or extensions and
assuming payment of all appropriate maintenance, renewal, annuity and other
government fees will be timely made.
 KJ103. As of the Latest Practicable Date, we owned four issued patents in the PRC
and one issued patent in the U.S. relating to KJ103, which are expected to expire
within the period from 2035 and 2044, separately; we had four pending patent
applications relating to KJ103, consisting of one in the PRC and three in other
jurisdictions including the U.S. and Europe. The patents that may be issued form the
currently pending patent application are expected to expire within the period from
2041 to 2042, without taking into account any possible patent term adjustments or
extensions and assuming payment of all appropriate maintenance, renewal, annuity
and other government fees will be timely made.
 SJ02. As of the Latest Practicable Date, we owned three issued patents and two
pending patent applications in the PRC relating to SJ02. The issued patents are
expected to expire in 2041. The patents that may be issued form the currently
pending patent application are expected to expire in 2041, without taking into
account any possible patent term adjustments or extensions and assuming payment
of all appropriate maintenance, renewal, annuity and other government fees will be
timely made.
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The following table summarizes the details of the material granted patents and patent
applications related to our Core Products. For more information, please refer to “Appendix VII
— Statutory and General Information — B. Further Information About our Business — 2.
Intellectual Property Rights — Patents.”
Related Product
Title of Patent/
Patent Application Jurisdiction Status
Patent Holder/
Applicant
Expiration
Y ear* Application Number
KJ017 /H1118/H1118/H1118/H1118/H1118/H1118A recombinant human hyaluronidase
lyophilized preparation and method
of preparation and applications
thereof
PRC Granted Suzhou Kangju;
The Company
2036 CN201610081945.X
KJ017 /H1118/H1118/H1118/H1118/H1118/H1118Tumor ECM degradation and/or
inhibitors and kits thereof and
applications thereof
PRC Granted The Company;
Suzhou Kangju
2039 CN201910357656.1
KJ017 /H1118/H1118/H1118/H1118/H1118/H1118A novel hyaluronan degrading
enzyme
PRC Pending The Company N/A** CN202310032602.4
KJ017 /H1118/H1118/H1118/H1118/H1118/H1118A recombinant human hyaluronidase
preparation and applications
thereof
PRC Pending The Company N/A** CN202011612733.2
KJ017 /H1118/H1118/H1118/H1118/H1118/H1118A recombinant human hyaluronidase
preparation and applications
thereof
Europe Pending The Company N/A** EP 20967573.5
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118An IdeS protease, a preparation
method thereof, and applications
thereof
PRC Granted Suzhou Kangju;
The Company
2035 CN201510848018.1
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118A mutant of immunoglobulin
degrading enzyme IdeE
United
States
Pending The Company N/A** US18/001876
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118A mutant of immunoglobulin
degrading enzyme IdeE
PRC Pending The Company N/A** CN202410654527.X
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118A mutant of immunoglobulin
degrading enzyme IdeE
Europe Pending The Company N/A** EP21825273.2
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118A pharmaceutical composition and
applications thereof
United
States
Pending The Company N/A** US18/027755
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118A pharmaceutical composition and
applications thereof
PRC Granted The Company 2041 CN202180013729.0
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118Use of a mutant of the
immunoglobulin degrading enzyme
IdeE
PRC Granted The Company 2042 CN202280078107.0
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118Use of a mutant of the
immunoglobulin degrading enzyme
IdeE
United
States
Granted The Company 2042 US18/749788
KJ103 /H1118/H1118/H1118/H1118/H1118/H1118An immunoglobulin degrading
enzyme
PRC Granted Suzhou Kangju;
The Company
2044 CN202410946714.5
BUSINESS
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--- page 381 ---
Related Product
Title of Patent/
Patent Application Jurisdiction Status
Patent Holder/
Applicant
Expiration
Y ear* Application Number
SJ02 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Antibodies, as well as conjugates and
immunosorbent materials
comprising them, and applications
thereof
PRC Pending Suzhou
Centergene;
The Company
N/A** CN202211103189.8
SJ02 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Antibodies, as well as conjugates and
immunosorbent materials
comprising them, and applications
thereof
PRC Granted Suzhou
Centergene;
The Company
2041 CN202110777660.0
SJ02 /H1118/H1118/H1118/H1118/H1118/H1118/H1118An antibody or antigen-binding
fragment thereof and applications
thereof
PRC Granted Suzhou
Centergene;
The Company
2041 CN202111045734.8
SJ02 /H1118/H1118/H1118/H1118/H1118/H1118/H1118A single domain antibody or antigen-
binding fragment thereof and
applications thereof
PRC Pending Suzhou
Centergene;
The Company
N/A** CN202210848964.6
SJ02 /H1118/H1118/H1118/H1118/H1118/H1118/H1118A mutant of a VHH antibody or
antigen-binding fragment thereof
and applications thereof
PRC Granted Suzhou
Centergene;
The Company
2041 CN202210817818.7
* Patent expiration does not include any applicable patent term extensions
** Patent application
*** We hold fully independent intellectual property rights of our Core Products. We completed the
acquisitions of Suzhou Kangju and Suzhou Centergene in September 2020, thereby making these entities
wholly-owned subsidiaries. As part of the acquisition, the Group acquired the full asset portfolios of
both companies, including all their intellectual property rights. Certain patents are thus co-owned by the
Company and Suzhou Kangju or Suzhou Centergene. As all co-owners of those patent rights are entities
within the Group, such joint ownership does not and is not expect to affect the our overall ownership
over the patents related to its Core Products in any aspect. The Group’s use, exploitation, prosecution
or any other operation of these patents will not be affected by this co-ownership arrangement. Under
PRC laws, as advised by the Company’s IP legal advisor, Jingtian & Gongcheng, the Group owns the
entire intellectual property rights related to those co-owned patents and each co-owner is entitled to
independently use the patent. In addition, as Suzhou Kangju and Suzhou Centergene are both wholly
owned subsidiaries of the Company, any actions requiring unanimous consent among co-owners, such
as patent right transfers or disposals, can be efficiently coordinated within the Group’s corporate
governance framework.
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The actual protection afforded by a patent varies on a claim-by-claim and jurisdiction-
by-jurisdiction basis and depends on many factors, including the type of patent, the scope of
its coverage, the availability of any patent term extensions or adjustments, the availability of
legal remedies in a particular jurisdiction, and the validity and enforceability of the patent. We
cannot provide any assurance that patents will issue with respect to any of our patent
applications or any such patent applications that may be filed in the future, nor can we provide
any assurance that any of our issued patents or any such patents that may be issued in the future
will be commercially useful in protecting our drug candidates and methods of manufacturing
the same. See “Risk Factors — Risks Relating to Our Intellectual Property Rights” for a
description of risks related to our intellectual property.
We conduct our business under the brand name “Bao Pharma” (“ ᘒ᏶ᖹุ”). As of the
Latest Practicable Date, we had (i) 32 registered trademarks in the PRC and seven registered
trademarks in Hong Kong, (ii) eleven registered trademarks in other jurisdiction, (iii) 14
trademark applications in the PRC, (iv) one trademark application in Hong Kong, and (v) four
trademark applications in other jurisdiction. We are also the registered owner of eight domain
name.
We enter into collaboration agreements and other relationships with biopharmaceutical
companies and other industry participants, through which we may grant access to our own
intellectual property, or gain access to the intellectual property of others. Notably, our
collaborations on antibody SC formulations primarily involve providing technical services and
supplying products, with clinical trials led and sponsored by partners, requiring no direct
participation. These collaborations ensure stable revenue from service fees and product supply
while expanding KJ017’s commercial potential achieve sustainable business development with
strong reputation. Additionally, we retains full control over KJ017’s research, development,
and commercialization, including patent rights and future development plans, with no impact
from current or future partnerships. See “— Collaboration Agreements.”
During the Track Record Period and up to the Latest Practicable Date, (i) we were not
involved in any legal, arbitral or administrative proceedings in respect of, and we had not
received notice of any material claims of infringement, misappropriation or other violations of
third-party intellectual property; and (ii) we were not involved in any proceedings in respect
of any intellectual property rights that may be threatened or pending and that may have an
influence on the research and development for any of our drug candidates in which we may be
a claimant or a respondent.
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DATA PRIV ACY AND PROTECTION
We routinely receive, collect, generate, store, process, transmit and maintain medical data
treatment records and other personal details of the subjects enrolled in our clinical trials, along
with other personal or sensitive information. As such, we are subject to the relevant local, state,
national and international data protection and privacy laws, directives regulations and
standards that apply to the collection, use, retention, protection, disclosure, transfer and other
processing of personal data in the various jurisdictions in which we operate and conduct our
clinical trials, as well as contractual obligations.
We have designed strict data protection policies to ensure that the collection, use, storage,
and processing of medical data comply with applicable laws and prevalent industry practices,
including our detailed data management plan for each clinical project. The collection of
personal data is primarily performed by hospitals in our clinical trials and operations. Subjects
enrolled in the clinical trials are anonymized with assigned subject numbers, and any datasets
transferred to us are only associated with the subject numbers, not the actual identities of
patients. As a result, we have no access to patients’ personally identifiable information, such
as their names, identity numbers, phone numbers or home addresses.
Furthermore, we require that all internal employees, as well as hospitals and third-party
contractors such as CROs involved in our clinical trials adhere to strict confidentiality
requirements. We conduct training to ensure compliance with these standards, thus reinforcing
our dedication to maintaining the highest levels of data security and patient confidentiality.
This comprehensive approach not only meets regulatory expectations but also fosters trust
among participants and stakeholders involved in our clinical processes.
We have a number of ongoing or planned clinical studies in China and may in the future,
conduct clinical trials the United States and European Union. While we are currently not
involved in any cross-border transfer of clinical trial data, any such transfer in connection with
our product development efforts and regulatory communications in the future will be subject
to the applicable local data and privacy protection laws, including those in China, the United
States and European Union. During the Track Record Period and up to the Latest Practicable
Date, we had complied with laws and regulations related to data security and privacy with our
products, services and operations in all material aspects, and we had neither incurred any
related administrative penalties nor received any related administrative inquiry notice. For
more details of laws and regulations regarding data privacy and protection, please see the
section headed “Risk Factors — Risks Relating to Extensive Government Regulations — We
face regulation and potential liability related to privacy, data protection and information
security which may require significant resources and may adversely affect our business,
operations and financial performance.”
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COMPETITION
The market for biopharmaceuticals is evolving and highly competitive. While we are
confident that our research and development capabilities allow us to establish a favorable
position in the industry, we face competition from both international and domestic
biopharmaceutical companies, as well as specialty pharmaceutical and biotechnology firms of
varying sizes, along with academic and research institutions. For more detailed insights into
the competitive landscape of our drug candidates, please refer to the sections headed “Industry
Overview” and “— Our Drug Candidates.”
We believe that the primary competitive factors in our markets include efficacy and safety
of drug candidates, manufacturing efficiency, and commercialization development. We
anticipate that competition will intensify in the future as additional players enter these
segments. Any drug candidates successfully developed and commercialized by us will compete
with existing drugs or any new drugs that may emerge in the future. For insights into the
potential impact of market competition, please see “Risk Factors — Key Risks Relating to Our
Business, Business Operations, Intellectual Property Rights and Financial Prospects — We face
intense competition and rapid technological change and the possibility that our competitors
may develop therapies that are similar, more advanced, or more effective than ours, which may
adversely affect our financial condition and our ability to successfully commercialize our drug
candidates.”
SUPPLIERS AND RA W MATERIALS
Suppliers
During the Track Record Period, our suppliers primarily consisted of (i) construction
service providers for our manufacturing facilities, (ii) suppliers of the raw materials and
equipment for our drug development, (iii) a CDMO outside the PRC, who provides third party
contracting services for our future large-scale supply to overseas customers, and (iv) CROs
engaged for our drug development. Purchases from our five largest suppliers in each
year/period during the Track Record Period, calculated on the group level with entities
controlled by the same group combined together, were RMB123.2 million, RMB108.6 million
and RMB74.5 million, respectively, representing 48.0%, 52.2% and 63.3% of our total
purchases for the same years/period, respectively. Purchases from our single largest supplier in
each year/period during the Track Record Period were RMB72.9 million, RMB76.0 million and
RMB61.9 million, respectively, representing 28.4%, 36.5% and 52.6% of our purchases for the
same years/period, respectively. We believe that we maintain strong and stable relationships
with our major suppliers.
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The following table sets forth details of our five largest suppliers in each year/period
during the Track Record Period:
Supplier Supplier background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Purchase
amount
% of total
purchases
(RMB’000)
For the six months ended June 30, 2025
Supplier Group I /H1118/H1118/H1118/H1118A construction company
incorporated in the PRC in
2003, headquartered in
Shijiazhuang, focusing on
design and construction of
construction projects
CAPEX Since 2021 30 days PRC 61,915.8 52.6%
Supplier Group E /H1118/H1118/H1118/H1118A global biologics CRDMO
group incorporated in the
PRC in 2015,
headquartered in Shanghai,
providing comprehensive
end-to-end services to
assist partners in
discovering, developing,
and manufacturing
biologics, enabling the
entire process from
concept to commercial
production
Research Since 2016 10-20
business
days
PRC 4,152.0 3.5%
Supplier Group F /H1118/H1118/H1118/H1118A construction company
incorporated in the PRC in
1984, headquartered in
Zhuji, Zhejiang, focusing
on construction
engineering and
mechanical & electrical
installation services
CAPEX Since 2023 30 days PRC 3,371.7 2.9%
Supplier Group G /H1118/H1118/H1118/H1118A pharmaceutical research
company incorporated in
the PRC in 2018,
headquartered in Shanghai,
focusing on innovative
drug discovery and
development
Research Since 2021 20 days PRC 2,830.2 2.4%
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--- page 386 ---
Supplier Supplier background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Purchase
amount
% of total
purchases
(RMB’000)
Supplier Group H /H1118/H1118/H1118/H1118A global pharmaceutical
group incorporated in the
PRC in 2009,
headquartered in
Shenyang, focusing on
development, production,
wholesale and retail of
drugs
Research Since 2023 20 days-60
business
days
PRC 2,217.0 1.9%
74,486.7 63.3%
For the year ended December 31, 2024
Supplier Group I /H1118/H1118/H1118/H1118A construction company
incorporated in the PRC in
2003, headquartered in
Shijiazhuang, focusing on
design and construction of
construction projects
CAPEX Since 2021 30 days PRC 76,014.9 36.5%
Joinn Laboratories
(China) Co., Ltd. ( ̏ԯ
΅
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
A leading CRO, incorporated
in the PRC in 1998 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Research Since 2014 20 days-20
business
days
PRC 11,695.6 5.6%
Supplier Group B /H1118/H1118/H1118/H1118A power company
established in 1993,
headquartered in Shanghai,
specializing in power
generation, supply,
construction, and energy
technology services
CAPEX Since 2023 30 days PRC 9,153.1 4.4%
Supplier Group A /H1118/H1118/H1118/H1118A leading CDMO company
that provides
biopharmaceutical services
and solutions for drug
development and
production
Research Since 2016 30 days Taiwan 5,942.6 2.9%
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--- page 387 ---
Supplier Supplier background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Purchase
amount
% of total
purchases
(RMB’000)
Tofflon Science and
Technology Group Co.,
Ltd. (Ҧණྠ
ʮ̡) /H1118/H1118/H1118/H1118/H1118
A leading solution provider
and manufacturer of
pharmaceutical
manufacturing facilities,
incorporated in the PRC in
1993 headquartered in
Shanghai and listed on the
Shenzhen Stock Exchange
CAPEX/
Raw
material
Since 2020 30 days PRC 5,841.3 2.8%
108,647.5 52.2%
For the year ended December 31, 2023
Supplier Group I /H1118/H1118/H1118/H1118/H1118A construction company
incorporated in the PRC in
2003, headquartered in
Shijiazhuang, focusing on
design and construction of
construction projects
CAPEX Since 2021 30 days PRC 72,906.0 28.4%
Tofflon Science and
Technology Group Co.,
Ltd. (Ҧණྠ
ʮ̡) /H1118/H1118/H1118/H1118/H1118
A leading solution provider
and manufacturer of
pharmaceutical
manufacturing facilities,
incorporated in the PRC in
1993 headquartered in
Shanghai and listed on the
Shenzhen Stock Exchange
CAPEX Since 2020 30 days PRC 18,770.3 7.3%
Joinn Laboratories
(China) Co., Ltd. ( ̏ԯ
΅
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
A leading CRO, incorporated
in the PRC in 1998 and
headquartered in Beijing,
provides one-stop
customized R&D and
commissioned production
services for to global
pharmaceutical and
biotechnology companies
Research Since 2014 20 days PRC 16,612.9 6.5%
Supplier Group C /H1118/H1118/H1118/H1118A wholesale and retail
company incorporated in
the PRC in 2003,
headquartered in Beijing,
focusing on medical
devices, food sales, and
technical services
CAPEX Since 2022 30 days PRC 8,407.1 3.3%
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Supplier Supplier background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Purchase
amount
% of total
purchases
(RMB’000)
Supplier Group D /H1118/H1118/H1118/H1118A leading solution provider
and manufacturer of
pharmaceutical R&D and
manufacturing facilities,
incorporated in the PRC in
2006 and headquartered in
Nanjing
CAPEX Since 2021 15 business
days
PRC 6,460.2 2.5%
123,156.5 48.0%
All of our five largest suppliers in each year/period during the Track Record Period were
Independent Third Parties. None of our Directors, their respective associates nor any
shareholder who, to the knowledge of our Directors, owned more than 5% of our issued share
capital as of the Latest Practicable Date, has any interest in any of our five largest suppliers
in each year/period during the Track Record Period.
Raw Materials
The principal raw materials that we used include chromatography resins, filters,
disposable bags and cell culture media, among others. We adopt stringent supplier selection
procedures. Potential suppliers are assessed based on various factors including their
qualifications, compliance with relevant regulations and industry standards, product offerings,
production quality, pricing, delivery capacities, reputation and after-sales service. Our
suppliers are required to possess all licenses and permits necessary for their operations.
Our principal raw materials are generally readily available in the market through a
number of suppliers. We believe we have alternative sources for our principal raw materials
with comparable quality and pricing. During the Track Record Period and up to the Latest
Practicable Date, we did not experience any material shortage or delay in the supply of raw
materials. During the Track Record Period and up to the Latest Practicable Date, we did not
experience any significant increases in the prices of our major raw materials or fluctuations in
raw material costs which had a material adverse impact on our results of operations or gross
profit margins. See “Risk Factors — Risks Relating to Our Reliance on Third Parties — We
depend on a stable and adequate supply of quality raw materials, including consumables,
devices and equipment from our suppliers, and price increases or interruptions of such supply
could have an adverse impact on our business.”
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CUSTOMERS
During the Track Record Period, our revenue was derived from (i) sales of materials,
including recombinant human hyaluronidase as a pharmaceutical excipient, IgG-degrading
enzyme and antibodies, (ii) provision of technical services, mainly representing certain service
fees, milestone payments, or other considerations we received under respective collaboration
agreements with our business partners, and (iii) recognition of upfront payments received
under a license and commercialization agreement. We had only four customers in 2023 and all
of our revenue in 2023 were generated from these four customers. For the year ended
December 31, 2024 and the six months ended June 30, 2025, revenue generated from our five
largest customers, calculated on the group level with entities controlled by the same group
combined together, were RMB5.8 million and RMB41.7 million, respectively, representing
94.8% and 99.4% of our total revenue for the same year/period. Revenue generated from our
single largest customer in each year/period during the Track Record Period were RMB2.8
million, RMB2.8 million and RMB40.0 million, respectively, representing 40.9%, 45.9% and
95.3% of our total revenue for the same years/period.
The following table sets forth details of our five largest customers in each year/period
during the Track Record Period:
Customer Customer background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Revenue
contribution
% of total
revenue
(RMB’000)
For the six months ended June 30, 2025
Customer Group E /H1118/H1118/H1118/H1118A global healthcare company
incorporated in the PRC in
1989, dedicated to
improving women’s health
and overall well-being,
focuses on importing,
marketing, and distributing
its portfolio of women’s
health, biosimilars, and
established medicines
across mainland China
Licensing Since 2024 45 days PRC 40,001.9 95.3%
Sichuan Kelun
Pharmaceutical Co.,
Ltd. (ٰ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
A biotechnology company
incorporated in the PRC in
1996, headquartered in
Chengdu and listed on the
Shenzhen Stock Exchange,
focuses on R&D,
manufacturing and
commercialization of novel
drugs
Technical
services
Since 2013 20 business
days
PRC 1,000.0 2.4%
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--- page 390 ---
Customer Customer background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Revenue
contribution
% of total
revenue
(RMB’000)
Customer Group F /H1118/H1118/H1118/H1118A pharmaceutical research
company incorporated in
the PRC in 2023,
headquartered in Shanghai,
focuses on the discovery
and clinical development
of innovative bispecific
antibodies and ADC
therapeutics
Sales of
materials
Since 2024 20 business
days
PRC 244.2 0.6%
Hangzhou Sumgen
Biotech Co., Ltd.
(ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A leading biotechnology
company incorporated in
the PRC in 2015,
headquartered in
Hangzhou, dedicated to
advancing scientific
innovation in the field of
antibody based
therapeutics
Sales of
materials
Since 2022 30 days PRC 233.6 0.6%
Customer Group B /H1118/H1118/H1118/H1118A leading CRO incorporated
in the PRC in 2012
headquartered in Shanghai,
providing one-stop
customized R&D and
commissioned production
services for innovative
drugs to global
pharmaceutical and
biotechnology companies
Sales of
materials
Since 2013 30 days PRC 199.1 0.5%
41,678.8 99.4%
For the year ended December 31, 2024
Qyuns Therapeutics Co.,
Ltd. (ᔼ
ʮ̡)/H1118/H1118/H1118/H1118
A biotechnology company
incorporated in the PRC in
2015, headquartered in
Taizhou and listed on the
Stock Exchange, focusing
on biologic therapies for
autoimmune and allergic
diseases
Technical
services
Since 2024 15 business
days
PRC 2,830.2 45.9%
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--- page 391 ---
Customer Customer background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Revenue
contribution
% of total
revenue
(RMB’000)
Customer Group B /H1118/H1118/H1118/H1118A leading CRO incorporated
in the PRC in 2012
headquartered in Shanghai,
providing one-stop
customized R&D and
commissioned production
services for innovative
drugs to global
pharmaceutical and
biotechnology companies
Sales of
materials
Since 2013 30 days - 30
business
days
PRC 1,278.8 20.8%
Customer Group A /H1118/H1118/H1118/H1118A leading solution provider
incorporated in 2022,
offers complete design,
manufacturing and
logistics to support to
every stage of
biomanufacturing process
Sales of
materials
Since 2024 30-60 days Singapore 1,204.1 19.5%
Hangzhou Sumgen
Biotech Co., Ltd. (ψ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A leading biotechnology
company incorporated in
the PRC in 2015,
headquartered in
Hangzhou, dedicated to
advancing scientific
innovation in the field of
antibody based
therapeutics
Sales of
materials
Since 2022 30 days PRC 345.1 5.6%
ABLINK Biotech /H1118/H1118/H1118/H1118A technology-driven biotech
company harnessing
proprietary biological drug
library and AI-enabled
macromolecular drug
development platform to
achieve cycle acceleration
and therapeutic diversity
through phage/mammalian
display technologies and
data-driven biological
insights
Technical
services
Since 2024 30 days PRC 184.0 3.0%
5,842.2 94.8%
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--- page 392 ---
Customer Customer background
Products/
services
purchased
Length of
business
relationship
Credit
terms
Registered
region
Revenue
contribution
% of total
revenue
(RMB’000)
For the year ended December 31, 2023 (1)
Hangzhou Sumgen
Biotech Co., Ltd. (ψ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A leading biotechnology
company incorporated in
the PRC in 2015,
headquartered in
Hangzhou, dedicated to
advancing scientific
innovation in the field of
antibody based
therapeutics
Technical
services
Since 2022 30 days PRC 2,830.2 40.9%
Sichuan Kelun
Pharmaceutical Co.,
Ltd. (ٰ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
A biotechnology company
incorporated in the PRC in
1996, headquartered in
Chengdu and listed on the
Shenzhen Stock Exchange,
focuses on R&D,
manufacturing and
commercialization of novel
drugs
Technical
services
Since 2013 20 business
days
PRC 2,000.0 28.9%
Customer Group D /H1118/H1118/H1118/H1118A biotechnology company
incorporated in the PRC in
2010, headquartered in
Shanghai, focusing on
drug delivery systems,
diagnostic instruments, and
related technical
development and
consulting services
Sales of
materials
Since 2023 10 business
days
PRC 1,701.1 24.5%
Customer Group B /H1118/H1118/H1118/H1118A leading CRO incorporated
in the PRC in 2012
headquartered in Shanghai,
providing one-stop
customized R&D and
commissioned production
services for innovative
drugs to global
pharmaceutical and
biotechnology companies
Sales of
materials
Since 2013 30 business
days
PRC 398.2 5.7%
6,929.5 100.0%
Note: We had four customers in total for the year ended December 31, 2023.
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Save for ABLINK Biotech, all of our five largest customers in each year/period during the
Track Record Period were Independent Third Parties. None of our Directors, their respective
associates nor any shareholder who, to the knowledge of our Directors, owned more than 5%
of our issued share capital as of the Latest Practicable Date, has any interest in any of our five
largest customers in each year/period during the Track Record Period.
Overlapping of Customers and Suppliers
Customer Group B, being one of our four largest customers in 2023 and one of our five
largest customers in 2024 and the six months ended June 30, 2025, was also our supplier in
2023 and 2024. Customer Group B mainly purchased from us recombinant human
hyaluronidase as a pharmaceutical excipient during the Track Record Period, and we engaged
Customer Group B for the supply of reference drugs used in our clinical trials in 2023 and
2024. Revenue generated from Customer Group B as a percentage of our total revenue was
5.7%, 20.8% and 0.5% in 2023, 2024 and the six months ended June 30, 2025, respectively.
Purchase from Customer Group B as a percentage of our total purchase was 1.5% and 0.0% in
2023 and 2024, respectively.
ABLINK Biotech, being one of our five largest customers in 2024, was also our supplier
during the Track Record Period. ABLINK Biotech mainly purchased from us yeast expression
technical services in 2024, and we engaged ABLINK Biotech for the supply of technical
services in relation to protein design and screening for our early-stage R&D projects during the
Track Record Period. Revenue generated from ABLINK Biotech as a percentage of our total
revenue was 3.0% in 2024. Purchase from ABLINK Biotech as a percentage of our total
purchase was 0.5%, 0.2% and 0.0% in 2023, 2024 and the six months ended June 30, 2025,
respectively.
Negotiations of the terms of our sales to and purchases from Customer Group B and
ABLINK Biotech were conducted on an individual basis, and the sales and purchases were
neither inter-connected nor inter-conditioned with each other. Our Directors confirm that all of
our sales to and purchases from Customer Group B and ABLINK Biotech were conducted in
the ordinary course of business under normal commercial terms and on arm’s length basis. Our
Directors confirm that, saved as disclosed above, none of our major suppliers was our
customers, or vice versa, during the Track Record Period.
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EMPLOYEES
As of September 30, 2025, we had a total of 348 full-time employees and all of them were
based in China. The following table sets forth the number of our employees by function as of
September 30, 2025:
Function Number Percentage
Drug Discovery, Preclinical Development and
Related Regulatory Affairs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865 18.7%
Medical and Clinical Development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 4.9%
CMC and Manufacturing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886 24.7%
Quality Control, Quality Assurance, V alidation
and Pharmacovigilance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883 23.8%
Business Development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 1.7%
General and Administrative /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841 11.8%
Operations and other Support Functions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 14.4%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118348 100.0%
Relationship with Employees
The success of our endeavors relies significantly on the efforts and expertise of all
employees, who form an integral part of our business. We typically recruit employees through
online platforms, recruitment agencies, internal referrals and campus job fairs, considering
factors including our needs and business plans and the candidates’ expertise and skills, working
experience and years of service, educational qualifications and background, as well as
adaptability and communication skills. We are dedicated to expanding our talent pool to
support future development, ensuring that the departure of any single key management or R&D
staff member will not materially or adversely affect our operations.
In compliance with the PRC labor law, we enter into standard labor and confidentiality
agreements with our employees, covering matters including salaries, employee benefits,
confidentiality and non-compete obligations and grounds for termination. For our key
personnel, the non-compete restricted period typically expires one year after the termination of
employment, and we agree to compensate the employees with a certain percentage of their
pre-departure salary during the restricted period. We also enter into intellectual property
ownership agreements with our employees, under which we own all the intellectual property
rights derived during the course of their work.
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We strive to create an equitable, inclusive, and diverse workplace while fostering positive
working relationships with our employees. All labor disputes are handled in accordance with
all applicable laws, rules and regulations. During the Track Record Period and up to the Latest
Practicable Date, we had not experienced any strikes or labor disputes that may have a material
adverse effect on our business, financial condition or results of operations.
Training and Development
We provide our employees with a diverse array of professional development opportunities
and foster a performance-driven environment. Our focus is on cultivating a culture that
promotes retention and engagement. With our emphasis on our integrated in-house research
and development capabilities, we place significant importance on the growth of internal talent.
We consistently seek out advancement opportunities for our staff through various internal and
external training and development programs, including pre-job training, tiered on-the-job
training and special skills training for major employees, as well as leadership training programs
for management.
Employee Benefits
We are committed to making sure that working conditions throughout our business
network are safe and that employees are treated with care and respect. We believe in providing
our employees with competitive compensation packages, reflecting our stakeholder-centric
ethos, which we believe fosters sustainable and enduring growth. In accordance with PRC
regulations, we participate in various government-mandated employee benefit plans, including
social insurance such as pension insurance, medical insurance, unemployment insurance,
work-related injury insurance, maternity insurance, and housing funds. During the Track
Record Period, we made adequate contributions to these social insurance and housing funds for
all employees.
INSURANCE
We maintain insurance policies that we consider to be in line with market practice and
adequate for our business to safeguard against risks and unexpected events. Our insurance
policies comprise all-risk property insurance and employer liability insurance to cover losses
arising from natural disasters and accidents, as well as employee injuries during work hours.
We maintain clinical trial liability insurance to ensure comprehensive protection against
adverse effects. We also provide social insurance for our employees in accordance with
relevant PRC laws and regulations. We believe that our insurance coverage is adequate to cover
our key assets, facilities, and liabilities. See “Risk Factors — Other Risks Relating to Our
Operations — We have limited insurance coverage, and any claims beyond our insurance
coverage may result in our incurring substantial costs and a diversion of resources.”
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SOCIAL, HEALTH, WORK SAFETY AND ENVIRONMENTAL MATTERS
We acknowledge our environment protection and social responsibilities and are aware of
the environmental, energy, climate-related and workplace safety issues that may impact our
Group’s business operations. We have implemented company-wide environmental, health and
safety (“ EHS”) policies and standard operating procedures in relation to work safety,
environmental protection, fire safety, emergency response and occupational health. Our
employees are required to regularly take internal and external training on EHS matters. We are
committed to complying with environmental, social and governance (“ ESG”) reporting
requirements upon Listing.
Our Board has overall responsibility for (i) overseeing and determining our Group’s
environmental, social, and climate-related risks and opportunities that impact our Group, (ii)
establishing ESG related targets of our Group, (iii) adopting the ESG related policies, and (iv)
reviewing our Group’s performance in ESG matters. Our EHS department is responsible for
monitoring the day-to-day practice of ESG-related matters and implementing our ESG policies.
Environmental Protection
We strive to operate our facilities in a manner that protects the environment. We do not
operate in a highly polluting industry, but the manufacturing process of our products and
product candidates for clinical trials and research involves the use of hazardous, flammable and
toxic materials, and may exhaust gas and generate wastewater, solid waste, and other hazardous
waste.
To ensure compliance with national, industrial, and local environmental standards, laws,
regulations, and policies, we have implemented internal policies for environmental risk
prevention. These policies include: (i) strict adherence to GMP regulations and relevant
pollutant emissions standards in the industry; (ii) implementing stringent guidelines of
procedures for operating in our laboratory and manufacturing facilities, covering solid waste
disposal, wastewater and exhaust gas treatment, and management of chemicals that are
hazardous, flammable, explosive and highly toxic; and (iii) conducting periodic environmental
assessments on exhaust gas emissions, hazardous waste disposal, and wastewater emissions.
During the Track Record Period and up to the Latest Practicable Date, we had not
received any fines or penalties associated with the breach of any environmental laws or
regulations. To the best knowledge and belief of our Directors, we are not subject to material
environmental liability risk and will not incur material compliance costs in the future.
We continuously monitor and strive to reduce hazardous waste production. The
wastewater and exhaust gas generated in our R&D and manufacturing process are pretreated
by us before being discharged. Our greenhouse gas emissions are categorized into Scope 1,
Scope 2, and Scope 3 emissions. Scope 1 emissions are primarily small-scale and tied to our
R&D processes and facilities. Scope 2 emissions mainly arise from the indirect emissions
linked to the electricity we purchase to power our operations. Scope 3 emissions encompass
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indirect emissions that occur outside of Scope 2, primarily within our value chain. As a
clinical-stage biotechnology company, our operations are currently centered on R&D activities,
leading to minimal greenhouse gas emissions across all three scopes. For hazardous wastes
generated from R&D activities, we engage qualified third parties for disposal. We select such
service providers by considering their quality, industry reputation and compliance with
relevant regulatory agencies. In 2023, 2024 and the six months ended June 30, 2025, we
incurred costs of approximately RMB169.2 thousand, RMB164.4 thousand and RMB85.0
thousand, respectively, for hazardous waste disposal. These third-party service providers
operate in accordance with relevant governmental laws and regulations. We are committed to
ongoing efforts to protect the ecological environment during our business operations, aiming
to minimize adverse environmental impacts.
Resource Consumption
In pursuit of our sustainable development objectives, we rigorously oversee our
environmental protection performance across various domains, including resource efficiency
and energy consumption. We closely monitor our electricity and water consumption levels and
actively implement strategies to enhance energy efficiency and promote water conservation:
Y ear Ended December 31,
Six Months
Ended June 30,
2023 2024 2025
Resource consumption
Electricity ( MWh)
– Total amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,692.0 8,585.6 4,362.6
– Intensity* ( MWh/RMB million) /H1118/H1118/H1118 50.5 34.2 39.3
Water ( ton)
– Total amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,000 111,064 54,801.0
– Intensity* ( t/RMB million) /H1118/H1118/H1118/H1118/H1118/H1118/H1118717.0 443.0 493.5
Emission
Hazardous solid waste ( ton)
– Total amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829.6 26.1 17.0
– Intensity* ( t/RMB million) /H1118/H1118/H1118/H1118/H1118/H1118/H11180.2 0.1 0.2
Hazardous water waste ( ton) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
– Total amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,993.9 53,106.7 38,053.6
– Intensity* ( t/RMB million) /H1118/H1118/H1118/H1118/H1118/H1118/H1118377.3 211.8 342.7
Note:
* Calculated as the total amount of resource consumption or emission divided by the R&D expense of the
respective year/period.
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Aligned with the ESG evaluation system standards in China and industry best practices,
we are committed to mitigating or minimizing the adverse environmental impacts resulting
from our operations. With the expansion of our business and anticipated commercialization of
our drug candidates, we expect our resource consumption to increase. However, we have
developed, and will continue to implement, environmental management plans aimed at
continually enhancing our energy consumption efficiency and ensuring compliance with all
governmental environmental regulations and requirements. Our current objective is to establish
a robust ESG governance mechanism and system for our Company. The historical energy
consumption data from the Track Record Period will serve as a foundational basis for devising
pertinent energy reduction strategies and establishing suitable reduction targets for the future.
To achieve our goal of sustainable development, we have already implemented the
following environmentally friendly measures:
 promote environmental awareness among all staff by encouraging them to minimize
paper waste and conserve water and electricity resources, such as placing water-
saving or power-saving signs in prominent areas to capture attention and foster our
employees’ commitment to environment protection;
 encouraging our employees to avoid printing hard copies and requiring double-sided
printing whenever possible;
 regularly conducting inspections of our equipment in laboratories and
manufacturing facilities to check for abnormal conditions, and make prompt report
to avoid potential damages;
 carrying out manual check after shift to eliminate unnecessary lighting;
 promoting recycling schemes, seeking alternative ways of disposing of and reducing
waste in environmental-friendly ways; and
 Prioritizing fair drug pricing within ESG frameworks. In anticipation of the
commercialization of drug candidates, we strive to set drug prices based on the value
they provide to patients, taking into account factors such as the cost of development,
the therapeutic benefits of the drug, and the need for accessibility and affordability.
During the Track Record Period, we complied with the relevant environmental laws and
regulations in all material aspects and we did not have any incidents or complaints which had
a material and adverse effect on our business, financial condition or results of operations.
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Goals, Targets and Policies
Goals and Targets
The ESG committee will set targets for each material key performance indicator at the
beginning of each financial year in accordance with the disclosure requirements under
Appendix 27 to the Listing Rules and any other relevant rules and regulations after Listing.
Relevant targets of the material key performance indicators will be reviewed annually to ensure
that they are still suitable for our needs. When setting the targets for environment-related KPIs,
we will take into account our respective consumption or emission levels during the Track
Record Period, and consider our future business expansion in a comprehensive and prudent
manner, with a view to crafting a balance between business growth and environmental
protection and achieving sustainable development. Our current objective is to establish a robust
ESG governance mechanism and system for our Company. With the expansion of our business
and commercialization of our drug candidates in the future, we endeavor to curb the increase
in our resource consumption and emissions and aim to keep them relatively stable. The
historical energy consumption data from the Track Record Period will serve as a foundational
basis for devising pertinent energy reduction strategies and establishing suitable reduction
targets for the future. In the context of drug development and excluding energy consumption
related to production, we aim to reduce per-employee electricity and water consumption by
around 5.0% by 2027. This goal reflects our endeavor to strike a balance between advancing
our R&D and manufacturing endeavors over the next three years, while also upholding our
environmental commitment. We plan to achieve this by optimizing processes to maximize
electricity utilization and minimize water wastage in our daily operations.
To achieve our goals, we have already implemented the following environmentally
friendly measures:
 promote environmental awareness among all staff by encouraging them to minimize
paper waste and conserve water and electricity resources, such as placing water-
saving and power-saving signs in prominent areas to capture attention and foster our
employees’ commitment to environmental protection;
 encouraging our employees to avoid printing hard copies and requiring double-sided
printing whenever possible;
 regularly conducting inspections of our laboratory equipment in order to check for
abnormal conditions, and make prompt report to avoid potential damages;
 carrying out manual check after shift to eliminate unnecessary lighting; and
 promoting recycling schemes, seeking alternative ways of disposing of and reducing
waste in environmental-friendly ways.
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During the Track Record Period and up to the Latest Practicable Date, we complied with
the relevant environmental laws and regulations in all material aspects and we did not have any
incidents or complaints which had a material and adverse effect on our business, financial
condition or results of operations.
Policies
We will implement measures in mitigating the greenhouse gases emissions and reduce
electricity consumption, including (i) providing trainings and educate our employees on the
concept of energy efficiency; (ii) posting water-saving or power-saving signs in eye-catching
areas to cultivate our employees’ awareness of environment protection; (iii) promoting
paperless environment, encourage the usage of electronic copies instead of hard copies, the use
of double-sided printing, and the use of single-sided printed paper when there is no confidential
information on it; (iv) requiring employee to turn off all electrical appliances when they are not
in use; (v) implementing policies regarding waste management; (vi) prioritize the use of natural
light whenever possible and have a “use as needed” policy for lights during off-peak hours;
(vii) encourage employees to turn off computer screens when not in use and ensure that
computers are turned off after meetings; and (viii) implemented strict temperature controls for
air conditioning, regularly clean air conditioning filters, and close doors and windows when
using air conditioning.
We have established sophisticated internal control measures to ensure the safe use of
hazardous chemicals in synthetic biology applications and to reduce the risk of accidental
contamination, biological hazards, chemical exposures, or personal injury, including (i)
mandatory double-verification protocols for all hazardous material handling; (ii) restricted
keycard access systems for high-risk areas; (iii) regular safety certification training for
laboratory personnel; (iv) strictly enforced personal protective equipment protocols,
standardized decontamination procedures; (v) designated safety officers for each laboratory
section, installation of advanced ventilation and containment systems; (vi) comprehensive
emergency response protocols, routine safety audits and compliance checks, proper waste
segregation and disposal procedures; (vii) detailed documentation requirements for all
experiments involving hazardous materials; and (viii) regular maintenance schedules for all
safety equipment and containment facilities.
Climate Change
We believe that we are not susceptible to climate change. Moreover, we consider that
potential changes to the regulations in the PRC regarding climate change will not adversely
impact our business operations. We will continue to pay attention to risks regarding climate
change and formulate emergency plans to safeguard us from climate change and extreme
weather conditions, such as hurricane and rainstorms. As of the Latest Practicable Date, we had
not experienced any material impact on our business operations or financial performance as a
result of climate change or extreme weather conditions.
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Preclinical and Clinical Study
We have implemented a series of measures to bolster laboratory and clinical trial safety
while ensuring compliance with relevant regulations. These measures include the establishment
and enforcement of internal policies and procedures aimed at clinical trial safety, starting with:
(a) formulating a comprehensive R&D project management policy to oversee the entire
lifecycle process of drug development, encompassing preclinical studies and clinical trials; (b)
implementing guidelines pertaining to employee health and safety, environmental protection,
and operational safety within laboratory settings; (c) monitoring AEs associated with drugs and
drug candidates during clinical trials and maintaining accurate records of these events for each
trial; (d) conducting analysis of collected AEs and assessing associated safety risks; (e)
reporting SAEs and potential safety risks; and (f) facilitating communication with relevant
employees and CROs to ensure enforcement of clinical trial protocols.
Supplier Management
We have effective supplier management in place, as we have established detailed internal
rules governing the selection of suppliers, including CROs. When research services are needed,
procurement requests are initiated by the R&D department. The R&D department evaluates
CRO candidates based on project requirements, qualifications, ESG policies (including but not
limited to the environmental friendliness of materials used, and the establishment of policies
safeguarding employee rights), goodwill, regulatory compliance and reputation, and other
factors, and requests specific documentation and data to ensure alignment with our Group’s
ESG policy. After the R&D department preliminarily selects CROs, service proposals are
submitted for approval by department heads, the chief scientific officer, and the general
manager of our Company. Once approved, CROs are engaged in accordance with our Group’s
service procurement policy.
Concurrent with partner management, we implement rigorous data protection protocols.
All clinical trial informed consent forms explicitly stipulate requirements for safeguarding
patient data in compliance with privacy regulations. Data collection is strictly limited to trial
protocol-specified parameters, such as baseline characteristics, efficacy endpoints and adverse
events. Hospital investigators employ de-identification measures using unique trial codes, such
as screening or enrollment numbers, excluding direct identifiers, including names and ID card
number. Data transmission via unsecured public networks is prohibited, with access restricted
through role-based authorization, for example, statisticians shall receive anonymized datasets
only.
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For biohazard management, blood samples undergo dual processing streams: hospital
laboratory analysis specimens are refrigerated per institutional protocols, typically autoclaved
after 7 days of retention. Serum samples transferred to analytical laboratories require strict
adherence to trial-specific storage conditions outlined in sample management manuals,
including continuous environmental monitoring with contingency protocols for parameter
deviations. Contractual agreements mandate that serum preservation duration aligns with
documented stability periods, with post-expiration disposal requiring sponsor authorization
and compliance with medical waste regulations, including Regulations on the Management of
Medical Waste (၍ଣૢԷ) and Administrative Measures for Medical Waste in
Healthcare Institutions (). All disposal processes maintain
auditable documentation of monitoring records and corrective actions.
Workplace Safety
We are dedicated to ensuring a safe working environment for our employees. We firmly
believe that a safe and healthy workplace is not only crucial for the well-being of our
employees but also indispensable for the sustainability of our business. We have implemented
and upheld a comprehensive set of rules, standard operating procedures, and measures to
ensure the health and safety of our employees. Our safety guidelines cover a range of areas
including identifying potential hazards, safe practices, accident prevention, and procedures for
reporting accidents. We ensure that our employees continually acknowledge their
understanding of safety protocols as needed. Specifically, we:
 have established guidelines governing laboratory procedures and the handling, use,
storage, treatment, and disposal of hazardous materials and wastes;
 provide regular safety awareness training to our employees, including sessions on
fire control and safety;
 fully inform our employees of the occupational disease factors they may be exposed
to through a safety warning letter during the onboarding process;
 maintain health records for all employees and conduct health examinations before,
during, and after their tenure with our Company, especially for those engaged in
work involving occupational hazards;
 engage qualified third-party testing agencies for periodic evaluation on occupational
disease hazard factors in the workplace, and submit the results to local authorities
for record; and
 conduct regular fire safety inspections, ensure the maintenance of firefighting
equipment, and organize routine emergency drills to prepare employees for
emergency situations.
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Workplace Diversity
Within our Company, we are steadfast in our commitment to fostering an open and
inclusive workplace that champions equality. We adhere to a corporate policy of hiring
employees based solely on their merits, offering equal opportunities regardless of gender, age,
race, religion, or any other social or personal characteristics. As of September 30, 2025
approximately 50.9% of our total employees were female. Our employee management system
operates on principles of fairness and transparency, and we actively work to enhance gender
and age diversity within our workforce.
LAND AND PROPERTIES
We are headquartered in Shanghai, China. We own properties in Shanghai and we lease
properties in Shanghai and Suzhou, Jiangsu Province in China.
The Property V aluation Report from A VISTA, an independent property valuer, set out in
Appendix III of this prospectus, sets out details of our selective property interests as of
September 30, 2025. A VISTA valued these property interests at an amount of RMB603.5
million as of September 30, 2025. Except for the property interests set forth in the property
valuation report from A VISTA, no single property interest that forms part of our non-property
activities had a carrying amount representing 15% or more of our total assets as of September
30, 2025.
Owned Properties
As of the Latest Practicable Date, we owned land use rights of two parcels of land in
Shanghai, China with an aggregate site area of 99,637.6 sq.m. On one of these parcels, we
owned seven buildings with an aggregate gross floor area (GFA) of 23,974.1 sq.m., which is
used as our manufacturing facilities, administrative offices and R&D buildings. We obtained
real estate certificates indicating (i) our land use right of the aforementioned parcels, and (ii)
our ownership of the aforementioned building. The other land parcel had an aggregate GFA of
73,836.1 sq.m. We intend to use this premise as our manufacturing facility for complex
biologics, particularly recombinant enzymes, as well as administrative offices and R&D
buildings. For more details, see “— Manufacturing — Manufacturing Facilities.” As of the
Latest Practicable Date, we had obtained the relevant land use rights certificate ( ʔਗପᛆᗇ
ࣣfor such property.
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Leased Properties
As of the Latest Practicable Date, we leased eight properties with an aggregate GFA of
approximately 4,092 sq.m. from Independent Third Parties as our employee dormitories, office
premises and R&D centers in the PRC. The relevant lease agreements generally provide a
duration of up to 36 months.
The following table sets forth the details of our leased properties as of the Latest
Practicable Date:
Location Usage GFA (sq.m) Lease Term
Shanghai,
the PRC /H1118/H1118/H1118/H1118/H1118
Employee Dormitory* 1,297 September 20, 2024 –
September 19, 2026
Suzhou,
the PRC /H1118/H1118/H1118/H1118/H1118
Office and R&D premise 1,133 December 9, 2024 –
December 8, 2027
Suzhou,
the PRC /H1118/H1118/H1118/H1118/H1118
Office and R&D premise 1,007 January 1, 2024 –
December 31, 2026
Shanghai,
the PRC /H1118/H1118/H1118/H1118
Office and R&D premise 224 November 1, 2025 –
December 31, 2028
Suzhou,
the PRC /H1118/H1118/H1118/H1118/H1118
Office and R&D premise 132 August 1, 2023 –
July 31, 2026
Shanghai,
the PRC /H1118/H1118/H1118/H1118/H1118
Employee Dormitory 142 September 1, 2025 –
August 31, 2026
Suzhou,
the PRC /H1118/H1118/H1118/H1118/H1118
Office and R&D premise 127 January 1, 2025 –
December 31, 2026
Shanghai,
the PRC /H1118/H1118/H1118/H1118
Employee Dormitory 30 October 9, 2025 –
October 8, 2026
* The lease of this premise is composed of 20 separate leases.
A W ARDS AND RECOGNITION
The following table sets forth the major awards and recognition we received as of the
Latest Practicable Date:
Y ear(s) of Grant Award/Recognition Issuing Authority
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182025 Special Fund for Promoting
High-Quality Industrial
Development Technical
Renovation Special Project
(2025ਖ਼
Ҧஔҷிਖ਼ධධͦ)
Shanghai Economic and
Information Technology
Committee (ࢹڦ
ึ)
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Y ear(s) of Grant Award/Recognition Issuing Authority
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182025 Shanghai Municipal
Biopharmaceutical Innovative
Product Key R&D Project
(2025ᔼᖹ௴อ
Ҹᗫධͦ)
Shanghai Science and
Technology Commission ( ɪऎ
ึ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182024 Chinese Healthcare Front-
Runners Top 100 Excellent
Leaders List (“2024ᔼ
٫100”ՙ൳ჯங࿮)
International Biopharma Industry
Week Committee ( ɪऎ਷ყ͛
ᔼᖹପุմଡ଼։ึ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai Unicorn (Potential)
Enterprise to Receive
Prioritized Service for 2024
(2024ਕዹԉᖕ
(ᆑɢ)Άุ)
Shanghai Centre for Small and
Medium Enterprise
Development Services ( ɪऎ̹
ਕʕː),
Beijing Greatwall Institute for
Enterprise Strategy (ڗ
ה)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Science and Innovation
Contribution Enterprise for
2023 (2023௴্ᘠΆุ)
The Communist Party Committee
of Shanghai Baoshan District
(ึ),
The People’s Government of
Shanghai Baoshan District
(ִ݁)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Baoshan Three-river Excellent
Talent Team (ʑ
ᎴӸɛʑྠඟ)
Organization Department of the
Communist Party Committee
of Shanghai Baoshan District
(ʕ΍ɪऎ̹ᘒʆਜ։ଡ଼ᔌ௅),
Shanghai-Baoshan Municipal
Talent Work Bureau ( ɪऎ̹ᘒ
ʆਜɛʑʈЪ҅)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118National Technological Small and
Medium-sized Enterprise (࢕
ʕʃΆุ) (Suzhou
Kangju, Suzhou Centergene)
Jiangsu Provincial Department of
Science and Technology ( Ϫᘽ
ኪҦஔᝂ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai Enterprise Technology
Center ( ɪऎ̹ΆุҦஔʕː)
Shanghai Municipal Commission
of Economy and
Informatization ( ɪऎ̹຾᏶ձ
ึ), Shanghai
Municipal Finance Bureau
(҅), Shanghai
Municipal Tax Service, State
Taxation Administration (࢕
೼ਕᐼ҅ɪऎ̹೼ਕ҅),
Customs of Shanghai of the
People’s Republic of China
(ʕശɛ͏΍ձ਷ɪऎऎᗫ)
BUSINESS
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Y ear(s) of Grant Award/Recognition Issuing Authority
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Synthetic Biology (Recombinant
Drugs) Innovative Consortia
(ي(ي)௴อᑌΥ
᜗)
Science and Technology
Commission of Shanghai
Baoshan District ( ɪऎ̹ᘒʆ
ึ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai “Specialized, Refined
Characterized and Innovative”
Small and Medium-Sized
Enterprise ( ɪऎ̹“ਖ਼ၚतอ”
ʕʃΆุ)
Shanghai Municipal Commission
of Economy and
Informatization ( ɪऎ̹຾᏶ձ
ึ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118High-Tech Enterprise ( ৷อҦஔ
Άุ)
Science and Technology
Commission of Shanghai
Municipality (ኪҦஔ
ึ), Shanghai Municipal
Finance Bureau (݁
҅), Shanghai Municipal Tax
Service, State Taxation
Administration (೼ਕᐼ҅
ɪऎ̹೼ਕ҅)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhangjiang National Independent
Innovation Demonstration Zone
“Zhangjiang Star” Potential
Enterprise (І˴௴อ
ͪᇍਜ“݋”Άุ)
Management Committee of
Shanghai Zhangjiang High-
Tech Industrial Development
Zone ( ɪऎ̹ੵϪ৷อҦஔପ
ึ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118High-Tech Enterprise ( ৷อҦஔ
Άุ) (Suzhou Kangju, Suzhou
Centergene)
Jiangsu Provincial Department of
Science and Technology ( Ϫᘽ
ኪҦஔᝂ), Jiangsu
Provincial Department of
Finance (ᝂ),
Jiangsu Provincial Tax Service,
State Taxation Administration
(೼ਕ҅)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Science and Innovation Rising
Star Award for 2021
(2021௴อቚᆤ)
The Communist Party Committee
of Shanghai Baoshan District
(ึ),
The People’s Government of
Shanghai Baoshan District
(ִ݁)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Science and Innovation Partner
for 2021
(2021௴Υྫɛ)
The Communist Party Committee
of Shanghai Baoshan District
(ึ),
The People’s Government of
Shanghai Baoshan District
(ִ݁)
BUSINESS
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Y ear(s) of Grant Award/Recognition Issuing Authority
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai Foreign Research and
Development Center ( ɪऎ̹̮
೯ʕː)
Shanghai Municipal Commission
of Commerce (ࡰ
ึ)
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Scientific and Technological
Innovation Demonstration
Enterprise for Building the
Main Position of Scientific and
Technological Innovation
Centre in Baoshan District ( ᘒ
௴ʕː˴৬ή
௴ͪᇍΆุ)
The Communist Party Committee
of Shanghai Baoshan District
(ึ),
The People’s Government of
Shanghai Baoshan District ( ɪ
ִ݁)
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai May Day Labor Award
(ً)
Shanghai Federation of Labor
Unions ( ɪऎ̹ᐼʈึ),
Shanghai Municipal Human
Resources and Social Security
Bureau (ึ
ღ҅)
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Potential Unicorn Enterprise in
Southern Jiangsu National
Independent Innovation
Demonstration Zone for 2021
(2021І˴௴อͪᇍ
ਜᆑίዹԉᖕΆุ)
Jiangsu Provincial Department of
Science and Technology ( Ϫᘽ
ኪҦஔᝂ)
LICENSES, PERMITS AND APPROV ALS
Our PRC Legal Advisor has advised us that during the Track Record Period and up to the
Latest Practicable Date, we had obtained all licenses, permits, approvals and certificates from
the relevant government authorities that are material for our business operations in the PRC.
The following table sets forth details of selected material licenses and permits obtained
by our Group as of the Latest Practicable Date:
License/Permit Holder Date of Grant Expiry Date
Drug Production License
(Type A) (͛ପ஢
̙ᗇ(Aᗇ))1/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our Company December 13, 2022 December 12, 2027
Drug Production License
(Type C) (͛ପ஢
̙ᗇ(Cᗇ))2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our Company May 15, 2023 December 12, 2027
Drug Production License
(Type B) (͛ପ஢
̙ᗇ(Bᗇ))3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Suzhou
Centergene
January 6, 2024 January 5, 2029
BUSINESS
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Notes:
1. Type A License signifies that the Marketing Authorization Holder (MAH) possesses self-production
capacity. The approval license holder and the manufacturing facility are the same legal entity under this
authorization.
2. Type C License is required for entity entrusted by MAH to produce pharmaceutical products. Crucially,
any enterprise undertaking contract manufacturing must obtain a Type C License regardless of whether
it already holds a Type A License. Type C License constitutes a mandatory standalone authorization that
cannot be replaced by a Type A License.
3. Type B License designates a MAH that commissions drug production to third-party manufacturers,
MAH shall also apply for the Type B License in accordance with the regulations.
LEGAL PROCEEDING AND COMPLIANCE
As of the Latest Practicable Date, there was no material litigation, arbitration or
administrative proceedings pending or threatened against the Company or any of our Directors
which could have a material and adverse effect on the research and development of our drug
candidates, our financial condition or results of operations. During the Track Record Period
and as of the Latest Practicable Date, except as disclosed under “Risk Factors — Other Risks
Relating to Our Operations — We have been, and may from time to time become, involved in
claims, disputes, litigation, arbitration or other legal proceedings in the ordinary course of
business, which could adversely affect our business, financial conditions, results of operations
and reputation,” we had not been a party to any actual or threatened material legal or
administrative proceedings, and our Directors had not been involved in any such proceedings.
For potential impact of legal or administrative proceedings on us, please also refer to the
paragraphs headed “Risk Factors — Other Risks Relating to Our Operations — We have been,
and may from time to time become, involved in claims, disputes, litigation, arbitration or other
legal proceedings in the ordinary course of business, which could adversely affect our business,
financial conditions, results of operations and reputation” in this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we had complied,
in all material respects, with all relevant laws and regulations in the jurisdictions we operate
in. We had not been and were not involved in any non-compliance incidents that led to fines,
enforcement actions or other penalties that could, individually or in the aggregate, have a
material adverse effect on our Group’s business operations.
RISK MANAGEMENT AND INTERNAL CONTROL
We are committed to developing and maintaining risk management and internal control
systems comprised of policies and procedures tailored to our business operations. Our
dedication lies in the continual enhancement of these systems to ensure their effectiveness.
Risk Management
We recognize that risk management is critical to the success of our business operation.
Key operational risks faced by us include changes in the general market conditions and the
regulatory environment of the Chinese and global biopharmaceuticals markets, our ability to
develop, manufacture and commercialize our drug candidates, and our ability to compete with
other biopharmaceutical companies. See “Risk Factors” for a discussion of various risks and
uncertainties we face. We also face various financial risks. In particular, we are exposed to
interest rate risk, foreign currency risk, credit risk, and liquidity risk that arise in the normal
course of our business. See “Financial Information — Financial Risk Disclosure” for a
discussion of these financial risks.
BUSINESS
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We have implemented a comprehensive set of risk management policies that establish a
framework for identifying, assessing, evaluating, and continuously monitoring key risks
aligned with our strategic objectives. Risks identified by management will be analyzed on the
basis of likelihood and impact, and will be properly followed up and mitigated and rectified by
our Group and reported to our Directors. Our audit committee supervise the implementation of
our risk management policies.
The following key principles outline our Group’s approach to risk management and
internal control we plan to implement:
 Our audit committee will oversee, evaluate, and enhance the internal control system,
which includes: (i) reviewing internal control and risk management policies and
providing suggestions for improvement; (ii) engaging in discussions with
management to evaluate the effectiveness of internal control and risk management
policies, ensuring that management fulfills its duties in formulating effective
policies; (iii) analyzing material findings related to internal control and assessing
the measures taken by management; and (iv) supervising potential misconduct by
employees regarding internal control and establishing procedures to investigate and
address complaints related to internal control within the Company.
 Our Board will be responsible for (i) formulating our risk management policy and
reviewing major risk management issues of our Company; (ii) providing guidance
on our risk management approach to the relevant teams in our Company; (iii)
reviewing the relevant teams’ reporting on key risks and providing feedbacks; and
(iv) implementing of our risk management measures by the relevant teams.
 The relevant departments within our Company bear the responsibility of
implementing our risk management policy and executing day-to-day risk
management practices. To standardize risk management procedures across our
organization and ensure a consistent level of transparency and risk management
performance, these teams will: (i) collect information regarding the risks associated
with their respective operations or functions; (ii) conduct comprehensive risk
assessments, encompassing the identification, prioritization, measurement, and
categorization of all key risks that could impact their objectives; (iii) prepare an
annual risk management report for review by our chief executive officer; (iv)
continuously monitor key risks pertinent to their operations or functions; (v)
implement appropriate risk responses when necessary; and (vi) develop and
maintain a suitable mechanism to facilitate the application of our risk management
framework.
We consider that our Directors and members of our senior management possess the
necessary knowledge and experience in providing good corporate governance oversight in
connection with risk management and internal control.
BUSINESS
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Internal Control
Our Board is responsible for establishing our internal control system and reviewing its
effectiveness. We engaged an internal control consultant (the “ Internal Control Consultant ”)
in November to December 2024 to perform certain agreed-upon procedures (the “ Internal
Control Review ”) in connection with the internal control of our Company and our major
operating subsidiaries in certain aspects, including entity-level controls, financial reporting and
disclosure controls, human resources and payroll management, general controls of IT system
and other procedures of our operations. The Internal Control Consultant performed the Internal
Control Review, identified internal control deficiencies and provided recommendation
accordingly. We have adopted the corresponding remediation actions to improve the
effectiveness of internal control system. The Internal Control Consultant performed a
follow-up review with regard to those actions taken by us and there are no further material
findings identified in the process of the follow up review. As of the Latest Practicable Date,
there were no material outstanding issues relating to our Company’s internal control.
During the Track Record Period, we regularly reviewed and enhanced our internal control
system. Below is a summary of the internal control policies, measures and procedures we have
implemented or plan to implement:
 We have adopted various measures and procedures regarding each aspect of our
business operation, such as related party transaction, risk management,
environmental protection and occupational health and safety. For more information,
see “— Social, Health, Work Safety and Environmental Matters” in this section. We
provide periodic training about these measures and procedures to our employees as
part of our employee training program. Our internal audit department conducts audit
field work to monitor the implementation of our internal control policies, reports
any weaknesses identified to our management and audit committee, and follows up
on the rectification actions.
 We provide various training programs to keep our employees updated on relevant
laws, regulations, and policies. Our new employees are required to attend
compliance training programs soon after on-boarding and must pass tests which
examine their understanding of the compliance issues addressed by the training
programs. Our employees are also required to regularly attend on-site and online
training sessions to keep them informed of recent updates in the relevant laws and
regulations.
 Our Directors (who are responsible for monitoring the corporate governance of our
Group), with help from our legal advisors, will also periodically review our
compliance status with all relevant laws and regulations after the Global Offering.
 We have established an audit committee which (i) makes recommendations to our
Directors on the appointment and removal of external auditors; and (ii) reviews the
financial statements and renders advice in respect to financial reporting as well as
oversees internal control procedures of our Group.
 We maintain strict anti-corruption policies. We believe we will therefore be less
affected by the increasingly stringent measures taken by the PRC government to
correct corruptive practices in the biopharmaceutical industry.
BUSINESS
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Following the Listing, the following transaction will continue between our Group and the
relevant connected person, which will constitute a continuing connected transaction under the
Listing Rules.
RELEV ANT CONNECTED PERSON
Following the Global Offering, we will become directly owned as to 12.24% by Center
Lab, which is wholly-owned by Center Laboratories. As at October 31, 2025, Lumosa
Therapeutics Co., Ltd. (ʮ̡)( “ Lumosa ”) is held as to approximately
34.30% by Center Laboratories. Pursuant to Rule 14A.07(4) of the Listing Rules, Lumosa is
a connected person of our Company.
FULLY EXEMPT CONTINUING CONNECTED TRANSACTION
Business Development Service Agreement
Principal Terms
Our Company has entered into a business development service agreement (the “ Business
Development Service Agreement ”) with Lumosa on August 8, 2024, pursuant to which
Lumosa shall provide certain business development, marketing, and communications services
(the “ Business Development Services ”) to our Company pertaining to the Company’s certain
pipeline products including KJ103 and KJ017. Pursuant to the Business Development Service
Agreement, the Company shall pay Lumosa a sum of (i) fixed monthly service fee; (ii) costs
and expense incurred by Lumosa for the provision of Business Development Services; and (iii)
if the Company successfully enters into any transaction with third party as a result of the
Business Development Services, a percentage of the proceeds received from such transaction,
including but not limited to any signing fees, milestone fees, sales right fees, distributorship
revenues and payments for goods, after deducting applicable taxes and any costs and expenses
paid by the Company for the provision of the Business Development Services (collectively, the
“Service Fee ”).
The Business Development Service Agreement is non-exclusive, non-assignable and has
a term of two years commencing from the date of the agreement. Subject to compliance with
Listing Rules and applicable laws and regulations, the Business Development Service
Agreement may be renewed for a further term of no more than three years from time to time,
unless either party notifies the other party to the contrary with 60 days’ written notice prior to
the expiry of the agreement’s term.
CONNECTED TRANSACTION
– 402 –


--- page 412 ---
Pricing Policies
The Service Fee was determined by our Company and Lumosa after arm’s length
negotiations primarily with reference to the current fee rates of similar business development
services (i) provided by Lumosa and its affiliates to other clients; and (ii) provided by
Independent Third Party service providers to the Group.
Listing Rules Implications
Based on the historical transaction amounts of the Business Development Services,
details of which are set out in note 33 to the Accountants’ Report in Appendix I and the
estimated amount of the net proceeds received by us in any transaction resulting from the
Business Development Services provided by Lumosa, it is expected that the maximum amounts
payable by us to Lumosa in respect of the Business Development Services for each of the three
years ending December 31, 2025, 2026 and 2027 will not exceed RMB1.3 million.
As our Company is eligible for listing on the Stock Exchange under Chapter 18A of the
Listing Rules as a biotech company, the revenue ratio under Rule 14.07 of the Listing Rules
would not be an appropriate measure of the size of relevant continuing connected transactions
set out in this section. As an alternative, we have applied a percentage ratio test based on the
total operating expenses of our Group.
As the Business Development Service Agreement was entered into and has been
conducted in the ordinary and usual course of business and on normal commercial terms or
better, and all of the applicable percentage ratios under the Listing Rules in respect of the
annual caps under the Business Development Services Agreement is expected to be less than
5% on an annual basis and the total consideration on an annual basis is less than HK$3.0
million, pursuant to Rule 14A.76(1) of the Listing Rules, the transactions contemplated under
the Business Development Services Agreement will be exempt from the reporting, annual
review, announcement, circular and independent Shareholders’ approval requirements under
Chapter 14A of the Listing Rules.
CONNECTED TRANSACTION
– 403 –


--- page 413 ---
OUR CONTROLLING SHAREHOLDERS
Pursuant to an acting-in-concert agreement dated March 10, 2021 (the “ AIC
Agreement ”), entered into by and amongst Dr. Liu, Ms. Wang and Mr. Tan (together, the
“Concert Parties ”), the Concert Parties confirmed that they have acted in concert in the
management and operation of our Group since the date of the AIC Agreement, and they have
agreed to continue to act in concert and reach consensus on any proposal related to the daily
management and operation of our Group presented to the meeting of the Board and the general
meeting of the Shareholders of our Company for voting. As of the Latest Practicable Date, the
Concert Parties were collectively interested in approximately 45.91% of our total issued share
capital, comprising: (i) 21.21% of our total issued share capital directly held by Dr. Liu; (ii)
11.69% of our total issued share capital controlled by Dr. Liu indirectly through the Share
Incentive Platforms (i.e., Shanghai Luoxu, Ningbo Hongsheng and Shanghai Luojun), of which
the executive partner is Dr. Liu; (iii) 7.81% of our total issued share capital directly held by
Ms. Wang; and (iv) 5.21% of our total issued share capital directly held by Mr. Tan. Therefore,
the Concert Parties, Shanghai Luoxu, Ningbo Hongsheng and Shanghai Luojun are considered
as a group of Controlling Shareholders of our Company. For details of the AIC Agreement and
the shareholding of our Controlling Shareholders, see “History, Development and Corporate
Structure—Acting In Concert Agreement” and “Substantial Shareholders.”
Dr. Liu is the co-founder of our Group, executive Director and the Chairman of our
Board. Ms. Wang is the co-founder of our Group, executive Director and Chief Executive
Officer of our Company. Mr. Tan is an executive Director and the director of internal control
of our Company. For background of Dr. Liu, Ms. Wang and Mr. Tan, see “Directors,
Supervisors and Senior Management.”
Immediately following the completion of the Global Offering the Controlling
Shareholders will together control approximately 40.57% of our total issued share capital.
Accordingly, the Controlling Shareholders will remain as a group of Controlling Shareholders
of the Company upon the Listing.
INTERESTS OF THE CONTROLLING SHAREHOLDERS IN OTHER BUSINESSES
Our Controlling Shareholders confirmed that as of the Latest Practicable Date, they did
not have any interest in other business, apart from the business of our Group, which competes
or is likely to compete, directly or indirectly, with our business, which would require disclosure
under Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM THE CONTROLLING SHAREHOLDERS GROUP
Having considered the following factors, our Directors are satisfied that we are capable
of carrying on our business independently of our Controlling Shareholders after the Listing.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 404 –


--- page 414 ---
Management Independence
Our Board comprises four executive Directors, three non-executive Directors and four
independent non-executive Directors. Our Company has three Supervisors and a senior
management team comprising five members (including four executive Directors). See
“Directors, Supervisors and Senior Management” for further details.
Our Directors consider that our Company will function independently from our
Controlling Shareholders because:
(a) each Director is aware of his or her fiduciary duties as a director which require,
among other things, that he or she acts for the benefit and in the interest of our
Company and does not allow any conflict between his or her duties as a Director and
his or her personal interest. In the event that there is a potential conflict of interest
arising out of any transaction to be entered into between our Group and a Director
and/or his/her associate, he/she is required to declare the nature of such interest
before voting at the relevant Board meetings of our Company in respect of such
transactions and the interested Director shall abstain from voting and shall not be
counted towards the quorum for the voting;
(b) the day-to-day management and operations of our Group are carried out by a senior
management team, all of whom have substantial experience in the industry in which
our Group is engaged, and will therefore be able to make business decisions that are
in the best interests of our Group. For details of the background of management, see
“Directors, Supervisors and Senior Management”;
(c) we have appointed four independent non-executive Directors, comprising more than
one-third of the total members of our Board, who have sufficient knowledge,
experience and competence, so that there is a balanced composition of executive,
non-executive Directors and independent non-executive Directors to ensure the
independence of the Board in making decisions affecting our Company and to
promote the interests of our Company and the Shareholders as a whole. For details
of the background of independent non-executive Directors, see “Directors,
Supervisors and Senior Management”;
(d) our Company has established internal control mechanisms to identify connected
transactions to ensure that our Shareholders or Directors with conflicting interests
in a proposed transaction will abstain from voting on the relevant resolutions. In the
event that there is a potential conflict of interest arising out of any transaction to be
entered into between our Company and our Directors or their respective close
associates, the interested Director is obliged to declare and fully disclose such
potential conflict of interest and shall abstain from voting at the relevant Board
meetings of our Company in respect of such transactions and shall not be counted
in the quorum; and
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
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--- page 415 ---
(e) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and the Controlling Shareholder which would
support our independent management. For details, see “— Corporate Governance
Measures” below.
Based on the above, we believe that our Board and senior management as a whole are able
to perform the managerial role independently from our Controlling Shareholders.
Operational Independence
Although our Controlling Shareholders will retain a controlling interest in us after
Listing, we have full rights to make all decisions on, and to carry out, our own business
operations independently. Our Company, through our subsidiaries, holds the licenses and
qualifications necessary to carry on our current business, and has sufficient capital, facilities,
technology and employees to operate the business independently from our Controlling
Shareholders. We have access to third parties independently from and not connected to our
Controlling Shareholders for sources of suppliers and customers.
Our Directors are of the view that there is no operational dependence by us on our
Controlling Shareholders, and our Group is able to operate independent from our Controlling
Shareholders after the Listing.
Financial Independence
We have established our own finance department with a team of financial staff, who are
responsible for financial control, accounting, reporting, group credit and internal control
functions of the Company, independent from the Controlling Shareholders. We are able to make
financial decisions independently and the Controlling Shareholders and their respective close
associates do not intervene with our financial matters. We have also established an independent
audit system, a standardized financial and accounting system and a complete financial
management system.
In addition, we are capable of obtaining financing from third parties at reasonable costs
without relying on any guarantee or security provided by the Controlling Shareholders or their
close associates (other than the Group). As of the Latest Practicable Date, there are no
outstanding loans or guarantees provided by, or granted to, our Controlling Shareholders or
their respective associates.
Based on the above, our Directors are of the view that we are capable of carrying on our
business independently of, and do not place undue reliance on the Controlling Shareholders
and their respective close associates after the Listing.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 406 –


--- page 416 ---
CORPORATE GOVERNANCE MEASURES
Our Company will comply with the provisions of the Corporate Governance Code in
Appendix C1 to the Listing Rules (“ Corporate Governance Code ”), which sets out principles
of good corporate governance in relation to, among other matters, directors, the chairman and
executive officer, board composition, the appointment, re-election and removal of directors,
their responsibilities and remuneration and communications with shareholders.
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We have adopted the following measures to safeguard good corporate
governance standards and to avoid potential conflict of interests between our Group and our
Controlling Shareholders:
(a) where a Shareholders’ meeting is to be held for considering proposed transactions
in which the Controlling Shareholders or any of their respective associates has a
material interest, the Controlling Shareholders will not vote on the resolutions and
shall not be counted in the quorum in the voting;
(b) the Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if the Company enters into connected transactions with
the Controlling Shareholders or any of their respective associates, the Company will
comply with the applicable Listing Rules;
(c) our Board consists of a balanced composition of executive, non-executive and
independent non-executive Directors, with more than one-third of independent
non-executive Directors to ensure that our Board is able to effectively exercise
independent judgment in its decision-making process and provide independent
advice to our Shareholders. Our independent non-executive Directors individually
and collectively possess the requisite knowledge and experience to perform their
roles. They will review whether there is any conflict of interests between our Group
and our Controlling Shareholder and provide impartial and professional advice to
protect the interest of our minority Shareholders;
(d) where the advice from an independent professional, such as that from financial or
legal advisor, is reasonably requested by our Directors (including the independent
non-executive Directors), the appointment of such independent professional will
made at our Company’s expenses; and
(e) we have appointed Rainbow Capital (HK) Limited as our Compliance Adviser to
provide advice and guidance to us in respect of compliance with the Listing Rules,
including various requirements relating to corporate governance.
Based on the above, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage conflict of interests that may arise between our
Group and the Controlling Shareholders, and to protect the interest of our Shareholders, in
particular, the minority Shareholders after the Listing.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 407 –


--- page 417 ---
You should read the following discussion and analysis in conjunction with our
consolidated financial information, included in the Accountants’ Report in Appendix I to
this prospectus, together with the respective accompanying notes. Our consolidated
financial information has been prepared in accordance with IFRSs.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance that
involve risks and uncertainties. These statements are based on our assumptions and
analysis made by us in light of our experience and perception of historical trends, current
conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. However , our actual results may differ materially
from those anticipated in these forward-looking statements as a result of certain factors.
In evaluating our business, you should carefully consider the information provided in the
section headed “Risk Factors” in this prospectus.
OVERVIEW
We are a biotechnology company with an approved product and a diverse clinical
pipeline, leveraging synthetic biology technology to develop and deliver recombinant biologic
drugs in China, targeting conditions with limited treatment options and complex manufacturing
challenges. From our inception, we have strategically focused on creating biologic drugs that
elevate treatment standards by replacing biochemically extracted products derived from animal
organs, blood or urine, or otherwise upgrading the current treatments. We have established
proprietary technology platforms, supported by our chassis cell engineering technology,
combining our drug design and bioprocessing capabilities. Our technology platforms enable us
to achieve a competitive position in developing drug candidates across four strategic
therapeutic areas with a combined clinically addressable market size of approximately RMB50
billion in total by 2033 in China according to Frost & Sullivan: (i) high-volume subcutaneous
(SC) drug delivery, (ii) antibody-mediated autoimmune conditions, (iii) drugs in assisted
reproduction and (iv) recombinant biologic products as transformative alternative to traditional
biochemical production.
We currently have no products approved for commercial sale and were loss-making
during the Track Record Period. In 2023, 2024 and the six months ended June 30, 2024 and
2025, we incurred net losses of RMB160.4 million, RMB364.4 million, RMB167.3 million and
RMB183.1 million, respectively. Substantially all of our net losses resulted from research and
development expenses and administrative expenses. In 2023, 2024 and the six months ended
June 30, 2024 and 2025, we recognized revenue of RMB6.9 million, RMB6.2 million, RMB1.5
million and RMB42.0 million, respectively, which were derived from our sales of materials,
provision of technical services, as well as upfront payments received under a license and
commercialization agreement.
FINANCIAL INFORMATION
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We expect to incur significant amount of expenses for at least the next several years as
we continue to advance the preclinical research, clinical development, and manufacturing of
our drug candidates, to prepare for the commercial launch of our future approved drugs, as well
as to recruit more talents necessary to operate our business. Subsequent to the Listing, we
expect to incur costs associated with operating as a public company. We expect that our
financial performance will fluctuate from period to period due to the development status,
regulatory approval timeline and commercialization of our pipeline products.
BASIS OF PREPARATION
Our historical financial information has been prepared in accordance with all applicable
International Financial Reporting Standards (“ IFRSs ”), which comprise all standards and
interpretations approved by the International Accounting Standards Board (“ IASB ”). For the
purpose of preparing the historical financial information throughout the Track Record Period,
we have early adopted all applicable IFRSs effective for the accounting period commencing
from January 1, 2024, together with the relevant transitional provisions. The historical
financial information has been prepared under the historical cost convention.
For ordinary Shares issued to Pre-IPO Investors, pursuant to the relevant supplemental
agreement and shareholders’ agreements entered into between our Company and the relevant
Shareholders, certain special rights granted by our Company, including the redemption rights,
liquidation preference rights and anti-dilution rights, were irrecoverably terminated and
deemed void ab initio as described in Note 27 to the Accountants’ Report set out in Appendix
I to this prospectus. Having taking into account the legal and regulatory framework of our
Company’s jurisdiction and the governing law of the relevant supplemental agreement and
shareholders’ agreements, our Directors considered that it is appropriate to present the Pre-IPO
Investments as equity throughout the Track Record Period. For details, please refer to note 2.1
to the Accountants’ Report set out in Appendix I to this prospectus.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to continue to be, affected by a
number of factors, many of which may be beyond our control. A discussion of the key factors
is set out below.
Our Ability to Successfully Develop and Commercialize Our Drug Candidates
Our business and results of operations depend on our ability to successfully advance our
drug development programs, demonstrate favorable safety and efficacy clinical trial results,
obtain the requisite regulatory approvals, secure adequate manufacturing capacity, and
commercialize our products in targeted markets as planned. By harnessing our deep
understanding in synthetic biology technologies, we have cultivated a comprehensive pipeline
across four therapeutic areas comprising twelve assets, including one recently approved Core
FINANCIAL INFORMATION
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Product, SJ02, six clinical-stage drug candidates, including our two other Core Products,
KJ103 and KJ017, and five preclinical assets. See “Business — Our Drug Candidates” for more
information on the development status of our drug candidates.
The time required to obtain marketing approvals from the NMPA, FDA, or other
comparable regulatory authorities is unpredictable, but it typically takes several years
following the commencement of clinical trials. Any delays in the regulatory approvals for any
of our drug candidates in major markets will correspondingly delay our ability to generate
revenue from those drug candidates in those markets and adversely affect our results of
operations. We have filed NDAs for SJ02 and KJ017 with the NMPA in 2023 and 2024,
respectively. We have received the NDA approval for SJ02 from the NMPA in August 2025.
Subject to regulatory communications and review status, we expect to receive the relevant
marketing approval KJ017 in China in the first quarter of 2026.
Upon commercialization of SJ02, KJ017, and our other drug candidates, our business and
results of operations will be driven by the market acceptance, sales of our drug products, as
well as our manufacturing capabilities to meet growing demands. The successful
commercialization may also require significant marketing efforts and inputs before we are able
to generate any revenue from product sales. We plan to collaborate with leading industry
players and leverage their established distribution channels and robust sales and marketing
capabilities to achieve fast market access in the short run. As our market penetration deepens,
we may also assemble a dedicated sales and marketing team to enhance in-house
commercialization capabilities. Despite our adaptive commercialization strategy, if we fail to
achieve the degree of market acceptance, we may not be able to generate revenue as expected.
See “Risk Factors — Other risks relating to our business — Risks relating to
commercialization of our drug candidates” for more details of the risks in relation to
commercialization of our drug candidates.
Our Cost Structure
Our results of operations are significantly affected by our cost structure, which primarily
includes research and development expenses and administrative expenses.
Research and development expenses have been, and are expected to continue to be, a
major component in our cost structure. We have invested a significant portion of our efforts and
financial resources in the development of our drug candidates. During the Track Record Period,
our research and development expenses primarily consisted of (i) staff costs, mainly including
wages, bonus, and other welfare benefits for our research and development personnel, (ii)
share-based payments incurred from our grant of share incentives to research and development
personnel, (iii) trial and testing expenses for our drug candidates, primarily in relation to the
engagement of CROs, CDMOs, and other service providers, (iv) depreciation and amortization
expenses for property, plant and equipment, right-of-use assets, and other intangible assets
used for research and development purpose, and (v) cost of raw materials consumed in the
course of our research and development activities. See “— Description of Selected
Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income
FINANCIAL INFORMATION
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— Research and Development Expenses” for details. In 2023, 2024 and the six months ended
June 30, 2024 and 2025, our research and development expenses amounted to RMB132.5
million, RMB250.7 million, RMB116.3 million and RMB111.0 million, respectively.
During the Track Record Period, our administrative expenses primarily consisted of (i)
share-based payments incurred from our grant of share incentives to management and
administrative personnel, (ii) staff costs, mainly including wages, bonus, and other welfare
benefits for our management and administrative personnel, (iii) depreciation and amortization
expenses for property, plant and equipment, right-of-use assets, and other intangible assets
used for administrative purpose, (iv) general office expenses, (v) professional service fees paid
to legal advisors, auditors, asset valuers, and other consulting service providers, and (vi) taxes
and surcharges. See “— Description of Selected Components of Consolidated Statements of
Profit or Loss and Other Comprehensive Income — Administrative Expenses” for details. In
2023, 2024 and the six months ended June 30, 2024 and 2025, our administrative expenses
amounted to RMB46.4 million, RMB107.6 million, RMB49.2 million and RMB46.2 million,
respectively.
We expect our cost structure to evolve as we continue to develop and expand our business.
As the preclinical studies and clinical trials of our drug candidates continue to progress and as
we gradually bring our pipeline products to commercialization, we expect to incur additional
costs in relation to research and development, manufacturing, regulatory affairs, and sales and
marketing efforts, among other things. Additionally, we anticipate increasing legal,
compliance, accounting, insurance, and investor and public relations expenses associated with
being a listed company in Hong Kong.
Our Existing and Future License and Collaboration Arrangements
In recent years, we entered into a number of license and collaboration agreements with
international and domestic leading pharmaceutical companies. For details, see “Business —
Collaboration Agreements.” These strategic partnerships not only enable us to maximize the
clinical and commercial value of our drug candidates, but also furnish us the capital support
to advance our pipeline assets and foster our long-term growth. The timing and amounts of
upfront payments, milestone payments, royalties, and other considerations, as applicable, may
differ by agreement and depend on the achievement of certain specified milestone events.
Moreover, building on the success of our existing partnerships, we are actively pursuing
additional collaborative opportunities to accelerate the clinical development, global
registration, and entry into international markets for our pipeline assets. See “Business — Our
Strategies — Advance our diversified business model combining self-development,
collaboration and excipient supply, and pursue and strengthen strategic partnership with
pharmaceutical companies over the world.” These factors will influence, and may result in
fluctuations in, our revenue, profit, and results of operations from period to period.
FINANCIAL INFORMATION
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Funding for Our Operations
During the Track Record Period, we funded our operations primarily through equity and
debt financings. We expect to fund our future operations primarily with existing cash and cash
equivalents, bank loans, considerations received under respective license and collaboration
agreements, and net proceeds from the Global Offering. Upon the successful
commercialization of one or more of our drug candidates, we expect to further complement the
funding for our operations with revenue generated from sales of our commercialized drugs.
However, with the continuing expansion of our business and product pipeline, we may require
further funding through public or private offerings, debt financing, license and collaboration
arrangements, or other sources. Any fluctuation in the funding for our operations will impact
our cash flow and our results of operations.
MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTING
JUDGEMENTS AND ESTIMATES
We have identified certain accounting policies that are significant to the preparation of
our consolidated financial statements. Some of our accounting policies involve subjective
assumptions and estimates, as well as complex judgments relating to accounting items.
Estimates and judgments are continually re-evaluated and are based on historical experience
and other factors, including industry practices and expectations of future events that we believe
to be reasonable under the circumstances. We have not changed our assumptions or estimates
in the past and have not noticed any material errors regarding our assumptions or estimates.
Under current circumstances, we do not expect that our assumptions or estimates are likely to
change significantly in the future. When reviewing our consolidated financial statements, you
should consider (i) our material accounting policies, (ii) the judgments and other uncertainties
affecting the application of such policies, and (iii) the sensitivity of reported results to changes
in conditions and assumptions.
We set forth below those accounting policies that we believe are material to us or involve
the most significant estimates and judgments used in the preparation of our consolidated
financial statements. Our material accounting policies and significant accounting judgements
and estimates, which are important for an understanding of our financial position and results
of operations, are set forth in detail in Notes 2.3 and 3 to the Accountants’ Report set out in
Appendix I to this prospectus.
FINANCIAL INFORMATION
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Material Accounting Policies
Revenue Recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services
is transferred to the customers at an amount that reflects the consideration to which we expect
to be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of
consideration is estimated to which we will be entitled in exchange for transferring the goods
or services to the customer. The variable consideration is estimated at contract inception and
constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognized will not occur when the associated uncertainty with the variable
consideration is subsequently resolved.
(a) Sale of materials
Revenue from the sale of materials is recognized at the point in time when control of the
products is transferred to the customer upon receipt of the goods.
(b) Technical services
We provide technical support to the consumers for the joint development of subcutaneous
formulations in combination with our drug candidates. We recognize revenue from technical
services at the point in time when the customer obtains technical support, limited to the
consideration that is not constrained, as we do not perform any activities that significantly
affect the technology to which the customer has rights. Non-refundable payments received
before the satisfaction of all of the relevant criteria for revenue recognition are recorded as
contract liabilities.
(c) Licensing revenue
Our licensing revenue may contain more than one performance obligation, including
grants of licenses to the intellectual property rights and other deliverables. As part of the
accounting for these arrangements, we must develop assumptions that require judgment to
determine the stand-alone selling price for each performance obligation identified in the
contract. In developing the stand-alone selling price for a performance obligation, we consider
competitor pricing for a similar or identical product, market awareness of and perception of the
product, expected product life and current market trends. In general, the consideration
allocated to each performance obligation is recognized when the respective obligation is
satisfied on acceptance of a good or a service, limited to the consideration that is not
constrained. Payments received before all of the relevant criteria for revenue recognition are
satisfied are recorded as contract liabilities.
FINANCIAL INFORMATION
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Licenses of intellectual property: Upfront payments for licensing our intellectual property
are evaluated to determine if the license is distinct from the other performance obligations
identified in the arrangement. For licenses determined to be distinct, we recognize revenues
from up-front fees allocated to the license at a point in time, when the license is transferred to
the licensee and the licensee is reasonably able to use and benefit from the license.
Milestone payments: Regulatory milestones are fully constrained until the period in which
those regulatory approvals are achieved due to the inherent uncertainty of the approval process.
Regulatory milestones are included in the transaction price in the period in which regulatory
approval is obtained.
Royalties: For arrangements that include sales-based royalties, including milestone
payments based on the level of sales, and the license is deemed to be the predominant item to
which the royalties relate, we recognize revenue at the later of (i) the first occurrence of the
specified sales milestone, and (ii) when the performance obligation to which some or all of the
royalty has been allocated has been satisfied (or partially satisfied).
Property, Plant and Equipment and Depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset
to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into
operation, such as repairs and maintenance, is normally charged to profit or loss in the period
in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure
for a major inspection is capitalized in the carrying amount of the asset as a replacement.
Where significant parts of property, plant and equipment are required to be replaced at
intervals, we recognize such parts as individual assets with specific useful lives and depreciates
them accordingly.
FINANCIAL INFORMATION
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Depreciation is calculated on the straight-line basis to write off the cost of each item of
property, plant and equipment to its residual value over its estimated useful life. The principal
annual rates used for this purpose are as follows:
Category Principal annual rate
Decoration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.00%-33.33%
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.79%
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50%-31.67%
Electronic equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50%-31.67%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50%-31.67%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.00%
Where parts of an item of property, plant and equipment have different useful lives, the
cost of that item is allocated on a reasonable basis among the parts and each part is depreciated
separately. Residual values, useful lives and the depreciation method are reviewed, and
adjusted if appropriate, at least at each financial year end.
An item of property, plant and equipment including any significant part initially
recognized is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss on disposal or retirement recognized in profit or loss
in the year the asset is derecognized is the difference between the net sales proceeds and the
carrying amount of the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not
depreciated. It is reclassified to the appropriate category of property, plant and equipment when
completed and ready for use.
Intangible Assets (other than Goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The
useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets
with finite lives are subsequently amortized over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The
amortization period and the amortization method for an intangible asset with a finite useful life
are reviewed at least at each financial year end.
Intangible assets with indefinite useful lives are tested for impairment annually either
individually or at the cash-generating unit level. Such intangible assets are not amortized. The
useful life of an intangible asset with an indefinite life is reviewed annually to determine
whether the indefinite life assessment continues to be supportable. If not, the change in the
useful life assessment from indefinite to finite is accounted for on a prospective basis.
FINANCIAL INFORMATION
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Software
Purchased software is stated at cost less any impairment losses and is amortized on the
straight-line basis over its estimated useful lives of three to ten years.
Patents and licenses
Purchased patents and licenses are stated at cost less any impairment losses and are
amortized on the straight-line basis over their estimated useful lives of ten years.
Research and development costs
All research costs are charged to profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalized and deferred only
when we can demonstrate the technical feasibility of completing the intangible asset so that it
will be available for use or sale, the intention to complete and the ability to use or sell the asset,
how the asset will generate future economic benefits, the availability of resources to complete
the project and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred.
Investments in Associates
An associate is an entity in which we have a long-term interest of generally not less than
20% of the equity voting rights and over which we have significant influence. Significant
influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies.
Our investments in associates are stated in the consolidated statements of financial
position at our share of net assets under the equity method of accounting, less any impairment
losses.
Our share of the post-acquisition results and other comprehensive income of associates is
included in the consolidated statements of profit or loss and other comprehensive income. In
addition, when there has been a change recognized directly in the equity of the associate, we
recognize our share of any changes, when applicable, in the consolidated statements of changes
in equity. Unrealized gains and losses resulting from transactions between us and our associates
are eliminated to the extent of our investments in the associates, except where unrealized losses
provide evidence of an impairment of the assets transferred. Goodwill arising from the
acquisition of associates is included as part of our investments in associates.
FINANCIAL INFORMATION
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Classification as equity and financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of financial
liability and equity instrument.
A financial liability is any liability that is (a) a contractual obligation (i) to deliver cash
or another financial asset to another entity; or (ii) to exchange financial assets or financial
liabilities with another entity under conditions that are potentially unfavourable to the entity;
or (b) a contract that will or may be settled in the entity’s own equity instruments and is: (i)
a non derivative for which the entity is or may be obliged to deliver a variable number of the
entity’s own equity instruments; or (ii) a derivative that will or may be settled other than by
the exchange of a fixed amount of cash or another financial asset for a fixed number of the
entity’s own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities.
Share-based Payments
We operate the Pre-IPO Share Incentive Plans for the purpose of providing incentives and
rewards to eligible participants who contribute to the success of our operations. Our Directors,
senior management and core employees receive remuneration in the form of share-based
payments, whereby employees render services in exchange for equity instruments (“ equity-
settled transactions ”). The cost of equity-settled transactions with employees is measured by
reference to the fair value at the date at which they are granted. The fair value of equity-settled
share-based payment granted was estimated as at the date of grant using recent transaction
price, taking into account the terms and conditions upon which the share incentives were
granted.
The cost of equity-settled transactions is recognized in employee benefit expense,
together with a corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled
transactions at each reporting period until the vesting date reflects the extent to which the
vesting period has expired and our best estimate of the number of equity instruments that will
ultimately vest. The charge or credit to profit or loss for a period represents the movement in
the cumulative expense recognized as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of our best estimate of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within the grant date fair value. Any other
FINANCIAL INFORMATION
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conditions attached to an award, but without an associated service requirement, are considered
to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award
and lead to an immediate expensing of an award unless there are also service and/or
performance conditions.
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is recognized. Where awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the market
or non-vesting condition is satisfied, provided that all other performance and/or service
conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognized as if the terms had not been modified, if the original terms of the award are met.
In addition, an expense is recognized for any modification that increases the total fair value of
the share-based payments, or is otherwise beneficial to the employee as measured at the date
of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on
the date of cancellation, and any expense not yet recognized for the award is recognized
immediately.
Significant Accounting Judgements and Estimates
The preparation of our historical financial information requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and their accompanying disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates could result in outcomes that
could require a material adjustment to the carrying amounts of the assets or liabilities affected
in the future.
Critical Accounting Judgements in Applying Accounting Policies
Research and development costs
All research costs are charged to profit or loss as incurred. Expenses incurred on each
pipeline to develop new products are capitalized and deferred in accordance with the
accounting policy for research and development expenses in Note 2.3 to the Accountants’
Report set out in Appendix I to this prospectus. Determining the amounts to be capitalized
requires our management to make judgements on the technical feasibility of existing pipelines
to be successfully commercialized and bring economic benefits to us.
FINANCIAL INFORMATION
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Deferred tax assets
Deferred tax assets are recognized for deductible temporary differences and unused tax
losses to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the unused tax losses can be utilized. Significant
management judgement is required to determine the amount of deferred tax assets that can be
recognized, based upon the likely timing and level of future taxable profits, together with
future tax planning strategies.
We have tax losses of RMB810.1 million, RMB1,168.2 million and RMB1,320.8 million
as of December 31, 2023 and 2024 and June 30, 2025 carried forward, respectively. These
losses related to our Company and our subsidiaries that have a history of losses, have not
expired, and may not be used to offset taxable income elsewhere in our Group. Our Company
and our subsidiaries have neither any taxable temporary difference nor any tax planning
opportunities available that could partly support the recognition of these losses as deferred tax
assets. On this basis, we have determined that we cannot recognize deferred tax assets on the
tax losses carried forward. For more details, see Note 25 to the Accountants’ Report set out in
Appendix I to this prospectus.
Key Sources of Estimation Uncertainty
Leases — Estimating the incremental borrowing rate
We cannot readily determine the interest rate implicit in a lease, and therefore, we use an
incremental borrowing rate (“ IBR”) to measure lease liabilities. The IBR is the rate of interest
that we would have to pay to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what we “would have to pay”, which requires
estimation when no observable rates are available (such as for subsidiaries that do not enter
into financing transactions) or when it needs to be adjusted to reflect the terms and conditions
of the lease (for example, when leases are not in the subsidiary’s functional currency). We
estimate the IBR using observable inputs (such as market interest rates) when available and are
required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit
rating).
FINANCIAL INFORMATION
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Impairment of non-financial assets (other than goodwill)
We assess whether there are any indicators of impairment for all non-financial assets
(including the right-of-use assets) at the end of each period comprising the Track Record
Period. Indefinite life intangible assets are tested for impairment annually and at other times
when such an indicator exists. Other non-financial assets are tested for impairment when there
are indicators that the carrying amounts may not be recoverable. An impairment exists when
the carrying value of an asset or a cash-generating unit exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value in use. The calculation of the
fair value less costs of disposal is based on available data from binding sales transactions in
an arm’s length transaction of similar assets or observable market prices less incremental costs
for disposing of the asset. When value in use calculations are undertaken, our management
must estimate the expected future cash flows from the asset or cash-generating unit and choose
a suitable discount rate in order to calculate the present value of those cash flows.
Estimation of provision for potential litigation claim
We consider the current process of the legal cases and the legal opinion of lawyers and
exercise considerable judgement in measuring and recognizing provisions and contingent
liabilities related to potential or outstanding legal claims. Judgement is necessary in assessing
the likelihood that a liability will arise, and to quantify the possible range of the final
settlement. Provisions are recognized when our Group has a present obligation, the loss is
considered probable and can be reliably estimated. Because of the inherent uncertainties in this
evaluation process, actual losses may be different from the originally estimated provision.
These estimates are subject to change as new information becomes available, primarily with
the support of in-house or external legal counsels.
FINANCIAL INFORMATION
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DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS
OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
The following table sets forth selected components of our consolidated statements of
profit or loss and other comprehensive income for the periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,930 6,160 1,491 41,990
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(149) (1,140) (451) (265)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,781 5,020 1,040 41,725
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H111817,597 7,604 2,859 5,899
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(132,545) (250,727) (116,292) (111,045)
Business development expenses /H1118/H1118 (1,227) (7,908) (3,465) (2,942)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(46,351) (107,636) (49,208) (46,153)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,566) – (12,435)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,655) (4,556) (2,006) (2,666)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(81) (78) – (55,365)
Share of loss of an associate /H1118/H1118/H1118/H1118 (915) (609) (240) (114)
Loss before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(160,396) (364,456) (167,312) (183,096)
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 32 3 –
Loss and total comprehensive
loss for the year/period /H1118/H1118/H1118/H1118/H1118(160,395) (364,433) (167,289) (183,096)
For details on the accounting treatment of redemption rights, anti-dilution rights and
liquidation preferences rights granted to Pre-IPO Investors, see “— Share Capital and Total
Equity” below and Note 27 to the Accountants’ Report set out in Appendix I to this prospectus.
Non-IFRS Measure
To supplement our consolidated statements of profit or loss and other comprehensive
income which are presented in accordance with IFRSs, we also use adjusted loss as a non-IFRS
measure, which is not required by, or presented in accordance with, IFRSs. We believe that the
presentation of the non-IFRS measure when shown in conjunction with the corresponding IFRS
measures provides useful information to management and investors in facilitating a comparison
of our operating performance from period to period. In particular, the non-IFRS measure
eliminates impact of certain expenses, including share-based payments and listing expenses.
Such non-IFRS measure allows investors to consider metrics used by our management in
evaluating our performance.
FINANCIAL INFORMATION
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We define adjusted loss (non-IFRS measure) as loss for the year/period adjusted by
adding back (i) share-based payments, and (ii) listing expenses. Share-based payments
represent expenses arising from our grant of share incentives to eligible individuals, which are
non-cash in nature. Listing expenses are the expenses arising from activities in relation to the
proposed Listing and Global Offering. The use of the non-IFRS measure has limitations as an
analytical tool, and you should not consider it in isolation from, or as a substitute for, or
superior to, analysis of our results of operations or financial condition as reported under IFRSs.
In addition, the non-IFRS financial measure may be defined differently from similar terms used
by other companies and therefore may not be comparable to similar measures presented by
other companies.
The following table reconciles our adjusted loss (non-IFRS measure) for the year/period
presented in accordance with IFRSs:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Loss for the year/period /H1118/H1118/H1118/H1118/H1118/H1118(160,395) (364,433) (167,289) (183,096)
Add:
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 153,152 70,097 46,805
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,566 – 12,435
Adjusted loss (non-IFRS
measure) for the year/period /H1118 (160,395) (205,715) (97,192) (123,856)
Revenue
During the Track Record Period, our revenue was derived from (i) sales of materials,
including recombinant human hyaluronidase as a pharmaceutical excipient, IgG-degrading
enzyme and antibodies, to downstream customers for research and development purpose, (ii)
provision of technical services, mainly representing certain service fees, milestone payments,
or other considerations we received under respective collaboration agreements with our
business partners, and (iii) recognition of upfront payments received under a license and
commercialization agreement as licensing revenue. The revenue generated from our sales of
antibodies was on a one-off basis and non-recurring in nature. For more information related to
our license and collaboration agreements, see “Business — Collaboration Agreements.”
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our revenue in absolute amounts and as
percentages of the total revenue for the periods indicated:
For the Y ear Ended December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Sales of materials /H1118/H1118/H11182,099 30.3 3,138 50.9 1,491 100.0 983 2.3
Technical services /H1118/H1118/H11184,831 69.7 3,022 49.1 – – 1,005 2.4
Licensing revenue /H1118/H1118/H1118 –––––– 40,002 95.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,930 100.0 6,160 100.0 1,491 100.0 41,990 100.0
The following table sets forth a breakdown of revenue from sales of materials by product
type for the periods indicated:
For the Y ear Ended December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Recombinant human
hyaluronidase /H1118/H1118/H1118/H1118398 19.0 3,111 99.1 1,491 100.0 960 97.7
IgG-degrading enzyme – – 27 0.9 – – 23 2.3
Antibodies /H1118/H1118/H1118/H1118/H1118/H1118/H11181,701 81. 0––––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,099 100.0 3,138 100.0 1,491 100.0 983 100.0
Cost of Sales
During the Track Record Period, our cost of sales was primarily related to our sales of
materials, including costs of raw materials, staff costs, and certain depreciation and
amortization expenses related thereto. In 2023, 2024 and the six months ended June 30, 2024
and 2025, our cost of sales was RMB0.1 million and RMB1.1 million, RMB0.5 million and
RMB0.3 million, respectively.
FINANCIAL INFORMATION
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Gross Profit and Gross Profit Margin
In 2023, 2024 and the six months ended June 30, 2024 and 2025, our gross profit was
RMB6.8 million, RMB5.0 million, RMB1.0 million and RMB41.7 million, respectively. For
the same years, our gross profit margin was 97.8%, 81.5%, 69.8% and 99.4%, respectively.
Other Income and Gains
During the Track Record Period, our other income and gains primarily consisted of (i)
bank interest income, (ii) government grants, and (iii) net foreign exchange gains. Bank
interest income represents interest on our bank deposits. Government grants refer to a variety
of subsidies granted by the PRC local government authorities in support of our research and
development activities and business operations, which had no conditions or contingencies
attached or were recognized upon compliance with the attached conditions. Net foreign
exchange gains represent the net exchange gains resulting from the translation of our cash
balance denominated in U.S. dollar at year-end exchange rates against Renminbi.
The following table summarizes a breakdown of our other income and gains in absolute
amounts and as percentages of the total other income and gains for the periods indicated:
For the Y ear Ended December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Other income:
Bank interest income /H1118 7,896 44.9 4,646 61.1 1,796 62.9 3,591 60.9
Government grants /H1118/H11186,320 35.9 1,766 23.2 593 20.7 1,894 32.1
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 1 2 2 . 3–––– 4 1 4 7 . 0
Gains:
Foreign exchange
gains, net /H1118/H1118/H1118/H1118/H1118/H11182,969 16.9 1,192 15.7 470 16.4 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,597 100.0 7,604 100.0 2,859 100.0 5,899 100.0
FINANCIAL INFORMATION
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Research and Development Expenses
During the Track Record Period, our research and development expenses consisted of (i)
staff costs, mainly including wages, bonus, and other welfare benefits for our research and
development personnel, (ii) share-based payments incurred from our grant of share incentives
to research and development personnel, (iii) trial and testing expenses for our drug candidates,
primarily in relation to the engagement of CROs, CDMOs, and other service providers, (iv)
depreciation and amortization expenses for property, plant and equipment, right-of-use assets,
and other intangible assets used for research and development purpose, (v) cost of raw
materials consumed in the course of our research and development activities, and (vi) other
expenses, mainly including utilities incurred for our research and development activities,
regulatory registration fees, and expenses incurred for the application and maintenance of
intellectual property rights.
The following table sets forth a breakdown of our research and development expenses in
absolute amounts and as percentages of the total research and development expenses for the
periods indicated:
For the Y ear Ended December 31, For the Six Months Ended June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H111846,694 35.2 59,786 23.9 28,458 24.5 36,231 32.6
Share-based payments – – 93,616 37.3 42,826 36.8 27,636 24.9
Trial and testing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111842,543 32.1 39,222 15.6 16,180 13.9 19,881 17.9
Depreciation and
amortization
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111817,626 13.3 23,957 9.6 11,943 10.3 12,166 11.0
Cost of raw materials /H1118 15,719 11.9 18,747 7.5 9,436 8.1 7,517 6.8
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,963 7.5 15,399 6.1 7,449 6.4 7,614 6.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,545 100.0 250,727 100.0 116,292 100.0 111,045 100.0
Our research and development expenses attributable to our Core Products were RMB79.9
million, RMB127.1 million, RMB69.1 million and RMB57.7 million, in 2023, 2024 and the six
months ended June 30, 2024 and 2025, respectively, accounting for 44.4%, 34.7%, 40.9% and
36.0%, of our total operating expenses in the same periods, respectively. Our research and
development expenses attributable to Core Products increased by 59.0% from 2023 to 2024,
primarily due to an increase of RMB52.3 million in share-based payments, arising from our
grant of share incentives to relevant research and development personnel in 2024; partially
offset by a decrease of RMB6.9 million in trial and testing expenses mainly attributable to
KJ103, as we completed two Phase I trials for KJ103 in China and New Zealand in 2023 and
FINANCIAL INFORMATION
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primarily focused on the Phase II trial for kidney transplantation desensitization in 2024 (with
less patients enrolled throughout the year), meanwhile its planned indication expansion and
overseas research and developments activities were still in preparatory stage. Our research and
development expenses attributable to Core Products decreased by 16.6% from the six months
ended June 30, 2024 to the corresponding period in 2025, primarily due to a significant
decrease of RMB35.5 million in research and development expenses for KJ017 and SJ02 as
they progressed into NDA registration-stage; partially offset by an increase of RMB24.0
million in research and development expenses for KJ103, mainly in relation to the initiation of
its Phase II trial in patients with anti-GBM disease in China in October 2024 and the
preparation for its Phase III trial for kidney transplantation desensitization planned in August
2025.
The proportion of research and development expenses for Core Products to total operating
expenses decreased from 44.4% in 2023 to 34.7% in 2024, due to the significant growth in our
total operating expenses which outpaced the growth in research and development expenses for
Core Products during the same years. The significant growth in our total operating expenses
was primarily driven by (i) an increase by 134.9% (RMB71.0 million) in research and
development expenses for pipeline products other than Core Products, in line with our
continued research and development endeavors to advance these candidates, and (ii) an
increase by 132.2% (RMB61.3 million) in administrative expenses, largely attributable to
share-based payments incurred from our grant of share incentives to management and
administrative personnel. The proportion of research and development expenses for Core
Products to total operating expenses decreased from 40.9% in the six months ended June 30,
2024 to 36.0% in the corresponding period in 2025, primarily due to a decrease by 57.5%
(RMB35.5 million) in research and development expenses attributable to KJ017 and SJ02, as
they advanced into the NDA registration-stage in the first half of 2025 and incurred less
research and development expenses compared to the clinical stage.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our research and development expenses by
each drug candidate and by different stages of Core Products in absolute amounts and as
percentages of the total research and development expenses for the periods indicated:
For the Y ear Ended December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Core Products
KJ017
Phase I /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Phase II /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Phase III /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,422 2.6 4,861 1.9 4,720 4.1 – –
NDA registration-stage
and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,259 16.0 44,497 17.8 21,680 18.6 18,541 16.7
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,681 18.6 49,358 19.7 26,400 22.7 18,541 16.7
KJ103
Phase I /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,730 21. 7––––––
Phase II /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,362 1.0 23,927 9.5 7,383 6.3 31,293 28.2
Phase III /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 1 1 5 0 . 1
NDA registration-stage
and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,092 22.7 23,927 9.5 7,383 6.3 31,408 28.3
SJ02
Phase I /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Phase II /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Phase III /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,766 2. 8––––––
NDA registration-stage
and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,350 16.1 53,777 21.4 35,352 30.4 7,711 6.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,116 18.9 53,777 21.4 35,352 30.4 7,711 6.9
Subtotal for Core
Products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,889 60.2 127,062 50.6 69,135 59.4 57,660 51.9
FINANCIAL INFORMATION
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For the Y ear Ended December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Major Drug Candidates
BJ007 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,839 1.4 7,500 3.0 1,204 1.0 4,977 4.5
BJ008 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,894 0.8 – – 1,045 0.9
BJ009 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,733 0.7 – – 2,584 2.3
KJ015 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,807 10.4 21,170 8.4 6,672 5.7 5,290 4.8
BJ045 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,890 1.2 398 0.3 6,622 6.0
BJ047 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 541 0.2 – – 1,224 1.1
SJ04 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,317 10.0 13,285 5.3 6,937 6.0 3,559 3.2
KJ101 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,697 5.1 26,715 10.7 9,146 7.9 3,816 3.4
BJ044 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887 0.1 3,480 1.4 790 0.7 5,711 5.1
Subtotal for Major Drug
Candidates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,747 27.0 79,208 31.7 25,147 21.6 34,828 31.3
Other Drug Candidates /H1118/H111816,909 12.8 44,457 17.7 22,010 19.0 18,557 16.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,545 100.0 250,727 100.0 116,292 100.0 111,045 100.0
Business Development Expenses
During the Track Record Period, our business development expenses primarily consisted
of staff costs and share-based payments attributable to our business development personnel, as
well as professional service fees paid to legal counsel, agents, and other service providers for
business development purpose. In 2023, 2024 and the six months ended June 30, 2024 and
2025, our business development expenses were RMB1.2 million, RMB7.9 million, RMB3.5
million and RMB2.9 million, respectively.
Administrative Expenses
During the Track Record Period, our administrative expenses consisted of (i) share-based
payments incurred from our grant of share incentives to management and administrative
personnel, (ii) staff costs, mainly including wages, bonus, and other welfare benefits for our
management and administrative personnel, (iii) depreciation and amortization expenses for
property, plant and equipment, right-of-use assets, and other intangible assets used for
administrative purpose, (iv) general office expenses, (v) professional service fees paid to legal
advisors, auditors, asset valuers, and other consulting service providers, (vi) taxes and
surcharges, and (vii) other expenses, including traveling and transportation expenses, property
management fees, utilities incurred for administrative purpose, and other miscellaneous
expenses.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our administrative expenses in absolute
amounts and as percentages of the total administrative expenses for the periods indicated:
For the Y ear Ended December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
RMB % RMB % RMB % RMB %
(in thousands, except for percentages)
(unaudited)
Share-based payments /H1118/H1118/H1118 – – 54,209 50.4 24,765 50.3 17,732 38.4
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,634 42.4 23,439 21.8 10,255 20.8 13,169 28.5
Depreciation and
amortization expenses /H1118/H11184,794 10.3 7,897 7.3 3,677 7.5 4,748 10.3
General office expenses /H1118/H11186,832 14.7 6,841 6.4 2,295 4.7 3,827 8.3
Professional service fees /H1118/H11186,088 13.1 5,498 5.1 4,223 8.6 2,622 5.7
Taxes and surcharges /H1118/H1118/H1118/H11181,986 4.3 2,117 2.0 1,001 2.0 991 2.1
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,017 15.2 7,635 7.0 2,992 6.1 3,064 6.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,351 100.0 107,636 100.0 49,208 100.0 46,153 100.0
Listing Expenses
Our listing expenses represented expenses incurred for our proposed Listing and Global
Offering. We recorded listing expenses of nil, RMB5.6 million, nil and RMB12.4 million in
2023, 2024 and the six months ended June 30, 2024 and 2025, respectively.
Finance Costs
During the Track Record Period, our finance costs consisted of (i) interest on bank
borrowings, and (ii) interest on lease liabilities. The following table sets forth a breakdown of
our finance costs for the periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Interest on bank borrowings /H1118/H1118/H1118/H11184,321 5,502 2,539 3,556
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118 73 68 35 50
Less: Interest capitalized /H1118/H1118/H1118/H1118/H1118/H1118(739) (1,014) (568) (940)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,655 4,556 2,006 2,666
FINANCIAL INFORMATION
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Other Expenses
During the Track Record Period, our other expenses primarily consisted of (i) provision
for losses on an ongoing litigation associated with a technology transfer agreement that is not
related to any of our Core Products or any drug candidates included in our pipeline chart with
a biotechnology company, (ii) foreign exchange loss, and (iii) loss on disposal of items of
property, plant and equipment. In 2023, 2024 and the six months ended June 30, 2024 and
2025, our other expenses were RMB81.0 thousand, RMB78.0 thousand, nil and RMB55.4
million, respectively.
Share of Loss of an Associate
Our share of loss of an associate during the Track Record Period represented our losses
from investments in ABLINK Biotech. For details, see “— Discussion of Certain Selected
Items from the Consolidated Statements of Financial Position — Investment in an associate.”
We recognized share of loss of an associate of RMB0.9 million, RMB0.6 million, RMB0.2
million and RMB0.1 million in 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, which was attributable to the net losses incurred by ABLINK Biotech during the
same periods.
Income Tax Credit
Our income tax during the Track Record Period consisted of deferred tax. We recorded
income tax credit of RMB1.0 thousand, RMB23.0 thousand, RMB23.0 thousand and nil, in
2023, 2024 and the six months ended June 30, 2024 and 2025, respectively. Our Directors
confirm that during the Track Record Period, we had made all the required tax filings and had
paid all outstanding tax liabilities with the relevant tax authorities in the relevant jurisdictions,
and we are not aware of any outstanding or potential disputes with such tax authorities.
We are subject to income tax on an entity basis on profits arising in or derived from the
jurisdictions in which we are domiciled and operate. Pursuant to the Enterprise Income Tax
Law of the PRC and the respective regulations (the “ EIT Laws ”), our PRC subsidiaries are
subject to income tax at a rate of 25% on the taxable income during the Track Record Period.
Our Company and certain PRC subsidiaries were accredited as “high and new technology
enterprises” under the relevant EIT laws in 2022 and were accordingly entitled to a preferential
income tax rate of 15% from 2022 to 2024. As of the Latest Practicable Date, we are in the
process of applying for the renewal of such qualifications for an additional three-year period
from 2025 to 2027. For more details, see Note 11 to the Accountants’ Report set out in
Appendix I to this prospectus.
FINANCIAL INFORMATION
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--- page 440 ---
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six months ended June 30, 2025 Compared to Six months ended June 30, 2024
Revenue
Our revenue increased significantly from RMB1.5 million in the six months ended June
30, 2024 to RMB42.0 million in the six months ended June 30, 2025, primarily attributable to
an increase of RMB40.0 million in licensing revenue, resulting from the recognition of upfront
payments received under a license and commercialization agreement.
Cost of Sales
Our cost of sales decreased by 41.2% from RMB0.5 million in the six months ended June
30, 2024 to RMB0.3 million in the six months ended June 30, 2025, primarily because our
revenue in the first half of 2025 was primarily derived from licensing revenue which incur
minimal cost of sales, while our cost of sales was mainly attributable to our sales of materials.
Gross Profit and Gross Profit Margin
As a result of the cumulative effect of the factors described above, our gross profit
increased significantly from RMB1.0 million in the six months ended June 30, 2024 to
RMB41.7 million in the six months ended June 30, 2025. Our gross profit margin increased
from 69.8% to 99.4% for the same periods.
Other Income and Gains
Our other income and gains increased significantly from RMB2.9 million in the six
months ended June 30, 2024 to RMB5.9 million in the six months ended June 30, 2025, mainly
due to (i) an increase of RMB1.8 million in bank interest income, in line with our increased
average bank deposits for the same periods, (ii) an increase of RMB1.3 million in government
grants.
Research and Development Expenses
Our research and development expenses decreased slightly from RMB116.3 million in the
six months ended June 30, 2024 to RMB111.0 million in the six months ended June 30, 2025,
mainly due to a decrease of RMB15.2 million in share-based payments incurred from our grant
of share incentives to research and development personnel; partially offset by (i) an increase
of RMB7.8 million in staff costs as a result of the expansion of our research and development
team, and (ii) an increase of RMB3.7 million in trial and testing expenses driven by continued
clinical development endeavors to advance our drug candidates.
FINANCIAL INFORMATION
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--- page 441 ---
Business Development Expenses
Our business development expenses decreased by 15.1% from RMB3.5 million in the six
months ended June 30, 2024 to RMB2.9 million in the six months ended June 30, 2025, mainly
due to a decrease in share-based payments incurred from our grant of share incentives to
business development personnel.
Administrative Expenses
Our administrative expenses decreased by 6.2% from RMB49.2 million in the six months
ended June 30, 2024 to RMB46.2 million in the six months ended June 30, 2025, mainly due
to a decrease of RMB7.0 million in share-based payments incurred from our grant of share
incentives to management and administrative personnel; partially offset by an increase of
RMB2.9 million in staff costs as a result of the expansion of management and administrative
team.
Listing Expenses
We recorded listing expenses of RMB12.4 million in the six months ended June 30, 2025
in connection with the proposed Listing and Global Offering, as compared to nil in the six
months ended June 30, 2024.
Finance Costs
Our finance costs increased by 32.9% from RMB2.0 million in the six months ended June
30, 2024 to RMB2.7 million in the six months ended June 30, 2025, mainly due to an increase
of RMB1.0 million in interest on bank borrowings, resulting from our increased interest-
bearing bank borrowing for the same periods; partially offset by an increase of RMB0.4 million
in interest capitalized.
Other Expenses
We recorded other expenses of RMB55.4 million in the six months ended June 30, 2025,
as compared to nil in the six months ended June 30, 2024, primarily due to the provision for
losses on an ongoing litigation associated with a technology transfer agreement with a
biotechnology company.
Share of Loss of an Associate
Our share of loss of an associate decreased by 52.5% from RMB0.2 million in the six
months ended June 30, 2024 to RMB0.1 million in the six months ended June 30, 2025,
primarily due to the improvements of the performance of our equity investee, namely ABLINK
Biotech.
FINANCIAL INFORMATION
– 432 –


--- page 442 ---
Loss for the Period
As a result of the foregoing, our loss for the period increased by 9.4% from RMB167.3
million in the six months ended June 30, 2024 to RMB183.1 million in the six months ended
June 30, 2025.
Y ear ended December 31, 2024 Compared to Y ear ended December 31, 2023
Revenue
Our revenue decreased by 11.1% from RMB6.9 million in 2023 to RMB6.2 million in
2024, due to a decrease of RMB1.8 million in revenue from technical services mainly arising
from less milestone payments recognized in 2024, as (i) these milestone payments and their
corresponding milestone events were tied to different collaboration agreements with different
partners and were not expected to recur in subsequent years, and (ii) the next milestone events
that would trigger payment obligations of our partners under certain collaboration agreements
had not been achieved as of December 31, 2024; offset by an increase of RMB1.0 million in
revenue from sales of materials mainly in connection with recombinant human hyaluronidase
as a pharmaceutical excipient.
Cost of Sales
Our cost of sales increased significantly from RMB0.1 million in 2023 to RMB1.1 million
in 2024, primarily attributable to the shift in the sales structure of materials, mainly from
antibodies in 2023 to recombinant human hyaluronidase as a pharmaceutical excipient in 2024.
Our cost of sales was primarily related to our sales of materials, and the respective costs
associated with antibodies and recombinant human hyaluronidase differ significantly. Our sales
of antibodies in 2023 was on a one-off basis.
Gross Profit and Gross Profit Margin
As a result of the cumulative effect of the factors described above, our gross profit
decreased by 26.0% from RMB6.8 million in 2023 to RMB5.0 million in 2024. Our gross profit
margin decreased from 97.8% to 81.5% for the same years.
Other Income and Gains
Our other income and gains decreased by 56.8% from RMB17.6 million in 2023 to
RMB7.6 million in 2024, mainly due to (i) a decrease of RMB4.6 million in government grants;
(ii) a decrease of RMB3.3 million in bank interest income in line with our decreased average
bank deposits for the same years; and (iii) a decrease of RMB1.8 million in net foreign
exchange gains, attributable to fluctuations in the exchange rate of U.S. dollar against
Renminbi.
FINANCIAL INFORMATION
– 433 –


--- page 443 ---
Research and Development Expenses
Our research and development expenses increased by 89.2% from RMB132.5 million in
2023 to RMB250.7 million in 2024, mainly due to (i) an increase of RMB93.6 million in
share-based payments, arising from our grant of share incentives to research and development
personnel in 2024; and (ii) an increase of RMB13.1 million in staff costs, resulting from the
expansion of our research and development team.
Business Development Expenses
Our business development expenses increased significantly from RMB1.2 million in 2023
to RMB7.9 million in 2024, mainly because we incurred share-based payments for our grant
of share incentives to business development personnel, increased staff costs resulting from the
expansion of business development team, as well as certain legal consulting and translation
service fees in relation to our business development activities, in 2024.
Administrative Expenses
Our administrative expenses increased significantly from RMB46.4 million in 2023 to
RMB107.6 million in 2024, mainly due to (i) an increase of RMB54.2 million in share-based
payments, arising from our grant of share incentives to management and administrative
personnel in 2024; and (ii) an increase of RMB3.8 million in staff costs, resulting from the
expansion of our management and administrative team.
Listing Expenses
We recorded listing expenses of RMB5.6 million in 2024 in connection with the proposed
Listing and Global Offering, as compared to nil in 2023.
Finance Costs
Our finance costs increased by 24.7% from RMB3.7 million in 2023 to RMB4.6 million
in 2024, mainly due to an increase of RMB1.2 million in interest on bank borrowings, resulting
from our increased interest-bearing bank borrowing for the same years; partially offset by an
increase of RMB0.3 million in interest capitalized.
Share of Loss of an Associate
Our share of loss of an associate decreased by 33.4% from RMB0.9 million in 2023 to
RMB0.6 million in 2024, primarily due to the improvements of the performance of our equity
investee, namely ABLINK Biotech.
Loss for the Y ear
As a result of the foregoing, our loss for the year increased significantly from RMB160.4
million in 2023 to RMB364.4 million in 2024.
FINANCIAL INFORMATION
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--- page 444 ---
DISCUSSION OF CERTAIN SELECTED ITEMS FROM THE CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
The following table sets forth our consolidated statements of financial position as of the
dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
ASSETS
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118531,215 621,681 681,580
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,207 55,451 54,269
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,565 12,317 11,977
Investment in an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,437 7,828 7,714
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,311 410 32,910
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118607,735 697,687 788,450
Current Assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,072 4,715 5,362
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,402 51,366 61,080
Restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 85,200 80,284
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 524,158 453,392
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118366,145 665,580 600,237
LIABILITIES
Current liabilities
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,786 125,102 212,946
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H111865,111 69,565 73,219
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118924 1,564 1,705
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,821 196,231 287,870
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,324 469,349 312,367
Total assets less current liabilities /H1118/H1118/H1118/H1118827,059 1,167,036 1,100,817
Non-current liabilities
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H111844,983 132,290 170,201
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897 1,840 1,101
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 3––
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,830 37,030 39,930
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,933 171,160 211,232
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,126 995,876 889,585
Equity
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,046 57,259 57,614
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118697,080 938,617 831,971
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,126 995,876 889,585
For details on the accounting treatment of redemption rights, anti-dilution rights and
liquidation preferences rights granted to Pre-IPO Investors, see “— Share Capital and Total
Equity” below and Note 27 to the Accountants’ Report set out in Appendix I to this prospectus.
FINANCIAL INFORMATION
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--- page 445 ---
Property, Plant and Equipment
During the Track Record Period, our property, plant and equipment consisted of
construction in progress, buildings, machinery, decoration, electronic equipment, motor
vehicles and office equipment. The following table sets forth a breakdown of our property,
plant and equipment as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Property, plant and equipment
Construction in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118199,594 302,123 359,627
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118187,078 181,514 178,732
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,981 123,110 130,003
Decoration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,010 10,434 9,000
Electronic equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,073 3,286 3,150
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,050 807 685
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118429 407 383
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118531,215 621,681 681,580
Our property, plant and equipment increased from RMB531.2 million as of December 31,
2023 to RMB621.7 million as of December 31, 2024, and further to RMB681.6 million as of
June 30, 2025, mainly due to an increase in construction in progress, in line with the continued
construction of our new manufacturing facilities in Shanghai; partially offset by the
depreciation charge of our existing properties and machinery.
Right-of-Use Assets
During the Track Record Period, our right-of-use assets were related to (i) leasehold land,
and (ii) leases of properties used as office premises, laboratories, and employee dormitories.
The following table sets forth a breakdown of our right-of-use assets as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Right-of-use assets
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,066 51,926 51,357
Leased properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 3,525 2,912
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,207 55,451 54,269
Our right-of-use assets remained relatively stable at RMB54.2 million, RMB55.5 million
and RMB54.3 million as of December 31, 2023 and 2024 and June 30, 2025, respectively.
FINANCIAL INFORMATION
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--- page 446 ---
Other Intangible Assets
During the Track Record Period, our other intangible assets consisted of (i) patents and
licenses, and (ii) software. The following table sets forth a breakdown of our other intangible
assets as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Other intangible assets
Patents and licenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,758 8,297 7,567
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,807 4,020 4,410
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,565 12,317 11,977
Our other intangible assets remained relatively stable at RMB12.6 million, RMB12.3
million and RMB12.0 million as of December 31, 2023 and 2024 and June 30, 2025,
respectively.
We assess whether there are any indicators of impairment for all non-financial assets
(including property, plant and equipment, right-of-use assets and other intangible assets) at the
end of each period comprising the Track Record Period by reviewing the internal and external
sources of information. As of December 31, 2023 and 2024 and June 30, 2025, no indicators
of the impairment for our non-financial assets were identified, given that (i) our non-financial
assets were neither obsolete nor physically damaged, and (ii) our actual losses incurred for the
years ended December 31, 2023 and 2024 and the six months ended June 30, 2025 did not
exceed the estimated losses for the same periods.
Investment in an Associate
We recorded investment in an associate during the Track Record Period, which was
attributable to our investment in 20% equity interest in ABLINK Biotech. ABLINK Biotech is
a biotech company principally engaged in the discovery and optimization of macromolecular
drugs. Our investment in an associate consisted of (i) goodwill on acquisition, and (ii) share
of net assets, of ABLINK Biotech. The following table sets forth a breakdown of our
investment in an associate as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Investment in an associate
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,055 7,055 7,055
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,382 773 659
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,437 7,828 7,714
FINANCIAL INFORMATION
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--- page 447 ---
As of December 31, 2023 and 2024 and June 30, 2025, the carrying amounts of our
investment in an associate were RMB8.4 million, RMB7.8 million and RMB7.7 million,
respectively. Such slight decreases were due to the continued net loss position of ABLINK
Biotech during the Track Record Period. For more details, see Note 17 of the Accountants’
Report set out in Appendix I to this prospectus.
Prepayments, Other Receivables and Other Assets
During the Track Record Period, our prepayments, other receivables and other assets
consisted of (i) deductible value-added tax primarily relating to our procurement of items of
property, plant and equipment, (ii) prepayments for material procurement, trial and testing fees,
listing expenses, and general office expenses (iii) deferred listing expenses, (iv) deposits and
other receivables, representing our rental deposits and advances for administrative expenses,
(v) prepaid expenses for the maintenance of equipment, (vi) prepayment for property, plant and
equipment, (vii) capital injection from shareholders, representing other receivables from one of
our Share Incentive Platforms in connection with issued yet not fully paid shares to such
platform, which were non-trade in nature, and (viii) amounts due from related parties, which
were non-trade in nature.
Our amounts due from related parties represented (i) our short-term loan to one of our
Share Incentive Platforms to support its normal operations, and (ii) advances to a Supervisor
for coverage of reimbursable expenses, such as traveling and transportation expenses, incurred
during her performance of obligations. For details, see Note 33 of the Accountants’ Report set
out in Appendix I to this prospectus. All non-trade balances with related parties and capital
injection from shareholders had been fully settled as of December 31, 2024 and we do not
expect to enter into any such arrangements thereafter.
The following table sets forth a breakdown of our prepayments, other receivables and
other assets as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Prepayments, other receivables and
other assets
Non-current:
Prepayment for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,311 410 32,910
Current:
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,515 43,852 50,092
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118264 4,022 4,848
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,488 4,586
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H11182,456 1,176 1,012
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,054 828 542
Capital injection from shareholders /H1118/H1118 2,073 – –
Amounts due from related parties /H1118/H1118/H1118 4 0––
Total current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,402 51,366 61,080
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,713 51,776 93,990
FINANCIAL INFORMATION
– 438 –


--- page 448 ---
Our prepayments, other receivables and other assets increased by 45.0% from RMB35.7
million as of December 31, 2023 to RMB51.8 million as of December 31, 2024, mainly due
to (i) an increase of RMB15.3 million in deductible value-added tax, and (ii) an increase
of RMB3.8 million in prepayments for listing expenses, material procurement and trial and
testing fees; partially offset by a decrease of RMB2.1 million in capital injection from
shareholders, because the Share Incentive Platform had fully paid the considerations for the
share capital issued to it by our Company. Our prepayments, other receivables and other assets
increased by 81.5% from RMB51.8 million as of December 31, 2024 to RMB94.0 million as
of June 30, 2025, mainly due to (i) an increase of RMB32.5 million in prepayment for property,
plant and equipment, and (ii) an increase of RMB6.2 million in deductible value-added tax.
As of October 31, 2025, RMB49.2 million, or 52.4%, of our prepayments, other
receivables and other assets as of June 30, 2025 had been subsequently settled.
Inventories
During the Track Record Period, our inventories represented certain raw materials,
reagents, and consumables procured for our preclinical studies and clinical development of
drug candidates. Our inventories decreased by 41.6% from RMB8.1 million as of December 31,
2023 to RMB4.7 million as of December 31, 2024, mainly due to the accelerated consumption
of inventories driven by our ramp-up research and development and CMC activities for certain
drug candidates as they advanced through late development stage. Our inventories increased by
13.7% from RMB4.7 million as of December 31, 2024 to RMB5.4 million as of June 30, 2025,
mainly due to the procurement of materials used in our clinical development and CMC
activities to advance our drug candidates.
The following table sets forth an aging analysis of our inventories as of the dates
indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Within 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,416 2,223 2,533
90 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448 410 1,829
180 to 360 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,584 363 455
360 to 540 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118215 1,211 146
540 to 720 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118409 508 399
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,072 4,715 5,362
FINANCIAL INFORMATION
– 439 –


--- page 449 ---
As of October 31, 2025, RMB3.9 million, or 72.6%, of our inventories as of June 30, 2025
had been consumed.
We do not foresee any material recoverability issue with our inventories, and do not
believe provision for impairment is necessary, considering that (i) our inventories primarily
consisted of raw materials used for our R&D activities, a higher utilization of which is
foreseeable in light of the continued advancement of our product pipeline and execution of
license and collaboration arrangements we have entered into; (ii) our inventories aged within
360 days accounted for 89.8% of the total inventories as of June 30, 2025, and our inventories
with extended aging periods have a relatively long shelf life. As of June 30, 2025, no inventory
items were identified approaching their respective expiration dates, and we anticipate all
inventories will be fully consumed before expiration in the ordinary course of business; and
(iii) we have implemented stringent inventory control system to closely monitor and manage
our inventory turnover. Specifically, we have appointed dedicated personnel responsible for
monitoring aging conditions and utilization of our inventories to identify obsolete and
slow-moving raw materials, if any, so that we can take prompt remedial measures and adjust
our procurement plan accordingly. We apply a consistent and prudent inventory assessment
policy, including regular reviews for impairment indicators. As of June 30, 2025, no material
impairment indicators were identified. Furthermore, we have not experienced significant
inventory write-downs, which supports our assessment that the current inventory, including
items aged over 360 days, remains recoverable.
Trade Receivables
During the Track Record Period, our trade receivables arose from our sales of materials
to various customers and provision of technical support services to a partner under the relevant
collaboration agreement. For more information related to such collaboration agreement, see
“Business — Collaboration Agreements.” We recorded trade receivables of RMB2.0 million,
RMB0.1 million and RMB0.1 million as of December 31, 2023 and 2024 and June 30, 2025,
respectively.
The following table sets forth an aging analysis of our trade receivables based on the
transaction dates and net of loss allowance as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Trade receivables
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
As of October 31, 2025, all of our trade receivables as of June 30, 2025 had been
subsequently settled.
FINANCIAL INFORMATION
– 440 –


--- page 450 ---
Restricted Deposits
During the Track Record Period, our restricted deposits consisted of (i) frozen deposits
at bank by order of the court in relation to an ongoing lawsuit, and (ii) bank deposits pledged
as collateral for the issuance of a letter of guarantee, which was subsequently released in
January 2025. Our restricted deposits were nil, RMB85.2 million and RMB80.3 million as of
December 31, 2023 and 2024 and June 30, 2025, respectively.
Cash and Cash Equivalents
During the Track Record Period, our cash and cash equivalents represented cash and bank
balances denominated in Renminbi and U.S. dollar, less our restricted deposits. Our cash and
cash equivalents increased by 62.9% from RMB321.7 million as of December 31, 2023 to
RMB524.2 million as of December 31, 2024, mainly due to the cash inflows from our Series
C Financing and Series C+ Financing. Our cash and cash equivalents decreased by 13.5% from
RMB524.2 million as of December 31, 2024 to RMB453.4 million as of June 30, 2025, mainly
due to our net cash used in operating and investing activities in the six months ended June 30,
2025; partially offset cash inflows from our Series C+ Financing and new interest-bearing bank
loans. For an analysis on cash flows during the Track Record Period, see “— Liquidity and
Capital Resources.”
Other Payables and Accruals
During the Track Record Period, our other payables and accruals consisted of (i) payables
for purchase of property, plant and equipment, (ii) provision for losses on litigation associated
with a technology transfer agreement with a biotechnology company, (iii) accrual for property,
plant and equipment, (iv) payroll payables, (v) accrued listing expenses in connection with the
proposed Listing and Global Offering, (vi) tax payables, (vii) contract liabilities, representing
short-term advances we received for grant of licenses, provision of technical support services
and sales of materials, for which we had not yet completed the corresponding performance
obligations to recognize as revenue, (viii) amounts due to related parties, representing amounts
payable to certain service providers that are our related parties, which were trade in nature, and
(ix) other payables, primarily including accrued or invoiced yet unpaid service fees to CROs
and CDMOs. The following table sets forth a breakdown of our other payables and accruals as
of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
(RMB in thousands)
Other payables and accruals
Payables for purchase of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,467 34,086 72,248
Provision for losses on litigation /H1118/H1118/H1118 – – 55,080
Accrual for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 31,014
Payroll payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,139 17,631 14,591
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,813 2,934
Tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118976 1,160 1,038
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,360 58,374 536
Amounts due to related parties /H1118/H1118/H1118/H1118/H1118– 336 156
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,844 10,702 35,349
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,786 125,102 212,946
FINANCIAL INFORMATION
– 441 –


--- page 451 ---
Our other payables and accruals increased by 54.9% from RMB80.8 million as of
December 31, 2023 to RMB125.1 million as of December 31, 2024, mainly due to an increase
of RMB40.0 million in contract liabilities, because we had received the first tranche of upfront
payments under the Organon Agreement in 2024. Our other payables and accruals further
increased by 70.2% from RMB125.1 million as of December 31, 2024 to RMB212.9 million
as of June 30, 2025, mainly due to (i) an increase of RMB55.1 million in provision for losses
on an ongoing litigation associated with a technology transfer agreement with a biotechnology
company, (ii) an increase of RMB38.2 million in payables for purchase of property, plant and
equipment, in line with the continued construction of our new manufacturing facilities in
Shanghai, and (iii) an increase of RMB31.0 million in accrual for property, plant and
equipment relating to certain outstanding construction fees and interest. See Note 23(d) to the
Accountants’ Report set out in Appendix I to this prospectus for more details; partially offset
by a decrease of RMB57.8 million in contract liabilities, mainly because following the receipt
of the termination notice provided by Organon, the uncertainty associated the upfront payments
received under the Organon Agreement was resolved and the related constraint on revenue
recognition was released. Accordingly, we reclassified the amounts previously recorded as
contract liabilities as licensing revenue for the first half of 2025.
As of October 31, 2025, RMB22.5 million, or 10.5%, of our other payables and accruals
as of June 30, 2025 had been subsequently settled.
Deferred Income
During the track record period, our deferred income represented certain income- and
asset-related government grants, which had not been recognized in profit or loss until the
compliance with the attached conditions. We recorded deferred income of RMB32.8 million,
RMB37.0 million and RMB39.9 million as of December 31, 2023 and 2024 and June 30, 2025,
respectively.
SHARE CAPITAL AND TOTAL EQUITY
Our share capital amounted to RMB52.0 million, RMB57.3 million and RMB57.6 million
as of December 31, 2023 and 2024 and June 30, 2025, respectively.
In addition, our total equity amounted to RMB749.1 million, RMB995.9 million and
RMB889.6 million as of December 31, 2023 and 2024 and June 30, 2025, respectively. In 2023,
our total equity decreased from RMB787.2 million as of January 1, 2023 to RMB749.1million
as of December 31, 2023, primarily due to our loss and total comprehensive loss for the year
of RMB160.4 million; offset by capital injection of RMB122.3 million. Our total equity
increased to RMB995.9 million as of December 31, 2024, primarily due to our capital injection
of RMB458.0 million and equity-settled share-based payment expense of RMB153.2 million;
offset by our loss and total comprehensive loss for the year of RMB364.4 million. As of June
30, 2025, our total equity decreased to RMB889.6 million, primarily due to our loss and total
comprehensive loss for the period of RMB183.1 million; offset by our equity-settled
share-based payment expense of RMB46.8 million and capital injection of RMB30.0 million.
FINANCIAL INFORMATION
– 442 –


--- page 452 ---
Prior to the Track Record Period, our Company entered into respective shareholders’
agreements and share subscription agreements with the Pre-IPO Investors and issued ordinary
Shares thereto with a total consideration of approximately RMB1,530.6 million with the
respective par value being recorded as share capital and the remainder as reserves. Pursuant to
these agreements, the Pre-IPO Investors were granted by our Company with special rights
which included but not limited to redemption rights, anti-dilution rights and liquidation
preferences rights. There was no exercise of special rights granted by our Company throughout
the Track Record Period.
Our Company and the relevant Shareholders subsequently entered into a supplemental
agreement on April 28, 2023, and the Series C Financing and Series C+ Financing
shareholders’ agreements on July 18, 2024 and December 18, 2024, respectively, agreeing that
certain of the special rights are granted by our Company to Pre-IPO Investors, including
redemption rights, anti-dilution rights and liquidation preferences rights. Specifically, (i) the
redemption rights, anti-dilution rights and liquidation preference rights granted by our
Company under Series A Financing, Series A1 Financing and Series B Financing shareholders’
agreements have been irrecoverably terminated according to the supplemental agreement dated
April 28, 2023 and shall be deemed void ab initio , and (ii) both the Series C Financing
shareholders’ agreement and the Series C+ Financing shareholders’ agreement contain a listing
application-triggered termination provision, which provides that, if and when the Company
submits a listing application to the Stock Exchange, the above special rights shall be deemed
as automatically and irrecoverably terminated on September 30, 2024 and shall be deemed void
ab initio . Following execution of Series C+ Financing shareholders’ agreement, such
agreement has superseded and replaced the Series C Financing shareholders’ agreement on
December 18, 2024 in their entirety, including the provisions in relation to the special rights.
On January 21, 2025, the Company submitted the listing application to the Stock Exchange. As
such, the special rights granted by the Company to Pre-IPO Investors contained in the Series
C+ Financing shareholders’ agreement were deemed to be terminated on September 30, 2024
and void ab initio . Taking into account the legal and regulatory framework of our Company’s
jurisdiction and the governing law of the relevant supplemental agreement and shareholders’
agreements, our Directors considered that it is appropriate to present the Pre-IPO Investments
as equity throughout the Track Record Period.
Had the special rights granted by our Company to the Pre-IPO Investors been accounted
for as financial liabilities measured at present value of the redemption amount prior to entering
into the relevant supplemental agreement and shareholders’ agreements, (i) the redemption
financial liabilities, total current liabilities, net current assets and net assets of our Company
would have been:
As of
December 31,
2024
RMB’000
Redemption financial liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,806,280
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,002,511
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,336,931)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(810,404)
FINANCIAL INFORMATION
– 443 –


--- page 453 ---
and (ii) our Company’s finance costs associated with the redemption financial liabilities, the
net loss for the year/period, basic and diluted loss per Share for the year/period would have
been:
For the year ended December 31,
For the six
months ended
June 30,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial costs associated with the
redemption financial liabilities /H1118/H1118/H1118/H1118/H111827,101 65,638 9,526
Total net loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(187,496) (430,071) (192,622)
Basic and diluted loss per Share
(expressed in RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3.71) (8.03) (3.34)
For further details of the financial impacts, see Note 27 to the Accountants’ Report set out in
Appendix I to this prospectus.
LIQUIDITY AND CAPITAL RESOURCES
Our primary use of cash during the Track Record Period was to fund our research and
development activities and administrative expenses. We recorded net cash used in operating
activities of RMB140.2 million, RMB219.8 million and RMB105.2 million in 2023, 2024 and
the six months ended June 30, 2025, respectively. During the Track Record Period, we
primarily funded our working capital requirements through equity and debt financings. Our
management closely monitors use of cash and cash equivalents and strives to maintain a
healthy liquidity for our operations. Going forward, we expect our liquidity requirements will
be satisfied by a combination of existing cash and cash equivalents, bank loans, net proceeds
from the Global Offering, considerations received under respective license and collaboration
agreements, as well as revenue generated from sales of our successfully commercialized drugs.
With the continuing expansion of our business, we may require further funding through public
or private offerings, debt financing, license and collaboration arrangements, or other sources.
FINANCIAL INFORMATION
– 444 –


--- page 454 ---
Current Assets and Current Liabilities
The following tables sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31,
As of
June 30,
As of
October 31,
2023 2024 2025 2025
(unaudited)
(RMB in thousands)
Current Assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,072 4,715 5,362 6,559
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119 183
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,402 51,366 61,080 29,572
Restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 85,200 80,284 80,331
Cash and cash equivalents /H1118/H1118/H1118321,671 524,158 453,392 464,718
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118366,145 665,580 600,237 581,363
Current liabilities
Other payables and accruals /H1118 80,786 125,102 212,946 225,192
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,111 69,565 73,219 88,823
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118924 1,564 1,705 1,567
Total current liabilities /H1118/H1118/H1118/H1118146,821 196,231 287,870 315,582
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,324 469,349 312,367 265,781
Our net current assets decreased from RMB312.4 million as of June 30, 2025 to
RMB265.8 million as of October 31, 2025, primarily attributable to (i) a decrease of RMB31.5
million in prepayments, other receivables and other assets, mainly due to a lower deductible
value-added tax balance resulting from a tax refund; and (ii) an increase of RMB15.6 million
in interest-bearing bank borrowings.
Our net current assets decreased from RMB469.3 million as of December 31, 2024 to
RMB312.4 million as of June 30, 2025, primarily attributable to (i) an increase of RMB87.8
million in other payables and accruals, mainly due to the provision for losses on an ongoing
litigation associated with a technology transfer agreement with a biotechnology company, as
well as increased payables for purchase of property, plant and equipment; and (ii) a decrease
of RMB70.8 million in cash and cash equivalents, mainly due to our net cash used in operating
and investing activities in the six months ended June 30, 2025.
FINANCIAL INFORMATION
– 445 –


--- page 455 ---
Our net current assets increased from RMB219.3 million as of December 31, 2023 to
RMB469.3 million as of December 31, 2024, primarily attributable to (i) an increase of
RMB202.5 million in cash and cash equivalents, mainly due to the cash inflows from our Series
C Financing and Series C+ Financing, and (ii) an increase of RMB85.2 million in restricted
deposits; partially offset by an increase of RMB44.3 million in other payables and accruals,
mainly because we received the first tranche of upfront payments under the Organon
Agreement in 2024 and recorded such payments as contract liabilities as of December 31, 2024.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Operating cash flows before
movements in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(144,230) (179,763) (81,509) (119,823)
Changes in working capital /H1118/H1118 (3,879) (44,664) (93,158) 11,042
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,896 4,646 1,796 3,591
Net cash used in operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(140,213) (219,781) (172,871) (105,190)
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(136,365) (122,120) (59,363) (29,820)
Net cash generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118122,933 543,196 45,625 64,526
Net (decrease)/increase in
cash and cash equivalents /H1118 (153,645) 201,295 (186,609) (70,484)
Cash and cash equivalents at
beginning of year/period /H1118/H1118472,347 321,671 321,671 524,158
Effect of foreign exchange
rate changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,969 1,192 470 (282)
Cash and cash equivalents at
end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 524,158 135,532 453,392
Net Cash Used in Operating Activities
In the six months ended June 30, 2025, our net cash used in operating activities was
RMB105.2 million, which was primarily attributable to loss before tax of RMB183.1 million
adjusted by certain non-cash and working capital items. Positive adjustments primarily
included (i) equity-settled share-based payment expense of RMB46.8 million, (ii) increase in
FINANCIAL INFORMATION
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other payables and accruals of RMB18.6 million, and (iii) depreciation of property, plant and
equipment of RMB15.1 million. Negative adjustments primarily included increase in
prepayments, other receivables and other assets of RMB7.1 million.
In 2024, our net cash used in operating activities was RMB219.8 million, which was
primarily attributable to loss before tax of RMB364.5 million adjusted by certain non-cash and
working capital items. Positive adjustments primarily included (i) equity-settled share-based
payment expense of RMB153.2 million, and (ii) an increase in other payables and accruals of
RMB44.1 million. Negative adjustments primarily included an increase in restricted deposits
of RMB80.2 million.
In 2023, our net cash used in operating activities was RMB140.2 million, which was
primarily attributable to loss before tax of RMB160.4 million adjusted by certain non-cash and
working capital items. Positive adjustments primarily included (i) depreciation of property,
plant and equipment of RMB19.1 million, and (ii) an increase in other payables and accruals
of RMB11.6 million. Negative adjustments primarily included an increase in prepayments,
other receivables and other assets of RMB13.3 million.
In view of our net operating cash outflows throughout the Track Record Period, we plan
to improve such position through the following initiatives: (i) advance our pipeline candidates
towards commercialization to generate revenue from product sales. We have received the NDA
approval for SJ02 from the NMPA in August 2025. Specifically, subject to regulatory
communications and review status, we expect to receive NDA approval for our Core Product
KJ017 in China in the first quarter of 2026 and subsequently launch these two Core Products
commercially; (ii) receive corresponding milestone payments pursuant to license and
collaboration agreements executed with our partners, and actively pursue business
development opportunities for entering into additional license and collaboration arrangements
with major pharmaceutical companies to further diversify our revenue streams.
Net Cash Used in Investing Activities
In the six months ended June 30, 2025, our net cash used in investing activities was
RMB29.8 million, primarily attributable to purchases of items of property, plant and equipment
of RMB37.9 million; partially offset by (i) withdrawal of restricted deposits of RMB5.0
million, and (ii) receipt of government grants for property, plant and equipment of RMB2.7
million.
In 2024, our net cash used in investing activities was RMB122.1 million, primarily
attributable to purchases of items of property, plant and equipment of RMB118.3 million and
placement of restricted deposits of RMB5.0 million as collateral for the issuance of a letter of
guarantee; partially offset by receipt of government grants for property, plant and equipment
of RMB1.0 million.
In 2023, our net cash used in investing activities was RMB136.4 million, representing our
purchases of items of property, plant and equipment.
FINANCIAL INFORMATION
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Net Cash Generated from Financing Activities
In the six months ended June 30, 2025, our net cash generated from financing activities
was RMB64.5 million, primarily attributable to (i) new interest-bearing bank borrowings of
RMB87.3 million and (ii) proceeds from issue of shares of RMB30.0 million; partially offset
by repayment of interest-bearing bank borrowings of RMB45.8 million.
In 2024, our net cash generated from financing activities was RMB543.2 million,
primarily attributable to (i) proceeds from issue of shares of RMB460.1 million, and (ii) new
interest-bearing bank borrowings of RMB161.7 million; partially offset by repayment of
interest-bearing bank borrowings of RMB70.0 million.
In 2023, our net cash generated from financing activities was RMB122.9 million,
primarily attributable to (i) proceeds from issue of shares of RMB120.3 million, and (ii) new
interest-bearing bank borrowings of RMB48.5 million; partially offset by repayment of
interest-bearing bank borrowings of RMB39.8 million.
WORKING CAPITAL CONFIRMATION
Our Directors are of the opinion that, taking into account the financial resources available
to us, including cash and cash equivalents, unutilized bank facilities and the estimated net
proceeds from the Global Offering, and considering our cash burn rate, we have available
sufficient working capital to cover at least 125% of our costs, including research and
development expenses, administrative expenses, business development expenses and other
operating costs, for at least the next 12 months from the date of this prospectus.
Our cash burn rate refers to the average monthly amount of net cash used in operating
activities, interest paid, capital expenditures and lease payments. We had cash and cash
equivalents of RMB453.4 million as of June 30, 2025. At the Offer Price of HK$26.38 per H
Share, we estimate that we will receive net proceeds of approximately HK$921.5 million in the
Global Offering. Assuming an average cash burn rate going forward of 1.7 times the level
during the Track Record Period, we estimate that our cash and cash equivalents as of June 30,
2025 will be able to maintain our financial viability for 29 months, taking into account the
estimated net proceeds from the Global Offering. We will continue to monitor our cash flows
from operations closely and expect to raise our next round of financing no earlier than six
months after the completion of the Global Offering.
FINANCIAL INFORMATION
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CASH OPERATING COSTS
The following table sets forth key information relating to our cash operating costs for the
periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Costs relating to research
and development of our
Core Products
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,879 33,574 20,423 23,348
Trials and testing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,247 10,298 5,661 5,007
Cost of raw materials /H1118/H1118/H1118/H1118/H111811,648 7,802 4,446 4,850
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,153 9,000 5,073 4,432
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,927 60,674 35,603 37,637
Costs relating to research
and development of our
other drug candidates
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,055 26,546 12,012 16,820
Trials and testing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,615 30,899 12,794 13,637
Cost of raw materials /H1118/H1118/H1118/H1118/H11185,975 11,661 4,068 5,149
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,190 5,436 2,417 5,536
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,835 74,542 31,291 41,142
Total research and
development costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118115,762 135,216 66,894 78,779
Other costs
Workforce employment
costs (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,154 24,782 12,087 15,604
Promotion expenses /H1118/H1118/H1118/H1118/H1118/H1118475 337 148 630
Direct production costs (3) /H1118/H1118 ––––
Non-income taxes,
royalties and other
governmental charges /H1118/H1118/H11181,981 2,051 1,028 1,116
Contingency allowances /H1118/H1118/H1118 ––––
Other significant cost
(4) /H1118/H1118/H111816,767 28,885 16,303 17,862
Total other costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,377 56,055 29,566 35,212
Total cash operating costs /H1118/H1118155,139 191,271 96,460 113,991
FINANCIAL INFORMATION
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Notes:
(1) Primarily includes utilities incurred for our research and development activities, regulatory registration
fees, and expenses incurred for the application and maintenance of intellectual property rights.
(2) Workforce employment costs represent total non-research and development personnel costs mainly
including wages, bonus and other welfare benefits.
(3) We had not commenced commercial manufacturing as of the Latest Practicable Date.
(4) Primarily includes general office expenses, professional service fees, utilities incurred for
administrative purpose, and other miscellaneous expenses.
INDEBTEDNESS
The following table sets forth the breakdown of our indebtedness as of the dates
indicated:
As of December 31,
As of
June 30,
As of
October 31,
2023 2024 2025 2025
(unaudited)
(RMB in thousands)
Indebtedness
Current:
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,111 69,565 73,219 88,823
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118924 1,564 1,705 1,567
Non-current:
Interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,983 132,290 170,201 196,709
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897 1,840 1,101 723
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,115 205,259 246,226 287,822
Except as disclosed in the table above, we did not have any material mortgages, charges,
debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,
finance lease or hire purchase commitments, liabilities under acceptances (other than normal
trade bills), acceptance credits, which are either guaranteed, unguaranteed, secured or
unsecured, or guarantees or other contingent liabilities as of October 31, 2025. Our Directors
confirm that there had been no material change in our indebtedness since October 31, 2025 and
up to the date of this prospectus.
FINANCIAL INFORMATION
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Interest-Bearing Bank Borrowings
The following table sets forth the breakdown of our interest-bearing bank borrowings,
categorized by current and non-current classifications, as well as the security status, as of the
dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2023 2024 2025 2025
(unaudited)
(RMB in thousands)
Interest-bearing bank
borrowings
Current:
Current portion of long-
term bank loans –
secured
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,825 22,850 33,535 33,991
Current portion of long-
term bank loans –
secured and
guaranteed
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,26 7–––
Current portion of long-
term bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 16,888 39,684 54,832
Bank loans – secured
(1) /H1118/H1118/H111820,019 20,019 – –
Bank loans – unsecured /H1118/H1118/H1118 – 9,808 – –
Total current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,111 69,565 73,219 88,823
Non-current:
Bank loans – secured (1) /H1118/H1118/H111830,750 90,710 106,841 107,924
Bank loans – secured and
guaranteed (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,23 3–––
Bank loans – unsecured /H1118/H1118/H1118 – 41,580 63,360 88,785
Total non-current /H1118/H1118/H1118/H1118/H1118/H1118/H111844,983 132,290 170,201 196,709
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 201,855 243,420 285,532
Notes:
(1) These bank loans were secured by pledge of our properties with carrying amounts of RMB187.1 million,
RMB470.4 million and RMB534.1 million as of December 31, 2023 and 2024 and June 30, 2025,
respectively, and our leasehold land with carrying amounts of RMB51.9 million and RMB51.4 million
as of December 31, 2024 and June 30, 2025, respectively.
(2) These bank loans were secured by pledge of our leasehold land with carrying amounts of RMB53.1
million as of December 31, 2023, and guaranteed by one of our Controlling Shareholders, Dr. Liu
Y anjun. We fully repaid this loan on November 15, 2024, and the corresponding pledge and guarantee
were consequently released.
FINANCIAL INFORMATION
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The following table sets forth the breakdown of our interest-bearing bank borrowings
based on maturity terms in the relevant agreements as of the date indicated:
As of December 31,
As of June
30,
As of
October 31,
2023 2024 2025 2025
(unaudited)
(RMB in thousands)
Interest-bearing bank
borrowings
Bank loans repayable:
Within one year or on
demand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,111 69,565 73,219 88,823
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H111822,846 93,227 117,181 142,237
In the third to fifth years,
inclusive /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,137 10,190 15,665 16,094
Beyond five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,873 37,355 38,378
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 201,855 243,420 285,532
We generally borrow bank loans from creditworthy commercial banks in the PRC to
supplement our working capital requirements and finance our capital expenditures. As of
December 31, 2023 and 2024, June 30 and October 31, 2025, we had total interest-bearing bank
borrowings of RMB110.1 million, RMB201.9 million, RMB243.4 million and RMB285.5
million, respectively. These borrowings bear an effective interest rate ranging from 2.75% to
3.96% per annum. All of these borrowings will become due by 2034. For details, see Note 24
to the Accountants’ Report set out in Appendix I to this prospectus.
As of October 31, 2025, we had committed unutilized bank facilities of RMB515.0
million.
Our Directors confirm that as of the Latest Practicable Date, there was no material
covenant on any of our outstanding debt, and there was no material breach of any covenant
during the Track Record Period and up to the Latest Practicable Date. Our Directors further
confirm that our Group did not experience any difficulty in obtaining or renewing bank loans,
nor did we experience any default in payment of bank loans during the Track Record Period
and up to the Latest Practicable Date.
FINANCIAL INFORMATION
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Lease Liabilities
During the Track Record Period, our lease liabilities were primarily related to leases of
properties used as office premises, laboratories, and employee dormitories. We recognized
lease liabilities in respect of all of our leases, except for short-term leases and leases of
low-value assets. The following table sets forth a breakdown of our lease liabilities as of the
dates indicated:
As of December 31,
As of June
30,
As of
October 31,
2023 2024 2025 2025
(unaudited)
(RMB in thousands)
Lease liabilities
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118924 1,564 1,705 1,567
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897 1,840 1,101 723
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,021 3,404 2,806 2,290
Our lease liabilities increased significantly from RMB1.0 million as of December 31,
2023 to RMB3.4 million as of December 31, 2024, mainly due to the renewal of leases for
office premises and employee dormitories upon expiration of lease terms. Our lease liabilities
decreased from RMB3.4 million as of December 31, 2024 to RMB2.8 million as of June 30,
2025, and further to RMB2.3 million as of October 31, 2025, mainly due to our lease payments.
CAPITAL EXPENDITURES
We regularly incur capital expenditures to purchase and maintain our property, plant and
equipment in order to enhance our drug development capabilities, expand our business
operations, and upgrade our facilities. Historically, we have funded our capital expenditures
primarily through equity and debt financings. The following table sets forth our capital
expenditures for the periods indicated:
For the Y ear Ended
December 31,
For the Six Months Ended
June 30,
2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Capital expenditures
Purchases of items of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,365 118,274 59,453 37,891
FINANCIAL INFORMATION
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We plan to finance our future capital expenditures primarily with existing cash and cash
equivalents, banks loans, and net proceeds from the Global Offering. See “Future Plans and
Use of Proceeds” for more details. We may adjust our capital expenditures for any given period
according to our development plans or in light of market conditions and other factors as
appropriate.
COMMITMENTS
Capital Commitments
As of December 31, 2023 and 2024 and June 30, 2025, we had capital expenditures
contracted for but not yet incurred relating to property, plant and equipment, amounting to
RMB101.9 million, RMB82.0 million and RMB67.8 million, respectively.
CONTINGENT LIABILITIES
During the Track Record Period, we were involved in an ongoing lawsuit concerning a
technology transfer agreement with a biotechnology company. Given the inherent uncertainty
surrounding the case’s progression, we had fully provided for the potential exposure. For
details, see Note 31 to the Accountants’ Report set out in Appendix I to this prospectus.
Save as disclosed above, as of December 31, 2023 and 2024 and June 30, 2025, we did
not have any material contingent liabilities. We confirm that as of the Latest Practicable Date,
there had been no material changes or arrangements to our contingent liabilities.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
We had not entered into any off-balance sheet transactions during the Track Record
Period and as of the Latest Practicable Date.
RELATED PARTY TRANSACTIONS
During the Track Record Period, we entered into certain transactions with our related
parties. For details, see Note 33 to the Accountants’ Report set out in Appendix I to this
prospectus. Our Directors confirm that each of the significant related party transactions during
the Track Record Period was conducted on an arm’s length basis, and would not distort our
results of operations over the Track Record Period or make our historical results not reflective
of our future performance.
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates indicated:
As of December 31, As of June 30,
2023 2024 2025
Current ratio (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.5 3.4 2.1
Note:
(1) Current ratio is calculated as current assets divided by current liabilities as of the end of the year/period.
Our current ratio increased from 2.5 as of December 31, 2023 to 3.4 as of December 31,
2024, because the increase in our current assets outpaced the increase in our current liabilities.
The increase in our current assets was primarily attributable to an increase in cash and bank
balances, resulting from the cash inflows from our Series C Financing and Series C+
Financing. The increase in our current liabilities was primarily attributable to an increase in
other payables and accruals, mainly because we received the first tranche of upfront payments
under the Organon Agreement in 2024 and recorded such payments as contract liabilities as of
December 31, 2024.
Our current ratio decreased from 3.4 as of December 31, 2024 to 2.1 as of June 30, 2025,
driven by a combination of a decrease in our current assets and an increase in our current
liabilities. The decrease in our current assets was primarily attributable to a decrease in cash
and cash equivalents, resulting from our net cash used in operating and investing activities in
the six months ended June 30, 2025. The increase in our current liabilities was primarily
attributable to an increase in other payables and accruals, mainly due to the provision for losses
on an ongoing litigation associated with a technology transfer agreement with a biotechnology
company, as well as increased payables for purchase of property, plant and equipment.
FINANCIAL RISK DISCLOSURE
We are exposed to a variety of financial risks, including interest rate risk, foreign
currency risk, credit risk, and liquidity risk. Our management manages and monitors these
exposures to ensure appropriate measure are implemented on a timely and effective manner.
For details, see Note 36 to the Accountants’ Report set out in Appendix I to this prospectus.
Interest Rate Risk
Our exposure to the risk of changes in market interest rates primarily relates to our bank
borrowings with a floating interest rate. For details on a sensitivity analysis of change in
interest rates, see Note 36 to the Accountants’ Report set out in Appendix I to this prospectus.
FINANCIAL INFORMATION
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Foreign Currency Risk
Our major businesses are in Mainland China and the majority of the transactions are
conducted in Renminbi. Most of our assets and liabilities are denominated in Renminbi. We do
not have material foreign currency risk during the Track Record Period.
Credit Risk
We trade only with recognized and creditworthy third parties. It is our policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis and our exposure to bad debts
is not significant.
The credit risk of our financial assets, which comprise cash and cash equivalents,
restricted cash, trade receivables, financial assets included in prepayments, other receivables
and other assets, arises from default of the counterparty, with a maximum exposure equal to the
carrying amount of these instruments. For more information related to maximum exposure and
year-end staging of credit risk, see Note 36 to the Accountants’ Report set out in Appendix I
to this prospectus.
Liquidity Risk
We monitor and maintain a level of cash and cash equivalents deemed adequate by our
management to finance the operations and mitigate the effects of fluctuations in cash flows. For
further details and an analysis of the maturity profile of our financial liabilities and lease
liabilities at the end of each period comprising the Track Record Period, see Note 36 to the
Accountants’ Report set out in Appendix I to this prospectus.
DIVIDENDS
We did not declare or pay any dividend during the Track Record Period. We do not
currently have a formal dividend policy or a fixed dividend payout ratio. We currently intend
to retain all available funds and earnings, if any, to fund the development and expansion of our
business and we do not anticipate paying any cash dividends in the foreseeable future.
Investors should not purchase our ordinary shares with the expectation of receiving cash
dividends. Any future determination to pay dividends will be made at the discretion of our
Directors and may be based on a number of factors, including our future operations and
earnings, capital requirements and surplus, general financial condition, contractual restrictions,
and other factors that our Directors may deem relevant. Regulations in the PRC currently
permit payment of dividends of a PRC company only out of accumulated distributable after-tax
profits less any recovery of accumulated losses and appropriations to statutory and other
reserves that we are required to make, as determined in accordance with its articles of
association and the accounting standards and regulations in China. As a result, we may not have
sufficient or any distributable profits to make dividend contributions to our Shareholders, even
if we become profitable.
FINANCIAL INFORMATION
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PROPERTY INTEREST AND PROPERTY V ALUATION
A VISTA, an independent property valuer, has valued our selective property interests as of
September 30, 2025. Particulars of these property interests are set out in Appendix III to this
prospectus.
The table below sets out the reconciliation between the net book value of our selective
property as of June 30, 2025 in the Accountants’ Report set out in Appendix I to this prospectus
and the market value of our selective property as of September 30, 2025 in the Property
V aluation Report set out in Appendix III to this prospectus.
(RMB’000)
Net book value of our selective property as of June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118585,410
Addition for the three months ended September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,844
Depreciation and amortization for the three months ended September
30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,675)
Net book value as of September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118587,579
V aluation surplus as of September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,871
V aluation as of September 30, 2025 as set out in Appendix III to
this prospectus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118603,450
DISTRIBUTABLE RESERVES
As of June 30, 2025, we did not have any distributable reserves.
LISTING EXPENSE
Listing expenses to be borne by us are estimated to be approximately HK$78.6 million
(including underwriting commission), at the Offer Price of HK$26.38 per H Share, which
represent 7.9% of the gross proceeds from the Global Offering. The above listing expenses are
comprised of (i) underwriting-related expenses of HK$33.8 million, and (ii) non-underwriting-
related expenses of HK$44.8 million, including (a) the legal advisors and the reporting
accountants expenses of HK$27.1 million, and (b) other fees and expenses of HK$17.7 million.
During the Track Record Period, we incurred listing expenses of HK$24.8 million, HK$19.8
million of which was charged to our consolidated statements of profit or loss, and HK$5.0
million of which was attributable to the issue of Shares and will be deducted from equity. We
expect to incur additional listing expenses of approximately HK$53.8 million after the Track
Record Period, approximately HK$15.6 million of which is expected to be charged to our
consolidated statements of profit or loss, and approximately HK$38.2 million of which is
attributable to the issue of Shares and will be deducted from equity upon Listing. The listing
expenses above are the latest practicable estimate for reference only, and the actual amount
may differ from this estimate.
FINANCIAL INFORMATION
– 457 –


--- page 467 ---
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of our Group was prepared in accordance with paragraph 4.29 of the Rules Governing the
Listing of Securities on the Stock Exchange of Hong Kong Limited and with reference to
Accounting Guideline 7 Preparation of Pro Forma Financial Information for inclusion in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants for
illustration purposes only, and is set out below to illustrate the effect of the Global Offering
on our consolidated net tangible assets attributable to owners of our Company as if the Global
Offering had taken place on June 30, 2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets was
prepared for illustrative purpose only, and due to its hypothetical nature, it may not give a true
picture of our consolidated net tangible assets to owners of the parent had the Global Offering
been completed as of June 30, 2025 or as of any future dates.
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of our Group is prepared based on our audited consolidated net tangible liabilities attributable
to our owners as of June 30, 2025 as derived from the Accountants’ Report set out in Appendix
I to this prospectus and adjusted as described below.
Consolidated net
tangible assets of
our Group
attributable to
owners of our
Company as of
June 30, 2025 (1)
Estimated net
proceeds from the
Global Offering (2)
Unaudited pro
forma adjusted
consolidated net
tangible assets of
our Group
attributable to
owners of Our
Company as of
June 30, 2025
Unaudited pro forma adjusted
consolidated net tangible assets of our
Group attributable to owners of our
Company as of June 30, 2025
per Share
RMB’000 RMB’000 RMB’000 RMB (3) HK$(4)
Based on an Offer Price of
HK$26.38 per H Share /H1118/H1118 877,608 856,857 1,734,465 5.32 5.85
Notes:
(1) The consolidated net tangible assets of our Group attributable to owners of our Company as of June 30,
2025 was equal to the consolidated net assets attributable to owners of our Company as of June 30, 2025
of RMB889.6 million after deducting intangible assets of RMB12.0 million as of June 30, 2025, as
extracted from the Accountants’ Report set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are calculated based on the indicative Offer Price
of HK$26.38 per H Share, after deduction of the estimated underwriting fees and related expenses paid
or payable by our Group (excluding the listing expenses charged to consolidated statements of profit or
loss during the Track Record Period).
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our
Company per Share are calculated based on 325,981,465 Shares in issue immediately following the
completion of the Global Offering.
FINANCIAL INFORMATION
– 458 –


--- page 468 ---
(4) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our
Company per Share are converted into Hong Kong dollars at an exchange rate of RMB0.9103 to HK$1.
(5) No adjustment has been made to reflect any trading results or open transactions of our Group entered
into subsequent to June 30, 2025.
(6) Our selective property interests as of September 30, 2025 have been valued by A VISTA, an independent
property valuer. The relevant property valuation report is set out in Appendix III to this prospectus. The
above unaudited pro forma statement of adjusted net tangible assets does not take into account the
surplus arising from the revaluation of our property interests. Revaluation surplus has not been recorded
in our historical financial information and will not be recorded in our consolidated financial statements
in the future periods, as our property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses, if any. If the revaluation surplus were recorded in our financial
statements, additional annual depreciation and amortization of approximately RMB0.5 million would be
charged against the profit in the future periods.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, there has been no material adverse change in our financial or
trading position or prospects since June 30, 2025 and up to the date of this prospectus and there
is no event since June 30, 2025 which would materially affect the information shown in our
consolidated financial statements included in the Accountants’ Report set out in Appendix I to
this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
– 459 –


--- page 469 ---
This section presents certain information regarding the share capital of our Company
following the completion of the Global Offering.
IMMEDIATELY BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered share capital of our Company was
RMB57,613,953 divided into 57,613,953 Unlisted Shares with a nominal value of RMB1.0
each.
UPON COMPLETION OF THE SHARE SUBDIVISION AND THE GLOBAL
OFFERING
Immediately following the completion of the Share Subdivision, the Global Offering and
the conversion of certain Unlisted Shares into H Shares, the share capital of our Company will
be as follows:
Description of Shares
Number
of Shares
Approximate
percentage of
issued share
capital of our
Company (2)
(%)
Unlisted Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,654,215 52.66%
H Shares to be issued under the Global Offering /H1118/H1118 37,911,700 11.63%
H Shares converted from Unlisted Shares (1) /H1118/H1118/H1118/H1118/H1118116,415,550 35.71%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118325,981,465 100.00
Notes:
(1) For details of the identities of the Shareholders whose Shares will be converted into H Shares upon the
Listing, see “History, Development and Corporate Structure — Capitalization.”
(2) Any discrepancies in the table between the total shown and the sum of the amounts listed are due to
rounding.
SHARE CAPITAL
– 460 –


--- page 470 ---
RANKING
Upon completion of the Global Offering, we would have only one class of Shares. H
Shares and Unlisted Shares are all ordinary Shares in the share capital of our Company.
However, apart from certain qualified domestic institutional investors in the PRC, the qualified
PRC investors under the Shanghai — Hong Kong Stock Connect or the Shenzhen — Hong
Kong Stock Connect and other persons who are entitled to hold our H Shares pursuant to
relevant PRC laws and regulations or upon approvals of any competent authorities, H Shares
generally cannot be subscribed for by or traded between legal or natural persons of the PRC.
Unlisted Shares and H Shares will rank pari passu with each other in all respects and, in
particular, will rank equally for all dividends or distributions declared, paid or made after the
date of this prospectus. All dividends in respect of the H Shares are to be paid by us in Hong
Kong dollars or in the form of H Shares.
CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
The Company has filed for a “full circulation” of existing 116,415,550 Unlisted Shares
into H Shares on a one-for-one basis, taking into account the Share Subdivision, and submitted
the application reports, authorization documents of the shareholders of Unlisted Shares for
which an H-share “full circulation” are applied, explanation about the compliance of share
acquisition and other documents in accordance with the requirements of the CSRC. The
relevant filings of the conversion of the existing 116,415,550 Unlisted Shares (taking into
account the Share Subdivision) held by the existing Shareholders into H Shares on a
one-for-one basis have been completed on October 29, 2025.
Upon completion of the Global Offering, if any of our Shares are not listed or traded on
any stock exchange, the holders of our Unlisted Shares (other than those to be converted to H
Shares) may convert their Shares into H Shares provided such conversion shall have gone
through any requisite internal approval process and complied with the regulations prescribed
by the securities regulatory authorities of the State Council and the regulations, requirements
and procedures prescribed by the overseas stock exchange(s) and have completed the required
filing with the securities regulatory authorities of the State Council, including the CSRC. The
listing of such converted Shares on the Stock Exchange will also require the approval of the
Stock Exchange.
Based on the procedures for the conversion of our Unlisted Shares into H Shares as
disclosed in this section, we can apply for the listing of all or any portion of our Unlisted
Shares on the Stock Exchange as H Shares in advance of any proposed conversion to ensure
that the conversion process can be completed promptly upon notice to the Stock Exchange and
delivery of Shares for entry on the H Share register. As any listing of additional Shares after
our initial listing on the Stock Exchange is ordinarily considered by the Stock Exchange to be
a purely administrative matter, it will not require such prior application for listing at the time
of our initial listing in Hong Kong.
SHARE CAPITAL
– 461 –


--- page 471 ---
No class Shareholder voting is required for the listing and trading of the converted Shares
on the Stock Exchange. Any application for listing of the converted Shares on the Stock
Exchange after our initial listing is subject to prior notification by way of announcement to
inform Shareholders and the public of such proposed conversion.
After all the requisite approvals have been obtained, the following procedures will need
to be completed: the relevant Unlisted Shares will be withdrawn from the Share register and
we will re-register such Shares on our H Share register maintained in Hong Kong and instruct
the H Share Registrar to issue H Share certificates. Registration on our H Share register will
be on the condition that (a) our H Share Registrar lodges with the Stock Exchange a letter
confirming the proper entry of the relevant H Shares on the H Share register of members and
the due dispatch of H Share certificates and (b) the admission of the H Shares to trade on the
Stock Exchange will comply with the Listing Rules and the General Rules of HKSCC and the
HKSCC Operational Procedures in force from time to time. Until the converted Shares are
re-registered on our H Share register, such Shares would not be listed as H Shares.
For further details, see “Risk Factors — Risks Relating to the Global Offering — Future
sales or perceived sales of our H Shares in the public market by major Shareholders, or any
possible conversion of our Unlisted Shares into H Shares, following the Global Offering may
adversely affect the price of our H Shares.”
TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL OFFERING
Pursuant to the PRC Company Law, our Shares issued prior to the Listing shall not be
transferred within one year from the Listing Date. Shares transferred by our Directors,
Supervisors and members of the senior management each year during their term of office shall
not exceed 25% of their total respective shareholdings in our Company. The Shares that the
aforementioned persons hold in our Company cannot be transferred within one year from the
Listing Date, nor within half a year after they leave their positions as Directors, Supervisors
or members of the senior management in our Company.
See “Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public
Offering — Undertakings to the Stock Exchange pursuant to the Listing Rules” and “—
Undertakings pursuant to the Hong Kong Underwriting Agreement” for details of the lock-up
undertakings.
SHAREHOLDERS’ GENERAL MEETING
For details of circumstances under which our Shareholders’ general meeting is required,
see “Appendix V — Summary of Principal Legal and Regulatory Provisions” and “Appendix
VI — Summary of Articles of Association.”
SHARE CAPITAL
– 462 –


--- page 472 ---
GENERAL MANDATES TO ISSUE SHARES, SELL AND/OR TRANSFER TREASURY
SHARES
Subject to the completion of the Global Offering, pursuant to the Shareholders resolutions
of the Company, our Directors have been granted general unconditional mandates to issue our
Shares and sell and/or transfer our Shares out of treasury that are held as treasury shares and
repurchase our Shares. See “Appendix VII — Statutory and General Information — A. Further
Information about the Group — 4. Resolutions of Our Shareholders.”
REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE
According to the Guidelines for the “Full Circulation” Program for Domestic Unlisted
Shares of H-Share Listed Companies ( H΅͡ሗ“ஷ”ˏ)
announced by the CSRC, the domestic shareholders of our Shares that are not listed on the
overseas stock exchange shall handle share transfer registration business in accordance with
the relevant business rules of the CSDC. Further, H-share companies should submit the
relevant status reports to the CSRC within 15 days after the transfer registration with the CSDC
of such shares involved in the application is completed.
SHARE CAPITAL
– 463 –


--- page 473 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering and the conversion of our Unlisted Shares to H Shares, the following persons will
have an interest and/or short position in the Shares or the underlying Shares which would fall
to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part
XV of the SFO, or, will be, directly or indirectly interested in 10% or more of the nominal
value of any class of our share capital carrying rights to vote in all circumstances at general
meetings of our Company:
Name of Shareholder Capacity/Nature of interest
Description of
Shares (1)
Number of
Shares (to be
converted) (1)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
(to be converted)
of our Company
as of the Latest
Practicable
Date (1)
Approximate
percentage of
shareholding in
the total Share
capital of our
Company
immediately after
completion of the
Global
Offering (2)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
immediately after
completion of the
Global
Offering (3)
Dr. Liu /H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner Unlisted
Shares
54,977,530 32.03% 16.87% 32.03%
H Shares 6,108,615 5.25% 1.87% 3.96%
Interest in controlled
corporation (4)
Unlisted
Shares
23,562,700 13.73% 7.23% 13.73%
H Shares 10,098,300 8.67% 3.10% 6.54%
Interest jointly held
with another
person
(5)
Unlisted
Shares
27,750,000 16.17% 8.51% 16.17%
H Shares 9,750,000 8.38% 2.99% 6.32%
Ms. Wang /H1118/H1118/H1118/H1118Beneficial owner Unlisted
Shares
20,250,000 11.80% 6.21% 11.80%
H Shares 2,250,000 1.93% 0.69% 1.46%
Interest jointly held
with another
person
(5)
Unlisted
Shares
86,040,230 50.12% 26.39% 50.12%
H Shares 23,706,915 20.36% 7.27% 15.36%
Mr. Tan /H1118/H1118/H1118/H1118/H1118Beneficial owner Unlisted
Shares
7,500,000 4.37% 2.30% 4.37%
H Shares 7,500,000 6.44% 2.30% 4.86%
Interest jointly held
with another
person
(5)
Unlisted
Shares
98,790,230 57.55% 30.31% 57.55%
H Shares 18,456,915 15.85% 5.66% 11.96%
Shanghai
Luoxu (4) /H1118/H1118/H1118/H1118
Beneficial owner Unlisted
Shares
13,125,000 7.65% 4.03% 7.65%
H Shares 5,625,000 4.83% 1.73% 3.64%
SUBSTANTIAL SHAREHOLDERS
– 464 –


--- page 474 ---
Name of Shareholder Capacity/Nature of interest
Description of
Shares (1)
Number of
Shares (to be
converted) (1)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
(to be converted)
of our Company
as of the Latest
Practicable
Date (1)
Approximate
percentage of
shareholding in
the total Share
capital of our
Company
immediately after
completion of the
Global
Offering (2)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
immediately after
completion of the
Global
Offering (3)
Shanghai
Luojun (4) /H1118/H1118/H1118/H1118
Beneficial owner Unlisted
Shares
7,255,915 4.23% 2.23% 4.23%
H Shares 3,109,680 2.67% 0.95% 2.01%
Ningbo
Hongsheng (4) /H1118
Beneficial owner Unlisted
Shares
3,181,785 1.85% 0.98% 1.85%
H Shares 1,363,620 1.17% 0.42% 0.88%
Center Lab (6) /H1118/H1118Beneficial owner Unlisted
Shares
31,924,265 18.60% 9.79% 18.60%
H Shares 7,981,065 6.86% 2.45% 5.17%
Center
Laboratories (6)/H1118
Interest in controlled
corporation
Unlisted
Shares
31,924,265 18.60% 9.79% 18.60%
H Shares 7,981,065 6.86% 2.45% 5.17%
V enus Capital
HK Limited (7) /H1118
Beneficial owner Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 16,111,110 13.84% 4.94% 10.44%
PCJ Bao
Holdings
Limited
(7) /H1118/H1118/H1118
Beneficial owner Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 5,550,000 4.77% 1.70% 3.60%
Fangyuan Capital
Holdings
(Cayman)
Limited
(7) /H1118/H1118/H1118
Interest in controlled
corporation
Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 21,661,110 18.61% 6.64% 14.04%
Ms. Zheng Juan
(ࢇ“() Ms.
Zheng ”)(7) /H1118/H1118/H1118
Interest in controlled
corporation
Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 21,661,110 18.61% 6.64% 14.04%
Shanghai Xihao
Investment
Management
Co., Ltd. ( ɪ
ऎဢ㒊ҳ༟၍
ʮ̡)
(“Shanghai
Xihao ”)
(8) /H1118/H1118/H1118
Interest in controlled
corporation
Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 8,319,280 7.15% 2.55% 5.39%
SUBSTANTIAL SHAREHOLDERS
– 465 –


--- page 475 ---
Name of Shareholder Capacity/Nature of interest
Description of
Shares (1)
Number of
Shares (to be
converted) (1)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
(to be converted)
of our Company
as of the Latest
Practicable
Date (1)
Approximate
percentage of
shareholding in
the total Share
capital of our
Company
immediately after
completion of the
Global
Offering (2)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
immediately after
completion of the
Global
Offering (3)
Mr. Li Jiaqi ( ҽ
Գೡ)( “ Mr.
Li”)(8) /H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporation
Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 8,319,280 7.15% 2.55% 5.39%
Shanghai Naixi
Technology
Co., Ltd. ( ɪ
ҦϞ
ʮ̡)
(“Shanghai
Naixi ”)
(8) /H1118/H1118/H1118
Interest in controlled
corporation
Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 8,319,280 7.15% 2.55% 5.39%
Mr. Qian
Jincheng
(፺ᎀ೻)
(“Mr.
Qian ”)
(8) /H1118/H1118/H1118
Interest in controlled
corporation
Unlisted
Shares
– 0.00% 0.00% 0.00%
H Shares 8,319,280 7.15% 2.55% 5.39%
Shanghai
Healthcare
Capital
Partnership
(Limited
Partnership)
(ᔼᖹ
ᛆҳ༟
ΥྫΆุ
(Υྫ))
(“SHC”)
(9) /H1118/H1118
Beneficial Owner Unlisted
Shares
2,957,170 1.72% 0.91% 1.72%
H Shares 8,871,510 7.62% 2.72% 5.75%
SUBSTANTIAL SHAREHOLDERS
– 466 –


--- page 476 ---
Name of Shareholder Capacity/Nature of interest
Description of
Shares (1)
Number of
Shares (to be
converted) (1)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
(to be converted)
of our Company
as of the Latest
Practicable
Date (1)
Approximate
percentage of
shareholding in
the total Share
capital of our
Company
immediately after
completion of the
Global
Offering (2)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
immediately after
completion of the
Global
Offering (3)
Shanghai
Healthcare
Capital
Management
Co., Ltd. ( ɪऎ
ᔼᖹପุ
ږ
ʮ̡)
(“SHC
Management ”)
(9)/H1118
Interest in controlled
corporation
Unlisted
Shares
2,957,170 1.72% 0.91% 1.72%
H Shares 8,871,510 7.62% 2.72% 5.75%
Notes:
(1) For the avoidance of doubt, both Unlisted Shares and H Shares are ordinary Shares in the share capital of our
Company, and are considered as one class of Shares. All interests stated are long positions. The calculation is
based on the total number of Shares in issue as of the Latest Practicable Date and the assumption that the Share
Subdivision is completed, which consist of 288,069,765 Unlisted Shares among which, 116,415,550 of the
Unlisted Shares will be converted into H Shares upon completion of the Global Offering after receipt of the
filing notice regarding H share “Full circulation” from the CSRC.
(2) The calculation is based on the total number of 325,981,465 Shares in issue immediately after completion of
the Global Offering.
(3) The calculation is based on the total number of 171,654,215 Unlisted Shares and 154,327,250 H Shares in issue
immediately after completion of the Global Offering after receipt of the filing notice regarding H share “Full
circulation” from the CSRC.
(4) Each of Shanghai Luoxu, Shanghai Luojun and Ningbo Hongsheng is one of our Share Incentive Platforms and
a limited partnership established under the laws of PRC. Pursuant to the Pre-IPO Share Incentive Plans, each
of the Share Incentive Platforms is managed by their executive partner, Dr. Liu, who controls the voting rights
and decision-making of the Share Incentive Platforms. As such, Dr. Liu is deemed to be interested in the Shares
held by each of the Share Incentive Platforms under the SFO. See “Appendix VII — Statutory and General
Information — C. Further Information about the Directors, Supervisors, Senior Management and Substantial
Shareholders — 5. Pre-IPO Share Incentive Plans” for further details.
(5) Dr. Liu, Ms. Wang, and Mr. Tan (collectively, the “ Concert Parties ”) entered into an acting-in-concert
agreement (the “ AIC Agreement ”) on March 10, 2021, pursuant to which the Concert Parties had confirmed
and agreed that they would: (i) act in concert with respect to the matters relating to the daily operations, key
matters or any other matters required to be approved by the shareholders’ meetings or board meetings of the
Company; (ii) consult each other and reach a consensus before voting at board meetings and/or shareholders’
meetings of the Company; and (iii) in the event that the Concert Parties fail to reach a consensus, vote based
on Dr. Liu’s opinion. As such, each of the Concert Parties and the Share Incentive Platforms is deemed to be
interested in the Shares each other is interested in under the SFO. See “History, Development and Corporate
Structure — Acting In Concert Agreement” for details.
SUBSTANTIAL SHAREHOLDERS
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--- page 477 ---
(6) To the best of our Directors’ knowledge, Center Laboratories Limited is a private company limited by shares
incorporated in Hong Kong, which is wholly-owned by Center Laboratories Inc., a company listed on the
Taipei Exchange (TWO: 4123).
(7) To the best of our Directors’ knowledge, V enus Capital HK Limited is directly wholly-owned by Fangyuan J
Fund II, which is in turn wholly-owned by Fangyuan Capital Holdings (Cayman) Limited. Fangyuan Capital
Holdings (Cayman) Limited is wholly-owned by Ms. Zheng.
PCJ Bao Holdings Limited is directly wholly-owned by Fangyuan Growth SPC — PCJ Healthcare Fund SP ,
which is wholly-owned by PCJ Capital Management Limited. Fangyuan Capital Holdings (Cayman) Limited
holds 50% of PCJ Capital Management Limited, and is in turn wholly-owned by Ms. Zheng. Therefore, Ms.
Zheng is deemed to be interested in the Shares held by V enus Capital HK Limited and PCJ Bao Holdings
Limited under the SFO.
(8) To the best of our Directors’ knowledge, the general partner of Shanghai Cixi and Jiaxing Xiqi is Shanghai
Xihao, holding approximately 0.10% of the partnership interest and approximately 1.11% of the partnership
interests, respectively. Shanghai Xihao was owned as to 50.00% by Mr. Li. Therefore, Shanghai Xihao and Mr.
Li are deemed to be interested in the Shares held by Shanghai Cixi and Jiaxing Xiqi under the SFO.
Shanghai Cixi is a limited partnership established in the PRC. Shanghai Cixi had two limited partners, namely
Shanghai Naixi and Shenzhen Yingsheng Investment Co., Ltd. (ʮ̡)( “ Shenzhen
Yingsheng ”), each holding 49.95% of the partnership interest, respectively. Shanghai Naixi was owned as to
99.00% by Mr. Qian. Shenzhen Yingsheng was owned as to approximately 87.44% by Mr. Li. Therefore,
Shanghai Naixi, Shenzhen Yingsheng, Mr. Qian and Mr. Li are deemed to be interested in the Shares held by
Shanghai Cixi under the SFO.
Jiaxing Xiqi is a limited partnership established in the PRC. Jiaxing Xiqi had four limited partners, with the
two largest limited partners, namely Xu Ren (΂) and Shanghai Naixi, holding approximately 44.44% and
43.33% of the partnership interest, respectively. Therefore, Xu Ren, Shanghai Naixi and Mr. Qian are deemed
to be interested in the Shares held by Jiaxing Xiqi under the SFO.
(9) To the best of our Directors’ knowledge, SHC is a limited partnership established in the PRC. SHC has eight
limited partners. None of its limited partners holds more than one third of its partnership interests. The general
partner of SHC is Shanghai Healthcare Capital Management Co., Ltd. (၍ଣ
ʮ̡), holding approximately 0.61% of its partnership interest. None of the shareholders of SHC
Management holds more than 30% of its total issued share capital.
Save as disclosed above, our Directors are not aware of any person who will, immediately
following completion of the Global Offering and the conversion of our Unlisted Shares to H
Shares, have any interest and/or short position in the Shares or underlying Shares of our
Company which will be required to be disclosed to our Company and the Stock Exchange
pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who are, directly
or indirectly interested in 10% or more of the nominal value of any class of share capital
carrying rights to vote in all circumstances at general meeting of the Company or any other
member of our Group. Our Directors are not aware of any arrangement which may at a
subsequent date result in a change of control of our Company.
SUBSTANTIAL SHAREHOLDERS
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--- page 478 ---
DIRECTORS
Upon Listing, our Board will consist of eleven Directors, including four executive
Directors, three non-executive Directors and four independent non-executive Directors. Our
Directors serve a term of three years and may be re-elected for successive reappointments.
The following table sets forth certain information about our Directors:
Name Age Position Responsibilities
Date of the first
appointment as
a Director
Date of joining
the Group
Executive Directors
Dr. Liu Y anjun
(ё) /H1118/H1118
60 Co-founder,
chairman of our
Board and
executive
Director
Responsible for the
overall strategic
planning of our Group
and making key
business and
operational decisions
of our Group
December 16,
2019
December 16,
2019
Ms. Wang
Zheng
(ˮᅄ) /H1118/H1118/H1118/H1118
49 Co-founder,
executive
Director and
Chief Executive
Officer
Responsible for the
business operations,
R&D and overall
operation management
of our Group
September 25,
2020
September 25,
2020
Mr. Tan
Jingwei
(ᗈཨਃ) /H1118/H1118
59 Executive
Director and
director of
internal control
Responsible for the
formulation of internal
control policies and
overseeing internal
control work of our
Group
February 8, 2021 September 25,
2020
Ms. Li Cui
(ҽၯ) /H1118/H1118/H1118/H1118
38 Executive
Director, Chief
Financial
Officer and
secretary to the
Board
Overseeing financial
management, corporate
governance, investor
relations, and capital
markets activities of
our Group
January 21, 2025 December 1,
2021
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 479 ---
Name Age Position Responsibilities
Date of the first
appointment as
a Director
Date of joining
the Group
Non-executive Directors
Ms. Lin
Chia-Ling
(Գ௒) /H1118/H1118
41 Non-executive
Director
Responsible for
participating in major
decisions on our
Group’s operations and
development
January 21, 2025 January 21, 2025
Mr. Diao
Juanhuan
(࣫)H1118/H1118
54 Non-executive
Director
Responsible for
participating in major
decisions on our
Group’s operations and
development
August 25, 2022 August 25, 2022
Mr. Li Chen /H1118/H111843 Non-executive
Director
Responsible for
participating in major
decisions on our
Group’s operations
and development
July 18, 2024 July 18, 2024
Independent Non-executive Directors
Mr. Cai
Zhongxi
(ᇹ΀ᘙ) /H1118/H1118
60 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
July 18, 2024 July 18, 2024
Dr. Zeng
Fanyi
(ಀɭɓ) /H1118/H1118
57 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
July 18, 2024 July 18, 2024
Dr. Ju
Dianwen
(ᒴХ˖) /H1118/H1118
56 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
July 18, 2024 July 18, 2024
Mr. Zhang
Senquan
(ݰ)H1118/H1118
48 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
January 21, 2025 January 21, 2025
Executive Directors
Dr. Liu Y anjun (ё), aged 60, is a co-founder of our Group, the chairman of our
Board and an executive Director. He is primarily responsible for the overall strategic planning
of our Group and making key business and operational decisions of our Group.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 480 ---
Dr. Liu has been serving as a Director of our Company since its inception and the
chairman of our Board since September 2020, and was re-designated as an executive Director
in January 2025. Dr. Liu has also been serving as a director and chairman of board of directors
of Suzhou Centergene since January 2021 and a director of ABLINK Biotechnology Co., Ltd.
(ʮ̡) since May 2021.
Dr. Liu has over 35 years of experiences in the medical and pharmaceutical industry. He
served as a teaching assistant at the Department of Naval Medicine of Second Military Medical
University (ᔼɽኪ) (currently known as Naval Medical University (ऎ
ᔼɽኪ)) from July 1989 to September 1991. From July 1998 to August 1999, he served
as an attending physician and lecturer at the Cancer Immunotherapy and Gene Therapy Center
of the Second Military Medical University Eastern Hepatobiliary Surgery Hospital (ᔼ
ᔼ৫) (currently known as Shanghai Eastern Hepatobiliary Surgery Hospital
(ᔼ৫). He also served as the director and associate researcher at the Second
Military Medical University Molecular Biology Laboratory of Cancer Research Institute ( ୋɚ
܃from August 1999 to January 2001. He further served
as the vice general manager of Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. ( ɪ
ʮ̡) (HKEX: 1349) from January 2001 to February 2012. He
then served as vice president of Shanghai Pharmaceuticals Holding Co., Ltd. (ٰ
ʮ̡) (HKEX: 2607; SSE: 601607) from June 2013 to June 2019, and served various
positions at subsidiaries of Shanghai Pharmaceuticals Holding Co., Ltd., including president at
Central Research Institution of Shanghai Pharmaceuticals Holding Co., Ltd. (ٰ
Ӻ৫) and the chairman of Shanghai Jiaolian Medicine Research and
Development Co., Ltd. (ʮ̡) (currently known as Shanghai Shangyao
Cross Linked Pharmaceutical Technology Co., Ltd. (ʮ̡)).
Dr. Liu obtained his bachelor’s degree in naval medicine, master’s degree in
pharmacology, and doctoral degree in surgery from Second Military Medical University ( ୋɚ
ᔼɽኪ) (currently known as Naval Medical University (ᔼɽኪ)) in
the PRC in July 1989, July 1994, and June 1998, respectively. Dr. Liu has published more than
30 research papers, and is the inventor of more than 50 patents. Dr. Liu passed the Shanghai
Natural Science Research Series Senior Professional and Technical Position Qualification ( ɪ
ࣸin April 2005 and was granted a senior
professional title and recognized as a researcher.
Dr. Liu currently serves as a post-doctoral fellow and visiting scholar at San Diego Sidney
Kimmel Cancer Center in California, the United States. He is the vice chairman of the fifth
council of China Medicinal Biotech Association (ଣԫึ) and
the chairman of the Ninth Shanghai Engineering Series Medical Professional Senior
Professional Technical Qualification Review Committee ( ɪऎ̹ʈ೻ӻΐᔼᖹਖ਼ุ৷ॴਖ਼ุ
ึ). He is also a committee member of the Biological Products
Supervision and Management Professional Committee of China Society for Drug Regulation
(Ӻึ) and Shanghai Biomedical Industry Technology Functional
Platform Expert Committee (ึ). Dr. Liu is a
recipient of the State Council Special Allowance (൨).
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 481 ---
Dr. Liu was (i) the executive director and general manager of Suzhou Hailian
Biotechnology Co., Ltd. (ʮ̡), which was de-registered in
December 2013, (ii) the executive partner and partner of Suzhou Baoji Jucai Management
Consulting Partnership Enterprise (Limited Partnership) ( ᘽψᘒ᏶ၳʑ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), which was de-registered in February 2021, (iii) the executive partner and partner of
Suzhou Baoji Juneng Management Consulting Partnership Enterprise (Limited Partnership) ( ᘽ
ψᘒ᏶ၳঐ၍ଣፔ༔ΥྫΆุ(Υྫ)), which was de-registered in February 2021, (iv) the
executive partner and partner of Suzhou Hongsheng Management Consulting Partnership
Enterprise (Limited Partnership) ( ᘽψᒿ᳅၍ଣፔ༔ΥྫΆุ(Υྫ)), which was de-
registered in July 2021, and (v) the partner of Shanghai Zhiyuan Investment Center (Limited
Partnership) ( ɪऎқ଀ҳ༟ʕː(Υྫ)), which was de-registered in January 2022. As of
the time of the deregistration, the aforementioned companies and enterprises were not
insolvent, nor had any outstanding liabilities nor were involved in any pending claims. To the
best knowledge of our Directors, the reason for deregistration of the aforementioned companies
and enterprises was cessation of business, which has not resulted in any punishment or fines
imposed by any competent authorities, nor has it resulted in any outstanding or potential claims
or liabilities against the aforementioned companies, enterprises and Dr. Liu, and there is no
material matter that should be brought to the attention of the Stock Exchange or the
Shareholders in this regard.
Ms. Wang Zheng ( ˮᅄ), aged 49, is a co-founder of our Group, an executive Director
and Chief Executive Officer of our Company. She is primarily responsible for the business
operations, R&D and overall operation management of our Group.
Ms. Wang has been serving as the general manager and a Director of our Company since
September 2020 and was re-designated as an executive Director in January 2025. She has also
been serving as the general manager of Suzhou Kangju since August 2011, the general manager
of Suzhou Centergene since July 2014 and the director and general manager of Hainan Baoji
since February 2022. She is a supervisor of Suzhou Shengde Y uekai Investment Management
Co., Ltd. (ʮ̡) since April 2017.
Ms. Wang has over 20 years of experience in genetic engineering drug development and
has participated in and led more than 10 national, provincial, and municipal scientific research
projects. She has extensive theoretical knowledge and practical experience in protein hormone
drugs and recombinant protein drugs. Prior to establishing our Group, she served as project
manager at Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (ᔼᖹ
ʮ̡) (HKEX: 1349) from September 2001 to July 2010, where she focused on
genetic engineering drug development. Ms. Wang joined Suzhou Kangju in August 2011 and
has been primarily focusing on genetic engineering drug development and has successfully
built technology platforms and pipeline products.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 482 ---
Ms. Wang obtained a bachelor’s degree and a master’s degree in microbiology from
Huazhong Agricultural University ( ശʕุ༵ɽኪ) in the PRC in June 1998 and June 2001,
respectively. In December 2014, Ms. Wang was recognized as the Science and Technology
Leading Talent of Suzhou Industrial Park Jinjihu Dual Hundred Talents Program (ᕒ
ྌ —ɛʑ) by Chinese Communist Party Suzhou Industrial Park
Working Committee and Suzhou Industrial Park Administrative Committee. In December 2021,
she received the Zhangjiang Outstanding Innovation and Entrepreneurship Talent Award ( ੵϪ
௫̈௴อ௴ุɛʑ) from Shanghai Science and Technology Innovation Center Construction
Office and Shanghai Municipal Human Resources and Social Security Bureau. In January
2023, she was recognized as Shanghai Industrial Elite Leading Talent (ɛʑ)
by the Shanghai Economic and Information Technology Working Committee and Shanghai
Economic and Information Technology Commission. In December 2023, she was selected for
the Oriental Talent Program Outstanding Project (φධͦ) by the Shanghai
Municipal Committee Talent Work Leading Group Office.
Ms. Wang was a supervisor of Suzhou Hailian Biotechnology Co., Ltd. (ي
ʮ̡)( “Suzhou Hailian ”), which was de-registered in December 2013. As of the time
of the deregistration, Suzhou Hailian was not insolvent, nor had any outstanding liabilities nor
was involved in any pending claims. To the best knowledge of our Directors, the reason for
deregistration of Suzhou Hailian was cessation of business, which has not resulted in any
punishment or fines imposed by any competent authorities, nor has it resulted in any
outstanding or potential claims or liabilities against Suzhou Hailian and Ms. Wang, and there
is no material matter that should be brought to the attention of the Stock Exchange or the
Shareholders in this regard.
Mr. Tan Jingwei ( ᗈཨਃ), aged 59, is an executive Director and the director of internal
control of our Company. He is primarily responsible for the formulation of internal control
policies and overseeing internal control work of our Group.
Mr. Tan has been serving as a Director and the director of internal control of our Company
since February 2021, and was re-designated as our executive Director in January 2025. Mr. Tan
has also been serving as the supervisor of Suzhou Kangju since July 2017 and Suzhou
Centergene since July 2022.
Mr. Tan has over 35 years of experience in biological research and pharmaceutical
industry. Prior to joining our Group, he served as an assistant researcher at the Toxicology
Research Laboratory of the Shanghai Institute of Entomology, Chinese Academy of Sciences
(הcurrently known as Chinese Academy of Sciences Center for
Excellence in Molecular Plant Science (ኪՙ൳௴อʕː)) from August
1988 to July 1998, during which he was awarded the title of intermediate research assistant in
insect biochemical toxicology by Shanghai Institute of Entomology, Chinese Academy of
Sciences in December 1993. He also served as a purification process researcher at Shanghai
Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (ʮ̡)
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 483 ---
(HKEX: 1349) from August 1998 to August 2009. He then served as the technical director at
Suzhou Kangju from August 2011 to July 2014. He later served as the technical director and
deputy general manager at Suzhou Centergene from August 2014 to August 2020.
Mr. Tan obtained a bachelor’s degree in bioengineering from East China Institute of
Chemical Technology (ʷʈኪ৫) (currently known as East China University of Science
and Technology (ଣʈɽኪ)) in the PRC in July 1988.
Ms. Li Cui ( ҽၯ), aged 38, has served as our Chief Financial Officer since December
2021, secretary to the Board since July 2023, and an executive Director since January 2025.
She is responsible for overseeing financial management, corporate governance, investor
relations, and capital markets activities of our Group.
Prior to joining our Group, Ms. Li served as auditor at Deloitte Touche Tohmatsu
Certified Public Accountants LLP Suzhou Branch (ה(౷ஷΥྫ)ᘽψ
הfrom July 2008 to November 2010. She then worked as assurance manager at
PricewaterhouseCoopers Zhong Tian LLPה(౷ஷΥྫ)) from
November 2010 to July 2017. Ms. Li also served as financial director at Yikon Genomics
(Shanghai) Co., Ltd. (ʮ̡) from July 2017 to October 2017,
followed by a position as deputy financial general manager at New World Department Stores
(Holdings) Limited (ϵ஬(ʕ਷)ʮ̡) from October 2017 to August 2018. She then
served as financial director at PPDai Group Inc. (ʮ̡) from
August 2018 to December 2020. She was the financial director at Genor Biopharma Co., Ltd.
(ʮ̡) (HKEX: 6998) from December 2020 to December 2021.
Ms. Li obtained a bachelor’s degree in finance from Shanghai University ( ɪऎɽኪ)i n
the PRC in July 2008 and an executive master of business administration (EMBA) degree from
Fudan University ( ూ͇ɽኪ) in the PRC in June 2024. She has been admitted as a member of
the Chinese Certified Public Accountants certified by the Shanghai Institute of Certified Public
Accountants (՘ึ) since September 2017.
Non-executive Directors
Ms. Lin Chia-Ling (Գ௒), aged 41, was appointed as a non-executive Director in
January 2025. She is primarily responsible for participating in major decisions on our Group’s
operations and development.
Ms. Lin currently holds director, supervisor and senior management positions in the
following companies including director and chairman of board of directors of BioEngine
Technology Development Inc. (ʮ̡) since June 2018 and October
2023, respectively; director of Glac Biotech Co., Ltd. (ʮ̡) since July
2024; director of Lumosa Therapeutics Co., Ltd. (ʮ̡) (TWO: 6535)
since May 2024; director and manager of organizational development and human resources
department at Center Laboratories, Inc. (ʮ̡) (TWO: 4123) since June
2016 and January, 2023, respectively; director of Cytoengine Co., Ltd. (ʮ
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 474 –


--- page 484 ---
̡) since January 2023; supervisor of LeJean Biotech Co., Ltd. (ʮ̡) since
September 2011; supervisor of Jason Technology Co., Ltd. (ʮ̡) since
November 2011; and supervisor of Royal Foods Co., Ltd (ʮ̡) since
November 2011.
Ms. Lin obtained a bachelor’s degree in economics from McMaster University in Canada
in June 2008.
Mr. Diao Juanhuan (࣫)aged 54, was appointed as a Director in August 2022 and
was re-designated as a non-executive Director in January 2025. He is primarily responsible for
participating in major decisions on our Group’s operations and development.
Mr. Diao has extensive experience in finance and investment management. He has been
serving as a partner at Shenzhen Oriental Fortune Capital Co., Ltd. (˙బऎҳ༟၍ଣ
ʮ̡) since January 2008.
From December 1996 to December 1998, Mr. Diao served as the general manager at the
securities trade business department of Jun’an Securities Co., Ltd., Lanzhou Longxi Road
Securities Trading Branch (ᐄุ௅) (currently
known as Guotai Junan Securities Co., Ltd. (ʮ̡) (HKEX: 2611; SSE:
601211), being responsible for various securities trade assignments and overseeing the
operation of the branch. He then served as the general manager at Shenzhen Aofan Investment
Co., Ltd. (ʮ̡) from August 1999 to November 2002. From
December 2002 to December 2007, Mr. Diao successively worked at Shenzhen Jiuyi
Investment Co., Ltd. (ப΂ʮ̡) and China Guangfa Bank Co., Ltd.,
Shenzhen Branch (ʮ̡ଉέʱБ).
Mr. Diao currently is a non-executive director of the following companies: Baiwang Co.,
Ltd. (ʮ̡) (HKEX: 6657) since January 2020; Shenzhen Hua’ao Data
Technology Co., Ltd. (ʮ̡) since January 2020; and Ningbo Hicon
Industry Co., Ltd. (ʮ̡) since June 2011. Mr. Diao also serves as a director
of Jingjing Pharmaceutical Co., Ltd. (ʮ̡) (NEEQ: 835033) since June
2011.
Mr. Diao obtained a bachelor’s degree in international trade from Shenzhen University
(ଉέɽኪ) in the PRC in July 1995, and an executive master of business administration
(EMBA) degree from Cheung Kong Graduate School of Business (Ϫਠኪ৫) in the PRC in
September 2011.
Mr. Diao was (i) the director of SINOMINE FORTUNE (HONG KONG)
INTERNA TIONAL MINING INVESTMENT CO., LIMITED ( ʕᘤబऎ(ಥ)਷ყᘤุҳ༟Ϟ
ʮ̡), which was dissolved in October 2020, (ii) the director of SINOMINE FORTUNE
(HONG KONG) OVERSEAS INVESTMENT CO., LIMITED ( ʕᘤబऎ(ಥ)ࠢ
ʮ̡), which was dissolved in July 2020, (iii) the director of SINOMINE FORTUNE (HONG
KONG) OVERSEAS RESOURCES INVESTMENT CO., LIMITED ( ʕᘤబऎ(ಥ)ऎ̮༟๕
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 485 ---
ʮ̡), which was dissolved in July 2020, (iv) the partner of Tianjin Xincheng Fuhai
Equity Investment Fund Partnership Enterprise (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), which was de-registered in December 2010, (v) the chairman of
Beijing Guohaitianyi Software Technology Co., Ltd. (ʮ̡), which
was de-registered in November 2004, (vi) the director of Shenzhen Bosun Investment Co., Ltd.
(ʮ̡), which was de-registered in December 2008, (vii) the executive
partner and partner of Ganzhou Fuhai Y ongxiang Investment Management Enterprise (Limited
Partnership) ( ᜯψబऎ͑ജҳ༟၍ଣΆุ(Υྫ)), which was de-registered in September
2024, and (viii) the director and general manager of Gansu Silk Road Fuhai Fund Management
Co., Ltd. (ʮ̡), which was de-registered in September 2020. As of
the time of the deregistration or dissolution, the aforementioned companies and enterprises
were not insolvent, nor had any outstanding liabilities nor were involved in any pending
claims. To the best knowledge of our Directors, the reason for deregistration or dissolution of
the aforementioned companies and enterprises was cessation of business, which has not
resulted in any punishment or fines imposed by any competent authorities, nor has it resulted
in any outstanding or potential claims or liabilities against the aforementioned companies,
enterprises and Mr. Diao, and there is no material matter that should be brought to the attention
of the Stock Exchange or the Shareholders in this regard.
Mr. Li Chen , aged 43, was appointed as a Director in July 2024 and was re-designated
as a non-executive Director in January 2025. He is primarily responsible for participating in
major decisions on our Group’s operations and development.
From June 2010 to September 2015, Mr. Li successively served as a senior associate and
vice president of investment banking division at CITIC Securities Company Limited (ᗇ
ʮ̡) (SSE: 600030; HKEX: 6030). Mr. Li also successively served as a vice
president and director of the investment banking division at Lazard Frères & Co. (Lazard ਠਕ
ፔ༔(̏ԯ)ப΂ʮ̡) (currently known as Lazard Inc.) from February 2016 to September
2018. From October 2018 to December 2021, he served as the managing director at Shanghai
Pharmaceuticals (HK) Investment Limited ( ɪऎᔼᖹ(ಥ)ʮ̡). From January 2022
to July 2025, Mr. Li served as executive director and managing director at Shanghai
Biopharmaceutical Industry Equity Investment Fund Management Co., Ltd. (ᔼᖹପ
ʮ̡). Since July 2025, Mr. Li has been serving as partner and
co-president at Shanghai Biomedical Mergers and Acquisitions Private Equity Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υྫ)).
Mr. Li has been serving as a non-executive director in the following companies including
Shanghai Huiyong Pharmaceutical Research Co., Ltd. (ʮ̡) since
January 2021; Hugobiotech Limited since March 2022, Shanghai PSI and Light Genomics
Technology Co., Ltd. (ʮ̡) since August 2022; and ReLive
Biotechnologies, Ltd. since January 2023.
Mr. Li obtained a bachelor’s degree in business administration from University of
Washington in May 2004 in the United States and a Juris Doctor degree from Loyola Law
School in the United States in May 2009. Mr. Li was admitted to the California State Bar in
January 2010.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 486 ---
Mr. Li was a governor of AZALEA INVESTMENTS, LLC, a company incorporated in the
State of Washington in the United States, which was dissolved in September 2020. As of the
time of the dissolution, AZALEA INVESTMENTS, LLC was not insolvent, nor had any
outstanding liabilities nor was involved in any pending claims. To the best knowledge of our
Directors, the reason for dissolution of AZALEA INVESTMENTS, LLC was cessation of
business, which has not resulted in any punishment or fines imposed by any competent
authorities, nor has it resulted in any outstanding or potential claims or liabilities against
AZALEA INVESTMENTS, LLC and Mr. Li, and there is no material matter that should be
brought to the attention of the Stock Exchange or the Shareholders in this regard.
Independent Non-executive Directors
Mr. Cai Zhongxi ( ᇹ΀ᘙ), aged 60, was appointed as a Director in July 2024 and was
re-designated as an independent non-executive Director in January 2025. He is responsible for
supervising and offering independent judgement to the Board.
Mr. Cai worked in the sales department of Shenzhen Southern Pharmaceutical Factory ( ଉ
˙Ⴁᖹᅀ) (currently known as San Jiu Enterprise Group ( ɧɘΆุණྠ)) from May 1991
to February 1993. From August 1995 to December 2005, Mr. Cai held various positions at
several subsidiaries of China National Medicines Corporation Ltd. (ʮ
̡) (SSE: 600511), including deputy general manager and general manager. Mr. Cai then
served as chairman of Shanghai Shengtai Medical Technology Co., Ltd. (ҦϞ
ʮ̡) (currently known as Sinopharm Group Med-Tech Co., Ltd. (ʮ
̡)) from July 2006 to May 2010, followed by the position of deputy general manager at
Sinopharm Holding Co., Ltd. (ʮ̡) (HKEX: 1099) from July 2010 to June
2017. He also served as independent director of Guangdong Taiantang Pharmaceutical Co.,
Ltd. (ʮ̡) from January 2023 to July 2024, which was delisted from
the Shenzhen Stock Exchange on July 5, 2024.
Mr. Cai serves as a partner at Hongsheng (Zhejiang Free Trade Zone) Equity Investment
Fund Management Partnership Enterprise (Limited Partnership) ( ̾ସ(एϪІ൱ਜ)ᛆҳ༟ਿ
၍ଣΥྫΆุ(Υྫ)) since September 2017, the chairman and founding partner at
Shanghai Hongsheng Junhao Equity Investment Fund Management Co., Ltd. (ٰ
ʮ̡) since September 2020, and an independent director at C.Q.
Pharmaceutical Holding Co., Ltd. (ʮ̡) (SZSE: 000950) since November
2023.
Mr. Cai obtained a bachelor’s degree in military medicine from Naval Medical University
(ᔼɽኪ) (formerly known as the Second Military Medical University
(ᔼɽኪ)) in the PRC in July 1989 and a master of business administration (MBA)
degree from China Europe International Business School ( ʕᆄ਷ყʈਠኪ৫) in the PRC in
September 2014.
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Mr. Cai was (i) the director of ZHONG YI TRADING (HONGKONG) LIMITED ( ΀จ
׸(ಥ)ʮ̡), which was dissolved in September 2018, (ii) the director of Suzhou
Ailongshengtai Medical Technology Co., Ltd. (ʮ̡), which was
de-registered in August 2009, (iii) the executive director of Shanghai Fuyi Precision Medicine
Laboratory Co., Ltd. (ʮ̡), which was de-registered in August
2024, and (iv) the director of Shanghai Dongshi Pharmaceutical Information Co., Ltd. (؇
ʮ̡), which was de-registered in November 2022. As of the time of the
deregistration or dissolution, the aforementioned companies were not insolvent, nor had any
outstanding liabilities nor were involved in any pending claims. To the best knowledge of our
Directors, the reason for deregistration or dissolution of the aforementioned companies was
cessation of business, which has not resulted in any punishment or fines imposed by any
competent authorities, nor has it resulted in any outstanding or potential claims or liabilities
against the aforementioned companies and Mr. Cai, and there is no material matter that should
be brought to the attention of the Stock Exchange or the Shareholders in this regard.
Dr. Zeng Fanyi ( ಀɭɓ), aged 57, was appointed as a Director in July 2024 and was
re-designated as an independent non-executive Director in January 2025. She is responsible for
supervising and offering independent judgement to the Board.
From July 2005 to December 2006, Dr. Zeng served as deputy researcher and assistant to
the director at the Institute of Medical Genetics, Shanghai Jiao Tong University ( ɪऎʹஷɽ
ኪ) and further served as a researcher, doctoral supervisor, and deputy director from December
2006 to January 2015. From October 2007 to October 2017, she also served as the director and
doctoral supervisor at the Laboratory of Developmental Biology, School of Medicine, Shanghai
Jiao Tong University ( ɪऎʹஷɽኪ).
Dr. Zeng is a senior researcher, executive director and general manager at Shanghai Fanyi
Biotechnology Co., Ltd. (ʮ̡) since March 2012, and an executive
director and chief financial officer at Shanghai Fanyi Biotechnology Co., Ltd. (ي
ʮ̡) since August 2011. She is also a director of Maxmed Biotechnology
Corporation since October 2024.
Dr. Zeng obtained a bachelor’s degree in biochemistry and cell biology the University of
California San Diego in the United States in June 1991, and a dual doctoral degree (M.D.&
Ph.D.) in medicine and science from the University of Pennsylvania in the United States in
May 2005. Dr. Zeng also obtained a doctoral degree in finance from Chinese Academy of
Social Sciences (ኪ৫) in the PRC in October 2014. In addition, Dr. Zeng obtained
a master’s degree in engineering management from the University of Illinois Chicago in the
United States in May 2014 and a master’s degree in public administration from the University
of Nebraska Omaha in the United States in May 2015.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Dr. Zeng was awarded with Second Prize of State Natural Science Award (ኪ
ᆤɚഃᆤ) by the State Council of the PRC in January 2015 and First Prize of Natural Science
Award (ኪᆤɓഃᆤ) by the Ministry of Education of the PRC in January 2008. Since
November 2018, Dr. Zeng has been serving as executive director of Genetics Society of China
(ʕ਷፲ෂ՘ึ) and chairman of the Human and Medical Genetics Committee ( ɛᗳၾᔼኪ፲
ෂਖ਼։ึ). Dr. Zeng is a recipient of the State Council Special Allowance (൨).
Dr. Zeng was the chairman and general manager of Shanghai Fanhua Biotechnology Co.,
Ltd. (ʮ̡)( “ Shanghai Fanhua ”), which was de-registered in August
2004. As of the time of the deregistration, Shanghai Fanhua was not insolvent, nor had any
outstanding liabilities nor was involved in any pending claims. To the best knowledge of our
Directors, the reason for deregistration of Shanghai Fanhua was cessation of business, which
has not resulted in any punishment or fines imposed by any competent authorities, nor has it
resulted in any outstanding or potential claims or liabilities against Shanghai Fanhua and Dr.
Zeng, and there is no material matter that should be brought to the attention of the Stock
Exchange or the Shareholders in this regard.
Dr. Ju Dianwen ( ᒴХ˖), aged 56, was appointed as an independent Director in July
2024 and was re-designated as an independent non-executive Director in January 2025. He is
responsible for supervising and offering independent judgement to the Board.
Dr. Ju has extensive experience in medical research, biotechnology, and academia. Prior
to joining our Group, Dr. Ju successively served as teaching assistant and lecturer in the
Department of Medical Immunology at Naval Medical University (ᔼɽ
ኪ) (formerly known as the Second Military Medical University (ᔼɽኪ)) from
September 1994 to August 2002. He then served as deputy general manager at Shanghai
MediPharm Biotech Co., Ltd. (ʮ̡) from August 2002 to January
2011. Since January 2011, Dr. Ju has been serving as principal investigator of Department of
Biomedicines, School of Pharmacy, Fudan University ( ూ͇ɽኪ). He has been serving a
scientific advisor at Novatim Immune Therapeutics (Zhejiang) Co., Ltd. (ܕ߅(एϪ)Ҧ
ʮ̡) since October 2019.
Dr. Ju has been serving as an independent director at Chengdu Olymvax
Biopharmaceuticals Inc. (ʮ̡) (SSE: 688319) since July 2025 and
Suzhou Wangshan Wangshui Biopharmaceutical Co., Ltd. (ʮ
̡) since March 2023. He has also been serving as a director at Shanghai Xingshen
Biotechnology Co., ltd (ʮ̡) (currently known as Xingshen
Biotechnology (Hangzhou) Co., Ltd. (ʮ̡)) since April 2020 and
Shanghai Xinze V enture Capital Management Co., Ltd. (ʮ̡)
since December 2019. He is a supervisor at Shanghai Dongci Biotechnology Co., Ltd. ( ɪऎ
ʮ̡) since March 2019. He served as an independent director at Shanghai
Baolong Pharmaceutical Co., Ltd. (ʮ̡) from March 2020 to
December 2024.
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Dr. Ju obtained a bachelor’s degree in pharmacy, a master’s degree in pharmacology, and
a doctoral degree in medical immunology from Naval Medical University (ऎ
ᔼɽኪ) (formerly known as the Second Military Medical University (ᔼɽኪ)) in
the PRC in July 1991, July 1994, and July 1999, respectively. In December 2014, Dr. Ju was
awarded the Second Prize of National Science and Technology Progress Award (ኪҦஔ
ආӉɚഃᆤ) by the Ministry of Science and Technology of the PRC (ኪҦ
ஔ௅). Dr. Ju has been serving as a committee member of the Biochemistry and Biotechnology
Pharmaceuticals Committee of Shanghai Pharmaceutical Association (ي
ึ) since August 2020, and a committee member of the Fourth Monoclonal
Antibody Professional Committee of China Medical Biotech Association (ᔼᖹҦஔ՘
ึ) since October 2021.
Mr. Zhang Senquan (ݰ)aged 48, was appointed as an independent non-executive
Director in January 2025. He is responsible for supervising and offering independent
judgement to the Board.
Mr. Zhang has more than 20 years of experience in accounting, auditing and management.
From October 1999 to October 2000, he was an auditor in the audit department of Deloitte
Touche Tohmatsu CPA Ltd. (הFrom November 2000 to February 2008,
he worked at KPMG Huazhen (הwith last position as an audit senior
manager. From February 2008 to November 2012, Mr. Zhang worked in the assurance
department of Ernst & Y oung Hua Ming (הwith last position as a
partner. From March 2013 to April 2014, Mr. Zhang served as the head of the strategic
development department of Goodbaby International Holdings Limited (ʮ
̡) (HKEX: 1086). From May 2014 to July 2015, he served as a joint company secretary and
the chief financial officer of Huazhong Holdings Company Limited (ʮ̡)
(currently known as Huazhong In-V ehicle Holdings Company Limited (ʮ
̡) (HKEX: 6830)). From February 2016 to March 2020, he held various positions in
Southwest Securities International Securities Limited (ʮ̡) (HKEX:
0812), including as the head of China business department and managing director. From May
2018 to July 2024, he was the chief executive officer of Zhong Rui Capital (Hong Kong)
Limited ( ʕ๿༟͉(ಥ)ʮ̡). Mr. Zhang also served as an independent non-executive
director at TYK Medicines, Inc. (ʮ̡) (HKEX: 2410) from January
2024 to September 2025, Sang Hing Holdings (International) Ltd. (ٰ(਷ყ)ʮ̡)
(HKEX: 1472) from January 2020 to April 2023 and Jiande International Holdings Limited (ܔ
ʮ̡) (HKEX: 0865) from October 2016 to December 2024.
Currently, Mr. Zhang is the audit principal at Nortex (HK) CPA Limited ( ፕᅃ(ಥ)ࠇ
ʮ̡) since March 2022. He has also been serving as a joint company secretary
at Zhonggan Communication (Group) Holdings Limited (ڦ(ණྠ)ʮ̡)
(HKEX: 2545) since July 2025, and a company secretary at Guanze Medical Information
Industry (Holding) Co., Ltd. (HKEX: 2427) since September 2021 and China General
Education Group Limited (ʮ̡) (HKEX: 2175) since October 2020. He
is an independent non-executive director in the following companies: Chenqi Technology
Limited (ʮ̡) (HKEX: 9680) since June 2024; Strawbear Entertainment
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Group (ᆀණྠ) (HKEX: 2125) since December 2020; and Natural Food International
Holding Limited (ʮ̡) (HKEX: 1837) since November 2018. He
also serves as an independent director at Shandong Weigao Blood Purification Products Co.,
Ltd. (ʮ̡) (SSE: 603014) since May 2022.
Mr. Zhang obtained a bachelor’s degree in investment economics from Fudan University
(ూ͇ɽኪ) in the PRC in July 1999. Mr. Zhang has been admitted as a member of the Chinese
Institute of Certified Public Accountants (՘ึ) since December 2001, a
member of the Hong Kong Institute of Certified Public Accountants since September 2011 and
further admitted as a member of the American Institute of Certified Public Accountants since
September 2015.
SUPERVISORS
Our Supervisory Committee consists of three members. Our Supervisors serve a term of
three years and may be re-elected for successive reappointments. The following table sets forth
the key information about our Supervisors.
Name Age Position Responsibilities
Date of
appointment as
a Supervisor
Date of joining
the Group
Mr. Lou Junwen
(˖) /H1118/H1118/H1118
40 Chairman of the
Supervisory
Committee
Supervising the
performance of our
Board and operational
and financial activities
of our Group
January 21, 2025 December 16,
2019
Mr. Cheng Y u
(ϓ༃) /H1118/H1118/H1118/H1118/H1118
37 Supervisor Supervising the
performance of our
Board and operational
and financial activities
of our Group
July 26, 2023 September 24,
2020
Ms. Cai
Qingqing
(ᇹ૶૶) /H1118/H1118/H1118
36 Supervisor Supervising the
performance of our
Board and operational
and financial activities
of our Group
July 26, 2023 June 21, 2021
Mr. Lou Junwen (˖), aged 40, has been serving as the Chairman of our Supervisory
Committee since January 2025 and is responsible for the overseeing our operational and
financial activities. Mr. Lou has also been serving as the director of project management of our
Company since December 2019.
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Prior to joining our Group, Mr. Lou served as purification technologist at Shanghai
Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (ʮ̡)
(HKEX: 1349) from August 2010 to August 2013. He then served as project manager at Suzhou
Kangju from August 2013 to July 2014. From July 2014 to December 2019, he served as
project department manager at Suzhou Centergene.
Mr. Lou obtained a bachelor’s degree in applied chemistry from Shanghai University ( ɪ
ऎɽኪ) in the PRC in July 2007. Mr. Lou also passed the Engineering Series Intermediate
Professional and Technical Position Qualification of Shanghai Pharmaceuticals Holding Co.,
Ltd. ( ɪऎᔼᖹ(ණྠ)ࣸin September 2014 and
was granted an intermediate professional title ( ʕॴᔖ၈) and recognized as an engineer.
Mr. Cheng Yu ( ϓ༃), aged 37, has served as our supervisor since June 2023 and is
responsible for supervising the performance of our Board and operational and financial
activities of our Group.
Since January 2022, Mr. Cheng has been serving as production director of our Company
with extensive experience in biopharmaceutical manufacturing and production management.
He has also served as manager at Suzhou Centergene from October 2014 to December 2021.
Previously, Mr. Cheng served as purification supervisor at Suzhou Kangju from June 2013 to
September 2014, and technical supporter at Suzhou Alpha Biological Experimental Devices
and Materials Co., Ltd. (ʮ̡) from July 2011 to May 2013.
Mr. Cheng obtained a bachelor’s degree in biopharmaceuticals (biotechnology) from
Soochow University ( ᘽψɽኪ) in the PRC in June 2011. Mr. Cheng has been admitted as a
certified pharmacist by Jiangsu Provincial Department of Human Resources and Social
Security (ღᝂ) in October 2016. In March 2022, he was selected as
the 2021 Gusu Key Industry Talent Program (ྌ) by Suzhou
Municipal Human Resources and Social Security Bureau (ღ҅).
Ms. Cai Qingqing ( ᇹ૶૶), aged 36, has served as our supervisor since June 2023 and
is responsible for supervising the performance of our Board and operational and financial
activities of our Group.
Since June 2021, Ms. Cai has been serving as director of the general manager office of
our Company and is responsible for assisting executive duties and managing human resources
administration work. Prior to joining our Group, Ms. Cai served as assistant to deputy general
manager of the general manager office at Merry Electronics (Suzhou) Co., Ltd. (Ҧ(ᘽ
ψ)ʮ̡) from August 2007 to June 2021.
Ms. Cai obtained her bachelor’s degree in human resources management from Soochow
University ( ᘽψɽኪ) in the PRC in January 2023.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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SENIOR MANAGEMENT
The senior management consists of five members who are responsible for our day-to-day
management and operation. The following table sets forth the key information about the senior
management of the Company.
Name Age Position Responsibilities
Date of
appointment as
senior
management
Date of joining
the Group
Dr. Liu Y anjun
(ё) /H1118/H1118/H1118/H1118
60 Co-founder,
chairman of our
Board and
executive
Director
Responsible for the
overall strategic
planning and making
key business and
operational decisions
of our Group
December 16,
2019
December 16,
2019
Ms. Wang Zheng
(ˮᅄ) /H1118/H1118/H1118/H1118/H1118
49 Co-founder,
executive
Director and
Chief Executive
Officer
Responsible for the
business operations,
R&D and overall
operation
management of our
Group
September 25,
2020
September 25,
2020
Mr. Tan Jingwei
(ᗈཨਃ) /H1118/H1118/H1118/H1118
59 Executive Director
and director of
internal control
Responsible for the
formulation of
internal control
policies and
overseeing internal
control work of our
Group
February 8, 2021 September 25,
2020
Ms. Li Cui
(ҽၯ) /H1118/H1118/H1118/H1118/H1118
38 Executive Director,
Chief Financial
Officer and
secretary to the
Board
Responsible for
overseeing financial
management,
corporate
governance, investor
relations, and capital
markets activities of
our Group
December 1, 2021 December 1, 2021
Mr. Sun Y uhua
(͗ശ) /H1118/H1118/H1118/H1118
44 Deputy general
manager
Responsible for
overseeing
manufacturing
operations, EHS, and
IT management of
our Group
September 24,
2020
September 24,
2020
For the biographical details of Dr. Liu Y anjun, Ms. Wang Zheng, Mr. Tan Jingwei and Ms.
Li Cui, see “— Directors” in this section.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Sun Yuhua (͗ശ), aged 44, has served as our deputy general manager since
September 2020 and is responsible for overseeing manufacturing operations, EHS, and IT
management of our Group. He also served as manager at Suzhou Kangju from April 2014 to
November 2020. He then has been serving as supervisor of Hainan Baoji since February 2022.
Prior to joining our Group, Mr. Sun successively served as project supervisor and deputy
director at Huake Biological Polymer Materials Institute of Kunshan Industrial Technology
Research Institute (הfrom May 2007 to April 2014,
where he was responsible for research project management and operations.
Mr. Sun obtained a bachelor’s degree in marine technology (food engineering) from
Y ancheng Institute of Technology (ʈኪ৫) in the PRC in June 2004 and a master’s degree
in fermentation engineering from Tianjin University of Science and Technology (Ҧɽ
ኪ) in the PRC in March 2007. Mr. Sun has received numerous accolades, including being
named as the Outstanding Talent of Kunshan City (ʆ̹ᎴӸɛʑ) in January 2013,
Technical Expert of Suzhou Industrial Park ( ᘽψʈุ෤ਜҦஔঐ˓) in July 2016, and
High-Skilled Leading Talent (ɛʑ) under the Jinji Lake Talent Program of Suzhou
Industrial Park (ྌ) in December 2016. In April 2024, as a
member of our innovative drug research team, he was recognized as a member of the
Outstanding Talent Team of Sanjiang Talents (ʑᎴӸɛʑྠඟ) in Baoshan District,
Shanghai. He currently serves as a committee member of the Forth Labor Union Committee of
Luodian Town, Baoshan District (ึ), and as vice president of
Shanghai Baoshan District Science and Technology Enterprise Association (Ҧ
ΆุᑌΥึ).
GENERAL
As of the Latest Practicable Date, to the best of the knowledge, information and belief of
the Directors after having made all reasonable enquiries,
(i) save as disclosed above, none of the Directors, Supervisors or members of the senior
management has held any directorship in any public company the securities of which
are listed on any securities market in Hong Kong or overseas during the three years
immediately preceding the date of this prospectus;
(ii) none of the Directors, Supervisors or members of the senior management of the
Company was related to any other Directors, Supervisors and members of the senior
management;
(iii) save as disclosed in “Appendix VII — Statutory and General Information” to this
prospectus, none of the Directors, Supervisors or general manager of the Company
held any interest in the Shares which would be required to be disclosed pursuant to
Part XV of the Securities and Futures Ordinance; and
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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(iv) save as disclosed in this prospectus, there was no additional matter with respect to
the appointment of the Directors or Supervisors that needs to be brought to the
attention of the Shareholders, and there was no additional information relating to the
Directors or Supervisors that is required to be disclosed pursuant to Rules 13.51(2)
of the Listing Rules as of the Latest Practicable Date.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
As of the Latest Practicable Date, none of our Directors and their respective close
associates had any interest in any business which competes or is likely to compete, either
directly or indirectly with our Group’s business which would require disclosure under Rule
8.10 of the Listing Rules.
From time to time our non-executive Directors may serve on the boards of both private
and public companies within the broader healthcare and biopharmaceutical industries.
However, as these non-executive Directors are not members of our executive management
team, we do not believe that their interests in such companies as directors would render us
incapable of carrying on our business independently from the other companies in which these
non-executive Directors may hold directorships from time to time.
Rule 3.09D of the Listing Rules
Each of our Directors confirmed that he or she (i) had obtained the legal advice referred
to under Rule 3.09D of the Listing Rules on January 7, 2025, and (ii) understood his or her
obligations as a director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of our independent non-executive Directors had confirmed (i) his or her
independence as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing
Rules; (ii) that he or she had no past or present financial or other interest in the business of the
Company or its subsidiary or any connection with any core connected person of the Company
under the Listing Rules as of the Latest Practicable Date; and (iii) that there were no other
factors that may affect his or her independence at the time of his or her appointments. Each of
our independent non-executive Directors will inform us and the Stock Exchange as soon as
practicable if there is any subsequent change of circumstances which may affect his or her
independence.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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JOINT COMPANY SECRETARIES
Ms. Li Cui ( ҽၯ), was appointed as a joint company secretary of our Company on
January 21, 2025. She is primarily responsible for overseeing financial management, corporate
governance, investor relations, and capital markets activities of our Group. For the
biographical details of Ms. Li, see “— Directors — Executive Directors” in this section.
Ms. Fong Christine Haiman ( ˙Ҏ೙), was appointed as a joint company secretary of our
Company on January 21, 2025. Ms. Fong is currently a manager of company secretarial
services of Tricor Services Limited, a member of Vistra Group and an integrated provider
offering business, corporate and investor services. She has over seven years of experience in
the corporate services field and has been providing professional corporate services to Hong
Kong listed companies as well as private and offshore companies.
Ms. Fong is a Chartered Secretary, a Chartered Governance Professional and an associate
of both the Hong Kong Chartered Governance Institute (HKCGI) and the Chartered
Governance Institute (CGI) in United Kingdom.
Ms. Fong obtained a bachelor’s degree in law from Queensland University of Technology
in Australia in December 2016 and a master’s degree in corporate governance from the Hong
Kong Polytechnic University in September 2022.
BOARD COMMITTEES
We have established four Board Committees in accordance with the relevant PRC laws
and regulations, the Articles of Association, the Corporate Governance Code and based on our
business needs, namely the Audit Committee, the Nomination Committee, the Remuneration
Committee and the Strategy Committee.
Audit Committee
We have established an Audit Committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and the Corporate Governance Code. The Audit Committee
consists of three Directors, namely Mr. Zhang Senquan, Dr. Ju Dianwen and Mr. Diao
Juanhuan, with Mr. Zhang Senquan serves as the chairperson. Mr. Zhang Senquan has the
appropriate professional experiences as required under Rules 3.10(2) and 3.21 of the Listing
Rules. The primary duties of the Audit Committee include, but are not limited to, the following:
(i) proposing the appointment or change of external auditors to our Board, monitoring
the independence of external auditors and evaluating their performance;
(ii) examining the financial information of the Company and reviewing financial reports
and statements of the Company;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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(iii) examining the financial reporting system, the risk management and internal control
system of the Company, overseeing their rationality, efficiency and implementation
and making recommendations to our Board; and
(iv) dealing with other matters that are authorized by the Board.
Nomination Committee
We have established a Nomination Committee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and the Corporate Governance Code. The
Nomination Committee consists of three Directors, namely Dr. Liu, Dr. Zeng Fanyi and Mr. Cai
Zhongxi, with Dr. Liu serves as the chairperson. The primary duties of the Nomination
Committee include, but are not limited to, the following:
(i) conducting extensive search and providing our Board with suitable candidates for
our Directors, general managers and other members of the senior management;
(ii) reviewing the structure, size and composition of our Board (including but not
limited to, gender, age, cultural and educational background, ethnicity, skills,
knowledge and experience) at least annually and make recommendations on any
proposed changes to the Board to complement the Company’s corporate strategy;
(iii) researching and developing standards and procedures for the election of our Board
members, general managers and members of the senior management, and making
recommendations to our Board;
(iv) assessing the independence of the independent non-executive Directors; and
(v) dealing with other matters that are authorized by the Board.
Remuneration Committee
We have established a Remuneration Committee with written terms of reference in
compliance with Rule 3.25 of the Listing Rules and the Corporate Governance Code. The
Remuneration Committee consists of three Directors, namely Ms. Wang, Dr. Ju Dianwen and
Mr. Zhang Senquan, with Dr. Ju Dianwen serves as the chairperson. The primary duties of the
Remuneration Committee include, but are not limited to, the following:
(i) advising our Board on the overall remuneration plan and structure of our Directors
and senior management and the establishment of transparent and formal procedures
for determining the remuneration policy of the Company;
(ii) monitoring the implementation of the remuneration system of the Company;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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(iii) making recommendations on the remuneration packages of our Directors and senior
management; and
(iv) dealing with other matters that are authorized by the Board.
Strategy Committee
We have established a Strategy Committee with written terms of reference. The Strategy
Committee consists of five Directors, namely Dr. Liu, Ms. Li Cui, Ms. Lin Chia-ling, Mr. Li
Chen and Mr. Cai Zhongxi, with Dr. Liu serves as the chairperson. The primary duties of the
Strategy Committee are, among others, to consider, review and make recommendation on the
Company’s long-term development strategies and other material matters that might impact our
development, and perform other duties and responsibilities as assigned by our Board.
KEY TERMS OF EMPLOYMENT CONTRACT
We normally enter into (i) an employment contract, (ii) a non-competition agreement, (iii)
a confidentiality agreement and (iv) an intellectual property agreement with certain of our
senior management members. The key terms of such contracts are set forth below.
Terms
We normally enter into employment contract of three-year or longer with our senior
management members.
Non-competition
The non-competition obligations shall subsist throughout the employee’s period of
employment and up to two years after termination of employment. During the non-competition
period, the employee shall not, directly or indirectly, accept employment or hold any position,
including but not limited to shareholders, partners, directors, supervisors, employees, agents,
consultants, etc., of any other natural person, legal entity or other economic organization that
produces or operates the same, similar or competing products, or engages in the same, similar
or competing business, with our Company.
Confidentiality
Trade secrets : The employee shall keep trade secrets, namely business-related
information or technology-related information (including but not limited to operational
information, marketing proposal, purchases information, pricing policy, financial information,
list of customers, business plan, information of research and development etc.) of our Company
in confidence.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Obligation and duration : The employee shall not divulge or otherwise disclose any trade
secrets to any third party or permit others to use our trade secrets, disclose our trade secrets
to irrelevant staffs within our Company, use the trade secrets for his/her or third party’s
benefits, or duplicate documents or copies of documents that contain our trade secrets. Such
obligation of confidentiality shall subsist for the term of his or her employment and regardless
of the reason of departure, the employee shall return all materials containing trade secrets to
our Company or destruct them under Company’s supervision.
Intellectual Property Rights
The ownership of intellectual endeavor, encompassing but not limited to patent rights,
rights to patent applications, trademark rights, rights to trademark registration applications,
and copyrights generated by the employee during the period of employment, shall exclusively
vest in the Company. Employees shall retain the right of authorship.
CORPORATE GOVERNANCE CODE
The Company is committed to achieving a high standard of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, the Company
intends to comply with the Corporate Governance Code set out in Appendix C1 to the Listing
Rules and the Model Code for Securities Transactions by Directors of Listed Issuers set out in
Appendix C3 to the Listing Rules after the Listing.
BOARD DIVERSITY POLICY
We have adopted the board diversity policy which sets out the objective and approach for
achieving and maintaining the diversity of the Board in order to enhance its effectiveness. In
accordance with the board diversity policy, the Company seeks to achieve board diversity by
taking into account a number of factors, including but not limited to gender, age, cultural and
educational background, professional experience, skills, knowledge and/or length of service.
The ultimate selection of Board candidates will be based on merit and potential contribution
to our Board having due regard to the benefits of diversity on the Board and also the specific
needs of the Company without focusing on a single diversity aspect. Our Directors have a
balanced mix of knowledge and skills, including overall management and strategic
development as well as knowledge and experience in areas such as medicine and
pharmaceutical research. They obtained degrees in various areas including, among others,
medicine, microbiology, pharmacy, bioengineering, international trade, business
administration, and economics. Furthermore, our Board has a diverse age and gender
representation. Our Board currently comprises four female Directors and seven male Directors,
ranging from 38 years old to 60 years old. We expect to maintain such gender ratio at the Board
level going forward.
With regards to gender diversity on the Board, we recognize the particular importance of
gender diversity. We have taken and will continue to take steps to promote and enhance gender
diversity at all levels of the Company, including but without limitation at our Board and senior
management levels. We will maintain a focus on gender diversity when recruiting staff at the
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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mid to senior level so as to develop a pipeline of potential female successors to our Board. The
Group will also identify and select several female individuals with a diverse range of skills,
experience and knowledge in different fields from time to time, and maintain a list of such
female individuals who possess qualities to become our Board members, which will be
reviewed by our nomination committee periodically to maintain gender diversity of our Board.
Taking into account our existing business model and specific needs as well as the different
background of our Directors, the composition of our Board satisfies our board diversity policy.
Upon the Listing, the Nomination Committee will from time to time discuss and agree on
expected goals to ensure board diversity, and review and, where necessary, update the board
diversity policy to ensure that the policy remains effective. The Company will disclose the
biographical details of each Director and report on the implementation of the board diversity
policy (including whether we have achieved board diversity) in its annual corporate
governance report.
DIRECTORS’, SUPERVISORS’ AND SENIOR MANAGEMENT’S REMUNERATION
AND REMUNERATION OF THE FIVE HIGHEST-PAID INDIVIDUALS
The Directors, Supervisors and senior management members who receive remuneration
from the Company are paid in the forms of salaries, bonuses, allowances and benefits in kind,
equity-settled share award expense and pension scheme contributions. Our independent
non-executive Directors receive compensation based on their responsibilities. The
remuneration of the Directors, Supervisors and senior management members is determined
with reference to the remuneration paid by comparable companies and the achievement of
major operating indicators of the Company.
The aggregate amount of remuneration (including salaries, bonuses, allowances and
benefits in kind, equity-settled share award expense and pension scheme contributions) paid to
the Directors and Supervisors for the years ended December 31, 2023 and 2024 and six months
ended June 30, 2025 amounted to RMB4.9 million, RMB105.8 million, and RMB39.6 million,
respectively.
The five highest paid individuals of our Group in the years ended December 31, 2023 and
2024 and six months ended June 30, 2025 included two, three, and three Directors,
respectively. The aggregate amount of remuneration (including salaries, bonuses, allowances
and benefits in kind, equity-settled share award expense and pension scheme contributions)
incurred by the five highest-paid individuals of the Group (excluding Directors) for the years
ended December 31, 2023 and 2024 and six months ended June 30, 2025 amounted to RMB2.9
million, RMB16.9 million, and RMB4.7 million, respectively .
Under the current compensation arrangement, we estimate the total compensation before
taxation, including estimated share-based compensation, to be accrued to our Directors and our
Supervisors for the year ended December 31, 2025 to be approximately RMB80.6 million. The
actual remuneration of Directors and Supervisors in 2025 may be different from the expected
remuneration.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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We confirmed that during the Track Record Period, no remuneration was paid by the
Company to, or receivable by, our Directors, Supervisors or the five highest paid individuals
as an inducement to join or upon joining the Company or as compensation for loss of office
in connection with the management positions of the Company or any subsidiary of the
Company.
During the Track Record Period, none of our Directors or Supervisors waived any
remuneration. Save as disclosed above, no other payments have been paid, or are payable, by
the Company or our subsidiary to our Directors, Supervisors or the five highest-paid
individuals during the Track Record Period.
COMPLIANCE ADVISER
The Company has appointed Rainbow Capital (HK) Limited as our Compliance Adviser
in compliance with Rules 3A.19 of the Listing Rules. The Compliance Adviser will provide us
with guidance and advice as to compliance with the Listing Rules and other applicable laws,
rules, codes and guidelines. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance
Adviser will advise the Company in certain circumstances including:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares and share
repurchases;
(iii) where we propose to use the proceeds from the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this prospectus;
and
(iv) where the Stock Exchange makes an inquiry to the Company in accordance with
Rule 13.10 of the Listing Rules.
Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Adviser will, on a timely
basis, inform the Company of any amendment or supplement to the Listing Rules that are
announced by the Stock Exchange. The Compliance Adviser will also inform the Company of
any new or amended law, regulation or code in Hong Kong applicable to us, and advise us on
the continuing requirements under the Listing Rules and applicable laws and regulations.
The term of the appointment will commence on the Listing Date and is expected to end
on the date on which the Company complies with Rule 13.46 of the Listing Rules in respect
of our financial results for the first full financial year commencing after the Listing.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and collectively, the “ Cornerstone Investment Agreements ”) with
the cornerstone investors set forth below (each a “ Cornerstone Investor ” and collectively, the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the
Offer Price for such number of Offer Shares (rounded down to the nearest whole board lot of
100 Shares) that may be purchased for an aggregate amount of HK$200.60 million (exclusive
of the brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee)
(the “ Cornerstone Placing ”).
At the Offer Price of HK$26.38 per H Share, the total number of Offer Shares to be
subscribed by the Cornerstone Investors would be approximately 7,604,100 Offer Shares,
representing approximately (i) 20.06% of the Offer Shares pursuant to the Global Offering, and
(ii) 2.33% of our total issued share capital upon completion of the Global Offering.
Our Company is of the view that, (i) the Cornerstone Placing will ensure a reasonable size
of solid commitment at the beginning of the marketing period of the Global Offering and will
provide confidence to the market; and (ii) by leveraging on the Cornerstone Investors’ industry
reputation and investment experience, in particular in the life sciences, healthcare and
biopharmaceutical sectors, the Cornerstone Placing will help raise the profile of our Company
and to signify that such investors have confidence in our business and prospect. Our Company
became acquainted with each of the Cornerstone Investors through the business network of our
Group or through the Overall Coordinators.
The Cornerstone Investment will form part of the International Offering, and the
Cornerstone Investors will not subscribe for any Offer Shares under the Global Offering other
than pursuant to the Cornerstone Investment Agreements. The Offer Shares to be subscribed for
by the Cornerstone Investors will rank pari passu in all respects with the fully paid H Shares
in issue following the completion of the Global Offering and to be listed on the Stock
Exchange. The Offer Shares to be subscribed for by the Cornerstone Investors will be counted
towards the public float of the Company under Rule 8.08 of the Listing Rules.
Immediately following the completion of the Global Offering, (i) none of the Cornerstone
Investors will become a substantial shareholder of the Company; (ii) none of the Cornerstone
Investors will have any Board representation in the Company solely by virtue of its cornerstone
investment; and (iii) equity interests in the Company being beneficially owned by the three
largest public Shareholders will be less than 50% for the purpose of Rule 8.08(3) of the Listing
Rules.
CORNERSTONE INVESTORS
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To the best knowledge of the Company, (i) each of the Cornerstone Investors is an
Independent Third Party; (ii) none of the Cornerstone Investors is accustomed to taking
instructions from the Company, the Directors, the Supervisors, chief executive of the Company,
the Controlling Shareholders, substantial Shareholders or existing Shareholders or any of its
subsidiaries or their respective close associates in relation to the acquisition, disposal, voting,
or other disposition of H Shares registered in its name or otherwise held by it; and (iii) none
of the subscription for the relevant Offer Shares by the Cornerstone Investors is financed by
the Company, the Directors, the Supervisors, chief executive of the Company, the Controlling
Shareholders, substantial Shareholders or existing Shareholders or any of its subsidiaries or
their respective close associates for the purpose of subscription of the Offer Shares.
To the best knowledge of the Company and as confirmed by each of the Cornerstone
Investors, they made their own independent decisions to enter into the Cornerstone Investment
Agreements, and their subscriptions under the Cornerstone Investment would be financed by
their own internal resources and they each have sufficient funds to settle their respective
investments under the Cornerstone Placing. The Cornerstone Investors have also confirmed
that all necessary approvals have been obtained with respect to the Cornerstone Investment and
that no specific approval from any stock exchange (if relevant) or their shareholders is required
for the Cornerstone Investment.
As confirmed by each of the Cornerstone Investors, there are no side arrangements or
agreements between our Company and the Cornerstone Investors or any benefit, direct or
indirect, conferred on the Cornerstone Investors by virtue of or in relation to the Listing, other
than a guaranteed allocation of the relevant Offer Shares at the Offer Price, following the
principles as set out in Chapter 4.15 of the Guide for New Listing Applicants.
The Cornerstone Investors have agreed to fully pay for the relevant Offer Shares that they
have subscribed before dealings in our H Shares commence on the Stock Exchange. As such,
there will be no deferred settlement of the investment amount for the Offer Shares to be
subscribed by the Cornerstone Investors. Since there is no over-allotment option in the
International Offering, there will be no delayed delivery of Offer Shares to be subscribed by
the Cornerstone Investors.
The total number of Offer Shares to be subscribed for by the Cornerstone Investors under
the Cornerstone Investment may be affected by reallocation of the Offer Shares between the
International Offering and the Hong Kong Public Offering in the event of over-subscription
under the Hong Kong Public Offering, as described in the paragraphs headed “Structure of the
Global Offering — The Hong Kong Public Offering — Reallocation” in this prospectus. The
number of Offer Shares to be acquired by each Cornerstone Investor may be deducted on a pro
rata basis in accordance with the terms of the Cornerstone Investment Agreements to satisfy the
public demands under the Hong Kong Public Offering, after taking into account the
requirements under Appendix F1 to the Listing Rules. Details of the actual number of Offer
Shares to be allocated to each of the Cornerstone Investors will be disclosed in the allotment
results announcement to be issued by the Company on or around December 9, 2025.
CORNERSTONE INVESTORS
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OUR CORNERSTONE INVESTORS
The following information about the Cornerstone Investors were provided to our
Company by the Cornerstone Investors in connection with the Cornerstone Placing.
AnkeBio (Hong Kong) Co., Limited
AnkeBio (Hong Kong) Co., Limited (“ AnkeBio HK ”) is a wholly owned subsidiary of
Anhui Anke Biotechnology (Group) Co., Ltd. (“ ANKE BIO ”). ANKE BIO is an A-share listed
company (SZSE: 300009) and a national high-tech enterprise with independent innovation
capabilities, focusing on the biopharmaceutical industry. It has participated in multiple national
and provincial research grants, including the National High-Tech Research and Development
Program (࢕863ྌ), the National Science and Technology Major Project (ࠇ
ྌ), the National Key Torch Program (ྌ), the National Significant New Drug
Development Project (ɽอᖹ௴Ⴁ), and numerous provincial science and technology
projects (ҦҸᗫධͦ). ANKE BIO is dedicated to the research, development,
production, and sales of genetic engineering products, diagnostic products and oncology drugs.
Its subsidiaries are engaged in the research, development, production, and sales of precision
medicine, polypeptide APIs, biochemistry, traditional Chinese medicines and novel DNA
technology drugs.
In July 2025, we entered into an exclusive sales agency agreement with ANKE BIO,
pursuant to which we granted ANKE BIO an exclusive right to market, sell, distribute, and
promote SJ02 in Mainland China, Hong Kong, Macau, and Taiwan, and accordingly, ANKE
BIO acts as an exclusive CSO responsible for the commercialization of SJ02 in the same
region. See “Business — Commercialization” in this prospectus for further details.
Derivatives China Alpha Fund SPC (acting for and on behalf of Derivatives China
Fundamental Fund SP)
Derivatives China Alpha Fund SPC (acting for and on behalf of Derivatives China
Fundamental Fund SP) (“ DC Alpha SPC ”) is a fund established in the Cayman Islands and
managed by Derivatives China (Hong Kong) Limited (“ DCHK ”). DCHK is a Hong
Kong-registered asset management company. Established in 2016, the firm holds a license from
the SFC to carry out Type 9 (asset management) regulated activities. Specializing as a
quantitative investment management firm, DCHK is committed to increasing investment
diversification, reducing risk, and improving returns through flexible global asset allocation
strategies. DCHK is ultimately controlled by Zhang Y ou ( ௝ʾ). DC Alpha SPC pursues long
term capital appreciation through investments in both listed and unlisted financial instruments
with a focus on listed instruments such as stocks. Its target investment industries include
medical and pharmaceutical, medical health, Internet, technology, high-end manufacturing,
new energy and other fields that represent the future direction of industrial development. The
portfolio employs flexible global allocation strategies designed to enhance diversification,
reduce risk, and improve returns. All investors of DC Alpha SPC are Independent Third Parties,
and no single investor holds 30% or more interest in the fund.
CORNERSTONE INVESTORS
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Guotai Junan Investments (Hong Kong) Limited (in connection with the Zhonghe OTC
Swaps)
Guotai Junan Investments (Hong Kong) Limited (“ GTINV ”) and Guotai Haitong
Securities Co., Ltd (“ GTHT ”) will enter into a series of cross border delta-one over-the-
counter (“ OTC”) swap transactions (the “ Zhonghe OTC Swaps ”) with each other and with
Zhonghe Capital Cultivation No. 811 Private Equity Investment Fund ( ʕձ༟͉ঁঀ811໮ӷ
ږ“() Cultivation No. 811 ”, or the “ GTHT Ultimate Client (Zhonghe) ”), an
investment fund managed by Splendid Zhonghe (Tianjin) Investment Management Co., Ltd.
(ᎀᔐʕձ(ݵ)ʮ̡)( “ Zhonghe Investment ”), pursuant to which GTINV will
hold the Offer Shares on a non-discretionary basis to hedge the Zhonghe OTC Swaps while the
economic risks and returns of the underlying Offer Shares are passed to the GTHT Ultimate
Client (Zhonghe), subject to customary fees and commissions. The Zhonghe OTC Swaps will
be fully funded by the GTHT Ultimate Client (Zhonghe). During the terms of the Zhonghe
OTC Swaps, all economic returns of the Offer Shares subscribed by GTINV will be passed to
the GTHT Ultimate Client (Zhonghe) and all economic loss shall be borne by the GTHT
Ultimate Client (Zhonghe) through the Zhonghe OTC Swaps, and GTINV will not take part in
any economic return or bear any economic loss in relation to the Offer Shares. The Zhonghe
OTC Swaps are linked to the Offer Shares and the GTHT Ultimate Client (Zhonghe) may, after
expiration of the lock-up period beginning from the date of the cornerstone agreement entered
into between GTINV and the Company and ending on the date which is six months from the
Listing Date, request to early terminate the Zhonghe OTC Swaps at their own discretions, upon
which GTINV may dispose of the Offer Shares and settle the Zhonghe OTC Swaps in cash in
accordance with the terms and conditions of the Zhonghe OTC Swaps. Despite that GTINV
will hold the legal title of the Offer Shares by itself, it will not exercise the voting rights
attaching to the relevant Offer Shares during the terms of the Zhonghe OTC Swaps according
to its internal policy. As of the Latest Practicable Date, the GTHT Ultimate Client (Zhonghe)
is held by Mr. Zhang Xiujian (ܔࡌ“() Mr. Zhang ”) as to 55.88% of its interest, who is
therefore considered its ultimate beneficial owner. Except for Mr. Zhang, there is no other
beneficial owner holding 30% or more of the equity interest in GTHT Ultimate Client
(Zhonghe).
GTINV is a Hong Kong incorporated company. Its principal business activities are trading
and investments. It is indirectly wholly owned by GTHT, a leading securities firm in China
with its shares dually listed in both Shanghai (SSE: 601211) and Hong Kong (HKEX: 2611).
GTINV is a close associate of Haitong Innovation Securities, an existing minority
Shareholder of the Company, holding less than 5% voting right in the Company as of the Latest
Practicable Date. The Stock Exchange has granted a waiver from strict compliance with the
requirements under Paragraph 1C(2) of Appendix F1 to the Listing Rules to permit H Shares
in the International Offering to be placed to Cultivation No. 811 through GTINV . For further
details, please refer to the section headed “Waivers from Strict Compliance with the Listing
Rules and Exemption from Strict Compliance with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance — Consent in Respect of the Proposed Subscription of
CORNERSTONE INVESTORS
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Offer Shares by a Cornerstone Investor as a Connected Client and Close Associate of an
Existing Minority Shareholder — (ii) Consent in Respect of the Proposed Subscription of Offer
Shares by A Cornerstone Investor as a Close Associate of an Existing Minority Shareholder.”
Haitong International Securities Company Limited (“ Haitong International Securities ”)
is an Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
in connection with the Global Offering. GTINV is a member of the same group of companies
as Haitong International Securities. Accordingly, GTINV is a connected client (as defined
under Appendix F1 to the Listing Rules) of GTHT, holding securities on a non-discretionary
basis on behalf of Independent Third Parties. The Company has applied to the Stock Exchange
for, and the Stock Exchange has granted, its consent under paragraph 1C(1) of Appendix F1 to
the Listing Rules to permit us to allocate the Offer Shares to GTINV . See “Waivers from Strict
Compliance with the Listing Rules and Exemption from Strict Compliance with the Companies
(Winding Up and Miscellaneous Provisions) Ordinance — Consent in Respect of the Proposed
Subscription of Offer Shares by a Cornerstone Investor as a Connected Client and Close
Associate of an Existing Minority Shareholder — (i) Consent in Respect of the Proposed
Subscription of Offer Shares by A Cornerstone Investor as a Connected Client.”
Cultivation No. 811 is an investment fund managed by Zhonghe Investment, which is in
turn wholly owned by Splendid Zhonghe (Beijing) Capital Co., Ltd. ( ᎀᔐʕձ(̏ԯ)༟͉၍ଣ
ʮ̡)( “ Zhonghe Capital ”), a full-industry-chain investment firm established in China in
2012 with an aggregate asset under management of over RMB26 billion. As of the Latest
Practicable Date, Zhonghe Capital had nine shareholders, among which, Mr. Zhang Jingting
(ࢬan Independent Third Party, holds 30.80% of its equity interests, and no other
individual shareholder holds 30% or more of its equity interests. To the best of GTINV’s
knowledge after having made all reasonable inquiries, (i) each of GTINV , GTHT Ultimate
Client (Zhonghe) and its ultimate beneficial owner is an Independent Third Party of the
Company, the connected persons or associates thereof, and (ii) each of the GTHT Ultimate
Client (Zhonghe) and shareholders of Zhonghe Capital is an Independent Third Party of
GTINV , GTHT and the companies which are members of the same group of GTHT.
CORNERSTONE INVESTORS
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The table below sets out details of the Cornerstone Placing:
Based on the Offer Price of HK$26.38 per H Share
Cornerstone Investor
Investment
amount (1)
Number
of Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital upon
completion of
the Global
Offering
(HK$ in
million)
AnkeBio HK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112.00 4,245,600 11.20 1.30
DC Alpha SPC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850.00 1,895,300 5.00 0.58
GTINV (in connection with the
Zhonghe OTC Swaps) /H1118/H1118/H1118/H1118/H1118/H1118/H111838.60 1,463,200 3.86 0.45
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200.60 7,604,100 20.06 2.33
Notes:
1. Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC
transaction levy.
2. Rounded down to the nearest whole board lot of 100 Shares. Calculated based on the exchange rate set
out in the section headed “Information about this prospectus and the Global Offering — Exchange Rate
Conversion.”
CONDITIONS PRECEDENT
The obligations of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreements are subject to, among others, the following
closing conditions:
(a) the underwriting agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in these underwriting agreements, and neither of the aforesaid
underwriting agreements having been terminated;
(b) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the Capital Market Intermediaries and
the Underwriters);
CORNERSTONE INVESTORS
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(c) the Listing Committee of Stock Exchange having granted the listing of, and
permission to deal in, the Shares in issue, the Shares to be issued pursuant to the
Global Offering (including the Shares under the Cornerstone Placing as well as other
applicable waivers and consents) and such approval, permission, waivers or
consents having not been revoked prior to the commencement of dealings in the
Shares on the Stock Exchange;
(d) no laws or regulations shall have been enacted or promulgated by any governmental
authority which prohibits the consummation of the transactions contemplated in the
Global Offering or the Cornerstone Investment Agreements, and there shall be no
orders or injunctions from a court of competent jurisdiction in effect precluding or
prohibiting consummation of such transactions; and
(e) the respective representations, warranties, undertakings, confirmations of the
Cornerstone Investors under the respective Cornerstone Investment Agreements are
(as of the date of the Cornerstone Investment Agreements) and shall be (as of the
Listing Date) accurate and true in all respects and not misleading and that there is
no material breach of any of the Cornerstone Investment Agreements on the part of
their respective Cornerstone Investors.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that without the prior written consent of
each of our Company, the Overall Coordinators and the Joint Sponsors, it will not, whether
directly or indirectly, at any time during the period of six months starting from and inclusive
of the Listing Date (the “ Lock-up Period ”), dispose of, in any way, any of the Offer Shares
or any interest in any company or entity holding such Offer Shares, save for certain limited
circumstances, such as transfers to any of its wholly-owned subsidiaries who will be bound by
the same obligations of such Cornerstone Investors, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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FUTURE PLANS
For details of our future plans, see “Business — Our Strategies.”
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$921.5 million, after deducting underwriting commissions, fees and other estimated
expenses paid and payable by us in connection with the Global Offering, at the Offer Price of
HK$26.38 per H Share.
We currently intend to use the net proceeds from the Global Offering for the following
purposes, subject to changes in light of our evolving business needs and changing market
conditions:
 Approximately 53.5%, or HK$493.2 million, will be allocated to the research and
development and commercialization of our Core Products, including KJ017, KJ103
and SJ02. We consistently implemented an overall “China - US/Europe”
development strategy for our Core Products, under which we (i) prioritize and
accelerate product development and commercialization in China to establish
first-mover advantages, (ii) generate stable revenue through product sales and
various collaborations in China to sustain the Company’s continuous R&D and
commercialization efforts, and (iii) then further expand indications and enters major
overseas markets following the commercialization in China. Specifically, we expect
that:
o Approximately 13.8%, or HK$127.4 million, will be used for the planned
clinical trials and preparation for registration filings of KJ017 in Europe and
the U.S. Building on KJ017’s clinical results from China trials, we plan to
submit IND applications to the EMA and the FDA, and are in the process of
simultaneously preparing both EMA and FDA IND filings. We anticipate
submitting one of the applications in the first half of 2026 and will
subsequently complete the IND application for the other region. For details of
KJ017’s clinical development plan, see “Business — Our Drug Candidates —
Large-volume Subcutaneous Delivery — KJ01 7 — a recombinant human
hyaluronidase, our Core Product — Clinical Development Plan;”
FUTURE PLANS AND USE OF PROCEEDS
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o Approximately 24.3%, or HK$223.8 million, will be used for the ongoing and
planned clinical trials, other research and development activities, and
preparation for registration filings of KJ103 in China, the U.S., Hong Kong and
Europe, of which:
/L501891.8%, or HK$16.7 million, will be used to fund the ongoing clinical trial
for desensitization therapy in highly HLA-sensitized patients awaiting
kidney transplantation in China. We initiated a Phase II trial of KJ103
targeting kidney transplantation desensitization in China in December
2023 and completed the trial in September 2024, following which we
initiated the Phase III trial in August 2025 and expect to complete this
trial in the first half of 2026;
/L501893.4%, or HK$31.2 million, will be used to fund the planned clinical trials
for anti-GBM disease in China and Hong Kong. We plan to proceed with
a Phase III registrational trial of KJ103 in patients with anti-GBM disease
in China, with anticipated patient enrollment by the first half of 2026; and
/L5018919.1%, or HK$175.9 million, will be used to fund the planned clinical
trials for other antibody-mediated acute autoimmune conditions,
particularly GBS, in China, the U.S. and Europe. We have received an
IND approval from the NMPA for the Phase II trial of KJ103 in GBS in
April 2025, following which we expect to commence such trial in China
in November 2025. Additionally, we plan to submit an IND application to
the FDA for the Phase II trial of KJ103 targeting pathological IgG-
mediated autoimmune diseases in the first half of 2026, following the
approval of which we expect to commence such trial in the U.S. as early
as 2026.
For details of KJ103’s clinical development plan, see “Business — Our
Drug Candidates — Antibody-mediated Autoimmune Conditions —
KJ10 3 — a recombinant IgG-degrading enzyme, our Core Product —
Clinical Development Plan.”
o Approximately 9.4%, or HK$87.1 million, will be used for the planned
multicenter clinical trials and preparation for registration filings of SJ02 in
Europe, Hong Kong and Australia. We plan to submit an IND application to the
EMA in the first half of 2026, following the approval of which we expect to
initiate a Phase III trial of SJ02 in subjects undergoing ART in the Europe as
early as 2026. For details of SJ02’s clinical development plan, see “Business
— Our Drug Candidates — Drugs in Assisted Reproduction — SJ02 — a
long-acting recombinant human FSH-CTP , our Core Product — Clinical
Development Plan”; and
FUTURE PLANS AND USE OF PROCEEDS
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--- page 510 ---
o Approximately 6.0%, or HK$54.9 million, will be used for the anticipated
commercialization of our Core Products, including KJ017, KJ103 and SJ02.
We submitted the NDAs for KJ017 and SJ02 to the NMPA in June 2024 and
December 2023, respectively. We successfully received NDAapproval from the
NMPA for SJ02 in August 2025, and completed delivery of the first SJ02 order
in November 2025. Contingent on the timeline of regulatory clearance, we
anticipate the commercial launch of KJ017 in China market by the first quarter
of 2026.
We adhere to a balanced commercialization strategy by building up internal
sales and marketing capabilities while engaging key stakeholders through
targeted promotional efforts to facilitate effective product adoption and market
penetration following regulatory approvals. We plan to allocate (i)
approximately 4.2%, or HK$38.4 million, to establish a dedicated in-house
salesforce of at least 30 professionals with strong industry knowledge over the
next five years; and (ii) approximately 1.8%, or HK$16.5 million, to continue
to attend and organize academic conferences and seminars and product launch
events, aimed at publicizing the therapeutic potential of our drug candidates,
as well as raising our brand awareness and recognition.
 Approximately 17.7%, or HK$162.8 million, will be allocated to the advancement
of our other existing pipeline assets and preparation for any related registration
filings, including:.
o Approximately 6.0%, or HK$55.6 million, will be used to fund the planned
clinical trials for our antibiotics SC formulation candidates, including BJ007,
BJ008 and BJ009, in China and the U.S. We received the IND approval from
the NMPA for BJ007 in February 2025, pursuant to which we initiated a Phase
I trial in China in August 2025 to evaluate its bioavailability. We also plan to
submit an IND application for BJ007 to the FDA in the first half of 2026. We
have further submitted IND application for BJ009 in May 2025 and have
received the IND approval from the NMPA in September 2025. Additionally,
we plan to submit the IND applications for BJ008 to the NMPA in the first half
of 2026. See “Business — Our Drug Candidates — Large-volume
Subcutaneous Delivery — BJ007, BJ008 and BJ009 — Antibiotics SC
Formulation Candidates” for details;
FUTURE PLANS AND USE OF PROCEEDS
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--- page 511 ---
o Approximately 6.9%, or HK$63.3 million, will be used to fund the planned
clinical trials for KJ015 in China, the U.S. and certain other jurisdictions. We
received the IND approval from the NMPA for KJ015 in December 2024,
pursuant to which we initiated a Phase I trial in China in June 2025. We also
plan to submit an IND application to the FDA in the first half of 2026. See
“Business — Our Drug Candidates — Large-volume Subcutaneous Delivery —
KJ015 — Antibody SC Formulation Candidate In-House Developed” for
details;
o Approximately 4.1%, or HK$37.6 million, will be used to fund the ongoing
clinical trial and any future clinical development for SJ04 in China. We
initiated a Phase I trial of SJ04 in China in August 2024 and have completed
this trial in September 2025. See “Business — Our Drug Candidates — Drugs
in Assisted Reproduction — SJ0 4 — a recombinant human chorionic
gonadotropin” for details; and
o Approximately 0.7%, or HK$6.3 million, will be used to fund the planned
clinical trials for KJ101 in China. We received the IND approval from the
NMPA for KJ101 in February 2025, pursuant to which we initiated its Phase II
clinical trial in July 2025. See “Business — Our Drug Candidates —
Recombinant Biologics Alternative to Biochemical Production — KJ101 — a
recombinant human chymotrypsin” for details.
 Approximately 8.4%, or HK$77.4 million, will be allocated to the continued
optimization of our proprietary synthetic biology technology platforms, as well as
exploration and development of new drug candidates.
o Approximately 2.0%, or HK$18.9 million, will be used to further enhance our
proprietary technology platforms mainly through two key initiatives, including
chassis cell optimization and AI-driven protein engineering. Specifically, we
intend to (i) develop a CHO cell bank engineered with glycosyltransferases for
advanced glycosylation capabilities and a host cell bank based on Pichia
pastoris , leveraging its efficiency in recombinant protein production, (ii)
optimize workflows, cultivation processes, and purification techniques for our
technology platforms while acquiring necessary R&D equipment to support
these improvements, and (iii) capitalize on large-scale sequence datasets and
advanced AI models for improved biopharmaceutical applications; and
o Approximately 6.4%, or HK$58.5 million, will be used to expand our product
pipeline and develop new drug assets revolving around four focused
therapeutic areas where treatment options remain limited, namely, large-
volume SC drug delivery, antibody-mediated autoimmune conditions, assisted
reproduction, and recombinant biologic products as transformative alternative
to traditional biochemical production.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 512 ---
 Approximately 10.4%, or HK$95.9 million, will be used to enhance and scale up our
manufacturing capabilities. To accommodate the growing demand for our drug
candidates upon commercialization, we plan to establish a new 10,000L drug
substance production line to elevate production capacity and efficiency while
improving process stability, efficiency, and quality control. Upon completion and
operation of such new facilities, our projected total reactor volume, including the
10,000L tanks and all reserved pipelines, will reach approximately 26,100L and our
annual production capacity will expand to approximately 22.5 million formulations.
Concurrently, to a lesser extent, we intend to upgrade and maintain our existing
production facilities, such as power systems, cooling/heating infrastructure, and
automation controls, ensuring reliable, cost-effective operations to support large-
scale biotherapeutics manufacturing. Although the utilization rate of existing
production facilities was relatively low during the Track Record Period, we consider
it prudent to upgrade the facilities in advance, consistent with market practice, so
that we can capture commercialization opportunities and meet anticipated market
demand promptly upon regulatory approval.
 Approximately 10.0% or HK$92.2 million, will be used for working capital and
general corporate purposes.
To the extent that the net proceeds from the Global Offering are not immediately applied
to the above purposes and to the extent permitted by relevant law and regulations, so long as
it is deemed to be in the best interests of our Group, we may hold such funds in short-term
interest-bearing accounts at licensed commercial banks and/or other authorized financial
institutions (as defined under the SFO or applicable laws and regulations in other
jurisdictions). We will issue an appropriate announcement if there is any material change to the
above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 513 ---
HONG KONG UNDERWRITERS
CLSA Limited
Haitong International Securities Company Limited
West Bull Securities Limited
BOCOM International Securities Limited
CCB International Capital Limited
Guoyuan Securities Brokerage (Hong Kong) Limited
Livermore Holdings Limited
Phillip Securities (Hong Kong) Limited
SDIC Securities (Hong Kong) Limited
Shenwan Hongyuan Securities (H.K.) Limited
SPDB International Capital Limited
V aluable Capital Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters.
The Global Offering comprises the Hong Kong Public Offering of initially 3,791,200
Hong Kong Offer Shares and the International Offering of initially 34,120,500 International
Offer Shares, subject, in each case, to reallocation on the basis as described in the section
headed “Structure of the Global Offering” in this prospectus.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering initially
3,791,200 Hong Kong Offer Shares (subject to reallocation) for subscription by way of the
Hong Kong Public Offering on and subject to the terms and conditions of this prospectus and
the Hong Kong Underwriting Agreement at the Offer Price.
Subject to (i) the Listing Committee granting approval for the listing of, and permission
to deal in, the H Shares pursuant to the Global Offering on the Main Board of the Stock
Exchange and such approval not having been withdrawn; and (ii) certain other conditions set
out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed
severally and not jointly to apply or procure applications, on the terms and conditions of this
prospectus, for their respective applicable proportions of the Hong Kong Offer Shares which
are being offered but are not taken up under the Hong Kong Public Offering.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been signed and becoming unconditional and not
having been terminated in accordance with its terms.
UNDERWRITING
– 504 –


--- page 514 ---
Grounds for Termination
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters)
and the Joint Sponsors shall be entitled, in their absolute discretion and by giving notice in
writing to our Company, to terminate the Hong Kong Underwriting Agreement with immediate
effect if at any time prior to 8:00 a.m. on the Listing Date:
(i) there shall develop, occur, exist or come into effect:
(a) any local, national, regional or international event or series of events in the
nature of force majeure (including, without limitation, any acts of government,
declaration of a local, national, regional or international emergency or war,
calamity, crisis, epidemic, pandemic, outbreaks, escalation, or outbreak of
infectious diseases (including, without limitation, COVID-19 and Severe
Acute Respiratory Syndrome (SARS), MERS, H5N1, H1N1, swine or avian
influenza or such related/mutated forms), economic sanctions, strikes, labor
disputes, lock-outs, fire, explosion, flooding, earthquake, tsunami, volcanic
eruption, civil commotion, riots, public disorder, acts of war, outbreak or
escalation of hostilities (whether or not war is or has been declared), acts of
God or acts of terrorism (whether or not responsibility has been claimed),
accident, interruptions or delay in transportation in or affecting Hong Kong,
the PRC, the United States, the European Union or any other jurisdiction
relevant to our Group (each a “ Relevant Jurisdiction ” and collectively, the
“Relevant Jurisdictions ”);
(b) any change or any development involving a prospective change, or any event
or series of events likely to result in any change or development involving a
prospective change, in any local, national, regional or international financial,
economic, political, military, industrial, legal, fiscal, regulatory, currency,
credit or market matters or conditions, taxation, equity securities or currency
exchange rate or controls or other financial markets (including, without
limitation, conditions and sentiments in the stock and bond markets, money
and foreign exchange markets, the interbank markets and credit markets) or
currency exchange rate or controls in or affecting any of the Relevant
Jurisdictions;
(c) any moratorium, suspension or restriction (including, without limitation, any
imposition of or requirement for any minimum or maximum price limit or price
range) on trading in shares or securities generally on the Stock Exchange, the
New Y ork Stock Exchange, the NASDAQ Global Market, the Shanghai Stock
Exchange, the Shenzhen Stock Exchange or the Singapore Stock Exchange;
UNDERWRITING
– 505 –


--- page 515 ---
(d) any general moratorium on banking activities in or affecting any of the
Relevant Jurisdiction or any disruption in commercial banking or foreign
exchange trading or securities settlement or clearance services in those places
or the Relevant Jurisdictions;
(e) any new laws or regulations or any change or any development involving a
prospective change in existing laws or regulations or any change or
development involving a prospective change in the interpretation or
application thereof by any court or any governmental authority in or affecting
any of the Relevant Jurisdictions;
(f) the imposition of sanctions or export controls on any member of our Group or
any of the Controlling Shareholders, or the withdrawal of trading privileges
which existed on the date of the Hong Kong Underwriting Agreement, in
whatever form, directly or indirectly, by, or for, any of the Relevant
Jurisdictions;
(g) there is an event, act or omission which gives or is likely to give rise to any
liability of our Company or the Controlling Shareholders pursuant to the
indemnities given by any of them under the Hong Kong Underwriting
Agreement, as applicable;
(h) any valid demand by any creditor for repayment of any indebtedness of any
member of our Group or in respect of which any member of our Group is liable
prior to its stated maturity;
(i) any change or development involving a prospective change or amendment in
taxation or exchange control, currency exchange rates or foreign investment
regulations (including, without limitation, a devaluation of the Hong Kong
dollar or the Renminbi against any foreign currencies, a change in the system
under which the value of the Hong Kong dollar is linked to that of the United
States dollar or Renminbi is linked to any foreign currency or currencies), or
the implementation of any exchange control, in any of the Relevant
Jurisdictions;
(j) any non-compliance of this prospectus, the CSRC filings, or other documents
in connection with the contemplated subscription and sale of the Offer Shares
or any aspect of the Global Offering with any applicable laws (including,
without limitation, the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance or the Listing Rules or the CSRC rules);
UNDERWRITING
– 506 –


--- page 516 ---
(k) any litigation, claim, regulatory or disciplinary proceeding, legal action or
dispute instigated, or any litigation, claim, regulatory or disciplinary
proceeding, legal action or dispute threatened against any member of our
Group, any Director, any member of senior management of the Company
named in this prospectus or the Controlling Shareholders pursuant to the Hong
Kong Underwriting Agreement;
(l) any non-compliance of this prospectus (or any other documents used in
connection with the contemplated offering, allotment, issue, subscription and
sale of the Offer Shares), or any aspect of the Global Offering with the Listing
Rules or any other applicable laws;
(m) any Director or any member of senior management of the Company named in
the Prospectus vacating his or her office;
(n) any contravention by our Company, the Controlling Shareholders, any Director
of any applicable laws and regulations or the Listing Rules; or
(o) any change or prospective change or development, or a materialization of, any
of the risks set out in the section headed “Risk Factors” in this prospectus,
which, in any such case individually or in the aggregate, in the absolute opinion of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters):
(A) has or will or may or is likely or could be reasonably expected to have a material
adverse effect, on the assets, liabilities, general affairs, business, management,
prospects, shareholder’s equity, profit, losses, results of operations, performance,
position or condition, financial or otherwise, of our Group as a whole; or
(B) has or will or may or is likely or could be reasonably expected to have a material
adverse effect on the success of the Global Offering and/or make it impracticable or
inadvisable for any material part of the Hong Kong Underwriting Agreement, the
Hong Kong Public Offering or the Global Offering to be performed or implemented
as envisaged; or
(C) has or will or may or is likely or could be reasonably expected to have a material
adverse effect on the level of applications under the Hong Kong Public Offering or
the level of interest under the International Offering; or
(D) make, will or may make or is likely or could be reasonably expected to make it
impracticable, inadvisable, inexpedient or not commercially viable to proceed with
the Hong Kong Public Offering and/or the Global Offering, to market the Global
Offering or the delivery of H Shares on the Listing Date; or
UNDERWRITING
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--- page 517 ---
(E) has or will or may or is likely or could be reasonably expected to have the effect of
making any part of the Hong Kong Underwriting Agreement (including
underwriting) incapable of performance in accordance with its terms or preventing
the processing of applications and/or payments pursuant to the Global Offering or
pursuant to the underwriting thereof.
(ii) there has come to the notice of the Joint Sponsors and the Overall Coordinators that:
(a) any statement contained in this prospectus, the formal notice and/or any
notices, announcements, advertisements, communications or other documents
(including any announcement, circular, document or other communication
pursuant to the Hong Kong Underwriting Agreement) issued or used by or on
behalf of our Company in connection with the Hong Kong Public Offering
(including any supplement or amendment thereto) (the “ Global Offering
Documents ”) was, when it was issued, or has become untrue, incorrect,
inaccurate or misleading in any material respect, unless such untrue, incorrect,
inaccurate or misleading statement has been properly rectified by the Company
in a timely manner;
(b) any estimate, forecast, expression of opinion, intention or expectation
contained in any of the Global Offering Documents was, when it was issued,
or has become unfair or misleading in any respect or based on untrue, dishonest
or unreasonable assumptions or given in bad faith;
(c) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
omission or misstatement in any of the Global Offering Documents and the
CSRC filings;
(d) it is required for the Company to issue a supplement to the prospectus (or to
any other documents used in connection with the Global Offering) pursuant to
the Companies Ordinance or the Companies (Winding Up and Miscellaneous
Provisions) Ordinance or the Listing Rules or any requirement or request of the
Stock Exchange and/or the SFC, unless consented by the Overall Coordinators
(for themselves and on behalf of the Hong Kong Underwriters);
(e) there is any material breach of any of the obligations of any party (other than
upon any of the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital
Market Intermediaries) to the Hong Kong Underwriting Agreement, the
Cornerstone Investment Agreements or the International Underwriting
Agreement;
(f) there is a breach of, or any event or circumstance rendering untrue, incorrect
or misleading in any respect, any of the warranties given by our Company or
the Controlling Shareholders in the Hong Kong Underwriting Agreement or the
International Underwriting Agreement;
UNDERWRITING
– 508 –


--- page 518 ---
(g) there is any material adverse effect;
(h) the approval of the Listing Committee of the Stock Exchange of the listing of,
and permission to deal in, the H Shares in issue and to be issued pursuant to
the Global Offering, is refused or not granted, other than subject to customary
conditions, on or before the Listing Date, or if granted, the approval is
subsequently withdrawn, qualified (other than by customary conditions) or
withheld;
(i) any expert named in this prospectus (other than any of the Joint Sponsors) has
withdrawn or sought to withdraw its consent to the issue of this prospectus
with the inclusion of its reports, letters and/or legal opinions (as the case may
be) and references to its name included in the form and context in which it
respectively appears;
(j) our Company withdraws this prospectus (and/or any other documents issued or
used in connection with the Global Offering) or the Global Offering;
(k) there is a prohibition on our Company or the Overall Coordinators for whatever
reason from offering, allotting, issuing or selling any of the Offer Shares
pursuant to the terms of the Global Offering;
(l) (a) any certificate given by our Company or any of our respective officers to
the Joint Sponsors and the Overall Coordinators under or in connection with
the Hong Kong Underwriting Agreement or the Global Offering is false or
misleading in any material respect, or (b) any Director, supervisor or any
member of senior management as named in this prospectus is being charged
with an indictable offence or prohibited by operation of law or otherwise
disqualified from taking part in the management of a company;
(m) any order or petition for the winding-up or liquidation of any member of our
Group or any composition or arrangement made by any member of our Group
with its creditors or a scheme of arrangement entered into by any member of
our Group or any resolution for the winding-up of any member of our Group
or the appointment of a provisional liquidator, receiver or manager over all or
part of the assets or undertaking of any member of our Group or anything
analogous thereto occurring in respect of any member of our Group;
(n) the notice of acceptance of the CSRC Filings issued by the CSRC and/or the
results of the CSRC Filings published on the website of the CSRC is rejected,
withdrawn, revoked or invalidated; or other than with the prior written consent
of the Overall Coordinators, the issue or requirement to issue by the Company
of a supplement or amendment to the CSRC Filings pursuant to the CSRC
Rules or upon any requirement or request of the CSRC; or any non-compliance
of the CSRC Filings with the CSRC Rules or any other applicable laws; or
UNDERWRITING
– 509 –


--- page 519 ---
(o) a material portion of the orders placed or confirmed in the bookbuilding
process, or of the investment commitments made by any cornerstone investors
under agreements signed with such cornerstone investors, have been
withdrawn, terminated or cancelled.
Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each member of our Controlling Shareholders
has undertaken to us and to the Stock Exchange that, except pursuant to the Global Offering,
he/she/it shall not, and shall procure that the relevant registered holders of the Shares in which
he/she/it is beneficially interested shall not:
(a) in the period commencing on the date by reference to which disclosure of his/her/its
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date (the “ First Six-month Period ”), dispose of, or enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of the Shares in respect of which he/she/it is shown
by this prospectus to be the beneficial owner (as defined in the Listing Rules (the
“Relevant Securities ”)); and
(b) in the period of six months commencing on the date on which the First Six-month
Period expires (the “ Second Six-month Period ”), dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of the Relevant Securities if, immediately following such
disposal or upon the exercise or enforcement of such options, rights, interests or
encumbrances, that, he/she/it would cease to be a Controlling Shareholders.
In addition, pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, each of our
Controlling Shareholders has also irrevocably undertaken to the Stock Exchange and us that,
within the period commencing on the date of this prospectus and ending on the date which is
12 months from the Listing Date, he/she/it will:
(a) when he/she/it pledges or charges any Shares or securities of our Company
beneficially owned by him/her/it in favor of an authorized institution (as defined in
the Banking Ordinance, Chapter 155 of the Laws of Hong Kong) pursuant to Note
(2) to Rule 10.07(2) of the Listing Rules, immediately inform us in writing of such
pledge or charge together with the number of securities so pledged or charged; and
(b) when he/she/it receives any indications, either verbal or written, from any pledgee
or chargee that any of the pledged or charged Shares or securities of our Company
will be disposed of, immediately inform us in writing of any such indications.
We will inform the Stock Exchange as soon as we have been informed of the above
matters (if any) by any member of our Controlling Shareholders and announce such as soon as
possible after being so informed by such Controlling Shareholders.
UNDERWRITING
– 510 –


--- page 520 ---
Undertakings by our Company
In accordance with Rule 10.08 of the Listing Rules, we have undertaken to the Stock
Exchange that no further Shares or securities convertible into equity securities of our Company
(whether or not of a class already listed) may be allotted or issued by us or form the subject
of any agreement to such an allotment or issue within six months from the Listing Date
(whether or not such issue of Shares or securities of the Company will be completed within six
months from the Listing Date), except for the issuance of Shares or securities pursuant to the
Global Offering or for circumstances permitted under Rule 10.08 of the Listing Rules.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Pursuant to the Hong Kong Underwriting Agreement, our Company has undertaken to
each of the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries not to (save for the issue, offer or sale of the Offer Shares by our Company
pursuant to the Global Offering), without the prior written consent of the Joint Sponsors and
the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters and the
Capital Market Intermediaries) and unless in compliance with the Listing Rules and applicable
PRC Laws, at any time during the period commencing on the date of the Hong Kong
Underwriting Agreement and ending on, and including, the last date of the six months after the
Listing Date (the “ First Six-Month Period ”):
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, right or contract to purchase or subscribe for, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create any claim, mortgage, charge, pledge, lien or other
security interest or any option, restriction, right of first refusal, equitable right,
power of sale, hypothecation, retention of title, right of pre-emption or other third
party claim, right, interest or preference or any other encumbrance of any kind or an
agreement, arrangement or obligation to create any of the foregoing under the Hong
Kong Underwriting Agreement (the “ Encumbrance ”) over, or agree to transfer or
dispose of or create an Encumbrance over, either directly or indirectly, conditionally
or unconditionally, or repurchase, any legal or beneficial interest in any H Shares or
other securities of our Company, as applicable, or any interests in any of the
foregoing (including, but not limited to, any securities that are convertible into or
exercisable or exchangeable for, or that represent the right to receive, or any
warrants or other rights to subscribe for, any H Shares or other equity securities of
our Company or any shares or other securities of such other member of our Group,
as applicable), or deposit any H Shares or other securities of our Company, as
applicable, with a depositary in connection with the issue of depositary receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of any H
Shares or other equity securities of our Company, as applicable, or any interest
UNDERWRITING
–5 1 1–


--- page 521 ---
therein (including, without limitation, any securities of which are convertible into or
exchangeable or exercisable for, or represent the right to receive, or any warrants or
other rights to purchase, any H Shares); or
(iii) enter into any transaction with the same economic effect as any transaction
described in paragraphs (i) or (ii) above; or
(iv) offer to agree to or announce any intention to effect any transaction described in
paragraphs (i), (ii) or (iii) above,
in each case, whether any of the transactions specified in paragraphs (i), (ii) or (iii) above is
to be settled by delivery of H Shares or other equity securities of our Company, as applicable,
in cash or otherwise (whether or not the issue of such H Shares or other shares or securities
of our Company will be completed within the First Six-Month Period). In the event that, during
the period of six months commencing on the date on which the First Six-Month Period expires
(the “ Second Six-Month Period ”), our Company enters into any of the transactions specified
in paragraphs (i), (ii) and (iii) above or offers to or agrees to or announces any intention to,
enter into any such transactions, our Company shall take all reasonable steps to ensure that we
will not create a disorderly or false market in the H Shares or other securities of our Company.
The Controlling Shareholders under the Hong Kong Underwriting Agreement undertake to
each of the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries to procure the Company to comply with
the undertakings in the paragraph above.
Undertakings by our Controlling Shareholders
Pursuant to the Hong Kong Underwriting Agreement, each of our Controlling
Shareholders has undertaken to each of our Company, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Hong Kong Underwriters and the Capital Market Intermediaries that, without the prior
written consent of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters and the Capital Market Intermediaries) and unless in
compliance with the Listing Rules (including pursuant to Note (2) to Rule 10.07 of the Listing
Rules):
(a) During the First Six-Month Period, he/she/it will not:
(i) offer, pledge, charge, sell, offer to sell, contract or agree to sell, mortgage,
charge, pledge, hypothecate, lend, grant or sell any option, warrant, contract or
right to purchase, grant, or purchase any option, warrant, contract or right to
sell, or otherwise transfer or dispose of or create an Encumbrance over, or
agree to transfer or dispose of or create an Encumbrance over, either directly
or indirectly, conditionally or unconditionally, any H Shares or other securities
of our Company or any interest therein (including, without limitation, any
securities convertible into or exchangeable or exercisable for or that represent
the right to receive, or any warrants or other rights to purchase, any Shares or
any such other securities, as applicable or any interest in any of the foregoing),
UNDERWRITING
– 512 –


--- page 522 ---
or deposit with a depositary in connection with the issue of depositary receipts
any Shares or other securities of our Company beneficially owned by him as
at the Listing Date (the “ Locked-up Securities ”);
(ii) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of, any Locked-up
Securities;
(iii) enter into any transaction with the same economic effect as any transaction
specified in paragraphs (i) and (ii) above; or
(iv) offer to or announce, or agree to any intention to effect any transaction
described in paragraphs (i), (ii) or (iii) above,
in each case, whether any such transaction described in paragraphs (i), (ii) or (iii)
above is to be settled by delivery of such H Shares or other securities of our
Company, in cash or otherwise (whether or not the settlement or delivery of such H
Shares or other securities will be completed within the First Six-Month Period); and
(b) in Second Six-Month Period, he/she/it will not and will procure that the relevant
registered holder(s) affiliated with him/her/it will, inform the Company, the Joint
Sponsors and the Overall Coordinators in writing, as soon as reasonably practicable,
if and when he/she/it or such registered holder(s) pledges or charges any Shares or
other securities of our Company beneficially owned by him/her/it, including the
number of Shares or other securities so pledged or charged, or if and when he/she/it
or such registered holder(s) receives any indications, whether verbal or written, from
any pledgee or chargee that any of the pledged or charged Shares or other securities
of our Company will be disposed of, and until the expiry of the Second Six-Month
Period, in the event that into any such transactions described in paragraphs (i), (ii)
or (iii) above or offers to or agrees to or announce any intention to effect any such
transaction, will take all reasonable steps to ensure that it will not create a disorderly
or false market in the Shares or other securities of our Company.
INTERNATIONAL OFFERING
International Underwriting Agreement
In connection with the International Offering, it is expected that our Company will enter
into the International Underwriting Agreement with the Joint Sponsors, the Overall
Coordinators and the International Underwriters. Under the International Underwriting
Agreement, the International Underwriters will, subject to certain conditions set out therein,
severally and not jointly, agree to procure subscribers or purchasers for, or to purchase, their
respective proportions of the International Offer Shares being offered under the International
Offering (subject to, among other, any reallocation between the International Offering and the
Hong Kong Public Offering).
UNDERWRITING
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It is expected that the International Underwriting Agreement may be terminated on
similar grounds as those in the Hong Kong Underwriting Agreement. Potential investors should
note that if the International Underwriting Agreement is not entered into, or is terminated, the
Global Offering will not proceed.
Our Company has agreed to indemnify the International Underwriters against certain
liabilities, including liabilities under the U.S. Securities Act.
UNDERWRITING COMMISSIONS AND LISTING EXPENSES
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission equal to 2.5% of the aggregate Offer Price payable for the Offer Shares. Our
Company may, at our sole and absolute discretion, pay to one or more Underwriters or Capital
Market Intermediaries an additional incentive fee up to 1.5% of the Offer Price payable for the
Offer Shares. For the purpose of disclosure of the ratio of fixed and discretionary fees payable
(the “ Fee Split Ratio ”) as required under paragraph 3B of Appendix D1A to the Listing Rules,
the Fee Split Ratio will be approximately 51.1%:48.9% (on the basis that the discretionary fees
will be fully paid). For any unsubscribed Hong Kong Offer Shares reallocated to the
International Offering, the underwriting commission will not be paid to the Hong Kong
Underwriters but will instead be paid, at the rate applicable to the International Offering, to the
relevant International Underwriters. Each of the Joint Sponsors is entitled to sponsor fee in the
amount of US$400,000.
The aggregate underwriting commissions and fees (including the incentive fees and
assuming full payment), together with the Stock Exchange listing fees, the SFC transaction
levy, AFRC transaction levy the Stock Exchange trading fee, legal and other professional fees,
printing and other expenses relating to the Global Offering, are estimated to be approximately
HK$78.6 million in aggregate (based on the Offer Price of HK$26.38 per Offer Share), and are
to be borne by us.
ACTIVITIES BY SYNDICATE MEMBERS
We describe below a variety of activities that each of the Underwriters and the Capital
Market Intermediaries of the Hong Kong Public Offering and the International Offering
(together, the “ Syndicate Members ”) and their affiliates, may individually undertake, and
which do not form part of the underwriting process. When engaging in any of these activities,
it should be noted that the Syndicate Members are subject to restrictions, including the
following:
(a) under the agreement among the Syndicate Members, all of them must not make bids
or purchases or effect any other transactions (including but not limited to issuing any
option or derivative or structured product which has, as its underlying asset, any
Offer Shares), whether in the open market or otherwise, for the purpose of or with
UNDERWRITING
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--- page 524 ---
a view to creating actual, or apparent, active trading in the Offer Shares or raising,
stabilizing or maintaining the price of the Offer Shares to or at levels other than
those which might otherwise prevail in the open market; and
(b) all of them must comply with all applicable laws and regulations, including the
market misconduct provisions of the SFO, including the provisions prohibiting
insider dealing, false trading, price rigging and stock market manipulation.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the accounts of others. In relation
to the H Shares, those activities could include acting as agent for buyers and sellers of the H
Shares, entering into over the counter or listed derivative transactions or listed or unlisted
securities transactions (including issuing securities such as derivative warrants listed on a stock
exchange) which have the H Shares as their or part of their underlying assets. Those activities
may require hedging activity by those entities involving, directly or indirectly, buying and
selling the H Shares. All such activity could occur in Hong Kong and elsewhere in the world
and may result in the Syndicate Members and their affiliates holding long and/or short
positions in the H Shares, in baskets of securities or indices including the H Shares, in units
of funds that may purchase the H Shares, or in derivatives related to any of the foregoing.
In relation to issues by the Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the exchange may require the issuer of those securities (or
one of its affiliates or agents) to act as a market maker or liquidity provider in the security, and
this will also result in hedging activity in the H Shares in most cases.
These activities may affect the market price or value of the H Shares, the liquidity or
trading volume in the H Shares, and the volatility of the H Shares’ share price, and the extent
to which this occurs from day to day cannot be estimated.
UNDERWRITERS’ AND CAPITAL MARKET INTERMEDIARIES’ INTEREST IN OUR
GROUP
Except as disclosed in this prospectus and the obligations under the Hong Kong
Underwriting Agreement and the International Underwriting Agreement, none of the
Underwriters and the Capital Market Intermediaries has any shareholding interest in any
member of our Group or any right (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for securities in any member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
UNDERWRITING
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--- page 525 ---
JOINT SPONSORS’ INDEPENDENCE
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors as set
out in Rule 3A.07 of the Listing Rules. For further details, please see “Appendix VII —
Statutory and General Information — D. Other Information — 3. Joint Sponsors” in this
Prospectus.
UNDERWRITING
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--- page 526 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering comprises:
(i) the Hong Kong Public Offering of initially 3,791,200 Offer Shares (subject to
reallocation as mentioned below) in Hong Kong as described in “— The Hong Kong
Public Offering” below in this section; and
(ii) the International Offering of initially 34,120,500 Offer Shares (subject to
reallocation) outside the United States (including to professional and institutional
investors within Hong Kong) in offshore transactions in reliance on Regulation S
and the applicable laws of the jurisdiction where those offers and sales occur, as
described in “— The International Offering” below in this section.
Investors may either apply for the Hong Kong Offer Shares under the Hong Kong Public
Offering, or apply for or indicate an interest for the International Offer Shares under the
International Offering, but may not do both.
The 37,911,700 Offer Shares in the Global Offering will represent approximately 11.63%
of our enlarged share capital immediately after the completion of the Global Offering. The
underwriting arrangements, and the respective Underwriting Agreements, are summarized in
the section headed “Underwriting” in this prospectus.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallocation as described in “— The Hong Kong
Public Offering — Reallocation” below in this section.
References in this prospectus to applications, application or subscription monies or
procedure for applications relate solely to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 3,791,200 Offer Shares for subscription by the public
in Hong Kong at the Offer Price, representing approximately 10% of the total number of Offer
Shares initially available under the Global Offering. Subject to the reallocation of Offer Shares
between the International Offering and the Hong Kong Public Offering. The Hong Kong Offer
Shares will represent approximately 1.16% of our Company’s enlarged share capital
immediately after completion of the Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities which regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in
“— Conditions of the Global Offering” below in this section.
Allocation
Allocation of the Hong Kong Offer Shares to investors under the Hong Kong Public
Offering will be based on the level of valid applications received under the Hong Kong Public
Offering. The basis of allocation may vary depending on the number of Hong Kong Offer
Shares validly applied for by applicants. We may, if necessary, allocate the Hong Kong Offer
Shares on the basis of balloting, which would mean that some applicants may receive a higher
allocation than others who have applied for the same number of Hong Kong Offer Shares and
those applicants who are not successful in the ballot may not receive any Hong Kong Offer
Shares.
For allocation purposes only, the total number of the Hong Kong Offer Shares available
under the Hong Kong Public Offering (after taking account of any reallocation referred to
below) is to be divided equally into two pools (subject to reallocation at odd lot size): pool A
and pool B, both of which are available on an equitable basis to successful applicants with any
odd board lots being allocated to pool A:
Pool A: the Offer Shares will be allocated on an equitable basis to applicants who have
applied for the Hong Kong Offer Shares with an aggregate subscription price
of HK$5 million (excluding the brokerage, the SFC transaction levy, AFRC
transaction levy and the Stock Exchange trading fee payable) or less; and
STRUCTURE OF THE GLOBAL OFFERING
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Pool B: the Offer Shares will be allocated on an equitable basis to applicants who have
applied for the Hong Kong Offer Shares with an aggregate subscription price
of more than HK$5 million (excluding the brokerage, the SFC transaction levy,
AFRC transaction levy and the Stock Exchange trading fee payable) and up to
the total value of pool B.
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the
pools are under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other
pool to satisfy demand in the pool and be allocated accordingly.
For the purpose of this subsection only, the “subscription price” for the Offer Shares
means the price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either
pool A or pool B but not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 50% of the Hong Kong Offer
Shares initially comprised in the Hong Kong Public Offering (being 1,895,600 Hong Kong
Offer Shares) will be rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocation under the Listing Rules. 3,791,200 Offer
Shares are initially available in the Hong Kong Public Offering, representing approximately
10% of the Offer Shares initially available for subscription under the Global Offering. In
accordance with the requirements set forth in paragraph 4.2(b) of Practice Note 18 of the
Listing Rules. Pursuant to Chapter 4.14 of the Guide for New Listing Applicants issued by the
Stock Exchange, if the Offer Shares under the International Offering are fully subscribed or
over-subscribed and if the Hong Kong Public Offering is not fully subscribed for, the Overall
Coordinators have the authority to reallocate all or any unsubscribed Hong Kong Offer Shares
to the International Offering in such proportions as the Overall Coordinators deem appropriate.
If (i) the Offer Shares under the International Offering are fully subscribed or
over-subscribed, and if the number of Offer Shares validly applied for in the Hong Kong Public
Offering represents more than 100% of the number of Hong Kong Offer Shares initially
available under the Hong Kong Public Offering; or (ii) the Offer Shares under the International
Offering are not fully subscribed, and if the number of Offer Shares validly applied for in the
Hong Kong Public Offering represents more than 100% of the number of Hong Kong Offer
Shares initially available under the Hong Kong Public Offering, the Overall Coordinators (for
themselves and on behalf of the Underwriters) may, at its discretion, reallocate the Offer Shares
initially allocated for the International Offering to the Hong Kong Public Offering to satisfy
valid applications under the Hong Kong Public Offering, provided that the total number of
Hong Kong Offer Shares available under the Hong Kong Public Offering following such
reallocation shall not be more than 5,686,700 Offer Shares, representing approximately 15% of
the total number of Offer Shares initially available under the Global Offering, in accordance
STRUCTURE OF THE GLOBAL OFFERING
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--- page 529 ---
with Chapter 4.14 of the Guide for New Listing Applicants issued by the Stock Exchange. If
both the International Offer Shares and Hong Kong Offer Shares are under-subscribed, the
Global Offering will not proceed unless the shortfall is taken up by the Underwriters.
Subject to the above, the Overall Coordinators (for themselves and on behalf of the
Underwriters) shall have the discretion to reallocate Offer Shares from the International
Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong
Public Offering, regardless of whether any reallocation pursuant to paragraph 4.2(b) of Practice
Note 18 of the Listing Rules is triggered. In each case, the additional Offer Shares reallocated
to the Hong Kong Public Offering will be allocated between pool A and pool B in equal
proportion and the number of Offer Shares allocated to the International Offering will be
correspondingly reduced in such manner as the Overall Coordinators deem appropriate.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows the provision of paragraph 4.2(b) of Practice Note 18 of the
Listing Rules, no mandatory clawback or reallocation mechanism is required to increase the
number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the
total number of Offer Shares offered under the Global Offering.
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him or her that he or she and any
person(s) for whose benefit he or she is making the application have not applied for or taken
up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
Offer Shares under the International Offering, and such applicant’s application is liable to be
rejected if the said undertaking and/or confirmation is breached and/or untrue (as the case may
be) or it has been or will be placed or allocated Offer Shares under the International Offering.
The listing of the Offer Shares on the Stock Exchange is sponsored by the Joint Sponsors.
Applicants under the Hong Kong Public Offering are required to pay, on application (subject
to application channel), the Offer Price of HK$26.38 per H Share in addition to any brokerage,
SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee payable on
each Offer Share, amounting to a total of HK$2,664.60 for one board lot of 100 H Shares.
Further details are set out below in the section headed “How to Apply for Hong Kong Offer
Shares” in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 530 ---
THE INTERNATIONAL OFFERING
Number of Offer Shares offered
Subject to the reallocation as described above, our Company will be initially offering for
subscription under the International Offering 34,120,500 Offer Shares, representing
approximately 90% of the Offer Shares initially available under the Global Offering and
approximately 10.47% of our enlarged issued share capital immediately after completion of the
Global Offering.
Allocation
The International Offering will include selective marketing of the International Offer
Shares to institutional and professional investors and other investors anticipated to have a
sizeable demand for such International Offer Shares in other jurisdictions outside the United
States in reliance on Regulation S. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and
other securities and corporate entities which regularly invest in shares and other securities.
Prospective professional, institutional and other investors will be required to specify the
number of International Offer Shares under the International Offering they would be prepared
to acquire. This process, known as “book-building”, is expected to continue up to, and to cease
on or around, the last day for lodging applications under the Hong Kong Public Offering.
Allocation of International Offer Shares pursuant to the International Offering will be
determined by the Overall Coordinators (for themselves and on behalf of the Underwriters) and
will be based on a number of factors, including the level and timing of demand, the total size
of the relevant investor’s invested assets or equity assets in the relevant sector and whether or
not it is expected that the relevant investor is likely to buy further Offer Shares, and/or hold
or sell its Offer Shares, after the listing of the Offer Shares on the Stock Exchange. Such
allocation is intended to result in a distribution of the Offer Shares on a basis which would lead
to the establishment of a solid professional and institutional shareholder base to the benefit of
our Company and our Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require
any investor who has been offered the International Offer Shares under the International
Offering and who has made an application under the Hong Kong Public Offering to provide
sufficient information to the Overall Coordinators so as to allow it to identify the relevant
application under the Hong Kong Public Offering and to ensure that they are excluded from any
application of the Offer Shares under the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the arrangement described in the subsection headed “— The Hong Kong
Public Offering — Reallocation” above, and/or any reallocation of unsubscribed Offer Shares
originally included in the Hong Kong Public Offering.
PRICING AND ALLOCATION
The Offer Price will be HK$26.38 per Offer Share. If you apply for the Offer Shares under
the Hong Kong Public Offering, you must pay the Offer Price of HK$26.38 per Offer Share,
plus 1.0% brokerage, 0.0027% SFC transaction levy, 0.00015% AFRC transaction levy and
0.00565% Stock Exchange trading fee, amounting to a total of HK$2,664.60 for one board lot
of 100 H Shares.
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building”, is expected to continue up to, and to
cease on or around, the last day for lodging applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
considered appropriate, based on the level of interest expressed by prospective investors during
the book-building process, and with the prior consent of our Company, reduce the number of
Offer Shares and/or the Offer Price below that stated in this prospectus prior to the morning
of the last day for lodging applications under the Hong Kong Public Offering. In such a
situation, our Company will, as soon as practicable following the decision to make such
reduction and in any event not later than the morning of the last day for lodging applications
under the Hong Kong Public Offering, post a notice on the website of the Stock Exchange
(www.hkexnews.hk ) and the website of our Company ( www.baopharma.com ) (the contents
of the website do not form a part of this prospectus). Our Company will also, as soon as
practicable following the decision to make such change, issue a supplemental or new
prospectus updating investors of the change in the number of Offer Shares being offered under
the Global Offering and/or the Offer Price. Such supplemental or new prospectus will also
include confirmation or revision, as appropriate, of the working capital statement and the
Global Offering statistics as currently set out in this prospectus, and any other financial
information which may change as a result of any such reduction. In the absence of any such
notice so published, the number of Offer Shares and/or the Offer Price will not be reduced.
STRUCTURE OF THE GLOBAL OFFERING
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The Global Offering must first be canceled and subsequently relaunched on FINI pursuant
to the supplemental or new prospectus. The supplemental or new Prospectus should include at
least the following: updated (i) revised Offer Price and market capitalization; (ii) listing
timetable and underwriting obligations; (iii) unaudited pro forma and adjusted net tangible
assets; and (iv) use of proceeds and confirmation of the working capital adequacy based on the
revised estimated proceeds.
If the number of Offer Shares being offered under the Global Offering or the Offer Price
is so reduced, applicants who have already submitted an application will be notified that they
are required to confirm their applications. All applicants who have already submitted an
application need to confirm their applications in accordance with the procedures set out in the
announcement and all unconfirmed applications will not be valid.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any notice of a reduction in the number of Offer Shares and/or the
Offer Price may not be made until the last day for lodging applications under the Hong Kong
Public Offering. Such notice will also include confirmation or revision, as appropriate, of the
working capital statement and the Global Offering statistics as currently set out in this
prospectus, and any other financial information which may change as a result of any such
reduction. In the absence of any such notice so published, the number of Offer Shares will not
be reduced and/or the Offer Price, if agreed upon with our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters) will under no circumstances
be set outside the Offer Price stated in this prospectus.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators (for
themselves and on behalf of the Underwriters) may, at its discretion, reallocate the number of
Offer Shares to be offered in the Hong Kong Public Offering and the International Offering,
provided that the number of Offer Shares comprised in the Hong Kong Public Offering shall
not be less than 10% of the total number of Offer Shares available under the Global Offering.
The Offer Shares to be offered in the Hong Kong Public Offering and the Offer Shares to be
offered in the International Offering may, in certain circumstances, be reallocated between
these offerings at the discretion of the Overall Coordinators (for themselves and on behalf of
the Underwriters).
The indication of the level of interest in the International Offering, the basis of allotment
of the Offer Shares available under the Hong Kong Public Offering and the results of
allocations in the Hong Kong Public Offering are expected to be made available in a variety
of channels in the manner described in the section headed “How to Apply for Hong Kong Offer
Shares — D. Despatch/Collection of Share Certificates and Refund of Application Monies” in
this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 533 ---
UNDERWRITING AGREEMENT
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement and is conditional upon the
International Underwriting Agreement being signed and becoming unconditional.
Our Company and the Controlling Shareholders expect to enter into the International
Underwriting Agreement relating to the International Offering on or around December 5, 2025.
The underwriting arrangements under the Hong Kong Underwriting Agreement and the
International Underwriting Agreement are summarized in the section headed “Underwriting” in
this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Hong Kong Offer Shares is conditional on, among
others:
(i) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering on the Main
Board of the Stock Exchange and such approval not subsequently having been
withdrawn or revoked prior to the Listing Date; and
(ii) the obligations of the Hong Kong Underwriters and the Capital Market
Intermediaries under the Hong Kong Underwriting Agreement and the obligations of
the International Underwriters and the Capital Market Intermediaries under the
International Underwriting Agreement becoming unconditional and not having been
terminated in accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the Hong Kong Underwriting
Agreement and/or the International Underwriting Agreement, as the case may be (unless and
to the extent such conditions are validly waived on or before such dates and times) and in any
event not later than 30 days after the date of this prospectus.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the times and dates specified,
the Global Offering will lapse, and the Stock Exchange will be notified immediately. Notice
of the lapse of the Hong Kong Public Offering will be published by our Company on the
website of the Stock Exchange ( www.hkexnews.hk ) and on the website of our Company
(www.baopharma.com ) on the next day following such lapse. In such a situation, all
application monies will be returned, without interest, on the terms set forth in the section
headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of Share
STRUCTURE OF THE GLOBAL OFFERING
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--- page 534 ---
Certificates and Refund of Application Monies” in this prospectus. In the meantime, all
application monies will be held in separate bank account(s) with the receiving banks or other
bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of
Hong Kong).
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the listing of, and
permission to deal in the H Shares to be issued by us pursuant to the Global Offering, and the
H Shares to be converted from the Unlisted Shares.
Except that we have applied for the Listing on the Stock Exchange, no part of our
Company’s share or loan capital is listed on or dealt in on any other stock exchange and no such
listing or permission to deal is being or proposed to be sought in the near future.
H SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made to enable the H Shares to be admitted into
CCASS. If the Stock Exchange grants the listing of, and permission to deal in, the H Shares
and our Company complies with the stock admission requirements of HKSCC, the H Shares
will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the date of commencement of dealings in the H Shares on the Stock
Exchange or any other date HKSCC chooses. Settlement of transactions between participants
of the Stock Exchange is required to take place in CCASS on the second settlement day after
any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Wednesday, December 10, 2025, it is expected that dealings in our H
Shares on the Stock Exchange will commence at 9:00 a.m. on Wednesday, December 10, 2025.
Our H Shares will be traded in board lots of 100 H Shares each and the stock code of the
H Shares is 2659.
H Share certificates issued in respect of the Offer Shares will only become valid evidence
of title at 8:00 a.m. on Wednesday, December 10, 2025 provided that (i) the Global Offering
has become unconditional in all respects and (ii) the right of termination as described in the
section headed “Underwriting — Underwriting Arrangements and Expenses — Hong Kong
Public Offering — Grounds for Termination” in this prospectus has not been exercised.
Investors who trade H Shares prior to the receipt of H Share certificates or prior to the H Share
certificates becoming valid evidence of title do so entirely at their own risk.
STRUCTURE OF THE GLOBAL OFFERING
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IMPORTANT NOTICE TO INVESTORS OF
HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.baopharma.com.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director, a Supervisor or any of his/her close associates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Tuesday, December
2, 2025 and end at 12:00 noon on Friday, December 5, 2025 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.eipo.com.hk Applicants who would like
to receive a physical H
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and
issued in your own
name.
From 9:00 a.m. on
Tuesday, December 2,
2025 to 11:30 a.m on
Friday, December 5,
2025, Hong Kong time.
The latest time for
completing full payment
of application monies
will be 12:00 noon on
Friday, December 5,
2025, Hong Kong time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or custodian
who is a HKSCC
Participant will submit
electronic application
instructions on your
behalf through
HKSCC’s FINI system
in accordance with your
instruction.
Applicants who would not
like to receive a
physical H Share
certificate. Hong Kong
Offer Shares
successfully applied for
will be allotted and
issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to
your designated
HKSCC Participant’s
stock account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this may
vary by broker or
custodian .
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the
last day of the application period to apply for Hong Kong Offer Shares.
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--- page 537 ---
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Kong Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
application instructions are given, you shall be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have declared that you have only given one set of
electronic application instructions for the benefit of the person for whom you are an agent
and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different application reference numbers without effecting
full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the White Form eIPO service, you are deemed to have authorized
the White Form eIPO Service Provider to apply on the terms and conditions in this
prospectus, as supplemented and amended by the terms and conditions of the White Form
eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 538 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
▪ Full name(s) 2 as shown on your
identity document
▪ Identity document’s issuing country or
jurisdiction
▪ Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document;
or
iii. Passport; and
▪ Identity document number
▪ Full name(s)
2 as shown on your
identity document
▪ Identity document’s issuing country or
jurisdiction
▪ Identity document type, with order of
priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate; or
iv. Other equivalent document; and
▪ Identity document number
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail
address, a contact telephone number and a Hong Kong address. Y ou are also required to declare that the
identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
Hong Kong Offer Shares. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint applicants on FINI is capped at 4
1 in accordance with market practice.
1 Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower
cap.
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--- page 539 ---
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Overall Coordinators, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 100 H Shares
Permitted number of Hong
Kong Offer Shares for
application and amount
payable on application/
successful allotment /H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The Offer Price is HK$26.38 per Share. If you are
applying through the HKSCC EIPO channel, you
are required to pre-fund your application based on
the amount specified by your broker or custodian,
as determined based on the applicable laws and
regulations in Hong Kong.
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--- page 540 ---
By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the Offer
Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank
account at the Designated Bank for your broker or
custodian.
If you are applying through the White Form eIPO
service, you may refer to the table below for the
amount payable for the number of Shares you have
selected. Y ou must pay the respective maximum
amount payable on application in full upon
application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
100 2,664.60 2,000 53,292.08 10,000 266,460.42 300,000 7,993,812.69
200 5,329.21 2,500 66,615.11 20,000 532,920.85 400,000 10,658,416.92
300 7,993.81 3,000 79,938.13 30,000 799,381.27 500,000 13,323,021.16
400 10,658.42 3,500 93,261.15 40,000 1,065,841.69 600,000 15,987,625.38
500 13,323.03 4,000 106,584.17 50,000 1,332,302.11 700,000 18,652,229.61
600 15,987.62 4,500 119,907.20 60,000 1,598,762.54 800,000 21,316,833.85
700 18,652.23 5,000 133,230.21 70,000 1,865,222.96 900,000 23,981,438.06
800 21,316.83 6,000 159,876.25 80,000 2,131,683.39 1,000,000 26,646,042.30
900 23,981.44 7,000 186,522.30 90,000 2,398,143.80 1,250,000 33,307,552.88
1,000 26,646.04 8,000 213,168.34 100,000 2,664,604.24 1,500,000 39,969,063.46
1,500 39,969.07 9,000 239,814.38 200,000 5,329,208.45 1,895,600
(1) 50,510,237.78
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
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--- page 541 ---
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “— A. Application for Hong Kong
Offer Shares — 3. Information Required to Apply” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply for any
International Offer Shares.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 542 ---
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Relevant Persons
2, the H Share Registrar and HKSCC will not be
liable for any information and representations not in this prospectus and any
supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes” and “— G. Personal Data — 4. Transfer of personal data” in this
section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “— B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “— C.
Circumstances in which Y ou will not be Allocated Hong Kong Offer Shares” in this
section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
2 Relevant Persons would include the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market Intermediates and any
of their or the Company’s respective directors, supervisors, officers, employees, partners, agents or
representatives and any other parties involved in the Global Offering.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 533 –


--- page 543 ---
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the H Share Registrar or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and (2)
you have due authority to give electronic application instructions on behalf of that
other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 544 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a
“search by ID” function.
24 hours, from 11:00 p.m.
and Tuesday, December
9, 2025 to 12:00
midnight on Monday,
December 15, 2025
(Hong Kong time).
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC EIPO
channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted
to them, among other things, will be
displayed on the “Allotment Results”
page of the White Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.baopharma.com which will provide
links to the above mentioned websites of
the H Share Registrar.
No later than 11:00 p.m.
on Tuesday, December 9,
2025 (Hong Kong time).
Telephone +852 2862 8555 – the allocation results
telephone enquiry line provided by the
H Share Registrar.
between 9:00 a.m. and
6:00 p.m., from
Wednesday, December
10, 2025 to Monday,
December 15, 2025
(Hong Kong time) on a
business day.
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Monday, December 8, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Monday, December 8, 2025 on a 24-hour basis and should report any discrepancies on
allotments to HKSCC as soon as practicable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 545 ---
Allocation Announcement
We expect to announce the results of the level of indications of interest in the
International Offering, the level of applications in the Hong Kong Public Offering and the basis
of allocations of Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.baopharma.com by no later than 11:00 p.m. on
Tuesday, December 9, 2025 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “— A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 536 –


--- page 546 ---
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its designated bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer
Shares applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the Share certificates will be deposited into CCASS as described
below).
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
Share certificates will only become valid evidence of title at 8:00 a.m. on Wednesday,
December 10, 2025 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination described in the section headed “Underwriting” has
not been exercised. Investors who trade Shares prior to the receipt of Share certificates or the
Share certificates becoming valid do so entirely at their own risk.
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--- page 547 ---
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate 3
For physical share
certificates of
1,000,000 or
more Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person: from
H Share Registrar at Shops
1712-1716, 17th Floor,
Hopewell Centre, 183
Queen’s Road East,
Wan Chai, Hong Kong
Share certificate(s) will be
issued in the name of
HKSCC Nominees,
deposited into CCASS and
credited to your designated
HKSCC Participant’s stock
account
Time: from 9:00 a.m. to
1:00 p.m. on Wednesday,
December 10, 2025 (Hong
Kong time)
No action by you is required
If you are an individual, you
must not authorise any other
person to collect for you. If
you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s
chop.
Both individuals and
authorized representatives
must produce, at the time of
collection, evidence of
identity acceptable to the
H Share Registrar.
3 Except in the event of any Severe Weather Signals (as defined below) in force in Hong Kong on the business
day before the Listing Date rendering it impossible for the relevant share certificates to be dispatched to
HKSCC in a timely manner, the Company shall procure the H Share Registrar to arrange for delivery of the
supporting documents and share certificates in accordance with the contingency arrangements as agreed
between them. Y ou may refer to “— E. Severe Weather Arrangements” in this section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 548 ---
White Form eIPO service HKSCC EIPO channel
Note: If you do not collect
your Share certificate(s)
personally within the time
above, it/they will be sent to
the address specified in your
application instructions by
ordinary post at your own
risk
For physical share
certificates of
less than
1,000,000 Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our Share certificate(s) will
be sent to the address
specified in your application
instructions by ordinary post
at your own risk
Time: Tuesday, December 9,
2025
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Wednesday, December 10,
2025
Subject to the arrangement
between you and your
broker or custodian
Responsible
party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
H Share Registrar Y our broker or custodian
Application
monies paid
through single
bank account /H1118/H1118
White Form e-Refund
payment instructions to your
designated bank account
Y our broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and it
Application
monies paid
through
multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post
at your own risk
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 539 –


--- page 549 ---
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Friday, December 5, 2025 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 an “extreme conditions” announcement issued after a super typhoon (“ Extreme
Conditions ”),
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, December 5,
2025.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.baopharma.com of the revised timetable.
If a Severe Weather Signal is hoisted on Tuesday, December 9, 2025, the H Share
Registrar will make appropriate arrangements for the delivery of the share certificates to the
CCASS Depository’s service counter so that they would be available for trading on Wednesday,
December 10, 2025.
If a Severe Weather Signal is hoisted on Wednesday, December 10, 2025: for physical
share certificates of 1,000,000 or more offer shares issued under your own name, you may
collect your Share certificate in person from the H Share Registrar’s office after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Wednesday, December 10,
2025 or on Thursday, December 11, 2025).
If a Severe Weather Signal is hoisted on Tuesday, December 9, 2025: for physical share
certificates of less than 1,000,000 of offer shares issued under your own name, despatch will
be made by ordinary post when the post office re-opens after the Severe Weather Signal is
lowered or cancelled (e.g. in the afternoon of Tuesday, December 9, 2025 or on Wednesday,
December 10, 2025).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 540 –


--- page 550 ---
Prospective investors should be aware that if they choose to receive physical share
certificates issued in their own name, there may be a delay in receiving the share
certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the Shares
will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the date of commencement of dealings in the Shares or any other date
HKSCC chooses. Settlement of transactions between Exchange Participants is required to take
place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 541 –


--- page 551 ---
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the Shares and/or regulators and/or any other purposes to which
applicants and holders of the Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 542 –


--- page 552 ---
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving bank and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar for the purposes of providing its services or
facilities or performing its functions in accordance with its rules or procedures and
operating FINI and CCASS (including where applicants for the Hong Kong Offer
Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 543 –


--- page 553 ---
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate Information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 544 –


--- page 554 ---
The following is the text of a report received from the independent reporting
accountants, Ernst & Young, Certified Public Accountants, Hong Kong, prepared for the
purpose of incorporation in this Prospectus.
Ernst & Young
27/F , One T aikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
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ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHANGHAI BAO PHARMACEUTICALS CO., LTD., CITIC
SECURITIES (HONG KONG) LIMITED AND HAITONG INTERNATIONAL CAPITAL
LIMITED
Introduction
We report on the historical financial information of Shanghai Bao Pharmaceuticals Co.,
Ltd. (the “Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-73,
which comprises the consolidated statements of profit or loss and other comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the years
ended 31 December 2023 and 2024 and the six months ended 30 June 2025 (the “Relevant
Periods”), and the consolidated statements of financial position of the Group and the
statements of financial position of the Company as at 31 December 2023 and 2024 and 30 June
2025 and material accounting policy information and other explanatory information (together,
the “Historical Financial Information”). The Historical Financial Information set out on pages
I-4 to I-73 forms an integral part of this report, which has been prepared for inclusion in the
prospectus of the Company dated 2 December 2025 (the “Prospectus”) in connection with the
initial listing of the shares of the Company on the Main Board of The Stock Exchange of Hong
Kong Limited (the “Stock Exchange”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
set out in note 2.1 to the Historical Financial Information, and for such internal control as the
directors determine is necessary to enable the preparation of the Historical Financial
Information that is free from material misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial
Information in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants (“HKICPA”). This standard requires that we comply with ethical standards and
plan and perform our work to obtain reasonable assurance about whether the Historical
Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 555 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in note 2.1 to the Historical Financial Information, in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of
the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group and the Company
as at 31 December 2023 and 2024 and 30 June 2025, and of the financial performance and cash
flows of the Group for each of the Relevant Periods in accordance with the basis of preparation
set out in note 2.1 to the Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative financial information of the Group which
comprises the consolidated statement of profit or loss and other comprehensive income,
statement of changes in equity and statement of cash flows of the Group for the six months
ended 30 June 2024 and other explanatory information (the “Interim Comparative Financial
Information”). The directors of the Company are responsible for the preparation of the Interim
Comparative Financial Information in accordance with the basis of preparation set out in note
2.1 to the Historical Financial Information. Our responsibility is to express a conclusion on the
Interim Comparative Financial Information based on our review. We conducted our review in
accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the Entity issued by the
HKICPA. A review consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion. Based on our review, nothing has come to our attention that causes
us to believe that the Interim Comparative Financial Information, for the purposes of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 556 ---
Report on matters under the Rules Governing the Listing of Securities on the Stock
Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to note 12 to the Historical Financial Information which states that no dividends
have been paid by the Company in respect of the Relevant Periods.
Ernst & Y oung
Certified Public Accountants
Hong Kong
2 December 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 557 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical
Financial Information is based, were audited by Ernst & Y oung in accordance with Hong Kong
Standards on Auditing (“HKSAs”) issued by the HKICPA (the “Underlying Financial
Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 558 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended 31 December Six months ended 30 June
Notes 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 6,930 6,160 1,491 41,990
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(149) (1,140) (451) (265)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,781 5,020 1,040 41,725
Other income and gains /H1118/H1118/H1118/H1118/H11185 17,597 7,604 2,859 5,899
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(132,545) (250,727) (116,292) (111,045)
Business development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,227) (7,908) (3,465) (2,942)
Administrative expenses /H1118/H1118/H1118/H1118 (46,351) (107,636) (49,208) (46,153)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,566) – (12,435)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (3,655) (4,556) (2,006) (2,666)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 (81) (78) – (55,365)
Share of loss of an associate /H1118 (915) (609) (240) (114)
LOSS BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H11186 (160,396) (364,456) (167,312) (183,096)
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 12 32 3 –
LOSS AND TOTAL
COMPREHENSIVE LOSS
FOR THE YEAR/PERIOD /H1118 (160,395) (364,433) (167,289) (183,096)
Attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118(160,395) (364,433) (167,289) (183,096)
LOSS PER SHARE
A TTRIBUTABLE TO
ORDINARY EQUITY
HOLDERS OF THE
PARENT /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813
Basic and diluted (RMB) /H1118/H1118/H1118/H1118 (3.17) (6.81) (3.21) (3.18)
For the details of pre-IPO investments, please refer to Note 27 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 559 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
30 June
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H111814 531,215 621,681 681,580
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 54,207 55,451 54,269
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 12,565 12,317 11,977
Investment in an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 8,437 7,828 7,714
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 1,311 410 32,910
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118607,735 697,687 788,450
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 8,072 4,715 5,362
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 2,000 141 119
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 34,402 51,366 61,080
Restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 – 85,200 80,284
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 321,671 524,158 453,392
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118366,145 665,580 600,237
CURRENT LIABILITIES
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 80,786 125,102 212,946
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H111824 65,111 69,565 73,219
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 924 1,564 1,705
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,821 196,231 287,870
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,324 469,349 312,367
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118827,059 1,167,036 1,100,817
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H111824 44,983 132,290 170,201
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 97 1,840 1,101
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 2 3––
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 32,830 37,030 39,930
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,933 171,160 211,232
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,126 995,876 889,585
EQUITY
Equity attributable to owners of
the parent
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 52,046 57,259 57,614
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 697,080 938,617 831,971
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,126 995,876 889,585
For the details of pre-IPO investments, please refer to Note 27 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 560 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2023
Attributable to owners of the parent
Notes
Share
capital
Share
premium*
Accumulated
losses* Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,402 1,002,326 (263,531) 787,197
Loss and total comprehensive
loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (160,395) (160,395)
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827, 28 3,644 118,680 – 122,324
Conversion into a joint stock
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – (120,695) 120,695 –
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H111852,046 1,000,311 (303,231) 749,126
Y ear ended 31 December 2024
Attributable to owners of the parent
Notes
Share
capital
Share
premium*
Share-
based
payment
reserve*
Accumulated
losses* Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024 /H1118/H1118/H1118/H1118/H111852,046 1,000,311 – (303,231) 749,126
Loss and total
comprehensive loss for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (364,433) (364,433)
Capital injection /H1118/H1118/H1118/H1118/H1118/H111827, 28 5,213 452,818 – – 458,031
Equity-settled share-
based payment expense 30 – – 153,152 – 153,152
At 31 December 2024 /H1118/H1118/H1118 57,259 1,453,129 153,152 (667,664) 995,876
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 561 ---
Six months ended 30 June 2024
Attributable to owners of the parent
Note
Share
capital
Share
premium
Share-
based
payment
reserve
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024 /H1118/H1118/H1118/H1118/H111852,046 1,000,311 – (303,231) 749,126
Loss and total
comprehensive loss for
the period (unaudited) /H1118 – – – (167,289) (167,289)
Equity-settled share-
based payment expense
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – 70,097 – 70,097
At 30 June 2024
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,046 1,000,311 70,097 (470,520) 651,934
Six months ended 30 June 2025
Attributable to owners of the parent
Notes
Share
capital
Share
premium*
Share-
based
payment
reserve*
Accumulated
losses* Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H111857,259 1,453,129 153,152 (667,664) 995,876
Loss and total
comprehensive loss for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (183,096) (183,096)
Capital injection /H1118/H1118/H1118/H1118/H1118/H111827, 28 355 29,645 – – 30,000
Equity-settled share-
based payment expense 30 – – 46,805 – 46,805
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H111857,614 1,482,774 199,957 (850,760) 889,585
* The reserve accounts comprised the consolidated reserves of RMB697,080,000, RMB938,617,000 and
RMB831,971,000 as at 31 December 2023 and 2024 and 30 June 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 562 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December Six months ended 30 June
Notes 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS FROM
OPERA TING ACTIVITIES
Loss before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(160,396) (364,456) (167,312) (183,096)
Adjustments for:
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (7,896) (4,646) (1,796) (3,591)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 3,655 4,556 2,006 2,666
Equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – 153,152 70,097 46,805
Foreign exchange differences,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,969) (1,192) (470) 282
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 19,086 28,265 13,971 15,099
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 1,667 1,638 833 851
Amortisation of other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 1,681 2,233 922 1,044
Loss on disposal of items of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 27 78 – 3
Share of loss of an associate /H1118/H1118/H111817 915 609 240 114
(144,230) (179,763) (81,509) (119,823)
(Increase)/decrease in trade
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,000) 1,859 (433) 22
Increase in prepayments, other
receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,257) (16,984) (6,056) (7,093)
(Increase)/decrease in inventories /H1118 (632) 3,357 3,421 (647)
Increase in deferred income /H1118/H1118/H1118/H1118/H1118 400 3,200 – 200
Increase/(decrease) in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118 11,610 44,104 (9,981) 18,644
Increase in restricted deposits /H1118/H1118/H111822 – (80,200) (80,109) (84)
Cash used in operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118(148,109) (224,427) (174,667) (108,781)
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,896 4,646 1,796 3,591
Net cash flows used in operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(140,213) (219,781) (172,871) (105,190)
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 563 ---
Y ear ended 31 December Six months ended 30 June
Notes 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchases of items of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(136,365) (118,274) (59,453) (37,891)
(Placement)/withdrawal of
restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,000) – 5,000
Proceeds from disposal of items of
property, plant and equipment /H1118/H1118 – 154 90 371
Receipt of government grants for
property, plant and equipment /H1118/H1118 – 1,000 – 2,700
Net cash flows used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(136,365) (122,120) (59,363) (29,820)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issue of shares /H1118/H1118/H1118 120,251 460,104 – 30,000
New interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,467 161,660 59,600 87,291
Repayment of interest-bearing
bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(39,800) (69,957) (10,567) (45,750)
Principal portion of lease
payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 (1,690) (1,639) (847) (836)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,295) (5,512) (2,561) (3,582)
Payment of listing expenses /H1118/H1118/H1118/H1118/H1118 – (1,460) – (2,597)
Net cash flows generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,933 543,196 45,625 64,526
NET (DECREASE)/INCREASE
IN CASH AND
CASH EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118 (153,645) 201,295 (186,609) (70,484)
Cash and cash equivalents at
beginning of year/period /H1118/H1118/H1118/H1118/H1118 472,347 321,671 321,671 524,158
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,969 1,192 470 (282)
CASH AND CASH
EQUIV ALENTS A T END OF
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 321,671 524,158 135,532 453,392
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 564 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
30 June
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 509,294 603,908 665,233
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 53,555 52,881 52,039
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 10,619 10,659 10,464
Investment in an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 8,437 7,828 7,714
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 490,451 527,536 538,840
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 1,311 26,771 60,040
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,073,667 1,229,583 1,334,330
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 7,015 4,205 4,747
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 2,279 141 1,274
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 42,166 159,366 153,984
Restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 – 78,700 73,700
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 306,494 410,620 361,052
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,954 653,032 594,757
CURRENT LIABILITIES
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 54,432 70,755 130,440
Loans from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 8,009 – –
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 65,111 69,565 73,219
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 333 541 549
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,885 140,861 204,208
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230,069 512,171 390,549
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,303,736 1,741,754 1,724,879
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 44,983 132,290 170,201
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 – 277 –
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 23 – –
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 26,830 30,030 32,930
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,836 162,597 203,131
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,231,900 1,579,157 1,521,748
EQUITY
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 52,046 57,259 57,614
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 1,179,854 1,521,898 1,464,134
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,231,900 1,579,157 1,521,748
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 565 ---
II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
The Company was established in the People’s Republic of China (the “PRC”) on 16 December 2019, as a
limited liability company under the Companies Law of the PRC. The registered office of the Company is located at
No. 28 Luoxin Road, Baoshan District, Shanghai. The Company was converted into a joint stock company on 26 July
2023.
During the Relevant Periods, the Company and its subsidiaries were involved in the research and development
of pharmaceutical products.
As at the date of this report, the Company had direct and indirect interests in its subsidiaries, all of which are
private limited liability companies, the particulars of which are as follows:
Name
Place and date of
registration and
place of operations
Nominal value of
issued ordinary/
registered share
capital
Percentage of
equity attributable
to the Company
Principal activitiesDirect Indirect
Suzhou Centergene
Pharmaceuticals Co., Ltd.*
(note a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC/Mainland
China
24 July 2014
RMB64,575,476 66.18% 33.82% Research and
development of
pharmaceutical
products
Suzhou Kangju Biotechnology
Co., Ltd.* (note a) /H1118/H1118/H1118/H1118/H1118/H1118
PRC/Mainland
China
15 August 2011
RMB10,000,000 100.00% – Research and
development of
pharmaceutical
products
Hainan Baoji Biotechnology
Co., Ltd.* (note a) /H1118/H1118/H1118/H1118/H1118/H1118
PRC/Mainland
China
8 February
2022
RMB1,000,000 100.00% – Research and
development of
pharmaceutical
products
Bao Pharmaceuticals Hong
Kong Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong,
China
17 April 2025
HKD10,000 100.00% – Research and
development of
pharmaceutical
products
Note:
a. The statutory financial statements of these entities for the years ended 31 December 2023 and 2024 prepared
in accordance with PRC generally accepted accounting principles and regulations for Business Enterprises
were audited by RSM China, certified public accountants registered in the PRC.
* The English names of these companies represent the best effort made by the directors of the Company to
translate the Chinese names as these companies have not been registered with any official English names.
2.1 BASIS OF PREPARATION
For ordinary shares issued to pre-IPO investors, pursuant to the relevant supplemental agreement and
shareholders’ agreements entered into between the Company and the relevant shareholders, certain special rights
granted by the Company, including redemption rights, liquidation preferences rights and anti-dilution rights, are void
ab initio as described in note 27 to this report, having taking into account the legal and regulatory framework of the
Company’s jurisdiction and the governing law of the supplementary agreements, the directors considered that it is
appropriate to present the pre-IPO Investments as equity throughout the Relevant Periods. For the details of financial
impacts, see note 27 of this report.
The Historical Financial Information has been prepared in accordance with IFRS Accounting Standards, which
comprise all standards and interpretations approved by the International Accounting Standards Board (the “IASB”).
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 566 ---
All IFRS Accounting Standards effective for the accounting period commencing from 1 January 2025, together
with the relevant transitional provisions, have been consistently applied by the Group in the preparation of the
Historical Financial Information throughout the Relevant Periods and in the period covered by the Interim
Comparative Financial Information.
The Historical Financial Information has been prepared under the historical cost convention. These financial
statements are presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand except when
otherwise indicated.
Basis of consolidation
The Historical Financial Information includes the financial statements of the Company and its subsidiaries
(collectively referred to as the “Group”) for the Relevant Periods. A subsidiary is an entity (including a structured
entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through
its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities
of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the Company has
less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control described above. A change in the ownership interest of a
subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
any non-controlling interest and the exchange fluctuation reserve; and recognises the fair value of any investment
retained and any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised
in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis
as would be required if the Group had directly disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and amended IFRS Accounting Standards, that have been issued
but are not yet effective, in the Historical Financial Information. The Group intends to apply these new and amended
IFRS Accounting Standards, if applicable, when they become effective.
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sale or Contribution of Assets between an Investor
and its Associate or Joint V enture
1
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial
Statements 2
IFRS 19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability:
Disclosures 2
APPENDIX I ACCOUNTANTS’ REPORT
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Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Amendments to the Classification and Measurement
of Financial Instruments 3
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent
Electricity 3
Annual Improvements to IFRS Accounting
Standards – V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10
and IAS 7 3
1 No mandatory effective date yet determined but available for adoption
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 Effective for annual periods beginning on or after 1 January 2026
IFRS 18 replaces IAS 1 Presentation of Financial Statements . While a number of sections have been brought
forward from IAS 1 with limited changes, IFRS 18 introduces new requirements for presentation within the statement
of profit or loss and other comprehensive income, including specified totals and subtotals. Entities are required to
classify all income and expenses within the statement of profit or loss and other comprehensive income into one of
the five categories: operating, investing, financing, income taxes and discontinued operations and to present two new
defined subtotals. It also requires disclosures about management-defined performance measures in a single note and
introduces enhanced requirements on the grouping (aggregation and disaggregation) and the location of information
in both the primary financial statements and the notes. Some requirements previously included in IAS 1 are moved
to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors , which is renamed as IAS 8 Basis of
Preparation of Financial Statements . As a consequence of the issuance of IFRS 18, limited, but widely applicable,
amendments are made to IAS 7 Statement of Cash Flows , IAS 33 Earnings per Share and IAS 34 Interim Financial
Reporting . In addition, there are minor consequential amendments to other IFRS Accounting Standards. IFRS 18 and
the consequential amendments to other IFRS Accounting Standards are effective for annual periods beginning on or
after 1 January 2027 with earlier application permitted. Retrospective application is required. The Group is currently
analysing the new requirements and assessing the impact of IFRS 18 on the presentation and disclosure of the Group’s
financial statements. The application of IFRS 18 is not expected to have material impact on the financial position of
the Group but is expected to affect the presentation of the statement of profit or loss and other comprehensive income
and statement of cash flows and additional disclosure will be included in the financial statements. Except for IFRS
18, the directors of the Company anticipate that the application of these new and amended IFRS Accounting
Standards will have no material impact on the Group’s financial performance and financial position in the foreseeable
future.
2.3 MATERIAL ACCOUNTING POLICY INFORMATION
Investments in associates
An associate is an entity in which the Group has a long-term interest of generally not less than 20% of the
equity voting rights and over which it has significant influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The Group’s investments in associates are stated in the consolidated statements of financial position at the
Group’s share of net assets under the equity method of accounting, less any impairment losses.
The Group’s share of the post-acquisition results and other comprehensive income of associates is included in
the consolidated statements of profit or loss and other comprehensive income. In addition, when there has been a
change recognised directly in the equity of the associate, the Group recognises its share of any changes, when
applicable, in the consolidated statements of changes in equity. Unrealised gains and losses resulting from
transactions between the Group and its associates are eliminated to the extent of the Group’s investments in the
associates, except where unrealised losses provide evidence of an impairment of the assets transferred. Goodwill
arising from the acquisition of associates is included as part of the Group’s investments in associates.
APPENDIX I ACCOUNTANTS’ REPORT
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Fair value measurement
The Group measures its financial assets at fair value at the end of each reporting period. Fair value is the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the
absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most
advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required (other
than inventories and deferred tax assets), the asset’s recoverable amount is estimated. An asset’s recoverable amount
is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of disposal, and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets, in which case the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, a portion of the carrying amount of a corporate asset (e.g.,
a headquarters building) is allocated to an individual cash-generating unit if it can be allocated on a reasonable and
consistent basis or, otherwise, to the smallest group of cash-generating units.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. An
impairment loss is charged to profit or loss in the period in which it arises in those expense categories consistent with
the function of the impaired asset.
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An assessment is made at the end of each reporting period as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable
amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there
has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher
than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment
loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss
in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated
depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase
price and any directly attributable costs of bringing the asset to its working condition and location for its intended
use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs
and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the
recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the
asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at
intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them
accordingly.
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 570 ---
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and
equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as
follows:
Category Principal annual rate
Decoration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.00%-33.33%
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.79%
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50%-31.67%
Electronic equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50%-31.67%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.50%-31.67%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.00%
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is
allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives
and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.
An item of property, plant and equipment including any significant part initially recognised is derecognised
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
or retirement recognised in profit or loss in the year the asset is derecognised is the difference between the net sales
proceeds and the carrying amount of the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is reclassified
to the appropriate category of property, plant and equipment when completed and ready for use.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The useful lives of intangible
assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over
the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at each financial year end.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an
indefinite life is reviewed annually to determine whether the indefinite life assessment continues to be supportable.
If not, the change in the useful life assessment from indefinite to finite is accounted for on a prospective basis.
Software
Purchased software is stated at cost less any impairment losses and is amortised on the straight-line basis over
its estimated useful lives of 3 years to 10 years.
Patents and licences
Purchased patents and licences are stated at cost less any impairment losses and are amortised on the
straight-line basis over their estimated useful lives of 10 years.
Research and development costs
All research costs are charged to profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can
demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its
intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete the project and the ability to measure reliably the expenditure during the
development. Product development expenditure which does not meet these criteria is expensed when incurred.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 571 ---
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less accumulated depreciation and any
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at
or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Properties and office premises /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 to 4 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for
termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The
variable lease payments that do not depend on an index or a rate are recognised as an expense in the period
in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments
resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying
asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of office premises
(that is those leases that have a lease term of 12 months or less from the commencement date and do not contain
a purchase option).
When the Group enters into a lease in respect of a low-value asset, the Group decides whether to
capitalise the lease on a lease-by-lease basis.
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a
straight-line basis over the lease term.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 572 ---
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each
of its leases as either an operating lease or a finance lease.
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of
an asset are classified as operating leases. Rental income is accounted for on a straight-line basis over the lease term
and is included in revenue in profit or loss due to its operating nature. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term
on the same basis as rental income.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient of not
adjusting the effect of a significant financing component, the Group initially measures a financial asset at its fair
value plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are
measured at the transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue
recognition” below.
In order for a financial asset to be classified and measured at amortised cost or fair value through other
comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”)
on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured
at fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held
within a business model with the objective to hold financial assets in order to collect contractual cash flows, while
financial assets classified and measured at fair value through other comprehensive income are held within a business
model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not
held within the aforementioned business models are classified and measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally established by
regulation or convention in the marketplace are recognised on the trade date, that is, the date that the Group commits
to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and are
subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s consolidated statements of financial position) when:
 the rights to receive cash flows from the asset have expired; or
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 573 ---
 the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a “pass-through”
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When
it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of
the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement.
In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or
other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the Group compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and considers reasonable and supportable information that is available
without undue cost or effort, including historical and forward-looking information. The Group considers that there
has been a significant increase in credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account
any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade receivables which apply the simplified
approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month
ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition
but that are not credit-impaired financial assets and for which the loss allowance is measured
at an amount equal to lifetime ECLs
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 574 ---
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or
originated credit-impaired) and for which the loss allowance is measured at an amount equal
to lifetime ECLs
Simplified approach
For trade receivables that do not contain a significant financing component or when the Group applies the
practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified
approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but
instead recognises a loss allowance based on lifetime ECLs at the end of each reporting date. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.
Classification as equity and financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of financial liability and equity instrument.
A financial liability is any liability that is (a) a contractual obligation (i) to deliver cash or another financial
asset to another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions
that are potentially unfavourable to the entity; or (b) a contract that will or may be settled in the entity’s own equity
instruments and is: (i) a non derivative for which the entity is or may be obliged to deliver a variable number of the
entity’s own equity instruments; or (ii) a derivative that will or may be settled other than by the exchange of a fixed
amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as loans and borrowings, or as payables, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Group’s financial liabilities include other payables and accruals and interest-bearing bank borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (other payables and borrowings)
After initial recognition, other payables and interest-bearing borrowings are subsequently measured at
amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which
case they are stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as
well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance
costs in profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or
expires.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 575 ---
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
a derecognition of the original liability and a recognition of a new liability, and the difference between the respective
carrying amounts is recognised in profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statements
of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in and
first-out basis. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to
completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statements of financial position comprise cash on hand and at banks, and
short-term highly liquid deposits with a maturity of generally within three months that are readily convertible into
known amounts of cash, subject to an insignificant risk of changes in value and held for the purpose of meeting
short-term cash commitments.
For the purpose of the consolidated statements of cash flows, cash and cash equivalents comprise cash on hand
and at banks, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form
an integral part of the Group’s cash management.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event
and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable
estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the
end of each reporting period of the future expenditures expected to be required to settle the obligation. The increase
in the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss
is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of
each reporting period, taking into consideration interpretations and practices prevailing in the countries in which the
Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of each reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries and an associate,
when the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 576 ---
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carryforward of unused tax credits and
unused tax losses can be utilised, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences; and
 in respect of deductible temporary differences associated with investments in subsidiaries and an
associate, deferred tax assets are only recognised to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of each reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right
to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected
to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be
received, and all attaching conditions will be complied with. When the grant relates to an expense item, it is
recognised as income on a systematic basis over the periods that the costs, for which it is intended to compensate,
are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to
profit or loss over the expected useful life of the relevant asset by equal annual instalments.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is transferred to the
customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those
goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to
which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable
consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue
reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the
variable consideration is subsequently resolved.
(a) Sale of materials
Revenue from the sale of materials is recognised at the point in time when control of the products is
transferred to the customer upon receipt of the goods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 577 ---
(b) Technical services
The Group provides technical support to the consumers for the joint development of subcutaneous
formulations in combination with the Group’s drugs. The Group recognises revenue from technical services at
the point in time when the customer obtains technical support, limited to the consideration that is not
constrained, as the Group does not perform any activities that significantly affect the technology to which the
customer has rights. Non-refundable payments received before all of the relevant criteria for revenue
recognition are satisfied are recorded as contract liabilities.
(c) Licensing revenue
The Group’s licensing revenue may contain more than one performance obligation, including grants of
licences to the intellectual property rights and other deliverables. As part of the accounting for these
arrangements, the Group must develop assumptions that require judgment to determine the stand-alone selling
price for each performance obligation identified in the contract. In developing the stand-alone selling price for
a performance obligation, the Group considers competitor pricing for a similar or identical product, market
awareness of and perception of the product, expected product life and current market trends. In general, the
consideration allocated to each performance obligation is recognized when the respective obligation is
satisfied on acceptance of a good or a service, limited to the consideration that is not constrained. Payments
received before all of the relevant criteria for revenue recognition are satisfied are recorded as contract
liabilities.
Licences of intellectual property: Upfront payments for licensing the Group’s intellectual property are
evaluated to determine if the licence is distinct from the other performance obligations identified in the
arrangement. For licences determined to be distinct, the Group recognizes revenues from up-front fees
allocated to the licence at a point in time, when the licence is transferred to the licensee and the licensee is
reasonably able to use and benefit from the licence.
Milestone payments: Regulatory milestones are fully constrained until the period in which those
regulatory approvals are achieved due to the inherent uncertainty of the approval process. Regulatory
milestones are included in the transaction price in the period in which regulatory approval is obtained.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on
the level of sales, and the licence is deemed to be the predominant item to which the royalties relate, the Group
recognizes revenue at the later of (i) the first occurrence of the specified sales milestone, and (ii) when the
performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially
satisfied).
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter
period, when appropriate, to the net carrying amount of the financial asset.
Contract liabilities
A contract liability is recognised when a payment is received, or a payment is due (whichever is earlier) from
a customer before the Group transfers the related services. Contract liabilities are recognised as revenue when the
Group performs under the contract (i.e., transfers control of the related services to the customer).
Contract costs
Other than the costs which are capitalised as inventories, property, plant and equipment and intangible assets,
costs incurred to fulfil a contract with a customer are capitalised as an asset if all of the following criteria are met:
(a) The costs relate directly to a contract or to an anticipated contract that the entity can specifically
identify.
(b) The costs generate or enhance resources of the entity that will be used in satisfying (or in continuing
to satisfy) performance obligations in the future.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 578 ---
(c) The costs are expected to be recovered.
The capitalised contract costs are amortised and charged to the statements of profit or loss on a systematic basis
that is consistent with the transfer to the customer of the goods or services to which the asset relates. Other contract
costs are expensed as incurred.
Share-based payments
The Company operates a restricted share unit scheme (“RSU”). Employees (including directors) of the Group
receive remuneration in the form of share-based payments, whereby employees render services in exchange for equity
instruments (“equity-settled transactions”).
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date
at which they are granted. The fair value of equity-settled share-based payment granted was estimated as at the date
of grant using recent transaction price, taking into account the terms and conditions upon which the RSUs were
granted.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled.
The cumulative expense recognised for equity-settled transactions at each reporting period until the vesting date
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in
the cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate
of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the
grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead
to an immediate expensing of an award unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service conditions have not
been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are
treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any
modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee
as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award is recognised immediately.
Other employee benefits
Pension scheme
The employees of the Group which operate in Mainland China are required to participate in a central pension
scheme operated by the local municipal government. The subsidiaries operating in Mainland China are required to
contribute a certain percentage of its payroll costs to the central pension scheme. The contributions are charged to
profit or loss as they become payable in accordance with the rules of the central pension scheme.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e.,
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as
part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially
ready for their intended use or sale. All other borrowing costs are expensed in the period in which they are incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 579 ---
Events after the reporting period
If the Group receives information after the reporting period, but prior to the date of authorisation for issue,
about conditions that existed at the end of the reporting period, it will assess whether the information affects the
amounts that it recognises in its financial statements. The Group will adjust the amounts recognised in its financial
statements to reflect any adjusting events after the reporting period and update the disclosures that relate to those
conditions in light of the new information. For non-adjusting events after the reporting period, the Group will not
change the amounts recognised in its financial statements, but will disclose the nature of the non-adjusting events and
an estimate of their financial effects, or a statement that such an estimate cannot be made, if applicable.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency. Each
entity in the Group uses RMB as its functional currency and items included in the financial statements of each entity
are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are
initially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange
ruling at each reporting period. Differences arising on settlement or translation of monetary items are recognised in
profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss
on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised
in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss,
respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on the
derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date of
initial transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability
arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines
the transaction date for each payment or receipt of the advance consideration.
The resulting exchange differences are recognised in other comprehensive income and accumulated in the
exchange fluctuation reserve, except to the extent that the differences are attributable to non-controlling interests. On
disposal of a foreign operation, the cumulative amount in the reserve relating to that particular foreign operation is
recognised in profit or loss.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or
liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements
apart from those involving estimations which have the most significant effect on the amounts recognised in the
Historical Financial Information.
Research and development costs
All research costs are charged to profit or loss as incurred. Expenses incurred on each pipeline to develop new
products are capitalised and deferred in accordance with the accounting policy for research and development
expenses in note 2.3 to the Historical Financial Information. Determining the amounts to be capitalised requires
management to make judgements on the technical feasibility of existing pipelines to be successfully commercialised
and bring economic benefits to the Company.
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 580 ---
Deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that
it is probable that taxable profit will be available against which the deductible temporary differences and the unused
tax losses can be utilised. Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and level of future taxable profits, together with future
tax planning strategies.
The Group has tax losses of RMB810,058,000, RMB1,168,193,000 and RMB1,320,780,000 as at 31 December
2023 and 2024 and 30 June 2025 carried forward, respectively. These losses related to the Company and subsidiaries
that have a history of losses, have not expired, and may not be used to offset taxable income elsewhere in the Group.
The Company and the subsidiaries have neither any taxable temporary difference nor any tax planning opportunities
available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has
determined that it cannot recognise deferred tax assets on the tax losses carried forward. Further details are included
in note 25 to the Historical Financial Information.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at each reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are described below.
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an incremental
borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay
to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value
to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group “would have
to pay”, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter
into financing transactions) or when it needs to be adjusted to reflect the terms and conditions of the lease (for
example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable
inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such
as the subsidiary’s stand-alone credit rating).
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets (including the
right-of-use assets) at the end of each reporting period. Indefinite life intangible assets are tested for impairment
annually and at other times when such an indicator exists. Other non-financial assets are tested for impairment when
there are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value
of an asset or a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs
of disposal and its value in use. The calculation of the fair value less costs of disposal is based on available data from
binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental
costs for disposing of the asset. When value in use calculations is undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to
calculate the present value of those cash flows.
Estimation of provision for potential litigation claim
The Group considered the current process of the legal cases and the legal opinion of lawyers and exercises
considerable judgement in measuring and recognising provisions and contingent liabilities related to potential or
outstanding legal claims. Judgement is necessary in assessing the likelihood that a liability will arise, and to quantify
the possible range of the final settlement. Provisions are recognised when the Group has a present obligation, the loss
is considered probable and can be reliably estimated. Because of the inherent uncertainties in this evaluation process,
actual losses may be different from the originally estimated provision. These estimates are subject to change as new
information becomes available, primarily with the support of in-house or external legal counsels.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 581 ---
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group has only one reportable operating segment, which is research and
development of pharmaceutical products. Since this is the only reportable operating segment of the Group, no further
operating segment analysis thereof is presented.
Geographical information
During the Relevant Periods, nearly all of the Group’s revenue was derived from customers located in
Mainland China and all of the Group’s non-current assets were located in Mainland China, and therefore no
geographical segment information is presented in accordance with IFRS 8 Operating Segments .
Information about major customers
Revenue from each of the major customers, which accounted for 10% or more of the Group’s revenue during
the Relevant Periods and the six months ended 30 June 2024, is as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,830 * 345 *
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,00 0***
Customer C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,70 1***
Customer D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 2,830 * *
Customer E /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 1,279 442 *
Customer F /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 1,204 657 *
Customer G /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * * 40,002
* Transactions with these customers did not account for 10% or more of the Group’s revenue.
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts with
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,930 6,160 1,491 41,990
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 582 ---
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Types of goods and services
Sales of materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,099 3,138 1,491 983
Technical services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,831 3,022 – 1,005
Licensing revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 40,002
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,930 6,160 1,491 41,990
Timing of revenue recognition
Goods transferred at a point in time /H1118 2,099 3,138 1,491 983
Services transferred at a point in
time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,831 3,022 – 41,007
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,930 6,160 1,491 41,990
The following table shows the amounts of revenue recognised in each of the Relevant Periods and the six
months ended 30 June 2024 that were included in the contract liabilities at the beginning of each of the Relevant
Periods and the six months ended 30 June 2024 and recognised from performance obligations satisfied in previous
periods:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts with
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 40,011
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sale of materials
The performance obligation is satisfied upon delivery of the materials and payment is generally due
within 30 days from the date of billing.
Technical services
The performance obligation is satisfied when the services are rendered, and payment is generally due
within 30 days upon completion of the services and customer acceptance.
During the Relevant Periods and the six months ended 30 June 2024, the Group entered into
collaboration agreements with pharmaceutical companies so as to jointly develop the subcutaneous
formulations in combination with the Group’s drugs. In general, the consideration allocated to each
performance obligation is recognized when the respective obligation is satisfied on acceptance of a service.
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 583 ---
Licensing revenue
During the Relevant Periods, the Group entered into a licence agreement with pharmaceutical companies
(the “Licensee”) so as to develop, manufacture and commercialise certain biologic drugs developed by the
Group in certain territories. In general, the consideration allocated to each performance obligation is
recognized when the respective obligation is satisfied on acceptance of a good or a service. The licence
agreement was terminated on 28 July 2025 as specified in the termination notice provided by the Licensee on
29 April 2025. Following this termination, the Group was not obliged to return any payments received
(including the first tranche of upfront payments received in 2024) and recognised the upfront payment as
licensing revenue upon receipt of the termination notice in accordance with the licence agreement.
Under the practical expedient allowed by IFRS 15, the Group does not disclose the value of unsatisfied
performance obligation.
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Other income
Government grants* /H1118/H1118/H1118/H1118/H1118/H1118/H11186,320 1,766 593 1,894
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H11187,896 4,646 1,796 3,591
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118412 – – 414
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,628 6,412 2,389 5,899
Gains
Foreign exchange gains, net /H1118/H1118 2,969 1,192 470 –
Total other income and gains /H1118/H1118 17,597 7,604 2,859 5,899
* The government grants have been received from the PRC local government authorities for
supporting the Group’s operating activities. There are no unfulfilled conditions relating to these
government grants.
6. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Y ear ended 31 December Six months ended 30 June
Notes 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cost of inventories sold* /H1118/H1118/H1118 149 929 451 265
Cost of services provided* /H1118/H1118 – 2 1 1––
Depreciation of property,
plant and equipment** /H1118/H1118/H1118/H111814 19,086 28,265 13,971 15,099
Depreciation of right-of-use
assets*** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 1,667 1,638 833 851
Amortisation of other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H111816 1,681 2,233 922 1,044
Auditor’s remuneration /H1118/H1118/H1118/H1118/H1118 1,961 550 286 47
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 5,566 – 12,435
Lease payments not included
in the measurement of lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 93 166 77 51
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 584 ---
Y ear ended 31 December Six months ended 30 June
Notes 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Employee benefit expense
(excluding directors’ and
chief executive’s
remuneration (note 9) ):
Wages and salaries /H1118/H1118/H1118/H1118/H1118/H1118 48,330 62,583 28,696 36,330
Pension scheme
contributions (defined
contribution scheme) /H1118/H1118/H1118 14,483 17,547 8,129 10,306
Equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118 – 56,524 26,071 14,040
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,813 136,654 62,896 60,676
Foreign exchange differences,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,969) (1,192) (470) 282
Loss on disposal of items of
property, plant and
equipment**** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 27 78 – 3
Share of loss of an associate /H1118 915 609 240 114
Provision for losses on
litigation**** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – 55,080
* Cost of inventories sold and cost of services provided include expenses relating to depreciation of
property, plant and equipment and staff costs, which are also included in the respective total amounts
disclosed separately above for each of these types of expenses.
** The amount of the depreciation of property, plant and equipment is included in “Cost of sales”,
“Research and development expenses”, “Business development expenses” and “Administrative
expenses” in the consolidated statements of profit or loss and other comprehensive income.
*** The amount of the depreciation of right-of-use assets is included in “Research and development
expenses” and “Administrative expenses” in the consolidated statements of profit or loss and other
comprehensive income.
**** Included in “Other expenses” in the consolidated statements of profit or loss and other comprehensive
income.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on bank borrowings /H1118/H1118/H1118/H1118/H1118/H11184,321 5,502 2,539 3,556
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111873 68 35 50
Total interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,394 5,570 2,574 3,606
Less: Interest capitalised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(739) (1,014) (568) (940)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,655 4,556 2,006 2,666
For the details of pre-IPO investments, please refer to Note 27 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 585 ---
8. OTHER EXPENSES
An analysis of other expenses is as follows:
Y ear ended 31 December Six months ended 30 June
Note 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Foreign exchange loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 2 8 2
Provision for losses on litigation /H1118/H1118/H1118/H111823 – – – 55,080
Loss on disposal of items of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 78 – 3
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 4–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 78 – 55,365
9. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION
Directors’ and chief executive’s remuneration for the Relevant Periods and the six months ended 30 June 2024
is as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100 322 50 300
Other emoluments:
Salaries, allowances and benefits
in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,894 2,942 1,470 2,192
Pension scheme contributions and
social welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375 386 193 265
Performance related bonuses /H1118/H1118/H1118/H1118 699 1,583 792 1,317
Equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 96,628 44,026 32,765
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,968 101,539 46,481 36,539
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,068 101,861 46,531 36,839
During the year ended 31 December 2024, certain directors were granted RSUs, in respect of their services to
the Group, under the share incentive plan of the Company, further details of which are set out in note 30 to the
Historical Financial Information. The fair value of such RSUs, which has been recognised in profit or loss over the
vesting period, was determined as at the date of grant and the amount included in the Historical Financial Information
for the Relevant Periods and the six months ended 30 June 2024 is included in the above directors’ and chief
executive’s remuneration disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 586 ---
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods and the six months ended
30 June 2024 were as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Dr. Ju Dianwen (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–6 8 –7 5
Dr. Zeng Fanyi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–6 8 –7 5
Mr. Cai Zhongxi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–6 8 –7 5
Mr. Zhang Senquan (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 6 6
Mr. Cao Xiaoguang (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6 8–9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 272 – 300
Notes:
(i) Dr. Ju Dianwen, Dr. Zeng Fanyi and Mr. Cai Zhongxi were appointed as independent non-executive
directors of the Company on 18 July 2024.
(ii) Mr. Zhang Senquan was appointed as an independent non-executive director of the Company on 21
January 2025.
(iii) Mr. Cao Xiaoguang was appointed as an independent non-executive director of the Company on 18 July
2024 and resigned as an independent non-executive director of the Company on 21 January 2025 due
to the devotion of more time in pursuing other personal commitments.
There were no other emoluments payable to the independent non-executive directors during the Relevant
Periods and the six months ended 30 June 2024.
(b) Executive directors, non-executive directors and the chief executive
Fees
Salaries,
allowances
and benefits
in kind
Pension
scheme
contributions
Performance
related
bonuses
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended
31 December 2023
Executive directors:
Dr. Liu Y anjun /H1118/H1118/H1118/H1118/H1118– 1,578 143 150 – 1,871
Ms. Wang Zheng /H1118/H1118/H1118/H1118 – 856 143 360 – 1,359
Mr. Tan Jingwei /H1118/H1118/H1118/H1118/H1118– 460 89 189 – 738
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,894 375 699 – 3,968
Non-executive directors:
Mr. Liu Tao (i) /H1118/H1118/H1118/H1118/H11181 0 0–––– 1 0 0
Ms. Zheng Juan (iv) /H1118/H1118 ––––––
Mr. Diao Juanhuan /H1118/H1118/H1118 ––––––
Mr. Lin, Jung-Chin (i) /H1118 ––––––
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0–––– 1 0 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100 2,894 375 699 – 4,068
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 587 ---
Fees
Salaries,
allowances
and benefits
in kind
Pension
scheme
contributions
Performance
related
bonuses
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended
31 December 2024
Executive directors:
Dr. Liu Y anjun /H1118/H1118/H1118/H1118/H1118– 1,605 145 650 77,864 80,264
Ms. Wang Zheng /H1118/H1118/H1118/H1118 – 874 145 560 12,504 14,083
Mr. Tan Jingwei /H1118/H1118/H1118/H1118/H1118– 463 96 373 6,260 7,192
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,942 386 1,583 96,628 101,539
Non-executive directors:
Mr. Liu Tao (i) /H1118/H1118/H1118/H1118/H11185 0–––– 5 0
Ms. Zheng Juan (iv) /H1118/H1118 ––––––
Mr. Diao Juanhuan /H1118/H1118/H1118 ––––––
Ms. Wang, Su-Chi (ii) /H1118 ––––––
Mr. Li Chen (iii) /H1118/H1118/H1118/H1118 ––––––
Mr. Lin, Jung-Chin (i) /H1118 ––––––
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 0–––– 5 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 2,942 386 1,583 96,628 101,589
Fees
Salaries,
allowances
and benefits
in kind
Pension
scheme
contributions
Performance
related
bonuses
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Six months ended
30 June 2024
Executive directors:
Dr. Liu Y anjun /H1118/H1118/H1118/H1118/H1118– 802 73 325 35,370 36,570
Ms. Wang Zheng /H1118/H1118/H1118/H1118 – 437 73 280 5,587 6,377
Mr. Tan Jingwei /H1118/H1118/H1118/H1118 – 231 47 187 3,069 3,534
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,470 193 792 44,026 46,481
Non-executive directors:
Mr. Liu Tao (i) /H1118/H1118/H1118/H1118/H11185 0–––– 5 0
Ms. Zheng Juan (iv) /H1118/H1118 ––––––
Mr. Diao Juanhuan /H1118/H1118/H1118 ––––––
Mr. Lin, Jung-Chin (i) ––––––
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 0–––– 5 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 1,470 193 792 44,026 46,531
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 588 ---
Fees
Salaries,
allowances
and benefits
in kind
Pension
scheme
contributions
Performance
related
bonuses
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Six months ended
30 June 2025
Executive directors:
Dr. Liu Y anjun /H1118/H1118/H1118/H1118/H1118– 865 72 569 25,045 26,551
Ms. Wang Zheng /H1118/H1118/H1118/H1118 – 553 72 341 4,036 5,002
Mr. Tan Jingwei /H1118/H1118/H1118/H1118/H1118– 303 49 126 1,400 1,878
Ms. Li Cui (v) /H1118/H1118/H1118/H1118/H1118/H1118– 471 72 281 2,284 3,108
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,192 265 1,317 32,765 36,539
Non-executive directors:
Ms. Lin, Chia-ling
(vi) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Ms. Zheng Juan (iv) /H1118/H1118 ––––––
Mr. Diao Juanhuan /H1118/H1118/H1118 ––––––
Ms. Wang, Su-Chi (ii) /H1118 ––––––
Mr. Li Chen (iii) /H1118/H1118/H1118/H1118 ––––––
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,192 265 1,317 32,765 36,539
Notes:
(i) Mr. Liu Tao and Mr. Lin, Jung-Chin resigned as non-executive directors of the Company on 18 July
2024 due to the devotion of more time in pursuing other personal commitments.
(ii) Ms. Wang, Su-Chi was appointed as a non-executive director of the Company on 18 July 2024 and
resigned as a non-executive director of the Company on 21 January 2025 due to the devotion of more
time in pursuing other personal commitments.
(iii) Mr. Li Chen was appointed as a non-executive director of the Company on 18 July 2024.
(iv) Ms. Zheng Juan resigned as a non-executive director of the Company on 21 January 2025 due to the
devotion of more time in pursuing other personal commitments.
(v) Ms. Li Cui was appointed as an executive director of the Company on 21 January 2025.
(vi) Ms. Lin, Chia-ling was appointed as a non-executive director of the Company on 21 January 2025.
There was no arrangement under which a director or the chief executive waived or agreed to waive any
remuneration during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 589 ---
10. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the years ended 31 December 2023 and 2024 and the six months ended
30 June 2024 and 2025 included two, three, three and three directors, respectively, the details of whose remuneration
are set out in note 9 above. Details of the remuneration of the remaining three, two, two and two highest paid
employees during the years ended 31 December 2023 and 2024 and the six months ended 30 June 2024 and 2025,
respectively, who are not the directors or the chief executive of the Company are as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and benefits
in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,812 1,275 638 660
Performance related bonuses /H1118/H1118/H1118/H1118/H1118 705 993 496 308
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118 429 290 145 121
Equity-settled share-based payment
expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,300 6,597 3,652
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,946 16,858 7,876 4,741
The number of non-director and non-chief executive highest paid employees whose remuneration fell within
the following bands is as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
(unaudited)
Nil to HK$1,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181–––
HK$1,000,001 to HK$1,500,000 /H1118/H1118/H1118 2–––
HK$2,000,001 to HK$2,500,000 /H1118/H1118/H1118 –––1
HK$2,500,001 to HK$3,000,000 /H1118/H1118/H1118 –––1
HK$4,000,001 to HK$4,500,000 /H1118/H1118/H1118 ––2–
HK$8,500,001 to HK$9,000,000 /H1118/H1118/H1118 –1––
HK$9,000,001 to HK$9,500,000 /H1118/H1118/H1118 –1––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183222
During the year ended 31 December 2024, RSUs were granted to the non-director and non-chief executive
highest paid employees in respect of their services to the Group, further details of which are included in the
disclosures in note 30 to the Historical Financial Information. The fair value of such RSUs, which has been
recognised in profit or loss over the vesting period, was determined as at the date of grant and the amount included
in the Historical Financial Information for the Relevant Periods and the six months ended 30 June 2024 is included
in the above non-director and non-chief executive highest paid employees’ remuneration disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 590 ---
11. INCOME TAX
Mainland China
Pursuant to the Corporate Income Tax Law of the People’s Republic of China and the respective regulations
(the “CIT Law”), Hainan Baoji Biotechnology Co., Ltd. which operates in Mainland China is subject to CIT at a rate
of 25% on the taxable income during the Relevant Periods.
Shanghai Bao Pharmaceuticals Co., Ltd., Suzhou Centergene Pharmaceuticals Co., Ltd. and Suzhou Kangju
Biotechnology Co., Ltd. were accredited as “High and New Technology Enterprises” under the relevant tax rules and
regulations in 2022, and accordingly, were entitled to a reduced preferential CIT rate of 15% from 2022 to 2024. This
qualification is subject to review by the relevant tax authority in the PRC for every three years. The renewal of the
above qualification for 2025 to 2027 is in process and the management of the Group expects the renewal will be
completed before the annual tax filing of tax return of Enterprise Income Tax for the year ending 31 December 2025.
The income tax expense of the Group for the Relevant Periods and the six months ended 30 June 2024 is
analysed as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current tax:
Charge for the year/period /H1118/H1118/H1118/H1118/H1118 ––––
Deferred tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (23) (23) –
Total tax credit for the year/period /H1118 (1) (23) (23) –
A reconciliation of the tax credit applicable to loss before tax at the statutory tax rate for the jurisdiction where
the operations of the Group are substantially based to the tax credit at the effective tax rate is as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(160,396) (364,456) (167,312) (183,096)
Tax at the statutory tax rate of 25% /H1118 (40,099) (91,114) (41,828) (45,775)
Lower tax rate or enacted by local
authority /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,039 36,395 16,641 18,311
Additional deductible allowance
for qualified research and
development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(20,082) (24,567) (9,809) (10,879)
Expenses not deductible for tax
purposes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249 149 71 78
Tax losses and temporary differences
not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,892 79,114 34,902 38,265
Tax credit at the Group’s effective
rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (23) (23) –
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 591 ---
12. DIVIDENDS
No dividend was paid or declared by the Company since its date of incorporation.
13. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic loss per share amounts is based on the loss attributable to ordinary equity holders
of the parent, and the weighted average number of ordinary shares outstanding during the Relevant Periods and the
six months ended 30 June 2024.
The calculation of the diluted loss per share amounts is based on the loss attributable to ordinary equity holders
of the parent, and the weighted average number of ordinary shares used in the calculation is the number of ordinary
shares outstanding during the Relevant Periods and the six months ended 30 June 2024, as used in the basic loss per
share calculation, and the weighted average number of ordinary shares assumed to have been issued at no
consideration on the deemed exercise or conversion of all dilutive potential ordinary shares into ordinary shares
during the Relevant Periods and the six months ended 30 June 2024.
The calculations of basic loss per share are based on:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss
Loss attributable to ordinary equity
holders of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(160,395) (364,433) (167,289) (183,096)
Number of shares
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Shares
Weighted average number of
ordinary shares outstanding during
the year/period used in the basic
loss per share calculation /H1118/H1118/H1118/H1118/H1118/H111850,592,809 53,534,643 52,046,194 57,608,071
During the Relevant Periods and the six months ended 30 June 2024, the potential ordinary shares were not
included in the calculation of diluted loss per share as the potential ordinary shares had an anti-dilutive effect on the
basic loss per share for each of those periods. Accordingly, the diluted loss per share amounts during the Relevant
Periods and the six months ended 30 June 2024 are the same as the basic loss per share amounts.
For the details of pre-IPO investments, please refer to Note 27 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 592 ---
14. PROPERTY, PLANT AND EQUIPMENT
The Group
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December
2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,556 199,133 621 2,311 77,810 1,205 120,929 407,565
Accumulated
depreciation /H1118/H1118/H1118(397) (6,491) (435) (650) (17,601) (331) – (25,905)
Net carrying
amount /H1118/H1118/H1118/H1118/H11185,159 192,642 186 1,661 60,209 874 120,929 381,660
At 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H11185,159 192,642 186 1,661 60,209 874 120,929 381,660
Additions /H1118/H1118/H1118/H1118/H11187,38 0–––– – 163,815 171,195
Transfers /H1118/H1118/H1118/H1118/H1118/H111865 – 298 877 80,983 413 (85,150) (2,514)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118–––– (27) – – (27)
Depreciation
provided during
the year /H1118/H1118/H1118/H1118/H1118(2,594) (5,564) (55) (465) (10,184) (237) – (19,099)
At 31 December
2023, net of
accumulated
depreciation /H1118/H1118/H1118/H111810,010 187,078 429 2,073 130,981 1,050 199,594 531,215
At 31 December
2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,001 199,133 919 3,181 158,752 1,617 199,594 576,197
Accumulated
depreciation /H1118/H1118/H1118(2,991) (12,055) (490) (1,108) (27,771) (567) – (44,982)
Net carrying
amount /H1118/H1118/H1118/H1118/H111810,010 187,078 429 2,073 130,981 1,050 199,594 531,215
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December
2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,001 199,133 919 3,181 158,752 1,617 199,594 576,197
Accumulated
depreciation /H1118/H1118/H1118(2,991) (12,055) (490) (1,108) (27,771) (567) – (44,982)
Net carrying
amount /H1118/H1118/H1118/H1118/H111810,010 187,078 429 2,073 130,981 1,050 199,594 531,215
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 593 ---
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H111810,010 187,078 429 2,073 130,981 1,050 199,594 531,215
Additions /H1118/H1118/H1118/H1118/H11182,15 4–––– – 1 18,805 120,959
Transfers /H1118/H1118/H1118/H1118/H1118/H11181,766 – 35 1,898 10,592 – (16,276) (1,985)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118– – – (1) (231) – – (232)
Depreciation
provided during
the year /H1118/H1118/H1118/H1118/H1118(3,496) (5,564) (57) (684) (18,232) (243) – (28,276)
At 31 December
2024, net of
accumulated
depreciation /H1118/H1118/H111810,434 181,514 407 3,286 123,110 807 302,123 621,681
At 31 December
2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,922 199,133 954 5,076 168,964 1,617 302,123 694,789
Accumulated
depreciation /H1118/H1118/H1118(6,488) (17,619) (547) (1,790) (45,854) (810) – (73,108)
Net carrying
amount /H1118/H1118/H1118/H1118/H111810,434 181,514 407 3,286 123,110 807 302,123 621,681
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 30 June 2025
At 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,922 199,133 954 5,076 168,964 1,617 302,123 694,789
Accumulated
depreciation /H1118/H1118/H1118(6,488) (17,619) (547) (1,790) (45,854) (810) – (73,108)
Net carrying
amount /H1118/H1118/H1118/H1118/H111810,434 181,514 407 3,286 123,110 807 302,123 621,681
At 1 January 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H111810,434 181,514 407 3,286 123,110 807 302,123 621,681
Additions /H1118/H1118/H1118/H1118/H11186 2 3–––– – 75,459 76,082
Transfers /H1118/H1118/H1118/H1118/H1118/H1118– – 3 290 16,958 – (17,955) (704)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118– – – (1) (373) – – (374)
Depreciation
provided during
the period /H1118/H1118/H1118/H1118(2,057) (2,782) (27) (425) (9,692) (122) – (15,105)
At 30 June 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H11189,000 178,732 383 3,150 130,003 685 359,627 681,580
At 30 June 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,486 199,133 957 5,345 185,490 1,617 359,627 769,655
Accumulated
depreciation /H1118/H1118/H1118(8,486) (20,401) (574) (2,195) (55,487) (932) – (88,075)
Net carrying
amount /H1118/H1118/H1118/H1118/H11189,000 178,732 383 3,150 130,003 685 359,627 681,580
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 594 ---
Certain of the Group’s buildings with aggregate net carrying amounts of approximately RMB187,078,000,
RMB181,514,000 and RMB178,732,000 were pledged to secure interest-bearing bank borrowings granted to the
Group as at 31 December 2023 and 2024 and 30 June 2025, respectively (note 24).
Certain of the Group’s construction in progress with aggregate net carrying amounts of approximately
RMB288,852,000 and RMB355,321,000 was pledged to secure interest-bearing bank borrowings granted to the
Group as at 31 December 2024 and 30 June 2025, respectively (note 24).
The Company
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December
2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,467 199,133 118 1,470 40,557 869 120,929 368,543
Accumulated
depreciation /H1118/H1118/H1118(355) (6,491) (16) (212) (3,885) (70) – (11,029)
Net carrying
amount /H1118/H1118/H1118/H1118/H11185,112 192,642 102 1,258 36,672 799 120,929 357,514
At 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H11185,112 192,642 102 1,258 36,672 799 120,929 357,514
Additions /H1118/H1118/H1118/H1118/H11187,311–––– – 162,157 169,468
Transfers /H1118/H1118/H1118/H1118/H1118/H111865 – 272 820 79,402 412 (83,485) (2,514)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118–––– ( 4 ) – – ( 4 )
Depreciation
provided during
the year /H1118/H1118/H1118/H1118/H1118(2,508) (5,564) (17) (361) (6,542) (178) – (15,170)
At 31 December
2023, net of
accumulated
depreciation /H1118/H1118/H1118/H11189,980 187,078 357 1,717 109,528 1,033 199,601 509,294
At 31 December
2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,843 199,133 389 2,290 119,954 1,281 199,601 535,491
Accumulated
depreciation /H1118/H1118/H1118(2,863) (12,055) (32) (573) (10,426) (248) – (26,197)
Net carrying
amount /H1118/H1118/H1118/H1118/H11189,980 187,078 357 1,717 109,528 1,033 199,601 509,294
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 595 ---
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December
2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,843 199,133 389 2,290 119,954 1,281 199,601 535,491
Accumulated
depreciation /H1118/H1118/H1118(2,863) (12,055) (32) (573) (10,426) (248) – (26,197)
Net carrying
amount /H1118/H1118/H1118/H1118/H11189,980 187,078 357 1,717 109,528 1,033 199,601 509,294
At 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H11189,980 187,078 357 1,717 109,528 1,033 199,601 509,294
Additions /H1118/H1118/H1118/H1118/H11182,12 2–––– – 1 19,296 121,418
Transfers /H1118/H1118/H1118/H1118/H1118/H11181,766 – 24 1,833 10,319 – (15,927) (1,985)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118–––– (153) – – (153)
Depreciation
provided during
the year /H1118/H1118/H1118/H1118/H1118(3,446) (5,564) (40) (585) (14,787) (244) – (24,666)
At 31 December
2024, net of
accumulated
depreciation /H1118/H1118/H1118/H111810,422 181,514 341 2,965 104,907 789 302,970 603,908
At 31 December
2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,731 199,133 414 4,123 130,099 1,281 302,970 654,751
Accumulated
depreciation /H1118/H1118/H1118(6,309) (17,619) (73) (1,158) (25,192) (492) – (50,843)
Net carrying
amount /H1118/H1118/H1118/H1118/H111810,422 181,514 341 2,965 104,907 789 302,970 603,908
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 30 June 2025
At 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,731 199,133 414 4,123 130,099 1,281 302,970 654,751
Accumulated
depreciation /H1118/H1118 (6,309) (17,619) (73) (1,158) (25,192) (492) – (50,843)
Net carrying
amount /H1118/H1118/H1118/H1118/H111810,422 181,514 341 2,965 104,907 789 302,970 603,908
At 1 January 2025,
net of accumulated
depreciation /H1118/H1118/H111810,422 181,514 341 2,965 104,907 789 302,970 603,908
Additions /H1118/H1118/H1118/H1118/H11185 9 0–––– – 74,976 75,566
Transfers /H1118/H1118/H1118/H1118/H1118– – 3 246 16,640 – (17,593) (704)
Depreciation
provided during
the period /H1118/H1118/H1118(2,032) (2,782) (21) (372) (8,208) (122) – (13,537)
At 30 June 2025,
net of accumulated
depreciation /H1118/H1118/H11188,980 178,732 323 2,839 113,339 667 360,353 665,233
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 596 ---
Decoration Buildings
Office
equipment
Electronic
equipment Machinery Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 30 June 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,321 199,133 416 4,369 146,739 1,280 360,353 729,611
Accumulated
depreciation /H1118/H1118 (8,341) (20,401) (93) (1,530) (33,400) (613) – (64,378)
Net carrying
amount /H1118/H1118/H1118/H1118/H11188,980 178,732 323 2,839 113,339 667 360,353 665,233
Certain of the Company’s buildings with aggregate net carrying amounts of approximately RMB187,078,000,
RMB181,514,000 and RMB178,732,000 were pledged to secure interest-bearing bank borrowings granted to the
Company as at 31 December 2023 and 2024 and 30 June 2025, respectively (note 24).
Certain of the Company’s construction in progress with aggregate net carrying amounts of approximately
RMB288,852,000 and RMB355,321,000 was pledged to secure interest-bearing bank borrowings granted to the
Company as at 31 December 2024 and 30 June 2025, respectively (note 24).
15. LEASES
The Group as a lessee
The Group has lease contracts for various items of properties and office premises used in its operations. Lump
sum payments were made upfront to acquire the leased land from the owners with lease periods of 50 years, and no
ongoing payments will be made under the terms of these land leases. Leases of properties and office premises
generally have lease terms between 2 and 4 years. Generally, the Group is restricted from assigning and subleasing
the leased assets outside the Group. Other rental agreements generally have lease terms of 12 months or less.
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements during the Relevant Periods
are as follows:
Properties and
office premises Leasehold land Total
RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,628 54,206 56,834
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180 – 180
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,667) (1,140) (2,807)
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 53,066 54,207
As at 31 December 2023 and 1 January
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 53,066 54,207
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,022 – 4,022
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,638) (1,140) (2,778)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,525 51,926 55,451
As at 31 December 2024 and 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,525 51,926 55,451
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238 – 238
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(851) (569) (1,420)
As at 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,912 51,357 54,269
The Group’s leasehold land with net carrying amounts of approximately RMB53,066,000,
RMB51,926,000 and RMB51,357,000 was pledged to secure interest-bearing bank borrowings granted to the
Group as at 31 December 2023 and 2024 and 30 June 2025, respectively (note 24).
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 597 ---
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are as follows:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Carrying amount at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,531 1,021 3,404
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180 4,022 238
Accretion of interest recognised during
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873 68 50
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,763) (1,707) (886)
Carrying amount at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,021 3,404 2,806
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118924 1,564 1,705
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897 1,840 1,101
The maturity analysis of lease liabilities is disclosed in note 36 to the Historical Financial Statement.
(c) The amounts recognised in profit or loss in relation to leases are as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on lease liabilities /H1118/H1118/H1118 73 68 35 50
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H1118/H1118/H11181,667 1,638 833 851
Expenses relating to
short-term leases /H1118/H1118/H1118/H1118/H1118/H1118/H111893 166 77 51
Total amount recognised in
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,833 1,872 945 952
(d) The total cash outflows for leases are disclosed in note 29 to the Historical Financial Information.
The Company as a lessee
The Company has a lease contract for properties and office premises used in its operations. Lump sum
payments were made upfront to acquire the leased land from the owners with lease periods of 50 years, and no
ongoing payments will be made under the terms of these land leases. The lease of properties and office premises has
a lease term of 2 years. Generally, the Company is restricted from assigning and subleasing the leased assets outside
the Company. Other rental agreements generally have lease terms of 12 months or less.
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 598 ---
(a) Right-of-use assets
The carrying amounts of the Company’s right-of-use assets and the movements during the Relevant
Periods are as follows:
Properties and
office premises Leasehold land Total
RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 54,206 55,347
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(652) (1,140) (1,792)
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118489 53,066 53,555
As at 31 December 2023 and 1 January
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118489 53,066 53,555
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,090 – 1,090
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(624) (1,140) (1,764)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118955 51,926 52,881
As at 31 December 2024 and 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118955 51,926 52,881
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(273) (569) (842)
As at 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118682 51,357 52,039
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are as follows:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Carrying amount at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118978 333 818
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,090 –
Accretion of interest recognised during
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 11 11
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(672) (616) (280)
Carrying amount at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333 818 549
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333 541 549
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 277 –
(c) The amounts recognised in profit or loss in relation to leases are as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on lease liabilities /H1118/H1118 27 11 3 11
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118652 624 326 273
Expenses relating to
short-term leases /H1118/H1118/H1118/H1118/H1118/H1118/H111873 160 71 51
Total amount recognised in
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118752 795 400 335
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 599 ---
16. OTHER INTANGIBLE ASSETS
The Group
Patents and
licences Software Total
RMB’000 RMB’000 RMB’000
31 December 2023
Cost at 1 January 2023, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,219 513 11,732
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,514 2,514
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118(1,461) (220) (1,681)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,758 2,807 12,565
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,608 3,238 17,846
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,850) (431) (5,281)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,758 2,807 12,565
Patents and
licences Software Total
RMB’000 RMB’000 RMB’000
31 December 2024
Cost at 1 January 2024, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,758 2,807 12,565
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,985 1,985
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118(1,461) (772) (2,233)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,297 4,020 12,317
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,608 5,223 19,831
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,311) (1,203) (7,514)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,297 4,020 12,317
Patents and
licences Software Total
RMB’000 RMB’000 RMB’000
30 June 2025
Cost at 1 January 2025, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,297 4,020 12,317
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 704 704
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118 (730) (314) (1,044)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,567 4,410 11,977
At 30 June 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,608 5,927 20,535
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,041) (1,517) (8,558)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,567 4,410 11,977
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 600 ---
The Company
Patents and
licences Software Total
RMB’000 RMB’000 RMB’000
31 December 2023
Cost at 1 January 2023, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,392 105 9,497
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,514 2,514
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118(1,225) (167) (1,392)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,167 2,452 10,619
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,250 2,621 14,871
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,083) (169) (4,252)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,167 2,452 10,619
Patents and
licences Software Total
RMB’000 RMB’000 RMB’000
31 December 2024
Cost at 1 January 2024, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,167 2,452 10,619
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,985 1,985
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118(1,225) (720) (1,945)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,942 3,717 10,659
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,250 4,606 16,856
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,308) (889) (6,197)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,942 3,717 10,659
Patents and
licences Software Total
RMB’000 RMB’000 RMB’000
30 June 2025
Cost at 1 January 2025, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,942 3,717 10,659
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 704 704
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118 (612) (287) (899)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,330 4,134 10,464
At 30 June 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,250 5,310 17,560
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,920) (1,176) (7,096)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,330 4,134 10,464
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 601 ---
17. INVESTMENT IN AN ASSOCIATE
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,382 773 659
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,055 7,055 7,055
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,437 7,828 7,714
Particulars of the associate are as follows:
Name
Particulars of issued
shares held
Place of registration
and business
Percentage of
ownership interest
attributable to the
Group Principal activities
ABLINK
Biotechnology
Co., Ltd. /H1118/H1118/H1118/H1118
Ordinary shares PRC/Mainland
China
20% Medical
technology
The Group casts significant influence in the decision making of the relevant activities of the associate through
its shareholdings, participation in the board or provision of technical information, which does not constitute unilateral
power to direct the relevant activities of the associate and the ability to use the power over the associate to affect
the amount of the Group’s returns.
The following table illustrates the financial information of the Group’s associate:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share of the associate’s loss for the year/period /H1118/H1118 (915) (609) (114)
Share of the associate’s total comprehensive loss /H1118/H1118 (915) (609) (114)
Carrying amount of the Group’s investment in
the associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,437 7,828 7,714
18. INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118490,451 490,451 491,451
Share-based compensation granted to employees
of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,085 47,389
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118490,451 527,536 538,840
The loans from subsidiaries included in the Company’s current liabilities totalling RMB8,009,000 as at 31
December 2023 are unsecured, bear interest at 3.1% per annum and are repayable on demand or within one year. The
outstanding balance of the loans from subsidiaries as at 31 December 2023 was settled as at 26 November 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 602 ---
19. INVENTORIES
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,072 4,715 5,362
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,015 4,205 4,747
20. TRADE RECEIV ABLES
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
The Group’s trading terms with its customers are mainly on credit. The credit period is generally 10 days to
60 days. Each customer has a maximum credit limit. The Group seeks to maintain strict control over its outstanding
receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management. The Group does
not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are
non-interest-bearing.
An ageing analysis of the trade receivables as at the end of each of the Relevant Periods, based on the
transaction dates and net of loss allowance, is as follows:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
During the years ended 31 December 2023 and 2024 and the six months ended 30 June 2025, the Group
estimated that the expected credit loss rate for trade receivables is minimal.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 603 ---
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,279 141 1,274
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,279 141 1,274
The Company’s trading terms with its customers are mainly on credit. The credit period is generally 10 days
to 60 days. Each customer has a maximum credit limit. The Company seeks to maintain strict control over its
outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management. The
Company does not hold any collateral or other credit enhancements over its trade receivable balances. Trade
receivables are non-interest-bearing.
An ageing analysis of the trade receivables as at the end of each of the Relevant Periods, based on the
transaction dates and net of loss allowance, is as follows:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,279 141 1,274
During the years ended 31 December 2023 and 2024 and the six months ended 30 June 2025, the Company
estimated that the expected credit loss rate for trade receivables is minimal.
21. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current:
Prepayment for property, plant and equipment /H1118/H1118 1,311 410 32,910
Current:
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118264 4,022 4,848
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,456 1,176 1,012
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,515 43,852 50,092
Amounts due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 0––
Capital injection from shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,073 – –
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,054 828 542
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,488 4,586
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,402 51,366 61,080
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 604 ---
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current:
Amounts due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 26,361 27,250
Prepayment for property, plant and equipment /H1118/H1118 1,311 410 32,790
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,311 26,771 60,040
Current:
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 3,790 4,738
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148 67 604
Deductible value-added tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,135 38,423 44,364
Amounts due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,285 115,392 99,504
Capital injection from shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,073 – –
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288 206 188
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,488 4,586
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,166 159,366 153,984
The balances are interest-free and are not secured with collateral.
The financial assets included in the above balances relate to receivables for which there was no recent history
of default and past due amounts. As at 31 December 2023 and 2024 and 30 June 2025, the loss allowance was
minimal.
22. CASH AND CASH EQUIV ALENTS AND RESTRICTED DEPOSITS
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 609,358 533,676
Less: Restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (85,200) (80,284)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 524,158 453,392
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118258,892 533,600 469,943
Denominated in US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,779 75,758 63,733
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 609,358 533,676
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306,494 489,320 434,752
Less: Restricted deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (78,700) (73,700)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306,494 410,620 361,052
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118245,816 415,695 373,144
Denominated in US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,678 73,625 61,608
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306,494 489,320 434,752
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 605 ---
The RMB is not freely convertible into other currencies, however, under Mainland China’s Foreign Exchange
Control Regulations and Administration of Settlement, and Sale and Payment of Foreign Exchange Regulations, the
Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange
business.
Cash at banks earns interest at floating rates based on daily bank deposit rates.
Deposits of RMB80,200,000 were frozen by the bank as at 31 December 2024 by the order of the courts in
the PRC pursuant to a legal claim. A deposit of RMB5,000,000 was held as collateral for a letter of guarantee and
was released as at 2 January 2025.
The bank balances are deposited with creditworthy banks with no recent history of default.
23. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,139 17,631 14,591
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) 18,360 58,374 536
Payables for purchase of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,467 34,086 72,248
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(b) 14,844 10,702 35,349
Amounts due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 336 156
Provision for losses on litigation /H1118/H1118/H1118/H1118/H1118/H1118(c) – – 55,080
Accrual for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(d) – – 31,014
Tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118976 1,160 1,038
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 2,813 2,934
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,786 125,102 212,946
Notes:
(a) Details of contract liabilities are as follows:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Short-term advances received from
customers
Licence fee /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 40,002 –
Technical services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,360 18,368 508
Sale of materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–4 2 8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,360 58,374 536
Contract liabilities include advances received for licence fee, technical services and sale of materials.
The increase in contract liabilities during the Relevant Periods was mainly due to the increase in
short-term advances received from customers in relation to the licence fee during the Relevant Periods.
(b) Other payables primarily consist of accrued or invoiced but unpaid fees for services from contract
research organisations (“CROs”) and contract development manufacture organisations (“CDMOs”). As
of 30 June 2025, other payables of RMB18,360,000 were related to a legal claim as set out in note (c).
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 606 ---
(c) As at 30 June 2025, the Group was involved in litigation associated with a technology transfer
agreement with a biotechnology company. This agreement and related dispute only involves a drug asset
that falls outside the Group’s current and future pipeline with no overlap to the Group’s existing
products and indications.
Pursuant to the first instance judgement in May 2025 issued by the PRC District Court, the Group was
ordered to (i) make payment amounting to approximately RMB55,080,000 which had been fully
recognised in “Provision for losses on litigation” in “Other expenses” in the consolidated statement of
profit or loss and other comprehensive income for the six months ended 30 June 2025; and (ii) return
the aforesaid balance of advances from the plaintiff, of which RMB18,360,000 was recognised in “Other
payables” as at 30 June 2025. The Group has filed for appeals for such judgement to the PRC District
Court.
(d) As at 30 June 2025, the Group was involved in litigation associated with a pharmaceutical enterprise
regarding a construction project. The dispute arose from a tripartite agreement between this enterprise,
the Group and a construction company related to this construction project. The Group was being
claimed, as one of the defendants, for unpaid construction fees and interest.
Pursuant to the first instance judgement in August 2025 issued by the PRC District Court, the Group was
held jointly and severally liable to pay the outstanding construction fees along with applicable interest
which had been fully recognised in “Accrual for property, plant and equipment” in “Other payables” at
30 June 2025. The construction fees and interest paid by the Group will serve as consideration for
acquisition of ownership of the construction project.
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,994 12,785 10,464
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 12 536
Payables for purchase of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,109 34,009 72,176
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) 11,534 9,273 12,276
Amounts due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 336 156
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 10,500 –
Accrual for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(b) – – 31,014
Tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118795 1,027 884
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 2,813 2,934
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,432 70,755 130,440
Notes:
(a) Other payables primarily consist of accrued or invoiced but unpaid fees for services from contract
research organisations (“CROs”) and contract development manufacture organisations (“CDMOs”).
(b) As at 30 June 2025, the Company was involved in litigation associated with a pharmaceutical enterprise
regarding a construction project.
Pursuant to the first instance judgement in August 2025 issued by the PRC District Court, the Company
was held jointly and severally liable to pay the outstanding construction fees along with applicable
interest which had been recognised in “Accrual for property, plant and equipment” in “Other payables”
at 30 June 2025. The construction fees and interest paid by the Company will serve as consideration for
acquisition of ownership of the construction project.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 607 ---
24. INTEREST-BEARING BANK BORROWINGS
As at 31 December As at 30 June
2023 2024 2025
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Current
Current portion of long term
bank loans – secured (a) /H1118/H1118 3.95% 2024 30,825 3.10%-3.75% 2025 22,850 2.75%-3.45% 2026 33,535
Current portion of long term
bank loans – secured and
guaranteed (b) /H1118/H1118/H1118/H1118/H1118/H11183.96% 2024 14,267 – – – – – –
Current portion of long term
bank loans – unsecured /H1118/H1118 – – – 3.10%-3.45% 2025 16,888 2.75%-3.45% 2026 39,684
Bank loans – secured (a) /H1118/H1118 3.10% 2024 20,019 3.10% 2025 20,019 – – –
Bank loans – unsecured /H1118/H1118/H1118 – – – 3.10% 2025 9,808 – – –
Total current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 65,111 69,565 73,219
Non-current
Bank loans – secured (a) /H1118/H1118 3.95% 2025-2026 30,750 3.10%-3.75% 2026-2034 90,710 2.75%-3.45% 2026-2034 106,841
Bank loans – secured and
guaranteed (b) /H1118/H1118/H1118/H1118/H1118/H11183.96% 2025-2030 14,233 – – – – – –
Bank loans – unsecured /H1118/H1118/H1118 – – – 3.10%-3.45% 2026 41,580 2.75%-3.10% 2026-2027 63,360
Total non-current /H1118/H1118/H1118/H1118/H1118/H1118 44,983 132,290 170,201
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 110,094 201,855 243,420
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Analysed into:
Bank loans repayable:
Within one year or on demand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,111 69,565 73,219
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,846 93,227 117,181
In the third to fifth years, inclusive /H1118/H1118/H1118/H1118/H1118/H111822,137 10,190 15,665
Beyond five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,873 37,355
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 201,855 243,420
Notes:
(a) These bank loans were secured by the Group’s property, plant and equipment with carrying amounts of
RMB187,078,000, RMB470,366,000 and RMB534,053,000 as at 31 December 2023 and 2024 and 30
June 2025, respectively, and by leasehold land with carrying amounts of RMB51,926,000 and
RMB51,357,000 as at 31 December 2024 and 30 June 2025, respectively.
(b) The bank loan was secured by the Group’s leasehold land with a carrying amount of RMB53,066,000
as at 31 December 2023, and was guaranteed by a director of the Group.
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 608 ---
25. DEFERRED TAX
The Group
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax liabilities
Right-of-use assets
Non-monetary
investment Total
RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118393 1,815 2,208
Deferred tax credited to profit or loss during the
year (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(223) (907) (1,130)
Gross deferred tax liabilities at 31 December
2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170 908 1,078
Deferred tax charged/(credited) to profit or loss
during the year (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118358 (908) (550)
Gross deferred tax liabilities at 31 December
2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118528 – 528
Deferred tax credited to profit or loss during the
period (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(92) – (92)
Gross deferred tax liabilities at 30 June 2025 /H1118/H1118/H1118 436 – 436
Deferred tax assets
Lease liabilities
Losses available
for offsetting
against future
taxable profits Total
RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118369 1,815 2,184
Deferred tax charged to profit or loss during the
year (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(222) (907) (1,129)
Gross deferred tax assets at 31 December 2023
and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147 908 1,055
Deferred tax credited/(charged) to profit or loss
during the year (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118361 (888) (527)
Gross deferred tax assets at 31 December 2024
and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508 20 528
Deferred tax charged to profit or loss during the
period (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(92) – (92)
Gross deferred tax assets at 30 June 2025 /H1118/H1118/H1118/H1118/H1118 416 20 436
For presentation purposes, certain deferred tax assets and liabilities have been offset in the consolidated
statements of financial position as at 31 December 2023 and 2024 and 30 June 2025. The following is an analysis
of the deferred tax balances for financial reporting purposes:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in the
consolidated statements of financial position /H1118/H1118 –––
Net deferred tax liabilities recognised in the
consolidated statements of financial position /H1118/H1118 2 3––
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 609 ---
Deferred tax assets have not been recognised in respect of the following item:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Tax losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118810,058 1,168,193 1,320,780
The Group has tax losses arising in Mainland China of RMB810,058,000, RMB1,168,193,000 and
RMB1,320,780,000 as at 31 December 2023 and 2024 and 30 June 2025, respectively, that will expire one to ten years
for offsetting against its future taxable profits.
Deferred tax assets have not been recognised in respect of these losses as it is not considered probable that
enough taxable profits will be available against which the tax losses can be utilised.
The Company
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax liabilities
Right-of-use assets
RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171
Deferred tax credited to profit or loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(98)
Gross deferred tax liabilities at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873
Deferred tax charged to profit or loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870
Gross deferred tax liabilities at 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143
Deferred tax credited to profit or loss during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(41)
Gross deferred tax liabilities at 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102
Deferred tax assets
Lease liabilities
Losses available
for offsetting
against future
taxable profits Total
RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147 – 147
Deferred tax charged to profit or loss during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(97) – (97)
Gross deferred tax assets at 31 December 2023
and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 – 50
Deferred tax credited to profit or loss during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873 20 93
Gross deferred tax assets at 31 December 2024
and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123 20 143
Deferred tax charged to profit or loss during the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(41) – (41)
Gross deferred tax assets at 30 June 2025 /H1118/H1118/H1118/H1118/H1118 82 20 102
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 610 ---
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statements of
financial position as at 31 December 2023 and 2024 and 30 June 2025. The following is an analysis of the deferred
tax balances for financial reporting purposes:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in the
statements of financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Net deferred tax liabilities recognised in the
statements of financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 3––
Deferred tax assets have not been recognised in respect of the following item:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Tax losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118296,990 546,427 699,976
The Company has tax losses arising in Mainland China of RMB296,990,000, RMB546,427,000 and
RMB699,976,000 as at 31 December 2023 and 2024 and 30 June 2025, respectively, that will expire in one to ten
years for offsetting against its future taxable profits.
Deferred tax assets have not been recognised in respect of these losses as it is not considered probable that
enough taxable profits will be available against which the tax losses can be utilised.
26. DEFERRED INCOME
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Income-related government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,850 8,050 8,250
Asset-related government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,980 28,980 31,680
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,830 37,030 39,930
Movements of income-related government grants:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,450 4,850 8,050
Government grants received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400 3,200 200
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,850 8,050 8,250
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 611 ---
Movements of asset-related government grants:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,980 27,980 28,980
Government grants received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,000 2,700
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,980 28,980 31,680
During the years ended 31 December 2023 and 2024 and 30 June 2025, the Group received government grants
of RMB400,000, RMB3,200,000 and RMB200,000, respectively, to compensate for the expense arising from the
Group’s research projects. The grants related to income were recognised in profit or loss upon the compliance with
the conditions attached to the grants and the government’s acknowledgement of acceptance. The grants related to
assets will be recognised in profit or loss over the expected useful life of the relevant asset by equal annual
instalments upon the compliance with the conditions attached to the grants and the government’s acknowledgement
of acceptance.
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Income-related government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,850 5,050 5,250
Asset-related government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,980 24,980 27,680
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,830 30,030 32,930
Movements of income-related government grants:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,450 1,850 5,050
Government grants received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400 3,200 200
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,850 5,050 5,250
Movements of asset-related government grants:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning and end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,980 24,980 24,980
Government grants received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,700
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,980 24,980 27,680
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 612 ---
27. SHARE CAPITAL
Shares
As at 31 December As at 30 June
2023 2024 2025
Numbers of
shares Amount
Numbers of
shares Amount
Numbers of
shares Amount
RMB’000 RMB’000 RMB’000
Issued and fully paid:
ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,973,075 49,973 57,259,093 57,259 57,613,953 57,614
Issued but not fully paid /H1118/H1118/H1118/H11182,073,119 2,073 – – – –
A summary of movements in the Company’s share capital is as follows:
Notes
Number of shares
in issue Share capital
RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,401,869 48,402
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) 3,644,325 3,644
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,046,194 52,046
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(b) 5,212,899 5,213
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,259,093 57,259
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(b) 354,860 355
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,613,953 57,614
Notes:
(a) In August 2022, the Company entered into a capital increase agreement with Series B investors. As of
31 December 2023, total capital of RMB108,001,000 was to be injected into the Company by the Series
B investors for the initial subscription with approximately RMB1,571,000 and RMB106,430,000
credited to the Company’s capital and reserves, respectively. In July 2023, the Company issued a total
of 2,073,119 shares of the Company to the employee stock ownership platform, Shanghai Luojun
Enterprise Management Partnership Enterprise (Limited Partnership) (“Shanghai Luojun”). As of 31
December 2023, total capital of RMB2,073,000 was to be injected into the Company by the employee
stock ownership platform and credited to the Company’s capital and was settled as at 31 December
2024.
(b) In July 2024, the Company entered into a capital increase agreement with Series C investors. As of 31
December 2024, total capital of RMB425,700,000 was contributed by these investors with
approximately RMB5,035,000 and RMB420,665,000 credited to the Company’s capital and reserves,
respectively. In December 2024, the Company entered into a capital increase agreement with Series C+
investors. According to the agreement, total capital of RMB45,000,000 was to be injected into the
Company by the Series C+ investors for the initial subscription with approximately RMB533,000 and
RMB44,467,000 credited to the Company’s capital and reserves, respectively. As of 31 December 2024,
RMB15,000,000 of the total capital was contributed by these investors with approximately RMB178,000
and RMB14,822,000 credited to the Company’s capital and reserves, respectively. The remaining
balance of RMB30,000,000 was received as at 3 January 2025, with approximately RMB355,000 and
RMB29,645,000 credited to the Company’s capital and reserves.
Prior to the Relevant Periods, the Company entered into respective shareholders’ agreements and share
subscription agreements (collectively, the “Agreements”) with various pre-IPO Investors (collectively, the “Pre-IPO
Investors”) and issued ordinary shares thereto with a total consideration of approximately RMB1,530.6 million
(collectively, the “Pre-IPO Investments”) with the respective par value being recorded as share capital and the
remainder as reserves. Pursuant to the Agreements, the Pre-IPO Investors were granted by the Company with special
rights (“Special Rights”) which included redemption rights, anti-dilution rights and liquidation preferences rights.
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 613 ---
There was no exercise of Special Rights granted by the Company throughout the Relevant Periods.
The Company and the Pre-IPO Investors subsequently entered into a supplemental agreement on 28 April
2023, and the Series C Financing and Series C+ Financing shareholders’ agreements on 18 July 2024 and 18
December 2024, respectively, agreeing that certain of the Special Rights are granted by the Company to Pre-IPO
investors, including redemption rights, anti-dilution rights and liquidation preferences rights. Specifically, (i) the
redemption rights, anti-dilution rights and liquidation preference rights granted by our Company under Series A
Financing, Series A1 Financing and Series B Financing shareholders’ agreements have been irrecoverably terminated
according to the supplemental agreement dated 28 April 2023 and shall be deemed void ab initio, and (ii) both the
Series C Financing shareholders’ agreement and the Series C+ Financing shareholders’ agreement contain a listing
application-triggered termination provision, which provides that, if and when the Company submits a listing
application to the Stock Exchange, the above special rights shall be deemed as automatically and irrecoverably
terminated on 30 September 2024 and shall be void ab initio. Following execution of Series C+ Financing
shareholders’ agreement, such agreement has superseded and replaced the Series C Financing shareholders’
agreement on 18 December 2024 in their entirety, including the provisions in relation to the special rights. On 21
January 2025, the Company submitted the listing application to the Stock Exchange. As such, the special rights
granted by the Company to Pre-IPO Investors contained in the Series C+ Financing shareholders’ agreement were
deemed to be terminated on 30 September 2024 and void ab initio. Taking into account the legal and regulatory
framework of the Company’s jurisdiction and the governing law of the relevant supplemental agreement and
shareholders’ agreements, the directors considered that it is appropriate to present the Pre-IPO Investments as equity
throughout the Relevant Periods.
Had the Special Rights granted by the Company to the Pre-IPO Investors been accounted for as financial
liabilities measured at present value of the redemption amount prior to entering into the relevant supplemental
agreement and shareholders’ agreements, (i) the redemption financial liabilities, total current liabilities, net current
assets and net assets would have been:
As at 31 December
2024
RMB’000
Redemption financial liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,806,280
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,002,511
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,336,931)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(810,404)
; and (ii) the Company’s finance costs associated with the redemption financial liabilities, net loss for the
year/period, basic and diluted loss per share would have been:
For the year ended 31 December
For the six
months ended
30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial costs associated with the redemption
financial liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,101 65,638 9,526
Total net loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(187,496) (430,071) (192,622)
Basic and diluted loss per share (expressed in
RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3.71) (8.03) (3.34)
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 614 ---
28. RESERVES
The Group
The amounts of the Group’s reserves and the movements therein are presented in the consolidated statements
of changes in equity of the Historical Financial Information.
(a) Share premium
The share premium of the Group represents the difference between the par value of the shares issued and the
consideration received.
(b) Share-based payment reserve
The share-based payment reserve comprises the fair value of restricted share units granted which are yet to be
exercised, further details of which are included in note 30 to the Historical Financial Information.
The Company
Share premium
Share-based
payment
reserve
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,255,113 – (89,837) 1,165,276
Loss and total comprehensive
loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – (104,102) (104,102)
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) 118,680 – – 118,680
Conversion into a joint stock
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(b) (120,695) – 120,695 –
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,253,098 – (73,244) 1,179,854
Loss and total comprehensive
loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – (263,926) (263,926)
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(c) 452,818 – – 452,818
Equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 153,152 – 153,152
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,705,916 153,152 (337,170) 1,521,898
Loss and total comprehensive
loss for the period /H1118/H1118/H1118/H1118/H1118/H1118 – – (134,214) (134,214)
Capital injection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,645 – – 29,645
Equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 46,805 – 46,805
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,735,561 199,957 (471,384) 1,464,134
Notes:
(a) A summary of the movements in the Company’s share capital and reserves arising from the capital
injection by the Series B investors and Shanghai Luojun is included in note 27 to the Historical
Financial Information. During the year ended 31 December 2023, the proceeds of RMB12,250,000 from
Dr. Liu Y anjun was credited to the Company’s share premium.
(b) The Company was converted into a joint stock company with limited liability under the Company Law
of the PRC on 26 July 2023. Accumulated losses of RMB120,695,000 were converted to the Company’s
share premium.
(c) A summary of the movements in the Company’s share capital and reserves arising from the capital
injections by the Series C and C+ investors is included in note 27 to the Historical Financial
Information. Besides, during the year ended 31 December 2024, proceeds of RMB17,331,000 from
Shanghai Luojun were credited to the Company’s share premium.
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 615 ---
29. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2023 and 2024 and six months ended 30 June 2025, the Group had
non-cash additions to right-of-use assets and lease liabilities of RMB180,000, RMB4,022,000 and RMB238,000,
respectively, in respect of lease agreements.
(b) Changes in liabilities arising from financing activities
Y ear ended 31 December 2023
Interest-bearing bank
borrowings Lease liabilities
RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,328 2,531
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,445 (1,763)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 180
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,321 73
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 1,021
Y ear ended 31 December 2024
Interest-bearing
bank borrowings Lease liabilities
Accrued listing
expenses
RMB’000 RMB’000 RMB’000
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 1,021 –
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,259 (1,707) (1,460)
Changes from operating cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (2,781)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,022 –
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,502 68 –
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,566
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,488
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,855 3,404 2,813
Six months ended 30 June 2024
Interest-bearing bank
borrowings Lease liabilities
RMB’000 RMB’000
(unaudited) (unaudited)
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 1,021
Changes in financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,507 (882)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,371
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,539 35
At 30 June 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,140 1,545
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 616 ---
Six months ended 30 June 2025
Interest-bearing
bank borrowings Lease liabilities
Accrued listing
expenses
RMB’000 RMB’000 RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,855 3,404 2,813
Changes in financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,009 (886) (2,597)
Changes from operating cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (14,303)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 238 –
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,556 50 –
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 12,435
Deferred listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,586
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243,420 2,806 2,934
(c) Total cash outflows for leases
The total cash outflows for leases included in the consolidated statements of cash flows are as follows:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Within operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H111893 166 77 51
Within financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H11181,763 1,707 882 886
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,856 1,873 959 937
30. SHARE-BASED PAYMENT TRANSACTIONS
The Company adopted the restricted share unit scheme (“RSU”) pursuant to the resolutions passed on 16
August 2023, for the purpose of recognising the contributions by the employees, directors, officers, advisors and
consultants of any member of the Group by providing them with incentives in order to retain them for the continual
operation and development of the Group and attracting suitable personnel for further development of the Group.
On the grant date of 5 January 2024, the employee stock ownership platform, Shanghai Luoxu Management
Consulting Partnership (Limited Partnership), granted restricted shares to 18 employees. The number of restricted
shares granted to the incentive objects under this incentive plan is 504,328.55, including 467,239.50 RSUs and
37,089.05 RSUs granted to 17 employees who joined the Group prior to or on 5 January 2020 and 1 employee who
joined the Group after 5 January 2020, respectively. The RSUs to grantees who joined the Group prior to or on 5
January 2020 were granted at an exercise price of RMB1.15, which can be exercised on the date of the successful
IPO (Batch 1-a). The RSUs to grantees who joined the Group after 5 January 2020 were granted at an exercise price
of RMB1.15, and shall vest in the portions of 20%, 20%, 30% and 30% on the first, second, third and fourth
anniversaries of the joining date of the employee (Batch 1-b). Each vested RSU shall not be exercisable until the later
of the following: (i) the date such RSU has vested and (ii) the successful IPO.
On the grant date of 5 January 2024, the employee stock ownership platform, Shanghai Luojun Enterprise
Management Partnership Enterprise (Limited Partnership), granted restricted shares to 43 employees. The number of
restricted shares granted to the incentive objects under this incentive plan is 2,073,119.00, including 2,056,119.00
RSUs and 17,000.00 RSUs granted to 38 employees who joined the Group prior to or on the issue date of Series B
financing and 5 employees who joined the Group after the issue date of Series B financing, respectively. The RSUs
to grantees who joined the Group prior to or on issue date of Series B financing were granted at an exercise price
of RMB9.36, and shall vest in the portions of 20%, 20%, 30% and 30% on the first, second, third and fourth
anniversaries of the issue date of Series B financing (Batch 2-a). Each vested RSU shall not be exercisable until the
later of the following: (i) the date such RSU has vested and (ii) the successful IPO.The RSUs to grantees who joined
the Group after the issue date of Series B financing were granted at an exercise price of RMB9.36, and shall vest in
the portions of 20%, 20%, 30% and 30% on the first, second, third and fourth anniversaries of the joining dates of
the employees (Batch 2-b). Each vested RSU shall not be exercisable until the later of the following: (i) the date such
RSU has vested and (ii) the successful IPO.
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 617 ---
On the grant date of 5 January 2024, the employee stock ownership platform, Ningbo Hongsheng Enterprise
Management Partnership Enterprise (Limited Partnership), granted restricted shares to 20 employees. The number of
restricted shares granted to the incentive objects under this incentive plan is 909,081.00, including 887,193.96 RSUs
and 21,887.04 RSUs granted to 13 employees who joined the Group prior to or on the issue date of Series B financing
and 7 employees who joined the Group after the issue date of Series B financing, respectively. The RSUs to grantees
who joined the Group prior to or on issue date of Series B financing were granted at an exercise price of RMB8.10,
and shall vest in the portions of 20%, 20%, 30% and 30% on the first, second, third and fourth anniversaries of the
issue date of Series B financing (Batch 3-a). Each vested RSU shall not be exercisable until the later of the following:
(i) the date such RSU has vested and (ii) the successful IPO. The RSUs to grantees who joined the Group after the
issue date of Series B financing were granted at an exercise price of RMB8.10 (Batch 3-b), and shall vest in the
portions of 20%, 20%, 30% and 30% on the first, second, third and fourth anniversaries of the joining dates of the
employees. Each vested RSU shall not be exercisable until the later of the following: (i) the date such RSU has vested
and (ii) the successful IPO.
The fair value of the RSUs granted during the year ended 31 December 2024 was RMB267,398,000, of which
the Group recognised an equity-settled share-based payment expense of RMB153,152,000 and RMB46,805,000
during the year ended 31 December 2024 and the six months ended 30 June 2025 under the RSU Scheme.
The following restricted shares were outstanding during the Relevant Periods:
Number of shares
authorised
’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Granted during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,487
As at 31 December 2024 and 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,487
The exercise prices and the fair value at grant date of the restricted stocks outstanding as at 31 December 2024
and 30 June 2025 are as follows:
As at 31 December 2024 and 30 June 2025
Number of shares
outstanding Exercise price
Fair value at
grant date
’000 RMB per share RMB per share
Batch 1-a /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118467 1.15 83.39
Batch 1-b /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 1.15 83.39
Batch 2-a /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,056 9.36 75.18
Batch 2-b /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 9.36 75.18
Batch 3-a /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118887 8.10 76.44
Batch 3-b /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 8.10 76.44
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,487
The fair value of the restricted stocks granted was estimated as at the date of grant using recent transaction
price, taking into account the terms and conditions upon which the RSUs were granted.
31. CONTINGENT LIABILITIES
As at 30 June 2025, the Group had pending litigation against a biotechnology company in respect of a dispute
on transfer and use of intellectuals. The litigation is still ongoing and the future development cannot be estimated
with certainty. The exposure of the Group had been fully provided for in these financial statements.
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 618 ---
32. COMMITMENTS
The Group had the following contractual commitments at the end of the Relevant Periods.
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,880 82,001 67,807
33. RELATED PARTY TRANSACTIONS
(a) Name and relationship:
Name of related party Relationship with the Group
ABLINK Biotechnology Co., Ltd. ϓேସ˰ёᑌ
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate
Shanghai Luojun Enterprise Management
Partnership Enterprise (Limited Partnership)
ɪऎᖯё၍ଣፔ༔ΥྫΆุ(Υྫ) /H1118/H1118/H1118/H1118/H1118
An entity controlled by a shareholder with
significant influence over the Group
Lumosa Therapeutics Co., Ltd.ٰ
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Mutual key management personnel of the Group
and the entity
Ningbo Hongsheng Enterprise Management
Partnership Enterprise (Limited Partnership)
ᒿ᳅Άุ၍ଣΥྫΆุ(Υྫ) /H1118/H1118/H1118/H1118/H1118
An entity controlled by a shareholder with
significant influence over the Group
Ms. Cai Qingqing ᇹ૶૶ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A supervisor of the Group
(b) The Group and the Company had the following transactions with related parties during the Relevant
Periods and the six months ended 30 June 2024:
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Purchases of services
ABLINK Biotechnology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,382 331 297 53
Lumosa Therapeutics Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118475 649 337 304
Provision of services
ABLINK Biotechnology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1 8 4––
The pricing of services was determined according to the published prices and conditions agreed upon
by the Group and the related parties.
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 619 ---
(c) Outstanding balances with related parties:
The Group
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-trade:
Prepayments, other receivables and other
assets
Ningbo Hongsheng Enterprise Management
Partnership Enterprise (Limited
Partnership) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0––
Ms. Cai Qingqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0––
Shanghai Luojun Enterprise Management
Partnership Enterprise (Limited
Partnership) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,073 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,113 – –
Trade:
Other payables and accruals
ABLINK Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118 –2 4 –
Lumosa Therapeutics Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 312 156
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 336 156
The Company
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-trade:
Prepayments, other receivables and other
assets
Ningbo Hongsheng Enterprise Management
Partnership Enterprise (Limited
Partnership) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0––
Shanghai Luojun Enterprise Management
Partnership Enterprise (Limited
Partnership) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,073 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,093 – –
Trade:
Other payables and accruals
ABLINK Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118 –2 4 –
Lumosa Therapeutics Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 312 156
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 336 156
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 620 ---
(d) Compensation of key management personnel of the Group
Y ear ended 31 December Six months ended 30 June
2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Short term employee benefits /H1118 6,226 7,870 3,823 5,577
Post-employment benefits /H1118/H1118/H1118 787 821 407 538
Equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 113,964 52,039 38,203
Total compensation paid to
key management personnel /H1118 7,013 122,655 56,269 44,318
Further details of directors’ and the chief executive’s emoluments are included in note 9 to the Historical
Financial Information.
(e) Redemption rights of the Pre-IPO Investors granted by Controlling Shareholders
Prior to the Relevant Periods, the Pre-IPO Investors had been granted redemption rights by Controlling
Shareholders. The Company is not a party to the agreement with the Controlling Shareholders. During the
Relevant Periods, there were no side agreements or arrangements between the Company and the Controlling
Shareholders regarding the redemption rights of the Pre-IPO Investors, nor had the Company provided any
form of guarantee in connection with any potential default or failure by the Controlling Shareholders to fulfill
their obligations relating to such redemption rights granted by Controlling Shareholders. Accordingly, no
financial liability regarding redemption rights granted by controlling shareholders was recorded by the
Company during the Relevant Periods.
34. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant
Periods are as follows:
The Group
Financial assets
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets at amortised cost:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 141 119
Financial assets included in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,496 1,176 1,012
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,671 609,358 533,676
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118326,167 610,675 534,807
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 621 ---
Financial liabilities
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial liabilities at amortised cost:
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,094 201,855 243,420
Financial liabilities included in other payables
and accruals (note 23) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,311 45,124 107,753
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,405 246,979 351,173
For the details of pre-IPO investments, please refer to Note 27 to this report.
35. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
The carrying amounts of the Group’s financial instruments, other than those with carrying amounts that
reasonably approximate to fair values, are as follows:
Carrying amounts Fair values
As at 31 December As at 30 June As at 31 December As at 30 June
2023 2024 2025 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Financial liabilities
Interest-bearing bank
borrowings – non-current /H1118/H111844,983 132,290 170,201 47,738 128,683 171,128
Management has assessed that the fair values of cash and bank balances, trade receivables, financial assets
included in prepayments, other receivables and other assets (in the current portion), financial liabilities included in
other payables and accrual and interest-bearing bank borrowings (in the current portion) approximate to their carrying
amounts largely due to the short-term maturities of these instruments.
The Group’s finance department headed by the finance director is responsible for determining the policies and
procedures for the fair value measurement of financial instruments. At the end of each of the Relevant Periods, the
finance department analyses the movements in the values of financial instruments and determines the major inputs
applied in the valuation. The directors review the results of the fair value measurement of financial instruments
periodically for financial reporting.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values:
The fair values of the non-current portion of financial assets included in prepayments, other receivables and
other assets and interest-bearing bank borrowings have been calculated by discounting the expected future cash flows
using rates currently available for instruments with similar terms, credit risk and remaining maturities. The Group’s
own non-performance risk for interest-bearing bank borrowings at 31 December 2023 and 2024 and 30 June 2025 was
assessed to be insignificant. Management has assessed that the fair values of the non-current portion of bank
borrowings with floating interest rates approximate to their carrying amounts because the interest rates are adjusted
periodically by reference to the fair market interest rates.
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 622 ---
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:
Liabilities for which fair values are disclosed:
As at 31 December 2023
Fair value measurement using
Quoted prices in
active markets
(Level 1)
Significant
observable inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings /H1118/H1118/H1118 – 47,738 – 47,738
As at 31 December 2024
Fair value measurement using
Quoted prices in
active markets
(Level 1)
Significant
observable inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings /H1118/H1118/H1118 – 128,683 – 128,683
As at 30 June 2025
Fair value measurement using
Quoted prices in
active markets
(Level 1)
Significant
observable inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings /H1118/H1118/H1118 – 171,128 – 171,128
36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and cash equivalents, trade receivables, and
financial assets included in prepayments, other receivables and other assets. The main purpose of these financial
instruments is to raise finance for the Group’s operations. The Group has various financial assets and liabilities such
as trade receivables, trade payables, financial assets included in prepayments, other receivables and other assets and
financial liabilities included in other payables and accruals, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk,
credit risk and liquidity risk. The board of directors reviews and agrees policies for managing each of these risks and
they are summarised below.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates primarily to the Group’s bank borrowings
with a floating interest rate.
The following table demonstrates the sensitivity at the end of the Relevant Periods to a reasonably possible
change in interest rates, with all other variables held constant, of the Group’s loss before tax (through the impact on
floating rate borrowings) and the Group’s equity (excluding retained profits):
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 623 ---
Increase/(decrease)
in basis points
Increase/(decrease)
in loss before tax
Increase/(decrease)
in equity
RMB’000 RMB’000
31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 1,203 1,023
31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 2,258 1,919
30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 2,906 2,470
Foreign currency risk
The Group’s major businesses are in Mainland China and the majority of the transactions are conducted in
RMB. Most of the Group’s assets and liabilities are denominated in RMB. The Group does not have material foreign
currency risk during the Relevant Periods.
Credit risk
The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant.
The credit risk of the Group’s financial assets, which comprise cash and cash equivalents, restricted cash, trade
receivables, and financial assets included in prepayments, other receivables and other assets, arises from default of
the counterparty, with a maximum exposure equal to the carrying amount of these instruments.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit
policy, which is mainly based on past due information unless other information is available without undue cost or
effort, and year-end staging classification as at the end of each of the Relevant Periods.
The amounts presented are gross carrying amounts for financial assets.
As at 31 December 2023
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* /H1118/H1118/H1118/H1118/H1118 – – – 2,000 2,000
Financial assets included
in prepayments, other
receivables and other
assets – normal** /H1118/H1118/H1118/H1118/H11182,49 6––– 2,496
Cash and bank balances –
not yet past due /H1118/H1118/H1118/H1118/H1118/H1118321,67 1––– 321,671
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118324,167 – – 2,000 326,167
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 624 ---
As at 31 December 2024
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* /H1118/H1118/H1118/H1118/H1118 – – – 141 141
Financial assets included
in prepayments, other
receivables and other
assets – normal** /H1118/H1118/H1118/H1118/H11181,17 6––– 1,176
Cash and bank balances –
not yet past due /H1118/H1118/H1118/H1118/H1118/H1118609,35 8––– 609,358
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118610,534 – – 141 610,675
As at 30 June 2025
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* /H1118/H1118/H1118/H1118/H1118 ––– 1 1 9 1 1 9
Financial assets included
in other receivables
and other assets –
normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,01 2––– 1,012
Cash and bank balances –
not yet past due /H1118/H1118/H1118/H1118/H1118/H1118533,67 6––– 533,676
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118534,688 – – 119 534,807
* For trade receivables to which the Group applies the simplified approach for impairment, information
is disclosed in note 20 to the Historical Financial Information.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is
considered to be “normal” when they are not past due and there is no information indicating that the
financial assets had a significant increase in credit risk since initial recognition. Otherwise, the credit
quality of the financial assets is considered to be “doubtful”.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables are
disclosed in note 20 to the Historical Financial Information.
Since the Group trades only with recognised and creditworthy third parties, there is no requirement for
collateral. Concentrations of credit risk are managed by customer/counterparty, by geographical region and by
industry sector. There is concentration in credit risk as the balances are with a few counterparties. Except for cash
and bank balances, the other balances are not material.
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management
of the Group to finance the operations and mitigate the effects of fluctuations in cash flows.
The maturity profile of the Group’s financial liabilities and lease liabilities as at the end of each of the Relevant
Periods, based on the contractual undiscounted payments, is as follows:
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 625 ---
The Group
As at 31 December 2023
Less than 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118943 100 – 1,043
Financial liabilities included in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,311 – – 49,311
Interest-bearing bank borrowings /H1118/H1118/H1118 68,888 50,231 1,372 120,491
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,142 50,331 1,372 170,845
As at 31 December 2024
Less than 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,650 1,888 – 3,538
Financial liabilities included in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,124 – – 45,124
Interest-bearing bank borrowings /H1118/H1118/H1118 73,568 110,478 31,790 215,836
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,342 112,366 31,790 264,498
As at 30 June 2025
Less than 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,772 1,124 – 2,896
Financial liabilities included in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,753 – – 107,753
Interest-bearing bank borrowings /H1118/H1118/H1118 78,898 141,669 40,790 261,357
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,423 142,793 40,790 372,006
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as
a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders’
value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions
and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may adjust
the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group is not subject
to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for
managing capital during the Relevant Periods.
The Group monitors capital using a gearing ratio, which is total debt divided by the total assets. Total debt
includes current liabilities and non-current liabilities. Total assets include current assets and non-current assets.
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 626 ---
The gearing ratios as at the end of each of the Relevant Periods are as follows:
As at 31 December As at 30 June
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,754 367,391 499,102
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118973,880 1,363,267 1,388,687
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823.08% 26.95% 35.94%
37. EVENTS AFTER THE RELEV ANT PERIODS
There were no significant events occurred after 30 June 2025.
38. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the companies now
comprising the Group in respect of any period subsequent to 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 627 ---
This information set forth in this Appendix II does not form part of the accountants’ report
prepared by Ernst & Young, Certified Public Accountants, Hong Kong, the reporting
accountants of the Company, as set forth in Appendix I in this Prospectus, and is included
herein for information only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial information” in this Prospectus and the accountants’ report set
forth in Appendix I in the prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following statement of unaudited pro forma adjusted net tangible assets attributable
to the Shareholders of the Company has been prepared in accordance with Rule 4.29 of the
Listing Rules, and is set out below to illustrate the effect of the Global Offering on the
consolidated net tangible liabilities attributable to the Shareholders of the Company as of
30 June 2025, as if the Global Offering had taken place on 30 June 2025.
The statement of unaudited pro forma adjusted net tangible assets has been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture
of the financial position of the Group had the Global Offering been completed as of 30 June
2025 or at any future date.
Consolidated
net tangible
assets of
the Group
attributable to
owners of the
parent as at
30 June 2025
Estimated net
proceeds from
the Global
Offering
Unaudited
pro forma
adjusted
consolidated
net tangible
assets
attributable to
owners of the
parent as at
30 June 2025
Unaudited pro forma
adjusted consolidated
net tangible assets
attributable to
owners of the parent
per Share as at
30 June 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer
Price of HK$26.38
per Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118877,608 856,857 1,734,465 5.32 5.85
Notes:
(1) The consolidated net tangible assets of the Group attributable to owners of the parent as at 30 June 2025
was equal to the consolidated net assets attributable to owners of the parent as at 30 June 2025 of
RMB889.6 million after deducting intangible assets of RMB12.0 million as at 30 June 2025, as shown
in the Accountants’ Report set out in Appendix I to this prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 628 ---
(2) The estimated net proceeds from the Global Offering are calculated based on the offer price of
HK$26.38 per Share, after deduction of the underwriting fees and related expenses paid or payable by
the Company (excluding the listing expenses charged to consolidated statements of profit or loss during
the Track Record Period).
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent
per Share are calculated based on 325,981,465 Shares in issue immediately following the completion of
the Global Offering.
(4) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent
per Share are converted into Hong Kong dollars at an exchange rate of RMB0.9103 to HK$1.00.
(5) No adjustment has been made to reflect any trading results or open transactions of the Group entered
into subsequent to 30 June 2025.
(6) The Group’s property interests as at 30 September 2025 have been valued by A VISTA V aluation
Advisory Limited, an independent valuer. The relevant property valuation report is set out in Appendix
III to this prospectus. The above unaudited pro forma statement of adjusted net tangible assets does not
take into account the surplus arising from the revaluation of the Group’s property interests. Revaluation
surplus has not been recorded in the Historical Financial Information of the Group and will not be
recorded in the consolidated financial statements of the Group in the future periods as the Group’s
property, plant and equipment are stated at cost less accumulated depreciation and impairment losses,
if any. If the valuation surplus were recorded in the Group’s financial statements, additional annual
depreciation and amortisation of approximately RMB503,000 would be charged against the profit in the
future periods.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 629 ---
Ernst & Young
27/F , One T aikoo Place
979 King’s Road
Quarry Bay, Hon
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INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Shanghai Bao Pharmaceuticals Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Shanghai Bao Pharmaceuticals Co., Ltd. (the “Company”)
and its subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the
Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial
information consists of the unaudited pro forma consolidated net tangible assets as at 30 June
2025, and related notes as set out on page II-1 and II-2 of the prospectus dated 2 December
2025 issued by the Company (the “Unaudited Pro Forma Financial Information”). The
applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma
Financial Information are described in note Appendix II(A).
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group’s financial
position as at 30 June 2025 as if the transaction had taken place at 30 June 2025. As part of
this process, information about the Group’s financial position has been extracted by the
Directors from the Group’s financial statements for the period ended 30 June 2025, on which
an accountants’ report has been published.
Directors’ responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to
Accounting Guideline (“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion
in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (the
“HKICPA”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 630 ---
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to
you. We do not accept any responsibility for any reports previously given by us on any
financial information used in the compilation of the Unaudited Pro Forma Financial
Information beyond that owed to those to whom those reports were addressed by us at the dates
of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus issued by the HKICPA. This standard requires
that the reporting accountants plan and perform procedures to obtain reasonable assurance
about whether the Directors have compiled the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the
HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited Pro
Forma Financial Information, nor have we, in the course of this engagement, performed an
audit or review of the financial information used in compiling the Unaudited Pro Forma
Financial Information.
The purpose of the Unaudited Pro Forma Financial Information included in the
Prospectus is solely to illustrate the impact of the global offering of shares of the Company on
unadjusted financial information of the Group as if the transaction had been undertaken at an
earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Unaudited Pro Forma
Financial Information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess whether the applicable criteria used by the Directors
in the compilation of the Unaudited Pro Forma Financial Information provide a reasonable
basis for presenting the significant effects directly attributable to the transaction, and to obtain
sufficient appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 631 ---
 the Unaudited Pro Forma Financial Information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to
the reporting accountants’ understanding of the nature of the Group, the transaction in respect
of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro
Forma Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled on the
basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing
Rules.
Ernst & Y oung
Certified Public Accountants
Hong Kong
2 December 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 632 ---
The following is the text of a letter , a summary of values and valuation certificates
prepared for the purpose of incorporation in this prospectus received from AVISTA V aluation
Advisory Limited, an independent valuer , in connection with its valuation as at 30 September
2025 of the property interests held by the Company.
Suites 2401-06, 24/F, Everbright Centre, 108 Gloucester Road,
Wan Chai, Hong Kong
荜虓鳟鍑⚽钏鍪
:  +852 3702 7338                         :  +852 3914 6388
2 December 2025
The Board of Directors
Shanghai Bao Pharmaceuticals Co., Ltd. (ʮ̡)
No. 28 Luoxin Road, Baoshan District
Shanghai, PRC
Dear Sirs/Madams,
INSTRUCTIONS
In accordance with the instructions of Shanghai Bao Pharmaceuticals Co., Ltd. ( ɪऎᘒ
ʮ̡) (the “Company”) and its subsidiaries (hereinafter together referred to as
the “Group”) for us to carry out the valuation of the property interests (the “Properties”)
located in the People’s Republic of China (the “PRC”) held by the Company, we confirm that
we have carried out inspection, made relevant enquiries and searches and obtained such further
information as we consider necessary for the purpose of providing you with our opinion of the
market value of the Properties as at 30 September 2025 (the “V aluation Date”).
BASIS OF V ALUATION AND V ALUATION STANDARDS
Our valuation is carried out on a market value basis, which is defined by the Royal
Institution of Chartered Surveyors as “ the estimated amount for which an asset or liability
should exchange on the valuation date between a willing buyer and a willing seller in an arm’ s
length transaction, after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion ”.
In valuing the Properties, we have complied with all the requirements set out in Chapter
5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock
Exchange of Hong Kong Limited (the “Listing Rules”), the RICS V aluation — Global
Standards published by the Royal Institution of Chartered Surveyors (“RICS”) and the
International V aluation Standards published from time to time by the International V aluation
Standards Council.
APPENDIX III V ALUATION REPORT
– III-1 –


--- page 633 ---
CATEGORISATION OF PROPERTY INTERESTS
In the course of our valuation, the appraised Properties have been categorized according
firstly to type of interests held by the Company, which in turn being classified into the
following groups:
Grou p I — Property interests held for owner occupation by the Company in the PRC
Group II — Property interests held for development by the Company in the PRC
V ALUATION ASSUMPTIONS
Our valuation of the Properties excludes an estimated price inflated or deflated by special
terms or circumstances such as atypical financing, sale and leaseback arrangement, special
considerations or concessions granted by anyone associated with the sale, or any element of
special value or costs of sale and purchase or offset for any associated taxes.
No allowance has been made in our report for any charges, mortgages or amounts owing
on any of the Properties valued nor for any expenses or taxation which may be incurred in
effecting a sale. Unless otherwise stated, it is assumed that the Properties are free from
encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.
In the course of our valuation of the Properties in the PRC, we have relied on the advice
given by the Group and its legal advisor, being Beijing DeHeng Law Offices (ࢪܛ
הthe “PRC Legal Advisor”), regarding the titles to the Properties.
In valuing the Properties, we have relied on a legal opinion regarding the Properties
provided by the PRC Legal Advisor dated 26 November 2025 (the “PRC Legal Opinion”).
Unless otherwise stated, the Company has legally obtained the land use rights of the Properties.
No environmental impact study has been ordered or made. Full compliance with
applicable national, provincial and local environmental regulations and laws is assumed.
V ALUATION METHODOLOGY
In valuing the property interests in Group I, due to the nature of the buildings and
structures of the subject property, there are no market sales comparables readily available. We
have valued the property interests on the basis of their depreciated replacement cost.
Depreciated replacement cost is defined as “ the current cost of replacing an asset with its
modern equivalent asset less deduction for physical deterioration and all relevant forms of
obsolescence and optimization ”. It is based on an estimation of the market value for the
existing use of the land, plus the current cost of replacement (reproduction) of the building,
including the improvements, less deductions for physical deterioration and all relevant forms
of obsolescence and optimization.
APPENDIX III V ALUATION REPORT
– III-2 –


--- page 634 ---
In valuing the property interests in Group II, where the corresponding property was under
construction as at the V aluation Date, we have assumed that it will be developed and completed
in accordance with the latest development proposals provided to us by the Group. We have
assumed that approvals for the proposals have been obtained. In arriving at our opinion of
values, we have adopted the comparison approach by making references to land comparable
sales evidence as available in the relevant market and have also taken into account the accrued
construction cost and professional fees relevant to the stage of construction as at the V aluation
Date and the remainder of the cost and fees expected to be incurred for completing the
developments. We have relied on the accrued construction cost and professional fees
information provided by the Group for the different stages of construction of the subject
properties as at the V aluation Date, and we did not find any material inconsistency from those
of other similar developments.
TITLE INVESTIGATION
We have been provided with copies of documents in relation to the title of the Properties
in the PRC. Where possible, we have examined the original documents to verify the existing
title to the Properties in the PRC and any material encumbrance that might be attached to the
Properties or any tenancy amendment. All documents have been used for reference only and all
dimensions, measurements and areas are approximate. In the course of our valuation, we have
relied considerably on the PRC Legal Opinion given by the PRC Legal Advisor, concerning the
validity of the title of the Properties in the PRC.
SITE INVESTIGATION
We have inspected the exteriors and, where possible, the interior of the subject properties.
The site inspection was carried out on 10 December 2024 by Turman Cheung (Manager) and
Y erna Liu (Senior Analyst). They have more than 3 years’ experience in valuation of properties
in the PRC.
In the course of our inspection, we did not note any serious defects. However, we have
not carried out an investigation on site to determine the suitability of ground conditions and
services for any development thereon, nor have we conducted structural surveys to ascertain
whether the subject properties are free of rot, infestation, or any other structural defects.
Additionally, no tests have been carried out on any of the utility services. Our valuation has
been prepared on the assumption that these aspects are satisfactory. We have further assumed
that there is no significant pollution or contamination in the locality which may affect any
future developments.
APPENDIX III V ALUATION REPORT
– III-3 –


--- page 635 ---
SOURCE OF INFORMATION
Unless otherwise stated, we shall rely to a considerable extent on the information
provided to us by the Group or the PRC Legal Advisor or other professional advisers on such
matters as statutory notices, planning approvals, zoning, easements, tenures, completion date
of buildings, development proposal, identification of the properties, particulars of occupation,
site areas, floor areas, matters relating to tenure, tenancies and all other relevant matters.
We have had no reason to doubt the truth and accuracy of the information provided to us
by the Group. We have also sought confirmation from the Group that no material factors have
been omitted from the information supplied. We consider that we have been provided with
sufficient information to reach an informed view and we have no reason to suspect that any
material information has been withheld.
We have not carried out detailed measurements to verify the correctness of the areas in
respect of the properties but have assumed that the areas shown on the title documents and
official site plans handed to us are correct. All documents and contracts have been used as
reference only and all dimensions, measurements and areas are approximations. No on-site
measurement has been taken.
LIMITING CONDITION
Wherever the content of this report is extracted and translated from the relevant
documents supplied in Chinese context and there are discrepancies in wordings, those parts of
the original documents will take prevalent.
CURRENCY
Unless otherwise stated, all monetary amounts stated in this report are in Renminbi
(RMB).
Our valuations are summarized below, and the valuation certificates are attached.
Y ours faithfully,
For and on behalf of
A VISTA Valuation Advisory Limited
Vincen t C B Pang
MRICS CF A FCP A FCP A Australia
RICS Registered V aluer
Managing Partner
Note: Mr. Vincen t C B Pang is a member of Royal Institution of Chartered Surveyors (RICS) and a registered valuer
of RICS. He has over 10 years’ experience in valuation of properties including Hong Kong, the PRC, the U.S.,
and East and Southeast Asia.
APPENDIX III V ALUATION REPORT
– III-4 –


--- page 636 ---
SUMMARY OF V ALUES
G r o u pI—P r operty interests held for owner occupation by the Company in the PRC
No. Property
Market value
in existing
state as at
30 September
2025
Interest
Attributable to
the Company
Market value
Attributable to
the Company
as at
30 September
2025
RMB RMB
1. No. 28 and
50 Luoxin Road
Baoshan District
Shanghai City
the PRC
(ʕ਷ɪऎ̹ᘒʆਜᖯอ
༩28ʿ50໮)
191,010,000 100% 191,010,000
Sub-total: 191,010,000 191,010,000
Group II — Property interests held for development by the Company in the PRC
No. Property
Market value
in existing
state as at
30 September
2025
Interest
Attributable to
the Company
Market value
Attributable to
the Company
as at
30 September
2025
RMB RMB
2. No. 555
Luoxin Road (East)
Baoshan District
Shanghai City
the PRC
(ʕ਷ɪऎ̹ᘒʆਜᖯอ
༩555໮)
412,440,000 100% 412,440,000
Sub-total: 412,440,000 412,440,000
Grand-total: 603,450,000 603,450,000
APPENDIX III V ALUATION REPORT
– III-5 –


--- page 637 ---
V ALUATION CERTIFICATE
G r o u pI—P r operty interests held for owner occupation by the Company in the PRC
No. Property Description and tenure
Particulars of
occupancy
Market value
in existing
state as at
30 September 2025
RMB
1. No. 28 and 50
Luoxin Road
Baoshan District
Shanghai City
the PRC
(ʕ਷ɪऎ̹ᘒʆਜ
ᖯอ༩28ʿ50໮)
The property comprises seven
1- to 3-storey industrial
buildings, with a total gross floor
area of approximately 23,974.13
sq.m.
The property was held for owner
occupation as at the V aluation
Date.
As advised by the Group, the
property was completed in 2007.
The classification, usage and area
details are set out in Note 3.
The property is located at Luoxin
Road in Baoshan District of
Shanghai City, with
approximately 5 km to Meilan
Lake Station of Shanghai Metro
and 35 km to Shanghai Hongqiao
International Airport.
The land use rights of the
property have been granted for a
term expiring on 13 December
2055 for industrial use.
The property was
occupied by the
Group as at the
V aluation Date for
biopharmaceutical
purpose.
191,010,000
(100% interest
attributable to the
Company:
191,010,000)
Notes:
1. Pursuant to a sale and purchase agreement dated 6 September 2021 (the “S&P”) between Shanghai
Jingfeng Pharmaceutical Co., Ltd. (ʮ̡, “Shanghai Jingfeng”) and Shanghai Bao
Pharmaceuticals Co., Ltd. (ʮ̡, formerly known asʮ̡, the
“Company”), the property was contracted to be purchased by the Company at a total consideration of
RMB203,000,000.
2. Pursuant to a Real Estate Ownership Certificate — Hu (2023) Bao Zi Bu Dong Chan Quan Di No.
038465 issued by the Shanghai Bureau of Natural Resources Title Confirmation and Registration ( ɪऎ
̹І್༟๕ᆽᛆ೮া҅), the land use rights of the property with a total site area of approximately
62,777.10 sq.m. for a term expiring on 13 December 2055 for industrial use and the building ownership
of the property with a total gross floor area of approximately 23,974.13 sq.m. for industrial use have
been vested in the Company.
APPENDIX III V ALUATION REPORT
– III-6 –


--- page 638 ---
3. As advised by the Group, the details of the property are set out as below:
Classification Usage Gross Floor Area
(sq.m.)
Grou p I — Property interests held for owner occupation
by the Company in the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Industrial 22,634.62
Ancillary Facilities 1,339.51
Total: 23,974.13
4. We have been provided with the PRC Legal Opinion, which contains, inter alia, the following:—
a. The Company has obtained the land use rights and the building ownership of the property under
the terms of the Real Estate Ownership Certificate;
b. In addition to the building with a total gross floor area of approximately 23,974.13 sq.m., there
are three unfinished buildings (the “Construction-in-progress”) and temporary structures with a
total gross floor area of approximately 500 sq.m. (the “Temporary Structures”) on the site for
which proper ownership certificates have not been issued.
i. According to the S&P , buildings without proper ownership certificates were excluded from
the transaction. As per the relevant construction permits, the Construction-in-progress was
constructed by Shanghai Jingfeng. The Company was neither involved in the construction
process, occupation or use of the Construction-in-progress, nor the owner of the
Construction-in-progress. In the event of any administrative penalties related to the
Construction-in-progress, the liable parties would be Shanghai Jingfeng and the
construction works contractor, as confirmed by local governmental authorities.
As of the Latest Practicable Date, the Company has not received any rectification
instructions, or been investigated or penalized in related to breaches of laws. The risk of
administrative penalties is deemed low, with no significant adverse impact foreseen on the
Company’s production and operations; and
ii. The Temporary Structures are not utilized for major production or operational activities.
The Company has not been penalized in related to the Temporary Structures. No significant
adverse impact is foreseen on the Company’s production and operations.
c. The property has been pledged to Baoshan Branch of Shanghai Pudong Development Bank Co.,
Ltd. (ʮ̡ᘒʆ˕Б).
5. In the course of our valuation, we assume that the property is transferable without legal impediment.
6. Our valuation has been made on the following basis and analysis:
In our valuation of the land use rights, we have considered and analyzed 4 land sale comparables in the
vicinity. The adjusted site values of the land sales range from RMB1,520 to RMB2,420 per sq.m. for
industrial use. The unit rate adopted in the valuation is consistent with the unit rates of the relevant
comparables after due adjustments in terms of location, time and size, etc.
Regarding the building portion, the current replacement cost of the building is assessed by determining
the construction cost of a modern substitute building with the same service capacity as the building
which is being valued. The adjusted replacement costs range from RMB4,270 per sq.m. to RMB5,230
per sq.m. for fully fitted industrial buildings based on our research of the local construction costs. The
replacement cost adopted in the valuation is consistent with the findings of our research.
APPENDIX III V ALUATION REPORT
– III-7 –


--- page 639 ---
V ALUATION CERTIFICATE
Group II — Property interests held for development by the Company in the PRC
No. Property Description and tenure
Particulars of
occupancy
Market value
in existing
state as at
30 September 2025
RMB
2. No. 555
Luoxin Road (East)
Baoshan District
Shanghai City
the PRC
(ʕ਷ɪऎ̹ᘒʆਜ
༩555໮)
The property comprises a parcel
of land with a site area of
approximately 36,860.50 sq.m.
which is being developed into an
industrial development.
As at the V aluation Date, the
property was under development
and was scheduled to be
completed and operational in Q2
2026. Upon completion, the
property will have a total planned
gross floor area of approximately
73,836.10 sq.m.
As advised by the Group,
the total construction cost
of the property was estimated
to be approximately
RMB432,492,300 of which
RMB356,043,809 had been paid
as at the V aluation Date.
The classification, usage and area
details are set out in Note 6.
The property is located at Luoxin
Road (East) in Baoshan District
of Shanghai City, with
approximately 5 km to Meilan
Lake Station of Shanghai Metro
and 35 km to Shanghai Hongqiao
International Airport.
The land use rights of the
property have been granted for a
term expiring on 16 August 2070
for industrial use.
As at the V aluation
Date, the property was
under construction.
412,440,000
(100% interest
attributable to the
Company:
412,440,000)
Notes:
1. Pursuant to a Land Use Rights Grant Contract — Hu Bao Gui Hua Zi Y uan (2020) Chu Rang He Tong
Di No. 28 dated 6 August 2020 between the Shanghai Baoshan Municipal Bureau of Planning and
Natural Resources ( ɪऎ̹ᘒʆਜ஝ྌձІ್༟๕҅) and Shanghai Bao Pharmaceuticals Co., Ltd.
(ʮ̡, formerly known asʮ̡, the “Company”), the land use
rights of a parcel of land with a site area of approximately 36,860.50 sq.m. have been granted to the
Company for a term of 50 years for industrial use at a total land premium of approximately
RMB55,300,000.
APPENDIX III V ALUATION REPORT
– III-8 –


--- page 640 ---
As revealed from the aforesaid contract, the property is subject to the following material development
conditions:
Permitted Use /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: Industrial
Plot Ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 2.0
Maximum Permitted Gross Floor Area /H1118/H1118/H1118/H1118/H1118: 74,507.61 sq.m.
Height Restriction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: /H1101730m
Minimum Site Coverage of Greenery /H1118/H1118/H1118/H1118/H1118: 20%
Other Material Restrictions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: The Company is prohibited from constructing
buildings for non-production purposes,
such as houses, residential flats or hostels.
2. Pursuant to a Real Estate Ownership Certificate — Hu (2025) Bao Zi Bu Dong Chan Quan Di No.
037958 issued by the Shanghai Bureau of Natural Resources Title Confirmation and Registration ( ɪऎ
̹І್༟๕ᆽᛆ೮া҅), the land use rights of the property with a total site area of approximately
36,860.50 sq.m. for a term expiring on 16 August 2070 for industrial use and the building ownership
of the property with a total gross floor area of approximately 73,836.10 sq.m. for industrial use have
been vested in the Company.
3. Pursuant to a Construction Land Planning Permit — Hu Bao Di (2020) No. EA310113202000636,
permission for the planning of a land parcel with a total site area of approximately 36,860.50 sq.m. has
been granted to the Company.
4. Pursuant to a Construction Works Planning Permit — Hu Bao Jian (2021) No. FA310113202100559 in
favour of the Company, the construction work of the property with a total gross floor area of
approximately 74,507.61 sq.m. has been approved for construction.
Further pursuant to a legal document — Hu Bao Gui Hua Zi Y uan Xu Jian Bian [2023] No. 68, the
Shanghai Baoshan Municipal Bureau of Planning and Natural Resources ( ɪऎ̹ᘒʆਜ஝ྌձІ್༟
๕҅) has approved the application of the Company to relax the maximum permitted gross floor area
from approximately 74,507.61 sq.m. to approximately 74,723.21 sq.m.
5. Pursuant to a Construction Work Commencement Permit — No. 310113202404080101 in favour of the
Company, permission has been given by the relevant local authority to commence the construction work
of the property with a total gross floor area of approximately 74,723.21 sq.m.
6. Pursuant to a Land and Building Title Investigation Report — Fang-Bao Ce-25-7901 issued by the Real
Estate Trade Center of Baoshan District (ʕː), the total gross floor area of the
property was surveyed to be approximately 73,836.10 sq.m.
7. As advised by the Group, the details of the property are set out as below:
Classification Usage Gross Floor Area
(sq.m.)
Group II — Property interests held for development by
the Company in the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Industrial 56,976.72
Ancillary Facilities 11,684.08
Carpark 5,175.30
Total: 73,836.10
8. We have been provided with the PRC Legal Opinion, which contains, inter alia, the following:—
a. The Company has obtained the land use rights of the property under the terms of the Real Estate
Ownership Certificate;
b. The Company has obtained the necessary approvals and permissions for the corresponding stages
of the construction of the property; and
c. The property has been pledged to Shanghai Rural Commercial Bank Co., Ltd. (Branch in
Songjiang) (Ϫ˕Б).
APPENDIX III V ALUATION REPORT
– III-9 –


--- page 641 ---
9. In the course of our valuation, we assume that the property is transferable without legal impediment.
10. Our valuation has been made on the following basis and analysis:
In our valuation of the land use rights, we have considered and analyzed 4 land sale comparables in the
vicinity. The adjusted site values of the land sales range from RMB1,780 to RMB2,830 per sq.m. for
industrial use. The unit rate adopted in the valuation is consistent with the unit rates of the relevant
comparables after due adjustments in terms of location, time and size, etc.
Regarding the building portion, the current replacement cost of the building is assessed by determining
the construction cost of a modern substitute building with the same service capacity as the building
which is being valued. The adjusted replacement costs range from RMB4,800 per sq.m. to RMB5,630
per sq.m. for fully fitted industrial buildings and from RMB6,710 per sq.m. to RMB7,980 per sq.m. for
basement based on our research of the local construction costs. The replacement cost adopted in the
valuation is consistent with the findings of our research.
APPENDIX III V ALUATION REPORT
– III-10 –


--- page 642 ---
THE PRC TAXATION
Taxation on Dividends
Individual Investor
Pursuant to the Individual Income Tax Law of the PRC (੻೼
), which was most recently amended on August 31, 2018 and the Implementation
Provisions of the Individual Income Tax Law of the PRC (ྼ
ૢԷ), which was most recently amended on December 18, 2018 (hereinafter collectively
referred to as the “ IIT Law ”), dividends distributed by PRC enterprises are subject to
individual income tax levied at a flat rate of 20%. For a foreign individual who is not a resident
of the PRC, the receipt of dividends from an enterprise in the PRC is normally subject to
individual income tax of 20% unless specifically exempted by the tax authority of the State
Council or reduced by relevant tax treaty.
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income (ᅄ೼
τર) (hereinafter referred to as the “ Arrangement for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ”
(τર)) signed by the Mainland of China and the
Hong Kong Special Administrative Region on August 21, 2006, the PRC government may
impose tax on dividends paid by a PRC company to a Hong Kong resident (including natural
person and legal entity), but such tax shall not exceed 10% of the total amount of dividends
payable. If a Hong Kong resident directly holds 25% or more of equity interest in a PRC
company and the Hong Kong resident is the beneficial owner of the dividends and meets other
conditions, such tax shall not exceed 5% of the total amount of dividends payable by the PRC
company. The Fifth Protocol to the Arrangement between the Mainland of China and the Hong
Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with Respect to Taxes on Income (׵<ಥतйБ
τર>) (the “ Fifth Protocol ”( ୋ
)) issued by the SA T and became effective on December 6, 2019 provides that such
provisions shall not apply to arrangements or transactions made for one of the primary
purposes of obtaining such tax benefits.
Enterprise Investors
In accordance with the Enterprise Income Tax Law of the PRC (ʕശɛ͏΍ձ਷Άุ
) issued by NPC on March 16, 2007 and latest amended on December 29, 2018 and
the Implementation Provisions of the Enterprise Income Tax Law of the PRC (ʕശɛ͏΍ձ
ૢԷ) issued by the State Council on December 6, 2007, newly revised
on December 6, 2024 and implemented on January 20, 2025, a non-resident enterprise is
generally subject to a 10% enterprise income tax on PRC-sourced income (including dividends
received from a PRC resident enterprise), if it does not have an establishment or premise in the
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 1–


--- page 643 ---
PRC or has an establishment or premise in the PRC but its PRC-sourced income has no real
connection with such establishment or premise. The aforesaid income tax payable for
non-resident enterprises are deducted at source, where the payer of the income is required to
withhold the income tax from the amount to be paid to the non-resident enterprise. Such
withholding tax may be reduced or exempted pursuant to an applicable treaty for the avoidance
of double taxation.
The Circular of the State Administration of Tax on Issues Relating to the Withholding and
Remitting of Enterprise Income Tax by PRC Resident Enterprises on Dividends Distributed to
Overseas Non-Resident Enterprise Shareholders of H Shares (͏Ά
ุΣྤ̮H), which was
issued and implemented by the SA T on November 6, 2008, further clarified that a PRC-resident
enterprise must withhold corporate income tax at a rate of 10% on the dividends paid to
non-PRC resident enterprise holders of H Shares which are derived out of profit generated
since 2008. Non-PRC resident enterprise shareholders who need to enjoy tax treaty benefits,
the relevant provisions of such tax treaty shall apply.
Pursuant to the Arrangement for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income, the PRC government may impose tax on
dividends paid by a PRC company to a Hong Kong resident (including natural person and legal
entity), but such tax shall not exceed 10% of the total amount of dividends payable. If a Hong
Kong resident directly holds 25% or more of equity interest in a PRC company and the Hong
Kong resident is the beneficial owner of the dividends and meets other conditions, such tax
shall not exceed 5% of the total amount of dividends payable by the PRC company. The Fifth
Protocol provides that such provisions shall not apply to arrangements or transactions made for
one of the primary purposes of obtaining such tax benefits.
Although there may be other provisions under the Arrangement for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the
treaty benefits under the criteria shall not be granted in the circumstance where relevant gains,
after taking into account all relevant facts and conditions, are reasonably deemed to be one of
the main purposes for the arrangement or transactions which will bring any direct or indirect
benefits under this Arrangement, except when the grant of benefits under such circumstance is
consistent with relevant objective and goal under the Arrangement. The application of the
dividend clause of tax agreements is subject to the requirements of PRC tax law and regulation,
such as the Notice of the State Administration of Taxation on the Issues Concerning the
Application of the Dividend Clauses of Tax Agreements (ٰ֛
).
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 2–


--- page 644 ---
Tax Treaties
Non-resident investors residing in jurisdictions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a reduction
of the Chinese corporate income tax imposed on the dividends received from PRC companies.
The PRC currently has entered into Avoidance of Double Taxation Treaties or Arrangements
with a number of countries and regions including Hong Kong Special Administrative Region,
Macau Special Administrative Region, Australia, Canada, France, Germany, Japan, Malaysia,
the Netherlands, Singapore, the United Kingdom and the United States. Non-PRC resident
enterprises entitled to preferential tax rates in accordance with the relevant taxation treaties or
arrangements are required to apply to the Chinese tax authorities for a refund of the corporate
income tax in excess of the agreed tax rate, and the refund application is subject to approval
by the Chinese tax authorities.
Taxation on Share Transfer
VAT and Local Additional Tax
Pursuant to the Notice on Fully Implementing the Pilot Reform for the Transition from
Business Tax to V alue-added Tax () (the
“Circular 36 ”), which was implemented on May 1, 2016 and partially repealed on July 1,
2017, January 1, 2018 and April 1, 2019, entities and individuals engaged in the services sale
in the PRC are subject to V alue-added Tax (“ VAT”) and “engaged in the services sale in the
PRC” means that the seller or buyer of the taxable services is located in the PRC. Circular 36
also provides that transfer of financial products, including transfer of the ownership of
marketable securities, shall be subject to V A T at 6% on the taxable revenue (which is the
balance of sales price upon deduction of purchase price), for a general or a foreign V A T
taxpayer. However, individuals who transfer financial products are exempt from V A T, which is
also provided in the Notice of Ministry of Finance and State Administration of Taxation on
Several Tax Exemption Policies for Business Tax on Sale and Purchase of Financial
Commodities by Individuals (ʍе
) effective on January 1, 2009. According to these regulations, if the holder is
a non-resident individual, the PRC V A T is exempted from the sale or disposal of H shares; if
the holder is a non-resident enterprise and the H-share buyer is an individual or entity located
outside the PRC, the holder is not necessarily required to pay the PRC V A T, but if the H-share
buyer is an individual or entity located in China, the holder may be required to pay the PRC
VAT.
However, in view of no clear regulations, it is still uncertain whether the non-Chinese
resident enterprises are required to pay the PRC V A T for the disposal of H shares in practice.
At the same time, V A T payers are also required to pay urban maintenance and
construction tax, education surtax and local education surcharge, which shall be usually subject
to 12% of the V A T payable (if any).
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 3–


--- page 645 ---
Income Tax
Individual Investors
According to the IIT Law, gains on the transfer of equity interests in the PRC resident
enterprises are subject to individual income tax at a rate of 20%.
Pursuant to the Circular on Declaring that Individual Income Tax Continues to be
Exempted over Income of Individuals from the Transfer of Shares (੻ᘱ
) issued by the SA T on March 30, 1998, from January 1, 1997,
income of individuals from transfer of the shares of listed enterprises continues to be exempted
from individual income tax. The SA T has not expressly stated whether it will continue to
exempt tax on income of individuals from transfer of the shares of listed enterprises in the
latest amended IIT Law.
However, on December 31, 2009, the MOF, SA T and CSRC jointly issued the Circular on
Related Issues on Levying Individual Income Tax over the Income Received by Individuals from
the Transfer of Listed Shares Subject to Sales Limitation (הٰ
), which came into effect on January 1, 2010, which states
that individuals’ income from the transfer of listed shares obtained from the public offering of
listed companies and transfer market on the Shanghai Stock Exchange and the Shenzhen Stock
Exchange shall continue to be exempted from individual income tax, except for the relevant
shares which are subject to sales restriction (as defined in the Supplementary Notice on Issues
Concerning the Levy of Individual Income Tax on Individuals’ Income from the Transfer of
Restricted Stocks of Listed Companies (੻೼
) jointly issued and implemented by such departments on November 10,
2010). As of the Latest Practicable Date, no aforesaid provisions have expressly provided that
individual income tax shall be levied from non-Chinese resident individuals on the transfer of
shares in PRC resident enterprises listed on overseas stock exchanges.
Enterprise Investors
In accordance with the EIT Law, a non-resident enterprise is generally subject to
corporate income tax at the rate of a 10% on PRC-sourced income, including gains derived
from the disposal of equity interests in a PRC resident enterprise, if it does not have an
establishment or premise in the PRC or has an establishment or premise in the PRC but its
PRC-sourced income has no real connection with such establishment or premise. Such income
tax payable for non-resident enterprises are deducted at source, where the payer of the income
is required to withhold the income tax from the amount to be paid to the non-resident
enterprise. Such tax may be reduced or exempted pursuant to relevant tax treaties or
agreements on avoidance of double taxation.
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 4–


--- page 646 ---
Stamp Duty
According to the Stamp Duty Law of the PRC (), which was
promulgated on June 10, 2021 and came into effect on July 1, 2022, PRC stamp duty only
applies to specific taxable document executed or received within the PRC, having legally
binding force in the PRC and protected under the PRC laws, thus the requirements of the stamp
duty imposed on the transfer of shares of PRC listed companies shall not apply to the
acquisition and disposal of H Shares by non-PRC investors outside of the PRC.
Estate Duty
As of the date of this prospectus, no estate duty has been levied in the PRC under the PRC
laws.
PRINCIPAL TAXATION OF THE COMPANY IN THE PRC
EIT
According to the EIT Law, enterprises and other income-generating organizations
(hereinafter collectively referred to as “an enterprise” or “enterprises”) within the territory of
the PRC are the taxpayers of enterprise income tax and shall pay enterprise income tax in
accordance with the provisions of the EIT Law. The Enterprise Income Tax rate is 25%.
According to the Administrative Measures for Determination of High and New Tech
Enterprises (), which was promulgated by the MOST, the
MOF and the SA T on April 14, 2008, amended on January 29, 2016 and became effective on
January 1, 2016, an enterprise recognized as a high and new technology enterprise may apply
for a preferential enterprise income tax rate of 15% pursuant to the relevant requirements of
the EIT Law.
VAT
Pursuant to the Interim Regulations on V alue-added Tax of the PRC (ʕശɛ͏΍ձ਷
೼ᅲБૢԷ) issued on December 13, 1993 by the State Council, came into effect on
January 1, 1994, and revised on November 10, 2008, February 6, 2016 and November 19, 2017,
as well as the Implementation Rules for the Interim Regulations on V alue-Added Tax of the PRC
() issued on December 25, 1993 by the MOF,
came into effect on the same day and revised on December 15, 2008 and October 28, 2011, any
entities and individuals engaged in the sale of goods, supply of processing, repair and
replacement services, and import of goods within the territory of the PRC are taxpayers of V A T
and shall pay the V A T in accordance with the law and regulation. Pursuant to the Notice on the
Implementation of the Pilot Programme of Replace the Business Tax with V A T (પ
) (Cai Shui [2016] No. 36) and its appendix the Measures
for the Implementation of the Pilot Programme of Replacing Business Tax with V A T ( ᐄุ
), effective on 1 May 2016, the tax rates applied to the taxpayer
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 5–


--- page 647 ---
for the different goods it sells and different services it provides shall be 17%, 11%, 6% and
zero, respectively. The MOF and the SA T issued the Notice of on Adjusting VAT Rates (ৌ
) on April 4, 2018 to adjust the tax rates of
17% and 11% applicable to any taxpayer’s V A T taxable sale or import of goods to 16% and
10%, respectively, this adjustment became effect on May 1, 2018. Subsequently, the MOF, the
SA T and the General Administration of Customs jointly issued the Announcement on Relevant
Policies for Deepening the VAT Reform (ʮѓ) on March
20, 2019 to make a further adjustment, which came into effect on April 1, 2019. The tax rate
of 16% applicable to the V A T taxable sale or import of goods shall be adjusted to 13%, and the
tax rate of 10% applicable thereto shall be adjusted to 9%.
TAXATION IN HONG KONG
Tax on dividends
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is
payable in Hong Kong in respect of dividends paid by us.
Capital gains and profits tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of H Shares by persons carrying on a trade, profession
or business in Hong Kong, where such gains are derived from or arise in Hong Kong from such
trade, profession or business will be subject to Hong Kong profits tax, which is currently
imposed at the maximum rate of 16.5% on corporations and at the maximum rate of 15% on
unincorporated businesses. Certain categories of taxpayers (for example, financial institutions,
insurance companies and securities dealers) are likely to be regarded as deriving trading gains
rather than capital gains unless these taxpayers can prove that the investment securities are held
for long-term investment purposes.
Trading gains from sales of H Shares effected on the Stock Exchange will be considered
to be derived from or arise in Hong Kong. Liability for Hong Kong profits tax would thus arise
in respect of trading gains from sales of H Shares effected on the Stock Exchange realized by
persons carrying on a business of trading or dealing in securities in Hong Kong.
Stamp duty
Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher
of the consideration for or the market value of H Shares, will be payable by the purchaser on
every purchase and by the seller on every sale of Hong Kong securities, including H Shares (in
other words, a total of 0.2% is currently payable on a typical sale and purchase transaction
involving H Shares). In addition, a fixed duty of HK$5.00 is currently payable on any
instrument of transfer of H Shares. Where one of the parties is a resident outside Hong Kong
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 6–


--- page 648 ---
and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the
instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid
on or before the due date, a penalty of up to ten times the duty payable may be imposed.
Estate duty
The Revenue (Abolition of Estate Duty) Ordinance 2005 abolished estate duty in respect
of deaths occurring on or after February 11, 2006.
FOREIGN EXCHANGE ADMINISTRATION IN THE PRC
The lawful currency of the PRC is Renminbi, which is currently subject to foreign
exchange control and cannot be freely converted into foreign currency. The SAFE, with the
authorization of the PBOC, is empowered with the functions of administering all matters
relating to foreign exchange, including the enforcement of foreign exchange control
regulations.
The Administrative Regulations on Foreign Exchange of the PRC (ʕശɛ͏΍ձ਷̮
ි၍ଣૢԷ) which was issued by the State Council on January 29, 1996, implemented on
April 1, 1996 and latest amended on 5 August, 2008, classifies all international payments and
transfers into current items and capital items. Current items are subject to the reasonable
examination of the veracity of transaction documents and the consistency of the transaction
documents and the foreign exchange receipts and payments by financial institutions engaging
in conversion and sale of foreign currencies and supervision and inspection by the foreign
exchange control authorities. For capital items, overseas organizations and overseas
individuals making direct investments in the PRC shall, upon approval by the relevant
authorities in charge, process registration formalities with the foreign exchange control
authorities. Foreign exchange income received overseas can be repatriated or deposited
overseas, and foreign exchange and foreign exchange settlement funds under the capital
account are required to be used only for purposes as approved by the competent authorities and
foreign exchange administrative authorities. In the event that international revenues and
expenditure occur or may occur a material misbalance, or the national economy encounters or
may encounter a severe crisis, the State may adopt necessary safeguard and control measures
on international revenues and expenditure.
The Regulations for the Administration of Settlement, Sale and Payment of Foreign
Exchange (), which was promulgated by the PBOC on June
20, 1996 and implemented on July 1, 1996, removes other restrictions on convertibility of
foreign exchange under current items, while imposing existing restrictions on foreign exchange
transactions under capital account items.
According to the Announcement on Improving the Reform of the Renminbi Exchange Rate
Formation Mechanism (ʮѓ), which was issued by
the PBOC and implemented on July 21, 2005, the PRC has started to implement a managed
floating exchange rate system in which the exchange rate would be determined based on market
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 7–


--- page 649 ---
supply and demand and adjusted with reference to a basket of currencies since July 21, 2005.
Therefore, the Renminbi exchange rate was no longer pegged to the U.S. dollar. PBOC would
publish the closing price of the exchange rate of the Renminbi against trading currencies such
as the U.S. dollar in the interbank foreign exchange market after the closing of the market on
each working day, as the central parity of the currency against Renminbi transactions on the
following working day.
According to the relevant laws and regulations in the PRC, PRC enterprises (including
foreign investment enterprises) which need foreign exchange for current item transactions may,
without the approval of the foreign exchange administrative authorities, effect payment
through foreign exchange accounts opened at the designated foreign exchange bank, on the
strength of valid transaction receipts and proof. Foreign investment enterprises which need
foreign exchange for the distribution of profits to their shareholders and PRC enterprises
which, in accordance with regulations, are required to pay dividends to their shareholders in
foreign exchange (such as our Company) may, on the strength of resolutions of the board of
directors or the shareholders’ meeting on the distribution of profits, effect payment from
foreign exchange accounts at the designated foreign exchange bank, or effect exchange and
payment at the designated foreign exchange bank.
According to the Decisions on Matters including Canceling and Adjusting a Batch of
Administrative Approval Items ()
which was promulgated by the State Council on October 23, 2014, it decided to cancel the
approval requirement of the SAFE and its branches for the remittance and settlement of the
proceeds raised from the overseas listing of the foreign shares into RMB domestic accounts.
According to the Notice of the State Administration of Foreign Exchange on Issues
Concerning the Foreign Exchange Administration of Overseas Listing (׵
) issued by the SAFE and implemented on December 26,
2014, a domestic company shall, within 15 business days from the date of the end of its
overseas listing issuance, register the overseas listing with the local branch office of state
administration of foreign exchange at the place of its establishment; the proceeds from an
overseas listing of a domestic company may be remitted to the domestic account or deposited
in an overseas account, but the use of the proceeds shall be consistent with the content of the
prospectus and other disclosure documents.
According to the Notice of the State Administration of Foreign Exchange of the PRC on
Revolutionizing and Regulating Capital Account Settlement Management Policies (̮ි
) which was promulgated by the SAFE
and implemented on June 9, 2016, partially repealed and nullified on March 23, 2023, foreign
currency earnings in capital account that relevant policies of willingness exchange settlement
have been clearly implemented on (including the recalling of raised capital by overseas listing)
may undertake foreign exchange settlement in the banks according to actual business needs of
the domestic institutions.
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 8–


--- page 650 ---
On January 26, 2017, the SAFE issued the Notice of the SAFE on Further Promoting the
Reform of Foreign Exchange Administration and Improving the Examination of Authenticity
and Compliance (ஷ
) to further expand the scope of settlement for domestic foreign exchange loans, allow
settlement for domestic foreign exchange loans with export background under goods trading,
allow repatriation of funds under domestic guaranteed foreign loans for domestic utilization,
allow settlement for domestic foreign exchange accounts of foreign institutions operating in the
Free Trade Pilot Zones, and adopt the model of full-coverage RMB and foreign currency
overseas lending management, where a domestic institution engages in overseas lending, the
sum of its outstanding overseas lending in RMB and outstanding overseas lending in foreign
currencies shall not exceed 30% of its owner’s equity in the audited financial statements of the
preceding year.
On October 23, 2019, the SAFE issued the Notice on Further Facilitating Cross-border
Trade and Investment (), which canceled
restrictions on domestic equity investments made with capital funds by non-investing
foreign-funded enterprises. In addition, restrictions on the use of funds for foreign exchange
settlement of domestic accounts for the realization of assets have been removed and restrictions
on the use and foreign exchange settlement of foreign investors’ security deposits have been
relaxed. Eligible enterprises in the pilot area are also allowed to use revenues under capital,
such as capital funds, foreign debts and overseas listing revenues for domestic payments
without providing materials to the bank in advance for authenticity verification on an item by
item basis, while the use of funds should be true, in compliance with applicable rules and
conforming to the current capital revenue management regulations.
APPENDIX IV TAXATION AND FOREIGN EXCHANGE
–I V - 9–


--- page 651 ---
PRC LA WS AND REGULATIONS
This Appendix sets out summaries of certain aspects of PRC laws and regulations, which
are relevant to the Company’s operations and business. Laws and regulations relating to
taxation in the PRC are discussed separately in “Appendix IV — Taxation and Foreign
Exchange” to this document. The principal objective of this summary is to provide potential
investors with an overview of the principal PRC legal and regulatory provisions applicable to
the Company. This summary is not intended to include all the information which may be
important to potential investors. For more details on laws and regulations which are relevant
to our business, please refer to the section headed “Regulatory Overview” in this document.
The PRC Legal System
The PRC legal system is based on the PRC Constitution () and
is made up of written laws, administrative regulations, local regulations, autonomous
regulations, separate regulations, rules and regulations of State Council departments, rules and
regulations of local governments, laws of special administrative regions and international
treaties of which the PRC government is a signatory, and other regulatory documents. Court
judgements do not constitute legally binding precedents, although they may be used for the
purposes of judicial reference and guidance.
Pursuant to the PRC Constitution and the Legislation Law of the PRC (ʕശɛ͏΍ձ
), the NPC and the SCNPC are empowered to exercise the legislative power of the
State. The NPC has the power to formulate and amend basic laws governing State organs, civil,
criminal and other matters. The SCNPC is empowered to formulate and amend laws other than
those required to be enacted by the NPC and to supplement and amend parts of the laws enacted
by the NPC during the adjournment of the NPC, provided that such supplements and
amendments are not in conflict with the basic principles of such laws.
The State Council is the highest organ of state administration and has the power to
formulate administrative regulations based on the PRC Constitution and laws.
The people’s congresses of the provinces, autonomous regions and municipalities and
their respective standing committees may formulate local regulations based on the specific
circumstances and actual needs of their respective administrative areas, provided that such
regulations do not contravene any provision of the PRC Constitution, laws or administrative
regulations. The people’s congresses of cities with districts and their respective standing
committees may formulate local regulations with respect to urban and rural construction and
administration, environmental protection, historical and cultural protection and other aspects
according to the specific circumstances and actual needs of such cities, which will become
enforceable after being reported to and approved by the standing committees of the people’s
congresses of the relevant provinces or autonomous regions, provided that such local
regulations do not contravene any provision of the PRC Constitution, laws, administrative
regulations and local regulations of their respective provinces or autonomous regions.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
–V - 1–


--- page 652 ---
The ministries and commissions of the State Council, the PBOC, the National Audit
Office of the PRC and the subordinate institutions with administrative functions directly under
the State Council may formulate rules and regulations within the authorization of their
respective departments in accordance with the laws and administrative regulations, and the
decisions and orders of the State Council. The people’s governments of the provinces,
autonomous regions, municipalities directly under the central government and cities with
districts may formulate rules and regulations in accordance with the laws, administrative
regulations and local regulations of such provinces, autonomous regions and municipalities
directly under the central government.
The PRC Constitution has supreme legal authority and no laws, administrative
regulations, local regulations, autonomous regulations or separate regulations may contravene
the PRC Constitution. The PRC laws rank higher than administrative regulations, local
regulations and rules. The administrative regulations rank higher than local regulations and
rules. The rules enacted by the people’s governments of the provinces or autonomous regions
rank higher than the rules enacted by the people’s governments of the cities with districts and
autonomous prefectures within the administrative areas of such provinces and the autonomous
regions.
The NPC has the power to alter or annul any inappropriate laws enacted by SCNPC, and
to annul any autonomous regulations or separate regulations which have been approved by its
Standing Committee, but which contravene the PRC Constitution or the PRC Legislation Law.
The SCNPC has the power to annul any administrative regulations that contravene the PRC
Constitution and laws, to annul any local regulations that contravene the PRC Constitution,
laws or administrative regulations, and to annul any autonomous regulations or local
regulations which have been approved by the standing committees of the people’s congresses
of the relevant provinces, autonomous regions or municipalities, but which contravene the PRC
Constitution and the PRC Legislation Law. The State Council has the power to alter or annul
any inappropriate ministerial rules and rules of local governments. The people’s congresses of
provinces, autonomous regions or municipalities have the power to alter or annul any
inappropriate local regulations enacted or approved by their respective standing committees.
The standing committees of local people’s congresses have the power to annul inappropriate
rules enacted by the people’s governments at the corresponding level. The people’s
governments of provinces and autonomous regions have the power to alter or annul any
inappropriate rules enacted by the people’s governments at a lower level.
According to the PRC Constitution, the power to interpret laws is vested in the SCNPC.
Pursuant to the Resolution of the Standing Committee of the NPC Providing an Improved
Interpretation of the Law (Ӕᙄ)
passed on 10 June 1981, issues related to the further clarification or supplement of laws should
be interpreted or provided by the SCNPC, issues related to the specific application of laws and
decrees in a court trial should be interpreted by the Supreme People’s Court, issues related to
the specific application of laws and decrees in a prosecution process should be interpreted by
the Supreme People’s Procuratorate, and the legal issues other than the above-mentioned
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
–V - 2–


--- page 653 ---
should be interpreted by the State Council and the competent authorities. If there are
differences in principle in the interpretation of the Supreme People’s court and the Supreme
People’s Procuratorate, they shall be submitted to the SCNPC for interpretation or decision.
The State Council and its ministries and commissions are also vested with the power to give
interpretations of the administrative regulations and departmental rules which they have
promulgated. At the regional level, the power to interpret regional laws is vested in the regional
legislative and administrative authorities which promulgate such laws.
The PRC Judicial System
Pursuant to the PRC Constitution and the Law of Organization of the People’ s Courts of
the PRC () most recently revised on 26 October 2018 and
taking effect on 1 January 2019, the people’s courts are classified into the Supreme People’s
Court, the local people’s courts at various local levels, and other special people’s courts. The
local people’s courts at various local levels are divided into three levels, namely, the primary
people’s courts, the intermediate people’s courts and the higher people’s courts. The primary
people’s courts are further divided into civil, criminal and economic tribunals. The
intermediate people’s courts have structure similar to those of the primary people’s courts and
other special tribunals, such as the intellectual property courts, military courts and maritime
courts. These two levels of people’s courts are subject to supervision by people’s courts at
higher levels. The Supreme People’s Procuratorate is authorized to supervise the judgement
and ruling of the people’s courts at all levels which have been legally effective, and the
people’s procuratorate at a higher level is authorized to supervise the judgement and ruling of
a people’s court at a lower level which have been legally effective. The Supreme People’s
Court is the highest judicial authority in the PRC. It supervises the administration of justice by
the people’s courts at all levels.
The people’s courts employ a two-tier appellate system. The judgements or rulings of the
second instance at a people’s court are final. A party may appeal against the judgement or
ruling of the first instance of a local people’s court. The people’s procuratorate may present a
protest to the people’s court at the next higher level in accordance with the procedures
stipulated by the laws. In the absence of any appeal by the parties and any protest by the
people’s procuratorate within the stipulated period, the judgements or rulings of the people’s
court are final. Judgements or rulings of the second instance of the intermediate people’s
courts, the higher people’s courts and the Supreme People’s Court are final. Judgements or
rulings of the first instance of the Supreme People’s Court are also final. However, if the
Supreme People’s Court or a people’s court at the next higher level discovers an error in a final
and binding judgement or ruling which has taken effect in any people’s court at a lower level,
or the presiding judge of a people’s court finds an error in a final and binding judgement or
ruling which has taken effect in the court over which he presides, a retrial of the case may be
initiated according to the judicial supervision procedures.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
–V - 3–


--- page 654 ---
The Civil Procedure Law of the PRC () adopted on
9 April 1991 and most recently amended on 1 September 2023, prescribes the conditions for
instituting a civil action, the jurisdiction of the people’s courts, the procedures to be followed
for conducting a civil action, and the procedures for enforcement of a civil judgement or ruling.
All parties to a civil action conducted within the PRC must abide by the PRC Civil Procedure
Law. The court of jurisdiction in respect of a civil action may also be chosen by explicit
agreement among the parties to a contract, provided that the people’s court having jurisdiction
should be located at places directly connected with the disputes, such as the plaintiff’s or the
defendant’s place of domicile, the place where the contract is executed or signed or the place
where the object of the action is located. However, such choice shall not in any circumstances
contravene the provisions on grade jurisdiction and exclusive jurisdiction.
A foreign individual, a person without nationality, a foreign enterprise or a foreign
organization that institute or respond to proceedings in a people’s court is given the same
litigation rights and obligations as a citizen or legal person of the PRC. Should a foreign court
limit the litigation rights of PRC citizens and enterprises, the PRC court shall apply the same
limitations to the citizens and enterprises of such foreign country. A foreign individual, a
person without nationality, a foreign enterprise or a foreign organization must engage a PRC
lawyer in case he/she or it needs to engage a lawyer for the purpose of initiating actions or
defending against litigations at a PRC court. In accordance with the international treaties to
which the PRC is a signatory or a participant or according to the principle of reciprocity, a
people’s court and a foreign court may request each other to serve documents, conduct
investigation, collect evidence and conduct other actions on its behalf. A PRC court shall not
accommodate any request made by a foreign court which will result in the violation of
sovereignty, security or public interests of the PRC.
All parties to a civil action shall perform legally effective judgements and rulings. If any
party to a civil action refuses to abide by a judgement or ruling made by a people’s court or
an award made by an arbitration tribunal in the PRC, the other party may apply to the people’s
court for the enforcement of the same within two years, subject to application for postponed
enforcement or revocation. If a party fails to satisfy within the stipulated period a judgement
which the court has granted an enforcement approval, the court may, upon the application of
the other party, mandatorily enforce the judgement.
A party seeking to enforce a judgement or ruling of a people’s court against another party
who is not or whose property is not within the PRC may apply to a foreign court with
jurisdiction over the case for recognition and enforcement of such judgement or ruling.
Alternatively, the people’s court may, pursuant to an international treaty concluded or acceded
to by the PRC or in accordance with the principle of reciprocity, request the foreign court to
recognize and execute the judgement or ruling. Likewise, if the PRC has entered into either a
treaty relating to judicial enforcement with the relevant foreign country or according to the
principle of reciprocity, a foreign judgement or ruling may also be recognized and enforced in
accordance with the PRC enforcement procedures by a PRC court unless the people’s court
considers that the recognition or enforcement of such judgement or ruling would violate the
basic legal principles of the PRC, its sovereignty or national security, or would not be in the
public interest.
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The PRC Company Law, Trial Measures for Overseas Listing and Guidance for Articles
of Association
A joint stock limited company incorporated in the PRC and seeking a listing on the Stock
Exchange is mainly subject to the following laws and regulations in the PRC:
(1) The PRC Company Law () which was promulgated on
29 December 2023 and took effect on 1 July 2024;
(2) The Trial Measures for Overseas Listing which were promulgated by the CSRC on
17 February 2023 pursuant to the PRC Securities Law ()
and are applicable to the direct and indirect overseas share offering or listing of
domestic companies; and
(3) The Guidelines for Articles of Association of Listed Companies (ܸ
ˏ) (the “ Guidance for Articles of Association ”) which was most recently
amended on March 28, 2025 by the CSRC. The Articles of Association is formulated
based on the Guidance for Articles of Association on a reference basis, the summary
of which is set out in the section entitled “Appendix VI — Summary of Articles of
Association” to this document.
Set out below is a summary of the major provisions of the currently effective PRC
Company Law, the Trial Measures for Overseas Listing for Articles of Association which are
applicable to the Company.
General
A joint stock limited company refers to a corporate legal person established in China
under the PRC Company Law with its registered capital divided into shares. All shares of the
company shall be either par value shares or no par value shares in accordance with the
company’s articles of association. Where par value shares are adopted, each share shall have
equal value. The liability of the company is limited to the total amount of all assets it owns and
the liability of its shareholders is limited to the extent of the shares they subscribe for.
The company shall conduct its business in accordance with laws and administrative
regulations. It may invest in other limited liability companies and joint stock limited companies
and its liabilities with respect to such invested companies are limited to the amount invested.
Unless otherwise provided by law, the company may not be a contributor that undertakes joint
liabilities for the debts of the invested companies.
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Incorporation
A company may be incorporated by promotion or floatation. A company shall be
incorporated by a minimum of one but no more than 200 promoters, and at least half of the
promoters must be residents within the PRC. Companies incorporated by promotion are
companies of which the entire registered capital is subscribed for by the promoters. Shares in
the company incorporated by promotion shall not be offered to others unless the registered
capital has been fully paid up. If laws, administrative regulations and decisions of the State
Council have separate provisions on paid-in registered capital and the minimum registered
capital, the company should follow such provisions.
For companies incorporated by way of promotion, the promoters shall subscribe in
writing for the shares required to be subscribed for by them and pay up their capital
contributions under the articles of association. Procedures relating to the transfer of titles to
non-monetary assets shall be duly completed if such assets are to be contributed as capital.
Promoters who fail to pay up their capital contributions in accordance with the foregoing
provisions shall assume default liabilities in accordance with the covenants set out in the
promoters’ agreements. After the promoters have confirmed the capital contribution under the
articles of association, a board of directors and a Supervisory Committee shall be elected and
the board of directors shall apply for registration of incorporation by filing the articles of
association with the company registration authority, and other documents as required by laws
or administrative regulations.
Where companies are incorporated by floatation, not less than 35% of their total number
of shares must be subscribed for by the promoters, unless otherwise provided for by laws or
administrative regulations. The promoters shall preside over and convene an inauguration
meeting within thirty days from the date of the full payment of subscription capital. The
inauguration meeting shall be formed by the promoters and subscribers. Where the shares
issued are not fully subscribed for within the offer period stipulated in the share offering
document, or where the promoter fails to convene an inauguration meeting within thirty days
of the subscription capital for the shares issued being fully paid up, the subscribers may
demand that the promoters refund the subscription capital so paid together with the interest
calculated at bank rates of a deposit for the same period. Within thirty days of the conclusion
of the inauguration meeting, the board of directors shall apply to the registration authority for
registration of the establishment of the company. A company is formally established and has
the status of a legal person after the registration with the relevant administration for market
regulation has been completed and a business license has been issued.
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Share Capital
The promoters may make a capital contribution in currencies, or non-monetary assets
such as in kind, intellectual property rights or land use rights which can be appraised with
monetary value and transferred lawfully, except for assets which are prohibited from being
contributed as capital by laws or administrative regulations. If a capital contribution is made
in non-monetary assets, a valuation of the assets contributed must be carried out pursuant to
the provisions of laws or administrative regulations on valuation without any over-valuation or
under-valuation.
There is no limit under the PRC Company Law as to the percentage of shares held by an
individual shareholder in a company. The shares of a company are represented by stocks. A
stock is a certificate issued by the company to certify the share held by a shareholder. The stock
issued by the company shall be in the form of registered stock.
The issuance of shares shall be conducted in a fair and equitable manner. Each share of
the same class must carry equal rights. Shares issued at the same time and within the same class
must be issued on the same conditions and at the same price. The same price per share shall
be paid by any share subscriber (whether an entity or an individual). The share offering price
may be equal to or greater than the par value of the share, but may not be less than the par
value.
Under the Trial Measures for Overseas Listing, if a domestic company offers shares
overseas, it may raise funds and dividend distributions in foreign currency or Renminbi.
Under the PRC Company Law, a company issuing registered share certificates shall
maintain a shareholder registry which sets forth the following matters:
(i) the name and domicile of each shareholder;
(ii) the number of shares held by each shareholder;
(iii) the serial numbers of shares held by each shareholder; and
(iv) the date on which each shareholder acquired the shares.
Increase in Share Capital
In light of its operational and development needs and in accordance with laws and
regulations, a company may increase its share capital under any of the following methods,
subject to the resolutions be passed at a shareholders’ general meeting: (i) a public offering of
shares; (ii) a private placement of shares; (iii) offering of bonus shares to existing shareholders;
(iv) the conversion of reserve funds into shares; and (v) any other methods provided in law and
administrative regulations and approved by the CSRC.
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Pursuant to the PRC Company Law, a company may, according to its articles of
association, issue the following classified shares, which have different rights from those of the
common shares: (i) shares with priority or inferior rights to profits or remaining property in
distribution; (ii) shares with more or less voting rights per share than those of the common
shares; (iii) shares whose transfer is subject to the consent of the company and other
restrictions; (iv) other classified shares provided by the State Council. A company making a
public offering of shares shall not issue any of the classified shares as prescribed on items (ii)
and (iii), except those issued prior to the public offering. Where a company is issuing new
shares, resolutions shall be passed at general meeting in accordance with the articles of
association in respect of the class and amount of the new shares, the issue price of the new
shares, the commencement and end dates for the issue of the new shares and when the new
shares are proposed to be issued to existing shareholders, the class and amount of such new
shares.
To offer shares overseas, the domestic company shall report the application documents for
offering and listing to the CSRC for record-filing within three business days after submission
of the application documents for offering and listing overseas.
Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the PRC Company Law:
(i) the company shall prepare a balance sheet and a list of properties;
(ii) the reduction of registered capital must be approved by shareholders at the general
meeting;
(iii) the company shall notify its creditors of the reduction in registered capital within ten
days and publish an announcement of the reduction in newspaper or on National
Enterprise Credit Information Publicity System within thirty days of the resolution
approving the reduction being passed;
(iv) the creditors of the company may within the statutory time limit require the
company to repay its debts or provide guarantees for covering the debts; and
(v) the company must apply to the relevant company registration authority for
registration of the change and reduction in registered capital.
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Repurchase of Shares
Pursuant to the PRC Company Law, a company shall not purchase its own shares other
than in any of the following circumstances:
(i) reducing its registered capital;
(ii) merging with another company which holds its shares;
(iii) utilizing the shares for employee stock ownership plan or stock ownership incentive
scheme;
(iv) acquiring its own shares at the request of its shareholders who vote in a
shareholders’ general meeting against a resolution regarding a merger or separation;
(v) utilizing the shares for conversion of corporate bonds which are convertible into
shares issued by a listed company; and
(vi) where it is necessary for a listed company to maintain its corporate value and
stockholders’ equity.
Any company’s purchase of its own shares for any reason specified in item (i) and item
(ii) of the preceding paragraph shall be subject to a resolution of the general meeting; any
company’s purchase of its own shares for any reason specified in item (iii), item (v) and item
(vi) of the preceding paragraph may be subject to a resolution of the board meeting with more
than two thirds of directors present, according to the provisions of the articles of associations
or upon authorization by the general meeting.
The shares acquired under the circumstance stipulated in item (i) hereof shall be
deregistered within ten days from the date of acquisition of shares; the shares shall be assigned
or deregistered within six months if the repurchase of shares is made under the circumstances
stipulated in either item (ii) or item (iv); and the shares held in total by a company after the
repurchase under any of the circumstances stipulated in item (iii), item (v) or item (vi) shall
not exceed 10% of the company’s total outstanding shares, and shall be assigned or
deregistered within three years.
Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant laws.
Pursuant to the PRC Company Law, a shareholder should effect a transfer of his shares on a
stock exchange established in accordance with laws or by any other means as required by the
State Council. Registered shares may be transferred after the shareholders endorse the back of
the share certificates or in any other manner specified by laws or administrative regulations.
Following the transfer, the company shall enter the names and addresses of the transferees into
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--- page 660 ---
its share register. No changes of registration in the share register described above shall be
effected during a period of twenty days prior to convening a shareholders’ general meeting or
five days prior to the record date for the purpose of determining entitlements to dividend
distributions, subject to any legal provisions on the registration of changes in the share register
of listed companies.
Pursuant to the PRC Company Law, shares of the company issued prior to the public
offering of shares may not be transferred within one year of the date of the company’s listing
on a stock exchange. Directors, supervisors and the Senior Executives of a company shall
declare to the company their shareholdings in the company and any changes thereof. During
their terms of office, they may transfer no more than 25% of the total number of shares they
hold in the company per annum. They shall not transfer the shares they hold within one year
of the date of the company’s listing on a stock exchange, nor within half a year after they leave
their positions in the company. The articles of association may set out other restrictive
provisions in respect of the transfer of shares in the company held by its directors, supervisors
and the Senior Executives.
Shareholders
Under the PRC Company Law, the rights of shareholders include the rights:
(i) to receive a return on assets, participate in significant decision-making and select
management personnel;
(ii) to petition the people’s court to revoke any resolution passed on a shareholders’
general meeting or a meeting of the board of directors that has not been convened
in compliance with the laws and regulations or the articles of association or whose
voting has violated the laws, administrative regulations or the articles of association
of the company, or any resolution the contents of which is in violation of the articles
of association, provided that such petition shall be submitted within sixty days of the
passing of such resolution;
(iii) to transfer the shares according to the applicable laws and regulations and the
articles of association;
(iv) to attend or appoint a proxy to attend shareholders’ general meetings and exercise
the voting rights;
(v) to inspect the articles of association, share register, counterfoil of company
debentures, minutes of shareholders’ general meetings, board resolutions,
resolutions of the Supervisory Committee and financial and accounting reports, and
to make suggestions or inquiries in respect of the company’s operations;
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--- page 661 ---
(vi) to receive dividends in respect of the number of shares held;
(vii) to participate in distribution of residual properties of the company in proportion to
their shareholdings upon the liquidation of the company; and
(viii) any other shareholders’ rights provided for in laws, administrative regulations, other
normative documents and the articles of association.
The obligations of shareholders include the obligation to abide by the company’s articles
of association, to pay the subscription capital in respect of the shares subscribed for, to be
liable for the company’s debts and liabilities to the extent of the amount of subscription capital
agreed to be paid in respect of the shares taken up by them and any other shareholder obligation
specified in the articles of association.
Shareholders’ General Meetings
The general meeting is the organ of authority of the company, which exercises its powers
in accordance with the PRC Company Law. The general meeting may exercise its powers:
(i) to elect and remove the directors and supervisors (not being representative(s) of
employees) and to decide on the matters relating to the remuneration of directors and
supervisors;
(ii) to review and approve the reports of the board of directors;
(iii) to review and approve the reports of the Supervisory Committee or supervisors;
(iv) to review and approve the company’s annual financial budgets and final accounts
plan;
(v) to review and approve the company’s profit distribution proposals and loss recovery
proposals;
(vi) to decide on any increase or reduction of the company’s registered capital;
(vii) to decide on the issue of corporate bonds;
(viii) to decide on merger, division, dissolution and liquidation of the company or change
of its corporate form;
(ix) to amend the company’s articles of association; and
(x) to exercise any other authority stipulated in the articles of association.
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--- page 662 ---
The general meeting may authorize the board of directors to make resolutions on the
issuance of corporate bonds.
Pursuant to the PRC Company Law, a shareholders’ general meeting is required to be held
once every year. An extraordinary general meeting is required to be held within two months of
the occurrence of any of the following circumstances:
(i) the number of directors is less than the number stipulated by the law or less than two
thirds of the number specified in the articles of association;
(ii) the outstanding losses of the company amounted to one-third of the company’s total
share capital;
(iii) shareholders individually or in aggregate holding 10% or more of the company’s
shares request that an extraordinary general meeting is convened;
(iv) the board of directors deems necessary;
(v) the Supervisory Committee so proposes; or
(vi) any other circumstances as provided for in the articles of association.
A shareholders’ general meeting shall be convened by the board of directors and presided
over by the chairman of the board of directors. In the event that the chairman is incapable of
performing or is not performing his duties, the meeting shall be presided over by the vice
chairman. In the event that the vice chairman is incapable of performing or is not performing
his duties, a director nominated by half or more of the directors shall preside over the meeting.
Where the board of directors is incapable of performing or is not performing its duties to
convene the general meeting, the Supervisory Committee shall convene and preside over such
meeting in a timely manner. If the Supervisory Committee fails to convene and preside over
such meeting, shareholders individually or in aggregate holding 10% or more of the company’s
shares for ninety days or more consecutively may unilaterally convene and preside over such
meeting. Where shareholders individually or in aggregately holding 10% or more of the
company’s shares request to convene an extraordinary general meeting, the board of directors
and the Supervisory Committee shall, within ten days after receipt of such request, decide
whether to convene the extraordinary general meeting and reply to the shareholders in writing.
In accordance with the PRC Company Law, a notice of the general meeting stating the
date and venue of the meeting and the matters to be considered at the meeting shall be given
to all shareholders twenty days before the meeting. A notice of extraordinary general meeting
shall be given to all shareholders fifteen days prior to the meeting.
There is no specific provision in the PRC Company Law regarding the number of
shareholders constituting a quorum in a shareholders’ general meeting.
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--- page 663 ---
Pursuant to the PRC Company Law, shareholders (excluding classified shareholders)
present at a shareholders’ general meeting have one vote for each share they hold, save that
shares held by the company are not entitled to any voting rights.
An accumulative voting system may be adopted for the election of directors and
supervisors at the general meeting pursuant to the provisions of the articles of association or
a resolution of the general meeting. Under the accumulative voting system, each share shall be
entitled to the number of votes equivalent to the number of directors or supervisors to be
elected at the general meeting, and shareholders may consolidate their votes for one or more
directors or supervisors when casting a vote.
Pursuant to the PRC Company Law, resolutions of the general meeting must be passed by
more than half of the voting rights held by shareholders present at the meeting, with the
exception of resolutions relating to merger, division or dissolution of the company, increase or
reduction of registered share capital, change of corporate form or amendments to the articles
of association, which in each case must be passed by more than two-thirds of the voting rights
held by the shareholders present at the meeting. Where the PRC Company Law and the articles
of association provide that the transfer or acquisition of significant assets or the provision of
external guarantees by the company must be approved by way of resolution of the general
meeting, the board of directors shall convene a shareholders’ general meeting promptly to vote
on such matters.
A shareholder may entrust a proxy to attend the general meeting on his/her behalf and the
matters, power and time limit of the proxy shall be clarified by such shareholder. The proxy
shall present the shareholders’ power of attorney to the company and exercise voting rights
within the scope of authorization.
Minutes shall be prepared in respect of matters considered at the general meeting and the
chairman and directors attending the meeting shall endorse such minutes by signature. The
chairman of the meeting and directors attending the meeting shall sign to endorse such minutes.
The minutes shall be kept together with the shareholders’ attendance register and the proxy
forms.
Board of Directors
A joint stock limited company shall have a board of directors which shall have at least
three members. For a company that has three hundred or more employees, the board of
directors shall include the staff representative unless the Supervisory Committee has been
established and already included the staff representative supervisor. The term of a director shall
be stipulated in the articles of association, provided that no term of office shall last for more
than three years. A director may serve consecutive terms if re-elected. A director shall continue
to perform his/her duties as a director in accordance with the laws, administrative regulations
and the articles of association until a duly re-elected director takes office, if re-election is not
conducted in a timely manner upon the expiry of his/her term of office or if the resignation of
directors results in the number of directors being less than the quorum.
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--- page 664 ---
Under the PRC Company Law, the board of directors may exercise its powers:
(i) to convene shareholders’ general meetings and report on its work to the
shareholders’ general meetings;
(ii) to implement the resolutions passed by the shareholders at the shareholders’ general
meetings;
(iii) to decide on the company’s operational plans and investment proposals;
(iv) to formulate the company’s profit distribution proposals and loss recovery
proposals;
(v) to formulate proposals for the increase or reduction of the company’s registered
capital and the issue of corporate bonds;
(vi) to formulate proposals for the merger, division or dissolution of the company or
change of corporate form;
(vii) to decide on the setup of the company’s internal management organs;
(viii) to appoint or dismiss the company’s manager and decide on his/her remuneration
and, based on the manager’s recommendation, to appoint or dismiss any deputy
manager and financial officer of the company and to decide on their remunerations;
(ix) to formulate the company’s basic management system; and
(x) to exercise any other authority stipulated in the articles of association.
Any restrictions on the powers of the board of directors set out in the articles of
association may not be claimed against any bona fide third party.
Meetings of the board of directors shall be convened at least twice each year. Notices of
meeting shall be given to all directors and supervisors ten days before the meeting. Interim
board meetings may be proposed to be convened by shareholders representing more than 10%
of the voting rights, more than one-third of the directors or the Supervisory Committee. The
chairman shall convene the meeting within ten days of receiving such proposal, and preside
over the meeting. The board of directors may otherwise determine the means and the period of
notice for convening an interim board meeting. Meetings of the board of directors shall be held
only if more than half of the directors are present. Resolutions of the board of directors shall
be passed by more than half of all directors. Each director shall have one vote for a resolution
to be approved by the board of directors. Directors shall attend the meetings of the board of
directors in person. If a director is unable to attend for any reason, he/she may appoint another
director to attend the meeting on his/her behalf by a written power of attorney specifying the
scope of authorization. The board of directors shall make minutes of the meeting’s decisions
on the matters discussed at the meeting, and the directors attending the meeting shall sign the
minutes.
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--- page 665 ---
If a resolution of the board of directors violates any laws, administrative regulations or
the articles of association or resolutions of the general meeting, and as a result of which the
company sustains serious losses, the directors participating in the resolution are liable to
compensate the company. However, if it can be proved that a director expressly objected to the
resolution when the resolution was voted on, and that such objection was recorded in the
minutes of the meeting, such director shall be relieved from that liability.
Under the PRC Company Law, the following person may not serve as a director in a
company:
(i) a person without capacity or restricted capacity to undertake any civil liabilities;
(ii) a person who has been sentenced to any criminal penalty for corruption, bribery,
embezzlement, misappropriation of property or destruction of the socialist economic
order, or who has been deprived of his political rights due to his crimes and such
sentence has expired for no more than five years, or who is granted probation, if no
more than two years have passed since the expiration of the probation period;
(iii) a person who has been a former director, factory manager or manager of a company
or an enterprise that has entered into insolvent liquidation and who was personally
liable for the insolvency of such company or enterprise, where no more than three
years have elapsed since the date of the completion of the bankruptcy and
liquidation of the company or enterprise;
(iv) a person who has been a legal representative of a company or an enterprise that has
had its business license revoked due to violations of the law or has been ordered to
close down by law and the person was personally responsible, where less than three
years have elapsed since the date of such revocation or the order to close down; or
(v) a person who is listed as a dishonest person subject to enforcement by the people’s
court due to failure to pay off a large amount of unliquidated mature debts.
Where a company elects or appoints a director to which any of the above circumstances
applies, such election or appointment shall be null and void. A director to which any of the
above circumstances applies during his/her term of office shall be released of his/her duties by
the company.
Pursuant to the PRC Company Law, the board of directors shall appoint a chairman and
may appoint a vice chairman. The chairman and the vice chairman shall be elected with
approval of more than half of all the directors. The chairman shall convene and preside over
board meetings and review the implementation of board resolutions. The vice chairman shall
assist the chairman to perform his/her duties. Where the chairman is incapable of performing
or is not performing his/her duties, the duties shall be performed by the vice chairman. Where
the vice chairman is incapable of performing or is not performing his/her duties, a director
elected by more than half of the directors shall perform his/her duties.
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Supervisory Committee
Pursuant to the PRC Company Law, a joint stock limited company may have a
Supervisory Committee composed of not less than three members, or establish an audit
committee composed of directors under the board of directors to exercise the powers of a board
of supervisors. The Supervisory Committee shall consist of representatives of the shareholders
and an appropriate proportion of representatives of the company’s staff, among which the
proportion of representatives of the company’s staff shall not be less than one-third, and the
actual proportion shall be determined in the articles of association. Representatives of the
company’s staff at the Supervisory Committee shall be democratically elected by the
company’s staff at the staff representative assembly, general staff meeting or otherwise. The
Supervisory Committee shall appoint a chairman and may appoint a vice chairman. The
chairman and the vice chairman of the Supervisory Committee shall be elected by more than
half of the supervisors. Directors and Senior Executives shall not act concurrently as
supervisors.
The chairman of the Supervisory Committee shall convene and preside over Supervisory
Committee meetings. Where the chairman of the Supervisory Committee is incapable of
performing or is not performing his/her duties, the vice chairman of the Supervisory
Committee shall convene and preside over supervisory board meetings. Where the vice
chairman of the Supervisory Committee is incapable of performing or is not performing his/her
duties, a supervisor nominated by more than half of the supervisors shall convene and preside
over meetings of the Supervisory Committee.
Each term of office of a supervisor is three years and he/she may serve consecutive terms
if re-elected. A supervisor shall continue to perform his/her duties as a supervisor in accordance
with the laws, administrative regulations and the articles of association until a duly re-elected
supervisor takes office, if re-election is not conducted in a timely manner upon the expiry of
his/her term of office or if the resignation of supervisors results in the number of supervisors
being less than the quorum.
The Supervisory Committee may exercise its powers:
(i) to review the company’s financial position;
(ii) to supervise the directors and Senior Executives in their performance of their duties
and to propose the removal of directors and Senior Executives who have violated
laws, regulations, the articles of association or shareholders’ resolutions;
(iii) when the acts of directors or Senior Executives are detrimental to the company’s
interests, to require the director and Senior Executives to correct these acts;
(iv) to propose the convening of extraordinary shareholders’ general meetings and to
convene and preside over shareholders’ general meetings when the board fails to
perform the duty of convening and presiding over shareholders’ general meetings
under the PRC Company Law;
(v) to submit proposals to the shareholders’ general meetings;
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--- page 667 ---
(vi) to bring actions against directors and Senior Executives pursuant to the relevant
provisions of the PRC Company Law; and
(vii) to exercise any other authority stipulated in the articles of association.
Supervisors may be present at board meetings and make inquiries or proposals in respect
of the resolutions of the board. The Supervisory Committee may investigate any irregularities
identified in the operation of the company and, when necessary, may engage an accounting firm
to assist its work at the cost of the company.
Manager and Senior Executives
Pursuant to the PRC Company Law, a company shall have a manager who shall be
appointed or removed by the board of directors. The manager shall exercise his/her powers in
accordance with the company’s articles of association or the authorization of the board of
directors.
Other provisions in the articles of association on the manager’s powers shall also be
complied with. The manager shall be present at meetings of the board of directors. However,
the manager shall have no voting rights at meetings of the board of directors unless he/she
concurrently serves as a director.
Pursuant to the PRC Company Law, Senior Executives refers to the manager, deputy
manager, financial officer, secretary to the board of directors of a listed company and other
personnel as stipulated in the articles of association.
Duties of Directors, Supervisors, Managers and Other Senior Executives
Directors, supervisors and Senior Executives are required under the PRC Company Law
to comply with the relevant laws, regulations and the articles of association, and shall be
obliged to be faithful and diligent towards the company. Where the controlling shareholder or
actual controller of the company who does not serve as a director but actually attends to the
company’s affairs, shall comply with the foregoing provisions.
Directors, supervisors and Senior Executives are prohibited from abusing their authority
in accepting bribes or other unlawful income and from misappropriating the company’s
property.
Directors, supervisors and Senior Executives are prohibited from:
(i) seizing the assets of the company or misappropriating company funds;
(ii) depositing company funds into accounts under their own names or the names of
other individuals;
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-17 –


--- page 668 ---
(iii) taking advantage of power to accept bribes or other illegal income;
(iv) accepting commissions paid by a third party for transactions conducted with the
company for their own benefit;
(v) unauthorized divulgence of confidential information of the company; and
(vi) other acts in violation of their duty of loyalty to the company.
Where directors, supervisors and Senior Executives directly or indirectly conclude any
contract or engage in transactions with the company, they shall report to the board of directors
or the shareholders’ general meeting and seek approval by resolutions of the board of directors
or the shareholders’ general meeting in accordance with the articles of association. The
requirement shall also apply to the conclusion of contracts or engagement in transactions by
close relatives of the directors, supervisors and Senior Executives or enterprises directly or
indirectly controlled by close relatives of the directors, supervisors and Senior Executives as
well as persons who are otherwise related to the directors, supervisors and Senior Executives.
Directors, supervisors and Senior Executives shall not take advantage of duty to seek
business opportunities for themselves or others that would have been directed to the company,
unless such act has been reported to and approved by the board of directors or the shareholders’
general meeting in accordance with the articles of association or the company is unable to take
the business opportunity in accordance with applicable laws, administrative regulations, and
the articles of association.
Directors, supervisors and Senior Executives shall not engage in the business similar to
those of the company for themselves or others, unless such act has been reported to and
approved by the board of directors or the shareholders’ general meeting in accordance with the
articles of association.
Income generated by directors or Senior Executives in violation of aforementioned shall
be returned to the company.
A director, supervisor or Senior Executives who contravenes any laws, regulations or the
company’s articles of association in the performance of his/her duties resulting in any loss to
the company shall be liable to the company for compensation.
The Guidance for Articles of Association provides that a company’s directors and Senior
Executives shall have duties of diligence towards the company, for example, the directors shall
be prudent, serious and diligent in exercising the authority conferred by the company to ensure
that the business activities of the company comply with state’s laws, administrative regulations
and various economic policy requirements and that the business activities do not go beyond the
scope of business activities specified in the company’s business license; the directors shall treat
all shareholders equally; the shareholders shall keep abreast of the company’s business
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-18 –


--- page 669 ---
management status; both the directors and the Senior Executives shall sign written statements
confirming periodic reports of the company and ensure that the information disclosed by the
company is true, accurate and complete; both the directors and the Senior Executives shall
provide accurate information and materials to the Supervisory Committee and shall not
interfere with the performance of duties by the Supervisory Committee or individual
supervisors; both the directors and the Senior Executives shall have other diligence duties
prescribed by laws, administrative regulations, departmental rules and the company’s articles
of association.
Finance and Accounting
Pursuant to the PRC Company Law, a company shall establish its own financial and
accounting systems according to the laws, administrative regulations and the regulations of the
competent financial departments of the State Council. At the end of each financial year, a
company shall prepare a financial report which shall be audited by an accounting firm in
accordance with the laws. The financial and accounting reports shall be prepared in accordance
with the laws, administrative regulations and the regulations of the financial departments of the
State Council.
The company’s financial reports shall be made available for shareholders’ inspection at
the company twenty days before the convening of an annual general meeting. A joint stock
limited company that makes public stock offerings shall publish its financial reports.
When distributing each year’s profits after taxation, the company shall set aside 10% of
its profits after taxation for the company’s statutory common reserve fund until the fund has
reached more than 50% of the company’s registered capital. When the company’s statutory
common reserve fund is not sufficient to make up for the company’s losses for the previous
years, the current year’s profits shall first be used to make good the losses before any allocation
is set aside for the statutory common reserve fund. After the company has made allocations to
the statutory common reserve fund from its profits after taxation, it may, upon passing a
resolution at a shareholders’ general meeting, make further allocations from its profits after
taxation to the discretionary common reserve fund. After the company has made good its losses
and made allocations to the abovementioned reserve fund, the remaining profits after taxation
shall be distributed in proportion to the number of shares held by the shareholders, except for
those which are not distributed in a proportionate manner as provided by the articles of
association.
Profits distributed to shareholders in violation of the requirements described above must
be returned to the company. The company shall not be entitled to any distribution of profits in
respect of shares held by it.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-19 –


--- page 670 ---
The premium over the nominal value of the shares of the company on issue and other
income as required by relevant government authorities to be treated as the capital reserve fund
shall be accounted for as the capital reserve fund. The common reserve fund of a company shall
be applied to make good the company’s losses, expand its business operations or increase its
capital. Where any losses need to be covered with reserve fund of the company, discretionary
reserve fund and statutory common reserve fund shall first be used and if still insufficient,
capital reserve fund can be used in accordance with applicable provisions. Upon the transfer
of the statutory common reserve fund into increasing capital, the balance of the statutory
common fund shall not be less than 25% of the registered capital of the company before such
transfer.
The company shall have no accounting books other than the statutory books. The
company’s capital shall not be deposited in any account opened under the name of an
individual.
Appointment and Retirement of Auditors
The Guidance for Articles of Association provides that a company shall engage an
accounting firm which is qualified with the PRC Securities Law to provide services including
the audit of financial statements, the verification of net assets and other relevant consultancy
services. The engagement term is one year and may be extended.
Pursuant to the PRC Company Law, the appointment or dismissal of an accounting firm
responsible for the company’s auditing shall be determined by shareholders at a shareholders’
general meeting or the board of directors or the Supervisory Committee in accordance with the
articles of association. The accounting firm should be allowed to make representations when
the general meeting or the board of directors conduct a vote on the dismissal of the accounting
firm. The company should provide true and complete accounting evidence, accounting books,
financial and accounting reports and other accounting information to the engaged accounting
firm without any refusal, withholding or falsification of information. Furthermore, the
Guidance for Articles of Association provides that the audit fee for the accounting firm shall
also be determined by shareholders at a general meeting.
Profit Distribution
According to the PRC Company Law, a company shall not distribute profits before losses
are covered and the statutory common reserve fund is provided.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-20 –


--- page 671 ---
Amendments to the Articles of Association
Pursuant to the PRC Company Law, the resolution of a shareholders’ general meeting
regarding any amendment to a company’s articles of association requires affirmative votes by
more than two-thirds of the votes held by shareholders attending the meeting.
Pursuant to the Guidance for Articles of Association, the company shall amend its articles
of association under any of the following circumstances:
(i) where, after any amendment to the PRC Company Law or any other applicable law
or administrative regulation, the provisions of the articles of association conflict
with the law and/or administrative regulations amended;
(ii) where the company’s circumstances change to such an extent that they are
inconsistent with what is recorded in the articles of association; and
(iii) where the shareholders’ general meeting decides to amend the articles of
association.
The Guidance for Articles of Association further provides that where any amendment to
the articles of association adopted by a shareholders’ general meeting is subject to approval by
the competent authorities, such amendment shall be submitted for approval; where any
amendment involves the company’s registration items, the company’s registration with the
authority shall also be amended. In addition, an announcement shall be made in accordance
with the applicable provisions provided that the amendment to the articles of association is
required to be disclosed by any law or regulation.
Dissolution and Liquidation
Pursuant to the PRC Company Law, a company shall be dissolved for any of the following
reasons:
(i) the term of its operation set out in the articles of association has expired or other
events of dissolution specified in the articles of association have occurred;
(ii) the shareholders have resolved at a shareholders’ general meeting to dissolve the
company;
(iii) the company is dissolved by reason of its merger or division;
(iv) the business license of the company is revoked or the company is ordered to close
down or to be dissolved in accordance with the laws; or
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-21 –


--- page 672 ---
(v) the company is dissolved by a people’s court in response to the request of
shareholders holding shares that represent more than 10% of the voting rights of all
shareholders of the company, on the grounds that the operation and management of
the company has suffered serious difficulties that cannot be resolved through other
means, rendering ongoing existence of the company a cause for significant losses to
the shareholders’ interests. On the occurrence of the abovementioned events, the
company shall make an announcement on the National Enterprise Credit Information
Publicity System within ten days.
In the event of paragraphs (i) and (ii) above, the company may carry on its existence by
amending its articles of association if no property has been distributed to any shareholder. The
amendments to the articles of association in accordance with the provisions described above
shall require the approval of more than two-thirds of voting rights of shareholders attending a
shareholders’ general meeting.
Where the company is dissolved under the circumstances set forth in paragraph (i), (ii),
(iv) or (v) above, the liquidation procedures shall be conducted and directors shall be the
company’s liquidation obligor and it should establish a liquidation committee within fifteen
days of the date on which the dissolution event occurs. The liquidation committee shall be
composed of directors or any other persons determined by a shareholders’ general meeting. If
a liquidation committee is not established within the prescribed period or the liquidation fails
to effect after the establishment of a liquidation committee, the interested party may file an
application with a people’s court, requesting that the court appoint relevant personnel to form
a liquidation committee to administer the liquidation. The people’s court should accept such
application and form a liquidation committee to conduct liquidation in a timely manner.
The liquidation committee may exercise following powers during the liquidation:
(i) to dispose of the company’s assets and to prepare a balance sheet and an inventory
of assets;
(ii) to notify the company’s creditors or publish announcements;
(iii) to deal with and settle any outstanding business related to the liquidation;
(iv) to pay any outstanding tax together with any tax arising during the liquidation
process;
(v) to settle the company’s claims and liabilities;
(vi) to distribute the company’s remaining assets after its debts have been paid off; and
(vii) to represent the company in any civil procedures.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-22 –


--- page 673 ---
The liquidation committee shall notify the company’s creditors within ten days from its
establishment, and publish an announcement in newspapers or on the National Enterprise
Credit Information Publicity System within sixty days.
A creditor shall lodge his claim with the liquidation committee within thirty days of
receipt of the notification or within forty-five days of the date of the announcement if he has
not received any notification.
A creditor shall, in making his claim, state matters relevant to his creditor’s rights and
furnish relevant evidence. The liquidation committee shall register such creditor’s rights. The
liquidation committee shall not make any settlement to creditors during the period of the claim.
Upon disposal of the company’s property and preparation of the required balance sheet
and inventory of assets, the liquidation committee shall draw up a liquidation plan and submit
this plan to a shareholders’ general meeting or a people’s court for endorsement. The remaining
assets of the company, after payment of liquidation expenses, employee wages, social
insurance expenses and statutory compensation, outstanding taxes and the company’s debts,
shall be distributed to shareholders in proportion to shares held by them. The company shall
continue to exist during the liquidation period, although it cannot engage in operating activities
that are not related to the liquidation. The company’s property shall not be distributed to
shareholders before repayments are made in accordance with the requirements described
above.
Upon liquidation of the company’s property and preparation of the required balance sheet
and inventory of assets, if the liquidation committee becomes aware that the company does not
have sufficient assets to repay its liabilities, it must apply to a people’s court for a declaration
of bankruptcy in accordance with the laws. Following such declaration by the people’s court,
the liquidation committee shall hand over the administration matters to the bankruptcy
administrator designated by the people’s court.
Upon completion of the liquidation, the liquidation committee shall prepare a liquidation
report and submit it to the shareholders’ general meeting or a people’s court for confirmation
of its completion, and to the company registration authority to cancel the company’s
registration, and an announcement of its termination shall be published. Members of the
liquidation committee are required to discharge their duties in good faith and in compliance
with relevant laws. Members of the liquidation committee shall be prohibited from abusing
their authority in accepting bribes or other unlawful income and from misappropriating the
company’s properties. Members of the liquidation committee are liable to indemnify the
company and its creditors in respect of any loss arising from their willful or material default.
Liquidation of a company declared bankrupt according to laws shall be processed in
accordance with the laws on corporate bankruptcy.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-23 –


--- page 674 ---
Overseas Listing
Pursuant to the Trial Measures for Overseas Listing, both initial public offerings or
listings in overseas markets shall be filed with the CSRC within three business days after the
relevant application is submitted overseas. Subsequent securities offerings of an issuer in the
same overseas market where it has previously offered and listed securities shall be filed with
the CSRC within three business days after the offering is completed. Moreover, where the
filing documents are complete and in compliance with stipulated requirements, the CSRC will,
within twenty business days after receiving the filing documents, conclude the filing procedure
and publish the filing results on the CSRC website. Where the filing documents are incomplete
or do not conform to stipulated requirements, the CSRC shall request supplementation and
amendment thereto within five business days after receiving the filing documents. The issuer
shall then complete supplementation and amendment within thirty business days.
Loss of Share Certificates
A shareholder may, in accordance with the public notice procedures set out in the PRC
Civil Procedure Law, apply to a people’s court if his share certificate(s) in registered form is
either stolen, lost or destroyed, for a declaration that such certificate(s) will no longer be valid.
After such a declaration has been obtained, the shareholder may apply to the company for the
issue of a replacement certificate(s).
Merger and Demerger
Merger of companies may be conducted by absorption or consolidation. If companies
adopt the method of absorption, the absorbed company shall be dissolved. If companies are
incorporated in the form of consolidation, the parties to the merger shall be dissolved.
The parties to the merger shall enter into a merger agreement and prepare a balance sheet
and a list of properties. Within ten days of the date on which the resolution on merger is made,
the creditors shall be notified by the company and a public announcement shall be in the press
or on the National Enterprise Credit Information Publicity System within thirty days. The
creditors may require the company to repay its debts or provide guarantees for covering the
debts within thirty days of receipt of the notification or within forty-five days of the date of
the announcement if the creditor has not received any notification; and in case of a merger, the
credits and debts of the merging parties shall be assumed by the surviving or the new company.
Where a company merges with another company in which the former holds not less than
90% of the shares, the acquired company is not required to obtain approval by resolution of its
shareholders’ general meeting, but shall notify the other shareholders who have the right to
request the company to buy its equities or shares as a reasonable price. If the price paid for a
company’s merger does not exceed 10% of the company’s net assets, approval by resolution of
its shareholder’s meeting may not be required unless otherwise provided by the company’s
articles of association. Where a company’s merger is exempt from approval by resolution of the
shareholders’ general meeting in the previous two cases, it shall be subject to approval by
resolution of the board of directors.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-24 –


--- page 675 ---
In case of a division, the company’s assets shall be divided and a balance sheet and an
inventory of assets shall be prepared. Within ten days of the date on which the resolution on
division is made, the creditors shall be notified by the company and a public announcement
shall be made in the press or on the National Enterprise Credit Information Publicity System
within thirty days. The liabilities of the company which have accrued prior to the division shall
be jointly borne by the separated companies, unless otherwise stipulated in the agreement in
writing entered into by the company with creditors in respect of the settlement of debts prior
to division.
The PRC Securities Law, Regulations and Regulatory Regimes
The PRC has promulgated a series of regulations that relate to the issue and trading of the
shares and disclosure of information. In October 1992, the State Council established the
Securities Committee and the CSRC. The Securities Committee is responsible for coordinating
the drafting of securities regulations, formulating securities-related policies, planning the
development of securities markets, directing, coordinating and supervising all securities related
institutions in the PRC and administering the CSRC. The CSRC is the regulatory arm of the
Securities Committee and is responsible for the drafting of regulatory provisions governing
securities markets, supervising securities companies, regulating public offerings of securities
by PRC companies in the PRC or overseas, regulating the trading of securities, compiling
securities-related statistics and undertaking relevant research and analysis. In April 1998, the
State Council consolidated the Securities Committee and the CSRC and reformed the CSRC.
The PRC Securities Law is the first national securities law in China, and the regulatory
matters include the issuance and trading of securities, the acquisition of listed companies,
information disclosure, obligations and responsibilities of stock exchanges, securities
companies and securities regulatory authorities, etc. The PRC Securities Law comprehensively
regulates activities in the PRC securities market.
Pursuant to the PRC Securities Law, domestic enterprises issuing securities overseas
directly or indirectly or listing and trading their securities overseas shall comply with the
relevant provisions of the State Council. At present, the issuance and trading of shares issued
overseas is mainly regulated by rules and regulations issued by the State Council and the
CSRC.
Arbitration and Enforcement of Arbitral Awards
The PRC Arbitration Law () was enacted by the SCNPC on
31 August 1994, which became effective on 1 September 1995 and was last amended on
1 September 2017. The PRC Arbitration Law provides that an arbitration committee may,
before the promulgation of arbitration regulations by the PRC Arbitration Association,
formulate interim arbitration rules in accordance with the PRC Arbitration Law and the PRC
Civil Procedure Law. Where the parties have agreed to settle disputes by means of arbitration,
a people’s court will refuse to handle a legal proceeding initiated by one of the parties at such
people’s court, unless the arbitration agreement is invalid.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-25 –


--- page 676 ---
Under the PRC Arbitration Law and the PRC Civil Procedure Law, an arbitral award shall
be final and binding on the parties involved in the arbitration. If any party fails to comply with
the arbitral award, the other party to the award may apply to a people’s court for its
enforcement.
If the respondent puts forward evidence to prove that the arbitral award is under any of
the following circumstances, the award shall not be enforced upon examination and
verification by an arbitration tribunal of the people’s court:
(i) the parties have no arbitration clause in their contract, nor have subsequently
reached a written agreement on arbitration;
(ii) the matter to be ruled does not fall within the scope of the arbitration agreement or
the arbitration institution has no right to arbitrate;
(iii) the composition of the arbitration tribunal or the arbitration procedure violates the
legal procedure;
(iv) the evidence on which the award is based is forged;
(v) the other party conceals evidence sufficient to influence the impartial award from
the arbitration institution;
(vi) the arbitrators have committed acts of embezzlement, bribery, favoritism and
malpractice, or perverting the law in arbitrating the case.
If the people’s court determines that the enforcement of the award violates the public
interest, the award shall not be enforced.
Any party seeking to enforce an arbitral award of a foreign affairs arbitration organ of the
PRC against a party who or whose property is not located within the PRC may apply to a
foreign court with jurisdiction over the case for recognition and enforcement of the award.
Likewise, an arbitral award made by a foreign arbitration body may be recognized and enforced
by a PRC court in accordance with the principle of reciprocity or any international treaties
concluded or acceded to by the PRC.
The PRC acceded to the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards () (the “ New Y ork Convention ”) adopted
on 10 June 1958 pursuant to a resolution of the SCNPC passed on 2 December 1986. The New
Y ork Convention provides that all arbitral awards made in a state which is a party to the New
Y ork Convention shall be recognized and enforced by other parties thereto subject to their
rights to refuse enforcement under certain circumstances, including where the enforcement of
the arbitral award is against the public policy of that state. At the time of the PRC’s accession
to the convention, the SCNPC declared that (i) the PRC will only apply the New Y ork
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-26 –


--- page 677 ---
Convention to the recognition and enforcement of arbitral awards made in the territory of
another contracting state based on the principle of reciprocity; and (ii) the New Y ork
Convention will only apply to disputes deemed under PRC law to be arising from contractual
or non-contractual mercantile legal relations.
The Arrangements on the Mutual Enforcement of Arbitral Awards between the Mainland
and the Hong Kong Special Administrative Region (ʝੂБ΀
τર) were passed at the Judicial Committee meetings of the Supreme People’s
Court on 18 June 1999, which went into effect on 1 February 2000. The Supplementary
Arrangements of Supreme People’ s Court on Reciprocal Enforcement of Arbitration Awards
between the Mainland and the Hong Kong Special Administrative Region (ಥ
໾̂τર) were promulgated by the Supreme People’s
Court on 26 November 2020. Under these arrangements, if a party fails to perform the arbitral
award rendered in the Mainland or the Hong Kong, the other party may apply for enforcement
to the relevant court in the place where the respondent is domiciled or where the property is
located.
Judicial Judgement and its Enforcement
On 14 January 2019, the Judicial Committee of the Supreme People’s Court adopted the
Arrangement on Reciprocal Recognition and Enforcement of Judgements in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region (ٙ
τર), which took effect on 29 January 2024 and seeks to establish a mechanism with greater
clarity and certainty for recognition and enforcement of judgements in wider range of civil and
commercial matters between Hong Kong and the mainland China. The arrangement
discontinued the requirement for a choice of court agreement for bilateral recognition and
enforcement. The arrangement further regulates, among others, the scope and particulars of
judgements, the procedures and methods of the application for recognition or enforcement, the
review of the jurisdiction of the court that issued the original judgement, the circumstances
where the recognition and enforcement of judgement shall be refused, and the approaches
towards remedies for the reciprocal recognition and enforcement of judgements in civil and
commercial matters between the courts in mainland China and those in the Hong Kong. Upon
implementation of this Arrangement, the Arrangement between the Mainland and the Hong
Kong Special Administrative Region on Reciprocal Recognition and Enforcement of
Judgements of Civil and Commercial Matters under Consensual Jurisdiction (࠰
τર) which was
adopted by the Judicial Committee of the Supreme People’s Court on 12 June 2006 and took
effect on 1 August 2008 has been repealed.
APPENDIX V SUMMARY OF PRINCIPAL LEGAL
AND REGULATORY PROVISIONS
– V-27 –


--- page 678 ---
This Appendix is mainly providing potential investors with an overview on the Articles
of Association of the Company. The following information is only a summary, not covering all
the information that may be material to potential investors.
INCREASE/DECREASE, REPURCHASE AND TRANSFER OF SHARES
Increase/Decrease of Shares
The Company may, in light of its operational and development needs and in accordance
with laws and regulations, increase its capital under any of the following methods, subject to
the resolution made separately at a General Meeting:
(1) issuing shares in a public offering;
(2) issuing shares via a private placement;
(3) distribution of bonus shares to existing Shareholders;
(4) converting the reserved funds into share capital;
(5) any other methods provided for in law and administrative regulations and approved
by the CSRC.
The Company may reduce its registered capital. Any reduction of its registered capital
shall be subject to the procedures prescribed in the PRC Company Law, and other applicable
provisions, as well as the Articles of Association.
Repurchase of Shares
The Company shall not acquire its own shares, except under any of the following
circumstances:
(1) where it reduces its registered capital;
(2) where it merges with any other company that holds its shares;
(3) where it uses its shares for an employee stock ownership plan or equity incentive;
(4) where any shareholder who holds objections to the resolution on the merger or
division of the Company made at the General Meeting of shareholders requires the
Company to purchase his/its shares;
(5) where it uses its shares for the conversion of the convertible corporate bonds which
are issued by the Company; and
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-1 –


--- page 679 ---
(6) where it is necessary for the Company to acquire its own shares to maintain the
value of the Company and shareholders’ rights and interests;
(7) any other circumstances permitted by laws, administrative regulations, departmental
rules, regulatory rules of the place where the company’s shares are listed, etc.
A resolution of a General Meeting is required for repurchasing shares under
circumstances specified in items (1) or (2) above. In accordance with the provisions of the
Articles of Association or the authorization of the General Meeting, a resolution of a meeting
of the Board of Directors with a quorum of more than two-thirds of Directors is required for
repurchasing shares under circumstances (3), (5) or (6) above.
After the Company repurchases Shares in accordance with the law, it shall cancel such
Shares within the time limit prescribed by laws and administrative regulations, and apply to the
original company registration authority for change in registration of registered capital. After
the company acquires the Shares of the Company in accordance with the case of item (1) above,
it shall be cancelled within ten days from the date of acquisition; in the case of items (2) and
(4), it shall be transferred or cancelled within six months; in the case of items (3), (5) and (6),
the total number of shares of the Company held by the Company shall not exceed 10% of the
total issued Shares of the Company, and they should be transferred or cancelled within three
years.
For any repurchase in above circumstances (3), (5) or (6), centralized trading shall be
adopted publicly.
Transfer of Shares
The shares that have been issued before the Company publicly offers shares shall not be
transferred within one year from the date when the shares in the Company get listed and traded
in the stock exchange concerned. Where it is otherwise provided for in any law, administrative
regulation or by the securities regulatory authority of the State Council for the transfer of
shares held by the shareholders or actual controllers of a listed company, such provisions shall
prevail.
The directors, supervisors and senior executives of the Company shall declare to the
Company the shares they hold and the changes thereof. During the term of office as determined
when they assume the posts, the shares transferred each year shall not exceed 25% of the total
shares they hold of the Company. The shares of the Company held by them shall not be
transferred within 1 year as of the day when the stocks of the Company are listed and traded
on the stock exchange. Any of the aforesaid persons shall not transfer the shares of the
Company held within six months after he/she leaves office.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-2 –


--- page 680 ---
SHAREHOLDERS AND GENERAL MEETING
Shareholders
The shareholders of the Company shall be entitled to the following rights:
(1) the right to receive dividends and benefits distributed in other forms based on the
number of shares they hold;
(2) the right to require, convene, preside over, participate in or send proxies of
shareholders to attend General Meeting, speak at General Meeting and to exercise
the corresponding voting rights according to the laws;
(3) the right to supervise, make suggestions on or question the Company’s operations;
(4) the right to transfer, donate or pledge their shares according to the law,
administrative regulations and the Articles of Association;
(5) the right to consult the Articles of Association, the register of shareholders
(including the Hong Kong branch register), corporate bond stubs, minutes of
General Meetings, Board of Directors’ resolutions, Supervisory Committee’
resolutions and financial accounting reports;
(6) the right to participate in the distribution of the Company’s residual assets based on
the number of shares they held when the Company terminates or liquidates;
(7) any shareholder who has a different view on a resolution on the merger or division
of the Company made by a General Meeting has the right to require the Company
to buy back his/its shares; and
(8) other rights prescribed in laws, administrative regulations, departmental rules or the
Articles of Association.
Where any resolution of the General Meeting or of the Board of Directors violate any law
or administrative regulation, the shareholders may request the court to invalidate such
resolution.
Where the convening procedure or voting method for the General Meeting or the Board
of Directors meetings violate any law, administrative regulation or the Articles of Association,
or any resolution thereof violates the Articles of Association, the shareholders may request the
court to cancel the resolution within 60 days of the date on which the resolution is made.
However, a shareholder shall have no right to do so if only minor flaws exist in the convening
procedures or voting method of a General Meeting or a board meeting, which have no material
impact on the resolution.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-3 –


--- page 681 ---
The Shareholders of the Company shall undertake the following obligations:
(1) to comply with laws, administrative regulations and the Articles of Association;
(2) to pay share capital according to the shares subscribed for and the method of shares
subscription;
(3) not to withdraw shares, except for the circumstances stipulated by laws and
regulations;
(4) not to abuse his/its shareholders’ rights to damage the Company’s interests or other
shareholders; not to abuse the independent legal person status of the Company or the
limited liabilities of shareholders to damage the interests of the Company’s
creditors; and
(5) to perform any other obligation as provided by laws, administrative regulations, and
the Articles of Association.
Any shareholder of the Company who abuses his/its shareholders’ rights and thereby
causes losses to the Company or any other shareholder shall be liable for compensation
according to the law. Any shareholder of the Company who abuses the independent legal
person status of the Company and the limited liability of shareholders in order to evade debts
and thereby seriously damages the interests of the Company’s creditors shall assume joint and
several liability for the Company’s debts.
The controlling Shareholder or actual controller of the Company shall not utilize its
related-party relationship against the interests of the Company, or else, shall compensate the
Company for any loss incurred.
General Rules for General Meetings
The General Meeting shall be the authority of the Company and shall exercise the
following powers and functions in accordance with the law:
(1) to elect and remove any director or supervisor (not including employee
representative(s)), and to determine the remuneration of the relevant Directors and
Supervisors;
(2) to review and approve the reports of the Board of Directors;
(3) to review and approve the reports of the Supervisory Committee;
(4) to review and approve the Company’s annual financial budgets and final accounts
plans;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-4 –


--- page 682 ---
(5) to review and approve the Company’s profit distribution plans and loss recovery
plans;
(6) to resolve on the Company’s increase/decrease of registered capital;
(7) to make a resolution on the issuance of corporate bonds;
(8) to resolve on the Company’s merger, division, spin-off, dissolution, liquidation or
change of its corporate form;
(9) to modify the Articles of Association;
(10) to decide on the engagement, dismissal and non-renewal of the appointment of the
accounting firm and the audit fee of the accounting firm or the method of
determining the audit fee;
(11) to approve upon deliberation the guarantees specifically provided in the Articles of
Association;
(12) to deliberate purchases and sales of significant assets within a year exceeding 30%
of the Company’s total assets as audited in the latest period;
(13) to consider and approve upon deliberation changes in the use of funds raised;
(14) to deliberate equity incentive plans and employee stock ownership plans;
(15) to consider upon repurchasing of the Company’s shares in accordance with the
provisions of the Articles of Association;
(16) consider and approve significant transactions or related party transactions required
by laws, administrative regulations, the Listing Rules and the Articles of Association
to be considered and approved by the General Meeting;
(17) to deliberate other matters to be decided by General Meetings prescribed by law,
administrative regulation, departmental regulation, normative documents, relevant
regulations of the Listing Rules and the provisions of the Articles of Association.
The General Meeting may authorize or entrust the Board of Directors to handle the
matters authorized or entrusted, provided that it does not violate the mandatory provisions of
laws and regulations and the listing rules of the listing location.
There are two types of General Meetings: annual General Meeting and extraordinary
General Meeting. The annual General Meeting shall be convened once a year, and be held
within six months from the end of last accounting year.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-5 –


--- page 683 ---
The Company shall hold extraordinary General Meeting within two months from the date
of occurrence of any of the following events:
(1) the number of directors is less than the quorum required by the PRC Company Law,
or less than two-thirds of the quorum required by the Articles of Association;
(2) the outstanding losses of the Company accounts for one-third of the Company’s total
paid-in share capital;
(3) shareholder(s) individually or jointly holding at least 10% shares of the Company
send(s) a written request for meeting;
(4) the Board of Directors deems necessary;
(5) the Supervisory Committee proposes to convene the meeting;
(6) more than half of the independent non-executive directors of the company agree to
convene the meeting;
(7) other circumstances stipulated by laws, administrative regulations, departmental
rules, regulatory rules of the place where the company’s shares are listed or the
Articles of Association.
Convening of a Shareholders’ General Meeting
The independent non-executive directors have the right to propose to the Board of
Directors to convene an extraordinary General Meeting. With respect to a proposal by an
independent non-executive director to convene an extraordinary General Meeting, the Board of
Directors shall, in accordance with the laws, administrative regulations, regulatory rules of the
place where the company’s shares are listed and the provisions of the Articles of Association,
provide a written feedback on whether it agrees or disagrees with the convening of an
extraordinary General Meeting within ten days of receipt of the proposal. If the Board of
Directors agrees to convene an extraordinary General Meeting, it shall issue a notice of the
convening of the General Meeting within five days after the Board of Directors’ resolution is
made; if the Board of Directors does not agree to convene an extraordinary General Meeting,
it shall state the reasons therefor in writing and make a public announcement thereof.
The Supervisory Committee shall have the right to propose to the Board of Directors to
convene an extraordinary General Meeting, and the Supervisory Committee shall propose in
writing to the Board of Directors when it proposes to convene an extraordinary General
Meeting. The Board of Directors shall, in accordance with laws, administrative regulations, the
Listing Rules and the provisions of the Articles of Association, provide written feedback on
whether it agrees or disagrees with the convening of an extraordinary General Meeting within
ten days after receipt of the proposal. If the Board of Directors agrees to convene an
extraordinary General Meeting, it shall issue a notice of the convening of the General Meeting
within five days after it has made a resolution of the Board of Directors, and any changes to
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-6 –


--- page 684 ---
the original proposal in the notice shall be approved by the Supervisory Committee. If the
Board of Directors does not agree to convene an extraordinary General Meeting, or fails to
provide feedback on the proposal within ten days after receipt of the proposal, it shall be
deemed that the Board of Directors is unable to fulfill, or fails to fulfill, its duty to convene
a General Meeting, and the Supervisory Committee may convene and preside over an
extraordinary General Meeting on its own.
Shareholders who individually or collectively hold 10% or more of the shares of the
Company shall have the right to request the Board of Directors to convene an extraordinary
General Meeting, and any proposal by a shareholder to convene an extraordinary General
Meeting shall be made in writing to the Board of Directors. The Board of Directors shall, in
accordance with the laws, administrative regulations, the Listing Rules and the provisions of
the Articles of Association, provide written feedback on whether it agrees or disagrees with the
convening of an extraordinary General Meeting within ten days after receiving the request.
Where the Board of Directors agrees to convene an extraordinary General Meeting, it shall
issue a notice of convening the General Meeting within five days after the Board of Directors’
resolution is made, and shall obtain the consent of the relevant shareholders for any changes
to the original request as set out in the notice. If the Board of Directors does not agree to
convene an extraordinary General Meeting or fails to respond within ten days after receiving
the request, shareholders holding individually or collectively 10% or more of the shares of the
Company shall have the right to propose to the Supervisory Committee to convene an
extraordinary General Meeting, and the shareholders’ proposal to the Supervisory Committee
to convene an extraordinary General Meeting shall be made in writing to the Supervisory
Committee. If the Supervisory Committee agrees to convene an extraordinary General
Meeting, it shall issue a notice of the convening of the General Meeting within five days upon
receipt of the request, and shall obtain the consent of the relevant shareholders for any changes
to the original request in the notice. If the Supervisory Committee fails to give notice of a
General Meeting within the prescribed period, it shall be deemed that the Supervisory
Committee does not convene and preside over the General Meeting, and that shareholders who
have individually or collectively held 10% or more of the Company’s shares for a period of
ninety consecutive days or more may convene and preside over the meeting on their own.
If the Supervisory Committee or the shareholders convene a General Meeting on their
own, the necessary expenses shall be borne by the Company.
Notice of General Meetings
The Company shall give written notice of an annual General Meeting at least twenty-one
days before the meeting, and the Company shall give written notice of an extraordinary General
Meeting fifteen days before the meeting.
The notice of a General Meeting shall include the following contents:
(1) the time and place of the meeting and the duration of the meeting;
(2) matters and proposals to be submitted for consideration at the meeting;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-7 –


--- page 685 ---
(3) a statement in conspicuous language that all shareholders have the right to attend the
meeting and may appoint a proxy in writing to attend and vote at the meeting, and
that the proxy need not be a shareholder of the Company;
(4) the registration date of the shareholders entitled to attend the General Meeting;
(5) the name and telephone number of the standing contact person for the meeting;
(6) the time and procedure for voting by internet or other means; and
(7) other contents stipulated in relevant laws, regulations, departmental rules,
regulatory rules of the place where the Company’s shares are listed and the Articles
of Association.
The notice of General Meeting and supplemental notice shall contain the contents as
required by laws, administrative regulations, departmental rules, the Listing Rules of the Stock
Exchange and the Articles of Association, and shall fully and completely disclose all specific
details of all proposals. Where the matters to be discussed require the opinion of the
independent non-executive directors, the opinion of the independent non-executive directors
and the reasons therefor will be disclosed at the same time when the notice of General Meeting
or supplementary notice is published. The notice of General Meeting shall provide a full and
clear explanation of the proposals for the meeting and, in respect of the motions to be voted
on, the directors’ recommendations on how the shareholders should vote in the best interests
of the shareholders as a whole. The notice of General Meeting should clearly state whether (and
how) shareholders who participate in the meeting remotely may vote.
Proposals at General Meeting
When the Company convenes a General Meeting, the Board of Directors, the Supervisory
Committee, and shareholders who individually or collectively hold more than 1% of the
Company’s shares shall have the right to submit proposals to the Company. The convener shall
include in the agenda of the General Meeting those items in the proposal that fall within the
scope of the duties of the meeting.
Shareholders who individually or collectively hold more than 1% of the shares of the
Company may, ten days prior to the date of the General Meeting, propose an interim proposal
and submit it in writing to the convener. The convener shall issue a supplementary notice of
the General Meeting within two days after receiving the proposal, announcing the contents of
the interim proposal.
Except for the cases stipulated in the preceding paragraph, the convener shall not amend
the proposals already set forth in the notice of General Meeting or add new proposals after the
convener has issued the notice of General Meeting.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-8 –


--- page 686 ---
Proxy for General Meeting
A shareholder shall appoint a proxy in writing under the signature of the principal or
under the signature of his proxy appointed in writing; if the principal is a legal person, the seal
of the legal person shall be affixed or the signature shall be that of its director or duly appointed
proxy.
Resolutions at General Meeting
Resolutions at General Meetings can be divided into ordinary resolutions and special
resolutions.
Ordinary resolutions shall be passed by a majority of the votes of the shareholders
(including shareholders’ proxies) present at the General Meeting.
Special resolutions shall be passed by more than two-thirds of the votes of the
shareholders (including shareholders’ proxies) present at the General Meeting.
Shareholders (including shareholders’ proxies) exercise their voting rights by the number
of voting shares they represent, with each share entitled to one vote.
The following matters shall be approved by ordinary resolution at the General Meeting:
(1) a report on the work of the Board of Directors or the Supervisory Committee;
(2) profit distribution plan and loss recovery plan prepared by the Board of Directors;
(3) appointment and removal of members of the Board of Directors and the Supervisory
Committee and their remuneration and methods of payment;
(4) the annual budget plan and final account plan of the Company;
(5) the annual report of the Company; and
(6) matters other than those prescribed by laws, administrative regulations, the listing
rules of the stock exchange on which the Company’s shares are listed, or the Articles
of Association, which shall be passed by special resolution.
The following matters shall be passed by special resolution at a General Meeting:
(1) the increase or reduction of the registered capital of the Company;
(2) the separation, division, merger, dissolution and liquidation of the Company;
(3) amendments to the Articles of Association of the Company;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-9 –


--- page 687 ---
(4) the purchase or sale of material assets or the amount of guarantees by the Company
within one year that individually or cumulatively exceeds 30% of the Company’s
total audited assets for the most recent period;
(5) equity incentive plan;
(6) repurchase of the Company’s shares; and
(7) any other matters required by laws, administrative regulations, the listing rules of
the stock exchange on which the Company’s shares are listed or the Articles of
Association, and any other matters which the General Meeting may by ordinary
resolution determine will have a material impact on the Company and which require
the approval of a special resolution.
When matters relating to connected transactions (as defined in the Listing Rules) are
considered at a General Meeting, shareholders constituting connected persons (as defined in
the Listing Rules) (hereinafter referred to as the “connected shareholders”) shall not participate
in the voting, and the number of voting shares represented by them shall not be counted
towards the total number of valid votes cast; and the announcement of the resolution of the
General Meeting shall provide adequate disclosure of the voting status of the non-connected
shareholders.
DIRECTORS AND BOARD OF DIRECTORS
Directors
The directors of the Company are natural persons.
Directors are elected or replaced by the General Meeting and may be removed by an
ordinary resolution of the General Meeting before the expiration of their terms of office. The
term of office of the directors is three years and they are eligible for re-election.
The term of office of a director is calculated from the date of assumption of office until
the expiration of the current term of office of the Board of Directors. If a director is not
re-elected in time for the expiration of his/her term of office, or if a director resigns during
his/her term of office resulting in less than a quorum of the Board of Directors, or resulting in
the Company being unable to satisfy the other Listing Rules, the original director shall still
fulfill his/her duties as a director in accordance with the provisions of laws, administrative
regulations, departmental rules and the Articles of Association until the re-elected director
assumes office.
A director may resign before the expiration of his term of office. A director who resigns
shall submit a written resignation report to the Board of Directors. The Board will disclose the
relevant circumstances within two days.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-10 –


--- page 688 ---
In the event that the Board of Directors of the Company becomes less than a quorum due
to the resignation of a director, the original director shall still perform the duties of a director
in accordance with the laws, administrative regulations, departmental regulations and the
provisions of the Articles of Association until the re-elected director assumes office.
Except for the circumstances listed in the preceding paragraph, the resignation of a
director shall take effect from the time the resignation report reaches the Board of Directors.
Chairman of the Board
The Board of Directors shall have one chairman and may have the vice-chairman(s) as the
case may be, who shall be elected by the Board of Directors by a majority of all the directors.
The term of office shall be three years, renewable upon re-election.
The chairman of the Board of Directors is entitled to the following functions and powers:
(1) to preside over General Meetings and to convene and preside over board meetings;
(2) to supervise and check on the implementation of resolutions of the General Meeting
and the Board of Directors;
(3) to exercise other functions and powers as conferred by the Board of Directors.
Board of Directors
The Board of Directors shall consist of 11 directors, of which not less than 3 shall be
independent non-executive directors and shall constitute at least one-third of the Board.
The Board of Directors shall be accountable to the General Meeting and exercise the
following powers and functions:
(1) to convene the General Meeting and report to the General Meeting on its work;
(2) to execute the resolutions of the General Meeting;
(3) formulating strategic plans for the medium- and long-term development of the
Company and monitoring and adjusting their implementation;
(4) determining the Company’s business objectives, business plans and investment and
financing programs;
(5) to formulate the annual financial budget and finalization plan of the Company;
(6) to formulate the profit distribution plan and the loss recovery plan of the Company;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-11 –


--- page 689 ---
(7) to formulate plans for the increase or reduction of the registered capital, issuance of
bonds or other securities and listing of the Company;
(8) formulating plans for major acquisitions, acquisition of the Company’s shares, or
mergers, demergers, dissolutions or changes in the form of the Company;
(9) within the scope of authorization by the General Meeting or in accordance with
regulatory rules of the place where the company’s shares are listed, to decide on the
Company’s external investment, acquisition and disposal of assets, pledge of assets,
external guarantee matters, entrustment of financial affairs, connected transactions,
and external donations;
(10) to decide on the establishment and staffing of the corresponding working
organizations of the Board of Directors and the internal management organizations
of the Company;
(11) to decide to appoint or dismiss the general manager of the Company, and decide on
his remuneration, rewards and punishments; according to the nomination of the
general manager, decide to appoint or dismiss the deputy general manager, the
Secretary to the Board of Directors, the Chief Financial Officer and other Senior
Executives personnel of the Company, and decide on their remuneration, rewards
and punishments;
(12) to formulate the basic management system of the Company;
(13) to formulate proposals for amendments to the Articles of Association;
(14) to manage the disclosure of information of the Company;
(15) proposing to the General Meeting the appointment or replacement of the accounting
firm for the audit of the Company;
(16) to receive reports on the work of the general manager of the Company and to inspect
the work of the general manager;
(17) to authorize the chairman of the Board of Directors and the general manager of the
Company to decide on major matters of the Company within the scope of
authorization;
(18) overseeing and approving major environmental, social and governance matters,
identifying potential risks in business development plans and making decisions
based on the recommendations made; and
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-12 –


--- page 690 ---
(19) other duties and responsibilities as stipulated in the laws, regulations and the listing
rules of the stock exchange where the Company’s shares are listed, and as conferred
by the General Meeting and the Articles of Association.
The resolution of the Board of Directors in the preceding paragraph shall be approved by
a majority vote of the Directors.
The Board of Directors of the Company shall give an explanation to the General Meeting
regarding the non-standard audit opinion on the Company’s financial reports issued by the
certified public accountants.
Board meetings are divided into regular and ad hoc meetings. The Board of Directors
shall hold at least two regular meetings each year, which shall be convened by the Chairman
of the Board of Directors.
Notification of the convening of the Board of Directors and interim Board of Directors
meetings shall be made by hand delivery, mail or facsimile; and the time limit for notification
shall be as follows: fourteen days prior to the convening of a regular meeting of the Board of
Directors, and in principle, three days prior to the convening of an interim Board of Directors
meeting, all Directors, Supervisors, the General Manager, and the Secretary of the Board of
Directors shall be notified in writing of the convening of the Board of Directors’ meeting.
In case of emergency, if it is necessary to convene an interim board meeting as soon as
possible, notice of the meeting may be given by telephone or other verbal means at any time,
but the convener shall give an explanation at the meeting and record it in the minutes.
When voting on board resolutions, each director shall have one vote.
The voting options open to directors are consent, opposition or abstention. The directors
present at a meeting shall select one from among the foregoing options. If a director fails to
select any of the options or selects two or more of the options, the chairman of the meeting
shall require him or her to select again. If he or she refuses to make a selection, he or she shall
be deemed to abstain. If a director leaves the venue during the course of a meeting without
returning to make a selection, he or she shall be deemed to abstain.
If at least one-quarter of the directors present at the meeting or at least two independent
non-executive directors believe that they are unable to reach a determination on a relevant
matter because the motion of the Board of Directors is unclear or unspecific, the meeting
materials are insufficient or other such reason, they may jointly propose that discussion of the
motion in question may be postponed to a later time. In such circumstances, the Board of
Directors shall accept the proposal.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-13 –


--- page 691 ---
GENERAL MANAGER AND OTHER SENIOR EXECUTIVES
The Company has a general manager, who is nominated by the chairman of the Board of
Directors and appointed or dismissed by the Board of Directors. According to the needs, there
may be a number of deputy general managers, a Chief Financial Officer and a Secretary of the
Board of Directors. The term of office of the general manager and deputy general manager shall
be three years, and they may be reappointed for a second term.
The general manager shall be responsible to the Board of Directors and exercise the
following powers and functions:
(1) to preside over the production and operation management of the Company, to
organize and implement the resolutions of the Board of Directors, and to report to
the Board of Directors on his work;
(2) organize and implement the annual business plan and investment plan of the
Company;
(3) to formulate plans for the establishment of the Company’s internal management
organization;
(4) to formulate the basic management system of the Company;
(5) to formulate specific rules and regulations of the Company;
(6) to propose to the Board of Directors the appointment or dismissal of the Vice
President, Chief Financial Officer, Secretary of the Board of Directors and other
Senior Executives personnel of the Company;
(7) to be responsible for handling major emergencies of the Company;
(8) Deciding and handling external affairs on behalf of the Company within the scope
of the authority delegated by the Board of Directors;
(9) to study and propose the Company’s strategic planning and medium and long-term
development plans;
(10) to formulate the Company’s annual operating budget, investment budget and
financial budget plan;
(11) other duties and responsibilities as authorized by the Articles of Association or the
Board of Directors.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-14 –


--- page 692 ---
The Senior Executives of the Company shall faithfully perform their duties to safeguard
the best interests of the Company and all shareholders. Senior Executives of the Company shall
be liable for compensation in accordance with the law for any damage caused to the interests
of the Company and the public shareholders as a result of their failure to faithfully perform
their duties or breach of the duty of good faith.
SUPERVISORS AND SUPERVISORY COMMITTEE
Supervisors
Directors, general managers and other Senior Executives personnel may not concurrently
serve as Supervisors.
Supervisors shall serve terms of three years. Upon expiration of their term, supervisors
may serve consecutive terms if re-elected.
Supervisory Committee
The Company has a Supervisory Committee. The Supervisory Committee shall be
composed of three supervisors, including one staff representative supervisor, who shall be
democratically elected by the staff representative meeting of the Company or in other forms.
The Supervisory Committee shall have a chairman, who shall be elected by a majority of all
the supervisors.
The Supervisory Committee shall be accountable to the General Meeting and shall
exercise the following powers and duties in accordance with the law:
(1) to examine and give written opinions on the periodic reports of the Company
prepared by the Board of Directors;
(2) to inspect the Company’s financial affairs;
(3) to supervise the conduct of directors and Senior Executives in the performance of
their duties in the Company, and to propose the removal of directors and Senior
Executives in the event of any violation of the laws, administrative regulations, the
Articles of Association, or the resolution of the General Meeting;
(4) to request the directors and Senior Executives to rectify the behavior of the directors
and Senior Executives when such behavior is detrimental to the interests of the
Company;
(5) to propose the convening of an extraordinary General Meeting, and to convene and
preside over the General Meeting in accordance with the law when the Board of
Directors fails to fulfill its duty to convene and preside over the General Meeting as
stipulated in the PRC Company Law;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-15 –


--- page 693 ---
(6) to make proposals to the General Meeting;
(7) to institute legal proceedings against directors and Senior Executives in accordance
with the provisions of Article 189 of the PRC Company Law;
(8) to investigate any abnormality in the operation of the Company; and if necessary, to
engage professional organizations such as accounting firms and law firms to assist
it in its work;
(9) other powers and functions conferred by laws, administrative regulations,
departmental rules, the Listing Rules or the Articles of Association.
Reasonable expenses incurred by the Supervisory Committee for hiring lawyers, certified
public accountants, certified public auditors and other professionals in the exercise of its duties
and powers shall be borne by the Company.
ELIGIBILITY AND OBLIGATIONS OF DIRECTORS, SUPERVISORS, AND SENIOR
EXECUTIVES
Any person who satisfies the following shall not act as a Director, Supervisor, general
manager or other Senior Executives:
(1) who has no or limited civil capacity;
(2) who was sentenced to any criminal penalty for corruption, bribery, embezzlement or
misappropriation of properties or destruction of the order of China socialist
market-oriented economy, or who was deprived of political rights due to crime, and
if no more than five years have passed since the expiration of the sentence, or who
was granted probation, if no more than two years have passed since the expiration
of the probation period;
(3) who acted as director, factory manager, manager of a bankrupt or liquidated
company or corporation, and personally liable for the bankruptcy of such company
or corporation, and a three-year period has not elapsed since the completion of
bankruptcy or liquidation of such company or corporation;
(4) who acted as the legal representative of a company or corporation whose business
licence was revoked or which was ordered to close down due to a violation of law
and who is personally accountable for the revocation or closure of such company or
corporation, and a three-year period has not elapsed since the revocation of the
business licence or the order to close down of such company or corporation;
(5) who was listed as a dishonest person subject to enforcement by the people’s court
due to failure to pay off a large amount of unliquidated mature debts;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-16 –


--- page 694 ---
(6) who has been barred from the securities market by the CSRC for a certain period of
time and such period has not expired yet;
(7) any other circumstances stipulated by applicable laws, administrative regulations,
departmental rules.
The Directors shall comply with the applicable laws, administrative regulations and the
Articles of Association and assume the duty of loyalty to the Company. Such obligations
include:
(1) shall not accept any bribery or other illegal income by using his or her powers and
position and shall not seize the assets of the Company;
(2) shall not misappropriate the Company’s funds;
(3) shall not open accounts in his/her own name or in the names of others to deposit
funds or assets of the Company;
(4) shall not lend the Company’s funds to others or pledge Company’s properties to
others in violation of the Articles of Association or without the approval of the
General Meeting or the Board;
(5) himself/herself and his/her close relatives, enterprises directly or indirectly
controlled by himself/herself and his/he close relatives, and other connected persons
of the Directors shall not enter into contracts or transactions with the Company in
violation of the provisions of the Articles of Association or without the consent of
the General Meeting;
(6) without the consent of the General Meeting, shall not take advantage of the
convenience of his/her duties to obtain for himself/herself or others business
opportunities that should belong to the Company, and to engage in the operation of
similar businesses with the Company on himself/herself or for others;
(7) shall not accept commissions for transactions between others and the Company as
personal gains;
(8) shall not disclose any confidential information involving the Company without
authorization;
(9) shall not impair the interests of the Company through affiliated relationship;
(10) other loyalty obligations in accordance with applicable laws, administrative
regulations, departmental rules and the Articles of Association.
The Senior Executives assume the aforementioned duty of loyalty.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-17 –


--- page 695 ---
The Directors shall comply with the applicable laws, administrative regulations and the
Articles of Association and assume the duty of diligence to the Company. Such obligations
include:
(1) shall exercise the powers granted by the Company with carefully, faithfully, and
diligently so that the business carried out by the Company is in compliance with
applicable laws, administrative regulations and economic policies, and such
business activities are within the scope of business licence specified in the
Company’s business licence;
(2) shall treat all Shareholders equally;
(3) shall stay informed with the business and operation of the Company timely;
(4) shall sign written confirmation opinion with regard to regular reports of the
Company and ensure the disclosure made by the Company is true, accurate and
complete;
(5) shall report to the Supervisory Committee truthfully and shall not hinder the
Supervisory Committee or the Supervisors from performing their duty;
(6) other diligence obligations in accordance with applicable laws, administrative
regulations, departmental rules and the Articles of Association.
The Senior Executives assume the aforementioned obligations in items (4), (5) and (6).
Supervisors shall observe laws, administrative regulations and the Company’s Articles of
Association and shall assume the duty of loyalty and the duty diligence to the Company, not
to accept any bribery or other illegal income by using his powers and position, nor seize the
assets of the Company in any manner.
FINANCIAL ACCOUNTING POLICY
The Company has formulated the Company’s financial accounting system in accordance
with the laws of the PRC and the provisions of the PRC Accounting Standards formulated by
the relevant state departments.
The financial report of the company shall be made available for inspection by the
shareholders at the company not later than twenty-one days before the annual General Meeting.
Each shareholder of the corporation shall be entitled to receive the financial reports referred
to in this chapter.
The Company shall send the aforesaid report to each shareholder of overseas listed
foreign shares at least twenty-one days prior to the annual General Meeting by postage-paid
mail, with the address of the addressee based on the address registered in the register of
shareholders. The Company may do so in the form of an announcement (including publication
through the Company’s website), subject to the fulfillment of the conditions of laws,
administrative regulations and the listing rules of the place where the Company is listed.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-18 –


--- page 696 ---
PROFITS DISTRIBUTION
To distribute after-tax profits of current year, the Company shall allocate 10% of profits
for the statutory reserves of the Company. If the cumulative amount of statutory reserves
exceeds 50% of the registered capital of the Company, no further allocation is required. If the
statutory reserves are insufficient to make up previous losses, then the Company shall firstly
make up previous losses with current profits, before any allocation is made to the statutory
reserves in accordance with the preceding paragraph. After foregoing provision for statutory
reserves, the Company may also draw discretionary reserves from after-tax profits, subject to
the resolution of the General Meeting. The remaining after-tax profits after loss makeup and
provisions for reserves shall be distributed to Shareholders in proportion to their shareholding
percentages unless otherwise provided in the Articles of Association. If the General Meeting
breaches the foregoing provisions and distributes profits to Shareholders, then Shareholders
shall refund the distributed profits to the Company in violation of the foregoing provisions, and
where any losses are incurred to the Company, Shareholders and each liable Director,
supervisor and Senior Executives shall be liable for compensation for such losses. The shares
held by the Company per se shall not participate in the profit distribution.
The reserves of the Company are used to make up losses, expand business, or increase the
registered capital of the Company. Where any losses need to be covered with reserves of the
Company, discretionary reserves and statutory reserves shall first be used and if still
insufficient, capital reserves can be used in accordance with applicable provisions. When the
statutory reserves are reversed into increasing capital, the remaining amount of said reserves
shall not be less than 25% of the registered capital of the Company before such reversal.
The Company shall appoint a collection agent for the shareholders holding the offshore
listed foreign shares. The collection agent shall collect on behalf of the shareholder concerned
the dividends and other moneys payable by the company in respect of the overseas-listed
foreign capital shares and shall hold such moneys in custody on his behalf for payment to the
shareholder concerned.
The collection agent appointed by the Company shall meet the requirements of laws of
the place of listing and the relevant regulations of the stock exchange.
The collection agent appointed by the Company for the shareholders of offshore listed
foreign shares listed on the Stock Exchange shall be a trust company registered in accordance
with the Trustee Ordinance of Hong Kong.
Payment of cash dividends and other payments by the Company to the domestic unlisted
shareholders shall be made in Renminbi. Cash dividends and other payments by the Company
to shareholders of offshore listed foreign shares shall be denominated and declared in RMB and
paid in foreign currencies. Payment of cash dividends and other amounts in foreign currencies
by the Company to shareholders of offshore listed foreign shares and other shareholders of
foreign shares shall be made in accordance with the provisions of the relevant state regulations
on foreign exchange control.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-19 –


--- page 697 ---
ENGAGEMENT OF ACCOUNTING FIRM
The Company shall engage an independent accounting firm that complies with the
Securities Law to audit the accounting statements, the verification of net assets and other
related consulting services, for a term of one year, which can be renewed.
The engagement of an accounting firm by the Company must be decided by the General
Meeting, and the Board of Directors shall not appoint an accounting firm before the decision
is made by the General Meeting.
The Company guarantees to provide true and complete accounting certificates,
accounting books, financial accounting reports, and other accounting information to the
accounting firm engaged, and shall not refuse, conceal, or misrepresent such information.
The decision for the Company to employ, terminate or not to re-appoint an accounting
firm shall be made by the General Meeting.
MERGER AND DIVISION OF THE COMPANY
The merger of the Company may take two forms: merger by absorption or merger by new
establishment.
In a merger of the Company, all parties to a merger shall sign the merger agreement and
shall prepare their respective balance sheets and inventory lists of assets. The Company shall
notify its creditors within 10 days from the date of passing the merger resolution and to make
announcement in newspaper or on the National Enterprise Credit Information Publicity
System, as well as on the Company’s website and the website of the stock exchange within 30
days. A creditor has the right within thirty days of receipt of the notice from the Company or,
in the case of creditor who does not receive such notice, within forty-five days of the date of
announcement, to require the Company to repay its debts or to provide a corresponding
guarantee for such debt. Upon the merger, the creditors’ rights and the indebtedness of each
merging party shall be assumed by the surviving entity or the newly established company
resulting from the merger.
Where the Company is to be divided, its assets shall be divided accordingly. In the event
of the division of the Company, the parties to such division shall prepare a balance sheet and
a list of assets. The Company shall notify its creditors within 10 days from the date of the
resolution on such division and shall make a public announcement through newspapers or the
National Enterprise Credit Information Publicity System, as well as on the Company’s website
and the website of the stock exchange within 30 days from the date of the resolution on such
division. The post-division Company shall be jointly and severally liable for the pre-division
debts of the Company, unless provided otherwise in a written agreement pertaining to the
payment of debts between the Company and its creditors prior to the division.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-20 –


--- page 698 ---
The Company shall, in accordance with law, apply for change in its registration with the
Company registration authority where a change in any item in its registration arises as a result
of any merger or division. Where the Company is dissolved, the Company shall apply for
cancellation of its registration in accordance with law. Where a new company is established,
the Company shall apply for registration thereof in accordance with law.
DISSOLUTION AND LIQUIDATION OF THE COMPANY
The Company shall be dissolved and liquidated upon the occurrence of any of the
following events:
(1) expiry of the valid term of the business or the occurrence of other events of
dissolution as stated in the Articles of Association;
(2) a resolution for dissolution is passed by a General Meeting;
(3) dissolution is necessary due to a merger or division of the Company;
(4) the Company is revoked of business licence, ordered to close or cancelled according
to law;
(5) serious difficulties arise in the operation and management of the Company and its
continued existence would cause material loss to the interests of the Shareholders
and such difficulties cannot be resolved through other means, in which case
Shareholders holding at least 10% of all shareholders’ voting rights may petition a
people’s court to dissolve the Company.
Where the Company is dissolved in accordance with the provisions of items (1), (2), (4)
and (5) above, a liquidation committee shall be formed within 15 days after the occurrence of
the event of dissolution to deal with matters of the liquidation. The members of the liquidation
committee shall be Directors or other persons appointed by a General Meeting. If a liquidation
committee is not established in time or the liquidation fails to effect after the establishment of
a liquidation committee, the Creditor may apply to the people’s court to establish a liquidation
committee by their appointment to proceed with the liquidation.
The liquidation committee shall exercise the following functions and powers during the
period of liquidation:
(1) to dispose of the property of the Company, and to prepare a balance sheet and a list
of properties;
(2) to inform creditors by notice and public announcement;
(3) to dispose of unfinished business of the Company relating to the liquidation;
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-21 –


--- page 699 ---
(4) to pay up all outstanding taxes and tax arising during the liquidation process;
(5) to clear up claims and debts;
(6) to distribute the residual properties of the Company after the full settlement of debts;
(7) to represent the Company in civil litigations.
The liquidation committee shall notify the creditors within 10 days after its establishment,
and publish announcements in the newspaper(s) or on the National Enterprise Credit
Information Publicity System within 60 days.
Creditors shall, within thirty days from the date of receiving the notice; or for creditors
who do not receive the notice, within 45 days from the date of the public announcement,
declare their claims to the liquidation committee.
The creditor shall provide a description and supporting evidence of the matters relating
to their claims. The liquidation committee shall register the creditors’ claims.
The liquidation committee shall not make any debt settlement during the period of
declaration of claims.
A liquidation plan shall be formulated by the liquidation committee after the stocktaking
of the Company’s assets has been carried out and the balance sheet and a detailed inventory of
assets have been formulated, and shall be submitted to the General Meeting or People’s Court
for confirmation.
The assets of the Company shall be applied for liquidation in the following order:
payment of liquidation expenses, staff wages, social insurance expenses and statutory
compensation, payment of outstanding taxes, and payment of the Company’s debts. The
residual assets of the Company after settlement of all liabilities in accordance with the
provisions of the preceding article shall be distributed to the Shareholders of the Company
according to the proportion of their shareholdings.
During the liquidation period, the Company shall continue to exist but shall not
commence any new business activities. Before the Company’s debts have been fully repaid in
accordance with the provisions of the preceding paragraph, no assets of the Company shall be
distributed to its Shareholders.
When the liquidation committee, having examined the Company’s assets and having
prepared a balance sheet and an inventory of assets, discovers that the Company’s assets are
insufficient to pay its debts in full, it shall immediately apply to the People’s Court for a
declaration of insolvency.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-22 –


--- page 700 ---
Once the People’s Court has declared the Company insolvent, the liquidation committee
shall turn over any matters regarding the liquidation to the People’s Court.
Upon completion of the liquidation of the Company, the liquidation group shall prepare
a liquidation report as well as a statement of income and expenditure and financial books
during the liquidation period, which shall be verified by a certified public accountant in the
PRC and reported to the General Meeting or the People’s Court for confirmation, and within
thirty days from the date of the confirmation by the General Meeting or the People’s Court,
shall submit the aforesaid documents to the Company’s registration authority, apply for the
cancellation of the Company’s registration, and announce the Company’s termination of its
operation.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
The Company may amend the Articles of Association in accordance with laws,
administrative regulations and the provisions of the Articles of Association. Under one of the
following circumstances, the Company shall amend the Articles of Association:
(1) after the amendment of the PRC Company Law, the Listing Rules or the relevant
laws and administrative regulations, the matters provided for in the Articles of
Association are inconsistent with the provisions of the amended laws and
administrative regulations;
(2) changes in the circumstances of the Company which are inconsistent with the
matters recorded in the Articles of Association; and
(3) the General Meeting decides to amend the Articles of Association.
If the amendments to the Articles of Association resolved by the General Meeting should
be subject to the approval of the competent authorities, they shall be reported to the competent
authorities for approval. If the amendment involves matters relating to the registration of the
Company, the amendment shall be registered in accordance with the law. Matters relating to the
amendment of the Articles of Association that are required by laws and regulations to be
disclosed shall be announced in accordance with the regulations.
APPENDIX VI SUMMARY OF ARTICLES OF ASSOCIATION
– VI-23 –


--- page 701 ---
A. FURTHER INFORMATION ABOUT THE GROUP
1. Establishment of the Company
The Company was established as a limited liability company in the PRC on December 16,
2019 and was converted into a joint stock limited company on July 26, 2023 under the laws
of the PRC. Our registered office is located at No. 28 Luoxin Road, Baoshan District,
Shanghai, PRC. As of the Latest Practicable Date, the registered share capital of the Company
is RMB57,613,953.
The Company has established a place of business in Hong Kong at Room 1919, 19/F, Lee
Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong, and has been registered as a
non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance. Ms. Fong
Christine Haiman ( ˙Ҏ೙), one of our joint company secretaries, has been appointed as our
Hong Kong authorized representative for acceptance of service of process and notices in Hong
Kong whose correspondence address is the same as our place of business in Hong Kong. The
address for service of process on our Company in Hong Kong is the same as our principal place
of business in Hong Kong as set out above.
As we are established in the PRC, our corporate structure and Articles of Association are
subject to the relevant laws and regulations of the PRC. A summary of the relevant provisions
of our Articles of Association is set out in “Appendix VI — Summary of Articles of
Association”.
2. Changes in the Share Capital of the Company
As of the Latest Practicable Date, the registered share capital of our Company was
RMB57,613,953 divided into 57,613,953 Unlisted Shares with a nominal value of RMB1.0
each. Further, our Company expects to subdivide its Share from one Share of RMB1.0 each into
five Shares of RMB0.20 each immediately prior to the Listing.
Save as disclosed above, there has been no alteration in the share capital of the Company
within two years immediately preceding the date of this prospectus.
3. Changes in the Share Capital of Our Subsidiaries
Details of our subsidiaries are set out in “History, Development and Corporate Structure
— Our Subsidiaries” and Note 1 to the Accountants’ Report as set out in Appendix I to this
prospectus.
Save as disclosed above, there has been no alteration of share capital of our subsidiaries
within two years immediately preceding the date of this prospectus.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-1 –


--- page 702 ---
4. Resolutions of Our Shareholders
Pursuant to the resolutions passed at a duly convened general meeting of our Shareholders
held on January 21, 2025, the following resolutions, among others, were passed by the
Shareholders:
(a) the sub-division of the Shares with nominal value of RMB1.0 each on the basis of
1:5, effective immediately prior to the Listing, and taking into account the Share
Subdivision, the issue of H Shares of nominal value of RMB0.2 each and such H
Shares be listed on the Stock Exchange;
(b) the issue of H Shares with a nominal value of RMB0.2 each and such H Shares being
listed on the Stock Exchange;
(c) the number of H Shares to be issued shall not be more than 25% of the total issued
share capital of the Company as enlarged by the Global Offering (without taking into
account of any H Shares which may be issued upon the exercise of the over-
allotment option), and the grant to the underwriters (or their representatives) of the
over-allotment option of not more than 15% of the number of H Shares initially
available under the Global Offering;
(d) subject to the completion of the filing with the CSRC, upon completion of the Share
Subdivision and the Global Offering, no more than 116,415,550 Unlisted Shares in
aggregate held by certain existing Shareholders will be converted into H Shares on
a one-for-one basis;
(e) subject to the completion of the Global Offering and the filing with the CSRC and
other relevant PRC authorities for the issuance of Shares, the granting of a general
mandate to the Board to separately or concurrently allot, issue Shares, or sell and/or
transfer Shares out of treasury that are held as treasury shares at any time within a
period up to the date of the conclusion of the next annual general meeting of the
Shareholders or the date on which the Shareholders pass a resolution to revoke or
change such mandate, whichever is earlier, upon such terms and conditions and for
such purposes as the Board in their absolute discretion deem fit, provided that, the
number of such Shares shall not exceed 20% of the total Shares in issue (assuming
the completion of Share Subdivision and excluding any treasury shares) as of the
Listing Date;
(f) subject to the completion of the Global Offering, the conditional adoption of the
Articles of Association which shall become effective on the Listing Date, and
authorization to the Board to amend the Articles of Association to the extent
necessary in accordance with laws, regulations and regulatory rules and
requirements from relevant government bodies or regulatory authorities and for the
purpose of the Listing; and
(g) authorization of the Board or its authorized individual(s) to handle all matters
relating, among other things, to the Global Offering, the issue and the listing of H
Shares on the Stock Exchange.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-2 –


--- page 703 ---
5. Restrictions on Repurchase
Please refer to “Appendix VI — Summary of Articles of Association” to this prospectus
for details of the restrictions on the shares repurchase by our Company.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
prospectus that are or may be material:
(a) the cornerstone investment agreement dated November 27, 2025 entered into among
the Company, AnkeBio (Hong Kong) Co., Limited (ي(ಥ)ʮ̡),
CITIC Securities (Hong Kong) Limited, CLSA Limited, Haitong International
Capital Limited and Haitong International Securities Company Limited, details of
which are set out in the section headed “Cornerstone Investors” in this prospectus;
(b) the cornerstone investment agreement dated November 27, 2025 entered into among
the Company, Derivatives China Alpha Fund SPC (acting for and on behalf of
Derivatives China Fundamental Fund SP), CITIC Securities (Hong Kong) Limited,
CLSA Limited, Haitong International Capital Limited and Haitong International
Securities Company Limited, details of which are set out in the section headed
“Cornerstone Investors” in this prospectus;
(c) the cornerstone investment agreement dated November 27, 2025 entered into among
the Company, Guotai Junan Investments (Hong Kong) Limited ( ਷इёτᗇՎҳ༟
(ಥ)ʮ̡), CITIC Securities (Hong Kong) Limited, CLSA Limited, Haitong
International Capital Limited and Haitong International Securities Company
Limited, details of which are set out in the section headed “Cornerstone Investors”
in this prospectus; and
(d) the Hong Kong Underwriting Agreement.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-3 –


--- page 704 ---
2. Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
considered to be material to our business:
No. Trademark Registration
Registered
Owner
Place of
Registration Class Validity Period
1 /H1118/H1118
 69017648 Our Company PRC 5 March 7, 2024 to
March 6, 2034
2 /H1118/H1118
 66308249 Our Company PRC 5 January 21, 2023 to
January 20, 2033
3 /H1118/H1118
 48415988 Our Company PRC 5 March 21, 2021 to
March 20, 2031
4 /H1118/H1118
 48439098 Our Company PRC 5 March 21, 2021 to
March 20, 2031
5 /H1118/H1118
 48435385 Our Company PRC 5 March 21, 2021 to
March 20, 2031
6 /H1118/H1118
 47675687 Our Company PRC 42 May 21, 2022 to
May 20, 2032
7 /H1118/H1118
 47675687 Our Company PRC 1 May 21, 2022 to
May 20, 2032
8 /H1118/H1118
 47675687 Our Company PRC 35 May 21, 2022 to
May 20, 2032
9 /H1118/H1118
 36989525 Our Company PRC 5 November 14, 2019
to November 13,
2029
10 /H1118
66304845 Suzhou
Kangju
PRC 5 February 21, 2023
to February 20,
2033
11/H1118/H1118
37000983 Suzhou
Kangju
PRC 5 January 21, 2020 to
January 20, 2030
12 /H1118
 36974533 Suzhou
Kangju
PRC 5 November 21, 2019
to November 20,
2029
13 /H1118
36980320 Suzhou
Kangju
PRC 5 November 7, 2019
to November 6,
2029
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-4 –


--- page 705 ---
No. Trademark Registration
Registered
Owner
Place of
Registration Class Validity Period
14 /H1118
 36980308 Suzhou
Kangju
PRC 5 November 7, 2019
to November 6,
2029
15 /H1118
36991559 Suzhou
Kangju
PRC 5 November 14, 2019
to November 13,
2029
16 /H1118
36997961 Suzhou
Kangju
PRC 5 November 14, 2019
to November 13,
2029
17 /H1118
73171452 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
18 /H1118
 73179952 Suzhou
Centergene
PRC 5 April 21, 2024 to
April 20, 2034
19 /H1118
 73169954 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
20 /H1118
 73188647 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
21 /H1118
 73186042 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
22 /H1118
 73171500 Suzhou
Centergene
PRC 5 February 7, 2024 to
February 6, 2034
23 /H1118
 73188641 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
24 /H1118
 73176438 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
25 /H1118
 73166591 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
26 /H1118
 73181908 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-5 –


--- page 706 ---
No. Trademark Registration
Registered
Owner
Place of
Registration Class Validity Period
27 /H1118
 73166562 Suzhou
Centergene
PRC 5 January 28, 2024 to
January 27, 2034
28 /H1118
 66304454 Suzhou
Centergene
PRC 5 February 21, 2023
to February 20,
2033
29 /H1118
20494250 Suzhou
Centergene
PRC 5 August 21, 2017 to
August 20, 2027
30 /H1118
 20494159 Suzhou
Centergene
PRC 5 August 21, 2017 to
August 20, 2027
31 /H1118
 20494149 Suzhou
Centergene
PRC 5 August 21, 2017 to
August 20, 2027
32 /H1118
 78788187 Our Company PRC 5 November 21, 2024
to November 20,
2034
33 /H1118
1822614 Our Company United
Kingdom
5 June 20, 2024 to
June 20, 2034
34 /H1118
 306692338 Our Company Hong Kong 5 October 12, 2024 to
October 11, 2034
35 /H1118
 306692356 Our Company Hong Kong 5 October 12, 2024 to
October 11, 2034
36 /H1118
 306692347 Our Company Hong Kong 5 October 12, 2024 to
October 11, 2034
37 /H1118
 306692365 Our Company Hong Kong 5 October 12, 2024 to
October 11, 2034
38 /H1118
 306693427 Our Company Hong Kong 5 October 14, 2024 to
October 13, 2034
39 /H1118
 306693436 Our Company Hong Kong 5 October 14, 2024 to
October 13, 2034
40 /H1118
 306693418 Our Company Hong Kong 5 October 14, 2024 to
October 13, 2034
41 /H1118
 1837511 Our Company European
Union
5 November 11, 2024
to November 11,
2034
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-6 –


--- page 707 ---
No. Trademark Registration
Registered
Owner
Place of
Registration Class Validity Period
42 /H1118
 1837511 Our Company United
Kingdom
5 November 11, 2024
to November 11,
2034
43 /H1118
1834010 Our Company European
Union
5 June 20, 2024 to
June 20, 2034
44 /H1118
 1834010 Our Company United
Kingdom
5 June 20, 2024 to
June 20, 2034
45 /H1118
 1822614 Our Company European
Union
5 June 20, 2024 to
June 20, 2034
46 /H1118
 1834010 Our Company United
States
5 September 16, 2025
to September 16,
2035
47 /H1118
1837511 Our Company Japan 5 November 11, 2024
to November 11,
2034
48 /H1118
1837511 Our Company United
States
5 November 11, 2024
to November 11,
2034
49 /H1118
1822614 Our Company Japan 5 June 20, 2024 to
June 20, 2034
50 /H1118
 1834010 Our Company Japan 5 June 20, 2024 to
June 20, 2034
Patents
As of the Latest Practicable Date, save as disclosed in “Business — Intellectual Property,”
our Group had registered the following patents which, in the opinion of our Directors, were
material to our business:
No. Patent Patentee
Place of
Application
Application
Number
Application
Date Expiry Date
1 /H1118/H1118Anti-HER2
bispecific
antibody and its
application ( Ҥ
HER2׌
Ҥ᜗ʿՉᏐ͜)
Our
Company
PRC CN202080011381.7 February 3,
2020
February 3,
2040
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-7 –


--- page 708 ---
No. Patent Patentee
Place of
Application
Application
Number
Application
Date Expiry Date
2 /H1118/H1118Anti-HER2
bispecific
antibody and its
application ( Ҥ
HER2׌
Ҥ᜗ʿՉᏐ͜)
Our
Company
PRC CN202010078527.1 February 3,
2020
February 3,
2040
3 /H1118/H1118An immunoglobulin
degrading enzyme
(ଢஐͣ
༆㺛)
Our
Company;
Suzhou
Kangju
PRC CN202410946714.5 July 16,
2024
July 16,
2044
4. /H1118Anti-HER2
bispecific
antibodies and
their applications
(ҤHER2ᕐतମ
Ҥ᜗ʿՉᏐ͜)
Our
Company
Japan JP2021-56047 February 3,
2020
February 3,
2040
Copyright
As of the Latest Practicable Date, we had registered the following copyright which we
considered to be material to our business:
No. Copyright
Place of
registration
Registered
owner Type
Registration
date
Registered
number
1. /H1118/H1118ᘒ᏶ᖹุ PRC Our Company Artistic
work
November 30,
2023
਷Ъ೮
ο-2023-F-
00286651
Domain Names
As of the Latest Practicable Date, we had registered the following internet domain names
which we considered to be material to our business:
No. Domain name Registered owner Registration date Expiry date
1. /H1118/H1118baopharma.com Our Company May 26, 2018 May 26, 2029
2. /H1118/H1118baopharma.com.cn Our Company April 10, 2020 April 10, 2029
3 /H1118/H1118/H1118centergene.com.cn Suzhou
Centergene
August 24, 2020 August 24, 2032
4. /H1118/H1118centergene.com Suzhou
Centergene
August 8, 2014 August 8, 2032
Save as the above, as of the Latest Practicable Date, there were no other intellectual
property rights which were material to our business.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-8 –


--- page 709 ---
C. FURTHER INFORMATION ABOUT THE DIRECTORS, SUPERVISORS, SENIOR
MANAGEMENT AND SUBSTANTIAL SHAREHOLDERS
1. Particulars of Directors’ and Supervisors’ Service Contracts
We have entered into a service contract with each of the Directors and Supervisors in
respect of, among others, (i) term of service, (ii) termination, (iii) compliance with the relevant
laws and regulations and (iv) observance of the Articles of Association. The service contracts
may be renewed in accordance with the Articles of Association and the applicable laws, rules
and regulations from time to time.
Save as disclosed above, none of the Directors or Supervisors has or is proposed to have
a service contract with any member of the Group (other than contracts expiring or determinable
by the employer within one year without payment of compensation (other than statutory
compensation)).
2. Remuneration of Directors and Supervisors
Save as disclosed in “Directors, Supervisors and Senior Management — Directors’,
Supervisors’ and Senior Management’s Remuneration and Remuneration of the Five Highest-
paid Individuals” and Note 9 to the Accountants’ Report as set out in Appendix I to this
prospectus, none of our Directors or Supervisors received other remuneration or benefits in
kind from the Company in respect of the financial years of 2023 and 2024 and the six months
ended June 30, 2025.
Under the arrangement currently in force, we estimate that the aggregate remuneration
payable to, any benefits in kind receivable by, our Directors and Supervisors by any member
of our Group in respect of the year ending December 31, 2025 is approximately RMB80.6
million.
Save as disclosed above, there is no arrangement under which any Director or Supervisor
has waived or agreed to waive any remuneration or benefits in kind during the Track Record
Period.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-9 –


--- page 710 ---
3. Disclosure of Interests
Interests and short positions of the Directors, Supervisors and Chief Executive of the
Company in the Shares, underlying Shares and debentures of the Company and our
associated corporations
Save as disclosed in “Substantial Shareholders” and below, immediately following the
completion of the Share Subdivision and the Global Offering and the conversion of the
Unlisted Shares into H Shares, so far as the Directors are aware, none of the Directors,
Supervisors or chief executive of the Company will have any interest and/or short position (as
applicable) in the Shares, underlying Shares or debentures of the Company or our associated
corporation (within the meaning of Part XV of the SFO) which will be required to be notified
to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests or short positions which they are taken or deemed to have under such
provisions of the SFO) or which will be required, pursuant to Section 352 of the SFO, to be
entered in the register referred to therein, or which will be required, pursuant to the Model
Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to
the Listing Rules to be notified to the Company and the Stock Exchange, once the H Shares
are listed on the Stock Exchange.
Name Position
Capacity/
Nature of
interest
Number and
description of
Shares held (1)
Approximate
percentage of
shareholding
in the
relevant type
of Shares as
of the Latest
Practicable
Date (2)
Approximate
percentage of
shareholding in
the total share
capital of the
Company
immediately after
completion of the
Global Offering (3)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
immediately after
completion of the
Global Offering (4)
Dr. Liu Y anjun
(ё) /H1118/H1118/H1118
Chairman of the
Board and
executive
Director
Beneficial
owner
54,977,530
Unlisted
Shares
32.03% 16.87% 32.03%
6,108,615
H Shares
5.25% 1.87% 3.96%
Interest in
controlled
corporation
(5)
23,562,700
Unlisted
Shares
13.73% 7.23% 13.73%
10,098,300
H Shares
8.67% 3.10% 6.54%
Interest jointly
held with
another
person
(6)
27,750,000
Unlisted
Shares
16.17% 8.51% 16.17%
9,750,000
H Shares
8.38% 2.99% 6.32%
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-10 –


--- page 711 ---
Name Position
Capacity/
Nature of
interest
Number and
description of
Shares held (1)
Approximate
percentage of
shareholding
in the
relevant type
of Shares as
of the Latest
Practicable
Date (2)
Approximate
percentage of
shareholding in
the total share
capital of the
Company
immediately after
completion of the
Global Offering (3)
Approximate
percentage of
shareholding in
the Unlisted
Shares/H Shares
immediately after
completion of the
Global Offering (4)
Ms. Wang Zheng
(ˮᅄ) /H1118/H1118/H1118/H1118/H1118
Executive Director
and Chief
Executive
Officer
Beneficial
owner
20,250,000
Unlisted
Shares
11.80% 6.21% 11.80%
2,250,000
H Shares
1.93% 0.69% 1.46%
Interest jointly
held with
another
person
(6)
86,040,230
Unlisted
Shares
50.12% 26.39% 50.12%
23,706,915
H Shares
20.36% 7.27% 15.36%
Mr. Tan Jingwei
(ᗈཨਃ) /H1118/H1118/H1118
Executive Director
and director of
internal control
Beneficial
owner
7,500,000
Unlisted
Shares
4.37% 2.30% 4.37%
7,500,000
H Shares
6.44% 2.30% 4.86%
Interest jointly
held with
another
person
(6)
98,790,230
Unlisted
Shares
57.55% 30.31% 57.55%
18,456,915
H Shares
15.85% 5.66% 11.96%
Notes:
(1) For the avoidance of doubt, both Unlisted Shares and H Shares are ordinary Shares in the share capital of our
Company, and are considered as one class of Shares. All interests stated are long positions. The number of
Shares were presented based on the assumption that the Share Subdivision is completed.
(2) The calculation is based on the total number of Shares in issue as of the Latest Practicable Date, which consist
of 288,069,765 Unlisted Shares among which, 116,415,550 of the Unlisted Shares will be converted into H
Shares upon completion of the Global Offering after receipt of the filing notice regarding H share “Full
circulation” from the CSRC.
(3) The calculation is based on the total number of 325,981,465 Shares in issue immediately after completion of
the Global Offering.
(4) The calculation is based on the total number of 171,654,215 Unlisted Shares and 154,327,250 H Shares in issue
immediately after completion of the Global Offering.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-11 –


--- page 712 ---
(5) As of the Latest Practicable Date, Dr. Liu Y anjun (ё) was the executive partner of the Share Incentive
Platforms, namely Shanghai Luojun, Shanghai Luoxu and Ningbo Hongsheng. As such, Dr. Liu Y anjun (ܗ
ё) is deemed to be interested in the 23,562,700 Unlisted Shares and 10,098,300 H Shares directly held by the
Employee Incentive Platforms under the SFO. For details of the Share Incentive Platforms, see “History,
Development and Corporate Structure — Share Incentive Platforms”.
(6) Pursuant to the AIC Agreement entered into among the Concert Parties, the Concert Parties had confirmed and
agreed that they would: (i) act in concert with respect to the matters relating to the daily operations, key
matters or any other matters required to be approved by the shareholders’ meetings or board meetings of the
Company; (ii) consult each other and reach a consensus before voting at board meetings and/or shareholders’
meetings of the Company; and (iii) in case that the Concert Parties fail to reach a consensus, vote based on
Dr. Liu’s opinion. As such, each of the Concert Parties are deemed to be interested in the Shares each other
is interested in under the SFO. See “History, Development and Corporate Structure — Acting In Concert
Agreement” for details.
Interests of substantial Shareholders
Save as disclosed above and in “Substantial Shareholders” in this prospectus, the
Directors are not aware of any other person who will, immediately following the completion
of the Global Offering and the conversion of the Unlisted Shares into H Shares, have an interest
and/or short position in the Shares or underlying Shares which would fall to be disclosed to the
Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the
SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting Shares
in all circumstances at general meetings of the Company or any other member of the Group.
4. Agency Fees or Commissions Received
The Underwriters will receive an underwriting commission in connection with the
Underwriting Agreements, as detailed in the paragraphs headed “Underwriting —
Underwriting Arrangements and Expenses — Underwriting Commissions and Listing
Expenses” in this prospectus. Save in connection with the Underwriting Agreements, no
commissions, discounts, brokerages or other special terms have been granted by the Group to
any person (including the Directors, promoters and experts referred to in the paragraphs headed
“— Other Information — Qualifications of Experts” below) in connection with the issue or sale
of any capital or security of the Company or any member of the Group within the two years
immediately preceding the date of this prospectus.
Within the two years immediately preceding the date of this prospectus, no commission
has been paid or is payable for subscription, agreeing to subscribe, procuring subscription or
agreeing to procure subscription for any share in or debentures of the Company.
5. Pre-IPO Share Incentive Plans
Our Company has adopted the Phase I Restricted Share Incentive Plan of Shanghai Bao
Pharmaceuticals Co., Ltd. (ྌ) (the
“Phase I Plan ”) and Phase II Restricted Share Incentive Plan of Shanghai Bao Pharmaceuticals
Co., Ltd. (ྌ) (the “ Phase II Plan ”,
together with the Phase I Plan referred to as the “ Pre-IPO Share Incentive Plans ”) on August
16, 2023. The Pre-IPO Share Incentive Plans do not involve any grant of share options or
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-12 –


--- page 713 ---
awards after the Listing and therefore is not subject to the provisions of Chapter 17 of the
Listing Rules. Given the underlying Shares under the Pre-IPO Share Incentive Plans have
already been issued, there will not be any dilution effect to the issued Shares.
The Company has established three Share Incentive Platforms to implement the Pre-IPO
Share Incentive Plans, namely Shanghai Luoxu for the Phase I Plan and Ningbo Hongsheng and
Shanghai Luojun for the Phase II Plan. For details of the Share Incentive Platforms, please
refer to “History, Development and Corporate Structure — Share Incentive Platforms” in this
prospectus. As of the Latest Practicable Date, all the underlying Shares of the awards granted
under the Pre-IPO Share Incentive Plans have been issued to our Share Incentive Platforms. For
details of the awards granted, please refer to “(g) Details of the Awards Granted Under the
Pre-IPO Share Incentive Plans” below.
The principal terms of the Pre-IPO Share Incentive Plans are substantially similar and are
summarized below.
(a) Objectives
The objectives of the Pre-IPO Share Incentive Plans are to further improve the corporate
governance structure, implement incentives and constraints for the Directors, senior
management and core employees of the Company, fully mobilize their enthusiasm and
creativity, closely align their interests with the long-term development of the Company, prevent
talent loss and, at the same time, attract more outstanding talents to participate in the business
operations, thereby achieving sustainable development of the Company.
(b) Administration
The Shareholders’ general meeting is responsible for considering and approving the
formulation, implementation and termination of and adjustments to the Pre-IPO Share
Incentive Plans. The Shareholders’ general meeting has agreed to delegate the subsequent
detailed implementation and termination of, and adjustments, amendments to, the Pre-IPO
Share Incentive Plans to the Board.
The Board is responsible for drafting and amending the Pre-IPO Share Incentive Plans as
its executive management body. The management team of the Company and the chairperson of
the Board are authorized by the Board to perform daily management and handle matters
necessary for implementing the Pre-IPO Share Incentive Plans in accordance with the
provisions of the Pre-IPO Share Incentive Plans and relevant agreements.
Dr. Liu serves as the general partner of all the Share Incentive Platforms. The general
partner of the Share Incentive Platforms may be changed to a person designated by Dr. Liu.
(c) Eligibility
The participants of the Pre-IPO Share Incentive Plans (the “ Participants ”) include, but
not limited to, the Directors, senior management members, core technical personnel and key
management members of the Company who have a direct impact on the Company’s overall
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-13 –


--- page 714 ---
performance and continuous development, as well as other individuals who have made special
contributions to the Company as determined in writing by the chairperson of the Board. The
Participants shall enter into labor or employment contracts with the Company, its branch, or
wholly-owned subsidiaries.
(d) Grant of Incentive Awards
The Company has established the Share Incentive Platforms, which directly hold Shares
of the Company, to implement the Pre-IPO Share Incentive Plans. The Participant will be
granted restricted Shares in the form of economic interest in the relevant Share Incentive
Platforms by entering into the partnership agreement to become a limited partner of the
relevant Share Incentive Platforms and accepting the terms and conditions set out in the
Pre-IPO Share Incentive Plans (the “ Awards ”). Upon becoming the limited partners of the
relevant Share Incentive Platforms, the Participant indirectly receives economic interest in the
number of Shares underlying the Awards granted to the Participant held by the relevant Share
Incentive Platforms.
As of the Latest Practicable Date, an aggregate of 504,329 Unlisted Shares (equivalent to
2,521,645 Shares after completion of the Share Subdivision) underlying the Awards granted
under the Phase I Plan had been granted to 18 Participants and 2,982,200 Unlisted Shares
(equivalent to 14,911,000 Shares after completion of the Share Subdivision) underlying the
Awards granted under the Phase II Plan had been granted to 59 Participants. For further details
of the interests in the Share Incentive Platforms, please refer to “History, Development and
Corporate Structure — Share Incentive Platforms” in this prospectus.
(e) Payment of the Price of the Awards
The subscription price of the Awards shall be proposed by the Company’s management
members, as authorized by the Shareholders’ general meeting and the Board, and determined
by the chairperson of the Board and specifically stated in the restricted Share grant agreements
which shall be entered into between the Participants and the Company. The subscription price
of the Awards shall be paid by the Participants out of their own funds or legally raised funds.
The Participants shall make the corresponding payment for the Awards fully and timely.
(f) Lock-up and V esting Periods
The lock-up period stipulated in the Pre-IPO Share Incentive Plans (the “ Share Incentive
Lock-up Period ”) refers to the period prior to the submission of application of listing by the
Company and certain duration following such application and the listing of the Shares (for
avoidance of doubt, such duration shall be determined by the lock-up period stipulated or
required by the securities regulatory authority and the stock exchange for the Shares held by
the Share Incentive Platforms). During the Share Incentive Lock-up Period, the Participants
may not sell, pledge, transfer or otherwise dispose of or create any encumbrances or burdens
on his or her interests in the relevant Share Incentive Platforms unless otherwise specified in
the Pre-IPO Share Incentive Plans.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-14 –


--- page 715 ---
The Awards that cannot vest due to the Participants’ failure to meet performance targets
shall be subject to mandatory repurchase by the general partner of relevant Share Incentive
Platforms or a third party designated by the general partner. Such repurchase shall adhere to
the eligibility requirements set forth in the Pre-IPO Share Incentive Plans and shall be executed
at a repurchase price equal to the actual amount paid by the Participants for such Awards.
(g) Details of the Awards Granted Under the Pre-IPO Share Incentive Plans
As of the Latest Practicable Date, there is an aggregate number of 61 Participants holding
partnership interests in the Share Incentive Platforms, and all of the Awards under the Pre-IPO
Share Incentive Plans have been fully granted and vested. Details of the Awards granted to
Directors, Supervisors, senior management or connected person of our Company under the
Pre-IPO Share Incentive Plans are set out below:
Name Position
Relevant Share
Incentive
Platform
Approximate
partnership
interests in the
relevant Share
Incentive
Platform
Approximate
number of
the Shares
underlying
the Awards
granted to
the
Participant (1)
Approximate
shareholding
percentage
underlying the
Awards granted to
the Participant in
the total number
of the Shares in
issue as of
the Latest
Practicable Date
Approximate
shareholding
percentage
underlying the
Awards granted to
the Participant in
the total number
of the Shares in
issue immediately
after the Global
Offering
Dr. Liu Y anjun
(ё)(2) /H1118/H1118
Chairman of the
Board and
executive
Director
Ningbo
Hongsheng
95.33%
(general partner)
4,333,084 1.50% 1.33%
Shanghai
Luojun
46.88%
(general partner)
4,859,375 1.69% 1.49%
Ms. Wang
Zheng ( ˮᅄ)/H1118
Executive
Director and
Chief
Executive
Officer
Shanghai
Luojun
14.37% 1,490,000 0.52% 0.46%
Mr. Tan Jingwei
(ᗈཨਃ) /H1118/H1118/H1118
Executive
Director and
director of
internal
control
Shanghai Luoxu 3.01% 563,573 0.20% 0.17%
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-15 –


--- page 716 ---
Name Position
Relevant Share
Incentive
Platform
Approximate
partnership
interests in the
relevant Share
Incentive
Platform
Approximate
number of
the Shares
underlying
the Awards
granted to
the
Participant (1)
Approximate
shareholding
percentage
underlying the
Awards granted to
the Participant in
the total number
of the Shares in
issue as of
the Latest
Practicable Date
Approximate
shareholding
percentage
underlying the
Awards granted to
the Participant in
the total number
of the Shares in
issue immediately
after the Global
Offering
Ms. Li Cui
(ҽၯ) /H1118/H1118/H1118/H1118
Executive
Director, Chief
Financial
Officer and
secretary to
the Board
Shanghai Luoxu 0.99% 185,445 0.06% 0.06%
Ningbo
Hongsheng
1.05% 47,695 0.02% 0.01%
Shanghai
Luojun
5.62% 582,500 0.20% 0.18%
Mr. Cheng Y u
(ϓ༃) /H1118/H1118/H1118/H1118
Supervisor Shanghai Luoxu 0.65% 122,250 0.04% 0.04%
Shanghai
Luojun
1.78% 185,000 0.06% 0.06%
Ms. Cai
Qingqing
(ᇹ૶૶) /H1118/H1118/H1118
Supervisor Shanghai
Luojun
0.14% 15,000 0.01% 0.00%
Mr. Lou Junwen
(˖) /H1118/H1118/H1118
Chairman of the
Supervisory
Committee
Shanghai Luoxu 1.96% 366,750 0.13% 0.11%
Ningbo
Hongsheng
0.11% 4,771 0.00% 0.00%
Shanghai
Luojun
0.06% 6,220 0.00% 0.00%
Mr. Sun Y uhua
(͗ശ) /H1118/H1118/H1118
Deputy general
manager
Shanghai Luoxu 1.30% 244,500 0.08% 0.08%
Shanghai
Luojun
5.02% 520,000 0.18% 0.16%
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-16 –


--- page 717 ---
Name Position
Relevant Share
Incentive
Platform
Approximate
partnership
interests in the
relevant Share
Incentive
Platform
Approximate
number of
the Shares
underlying
the Awards
granted to
the
Participant (1)
Approximate
shareholding
percentage
underlying the
Awards granted to
the Participant in
the total number
of the Shares in
issue as of
the Latest
Practicable Date
Approximate
shareholding
percentage
underlying the
Awards granted to
the Participant in
the total number
of the Shares in
issue immediately
after the Global
Offering
Other
employees /H1118/H1118
Shanghai Luoxu 5.54% 1,039,125 0.36% 0.32%
Ningbo
Hongsheng
3.52% 159,854 0.06% 0.05%
Shanghai
Luojun
26.12% 2,707,500 0.94% 0.83%
Notes:
(1) The number of Shares underlying the Awards granted to the Participant were presented based on the
assumption that the Share Subdivision is completed.
(2) The general partnership interest of approximately 86.55% in Shanghai Luoxu, held by Dr. Liu, is not associated
with the Pre-IPO Share Incentive Plans and is not included in the total incentive awards to be distributed under
the Pre-IPO Share Incentive Plans.
6. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors, Supervisors or our chief executive has any interest or short
position in our Shares, underlying Shares or debentures of us or any of our
associated corporations (within the meaning of Part XV of the SFO) which will have
to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part
XV of the SFO, or which will be required, pursuant to section 352 of the SFO, to
be entered in the register referred to therein, or which will be required to be notified
to us and the Stock Exchange pursuant to Model Code for Securities Transactions by
our Directors of Listed Issuers once the H Shares are listed on the Stock Exchange;
(b) none of our Directors or Supervisors is aware of any person (not being a Director,
Supervisor or chief executive of our Company) who will, immediately following
completion of the Global Offering and conversion of Unlisted Shares into H Shares,
have an interest or short position in our Shares or underlying Shares which would
fall to be disclosed to us under the provisions of Divisions 2 and 3 of Part XV of the
SFO or who is interested, directly or indirectly, in 10% or more of the issued voting
shares of any member of our Group;
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-17 –


--- page 718 ---
(c) none of the Directors, Supervisors nor any of the experts referred to in
“Qualifications of Experts” below has any direct or indirect interest in the promotion
of, or in any assets which have been, within two years immediately preceding the
date of this prospectus, acquired or disposed of by, or leased to, any member of the
Group, or are proposed to be acquired or disposed of by, or leased to, any member
of the Group;
(d) save in connection with the Underwriting Agreements, none of the Directors,
Supervisors nor any of the experts referred to in “Qualifications of Experts” below
is (i) materially interested in any contract or arrangement subsisting at the date of
this prospectus which is interested legally or beneficially in any shares in any
member of the Group; or (ii) has any right (whether legally enforceable or not) to
subscribe for or to nominate persons to subscribe for any securities in any member
of the Group; and
(e) none of the Directors or their respective close associates or the Shareholders who to
the knowledge of the Directors are interested in more than 5% of our issued share
capital has any interest in our five largest customers or suppliers during the Track
Record Period.
D. OTHER INFORMATION
1. Estate Duty
The Directors have been advised that no material liability for estate duty is likely to fall
on our Company or any of our subsidiaries.
2. Litigation
As of the Latest Practicable Date, no member of the Group was involved in any litigation,
arbitration, administrative proceedings or claims of material importance, and so far as the
Directors are aware, no litigation, arbitration, administrative proceedings or claims of material
importance are pending or threatened against any member of the Group.
3. Joint Sponsors
As of the Latest Practicable Date, approximately 1.52% of the total number of issued
Shares was held by Haitong Innovation Securities, which is a wholly-owned subsidiary of
Guotai Haitong Securities Co., Ltd. (HKEX: 2611; SSE: 601211) (“ Guotai Haitong ”). Haitong
International Capital Limited, one of the Joint Sponsors, is an indirectly wholly-owned
subsidiary of Guotai Haitong. Haitong Innovation Securities is regarded as a member of the
sponsor group of Haitong International Capital Limited as defined in Rule 3A.01(9) of the
Listing Rules.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-18 –


--- page 719 ---
Notwithstanding the aforesaid, (i) none of the sponsor groups of the Joint Sponsors, or
any directors or directors’ close associates of the Joint Sponsors collectively holds or will,
immediately following the completion of the Global Offering, hold, directly or indirectly, more
than 5% of the number of issued Shares of the Company; and (ii) each of the Joint Sponsors,
having conducted its own assessment taking into consideration the independence criteria
applicable to sponsors as set out in Rule 3A.07 of the Listing Rules, considers itself to be
independent under Rule 3A.07 of the Listing Rules.
The fee payable by the Company to the Joint Sponsors to act as sponsor to the Company
in connection with the Global Offering is US$400,000 each, among which US$200,000 had
been paid to each Joint Sponsor by the Company as of the Latest Practicable Date.
4. Preliminary Expense
As of the Latest Practicable Date, our Company did not incur any material preliminary
expenses.
5. Promoters
The promoters of the Company are all then 42 shareholders of the Company as of July 26,
2023 before our conversion into a joint stock company with limited liability. Save as disclosed
in this prospectus, within the two years immediately preceding the date of this prospectus, no
cash, securities or other benefit has been paid, allotted or given nor are any proposed to be paid,
allotted or given to any promoter of the Company in connection with the Global Offering or
the related transactions described in this prospectus.
6. Application for Listing
The Joint Sponsors have made an application on behalf of the Company to the Listing
Committee of the Stock Exchange for the listing of, and permission to deal in, the H Shares
to be issued as mentioned in this prospectus and the H Shares to be converted from Unlisted
Shares, on the Main Board of the Stock Exchange. All necessary arrangements have been made
to enable the securities to be admitted into CCASS.
7. No Material Adverse Change
Our Directors confirm that, up to the date of this prospectus, there has been no material
adverse change in the financial or trading position or prospect of our Group since June 30, 2025
(being the date to which the latest consolidated financial statements of our Group were
prepared).
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-19 –


--- page 720 ---
8. Qualifications of Experts
The qualifications of the experts who have given opinions or advice in this prospectus are
as follows:
Name Qualification
CITIC Securities (Hong Kong)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Licensed corporation to conduct Type 4 (advising on
securities) and Type 6 (advising on corporate finance)
regulated activities as defined under the SFO
Haitong International Capital
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A corporation licensed to conduct Type 6 (advising
on corporate finance) of the regulated activities as
defined under the SFO
Ernst & Y oung /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and Registered Public
Interest Entity Auditor
Beijing DeHeng Law Offices /H1118/H1118/H1118Legal advisor to the Company as to PRC laws
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent Industry Consultant
A VISTA V aluation Advisory
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent Property V aluer
9. Consents of Experts
Each of the experts referred to in “8. Qualification of Experts” above has given and has
not withdrawn its written consent to the issue of this prospectus with the inclusion of its
reports, letters or opinions (as the case may be) and the references to its name included herein
in the form and context in which they are included.
As of the Latest Practicable Date, none of the experts named above had any shareholding
interest in our Company or our subsidiaries or rights (whether legally enforceable or not) to
subscribe for or to nominate persons to subscribe for securities in any member of our Group.
10. Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The
current rate charged on each of the sellers and purchasers is 0.1% of the consideration or, if
higher, the fair value of the H Shares being sold or transferred. For further information in
relation to taxation, please refer to the section headed “Appendix IV — Taxation and Foreign
Exchange” in this prospectus.
11. Binding Effect
This prospectus shall have the effect, if any application is made pursuant hereto, of
rendering all persons concerned bound by all the provisions (other than the penal provisions)
of Sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance as far as applicable.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
– VII-20 –


--- page 721 ---
12. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being
published separately in reliance upon the exemption provided by Section 4 of the Companies
Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions)
Notice (Chapter 32L of the Laws of Hong Kong).
13. Miscellaneous
Save as otherwise disclosed in this prospectus:
(a) within the two years immediately preceding the date of this prospectus, no share or
loan capital or debenture of the Company or any of our subsidiaries has been issued
or agreed to be issued or is proposed to be issued for cash or as fully or partly
paid-up other than in cash or otherwise;
(b) no share or loan capital of the Company or any of its subsidiaries is under option or
is agreed conditionally or unconditionally to be put under option;
(c) the Company or any of its subsidiaries has not issued nor agreed to issue any founder
or management or deferred shares;
(d) there are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong;
(e) there are no arrangements under which future dividends are waived or agreed to be
waived;
(f) there have been no interruptions in our business which may have or have had a
significant effect on our financial position in the 12 months preceding the date of
this prospectus;
(g) no part of the equity or debt securities of the Company, if any, is currently listed on
or dealt in on any stock exchange or trading system, and no such listing or
permission to deal in on any stock exchange other than the Stock Exchange is being
or is proposed to be sought;
(h) the Company has no outstanding convertible debt securities or debentures;
(i) the Company is a joint stock limited company and is subject to the PRC Company
Law; and
(j) the English text of this prospectus shall prevail over its respective Chinese text.
APPENDIX VII STATUTORY AND GENERAL INFORMATION
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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were:
1. the written consents referred to in “Appendix VII — Statutory and General
Information — D. Other Information — 9. Consents of Experts”; and
2. copies of the material contracts referred to in “Appendix VII — Statutory and
General Information — B. Further Information about our Business — 1. Summary
of Material Contracts.”
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at www.hkexnews.hk and our website at www.baopharma.com during a
period of 14 days from the date of this prospectus:
1. the Articles of Association;
2. the Accountants’ Report prepared by Ernst & Y oung, the text of which is set out in
Appendix I to this prospectus;
3. the audited consolidated financial statements of our Group for the years ended
December 31, 2023 and 2024 and six months ended June 30, 2025;
4. the report prepared by Ernst & Y oung on the unaudited pro forma financial
information of our Group, the text of which is set out in Appendix II to this
prospectus;
5. the material contracts in “Appendix VII — Statutory and General Information — B.
Further Information about Our Business — 1. Summary of Material Contracts”;
6. the written consents referred to in “Statutory and General Information — D. Other
Information — 9. Consents of Experts” in Appendix VII to this prospectus;
7. the service contracts referred to in “Appendix VII — Statutory and General
Information — C. Further Information about the Directors, Supervisors, Senior
Management and Substantial Shareholders — 1. Particulars of Directors’ and
Supervisors’ Service Contracts”;
APPENDIX VIII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
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8. the PRC legal opinions issued by Beijing DeHeng Law Offices, our PRC Legal
Advisor, in respect of, among other things, the general corporate matters and
property interests of our Group under PRC law;
9. the terms of the Pre-IPO Share Incentive Plans;
10. the industry report issued by Frost & Sullivan, the summary of which is set forth in
“Industry Overview”;
11. the Property V aluation Report prepared by A VISTA, the text of which is set out in
Appendix III to this prospectus; and
12. the PRC Company Law and the Trial Measures for Overseas Listing, together with
their unofficial English translations.
APPENDIX VIII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– VIII-2 –


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上海寶濟藥業股份有限公司
Shanghai Bao Pharmaceuticals Co., Ltd.
