diff --git a/data/extracted_text/02335/prospectus_2026-06-15_2026061500009.txt b/data/extracted_text/02335/prospectus_2026-06-15_2026061500009.txt new file mode 100644 index 0000000..b112854 --- /dev/null +++ b/data/extracted_text/02335/prospectus_2026-06-15_2026061500009.txt @@ -0,0 +1,23990 @@ +--- page 1 --- +Shaanxi Micot Pharmaceutical Technology Co., Ltd. +ʮ̡ +(A joint stock company incorporated in the People’s Republic of China with limited liability ) +Stock Code : 2335 +GLOBAL +OFFERING +Joint Sponsors, Overall Coordinators, Sponsor-Overall Coordinators, +Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers + + +--- page 2 --- +IMPORTANT: If you have doubt about any of the contents in this prospectus, you should obtain independent professional advice. +Shaanxi Micot Pharmaceutical T echnology Co., Ltd. +ʮ̡ +(A joint stock company incorporated in the People’s Republic of China with limited liability) +GLOBAL OFFERING +Number of Offer Shares under the +Global Offering +: 58,054,400 H Shares +(subject to the Over-allotment Option) +Number of Hong Kong Offer Shares : 5,805,600 H Shares (subject to reallocation) +Number of International Offer Shares : 52,248,800 H Shares (subject to reallocation +and the Over-allotment Option) +Maximum Offer Price : HK$21.0 per H Share, plus brokerage of +1.0%, SFC transaction levy of 0.0027%, +AFRC transaction levy of 0.00015% and +the Stock Exchange trading fee of +0.00565% (payable in full on application +in Hong Kong Dollars, subject to refund) +Nominal V alue : RMB0.02 per Offer Share +Stock Code : 2335 +Joint Sponsors, Overall Coordinators, Sponsor-Overall Coordinators, +Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers +Joint Bookrunners and Joint Lead Managers +SOMERLEY CAPITAL LIMITED +⳪暲@:9) +Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take +no responsibility 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 arising 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 Appendix V “Documents Delivered to the Registrar of Companies in +Hong Kong and Available on Display” to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C +of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures +Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents of this prospectus or any other document referred +to above. +The Offer Price is expected to be fixed by agreement between the Overall Coordinators and us on the Price Determination Date. The Price +Determination Date is expected to be on or before Monday, June 22, 2026. The Offer Price will be not more than HK$21.0 and is currently expected to +be not less than HK$18.20. Applicants for Hong Kong Offer Shares may be required to pay, on application (subject to application channels), the +maximum offer price of HK$21.0 for each Hong Kong Offer Share together with brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange +trading fee of 0.00565% and AFRC transaction levy of 0.00015%, subject to refund if the Offer Price should be lower than HK$21.0. If, for any reason, +the Overall Coordinators and us are unable to reach an agreement on the Offer Price at or before 12: 00 noon on Monday, June 22, 2026, the Global +Offering will not proceed and will lapse. +We are incorporated, and a majority of our business is located, in the PRC. Potential investors should be aware of the differences in the legal, economi c +and financial systems between the PRC and Hong Kong and that there are different risk factors relating to investment in PRC-incorporated businesses. +Potential investors should also be aware that the regulatory framework in the PRC is different from the regulatory framework in Hong Kong and +should take into consideration the different market nature of the H Shares. Such differences and risk factors are set out in “Risk Factors” and +“Appendix III — Summary of Articles of Association”. +The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applicants for the +subscription for, the Hong Kong Offer Shares, are subject to termination by the Overall Coordinators if certain grounds arise prior to 8:00 a.m. on the +day that trading in the Shares commences on the Hong Kong Stock Exchange. Such grounds are set out in the section headed “Underwriting” in this +prospectus. +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 +offered, sold, pledged or transferred within the United States, except in transactions exempt from, or not subject to, the registration requirements of +the U.S. Securities Act. The Offer Shares are being offered only outside the United States in offshore transactions in reliance on Regulation S under the +U.S. Securities Act. +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 public in relation to the Hong Kong Public Offering. +This prospectus is available at the websites of the Stock Exchange ( www.hkexnews.hk ) and our Company ( www.micot.cn ). If you require a +printed copy of this prospectus, you may download and print from the website addresses above. +IMPORTANT +* For identification purposes only Monday, June 15, 2026 + + +--- page 3 --- +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 printed copies of this prospectus to the +public in relation to the Hong Kong Public Offering. +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.micot.cn If you require a printed +copy of this prospectus, you may download and print from the websites above. +To apply for the Hong Kong Offer Shares, you may: +(1) apply online through the HK eIPO White Form service at +www.hkeipo.hk; +(2) apply through the HKSCC EIPO channel to electronically cause +HKSCC Nominees to apply on your behalf by instructing your broker or +custodian who is a HKSCC Participant to give electronic application +instructions through HKSCC’s FINI system to apply for the Hong Kong +Offer Shares on your behalf. +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 document as registered with the Registrar of +Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up +and Miscellaneous Provisions) Ordinance. +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 +websites above. +Please refer to the section headed “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 +–i– + + +--- page 4 --- +Your application through the HK eIPO White Form service or the HKSCC +EIPO channel must be for a minimum of 200 Hong Kong Offer Shares and in one of +the numbers set out in the table. If you are applying through the HK eIPO White +Form service, you may refer to the table below for the amount payable for the +number of H Shares you have selected. You 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. +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +HK$ HK$ HK$ HK$ +200 4,242.36 3,000 63,635.35 40,000 848,471.40 500,000 10,605,892.50 +400 8,484.71 4,000 84,847.15 50,000 1,060,589.26 600,000 12,727,071.00 +600 12,727.07 5,000 106,058.93 60,000 1,272,707.10 700,000 14,848,249.50 +800 16,969.43 6,000 127,270.71 70,000 1,484,824.96 800,000 16,969,428.00 +1,000 21,211.79 7,000 148,482.50 80,000 1,696,942.80 900,000 19,090,606.50 +1,200 25,454.14 8,000 169,694.28 90,000 1,909,060.66 1,000,000 21,211,785.00 +1,400 29,696.49 9,000 190,906.06 100,000 2,121,178.50 2,000,000 42,423,570.00 +1,600 33,938.86 10,000 212,117.86 200,000 4,242,357.00 2,902,800 (1) 61,573,569.50 +1,800 38,181.22 20,000 424,235.70 300,000 6,363,535.50 +2,000 42,423.56 30,000 636,353.56 400,000 8,484,714.00 +(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the +Hong Kong Offer Shares initially offered. +(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) or to the HK eIPO +White Form Service Provider (for applications made through the application channel of +the HK eIPO White Form service) while the SFC transaction levy, the Stock Exchange +trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and +the AFRC, respectively. +No application for any other number of Hong Kong Offer Shares will be +considered and any such application is liable to be rejected. +IMPORTANT +–i i– + + +--- page 5 --- +If there is any change in the following expected timetable of the Global Offering, we will +issue an announcement on the website of our Company at http://www.micot.cn and the +website of the Stock Exchange at http://www.hkexnews.hk . +Hong Kong Public Offering commences ..................... 9:00 a.m. on Monday, +June 15, 2026 +Latest time to complete electronic applications +under the HK eIPO White Form service through +the designated website at www.hkeipo.hk (2) ..............1 1:30 a.m. on Thursday, +June 18, 2026 +Application lists open (3) ................................1 1:45 a.m. on Thursday, +June 18, 2026 +Latest time to give electronic application instructions +to HKSCC (4) ....................................... 12:00 noon on Thursday, +June 18, 2026 +Latest time to complete payment of +HK eIPO White Form applications by +effecting internet banking transfer(s) or +PPS payment transfer(s) ............................. 12:00 noon on Thursday, +June 18, 2026 +If you are instructing your broker or custodian who is a HKSCC Participant to give +electronic application instructions via HKSCC’s FINI System terminals to apply for the +Hong Kong Offer Shares on your behalf, you are advised to contact your broker or +custodian for the latest time for giving such instructions which may be different from the +latest time as stated above. +Application lists close (3) ............................... 12:00 noon on Thursday, +June 18, 2026 +(1) Announcement of the Offer Price, the level 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 +to be published on our website at www.micot.cn +(5) +and the website of the Hong Kong Stock Exchange at +www.hkexnews.hk +(5) on or before ...................1 1:00 p.m. on Tuesday, +June 23, 2026 +(2) Results of allocations in the Hong Kong Public Offering +to be available through a variety of channels as +described in “How to Apply for Hong Kong Offer Shares — +B. Publication of Results” in this prospectus from .............. 1 1:00 p.m. on +Tuesday, June 23, 2026 +(3) A full announcement of the Hong Kong Public Offering +containing (1) and (2) above to be published on +the website of the Stock Exchange at www.hkexnews.hk and +the Company’s website at www.micot.cn (5) f r o m................ 1 1:00 p.m. on +Tuesday, June 23, 2026 +Result of allocations in the Hong Kong Public Offering +(with successful applicants’ identification document +numbers, where appropriate) will be available at the +“Allotment Results” page at www.hkeipo.hk/IPOResult +(or www.tricor.com.hk/ipo/result ) with +a “search by ID” function from .................................1 1:00 p.m. on +Tuesday, June 23, 2026 +H Share certificates in respect of wholly or +partially successful applications to be despatched or +deposited into CCASS on or before +(6) .................... T uesday, June 23, 2026 +EXPECTED TIMETABLE (1) +– iii – + + +--- page 6 --- +HK eIPO White Form e-Auto Refund payment instructions/ +refund cheques in respect of wholly or partially +successful applications if the final Offer Price is +less than the price payable on application (if applicable) and +wholly or partially unsuccessful applications pursuant to the +Hong Kong Public Offering to be despatched on or before +(7)(8) ......... W ednesday, +June 24, 2026 +Dealings in H Shares on the Hong Kong Stock Exchange +expected to commence at ............................ 9:00 a.m. on Wednesday, +June 24, 2026 +Notes: +(1) All dates and times refer to Hong Kong local dates and time, except as otherwise stated. For details of the +structure of the Global Offering, including conditions of the Hong Kong Public Offering, please see +“Structure of the Global Offering” in this prospectus. +(2) You will not be permitted to submit your application through the designated website at www.hkeipo.hk +after 11:30 a.m. on the last day for submitting applications. If you have already submitted your +application through the designated website at www.hkeipo.hk and obtained an application reference +number from the designated website 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/are a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning signal +and/or Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on +Thursday, June 18, 2026, the application lists will not open or close on that day. Please see “How to Apply +for Hong Kong Offer Shares — E. Severe Weather Arrangements” in this prospectus. +(4) Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to +HKSCC via HKSCC’s FINI system should see “How to Apply for Hong Kong Offer Shares — A. +Applications for Hong Kong Offer Shares” in this prospectus. +(5) None of the websites or any of the information contained on the websites forms part of this prospectus. +(6) No temporary documents of title will be issued in respect of the Offer Shares. H Share certificates will +only become valid evidence of title provided that (i) the Global Offering has become unconditional and +(ii) neither of the Underwriting Agreements has been terminated in accordance with their terms prior to +8:00 a.m. on the Listing Date. Investors who trade H Shares on the basis of publicly available allocation +details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid do so +entirely at their own risk. +(7) HK eIPO White Form e-Auto Refund payment instruction/refund cheques will be issued in respect of +wholly or partially unsuccessful applications pursuant to the Hong Kong Public Offering and also in +respect of wholly or partially successful applications in the event that the final Offer Price is less than the +price payable per Offer Share on application. +(8) Applicants who have applied through the HK eIPO White Form service for 1,000,000 or more Hong Kong +Offer Shares may collect H Share certificates in person from our H Share Registrar, Tricor Investor +Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong from 9:00 a.m. to 1:00 +p.m. on Wednesday, June 24, 2026 or such other date as notified by us as the date of despatch/collection +of H Share certificates/ HK eIPO White Form e-Auto Refund payment instructions/refund cheques. +Applicants being individuals who are eligible for personal collection may not authorize any other person +to collect on their behalf. If you are a corporate applicant which is eligible for personal collection, your +authorized 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 our H Share Registrar. Applicants who have applied for +Hong Kong Offer Shares through the HKSCC EIPO channel should see the section headed “How to +Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates and Refund of +Application Monies” in this prospectus for details. +Applicants who have applied through the HK eIPO White Form service and paid their application +monies through single bank account may have refund monies (if any) despatched to the bank account, in +the form of HK eIPO White Form e-Auto Refund payment instructions. Applicants who have applied +through the HK eIPO White Form service and paid their application monies through multiple bank +accounts may have refund monies (if any) despatched to the address as specified in their application +instructions, in the form of refund cheques in favour of the applicant (or, in the case of joint applications, +the first-named applicant), by ordinary post at their own risk. +H Share certificates and/or refund cheques (if applicable) for applicants who have applied for less than +1,000,000 Hong Kong Offer Shares and any uncollected H Share certificates will be despatched by +ordinary post, at the applicants’ risk, to the addresses specified in the relevant applications. +Further information is set out in “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection +of H Share Certificates and Refund of Application Monies” in this prospectus. +The above expected timetable is a summary only. You should refer to “Structure of +the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this prospectus +for details of the structure of the Global Offering, including the conditions of the Global +Offering, and the procedures for application for the Hong Kong Offer Shares. +EXPECTED TIMETABLE (1) +–i v– + + +--- page 7 --- +IMPORTANT NOTICE TO INVESTORS +This prospectus is issued by us 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 distribution 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 made in this prospectus must not be +relied on by you as having been authorised by us, the Joint Sponsors, the Overall Coordinators, +the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the +Underwriters, any of our or their respective directors, officers, employees, agents, or +representatives or any other person involved in the Global Offering. Information contained on +our website (www.micot.cn) does not form part of this prospectus. +Page +Expected Timetable ................................................. i i i +Contents .......................................................... v +Summary ......................................................... 1 +Definitions ........................................................ 1 3 +Glossary of T echnical T erms .......................................... 2 1 +Forward-looking Statements .......................................... 2 9 +Risk Factors ....................................................... 3 0 +Waivers from Strict Compliance with the Listing Rules and Exemption +from Strict Compliance with the Companies (Winding Up and +Miscellaneous Provisions) Ordinance ................................. 5 5 +Information about this Prospectus and the Global Offering ................. 6 2 +Directors and Parties Involved in the Global Offering ..................... 6 7 +Corporate Information ............................................... 7 3 +Industry Overview .................................................. 7 5 +Regulatory Overview ................................................ 9 2 +History, Development and Corporate Structure ........................... 1 1 1 +Business .......................................................... 1 3 6 +Relationship with our Controlling Shareholders .......................... 2 2 4 +Share Capital ...................................................... 2 2 6 +Cornerstone Investors ............................................... 2 2 9 +Substantial Shareholders ............................................. 2 3 5 +Directors and Senior Management ..................................... 2 3 7 +Financial Information ............................................... 2 5 0 +Future Plans and Use of Proceeds ...................................... 2 7 1 +Underwriting ...................................................... 2 7 5 +CONTENTS +–v– + + +--- page 8 --- +Page +Structure of the Global Offering ....................................... 2 8 5 +How to Apply for the Hong Kong Offer Shares ........................... 2 9 2 +Appendix I — Accountants’ Report ................................ I - 1 +Appendix II — Unaudited Pro Forma Financial Information ............ II-1 +Appendix III — Summary of Articles of Association ................... III-1 +Appendix IV — Statutory and General Information .................... I V - 1 +Appendix V — Documents Delivered to the Registrar of Companies and +Available on Display ............................. V - 1 +CONTENTS +–v i– + + +--- page 9 --- +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 entire prospectus carefully before you decide to invest in +the Offer Shares. In particular, we are a biotechnology 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. Our Core Product is 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. We may continue to incur substantial costs and expenses in relation to +R&D activities for the Core Product, and the Core Product may not be successfully developed +or marketed. Moreover, there are risks associated with any investment. Some of the particular +risks in investing in the Offer Shares are set out in the section headed “Risk Factors” You +should read that section carefully. +OVERVIEW +Who We Are +We are a biotechnology company specializing in the discovery, development and +commercialization of bi-/multi-specific peptide drugs for the treatment of metabolic +diseases as well as cardiovascular and cerebrovascular diseases. We have self-developed a +product pipeline of one Core Product and other six product candidates. Our Core Product +MT1013 is a self-developed, Phase III-stage, dual-targeting receptor agonist polypeptide +that simultaneously targets the CaSR and the OGP receptor, primarily designed for the +treatment of Chronic Kidney Disease-Secondary Hyperparathyroidism (“ CKD-SHPT”) +with potential for expansion into additional indications such as Chronic Kidney +Disease-Mineral and Bone Disorder (“ CKD-MBD”) with osteoporosis and CKD-SHPT not +on Dialysis. +WE MA Y NOT ULTIMATELY BE SUCCESSFUL IN DEVELOPING AND/OR +COMMERCIALIZING OUR CORE PRODUCT OR ANY OF OUR OTHER PIPELINE +PRODUCTS +All of the drug candidates have been in-house developed by us. The chart below +summarizes the development status of our clinical-stage product candidates as of the +Latest Practicable Date: +SUMMARY +–1– + + +--- page 10 --- +Core product Key product +MT200605 +Drug Candidates Target/Mechanism Indication RegionTreatment +regimen +IND and IND +Preparation Phase I Phase II Phase III Current Status/Projected Milestones Commercialization +Rights +Metabolic drugs +CaSR/OGP +CKD-SHPT +PRC Complete Phase III clinical trial +by the end of 2026 Global(2) +U.S. +CKD-MBD with Osteoporosis PRC Commence Phase III clinical trial +in early 2028 +(1) +Global +CKD-SHPT not on Dialysis PRC File IND by the end of 2027 +GLP-1R/ +GCGR/MasR +Weight management for +obesity or overweight +PRC Complete Phase I clinical trial +in Q2 of 2026 +U.S. +Proteinuric CKD PRC Complete Phase I clinical trial +in Q2 of 2026 +MASH PRC File IND in early 2027 +MT2004 FXR +(small-molecule) +DILI PRC Complete Phase II clinical trial +by the end of 2027 +MASLD +PRC +U.S. +CLD PRC Commence Phase II clinical trial +by the end of 2027 +(3) +PTH1R/OGP +GIOP +PRC Commence Phase I clinical trial +in January 2026 +U.S. +PMO +PRC Commence Phase I clinical trial +in January 2026 +U.S. +Cardio-cerebrovascular drugs +Coagulation +Factor II/ +GP IIb/IIIa +ACS-PCI PRC Complete Phase IIb +(4) clinical trial +by mid-2028 +Global +U.S. +Stroke PRC Commence Phase II clinical trial(5)(6) +by June 2026 +HD +PRC Commence Phase II clinical trial(5)(7) +by July 2026 +U.S. +HD-PF4 PRC Commence Phase II clinical trial +by the end of 2027 +(5) +TrKB +(small-molecule) AIS +PRC Complete Phase II clinical trial in 2026 +U.S. +MT1011 NOACs +(small-molecule) +Universal Anticoagulant +Reversal Agent PRC +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy Complete Phase I clinical trial +in Q2 of 2026 +MT1013 +XTL6001 +MT1009 +MT1002 +Directly proceed to the next stage Currently evaluating the competitive landscape and formulating the future Clinical Development Plan +Abbreviation: CaSR: Calcium-Sensing Receptor; OGP: Osteogenic Growth Peptide; CKD-MBD: Chronic Kidney Disease-Mineral and Bone Disorder; GLP-1R: Glucagon-like Peptide-1 Receptor; GCGR: Glucagon Receptor; MasR: Mas Receptor; +MASH: Metabolic Dysfunction-associated Steatohepatitis; FXR: Farnesoid X Receptor; DILI: Drug-Induced Liver Injury; MASLD: Metabolic Dysfunction-associated Steatotic Liver Disease; CLD: Cholestatic Liver Disease; PTH1R: Parathyroid hormone 1 receptor; GIOP: Glucocorticoid-Induced Osteoporosis; +PMO: Postmenopausal Osteoporosis; GP IIb/IIIa: Glycoprotein IIb/IIIa Complex; ACS: Acute Coronary Syndrome; PCI: Percutaneous Coronary Intervention; HD: hemodialysis; HD-PF4: HD with heparin-platelet factor 4 complex positive; PF-4: Platelet Factor-4; AIS: acute ischemic stroke; TrkB: +Tyrosine kinase receptor B; NOACs: Novel Oral Anticoagulants +SUMMARY +–2– + + +--- page 11 --- +Notes: +(1) We have completed Phase II clinical trial of the relevant product for the indication of CKD-SHPT, and as patients with CKD-SHPT are all within the CKD-MBD +population, we plan to leverage data collected from respective trials to seek IND approvals from competent regulatory authorities to conduct Phase III clinical trial +of the relevant product for the expanded indication of CKD-MBD with Osteoporosis. +(2) Researched and developed in-house. We have granted Everest Medicines (China) Co., Ltd. (“ Everest”) the exclusive right to sell, commercialize and promote MT1013 +for the treatment of CKD-SHPT in Mainland China, Hong Kong, Macao and the Taiwan region as well as the Asia-Pacific region (excluding Japan) (the “ T erritory”). +We reserved the rights to: (i) research, develop and manufacture MT1013 globally; (ii) commercialize MT1013 for any indications outside Territory; and (iii) +commercialize MT1013 in the Territory for any indications other than CKD-SHPT. For more information, see “Business — Commercialization”. +(3) The Phase I clinical trial of MT2004 had conducted adequate safety and dose-ranging evaluation to support the therapeutic dose range for the treatment of MASLD +and CLD in the PRC, thereby providing the basis for directly commencing the respective Phase II clinical trials. +(4) The Phase IIb clinical trial forms part of MT1002-II-C04 and was conducted to further evaluate the selected dose(s) in a larger patient population. For more +information, see “Business — Our Key Product MT1002 — Clinical Trial Overview of MT1002 — MT1002-II-C04 PRC Phase II Efficacy Study in ACS-PCI Patients ”. +(5) The Phase I clinical trial of MT1002 had conducted adequate safety and dose-ranging evaluation to support the therapeutic dose range for the treatment of stroke, HD +and HD-PF4 in the PRC, thereby providing the basis for directly commencing the respective Phase II clinical trials. +(6) In June 2023, we obtained IND approval from the NMPA to conduct a Phase II clinical trial of MT1002 for stroke. Trial preparation was initiated in March 2026, +including the finalization of the clinical trial protocol. +(7) In July 2023, we obtained IND approval from the NMPA to conduct a Phase II clinical trial of MT1002 for HD. Trial preparation was initiated in March 2026, including +the finalization of the clinical trial protocol. +SUMMARY +–3– + + +--- page 12 --- +Our Core Product — MT1013 +Our Core Product, MT1013, is a dual-targeting receptor agonist polypeptide that +simultaneously targets the CaSR and the OGP receptor. MT1013 is primarily developed +with CKD-SHPT as its leading indication and is planned to expand into additional +indications including CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis. +MT1013’s clinical studies have demonstrated the following: +• MT1013 demonstrated a roughly 2.5-fold higher comprehensive control rate +of iPTH, serum calcium, and serum phosphorus compared to etelcalcetide in a +head-to-head Phase II evaluation. +• MT1013 showed onset of efficacy within three weeks and sustained control of +iPTH levels by week nine, as observed in a Phase II trial. +• MT1013 exhibited cardiovascular benefit potential. MT1013 was associated +with greater FGF23 reduction, a biomarker directly linked to cardiovascular +risk in CKD-SHPT, alongside effective control of iPTH, serum calcium, and +serum phosphorus. +• MT1013 showed a generally favorable safety and tolerability profile, with no +severe hypocalcemia reported across clinical trials. +• MT1013 enhanced bone mineral density and metabolism. A Phase II study +suggested that MT1013 was associated with improved bone turnover, +metabolism, and remodeling balance in CKD-SHPT patients. +The above safety and efficacy profiles are based on findings from early phase(s) of +clinical trials and cannot be viewed as definitive. For more information of the clinical +results, see “Business — Clinical Trial Overview of MT1013”. +CKD-SHPT is caused by CKD as the primary disease, and its therapeutic approach +must be determined on an individualized basis, taking into account the stage of the +underlying disease, disease severity, serum calcium and phosphate levels, vitamin D +metabolism, the degree of PTH elevation and comorbidities. Therapy of CKD-SHPT is +primarily symptomatic and progressive in nature, following a stepwise and +comprehensive treatment principle. Accordingly, treatment options vary according to +individual patient conditions, including phosphate-lowering therapy, vitamin D or +vitamin D analogues and calcimimetics etc. The foregoing treatment principles are +consistent with prevailing international and domestic clinical guidelines and published +reviews, including the KDIGO 2017 Clinical Practice Guideline Update for CKD-MBD and +the Chinese Guidelines for the Diagnosis and Treatment of Chronic Kidney +Disease-Mineral and Bone Disorder, neither of which classifies CKD-SHPT treatment into +formal first-line, second-line or subsequent-line therapies. Frost & Sullivan further +confirmed that there is no formal classification of CKD-SHPT treatment into any line of +treatment. +We are actively expanding the indications for our Core Product MT1013 into areas +such as CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis in light of the Phase +II clinical results, which showed a positive effect on improving bone mineral density. +As of the Latest Practicable Date, MT1013 completed its Phase II clinical trials +(MT1013-II-C01 and MT1013-II-C03) for the treatment of CKD-SHPT and has commenced +a Phase III clinical trial with Cinacalcet as the active comparator, and all 424 planned +patients have been enrolled. Etelcalcetide and Cinacalcet are approved CaSR agonist +drugs, for more information, see “Industry Overview — Competitive landscape of CaSR +agonist”. In respect of the commercialization of MT1013, we have entered into an +agreement with Everest. For more information, see “Business — Commercialization”. +The market size of CKD-SHPT drugs in the PRC is estimated to reach RMB5.0 billion +by 2030 and RMB13.1 billion by 2035, with the CAGR of 21.4%. In 2025, the global number +for CKD-SHPT patients reached 160.4 million, and is expected to increase to 188.0 million +by 2030. +Our Key Products +XTL6001 +Our Key Product, XTL6001, is a GLP-1R/GCGR/MasR tri-target agonist that has +received IND approval in both the PRC and the U.S. and has entered the clinical trial +stage. The introduction of MasR into the target panel of GLP-1R/GCGR is novel among +current GLP-1 drugs, with potential applications in the treatment of diseases such as +SUMMARY +–4– + + +--- page 13 --- +Chronic Weight Management in Obese or Overweight Populations, Proteinuric CKD, and +MASH. XTL6001’s preclinical studies have demonstrated its ability to preserve muscle +mass, achieve weight loss through enhanced energy metabolism-driven mechanisms and +deliver multi-organ protection. Phase I clinical trial data show that weekly XTL6001 +dosing for 4-5 weeks achieves clinically meaningful reductions in waist circumference +driven by visceral fat loss (markedly outperforming hip circumference changes), coupled +with robust lipid lowering (TG, LDL-C, ApoB), reduced serum uric acid, and enhanced +uric acid clearance, indicating its potential for multimodal cardiometabolic and renal risk +control. +XTL6001 had obtained IND approvals in both the PRC and the United States for the +treatment of Chronic Weight Management in Obese or Overweight Populations. As of the +Latest Practicable Date, the LPLV (Last Patient Last Visit) occurred and the database lock +was completed. +The global population affected by metabolic diseases continues to rise, with obesity +becoming an increasingly severe issue. The overweight and obesity drug market in the +PRC is expected to reach RMB23.5 billion in 2030 and RMB107.3 billion in 2035, with a +CAGR of 35.5% from 2030 to 2035. The GLP1R polypeptide drug market in China is +expected to grow to RMB81.4 billion in 2030 and RMB176.9 billion in 2035, with a CAGR of +16.8% from 2030 to 2035. +MT1002 +Our Key Product, MT1002, is a coagulation factor II and GP IIb/IIIa dual-targeting +peptide antagonist, primarily designed for clinical needs in anticoagulation and +anti-thrombosis for indications such as ACS-PCI, Stroke, HD and HD-PF4. MT1002’s +clinical studies have demonstrated its potential to address the bleeding and ischemia +balance in ACS-PCI, with a fast onset of action, recovery after discontinuation, stable +pharmacokinetic profile, and favorable population adaptability. +MT1002 had successfully completed Phase I clinical trials in both the PRC and the +United States for the treatment of ACS-PCI. A Phase II clinical trial is underway in the +PRC. As of the Latest Practicable Date,five dose-exploration cohorts involving a total of 24 +subjects have been completed, and enrollment of 26 subjects in the dose-expansion cohort +was completed. In addition, commencement of Phase II clinical trials for Stroke and HD in +the PRC is expected by June 2026 and July 2026, respectively. +In 2025, the antithrombotic drugs market in China reached RMB34.5 billion. It is +estimated that the antithrombotic drugs market in China will grow to RMB47.2 billion in +2030, and RMB61.8 billion in 2035, with a CAGR of 6.4% from 2025 to 2030 and 5.6% from +2030 to 2035, respectively. +MT200605 +Our Key Product, MT200605, is a neuroprotectant for injection. Its core +breakthrough lies in a dual synergistic mechanism of action — by simultaneously +activating the TrkB receptor and eliminating oxygen radicals, it blocks the post-AIS +pathological cascade via dual pathways. MT200605’s clinical studies have demonstrated +its favorable safety and tolerability profile, as well as dual-pathway synergistic +neuroprotective effects, offering a therapeutic option for patients. +As of the Latest Practicable Date, MT200605 has successfully completed Phase I +clinical studies in both the PRC and the United States. A Phase II clinical trial is underway +in the PRC, and enrollment of 360 subjects has been completed. +In 2025, the market size neuroprotective drugs in China reached RMB11.7 billion. It +is estimated that the neuroprotective agent market in China will grow to RMB15.7 billion +in 2030, and RMB24.6 billion in 2035, with a CAGR of 6.2% from 2025 to 2030 and 9.3% +from 2030 to 2035 respectively. +OUR TECHNOLOGY PLATFORMS +We have established four core technology platforms, including (i) Bi-/Multi-specific +Peptide and Peptide-based Macromolecule Technology Platform, (ii) Computer-Aided +Peptide Design Platform, (iii) Oral Peptide Delivery Platform, and (iv) Druggability +Evaluation Platform. These platforms collectively span the entire R&D continuum from +basic research, drug discovery research, drug development research to NDA submission +and serve as the foundational engine driving the advancement of our differentiated +peptide-based pipeline. For details, see “Business — Our Technology Platforms”. +SUMMARY +–5– + + +--- page 14 --- +RESEARCH AND DEVELOPMENT +For the years ended December 31, 2024 and 2025, our R&D expenses amounted to +RMB107.0 million and RMB130.1 million, respectively. We have been focusing our +in-house R&D efforts on the development of our Core Product, MT1013. For the years +ended December 31, 2024 and 2025, we incurred R&D expenses for MT1013 in amounts of +RMB66.7 million and RMB84.4 million respectively, representing 62.3% and 64.9% of our +total R&D expenses for the same period, respectively. As of the Latest Practicable Date, we +had a team of 117 R&D professionals, representing approximately 80.7% of our total staff +count. +INTELLECTUAL PROPERTY +As of the Latest Practicable Date, we owned (i) 10 granted patents in the PRC, three +granted patents in Hong Kong, 23 granted patents overseas, and (ii) three patent +applications in the PRC, three patent applications in Hong Kong, 9 patent applications +overseas and one PCT patent application. With respect to our Core Product MT1013, we +owned (i) four granted patents, including one in the PRC, one in Hong Kong, one in Japan +and one in Australia, and (ii) four patent applications, including one in the U.S., one in +Europe, one in Canada and one in Korea. +PRODUCTION +At current stage, as all our manufactured products are investigational drugs for +clinical trial use, we arrange production schedules in accordance with clinical +development plans and outsource the manufacturing of both active pharmaceutical +ingredients (APIs) and drug products to third-party Contract Development and +Manufacturing Organizations (CDMOs). Our CMC R&D center, comprising the CMC +quality department, API department, formulation department and analytical department, +provides support throughout the drug development process. Our CMC platform covers +the key CMC development stages for APIs, formulations and sustained-release +preparations. Leveraging this platform, our CMC R&D team is capable of independently +conducting key activities including API process development, formulation process +development and API scale-up at kilogram level. +COMMERCIALIZATION +As of the Latest Practicable Date, we had not obtained marketing approval for any +drug candidates, nor had we generated any revenue from product sales. Anticipating +commercialization of our MT1013 in early 2028, we will implement a dual-track +commercialization approach: domestically through collaborations with third party +Contract Sales Organizations (CSOs) and internationally via license-out partnerships. +During the Track Record Period and up to the Latest Practicable Date, we had no +commercialized drugs on the market either in China or overseas. When our drug +candidates progress to commercialization in the future, we will determine their prices +based on various factors, such as current medical needs, our drugs’ pharmacoeconomic +evaluation, our production costs, prices of prior line treatment options, competitive +landscape and prices of competing drugs, differences in features between our drugs and +competing drugs, and health economics in the country to market in. For more information, +see “Business — Commercialization”. +SUPPLIERS AND PROCUREMENT +During the Track Record Period, we procure clinical and pre-clinical services, as +well as administrative and operational services, from suppliers. For the years ended +December 31, 2024 and 2025, the aggregate purchases attributable to our five largest +suppliers in each year during the Track Record Period amounted to RMB31.3 million and +RMB26.8 million, respectively, representing 39.5% and 27.6% of our total purchases for the +respective periods. Purchases attributable to our single largest supplier in each year +amounted to RMB7.6 million and RMB8.6 million for the same years, accounting for 9.6% +and 8.9% of our total purchases for the respective periods. +COMPETITION +Our industry is highly competitive and subject to significant change. While we +believe that our technology platforms, our drug candidates and our experienced +management team provide us with competitive advantages, we face potential competition +from many others working to develop therapies targeting the same indications. These +include major biopharmaceutical companies, specialty pharmaceutical and biotechnology +companies, and academic institutions, government agencies and research institutions. +SUMMARY +–6– + + +--- page 15 --- +Any drug candidates that we successfully develop and commercialize will compete both +with existing drugs and with any new drugs that may become available in the future. For +more information on the competitive landscape of our drug candidates, please see +“Industry Overview” in this prospectus. +RISK FACTORS +Our business and the Global Offering involve certain risks as set out in “Risk +Factors” in this prospectus. You should read that section in its entirety carefully before +you decide to invest in our H Shares. Some of our major risks we face include but are not +limited to: (i) We face intense competition particularly from other peptide drugs with +similar targets. Our competitors may discover, develop or commercialize competing +drugs earlier or more successfully than we do; (ii) Our business and financial prospects +depend substantially on the success of our clinical stage and pre-clinical stage product +candidates, and we may be unable to successfully complete the clinical development, +obtain relevant regulatory approvals or we may experience significant delays in doing so; +(iii) Adverse events or undesirable side effects in clinical trials could interrupt, delay 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; (iv) 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; (v) We may not +be able to identify or discover new drug candidates, or to identify additional therapeutic +opportunities for our drug candidates; (vi) We have little experience in manufacturing +biopharmaceutical products on a large commercial scale and our business could be +materially and adversely affected if we encounter problems in manufacturing our future +drug products; (vii) We have limited experience in launching and marketing drug +products. If we are unable to leverage third-party sales networks or build and manage our +in-house commercialization team, we may not successfully commercialize our drug +products; and (viii) Our drug candidates may fail to achieve or maintain the degree of +market acceptance, and the actual scale of market sales of our product candidates may be +smaller than we anticipate, which could render some product candidates ultimately +unprofitable even if commercialized. +OUR STRENGTHS +We believe the following competitive strengths have contributed to our success and +differentiate us from our competitors. (i) Scientific insights facilitating our development +of next-generation bi-/multi-specific peptide drugs; (ii) Core Product MT1013 as the +dual-targeting receptor agonist polypeptide targeting CaSR and OGP receptor, with +demonstrated improvements in comprehensive control rate and patient survival benefits; +(iii) Differentiated pipeline targeting high-potential areas with significant unmet clinical +needs; (iv) Integrated end-to-end platform covering the full value chain from discovery to +commercialization, enabling accelerated global expansion; and (v) Management team +comprised of experts in peptide drug development. +OUR STRATEGIES +We intend to pursue the following strategies to further grow our business. (i) +Accelerate clinical development and commercialization of our Product Candidates; (ii) +Focus on clinical needs and advance peptide drug candidates with mechanisms and +commercialisation potential; (iii) Deepen strategic collaborations to unlock the clinical +and commercial potential of our Product Candidates; and (iv) Recruit and retain talent to +promote systematic training and sustainable development. +SUMMARY OF HISTORICAL FINANCIAL INFORMATION +This summary of key financial information set forth below has been derived from, +and should be read in conjunction with, the Accountants’ Report in Appendix I to, and +“Financial Information” of, this prospectus. Our historical financial information was +prepared in accordance with IFRS Accounting Standards. +SUMMARY +–7– + + +--- page 16 --- +Summary of Consolidated Statements of Profit or Loss and Other Comprehensive Income +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Other income ........................... 4,002 2,301 +Other gains and losses, net ................ 2,670 43,268 +Administrative expenses .................. (18,812) (23,490) +Research and development expenses ......... (107,022) (130,089) +Listing expenses ........................ – (9,901) +Finance costs ........................... (37,646) (67,003) +Loss before tax .......................... (156,808) (184,914) +Income tax expense ...................... (24) – +Loss for the year ........................ (156,832) (184,914) +Our other gains and losses, net increased by 1,503.7% from RMB2.7 million for 2024 +to RMB43.3 million for 2025, primarily due to gain on non-substantial modification of +redemption liabilities arising from an extension of the redemption date in relation to our +Pre-IPO Investment, partially offset by (i) a decrease in gain on fair value changes from +financial assets at FVTPL which was in turn primarily due to a decrease in interest rates +applicable to our financial assets at FVTPL, and (ii) a decrease in gains of early +termination of a lease. +Our research and development expenses increased by 21.6% from RMB107.0 million +for 2024 to RMB130.1 million for 2025, primarily due to (i) an increase in experiments and +tests expenses, and (ii) an increase in staff costs and welfare expenses for our R&D +personnel, in connection with our R&D activities with respect to, in particular, our Core +Product, MT1013, and a Key Product, MT200605. +Our finance costs increased by 78.2% from RMB37.6 million for 2024 to RMB67.0 +million for 2025, primarily attributable to the increase in interest expenses on redemption +liabilities. +We recorded net losses of RMB156.8 million and RMB184.9 million for 2024 and +2025, respectively, primarily in relation to: (i) our ongoing investment in R&D activities, +(ii) the increase in interest expenses on redemption liabilities which will be reclassified to +equity upon Listing, and (iii) partially offset by the increase in other gains and losses, net. +For details, see “Financial Information — Description of Selected Components of +Consolidated Statements of Profit or Loss and Other Comprehensive Income”. +Summary of Consolidated Statements of Financial Position +As at December 31, +2024 2025 +RMB’000 RMB’000 +Total non-current assets .................. 61,281 69,260 +Total current assets ...................... 185,977 262,201 +Total current liabilities ................... 77,932 266,407 +Total non-current liabilities ................ 42,533 1,024,939 +Net current assets (liabilities) .............. 108,045 (4,206) +Total equity (deficits) ..................... 126,793 (959,885) +As of December 31, 2025, we recorded net current liabilities of RMB4.2 million +compared to net current assets of RMB108.0 million as of December 31, 2024, primarily +because (i) part of the non-current portion of our bank borrowings became current, and (ii) +redemption liabilities of RMB134.3 million were classified as current liabilities. +SUMMARY +–8– + + +--- page 17 --- +As of December 31, 2025, we recorded net liabilities of RMB959.9 million, compared +to net assets of RMB126.8 million as of December 31, 2024, primarily because of (i) the +redemption liabilities recognized for the shares with preferential rights amounting to +RMB1,137.3 million and (ii) loss for the year ended December 31, 2025 amounting to +RMB184.9 million, partially offset by the capital injection from shareholders amounting to +RMB235.5 million. We expect our net liabilities position to turn into net assets position +upon Listing as certain investors’ redemption rights will be terminated and the financial +liabilities recognized for those rights will be released upon Listing. +For details, see “Financial Information — Discussion of Certain Selected Items from +the Consolidated Statements of Financial Position”. +Summary of Consolidated Statements of Cash Flows +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Net Cash used in Operating Activities ............ (107,742) (137,130) +Net Cash from (used in) Investing Activities ....... 54,803 (57,582) +Net Cash from Financing Activities .............. 21,123 212,235 +Net (Decrease) Increase in Cash and Cash +Equivalents ............................... (31,816) 17,523 +Cash and Cash Equivalents at the Beginning of the +Y e a r ...................................... 95,942 64,661 +Effect of Foreign Exchange Rate Changes ......... 5 3 5 (1,628) +Cash and Cash Equivalents at the End of the Year . . . 64,661 80,556 +During the Track Record Period, we incurred negative cash flows from our +operations and our operating cash outflows mainly resulted from our research and +development expenses. +For details, see “Financial Information — Liquidity and Capital Resources — Cash +Flows”. +OUR CONTROLLING SHAREHOLDERS +As of the Latest Practicable Date, Dr. Wang Bing ( ˮΏ), Dr. Wang Mei (ˮૠ) and +Xi’an Zhongrui directly held 40.56%, 6.60% and 5.48% of the interest in our Company, +respectively. Dr. Wang Bing and Dr. Wang Mei are spouses. Dr. Wang Mei and Dr. Wang +Bing held 99.00% and 1.00% of the equity interest, respectively, in Xi’an Zhongrui Zekang +Enterprise Management Consulting Co., Ltd.* (ʮ̡) +(“Zhongrui Zekang ”), which acts as the general partner of Xi’an Zhongrui. Xi’an +Zhongrui directly held 5.48% of the equity interest in the Company, such that Dr. Wang +Mei and Dr. Wang Bing are deemed to be the beneficial owners of the 5.48% equity interest +in the Company held by Xi’an Zhongrui. Therefore, Dr. Wang Bing, Dr. Wang Mei, Xi’an +Zhongrui and Zhongrui Zekang will be regarded as our Controlling Shareholders under +the Listing Rules before the Listing. +Immediately upon completion of the Global Offering (assuming the Over-allotment +Option is not exercised), Dr. Wang Bing, Dr. Wang Mei, Xi’an Zhongrui and Zhongrui +Zekang will collectively be entitled to exercise approximately 43.43% voting rights in our +Company and thus remain as our Controlling Shareholders. +PRE-IPO INVESTORS +We have attracted certain Pre-IPO Investors and undergone six rounds of financing +as of the Latest Practicable Date. Our Pre-IPO Investors include Sophisticated Investors, +such as Northern Light Venture Capital ( ̏฽Έ௴ҳ) and NRL Capital (ॲဧл༟͉), who +have made meaningful investment in our Company in accordance with Chapter 2.3 of the +Guide for New Listing Applicants. As of the Latest Practicable Date, Northern Light +Venture Capital (through Beta Achieve) and NRL Capital (through Suzhou Mainiv) held +approximately 6.48% and 9.99%, respectively, of our Company’s total issued share capital, +and will hold approximately 5.35% and 8.24%, respectively, upon the Listing (assuming +that the Over-allotment Option is not exercised). For details, see “History, Development +and Corporate Structure — Pre-IPO Investment — 3. Information about our Pre-IPO +Investors”. +SUMMARY +–9– + + +--- page 18 --- +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, +and has no relationship with any connected persons of our Company or other Pre-IPO +Investors. +GLOBAL OFFERING STATISTICS +The statistics in the following table are based on the assumptions that (i) the Global +Offering has been completed and 58,054,400 H Shares are newly issued in the Global +Offering, (ii) the Over-allotment Option for the Global Offering is not exercised, and (iii) +331,740,350 Shares are issued and outstanding following the completion of the Global +Offering: +Based on an +Offer Price of +HK$18.20 per +Share +Based on an +Offer Price of +HK$21.00 per +Share +Market capitalization of our Shares (1) . . . HK$6,037.7 +million +HK$6,966.5 +million +Unaudited pro forma adjusted net +tangible (liabilities) assets per Share (2) . HK$(0.37) HK$0.12 +Notes: +(1) The calculation of market capitalization is based on 331,740,350 Shares expected to be in issue +immediately upon completion of the Global Offering (assuming the Over-allotment Option is not +exercised). The number of Shares in calculating the market capitalization is different from that in +calculating the unaudited pro forma adjusted net tangible liabilities per Share as set out in note +(2) below is primarily because the number of treasury shares are not excluded from the total +number of Shares when calculating the market capitalisation. Those treasury shares refer to +shares held by Xi’an Zhongrui, the Pre-IPO Share Incentive Plan of the Company and was treated +as treasury shares under the relevant accounting treatment. However, those Shares held by Xi’an +Zhongrui would be converted into H Shares and listed on the Stock Exchange, hence they are not +excluded from the total share capital of the Company or the calculation of market capitalization. +(2) The unaudited pro forma adjusted net tangible (liabilities) assets per Share as of December 31, +2025 is calculated after making the adjustments referred to in Appendix II and on the basis that +316,740,350 Shares are expected to be in issue immediately upon completion of the Global +Offering (assuming the Over-allotment Option is not exercised). +(3) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible +assets (liabilities) of the Group attributable to owners of the Company as at December 31, 2025 to +reflect any trading result or other transactions of the Group entered into subsequent to December +31, 2025. In particular, the unaudited pro forma adjusted consolidated net tangible liabilities of +the Group attributable to owners of the Company as shown in Appendix II to this prospectus have +not been adjusted to illustrate the effect of the termination of the redemption and other +preferential rights granted to the investors of Series A, B, B1, C and D Financings upon +completion of the Global Offering (“ T ermination of Preferential Rights ”), which would result in +the reclassification of the redemption liabilities with carrying amount of RMB1,159,018,000 as at +December 31, 2025 to equity. +Assuming the Series D Financing, Termination of Preferential Rights, Share Subdivision and +Global Offering had been completed on December 31, 2025, the unaudited pro forma adjusted +consolidated net tangible (liabilities) assets of the Group attributable to owners of the Company +would have adjusted by RMB1,159,018,000, resulting in unaudited pro forma adjusted +consolidated net tangible assets of the Group attributable to the owners of the Company of +RMB1,057,188,000 and RMB1,192,806,000, based on an Offer Price of HK$18.2 and HK$21.0 per H +Share, respectively. The unaudited pro forma adjusted consolidated net tangible assets of the +Group attributable to owners of the Company as at December 31, 2025 per Share after Termination +of Preferential Rights would have been RMB3.34 per Share (approximately HK$3.84 per Share) +and RMB3.77 per Share (approximately HK$4.33 per Share), respectively, calculated on the basis +of 316,740,350 Shares in issue and based on an Offer Price of HK$18.2 and HK$21.0 per H Share. +For details, please see “Unaudited Pro Forma Financial Information” in Appendix II to this +prospectus. +For the calculation of the unaudited pro forma adjusted net tangible asset value per +Share attributed to our Shareholders, see “Unaudited Pro Forma Financial Information” in +Appendix II to this prospectus. +SUMMARY +–1 0– + + +--- page 19 --- +FUTURE PLANS AND USE OF PROCEEDS +We estimate that we will receive net proceeds of approximately HK$1,067.2 million +after deducting the underwriting fees and expenses payable by us in the Global Offering +assuming an Offer Price of HK$19.60 per Offer Share, being the mid-point of the indicative +Offer Price range of HK$18.20 to HK$21.00 per Offer Share set out in this prospectus. We +intend to use the net proceeds from the Global Offering for the following purposes: (i) +approximately 39.1%, or HK$417.3 million, will be used for ongoing and planned clinical +trials and planned commercial launch of our Core Product; (ii) approximately 36.3%, or +HK$387.4 million, will be used for ongoing and planned clinical trials and planned +commercial launch of our Key Products; (iii) approximately 14.6%, or HK$155.8 million, +will be used for the R&D of our other product candidates and technology platforms; and +(iv) approximately 10.0%, or HK$106.7 million, will be used for working capital and +general corporate purposes. +DIVIDENDS +No dividend has been proposed, paid or declared by our Company since its +incorporation. As of the Latest Practicable Date, we did not have a formal dividend policy +or fixed dividend payout ratio. We do not have any plan to declare or pay any dividends in +the foreseeable future. The determination of whether to pay a dividend and in which +amount is based on factors the Board may deem relevant. Any dividend distribution will +also be subject to the approval of the Shareholders in the Shareholder’s meeting. Under +the PRC law and the Articles of Association, the general reserve requires annual +appropriations of 10% of after-tax profits at each year-end until the balance reaches 50% of +the relevant PRC entity’s registered capital. In view of our accumulated losses, as advised +by our PRC Legal Advisor, according to the relevant PRC laws and regulations and the +Articles of Association, we shall not declare or pay dividend until the accumulated losses +are covered by our after-tax profits and sufficient statutory common reserve are drawn in +accordance with the relevant laws, regulations and our Articles of Association. +LISTING EXPENSES +Listing expenses to be borne by us are estimated to be approximately RMB61.4 +million (including underwriting commission, at the Offer Price of HK$19.60 per H Share, +being the midpoint of the indicative Offer Price range of HK$18.20 to HK$21.00 per H +Share), which represent 6.2% of the gross proceeds from the Global Offering, assuming no +Shares are issued pursuant to the Over-allotment Option. The above listing expenses are +comprised of (i) underwriting-related expenses, including sponsor fee and underwriting +commission, of RMB39.6 million, and (ii) non-underwriting-related expenses of RMB21.8 +million, including (a) the legal advisors and the reporting accountants’ expenses of +RMB13.0 million, and (b) other fees and expenses of RMB8.8 million. Approximately +RMB19.4 million of our listing expenses shall be charged to our consolidated statements of +profit or loss, among which, approximately RMB9.9 million has been charged during the +Track Record Period, and approximately RMB42.0 million is expected to 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. +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 (including any H Shares which may be issued +pursuant to the Over-allotment Option). No part of our H 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 +our Company by the Stock Exchange. +SUMMARY +–1 1– + + +--- page 20 --- +RECENT DEVELOPMENT +Clinical Development +The Phase III clinical trial of MT1013 for CKD-SHPT was initiated in July 2025. As of +the Latest Practicable Date, all 424 planned patients have been enrolled. The Phase I +clinical trial of XTL6001 for overweight and obesity was initiated in June 2025. As of the +Latest Practicable Date, the LPLV had occurred and the database lock had been completed. +Expected Net Loss in 2026 +We expect to record an increase in net loss in 2026, primarily due to (i) our continued +investment in R&D as we advance the development of our drug candidates, and (ii) an +increase in share-based payment expenses. +Progress in Commercialization +In February 2026, in respect of the commercialization of MT1013 for the treatment of +CKD-SHPT in Asia-Pacific (excluding Japan), we entered into an agreement with Everest. +For more information, see “Business — Commercialization”. +NO MATERIAL ADVERSE CHANGE +Our Directors confirm that, up to the date of this prospectus, there has been no +material adverse change in our operations, financial performance, market position or +prospects since December 31, 2025, being the end date of the periods reported on in the +Accountants’ Report in Appendix I to this prospectus, and there is no event since +December 31, 2025 that would materially affect the information as set out in the +Accountants’ Report in Appendix I to this prospectus. +SUMMARY +–1 2– + + +--- page 21 --- +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” +“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 +“Articles of Association” or +“Articles” +the articles of association of our Company adopted on +September 19, 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 III — Summary of Articles of Association” +“associate(s)” has the meaning ascribed to it under the Listing Rules +“Audit Committee” audit committee of our Board +“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 +“CAGR” the compound annual growth rate, annualized +average growth rate between given years, assuming +growth takes place at an exponentially compound rate +“Capital Market +Intermediary(ies)” +the capital market intermediary(ies) participating in +the Global Offering as set out in “Directors and +Parties Involved in the Global Offering” in this +prospectus +“CCASS” Central Clearing and Settlement System established +and operated by HKSCC +“China”, “Mainland China” +or “PRC” +the People’s Republic of China, but for the purpose of +this prospectus and for geographical reference only +and except where the context requires otherwise, +references in this prospectus to “China” and the +“PRC” do not apply to Hong Kong, the Macau Special +Administrative Region and Taiwan Region +“close associate(s)” has the meaning ascribed to it under the Listing Rules +“Companies Ordinance” Companies Ordinance (Chapter 622 of the Laws of +Hong Kong), as amended, supplemented or otherwise +modified from time to time +“Companies (Winding Up and +Miscellaneous Provisions) +Ordinance” +the Companies (Winding Up and Miscellaneous +Provisions) Ordinance (Chapter 32 of the Laws of +Hong Kong), as amended or supplemented from time +to time +DEFINITIONS +–1 3– + + +--- page 22 --- +“Company” or “our Company” Shaanxi Micot Pharmaceutical Technology Co., Ltd. +(ʮ̡), established +under the laws of the PRC on 19 January 2007 as a +limited liability company and converted into a joint +stock company under the laws of the PRC on January +17, 2025 +“Company Law” or “PRC +Company Law” +the Company Law of the PRC ( ʕശɛ͏΍ձ਷ʮ̡ +‘), as amended, supplemented or otherwise +modified from time to time +“Controlling Shareholder(s)” has the meaning ascribed thereto under the Listing +Rules and unless the context requires otherwise, +refers to Dr. Wang Bing, Dr. Wang Mei, Xi’an +Zhongrui and Xi’an Zhongrui Zekang Enterprise +Management Consulting Co., Ltd* ( Гτ଺๿ዣੰΆุ +ʮ̡), further details of which are set out +in “Relationship with our Controlling Shareholders” +“connected persons(s)” has the meaning ascribed to it under the Listing Rules +“connected transaction(s)” has the meaning ascribed to it under the Listing Rules +“core connected person” has the meaning ascribed to it under the Listing Rules +“Core Product” has the meaning ascribed to it in Chapter 18A of the +Listing Rules, and for the purpose of this prospectus, +our core product refers to MT1013 +“Corporate Governance Code” the Corporate Governance Code as set out in +Appendix C1 to the Listing Rules +“CSDC” China Securities Depository and Clearing +Corporation Limited (ப΂ʮ̡ ) +“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇ +ึ) +“Deed of Indemnity” the deed of indemnity dated June 10, 2026 entered +into by Dr. Wang Bing and Dr. Wang Mei, our +Controlling Shareholders in favor of our Company +(for our Company and as trustee for each of our +subsidiaries) +“Director(s)” the director(s) of our Company +“Domestic Share(s)” ordinary share(s) in the share capital of our Company +with a nominal value of RMB0.02 each upon the +completion of the Share Subdivision, which is/are +subscribed for and paid up in RMB; 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, which is/are +subscribed for and paid up in RMB +“Employee Incentive +Platform(s)” +the employee shareholding platform(s) of our +Company, namely Xi’an Zhongrui +“Exchange Participant(s)” a person (a) who, in accordance with the Listing +Rules, may trade on or through the Hong Kong Stock +Exchange; and (b) whose name is entered in a list, +register or roll kept by the Hong Kong Stock Exchange +as a person who may trade on or through the Hong +Kong Stock Exchange +DEFINITIONS +–1 4– + + +--- page 23 --- +“Extreme Conditions” the occurrence of “extreme conditions” as announced +by any government authority of Hong Kong due to +serious disruption of public transport services, +extensive flooding, major landslides, large-scale +power outage or any other adverse conditions before +Typhoon Signal No. 8 or above is replaced with +Typhoon Signal No. 3 or below +“FINI” Fast Interface for New Issuance, an online platform +operated by HKSCC that is mandatory for admission +to trading and, where applicable, the collection and +possessing of specified information on subscription in +and settlement for all new listing of equity securities +or interests issued by a new applicant, irrespective of +whether there is an offering of equity securities or +interests +“Frost & Sullivan” or “Industry +Consultant” +Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., +our industry consultant, an independent market +research and consulting company +“Global Offering” the Hong Kong Public Offering and the International +Offering +“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 +“Group,” “our Group,” +“we,” “our” or “us” +our Company and its subsidiaries (or our Company +and any one or more of its subsidiaries, as the context +may require) +“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 RMB0.02 each upon the +completion of the Share Subdivision, which will be +subscribed for and traded in Hong Kong dollars and +listed on the Stock Exchange; 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, which will be subscribed for and +traded in Hong Kong dollars and listed on the Stock +Exchange +“H Share Registrar” Tricor Investor Services Limited +“HK eIPO White Form” the application for Hong Kong Offer Shares to be +issued in the applicant’s own name by submitting +applications online through the designated website at +www.hkeipo.hk +“HK eIPO White Form +Service Provider” +the HK eIPO White Form service provider designated +by our Company, as specified on the designated +website at www.hkeipo.hk +“HKSCC” Hong Kong Securities Clearing Company Limited, a +wholly-owned subsidiary of Hong Kong Exchanges +and Clearing Limited +DEFINITIONS +–1 5– + + +--- page 24 --- +“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 +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 or a custodian participant +“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the +PRC +“Hong Kong dollars” or “HK$” Hong Kong dollars, the lawful currency of Hong +Kong +“Hong Kong Offer Shares” 5,805,600 H Shares initially offered by us for +subscription at the Offer Price pursuant to the Hong +Kong Public Offering +“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for +subscription by the public in Hong Kong (as set out in +“Structure of the Global Offering”) at the Offer Price +and on, and subject to, the terms and conditions +described in this prospectus +“Hong Kong Underwriters” the underwriters as set out in “Underwriting — Hong +Kong Underwriters” +“Hong Kong Underwriting +Agreement” +the underwriting agreement dated June 12, 2026 +relating to the Hong Kong Public Offering, entered +into by, among others, our Company, the Controlling +Shareholders, the Joint Sponsors and the Hong Kong +Underwriters, as set out in “Underwriting” +“IFRS” International Financial Reporting Standards +“Independent Third Party(ies)” any entity(ies) or person(s) who is not a connected +person of our Company or an associate of any such +entity(ies) or person(s) within the meanings ascribed +thereto under the Listing Rules +“International Offering” the offer of the International Offer Shares by the +International Underwriters at the Offer Price, outside +the United States in offshore transactions in +accordance with Regulation S, as set out in “Structure +of the Global Offering” +DEFINITIONS +–1 6– + + +--- page 25 --- +“International Offer Shar es” 52,248,800 H Shares (subject to the exercise of the +Over-allotment Option as set out in “Structure of the +Global Offering”) initially offered by our Company +pursuant to the International Offering +“International Underwriters” the underwriters of the International Offering +“International Underwriting +Agreement” +the international underwriting agreement relating to +the International Offering, which is expected to be +entered into by, among others, our Company, our +Controlling Shareholders, the Joint Sponsors and the +International Underwriters on or around the Price +Determination Date, as set out in “Underwriting” +“Jinan Liuji” Jinan Liuji Enterprise Management Partnership +Enterprise (Limited Partnership)* (ʬ᝘Άุ၍ଣ +Υྫ) +“Joint Bookrunners” the joint bookrunners as named in “Directors and +Parties Involved in the Global Offering” +“Joint Global Coordinators” the joint global coordinators as named in “Directors +and Parties Involved in the Global Offering” +“Joint Lead Managers” the joint lead managers as named in “Directors and +Parties Involved in the Global Offering” +“Joint Sponsors”, +“Sponsor-Overall +Coordinators” and “Overall +Coordinators” +the joint sponsors, overall coordinators, and +sponsor-overall coordinators as named in “Directors +and Parties Involved in the Global Offering” +“Latest Practicable Date” June 7, 2026, being the latest practicable date for the +purpose of ascertaining certain information contained +in this prospectus prior to its publication +“Linhai Qize” Linhai Qize Maite Venture Investment Partnership +(Limited Partnership) ( ᑗऎ઼̹ዣ௥त௴ุҳ༟ΥྫΆ +Υྫ) +“Listing” the listing of the H Shares on the Main Board of the +Stock Exchange +“Listing Committee” the listing sub-committee of the Stock Exchange +“Listing Date” the date expected to be on or about Wednesday, June +24, 2026, on which the H Shares are 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 +“Maicheng Century” Maicheng Century (Xi’an) Enterprise Management +Partnership Enterprise (Limited Partnership)* ( ௥༐˰ +Υྫ) +“Main Board” the stock market (excluding the option market) +operated by the Stock Exchange which is independent +from and operated in parallel with the GEM of the +Stock Exchange +DEFINITIONS +–1 7– + + +--- page 26 --- +“Nasdaq” National Association of Securities Dealers Automated +Quotations +“NDRC” National Development and Reform Commission of +the PRC (ึ ) +“Nomination Committee” the nomination committee of our Board +“Offer Price” the final offer price per H Share (exclusive of a +brokerage fee of 1.0%, a SFC transaction levy of +0.0027%, a Stock Exchange trading fee of 0.00565% +and AFRC transaction levy of 0.00015%), expressed in +Hong Kong dollars, at which Hong Kong Offer Shares +are to be subscribed for pursuant to the Hong Kong +Public Offering and International Offer Shares are to +be offered pursuant to the International Offering, to +be determined as set out in “Structure of the Global +Offering — Pricing and Allocation” +“Offer Share(s)” the Hong Kong Offer Shares and/or the International +Offer Share(s), as the context may require +“Over-allotment Option” the option expected to be granted by our Company to +the International Underwriters, exercisable by the +Overall Coordinator (for itself and on behalf of the +International Underwriters), pursuant to which our +Company may be required to allot and issue up to an +aggregate of 8,708,000 additional H Shares, +representing up to 15.0% of the Offer Shares initially +being offered under the Global Offering, at the Offer +Price to, among other things, to cover over-allocations +in the International Offering, if any, details of which +are set out in “Structure of the Global Offering — +Over-allotment Option” +“PBOC” the 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 Legal Advisor” JunHe LLP , our legal advisor as to PRC law +“PRC Intellectual Property +Legal Advisor” +Tian Yuan Law Firm, our legal advisor as to PRC +intellectual property law +“Pre-IPO Investment(s)” the 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) as set out in “History, Development +and Corporate Structure” +“Price Determination Date” the date expected to be on or around Monday, June 22, +2026, but no later than 12:00 noon on Monday, June 22, +2026, on which our Company and the Overall +Coordinators (for itself and on behalf of the +Underwriters) determine the Offer Price for the +purpose of the Global Offering +“prospectus” this prospectus being issued in connection with the +Hong Kong Public Offering +DEFINITIONS +–1 8– + + +--- page 27 --- +“R&D” research and development +“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 +“SFC” Securities and Futures Commission of Hong Kong +“SFO” Securities and Futures Ordinance (Chapter 571 of the +Laws of Hong Kong), as amended, supplemented or +otherwise modified from time to time +“Shaanxi Innovation Relay” Shaanxi Innovation Relay Equity Investment +Partnership (Limited Partnership)* (ᛆ +Υྫ) +“Shaanxi Jingang” Shaanxi Jingang Nongtou Biomedical Industry +Development Equity Investment Partnership +(Limited Partnership)* (ᔼᖹପุ೯ +Υྫ) +“Share(s)” ordinary share(s) in the share capital of our Company +with a nominal value of RMB0.02 each upon the +completion of the Share Subdivision; 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, comprising Unlisted +Share(s) and H Share(s) +“Share Subdivision” the subdivision of each share in our Company’s share +capital with a nominal value of RMB1.00 each into 50 +shares with a nominal value of RMB0.02 each effective +immediately prior to the Listing +“Shareholder(s)” holder(s) of the Share(s) +“Sophisticated Investor(s)” has the meaning ascribed to it under Chapter 2.3 of +the Guide for New Listing Applicants issued by the +Stock Exchange +“Stabilising Manager” CCB International Capital Limited +“State Council” The State Council of the People’s Republic of China +(ʕശɛ͏΍ձ਷਷ਕ৫) +“Stock Exchange” or +the “Hong Kong +Stock Exchange” +The Stock Exchange of Hong Kong 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)” the supervisor(s) of our Company +“Takeovers Code” the Codes on Takeovers and Mergers and Share +Buybacks issued by the SFC, as amended, +supplemented or otherwise modified from time to +time +“Track Record Period” the two years ended December 31, 2024 and 2025 +DEFINITIONS +–1 9– + + +--- page 28 --- +“treasury shares” has the meaning ascribed to it under the Listing Rules +“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) in the share capital of our Company +with a nominal value of RMB0.02 each upon the +completion of the Share Subdivision, which is/are not +listed on any stock exchange; 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, which is/are not listed on any stock +exchange +“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. dollars”, “US$” or “USD” the United States dollars, the lawful currency of the +U.S. +“U.S. Securities Act” the United States Securities Act 1933, as amended or +supplemented from time to time +“Xi’an Zhongrui” Xi’an Zhongrui Hongyuan Information Technology +Partnership (Limited Partnership) (ࢹڦ +Υྫ), a limited partnership +established under the laws of the PRC on July 18, +2019, an employee incentive platform of our +Company +“Zhongrui Zekang” Xi’an Zhongrui Zekang Enterprise Management +Consulting Co., Ltd.ࠢ +ʮ̡) a limited liability company incorporated under +the laws of the PRC on July 10, 2019, a General Partner +of Xi’an Zhongrui +“%” percent +For ease of reference, the names of Chinese laws and regulations, governmental authorities, +institutions, natural persons or other entities (including certain of our subsidiaries) 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. +For the purpose of this prospectus, references to “provinces” of China include provinces, +municipalities under direct administration of the central government and provincial-level +autonomous regions. +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 +–2 0– + + +--- page 29 --- +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” within the context of drug metabolism, the process by +which drug compounds and other molecules move +across cells and tissues such as the gastrointestinal +tract into the circulatory system +“ACS” acute coronary syndromes +“ACS-PCI” Acute Coronary Syndrome-Percutaneous Coronary +Intervention. ACS patients who undergo +percutaneous coronary intervention (PCI) procedures +“ADMET” Absorption, Distribution, Metabolism, Excretion and +Toxicity +“AIDD” artificial intelligence for drug design +“AIS” acute ischemic stroke +“API” active pharmaceutical ingredient, the component of a +drug product that is intended to furnish +pharmacological activity or other direct effect in the +diagnosis, cure, mitigation, treatment, or prevention +of disease, or to affect the structure or any function of +the body +“AMD” age-related macular degeneration +“ANG-(1-7)” Angiotensin-(1-7), an important biologically active +molecule +“BMI” body mass index, a numerical value calculated from +height and weight, providing a standardized measure +to classify underweight, healthy weight, being +overweight, and obesity +“CADD” computer aided drug design +“CaSR” calcium-sensing receptor ,aGp r otein-coupled +receptor located on the cell membrane +“CDE” the Center for Drug Evaluation of the NMPA +“CDMO” contract development and manufacturing +organization, a company that serves other companies +in the pharmaceutical industry on a contract basis, +providing drug development and drug +manufacturing services +“CHD” consumer health data +“Cinacalcet” a CaSR agonist drug approved by the FDA and the +NMPA for the treatment of CKD-SHPT and +Hypercalcemia +“CKD” chronic kidney disease +GLOSSARY OF TECHNICAL TERMS +–2 1– + + +--- page 30 --- +“CKD-MBD” the coexistence of chronic kidney disease, mineral and +bone disorder (CKD-MBD) and either osteoporosis or +low bone mass (osteopenia) +“CKD-SHPT” chronic kidney disease-secondary hyperparathyroidism, +specifically at the advanced stage of CKD where +maintenance hemodialysis is necessary, unless the +context indicates otherwise +“CLD” cholestatic liver disease +“clinical trial” an experiment done in clinical research +“CMC” chemistry, manufacturing, and controls, a term for the +chemical composition, formulation, and quality +control processes used in the manufacturing of a drug +“Comprehensive Control Rate” the pr oportion achieving all three targets (iPTH, +serum calcium, and serum phosphorus) +simultaneously, where iPTH is maintained at 2-9 +times the upper limit of normal (130-586 pg/mL), +serum calcium at 2.10-2.50 mmol/L, and serum +phosphorus at 1.13-1.78 mmol/L +“COVID-19” coronavirus disease 2019, a disease caused by a novel +virus designated as severe acute respiratory +syndrome coronavirus +“CRO” contract research organization, a company that +provides research services to pharmaceutical and +biotechnology companies on a contract basis +“DILI” drug-induced liver injury, liver damage caused by the +drug itself and/or its metabolites or due to +hypersensitivity or reduced tolerance to the drug due +to special physical conditions during drug use DIO +mouse model +“distribution” in the context of DMPK, the process by which +molecules are transported throughout the body +“double-blind” a type of clinical trial in which neither the participants +nor the researcher knows which treatment or +intervention participants are receiving until the +clinical trial is completed +“DKD” diabetic kidney disease +“DMPK” Drug Metabolism and Pharmacokinetics +“EAP” Efficacy Assessment Period +“ERAS” enhanced recovery after surgery +“Etelcalcetide” a CaSR agonist drug approved by the FDA and the +NMPA for the treatment of CKD-SHPT +“FDA” the United States Food and Drug Administration, a +federal agency of the Department of Health and +Human Services +“FGF23” fibroblast growth factor 23 +GLOSSARY OF TECHNICAL TERMS +–2 2– + + +--- page 31 --- +“FPI” first patient in +“FXR” Farnesoid X Receptor +“GA” geographic atrophy +“GCP” good clinical practice, an international ethical and +scientific quality standard for the performance of a +clinical trial on medicinal products involving humans +“GFR” glomerular filtration rate, a quantitative measure of +kidney function reflecting the volume of plasma +filtered by the glomeruli per unit time +“GLP” good laboratory practice, a quality system of +management controls for research laboratories and +organizations to try to ensure the uniformity, +consistency, reliability, reproducibility, quality and +integrity of chemical and pharmaceuticals +non-clinical safety tests +“GIOP” glucocorticoid-induced osteoporosis +“GLP-1” glucagon-like peptide-1, a peptide hormone that +exerts biological function through activation of GLP-1 +receptors, which are expressing in various organs and +tissues in the body, including adipose tissue, the liver, +the cardiovascular system, and the central nervous +system. In pancreatic islets, GLP-1 stimulates insulin +secretion and suppresses glucagon release. +Importantly, GLP-1 can increase cell regeneration. +Furthermore, GLP-1-based therapy can also suppress +appetite, delay gastric emptying, regulate blood lipid +metabolism and reduce fat deposition +“GLP-1R/GLP1R” glucagon-like peptide-1 receptor +“GLP-1 based therapy” a class of therapy that mimics the biological function +of GLP-1 for the treatment of diabetes, obesity and +being overweight, metabolic dysfunction-associated +steatohepatitis, other metabolic diseases and +Alzheimer’s disease +“GLP-1 receptor agonist/ +GLP-1 RA” +a class of drug that activates the GLP-1 receptor for +the treatment of diabetes, obesity and being +overweight, metabolic dysfunction-associated +steatohepatitis, other metabolic diseases +“glucagon” a hormone that raises blood sugar levels by signaling +the liver to release stored glucose +“glucagon receptor” or “GCGR” a protein that is activated by glucagon that is a target +of interest for developing innovative drugs for the +treatment of diabetes +“GMP” good manufacturing practice, a quality system +imposed on pharmaceutical firms to ensure that +products produced meet specific requirements for +identity, strength, quality and purity, and enforced by +public agencies, for example the FDA +“GPŘ b/řa” Glycoprotein llb/llla Complex +GLOSSARY OF TECHNICAL TERMS +–2 3– + + +--- page 32 --- +“GI side effect” gastrointestinal side effect +“HD-PF4” hemodialysis (HD) with heparin-platelet factor 4 +complex positive +“half-life” the time required for a quantity of substance to reduce +to half of its initial quantity +“HD” hemodialysis, clearing metabolic waste and excess +water from the blood through extracorporeal +circulation for renal replacement therapy in patients +with acute and chronic renal failure +“hit to lead” critical early-stage drug discovery process that +involves optimizing initially identified “hits” +(compounds showing desired biological activity in +initial screens) into “leads” (promising drug +candidates with improved potency, selectivity, +pharmacokinetic properties, and preliminary safety +profiles) +“ICH E1” The Extent of Population Exposure to Assess Clinical +Safety for Drugs Intended for Long-Term Treatment of +Non-Life-Threatening Conditions E1, a clinical safety +guideline issued by the International Council for +Harmonisation of Technical Requirements for +Pharmaceuticals for Human Use on October 27, 1994, +which provides guidance on the extent of patient +exposure generally considered appropriate for the +safety assessment of drugs intended for long-term +treatment of non-life-threatening conditions +“IND” investigational new drug, an application in the drug +review process required by a regulatory authority to +decide whether a new drug is permitted to initiate +clinical trials +“in vitro activity validation” the pr ocess of confirming and characterizing the +biological activity, potency, and specificity of a +compound outside a living organism +“in vivo exposure” the administration of a compound to a living +organism and the subsequent measurement of its +systemic exposure, distribution, metabolism, and +elimination over time +“in vitro druggability +assessment” +an early-stage evaluation process in drug discovery +that uses cell-free or cell-based assays to determine +whether a biological target is amenable to modulation +by drug-like molecules +“in vivo druggability +assessment” +the evaluation of a compound’s potential to exert its +intended pharmacological effect in a living organism +“insulin” a hormone that regulates blood glucose levels by +facilitating the uptake of glucose from blood into cells +and inhibiting the liver from producing more glucose +“in vitro” latin for “within the glass”, referring to studies that +are performed with biological molecules outside their +normal biological context +GLOSSARY OF TECHNICAL TERMS +–2 4– + + +--- page 33 --- +“in vivo” latin for “within the living”, referring to studies in +which the effects of various biological molecules are +tested on whole, living organisms or cells, usually +animals, including humans, and plants, as opposed to +a tissue extract or dead org +“iPTH” intact parathyroid hormone +“KOR” kappa opioid receptor +“liver fibrosis” the excessive accumulation of extracellular matrix +proteins including collagen that occurs in most types +of chronic liver diseases +“LPLV” last patient last visit +“MACE” major adverse cardiovascular events +“MAH” the marketing authorisation holder, the entity that +obtains a drug registration certificate from the +relevant drug regulatory authority, who is allowed to +market and sell a drug in the approved region and is +responsible for the entire lifecycle of the drug, +including R&D, manufacturing, marketing, and usage +“MAFLD” metabolic dysfunction-associated fatty liver disease, a +range of liver conditions in individuals with +metabolic dysfunction +“MAPK/ERK” a conserved signaling cascade (mitogen-activated +protein kinase/extracellular signal-regulated kinase) +that transmits extracellular stimuli to the nucleus, +controlling cell growth, differentiation, migration, +and apoptosis, implicated in inflammation and tissue +repair +“MASLD” metabolic dysfunction-Associated steatotic liver +disease +“MASH” metabolic dysfunction-associated steatohepatitis, the +liver manifestation of a metabolic disorder, and the +most severe form of MAFLD +“MaSR” Mas receptor +“MBD” mineral and bone disorder +“metabolic disease” a kind of disorder that disrupts normal metabolism, +the body’s natural process of converting food into +nutrients on a cellular level +“monotherapy” the use of a single therapy +“MRCT” multi-regional clinical trial, clinical trials conducted +across multiple regions of the world +“NACE” net adverse clinical events +“NASH” non-alcoholic steatohepatitis +“NDA” new drug application, the formal application to the +FDA or NMPA proposing approval of a new +pharmaceutical product for sale and marketing +GLOSSARY OF TECHNICAL TERMS +–2 5– + + +--- page 34 --- +“NIHSS” National Institutes of Health Stroke Scale +“NMPA” the National Medical Products Administration of the +PRC (္ຖ၍ଣ҅ ) +“NSTEMI” non-ST-segment elevation myocardial infarction +“obesity” the abnormal or excessive fat accumulation in the +body +“OGP” osteogenic growth peptide, a polypeptide consisting +of 14 amino acid residues +“onset” the amount of time it takes for a drug to start +producing its therapeutic effects after administration +“overweight” a term used to refer an excess body weight relative to +height +“Proteinuric CKD” chronic kidney disease characterized by persistent +proteinuria +“PCI” percutaneous coronary intervention, a non-surgical, +invasive procedure with a goal to relieve the +narrowing or occlusion of the coronary artery and +improve blood supply to the ischemic tissue +“PCT patent application” a patent application filed under the Patent +Cooperation Treaty (PCT), an international patent law +treaty, concluded in 1970, which provides a unified +procedure for filing patent applications to protect +inventions in each of its contracting states +“pharmacodynamics” or “PD” pharmacodynamics, the study of how a drug affects +an organism, which, together with pharmacokinetics, +influences dosing, benefit, and adverse effects of the +drug +“pharmacology” the branch of medicine concerned with the uses, +effects, and modes of action of drugs +“PK” pharmacokinetics, the study of the bodily absorption, +distribution, metabolism, and excretion of drugs, +which, together with pharmacodynamics, influences +dosing, benefit, and adverse effects of the drug +“placebo” a medical treatment or preparation with no specific +pharmacological activity +“PMO” postmenopausal osteoporosis, a common disease +related to aging +“pre-clinical” a stage preceding a clinical stage +“PCC” pr eclinical candidate compounds, candidate +molecules identified as having further development +potential during the drug discovery phase through +target validation, lead compound optimization, and +in vitro/in vivo experimental validation +GLOSSARY OF TECHNICAL TERMS +–2 6– + + +--- page 35 --- +“PLCγ ” phospholipase C gamma, a cytosolic enzyme that +hydrolyzes phosphatidylinositol 4,5-bisphosphate +(PIP2) into inositol 1,4,5-trisphosphate (IP3) and +diacylglycerol (DAG), initiating calcium signaling +and protein kinase C (PKC) activation to mediate cell +responses like contraction and secretion +“Pre-NDA” pre-marketing communication for new drugs +“PTH” parathyroid hormone +“PTH1R” parathyroid hormone receptor 1 +“p-TrkB” phospho-TrkB (Tyr705) +“P2Y12 receptor antagonists” a class of important antiplatelet agents that prevent +and treat thrombosis by blocking the P2Y12 receptor +on the platelet surface, thereby inhibiting platelet +aggregation +“PI3K/Akt” a key intracellular signaling pathway activated by +growth factors and cytokines, regulating cell +proliferation, survival, metabolism, and +angiogenesis, frequently dysregulated in cancer and +cardiovascular disorders +“QA” quality assurance, the systematic efforts taken to +assure that a drug meets with all the quality +expectations +“QC” a process by which a company reviews the quality of +all factors involved in the production of a drug +“RAS inhibitor” a class of medications that blocks the +renin-angiotensin-aldosterone system (RAS), used to +treat hypertension, heart failure, and kidney disease +by reducing vasoconstriction and fluid retention +“SAE” the adverse medical event that results in death, is +life-threatening, causes permanent or significant +disability, requires hospitalization or extends hospital +stays +“SAR” structure-activity relationship +“SGLT2 inhibitors” oral hypoglycemic agents that inhibit sodium-glucose +cotransporter 2 in the kidneys, promoting urinary +glucose excretion to lower blood sugar, with proven +cardioprotective and renoprotective effects in type 2 +diabetes, heart failure, and chronic kidney disease +“STEMI” ST-Elevation myocardial infarction, a type of ACS +characterized by complete occlusion of a coronary +artery, leading to transmural myocardial ischemia +and necrosis +“SMO” Site Management Organization, an organization that +provides clinical trial related services to a CRO, a +pharmaceutical company, a biotechnology company, a +medical device company or a clinical site +GLOSSARY OF TECHNICAL TERMS +–2 7– + + +--- page 36 --- +“Stroke” acute brain injury caused by sudden rupture or +blockage of cerebral blood vessels, resulting in +ischemia and hypoxia of brain tissue +“TEAE” Treatment-Emergent Adverse Event +“TrkB” one of the tyrosine kinase receptors +“Universal Anticoagulant +Reversal Agent” +a therapeutic compound capable of neutralizing the +anticoagulant effects of multiple classes of +anticoagulants +GLOSSARY OF TECHNICAL TERMS +–2 8– + + +--- page 37 --- +This prospectus contains, and the documents incorporated by reference herein may +contain, forward-looking statements representing our goals, beliefs, expectations, +intentions or predictions for the future. These forward-looking statements are contained +principally in “Summary,” “Risk Factors,” “Industry Overview,” “Business,” “Financial +Information” and “Future Plans and Use of Proceeds.” Forward-looking statements +typically can be identified by the use of words such as “aim,” “anticipate,” “aspire,” +“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goals,” “intend,” +“may,” “objective,” “ought to,” “outlook,” “plan,” “potential,” “project,” “schedules,” +“seek,” “should,” “target,” “vision,” “will,” “would” and other similar terms. +Forward-looking statements reflect the current views of the Directors 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 those listed in “Risk Factors,” which are beyond our control and +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. +Our forward-looking statements have been based on assumptions and factors +concerning future events that may prove to be inaccurate. Those assumptions and factors +are based on information currently available to us about the businesses that we operate. +The risks, uncertainties and other factors, many of which are beyond our control, that +could influence actual results include, but are not limited to: +• our operations and business prospects; +• our business and operating strategies and our ability to implement such +strategies; +• our future business development, financial condition and results of +operations; +• our ability to develop and manage our operations and business; +• our ability to control costs and expenses; +• our capital expenditure plan; +• our expectations regarding demand for and market acceptance of our +products and services; +• our expectations regarding our relationships with customers, suppliers and +other partners to conduct our business; +• our planned use of proceeds; +• future developments, trends and competitive landscape in the industries and +markets in which we operate or plan to operate; +• relevant government policies and regulations relating to our industry; +• capital market developments in Hong Kong and the PRC; and +• economic, political and business conditions in the PRC. +By their nature, certain disclosures relating to these and other risks are only +estimates. Should one or more of these risks or uncertainties, among others, materialize, +or should the underlying assumptions prove to be incorrect, actual results may vary +materially from those estimated, anticipated or projected, as well as from historical +results. Accordingly, you should not place undue reliance on any forward-looking +statements. +Any forward-looking statement speaks only as of the date on which such statement +is made. Except as required by applicable laws, rules and regulations, including the +Listing Rules, we undertake no obligation to update any forward-looking statement to +reflect events or circumstances after the date on which such statement is made or to reflect +the occurrence of unanticipated events. Statements of, or references to, our intentions or +those of any of the Directors are made as of the date of this prospectus. Any such +intentions may change in light of future developments. All forward-looking statements in +this prospectus are expressly qualified by reference to this cautionary statement. +FORWARD-LOOKING STATEMENTS +–2 9– + + +--- page 38 --- +In addition to other information in this prospectus, you should carefully consider the +following risk factors before making any investment decision in relation to our H Shares. Any +of the following risks may materially and adversely affect our business, financial condition or +results of operations, or otherwise cause a decrease in the trading price of our H Shares and +cause you to lose part or all of the value of your investment in our H Shares. +RISKS RELATING TO OUR BUSINESS AND INDUSTRY +We face intense competition particularly from other peptide drugs with similar targets. +Our competitors may discover, develop or commercialize competing drugs earlier or +more successfully than we do. +Our Company faces competition from global biopharmaceutical companies, +including companies with substantially greater financial, technical, manufacturing, +marketing and commercialization resources than us, particularly from other peptide +drugs with similar targets. For example, our Core Product, MT1013, is a dual-target +peptide agonist simultaneously acting on CaSR and OGP and is currently in development +for CKD-SHPT as its lead indication. However, as of the Latest Practicable Date, there +were two CaSR agonist drugs approved by the FDA and three CaSR agonist drugs +approved by the NMPA, as well as five CaSR agonist drug candidates for CKD-SHPT at +the clinical stage globally, including peptide-based therapies targeting similar pathways. +In addition, existing therapies for CKD-SHPT, including cinacalcet, evocalcet and +etelcalcetide, have established market presence and physician recognition. We also face +intense competition in relation to our Key Product XTL6001 in the GLP-1-based obesity +and metabolic disease treatment market. As of the Latest Practicable Date, there were 17 +triple-target GLP1R peptide drug candidates for overweight and obesity at the clinical +stage globally, among which 12 drug candidates target GLP-1R, GCGR and GIPR, two +drug candidates target GLP-1R, GCGR, and FGF21, one drug candidate targets GLP1R, +GIPR, and AMYR, and one drug candidate targets GLP1R, GIPR, and NPY2R. XTL6001 is +the only triple-target GLP-1R peptide drug candidate targeting GLP-1R, GCGR, and +MASR. Competing products may be approved earlier, achieve broader market acceptance +or demonstrate superior efficacy, safety, convenience or pricing advantages over our +products. As a result, if competing products are approved earlier, achieve broader market +acceptance or demonstrate superior efficacy, safety, convenience or pricing advantages +over our products, our competitive position, business, financial condition, results of +operations and prospects could be materially and adversely affected. +Our commercial opportunities may deteriorate if our competitors develop and +commercialize drugs that are safer, more effective, more convenient, or less expensive +than our products. Our competitors may also obtain approval from the NMPA, the FDA, +or other comparable regulatory authorities for their drugs more quickly than we do, +which could result in them establishing a stronger market position. +Our business and financial prospects depend substantially on the success of our +clinical stage and pre-clinical stage product candidates, and we may be unable to +successfully complete the clinical development, obtain regulatory approvals or we may +experience significant delays in doing so. +Our ability to generate revenue and realize profitability depends on the successful +completion of the development of our product candidates, obtaining regulatory +approvals, which is contingent upon various factors. Such factors may include: +• successful completion of pre-clinical studies, enrollment in and completion of +clinical trials, and favorable safety and efficacy data meeting the clinical trial +endpoints therefrom; +• receipt of regulatory approvals; +• performance by CROs or other third parties of their duties in accordance with +our trial protocols and applicable laws; +RISK FACTORS +–3 0– + + +--- page 39 --- +• obtaining, maintaining, protecting and enforcing our intellectual property +and proprietary protection and regulatory exclusivity, and ensuring we do not +infringe, misappropriate or otherwise violate any intellectual property and +proprietary rights of third parties; and +• continued acceptable safety profile following regulatory approval. +While we have invested significant efforts and financial resources in the +development, regulatory approval of our product candidates, and expect to continue the +same, we may not be able to achieve one or more of the foregoing timely or at all. As a +result, we could experience significant delays or inability in obtaining approval for our +product candidates, which would render us unable to achieve our milestones as planned +and materially harm our product development prospects. +Adverse events or undesirable side effects in clinical trials could interrupt, delay 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. +Adverse events in clinical trials could cause us or regulatory authorities to +interrupt, delay or halt clinical trials and result in a more restrictive label or the delay or +denial of regulatory approval. Results of our clinical trials could reveal a high and +unacceptable seriousness or prevalence of adverse events. In such event, our clinical trials +could be suspended or terminated, and regulatory authority could order us to cease +development of, or deny approval of, our product candidates for any or all targeted +diseases. Adverse events related to our product candidates could affect subject +recruitment or the ability of enrolled subjects to complete the trial and result in potential +product liability claims. Additionally, if any of our product candidates receives regulatory +approval, and we or others later identify undesirable adverse events caused by such +product, potentially significant negative consequences could result, including: +• regulatory authorities could interrupt, delay or halt pending clinical trials; +• we may suspend, delay or alter the development or marketing of our drug +candidates; +• regulatory authorities may order us to cease further development of, or deny +approval of, our drug candidates for any or all targeted indications if results +of our trials reveal a high and unacceptable severity or prevalence of certain +adverse events; +• regulatory authorities may delay or deny approval 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; +• regulatory authorities may require additional warnings on the label of, or +impose other limitations on, an approved drug candidate; +• we may be required to develop a risk evaluation mitigation strategy for the +drug candidate, or, if one is already in place, to enhance such strategy, or to +develop a similar strategy as required by a comparable regulatory authority; +• we may be required to conduct post-market studies; +• we could be subject to litigation proceedings and held liable for harm caused +to patients exposed to or taking our drug candidates; +• the patient enrollment may be insufficient or slower than we anticipate or +patients may drop out or fail to return for post-treatment follow-up at a higher +rate than anticipated; and +• the costs of clinical trials of our drug candidates may be substantially higher +than anticipated. +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 selected +indications. For 2024 and 2025, we incurred R&D expenses for our Core Product MT1013 +of RMB66.7 million and RMB84.4 million, respectively, representing 62.3% and 64.9% of +RISK FACTORS +–3 1– + + +--- page 40 --- +our total R&D expenses. 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 R&D programs and drug candidates for specific +indications may not yield any commercially viable products. If we cannot 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 drug candidate in a therapeutic area in which it would +have been more advantageous to enter into a collaboration arrangement. +Clinical drug development involves a lengthy and expensive process with uncertain +outcomes, and results of earlier studies and trials may not be predictive of future trial +results. +Research programs to discover new drug candidates, develop new formulations or +pursue the development of our drug candidates for additional indications require +substantial technical, financial and human resources. Clinical testing is expensive and can +take years to complete, and its outcome is inherently uncertain. Failure can occur at any +time during the clinical trial process. The results of pre-clinical studies and early clinical +trials of our drug candidates may not be predictive of the results of later-stage clinical +trials, and initial or interim results of a trial may not be predictive of the final results. Drug +candidates in later stages of clinical trials may fail to show the desired safety and efficacy +traits. In some instances, there can be significant variability in safety and/or efficacy +results between different trials of the same drug candidate due to numerous factors, +including changes in trial procedures, differences in the size and type of the patient +populations, including genetic differences, patient adherence to the dosing regimen, other +trial protocol elements and the rate of dropout among clinical trial participants. +Moreover, a number of factors could affect clinical results including the different +patient enrollment standards adopted in different trials, dose regimen, and the other +aspects of clinical trial design. For our trials, results may differ from earlier trials due to +the larger number of clinical trial sites and additional countries and languages involved in +such trials. A number of pharmaceutical companies have suffered significant setbacks in +advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding +positive results in earlier trials. Our future clinical trial results may thus not be favorable, +which may materially and adversely affect our business, results of operations and +prospects. +Negative results from off-label use of our products could materially and adversely +affect our business, reputation, brand and results of operations, and could expose us to +liability. +The peptide drug market in the PRC has experienced accelerated growth due to +favorable government policies, increasing treatment demand and technological +advancements. The market has grown from RMB58.9 billion in 2020 to RMB70.0 billion in +2025, and is estimated to reach RMB174.2 billion by 2030. Peptide-based therapeutic +products include GLP-1 receptor agonists, gonadotropin-releasing hormone (GnRH) +agonists and other peptide-derived therapies, which are widely used in the treatment of +diabetes and obesity, oncology, endocrine disorders, cardiovascular diseases, +gastrointestinal diseases and infectious diseases. +As the peptide drug market continues to expand and peptide-based therapeutic +products become increasingly popular and widely adopted, physician and patient +awareness of such therapies may continue to increase. Coupled with their potential +applicability across multiple therapeutic areas and patient populations, including +metabolic diseases, cardiovascular diseases, tumors and immune-related disorders, +peptide-based therapeutic products may be particularly vulnerable to off-label use, which +refers to prescribing a product for an indication, dosage or in a dosage form that is not in +accordance with regulatory approved usage and labeling. +There is a risk that our drug candidates, upon regulatory approval for certain +indications, may be subject to off-label drug use with indications, dosages or dosage forms +not approved by relevant authorities, and the occurrence of such off-label use could +render our drug candidates less effective or entirely ineffective for those indications, or +cause unexpected adverse events, particularly if used at inappropriate dosage levels. To +the extent our products are used outside their approved indications and in turn result in +RISK FACTORS +–3 2– + + +--- page 41 --- +adverse patient outcomes, such incidents may create negative publicity and significantly +harm our business reputation, product brand name, commercialization efforts and +financial condition. These occurrences may also expose us to liability arising from +off-label use of our drug candidates upon regulatory approval, which may subsequently +cause, or lead to, delays in our ongoing or planned clinical trials and may also ultimately +result in failure to obtain or maintain regulatory approval. +If we encounter difficulties or delays in enrolling suitable subjects in our clinical trials, +our clinical development activities could be delayed or otherwise adversely affected. +The timely completion of clinical trials depends, among other things, on our ability +to enroll a sufficient number of patients who remain in the trial until its conclusion. We +may experience difficulties in patient enrollment in trials for a variety of reasons. For +example, patient eligibility criteria defined in the protocols could be strict and it might +increase the chances that we are not able to recruit and retain suitable patients for our +clinical trials. Our clinical trials may compete with other clinical trials for drug candidates +that are in the same therapeutic areas. +We may not be able to identify or discover new drug candidates, or to identify +additional therapeutic opportunities for our drug candidates. +The success of our business depends in part upon our ability to identify or discover +additional drug candidates. There can be no assurance that we will be successful in +identifying new drug candidates in the future. We have also pursued, and may continue to +pursue, collaboration with third parties in the discovery and development of potential +drug candidates, including through co-development and licensing arrangements. +We work with CROs and other collaboration partners to develop our drug candidates. If +these third parties fail to duly perform their contractual obligations or meet expected +timelines, we may be unable to obtain regulatory approvals for, or commercialize, our +drug candidates. +We have worked with and plan to continue to work with third-party CROs to +execute our pre-clinical studies and clinical trials, and control only certain aspects of their +activities. Nevertheless, we are responsible for ensuring that each of our studies is +conducted in accordance with the applicable protocols, legal and regulatory requirements +and scientific standards, and our collaboration with the CROs does not relieve us of our +regulatory responsibilities. 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, the FDA, or comparable regulatory authorities may +require us to perform additional clinical trials before approving our marketing +applications. In addition, our registrational clinical trials must be conducted with product +produced under GMP regulations. +Our collaboration plays an important role in the R&D of our drug candidates. While +we generally seek to establish and maintain productive relationships, there can be no +assurance that all CROs will perform as expected. 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 or timely. 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 clinical and non-clinical programs. If CROs do not carry out their contractual +duties or obligations or meet expected deadlines, or 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. If our CROs err in their experimental operations, the development projects of +our drug candidates may be delayed or adversely affected. Switching or adding +additional CROs involves additional cost and delays, which can materially influence our +ability to meet our desired clinical development timelines. If any of the foregoing events +occurs, our results of operations and the commercial prospects for our drug candidates +would be adversely affected. +If we cannot maintain or develop clinical collaborations and relationships with our +principal investigators, key opinion leaders, physicians and experts, our results of +operations and prospects could be adversely affected. +Our relationships with principal investigators (“PIs”), KOLs, physicians and +experts play an important role in our R&D and marketing activities. However, we cannot +RISK FACTORS +–3 3– + + +--- page 42 --- +assure you that we will be able to maintain or strengthen our clinical collaborations and +relationships with our PIs, KOLs, physicians and experts, or that our efforts to maintain or +strengthen such relationships will yield 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. If we are unable to develop new drugs or generate returns from our relationships +with industry participants as anticipated, or at all, our business, financial condition and +results of operations may be materially and adversely affected. +We have little experience in manufacturing biopharmaceutical products on a large +commercial scale and our business could be materially and adversely affected if we +encounter problems in manufacturing our future drug products. +As of the Latest Practicable Date, we had not established any manufacturing facility +for clinical and commercialization scale. We currently outsource the production of our +drug candidates to CDMOs. We have no experience in large-scale manufacturing of our +drug products for commercial use. Anticipating future commercialization, we plan to +continue to engage third-party CDMOs to manufacture our approved drug products. We +may in the future establish our own manufacturing facilities to support our development +and commercialization. +If we construct manufacturing facilities in the future, any delays in construction, +regulatory review or approval could limit our ability to produce sufficient quantities of +our product candidates, if approved, and thereby limit our development and +commercialization activities and our opportunities for growth. Cost overruns associated +with constructing or maintaining our facilities could require us to raise additional funds. +Our future manufacturing facilities may be subject to ongoing, periodic inspection +by the NMPA or other comparable regulatory agencies to ensure compliance with GMP . +Our failure to follow and document our adherence to GMP regulations or other regulatory +requirements may lead to significant delays in the availability of products for clinical or, +in the future, commercial use; and result in the termination of or a hold on a clinical trial; +or delay or prevent filing or approval of marketing applications for our product +candidates or the commercialization of our products, if approved. Meanwhile, our future +manufacturing facilities will need to comply with cGMP regulations and may be subject to +unannounced inspections and ongoing periodic inspections. If our future manufacturing +facilities or the equipment is damaged or destroyed, we may not be able to quickly or +inexpensively replace our manufacturing capacity or replace it at all. +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 +changes carry the risk that they will not achieve these intended objectives. Any of these +changes could cause the drug products 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 products and require bridging studies or +the repetition of clinical trials, which may increases clinical trial costs, delay 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 standards or specifications of the NMPA, the FDA, or other +comparable regulatory agencies, and maintaining consistent and acceptable production +costs. We may experience shortages of qualified personnel, raw materials or key +contractors, and experience unexpected damage to our facilities or the equipment. In +these cases, we may be required to delay or suspend our 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 drugs for commercial sales. Moreover, we may spend +significant time and costs to rectify these deficiencies before we can continue production. +We may not be able to maintain effective quality control over our drug products. +The quality of our products, including drug manufactured or to be manufactured by +our CDMO partner and drugs to be manufactured by us 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, the quality and +reliability of equipment used, the quality of manufacturing staff and related training +programs and our ability to ensure that manufacturing employees adhere to our quality +control and quality assurance protocol. However, we cannot assure you that our quality +RISK FACTORS +–3 4– + + +--- page 43 --- +control and quality assurance procedures will be effective in consistently preventing and +resolving deviations from our quality standards. Any significant failure or deterioration +of our quality control and quality assurance protocol could render our products +unsuitable for use, jeopardize any GMP certifications we may have and/or harm our +market reputation and relationship with business partners. Any such event may have a +material adverse effect on our business, financial condition and results of operations. +Our operations are dependent on the supply of certain raw materials. If the supply of +raw materials decreases or the cost increases, our ability to conduct our business could +be materially impaired. +During the Track Record Period, we relied on third parties to supply certain +materials. We expect to continue to rely on third parties to supply such materials and +equipment for the research, development, manufacturing and commercialization of our +drug products. For details, please refer to the paragraphs headed “Business — Suppliers +and Procurement” in this prospectus. There is a risk that, if supplies are interrupted, we +may not be able to find alternative supplies in a timely and commercially reasonable +manner, or at all, and it would materially harm our business. +Moreover, we require a stable supply of materials for our drug candidates in the +course of our R&D activities, and such needs increase significantly as we enter commercial +production of our products, but there is no assurance that current suppliers have the +capacity to meet our demand. Any delay in receiving such materials in the quantity and +quality that we need could delay the completion of our clinical studies, regulatory +approval of our drug candidates or our ability to timely meet market demand for our +commercialized products, as applicable. Our suppliers may not be able to cater to our +growing demands or may reduce or cease their supply of materials to us at any time. +We are also exposed to the risk of increased costs, which we may not be able to pass +on to customers and, as a result, lower our profitability. In the event of significant price +increases for materials, we cannot assure you that we will be able to raise the prices of our +future drug products sufficiently to cover the increased costs. As a result, any significant +price increase for materials may have an adverse effect on our profitability. +Additionally, our suppliers may also fail to maintain adequate quality of the +services, materials and equipment we need. We cannot assure you that we will be able to +identify all of the quality issues. Suboptimal or even deficient supplies of services, +materials and equipment may hinder the R&D of our drug candidates and the +commercial-scale manufacturing of our approved products, subject us to product liability +claims or otherwise have a material adverse effect on our operations. +In addition, we cannot assure you that these third parties will maintain and renew +all licenses, permits and approvals necessary for their operations or comply with all +applicable laws and regulations. Their failure to do so may lead to interruption in their +business operations, which in turn may result in shortage of materials and equipment +supplied to us, and cause delays in clinical trials and regulatory filings, or recall of our +products. The non-compliance of third parties may also subject us to potential product +liability claims, cause us to fail to comply with regulatory requirements, and incur +significant costs to rectify such non-compliance, which may have a material adverse effect +on our business, financial condition and results of operations. +We have limited experience in launching and marketing drug products. If we are unable +to effectively leverage third-party sales networks or build up or manage our in-house +commercialization team as we expected, or if we otherwise fail to effectively +commercialize our drugs after obtaining the regulatory approval, our business, +financial condition, results of operations and prospects may be materially and +adversely affected. +We have not yet demonstrated an ability to launch and commercialize any of our +drug products since our inception. The commercialization process involves numerous +complex stages, including but not limited to regulatory approvals, quality control and +scaled production, development of distribution channels, pricing strategy formulation, +market and customer education, brand building and marketing. Failure by our +management team to effectively coordinate and navigate these stages could result in +significant delays in product launch, cost overruns, suboptimal market acceptance, +regulatory or certification setbacks, loss of market share to competitors, and +lower-than-expected profit margins. Any of these factors could materially impede our +ability to achieve anticipated revenue and profitability targets and may have a material +adverse effect on our financial condition, cash flows, and returns to investors. +RISK FACTORS +–3 5– + + +--- page 44 --- +We are preparing for the potential commercialization of our Core Product and other +drug candidates, which may involve building sales and marketing capabilities and +working with third parties such as CSOs. See “Business — Commercialization” for more +information. Such commercialization requires significant expenditures, management +resources and time. We may not be able to implement our commercialization strategies +successfully. We will have to continuously compete with other pharmaceutical companies +to recruit, hire, train and retain marketing and sales personnel. Additionally, there can be +no assurance that we will be able to establish or maintain stable and reliable collaborative +arrangements with third parties. 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 if our +collaborating third parties do not perform as expected. +Our drug candidates may fail to achieve or maintain the degree of market acceptance, +and the actual scale of sales of our product candidates may be smaller than anticipated, +which could render some product candidates unprofitable even if commercialized. +The degree of market acceptance of our drug products, if approved for commercial +sale, will depend on a number of factors, including, but not limited to: the clinical +indications for which our drug products are approved; physicians, hospitals, medical +treatment centers and patients considering our drug products as a safe and effective +treatment; the potential and perceived advantages of our drug products over alternative +treatments; the prevalence and severity of any side effects; product labelling or package +insert requirements of regulatory authorities; limitations or warnings contained in the +labelling approved by regulatory authorities; the timing of market introduction of our +drug products as well as competitive drugs; the cost of treatment in relation to alternative +treatments; the availability of adequate coverage and reimbursement under the NRDL, the +PRDL and other government-sponsored medical insurance programs in the PRC or other +jurisdictions worldwide, or from third-party payers such as commercial insurers; price +control or downward adjustment by the government authorities or other pricing pressure, +including the pricing constraints due to potential inclusion in the NRDL; the willingness +of patients to pay out-of-pocket in the absence of coverage and reimbursement by +third-party payers such as commercial insurers and government authorities; relative +convenience and ease of administration, including as compared to alternative treatments +and competitive therapies; adverse publicity about our products or favorable publicity +about competitive products; and the effectiveness of our sales and marketing efforts. Our +failure to achieve or maintain market acceptance for our future approved drug candidates +would materially adversely affect our business, financial condition, results of operations +and prospects. +The total addressable market opportunity will depend on, among other things, +acceptance of the product by the medical community and patient access, product pricing +and reimbursement. Moreover, the number of patients in the addressable markets may +turn out to be lower than expected, patients may not be amenable to treatment with our +products, or new patients may become increasingly difficult to identify or access. Further, +new studies may change the estimated incidence or prevalence of the diseases that our +product candidates target. Any of the above unfavorable developments could have a +material adverse effect on our business, financial condition and results of operations. For +details of the market size of the metabolic disease drug, antithrombotic drug and +neurological disease drug markets, please refer to the section headed “Industry +Overview” in this prospectus. +Guidelines, recommendations, and studies published by various organizations could +disfavor our approved drugs and drug candidates. +Government agencies, professional societies, practice management groups, private +health and science foundations and organizations focused on various diseases may +publish guidelines, recommendations or studies that affect our or our competitors’ drugs +and drug candidates. Any such guidelines, recommendations or studies that reflect +negatively on our drug products, either directly or indirectly relative to our competitive +drug products, could result in current or potential decreased use of, sales of, and revenue +from one or more of our drug products. Furthermore, our success depends in part on our +ability to educate healthcare providers and patients about our drug products, and these +education efforts could be rendered ineffective by, among other things, third-parties’ +guidelines, recommendations or studies. As a result, our business, reputation, financial +condition and results of operations could be adversely affected. +If our products are not included in or are removed from national, provincial or other +government sponsored medical insurance programs, our business, financial condition, +results of operations and prospects could be materially and adversely affected. +The successful commercialization of our drugs when approved depends in part on +the extent to which reimbursement for these drugs and related treatments will be +RISK FACTORS +–3 6– + + +--- page 45 --- +available from relevant health administrative authorities, private health insurers and +other organizations. In China, the National Reimbursement Drug List (“NRDL”) (ᔼ +ͦ፽‘) and Provincial Reimbursement Drug Lists (“PRDL”) (ͦ፽‘) +include drugs under the National Medical Insurance Catalogue, which affect the amounts +reimbursable to program participants for those drugs. There can be no assurance that any +of our drug products will be included in the NRDL or the PRDL after approval for +commercial sale. Innovative drugs similar to our drug products have historically been +more limited on their inclusion in the NRDL or the PRDL due to cost constraints. If we +were to successfully launch commercial sales of our products but fail in our efforts to have +our products included in the NRDL or the PRDL, our revenue from commercial sales will +be highly dependent on patient self-payment and payment from third parties such as +commercial insurers, which can make our products less competitive. +Government authorities and third-party payers, such as private health insurers and +healthcare organizations, decide which medications they will pay for and stipulate +reimbursement levels. With the trend of cost containment in the global healthcare +industry, government authorities and third-party payers have attempted to control costs +by limiting coverage and the amount of reimbursement for particular medications. +Obtaining reimbursement for our drugs may be particularly difficult because of the higher +prices often associated with drugs administered under the supervision of a doctor. If +reimbursement is not available or is available only to limited levels, we may not be able to +successfully commercialize MT1013 or any drug candidate that we have developed. +There may be significant delays in obtaining reimbursement for approved drug +candidates, and coverage may be more limited than the indications and purposes for +which the drug candidates are approved by the NMPA, the 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. 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 drugs with lower cost that have been covered in reimbursement policies, and +may be incorporated into existing payments for other services. 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, financial condition, results of operations +and prospects. +The target market for CKD-SHPT may be limited, which may restrict the commercial +potential of our Core Product. +Clinically, CKD is classified into stages 1 to 5 based on GFR levels. In stage 1, renal +function is basically normal; stage 5 is end-stage renal disease, where patients need to rely +on dialysis or renal transplantation to sustain life. CKD-SHPT is particularly common in +patients with CKD in middle and advanced stages. +Our Company aims to get marketing approval for MT1013 for indication of stage 5 +CKD complicated with CKD-SHPT. We are currently expanding indications to treat CKD +not on dialysis and CKD-MBD with Osteoporosis. According to Frost & Sullivan, the +global population of patients with Stage 5 CKD complicated by SHPT expanded from 5.0 +million in 2020 to 5.9 million in 2025. This cohort is projected to reach 6.9 million by 2030 +and 8.1 million by 2035. Concurrently, the patient population in China grew from 0.60 +million in 2020 to 0.65 million in 2025, and is forecasted to hit 0.69 million by 2030 and 0.73 +million by 2035. +A limited target market size may restrict our ability to achieve significant +commercial sales, and there can be no assurance that our Core Product will achieve +sufficient market acceptance or generate meaningful revenue. If the addressable patient +population is smaller than expected, our business, financial condition and results of +operations may be materially and adversely affected. +We may experience difficulties in our sales efforts as a result of pricing regulations or +other policies that are intended to reduce healthcare costs, which could subject us to +pricing and volume pressures and adversely affect our business, financial condition +and results of operations. +The regulations that govern regulatory approvals, pricing and reimbursement for +new therapeutic products vary widely from country to country. Some countries require +approvals of the sale price of a drug before marketing. In some markets, prescription +pharmaceutical pricing remains subject to continuing governmental control even after +RISK FACTORS +–3 7– + + +--- page 46 --- +initial approvals are granted. As a result, we might obtain regulatory approvals for a drug +in a particular country, but then be subject to price regulations that delay our commercial +launch of the drug and negatively impact the revenue we are able to generate from the sale +of the drug in that country. Adverse pricing limitations may hinder our ability to recoup +our investment in one or more drug candidates. +It is typical that the prices of pharmaceutical products will decline over the life of +the products as a result of, among other things, the centralized tender process, +government pricing regulation, or increased competition from substitute products. The +importation of competing products from countries where government price controls or +other market dynamics result in lower prices may also exert downward pressure on the +prices of pharmaceutical products. +Prices of our products, if approved, may be susceptible to pricing pressure coming +from competing products. In addition, the relevant government authorities may change +the schemes of pricing control and statutory tender processes for pharmaceutical products +or revise other policies affecting prices of pharmaceutical products. Any development of +policies could create uncertainties materially and adversely affecting our product pricing, +and accordingly, our revenue and profitability. +If the prices of our products decline due to government pricing regulation, pricing +constraints due to potential inclusion in the NRDL, emergence of substitute products or +other market factors, we may not be able to mitigate the adverse effects of such price +reduction without incurring substantial expenses to improve our products, and our +business and profitability could be materially and adversely affected. +RISKS RELATING TO OUR INTELLECTUAL PROPERTY RIGHTS +If we are unable to obtain and maintain adequate intellectual property protection for +our product candidates throughout the world, or if the scope of such intellectual +property rights obtained is not sufficiently broad, third parties could compete directly +against us and our ability to successfully develop and commercialize any of our product +candidates would be materially and adversely affected. +Our success depends largely on our ability to protect our proprietary technology +and product candidates from competition by obtaining, maintaining and enforcing our +intellectual property rights, including patent rights. We seek to protect our technologies +and product candidates by, among others, filing patent applications in the PRC, and other +jurisdictions. However, applying for patent protection is expensive and time-consuming, +and we may not be able to successfully file and prosecute all necessary or desirable patent +applications at a reasonable cost or timely. We cannot assure you that our patent +application will be approved eventually. In addition, we may fail to identify patentable +aspects of our R&D output before it is too late to obtain patent protection. +Specifically, patents may be invalidated and patent applications may not be granted +not only because of known or unknown prior deficiencies in the patent applications, but +also due to the lack of novelty or inventiveness of the underlying invention or technology. +Parties who have access to confidential or patentable aspects of our R&D output may +breach our agreements and disclose such output before a patent application is filed, +jeopardizing our ability to seek patent protection. +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, if such +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 condition, results of operations and prospects. +Our current or any future patent applications may not be successful and any patent +rights we or our licensing partners have may be challenged and invalidated even after +issuance, which would materially adversely affect our ability to successfully +commercialize any product or technology. +Our current and future patent applications may not result in the issuance of patents +at all, and even if were granted patents, they may not be issued in a form, or with a scope +of claims, that will provide us with any meaningful protection, prevent competitors or +other third parties from competing with us. In addition, the coverage claimed in a patent +application can be significantly reduced before the patent is issued, and changes in either +the patent laws or interpretation of the patent laws in China and other jurisdictions may +diminish the value of our patent rights or narrow the scope of our patent protection. Our +RISK FACTORS +–3 8– + + +--- page 47 --- +patents may be challenged, narrowed, circumvented or invalidated by third parties, and +the product candidates relating to such patents could also be adversely affected. If any of +our patents are determined to constitute research achievements or service inventions of +our employees while working at third parties, including academic institutions, or involve +violations of non-compete obligations, they could adversely affect our patent rights and +operations. We cannot predict whether the patent applications we or our licensing +partners are currently pursuing and may pursue in the future will successfully result in +the issuance of any patents in any particular jurisdiction or whether the claims of any +issued patents will provide sufficient protection from competitors or other third parties. +The issuance of a patent is not conclusive as to its inventorship, scope, validity or +enforceability, and our patent rights may be challenged in the courts or patent offices in +China and other jurisdictions. For example, if we or one of our licensors were to initiate +legal proceedings against a third party to enforce a patent covering one of our product +candidates, the defendant could counterclaim that our patent is invalid or unenforceable. +Grounds for a validity challenge could be an alleged failure to meet statutory +requirements, including lack of novelty, obviousness, lack of sufficient description or +non-enablement. Grounds for an unenforceability assertion could be an allegation that +someone connected with prosecution of the patent withheld material information from the +relevant patent office, or made a misleading statement, during prosecution. Third parties +may also raise similar patent invalidity claims before administrative bodies in China or in +other jurisdictions. Such mechanisms include invalidation, revocation. The outcome +following legal assertions of invalidity and unenforceability is unpredictable. Such +proceedings could result in revocation of or amendment to our patents in such a way that +they no longer adequately cover and protect our product candidates. +Obtaining and maintaining our patent protection depends on compliance with various +procedural, document submissions, fee payment and other requirements imposed by +governmental patent agencies, and our patent protection could be reduced or +eliminated for non-compliance with these requirements. +Periodic maintenance fees, renewal fees, annuity fees and various other +governmental fees on patents and patent applications are due to be paid to the CNIPA, the +United States Patent and Trademark Office (the “USPTO”) and other governmental patent +agencies in several stages over the lifetime of a patent. The CNIPA, USPTO and various +other governmental patent agencies require compliance with a number of procedural, +documentary, fee payment and other similar provisions during the patent application and +maintenance process. We are also dependent on our licensors to take the necessary action +to comply with these requirements with respect to our licensed intellectual property. +There are situations in which 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. Non-compliance events that could result in abandonment or lapse of +a patent or patent application include failure to respond to official actions within +prescribed time limits, non-payment of fees and failure to properly legalize and submit +formal documents. In any such event, our competitors might be able to enter the market, +which would have a material adverse effect on our business. +We may become involved in lawsuits to protect or enforce our intellectual property or +being sued for infringing, misappropriating or other violating the intellectual property +rights of third parties, which could be expensive, time-consuming and unsuccessful. +Our commercial success depends upon our ability to develop, manufacture, market +and sell our drug candidates without infringing, misappropriating or otherwise violating +the intellectual property rights of others. The pharmaceutical industry is characterized by +extensive litigation regarding patents and other intellectual property rights. We or our +collaboration partners may be subject to claims that former employees, collaboration +partners or other third parties have an interest in our owned patents or other intellectual +property. It is also possible that we failed to identify, or may in the future fail to identify, +relevant patents or patent applications held by third parties that cover our drug +candidates. Additionally, pending patent applications which have been published can, +subject to certain limitations, be later amended in a manner that could cover our products +or their use. +Third parties might allege that we are infringing their patent rights or that we have +misappropriated their trade secrets, or that we are otherwise violating their intellectual +property rights, whether with respect to the manner in which we have conducted our +research, use or manufacture of the compounds we have developed or are developing. +Such third parties might resort to litigation against us or other parties we have agreed to +RISK FACTORS +–3 9– + + +--- page 48 --- +indemnify, which litigation could be based on either existing intellectual property or +intellectual property that arises in the future. +Parties making infringement, misappropriation, or other intellectual property +claims against us may obtain injunctive or other equitable relief, which could block our +ability to further develop and commercialize one or more of our drug candidates. Defense +of these claims, regardless of their merit, would involve substantial litigation expense and +would be a substantial diversion of management and employee resources from our +business. In addition, there is no assurance that a court would find in our favor on +questions of validity, enforceability, priority, or non-infringement. A court of competent +jurisdiction could hold that such third party patents are valid, enforceable, and infringed, +which could materially and adversely affect our ability to commercialize any of our +products or technologies covered by the asserted third-party patents. +In order to avoid or settle potential claims with respect to any patent or other +intellectual property rights of third parties, we may choose or be required to seek a license +from a third party and be required to pay license fees or royalties or both, which could be +substantial. These licenses may not be available on acceptable terms, or at all. Ultimately, +we could be prevented from commercializing future approved drugs, or be forced, by +court order or otherwise, to cease some or all aspects of our business operations, if, as a +result of actual or threatened patent or other intellectual property claims, we are unable to +enter into licenses on acceptable terms. Further, we could be found liable for significant +monetary damages as a result of claims of intellectual property infringement, including +treble damages and attorneys’ fees if we are found to willfully infringe a third party’s +patent. Defending against claims of patent infringement, misappropriation of trade +secrets or other violations of intellectual property rights could be costly and +time-consuming, regardless of the outcome. +If our trademarks and trade names are not adequately protected, then we may not be +able to build name recognition in our markets of interest and our business may be +adversely affected. +As of the Latest Practicable Date, we had 32 registered trademarks in the PRC and +six registered trademarks overseas, 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 may be unable to overcome such +rejections. In addition, in proceedings before the CNIPA, the USPTO or comparable +agencies in many foreign jurisdictions, third parties are given an opportunity to oppose +pending trademark applications and to seek to cancel registered trademarks. Opposition +or cancellation proceedings 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 and adversely affect our business. Moreover, as our products mature, 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 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 and adversely affected. +If we are unable to protect the confidentiality of our trade secrets and other confidential +information, including unpatented know-how upon which we rely, our business and +competitive position will 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 patents and pending patent applications, we rely on trade +secrets and confidential information, including unpatented know-how, technology and +other proprietary information, to maintain our competitive position and to protect our +drug candidates. We seek to protect our trade secrets and confidential information, in +part, by entering into non-disclosure and confidentiality agreements with parties that +have access to trade secrets or confidential information, such as our employees, corporate +collaborators, sponsored researchers, contract manufacturers, consultants, advisers and +other third parties. However, we may not be able to prevent the unauthorized disclosure +or use of our trade secrets and confidential information. Monitoring unauthorized uses +and disclosures is difficult and we do not know whether the steps we have taken to protect +RISK FACTORS +–4 0– + + +--- page 49 --- +our proprietary technologies will be effective. Any of the parties with whom we enter into +confidentiality agreements may breach or violate such agreements, and we may not be +able to obtain adequate remedies for such breach or violation. As a result, we could lose +our trade secrets and third parties could use our trade secrets to compete with us. +Additionally, we cannot guarantee that we have entered into such agreements with each +party that may have or has had access to our trade secrets or proprietary technology and +processes. 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. +In addition, some courts in China, the U.S. and other jurisdictions may be less willing or +unwilling to recognize certain information as trade secrets to be protected. If any of our +trade secrets were to be lawfully obtained or independently developed by a competitor or +other third party, we would have no right to prevent them from using that to compete with +us and our competitive position would be harmed. +Furthermore, many of our employees, consultants, and advisers, including our +senior management, may currently be, or were previously employed at other +pharmaceutical companies, including our competitors or potential competitors. Some of +them, including each member of our senior management, may have executed proprietary +rights, non-disclosure and non-competition agreements in connection with such previous +employment. We cannot assure you that our employees, consultants and advisors do not +use the proprietary information or know-how of others in their work for us, and we may +be subject to claims that we or these individuals have used or disclosed intellectual +property, including trade secrets or other proprietary information, of any such +individual’s current or former employer. We may be subject to threatened or pending +claims related to these matters or concerning the agreements with our senior management +in the future. If we fail in defending any such claims, in addition to paying monetary +damages, we may lose valuable intellectual property rights or be required to obtain +licenses to such intellectual property rights, which may not be available on commercially +reasonable terms or at all. An inability to incorporate such intellectual property rights +would materially and adversely affect our business and may prevent us from successfully +commercializing our drug candidates. In addition, we may lose personnel as a result of +such claims and any such litigation or the threat thereof may adversely affect our ability to +hire employees or contract with independent contractors. A loss of key personnel or their +work product could hamper or prevent our ability to commercialize our drug candidates +and technology, which would have a material adverse effect on our business, results of +operations, financial condition and prospects. +While we typically require our employees, consultants and contractors who may be +involved in the conception or 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. Furthermore, even when we obtain agreements assigning intellectual property +to us, the assignment of intellectual property rights may not be self-executing, or the +assignment agreements may be breached, each of which may result in claims by or against +us related to the ownership of such intellectual property to determine the ownership of +what we regard as our intellectual property. Furthermore, individuals executing +agreements with us may have pre-existing or competing obligations to a third party, such +as an academic institution, and thus an agreement with us may be ineffective in perfecting +ownership of inventions developed by that individual. If we fail in prosecuting or +defending any such claims, in addition to paying monetary damages, we may lose +valuable intellectual property rights. +In addition, we may in the future be subject to claims by former employees, +consultants or other third parties asserting an ownership right in our owned or licensed +patents or patent applications. An adverse determination in any such submission or +proceeding may result in loss of exclusivity or freedom to operate or in patent claims +being narrowed, invalidated or held unenforceable, in whole or in part, which could limit +our ability to stop others from using or commercializing similar drug candidates or +technology, without payment to us, or could limit the duration of the patent protection +covering our drug candidates and technology. Such challenges may also result in our +inability to develop, manufacture or commercialize our drug candidates without +infringing third-party patent rights. In addition, if the breadth or strength of protection +provided by our owned or licensed patents and patent applications is threatened, it could +dissuade companies from collaborating with us to license, develop or commercialize +current or future drug candidates. Any of the foregoing could have a material adverse +effect on our competitive position, business, financial conditions, results of operations +and prospects. +RISK FACTORS +–4 1– + + +--- page 50 --- +Changes in patent and other intellectual property laws of China, the U.S., or other +jurisdictions could diminish the value of patents in general, thereby impairing our +ability to protect our drug candidates and future drugs. +Obtaining and enforcing patents in the pharmaceutical and biopharmaceutical +industry involves technological and legal complexity and 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, and, more +generally, affect the value of our intellectual property or narrow the scope of our patent +rights. +In China, the recent amendment to the PRC Patent Law, amended in October 2020 +and implemented in June 2021, introduced patent term compensation mechanism for +eligible invention patents related to new drugs. The patents owned by third parties may +be extended, which may in turn affect our ability to commercialize our products (if +approved) without facing infringement risks. According to the PRC Patent Law, the patent +term compensation may not exceed five years, and the total effective term of the patent +after the new drug approved for marketing shall not exceed 14 years. 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 products +non-competitive. We cannot guarantee that any other changes to PRC intellectual +property related laws would not have a negative impact on our intellectual property +protection. +Under the America Invents Act, the AIA, 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. +RISKS RELATING TO OUR OPERATIONS +We are a biotechnology company with a limited operating history, which may make it +difficult to evaluate our current business and predict our future performance. +Our business can be traced back to our establishment in 2007, and we shifted our +focus to the development of peptide drugs in 2011. To date, we have no product approved +for commercial sale and have not become profitable from product sales. Our limited +operating history, particularly in light of the evolving drug R&D industry in which we +operate, the inherent uncertainties in drug R&D, and the changing regulatory and market +environments we encounter, may make it difficult to evaluate our prospects for future +performance. Consequently, any predictions about our future success or viability may not +be as accurate as they could be if we had a longer operating history. We will encounter +risks and difficulties frequently experienced by early-stage companies in evolving fields +as we seek to transition into a company capable of supporting commercial activities. If we +do not address these risks and difficulties successfully, our business will suffer. +Our future success depends on our ability to retain key executives and to attract, hire, +retain and motivate other qualified and highly skilled personnel. +Our future success is dependent on our ability to attract a significant number of +qualified employees and retain existing key employees. We are highly dependent on the +continued contributions of Dr. Wang and our senior management, as well as other key +clinical and scientific personnel. The loss of the services of any of our executive officers or +other key employees could materially harm our business. +Competition for qualified employees in the biopharmaceutical industry is intense +and the pool of qualified candidates is limited. Our need to significantly increase the +number of our qualified employees and retain key employees may cause us to materially +increase compensation-related costs, including share-based compensation. We may not be +able to retain experienced senior management or key clinical and scientific personnel in +the future. The departure of any key employees may disrupt our drug development +progress and have a material and adverse effect on our business, financial condition, +results of operations and prospects. Moreover, to the extent we hire personnel from +RISK FACTORS +–4 2– + + +--- page 51 --- +competitors, we also may be subject to allegations that they have been improperly +solicited or divulged proprietary or other confidential information. In addition, our senior +management team has limited experience in running public companies, which will require +us to hire additional staff and incur additional costs and expenses. If we are unable to +retain and motivate our employees and attract qualified personnel for important +positions, we may be unable to manage our business effectively which could adversely +affect our business, financial condition and results of operations. +We may engage in acquisitions or strategic partnerships, which may increase our capital +requirements, cause dilution for our Shareholders, cause us to incur debt or assume +contingent liabilities and subject us to other risks. +From time to time, to pursue our growth strategy, we may evaluate various +acquisitions, joint ventures 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; 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 and/or products sufficient to meet our objectives in undertaking the +acquisition or even to offset the associated acquisition and maintenance costs. +We may become involved in lawsuits or other legal proceedings, which could adversely +affect our business, financial conditions, results of operations and reputation. +We may become subject, from time to time, to legal proceedings and claims that arise +in the ordinary course of business or pursuant to governmental or regulatory enforcement +activity. Litigation to which we become a party might result in substantial costs and divert +management’s attention and resources. Additionally, it is possible that our liabilities +could exceed our insurance coverage. 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 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 required under the PRC laws and regulations as well +as based on our assessment of our operational needs and industry practice. In line with +industry practice in the PRC, we have elected not to maintain certain types of 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 substantial costs and a diversion of resources and may negatively +impact our drug development and overall operations. +Increased labor costs could slow our growth and affect our operations. +Our success depends in part upon our ability to attract, motivate and retain a +sufficient number of qualified employees, including management, technical, R&D, sales +and marketing, production, quality control and other personnel. We have implemented a +number of initiatives in an effort to attract, retain and motivate our qualified and +competent staff. There is no assurance that these measures will be effective or that supply +of skilled labor in local markets will be sufficient to fulfill our needs. Competition for +competent and skilled labor is intensive in the industry. Our failure to hire and retain +enough skilled employees could delay the anticipated pre-clinical studies or clinical trials +timeframe or receipt of regulatory approvals to commercialize our drug candidates, or +result in our expenses exceeding our initial budget. Any of the foregoing changes could +have a material adverse effect on our business, profitability and prospects. +As of the Latest Practicable Date, we had 145 full-time employees, all based in +China, where the average labor cost has been steadily increasing over the past years as a +result of inflation, government-mandated wage increases and other changes in labor laws +and local economics. For example, staff costs and welfare expenses of our management +RISK FACTORS +–4 3– + + +--- page 52 --- +and administrative personnel increased from RMB11.2 million for 2024 to RMB14.7 +million for 2025. In particular, further changes in the labor laws, rules and regulations +may be promulgated by the PRC government in the future and our operations may be +materially and adversely affected if such laws, rules or regulations impose additional +burden on the employers. The labor cost will continue to increase in the future which is in +line with the economic growth in China. Competition for employees would require us to +pay higher wages, which would result in higher labor costs. +Our business faces considerable risks from health epidemics, natural disasters, acts of +war, and terrorism, which have historically disrupted operations and could +significantly impact our financial stability and operational effectiveness in the future. +Our operations and business plans may be adversely affected by health epidemics, +natural disasters, acts of war, terrorism, and other force majeure events. Events such as +severe natural disasters, epidemics, or government responses to these crises could +materially harm both the economy and our operations. Our operations are also vulnerable +to floods, earthquakes, sandstorms, snowstorms, fires, droughts, resource shortages, +system malfunctions, technical problems, and the potential impacts of wars or terrorist +attacks. These disasters could result in loss of life, injury, destruction of assets, and +significant disruption to our business. +We may be unable to detect, deter and prevent all instances of fraud or other +misconduct committed by our employees, principal investigators, consultants and +commercial partners. +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. 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. +We are subject to risks associated with leasing space. +As of the Latest Practicable Date, we leased four properties for office and R&D uses +in China. 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 offices or manufacturing +facilities. 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. In addition, as of the Latest Practicable Date, we had not registered +two of our lease agreements for these properties with the PRC government authorities as +required by laws of the PRC. We may be ordered by the PRC government authorities to +rectify such non-compliance and, if such non-compliance is not rectified within a given +period of time, we may be subject to fines imposed by PRC government authorities for +lease agreements that has not been registered with the PRC government authorities. +Our reputation is important to our business success, and damage to our reputation may +adversely affect our business. +Any negative publicity concerning us, our affiliates, our Shareholders, our +beneficial owners, Directors, officers, employees and business partners, management, or +any involvement in, or potential exposure to, claims, disputes, litigation, arbitration, +governmental investigations, administrative proceedings, or penalties, could materially +and adversely affect our business, financial condition, results of operations, and +reputation. In addition, to the extent our Shareholders, Directors, officers, employees and +business partners were incompliant with any laws or regulations or became 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. Any negative publicity regarding our +industry could also affect our reputation and commercialization. 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. As a result, we may be required +to spend significant time and incur substantial costs to respond and protect our +RISK FACTORS +–4 4– + + +--- page 53 --- +reputation, and we cannot assure you that we will be able to do so within a reasonable +period of time, or at all, in which case our business, results of operations, financial +condition and prospects may be materially and adversely affected. +We may be exposed to the risks associated with potential expansion into global +markets. +We plan to explore market opportunities overseas. However, such activities may +subject us to additional risks that may materially adversely affect our ability to attain or +achieve profitable operations, including but not limited to: efforts to enter into license and +collaboration arrangements with third parties may increase our expenses or divert our +management’s attention from the development of drug candidates; political and economic +instability as well as geopolitical tensions, including the threat of war or terrorist attacks; +differing regulatory requirements for drug approvals and marketing internationally; +difficulty of effective enforcement of contractual provisions in local jurisdictions; and +potentially reduced protection for intellectual property rights. +These and other risks may materially adversely affect our ability to attain or sustain +revenue and profits from international markets. +RISKS RELATING TO OUR FINANCIAL POSITION AND NEED FOR ADDITIONAL +CAPITAL +We may need to obtain additional financing to fund our expansion of R&D and our +operations, and we may not have access to sufficient funding. +During the Track Record Period, our Company invested a large amount of funds in +preclinical research, clinical trials and pre-launch preparations for drug candidates in our +product pipeline. For 2024 and 2025, our R&D expenses amounted to RMB107.0 million +and RMB130.1 million, respectively. In the future, our business operations and the +implementation of our strategies will require significant funding. For further information, +please refer to “Future Plans and Use of Proceeds” in this prospectus. +In addition, many aspects of our general business operations have on-going funding +requirements that may increase over time. While we expect that the implementation of our +strategies and business plans will require us to rely in part on external financing sources, +our ability to obtain additional capital on commercially reasonable terms is subject to a +variety of factors, many of which are outside of our control, including our future financial +condition, results of operations and cash flows, the global economic conditions, industry +and competitive conditions, interest rates, prevailing conditions in the credit markets and +government policies on lending. If we cannot do so successfully, our strategies and +business plans will not be carried out as currently contemplated. +We recorded net losses and net operating cash outflows historically. We may continue to +incur net losses and net operating cash outflows for the foreseeable future and may not +achieve or maintain profitability in the future. +Investment in biopharmaceuticals is highly unpredictable in terms of commercial +success. It entails substantial upfront capital expenditures and significant risk that a +product candidate will fail to gain regulatory approval or become commercially viable. +We incurred losses and net operating cash outflows in each period since our inception. For +2024 and 2025, we recorded a loss of RMB156.8 million and RMB184.9 million, +respectively. A majority of our loss has resulted from costs incurred for R&D programs. We +expect to continue to incur losses for the foreseeable future, and we expect these losses to +increase as we continue to expand our R&D activities for our product and product +candidates, as well as to enhance our sales and marketing efforts. +We recorded net cash used in operating activities of RMB107.7 million and +RMB137.1 million for 2024 and 2025, respectively. For details, please refer to “Financial +Information — Liquidity and Capital Resources — Cash Flows” in this prospectus. +Negative operating cash flow may require us to obtain additional financing to meet our +financing needs and obligations and support our expansion plans. We cannot assure you +that we will have sufficient cash from other sources to fund our operations. If we resort to +other financing activities, we will incur additional financing costs, and we cannot +guarantee that we will be able to obtain the financing on terms acceptable to us, or at all. +In the event that we are unable to generate sufficient cash flow from our operations or +otherwise obtain sufficient external funds to finance our business, our liquidity and +financial condition may be materially and adversely affected and we may not be able to +expand our business as expected. +RISK FACTORS +–4 5– + + +--- page 54 --- +We recorded net liabilities and net current liabilities historically, which may expose us +to liquidity risk. +As of December 31, 2025, we recorded net liabilities of RMB959.9 million and net +current liabilities of RMB4.2 million. A net liabilities position can expose us to liquidity +and financial risks. This in turn could require us to seek financing from external sources +such as bank borrowings, which may not be available on terms favorably or commercially +reasonable to us, or at all. If we are unable to maintain adequate working capital or obtain +sufficient financings to meet our capital needs, we may be unable to continue our +operations according to our plan, default on our payment obligations and fail to meet our +capital expenditure requirements, which may have a material adverse effect on our +business, financial condition, results of operations and prospects. +Our ability to generate revenue from sales of drug products and become profitable +depends significantly on our success in a number of factors that affect the sales volume, +pricing levels and profit margins of such drug products, such as competition or change +in market environment. +Our ability to generate revenue and achieve profitability depends significantly on +our success in many factors, including but not limited to: (i) obtaining regulatory +approvals and marketing authorizations for drug candidates for which we complete +clinical studies; (ii) completing research regarding, and nonclinical and clinical +development of, our drug candidates; (iii) addressing any competing technological and +market developments; (iv) identifying, assessing, acquiring and/or developing new drug +candidates, intellectual property and technologies; (v) negotiating favorable terms in any +collaboration, licensing, or other arrangements into which we may enter; (vi) maintaining, +protecting, expanding and enforcing our portfolio of intellectual property rights, +including patents, trademarks, trade secrets, and know-how; and (vii) attracting, hiring, +and retaining qualified personnel. +We cannot guarantee that we will be able to obtain regulatory approvals for any of +our drug candidates in a timely manner, or at all. Substantial investments may be incurred +before and after we generate any revenue from product sales. We expect to continue +incurring significant costs associated with the manufacturing and the commercial launch +of the drug products. Moreover, our expenses could increase beyond expectations if we +are required by the NMPA, the FDA or other applicable authorities to perform studies in +addition to those that we currently anticipate. +Considering the potential approval to market our drug candidates in the future, our +revenue will depend on factors that affect the sales volume, pricing level or profitability of +such approved products. Factors that could adversely affect the sales volumes, pricing +levels and profitability of the products we sell include: exclusion from, or reduced +coverage under, the national, provincial or other government-sponsored medical +insurance programs, the impact of government pricing regulations, sales of substitute +products by competitors, interruptions in the supply of raw materials, increases in the cost +of raw materials, issues with product quality or side effects, intellectual property +infringements, adverse changes in our sales and distribution network, and unfavorable +policy, regulatory or enforcement changes. These factors, many of which are outside of our +control, could adversely affect our operations, revenue and profitability. +We are exposed to changes in the fair value of financial assets at fair value through +profit or loss (“FVTPL”) and valuation uncertainties. +As of December 31, 2024 and 2025, our financial assets at FVTPL were RMB54.6 +million and RMB95.2 million, respectively. Our financial assets at FVTPL represent the +structured deposits we purchased from banks in the PRC. We may incur fair value loss +with respect to our financial assets in the future as such fair value could be subject to +factors out of our control such as the macroeconomic conditions. For details, please refer +to Notes 20 and 32 to the Accountants’ Report in Appendix I to this prospectus. +Share-based payment may cause shareholding dilution to our existing Shareholders +and have a negative effect on our financial performance. +We adopted employee incentive plans for the benefit of our employees (including +directors) and consultants to incentivize and reward the eligible persons who have +contributed to the success of our Company. See Note 28 of the Accountants’ Report in +Appendix I to this prospectus. During the Track Record Period, no share-based payment +expenses were recognized. To further incentivize our employees to contribute to us, we +may grant additional incentives in the future. Issuance of Shares with respect to such +RISK FACTORS +–4 6– + + +--- page 55 --- +incentives may dilute the shareholding percentage of our existing Shareholders. Expenses +incurred with respect to such share-based payments may increase our operating expenses +and have a material and adverse effect on our financial performance. +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 recorded government grants of RMB0.8 million and RMB0.3 million for 2024 and +2025, respectively. We generally do not have the ability to influence local government +authorities in making these decisions. Local authorities may reduce or eliminate +incentives at any time. In addition, some of the government financial incentives are +granted on a project basis and subject to the satisfaction of certain conditions, including +compliance with the applicable financial incentive agreements and completion of specific +projects therein. We cannot guarantee that we will satisfy all conditions, the failure of +which may deprive us of the incentives and have an adverse effect on our business, +financial condition and results of operations. +RISKS RELATING TO GOVERNMENT REGULATIONS +All material aspects of the research, development, manufacturing and +commercialization of our drug candidates are key concerns of the supervisory +authorities and the related regulations are subject to change. +All jurisdictions in which we intend to develop and commercialize our drug +candidates and conduct other pharmaceutical-industry activities regulate these activities +in great depth and detail. Major markets in the world all strictly regulate the +pharmaceutical industry, and in doing so they employ broadly similar regulatory +strategies, including regulation of the development and approval, manufacturing, +marketing, sales and distribution of pharmaceutical products. However, there are +differences in the regulatory regimes that make for a more complex and costly regulatory +compliance burden for a company like us that plans to operate in these regions. +Moreover, the regulatory framework regarding the pharmaceutical industry is +continuing to develop, and we cannot guarantee that amendments to the laws and +regulations with regard to pharmaceutical industry would not adversely affect our +business and prospects. Any such amendments may result in increased compliance +difficulty and costs or cause delays in, or prevent the successful development or +commercialization of, our drug candidates and reduce the current benefits. Developments +in government regulations or in practices relating to the pharmaceutical industry such as +a relaxation in regulatory requirements or the introduction of simplified approval +procedures which would lower the entry barrier for potential competitors, or an increase +in regulatory requirements which may increase the difficulty for us to satisfy such +requirements, may have a material adverse impact on our business, financial condition, +results of operations and prospects. +Obtaining regulatory approvals for our drug candidates is lengthy, time-consuming +and inherently unpredictable, and we may remain subject to extensive post-approval +regulatory requirements. +Significant time, efforts and expenses are required to bring our drug candidates to +market in compliance with the regulatory process, and we cannot assure you that any of +our drug candidates will be approved for sale. The time required to obtain approvals from +the NMPA, the FDA and other comparable regulatory authorities is often unpredictable, +and depends on numerous factors, including the substantial discretion of the regulatory +authorities. Our drug candidates could fail to receive regulatory approval in a timely +manner for many reasons, including but not limited to: failure to begin or complete +clinical trials due to disagreements with regulatory authorities; failure to demonstrate +that a drug candidate is safe and effective or, it is safe, pure, and potent for its proposed +indication; failure of clinical trial results to meet the level of statistical significance +required for approval; data integrity issues related to our clinical trials; disagreement +with our interpretation of data from preclinical studies or clinical trials; failure to conduct +a clinical trial in accordance with regulatory requirements or our clinical trial protocols; +and clinical sites, investigators or other participants in our clinical trials deviating from a +trial protocol, failing to conduct the trial in accordance with regulatory requirements, or +dropping out of a trial. +RISK FACTORS +–4 7– + + +--- page 56 --- +In addition, the NMPA, the FDA or a comparable regulatory authority may require +more information, including additional analyses, reports, data, non-clinical studies and +clinical trials, or questions regarding interpretations of data and results, to support +approval, which may prolong, delay or prevent approval and our commercialization +plans, or we may decide to abandon the development programs. Changes in regulatory +requirements and guidance may also occur, and we may need to amend clinical trial +protocols submitted to competent regulatory authorities to reflect these changes. +Resubmission may impact the costs, timing or successful completion of a clinical trial. The +policies of the NMPA, the FDA and other comparable regulatory authorities may also +change, and additional government regulations may be enacted that could prevent, limit +or delay regulatory approval of our drug candidates. If we are slow or unable to adapt to +changes in existing requirements or the adoption of new requirements or policies, or if we +fail to maintain regulatory compliance, we may not obtain the regulatory approvals or +may lose the approvals that obtained and we may not achieve or sustain profitability. +Additionally, clinical trials conducted in one country may not be accepted by +regulatory authorities in other countries, and regulatory approval in one country does not +mean that regulatory approval will be obtained in any other country. Approval +procedures vary among countries and can involve additional product testing and +validation and additional administrative review periods. Seeking regulatory approvals in +various jurisdictions could result in significant delays, difficulties and costs for us and +may require additional preclinical studies or clinical trials which would be costly and time +consuming. We cannot assure you that we will meet regulatory requirements of different +jurisdictions or that our drug candidates will be approved for sale in those jurisdictions. +If the NMPA, the FDA or a comparable regulatory authority approves any of our +drug candidates, the manufacturing processes, labeling, packaging, storage, distribution, +adverse event reporting, advertising, promotion, sampling, record-keeping and +post-marketing studies for the drug will be subject to extensive and ongoing or additional +regulatory requirements on pharmacovigilance. These requirements include submissions +of safety and other postmarketing information and reports, registration, random quality +control testing, adherence to any CMC, variations, continued compliance with GMPs, +cGMPs, GCPs, good storage practices (“GSPs”) and good vigilance practices (“GVPs”) +and potential post-approval studies for the purposes of license renewal. +Any regulatory approvals that we receive for our drug candidates may also be +subject to limitations on the approved indicated uses for which the drug may be marketed +or to the conditions of approval, or contain requirements for potentially costly +post-marketing studies for the surveillance and monitoring of the safety and efficacy of +the drug. +In addition, once a drug is approved by the NMPA, the FDA or a comparable +regulatory authority for marketing, it is possible that there could be a subsequent +discovery of previously unknown problems with the drug, including problems with +third-party manufacturers or manufacturing processes. If any of the foregoing occurs with +respect to our drug candidates, it may result in, among other things: restrictions on the +marketing or manufacturing of our drugs, withdrawal of the product from the market, or +voluntary or mandatory product recalls; fines, warning letters, or holds on clinical trials; +refusal by the NMPA, the FDA or other comparable regulatory authorities to approve +pending applications or supplements to approved applications filed by us or suspension +or revocation of license approvals; product seizure or detention, or refusal to permit the +import or export of our drug candidates; and injunctions or the imposition of civil, +administrative or criminal penalties. +We may face risks arising from IT system failures and cybersecurity breaches, any of +which may require significant resources and may adversely affect our business, +operations and financial performance. +Our information technology systems and those of our business partners 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 R&D 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. +RISK FACTORS +–4 8– + + +--- page 57 --- +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 +jurisdictions in which we may 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. +Our operations are subject to extensive and evolving anti-kickback, anti-bribery, false +claims, physician payment transparency, fraud and abuse, and other healthcare-related +laws and regulations in multiple jurisdictions, and changes in the interpretation, +enforcement or application of such laws and regulations may adversely affect our +business, reputation, financial condition and results of operations. +Healthcare providers, physicians and others play a primary role in the +recommendation and prescription of any products for which we obtain regulatory +approval. Our operations are subject to various applicable anti-kickback, false claims +laws, physician payment transparency laws, fraud and abuse laws or similar healthcare +and security laws and regulations in China and the United States. Violations of 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 governments. +There is no definitive guidance on the applicability of fraud and abuse laws to our +business. Law enforcement authorities are increasingly focused on enforcing these laws, +and the interpretation and application of such laws may evolve over time. As a result, our +business arrangements with third parties may be subject to regulatory scrutiny or +challenge. Efforts to ensure that our business arrangements with third parties comply +with applicable healthcare laws and regulations will involve substantial costs. If +regulatory authorities determine that any of our practices are not in compliance with +applicable laws and regulations, we may be subject to civil, criminal and administrative +penalties, damages, disgorgement, monetary fines, possible exclusion from participation +in governmental healthcare programs, contractual damages, reputational harm, +diminished profits and future earnings, and curtailment of our operations, any of which +could adversely affect our ability to operate our business and have a significant impact on +our business and results of operations. +In addition, we are subject to anti-bribery laws in China that generally prohibit +companies and their intermediaries from making payments to government officials for the +purpose of obtaining or retaining business or securing any other improper advantage. +Moreover, we are subject to the Foreign Corrupt Practices Act (the “FCPA”). The FCPA +generally prohibits us from making improper payments to non-U.S. officials for the +purpose of obtaining or retaining business. Non-compliance with anti-bribery laws may +disrupt our business and lead to severe criminal and civil penalties, including +imprisonment, criminal and civil fines, loss of our export licenses, suspension of our +ability to do business with the government, denial of government reimbursement for our +products and/or exclusion from participation in government healthcare programs. Other +remedial measures could include further changes or enhancements to our procedures, +policies, and controls and potential personnel changes and/or disciplinary actions, any of +which could have a material adverse effect on our business, financial condition, results of +operations and liquidity. We could also be adversely affected by any allegation that we +violated such laws. +RISKS RELATING TO CONDUCTING BUSINESS IN THE JURISDICTION WHERE +WE MAINLY OPERATE +The pharmaceutical industry in the jurisdiction where we mainly operate is highly +regulated and such regulations are subject to change which may affect approval and +commercialization of our drugs. +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. Any changes or amendments regulations, that alter our +Company’s original mode of operation, 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 may face risks of having to transfer our scientific data. +On March 17, 2018, the General Office of the State Council promulgated the +Measures for the Management of Scientific Data (‘), or the Scientific +RISK FACTORS +–4 9– + + +--- page 58 --- +Data Measures, which provided a broad definition of scientific data and 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 is generated with the +government funding. Given the term ‘‘state secret’’ is not clearly defined, we cannot +assure you that we can always obtain approvals for sending scientific data in the future, +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 timely, or at 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 Scientific Data Measures, we may be subject to +rectification and other administrative penalties imposed by those government authorities. +Investors of our H Shares may be subject to PRC income tax obligations. +Under the PRC Enterprise Income Tax Law (‘ ) and its +implementation regulations, dividends paid by a PRC resident enterprise, such as our +Company, to non-PRC resident enterprise investors are subject to a 10% withholding tax, +unless a lower treaty rate applies. Pursuant to the PRC Individual Income Tax Law, +dividends paid by a PRC company to non-PRC resident individual investors are subject to +a 20% withholding tax. This rate may be reduced under an applicable tax treaty. To +simplify tax administration for shares listed in Hong Kong, a withholding tax rate of 10% +is generally applied to dividends paid to non-PRC resident individual investors. There +remain uncertainties as to whether gains realized by non-PRC resident investors upon the +sale or other disposition of our H Shares would be considered income derived from +sources within the PRC and thus be subject to PRC income tax. If such gains are subject to +PRC income tax, the applicable rate for non-resident enterprises would generally be 10%, +and for non-resident individuals could be 20%, subject to any relief under applicable tax +treaties. If you are a non-PRC resident investor, you should consult your own tax adviser +regarding the tax implications of investing in our H Shares. +Governmental supervision of currency conversion, and restrictions on the remittance of +Renminbi into and out of China, may adversely affect the value of your investment. +Renminbi is currently not a fully freely convertible currency. The PRC government +imposes supervision on the convertibility of Renminbi into foreign currencies and, in +certain cases, the supervision of currency out of China. A portion of our revenue may be +converted into other currencies in order to meet our foreign currency obligations, e.g., to +obtain foreign currency to make payments of declared dividends, if any, on our H Shares. +Under China’s existing laws and regulations on foreign exchange, following the +completion of the Global Offering, we will be able to make dividend payments in foreign +currencies by complying with certain procedural requirements and without prior +approval from the State Administration of Foreign Exchange. However, in the future, the +PRC government may, at its discretion, take measures to restrict access to foreign +currencies for capital account and current account transactions under certain +circumstances. As a result, we may not be able to pay dividends in foreign currencies to +holders of our H Shares. +Fluctuations in exchange rates could result in foreign currency exchange losses. +All of our costs are denominated in Renminbi and our financial assets are +denominated in Renminbi and U.S. dollars. However, our proceeds from the Global +Offering will be denominated in Hong Kong dollars. The value of the Renminbi against +U.S. dollars and Hong Kong dollars, may fluctuate and is affected by, among other things, +changes in global political and economic conditions, which are out of our control. +Therefore, any fluctuations in the exchange rate of the Renminbi against other currencies +may expose us to exchange rate risks, and our results of operations may be adversely +affected. In addition, we normally do not have a foreign currency hedging policy and our +use of derivatives markets or foreign exchange hedging measures to minimize foreign +exchange rate risk may fail. Accordingly, we are exposed to exchange rate fluctuations and +such exposure may adversely affect our financial position and the performance of our +business. +RISK FACTORS +–5 0– + + +--- page 59 --- +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 incorporated under the laws of China, and substantially all of our assets are +located in China. In addition, a majority of our Directors and senior management +personnel reside within the PRC, with the majority of their assets located within the PRC. +Therefore, it may be difficult for investors to effect service of process upon us or our +Directors and senior management personnel in the PRC. +The approval, filing or other requirements of the CSRC or other PRC government +authorities may be required under PRC laws. +On February 17, 2023, the CSRC promulgated the Trial Measures and five related +guidelines, which became effective on March 31, 2023. The Trial Measures +comprehensively improve and reform the existing regulatory regime for overseas offering +and listing of PRC domestic companies’ securities and regulate both direct and indirect +overseas offering and listing of PRC domestic companies’ securities through a +filing-based regulatory regime. +Pursuant to the Trial Measures, PRC domestic companies that seek to offer and list +securities in overseas markets, either through direct or indirect means, are required to go +through the filing procedure with the CSRC and report relevant information. Where an +issuer submits an application for initial public offering to competent overseas regulators, +such issuer must file with the CSRC within three business days after such application is +submitted. +We cannot assure you that we could meet such requirements, complete such filing in +a timely manner. Any failure may restrict our ability to complete the proposed listing or +any future equity capital raising activities, which would have a material adverse effect on +our business and financial positions. +Changes in international trade policies and rising political tensions may adversely +impact our business and results of operations. +We are susceptible to constantly changing international economic, regulatory, social +and political conditions and local conditions in foreign countries and regions. China’s +political relationships with foreign countries and regions may affect the prospects of our +relationships with third parties, such as business partners, suppliers and future +customers. 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 political relationships between China and the relevant +foreign countries or regions. Any tensions and political concerns between China and the +relevant foreign countries or regions may cause a decline in the demand for our future +products and adversely affect our business, financial condition, results of operations, cash +flow and prospects. Rising trade and political tensions could reduce levels of trade, +investments, technological exchanges and other economic activities between China and +other countries and regions, which would have an adverse effect on global economic +conditions, the stability of global financial markets, and international trade policies. +RISKS RELATING TO THE GLOBAL OFFERING +Any possible conversion of our Domestic Shares into H Shares in the future could +increase the supply of our H Shares in the market and may negatively impact the market +price of our H Shares. +Subject to the approval of the CSRC, all of our Domestic Shares may be converted +into H Shares 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 internal approval by our Shareholders and approval from +relevant PRC regulatory authorities shall have been obtained. 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 the listing. Therefore, upon obtaining the requisite approval, our +Domestic Shares may be traded, after the conversion, in the form of H Shares on the Stock +Exchange after one year of the Global Offering, which could further increase the supply of +our H Shares in the market and may negatively impact the market price of our H Shares. +RISK FACTORS +–5 1– + + +--- page 60 --- +No public market currently exists for our H Shares, and an active trading market for our +H Shares may not develop, especially considering that our existing Shareholders are +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 negotiations between our Company and the +Overall Coordinator (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 for listing of and permission to deal in our Offer Shares on the Stock Exchange. +However, a listing on the Stock Exchange does not guarantee that an active and liquid +trading market for the 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 the H Shares in the short term +following the Global Offering. +The price and trading volume of our H Shares may be volatile, which could lead to +substantial losses to investors. +The price and trading volume of our 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 Shares. In addition to market and +industry factors, the price and trading volume of our Shares may be highly volatile for +specific business reasons, such as 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, movements or activities of key personnel, +and actions taken by competitors. Moreover, shares of other companies listed on the Stock +Exchange with significant operations and assets in China have experienced price volatility +in the past, and it is possible that our 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 following the Global Offering could materially and 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. +Payment of dividends is subject to restrictions under the PRC law and there is no +assurance whether and when we will pay dividends. +Under PRC law and regulations, we may only pay dividends out of distributable +profits. Distributable profits are our after-tax profits, less any recovery of accumulated +losses and appropriations to statutory and other reserves that we are required to make. As +a result, we may not have sufficient or any distributable profit to enable us to make +dividend distributions to our Shareholders, including in periods for which our financial +statements indicate we are profitable. Any distributable profit not distributed in a given +year is retained and available for distribution in subsequent years. The calculation of our +distributable profits under the PRC GAAP differs in many aspects from the calculation +under IFRS Accounting Standards. Moreover, our operating subsidiaries in China may not +have distributable profit as determined under the PRC GAAP . Accordingly, we may not +receive sufficient distributions from our subsidiaries for us to pay dividends. Failure by +our operating subsidiaries to pay us dividends could adversely impact our ability to make +dividend distributions to our Shareholders and our cash flow, including periods in which +we are profitable. +RISK FACTORS +–5 2– + + +--- page 61 --- +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. In addition, we may seek additional capital due to +favorable market conditions or strategic considerations. 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 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. +Potential investors will experience immediate and substantial dilution as a result of the +Global Offering. +The Offer Price of the H Shares is higher than the net tangible asset value per H +Share immediately prior to the Global Offering. Therefore, purchasers of the H Shares in +the Global Offering will experience an immediate dilution. In order to expand our +business, we may consider offering and issuing additional Shares in the future. Purchasers +of the H Shares may experience dilution if we issue additional Shares in the future at a +price which is lower than the net tangible asset value per Share at that time. Furthermore, +we may issue Shares through the employee incentive platforms, which would further +dilute Shareholders’ interests in our Company. +We cannot make fundamental changes to our business without the consent of the Stock +Exchange. +On April 30, 2018, the Hong Kong Stock Exchange adopted rules under Chapter 18A +of Listing Rules. 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. +Facts, forecasts and statistics in this prospectus relating to the pharmaceutical industry +are derived from various official government sources, which may not be accurate, +reliable, complete or up to date and have not been independently verified by us. +We have derived certain facts and other statistics in this prospectus, particularly the +section headed “Industry Overview,” from information provided by the PRC and other +government agencies. However, the information from official government sources has not +been independently verified by us, the Joint Sponsors, the Overall Coordinators, the +underwriters, any of their respective directors, employees, agents or advisors or any other +person or 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 future plans and forward-looking statements about +us that are made based on the information currently available to our management. The +forward-looking information contained in this prospectus is subject to certain risk and +uncertainties. Whether we implement those plans, or whether we can achieve the +objectives described in this prospectus, will depend on various factors including the +market conditions, our business prospects, actions by our competitors and the global +financial situations. +RISK FACTORS +–5 3– + + +--- page 62 --- +You should read the entire prospectus carefully, and we caution you not to place any +reliance on any information contained in press articles or other media regarding us or +the Global Offering. +Prior or subsequent to the publication of this prospectus, there may have been or be +press and media coverage regarding us and the Global Offering, which includes certain +information about us that does not appear in, or is different to what is contained in, this +prospectus. We have not authorized the disclosure of any such information in the press or +media. Financial information, financial projections, valuation and other information +about us contained in such unauthorized press or media coverage may not truly reflect +what is disclosed in the prospectus or the actual circumstances. We do not accept any +responsibility for such unauthorized press and media coverage or for the accuracy or +completeness of any such information. We make no representation as to the +appropriateness, accuracy, completeness or reliability of any such information. To the +extent that any information appearing in the press and media is inconsistent or conflicts +with the information contained in this prospectus, we disclaim it. Investors should rely +only on the information contained in this prospectus in making an investment decision. +RISK FACTORS +–5 4– + + +--- page 63 --- +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: +WAIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG +Pursuant to Rule 8.12 of the Listing Rules, an issuer must have a sufficient +management presence in Hong Kong. This normally means that at least two of its +executive directors must be ordinarily resident in Hong Kong. Rule 19A.15 of the Listing +Rules further provides that the requirement in Rule 8.12 of the Listing Rules may be +waived by having regard to, among other considerations, the new applicant’s +arrangements for maintaining regular communication with the Stock Exchange, including +but not limited to compliance by the new applicant with Rules 3.06, 3A.23 and 3A.24 of the +Listing Rules. +Our Group’s daily operations and major assets are primarily located in the PRC, and +our Group’s management members are, and expect to continue to be, based primarily in +the PRC. Our Company considers that our Group’s management members are best able to +attend to its functions by being based in the PRC. Our Company’s executive Director is not +or will not be ordinarily resident in Hong Kong after the Listing of our Company. The +Directors consider that relocation of our Company’s executive Director to Hong Kong will +be burdensome and costly for our Company, and it may not be in the best interests of our +Company and its Shareholders as a whole to appoint additional executive Directors who +are ordinarily resident in Hong Kong. Furthermore, if the executive Director or the +additional ones are not able to be physically present at the location where our Group’s +daily operations take place, they may not be able to fully or promptly understand the +daily business operation of our Group nor appreciate the circumstances affecting the +business operations and development of our Group from time to time. +As such, our Company does not have, and for the foreseeable future will not 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 Rule 8.12 and Rule 19A.15 of the Listing +Rules. Our Company has made the following arrangements to maintain effective +communication between the Stock Exchange and us: +(i) our Company has appointed and will continue to maintain Dr. Wang Bing ( ˮ +Ώ) and Ms. Chan Yee Lam (௓ၥᔝ) as its authorised representatives (the +“Authorised Representatives”) pursuant to Rules 3.05 and 3.06(2) of the +Listing Rules. The Authorised Representatives will act as our Company’s +principal communication channel with the Stock Exchange. Each of the +Authorised Representatives will be available to meet with the Stock Exchange +within a reasonable time frame upon the request of the Stock Exchange and +will be readily contactable by telephone, facsimile and email. Our Company +has provided the Stock Exchange with the contact details of the Authorised +Representatives and our Company will inform the Stock Exchange promptly +in respect of any change to the contact details of the Authorised +Representatives; +(ii) the Authorised Representatives have the means of contacting all Directors +(including the independent non-executive Directors) promptly at all times as +and when the Stock Exchange proposes to contact a Director with respect to +any matter. To enhance communication between the Stock Exchange and the +Authorised Representatives or the Directors, our Company will implement a +policy whereby (i) the executive Director will provide a valid phone number +or other means of communication for the Authorised Representatives when he +is traveling or out of office, and (ii) each Director will provide his or her +mobile phone number, office phone number, e-mail address and, where +available, fax number to the Stock Exchange and our Company will inform the +Stock Exchange promptly in respect of any changes to the contact details of +the Directors; +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–5 5– + + +--- page 64 --- +(iii) all the Directors who are not ordinarily resident in Hong Kong have +confirmed that they possess or can apply for valid travel documents to visit +Hong Kong and will be able to meet with relevant members of the Stock +Exchange in Hong Kong upon reasonable notice, when required; and +(iv) Pursuant to Rule 3A.19 of the Listing Rules, we have retained the services of +Halcyon Capital Limited as Compliance Adviser upon Listing for a period +commencing on the Listing Date and ending on the date on which we comply +with Rule 13.46 of the Listing Rules in respect of our financial results for the +first full financial year commencing after the Listing Date. The Compliance +Adviser will have access at all times to the Authorised Representatives, our +Company’s Directors and senior management, who will act as the additional +channel of communication with the Stock Exchange when the Authorised +Representatives are not available. Our Company has provided the Stock +Exchange with the contact details of the Compliance Adviser and will inform +the Stock Exchange promptly in respect of any changes to the contact details +of the Compliance Adviser. +Our Company will inform the Stock Exchange as soon as practicable in respect of +any changes in the Authorised Representatives and/or the Compliance Adviser in +accordance with the Listing Rules. +WAIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARIES +Pursuant to Rules 3.28 and 8.17 of the Listing Rules, the company secretary of an +issuer must be an individual 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 company secretary. +(i) a member of The Hong Kong Chartered Governance Institute (formerly +known as The Hong Kong Institute of Chartered Secretaries); +(ii) a solicitor or barrister as defined in the Legal Practitioners Ordinance +(Chapter 159 of the Laws of Hong Kong); and +(iii) 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”: +(i) length of employment with the issuer and other issuers and the roles he or she +played; +(ii) familiarity with the Listing Rules and other relevant laws and regulations +including the SFO, the Companies Ordinance, the Companies (Winding Up +and Miscellaneous Provisions) Ordinance and the Takeovers Code; +(iii) r elevant training taken and/or to be taken in addition to the minimum +requirement under Rule 3.29 of the Listing Rules; and +(iv) professional qualifications in other jurisdictions. +Pursuant to paragraph 13 of Chapter 3.10 of the Guide for New Listing Applicants, +the Stock Exchange will consider a waiver application by an issuer in relation to Rules 3.28 +and 8.17 of the Listing Rules based on the specific facts and circumstances. Factors that +will be considered by the Stock Exchange include: +(i) whether the issuer has principal business activities primarily outside Hong +Kong; +(ii) whether the issuer was able to demonstrate the need to appoint a person who +does not have the Acceptable Qualification (as defined under paragraph 11 of +Chapter 3.10 of the Guide for New Listing Applicants) nor Relevant +Experience (as defined under paragraph 11 of Chapter 3.10 of the Guide for +New Listing Applicants) as a company secretary; and +(iii) why the directors consider the individual to be suitable to act as the issuer’s +company secretary. +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–5 6– + + +--- page 65 --- +Further, pursuant to paragraph 13 of Chapter 3.10 of the Guide for New Listing +Applicants, such waiver, if granted, will be for a fixed period of time (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 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. +Our Company considers that while it is important for the company secretary to be +familiar with the relevant securities regulations in Hong Kong, he/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 is familiar +with our Company’s business and affairs as company secretary. +Our Company has appointed Ms. Chan Yee Lam ( ௓ၥᔝ ), as one of the joint +company secretaries. +We have applied to the Hong Kong Stock Exchange for, and the Stock Exchange has +granted, a waiver from strict compliance with the requirements under Rules 3.28 and 8.17 +of the Listing Rules on the basis of the proposed arrangements below: +(i) Mr. Zou Ran ( ཅ್ ) will endeavor to attend relevant training courses, +including briefings on the latest changes to the relevant applicable Hong +Kong laws and regulations and the Listing Rules which will be organized by +our Company’s Hong Kong legal advisors on an invitation basis and seminars +organized by the Stock Exchange for listed issuers from time to time; +(ii) Mr. Zou Ran (ཅ್) has confirmed that he will be attending a total of no less +than 15 hours of training courses on the Listing Rules, corporate governance, +information disclosure, investors relation as well as the functions and duties +of the company secretary of a Hong Kong listed issuer during each financial +year as required under Rule 3.29 of the Listing Rules; +(iii) Ms. Chan Yee Lam ( ௓ၥᔝ) will assist Mr. Zou Ran ( ཅ್) to enable him to +acquire the relevant experience (as required under Rule 3.28 of the Listing +Rules) to discharge the duties and responsibilities as the company secretary of +our Company; +(iv) Ms. Chan Yee Lam ( ௓ၥᔝ) will communicate regularly with Mr. Zou Ran ( ཅ +್) on matters relating to corporate governance, the Listing Rules and any +other laws and regulations which are relevant to our Company and its affairs. +Ms. Chan Yee Lam (௓ၥᔝ) will work closely with, and provide assistance for, +Mr. Zou Ran (ཅ್) in the discharge of his duties as a company secretary, +including organizing our Company’s Board meetings and Shareholders’ +general meetings; +(v) upon expiry of Mr. Zou Ran ( ཅ್)’s initial term of appointment as the +company secretary of our Company, our Company will evaluate his +experience in order to determine if he has acquired the qualifications required +under Rule 3.28 of the Listing Rules, and whether on-going assistance should +be arranged so that Mr. Zou Ran (ཅ್)’s appointment as the company +secretary of our Company continues to satisfy the requirements under Rules +3.28 and 8.17 of the Listing Rules. The waiver will be revoked immediately if +Ms. Chan Yee Lam (௓ၥᔝ) ceases to provide assistance to Mr. Zou Ran (ཅ್) +as a joint company secretary for the three-year period after the Listing or +where there are material breaches of the Listing Rules by our Company; +(vi) our Company has appointed Halcyon Capital Limited as the Compliance +Adviser pursuant to Rule 3A.19 of the Listing Rules which will act as the +additional communication channel with the Stock Exchange (for a period +commencing on the Listing Date and ending on the date on which our +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–5 7– + + +--- page 66 --- +Company complies with Rule 13.46 of the Listing Rules in respect of its +financial results for the first full financial year after the date of listing, or until +the engagement is terminated, whichever is earlier). Halcyon Capital Limited +will provide professional guidance and advice to our Company as to the +compliance with the Listing Rules and all other applicable laws and +regulations; and +(vii) the waiver is valid for an initial three-year period commencing from the +Listing, and will be revoked immediately if Ms. Chan Yee Lam ( ௓ၥᔝ) ceases +to provide assistance and guidance to Mr. Zou Ran ( ཅ್), or if there are +material breaches of the Listing Rules by our Company. Prior to the expiry of +the initial three-year period, our Company will re-evaluate the qualifications +and experiences of Mr. Zou Ran ( ཅ್) and liaise with the Stock Exchange to +revisit the situation in the expectation that we should then be able to +demonstrate to the Stock Exchange’s satisfaction that Mr. Zou Ran ( ཅ್), +having had the benefit of assistance from Ms. Chan Yee Lam ( ௓ၥᔝ)’s for +three years, would then have acquired the relevant experience within the +meaning of Note 2 to Rule 3.28 of the Listing Rules such that a further waiver +would not be necessary. +EXEMPTION 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 TO THE COMPANIES (WINDING UP AND MISCELLANEOUS +PROVISIONS) ORDINANCE +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 Companies (Winding Up +and Miscellaneous Provisions) Ordinance. +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 the company to include in its +prospectus a report by the auditors of the company with respect to profits and losses of the +company in respect of each of the three financial years immediately preceding the issue of +the prospectus and 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 strict 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 +interests of the investing public and compliance with any or all of such requirements +would be irrelevant or unduly burdensome, or would otherwise be unnecessary or +inappropriate. +Rule 18A.03(3) of the Listing Rules requires that an eligible 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 an eligible 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 reference 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. +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–5 8– + + +--- page 67 --- +Accordingly, we applied to the SFC for, and the SFC has granted, 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: +(i) our Company is a biotechnology company focusing on the field of +bi-/multi-Specific peptide drug development, and falls within the scope of a +biotech company as defined under Chapter 18A of the Listing Rules. Our +Company is seeking a listing under Chapter 18A and will fulfill the additional +conditions for listing required under Chapter 18A of the Listing Rules; +(ii) the Accountants’ Report of our Company for the two financial years ended +December 31, 2025 has been prepared and is set out in Appendix I to this +prospectus in accordance with Rule 18A.06 of the Listing Rules; +(iii) as of the Latest Practicable Date, our Company had developed a pipeline of +bi-/multi-functional peptides and innovative drug candidates, including: (i) +the Core Product, MT1013, the peptide drug targeting both CaSR and OGP +receptors, primarily developed for the treatment of CKD-SHPT, with the +potential to be further developed for additional indications such as +CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis; and (ii) three +Key Products, namely XTL6001, MT1002 and MT200605, as well as other +product candidates. Major financing activities conducted by our Company +since its incorporation include the Pre-IPO Investments, the details of which +have been fully disclosed in the paragraphs headed “History, Development +and Corporate Structure — Pre-IPO Investments” in this prospectus; +(iv) notwithstanding that the financial results set out in this prospectus are only +for the two financial years ended December 31, 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; +(v) furthermore, as Chapter 18A of the Listing Rules provides track record period +of two years for biotech companies in terms of financial disclosure, strict +compliance with the requirements of section 342(1)(b) of the Companies +(Winding Up and Miscellaneous Provisions) Ordinance in relation to +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 +unnecessary and/or irrelevant in the circumstance of our Company. We did +not generate any revenue or incur any cost of sales during the Track Record +Period. For the years ended December 31, 2024 and 2025, we reported total +comprehensive losses of RMB156.83 million and RMB184.91 million, +respectively, which were primarily attributable to research and development +expenses, administrative expenses and finance costs. Our Company did not +record any revenue for the financial year ended December 31, 2023, and other +income in 2023 mainly came from bank interest income and government +grants. We believe the financial information for the financial year ended +December 31, 2023 does not provide meaningful insight into our future +performance and is not necessary for investors’ understanding and +assessment of the business, assets and liabilities, financial position, +management and prospects of the Group; and +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–5 9– + + +--- page 68 --- +(vi) our Directors and the Joint Sponsors are of the view that the Accountants’ +Report covering the two financial years ended December 31, 2025 (as set out in +Appendix I to this prospectus), together with other disclosures in this +prospectus, have already provided adequate and reasonable up-to-date +information 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, and our Directors +confirm that all information which is necessary for the investing public to +make an informed assessment of our Company’s business, assets and +liabilities, financial position, trading position, management and prospects has +been included in this prospectus. Therefore, the exemption would not +prejudice the interest of the investing public. +A certificate of exemption has been granted by the SFC under section 342A of the +Companies (Winding Up and Miscellaneous Provisions) Ordinance on the conditions that: +(i) the particulars of the exemption are set out in this prospectus; and (ii) this prospectus +will be issued on or before June 15, 2026. +CONSENT IN RESPECT OF CORNERSTONE INVESTMENT BY CLOSE ASSOCIATE +OF EXISTING SHAREHOLDERS +Paragraph 1C(2) of Appendix F1 to the Listing Rules (the “ Placing Guidelines ”) +provides, inter alia, that without the prior written consent of the Stock Exchange, 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 of the Listing Rules are fulfilled. +Chapter 2.3 of the Guide for New Listing Applicants provides that existing +shareholders and/or their close associates are allowed to participate in the initial public +offering of a Biotech Company (as defined under Chapter 18A of the Listing Rules) +provided that the applicant complies with Rules 8.08(1)/19A.13A and 8.08A/19A.13C of +the Listing Rules. Further, pursuant to paragraph 18 of Chapter 2.3 of the Guide, an +existing shareholder holding less than 10% of shares in a Biotech Company may subscribe +for shares in the proposed listing as either a cornerstone investor or as a placee and an +existing shareholder holding 10% or more of shares in a Biotech Company must subscribe +for shares in the proposed listing as a cornerstone investor. +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. +Each of Junying Growth, Listing Reserve Fund, Junying Jiacheng, Xi’an Huiyu, +Shaanxi Innovation Relay, Shaanxi Jingang and New Materials Fund are ultimately +controlled by the People’s Government of Shaanxi Province (the “ Existing +Shareholders”). Qiyuan High-tech Innovation Investment (Hong Kong) Limited +(“Qiyuan Hong Kong”), one of our Cornerstone Investors, is also ultimately controlled by +Shaanxi Provincial SASAC and hence a close associate of one of our Existing Shareholders +(the “Proposed Cornerstone Investment ”). For further details, please refer to the section +headed “Cornerstone Investors” in this prospectus. +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–6 0– + + +--- page 69 --- +The Stock Exchange has granted the requested consent subject to the conditions +that: +(a) our Company will comply with the public float requirements of Rule 19A.13A +and the free float requirement under Rule 19A.13C of the Listing Rules. For +details of the calculation of public float and free float of the Company, please +refer to the section headed “History, Development and Corporate Structure” +in this prospectus; +(b) the Offer Shares to be subscribed by and allocated to Qiyuan Hong Kong as a +Cornerstone Investor under the Global Offering will be at the same Offer Price +and on substantially the same terms as the other Cornerstone Investor +(including being subject to a lock-up period of six months from the Listing +Date, and Qiyuan Hong Kong shall pay and settle in full the consideration for +the Offer Shares before the dealing commence on the Listing Date); +(c) no preference in allocation has been, nor will be, given to Qiyuan Hong Kong +other than the preferential treatment of assured entitlement at the Offer Price +under a cornerstone investment and the terms of the cornerstone investment +agreement of the Qiyuan Hong Kong 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 and each of the Company, the Joint +Sponsors and the Overall Coordinators 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 +(d) details of the allocation of the Offer Shares to Qiyuan Hong Kong in the Global +Offering as a cornerstone investor are disclosed in this prospectus, and details +of the allocation will be disclosed in the allotment results announcement of +our Company. +For further information about the Proposed Cornerstone Investment, please refer to +the section headed “Cornerstone Investors” in this prospectus. +WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND +EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES +(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE +–6 1– + + +--- page 70 --- +DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS +This prospectus, for which our Directors (including any proposed director who is +named as such in this prospectus) 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 March 27, 2026, confirming our completion of the filing pursuant to the +new filing regime introduced by the Overseas Listing Trial Measures 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. +UNDERWRITING +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 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. +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 underwritten by +the Hong Kong Underwriters on a conditional basis, with one of the conditions being that +the Offer Price is agreed between the Overall Coordinators (for themselves and on behalf +of the Underwriters) and us. The International Offering is managed by the Overall +Coordinators and is underwritten by the International Underwriters. The International +Underwriting Agreement is expected to be entered into on or about the Price +Determination Date, subject to agreement on the Offer Price between our Company and +the Overall Coordinators (for themselves and on behalf of the Underwriters). If, for any +reason, the Offer Price is not agreed between our Company and the Overall Coordinators +(for themselves and on behalf of the Underwriters) on or before the Price Determination +Date, or such later date or time as may be agreed between the Overall Coordinators (for +themselves and on behalf of the Underwriters) and our Company, the Global Offering will +not proceed. See “Underwriting” for details about the Underwriters and the underwriting +arrangements. +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 prospectus or imply that the information +contained in this prospectus is correct as at any date subsequent to the date of this +prospectus. +DETERMINATION OF THE OFFER PRICE +The Offer Shares are being offered at the Offer Price which the Overall Coordinators +(for themselves and on behalf of the Underwriters) and our Company will determine on or +before Monday, June 22, 2026, and in any event not later than 12:00 noon on Monday, June +22, 2026. +INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING +–6 2– + + +--- page 71 --- +If, for any reason, the Overall Coordinators (for themselves and on behalf of the +Underwriters) and our Company are unable to reach an agreement on the Offer Price on or +before the Price Determination Date, or such later date or time as may be agreed between +the Overall Coordinators (for themselves and on behalf of the Underwriters) and our +Company, the Global Offering (including the Hong Kong Public Offering) will not become +unconditional and will lapse. +RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES +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. +The Offer Shares are offered for subscription 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 in connection with the +Global Offering to give any information, or to make any representation not contained in +this prospectus, and any information or representation not contained in this prospectus +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 +Underwriters, the Capital Market Intermediaries, any of their respective directors, +officers, employees, agents, affiliates or advisers or any other persons or parties involved +in the Global Offering. 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”. +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 (including any H Shares which may be issued +pursuant to the Over-allotment Option). No part of our H 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 +our Company by 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, June 24, 2026. The H Shares will be traded in board lots of 200 H Shares. The +stock code of the H Shares is 2335. +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 +cancelation or disciplinary proceedings in accordance with the Listing Rules. +INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING +–6 3– + + +--- page 72 --- +H SHARE REGISTER OF MEMBERS 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 our Company’s H Share +register of members to be maintained by our H Share Registrar, Tricor Investor Services +Limited. We will maintain our 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 “Statutory and General Information — Taxation +of Holders of H Share” in Appendix IV to this prospectus. Investors should seek +professional tax advice for further details of Hong Kong stamp duty. +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 +Overseas Listing Trial Measures and our Articles of Association; +• agrees with us, each of our Shareholders, Directors, managers and officers, +and we, acting for ourselves and for each of our Directors, 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, managers and officers whereby such Directors, 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, or existing Shareholder or a nominee of any +of the foregoing. +DIVIDENDS PA YABLE 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. +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. +INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING +–6 4– + + +--- page 73 --- +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. All necessary arrangements have been made for our H Shares to be admitted +into CCASS. 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. +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 our 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 representatives or any other persons involved in the Global Offering +accepts responsibility for any tax effects on, or liabilities of, any 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. +OVER-ALLOTMENT AND STABILIZATION +In connection with the Global Offering, the Stabilizing Manager (on behalf of the +International Underwriters) or any persons acting for it may over-allot shares or effect any +other transactions with a view to prevent a decline in the market price of our H Shares for +a limited period after the issue date. However, there is no obligation on the Stabilizing +Manager or any person acting for it to do this. Such stabilization action, if taken, may be +discontinued at any time and is required to end after a limited period. In Hong Kong and +certain other jurisdictions, activities aimed at reducing the market price are prohibited, +and the price at which stabilization is effected is not permitted to exceed the Offer Price. +In connection with the Global Offering, our Company intends to grant to the +International Underwriters the Over-allotment Option, exercisable by the Overall +Coordinators (on behalf of the International Underwriters) for up to 30 days after the last +day for the lodging of applications under the Hong Kong Public Offering. Pursuant to the +Over-allotment Option, our Company may be required to allot and issue at the Offer Price +up to an aggregate of 8,708,000 additional H Shares (representing not more than 15% of the +Offer Shares initially available under the Global Offering), in connection with +over-allocations in the Global Offering, if any. +See the section headed “Structure of the Global Offering” for further details with +respect to stabilization and the Over-allotment Option. +INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES +Our Company has applied for conversion of Domestic Shares into H Shares, which +involves 222,016,700 Unlisted Shares (taking into account the Subdivision) 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 of certain Unlisted Shares into H Shares has been +completed on March 27, 2026. +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.” +STRUCTURE OF THE GLOBAL OFFERING +See the section headed “Structure of the Global Offering” for details of the structure +of the Global Offering, including its conditions. +INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING +–6 5– + + +--- page 74 --- +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 +RMB0.87 to HK$1.00, being the middle exchange rate set by the PBOC +prevailing on the Latest Practicable Date; +(ii) all amounts in Renminbi are translated into US dollars at an exchange rate of +RMB6.82 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$7.83 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. +INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING +–6 6– + + +--- page 75 --- +DIRECTORS +Name Address Nationality +Executive Directors +Wang Bing +(ˮΏ) +No. 2504, Unit 2, Building 5 +North Area +Residential Area +Jiaotong Medical College +No. 239, Yanta West Road +Yanta District +Xi’an, Shaanxi Province +PRC +Chinese +Yu Weiping 6-7780 Bridge Street +Richmond +British Columbia +Canada +Canadian +Non-executive Directors +Wang Mei +(ˮૠ) +No. 2504, Unit 2, Building 5 +North Area +Residential Area +Jiaotong Medical College +No. 239, Yanta West Road +Yanta District +Xi’an, Shaanxi Province +PRC +Chinese +You Xiangdong +(؇) +No. 2101, Unit 1, Building 7 +Binjiang Jinse Jiayuan +Shangcheng District +Hangzhou, Zhejiang Province +PRC +Chinese +Song Gaoguang +(҂৷ᄿ) +No. 401, Unit 1, Building 4 +Yujingyuan Residential Quarter +Yinghai Town +Daxing District +Beijing +PRC +Chinese +Wang Nayi +(❙) +Room F, 24th Floor, Building 2 +Guozhong Apartment +Lane 20, Fuxin Road +Yangpu District +Shanghai +PRC +Chinese +DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING +–6 7– + + +--- page 76 --- +Name Address Nationality +Independent Non-executive Directors +Xiangli Liuxu +(Ԣʬᚃ) +Room 1804, Building 33 +Jiaoda Third Village +Beilin District +Xi’an, Shaanxi Province +PRC +Chinese +Zhang Wenqiang +(ੵ˖੶) +No. 1502, Unit 1, Building 3 +Courtyard 2 +Guomei First City +Qingnian Road +Chaoyang District +Beijing +PRC +Chinese +Wang Kaifeng +(ࢤ) +Flat 31H, Block 21 +South Horizons +Aberdeen +No. 18 South Horizons Drive +Southern District +Hong Kong +Chinese +For further details, please refer to the section headed “Directors and Senior +Management” in this prospectus. +PARTIES INVOLVED +Joint Sponsors, +Overall Coordinators, +Sponsor-Overall +Coordinators, Joint Global +Coordinators, Joint +Bookrunners and +Joint Lead Managers +CCB International Capital Limited +12/F, CCB Tower +3 Connaught Road Central +Central +Hong Kong +China Merchants Securities (HK) Co., Limited +32/F, One Exchange Square +8 Connaught Place +Central +Hong Kong +Joint Bookrunners and +Joint Lead Managers +Jakota Securities Group Limited +Unit E, 24/F, Tai Yau Building +181 Johnston Road +Wanchai +Hong Kong +Ruibang Securities Limited +9/F, Sang Woo Building +227-228 Gloucester Road +Wanchai +Hong Kong +Sinolink Securities (Hong Kong) Company Limited +Unit 3501-08, 35/F Cosco Tower +183 Queen’s Road Central +Sheung Wan +Hong Kong +DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING +–6 8– + + +--- page 77 --- +Skyvast Securities Limited +FLAT 3304, 33/F, Bank of America Tower +12 Harcourt Road +Central +Hong Kong +Somerley Capital Limited +20/F China Building +29 Queen’s Road Central +Hong Kong +Tiger Brokers (HK) Global Limited +23/F, Li Po Chun Chambers +189 Des Voeux Road Central +Hong Kong +uSmart Securities Limited +Room 2602A, 26/F, Tower 1 Lippo Centre +89 Queensway +Admiralty +Hong Kong +Webull Securities Limited +Suites 2509-12, 25/F, Tower 6, The Gateway, Harbour +City +9 Canton Road +Hong Kong +Zhongtai International Securities Limited +19 Floor, Li Po Chun Chambers +189 Des Voeux Road Central +Hong Kong +ZMF Asset Management Limited +2502, World Wide House +19 Des Voeux Road Central +Hong Kong +Capital Market Intermediaries CCB International Capital Limited +12/F, CCB Tower +3 Connaught Road Central +Central +Hong Kong +China Merchants Securities (HK) Co., Limited +32/F, One Exchange Square +8 Connaught Place +Central +Hong Kong +Jakota Securities Group Limited +Unit E, 24/F, Tai Yau Building +181 Johnston Road +Wanchai +Hong Kong +Ruibang Securities Limited +9/F, Sang Woo Building +227-228 Gloucester Road +Wanchai +Hong Kong +DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING +–6 9– + + +--- page 78 --- +Sinolink Securities (Hong Kong) Company Limited +Unit 3501-08, 35/F Cosco Tower +183 Queen’s Road Central +Sheung Wan +Hong Kong +Skyvast Securities Limited +FLAT 3304, 33/F, Bank of America Tower +12 Harcourt Road +Central +Hong Kong +Somerley Capital Limited +20/F China Building +29 Queen’s Road Central +Hong Kong +Tiger Brokers (HK) Global Limited +23/F, Li Po Chun Chambers +189 Des Voeux Road Central +Hong Kong +uSmart Securities Limited +Room 2602A, 26/F, Tower 1 Lippo Centre +89 Queensway +Admiralty +Hong Kong +Webull Securities Limited +Suites 2509-12, 25/F, Tower 6, The Gateway, Harbour +City +9 Canton Road +Hong Kong +Zhongtai International Securities Limited +19 Floor, Li Po Chun Chambers +189 Des Voeux Road Central +Hong Kong +ZMF Asset Management Limited +2502, World Wide House +19 Des Voeux Road Central +Hong Kong +DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING +–7 0– + + +--- page 79 --- +Legal Advisors to +the Company +As to Hong Kong law: +Tian Yuan Law Firm LLP +Suites 3304–3309, 33/F, Jardine House +One Connaught Place +Central Hong Kong +As to PRC law: +JunHe LLP +26/F, HKRI Centre One +HKRI Taikoo Hui 288 Shimen Road (No. 1) +Shanghai +PRC +As to U.S. law in relation to our business operation +in the U.S.: +King and Wood LLP +600 Fifth Avenue +27th Floor +New York NY 10020 +As to PRC intellectual property law: +Tian Yuan Law Firm +Unit 509 Tower A, Corporation Square +35 Financial Street, Xicheng District +Beijing +China +As to PRC data compliance laws: +Grandall Law Firm (Shenzhen) +42/F, 41/F, 31 DE, 2403, 2405 +Shenzhen Special Zone Press Tower +6008 Shennan Avenue +Shenzhen +PRC +As to U.S. data compliance laws: +Concord & Sage PC +1360 Valley Vista Dr., Suite 140 +Diamond Bar, CA 91765 +USA +Legal Advisers to the +Joint Sponsors and +the Underwriters +As to Hong Kong law: +Eric Chow & Co. in Associate with +Commerce & Finance Law Offices +3401, Alexandra House +18 Chater Road +Central +Hong Kong +As to PRC law: +Commerce & Finance Law Offices +12/F−15/F +China World Office 2 +No. 1 Jian Guo Men Wai Avenue +Chaoyang District +Beijing +PRC +DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING +–7 1– + + +--- page 80 --- +Reporting Accountants Deloitte T ouche T ohmatsu +Certified Public Accountants +Registered Public Interest Entity Auditor +35th floor, One Pacific Place +88 Queensway +Hong Kong +Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch +Co. +Suite 2504 Wheelock Square +1717 Nanjing West Road +Shanghai +PRC +Receiving Banks CMB Wing Lung Bank Limited +45 Des Voeux Road +Central +Hong Kong +DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING +–7 2– + + +--- page 81 --- +Registered Office Room B06, 26th Floor, Building 5 +Digital China Science and Technology Park +No. 20, Zhangba 4th Road +High-tech Development Zone +Xi’an +Shaanxi Province +PRC +Head Office and Principal +Place of Business in the PRC +Building 6, Collaborative Innovation Port +Chang’an District +Xi’an +Shaanxi Province +PRC +Principal Place of Business in +Hong Kong +31/F, Tower Two +Times Square, 1 Matheson Street +Causeway Bay +Hong Kong +Company’s Website www.micot.cn +(The information contained on this website does not form +part of this prospectus) +Joint Company Secretaries Mr. Zou Ran (ཅ್) +Room B06, 26th Floor, Building 5 +Digital China Science and Technology Park +No. 20, Zhangba 4th Road +High-tech Development Zone +Xi’an +Shaanxi Province +PRC +Ms. Chan Yee Lam (௓ၥᔝ) +31/F, Tower Two +Times Square, 1 Matheson Street +Causeway Bay +Hong Kong +Authorized Representatives Dr. Wang Bing (ˮΏ) +No. 2504, Unit 2, Building 5 +North Area +Residential Area +Jiaotong Medical College +No. 239, Yanta West Road +Yanta District +Xi’an, Shaanxi Province +PRC +Ms. Chan Yee Lam (௓ၥᔝ) +31/F, Tower Two +Times Square, 1 Matheson Street +Causeway Bay +Hong Kong +Audit Committee Mr. Zhang Wenqiang (ੵ˖੶) (Chairperson) +Mr. Wang Kaifeng (ࢤ) +Dr. Wang Mei (ˮૠ) +CORPORATE INFORMATION +–7 3– + + +--- page 82 --- +Nomination Committee Dr. Wang Bing (ˮΏ) (Chairperson) +Dr. Wang Mei (ˮૠ) +Mr. Zhang Wenqiang (ੵ˖੶) +Dr. Xiangli Liuxu (Ԣʬᚃ) +Mr. Wang Kaifeng (ࢤ) +Remuneration Committee Dr. Xiangli Liuxu (Ԣʬᚃ) (Chairperson) +Mr. Wang Kaifeng (ࢤ) +Dr. Wang Bing (ˮΏ) +Compliance Adviser Halcyon Capital Limited +Room 3401, 34/F. +Hopewell Centre +183 Queen’s Road East +Wan Chai +Hong Kong +H Share Registrar T ricor Investor Services Limited +17/F +Far East Finance Centre +16 Harcourt Road +Hong Kong +Principal Bank China Merchants Bank Limited +(Xi’an Zhuque Street Branch) +1st floor, Block C +Nanfang Xingzuo +No. 19 Zhuque Street +Yanta District +Xi’an City, Shaanxi Province +PRC +CORPORATE INFORMATION +–7 4– + + +--- page 83 --- +The information and statistics set out in this section and other sections of this +Prospectus were extracted from the Frost & Sullivan Report, and from various official +government publications and other publicly available publications. We engaged Frost & +Sullivan to prepare the Frost & Sullivan Report, an independent industry report, in +connection with the Global Offering. The information from official government sources has +not been independently verified by us, the Joint Sponsors, Overall Coordinators, Joint Global +Coordinators, Joint Bookrunners, Joint Lead Managers, Underwriters, any of their respective +directors and advisors, or any other persons or parties involved in the Global Offering, and no +representation is given as to its accuracy. Accordingly, you should not place undue reliance on +information, statistics and data from official government sources. For more details of the risks +relating to our industry, see “Risk Factors” in this Prospectus. +1. OVERVIEW OF PEPTIDE DRUG MARKET +Peptide drugs are composed of a defined sequence of amino acids, typically +possessing a molecular weight ranging from 500 to 5,000 Daltons. They function by acting +as agonists or antagonists of endogenous peptides or proteins, exerting their therapeutic +effects through high-affinity and high-specificity binding to biological targets. +The global peptide drug market has grown from USD62.8 billion in 2020 to +USD139.3 billion in 2025 with a CAGR of 17.3%, and is estimated to reach USD267.6 billion +by 2030, at a CAGR of 13.9%. Given the advantages of peptide drugs, their clinical +applications will further expand to multiple areas such as cardiovascular diseases, +tumors, and immune regulation. The peptide drug market in China has experienced an +accelerated growth trend due to favorable policies, increasing treatment demand and +technological iteration and upgrading. The peptide drug market in China has grown from +RMB58.9 billion in 2020 to RMB70.0 billion in 2025, at a CAGR of 3.5%, and is estimated to +reach RMB174.2 billion by 2030, at a CAGR of 20.0% during this period. Driven by aging +populations, rising chronic disease rates and advances in costly innovative therapies, cost +containment has become a key trend in global healthcare. Under fiscal pressure, +governments and third-party payers (public and commercial insurers) are controlling +surging medical spending by limiting coverage and adjusting reimbursement for specific +drugs. Although healthcare cost control has become a global norm, this trend has also +driven structural optimization of healthcare payment systems, channeling limited public +healthcare funds and commercial insurance resources to prioritize coverage for +innovative drugs with differentiated clinical value — specifically those featuring novel +target combinations, new mechanisms of action and the ability to effectively address +unmet clinical needs. +Market Drivers of Peptide Drug Market +Vast and unmet therapeutic demand created by the pandemic of chronic diseases: +According to WHO, the global obese population has exceeded one billion and is closely +linked to an increased risk of developing numerous conditions, including type 2 diabetes +and certain cancers. Peptide drugs, exemplified by GLP-1 agonists, have, for the first time, +achieved safe and effective weight loss comparable to bariatric surgery through +pharmacological means, addressing this immense market need. Concurrently, the aging of +the global population has led to a continuous expansion of the patient base for related +chronic conditions such as CKD and osteoporosis. According to literature published in The +Lancet , the prevalence and burden of CKD continue to rise in tandem with global +population aging. Osteoporosis disrupts calcium and phosphorus metabolism and may +induce or worsen chronic kidney disease-secondary hyperparathyroidism (CKD-SHPT), +further driving corresponding treatment demand and providing a stable foundational +market for peptide drugs. +The advent and development of multi-target peptides: Compared with single-target +peptides, multi-target peptides can simultaneously act upon multiple intrinsically linked +targets within a disease, producing synergistic effects that hold promise for enhanced +efficacy and safety. For instance, Eli Lilly’s dual-target peptide, tirzepatide, has +demonstrated significant clinical and commercial value in the fields of glucose control +and weight reduction. Compared to single-target drugs, dual- or triple-target GLP-1 +agonists demonstrate a 30-50% improvement in weight loss efficacy. +INDUSTRY OVERVIEW +–7 5– + + +--- page 84 --- +Innovation in oral formulation development: The emergence and commercialization +of oral formulations have marked a breakthrough in the field of peptide therapeutics, w hich +significantly enhance patient convenience and treatment compliance. Unlike conventional +peptide delivery methods, such as intravenous injection or intramuscular injection, which +often require professional medical supervision or frequent clinic visits, oral peptide +formulations enable patients to administer medications independently in the comfort of +their homes. +2. OVERVIEW OF METABOLIC DISEASE DRUG MARKET +Metabolic diseases refer to a series of diseases caused by disorders of substance +metabolism in the body (such as carbohydrates, lipids, proteins, purines, etc.). Disorders +of substance metabolism in the body can damage organs such as the kidneys; if this +condition persists for a long time, it may lead to organ failure, which in turn can induce or +exacerbate diseases like CKD. Common metabolic diseases include CKD, obesity and +being overweight, metabolic dysfunction-associated steatohepatitis, and other conditions. +Overview of Chronic Kidney Disease (CKD) Market +CKD is a group of chronic diseases centered on abnormalities in renal structure or +function. Its diagnostic criteria are renal damage or a decrease in glomerular filtration rate +(GFR) lasting for 3 months or longer. The core feature of CKD is a progressive decline in +renal function, which prevents the kidneys from normally performing key tasks such as +excretion of metabolic waste products, regulation of water and electrolyte balance, and +endocrine functions. Common etiologies include diabetic nephropathy, hypertensive +nephropathy, primary glomerulonephritis, and polycystic kidney disease, among which +diabetes and hypertension are the primary driving factors for the global incidence of +CKD. Clinically, CKD is classified into stages 1 to 5 based on GFR levels. In stage 1, renal +function is basically normal; stage 5 is end-stage renal disease, where patients need to rely +on dialysis or renal transplantation to sustain life. CKD not only affects the kidneys +themselves but also causes systemic multisystem complications, such as renal anemia, +chronic kidney disease-secondary hyperparathyroidism (CKD-SHPT), and cardiovascular +diseases (e.g., heart failure, arteriosclerosis). Among these, CKD-SHPT is particularly +common in patients with CKD in middle and advanced stages, seriously endangering +patients’ quality of life and lifespan. +The global prevalence of CKD grew from 936.3 million in 2020 to 1,100.4 million in +2025, and is projected to reach 1,289.7 million by 2030 and 1,505.1 million by 2035. In +China, the prevalence of CKD grew from 152.0 million in 2020 to 163.8 million in 2025, and +is projected to reach 175.0 million by 2030 and 185.8 million by 2035. +Market drivers of CKD drugs market +• Synergistic Effects of Increasing Prevalence and Population Aging. The prevalence +of CKD is continuously rising, attributable to the high incidence of metabolic +disorders such as diabetes mellitus and hypertension, as well as the impacts of +unhealthy lifestyles. The acceleration of population aging has led to an +increase in the proportion of the elderly population, which are more prone to +comorbid chronic diseases. The complexity of their conditions has also +elevated the difficulty of diagnosis and treatment as well as the consumption +of medical resources. +• Innovations and Breakthroughs in Diagnostic and Monitoring Technologies. +Innovations in diagnostic and monitoring technologies have optimized the +diagnostic and therapeutic workflow of CKD. AI algorithms can accurately +identify early signs of renal injury, enhancing diagnostic precision; the +integration of smart wearable devices with telemedicine has enabled real-time +monitoring of renal function parameters, furnishing data support for early +screening and personalized diagnosis and treatment. +• Transformation of Chronic Disease Management Models. The management model +of CKD has shifted from end-stage treatment to full-cycle comprehensive +management. The hierarchical diagnosis and treatment system has optimized +the allocation of medical resources, digital tools have improved patients’ +treatment adherence, and the multidisciplinary collaboration model has +provided integrated diagnostic and therapeutic services for patients, +effectively decelerating the progression of CKD. +INDUSTRY OVERVIEW +–7 6– + + +--- page 85 --- +Entry barriers of CKD drug market +• Technical Barriers. CKD features a complex pathogenesis, and drug R&D +requires target design for multiple pathological processes such as renal +fibrosis and metabolic disorders, imposing extremely high demands on +pharmaceutical enterprises’ basic research capabilities and target +development technologies. In addition, enterprises producing mainstream +existing drugs have established a full-chain patent system covering +compounds, processes and indications, forming a technical monopoly, and +new entrants are prone to intellectual property disputes. +• Policy Barriers. Drug regulatory authorities worldwide implement high +standards for the approval of CKD drugs, requiring the provision of clear +clinical benefits and comprehensive safety data. The approval process for +innovative drugs takes 3-5 years or even longer. Meanwhile, medical +insurance access requires passing strict economic evaluations. Hospital +procurement tends to favor mature brands, and new drugs face long cycles of +academic promotion and access, further raising the policy threshold. +• Financial Barriers. CKD drug R&D is characterized by long cycles and high +failure rates, with huge financial investment requirement. The production end +needs to construct GMP-compliant production lines, entailing high upfront +fixed costs. Meanwhile, after the launch of new drugs, continuous capital +investment is necessary for market promotion. Enterprises lacking sufficient +financial strength are unable to break through this barrier. +Overview of Chronic Kidney Disease-Secondary Hyperparathyroidism (CKD-SHPT) +Market +CKD-SHPT is a common and severe complication in patients with CKD, particularly +those with end-stage renal disease receiving dialysis, and represents one of the core +manifestations of CKD-mineral and bone disorder. Its pathogenesis mainly arises from +impaired phosphorus excretion caused by progressive renal function decline, leading to +hyperphosphatemia, insufficient synthesis of active vitamin D and hypocalcemia; +abnormalities in regulatory pathways including the calcium-sensing receptor and vitamin +D receptor continuously stimulate excessive secretion of parathyroid hormone by the +parathyroid glands, which further results in diffuse or nodular hyperplasia of the +parathyroid glands and forms a vicious cycle of autonomous hypersecretion of PTH. In +patients with CKD-SHPT, long-term, sustained excessive secretion of parathyroid +hormone (PTH) over-activates osteoclast-mediated bone resorption and inhibits +osteoblast-mediated bone formation, resulting in a rate of bone resorption that far exceeds +bone formation. This causes continuous dissolution of hydroxyapatite crystals in bone +and massive mobilization of calcium and phosphorus minerals into the bloodstream. The +massive loss of bone calcium, combined with hyperphosphatemia caused by CKD-SHPT +itself, significantly increases the calcium-phosphorus product beyond the normal +threshold, leading to ectopic deposition of calcium-phosphate complexes in blood vessel +walls, heart valves and other soft tissues. Consequently, CKD-SHPT may give rise to renal +osteodystrophy, vascular and soft tissue calcification and other disorders, clinically +manifesting as bone pain, increased bone fragility, pathological fractures, vascular +stiffness and increased cardiovascular burden, and significantly increases the risk of +adverse cardiovascular events and mortality among affected patients. +CKD-SHPT, as a secondary complication stemming from chronic diseases, is a +chronic condition characterised by non-curability in the short term and a requirement for +lifelong management. Per industry practice, prevalence data is generally utilised to +measure and reflect the scale of the existing patient pool for such chronic illnesses. Given +the insidious onset of CKD-SHPT, its exact time of onset is often difficult to be precisely +determined, making incidence data quite challenging to compile and as such the data set +might be biased. To date, there are few dedicated industry-wide studies focusing on the +incidence of CKD-SHPT. Accordingly, prevalence data carries greater industry-referential +value and practical research feasibility for CKD-SHPT when compared with incidence +data. The global prevalence of CKD-SHPT grew from 136.5 million in 2020 to 160.4 million +in 2025, and is projected to reach 188.0 million by 2030 and 219.4 million by 2035. The +prevalence of CKD-SHPT in China grew from 13.0 million in 2020 to 14.0 million in 2025, +and is projected to reach 15.0 million by 2030 and 15.9 million by 2035. The global +population of patients with Stage 5 CKD complicated by SHPT expanded from 5.0 million +in 2020 to 5.9 million in 2025. This cohort is projected to reach 6.9 million by 2030 and 8.1 +million by 2035. Concurrently, the patient population in China grew from 0.60 million in +2020 to 0.65 million in 2025, and is forecasted to hit 0.69 million by 2030 and 0.73 million +by 2035. +INDUSTRY OVERVIEW +–7 7– + + +--- page 86 --- +Main treatment of CKD-SHPT +In the field of CKD-SHPT treatment, there is no concept of first-line, second-line, or +other sequential therapies. The choice of a specific treatment regimen depends entirely on +whether the patient meets the eligibility criteria for the medication. In the early stages, +CKD-SHPT can be effectively managed with medical therapy. For example, phosphorus +binding agents, vitamin D and its analogs, and calcium-sensitive receptor agonists can +control the patient’s parathyroid hormone levels to some extent in the early stages of the +disease. Phosphorus binding agents inhibit parathyroid cell proliferation by lowering +blood phosphorus levels, which in turn reduces parathyroid hormone levels. Vitamin D +and its analogs regulate calcium and phosphorus metabolism and inhibit parathyroid +hormone production by inhibiting osteoclasts, promoting osteoblasts, and intestinal +calcium absorption. +CaSR agonists inhibit parathyroid hormone production by increasing the sensitivity +of calcium-sensitive receptors to extracellular calcium and binding to receptor variants. +The potential for severe gastrointestinal reactions, drug-drug interactions, and side effects +such as hypercalcemia and hyperphosphatemia greatly reduce patient compliance, while +increased drug resistance further reduces efficacy as the patient’s disease progresses. +Surgical intervention is still needed for patients who fail drug therapy or have advanced +CKD-SHPT, with parathyroidectomy being the main surgical procedure. +Market size of CKD-SHPT drugs +Between 2020 and 2025, core drugs for the treatment of CKD-SHPT in China have +fully completed generic substitution and been successively included in the national +volume-based procurement, resulting in a significant decline in the overall average selling +price of the market. As of the end of 2025, all mainstream CKD-SHPT treatment drugs are +small-molecule drugs, including oral CaSR agonist cinacalcet, vitamin D analog +paricalcitol, traditional vitamin D drug calcitriol, and phosphate binders lanthanum +carbonate and sevelamer, have been included in the national or local centralized drug +procurement programs, leading to a substantial drop in the overall average selling price. +Between 2020 and 2025, the average selling price of CKD-SHPT drugs declined by +approximately 80%. The aforementioned mainstream CKD-SHPT drugs were all included +in the NRDL at an early stage, and the implementation of volume-based procurement has +further significantly reduced the financial burden on patients and greatly improved drug +accessibility. Meanwhile, with the continuous increase in the dialysis rate of patients with +CKD in China and the improvement in CKD-SHPT disease screening and diagnosis +capabilities, the number of CKD-SHPT patients receiving standardized pharmacotherapy +has achieved rapid growth. Between 2020 and 2025, annual sales volume of CKD-SHPT +drugs increased by 3 to 5 times. The significant decline in the average selling price of +CKD-SHPT drugs and the rapid growth in their sales volume have offset each other, +resulting in a minimal growth of only 0.7% in the market size of CKD-SHPT drugs in +China Mainland from 2020 to 2025, increasing from RMB2.0 billion to RMB2.1 billion. +With the approval and launch of peptide-based CaSR agonists, the domestic +CKD-SHPT drug market is poised for rapid growth, with the specific market drivers +outlined below: +• Multiple peptide-based CaSR agonists will be launched successively and +included in the NRDL, improving drug accessibility: Etelcalcetide was +approved by NMPA in May 2023 and has not yet been included in the NRDL. +In addition, two other peptide-based CaSR agonists (MT1013 and SHR6508) +are in Phase III clinical trials and nearing approval for launch. As most other +drugs in the CKD-SHPT treatment field have already been included in the +NRDL, all three drugs are expected to be successively included in the NRDL +through national medical insurance negotiations within the next 2 to 3 years, +enhancing their accessibility and achieving commercial volume expansion. +• The treatment cost of peptide-based CKD-SHPT drugs will be significantly +higher than that of small-molecule SHPT drugs, driving up the average +treatment cost of CKD-SHPT drugs: Currently, the monthly treatment cost of +mainstream small-molecule CKD-SHPT drugs is less than RMB100, while the +monthly treatment cost of peptide-based CaSR agonists exceeds RMB2,000. +INDUSTRY OVERVIEW +–7 8– + + +--- page 87 --- +Even after being included in the NRDL, the projected monthly treatment cost +of peptide-based CaSR agonists will still be more than 10 times that of the +existing post-procurement small-molecule CaSR agonist cinacalcet, which +will raise the overall average treatment cost of CKD-SHPT drugs. +• The small-molecule CaSR agonist cinacalcet is constrained by high incidence +of gastrointestinal adverse reactions and poor patient treatment compliance, +which hinders the improvement of its market penetration and expansion of its +market space. Cinacalcet features a relatively high incidence of +gastrointestinal adverse reactions, leading numerous patients to discontinue +treatment due to intolerance to such reactions. Meanwhile, as an oral +formulation, it comes with stringent administration requirements coupled +with prominent side effects, further resulting in frequent missed doses, +arbitrary dosage adjustment and even premature treatment cessation among +patients, thus resulting in unsatisfactory overall treatment compliance. The +aforesaid gastrointestinal adverse reactions and compliance issues not only +constrain the market penetration of cinacalcet, but also restrict the overall +treatment rate of CKD-SHPT patients, ultimately forming a bottleneck that +curbs further growth of its market size. +• Peptide-based CaSR agonists avoid the common adverse reactions of +small-molecule CaSR agonists and expand the eligible patient population: +Peptide-based CaSR agonists are administered intravenously and directly +enter the blood circulation, avoiding the severe gastrointestinal adverse +reactions commonly associated with oral cinacalcet, enabling a large number +of patients who were previously unable to tolerate oral treatment to receive +standardized therapy. They also carry a lower risk of causing hypercalcemia +and hyperphosphatemia, and their indication scope can be extended to +patients with all stages of CKD-SHPT. +• Peptide-based CaSR agonists can be administered concurrently with dialysis, +compared to small-molecule CaSR agonists, can significantly improve +patient treatment adherence: These agents can be directly administered by +medical staff through dialysis lines during patients’ routine dialysis sessions, +completely resolving the common problems of missed doses, self-medication +reduction, and treatment discontinuation associated with oral drugs, and +significantly improving patient treatment adherence. +Driven by the continuous increase in market penetration resulting from improved +accessibility following the commercial launch and NRDL inclusion of peptide-based +CKD-SHPT drugs, the rise in overall patient treatment rate and expansion of the eligible +patient population brought about by their superior safety and treatment adherence +advantages, as well as their higher treatment costs compared to small-molecule +CKD-SHPT drugs, both the sales volume and average treatment cost per patient of +CKD-SHPT drugs will be simultaneously boosted, thereby propelling the rapid expansion +of the domestic CKD-SHPT drug market. It is projected that the market size will reach +RMB5.0 billion by 2030 and RMB13.1 billion by 2035, representing CAGRs of 18.7% and +21.4% respectively during the corresponding periods. +CKD-SHPT drug market in China, 2020-2035 +2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E +2.7 2.2 2.2 2.1 2.2 2.4 2.9 3.8 5.0 6.8 +9.3 10.3 11.9 13.1 +2.0 2.8 +Billion RMB +Period +2020-2025 0.7% +CAGR +2025-2030E 18.7% +2030E-2035E 21.4% +Source: Annual Reports of Listed Companies, Expert Interviews, Frost & Sullivan Report +INDUSTRY OVERVIEW +–7 9– + + +--- page 88 --- +Overview of Chronic Kidney Disease-Mineral and Bone Disorder (CKD-MBD) Market +CKD-MBD is a common complication in CKD patients, characterized by mineral +metabolism disorders, bone metabolism and structural abnormalities, as well as vascular +and other soft tissue calcifications. It represents a systemic manifestation of multisystem +involvement during CKD progression. Patients with CKD-MBD may experience bone +pain, deformities, and increased fracture risk in the skeletal system, while children may +also exhibit growth retardation. The cardiovascular system experiences accelerated +atherosclerosis and elevated blood pressure due to vascular calcification, triggering +coronary heart disease, heart failure, and even sudden death — a major contributor to +elevated cardiovascular mortality risk. Additionally, soft tissue calcification causes +localized pain, while hyperparathyroidism exacerbates metabolic imbalance, creating a +vicious cycle that significantly increases disability rates and mortality while severely +compromising quality of life and survival prognosis. The NHANES study found that +CKD-MBD patients with serum phosphorus ≥4.5 mg/dL had a 28% increase in all-cause +mortality and a 57% increase in cardiovascular mortality. The CORES study showed that +CKD patients with serum calcium <9.5 mg/dL or >10.5 mg/dL both experienced elevated +all-cause mortality. +The global prevalence of CKD-MBD grew from 291.7 million in 2020 to 342.8 million +in 2025, and is projected to reach 403.0 million by 2030 and 470.3 million by 2035. The +prevalence of CKD-MBD in China grew from 47.0 million in 2020 to 50.6 million in 2025, +and is projected to reach 54.1 million by 2030 and 57.4 million by 2035. +Main treatment of CKD-MBD +The treatment of CKD-MBD is a comprehensive regimen centered on correcting +calcium-phosphorus metabolism imbalance and inhibiting hyperparathyroidism, mainly +consisting of basic nutritional and lifestyle interventions, pharmacotherapy, and surgical +treatment. +T reatment Paradigm of CKD-MBD +Hyperphosphatemia +• Calcium-free phosphate binders: Sevelamer, +Lanthanum carbonate +• +• +• +• +• +Hypercalcemia Serum calcium > +2.75 mmol/L +Vitamin D +deficiency +25(OH)D < +30 ng/mL +Serum calcium & iPTH +& serum phosphorus > +target values. +iPTH > target value +Serum phosphorus > +target value +•Failure of +drug therapy +CKD-MBD +CKD-SHPT +Eligibility Criteria Appropriate treatment methodsClinical Symptoms +Calcium-containing phosphate binders: Calcium carbonate +Active vitamin D analogs: Calcitriol, Paricalcitol, Alfacalcidol +CaSR agonist: Cinacalcet, Etelcalcetide, Evocalcet +Parathyroidectomy: Total parathyroidectomy, +subtotal parathyroidectomy, total parathyroidectomy +with autotransplantation +Vitamin D: Cholecalciferol (Vitamin D +3) +Active vitamin D: Calcitriol +• +• +Calcium-lowering agents: Calcitonin +Bisphosphonates: Zoledronic acid +INDUSTRY OVERVIEW +–8 0– + + +--- page 89 --- +Efficacy and Safety Profile of Standard T reatment for CKD-MBD +Phosphate Binders +(Lanthanum +Carbonate) +Patients with Stage +3-5 CKD +complicated with +hyperphosphatemia +Global: 60.0 million +China: 5.2 million +Potently reduces serum phosphorus levels, +lowers the risk of vascular calcification, +and serves as an adjuvant therapy to +stabilize patients' PTH levels +The core adverse reactions are +gastrointestinal reactions, with +favorable tolerability and safety +profile for long-term use +Phosphate Binders +(Calcium Carbonate) +Patients with Stage +3-5 CKD +complicated with +hyperphosphatemia +Global: 60.0 million +China: 5.2 million +Binds to phosphate to reduce its absorption +and lower serum phosphorus levels, while +supplementing calcium to correct +hypocalcemia and inhibit excessive PTH +secretion from the parathyroid glands, with +a rapid onset of action +It may cause hypercalcemia; +long-term excessive use may +accelerate calcification of blood +vessels and soft tissues, and +gastrointestinal adverse reactions +are common +Active Vitamin D +(Calcitriol) +Patients with Stage +5 CKD +complicated with +CKD-SHPT +Global: 5.9 million +China: 0.6 million +Directly acts on the vitamin D receptors of +the parathyroid glands, potently inhibits the +synthesis and secretion of PTH, and rapidly +reduces serum PTH levels +The core adverse reactions include +hypercalcemia and +hyperphosphatemia. Excessively +high dosage may induce +overinhibition of PTH, resulting in +adynamic bone disease +Active Vitamin D +Analogues +(Paricalcitol) +Patients with Stage +5 CKD +complicated with +CKD-SHPT +Global: 5.9 million +China: 0.6 million +With high targeting specificity to the +vitamin D receptors of the parathyroid +glands, it potently inhibits the synthesis and +secretion of PTH with a minimal impact on +ser +um calcium and phosphorus levels. +It has a significantly lower +incidence of hypercalcemia and +hyperphosphatemia, with a superior +safety profile and favorable +long-term tolerability +CaSR agonist +(Cinacalcet) +Patients with Stage +5 CKD +complicated with +CKD-SHPT +Global: 5.9 million +China: 0.6 million +Activates the CaSR to enhance the +sensitivity of the receptors to serum +calcium. It potently inhibits the synthesis +and secretion of PTH without increasing +serum calcium, while simultaneously +reducing serum phosphorus levels +The core adverse reaction is +dose-dependent hypocalcemia, +with common mild to moderate +gastrointestinal reactions +Bisphosphonates +(Alendronate +Sodium) +Patients with CKD +complicated with +osteoporosis +Global: 121.3 million +China: 10.8 million +Binds to bone mineralization sites with +high affinity, specifically inhibits osteoclast +activity and reduces bone resorption, +significantly increases bone mineral +density, lowers the risk of fragility +fractures, and delays bone mass loss. +It has a favorable safety profile in +patients with Stage 1-3 CKD; for +patients with Stage 4-5 CKD, +cautious use with dose reduction is +required to avoid exacerbation of +renal impairment +Calcium-lowering +Agents +(Calcitonin) +Patients with CKD +complicated with +osteoporosis +Global: 121.3 million +China: 10.8 million +For patients with osteoporosis, it reduces +bone calcium loss and relieves bone pain, +with a rapid onset of action. However, it +provides no long-term prognostic +improvement +Short-term use has no risk of +elevated serum calcium and +phosphorus, with a favorable safety +profile. Long-term use may cause +dose-dependent hypocalcemi +a, and +there is a risk of immunogenicity +Standard +Treatment +(Representative +Drug) +Recommended +Indicated +Patient +Global and +Chinese Indicated +Patients in 2025 +Efficacy Safety Profile +Source: Chinese guidelines for the diagnosis and treatment of mineral and bone disorders in chronic kidney disease, +Frost & Sullivan Report +Market size of CKD-MBD drugs +In 2025, the market size of CKD-MBD drugs in China reached RMB5.7 billion. It is +estimated that the market size will reach RMB9.9 billion by 2030 and RMB19.8 billion by +2035, with the CAGR of 11.7% and 14.8%, respectively, during the period. +CKD-MBD drugs market in China, 2020-2035 +2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E +7.1 6.5 6.3 5.7 6.0 6.5 7.2 8.4 9.9 +12.1 +15.0 16.3 18.3 19.8 +5.4 6.8 +Billion RMB +Period +2020-2025 1.3% +CAGR +2025-2030E 11.7% +2030E-2035E 14.8% +Source: Annual Reports of Listed Companies, Expert Interviews, Frost & Sullivan Report +INDUSTRY OVERVIEW +–8 1– + + +--- page 90 --- +Overview of CaSR and OGP Agonist Drugs Market +Calcium-sensing receptor (CaSR) i saGp r otein-coupled receptor distributed in +parathyroid glands, kidneys, and other tissues, and its core function is to sense changes in +extracellular calcium ion concentration and regulate the secretion of parathyroid hormone +(PTH) through negative feedback to maintain calcium metabolism homeostasis. CaSR +agonists enhance their sensitivity to extracellular calcium by binding to CaSR, which can +activate the CaSR signaling pathway and directly inhibit the secretion of PTH by +parathyroid master cells even when blood calcium levels are not high; at the same time, +prolonged use of these agents reduces the proliferation of parathyroid cells and slows +down the process of glandular hyperplasia. This mechanism can not only reduce the blood +PTH level, but also indirectly improve the calcium and phosphorus metabolism disorder, +thus alleviating the complications of bone pain, fracture and vascular calcification caused +by CKD-SHPT. +The first generation of CaSR receptor agonists is cinacalcet, as the first approved +drug, which is used to treat calcium metabolism disorders such as CKD-SHPT in chronic +kidney disease by activating calcium-sensitive receptors to inhibit PTH secretion, but it +has significant drawbacks, including a high incidence of gastrointestinal side effects, +susceptibility to hypercalcemia, and limited effects on severe parathyroid hyperplasia and +requires daily dosing. The second generation of drugs includes Evocalcet and +Etelcalcetide, of which Evocalcet reduces the risk of gastrointestinal reactions and drug +interactions through structural optimization, and Etelcalcetide avoids oral side effects +and has a stronger activation effect due to intravenous injection, which improves the +safety of the first generation as a whole, but there are still shortcomings to be solved, such +as an increased incidence of hypocalcemia, and severe hypocalcemia still requires +emergency intervention, and the insufficient efficacy for severe parathyroid hyperplasia +requires combination therapy, and the convenience of drug administration is not easy. +Combination therapy is needed for severe parathyroid hyperplasia, and the convenience +of drug administration needs to be improved. +Osteogenic growth peptide (OGP) is an active peptide involved in the regulation of +bone metabolism, which can promote the proliferation of osteoblasts, enhance osteogenic +activity, stimulate the synthesis of collagen and the formation of bone matrix, and regulate +the process of bone formation. OGP has the potential to combat the symptoms of excessive +bone resorption activity and inhibited bone formation caused by CKD-SHPT. By +promoting bone formation, it can reduce the excessive release of calcium from bones, +facilitate the deposition of calcium and phosphorus to bone tissue, and indirectly stabilize +the levels of blood phosphorus and blood calcium — thereby alleviating the stimulation to +the parathyroid glands caused by calcium loss from bones. Although no OGP-targeting +drugs have been approved, OGP’s bone metabolism regulation mechanism holds +therapeutic promise for CKD-MBD-related conditions. +Competitive landscape of CaSR agonist +As of the latest practicable date, there are two CaSR agonist drugs approved by +FDA. +Global competitive landscape of CaSR agonist +Target Drug Name Brand Name Company Indication Dosage +Form Approval Date +2017-02-07CASR Etelcalcetide Parsabiv Amgen CKD-SHPT +2004-03-08CASRC inacalcet Sensipar Amgen CKD-SHPT, +Hypercalcemia Oral +Injection +Source: FDA, Frost & Sullivan Analysis +INDUSTRY OVERVIEW +–8 2– + + +--- page 91 --- +As of the latest practicable date, there are three CaSR agonist drugs approved by +NMPA. +Competitive landscape of CaSR agonist in China +Target Drug Name Brand +Name Company Indication Dosage +Form +Market share +in 2024 +(by revenue) +Approval Date +2014-08-21 +2023-05-06 +2024-07-30 +NRDL +Status +List B +Not +Included +List B +CASR +CASR +CASR +Etelcalcetide +Evocalcet +Cinacalcet +Parsabiv +Sensipar +Amgen +Amgen +CKD-SHPT +Orkedia Kyowa Kirin CKD-SHPT +CKD-SHPT, +Hypercalcemia +Injection +Oral +Oral 99.6% +0.4% +0.0% +Annual +Treatment +Cost +(thousand RMB) +5.9 +43.7 +24.1 +Source: NMP A, Frost & Sullivan Analysis +As of the latest practicable date, there are five CaSR agonist drug candidates for +CKD-SHPT in the clinical stage globally. +Global competitive landscape of CaSR agonist pipelines +Target Drug Code Company Dosage Form Regulatory +Authorities +Clinical +Stage +Latest Update +Date +CASR +CASR +CASR +CASR +CASR, OGP +Upacicalcet +Evocalcet +SHR-6508 +ASP7991 +MT1013 +Pathalys Pharma +Kyowa Kirin +Hengrui Pharmaceutical +Astellas Pharma +Shaanxi Micot Pharmaceutical +Technology +Oral +Oral +Injection +Oral +Injection +FDA +FDA +NMPA +FDA +NMPA +Phase III +Phase III +Phase III +Phase II +Phase III +2025-09-09 +2022-04-25 +2025-12-27 +2024-11-06 +2025-10-09 +FDA Phase I 2022-07-29 +Source: ClinicalTrials.gov, CDE, Frost & Sullivan Analysis +Overview of Overweight and Obesity Market +Overweight and obesity are chronic diseases characterized by excessive fat +accumulation that poses risks to health. These conditions are the major contributors to +various other health issues, such as diabetes and cardiovascular diseases. The global +prevalence of overweight and obesity patients grew from 2,275.7 million in 2020 to 2,687.4 +million in 2025, and is projected to reach 3,070.6 million by 2030 and 3,477.2 million by +2035. In China, the prevalence of overweight and obesity increased from 570.7 million in +2020 to 659.1 million in 2025, and is projected to reach 756.5 million by 2030 and 860.5 +million by 2035. +Currently, the treatment for overweight and obesity focuses on reducing and +maintaining body weight, as well as managing any associated diseases and complications. +A differentiated approach is typically used, depending on the degree of obesity. For +patients who are overweight but do not have obesity-related conditions, weight control is +primarily achieved through lifestyle interventions such as diet and exercise. For patients +whose health condition process from overweight to obese, medication may be added +alongside with lifestyle interventions to support weight loss. Surgery is considered a last +resort, which is used for patients who are extremely obese and have no effective responses +to other treatments. The current standard of care includes orlistat and GLP-1-based +therapies (e.g., liraglutide, semaglutide, and tirzepatide). GLP-1 RAs are established as +first-line treatments for obesity or overweight management due to their dual efficacy in +glycemic control and weight reduction. +Currently, the primary GLP-1 drugs worldwide are semaglutide (a GLP-1 +single-target agonist) and tirzepatide (a GIP/GLP-1 dual-target agonist). Although both +drugs demonstrate significant weight-loss effects, they still face numerous limitations in +clinical application. Semaglutide is associated with gastrointestinal side effects, and +weight loss is accompanied by some muscle loss. Long-term medication is required for +INDUSTRY OVERVIEW +–8 3– + + +--- page 92 --- +maintenance, and weight rebound occurs after discontinuation. Tirzepatide demonstrates +superior weight loss efficacy compared to semaglutide, but it also exhibits a higher +incidence of gastrointestinal side effects, greater muscle loss, and faster weight rebound +after discontinuation than semaglutide. +Historically, treatment options for overweight and obesity in China were relatively +limited. The mismatch between existing treatment regimens and clinical needs has +unlocked immense market opportunities for GLP-1 receptor agonists. The research and +development of long-acting GLP-1 drugs can reduce dosing frequency and enhance +patient compliance, which is expected to lift the penetration level of GLP-1 therapeutics. +This will broaden the patient base and further raise market penetration of GLP-1 drugs, +especially against the backdrop of sustained growth in China’s overweight and obese +population. In addition, numerous GLP-1 receptor agonist candidates for the treatment of +overweight and obesity are currently in clinical development across China. In view of the +limited availability of existing therapies, the launch of such novel GLP-1 receptor agonists +is expected to significantly fuel the rapid growth of China’s overweight and obesity drug +market. In 2025, the overweight and obesity drug market in China is RMB5.7 billion. It is +estimated that the overweight and obesity drug market in China will grow to RMB23.5 +billion in 2030 and RMB107.3 billion in 2035, with a CAGR of 32.9% from 2025 to 2030 and +35.5% from 2030 to 2035 respectively. +Overweight and obesity drugs market in China, 2020-2035 +2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E +4.3 4.8 4.2 5.7 7.9 11.0 13.2 17.0 23.5 +32.7 +45.4 +62.6 +83.5 +107.3 +1.9 3.0 +Billion RMB +Period +2020-2025 24.4% +CAGR +2025-2030E 32.9% +2030E-2035E 35.5% +Source: Annual Reports of Listed Companies, Expert Interviews, Frost & Sullivan Report +Market drivers and future trends of GLP1R polypeptide drugs market +• Large unmet clinical needs. The prevalence of obesity and overweight has +been rising rapidly among both children/adolescents and senior adults across +China and globally, due to modern lifestyle factors such as excessive calorie +intake and insufficient physical activity. Currently, a number of GLP-1R drugs +have been approved; however, there are still many unmet clinical needs, +including muscle loss after weight loss, severe rebound and deterioration of +body composition profile after discontinuation of treatment, as well as the +failure to fully address various comorbidities commonly associated with +clinically obese patients. +• Rising awareness for obesity and overweight management. The rising public +awareness regarding the health risks associated with obesity and overweight +has led to a surge in demand for effective obesity and overweight +management solutions. According to the China Public Weight Management +and Nutrition Awareness Survey Report (2026), 91.7% of the public recognizes +the importance of weight management. In particular, the younger +generations, who are increasingly impacted by obesity and overweight, are +showing a greater willingness to engage in weight management treatments. +• Multi-targeted GLP-1 peptide drugs become mainstream. Multi-targeted +drugs have become the core track of competition among global +pharmaceutical companies by activating multiple metabolism-related +receptors (e.g., GLP-1R, GIPR, GCGR) at the same time to achieve synergistic +efficacy and optimization of side effects. The multi-target GLP1-related +peptide drugs of many companies have proved to be more effective than +single-target drugs, and multi-target GLP1-related peptide drugs are expected +to occupy a dominant position in the market. +INDUSTRY OVERVIEW +–8 4– + + +--- page 93 --- +• Indications for expansion. The earliest GLP-1 drugs were only indicated for +hypoglycemic therapy in diabetic patients. With clinical exploration and the +unmet needs of the large number of obese patients, the indications of GLP-1 +peptide drugs have gradually expanded to include metabolic diseases such as +obesity, CKD with albuminuria and MASH. According to Prevalence of Chronic +Kidney Disease in China, more than 80% of CKD patients present with albuminuria . +According to Guideline for Primary Care Diagnosis, Treatment and +Management of Metabolic Associated Fatty Liver Disease (MAFLD) (2025), +China has over 40 million MASH patients, yet current medications only +provide symptomatic relief with limited efficacy. GLP-1 peptides possess the +potential to address these unmet clinical needs and have emerged as one of +the most significant therapeutic approaches in the field of metabolic diseases. +Competitive landscape of GLP1R polypeptide drugs +As of the latest practicable date, there are 17 triple-target GLP1R peptide drug +candidates for overweight and obesity in the clinical stage globally. Among these, 12 drug +candidates target GLP-1R, GCGR, and GIPR, two drug candidates target GLP-1R, GCGR, +and FGF21, one drug candidate targets GLP1R, GIPR, and AMYR, and one drug candidate +targets GLP1R, GIPR, and NPY2R. XTL6001, our GLP1R drug candidate, is the only +triple-target GLP-1R peptide drug candidate targeting GLP-1R, GCGR, and MASR. +Agonizing MasR can increase protein synthesis and preserve muscle mass. XTL6001 holds +the potential to eliminate the side effect of muscle loss associated with GLP-1R agonists +during weight loss. +Global competitive landscape of triple-target GLP1R peptide drugs pipelines +Target Drug Code Company Indication Regulatory +Authorities +Clinical +Stage +Latest Update +Date +GLP1R, GCGR, +MASR XTL6001 Shaanxi Micot Pharmaceutical +Technology +Overweight & Obesity, CKD with proteinuria NMPA Phase I 2026-05-09 +Overweight & Obesity FDA IND 2024-12-20 +GLP1R, GCGR, +GIPR +Retatrutide +Eli Lilly +Overweight & Obesity, Diabetes Type 2, Chronic Low Back Pain, +ASCVD, CKD, Obstructive Sleep Apnea, Osteoarthritis FDA Phase III 2026-05-22 +MASLD NMPA Phase III 2026-05-08 +Overweight & Obesity, Diabetes Type 2 FDA Phase I 2026-05-12 +LY4086940 Overweight & Obesity NMPA Phase I 2024-07-08 +Efocipegtrutide +Hanmi Pharmaceutical +NAFLD FDA Phase II 2025-11-19 +Overweight & Obesity FDA Phase I 2025-02-06 +HM15275 Overweight & Obesity FDA Phase II 2026-05-26 +UBT251 +Federal Biotechnology Overweight & Obesity, Type 2 diabetes, MASH, CKD with proteinuria NMPA Phase II 2026-04-24 +Novo Nordisk Overweight & Obesity FDA Phase II 2026-02-17 +ZX2021 Jiangsu Kanion Pharmaceutical Overweight & Obesity NMPA Phase II 2025-06-18 +DYX116 Jiangsu Deyuan Pharmaceutical Type 2 diabetes, Overweight & Obesity NMPA Phase II 2026-05-18 +MWN101 +Lepu Medical Technology +Type 2 diabetes, Overweight & Obesity NMPA Phase II 2025-01-23 +MWN109 +Type 2 diabetes, Overweight & Obesity NMPA Phase II 2026-05-30 +Overweight & Obesity FDA Phase I 2025-11-20 +SAR441255 Sanofi Overweight FDA Phase I 2025-09-22 +HEC-007 HEC Pharmaceutical Type 2 diabetes, Overweight & Obesity NMPA Phase I 2026-04-12 +HRS-4729 Hengrui Pharma Overweight & Obesity NMPA Phase I 2026-05-07 +GLP1R, GCGR, +FGF21 +MWN105 Lepu Medical Technology +Overweight & Obesity NMPA Phase II 2025-09-05 +Type 2 diabetes, Overweight & Obesity NMPA Phase I 2024-12-27 +DR10624 Huadong Medicine MAFLD, Hypertriglyceridemia NMPA Phase II 2026-02-14 +GLP1R, GIPR, +AMYR NN9662 Novo Nordisk Overweight & Obesity, Diabetes Type 2 FDA Phase II 2026-05-19 +GLP1R, GIP, +NPY2R BI 3034701 Boehringer Ingelheim Overweight & Obesity FDA Phase I 2025-11-21 +Source: clinicaltrials.gov, CDE, Frost & Sullivan analysis +INDUSTRY OVERVIEW +–8 5– + + +--- page 94 --- +3. OVERVIEW OF THE ANTITHROMBOTIC DRUG MARKET +Overview of Antithrombotic Therapy for ACS-PCI +Acute coronary syndrome (ACS), a type of coronary heart disease (CHD), refers to a +group of conditions that include ST-elevation myocardial infarction (STEMI), non-ST +elevation myocardial infarction (NSTEMI), and unstable angina. From 2020 to 2025, the +incidence of ACS worldwide increased from 23.8 million to 26.6 million. It is estimated +that by 2030 and 2035, the incidence of ACS worldwide will reach 29.1 million and 31.4 +million, respectively. From 2020 to 2025, the incidence of ACS in China increased from 4.6 +million to 5.2 million. It is estimated that by 2030 and 2035, the incidence of ACS in China +will reach 5.8 million and 6.3 million, respectively. +Percutaneous coronary intervention (PCI) is a non-surgical, invasive procedure +with a goal to relieve the narrowing or occlusion of the coronary artery and improve blood +supply to the ischemic tissue. From 2020 to 2025, the volume of PCI procedures worldwide +increased from 6.2 million to 10.7 million. It is estimated that by 2030 and 2035, the volume +of PCI procedures worldwide will reach 15.6 million and 21.7 million, respectively. From +2020 to 2025, the volume of PCI procedures in China increased from 1.0 million to 2.3 +million. It is estimated that by 2030 and 2035, the volume of PCI procedures in China will +reach 4.0 million and 6.0 million, respectively. +Main perioperative treatment of PCI in ACS +Although PCI has become increasingly technically mature, throughout the entire +procedure related medical devices may cause damage to both the access vessel and the +coronary artery, potentially leading to severe complications that threaten patient life. To +prevent in-stent thrombosis, patients are required to undergo antithrombotic therapy, +which includes dual antiplatelet therapy (DAPT) before and after PCI, intraoperative +heparin-based anticoagulation, and the use of glycoprotein IIb/IIIa inhibitors (GPIs) +when necessary. +China is witnessing accelerated population aging alongside a growing elderly +population, and the morbidity rate of thromboembolic diseases rises progressively with +age, forming the core demand group for antithrombotic drugs. Meanwhile, there exists a +substantial patient base suffering from chronic illnesses including cardiovascular +diseases, and the heavy socioeconomic and medical burden imposed by such ailments +fuels sustained clinical treatment needs. The continuous refinement of national clinical +diagnosis and treatment guidelines has facilitated the standardization and normalization +of antithrombotic therapy, thereby further unlocking unmet clinical demand. Leveraging +superior efficacy, favourable safety profiles and higher administration convenience, novel +antithrombotic drugs are rapidly substituting conventional alternatives and reshaping the +market structure. In addition, patients afflicted with thromboembolic diseases generally +require long-term or even lifelong medication use, which underpins steady repeat +purchasing demand. Collectively, the aforesaid factors drive the steady expansion of +China’s antithrombotic drug market. +In 2025, the antithrombotic drugs market in China reached RMB34.5 billion. It is +estimated that the antithrombotic drugs market in China will grow to RMB47.2 billion in +2030 and RMB61.8 billion in 2035, with a CAGR of 6.4% from 2025 to 2030 and 5.6% from +2030 to 2035, respectively. +INDUSTRY OVERVIEW +–8 6– + + +--- page 95 --- +Antithrombotic drugs market in China, 2020-2035 +2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E +31.9 32.5 32.7 34.5 36.9 39.4 41.9 44.5 47.2 50.0 52.8 55.7 58.7 61.8 +30.5 33.1 +Billion RMB +Period +2020-2025 2.5% +CAGR +2025-2030E 6.4% +2030E-2035E 5.6% +Source: Annual Reports of Listed Companies, Expert Interviews, Frost & Sullivan Report +Market drivers and future trends of antithrombotic drugs market +• High Incidence of Cardiovascular Diseases. Cardiovascular diseases (CVDs) +are among the leading causes of mortality worldwide. With the accelerating +progression of global population aging, the incidence and prevalence of CVDs +continue to rise steadily, according to the Report on Cardiovascular Health and +Diseases in China 2024 , the incidence of CVDs and cerebrovascular diseases +among Chinese residents reached 8.7 million in 2023, and the projected +incidence and mortality rates of CVDs in China are expected to rise +continuously over the period from 2020 to 2030, driving an increasing demand +for antithrombotic therapies. +• Heightened Risk of Thrombosis in Interventional Therapies. The continuous +development and widespread adoption of cardiovascular interventional +procedures have significantly improved the treatment outcomes for patients +with CVDs. Nevertheless, these interventions are associated with a +heightened risk of thrombosis during and after the procedures. According to +Complications and Management of Coronary Artery Injury During Emergency PCI , +the overall incidence of thrombotic events during PCI is 7.7%, necessitating +the use of antithrombotic agents for both prophylaxis and therapeutic +management. This has driven the expanded application of antithrombotic +therapies in the field of interventional cardiology and contributed to the +growth of their market demand. +• Innovative Drug Targets and Mechanisms. Thrombosis involves complex +interactions among the coagulation system including thrombin, platelet +activation including GPIIb/IIIa receptor and P2Y +12 receptor, and the +fibrinolytic system. Given that single-target agents struggle to +comprehensively address all pathological procedures, dual-target and +multi-mechanism drugs have emerged as hotspots in drug development. For +instance, bifunctional antagonists simultaneously target both coagulation and +platelet function such as dual-target agents against factor II and GPIIb/IIIa, +along with innovative therapeutics combining anticoagulant and +anti-inflammatory effects, represent key future directions in antithrombotic +drug innovation. +Competitive landscape of PCI drugs +PCI drugs are primarily used in patients with ACS who are scheduled to undergo +PCI. As of the latest practicable date, there were three drugs with an indication for PCI +approved by NMPA and three drugs with an indication for PCI approved by FDA. +INDUSTRY OVERVIEW +–8 7– + + +--- page 96 --- +Global competitive landscape of PCI drugs +Target Drug Name Regulatory +Authorities Approval dateIndication +GPIIb/IIIa Bevifibatide BetagrinB io-Thera • Perioperative antithrombotic +therapy for PCI +• Adjunct to PCI +• ACS patients who are +scheduled to undergo PCI +• Patients undergoing PCI +• Patients undergoing +PTCA or PCI +• HIT; Adult patients with or at +risk for HIT undergoing PCI +NMPA 2024-06-25 +P2RY12 Cangrelor Kengreal CHIESI FDA 2015-06-22 +GPIIb/IIIa Eptifibatide* NA +Hansoh +Pharmaceutical +etc. +NMPA 2012-10-30 +Thrombin Argatroban Argatroban Plano +Pharmaceuticals FDA 2011-05-09 +NA +Salubris +Pharmaceuticals +etc. +NMPA 2011-01-01 +ThrombinB ivalirudin* +Angiomax Sandoz FDA 2000-12-15 +Brand Name Company +*Abbreviations: HIT = heparin-induced thrombocytopenia; PTCA = Percutaneous Transluminal +Coronary Angioplast +*Note: The original drug of Eptifibatide (Integrilin) discontinued manufacturing based on a supply +issue with eptifibatide, the active pharmaceutical ingredient in Integrilin. In China, eptifibatide +is only approved as a generic drug, with approved manufacturers including Hybio +Pharmaceutical Co., Ltd., Beijing SL Pharmaceutical Co., Ltd., Shenyang Shuangding +Pharmaceutical Co., Ltd., among others. Bivalirudin is only approved in China as a generic drug, +with approved manufacturers including Shenzhen Salubris Pharmaceuticals Co.,Ltd., +Yangzijiang Pharmaceutical Group Co., Ltd., among others. +Source: NMP A, FDA, Frost & Sullivan Analysis +As of the latest practicable date, there were ten PCI drug candidates for in the +clinical stage globally. +Global Competitive Landscape of PCI Drugs Pipeline +Target Drug Code Company Indication Regulatory +Authorities Clinical Stage Latest Update +Date +GPFactor II, +GPIIb/IIIa MT1002 Shaanxi Micot +Pharmaceutical Technology +NMPA Phase II 2024-05-11 +FDA Phase I 2019-08-08 +P2RY12 +Vicagrel Jiangsu vcare pharmaceutical FDA Phase III 2024-10-01 +DT678 Beijing SL Pharmaceutical NMPA Phase II 2026-01-04 +PRT060128 Portola Pharmaceuticals FDA Phase II 2023-08-08 +HY-022619 Hefei medical and +Pharmaceutical NMPA Phase I 2026-01-28 +CG-0255 Shanghai CureGene +Pharmaceutical NMPA Phase I 2026-03-04 +Cangrelor Jiangsu Aosaikang +Pharmaceutical NMPA Phase I 2019-07-30 +LIAS, LIPT1, +SLC5A6 CMX-2043 Ischemix, LLC FDA Phase II 2011-06-20 +CDH5 FX06 Biopure Corporation FDA Phase II 2007-12-04 +/ SBK009 Chengdu Shibeikang +Biopharmaceutical NMPA Phase I 2025-12-23 +• Anticoagulation therapy and +antithrombotic therapy for ACS patients +undergoing PCI; +• ACS patients undergoing PCI with HIT +or HITT +• ACS patients undergoing PCI +• Patients with ACS undergoing PCI +• Non-urgent PCI +• Antiplatelet therapy in patients following +PCI +• Antiplatelet therapy in the perioperative +treatment of PCI in patients with ACS +• Antiplatelet therapy in the perioperative +treatment of PCI in patients with ACS +• Antithrombotic therapy in the +perioperative treatment of PCI in patients +with ACS +• Patients undergoing PCI and +Perioperative reperfusion treatment +• Ischemia reperfusion injury in patients +undergoing PCI +• Antiplatelet therapy in the perioperative +treatment of PCI in patients with ACS +*Abbreviations: HIT = heparin-induced thrombocytopenia; HITT=heparin-induced thrombocytopenia with +thrombosis +Source: ClinicalTrials.gov, CDE, Frost & Sullivan Analysis +INDUSTRY OVERVIEW +–8 8– + + +--- page 97 --- +4. OVERVIEW OF NEUROLOGICAL DISEASES DRUG MARKET +Overview of Ischemic Stroke Market +Ischemic stroke is the most common type of stroke, accounting for about 70%-80% of +strokes. The global prevalence of ischemic stroke grew from 65.7 million in 2020 to 85.3 +million in 2025, and is projected to reach 105.8 million by 2030 and 127.4 million by 2035. +In China, the prevalence of ischemic stroke grew from 18.6 million in 2020 to 23.5 million +in 2025, and is projected to reach 28.9 million by 2030 and 35.1 million by 2035. Ischemic +stoke caused by the sudden reduction or interruption of blood supply to the brain, +resulting in ischemia and hypoxia, necrosis and softening of brain tissues, and triggering +neurological dysfunction. Acute ischemic stroke should be treated promptly within the +time window, intravenous thrombolysis can be performed within 4.5 hours, and +endovascular thrombolysis can be performed within 6 hours in case of large-vessel +occlusion, and antiplatelet, plaque stabilization, etc. are required at the same time. The +use of neuroprotective agents can reduce ischemia-induced nerve cell damage and protect +brain tissue function. +Main treatment of Ischemic Stroke +The treatment of ischemic stroke is centered on restoring blood flow and preventing +recurrence, and mainly includes surgery and medication. In terms of surgery, +endovascular intervention can quickly open up occluded blood vessels, and carotid +endarterectomy is suitable for patients with severe carotid stenosis; in medication, +thrombolytic drugs are the key to restoring blood flow in the acute stage, antiplatelet and +anticoagulant drugs can prevent the enlargement or formation of blood clots, and statins, +and drugs for controlling blood pressure, glucose, and lipids are used for long-term +prevention and treatment. +However, brain cell damage brought about during cerebral ischemia and the fact +that reperfusion can make neutrophils more likely to recruit toward the ischemic area, +triggering more severe immune inflammation, can have a significant negative impact on +stroke prognosis. Neuroprotective drugs reduce necrosis and apoptosis of neuronal cells +caused by ischemia by inhibiting oxidative stress, reducing intracellular calcium +overload, and improving mitochondrial function, thereby protecting brain tissue function +and effectively improving the prognosis of patients with ischemic stroke. +Market size of neuroprotective drugs +The patient population suffering from stroke in China continues to expand. The +accelerating aging of the population, the simultaneous increase in incidence and +prevalence rates, and the trend of younger onset have laid a solid foundation for the rigid +demand for neuroprotective drugs. The nationwide construction of stroke centers and the +implementation of the hierarchical medical system have significantly improved the +diagnosis rate and standardized treatment rate of stroke at primary medical institutions, +releasing a large amount of potential demand for medication. Core neuroprotective drugs +have been included in the NRDL, which has greatly reduced the financial burden on +patients and enhanced clinical accessibility and penetration rates. The launch of +multi-target innovative drugs and optimized dosage forms has enriched clinical treatment +options and extended the medication cycle for patients. Meanwhile, the growing +popularity of stroke rehabilitation concepts has promoted the expansion of drug +application scenarios from the traditional acute phase to the recovery phase and +home-based treatment, all of which are driving the steady growth of China’s +neuroprotective drug market. +In 2025, the neuroprotective drugs market in China reached RMB11.7 billion. It is +estimated that the market will expand to RMB15.7 billion in 2030 and 24.6 billion in 2035, +representing a CAGR of 6.2% from 2025 to 2030 and 9.3% from 2030 to 2035. +INDUSTRY OVERVIEW +–8 9– + + +--- page 98 --- +Neuroprotective drugs market in China, 2020-2035 +2020 +7.6 +2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E +11.0 11.0 11.5 11.7 12.2 13.2 13.9 14.9 15.7 16.9 18.4 20.4 22.3 24.6 +9.0 +Billion RMB +Period +2020-2025 8.8% +CAGR +2025-2030E 6.2% +2030E-2035E9 .3% +Source: Annual Reports of Listed Companies, Expert Interviews, Frost & Sullivan Report +Market drivers and future trends of neuroprotective drugs market +• Unmet clinical needs. Influenced by the aging population and changes in +lifestyle, the incidence of neurological diseases represented by stroke has +increased significantly, and Alzheimer’s disease and Parkinson’s disease have +also shown a high prevalence. According to the Panorama of the Burden of +Neurological Diseases in China: A National and Provincial-Level Disease Burden +Study (1990-2021), 16 types of neurological diseases affect 468 million people +in China. +• Clinical application scenarios continue to expand. The clinical application +scenarios of neuroprotective drugs continue to broaden, extending from +traditional indications to multiple fields. In the field of acute cerebrovascular +disease, the application scenarios have been expanded from the acute stage to +pre-hospital emergency and recovery management. In the field of +neurodegenerative diseases, relevant drugs are included in medical insurance +as adjuvant therapy. Meanwhile, its application in the field of rare diseases +has made breakthroughs, and gene-targeted neuroprotection cases have +emerged. +• Accelerated development of drugs with new mechanisms. The mechanism of +action of neuroprotective drugs has evolved from single target to +multi-pathway synergy, and TrKB receptor agonists have shown potential in +protection against neurological impairment in the brain. Preclinical data +demonstrate that TrKB receptor agonists possess more than 40 times stronger +free radical-scavenging activity than first-line drugs, and exert a significant +therapeutic effect on cerebral ischemia-reperfusion injury. +Competitive landscape of neuroprotective drugs +As of the latest practicable date, there are three neuroprotective drugs approved by +NMPA. +Competitive landscape of neuroprotective drugs approved by NMPA, China +Target Drug Name Brand Name Company Indication NMPA +Approval Date +/ Edaravone and +Dexborneol ΋̀อ Simcere +Pharmaceutical +Neuroprotection in acute +ischemic stroke 2020-7-29 +Bradykinin B2 +receptor +Urinary +Kallidinogenase ௱ɢੰ Tianpu Biochemical +Pharmaceutical +Mild and moderate acute +ischemic stroke 2005-6-28 +/B utylphthalide Enbipu CSPC Neuroprotection in acute +ischemic stroke 2002-9-30 +Note: Excludes drugs included in the National Key Monitoring List for Rational Drug Use. +INDUSTRY OVERVIEW +–9 0– + + +--- page 99 --- +As of the latest practicable date, there are 12 neuroprotective drug candidates for +neuroprotection in acute ischemic stroke in the clinical stage in China. +Competitive landscape of neuroprotective drug pipelines in China +Target Drug Code Company Clinical Stage Latest update date +Nitrone Triazine injectionNRF2, mTOR, AMPK Guangzhou magpie Pharmaceuticals Phase III 2023-12-18 +Y-6 sublingual tabletPDE3 Neurodawn Pharmaceutical Phase III 2025-06-03 +piragrel sodiumThromboxane A2 synthase Hefei Institute of Pharmaceutical Industry Phase III 2023-08-31 +SalfaprodilGRIN Zhejiang Apeloa Medical Phase III 2022-01-01 +MT200605TrKB Shaanxi Micot Pharmaceutical Technology Phase II 2025-10-21 +AndrotriolGRIN Guangzhou Saipute Medicine Phase II 2025-06-18 +ZKLJ02FXII, KLK Zhongke Longjin Biotechnology Phase I 2025-12-08 +hNPC-01/ Hopstem Biotechnology Phase I 2024-01-08 +HY0721/ Suzhou Pharmavan Natural & Health Phase I 2021-12-11 +GD-11/J iangsu Vanguard Pharmaceutical Phase I 2025-09-02 +XY0507Thromboxane A2 synthase Nanjing Xiangyuan Biomedical Technology Phase I 2025-05-21 +Source: NMP A, CDE, Frost & Sullivan analysis +Source of Industry Information +In connection with this Global Offering, we have engaged Frost & Sullivan to +conduct a detailed analysis of our market and prepare an industry report. Frost & +Sullivan, founded in 1961 and based in the United States, is an independent global market +research and consulting firm. The company provides services including market +assessment, competitive landscape analysis, and strategic and market planning for +multiple industries. We have included excerpts from the Frost & Sullivan Report in this +Prospectus as we believe such information will assist potential investors in understanding +our market environment. +The Frost & Sullivan Report was prepared by Frost & Sullivan based on its internal +databases, independent third party reports, and publicly available information from +authoritative industry organizations. Frost & Sullivan believes that the fundamental +assumptions (including those used for future forecasts) adopted in preparing the Frost & +Sullivan Report are factual, accurate, and not misleading. We have agreed to pay Frost & +Sullivan a fee of RMB560,000 for preparing the Frost & Sullivan Report. This payment is +not conditional upon the success of our Listing or the contents of the Frost & Sullivan +Report. +Other than the Frost & Sullivan Report, we have not commissioned any other +industry report in connection with this Global Offering. Our Directors confirm that, upon +reasonable and prudent care, there have been no material adverse changes in the overall +market information since the date of the Frost & Sullivan Report that would materially +qualify, contradict or affect such information. +INDUSTRY OVERVIEW +–9 1– + + +--- page 100 --- +We are subject to a variety of PRC laws, rules and regulations affecting many aspects +of our business. This section summarizes the major PRC regulatory authorities and PRC +laws and regulations that we believe are relevant to our business and operations in the +PRC. +PRINCIPAL REGULATORY AUTHORITIES +NMPA and Center for Drug Evaluation +National Medical Products Administration (္ຖ၍ଣ҅) (formerly known +as the China Food and Drug Administration (္ຖ၍ଣᐼ҅ ) (the “CFDA”)) +(the “NMPA”) is the department in charge of the pharmaceutical industry of China. It is +primarily responsible for supervision and management of safety of pharmaceuticals, +medical devices and cosmetics, including drawing up the relevant laws and regulations; +conducting standard management, registration management, 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 and +etc. +Center for Drug Evaluation, NMPA (ᄲ൙ʕː ) (the “CDE”) +is the technical evaluation unit for drug registration with NMPA. It is primarily +responsible for conducting technical evaluation on the drugs application for registration +and verifying the relevant drug registrations. +NHC +The National Health Commission (ึ) (formerly known as the +National Health and Family Planning Commission (ึ)) (the +“NHC”), is primary national regulator for national public health and medical system. +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. +NHSA +The National Healthcare Security Administration (ღ҅) (the “NHSA”), a +new authority established in May 2018, is directly under the State Council and 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. +PRINCIPAL REGULATORY PROVISIONS +Laws and Regulations on New Drugs +Research and development of new drugs +The Drug Administration Law of the PRC (‘) (the “Drug +Administration Law ”) promulgated by the Standing Committee of the National People’s +Congress (the “SCNPC”) in September 1984, last amended on August 26, 2019 and became +effective on December 1, 2019, and the Implementation Regulations of the Drug +Administration Law of the PRC (ૢԷ‘ ) (the +“Implementation Regulations ”) promulgated by the State Council in August 2002 and +last amended on December 6, 2024 and became effective on January 20, 2025, have laid +down the legal framework for the establishment and maintenance of pharmaceutical +manufacturing and trading enterprises, as well as for the administration of +pharmaceutical products including the development and manufacturing of new drugs. +According to the Drug Administration Law and the Implementation Regulations, the PRC +encourages the R&D of new drugs, and protects the legal rights and interests in the R&D +of new drugs. The developer and clinical trial applicant of any new drug shall truthfully +submit the new drug’s manufacturing method, quality specifications, results of +pharmacological and toxicological tests and the related data, documents and samples to +the NMPA for approval before any clinical trial is conducted. +REGULATORY OVERVIEW +–9 2– + + +--- page 101 --- +In 2017, the drug regulatory system entered a new and significant period of reform. +The General Office of the State Council and the General Committee of China Communist +Party jointly issued the Opinions on Deepening the Reform of the Evaluation and +Approval Systems and Encouraging Innovation on Drugs and Medical Devices (ଉʷ +จԈ ) (the “Innovation Opinions”) on October +2017. According to the Innovation Opinions, institutions for drug clinical trials should +establish an independent ethics committee and the clinical trial schemes are subject to +examination, approval and signing with approval opinions by the ethics committee before +implementation, in order to protect the rights and interests of human subjects in clinical +trials. For a multi-center clinical trial conducted in the PRC, after ethical review by the +leader unit of clinical trial, other member units should recognize the review results of the +leader unit and may not conduct repeated review. +Non-clinical research +The non-clinical safety evaluation study for drugs for the purpose of applying for +drug registration shall be conducted in accordance with the Administrative Measures for +Good Laboratories Practice (Ӻሯඎ၍ଣ஝ᇍ‘ ), which was promulgated in +August 2003 and amended in July 2017 by the CFDA and became into effective on +September 1, 2017. In April 2007, the CFDA issued the Circular on Measures for +Certification of Good Laboratory Practice (‘ ), +last amended on January 19, 2023 and taking effect on July 1, 2023, which set forth the +requirements for an institution to apply for a Certification of Good Laboratory Practice to +undertake non-clinical research on drugs. +Animal Testing +According to the Regulations for the Regulation on Administration of Experimental +Animals (၍ଣૢԷ‘ ) issued by the State Scientific and Technological +Commission on November 14, 1988 and last amended by the State Council on March 1, +2017, the Administrative Measures on Good Practice of Experimental Animals (ي +‘) jointly issued by the State Scientific and Technological Commission and +the State Bureau of Quality and Technical Supervision on December 11, 1997 and the +Administrative Measures on the Certificate for Experimental Animals (Trial) (஢ +€༊Б‘) issued by the Ministry of Science and Technology and other +regulatory authorities on December 5, 2001 and effective from January 1, 2002, using, +breeding, providing, transporting experimental animals shall be subject to some rules and +requirements, and performing experimentation on animals requires a Certificate for Use +of Experimental Animals. +Application for clinical trial +According to the Decision on Adjusting the Approval Procedures of Certain +Administrative Approval Items for Drugs (Ӕ +‘) promulgated by the CFDA on March 17, 2017, the decision on the approval of clinical +trials of drugs shall be made by the CDE from May 1, 2017. According to the +Administrative Measures for Drug Registration (‘) (the “Circular 27”), +which was promulgated on January 22, 2020 and took effect on July 1, 2020, drug clinical +trials shall be divided into Phase I clinical trial, Phase II clinical trial, Phase III clinical +trial, Phase IV clinical trial, and bioequivalence trial. In accordance with Circular 27 and +the Announcement on Adjusting Evaluation and Approval Procedures for Clinical Trials +for Drugs (ʮѓ‘ ) issued in July 2018, if a clinical +trial applicant does not receive any negative or questioned opinions from the CDE within +60 days after the date when the trial application is accepted and the fees are paid, the +applicant can proceed with the clinical trial in accordance with the trial protocol +submitted to the CDE. According to the Announcement on Matters Related to Optimizing +the Review and Approval of Clinical Trials for Innovative Drugs (Ꮄʷ௴ +ʮѓ‘ ) promulgated by the NMPA on September 12, 2025, +the NMPA shall complete the review and approval process for qualifying innovative drug +clinical trial applications within 30 working days. +After obtaining the approval of clinical trial from the NMPA, the applicant must +complete the clinical trial registration at the Drug Clinical Trial Information Platform for +public disclosure in accordance with the Circular on Drug Clinical Trial Information +Platform (ʮѓ‘ ), which came into effect in September 2013. +The applicant shall complete the initial registration of the trial within one month after +obtaining the approval of clinical trial to obtain an exclusive trial registration number, and +then complete the subsequent information registration before the first patient is enrolled +in the trial and submit the registration for public disclosure for the first time. +REGULATORY OVERVIEW +–9 3– + + +--- page 102 --- +Conduct of clinical trial +After obtaining clinical trial approval, the applicant shall conduct clinical trials at +qualified clinical trial institutions. The qualified clinical trial institution refers to +institutions that have the conditions to conduct clinical trials in accordance with the +requirements and technical guidelines set forth in the Regulations for the Administration +of Drug Clinical Trial Institutions (‘), which came into effect +on December 1, 2019. +Clinical trials must be conducted in accordance with the Good Clinical Practice for +Drug Trials (ᑗґ༊᜕ሯඎ၍ଣ஝ᇍ‘) promulgated by NMPA and NHC on April 23, +2020 and effective on July 1, 2020, which stipulates the requirements for the procedures of +conducting clinical trials, including preclinical trial preparation, trial protocols, +protection of testees’ rights and interests, duties of researchers, sponsors and monitors, as +well as data management and statistical analysis. +According to the Announcement on Adjusting Evaluation and Approval Procedures +for Clinical Trials for Drugs (ʮѓ‘ ), where the +application for clinical trial of new drug has been approved, upon the completion of +Phases I and II clinical trials and prior to Phase III clinical trial, the applicant shall submit +the application for communication meetings to CDE to discuss with CDE the key technical +questions including the design of Phase III clinical trial protocol. According to the +Administrative Measures for Communication on the Research, Development and +Technical Evaluation of Drugs (‘ ), revised by the +NMPA on December 10, 2020, during the R&D periods and in the registration applications +of, among others, the innovative new drugs, the applicants may propose to conduct +communication meetings with the CDE. The communication meetings can be classified +into three types. Type I meetings are convened to address key safety issues in clinical trials +of drugs and key technical issues in the R&D of breakthrough therapeutic drugs. Type II +meetings are held during the key R&D stages of drugs, mainly including meetings before +submitting the clinical trial application, meetings upon the completion of Phase II trials +and prior to Phase III trials and meetings before submitting the marketing application for +a new drug. Type III meetings refer to other meetings not classified as Type I or Type II. +According to the Announcement on Matters Concerning the Optimization of Drug +Registration Review and Approval (ʮѓ) jointly +issued by the NMPA and the NHC on May 17, 2018, the CDE will prioritize the allocation +of resources for review, inspection, examination and approval of registration applications +that have been included in the scope of fast track clinical trial approval. +New drug registration +Pursuant to Circular 27, upon completion of clinical trials, determination of quality +standards, completion of validation of commercial-scale production processes and +completion of other related preparation works, the applicant may apply with the NMPA +for the marketing authorization. The NMPA then determines whether to approve the +application according to applicable laws and regulations. The applicant must obtain the +marketing authorization for a new drag before the drug can be sold in the China market. +According to Circular 27, the holders of any of the following drugs can apply for +conditional approval of such drugs: (1) drugs which are used for the treatment of severe +life-threatening diseases currently lacking effective treatment and the data of clinical +trials can confirm their efficacy and forecast their clinical value; (2) drugs which are +urgently needed for public health and data of clinical trials can demonstrate their efficacy +and forecast their clinical value; and (3) vaccines which are urgently needed to deal with +major public health emergencies or other vaccines which the NHC deems to be urgently +needed, the benefits of both of which are assessed to be outweigh the risk. +Pursuant to the Reform Plan for Registration Category of Chemical Medicine ( ʷኪ +‘) issued by the CFDA on March 4, 2016, new registration of +chemical drugs are divided into 5 categories: (i) Category 1: innovative drugs that have +not been marketed in the PRC or abroad which shall contain new compounds with clear +structure and pharmacological effects and clinical value; (ii) Category 2: improved new +drugs that have not been marketed in the PRC or abroad with optimization in structure, +dosage form, prescription technology, route of drug administration and indications on the +basis of known active ingredients as well as obvious clinical advantages; (iii) Category 3: +drugs imitated by domestic applicants which are marketed overseas while originator’s +drugs are not marketed in the PRC. Such drugs should possess quality and efficacy in line +with that of the originator’s drugs (i.e. the first drugs approved to be marketed in the PRC +REGULATORY OVERVIEW +–9 4– + + +--- page 103 --- +or overseas with complete and sufficient safety and efficacy data to serve as the basis for +its launch); (iv) Category 4: drugs imitated by domestic applicants while originator’s +drugs have been marketed in the PRC. The quality and efficacy of such drugs should be +consistent with that of the originator’s drugs; and (v) Category 5: drugs which have been +marketed abroad with the applications to be marketed in the PRC. Among them, the +reporting procedure for Category 1 and 2 shall comply with those for new drugs and for +Category 3 and 4 it shall be in accordance with those for generic drugs, while Category 5 +shall be reported pursuant to the procedures for imported drugs. +According to the Registration Classification of Chemical Drugs and the Reporting +Information Requirements (Ӌ‘ ) issued by the NMPA on +June 29, 2020 with implementation of the Registration Classification of Chemical Drugs +from July 1, 2020, the registration of chemical drugs is categorized into innovative drugs, +improved new drugs, generic drugs, and chemical drugs marketed abroad only. +Accelerated Approval for Clinical Trial and New Drug Registration +The Opinions of the State Council on the Reform of Evaluation and Approval +System for Drugs and Medical Devices (จ +Ԉ‘) issued by the State Council on August 9, 2015, established a reform framework of the +evaluation and approval system for drugs and medical devices, and specified the tasks of +enhancing the standards of approval for, among others, drug registration, accelerating the +evaluation and approval process for innovative drugs, and improving the approval for +clinical trials of drugs. +The Announcement on Several Policies on Drug Registration Review and +Approval (ʮѓ‘ ) issued by the CFDA on November 11, +2015, provided fast-track clinical trial approvals and drug registration pathways for the +following new drug applications: (i) registration of innovative new drugs treating HIV , +malignant tumors (cancers), severe infectious diseases and rare diseases; (ii) registration +of pediatric drugs; (iii) registration of geriatric drugs and drugs treating diseases specially +or commonly contracted by the senior population; (iv) registration of drugs listed in +national major science and technology projects or national key R&D plan; (v) registration +of innovative drugs using advanced technology or innovative treatment methods, or +having distinctive clinical benefits; (vi) registration of foreign innovative drugs to be +manufactured locally in China; (vii) concurrent applications for new drug clinical trials +which are already approved in the United States or the European Union or concurrent +drug registration applications for drugs which have applied to the competent drug +approval authorities for marketing authorization and passed such authorities’ onsite +inspections in the United States or European Union and are manufactured using the same +production line in China; and (viii) clinical trial applications for drugs with urgent clinical +need and patent expiry within three years, and manufacturing authorization applications +for drugs with urgent clinical need and patent expiry within one year. +On October 8, 2017, the General Office of the Central Committee of the Communist +Party of China and the General Office of the State Council jointly issued the Opinions on +Deepening the Reform of the Evaluation and Approval System and Encouraging +Innovation of Drugs and Medical Devices (ᔼᐕኜ૛ +จԈ‘), aiming to simplify the clinical trial procedures and shorten the time. +Furthermore, according to the Announcement on Matters Concerning the +Optimization of Drug Registration Review and Approval (ൗ̅ᄲ൙ᄲҭϞ +ʮѓ‘) jointly issued by the NMPA and the NHC on May 17, 2018, the drug +approval process shall be further streamlined and expedited. +Pursuant to the provisions of the Procedures for the Evaluation of Breakthrough +Therapeutic Drugs (Trial) (ᄲ൙ʈЪ೻ҏ €༊Б‘) issued by the NMPA on +July 7, 2020, during the clinical drug trials, the applicant is allowed to apply for the +breakthrough therapeutic drug procedure during Phase I and Phase II clinical trials and +normally no later than the commencement of Phase III clinical trials for the innovative or +improved drugs etc. which are used for the prevention and treatment of diseases that +seriously endanger life or seriously affect quality of life and there is no effective means of +prevention and treatment or there is sufficient evidence to show a significant clinical +advantage over existing treatment approach. +REGULATORY OVERVIEW +–9 5– + + +--- page 104 --- +Marketing Authorization Holder Mechanism +Pursuant to the Drug Administration Law, China implements the marketing +authorization holder mechanism for management of the drug industry. 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. +The marketing authorization holders may manufacture drugs by themselves or +entrust a pharmaceutical manufacturing enterprise to manufacture drugs. Likewise, they +may sell drugs by themselves or entrust a pharmaceutical distribution enterprise to sell +drugs. However, marketing authorization holders may not entrust a pharmaceutical +manufacturing enterprise to produce blood products, narcotic drugs, psychotropic drugs, +medical-use toxic drugs or pharmaceutical precursor chemicals, except as otherwise +stipulated by the drug regulatory department under the State Council. +The drug marketing authorization holder shall establish a drug quality assurance +system and be equipped with special personnel to take charge of quality management on +drugs independently. The drug marketing authorization holder shall regularly review the +quality management system of the drug manufacturer and the drug distributor, and +supervise its continuous quality assurance and control capabilities. +Where the marketing authorization holder is an overseas enterprise, its designated +domestic enterprise shall perform the obligations of the marketing authorization holder +and jointly assume responsibilities of the marketing authorization holder with the +overseas enterprise. +Laws and Regulations on Gathering, Collection and Filing of Human Genetic +Resources +On June 10, 1998, the Ministry of Science and Technology (the “MOST”) and the +Ministry of Health (the “MOH”, which was canceled in the institutional reform of the +State Council in 2013, its functions were first inherited by the National Health and Family +Planning Commission and then by the NHC, which was established in 2018) promulgated +the Interim Measures for the Management of Human Genetic Resources ( ɛᗳ፲ෂ༟๕၍ +‘), which sets out rules for the protection and use of human genetic resources +in China. 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 on July 2, 2015 and the Notice on the Implementation of the +Administrative License for the Gathering, Collection, Deal, Export and Exit of Human +Genetic Resources (‘ ) +promulgated by the MOST on August 24, 2015, the gathering and collection of human +genetic resources though clinical trials by a foreign-invested sponsor shall be filed for +record with the China Human Genetic Resources Management Office through an online +system. The Ministry of Science and Technology promulgated the Circular on Optimizing +the Administrative Examination and Approval of Human Genetic Resources (Ꮄʷɛ +‘ ) on October 26, 2017, which became effective on +December 1, 2017, simplifying the approval of sampling and collecting human genetic +resources for the purpose of marketing a drug in the PRC. +Pursuant to the Regulations on the Management of Human Genetic Resources of the +PRC (ʕശɛ͏΍ձ਷ɛᗳ፲ෂ༟๕၍ଣૢԷ‘ ), last amended by the State Council on +March 10, 2024 and came into effect 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. The Implementing +Rules of the Regulation on the Administration of Human Genetic Resources ( ɛᗳ፲ෂ༟ +‘), which was promulgated by the MOST on May 26, 2023 and became +effective on July 1, 2023, further provides specific requirements on the collection, +preservation, utilization and external provision of China’s human genetic resources. +The Biosecurity Law of the PRC (‘) (the “Biosecurity +Law”), which was promulgated by SCNPC on October 17, 2020 and last amended on April +REGULATORY OVERVIEW +–9 6– + + +--- page 105 --- +26, 2024, 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 microbial laboratories, security management of human +genetic resources and biological resources, countermeasures for microbial resistance, and +prevention of bioterrorism and defending threats of biological weapons. According to the +Biosecurity Law, the R&D activities of high-risk and medium-risk biotechnology shall be +carried out by a legal person organization established within the territory of the PRC in +accordance with the law, upon obtaining the approval or record-filing. The following +activities are subject to approval of the competent health department: (i) collecting human +genetic resources of important genetic families or specific areas in the PRC, or collecting +human genetic resources of which the types and quantities are subject to provisions of the +competent health department under the State Council, (ii) preserving China’s human +genetic resources, (iii) using China’s human genetic resources to carry out international +scientific research cooperation, or (iv) transporting, mailing, and carrying China’s human +genetic resource materials out of the country. +Laws and Regulations on the Manufacturing of Drugs +Drug Manufacturing Certificate +Pursuant to the Drug Administration Law and the Implementing Regulations, a +drug manufacturer must obtain a Drug Manufacturing Certificate (͛ପ஢̙ᗇ) from +the drug regulatory authority at provincial, autonomous regional or municipal level +before it may start manufacturing drugs in the PRC. The Drug Manufacturing Certificate +shall indicate the validity period and the scope of production. Each Drug Manufacturing +Certificate is valid for a period of five years and the manufacturer is required to apply for +renewal of the permit within six months prior to its expiration date. +Contract manufacturing of drugs +Pursuant to the Administrative Regulations for the Contract Manufacturing of +Drugs (‘) (the “Contract Manufacturing Regulations”) issued +by the CFDA in August 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 (͛ପ္ +‘) (the “Revised Administrative Measures of Drug Manufacturing”) +promulgated by the State Administration for Market Regulation 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. +Drug Operation License +According to the Drug Administration Law, the Measures for the Supervision and +Administration of Drug Quality in Operation and Usage (຾ᐄձԴ͜ሯඎ္ຖ၍ଣ፬ +‘), which was issued by the SAMR on September 27, 2023 and came into effect on +January 1, 2024, whoever engages in the wholesale or retail of drugs shall be subject to the +approval of the drug regulatory authority, obtain a Drug Operation License in accordance +with the law. The drug marketing authorization holders may sell the drugs for which they +have obtained drug registration certificate on their own or entrust a drug operating +enterprise with the sale of such drugs. However, the drug marketing authorization +holders engaged in retail activities of drugs shall obtain a Drug Operation License. Each +Drug Operation License is valid for five years. Where it is necessary to continue the +operation of drugs upon the expiration of the period of validity of the Drug Operation +License, a drug operating enterprise shall file an application with the license-issuing +organ for re-examination and issuance of license in 6 to 2 months before the expiration of +the period of validity. +Laws and Regulations on Drug Supply +Drug Purchases by Hospitals +According to the Opinion on the Guidance of the Reform of Urban Medical and +Health Care System (ኬจԈ‘ ) promulgated and took into +REGULATORY OVERVIEW +–9 7– + + +--- page 106 --- +effect on February 16, 2000 and the Opinion on the Implementation of Classification +Management of Urban Medical Institutions (จԈ‘ ) +promulgated on July 18, 2000 and became effective from September 1, 2000, a medical +institution must be defined as a profit-making or non-profit-making institution at the time +when it is established. A non-profit-making medical institution is established to provide +services to the general public, with its revenue used for maintaining and developing such +institution, while a profit-making medical institution is established by investors for the +purpose of investment return. The PRC government does not establish any profit-making +medical institutions, while non-government entities may establish profit-making medical +institutions. Any non-profit-making medical institutions must implement a collective +tender system in respect of any drug purchases and any profit-making medical +institutions need not to implement such a system according to PRC law. +According to the Notice on the Trial Implementation of the Centralized Tender with +Respect to Drug Purchases by Medical Institutions (ᅺમᒅ༊ +‘) promulgated and became effective on July 7, 2000, the Notice on the +Further Standardizing of the Centralized Tender with respect to Drug Purchases By Medical +Institutions (‘ ) promulgated and +became effective on July 23, 2001 and the Opinions concerning Further Regulating +Purchase of Medicines by Medical Institutions through Centralized Tendering ( ආɓӉ஝ +จԈ‘ ) promulgated and took into effect on January 17, +2009, any non-profit-making medical institutions established and/or controlled by any +government at a county level or above must implement the centralized tender system in +respect of purchase of any drugs which are contained in the Medicines List for National +Basic Medical Insurance and are generally used for clinical purposes and purchased in +relatively large amount. +The Circular on the Good Practice of Medical Institutions with respect to +Centralized Procurement of Drugs (ණʕમᒅʈЪ஝ᇍ‘ ) promulgated and +was effective on July 7, 2010, provides stipulations in detail in respect of the catalog for +centralized procurement and methods, procedures, evaluators, expert database +construction and management of drugs, further regulating the centralized drug +procurement and clarifying the code of conduct on the part of purchasing parties. +According to the Good Practice of Medical Institutions with respect to Centralized +Procurement of Drugs, any non-profit-making medical institutions established by the +government at the county level or above or state-owned enterprises (including +stock-holding enterprises) must participate in the centralized procurement of medical +institutions. The centralized procurement management authority at provincial (municipal +or district) level is responsible for compiling the catalog of drugs for centralized +procurement by medical institutions within its own administrative region, and narcotic +drugs and first class psychoactive drugs with respect to which the special administration +is carried out by the state are not included in such catalog for centralized procurement; +second class psychoactive drugs, radioactive pharmaceuticals, toxic drugs for medical +use, crude drugs, traditional Chinese medicinal materials and traditional Chinese +medicine decoction pieces may be excluded from such catalog for centralized +procurement. +According to the Guidance Opinion of the General Office of the State Council on the +Improvement of the Drug Centralized Procurement Work of Public Hospitals ( ਷ਕ৫፬ +ኬจԈ‘ ) promulgated and came into effect on +February 9, 2015, the centralized procurement work of public hospitals will be improved +through the classification purchase of drugs. All drugs used by public hospitals (with the +exception of traditional Chinese medicine decoction pieces) should be procured through a +provincial centralized pharmaceutical procurement platform. The provincial procurement +agency should work out a summary of the procurement plans and budget submitted by +hospitals and compile reasonably a drug procurement catalog of the hospitals with its +own administration region, listing by classification the drugs to be procured through bids, +negotiations, direct purchases by hospitals or to be manufactured by appointed +manufacturers. +According to the Opinions of the General Office of the State Council on Further +Reform and Improvement of Policy on Drug Production, Circulation and Use ( ਷ਕ৫፬ +ʍจԈ‘ ) promulgated by the General +Office of the State Council on January 24, 2017, cross-regional and specialized hospitals +are encouraged to make joint purchases; in areas where the reform of the payment method +of health insurance is comprehensively implemented or where the payment standard for +drugs under health insurance has already been formulated, public hospitals are allowed +REGULATORY OVERVIEW +–9 8– + + +--- page 107 --- +to jointly carry out volume- and budget-based procurement on the provincial centralized +drug procurement platform (the provincial public resources trading platform). +According to the Pilot Program of the Centralized Procurement and Use of Drugs +Organized by the State (‘ ) issued by the General +Office of the State Council on January 1, 2019, eleven pilot cities including Beijing, Tianjin, +Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu and +Xi’an, are selected to launch pilot programs of the centralized procurement and use of +drugs under the organization of the State. According to the Implementation Opinions on +Expanding the Regional Scope in the Pilot Program of Centralized Drug Procurement and +Use Organized by the State (จ +Ԉ‘) issued by the National Healthcare Security Administration and other departments on +September 25, 2019, the regional scope in the pilot program of centralized procurement +and use of drugs organized by the State is being expanded and the volume-based +procurement model of the pilot program for conducting the centralized procurement and +use of drugs organized by the State is being promoted throughout the country. +The Opinions of the General Office of the State Council on Promoting the +Centralized Volume-based Procurement of Drugs in a Normalized and Institutionalized +Manner (จԈ‘ ), which +was promulgated by the General Office of the State Council on January 22, 2021, set out +the promotion of the normalization and institutionalization of the centralized +procurement of drugs. All public medical institutions (including military medical +institutions, hereinafter referred to as the same) shall participate in the centralized +procurement of drugs, with reference to the requirements of the management of +designated social medical institutions and designated pharmacies in accordance with the +management of designated agreements for medical insurance. In accordance with the +principles of preserving the basics and the clinical care, emphasis shall be placed on +including drugs that are listed in the Drug Catalogue of Basic Medical Insurance with +large consumption and high procurement price in the procurement scope, and gradually +covering various drugs which are clinically necessary and reliable, so as to achieve the +procurement of all medicines as much as possible. +Drug Price Management +Pursuant to the Opinions on Promoting Drug Pricing Reform (ٙࠧ +จԈ‘), which was jointly promulgated by the authorities including the NDRC on May 4, +2015, from June 1, 2015, the original prices of the drugs formulated by the government will +be canceled, except for narcotic drugs and Class I psychotropic drugs. The prices of +narcotic drugs and Class I psychotropic drugs are still temporarily managed by the NDRC +through the implementation of maximum factory prices and maximum retail prices. The +drugs other than the narcotic drugs and Class I psychotropic drugs no longer adopted +government-designated pricing. Such notice aimed to improve the mechanism of the drug +purchase, give play to the role of health care insurance in drug fees controlling, and actual +transaction prices of the drugs are mainly determined by the market competition. +Two-invoice System +In order to further optimize the order of purchasing and selling pharmaceutical +products and reduce circulation steps, as required at the executive meeting of the State +Council dated April 6, 2016 and under the 2016 List of Major Tasks in Furtherance of the +Healthcare and Pharmaceutical Reforms (ࠧ2016ᓃʈЪ΂ਕ‘) +issued by the General Office of the State Council on April 21, 2016, the “two-invoice +System” (ՇୃՓ) will be fully implemented in the PRC. According to the Circular on +Issuing the Implementing Opinions on Carrying out the Two-invoice System for Drug +Procurement among Public Medical Institutions (for Trial Implementation) (ί +‘) (the “Circular”), which +was effective from December 26, 2016, the two-invoice system means one invoice between +the pharmaceutical manufacturer and the pharmaceutical distributor, and one invoice +between the pharmaceutical distributor and the hospital, and thereby only allows a single +level of distributor for the sale of pharmaceutical products from the pharmaceutical +manufacturer to the hospital. According to the Circular, two-invoice system will be +promoted in pilot provinces (autonomous regions and municipalities directly under the +Central Government) involved in the comprehensive medical reform program and pilot +cities for public hospital reform on a priority basis, while other regions are encouraged to +implement such system, so that such system can be promoted in full swing nationwide in +2018. +Commercial Briberies in Pharmaceutical Industry +According to the Anti-Unfair Competition Law of the People’s Republic of China ( ʕശ +‘), as amended on 27 June 2025 and implemented on 15 October +REGULATORY OVERVIEW +–9 9– + + +--- page 108 --- +2025, promulgated by the Standing Committee of the National People’s Congress, +operators shall not bribe the following entities or individuals by means of offering money +or other benefits in order to seek out transactional opportunities or competitive +advantages: (i) Staff members of the counterparty to the transaction; (ii) Entities or +individuals entrusted by the counterparty to handle relevant affairs; and (iii) Entities or +individuals who may influence transactions through their authority or influence. +Pursuant to the Provisional Regulations on Prohibiting Commercial Bribery (ຫ˟ਠ +‘) issued by the former State Administration for Industry and +Commerce on 15 November 1996, commercial bribery is defined as the offering of +financial and material assets or other means by an operator to another organization or +individual with the aim of influencing the sale or purchase of goods. +According to the Provisions on the Establishment of Adverse Records of +Commercial Briberies in the Medicine Purchase and Sales Industry (ͭᔼᖹᒅቖჯ +‘), which was promulgated by the National Health and Family +Planning Commission (currently the NHC) and came into effect on March 1, 2014, an +enterprise engaged in the manufacturing or distribution of medicines, medical devices or +medical consumables (or its agent) that offers any items of value or other benefits to the +staff of a medical institution may be listed in the Adverse Records of Commercial Bribery +(“Adverse Records”) by the relevant government authorities. As a result, its products +cannot be purchased by public medical institutions or medical and health institutions +receiving financial subsidies within the relevant provinces, and the scores of its products +in the centralized procurement processes conducted by public medical institutions or +medical and health institutions receiving financial subsidies in other provinces will be +reduced. Where the relevant enterprise (or its agent) is listed in Adverse Records twice +within a five-year period, its products cannot be purchased by public medical institutions +or medical and health institutions receiving financial subsidies across China for two years. +Regulations in relation to the Medical Insurance Program +Coverage of the national medical insurance program +The national medical insurance program was first adopted according to the +Decision of the State Council on the Establishment of the Urban Employee Basic Medical +Insurance Program (‘ ) issued by the +State Council on December 14, 1998, under which all employers in urban cities are +required to enroll their employees in the basic medical insurance program and the +insurance premium is jointly contributed by the employers and employees. On July 10, +2007, the State Council issued the Guiding Opinions of the State Council about the Pilot +Urban Resident Basic Medical Insurance (ܸٙ +ኬจԈ‘), further enlarged the coverage of the basic medical insurance program, under +which urban residents of the pilot district, rather than urban employees, may voluntarily +join Urban Resident Basic Medical Insurance. In addition, on January 3, 2016, the +Opinions of the State Council on Integrating the Basic Medical Insurance Systems for +Urban and Rural Residents (จԈ‘ ) issued by +the State Council required the integration of the urban resident basic medical insurance +and the new rural cooperative medical care system and the establishment of a unified +basic medical insurance system, which will cover all urban and rural residents other than +rural migrant workers and persons in flexible employment arrangements who participate +in the basic medical insurance for urban employees. +Medical Insurance Catalogue +According to the Interim Measures for the Administration of Use of Drugs Covered +by the Basic Medical Insurance (‘ ) or the NRDL +Administrative Measures, which promulgated by the NHSA, on July 30, 2020 and took +effect on September 1, 2020, the scope of drugs covered by the basic medical insurance +shall be administered through a reimbursement drug list. +The National Drug Catalog for Basic Medical Insurance, Work-related Injury +Insurance and Maternity Insurance (ͦ፽‘ ), +or the National Reimbursement Drug List (the “NRDL”), which promulgated by the +NHSA and last amended on January 6, 2025, sets forth the payment standard for +pharmaceutical products under the basic medical insurance, work-related injury +insurance and maternity insurance funds. The local government shall strictly implement +the NRDL and shall not adjust the contents contained in the NRDL at their own discretion. +Medicines listed in the NRDL are divided into two parts, List A and List B. List A drugs are +widely used clinical treatments with good efficacy and lower prices compared to similar +REGULATORY OVERVIEW +– 100 – + + +--- page 109 --- +drugs, while List B drugs are clinical treatments with good efficacy and slightly higher +prices compared to List A drugs. +According to the NRDL Administrative Measures, a Provincial Reimbursement +Drug List (“PRDL”) must be made by the provincial healthcare security authorities. +Patients purchasing List A drugs can directly obtain reimbursement under the basic +medical insurance program. Patients purchasing List B drugs shall pay a certain +percentage of the purchase price first and then obtain reimbursement under the basic +medical insurance program. +National Essential Drug List +On August 18, 2009, the Ministry of Health (the “MOH”) and eight other ministries +and commissions in the PRC issued the Provisional Measures on the Administration of the +National Essential Drug List (€ᅲБ‘), which was amended +on February 13, 2015, and the Guidelines on the Implementation of the National Essential +Drug List System (จԈ‘ ), which aims to promote +essential medicines sold to consumers at fair prices in the PRC and ensure that the general +public in the PRC has equal access to the drugs contained in the National Essential Drug +List. The NHC promulgated the National Essential Drug List (2018) (ͦ፽ +€2018‘), the “National Essential Drug List”) on September 30, 2018, replacing the +National Essential Drug List (2012) (ͦ፽ €2012 ‘) which was +promulgated on March 13, 2013. According to these regulations, basic healthcare +institutions funded by government shall store up and use drugs listed in National +Essential Drug List. The drugs listed in National Essential Drug List shall be purchased by +centralized tender process and shall be subject to the price control by the National +Development and Reform Commission of the PRC (ึ +(the “NDRC”)). Remedial drugs in the National Essential Drug List are all listed in the +Medical Insurance Catalogue and the entire amount of the purchase price of such drugs is +entitled to reimbursement. +Laws and Regulations on Intellectual Properties +In terms of international conventions, the PRC has entered into (including but not limited +to) the Agreement on Trade-Related Aspects of Intellectual Property Rights (ᗆ +‘), the Paris Convention for the Protection of Industrial Property (ᚐʈุପᛆˋ +‘), the Madrid Agreement Concerning the International Registration of Marks ( ਠᅺ਷ +‘) and the Patent Cooperation Treaty (‘). +Patent +Patents in the PRC are mainly protected by the Patent Law of the PRC ( ʕശɛ͏΍ +‘), which was promulgated by the SCNPC on March 12, 1984, last amended on +October 17, 2020 and became effective on June 1, 2021, and the Implementation Rules of +the Patent Law of the PRC (‘ ), which were promulgated +by the State Council on June 15, 2001, last amended on December 11, 2023 and became +effective on January 20, 2024. The Patent Law of the PRC and its Implementation Rules +provide for three types of patents, “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 20 years, the duration of a +patent right for “utility model” is 10 years, and the duration of a patent right for “design” +is 15 years, from the date of application. According to the Patent Law of the PRC, for the +purpose of public health, the patent administrative department of the State Council may +grant mandatory licensing to manufacture and export patented drugs to countries or +regions in comply with provisions of the relevant international treaty participated by the +PRC. +Trade Secret +According to the Anti-Unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍ +‘), promulgated by the SCNPC in September 1993 and subsequently amended on +November 4, 2017, April 23, 2019, June 27, 2025 and which will become effective on +October 15, 2025, 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 +REGULATORY OVERVIEW +– 101 – + + +--- page 110 --- +Anti-Unfair Competition Law of the PRC, business persons are prohibited from infringing +others’ trade secrets by: (1) acquiring a trade secret from the right holder by theft, bribery, +fraud, coercion, electronic intrusion, or any other means; (2) disclosing, using, or allowing +another person to use a trade secret acquired from the right holder by any means as +specified in the item (1) above; (3) 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; (4) 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. +Trademark +Pursuant to the Trademark Law of the PRC (‘) promulgated +by the SCNPC on August 23, 1982, last amended on April 23, 2019 and became effective on +November 1, 2019, the period of validity for a registered trademark is 10 years, +commencing from the date of registration. Upon expiry of the period of validity, the +registrant shall go through the formalities for renewal within twelve months prior to the +date of expiry as required if the registrant needs to continue to use the trademark. Where +the registrant fails to do so, a grace period of six months may be granted. The period of +validity for each renewal of registration is 10 years, commencing from the day +immediately after the expiry of the preceding period of validity for the trademark. In the +absence of a renewal upon expiry, the registered trademark shall be canceled. Industrial +and commercial administrative authorities have the authority to investigate any behavior +in infringement of the exclusive right under a registered trademark in accordance with the +law. In case of a suspected criminal offense, the case shall be timely referred to a judicial +authority and decided in accordance with applicable laws. +Copyright +Copyright in the PRC is primarily protected by the Copyright Law of the PRC ( ʕശɛ +‘), which was promulgated by the SCNPC on September 7, 1990, last +amended on November 11, 2020 and became effective on June 1, 2021, and Implementation +Regulations of the Copyright Law of PRC (ૢԷ‘ ), which +was promulgated by the State Council on August 2, 2002 and last amended on January 30, +2013. These law and regulation provide provisions on the classification of works and the +obtaining and protection of copyright. +Domain Names +In accordance with the Measures for the Administration of Internet Domain +Names (‘) which was issued by the Ministry of Information Industry +on August 24, 2017 and came into effect on November 1, 2017, the Ministry of Industry and +Information Technology is responsible for supervision and administration of domain +name services in the PRC. Communications administrative bureaus at provincial levels +shall conduct supervision and administration of the domain name services within their +respective administrative jurisdictions. Domain name registration services shall, in +principle, be subject to the principle of “first apply, first register.” A domain name +registrar shall, in the process of providing domain name registration services, ask the +applicant for which the registration is made to provide authentic, accurate and complete +identity information on the holder of the domain name and other domain name +registration related information. +Laws and Regulations on Labor Protection and Social Insurance +General Labor Contracts Rules +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 (ૢ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 +REGULATORY OVERVIEW +– 102 – + + +--- page 111 --- +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. +Labor, Social Insurance and Housing Provident Funds +According to the Social Insurance Law of 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. +On July 20, 2018, the General Office of the Communist Party of China and the +General Office of the PRC State Council jointly issued the Reform Plan of the State Tax and +Local Tax Collection Administration System (‘), under which, +starting from January 1, 2019, tax authorities are responsible for the collection of social +insurance contributions in China. According to the Notice on Conducting the Relevant +Work Concerning the Administration of Collection of Social Insurance Premiums in a +Steady, Or derly and Effective Manner (‘) +issued by the SAT in September 2018 and the Urgent Notice on Implementing the Spirit of +the Executive Meeting of the State Council in Stabilizing the Collection of Social Security +Contributions (ஷ +‘) issued by the General Office of the Ministry of Human Resources and Social Security +in September 2018, all the local authorities responsible for the collection of social +insurance are strictly forbidden to conduct self-collection of historical unpaid social +insurance contributions from enterprises. The Notice on Implementing Several Measures +to Further Support and Serve the Development of Private Economy (ܵ +‘ ) issued by the SAT in November 2018, repeats that +tax authorities at all levels may not organize self-collection of unpaid social insurance +contributions of taxpayers including private enterprises in the previous years. The Notice +on Issuing the Comprehensive Plan for the Reduction of Social Insurance Premium Rate (׵ +‘) promulgated by the General Office of the PRC State +Council in April 2019, generally reduces the social insurance contribution burden of +enterprises, underlines that the duties for collection of social insurances premium paid by +the enterprises in any province shall not be transferred to tax authorities until the +condition of the province is mature, and re-emphasizes that local authorities shall not +conduct self collection of historical unpaid social insurance contributions from +enterprises. +According to the Interpretation (II) of the Supreme People’s Court on Issues +Concerning the Application of Law in the Trial of Labor Dispute Cases (׵ +༆ᙑ €ɚ), which was promulgated by the Supreme +People’s Court in July 2025 and came into effect in September 2025, an employer and an +employee conclude an agreement, or an employee promises to an employer, that there is +no need to pay social insurance premiums, such agreement or promise shall be +determined invalid; where an employer fails to pay social insurance premiums in +accordance with the law, and the relevant employee requests to terminate the labor +contract and requests for the employer to pay economic compensation, the people’s court +shall support such requests in accordance with the law. Where an employer, after making +up the social insurance contributions in accordance with the law under the circumstances +stipulated in the preceding paragraph, requests the employee to return the social +insurance compensation already paid, the people’s court shall support such request in +accordance with the law. +Prevention and Control of Occupational Diseases +The Prevention and Control of Occupational Diseases Law of the PRC ( ʕശɛ͏΍ +‘), which was promulgated by the SCNPC on October 27, 2001 and latest +amended on December 29, 2018 (the “Prevention and Control of Occupational Diseases +Law”), is the basic law for the prevention and control of occupational diseases. According +to the Prevention and Control of Occupational Diseases Law, budget for facilities for the +REGULATORY OVERVIEW +– 103 – + + +--- page 112 --- +prevention and control of occupational diseases of a construction project shall be included +in the budget of the project and those facilities shall be designed, constructed and put into +operation simultaneously with the main body of the project. The entity that takes charge +of the project should carry out the assessment of the effectiveness of measures for the +prevention and control of occupational diseases before the final acceptance of the +construction project. In addition, employers shall take required administrative measures +to prevent and control occupational diseases in work. +Laws and Regulations on Leasing +On December 1, 2010, the Ministry of Housing and Urban-Rural Development +promulgated the Administrative Measures on Leasing of Commodity Housing (܊גۜ +‘),which became effective on February 1, 2011. According to such measures, +the lessor and the lessee are required to complete property leasing registration and filing +formalities within 30 days from execution of the property lease contract with the +development authorities or real estate authorities of the municipality or county where the +leased property is located. If a company fails to do as aforesaid, it may be ordered to +rectify within a stipulated period, and if such company fails to rectify, a fine ranging from +RMB1,000 to RMB10,000 may be imposed on each lease agreement. +According to the Civil Code of the PRC (Պ‘), the relevant +parties fail to complete property leasing registration and filing formality in accordance +with the laws and regulations, the validity of the lease is not affected. +Laws and Regulations on Environmental Protection, Health and Safety +Environment Protection +The Environmental Protection Law of the PRC (‘) (“the +Environmental Protection Law”), which was promulgated by the SCNPC on December 26, +1989 and last amended on April 24, 2014, came into effect on January 1, 2015, outlines the +authorities and duties of various environmental protection regulatory agencies. The +Ministry of Ecology and Environment is authorized to issue national standards for +environmental quality and emissions, and to monitor the environmental protection +scheme of the PRC. Meanwhile, local environment protection authorities may formulate +local standards which are more rigorous than the national standards, in which case, the +concerned enterprises must comply with both the national standards and the local +standards. +Environmental Impact Appraisal +According to the Administration Rules on Environmental Protection of +Construction Projects (ᚐ၍ଣૢԷ‘), which was promulgated by the State +Council on November 29, 1998, amended on July 16, 2017 and became effective on October +1, 2017, depending on the impact of the construction project on the environment, an +construction employer shall submit an environmental impact report or an environmental +impact statement, or file a registration form. As to a construction project, for which an +environmental impact report or the environmental impact statement is required, the +construction employer shall, before the commencement of construction, submit the +environmental impact report or the environmental impact statement to the relevant +authority at the environmental protection administrative department for approval. If the +environmental impact assessment documents of the construction project have not been +examined or approved upon examination by the approval authority in accordance with +the law, the construction employer shall not commence the construction. According to the +Environmental Impact Appraisal Law of PRC (‘ ) (“the +Environmental Impact Appraisal Law”), which was promulgated by the SCNPC on +October 28, 2002, amended on July 2, 2016 and December 29, 2018, for any construction +projects that have an impact on the environment, an entity is required to produce either a +report, or a statement, or a registration form of such environmental impacts depending on +the seriousness of effect that may be exerted on the environment. +Completion and Acceptance +The Interim Measures for Acceptance of Environmental Protection upon +Completion of Construction Projects (‘ ), +promulgated and implemented by the former Ministry of Environmental Protection (now +the MEE) on November 20, 2017, regulate the procedures and standards for environmental +protection acceptance by construction entities upon the completion of construction +projects. +Fire Prevention +According to the Fire Prevention Law of the PRC (‘ ), +promulgated by the SCNPC on April 29, 1998 and last amended with effect from April 29, +REGULATORY OVERVIEW +– 104 – + + +--- page 113 --- +2021, design and construction of the fire control facilities for a construction work shall +comply with the national fire control technical standards. The developer, designer, +constructors and project supervisor of a construction project shall be responsible for the +quality of the design and construction of the fire control facilities for the construction +work according to the relevant laws. If the design of fire control of a construction project +has not been examined pursuant to the relevant laws or failed to pass the examination, the +construction of such project is not allowed. If a completed construction project has not +gone through the fire safety inspection or failed to satisfy the requirements of fire safety +upon inspection, such project is not allowed to be put to use or business. +Management of Waste Discharge +Pursuant to the Catalog of Classified Management of Pollutant Discharge Permits +for Stationary Pollution Sources (2019 Version) (๕રϮ஢̙ʱᗳ၍ଣΤ፽ €2019ϋ +‘) issued by the Ministry of Ecology and Environment of the PRC and became effective +on December 20, 2019, the State implements the primary management, simplified +management and registration management of pollutant discharge permits based on the +pollutant production, emission amount and the extent of environmental impact of the +pollutant discharge entities. A pollutant discharge unit under registration management +does not need to apply for a pollutant discharge license. +Pursuant to the Regulations on the Administration of Pollutant Discharge Permits (રϮ +஢̙၍ଣૢԷ‘) promulgated by the State Council on January 24, 2021 and became effective +on March 1, 2021, based on the quantity of pollutants generated and discharged, their +impacts on the environment and other factors, categorical administration of pollutant +discharge permit system is implemented to regulate pollutant-discharging entities: (1) key +administration of pollutant discharge permits shall be implemented for pollutant +discharging entities which generate and discharge relatively large quantities of pollutants +or have a relatively serious impact on the environment; and (2) administration of +pollutant discharge permits shall be simplified for pollutant-discharging entities which +generate and discharge relatively small quantities of pollutants and have a relatively +small impact on the environment. The entities that generate and discharge relatively small +quantities of pollutants and have a relatively small impact on the environment shall fill in +the waste discharge registration form (ڌand are no longer required to obtain a +waste discharge license ( રϮ஢̙ᗇ). +Laws and Regulations on Foreign Investment +Company Law of the PRC +The Company Law of the PRC (‘) (the “Company Law”) +which was promulgated by the Standing Committee of the NPC on December 29, 1993, +came into effect on July 1, 1994, revised on December 25,1999, August 28, 2004, October 27, +2005 and December 28, 2013, October 26, 2018, December 29, 2023 respectively and the +latest revision of which was implemented on July 1, 2024, governs the establishment, +operation and management of companies in the PRC, including foreign-invested +companies. Unless foreign investment laws provide otherwise, foreign-invested +companies shall abide by the Company Law of the PRC. +Foreign Investment +On December 30, 2019, the Ministry of Commerce and the SAMR, jointly +promulgated the Measures for Information Reporting on Foreign Investment (ڦ +‘), which became effective on January 1, 2020. Pursuant to the Measures for +Information Reporting on Foreign Investment, where a foreign investor carries out +investment activities in China directly or indirectly, the foreign investor or the +foreign-invested enterprise shall submit the investment information to the competent +commerce department through the enterprise registration system and the National +Enterprise Credit Information Publicity System, and the reporting methods include initial +reports, change reports, cancelation reports, and annual reports. +Laws and Regulations on Outbound Investment +Pursuant to the Administrative Measures on Outbound Investments ( ྤ̮ҳ༟၍ଣ +‘) issued by the MOFCOM on March 16, 2009, and amended on September 6, 2014, +and the Administrative Measures for the Outbound Investments of Enterprises ( Άุྤ̮ +‘) issued by the NDRC on December 26, 2017, and effective from March 1, +2018, if an enterprise in the PRC intends to make outbound investments, it shall be subject +to approval or filing for the project, report relevant information, and cooperate in the +supervisory inspections. Non-sensitive projects directly conducted by domestic +REGULATORY OVERVIEW +– 105 – + + +--- page 114 --- +enterprise in China, involving direct contribution of assets or rights and interests or +provision of financing or security, shall be subject to filing. +Laws and Regulations on Foreign Exchange and T axation +Foreign Exchange +On January 29, 1996, the State Council promulgated the Administrative Regulations +on Foreign Exchange of the PRC ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ‘ ) which became effective +on April 1, 1996 and was amended on January 14, 1997 and August 5, 2008. Foreign +exchange payments under current account items shall, pursuant to the administrative +provisions of the foreign exchange control department of the State Council on payments of +foreign currencies and purchase of foreign currencies, be made using self-owned foreign +currency or foreign currency purchased from financial institutions engaging in conversion +and sale of foreign currencies by presenting the valid document. Domestic entities and +domestic individuals making overseas direct investments or engaging in issuance and +trading of overseas securities and derivatives shall process registration formalities +pursuant to the provisions of the foreign exchange control department of the State +Council. +On November 19, 2012, the SAFE issued the Circular of Further Improving and +Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment (࢕ +‘ ) (“the SAFE Circular 59”), +which came into effect on December 17, 2012 and was revised on May 4, 2015, October 10, +2018 and partially abolished on December 30, 2019. The SAFE Circular 59 aims to simplify +the foreign exchange procedure and promote the facilitation of investment and trade. +According to the SAFE Circular 59, the opening of various special purpose foreign +exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital +accounts and guarantee accounts, the reinvestment of RMB proceeds derived by foreign +investors in the PRC, and remittance of foreign exchange profits and dividends by a +foreign-invested enterprise to its foreign shareholders no longer require the approval or +verification of SAFE, as well multiple capital accounts for the same entity may be opened +in different provinces. Later, the SAFE promulgated the Circular on Further Simplifying and +Improving Foreign Exchange Administration Policies in Respect of Direct Investment (׵ +‘) on February 13, 2015, which was partially +abolished on December 30, 2019 and prescribed that the bank instead of SAFE can directly +handle the foreign exchange registration and approval under foreign direct investment +while SAFE and its branches indirectly supervise the foreign exchange registration and +approval under foreign direct investment through the bank. +On May 10, 2013, the SAFE issued the Administrative Provisions on Foreign +Exchange in Domestic Direct Investment by Foreign Investors (ટҳ༟ +‘) (“the SAFE Circular 21”), which became effective on May 13, 2013, +amended on October 10, 2018 and partially abolished on December 30, 2019. The SAFE +Circular 21 specifies that the administration by SAFE or its local branches over direct +investment by foreign investors in the PRC must be conducted by way of registration and +banks must process foreign exchange business relating to the direct investment in the PRC +based on the registration information provided by SAFE and its branches. +According to the Notice of the State Administration of Foreign Exchange on Issues +Concerning the Foreign Exchange Administration of Overseas Listing (̮ි၍ଣ҅ᗫ +‘ ) issued by the SAFE 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 document and other disclosure documents. +According to the Notice of the State Administration of Foreign Exchange on +Reforming the Management Mode of Foreign Exchange Capital Settlement of Foreign +Investment Enterprises (ٙ +‘) (“the SAFE Circular 19”) promulgated on March 30, 2015, coming effective on June +1, 2015, partially abolished on December 30, 2019 and partially amended on March 23, +2023, foreign-invested enterprises could settle their foreign exchange capital on a +discretionary basis according to the actual needs of their business operations. +On June 9, 2016, SAFE issued the Notice of the State Administration of Foreign +Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management +REGULATORY OVERVIEW +– 106 – + + +--- page 115 --- +Policy of Capital Account (‘ ) +(“the SAFE Circular 16”), which came into effect on the same day and was partially +amended according to Notice of the State Administration of Foreign Exchange on Further +Deepening Reforming to Facilitate Cross-border Trade and Investment (̮ි၍ଣ҅ +‘ ) promulgated by the SAFE on +December 4, 2023. The SAFE Circular 16 provides that discretionary foreign exchange +settlement applies to foreign exchange capital, foreign debt offering proceeds and +remitted foreign listing proceeds, and the corresponding RMB capital converted from +foreign exchange may be used to extend loans to related parties or repay inter-company +loans (including advances by third parties). However, there remain substantial +uncertainties with respect to SAFE Circular 16’s interpretation and implementation in +practice. +On October 23, 2019, SAFE promulgated the Notice on Further Facilitating +Cross-Board Trade and Investment (ٙ +‘), which became effective on the same date (except for Article 8.2, which became +effective on January 1, 2020) and was partially amended according to Notice of the State +Administration of Foreign Exchange on Further Deepening Reforming to Facilitate +Cross-border Trade and Investment (ҳ +‘) promulgated by the SAFE on December 4, 2023. +On September 15, 2025, SAFE promulgated the Notice of the State Administration of +Foreign Exchange on Matters Concerning Deepening the Reform of Foreign Exchange +Administration for Cross-Border Investment and Financing (ଉʷ༨ +‘ ). This notice cancels the registration of basic +information on pre-investment expenses for domestic direct investment and the +registration of domestic reinvestment by foreign-invested enterprises, allows the +domestic reinvestment of foreign exchange profits under foreign direct investment, +expands cross-border financing convenience, simplifies the registration management +requirements for cross-border financing facilitation business, and reduces the negative list +for the use of income from capital projects. +Taxation +Enterprise Income Tax +The Enterprise Income Tax Law of the PRC (‘ ) (“the +EIT Law”), promulgated by the NPC on March 16, 2007, came into effect on January 1, 2008 +and amended on February 24, 2017 and December 29, 2018, as well as the Implementation +Rules of the EIT Law (ૢԷ‘ ) (“the Implementation +Rules”), promulgated by the State Council on December 6, 2007, came into force on +January 1, 2008 and last amended on December 6, 2024, are the principal law and +regulation governing enterprise income tax in the PRC. According to the EIT Law and its +Implementation Rules, enterprises are classified into resident enterprises and +non-resident enterprises Resident enterprises refer to enterprises that are legally +established in the PRC, or are established under foreign laws but whose actual +management bodies are located in the PRC. And non-resident enterprises refer to +enterprises that are legally established under foreign laws and have set up institutions or +sites in the PRC but with no actual management body in the PRC, or enterprises that have +not set up institutions or sites in the PRC but have derived incomes from the PRC. A +uniform income tax rate of 25% applies to all resident enterprises and non-resident +enterprises that have set up institutions or sites in the PRC to the extent that such incomes +are derived from their set-up institutions or sites in the PRC, or such income are obtained +outside the PRC but have an actual connection with the set-up institutions or sites. And +non-resident enterprises that have not set up institutions or sites in the PRC or have set up +institutions or sites but the incomes obtained by the said enterprises have no actual +connection with the set-up institutions or sites, shall pay enterprise income tax at the rate +of 10% in relation to their income sources from the PRC. +Value-Added Tax (the “VAT”) +Pursuant to the Provisional Regulations of the PRC on Value-added Tax ( ʕശɛ͏ +೼ᅲБૢԷ‘) amended in November 2017, and the Detailed Rules for the +Implementation of the Interim Regulations of the PRC on Value-Added Taxes ( ʕശɛ͏ +‘ ) amended in October 2011, all entities or individuals +engaged in the sale of goods, provision of processing, repair and maintenance services, or +importation of goods within China shall be value-added tax taxpayers and subject to +value-added tax in accordance with relevant laws and regulations. Thr ough the +REGULATORY OVERVIEW +– 107 – + + +--- page 116 --- +value-added tax reform in China, value-added tax rates have undergone multiple adjustments +and value-added tax are regulated by the Value-Added Tax Law of the PRC (ʕശɛ͏΍ձ਷ᄣ +‘), which was implemented in January 2026. +Laws and Regulations on Information Security and Data +Privacy Data Security and Data Export +The SCNPC promulgated the Data Security Law of the PRC ( ʕശɛ͏΍ձ਷ᅰኽτ +‘) on June 10, 2021, which became 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. +On December 28, 2021, the Cyberspace Administration of China (the “CAC”) and +other twelve PRC regulatory authorities jointly revised and promulgated the Measures for +Cybersecurity Review (‘) (the “Cyber Review Measures”), which came +into effect on February 15, 2022. The Cyber Review Measures stipulate that, among others, +(i) when the purchase of network products and services by a critical information +infrastructures operator (the “CIIO”) (٫or the data processing +activities conducted by a network platform operator (٫affect or may affect +national security, a cybersecurity review shall be conducted pursuant to the Cyber Review +Measures; (ii) an application for cybersecurity review shall be made by an issuer who is a +network platform operator holding personal information of more than one million users +before such issuer applies to list its securities abroad; and (iii) the relevant PRC +governmental authorities may initiate cybersecurity review if such governmental +authorities determine that the issuer’s network products or services, or data processing +activities affect or may affect national security. +According to the Measures on Security Assessment of Cross-border Data Transfer (ᅰኽ +‘) issued by the CAC on July 7, 2022 and effective 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 CIIO or the data processor that has +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 CIIO; (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 Promoting and Regulating Cross-border Data +Flows (‘ ), which was promulgated by the CAC on March 22, +2024 and came into effect on the same day, if the data have not been informed or publicly +announced as important data by relevant departments or regions, data handlers are not +required to declare security assessment for cross-border provision of the data as important +data. +Personal Information Protection +According to the Civil Code of the PRC (Պ‘ ), 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, ensure the security of the information, and must not illegally collect, use, process, or +transmit other people’s personal information or illegally buy, sell, provide, or disclose the +information. The Personal Information Protection Law of the PRC (ڦ +REGULATORY OVERVIEW +– 108 – + + +--- page 117 --- +‘) 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. +According to the Cybersecurity Law of the PRC (‘ ) +promulgated by the SCNPC on November 7, 2016 and effective on June 1, 2017, and +amended on 28 October 2025, with the latest revised version becoming effective on 1 +January 2026, network operators must follow the principles of legality, legitimacy and +necessity when collecting and using personal information, 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, and 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. +Laws and Regulations on Overseas Securities Offering and Listing by Domestic +Companies +Securities Law of the PRC +The Securities Law of the People’s Republic of China (‘) (the +“Securities Law”) took effect on July 1, 1999 and was revised on August 28, 2004, October +27, 2005, June 29, 2013, August 31, 2014 and December 28, 2019, respectively. The latest +revised Securities Law came into effect on March 1, 2020. This is the first national +securities law in the PRC, which is divided into 14 chapters and 226 articles regulating, +among other things, the issuance and trading of securities, takeovers by listed companies, +securities exchanges, securities companies and the duties and responsibilities of the State +Council’s securities regulatory authorities. The Securities Law comprehensively regulates +activities in the PRC securities market. Article 224 of the Securities Law provides that +domestic enterprises shall comply with the relevant provisions of the State Council to list +its shares outside the PRC. Currently, the issuance and trading of foreign issued shares +(including H shares) are mainly governed by the rules and regulations promulgated by the +State Council and the CSRC. +Overseas Listing +On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures (ྤʫ +‘), and relevant supporting guidelines, which came +into effect on March 31, 2023. The Overseas Listing Trial Measures comprehensively +improves and reforms the existing regulatory regime for overseas offering and listing of +PRC domestic companies’ securities and regulates both direct and indirect overseas +offering and listing of PRC domestic companies’ securities. Any domestic company that is +deemed to conduct overseas offering and listing activities shall file with the CSRC in +accordance with the Overseas Listing Trial Measures. +The Overseas Listing Trial Measures provide that the overseas securities offering +and listing will be considered a direct overseas offering by a PRC domestic company if the +issuer is a company limited by shares registered and established in mainland China. +Pursuant to the Overseas Listing Trial Measures, an issuer shall file with the CSRC +within three business days after its application for initial public offering is submitted to +competent overseas securities regulators. +H-share Full Circulation +“Full circulation” means listing and circulating on the stock exchange of the +domestic unlisted shares of an H-share listed company, including unlisted domestic +shares held by domestic shareholders prior to overseas listing, unlisted domestic shares +additionally issued after overseas listing, and unlisted shares held by foreign +shareholders. On November 14, 2019, the CSRC issued the Guidelines for the “Full +Circulation” Program for Domestic Unlisted Shares of H-share Listed Companies ( Hʮ +ˏ‘) (the “Guidelines for the Full Circulation”), +which was partly revised on August 10, 2023 according to the Decision on Revising and +Abolishing Part of Securities and Futures Policy Documents by CSRC ( ʕ਷ᗇՎ္ຖ၍ଣ +‘ ). +REGULATORY OVERVIEW +– 109 – + + +--- page 118 --- +According to the Guidelines for the Full Circulation, shareholders of domestic +unlisted shares may determine by themselves through consultation the amount and +proportion of shares, for which an application will be filed for circulation, provided that +the requirements laid down in the relevant laws and regulations and set out in the policies +for state-owned asset administration, foreign investment and industry regulation are met, +and the corresponding H-share listed company may be entrusted to file the said +application for full circulation. To apply for full circulation, an H-share listed company +shall file the application with the CSRC according to the administrative filing procedures +necessary for the Overseas Listing Trial Measures. After the application for full circulation +has been approved by the CSRC, the H-share listed company shall submit a report on the +relevant situation to the CSRC within 15 days after the registration with CSDCC of the +shares related to the application has been completed. +On December 31, 2019, CSDCC and the Shenzhen Stock Exchange (“SZSE”) jointly +announced the Measures for Implementation of H-share Full Circulation Business ( Hٰ +‘) (the “Measures for Implementation”). The businesses in relation +to the H-share full circulation business, such as cross-border transfer registration, +maintenance of deposit and holding details, transaction entrustment and instruction +transmission, settlement, management of settlement participants, services of nominal +holders, etc. are subject to the Measures for Implementation. +On June 30, 2025, the Shenzhen Branch of CSDC issued the latest Guidelines to the +Program for “Full Circulation” of H-shares of Shenzhen Branch of China Securities +Depository and Clearing Corporation Limited (ப΂ʮ̡ଉέʱʮ +̡H‘), which are applicable to the business preparation, cross-border +share transfer registration and overseas centralized custody, the initial maintenance of +details of domestic shareholding and the maintenance of its changes, corporate actions, +clearing, settlement and risk management measures. On the same day, China Securities +Depository and Clearing (Hong Kong) Company Limited issued the H-Share Full +Circulation Business Guide of China Securities Depository and Clearing (Hong Kong) +Limited (ʮ̡H‘), which is applicable +to businesses such as share custody and depository, agent service, arrangement for +settlement and delivery, and risk management measures. +Confidentiality and Archives Administration +On February 24, 2023, the CSRC, the MOF, the National Administration of State +Secrets Protection and the National Archives Administration jointly released the revised +Provisions on Strengthening the Confidentiality and Archives Administration of Overseas +Securities Offering and Listing by Domestic Companies (̋੶ྤʫΆุྤ̮೯БᗇՎ +‘ )(the”Archives Administration Provisions”), which +came into effect on March 31, 2023. According to the Archives Administration Provisions, +the domestic companies shall establish and implement a solid confidentiality and archives +administration 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 in the overseas securities +offering and listing activities of such domestic companies. +In terms of providing accounting archives or copies thereof to any other entities or +persons (such as securities companies, securities services providers and overseas +regulators), the Archives Administration Provisions stipulate that relevant governmental +procedures should be complied with. Any violation of the above regulations may subject +the domestic companies to regulatory penalties under the Safeguarding State Secrets Law +of the PRC (‘ ) and the Archives Law of the PRC ( ʕശɛ +‘) and even criminal liabilities to the extent applicable. +REGULATORY OVERVIEW +–1 1 0– + + +--- page 119 --- +OVERVIEW +We are a biotechnology company specializing in the discovery, development and +commercialization of bi-/multi-specific peptide drugs for the treatment of metabolic +diseases as well as cardiovascular and cerebrovascular diseases, with our Core Product in +Phase III clinical trials. Our history can be traced back to the establishment of our +predecessor, Shaanxi Micot Technology Co., Ltd.* (ʮ̡ ) in January +2007 under the laws of the PRC, and our Group was founded by Dr. Wang Bing, our +Chairman, Chief Executive Officer and executive Director. At inception, our Company +first focused on the R&D of medical devices, and in particular a medical device designed +to separate rare cells from human blood. Due to funding constraints at the time, the Group +discontinue the medical device project. Following that and leveraging Dr. Wang Bing’s +extensive experience in peptide research as well as the Group’s assessment of the broad +market potential, in 2011, we shifted our focus to the development of peptide drugs, and +secured our first significant funding through the National Major Scientific and +Technological Special Project for Major New Drug Development, a government-funded +R&D program, under which we have cumulatively received approximately RMB 3.0 +million in funding since 2013 to support our R&D activities. In particular, we directed +efforts towards our previous pipeline product MT1001 (Prifibatide) for treating acute +coronary syndrome, the patent applications and patents related to which were +out-licensed by us to a third party and will be transferred to such third party upon among +other things the drug manufacture approval of MT1001 being issued. Save for the MT1001 +project, we have been conducting and will continue to conduct discovery, development +and commercialization of drugs in-house. The Group’s historical operations since its +transition to peptide drug development in 2011 are consistent with and supportive of its +current business and development strategies. Since our transition to peptide drug +development in 2011, we have maintained a consistent and focused strategic direction. +Our accumulated R&D experience of over a decade forms the foundation of our current +business, including our pipeline of globally leading bi-/multi-functional peptide drug +candidates anchored by our Core Product MT1013, and supports our strategies to +accelerate clinical development and commercialization, advance peptide drug candidates +with innovative mechanisms, and deepen strategic collaborations. In January 2025, we +converted from a limited liability company into a joint stock limited company with our +corporate name changed to Shaanxi Micot Pharmaceutical Technology Co., Ltd. (߅ +ʮ̡ ). As of the Latest Practicable Date, the registered capital of our +Company was RMB5,473,719, divided into 273,685,950 Shares, with a nominal value of +RMB0.02 each. +MILESTONES +The following sets out a summary of our key development milestones: +Year Milestone(s) +2007 ........ T h ep r edecessor of our Company, Shaanxi Micot Technology Co., Ltd.* +(ʮ̡ ) was established in January +2013 ........ W ec o m pleted the National Major Scientific and Technological Special +Project for major new drug development, focusing on the R&D of key +sustained-release technologies and products for protein and +peptide-based pharmaceuticals* ({ஐͣ +೯ ) +2014 ........ W e successfully out-licensed our self-developed pipeline product +MT1001 to Shandong Danhong Pharmaceutical Co., Ltd* (Ⴁᖹ +ʮ̡ ) (previously known as Heze Buchang Pharmaceutical Co., +Ltd.* (ʮ̡ )) +2016 ........ O u r application for the National Major Scientific and Technological +Special Project for “Major New Drug Development” — clinical research +on Prifibatide for Injection, a category 1.1 new drug for the treatment of +acute coronary syndrome* (ڿ׌ܢ +এၝΥस1.1Ӻ) was accepted +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 111 – + + +--- page 120 --- +Year Milestone(s) +2019 ........ W e obtained IND approval from the FDA for the development of +MT1002 for the treatment of ACS+PCI +2021 ........ W e obtained IND approval from the FDA for the development of +MT1013 for the treatment of CKD-SHPT and was accepted by the NMPA +We obtained IND approval from the NMPA for the development of +MT1002 for the treatment of ACS+PCI +We obtained IND approval from the FDA for the development of +MT200605 for the treatment of ischemic stroke +2023 ........ W e obtained IND approval from the NMPA for the development of +MT200605 for the treatment of acute ischemic stroke +We obtained IND approval from the NMPA for the development of +MT1002 for the treatment of Stroke and HD-PF4 +We obtained IND approval from the FDA for the development of +MT1002 for the treatment of HD and was accepted by the NMPA +2024 ........ W e obtained IND approval from the FDA for the development of +XTL6001 for the treatment of obesity and weight management +2025 ........ W e obtained IND approval from the NMPA for the development of +XTL6001 for the treatment of Proteinuric CKD +OUR SUBSIDIARIES +As of the Latest Practicable Date, our Group comprised our Company, eight +subsidiaries and two branches. The following table sets out certain information of our +subsidiaries as of the Latest Practicable Date: +Name of Subsidiaries +Date and +place of +incorporation +Authorized share +capital/ Registered +capital +Equity interest +attributable to +our Group Principal business activities +Micot (Suzhou) Pharmaceutical +Co., Ltd.* +(ʮ̡) .... +September 2, 2022, +PRC +RMB10,000,000 100% Medical and engineering technology +R&D, technology services and +transfers, and sales of medical +equipment +Micot (Suzhou) Technology +Co., Ltd.* +(ʮ̡) .... +August 20, 2020, +PRC +RMB80,000,000 100% Medical research and experimental +development; technology services, +development, consultation, +exchange, transfer, and promotion +Xi’an Biocare Pharma Ltd. +(ʮ̡) ..... +August 11, 2017, +PRC +RMB60,000,000 100% Biopharmaceutical R&D, +manufacturing, and commercial +distribution +Micot (Taizhou) Pharmaceutical +Technology Co., Ltd.* +(ʮ̡) .. +May 16, 2025, PRC RMB50,000,000 100% Medical R&D, and drug production, +clinical trial services and distribution +Shanghai Xitaili Biomedical Technology +Co., Ltd.* +(ʮ̡) ... +November 22, 2022, +PRC +RMB33,683,333 89.06% Medical and cellular technology R&D, +technical services and sales of +medical equipment +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 2– + + +--- page 121 --- +Name of Subsidiaries +Date and +place of +incorporation +Authorized share +capital/ Registered +capital +Equity interest +attributable to +our Group Principal business activities +Micot (Hong Kong) Technology Limited +(ʮ̡) .... +October 29, 2021, +Hong Kong +HKD10,000 100% Pharmaceuticals and medical devices +R&D, production, promotion and +distribution +Micot (U.S.) Technology Co., Ltd +(ʮ̡) .... +November 29, 2021, +US +USD20,000 100% Overseas R&D and operations +Micot (U.S.) Biopharmaceutics Co., Ltd +(ʮ̡) .... +September 21, 2022, +US +USD1,000 100% Overseas R&D and operations +The following table sets out certain information of our branches as of the Latest +Practicable Date: +Name of branches +Date of +incorporation Location Principal business activities +Shaanxi Micot Pharmaceutical +Technology Co., Ltd. Beijing Branch +(ʮ̡ +̏ԯʱʮ̡) .................. +March 1, 2021 Beijing, PRC Providing administrative and +operational support to the +Group +Shaanxi Micot Pharmaceutical +Technology Co., Ltd. Shanghai Branch +(ʮ̡ +ɪऎʱʮ̡) .................. +August 28, 2024 Shanghai, PRC Providing administrative and +operational support to the +Group +Former pipeline product – MT1001 (Prifibatide) +In 2011, our Company started focusing on developing peptide drugs and in +particular, we commenced R&D activities on our previous pipeline product Prifibatide +which is indicated for treating acute coronary syndrome. +Having conducted pre-clinical studies on the API and injectable formulation of +Prifibatide (a class 1.1 novel anti-platelet chemical drug), and after taking into account its +relatively limited financial and R&D resources at the time, and having considered the +respective development capabilities, the collaboration model and the expected economic +benefits, the Group decided to adopt an out-licensing model to conduct collaborative +development of the project, we entered into a technical development agreement with +Shandong Danhong Pharmaceutical Co., Ltd.* (ʮ̡) (formerly known +as Heze Buchang Pharmaceutical Co., Ltd.*ʮ̡) (“Shandong +Danhong”) on October 30, 2013 (“Technical Development Agreement”) which is an +Independent Third Party for the cooperation on the development thereof. According to +the Technical Development Agreement, we were responsible for pre-clinical research, +preparing and submitted application for clinical trial approval, and providing technical +guidance for process validation and sample production, and Shandong Danhong was +responsible for phases I, II and III clinical trials, application for new drug certificate and +production approval, providing GMP production facilities, and bearing all associated +costs for these activities. +The development fee to be paid by Shandong Danhong to our Company was +RMB120 million, to be paid in five installments. The settlement date of the five +installments were tied to specific milestones as follows: (i) RMB12 million upon the +signing of the Technical Development Agreement; (ii) RMB58 million upon obtaining +clinical trial approval; (iii) RMB20 million upon completion of phase I clinical trials and +obtaining approval for phase II trials; (iv) RMB20 million upon completion of phase II +trials and approval for phase II trials; and (v) RMB10 million upon obtaining the new drug +certificate and production approval for MT1001. The development fee was determined +between the parties through arm’s length negotiation taking into account, among other +things, our costs in the early research and intellectual property development of MT1001 +up to the date of the Technical Development Agreement, costs for completing the +remaining preclinical work and preparing the clinical trial application, our scientific +expertise, technical know-how, resources dedicated to the project and the transfer of the +relevant intellectual properties. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 3– + + +--- page 122 --- +Pursuant to the Technical Development Agreement, patents in respect of MT1001 +shall be transferred to Shandong Danhong upon the full settlement of the RMB120 million +development fee, and any new discoveries during clinical trials shall belong to both +parties, with terms to be negotiated separately. +Following the completion of the preclinical development of MT1001, we entered +into agreements with Shandong Danhong from 2016 to 2018 for phase I clinical study of +Prifibatide whereby Shandong Danhong had engaged our Company for, among other +things, the design, management, oversight and reporting of the phase I study for +Prifibatide and managing trial execution at third-party clinical sites at the aggregate fees +of RMB13.14 million, which determined by the parties through arm’s length negotiation. +All fees under these clinical agreements have been settled. +As of the Latest Practicable Date, Shandong Danhong has paid RMB83.15 million of +the fee under the Technical Development Agreement in accordance with the terms thereof. +The project has been stalled since the completion of phase I, as Shandong Danhong halted +further development thereon, and therefore did not advance to later clinical stages or +trigger subsequent milestone for payment under the Technical Development Agreement. +Following the completion of the phase I clinical trial, our Company did not receive any +notification from Shandong Danhong regarding the advancement to subsequent +development stages, nor did Shandong Danhong provide any explanation as to the +reasons for halting further development. The Technical Development Agreement imposed +no obligation on Shandong Danhong to disclose or explain its internal development +decisions to us, and accordingly our Company is not aware of the specific reasons for the +discontinuation. To the best of our Company’s knowledge, there were no disputes, +disagreements or outstanding issues between us and Shandong Danhong under the +Technical Development Agreement, nor was there any fault on the part of us that led to the +halting of the project. The project was not terminated by us and our Company has fulfilled +its obligations under the Technical Development Agreement. +The development and commercialization rights for MT1001 belonged to Shandong +Danhong under the Technical Development Agreement and Purabatide is not part of our +current pipeline. +ESTABLISHMENT AND MAJOR CORPORATE DEVELOPMENT +Establishment and Shareholding Changes prior to 2011 +On January 19, 2007, the predecessor of our Company was established under the +laws of the PRC known as Shaanxi Micot Technology Co., Ltd.* (ʮ +̡) with an initial registered capital of RMB3,000,000 by Dr. Wang Bing ( ˮΏ), Mr. Wang +Yan (ࣝMr. Guo Dapeng (ெɽᘄ), Ms. Ren Yaping (΂ඩ̻), and Mr. Yu Gang (࡝,) +holding 60.00%, 20.00%, 10.00%, 5.00% and 5.00% of our Company’s then registered +capital, respectively. +Equity T ransfers in October 2011 +Mr. Guo Dapeng, Mr. Yu Gang and Mr. Wang Yan invested in our Company when we +initially focused on the R&D of medical devices. In 2011, our Company made a strategic +pivot to shift our focus towards the R&D of innovative drugs. Following this +reorientation, Mr. Guo Dapeng, Mr. Yu Gang and Mr. Wang Yan whose investment thesis +was aligned with the original medical device focus had intended to exit our Company in +October 2011 and Dr. Wang Bing had intended to acquire their respective equity interest in +our Company at the time. However, as Dr. Wang Bing would like to devote more time in +his academic research and related areas, he had decided to entrust his equity interest in +our Company, including the equity interest under his own name and those to be acquired +from Mr. Guo Dapeng, Mr. Yu Gang and Mr. Wang Yan, to his family members so as to +reduce his personal administrative burden. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 4– + + +--- page 123 --- +Against such background, on October 10, 2011, Mr. Guo Dapeng, Dr. Wang Bing and +Mr. Yu Gang each entered into an equity transfer agreement with Ms. Wang Qiuxia (being +the mother of Dr. Wang Bing), and Mr. Wang Yan entered into an equity transfer agreement +with Mr. Wang Anmin (being the father of Dr. Wang Bing). +Pursuant to the aforesaid agreements, Mr. Guo Dapeng, Dr. Wang Bing and Mr. Yu +Gang transferred their respective equity interest of 10%, 60% and 5% in our Company to +Ms. Wang Qiuxia at consideration of RMB300,000, RMB1,800,000 and RMB150,000, +respectively. On the same date, Mr. Wang Yan transferred 20.00% equity interest in our +Company to Mr. Wang Anmin at a total consideration of RMB600,000, reflecting the +amount of registered capital transferred. +Such entrustment arrangement was terminated in March 2020. For details, see “— +Release of Equity Interest Entrusted by Dr. Wang Bing” in this section. +Upon completion of the above transfers in October 2011, our Company was owned +by Ms. Wang Qiuxia, Mr. Wang Anmin and Ms. Ren Yaping as to 75.00%, 20.00% and +5.00%, respectively. +Equity T ransfer in September 2014 +On August 18, 2014, Ms. Ren Yaping intended to exit and entered into an equity +transfer agreement with Ms. Wang Qiuxia to transfer all her equity interest, totaling 5.00% +equity interest in our Company to Ms. Wang Qiuxia at a total consideration of +RMB150,000, reflecting the amount of registered capital transferred. +Upon completion of the above transfer in September 2014, our Company was owned +by Ms. Wang Qiuxia and Mr. Wang Anmin as to 80.00% and 20.00%, respectively. +Equity T ransfer in March 2016 +Following the passing of the late Mr. Wang Anmin in the first half of 2015, the 20% +equity interest held in the name of the late Mr. Wang Anmin was recognized as part of his +estate, where 10% equity interest had been transferred to Ms. Wang Qiuxia and 10% equity +interest had been transferred to Dr. Wang Bing. Subsequently, as a part of their family +arrangement, Dr. Wang Bing and Ms. Wang Qiuxia had agreed to transfer such 20% equity +interest to Dr. Wang Mei, Dr. Wang Bing’s spouse. As such, an equity transfer agreement +was entered into by Ms. Wang Qiuxia, Dr. Wang Bing and Dr. Wang Mei on March 16, 2016, +pursuant to which, each of Ms. Wang Qiuxia and Dr. Wang Bing agreed to transfer their +respective 10% equity interest in our Company to Dr. Wang Mei. As a result of such +transfers, the entrustment arrangement between the late Mr. Wang Anmin and Dr. Wang +Bing had then been terminated. +Upon completion of the above transfer in March 2016, our Company was owned by +Ms. Wang Qiuxia and Dr. Wang Mei as to 80.00% and 20.00%, respectively. +Equity T ransfer in August 2019 +On July 22, 2019, Ms. Wang Qiuxia and Dr. Wang Mei each entered into an equity +transfer agreement with Xi’an Zhongrui, for the purpose of transferring the incentive +equity interest to our employee incentive platform. Pursuant to the aforesaid agreements, +Ms. Wang Qiuxia and Dr. Wang Mei transferred 6% and 4% equity interest to Xi’an +Zhongrui, at the consideration of RMB180,000 and RMB120,000, respectively, reflecting +the amount of registered capital transferred. +Upon completion of the above transfers in July 2022, our Company was owned by +Ms. Wang Qiuxia, Dr. Wang Mei and Xi’an Zhongrui as to 74.00%, 16.00% and 10.00%, +respectively. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 5– + + +--- page 124 --- +Series A Financing +Our Company underwent series A financing through capital increases (“ Series A +Financing”). Under the capital contribution agreement dated July 30, 2019 entered into +among our Company, the Series A Financing investors set forth below and the then +Shareholders of our Company, the registered capital of our Company was increased to +RMB3,690,000 and the following Series A Financing investors agreed to subscribe for a +total amount of RMB690,000 in the registered capital of our Company at an aggregate +consideration of RMB115,000,000. The respective subscription amount and consideration +paid by the subscribers in Series A Financing are set out as follow: +Subscribers +Registered +capital +subscribed for Consideration Basis of consideration +(RMB) (RMB) +Beta Achieve Limited (ʮ̡ ) (“Beta Achieve”) . . . 300,000 50,000,000 +Determined based on arm’s +length negotiations among +the relevant parties taking +into account various R&D +advancements of our +Company, including the +completion of the MT1002 +US IND approval and the +initiation of its Phase I +clinical trial. +Tianjin Huaxin Pharmaceutical Venture Capital +Partnership (Limited Partnership)* +(Υྫ) +(“Huaxin Pharmaceutical V enture Capital ” )....... +120,000 20,000,000 +Shaanxi Junying Growth Industry Development Fund +Partnership (Limited Partnership)* +(Υྫ) +(“Junying Growth” ) .................... +120,000 20,000,000 +Shaanxi New Materials High-Tech Venture Investment +Fund (Limited Partnership)* (৷Ҧஔ௴ุҳ +Υྫ) (“New Materials Fund” ) ....... +120,000 20,000,000 +Xi’an Jingcheng Daxing Enterprise Management +Partnership (Limited Partnership) +(Υྫ) +(“Jingcheng Daxing” ) ................... +30,000 5,000,000 +Release of Equity Interest Entrusted by Dr. Wang Bing +On March 30, 2020, in order to release the equity interest entrusted by Dr. Wang +Bing, Ms. Wang Qiuxia and Dr. Wang Bing entered into an equity transfer agreement, +pursuant to which, Ms. Wang Qiuxia transferred all her equity interest, totaling +approximately 60.17% equity interest in our Company to Dr. Wang Bing at a total +consideration of RMB2,220,000, reflecting the amount of registered capital transferred. +Upon completion of the Series A Financing and the aforementioned equity transfer, Dr. +Wang Bing, Dr. Wang Mei, Beta Achieve, Xi’an Zhongrui, Huaxin Pharmaceutical Venture +Capital, Junying Growth, New Materials Fund and Jingcheng Daxing hold 60.17%, +13.01%, 8.13%, 8.13%, 3.25%, 3.25%, 3.25% and 0.81% of the Company’s equity +respectively. +Equity T ransfer in January 2021 +On December 29, 2020, Dr. Wang Mei and Xi’an Tongshang Investment Partnership +(Limited Partnership)* (Υྫ) (“Xi’an T ongshang ”) entered +into an equity transfer agreement. Pursuant to the aforesaid agreement, Dr. Wang Mei +agreed to transfer 3.22% equity interest in our Company to Xi’an Tongshang as Xi’an +Tongshang intended to invest in our Company at a total consideration of RMB4,276,800 +and the consideration was determined based on arm’s length negotiations among the +relevant parties. Upon completion of the aforesaid transfer, Dr. Wang Bing, Dr. Wang Mei, +Beta Achieve, Xi’an Zhongrui, Huaxin Pharmaceutical Venture Capital, Junying Growth, +New Materials Fund, Jingcheng Daxing and Xi’an Tongshang hold 60.17%, 9.79%, 8.13%, +8.13%, 3.25%, 3.25%, 3.25%, 0.81% and 3.22% of the Company’s equity respectively. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 6– + + +--- page 125 --- +Series B and B1 Financing +Our Company underwent series B and B1 financing through capital increases and +equity transfer (“Series B Financing”). Under the capital contribution agreements dated +February 21, 2021 and August 30, 2021 (“ Series B Subscription Agreement(s) ”) entered +into among our Company, the Series B Financing investors set forth below and the then +Shareholders of our Company, the registered capital of our Company was increased to +RMB4,674,000 and RMB4,812,095, respectively, and the following Series B Financing +investors agreed to subscribe for a total amount of RMB984,000 and RMB138,095 in the +registered capital of our Company at an aggregate consideration of RMB360,000,000 and +RMB65,000,000, respectively. +On May 11, 2021, Shanghai NRL Investment Holding Co., Ltd* (ٰ +ʮ̡) (“Shanghai NRL”), being one of the initial Series B Financing investors who +agreed to subscribe for a total amount of RMB546,667 in the registered capital of our +Company at an aggregate consideration of RMB200,000,000 under the Series B +Subscription Agreements, entered into an equity transfer agreement with Suzhou Mainiv +Venture Investment Partnership (Limited Partnership)* (ࠢ +Υྫ) (“Suzhou Mainiv”) to transfer all of its rights and obligations under the Series B +Subscription Agreement to Suzhou Mainiv. +Pursuant to the aforementioned agreements, the respective subscription amount +and consideration paid by the subscribers in Series B Financing are set out as follow: +Subscribers +Registered +capital +subscribed for Consideration Basis of consideration +(RMB) (RMB) +Beta Achieve .......................... 54,667 20,000,000 +Determined based on arm’s +length negotiations among +the relevant parties taking +into account various R&D +advancements of our +Company, including the +IND approval from the +FDA for the development +of MT1013 and the +subsequent initiation of its +Phase I clinical trial in the +US, the IND approval from +FDA for the development +of MT2004 and the +subsequent initiation of its +Phase I clinical trial in the +US, as well as the approval +of the IND approval from +the NMPA for the +development of MT1002. +Huaxin Pharmaceutical Venture Capital ........... 35,533 13,000,000 +Jingcheng Daxing ....................... 71,501 29,500,000 +Suzhou Mainiv ........................ 546,667 200,000,000 +Suzhou Rongsheng Xianxing Venture Investment +Partnership (Limited Partnership)* +(Υྫ) +(“Suzhou Rongsheng” ) ................... +136,667 50,000,000 +Ningbo Meishan Bonded Port Area Fengchuan +Hongbo Investment Management Partnership +(Limited Partnership)* +(೼ಥਜᔮʇ̾௹ҳ༟၍ଣΥྫΆุ +Υྫ) (“Fengchuan Hongbo” ) ............ +102,500 37,500,000 +Xinyu Shanjin Runji Equity Investment +Partnership (Limited Partnership)* +(Υྫ) +(“Shanjin Runji” ) ...................... +78,956 30,000,000 +Xi’an Tangxing Technology Venture Capital +Investment Partnership (Limited Partnership)* +(Υྫ) +(“T angxing T echnology” ) ................. +95,605 45,000,000 +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 7– + + +--- page 126 --- +Series C Financing +Our Company underwent series C financing through capital increases (“ Series C +Financing”). Under the capital contribution agreement dated January 16, 2023 entered +into among our Company, the Series C Financing investors set forth below and the then +Shareholders of our Company, the registered capital of our Company was increased to +RMB4,984,604 and the following Series C Financing investors agreed to subscribe for a +total amount of RMB172,509 in the registered capital of our Company at an aggregate +consideration of RMB95,000,000. The respective subscription amount and consideration +paid by the subscribers in Series C Financing are set out as follow: +Subscribers +Registered +capital +subscribed for Consideration Basis of consideration +(RMB) (RMB) +Xi’an Huiyu Investment Fund Partnership +(Limited Partnership)* +(Υྫ) +(“Xi’an Huiyu” )....................... +18,159 10,000,000 Determined based on arm’s +length negotiations among +the relevant parties taking +into account various R&D +advancements of our +Company, including the +completion of Phase I +clinical trials for MT1013 +and MT1002 in China and +US, the IND approval from +the NMPA for the +development of MT2004 +and the completion of its +Phase I clinical trials in the +US, as well as the IND +approvals for the +development of MT1009 +and MT200605 from the +FDA and the development +of MT1011 from the NMPA. +Shaanxi Huichang Listed Reserve Enterprise Equity +Investment Fund Partnership (Limited Partnership)* +(ΥྫΆุ +Υྫ) (“Listing Reserve Fund” ) ........... +72,635 40,000,000 +Hangzhou Quandewang Enterprise Management Co., Ltd.* +(ʮ̡) +(“Hangzhou Quandewang” )................ +18,159 10,000,000 +Hainan Ruizheng Enterprise Management Partnership +(Limited Partnership)* +(Υྫ) +(“Hainan Ruizheng” ) .................... +18,159 10,000,000 +Shengzhou Yinyun Heman Enterprise Management +Partnership (Limited Partnership)* +(Υྫ) +(“Yinyun Heman” ) ..................... +18,159 10,000,000 +Hainan Wanfeng Investment Partnership (Limited +Partnership)* +(Υྫ) (“Hainan Wanfeng”) +27,238 15,000,000 +Equity T ransfer in March 2024 +On March 15, 2024, Junying Growth and Shaanxi Junying Jiacheng Pharmaceutical +Industry Development Fund Partnership (Limited Partnership)* (Գϓᔼᖹପุ೯ +Υྫ) (“Junying Jiacheng”) entered into an equity transfer +agreement. Pursuant to the aforesaid agreement, Junying Growth agreed to transfer +approximately 0.81% equity interest in our Company to Junying Jiacheng at a total +consideration of RMB20,000,000. The consideration was determined on arm’s length +negotiations among the relevant parties taking into account the timing of the transfer and +relevant shareholder’s strategic plan. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 8– + + +--- page 127 --- +Conversion into a Joint Stock Company +On December 9, 2024, a Shareholders’ resolution was passed for the conversion of +our Company into a joint stock company with its corporate name changed to Shaanxi +Micot Pharmaceutical Technology Co., Ltd. (ʮ̡ ) and the +registration thereof was completed on January 17, 2025. Upon completion of the +conversion, the registered capital of our Company became RMB4,984,604 divided into +4,984,604 Shares with a nominal value of RMB1.00 each. +Series D Financing +Our Company underwent series D financing through capital increases (“ Series D +Financing”). Under the capital contribution agreements entered into among our +Company, the Series D Financing investors set forth below and the then Shareholders of +our Company, the registered capital of our Company was increased to RMB5,473,719 and +the following Series D Financing investors agreed to subscribe for a total amount of +RMB489,115 in the registered capital of our Company at an aggregate consideration of +RMB235,500,000. The respective subscription amount and consideration paid by the +subscribers in Series D Financing are set out as follow: +Date of the capital +contribution +agreement(s) Subscribers +Number of +Shares +subscribed for Consideration +(RMB) +June 27, 2025 ........ Linhai Qize Maite Venture Investment +Partnership (Limited Partnership)* +(ᑗऎ઼̹ዣ௥त௴ุҳ༟ΥྫΆุ +Υྫ) (“Linhai Qize”) +287,653 138,500,000 +September 19, 2025 .... Maicheng Century (Xi’an) Enterprise +Management Partnership Enterprise +(Limited Partnership)* +(€Гτ Άุ၍ଣΥྫΆุ +Υྫ) (“Maicheng Century”) +31,154 15,000,000 +September 19, 2025 .... Jinan Liuji Enterprise Management +Partnership Enterprise (Limited +Partnership)* (ʬ᝘Άุ၍ଣ +Υྫ) (“Jinan Liuji”) +24,923 12,000,000 +September 24, 2025 .... Shaanxi Jingang Nongtou Biomedical +Industry Development Equity +Investment Partnership (Limited +Partnership)* (ᔼᖹ +Υྫ) +(“Shaanxi Jingang”) +62,308 30,000,000 +September 26, 2025 .... Shaanxi Innovation Relay Equity +Investment Partnership (Limited +Partnership)* (ᛆ +Υྫ) +(“Shaanxi Innovation Relay ”) +83,077 40,000,000 +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +–1 1 9– + + +--- page 128 --- +EMPLOYEE INCENTIVE SCHEME +Xi’an Zhongrui +In recognition of the contributions of our employees and to incentivize them to +further promote our development, we established Xi’an Zhongrui as our employee +incentive platform, with Xi’an Zhongrui Zekang Enterprise Management Consulting Co., +Ltd* (ʮ̡ ) (“Zhongrui Zekang ”) (a limited partnership +established in the PRC, owned as to approximately 99.00% by Dr. Wang Mei, of which +99.00% is held for her own benefit and the remaining 1.00% is held by Dr. Wang Bing) +being their general partner. Xi’an Zhongrui was established as a limited partnership on +July 18, 2019, and owned approximately 5.48% of our issued Shares as of the Latest +Practicable Date. +As of the Latest Practicable Date +Employee +Incentive Platform +Date of +Establishment +Percentage of +Shareholding in +our Company Limited Partners +Xi’an Zhongrui . . . July 18, 2019 5.48% Dr. Yu Weiping (our Executive Director +and Senior Vice President), holding +the partnership interest through +Nexarcana Limited, Wang Xiangling +(our Chief Medical Officer), Zou Ran +(our Chief Financial Officer), Wang +Ruiling, Fu Guoqin, and together with +the foregoing individuals, a total of 43 +current employees of our Group +Wang Xiangling, Zou Ran, Wang Ruiling and Fu Guoqin had become limited +partners of Xi’an Zhongrui as part of our employee incentive scheme. For information on +Wang Xiangling and Zou Ran, see the section headed “Directors and Senior Management” +in this prospectus. Wang Ruiling joined the Group in June 2018 and serves as a clinical +pharmacology associate director of our Company. Fu Guoqin joined the Group in August +2016 and serves as a senior pharmaceuticals director, a director of the analytical +department of our Company and a deputy general manager of Micot (Suzhou) +Pharmaceutical Co., Ltd., our subsidiary. Wang Ruiling and Fu Guoqin were both +supervisors of our Company as at the Latest Practicable Date. +PRC Legal Advisors’ View on the Employee Incentive Schemes +Our PRC Legal Advisors are of the view that our Company’s equity incentive +matters have been approved and adopted by the relevant decision-making body of our +Company. The Employee Incentive Schemes are formulated in accordance with the +applicable PRC Company Law and other relevant regulations in all material respects. The +relevant equity incentive agreements comply with the provisions of the PRC Civil Code in +all material respects. +MATERIAL ACQUISITIONS AND DISPOSALS +During the Track Record Period and up to the Latest Practicable Date, we did not +conduct any material acquisition or disposal. +SHARE SUBDIVISION +Pursuant to the resolutions of the Shareholders dated September 19, 2025 and April +2, 2026, the Shares had been split on a one-for-fifty basis, and the nominal value of the +Shares had been changed from RMB1.0 each to RMB0.02 each (the “ Share Subdivision ”). +As of the Latest Practicable Date, the registered share capital of our Company had been +RMB5,473,719 with 273,685,950 Shares in a nominal value of RMB0.02 each. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 120 – + + +--- page 129 --- +PRE-IPO INVESTMENT +1. Overview +We underwent rounds of Pre-IPO Investments since our establishment, the details of which are set forth below: +Series A Financing Series B Financing Series B1 Financing Series C Financing +Equity T ransfer in +March 2024 Series D Financing +Date of Agreement(s) .............. July 30, 2019 February 21, 2021 +May 11, 2021 +August 30, 2021 January 16, 2023 December 11, 2023 June 27, 2025 +September 19, 2025 +September 19, 2025 +September 24, 2025 +September 26, 2025 +Amount of registered capital and/or shares +subscribed and/or transferred ........ +RMB690,000 RMB984,000 +2 RMB138,095 RMB172,509 RMB40,353 RMB489,115 +Amount of consideration paid in connection +with the equity subscription and transfers . . +RMB115,000,000 RMB360,000,000 2 RMB65,000,000 RMB95,000,000 RMB20,000,000 RMB235,500,000 +Date of payment of full consideration ..... September 25, 2019 July 15, 2021 2 September 6, 2021 February 6, 2023 December 27, 2023 September 26, 2025 +Approximate cost per RMB1.0 of the registered +capital paid before conversion into a +joint-stock company/per Share +1 ....... +RMB166.67 RMB365.85 2 RMB470.69 RMB550.70 RMB495.63 RMB481.48 +Discount to the Offer Price 3 ........... 80.45% 57.09% 2 44.79% 35.41% 41.87% 43.53% +Post-money valuation (approximate) of +our Company 4 ................. +RMB615,000,000 RMB1,710,000,000 5 RMB2,265,000,000 6 RMB2,745,000,000 7 RMB2,470,499,839 8 RMB2,635,500,000 9 +Basis of determination of the valuation and +consideration .................. +The valuation and considerations for each round of Pre-IPO Investments were determined based on arm’s length negotiation amongst the +respective Pre-IPO Investors and our Group (as the case may be) after taking into consideration of the status of our business operations and +product development. Other factors were also taken into account in the determination of the consideration including but not limited to (i) +the investment risk assumed by the relevant Pre-IPO Investors under the market conditions at the time of the relevant investments and (ii) +the strategic benefits which would be brought by the Pre-IPO Investors to our Group as described below. +Lock-up period .................. Under 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. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 121 – + + +--- page 130 --- +Series A Financing Series B Financing Series B1 Financing Series C Financing +Equity T ransfer in +March 2024 Series D Financing +Use of proceeds ................. W e utilized the proceeds from our Pre-IPO Investors to support, among others, the R&D activities of our Group, including clinical promotion of our +Core Product pipelines, R&D of pre-clinical product pipelines and the payment of our daily operation and management fees. As of the Latest +Practicable Date, the amount of proceeds from our Pre-IPO Investors that had not been utilized was approximately 31.76% of all the proceeds +from our Pre-IPO Investors. The remaining proceeds will mainly be used to support the R&D activities and the business operations of our Group. +Strategic benefits to our Company ....... A t t h e time of the Pre-IPO Investments, the Directors were of the view that (i) our 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. +1 The calculation was based on the amount of consideration paid in connection with the equity/share subscription and transfers by the amount of registe red +capital/share subscribed and/or transferred; +2 The investment amount for Series B Financing does not include the transfer of RMB546,667 registered capital in the Company between Shanghai NRL and Suzhou +Mainiv, given that no new capital was injected to the Company pursuant to the equity transfer agreement entered into on May 11, 2021. For further details, please +refer to “Series B and B1 Financing” in the section. +3 The discount to the Offer Price is calculated based on the currency translation of HK$1.00 to RMB0.87 and on the basis of the Offer Price of HK$19.60, the mid-point +of the proposed range of the Offer Price. +4 Post-money valuation is calculated on the basis of (a) cost per Share; and (b) the total number of Shares our Company upon completion of the relevant round of the +Pre-IPO investment. +5 The increase in the valuation of our Company from the Series A Financing to the Series B Financing was primarily due to significant progress of our R&D progress, +including but not limited to the IND approval from the FDA for the development of MT1013 and the subsequent initiation of its Phase I clinical trial in the US, the IND +approval from FDA for the development of MT2004 and the subsequent initiation of its Phase I clinical trial in the US, as well as the approval of the IND approval +from the NMPA for the development of MT1002. +6 The increase in the valuation of our Company from the Series B and B1 Financing to the Series C Financing was primarily due to significant progress of our R&D +progress, including but not limited to the completion of Phase I clinical trials for MT1013 and MT1002 in China and US, the IND approval from the NMPA for the +development of MT2004 and the completion of its Phase I clinical trials in US, as well as the IND approvals for the development of MT1009 and MT200605 from the +FDA and the development of MT1011 from the NMPA. +7 The decrease in the valuation of our Company from the Series C Financing to the Series D Financing was primarily due to the downturn in the overall +biopharmaceutical market financing activity in China. In and around 2022, there was contraction in the availability of capital, investment appetite and transaction +volumes within China’s biopharmaceutical sector which persisted through the Series D Financing round. Key manifestations of this downturn included tightened +regulatory and capital that led to increased risk aversion among investors, steering investors towards later-stage assets with clearer near-term commercialization +pathways. +8 Series C Financing was completed during a period of more buoyant market sentiment and higher sector valuations. As the March 2024 Equity Transfer was a transfer +of existing shares between related parties, namely Junying Growth and Junying Jiacheng. Transactions between related parties may reflect pricing that differs from +market valuations due to the distinct commercial considerations and arrangements inherent in such transfers. +9 The increase in the valuation of our Company from the Series D Financing to the expected market capitalisation upon Listing is primarily attributable to the +significant progress made across our R&D activities and overall business operations since the completion of the Series D Financing. The Series D Financing was +completed at a post-money valuation of RMB2,635,500,000. Such progress includes, but is not limited to, the advancement of our core and key pipeline products +through critical clinical stages in China, the execution of a business development transaction in respect of MT1013 with Everest Medicines for a total potential +consideration of up to RMB1.24 billion, and the submission of our listing application which has been filed with the CSRC. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 122 – + + +--- page 131 --- +2. Special Rights of the Pre-IPO Investors +Certain Pre-IPO Investors have been granted certain special rights in relation to our +Company, including, among others, pre-emptive rights, rights of first refusal, co-sale +rights, information rights, redemption rights, liquidation preference rights, anti-dilution +rights, and appointment rights of observers to the Board. +The Company and the Series A, Series B, Series B1 and Series C investors entered +into a preferential rights termination agreement on April 29, 2024, pursuant to which the +Company’s obligations in respect of the redemption rights, anti-dilution rights and +liquidation preference rights held by these investors were terminated with effect from +April 30, 2024, while the founders’ corresponding obligations remained effective (the +“obliged founders ”). On June 27, 2025, the Company and the relevant investors entered +into the Series D Shareholding Agreements, pursuant to which the aforementioned +preferential rights, including redemption rights, anti-dilution rights and liquidation +preference rights, were re-granted to investors of Series A, Series B, Series B1 and Series C +with effect from June 27, 2025, and the Company’s corresponding obligations were +reinstated as of that date. The preferential rights for the Series D investors became +effective in July 2025 upon the closing of the Series D financing. For further details of the +termination and re- grant of these rights and their accounting treatment, please refer to +Note 25 to “Appendix I — Accountants’ Report” in this prospectus. Accordingly, the +redemption right had three phases: (1) prior to April 30, 2024, it was granted jointly by the +Company and the obliged founders; (2) from April 30, 2024 to June 27, 2025, the +Company’s obligations were terminated and, accordingly, the redemption right was +granted solely by the obliged founders; and (3) from June 27, 2025, pursuant to the Series +D Shareholding Agreements, the Company’s obligations were reinstated and the +redemption right was again granted jointly by both parties. +Pursuant to a shareholders’ agreement entered into between, amongst others, our +Company and the Pre-IPO Investors (the “ Shareholders Agreement ”), and the Articles of +Association of our Company currently in effect, all special rights granted shall be +automatically terminated on the date immediately before the date of our first submission +of listing application to the Stock Exchange, provided that such rights shall be +automatically and immediately reinstated and restored in the event of rejection, return +and/or termination of our Company’s listing application and/or the filing application by +the Stock Exchange and/or the CSRC (as the case may be) or withdrawal of the listing +application by our Company. +In respect of the redemption right granted by the obliged founders, (i) the Company +did not provide any guarantee; (ii) there is no side agreement; and (iii) as advised by our +PRC Legal Advisor, based on the Shareholders Agreement, from April 30, 2024 to June 27, +2025, the redemption obligation was solely a liability of the obliged founders, and the +Company had no corresponding obligation. During such period, no financial liability +regarding the redemption right was recorded. See Note 25 to “Appendix I — Accountants’ +Report” in this prospectus. +3. Information about our Pre-IPO Investors +Our Pre-IPO Investors include Sophisticated Investors, such as Northern Light +Venture Capital (̏฽Έ௴ҳ) and NRL Capital (ॲဧл༟͉), who have made meaningful +investment in our Company in accordance with Chapter 2.3 of the Guide for New Listing +Applicants. Northern Light Venture Capital (through Beta Achieve) and NRL Capital +(through Suzhou Mainiv) will hold approximately 5.35% and 8.24%, respectively, of our +Company’s total issued share capital upon the Listing (assuming that the Over-allotment +Option is not exercised). The background information on our Pre-IPO Investors is set out +below. To the best knowledge of the Directors, save as disclosed below, (i) each of the +Pre-IPO Investors and their respective ultimate beneficial owners is an independent third +party, (ii) has no relationship with any connected persons of our Company or other +Pre-IPO Investors, and (iii) the limited partners of our Pre-IPO Investors (if applicable) are +independent from each other. +Northern Light Venture Capital +Beta Achieve made its initial investment in the Company in July 2019. Beta Achieve +is a limited liability company incorporated under the laws of Hong Kong on December 15, +2017, and is an investment arm of Northern Light Venture Capital. NLVF holds a 91.67% +equity interest in Beta Achieve and is ultimately controlled by Mr. Deng Feng ( ቎ቜ), an +independent third party to our Company. NL Partners is the general partner of NLVF and +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 123 – + + +--- page 132 --- +its general partner is Northern Light Venture Capital V , Ltd., a company ultimately +controlled by Mr. Deng Feng. The value of assets under management of Northern Light +Venture Capital as of the Latest Practicable Date was approximately RMB30 billion. The +investment portfolio of Northern Light Venture Capital in the medical and healthcare and +related industries include, among others, GenFleet Therapeutics (Shanghai) Inc. (˙ᔼᖹ +ʮ̡) (a company listed on the Hong Kong Stock Exchange, stock +code: 2595), Suzhou Zelgen Biopharmaceuticals Co., Ltd. (ʮ̡ ) +(a company listed on the Shanghai Stock Exchange, stock code: 688266), Brain Aurora +Medical Technology Limited (ʮ̡ ) (a company listed on the Hong +Kong Stock Exchange, stock code: 6681); and iRay Group (ʮ̡ ) +(a company listed on the Shanghai Stock Exchange, stock code: 688301). Northern Light +Venture Capital is therefore a Sophisticated Investor. Beta Achieve is an investment +institution of Northern Light Venture Capital, a venture capital dedicated to investing in +early-stage, technology-driven innovative companies, primarily focusing on enterprises +in new technology, healthcare and new customer industries. +NRL Capital +Suzhou Mainiv made its initial investment in the Company in May 2021. Suzhou +Mainiv is a limited partnership established in the PRC on March 25, 2021, and its general +partner is Hainan Nivmai Enterprise Management Partnership (Limited Partnership)* ( ऎ +Υྫ) (“ Hainan Nivmai”), which is controlled by its +general partner, Suzhou NRL Capital Management Co., Ltd. (ʮ̡ +) (“Suzhou NRL”), and is held as to 71.43%, 14.29% and 14.29% by Ms. Meng Si (an +Independent Third Party), Shanghai NRL and Suzhou NRL, respectively. Each of Suzhou +Mainiv, Suzhou NRL and Shanghai NRL is ultimately controlled by Mr. Lin Xianghong (؍ +ߎa former non-executive Director appointed by NRL Capital and resigned in August +2025 to focus on his other business and personal commitments, and is an investment +vehicle managed by NRL Capital. The value of assets under management of NRL Capital +as of the Latest Practicable Date, exceeds RMB8 billion. The investment portfolio of NRL +Capital in the medical and healthcare and related industries include, among others, +Shanghai BioEngine Sci-Tech Co., Ltd. (ʮ̡ ) (A biotechnology +company specializing in cell culture process technologies, with a registered capital of +approximately RMB32.99 million) and Shanghai Xinchuang Huimei Technology Co., Ltd.* +(ʮ̡) (A healthcare company specializing in medical artificial +intelligence with a registered capital of approximately RMB28.33 million), Jiangsu Gairu +Health Technology Co., Ltd. (ʮ̡) (a company specializing in +digital solutions for primary healthcare, with a registered capital of approximately +RMB56.52 million), and Zhejiang Fuli Analytical Instrument Co., Ltd. (ᄃኜϞ +ʮ̡) (a company specializing in the manufacture of analytical instruments for the +pharmaceutical, food, energy and other industries, with a registered capital of +approximately RMB50 million). NRL Capital is therefore a Sophisticated Investor +ultimately controlled by Mr. Lin Xianghong. As of the Latest Practicable Date, Suzhou +Mainiv had six partners, comprising one general partner and five limited partners +(namely Nanjing Weixin Real Estate Development Co., Ltd. holding 25.39%, Shanghai +Newerly Investment Holdings Co., Ltd. holding 24.65%, Suzhou Newerly Xincheng +Equity Investment Partnership (Limited Partnership) holding 24.65%, Lhasa Economic +and Technological Development Zone Baihui Yihe Phase III Equity Investment +Partnership (Limited Partnership) holding 15.23%, and an independent third-party +individual holding 7.62%), and was ultimately owned as to approximately 49.30% by Mr. +Lin Xianghong, and no other ultimate beneficial owners owned more than 30% benefits in +it. Suzhou Mainiv is a venture capital fund primarily engaged in investment in unlisted +enterprises. +Entities controlled by the People’s Government of Shaanxi Province +(i) Junying Growth +Junying Growth is a limited partnership established in the PRC on December 17, +2018 and its general partner is Shaanxi Growth Enterprise Leading Fund Co., Ltd.* (޲ +ʮ̡ ) (“Shaanxi Growth Enterprise Guidance Fund ”), who +held approximately 0.98% of the partnership interest. Shaanxi Growth Enterprise +Guidance Fund was owned as to 70.00% of shares by Shaanxi Shaanxi Investment Capital +Management Co., Ltd.* (ʮ̡ ) and 30.00% of shares by Xi’an +Zhongke Chuangxing Growth Enterprise Service Partnership Enterprise (Limited +Partnership)* (Υྫ ), respectively. As of the +Latest Practicable Date, Junying Growth had two limited partners, Shaanxi Province +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 124 – + + +--- page 133 --- +Growth Enterprise Leading Fund Partnership (Limited Partnership)* (Άุˏ +Υྫ), who held approximately 98.04% of its partnership interest, +and Xi’an Jiuying Fenglong Investment Management Partnership (Limited Partnership)* +(Υྫ ) (“Jiuying Fenglong”), who held +approximately 0.98% of its partnership interest. Junying Growth is mainly engaged in +investment management, venture capital, and equity investment. Shaanxi Growth +Enterprise Guidance Fund and Shaanxi Province Growth Enterprise Leading Fund +Partnership (Limited Partnership) were both ultimately controlled by the State-owned +Assets Supervision and Administration Commission of the Shaanxi Provincial People’s +Government (“Shaanxi Provincial SASAC ”). +(ii) Listing Reserve Fund +Listing Reserve Fund is a limited partnership established in the PRC on December +13, 2022 and its general partners are (i) Changan Huitong Private Equity Fund +Management Co., Ltd.* (ʮ̡) (“Changan Huitong”), which +held 0.50% of the partnership interest. Chang’an Huitong was solely owned by Chang’an +Huitong Group Co., Ltd.* (ப΂ʮ̡ ) and ultimately controlled by the +Shaanxi Provincial SASAC; and (ii) Yulin City Coal Conversion Fund Investment +Management Co., Ltd.* (ʮ̡ ), which held 0.50% of the +partnership interest, and whose ultimate beneficial owner is the Shaanxi Provincial +SASAC. As of the Latest Practicable Date, Listing Reserve Fund had three limited +partners, including (i) Changan Huitong Asset Management Co., Ltd.* (τිஷ༟ପ၍ଣ +ʮ̡ ) (“Changan Huitong Asset ”) which held 49.00% of partnership interest in +Listing Reserve Fund and was ultimately owned by Shaanxi Provincial SASAC; (ii) Yulin +Investment Fund Management Co., Ltd.* (ப΂ʮ̡ ), which held +30.00% of partnership interest in Listing Reserve Fund and was ultimately owned by Yulin +Municipal Finance Bureau (҅ ); and (iii) Yulin City Yuyang District +State-owned Assets Operation Co., Ltd.* (ʮ̡ ), which held +approximately 20.00% of partnership interest in Listing Reserve Fund. As of the latest +Practicable Date, as confirmed by Listing Reserve Fund, Listing Reserve Fund is primarily +engaged in equity investment, investment management and asset management activities +as a private fund. +(iii) Junying Jiacheng +Junying Jiacheng is a limited partnership established in the PRC on October 28, 2022 +and its general partner is Shaanxi Growth Enterprise Guidance Co., which held 10.00% of +the partnership interest. Shaanxi Growth Enterprise Guidance Co. was ultimately +controlled by the Shaanxi Provincial SASAC and was owned as to 70.00% of shares by +Shaanxi Shaanxi Investment Capital Management Co., Ltd.* (ʮ̡ ) +(which is ultimately owned by Shaanxi Provincial SASAC) and 30.00% of shares by Xi’an +Zhongke Chuangxing Growth Enterprise Service Partnership Enterprise (Limited +Partnership)* (Υྫ) (which is controlled by Li +Hao, an Independent Third Party), respectively. As of the Latest Practicable Date, Junying +Jiacheng had eight limited partners, including (i) Shaanxi Junyuan Huike Investment +Fund Partnership (Limited Partnership)* (Υྫ ) +which held 33.00% of partnership interest in Junying Jiacheng and was ultimately owned +by Shaanxi Provincial SASAC; (ii) Xi’an Innovation Investment Fund Partnership +(Limited Partnership)* (Υྫ), which held 25.00% of +partnership interest in Junying Jiacheng and was ultimately owned by Xi’an Municipal +Finance Bureau (҅); (iii) Xi’an Small and Medium Enterprises Development +Fund (Limited Partnership)* (Υྫ), which held 20.00% of +partnership interest in Junying Jiacheng and was ultimately owned by Xi’an Municipal +Finance Bureau (҅); (iv) Tianjin Shenlong Supply Chain Co., Ltd.* (ग़ᎲԶ +ʮ̡), which held 5.00% of partnership interest in Junying Jiacheng; (v) Hainan +Linfengyan Investment Partnership (Limited Partnership)* (ࠢ +Υྫ), which held 4.75% of partnership interest in Junying Jiacheng; (vi) Shaanxi +Hongdaxin Construction Engineering Co., Ltd.* (ʮ̡), which +held 1.25% of partnership interest in Junying Jiacheng; (vii) Xi’an Caijin Huifeng Private +Equity Fund Management Co., Ltd.* (ʮ̡), which held +0.50% of partnership interest in Junying Jiacheng; and (viii) Xi’an Jiuying Fenglong +Investment Management Partnership (Limited Partnership)* (ᔮඤҳ༟၍ଣΥྫ +€Υྫ), which held 0.50% of partnership interest in Junying Jiacheng. Junying +Jiacheng is primarily engaged in equity investment, investment management and asset +management activities as a private fund. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 125 – + + +--- page 134 --- +(iv) Xi’an Huiyu +Xi’an Huiyu is a limited partnership established in the PRC on September 23, 2021 +and its general partner is Changan Huitong, who held 2.50% of the partnership interest. +Changan Huitong was solely owned by Chang’an Huitong Group Co., Ltd.* (τිஷණྠ +ப΂ʮ̡) which was ultimately controlled by the Shaanxi Provincial SASAC. As of +the Latest Practicable Date, Xi’an Huiyu had one limited partner, being Shaanxi Provincial +Scientific and Technological Innovation Master Fund Partnership (Limited Partnership)* +(Υྫ), who held 97.5% of its partnership interest +and was ultimately controlled by the Shaanxi Provincial SASAC. Xi’an Huiyu is mainly +engaged in investment activities with self-owned funds, equity investment, investment +management and asset management. +(v) Shaanxi Innovation Relay +Shaanxi Innovation Relay is a limited partnership established in the PRC on +December 23, 2024 and its general partners consist of (i) Shaanxi New Era Capital +Management Co., Ltd.* (ʮ̡ ), and (ii) Shaanxi Jinzi, each of +whom held approximately 0.20% of the partnership interest. Shaanxi Jinzi largest ultimate +beneficial owner was the Shaanxi Provincial SASAC, and Shaanxi New Era Capital +Management Co., Ltd. was ultimately controlled by the Department of Finance of Shaanxi +Province of the PRC. Shaanxi Innovation Relay had two limited partners, including (i) +Shaanxi Financial Holding Group Co., Ltd.* (ʮ̡ ), which held +approximately 59.76% of the partnership interest and was ultimately owned by the +Shaanxi Provincial Department of Finance; and (ii) Shaanxi Jinzi Rongtong Equity +Investment Partnership Enterprise (Limited Partnership)* (ᛆҳ༟ΥྫΆุ +Υྫ), which held approximately 39.84% of the partnership interest and was +controlled by Shaanxi Jinzi. Shaanxi Innovation Relay is primarily engaged in investment +activities with its own funds. +(vi) Shaanxi Jingang +Shaanxi Jingang is a limited partnership established in the PRC on December 23, +2024 and its general partners consist of (i) Shaanxi Jinzi Fund Management Co., Ltd* ( ৯Г +ʮ̡) (“Shaanxi Jinzi”), and (ii) Xi’an Agricultural Investment +Management Co., Ltd* (ʮ̡ ), each of whom held 0.50% of the +partnership interest. Shaanxi Jinzi largest ultimate beneficial owner was the Shaanxi +Provincial SASAC, and Xi’an Agricultural Investment Management Co., Ltd was +ultimately controlled by the State-owned Assets Supervision and Administration +Commission of the Xi’an Municipal People’s Government (਷Ϟ༟ପ္ຖ၍ +ึ). As of the Latest Practicable Date, Shaanxi Jingang had four limited partners, +including (i) Shaanxi Jinyi Biotechnology Development Co., Ltd.* (࢝ +ʮ̡), which held 39.50% of the partnership interest and was wholly owned by +Shaanxi Jinzi; (ii) Xi’an Industrial Doubling Fund Partnership Enterprise (Limited +Partnership)* (Υྫ ), which held 30.00% of the +partnership interest and was ultimately owned by Xi’an Municipal Finance Bureau ( Гτ +҅); (iii) Xi’an Port Capital Management Co., Ltd.* (ʮ̡ ), which +held 15.00% of the partnership interest; (iv) Xi’an Industrial Poverty Alleviation +(Agriculture) Investment Fund Partnership Enterprise (Limited Partnership)* ( Гτ̹ପุ +Υྫ), which held 14.50% of the partnership interest. +Shaanxi Jingang is primarily engaged in investment activities with its own funds. +(vii) New Materials Fund +New Materials Fund is a limited partnership established in the PRC on March 21, +2014 and its general partner is Shaanxi Detongfufang Investment Management Co., Ltd.* ( +ʮ̡ ) (“Shaanxi Detongfufang ”), which held approximately +1.95% of the partnership interest. Shaanxi Detongfufang was owned as to 40.00% of shares +by Shaanxi Province Industry Investment Co.,Ltd.* (ʮ̡ ) (“Shaanxi +Industry Investment ”) (which is ultimately owned by the Shaanxi Provincial Department +of Finance through Shaanxi Financial Holding Group Co., Ltd.* (ʮ +̡) (“Shaanxi Financial”)) and 60.00% of shares by Shaanxi Detong Investment +Management Co., Ltd.* (ʮ̡ ), respectively and was ultimately +controlled by Mr. Geng Jian ( অ਄), an independent third party. As of the Latest Practicable +Date, New Materials Fund had six limited partners, including (i) Shanghai +Detonggongying Equity Investment Fund Center (Limited Partnership)* (ٰޮ +Υྫ) which held approximately 19.92% of partnership interest in +New Materials Fund; (ii) Shaanxi Industrial Investment, which held approximately +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 126 – + + +--- page 135 --- +19.53% of partnership interest in New Materials Fund; (iii) Shaanxi Financial, which held +approximately 19.53% of partnership interest in New Materials Fund and was ultimately +owned by the Shaanxi Provincial Department of Finance; (iv) Yingfutech Venture Capital +Co., Ltd. (ʮ̡ ), which held approximately 19.53% of partnership +interest in New Materials Fund and was ultimately owned by Liu Tingru ( ᄎҒኊ), an +Independent Third Party; (v) Baoji High-tech Investment Holding Group Co., Ltd* ( ᘒᕒ৷ +ʮ̡) (“Baoji High-tech Investment”), which held approximately +11.72% of partnership interest in New Materials Fund; and (vi) Baoji High-tech Innovation +Service Center Co. Ltd.* (ʮ̡ ) (“Baoji High-tech Innovation ”), +which held approximately 7.81% of partnership interest in New Materials Fund. Baoji +High-tech Investment and Baoji High-tech Innovation are owned by Baoji High-tech +Industries Development Zone Administrative Committee ( ᘒᕒ৷อҦஔପุක೯ਜ၍ଣ։ +ึ). New Materials Fund is primarily engaged in venture investment business, +investment consulting and venture management services. +Linhai Qize +Linhai Qize is a limited partnership established in the PRC on May 20, 2025 and its +general partner is ZheShang Venture Capital Co., Ltd.* (ʮ̡ ) +(“ ZheShang V enture Capital”), who held approximately 0.07% of the partnership +interest. ZheShang Venture Capital was owned as to approximately 38.71% by Zhejiang +Zhongjian Enterprise Management Co., Ltd.* (ʮ̡ ) (ultimately +beneficially owned by Chen Yuemeng, an independent third party). No other shareholders +hold more than 30.00% shares of ZheShang Venture Capital Co., Ltd.. As of the Latest +Practicable Date, Linhai Qize had three limited partners, Linhai Jingyue Financial +Investment Group Co., Ltd.* (ʮ̡ ) (“Linhai Jingyue”), who +held approximately 79.95% of its partnership interest and was ultimately owned by the +Linhai Municipal Finance Bureau, Mr. Wang Yiqiang ( ˮɓ੶) (a former non-executive +Director who resigned in August 2025 to focus on his other business and personal +commitments), who held approximately 19.32% of its partnership interest, and Mr. Yang +Renlong (เɛᎲ), an independent third party who held approximately 0.67% of the +partnership interest. Linhai Qize is mainly engaged in venture capital (limited to +investment in unlisted companies) and equity investment. +Huaxin Pharmaceutical Venture Capital +Huaxin Pharmaceutical Venture Capital is a limited partnership established in the +PRC on May 16, 2018 and its general partner is Shenzhen Chongshi Private Equity +Investment Fund Management Co., Ltd.* (ʮ̡) +(“Shenzhen Chongshi”), who held approximately 1.48% of the partnership interest. +Shenzhen Chongshi was owned as to 51.00% of shares by Yan Kaijing ( ₢௱ྤ) and 49.00% +of shares by Tianjin Tianshili Health Industry Investment Group Co., Ltd.* ( ˂ɻɢɽ਄ੰ +ʮ̡) (“Tianjin Tianshili Health”), respectively. As of the Latest +Practicable Date, Huaxin Pharmaceutical Venture Capital had only one limited partner, +being Tianjin Tasly Venture Capital Co., Ltd.* (ʮ̡ ) (“Tianjin +T asly”), who held approximately 98.52% of its partnership interest. Tianjin Tianshili +Health and Tianjin Tasly were ultimately owned by Mr. Yan Kaijing. Huaxin +Pharmaceutical Venture Capital is mainly engaged in investment in unlisted companies +and non-public offerings of stocks by listed companies and is controlled by Mr. Yan +Kaijing (₢௱ྤ), an independent third party. +Suzhou Rongsheng +Suzhou Rongsheng is a limited partnership established in the PRC on January 25, +2021, and its general partner is Suzhou High-Tech Venture Capital Group Rongsheng +Investment Management Co., Ltd.* (ʮ̡ ) +(“Suzhou Rongsheng ”), who held 1% of the partnership interest. Suzhou Rongsheng was +owned as to 35.00% of equity interest by Suzhou High-tech Venture Capital Group Co., +Ltd.* (ʮ̡) (“Suzhou High-tech V enture”) and 65.00% of +equity interest by Suzhou Rongyu Venture Capital Partnership Enterprise (Limited +Partnership)* (Υྫ) (“Suzhou Rongyu”), respectively. +The remaining two limited partners of Suzhou Rongsheng were Suzhou Xushuguan +Economic Development Zone Xuchuang Asset Management Co., Ltd.* ( ᘽψ⛰ྨᗫ຾කਜ +ʮ̡), who held 50.00% of the partnership interest and was ultimately +owned by Suzhou Hushuguan Economic and Technological Development Zone +Administrative Committee (ึ ); and Suzhou +High-Tech Venture Capital Group Co., Ltd.* (ʮ̡ ), who held +49.00% of the partnership interest and was ultimately owned by Suzhou Huqiu District +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 127 – + + +--- page 136 --- +People’s Government (ִ݁Suzhou Rongsheng, Suzhou Rongyu and +Suzhou High-Tech Venture were both ultimately controlled by Mr. Miao Lv (ܛSuzhou +Rongsheng is a venture capital fund primarily engaged in investment in unlisted +enterprises. As of the Latest Practicable Date, its total capital contribution amount was +RMB500 million. +Xi’an Tongshang +Xi’an Tongshang is a limited partnership established in the PRC on July 27, 2020 and +its general partner is Mr. Ju Hangsheng (͛), a former non-executive Director as +appointed by Xi’an Tongshang and resigned in August 2025 to focus on his other business +and personal commitments, who held approximately 72.73% of the partnership interest. +As of the Latest Practicable Date, Xi’an Tongshang had only one limited partner, being Ms. +Nie Xiaoxi (ᔗወᘙ), an independent third party who held approximately 27.27% of its +partnership interest. Xi’an Tongshang is mainly engaged in investment activities with its +own funds. +Fengchuan Hongbo +Fengchuan Hongbo is a limited partnership established in the PRC on March 7, 2017 +and its general partner is Jingning Fengchuan Jiahong Equity Investment Partnership +(Limited Partnership)* (Υྫ ) (“Fengchuan +Jiahong”), who held approximately 3.85% of the partnership interest and was ultimately +controlled by Mr. Xiang Duan (၌), an independent third party. Fengchuan Jiahong was +owned as to 99.00% of partnership interest by Xiang Duan (၌) and 1.00% of partnership +interest by Beijing Fengchuan Private Equity Fund Management Co., Ltd.* ( ̏ԯᔮʇӷ෍ +ʮ̡), respectively. As of the Latest Practicable Date, Fengchuan Hongbo had +two limited partners, Tianjin Longyaohengda Enterprise Management Consulting Co., +Ltd.* (ʮ̡), who held approximately 67.31% of its +partnership interest and was ultimately owned by Zhang Ruimin (ੵ๿ઽ ), an +Independent Third Party, and Zhejiang Wahaha Venture Capital Co., Ltd.* (௴ +ʮ̡), who held approximately 28.85% of its partnership interest and was +ultimately owned by Zong Fuli (ᕢ஁), an Independent Third Party. Fengchuan Hongbo +is mainly engaged in equity investment management. +Jingcheng Daxing +Jingcheng Daxing is a limited partnership established in the PRC on July 18, 2019 +and its general partner is Mr. Wang Yiqiang ( ˮɓ੶), and independent third party who +held approximately 19.90% of the partnership interest. As of the Latest Practicable Date, +Jingcheng Daxing had eight limited partners who were each an independent third party, +including (i) Xi’an Jiaotong University Siyuan Puhui Investment Partnership (Limited +Partnership)* (Υྫ ) which held approximately +31.40% of the partnership interest in Jingcheng Daxing and was ultimately owned by +Education Foundation of Xi’an Jiaotong University (ึ ); (ii) Ms. Xue +Miao (ߴwho held approximately 30.97% of partnership interest in Jingcheng Daxing; +(iii) Mr. Gai Wenliang (ڥwho held approximately 4.60% of partnership interest in +Jingcheng Daxing; (iv) Mr. Wang Jianqiao ( ˮᄏఐ), who held approximately 4.60% of +partnership interest in Jingcheng Daxing; (v) Ms. Wang Yanying (ڎwho held +approximately 2.43% of partnership interest in Jingcheng Daxing; (vi) Mr. Qiu Juntao ( ʤ +ᏹ), who held approximately 2.41% of partnership interest in Jingcheng Daxing; (vii) +Mr. Gao Ke (ݚwho held approximately 1.85% of partnership interest in Jingcheng +Daxing; and (viii) Mr. Huang Xuefeng (ࢤwho held approximately 1.85% of +partnership interest in Jingcheng Daxing. Each of the above limited partners of Jingcheng +Daxing is an Independent Third Party. Jingcheng Daxing is primarily engaged in +enterprise marketing planning, management consulting and business information +consulting. +Tangxing Kechuang +Tangxing Kechuang is a limited partnership established in the PRC on August 6, +2019 and its general partner is Tangxing Tianxia Investment Management (Xi’an) Co., +Ltd.* (ப΂ʮ̡) (“T angxing Tianxia”), which held 1.05% of +the partnership interest. Tangxing Tianxia was owned as to 51.00% of shares by Xi’an +Qiushi Commercial Operation Management Co., Ltd.* (ʮ̡ ) +(“Xi’an Qiushi”), 34.00% of shares by Xi’an Hechuang Tonghui Enterprise Management +Consulting Partnership Enterprise (Limited Partnership)* ( ГτΥ௴ΝሾΆุ၍ଣፔ༔Υྫ +Υྫ) (which is ultimately owned by Feng Xue, an Independent Third Party), +and 15.00% of shares by Xi’an Heli Tonghui Enterprise Management Consulting +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 128 – + + +--- page 137 --- +Partnership Enterprise (Limited Partnership)* (ࠢ +Υྫ) (which is ultimately owned by Yang Shengrong, an Independent Third Party), +respectively. Tangxing Tianxia was ultimately controlled by Ms. Gong Puling (ޛ) +through Xi’an Qiushi, an independent third party. As of the Latest Practicable Date, +Tangxing Kechuang had six limited partners who were each an independent third party, +including (i) Shaanxi Mingyuan Real Estate Co., Ltd.* (ப΂ʮ̡ ) which +held 28.42% of partnership interest in Tangxing Kechuang; (ii) New Quality Productivity +Promotion Center of the Ministry of Science and Technology* (ආ +ʕː), which held 26.32% of partnership interest in Tangxing Kechuang; (iii) Mr. Yang +Shengrong (เ͛࿲), which held 16.84% of partnership interest in Tangxing Kechuang; (iv) +Shaanxi Provincial Government Investment Guidance Fund Partnership (Limited +Partnership)* (Υྫ ), which held 10.53% of +partnership interest in Tangxing Kechuang; (v) Xi’an Industrial Investment Fund Co., +Ltd.* (ʮ̡ ), which held 9.47% of partnership interest in Tangxing +Kechuang; and (vi) Xi’an Fudi Nanotechnology Co., Ltd.* (ʮ̡ ), +which held 7.37% of partnership interest in Tangxing Kechuang. Tangxing Kechuang is +primarily engaged in equity investment, investment management, and investment +consulting. +Shanjin Runji +Shanjin Runji is a limited partnership established in the PRC on July 28, 2020 and its +general partner is Shanghai Shanjin Private Equity Fund Management Co., Ltd.* (ږ +ʮ̡) (“Shanghai Shanjin ”), which held approximately 1.02% of the +partnership interest. Shanghai Shanjin was owned as to 36.00% of shares by Liu Jing ( ᄎẙ +), 34.00% of shares by Lv Yuanyuan (ѐ෤෤), and 30.00% of shares by Shanghai Maisi Lai +Enterprise Management Consulting Partnership Enterprise (Limited Partnership)* ( ɪऎ +Υྫ ) (which is ultimately owned by Liu Jing), +respectively. Each of Liu Jing and Lv Yuanyuan was an independent third party. As of the +Latest Practicable Date, Shanjin Runji had thirty limited partners, and Mr. Zhu Chen ( ϡો +), being its largest limited partner, held approximately 8.47% of partnership interest in +Shanjin Runji. None of the ultimate beneficial owners of Shanjin Runji owned more than +10% benefits in it and each of them was an independent third party. As of the latest +Practicable Date, as confirmed by Shanjin Runji, Shanjin Runji is primarily engaged in +equity investment. +Hainan Wanfeng +Hainan Wanfeng is a limited partnership established in the PRC on December 21, +2022 and its general partner is Mr. Jia Shaochi (༠ˇཱུ ), who held 50.00% of the +partnership interest. Mr. Jia has many years of investment experience, focusing primarily +on the intelligent manufacturing and pharmaceutical sectors. Hainan Wanfeng’s +investment in us is primarily driven by its recognition of our long-term growth potential +and value creation capabilities. As of the Latest Practicable Date, Hainan Wanfeng had +only one limited partner, being Ms. Qiu Bo (ت߇who held 50.00% of its partnership +interest. Hainan Wanfeng is primarily engaged in investment activities and provide asset +management services for self-owned fund investments. Mr. Jia Shaochi and Ms. Qiu Bo are +each an independent third party. +Hangzhou Quandewang +Hangzhou Quandewang is a limited company incorporated in the PRC on August 5, +2022 and is mainly engaged in corporate headquarters management, corporate +management consulting, and information consulting services. Hangzhou Quandewang is +owned as to 99% by Mr. Xu Junqing (ё૶) and 1% by Mr. Xu Zhiqiang (қ੶), both +independent third parties, with a registered share capital of RMB10 million. Mr. Xu has +many years of investment experience, focusing primarily on the photovoltaic power +generation, pharmaceutical, and drone sectors. Hangzhou Quandewang’s investment in +us is primarily driven by its optimism towards the prospects of the biopharmaceutical +industry and its recognition of our development potential. +Hainan Ruizheng +Hainan Ruizheng is a limited partnership established in the PRC on June 15, 2020 +and its general partner is Ms. Tang Zhijun (౽ё), an independent third party who held +40.00% of the partnership interest. Ms. Tang has many years of investment experience, +focusing primarily on the consumer goods sector.Hainan Ruizheng’s investment in us is +primarily driven by its confidence in our business development and the innovative drug +space. As of the Latest Practicable Date, Hainan Ruizheng had only one limited partner, +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 129 – + + +--- page 138 --- +being Mr. Cao Zheng (૎͍), an independent third party who held 60.00% of its +partnership interest. Hainan Ruizheng is mainly engaged in other business management +services, market research, and business marketing planning. +Yinyun Heman +Yinyun Heman is a limited partnership established in the PRC on December 7, 2022 +and its general partner is Ms. Fu Dongjin ( ௩̆ᆩ), an independent third party who held +10.00% of the partnership interest. Ms. Fu’s investments are primarily focused on the +production and sales of apparel. Yinyun Heman’s investment in us is primarily driven by +its optimism towards the broad prospects of innovative drugs, as well as its recognition of +our development and growth potential. As of the Latest Practicable Date, Yinyun Heman +had five limited partners, who were each an independent third party, including (i) Mr. +Yuan Xuejun (ࠏwho held 60.00% of partnership interest in Yinyun Heman; (ii) Ms. +Chen Xian (௓ᄫ), who held 10.00% of partnership interest in Yinyun Heman; (iii) Ms. Ye +Huili (໢ᅆᘆ), who held 10.00% of partnership interest in Yinyun Heman; (iv) Mr. Dong +Songzhen (ᕄ), who held 5.00% of partnership interest in Yinyun Heman; and (v) Ms. +Shi Xiaohong (ߎwhich held 5.00% of partnership interest in Yinyun Heman. Yinyun +Heman is primarily engaged in enterprise management, management consulting and +socio-economic consulting services. +Maicheng Century +Maicheng Century is a limited partnership established in the PRC on September 17, +2025 and its general partner is Mr. Zhao Yajun (ࠏan independent third party who +held approximately 3.33% of the partnership interest. Mr. Zhao has many years of +investment experience, focusing primarily on the biopharmaceutical and high-technology +sectors. Maicheng Century’s investment in us is primarily driven by its confidence in our +development and growth prospects. As of the Latest Practicable Date, Maicheng Century +had four limited partners who were each an independent third party, including (i) Ms. Wu +Haiping (юऎറ), who held approximately 36.67% of the partnership interest; (ii) Ms. +Zhang Aifang (ٹwho held approximately 13. 33% of the partnership interest; (iii) +Mr. Gou Lei (ᆾ), who held approximately 13.33% of the partnership interest; (iv) Mr. +Gao Yan (৷Ԋ), who held approximately 33.33% of the partnership interest. Maicheng +Century is primarily engaged in investment activities with its owned funds. +Jinan Liuji +Jinan Liuji is a limited partnership established in the PRC on September 16, 2025 and +its general partner is Mr. Guo Jiaxin (㒥), an independent third party who held +approximately 16.67% of the partnership interest. Mr. Guo has many years of experience +in equity investment, with a dedicated focus on long-term value investing. Jinan Liuji’s +investment in us is primarily driven by its optimism towards our long-term development +prospects and its recognition of our value creation capabilities. As of the Latest Practicable +Date, Jinan Liuji had five limited partners who were each an independent third party, +including Mr. Zheng Xiaobin ( ቍʃႷ), Mr. Yan Dong (₢̆), Mr. Meng Zhihai (౽ऎ), Ms. +Ren Yali (΂ԭᘆ), and Mr. Wang Jin (ˮ䆷), and each of whom owned approximately +16.67% of the partnership interest. Jinan Liuji is primarily engaged in business +management, marketing planning and some consulting services. +4. PRC Legal Advisor’s confirmation +As advised by our PRC Legal Advisor, our Company is in the course of making all +necessary registration or filings with the relevant local branch of SAMR in respect of the +Pre-IPO Investments set out above, and the Pre-IPO Investments were conducted in +compliance with the applicable PRC laws and regulations in all material respects. +5. Joint Sponsors’ Confirmation +On the basis that (i) the Listing Date, being the first day of trading of the H Shares on +the Stock Exchange, will take place no earlier than 120 clear days after completion of the +Pre-IPO Investments and (ii) the special rights granted to the Pre-IPO Investors pursuant +to the relevant pre-IPO investment agreements have been terminated immediately before +submission of the first listing application and/or will be terminated no later than the +Listing, as the case may be, the Joint Sponsors confirm that the investments by the Pre-IPO +Investors are in compliance with Chapter 4.2 of the Guide published by the Stock +Exchange. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 130 – + + +--- page 139 --- +6. Public Float and Free Float +Following the conversion of 222,016,700 Unlisted Shares into H shares and upon +completion of the Share Subdivision and the Global Offering (assuming the +Over-allotment Option is not exercised): +(a) each of Dr. Wang Bing, Dr. Wang Mei and Xi’an Zhongrui will be our +Controlling Shareholders and a total of 144,060,050 Shares held by them will +not be counted towards either the public float or the free float, representing +43.43% of our share capital in aggregate; +(b) a total of 222,016,700 Unlisted Shares will be converted into H Shares and +excluding such Unlisted Shares held by our core connected persons, a total of +122,356,650 of such Unlisted Shares will be counted as part of the public float, +representing 36.88% of our share capital in aggregate. However, as the H +Shares held by the current Shareholders holding Unlisted Shares will be +subject to a lock-up period, those H Shares will not count towards the free +float at the time of the Listing; and +(c) as Qiyuan Hong Kong, one of the Cornerstone Investors, is a close associate of +each of Junying Growth, Listing Reserve Fund, Junying Jiacheng, Xi’an +Huiyu, Shaanxi Innovation Relay, Shaanxi Jingang and New Materials Fund +(collectively, the “Existing Shareholders”), all of which are ultimately +controlled by the People’s Government of Shaanxi Province. Upon its +subscription of Offer Shares as a Cornerstone Investor: (i) at the indicative +Offer Price of HK$18.20 (being the low end of the indicative Offer Price +range), Qiyuan Hong Kong will subscribe for 18,756,200 Offer Shares, and +Existing Shareholders and Qiyuan Hong Kong will in aggregate hold +42,565,150 Shares, representing approximately 12.83% of the total Shares; and +(ii) at the indicative Offer Price of HK$21.00 (being the high end of the +indicative Offer Price range), Qiyuan Hong Kong will subscribe for 16,255,400 +Offer Shares, and such entities will in aggregate hold 40,064,350 Shares, +representing approximately 12.07% of the total Shares, in each case, whose +Shares will not be counted towards the public float. +(d) as all existing Shareholders (including Pre-IPO Investors) are subject to a +lock-up period of twelve months following the Listing Date under applicable +PRC law, Shares held by them will not count towards free float, and a total of +58,054,400 H Shares to be issued pursuant to the Global Offering will be +counted as part of free float at the time of the Listing, representing 17.50% of +our share capital in aggregate. +Rule 19A.13A of the Listing Rules requires that where the expected market value of +the Shares at the time of Listing is over HK$6,000,000,000 but not exceeding +HK$30,000,000,000, the minimum prescribed percentage of the Shares which must be H +Shares held by the public is determined at the higher of: (i) the percentage that would +result in the expected market value of the H Shares held by the public to be +HK$1,500,000,000 at the time of Listing; and (ii) 15%. +Based on the indicative Offer Price of HK$18.20 (being the low-end of the indicative +Offer Price range), HK$19.60 (being the mid-point of the indicative Offer Price range), and +HK$21.00 (being the high-end of the indicative Offer Price range), and assuming the +Over-allotment Option is not exercised, the expected market value of the H Shares of our +Company would be approximately HK$6,037.7 million, HK$6,502.1 million and +HK$6,966.5 million, respectively. As the market value of our H Shares will exceed +HK$6,000,000,000 but will not exceed HK$30,000,000,000, at least 24.84%, 23.07% and +21.53% of our total issue share shall be held by the public based on the low-end, mid-point +and high-end of the indicative Offer Price range. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 131 – + + +--- page 140 --- +It is expected that, immediately following completion of the Global Offering +(assuming that the Over-allotment Option is not exercised), based on the indicative Offer +Price of HK$18.20 (being the low-end of the indicative Offer Price range), a total of +145,115, 150 H Shares, representing 43.74% of our total issued Share upon the completion +of the Global Offering (assuming that the Over-allotment Option is not exercised) will be +held by the public, which will satisfy the public float requirement under Rule 19A.13A of +the Listing Rules. It is expected that, immediately following completion of the Global +Offering (assuming that the Over-allotment Option is not exercised), based on the +indicative Offer Price of HK$21.00 (being the high-end of the indicative Offer Price range), +a total of 147,615,950 H Shares, representing 44.50% of our total issued Share upon the +completion of the Global Offering (assuming that the Over-allotment Option is not +exercised) will be held by the public, which will satisfy the public float requirement under +Rule 19A.13A of the Listing Rules. Therefore, the Company will be able to meet the public +float requirement under Rule 19A.13A of the Listing Rules. +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, the portion of H shares for which +listing is sought that are held by the public and not subject to any disposal restrictions at +the time listing must normally (i) 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 (ii) have an expected market value at the time of listing of not less than +HK$600,000,000. +It is expected that, immediately upon completion of the Global Offering (assuming +the Over-Allotment Option is not exercised), based on the indicative Offer Price of +HK$18.20 (being the low-end of the indicative Offer Price range), except for (i) 273,685,950 +Shares held by all existing Shareholders that are subject to a lock-up period of twelve +months following the Listing Date under applicable PRC law; and (ii) 24,681,000 Shares +held by Cornerstone Investors that are subject to a lockup period of six months from and +including the Listing Date, all remaining 33,373,400 Shares, representing 10.06% of the +total Shares, will be counted toward the free float. It is expected that, immediately upon +completion of the Global Offering (assuming the Over-Allotment Option is not exercised), +based on the indicative Offer Price of HK$21.00 (being the high-end of the indicative Offer +Price range), except for (i) 273,685,950 Shares held by all existing Shareholders that are +subject to a lock-up period of twelve months following the Listing Date under applicable +PRC law; and (ii) 21,390,200 Shares held by Cornerstone Investors that are subject to a +lockup period of six months from and including the Listing Date, all remaining 36,664,200 +Shares, representing 11.05% of the total Shares, will be counted toward the free float. +Therefore, our Company will be able to satisfy the free float requirement under Rule +19A.13C(1)(a) of the Listing Rules. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 132 – + + +--- page 141 --- +CAPITALIZATION OF OUR COMPANY +The table below is a summary of the capitalization of our Company as of Latest +Practicable Date and immediately following the Share Subdivision, conversion of the +Unlisted Shares into H Shares and the Global Offering (assuming the Over-Allotment +Option is not exercised): +As of the Latest +Practicable Date without +taking into account the +Share Subdivision +Immediately Following the Completion of +the Share Subdivision Conversion of the Unlisted Shares +into H Shares and the Global Offering +Whether +the H +Shares +count +towards +public +float or notShareholder Unlisted Shares H Shares Unlisted Shares T otal Shares +Number of +Shares +Percentage +of +Shareholding +in the Shares +Number of +H Shares +Percentage +of +Shareholding +in the +H Shares +Number of +Unlisted +Shares +Percentage +of +Shareholding +in the +Unlisted +Shares +Number of +Shares +Percentage +of +Shareholding +in the Shares +Controlling Shareholders +D r . W a n g B i n g ........ 2,220,000 40.56% 66,600,000 23.78% 44,400,000 85.93% 111,000,000 33.46% No +D r . W a n g M e i ........ 361,201 6.60% 18,060,050 6.45% – – 18,060,050 5.45% No +Xi’an Zhongrui ....... 300,000 5.48% 15,000,000 5.36% – – 15,000,000 4.52% No +Subtotal ........... 2,881,201 52.64% 99,660,050 35.58% 44,400,000 85.93% 144,060,050 43.43% No +The People’s Government of +Shaanxi Province +Junying Growth . . . . . . . 79,647 1.46% 3,982,350 1.42% – – 3,982,350 1.20% No +Listing Reserve Fund ..... 72,635 1.33% 3,631,750 1.30% – – 3,631,750 1.09% No +Junying Jiacheng ...... 40,353 0.74% 2,017,650 0.72% – – 2,017,650 0.61% No +Xi’an Huiyu ......... 18,159 0.33% 907,950 0.32% – – 907,950 0.27% No +Shaanxi Innovation Relay . . . 83,077 1.52% – – 4,153,850 8.04% 4,153,850 1.25% No +Shaanxi Jingang ....... 62,308 1.14% – – 3,115,400 6.03% 3,115,400 0.94% No +New Materials Fund ..... 120,000 2.19% 6,000,000 2.14% – – 6,000,000 1.81% No +Subtotal ........... 476,179 8.70% 16,539,700 5.9% 7,269,250 14.07% 23,808,950 7.18% No +Other Shareholders +Suzhou Mainiv ....... 546,667 9.99% 27,333,350 9.76% – – 27,333,350 8.24% Yes +Beta Achieve ........ 354,667 6.48% 17,733,350 6.33% – – 17,733,350 5.35% Yes +Linhai Qize . . . . . . . . . 287,653 5.26% 14,382,650 5.14% – – 14,382,650 4.34% Yes +Huaxin Pharmaceutical +Venture Capital ...... 155,533 2.84% 7,776,650 2.78% – – 7,776,650 2.34% Yes +Suzhou Rongsheng ..... 136,667 2.50% 6,833,350 2.44% – – 6,833,350 2.06% Yes +Xi’an Tongshang ...... 1 18,799 2.17% 5,939,950 2.12% – – 5,939,950 1.79% Yes +Fengchuan Hongbo ..... 102,500 1.87% 5,125,000 1.83% – – 5,125,000 1.54% Yes +Jingcheng Daxing ...... 101,502 1.85% 5,075,100 1.81% – – 5,075,100 1.53% Yes +Tangxing Technology .... 95,604 1.75% 4,780,200 1.71% – – 4,780,200 1.44% Yes +Shanjin Runji ........ 78,955 1.44% 3,947,750 1.41% – – 3,947,750 1.19% Yes +Hainan Wanfeng ...... 27,238 0.50% 1,361,900 0.49% – – 1,361,900 0.41% Yes +Yinyun Heman . . . . . . . 18,159 0.33% 907,950 0.32% – – 907,950 0.27% Yes +Hangzhou Quandewang . . . 18,159 0.33% 907,950 0.32% – – 907,950 0.27% Yes +Hainan Ruizheng ...... 18,159 0.33% 907,950 0.32% – – 907,950 0.27% Yes +Maicheng Century ..... 31,154 0.57% 1,557,700 0.56% – – 1,557,700 0.47% Yes +Jinan Liuji ......... 24,923 0.46% 1,246,150 0.44% – – 1,246,150 0.38% Yes +Subtotal ........... 2 , 1 16,339 38.67% 105,816,950 37.78% – – 105,816,950 31.9% Yes +H Shareholders under the +Global Offering +(1) ..... – – 58,054,400 20.73% – – 58,054,400 17.50% +T otal ........... 5,473,719 100.00% 280,071,100 100.00% 51,669,250 100.00% 331,740,350 100.00% +Note: +(1) The Shares to be subscribed by Qiyuan Hong Kong as a Cornerstone Investor will not be counted +towards the public float. +Except for the 99,660,050 H Shares to be held by our Controlling Shareholders upon +Listing and the 51,669,250 Unlisted Shares that will not be converted into H Shares before +the Listing as illustrated above, the rest of the Shares in our Company, namely 180,411,050 +H Shares, will be counted towards public float upon Listings. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 133 – + + +--- page 142 --- +CORPORATE STRUCTURE IMMEDIATELY BEFORE COMPLETION OF THE GLOBAL OFFERING +The following chart sets forth our Group’s corporate structure immediately prior to the completion of the Global Offering: +Dr. Wang +Bing +40.56% +6.60% +5.48% +9.99% +6.48% +Dr. Wang +Mei +Xi’an +Zhongrui +Suzhou +Mainiv +Beta +Achieve +5.26% +Linhai +Qize +2.50% +Suzhou +Rongsheng +2.17% +Xi’an +Tongshang +1.87% +Fengchuan +Hongbo +2.19% +New Materials +Fund +2.84% +Huaxin +Pharmaceutical +Venture Capital +1.85% +Jingcheng +Daxing +Xi’an Biocare Pharma Ltd. +100% +Our Company +Micot (Taizhou) +Pharmaceutical +Technology Co., Ltd. +100% +Micot (Hong Kong) +Technology Limited +100% +Shanghai Xitaili +Biomedical Technology +Co., Ltd. +Other +shareholders(1) +Micot (U.S.) Technology +Co., Ltd +89.06% +10.94% +100% +Micot (Suzhou) +Technology Co., Ltd. +100% +Micot (Suzhou) +Pharmaceutical Co., Ltd. +100% +Micot (U.S.) +Biopharmaceutices +Co., Ltd +100% +1.75% +Tangxing +Technology +1.46% +Junying +Growth +1.44% +Shanjin +Runji +0.74% +Junying +Jiacheng +0.50% +Hainan +Wanfeng +0.33% +Hainan +Ruizheng +0.33% +Yinyun +Heman +0.33% +Xi’an Huiyu +0.33% +Hangzhou +Quandewang +1.33% +Listing +Reserve Fund +1.52% +Shaanxi +Innovation Relay +1.14% +0.57% +0.46% +Shaanxi +Jingang +Maicheng +Century +Jinan +Liuji +(1) As of the Latest Practicable Date, Shanghai Xitaili Biomedical Technology Co., Ltd* was owned as to approximately 89.06% by our Company, approximately 4.95% by +Shanghai Huitai Biopharmaceutical Partnership (Limited Partnership)* (Υྫ), approximately 2.47% by Ms. Wang Xin (ؚ,) +approximately 2.47% by Xi’an Xijiao 1896 Kechuang Investment Partnership (Limited Partnership)* (Υྫ) (“Xijiao 1896 +Kechuang Investment”) and approximately 1.04% by Xijiao 1896 (Xi’an) Innovation Service Co., Ltd.* (ʮ̡) (“Xijiao 1896 +Innovation”). Ms. Wang Xin, an independent third party to our Company, is engaged in the investment in companies in the biomedicine industry. Xijiao 1896 +Kechuang Investment and Xijiao 1896 Innovation are ultimately controlled by Mr. Wei Changqing (ڡڗan independent third party to our Company, who holds +investment vehicles to invest in companies in the new materials, new energy, biomedicine and high-end equipment manufacturing industries. Our Company became +acquainted with Ms. Wang Xin and representatives of Xijiao 1896 Kechuang Investment and Xijiao 1896 Innovation through the alumni network of Xi’an Jiaotong +University of which Dr. Wang Bing was an alumnus. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 134 – + + +--- page 143 --- +CORPORATE STRUCTURE IMMEDIATELY FOLLOWING COMPLETION OF THE GLOBAL OFFERING +The following chart sets forth our corporate and shareholding structure immediately following completion of the Global Offering, +assuming the Over-allotment Option is not exercised. +Dr. Wang +Bing +33.46% +5.44% +4.52% +8.24% +5.35% +Dr. Wang +Mei +Xi’an +Zhongrui +Suzhou +Mainiv +Beta +Achieve +4.34% +Linhai +Qize +2.06% +Suzhou +Rongsheng +1.79% +Xi’an +Tongshang +1.54% +Fengchuan +Hongbo +1.81% +New Materials +Fund +2.34% +Huaxin +Pharmaceutical +Venture Capital +1.53% +Jingcheng +Daxing +Xi’an Biocare Pharma Ltd. +100% +Our Company +Micot (Taizhou) +Pharmaceutical +Technology Co., Ltd. +100% +Shanghai Xitaili +Biomedical Technology +Co., Ltd. +100% +Micot (Hong Kong) +Technology Limited +Micot (U.S.) Technology +Co., Ltd +89.06% +100% +Micot (Suzhou) +Technology Co., Ltd. +100% +Micot (Suzhou) +Pharmaceutical Co., Ltd. +100% +Micot (U.S.) +Biopharmaceutices +Co., Ltd +100% +1.44% +Tangxing +Technology +1.20% +Junying +Growth +1.19% +Shanjin +Runji +0.61% +Junying +Jiacheng +0.41% +Hainan +Wanfeng +0.27% +Hainan +Ruizheng +0.27% +Yinyun +Heman +0.27% +Xi’an Huiyu +0.27% +Hangzhou +Quandewang +1.09% +Listing +Reserve Fund +1.25% +Shaanxi +Innovation Relay +0.94% +0.47% 17.50% +0.38% +Shaanxi +Jingang +Maicheng +Century +Public +Shareholders +Jinan +Liuji +Other +shareholders(1) +10.94% +(1) As of the Latest Practicable Date, Shanghai Xitaili Biomedical Technology Co., Ltd* was owned as to approximately 89.06% by our Company, approximately 4.95% by +Shanghai Huitai Biopharmaceutical Partnership (Limited Partnership)* (Υྫ), approximately 2.47% by Ms. Wang Xin (ؚ,) +approximately 2.47% by Xi’an Xijiao 1896 Kechuang Investment Partnership (Limited Partnership)* (Υྫ) (“Xijiao 1896 +Kechuang Investment”) and approximately 1.04% by Xijiao 1896 (Xi’an) Innovation Service Co., Ltd.* (ʮ̡) (“Xijiao 1896 +Innovation”). Ms. Wang Xin is engaged in the investment in companies in the biomedicine industry. Xijiao 1896 Kechuang Investment and Xijiao 1896 Innovation are +ultimately controlled by Mr. Wei Changqing (ڡڗwho holds investment vehicles to invest in companies in the new materials, new energy, biomedicine and +high-end equipment manufacturing industries. Our Company became acquainted with Ms. Wang Xin and representatives of Xijiao 1896 Kechuang Investment and +Xijiao 1896 Innovation through the alumni network of Xi’an Jiaotong University of which Dr. Wang Bing was an alumnus. +HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE +– 135 – + + +--- page 144 --- +OVERVIEW +Who We Are +We are a biotechnology company specializing in the discovery, development and +commercialization of bi-/multi-specific peptide drugs for the treatment of metabolic +diseases as well as cardiovascular and cerebrovascular diseases, with our Core Product in +Phase III clinical trials. +We are committed to advancing peptide drugs as cornerstone therapies across +multiple disease areas. Leveraging over a decade of experience in peptide drug R&D, we +have established a fully integrated platform supporting the industrialization of +bi-/multi-functional peptide drug candidates. As of the Latest Practicable Date, we had +developed a pipeline of bi-/multi-functional peptides and innovative drug candidates, +including: (i) our Core Product, MT1013, the peptide drug targeting both CaSR and OGP +receptors, primarily developed for the treatment of CKD-SHPT, with the potential to be +further developed for additional indications such as CKD-MBD with Osteoporosis and +CKD-SHPT not on Dialysis; and (ii) three Key Products, namely XTL6001, MT1002 and +MT200605, as well as other product candidates. +All of the drug candidates have been in-house developed by us. The chart below +summarizes the development status of our clinical-stage product candidates as of the +Latest Practicable Date: +BUSINESS +– 136 – + + +--- page 145 --- +Core product Key product +MT200605 +Drug Candidates Target/Mechanism Indication RegionTreatment +regimen +IND and IND +Preparation Phase I Phase II Phase III Current Status/Projected Milestones Commercialization +Rights +Metabolic drugs +CaSR/OGP +CKD-SHPT +PRC Complete Phase III clinical trial +by the end of 2026 Global(2) +U.S. +CKD-MBD with Osteoporosis PRC Commence Phase III clinical trial +in early 2028 +(1) +Global +CKD-SHPT not on Dialysis PRC File IND by the end of 2027 +GLP-1R/ +GCGR/MasR +Weight management for +obesity or overweight +PRC Complete Phase I clinical trial +in Q2 of 2026 +U.S. +Proteinuric CKD PRC Complete Phase I clinical trial +in Q2 of 2026 +MASH PRC File IND in early 2027 +MT2004 FXR +(small-molecule) +DILI PRC Complete Phase II clinical trial +by the end of 2027 +MASLD +PRC +U.S. +CLD PRC Commence Phase II clinical trial +by the end of 2027 +(3) +PTH1R/OGP +GIOP +PRC Commence Phase I clinical trial +in January 2026 +U.S. +PMO +PRC Commence Phase I clinical trial +in January 2026 +U.S. +Cardio-cerebrovascular drugs +Coagulation +Factor II/ +GP IIb/IIIa +ACS-PCI PRC Complete Phase IIb +(4) clinical trial +by mid-2028 +Global +U.S. +Stroke PRC Commence Phase II clinical trial(5)(6) +by June 2026 +HD +PRC Commence Phase II clinical trial(5)(7) +by July 2026 +U.S. +HD-PF4 PRC Commence Phase II clinical trial +by the end of 2027 +(5) +TrKB +(small-molecule) AIS +PRC Complete Phase II clinical trial in 2026 +U.S. +MT1011 NOACs +(small-molecule) +Universal Anticoagulant +Reversal Agent PRC +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy Complete Phase I clinical trial +in Q2 of 2026 +MT1013 +XTL6001 +MT1009 +MT1002 +Directly proceed to the next stage Currently evaluating the competitive landscape and formulating the future Clinical Development Plan +Abbreviation: CaSR: Calcium-Sensing Receptor; OGP: Osteogenic Growth Peptide; CKD-MBD: Chronic Kidney Disease-Mineral and Bone Disorder; GLP-1R: Glucagon-like Peptide-1 Receptor; GCGR: Glucagon Receptor; MasR: Mas Receptor; +MASH: Metabolic Dysfunction-associated Steatohepatitis; FXR: Farnesoid X Receptor; DILI: Drug-Induced Liver Injury; MASLD: Metabolic Dysfunction-associated Steatotic Liver Disease; CLD: Cholestatic Liver Disease; PTH1R: Parathyroid hormone 1 receptor; GIOP: Glucocorticoid-Induced Osteoporosis; +PMO: Postmenopausal Osteoporosis; GP IIb/IIIa: Glycoprotein IIb/IIIa Complex; ACS: Acute Coronary Syndrome; PCI: Percutaneous Coronary Intervention; HD: hemodialysis; HD-PF4: HD with heparin-platelet factor 4 complex positive; PF-4: Platelet Factor-4; AIS: acute ischemic stroke; TrkB: +Tyrosine kinase receptor B; NOACs: Novel Oral Anticoagulants +BUSINESS +– 137 – + + +--- page 146 --- +Notes: +(1) We have completed Phase II clinical trial of the relevant product for the indication of CKD-SHPT, and as patients with CKD-SHPT are all within the CKD-MBD +population, we plan to leverage data collected from respective trials to seek IND approvals from competent regulatory authorities to conduct Phase III clinical trial +of the relevant product for the expanded indication of CKD-MBD with Osteoporosis. +(2) Researched and developed in-house. We have granted Everest Medicines (China) Co., Ltd. (“ Everest”) the exclusive right to sell, commercialize and promote MT1013 +for the treatment of CKD-SHPT in Mainland China, Hong Kong, Macao and the Taiwan region as well as the Asia-Pacific region (excluding Japan) (the “ T erritory”). +We reserved the rights to: (i) research, develop and manufacture MT1013 globally; (ii) commercialize MT1013 for any indications outside Territory; and (iii) +commercialize MT1013 in the Territory for any indications other than CKD-SHPT. For more information, see “Business — Commercialization”. +(3) The Phase I clinical trial of MT2004 had conducted adequate safety and dose-ranging evaluation to support the therapeutic dose range for the treatment of MASLD +and CLD in the PRC, thereby providing the basis for directly commencing the respective Phase II clinical trials. +(4) The Phase IIb clinical trial forms part of MT1002-II-C04 and was conducted to further evaluate the selected dose(s) in a larger patient population. For more +information, see “Business — Our Key Product MT1002 — Clinical Trial Overview of MT1002 — MT1002-II-C04 PRC Phase II Efficacy Study in ACS-PCI Patients ”. +(5) The Phase I clinical trial of MT1002 had conducted adequate safety and dose-ranging evaluation to support the therapeutic dose range for the treatment of stroke, HD +and HD-PF4 in the PRC, thereby providing the basis for directly commencing the respective Phase II clinical trials. +(6) In June 2023, we obtained IND approval from the NMPA to conduct a Phase II clinical trial of MT1002 for stroke. Trial preparation was initiated in March 2026, +including the finalization of the clinical trial protocol. +(7) In July 2023, we obtained IND approval from the NMPA to conduct a Phase II clinical trial of MT1002 for HD. Trial preparation was initiated in March 2026, including +the finalization of the clinical trial protocol. +BUSINESS +– 138 – + + +--- page 147 --- +MT1013 +Our Core Product, MT1013, is the dual-targeting receptor agonist polypeptide that +simultaneously targets the CaSR and the OGP receptor. It is designed for the treatment of +CKD-SHPT, CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis. MT1013’s +clinical studies have demonstrated its significant improvement in comprehensive control +rate of iPTH/serum calcium/serum phosphorus levels, fast-acting and sustained efficacy +in lowering iPTH, cardiovascular benefit potential, enhanced bone mineral density and +metabolism, and a favorable safety and tolerability profile. +• Market and Clinical Needs: The market size of CKD-SHPT drugs in the PRC is +estimated to reach RMB5.0 billion by 2030 and RMB13.1 billion by 2035. Currently, +the clinical management of CKD-SHPT primarily relies on single-target drugs, +which may present limitations such as suboptimal efficacy in severe cases with +significantly elevated iPTH levels, inadequate improvement in bone metabolism +abnormalities, and safety concerns such as the risk of hypocalcemia and +gastrointestinal adverse reactions. +• Promising Clinical Data: MT1013 (i) demonstrated a roughly 2.5-fold higher +comprehensive control rate of iPTH, serum calcium, and serum phosphorus +compared to etelcalcetide in a head-to-head Phase II evaluation; (ii) showed onset of +efficacy within three weeks and sustained control of iPTH levels by week nine, as +observed in a Phase II trial; (iii) exhibited cardiovascular benefit potential as it was +associated with greater FGF23 reduction, a biomarker directly linked to +cardiovascular risk in CKD-SHPT, alongside effective control of iPTH, serum +calcium, and serum phosphorus; (iv) showed a generally favorable safety and +tolerability profile, with no severe hypocalcemia reported across clinical trials; and +(v) enhanced bone mineral density and metabolism, as a Phase II study suggested +that MT1013 was associated with improved bone turnover, metabolism, and +remodeling balance in CKD-SHPT patients. +• Clinical Progress: MT1013 completed its Phase II clinical trials (MT1013-II-C01 and +MT1013-II-C03) for the treatment of CKD-SHPT and has entered a Phase III clinical +trial using Cinacalcet as the active comparator, which is expected to be completed by +the end of 2026. The Pre-NDA submission is planned in late 2026, followed by the +NDA submission in early 2027. +XTL6001 +Our Key Product, XTL6001, is a GLP-1R/GCGR/MasR tri-target agonist. The +introduction of MasR into the target panel of GLP-1R/GCGR is novel among current +GLP-1 drugs, with potential applications in the treatment of diseases such as Chronic +Weight Management in Obese or Overweight Populations, Proteinuric CKD, and MASH. +XTL6001’s preclinical studies have demonstrated its ability to preserve muscle mass, +achieve weight loss through enhanced energy metabolism-driven mechanisms and deliver +multi-organ protection. +• Market and Clinical Needs: The global population affected by metabolic diseases +continues to rise, with obesity becoming an increasingly severe issue. The +overweight and obesity drug market in the PRC is expected to reach RMB23.5 billion +in 2030 and RMB107.3 billion in 2035, with a CAGR of 35.5% from 2030 to 2035. +Current GLP-1-based therapies face clinical limitations including muscle loss and +gastrointestinal adverse reactions, highlighting the urgent need for safer and more +effective treatment options. +• Preclinical and Clinical Data: The introduction of MasR, into the GLP-1R/GCGR +panel provides additional benefits. In terms of muscle preservation, XTL6001 +activates renal MasR receptors to promote protein synthesis and has demonstrated a +breakthrough effect of “fat loss without muscle loss” in DIO mouse models. In terms +of tolerability, the tri-agonist synergy enables weight loss without significant +appetite suppression, suggesting a lower risk of gastrointestinal adverse events +compared to GLP-1-based drugs that primarily act by delaying gastric emptying. +Phase I clinical trial results further suggest that XTL6001 reduces body weight and +waist circumference, improves lipid profiles, and lowers serum uric acid levels. +BUSINESS +– 139 – + + +--- page 148 --- +• Clinical Progress: XTL6001 had obtained IND approvals in both the PRC and the +United States for the treatment of Chronic Weight Management in Obese or +Overweight Populations. As of the Latest Practicable Date, the Phase I clinical trial +of XTL6001 in the PRC had completed the LPLV and the database lock. We are also +exploring its potential in other metabolic diseases. A Phase II clinical trial for the +treatment of Proteinuric CKD is expected to commence in mid 2027, and an IND +application for the treatment of MASH is expected to be submitted in early 2027. +MT1002 +Our key product, MT1002, is a coagulation factor II and GP IIb/IIIa dual-targeting +peptide antagonist, primarily designed for clinical needs in anticoagulation and +anti-thrombosis for indications such as ACS-PCI, Stroke, HD and HD-PF4. MT1002’s +clinical studies have demonstrated its potential to address the bleeding and ischemia +balance in ACS-PCI, with a fast onset of action, recovery after discontinuation, stable +pharmacokinetic profile, and favorable population adaptability. +• Market and Clinical Needs: The global population of ACS patients continues to +grow, accompanied by a steady increase in the volume of PCI procedures. The +antithrombotic drugs market in the PRC is estimated to reach RMB47.2 billion in +2030 and RMB61.8 billion in 2035. The current standard of care involves a +combination of anticoagulants and antiplatelet agents, which may lead to +challenges such as complex drug-drug interactions and an increasing risk of +bleeding. MT1002, administered via intravenous bolus followed by continuous +infusion is intended for use in emergency PCI settings especially when oral +antiplatelet agents are not yet effective or cannot be administered. +• Clinical Data: Results from the Phase II clinical trials of MT1002 showed that all +subjects successfully completed PCI procedures under the anticoagulant and +antiplatelet effect of MT1002 without thrombotic events or major bleeding. No +deaths, SAEs or early withdrawals due to TEAEs were observed, and all adverse +events were mild or moderate in severity, supporting the favorable safety and +efficacy profile of MT1002. +• Clinical Progress: As of the Latest Practicable Date, MT1002 had completed Phase I +clinical trials in both the PRC and the United States for the treatment of ACS-PCI. A +Phase II clinical trial is underway in the PRC. Upon completion, we plan to initiate +an EOP II meeting with the CDE and proceed to a confirmatory Phase III clinical +trial. We have also obtained Phase II clinical trial approvals in the PRC for +additional indications, including Stroke, HD and HD-PF4, and plan to commence +the Phase II clinical trials of Stroke and HD in the PRC by June 2026 and July 2026, +respectively, and to initiate the Phase II clinical trial of HD-PF4 in the PRC by the +end of 2027. +MT200605 +Our Key Product, MT200605, is a neuroprotectant for injection. Its core +breakthrough lies in a dual synergistic mechanism of action — by simultaneously +activating the TrkB receptor and eliminating oxygen radicals, it blocks the post-AIS +pathological cascade via dual pathways. MT200605’s clinical studies have demonstrated +its favorable safety and tolerability profile, as well as dual-pathway synergistic +neuroprotective effects, offering a therapeutic option for patients. +• Market and Clinical Needs: In the PRC, the market size of neuroprotective drugs is +estimated to reach RMB15.7 billion in 2030 and RMB24.6 billion in 2035. Existing +neuroprotective agents may face limitations such as single mechanisms of action, +modest efficacy and low blood-brain barrier penetration rates which may hinder +their ability to comprehensively address the complex cascade of neural damage +following an ischemic event. +• Clinical Data: MT200605 promotes neuronal repair by activating the p-TrkB +signaling pathway and exerts antioxidant radical effects by enhancing SOD and +GSH-Px activities, thereby reducing neuronal cell death. Clinical studies have +shown that MT200605 was safe and well tolerated in healthy subjects, with all +TEAEs related to MT200605 being Grade 1 in severity. No SAEs or withdrawals due +to adverse events were reported, and all TEAEs were reversible or resolved. +BUSINESS +– 140 – + + +--- page 149 --- +• Clinical Progress: MT200605 has completed Phase I clinical studies in both the PRC +and the United States. A Phase II clinical trial is currently underway in the PRC to +evaluate its neuroprotective effect in patients with AIS, which is expected to be +completed in 2026. +Other Clinical-Stage Pipeline Candidates +We have established a diversified pipeline focused on metabolic diseases +(particularly renal-related) and cardiovascular and cerebrovascular diseases. As of the +Latest Practicable Date, in addition to our Core Product and Key Products, we have been +developing three other clinical-stage drug candidates, including MT2004 for DILI, +MASLD and CLD; MT1009 for GIOP and PMO; and MT1011 for anticoagulant reversal +therapy. Leveraging differentiated mechanisms, these candidates are designed to provide +therapeutic options for diseases with limited effective treatments. See “— Our Drug +Candidates” for more information. +R&D System and T echnology Platforms +We have established four core technology platforms covering the full R&D cycle of +multi-functional peptide drugs, including (i) Bi-/Multi-specific Peptide and +Peptide-based Macromolecule Technology Platform, which adopts a multi-target +synergistic design to precisely identify targets and optimize drug structures,extending +half-life, enhancing metabolic stability, improving specificity and reducing adverse effects +through fusion protein engineering and related techniques; (ii) Computer-aided Peptide +Design Platform, which leverages AI algorithms to accelerate molecular design and +optimization, thereby enabling an intelligent R&D workflow from molecular generation +to druggability evaluation; (iii) Oral Peptide Delivery Platform, which is being developed +to overcome the limitations of injectable peptide therapies with the aim of enhancing +patient convenience and improving treatment adherence; and (iv) Druggability +Evaluation Platform, which supports the selection of clinical candidates from target +validation by leveraging approximately 100 animal models and completing numerous in +vivo and in vitro evaluations annually. +Clinical Development and CMC Capability +We have adopted a self-operated model for clinical development in the PRC, under +which our in-house professional team is responsible for protocol design, management and +execution oversight, with the aim of improving the quality, cost-effectiveness and +efficiency of clinical development. This model ensures closer alignment between trial +design and R&D objectives while enhancing data quality and regulatory compliance. We +have established an integrated CMC platform covering API, formulation and +sustained-release development, with in-house capabilities to conduct process +development. Our CMC R&D center is equipped to support core process development and +optimization from the preclinical to clinical stages without reliance on third-party +partners in process development. +Management T eam +Led by our founder, Chairman and Chief Executive Officer Dr. Wang Bing, we have +achieved significant milestones. Dr. Wang has over 20 years of experience in the +biopharmaceutical industry, underpinned by a solid academic foundation and scientific +expertise. He has served in key industry roles, including as a review expert for the +National Major New Drug Innovation Program (“ɽอᖹ௴Փਖ਼ධ”), and has a proven +track record of professional recognition. Our senior management team possesses expertise +spanning the full drug development lifecycle, from preclinical research to clinical +execution. The team members bring extensive experience at global pharmaceutical +companies and research institutions, and possess capabilities in drug development, +regulatory submission and commercialization. +BUSINESS +– 141 – + + +--- page 150 --- +OUR STRENGTHS +1. Scientific Insights Facilitating Our Development of Next-Generation +Bi-/Multi-Specific Peptide Drugs +Compared with small-molecule chemical drugs, peptide drugs offer higher +biological activity and specificity; and compared with protein-based drugs, they provide +stability, higher purity and lower manufacturing costs. As such, peptide drugs combine +the advantages of both modalities and address treatment across various therapeutic areas. +Globally, the peptide drug industry is gaining momentum, with several products already +approved, such as Semaglutide (USD34.5 billion), Dulaglutide (USD4.3 billion), +Tirzepatide (USD36.5 billion) and Pegcetacoplan (USD1.0 billion) in sales in 2024. Their +clinical application has expanded from metabolic diseases to a broad range of indications, +including cardiovascular, CNS, endocrine, gastrointestinal, hematological, ophthalmic +and orthopedic diseases. +Driven by continued development, the global peptide drug market is expected to +grow from USD109.6 billion in 2024 to USD267.6 billion in 2030, representing a CAGR of +13.9%. The peptide drug market in the PRC is also experiencing growth, with its market +size projected to increase from RMB60.2 billion in 2024 to RMB174.2 billion in 2030, +representing a CAGR of 20.0%. Given their precision, safety and broad therapeutic +potential, peptide drugs are well positioned to address significant unmet medical needs, +underpinning their growth trajectory. +Against this backdrop, bi-functional and multi-functional peptides have emerged as +one of the most promising directions in the peptide drug field, offering substantial +competitive barriers. Such peptides are designed to selectively modulate two or more +molecular targets through a single compound. For complex and multi-etiological diseases, +including cardiovascular and cerebrovascular diseases, metabolic disorders, central +nervous system diseases and immune-related conditions, bi- or multi-specific peptides +are capable of simultaneously targeting interrelated disease pathways, thereby producing +synergistic therapeutic effects and achieving clinical outcomes. +As a key innovator in the peptide-based therapeutic field in the PRC, we have +established a differentiated portfolio of bi/multi-functional peptide drug candidates, +particularly in the non-GLP-1 segment, where we have built technical barriers and unique +competitive advantages. Our clinical-stage multifunctional peptide assets include +MT1013, XTL6001, MT1002, MT1009. For more information of efficacy and advantages of +these clinical-stage assets, see “— Our Drug Candidates” in this section. +2. Core Product MT1013 as a Bi-functional Peptide Agonist T argeting CaSR and +OGP Receptor, with Demonstrated Improvements in Comprehensive Control +Rate and Patient Survival Benefits +MT1013 is a dual-targeting receptor agonist polypeptide that concurrently targets +the CaSR of the parathyroid gland and OGP . Through our in-house development efforts, +MT1013 is primarily designed for the treatment of CKD-SHPT, with potential for +expansion into additional indications such as CKD-MBD with osteoporosis and +CKD-SHPT not on Dialysis. +Significant improvement in comprehensive control rate of iPTH/serum +calcium/serum phosphorus levels: MT1013 has demonstrated a significant advantage in +improving the comprehensive control rate of iPTH/serum calcium/serum phosphorus +levels. In a head-to-head Phase II clinical trial against Etelcalcetide, after 26 weeks of +treatment,the proportion of subjects in the MT1013 group achieving simultaneous control +of iPTH, serum calcium and serum phosphorus was approximately 2.5 times that of +Etelcalcetide. A higher triple-target attainment rate is indicative of a substantial reduction +in all-cause mortality, more effective prevention of vascular calcification, comprehensive +bone protection and improved patient quality of life. +Fast-acting, and sustained efficacy: MT1013 has demonstrated fast-acting, and +sustained efficacy in reducing iPTH levels. Results from the Phase II clinical trials showed +significant improvement in iPTH levels shortly after treatment initiation and sustained +efficacy with continued treatment. In a head-to-head clinical trial against Etelcalcetide, +MT1013 showed favorable efficacy in achieving the target iPTH range. +BUSINESS +– 142 – + + +--- page 151 --- +Cardiovascular benefit potential: FGF23, a key biomarker of vascular calcification +and cardiovascular risk, has been shown to correlate with improved cardiovascular +outcomes when reduced. In the head-to-head Phase II clinical trial against Etelcalcetide, +MT1013 achieved efficacy in both absolute FGF23 reduction and the proportion of subjects +with a reduction of more than 30%, consistent with its higher attainment rates of iPTH, +calcium and phosphorus, suggesting potential to substantially reduce cardiovascular +events and mortality risk. +Enhanced bone mineral density and metabolism: MT1013 has shown favorable +effects on bone health. Results from the Phase II clinical trials showed that MT1013 can +effectively improve the high-turnover bone status frequently in CKD-SHPT patients, +promote bone metabolic balance, and establish a more favorable bone remodeling profile. +These results support the clinical potential of MT1013 in treating CKD-MBD-related bone +disorders. +A favorable safety and tolerability profile: The most common adverse events +associated with existing calcimimetics are hypocalcemia and gastrointestinal reactions. +No severe hypocalcemia was observed in any of the clinical trials of MT1013. In addition, +only a small number of subjects experienced gastrointestinal adverse reactions, such as +nausea and vomiting during long-term treatment, with incidence rates lower than those +observed with existing calcimimetics. These results support the favorable safety and +tolerability profile of MT1013. +Broad potential for indication expansion: The Phase II clinical trials of MT1013 +observed improvement in bone mineral density. To fully leverage the therapeutic +potential of MT1013, we have been actively expanding its indications to include +CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis. See “— Our Drug +Candidates” for more information of MT1013’s clinical results. +3. Differentiated Pipeline T argeting High-Potential Areas with Significant Unmet +Clinical Needs +We focus on addressing significant unmet clinical needs in metabolic (especially +renal-related) and cardiovascular diseases, aiming to offer effective treatment options +globally. Beyond our Core Product MT1013, we have advanced several Key Products with +differentiated mechanisms to expand treatment pathways. +Chronic Weight Management in Obese or Overweight Populations: The obesity and +weight management therapeutics market presents substantial growth opportunities, +driven by the continuously rising prevalence of obesity and associated complications. The +overweight and obesity drug market in the PRC is expected to reach RMB23.5 billion in +2030 and RMB107.3 billion in 2035, with a CAGR of 32.9% from 2030 to 2035. The GLP1R +polypeptide drug market in the PRC is estimated to reach RMB81.4 billion in 2030 and +RMB176.9 billion in 2035, with a CAGR of 16.8% from 2030 to 2035. +Against this backdrop, we are developing XTL6001, a long-acting tri-agonist +peptide drug candidate intended for the treatment of obesity, Proteinuric CKD and +MASH. Existing anti-obesity therapies face multiple limitations, including +gastrointestinal adverse events, hepatic toxicity, and impaired absorption of fat-soluble +vitamins during clinical use. GLP-1-based therapies primarily induce weight loss by +delaying gastric emptying, but are frequently associated with gastrointestinal side effects +such as nausea and vomiting, resulting in limited patient tolerance. Leveraging its +differentiated mechanism of action, XTL6001 is designed to enhance basal metabolic rate +while potentially addressing key challenges observed with single- or dual-agonist +therapies, including muscle loss, severe gastrointestinal adverse reactions, and weight +rebound following drug discontinuation. In addition, XTL6001 offers potential liver- and +kidney-protective benefits beyond weight reduction, targeting the complex comorbidity +profile commonly seen in obese patients. +ACS-PCI: ACS is an acute manifestation of CAD, continues to demonstrate a +progressively increasing incidence trend. It is estimated that by 2030 and 2035, the +incidence of ACS in China will reach 5.8 million and 6.3 million, respectively. The volume +of PCI procedures in China will reach 4.0 million and 6.0 million, respectively. The +antithrombotic drugs market in the PRC is estimated to reach RMB47.2 billion in 2030, and +RMB61.8 billion in 2035, with a CAGR of 5.6% from 2030 to 2035. +BUSINESS +– 143 – + + +--- page 152 --- +MT1002 is the first domestically developed dual-functional antithrombotic peptide +drug with both anticoagulant and antiplatelet activities. It simultaneously targets +coagulation factor II and GPIIb/IIIa, exerting dual anticoagulant and antiplatelet effects. +Unlike conventional anticoagulants used during PCI procedures, MT1002 does not require +combination therapy and is designed to reduce both bleeding risk and the incidence of +in-stent thrombosis. It may serve as an alternative to heparin while avoiding HIT, and +addresses the unmet clinical need in emergency PCI procedures for patients who are +unresponsive to antiplatelet agents or unable to take oral medications. Results from the +Phase II clinical trial have demonstrated favorable safety and dual activity in thrombin +inhibition and platelet aggregation suppression. +AIS: AIS is the acute phase of ischemic stroke. The global prevalence of ischemic +stroke is projected to reach 127.4 million by 2035, while in the PRC it is projected to reach +35.1 million. The neuroprotective drugs market in the PRC is estimated to reach RMB15.7 +billion in 2030 and RMB24.6 billion in 2035. +MT200605 is the first flavonoid-based small molecule compound that acts as an +agonist of the TrkB receptor. MT200605 promotes neural regeneration through TrkB +receptor activation and reduces free radical-induced neuronal damage via its antioxidant +effects, thereby forming a dual protective mechanism. Preclinical studies have shown that +MT200605 demonstrates good brain tissue distribution, the ability to cross the blood-brain +barrier, and efficacy in improving stroke-related behavioral outcomes and reducing +infarct volume compared with existing neuroprotective agents, supporting its therapeutic +potential and future development prospects. +Other Indications: We are advancing a tiered pipeline of product candidates +addressing unmet clinical needs to accelerate translation and capture market +opportunities. Our product candidates include MT2004 for DILI, MASLD and CLD, +MT1011 for anticoagulant reversal therapy, and MT1009 for GIOP and PMO, which +collectively strengthen and expand our portfolio in metabolic diseases (particularly +renal-related) and cardiovascular and cerebrovascular diseases. See “— Our Drug +Candidates” for more information. +4. Integrated End-to-End Platform Covering the Full V alue Chain from Discovery to +Commercialization, Enabling Accelerated Global Expansion +We have established a fully integrated system covering early target discovery, +preclinical research, clinical development and CMC process development. Our R&D and +operations headquarters is located in Xi’an, clinical and regulatory center in Beijing and +large molecule development platform in Shanghai. This structured and collaborative +network enables end-to-end capabilities from laboratory research to commercial +translation. +Platform Development +We have established four core technology platforms that operate in a coordinated +manner, encompassing our entire R&D process and establishing an integrated drug R&D +system that spans from molecular design to clinical translation. Leveraging our four +technology platforms, we have generated and developed multiple drug candidates that +have entered various stages of preclinical and clinical development, further +demonstrating the maturity and translational capability of our platforms. +• Bi-/Multi-specific Peptide and Peptidebased Macromolecule Technology Platform: The core +advantage of the platform lies in its ability to address limitations associated with +traditional single-function peptides, including restricted target engagement and +limited therapeutic outcomes. Centered on a peptide-based modular architecture, +our platform enables the integration of precise target binding, multi-target +synergistic pharmacological regulation and optimized pharmacokinetics into a +single molecular entity, making it well-suited to address the long-term treatment +needs of chronic diseases. To address the limitations of peptide drugs in metabolic +stability and biological half-life, particularly in chronic diseases requiring +long-term administration, we have established a macromolecule platform based on +functional peptides as an extension of our Bi-/Multi-functional Peptide Platform. +• Computer-aided Peptide Design Platform: The core advantage of our platform lies in its +ability to accelerate early-stage peptide drug discovery through the synergistic +application of homology modeling, molecular dynamics simulation and virtual +screening modules. This enables precise prediction of peptide–target binding +conformations, thereby shortening the discovery cycle and reducing the cost of +screening. +BUSINESS +– 144 – + + +--- page 153 --- +• Oral Peptide Delivery Platform: The core advantage of this platform lies in its +application of solid dosage technologies, including solid dispersion, inclusion +complexation, dry granulation and direct compression. To enhance absorption of +protein and peptide drugs, the platform employs permeation enhancers and +inclusion techniques to modulate local pH, inhibit enzymatic degradation and +molecular aggregation, stabilize the microenvironment at the administration site, +preserve the active conformation of the drug, improve mucosal permeability and +enhance overall formulation stability. +• Drugability Evaluation Platform: The core advantage of this platform lies in its +comprehensive animal model coverage tailored to our pipeline and a standardized +evaluation system for safety, efficacy and pharmacokinetics. It enables in vitro +studies such as target selectivity and plasma protein binding, and in vivo +assessments including PK, PD and toxicology, supporting full-spectrum +developability evaluation in-house. The candidate molecules evaluated through +this platform have demonstrated a high success rate in clinical trial applications. +For more information on our technology platforms and the drug candidates derived +from these platforms, see “— Our Technology Platforms” in this section. +Pipeline Development +We have established a clinical development and registration system covering both +the PRC and the United States, with full-process execution capabilities for international +multi-regional clinical trials (MRCTs). Adopting a “dual China-U.S. filing and global +commercialization” model, we aim to accelerate the global time-to-market of our drug +candidates. We have established collaborations with clinical trial centers in China, the +United States and other regions to support registration trials. For our core pipeline +programs, we have generally adopted a dual China-U.S. filing strategy. As of the Latest +Practicable Date, seven drug candidates had entered clinical trials in China and/or the +United States, and six had completed dual regulatory filings in both jurisdictions. We have +built a fully functional clinical operations team and collaborate with leading international +principal investigators (PIs) and academic institutions to ensure data integrity and +registration efficiency. We have implemented a self-operated clinical trial management +model, which has demonstrated advantages in execution efficiency, data quality and cost +control, particularly in multi-program parallel settings, and has laid a solid foundation for +future multi-regional clinical development. +CMC Capability and Commercialization Strategy +We have established in-house R&D capabilities covering API and formulation +development, and are able to conduct process development without reliance on +third-party partners. As of the Latest Practicable Date, we had developed manufacturing +processes and quality standards for multiple APIs and formulations, including a +cost-effective, environmentally friendly and scalable synthetic process for the API of our +Core Product MT1013, and a scalable manufacturing process for its injectable formulation. +We have continued to optimize key steps such as solution preparation and lyophilization +to enhance product quality and consistency, while improving cost efficiency to support +future commercial production. +For commercialization, we intend to pursue a dual-track strategy combining +external partnerships and internal sales team development to gradually support product +launches. For more information of our commercialization strategy, see “Business — +Commercialization”. We believe that our integrated capabilities and experience across +product development, regulatory filings and CMC Capability will continue to support the +successful translation of our innovative drug candidates and drive the ongoing expansion +of our business scale and market competitiveness. +5. Management T eam Comprised of Experts in Peptide Drug Development +We are led by a management team with proven track record, which consists of +professionals with academic backgrounds in the peptide industry and comprehensive +experience across the entire drug development chain — from research and clinical +development to commercialization. Several members have led the development and +commercialization of multiple globally successful drugs, providing support for our +sustained development. +BUSINESS +– 145 – + + +--- page 154 --- +Our founder, Dr. Wang Bing, holds a Ph.D. in pharmacology and has over 20 years of +experience in peptide-based drug research, with academic and scientific expertise in the +field. Dr. Wang focuses on the pathological mechanisms of cardiovascular, +cerebrovascular, metabolic, anti-inflammatory, and analgesic diseases, as well as the R&D +of novel peptide drugs. +Our management team consists of professionals with extensive industry experience. +Our Executive Director and Senior Vice President, Dr. Yu Weiping, has over 40 years of +experience in pharmaceutical R&D and senior management and is primarily responsible +for our Group’s CMC and quality control. Our Chief Medical Officer, Ms. Wang Xiangling, +has nearly 20 years of experience in the pharmaceutical industry and oversees all clinical +development and related functional operations. Our Chief Financial Officer, Mr. Zou Ran, +has more than 17 years of experience in corporate finance, management, and equity +investments, and is responsible for formulating our Group’s financial and development +strategies, as well as overall financial management and corporate development. +In addition, we have also received support from a number of institutional and +industrial investors, including Northern Light Venture Capital, NRL Capital and TASLY +Group. +OUR STRATEGIES +1. Accelerate Clinical Development and Commercialization of Our Product +Candidates +We plan to accelerate the clinical development of our Core Product and Key Product +candidates to expedite their registration in priority indications and enable +commercialisation. In parallel, we intend to leverage existing clinical and mechanistic +data to explore their potential applications in other related disease areas, with a view to +extending product lifecycle and expanding market opportunities. Specifically, we have +formulated the following development plans: +• For MT1013, we plan to pursue our first marketing approval for the treatment of +CKD-SHPT Undergoing Maintenance Hemodialysis and we expect to submit the +pre-NDA in late 2026 and the NDA in early 2027. Furthermore, we are developing +new indications for MT1013 as set forth below: +(i) CKD-MBD with Osteoporosis: We have completed Phase II clinical trial of +MT1013 for the indication of CKD-SHPT, and plan to leverage data collected +from respective trials to seek IND approvals from competent regulatory +authorities to conduct Phase III clinical trial of MT1013 for the expanded +indication of CKD-MBD with Osteoporosis. We expect to initiate the Phase III +trial for this indication in early 2028. +(ii) CKD-SHPT not on Dialysis: we plan to submit the IND application by the end +of 2027. +For more information of our future development plans, see “Business — Our Drug +Candidates — Our Core Product MT1013 — Clinical Development Plan”. +• For XTL6001, we plan to advance XTL6001 primarily for the treatment of Chronic +Weight Management in Obese or Overweight Populations, while also exploring its +potential in other metabolic diseases. We plan to initiate a Phase II clinical trial for +the treatment of Proteinuric CKD in mid 2027, and to submit an IND application for +the treatment of MASH in early 2027. +For more information of our future development plans, see “Business — Our Drug +Candidates — Our Key Product — XTL6001 — Clinical Development Plan”. +• For MT1002, following the completion of the China Phase II (MT1002-II-C04) study, +we plan to initiate an EOP II meeting with the CDE and proceed to a confirmatory +Phase III clinical trial with NACE and MACE events as primary efficacy endpoints +to support subsequent NDA submission. We have also obtained Phase II clinical trial +approvals in the PRC for additional indications, including stroke, HD and HD-PF4, +and plan to commence the Phase II clinical trials of Stroke and HD in the PRC by +June 2026 and July 2026, respectively, and to initiate the Phase II clinical trial of +HD-PF4 in the PRC at the end of 2027. +• For MT200605, we plan to complete the Phase II clinical trial of MT200605 in the PRC +in 2026. This study is a randomized, double-blind, placebo-controlled, multi-center +trial designed to evaluate the efficacy, safety and pharmacokinetic profile of +MT200605 in patients with AIS. As of the Latest Practicable Date, enrollment of 360 +subjects has been completed. +BUSINESS +– 146 – + + +--- page 155 --- +2. Focus on Clinical Needs and Advance Peptide Drug Candidates with +Differentiated Mechanisms and Commercialisation Potential +Leveraging our deep industry knowledge in the peptide field, extensive R&D +experience, and forward-looking product strategy, we will continue to focus on major +disease areas such as metabolic disorders (particularly renal-related) and cardiovascular +and cerebrovascular diseases to develop differentiated treatment solutions with +differentiated advantages. +3. Deepen Strategic Collaborations to Unlock the Clinical and Commercial Potential +of Our Product Candidates +With a portfolio of assets advancing in global clinical development, we have been +actively seeking collaboration opportunities to accelerate their clinical progress and +commercialization. In the PRC, we are advancing the clinical studies of our pipeline +candidates, while also planning to establish partnerships to expedite development and +expand into major international markets. +We intend to form strategic collaborations with industry participants both +domestically and overseas to drive commercialization and enhance our global market +potential. In addition, we will continue to explore and evaluate external collaboration +models such as license-out, co-development and the establishment of new joint ventures +(NewCo). For more information of our commercialization strategy, see “Business — +Commercialization”. +4. Recruit and Retain T alent to Promote Systematic T raining and Sustainable +Development. +The majority of our Board members possess extensive backgrounds in the medical +field and substantial industry experience, and place emphasis on the selection and +development of professional talent. To further enhance our market competitiveness, we +will continue to bring in additional experts specialized in drug research, clinical +development, commercialization, and other critical functions, injecting renewed vitality +into our Company’s long-term growth. For our existing team, we regularly organize +systematic training programs designed to align individual career development with our +Company’s future objectives, ensuring mutual growth and consistent progress. +OUR DRUG CANDIDATES +Leveraging our expertise in polypeptide therapies and relying on our four major +technology platforms, we independently develop dual-target and multi-target specific +polypeptide drugs. As of the Latest Practicable Date, we have established an extensive +pipeline of drugs under development. The diagram below summarises the development +progress of our clinical-stage drug candidates: +BUSINESS +– 147 – + + +--- page 156 --- +Core product Key product +MT200605 +Drug Candidates Target/Mechanism Indication RegionTreatment +regimen +IND and IND +Preparation Phase I Phase II Phase III Current Status/Projected Milestones Commercialization +Rights +Metabolic drugs +CaSR/OGP +CKD-SHPT +PRC Complete Phase III clinical trial +by the end of 2026 Global(2) +U.S. +CKD-MBD with Osteoporosis PRC Commence Phase III clinical trial +in early 2028 +(1) +Global +CKD-SHPT not on Dialysis PRC File IND by the end of 2027 +GLP-1R/ +GCGR/MasR +Weight management for +obesity or overweight +PRC Complete Phase I clinical trial +in Q2 of 2026 +U.S. +Proteinuric CKD PRC Complete Phase I clinical trial +in Q2 of 2026 +MASH PRC File IND in early 2027 +MT2004 FXR +(small-molecule) +DILI PRC Complete Phase II clinical trial +by the end of 2027 +MASLD +PRC +U.S. +CLD PRC Commence Phase II clinical trial +by the end of 2027 +(3) +PTH1R/OGP +GIOP +PRC Commence Phase I clinical trial +in January 2026 +U.S. +PMO +PRC Commence Phase I clinical trial +in January 2026 +U.S. +Cardio-cerebrovascular drugs +Coagulation +Factor II/ +GP IIb/IIIa +ACS-PCI PRC Complete Phase IIb +(4) clinical trial +by mid-2028 +Global +U.S. +Stroke PRC Commence Phase II clinical trial(5)(6) +by June 2026 +HD +PRC Commence Phase II clinical trial(5)(7) +by July 2026 +U.S. +HD-PF4 PRC Commence Phase II clinical trial +by the end of 2027 +(5) +TrKB +(small-molecule) AIS +PRC Complete Phase II clinical trial in 2026 +U.S. +MT1011 NOACs +(small-molecule) +Universal Anticoagulant +Reversal Agent PRC +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy +Monotherapy Complete Phase I clinical trial +in Q2 of 2026 +MT1013 +XTL6001 +MT1009 +MT1002 +Directly proceed to the next stage Currently evaluating the competitive landscape and formulating the future Clinical Development Plan +Abbreviation: CaSR: Calcium-Sensing Receptor; OGP: Osteogenic Growth Peptide; CKD-MBD: Chronic Kidney Disease-Mineral and Bone Disorder; GLP-1R: Glucagon-like Peptide-1 Receptor; GCGR: Glucagon Receptor; MasR: Mas Receptor; +MASH: Metabolic Dysfunction-associated Steatohepatitis; FXR: Farnesoid X Receptor; DILI: Drug-Induced Liver Injury; MASLD: Metabolic Dysfunction-associated Steatotic Liver Disease; CLD: Cholestatic Liver Disease; PTH1R: Parathyroid hormone 1 receptor; GIOP: Glucocorticoid-Induced Osteoporosis; +PMO: Postmenopausal Osteoporosis; GP IIb/IIIa: Glycoprotein IIb/IIIa Complex; ACS: Acute Coronary Syndrome; PCI: Percutaneous Coronary Intervention; HD: hemodialysis; HD-PF4: HD with heparin-platelet factor 4 complex positive; PF-4: Platelet Factor-4; AIS: acute ischemic stroke; TrkB: +Tyrosine kinase receptor B; NOACs: Novel Oral Anticoagulants +BUSINESS +– 148 – + + +--- page 157 --- +Notes: +(1) We have completed Phase II clinical trial of the relevant product for the indication of CKD-SHPT, and as patients with CKD-SHPT are all within the CKD-MBD +population, we plan to leverage data collected from respective trials to seek IND approvals from competent regulatory authorities to conduct Phase III clinical trial +of the relevant product for the expanded indication of CKD-MBD with Osteoporosis. +(2) Researched and developed in-house. We have granted Everest Medicines (China) Co., Ltd. (“ Everest”) the exclusive right to sell, commercialize and promote MT1013 +for the treatment of CKD-SHPT in Mainland China, Hong Kong, Macao and the Taiwan region as well as the Asia-Pacific region (excluding Japan) (the “ T erritory”). +We reserved the rights to: (i) research, develop and manufacture MT1013 globally; (ii) commercialize MT1013 for any indications outside Territory; and (iii) +commercialize MT1013 in the Territory for any indications other than CKD-SHPT. For more information, see “Business — Commercialization”. +(3) The Phase I clinical trial of MT2004 had conducted adequate safety and dose-ranging evaluation to support the therapeutic dose range for the treatment of MASLD +and CLD in the PRC, thereby providing the basis for directly commencing the respective Phase II clinical trials. +(4) The Phase IIb clinical trial forms part of MT1002-II-C04 and was conducted to further evaluate the selected dose(s) in a larger patient population. For more +information, see “Business — Our Key Product MT1002 — Clinical Trial Overview of MT1002 — MT1002-II-C04 PRC Phase II Efficacy Study in ACS-PCI Patients ”. +(5) The Phase I clinical trial of MT1002 had conducted adequate safety and dose-ranging evaluation to support the therapeutic dose range for the treatment of stroke, HD +and HD-PF4 in the PRC, thereby providing the basis for directly commencing the respective Phase II clinical trials. +(6) In June 2023, we obtained IND approval from the NMPA to conduct a Phase II clinical trial of MT1002 for stroke. Trial preparation was initiated in March 2026, +including the finalization of the clinical trial protocol. +(7) In July 2023, we obtained IND approval from the NMPA to conduct a Phase II clinical trial of MT1002 for HD. Trial preparation was initiated in March 2026, including +the finalization of the clinical trial protocol. +BUSINESS +– 149 – + + +--- page 158 --- +Our Core Product — MT1013 +Our Core Product, MT1013, is a dual-targeting receptor agonist polypeptide that +adopts an OGP-like structure and simultaneously activates the CaSR and mimics the OGP +mechanism. It targets two key pathogenic links of CKD-SHPT/CKD-MBD by acting on the +CaSR in the parathyroid gland and concurrently on disease-related OGP . It +simultaneously regulates the two key metabolic pathways of calcium and phosphorus, +demonstrating advantages in regulating the key indicators of calcium and phosphorus +metabolism, thereby achieving the dual synergistic benefits of both calcimimetic and +pro-osteogenic effects. This distinguishes it from traditional single-target calcimimetics, +which directly regulate iPTH but lack a direct pro-osteogenic effect. MT1013 is primarily +developed for the treatment of CKD-SHPT, with planned expansion to indications such as +CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis. +Mechanism of Action +MT1013 adopts an OGP-like structure and simultaneously activates the CaSR and +mimics the OGP mechanism, thereby targeting and controlling CKD-SHPT and related +bone disorders. On one hand, by activating the CaSR on the surface of parathyroid cells, +MT1013 mimics the action of calcium ions to inhibit the synthesis and secretion of iPTH, +thus lowering iPTH levels to counteract the damage to bone and kidneys caused by high +iPTH; reducing Ca reabsorption in the renal tubules and increasing urinary Ca excretion. +On the other hand, its OGP-like structure promotes the proliferation and differentiation of +osteoblasts, enhances alkaline phosphatase activity, and facilitates bone matrix +mineralization, which helps to ameliorate osteoporosis and treat renal osteodystrophy. +Through this synergistic CaSR+OGP mechanism, MT1013 can achieve comprehensive +regulation of iPTH, serum calcium, and serum phosphorus in CKD-SHPT patients, +resulting in a higher comprehensive control rate and providing cardiovascular protection +benefits; improving bone metabolism and addressing the challenge of the lack of effective +treatment for renal osteodystrophy in patients with CKD (G5D) and concomitant +CKD-SHPT. +iPTH +CaSR +CaSR +Activation: +OGP Activation: +1,25 Vit D +Secretion Resorption +Excretion +Absorption +Serum +calcium +Alkaline phosphatase/ +Matrix mineralization +Differentiation +Proliferation +Accessory Domain +OGP protein structure +Active Domain (10-14) +α2M +Source: Company data +CaSR isaGp r otein-coupled receptor distributed in parathyroid glands, kidneys, +and other tissues, and its core function is to sense changes in extracellular calcium ion +concentration and regulate the secretion of iPTH through negative feedback to maintain +calcium metabolism homeostasis. In CKD-SHPT, the abnormal decrease in extracellular +calcium concentration due to impaired phosphorus excretion and decreased calcium +absorption caused by chronic kidney disease will weaken the CaSR’s ability to sense +calcium, making it unable to effectively inhibit iPTH secretion; at the same time, +long-term calcium-phosphorus disorders will stimulate the proliferation of parathyroid +glands, which will further reduce the sensitivity of the CaSR, forming a iPTH. At the same +time, long-term calcium and phosphorus disorders will stimulate parathyroid +hyperplasia, further reducing CaSR sensitivity, forming a vicious cycle of “iPTH +over-secretion — parathyroid hyperplasia”, aggravating bone metabolism abnormalities +and cardiovascular damage. +BUSINESS +– 150 – + + +--- page 159 --- +OGP is an active peptide involved in the regulation of bone metabolism, which can +promote the proliferation of osteoblasts, enhance osteogenic activity, stimulate the +synthesis of collagen and the formation of bone matrix, and regulate the process of bone +formation. OGP has the potential to counteract the symptoms of CKD-SHPT-induced bone +resorption hyperactivity and inhibition of bone formation, and indirectly stabilizes the +blood calcium level by reducing the excessive release of calcium from the bone through +the promotion of bone formation, thus alleviating the stimulation of parathyroid gland by +the loss of calcium from the bone. +Source: +(1) Bab, I.; Gazit, D.; Chorev, M.; Muhlrad, A.; Shteyer, A.; Greenberg, Z.; Namdar, M.; Kahn, A. +Histone H4-related osteogenic growth peptide (OGP): a novel circulating stimulator of +osteoblastic activity. EMBO J 1992, 11, 1867-1873 +(2) Pigossi SC, Medeiros MC, Saska S, Cirelli JA, Scarel-Caminaga RM. Role of Osteogenic Growth +Peptide (OGP) and OGP(10-14) in Bone Regeneration: A Review. Int J Mol Sci. 2016 Nov +22;17(11):1885. +Market Opportunities and Competition +CKD-SHPT +CKD-SHPT is a parathyroid dysfunction caused by disorders in calcium, +phosphorus, and vitamin D metabolism, characterized by parathyroid hyperplasia and +excessive secretion of iPTH. CKD-SHPT is particularly common in patients with CKD in +middle and advanced stages, seriously endangering patients’ quality of life and lifespan. +In 2025, the global number for CKD-SHPT patients reached 160.4 million, and is expected +to increase to 188.0 million by 2030. As of the Latest Practicable Date, there are two CaSR +agonist drugs approved by FDA and three CaSR agonist drugs approved by NMPA. In +addition, there are five CaSR agonist drug candidates for CKD-SHPT in the clinical stage +globally, including MT1013 (currently in Phase III). For more information, see “Industry +Overview — Competitive landscape of CaSR agonist.” +CKD-SHPT is caused by CKD as the primary disease, and its therapeutic approach +must be determined on an individualized basis, taking into account the stage of the +underlying disease, disease severity, serum calcium and phosphate levels, vitamin D +metabolism, the degree of PTH elevation and comorbidities. Therapy of CKD-SHPT is +primarily symptomatic and progressive in nature, following a stepwise and +comprehensive treatment principle. Accordingly, treatment options vary according to +individual patient conditions, including phosphate-lowering therapy, vitamin D or +vitamin D analogues and calcimimetics etc. The foregoing treatment principles are +consistent with prevailing international and domestic clinical guidelines and published +reviews, including the KDIGO 2017 Clinical Practice Guideline Update for CKD-MBD and +the Chinese Guidelines for the Diagnosis and Treatment of Chronic Kidney +Disease-Mineral and Bone Disorder, neither of which classifies CKD-SHPT treatment into +formal first-line, second-line or subsequent-line therapies. Frost & Sullivan further +confirmed that there is no formal classification of CKD-SHPT treatment into any line of +treatment. +CKD-MBD with Osteoporosis +The global prevalence of CKD-MBD grew from 291.7 million in 2020 to 342.8 million +in 2025, and is projected to reach 403.0 million by 2030 and 470.3 million by 2035. The +prevalence of CKD-MBD in China grew from 47.0 million in 2020 to 50.6 million in 2025, +and is projected to reach 54.1 million by 2030 and 57.4 million by 2035. +CKD-SHPT not on Dialysis +The global prevalence of CKD-SHPT not on hemodialysis grew from 133.2 million in +2020 to 156.5 million in 2025. It is projected to reach 185.3 million by 2030 and 216.2 million +by 2035. In China, the number of CKD-SHPT patients not on hemodialysis grew from 12.3 +million in 2020 to 12.9 million in 2025, and is projected to reach 13.1 million by 2030. +Competitive Advantages +(1) Significant improvement in comprehensive control rate of iPTH/serum calcium/serum +phosphorus levels +Numerous studies suggest that when targets for the three indicators of iPTH, serum +calcium, and serum phosphorus are simultaneously met, the risks of hospitalisation due +to cardiovascular disease, cardiac death and all-cause mortality are significantly lower for +BUSINESS +– 151 – + + +--- page 160 --- +patients compared to when targets for only two or one of these indicators are met. In a +Phase II head-to-head clinical study against Etelcalcetide, MT1013 demonstrated that +after 26 weeks of treatment, it not only potently lowered iPTH and maintained serum +calcium within the normal range, but also significantly reduced serum phosphorus, +outperforming Etelcalcetide (MT1013 groups: 11.2%-11.6% vs. Etelcalcetide: 5.3%), with a +phosphorus-lowering effect 2.1 to 2.2 times greater. Consequently, the proportion of +subjects achieving the simultaneous targets for the three indicators of iPTH, serum +calcium, and serum phosphorus (iPTH: 2-9 times the upper limit of normal (130-586 +pg/mL); serum calcium: 2.10-2.50 mmol/L; serum phosphorus: 1.13-1.78 mmol/L) was +higher than the existing single-target calcimimetic Etelcalcetide (MT1013 groups: +34.48%-39.29% vs. Etelcalcetide: 15.63%), with the comprehensive control rate for the two +MT1013 dose groups being 220%-251% of that of the single-target calcimimetic +Etelcalcetide. A higher comprehensive control rate suggests a significant reduction in +all-cause mortality, effective prevention of vascular calcification, comprehensive +maintenance of skeletal health, and improved quality of life for patients. For more +information of the clinical results, see “— Clinical Trial Overview of MT1013” below in +this section. +Comprehensive Control Rate +of iPTH, Ca, P (%) +MT1013-G1 MT1013-G2 Etelcalcetide +15.63% +34.48% +39.29% +Higher than Etelcalcetide 251%; P=0.0482 +Higher than Etelcalcetide 220% +0 +10 +20 +30 +40 +50 +Figure: Comprehensive Control Rate of iPTH, Serum Calcium (Ca), +and Serum Phosphorus (P) by Group during Weeks 20-27 (%) +Comprehensive Control Rates: Week 20-27, +iPTH: 2-9 times the upper limit of normal (130-586 pg/mL); +serum calcium: 2.10-2.50 mmol/L; Serum Phosphorus: 1.13-1.78 mmol/L +Note: EAP treatment group N=28-32/group +(2) Fast-acting, and sustained efficacy in reducing iPTH +The iPTH-lowering effect of MT1013 is characterised by early onset, potent +achievement of targets, and long-lasting, stable efficacy; therefore, earlier use by patients +leads to earlier benefits. Based on the results of two clinical studies (II-C01/C02), it was +observed that after 3 weeks of treatment, iPTH levels in one-third of the subjects had +decreased by over 30%; after 9 weeks of treatment, a stable state of efficacy was achieved, +with nearly 80% of patients showing an iPTH reduction of over 30%. After 26 and 52 +weeks of continuous treatment, the proportion of patients with an iPTH reduction of >30% +reached 80%-90%, and the proportion with an iPTH reduction of >50% reached 65%-70%. +Based on the results of a dual-controlled clinical study with placebo and +Etelcalcetide as the active comparator (MT1013-II-C03), a head-to-head comparison +showed that 54.8%–56.7% of subjects in the MT1013 groups achieved the ideal iPTH +standard (150≤iPTH≤300 pg/ml), which was higher than the 43.8% in the Etelcalcetide +group. Furthermore, MT1013 demonstrated greater advantages in patients with severe +CKD-SHPT (baseline iPTH >600 pg/ml). MT1013 group 2 reduced iPTH by 69.6% from a +baseline mean of 938.5 pg/ml to a mean of 274.2 pg/ml (within the +guideline-recommended ideal target range of 150-300 pg/ml), which was significantly +higher than Etelcalcetide (a 61.8% reduction from a baseline mean of 912.5 pg/ml to 350.7 +pg/ml, which did not reach the guideline-recommended ideal target range of 150-300 +pg/ml). For more information of the clinical results, see “— Clinical Trial Overview of +MT1013” below in this section. +(3) Cardiovascular benefit potential +High iPTH, hypercalcemia, and hyperphosphatemia are significantly associated +with the risks of cardiovascular events, fractures, and mortality, and have become one of +BUSINESS +– 152 – + + +--- page 161 --- +the major risk factors for complications in CKD-MBD patients. In clinical studies, MT1013 +has demonstrated comprehensive control of high iPTH, hypercalcemia, and +hyperphosphatemia within target ranges. This suggests the potential to reduce the risk of +cardiovascular events in CKD-SHPT patients, thereby achieving potential cardiovascular +protection benefits. FGF23, an indicator of vascular calcification recommended by the +2017 KDIGO CKD-MBD guidelines, is also a key indicator for assessing cardiovascular +risk. The EVOLVE study demonstrated that a >30% reduction in FGF-23 from baseline in +the target population is associated with improved cardiovascular outcomes (reduced risk +of cardiovascular mortality, heart failure, and sudden death). In the head-to-head study +between MT1013 and Etelcalcetide, it was observed that MT1013 was higher than +Etelcalcetide in both the absolute reduction of FGF-23 and the proportion of subjects with +a >30% reduction in FGF-23. This trend is consistent with its composite endpoint +achievement rate for iPTH/serum calcium/serum phosphorus compared to Etelcalcetide. +This indicates that MT1013 has the potential to significantly reduce the incidence of +cardiovascular events and the risk of mortality. For more information of the clinical +results, see “— Clinical Trial Overview of MT1013” below in this section. +Source: +(1) Tentori F, Blayney MJ, Albert JM, Gillespie BW, Kerr PG, Bommer J, Young EW, Akizawa T, Akiba +T, Pisoni RL, Robinson BM, Port FK. Mortality risk for dialysis patients with different levels of +serum calcium, phosphorus, and iPTH: the Dialysis Outcomes and Practice Patterns Study +(DOPPS). Am J Kidney Dis. 2008 Sep;52(3):519-30 +(2) Block GA, Kilpatrick RD, Lowe KA, Wang W, Danese MD. CKD-mineral and bone disorder and +risk of death and cardiovascular hospitalization in patients on hemodialysis. Clin J Am Soc +Nephrol. 2013 Dec;8(12):2132-40 +(4) A favorable safety and tolerability profile with no new safety signals observed beyond those +associated with calcimimetics. +The most common adverse events associated with existing calcimimetics are +hypocalcemia and gastrointestinal adverse reactions: (i) No severe hypocalcemia occurred +in any of the MT1013 clinical trials; (ii) In the MT1013-II-C01 and C02 studies, after +receiving MT1013, as iPTH levels decreased, the hypercalcemic state of subjects improved, +and Ca levels gradually declined. After 52 weeks of continuous treatment, the mean +corrected calcium levels of the subjects remained consistently within the normal range; +(iii) In the head-to-head study with Etelcalcetide, the incidence of hypocalcemia in the +MT1013 groups was significantly lower than in the Etelcalcetide group (7.7% vs. 12.1%); +(iv) In the head-to-head study with Etelcalcetide, the incidence of adverse reaction +leading to temporary drug discontinuation in the MT1013 group was lower than that of +the Etelcalcetide group (MT1013: 27.7% vs. Etelcalcetide: 33.3%); and (v) In the +MT1013-II-C01 and C02 studies, a total of 133 subjects were treated for up to 52 weeks. The +incidences of the gastrointestinal adverse reactions of nausea (1.5%) and vomiting (1.5%) +were both significantly lower than those of existing calcimimetics. +0 +5 +10 +15 +Incidence of Hypocalcemia (%) +Placebo MT1013 +C01+C02 +MT1013 +C03 +Etelcalcetide +C03 +12.1% +7.7% +6.8% +0% +Figure: Incidence of Hypocalcemia in Each Group of MT1013-II-C01/C02 and +MT1013-II-C03 Studies (%) +MT1013-II-C01+C02 jMT1013 N=133 +MT1013-II-C03: MT1013 group 1/33 subjects, MT1013 group 2/32 subjects, etelcalcetide/33 subjects, +placebo group/16 subjects +Source: Company data +BUSINESS +– 153 – + + +--- page 162 --- +For more information of the clinical results, see “— Clinical Trial Overview of +MT1013” below in this section. +(5) Enhanced bone mineral density and metabolism +In the Phase II study (II-C01), subjects with baseline bone mass +reduction/osteoporosis showed a significant increase in lumbar spine and femoral neck +bone mineral density after 24 and 52 weeks of treatment with MT1013 (at 52 weeks of +treatment, lumbar spine increased by 1.65% and femoral neck by 4.44% from baseline). +Bone turnover markers (b-ALP , OC, PINP , CTX, TRAP-5b) in all subjects were +significantly reduced relative to baseline (at week 53, ALP decreased by 27.06% and +TRAP-5b by 45.55%), indicating that MT1013 significantly ameliorated the high bone +turnover state in CKD-SHPT patients, improved bone metabolism, and established better +bone balance. This demonstrates its promising clinical application prospects in the field of +CKD-MBD-related bone diseases. For more information of the clinical results, see “— +Clinical Trial Overview of MT1013” below in this section. +Summary of Clinical Trial Results +The table below sets out a summary of the completed and ongoing clinical trials for +MT1013: +Study ID Study Phase Location +No. of +(Planned) +Subjects Dosing Period Primary Study Design Status +MT1013-I-A01 .......... Phase I U.S. 40 Single dose Healthy Subjects +SAD: 2.5 mg, 5 mg, 10 mg, +15 mg, 20 mg +Completed in +October +2021 +MT1013-I-C02 +(1) ......... Phase I PRC 44 Single dose Healthy Subjects +SAD: 1.25 mg, 2.5 mg, +5 mg, 10 mg, 15 mg, 20 mg +Completed in +September +2022 +MT1013-I-C03 +(2) ......... Phase I PRC 4-6 Single-dose +administration +on Day 1; +continuous +dosing from +Week 6 for 3 +weeks. +Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis in the PRC; A +single-center, +non-randomized, open-label +study design +Ongoing +MT1013-II-C01 +(1) . . . SAD Phase II PRC 40 Single dose Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis +SAD: 5mg, 10 mg, 20 mg, +40 mg, 60 mg +Completed in +May 2025 +MAD 24 2w/4w Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis +MAD: 5 mg (2w), 10 mg +(4w), +20 mg (4w) +Long-term +cohort +33 52w Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis, single-arm; +titrated dosing +MT1013-II-C02 +(2) ......... Supportive +Phase III, +registered +as IIb +PRC 350 52w Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis, single-arm; +titrated dosing; safety as the +primary endpoint; efficacy as +the secondary endpoint +Ongoing +BUSINESS +– 154 – + + +--- page 163 --- +Study ID Study Phase Location +No. of +(Planned) +Subjects Dosing Period Primary Study Design Status +MT1013-II-C03 +(1)(3) ........ Phase II PRC 114 26w Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis, randomized, +active comparator +(Etelcalcetide) and +placebo-controlled, titrated +dosing; efficacy as the +primary endpoint +Completed in +March 2026 +MT1013-III-C01 +(1) ......... Phase III PRC 424 26w Patients with CKD-SHPT +Undergoing Maintenance +Hemodialysis; multicenter, +randomized, double-blind, +double-dummy, with +cinacalcet as the active +comparator +Ongoing +Notes: +(1) Clinical trials that are registrational or for advancing the Core Product to the next phase of clinical +trial/NDA in the PRC. For details of each clinical trial, see “— Clinical Trial Overview of MT1013” below +in this section. +(2) Clinical trials that are supplementary and voluntary in nature and intended to provide supportive +clinical data as part of the overall clinical data package for the NDA in the PRC. For details of each +clinical trial, see “— Clinical Trial Overview of MT1013” and “— Material Communications” below in +this section. +(3) (i) During the EOP2 communication meeting with the CDE in July 2024, the CDE recommended that the +Company conduct a small-scale comparative study of MT1013 against Etelcalcetide and placebo, with a +treatment period of approximately 14 to 16 weeks to observe efficacy, and did not require completion of +MT1013-II-C03 as a prerequisite for commencement of the Phase III clinical trial. (ii) MT1013-II-C03 was +designed by the Company with a 26-week treatment period in order to facilitate a more comprehensive +evaluation of the efficacy and safety profile. As of the June 2025 EOP2 communication meeting, 22-week +data from MT1013-II-C03 had already been obtained, which exceeded the 14-to-16-week treatment period +recommended by the CDE and sufficiently reflected the efficacy and safety profile of MT1013. The CDE +considered that, based on the available Phase II clinical data submitted by our Company, MT1013 +demonstrated efficacy comparable with marketed drug products and agreed that we could proceed to the +Phase III clinical trial, notwithstanding that MT1013-II-C03 had not yet been completed. +Clinical Trial Overview of MT1013 +MT1013-I-A01 U.S. Phase I Study +Overview: This study was a Phase I clinical study with single ascending doses +conducted in healthy subjects in the U.S. The primary objective was to evaluate the safety +and tolerability, and the secondary objective was to characterize the pharmacokinetics and +pharmacodynamics of MT1013. +T rial design: A single-center, randomized, placebo-controlled, double-blind, single +ascending dose study, comprising five dose cohorts with dose levels of 2.5, 5, 10, 15, and +20 mg, respectively. Each subject received a single-dose administration. Cohorts received +treatment sequentially in an ascending dose manner, with each cohort comprising 8 +subjects (6 subjects receiving the active investigational drug and 2 subjects receiving a +matching placebo). Subjects underwent a follow-up visit on Day 8 (±1 day). +A total of 40 subjects were enrolled in the US in this trial. The key inclusion criteria +included, among others: (1) male or female non-smokers aged between 18 and 55 years, +with a body mass index (BMI) greater than 18.0 kg/m² and less than 30.0 kg/m², and a +body weight of no less than 45.0 kg; and (2) healthy subjects without clinically significant +medical history or conditions. The key exclusion criteria included but were not limited to: +(1) any clinically significant abnormalities identified during physical examination at +medical screening, including abnormal laboratory test results, or positive findings for +HIV , hepatitis B virus (HBV), hepatitis C virus (HCV) or Treponema pallidum antibody; +and (2) other clinically significant abnormalities identified during screening, including +abnormalities in ECG, vital signs or laboratory findings. +T rial status: The Phase I clinical trial was conducted in the United States, with the +first subject receiving the first dose in June 2021 and the last subject completing the last +visit in October 2021. +BUSINESS +– 155 – + + +--- page 164 --- +Pharmacokinetics (PK) results: The geometric mean values of PK exposure +parameters for each dose level were as follows: AUC 0-t were 205.87, 435.43, 714.29, +1,328.67, and 1,602.78 h*ng/mL, respectively; AUC 0-inf were 211.97, 447.68, 729.02, +1,340.27, and 1,625.27 h*ng/mL, respectively; C max were 197.20, 425.70, 576.72, 1,128.90, +and 1,218.03 ng/mL, respectively, with the mean T max ranging from 0.114 to 0.181 hours. +Results from a power model analysis indicated that exposure increased proportionally +with the dose in the 2.5–20 mg range. +Safety data: In healthy subjects, single intravenous (IV) administration of MT1013 +in the dose range of 2.5 mg to 20 mg was well tolerated. Among the 40 subjects who +received any dose of MT1013 or placebo, 3 subjects (7.5%) reported a total of 4 TEAEs. +Among the 30 subjects who received any dose of MT1013, 2 subjects (6.66%) reported 3 +TEAEs, and among the 10 subjects who received placebo, 1 subject (10%) reported 1 TEAE. +A total of 3 subjects (7.5%) reported headache, and 1 subject reported nausea. All TEAEs +reported during the study were mild in severity. No moderate or severe TEAEs were +reported. Of these 4 TEAEs, 3 were considered unrelated, and 1 (headache) was +considered related to MT1013. No drug-related SAEs were reported. No life-threatening +AEs occurred, nor did any AE lead to patient withdrawal or study discontinuation. +Efficacy data: At different doses from 2.5 to 20 mg, MT1013 significantly reduced +serum iPTH, with maximum inhibition rates of 32.1%, 19.8%, 66.6%, 63.0%, and 74%, +respectively. The reduction was reversible, with levels gradually recovering after 6 hours. +The preliminary pharmacodynamic effect lasted for 24 - 48 hours. In the placebo group, +iPTH levels ranged from 11.70 to 98.50 pg/ml. For MT1013, at different doses and time +points, iPTH levels ranged from 5.30 to 82.90 pg/ml. +MT1013-I-C02 PRC Phase I Study +Overview: This study was a Phase I clinical study with single ascending doses in +healthy adult subjects in the PRC. Its objective was to evaluate the safety, tolerability, +pharmacokinetics, and preliminary pharmacodynamics of MT1013. +T rial design: A single-center, randomized within each dose group, +placebo-controlled, double-blind, single ascending dose study. Six dose groups were +designed within the 1.25 mg to 20 mg range. Group A1 consisted of 4 subjects +(investigational drug: placebo = 3:1), and groups A2-A6 each consisted of 8 subjects +(investigational drug: placebo = 6:2). The trial proceeded from the lowest dose group to +the highest. Subjects underwent a safety assessment on Day 3 and were discharged from +the study thereafter. +A total of 44 subjects were enrolled in the PRC in this trial. The key inclusion criteria +included: (1) male or female healthy subjects of Chinese nationality with an appropriate +gender ratio; (2) aged between 18 (inclusive) and 45 (inclusive) years; and (3) body weight +of no less than 50.0 kg for male subjects and no less than 45.0 kg for female subjects, with +a body mass index (BMI) between 19.0 kg/m² and 26.0 kg/m² (inclusive). The key +exclusion criteria included but were not limited to: (1) subjects with clinically significant +abnormalities in cardiovascular, hepatic, renal, endocrine, metabolic, gastrointestinal, +hematologic or respiratory laboratory findings as determined by the investigator, or with +a confirmed diagnosis of any of the above diseases, or with a history of infections, +malignancy or psychiatric disorders; (2) subjects with a history of clinically significant +ECG abnormalities or long QT syndrome, or a history of epileptic seizures; and (3) +subjects with clinically significant abnormalities in physical examination, vital signs, +laboratory tests or ECG results, as determined by the investigator. +T rial status: The Phase I clinical trial was initiated in January 2022 and completed in +September 2022. +Pharmacokinetics (PK) results: For the 1.25 mg to 20 mg MT1013 dose groups, the +geometric mean C +max values were 129.28, 284.91, 537.21, 1,038.90, 1,570.64, and 2,264.62 +ng/mL, respectively; the geometric mean AUC 0-t values were 97.75, 194.04, 350.78, 709.75, +1,110.29, and 1,723.16 ng·h/mL, respectively; and the geometric mean t 1/2 values were +1.18, 1.30, 1.13, 1.16, 1.29, and 1.47 h, respectively. A power model was used for linear +pharmacokinetic analysis of blood PK parameters (C +max, AUC0-t, AUC0-Ü), which met the +criteria for linear pharmacokinetics. +BUSINESS +– 156 – + + +--- page 165 --- +Safety data: MT1013 demonstrated good safety and tolerability. The number of +subjects with adverse reactions (and incidence rates) in the MT1013 1.25 mg, 2.5 mg, 5 mg, +10 mg, 15 mg, 20 mg, and placebo groups were 1 (33.3%), 4 (66.7%), 4 (66.7%), 5 (83.3%), 4 +(66.7%), 6 (100.00%), and 6 (54.5%), respectively. There was no significant association +between AE incidence or severity and the administered dose. No drug-related TEAEs of +Grade 3 or above were observed, and no drug-related SAEs were reported. No +life-threatening AEs occurred, nor did any AE lead to patient withdrawal or study +discontinuation. +Efficacy data: In the MT1013 1.25 mg to 20 mg groups, serum parathyroid hormone +levels began to decrease after intravenous bolus injection of MT1013, reaching a nadir +approximately 6 hours post-injection. At this time point, the percentage change from +baseline in serum parathyroid hormone concentration for the placebo group and the +various dose groups were -36.42(16.80)%, -46.42(19.12)%, -39.99(17.75)%, -52.65(7.96)%, +-68.51(7.07)%, -71.51(5.74)%, and -80.35(5.98)%, respectively. Serum parathyroid hormone +levels reached their nadir 6 hours after a single intravenous bolus injection of MT1013. +This pharmacodynamic effect lasted for up to 24 hours and returned to baseline by 48 +hours. +MT1013-I-C03 PRC Phase I Mass Balance Study +Overview: This is an in vivo mass balance study conducted in the PRC in patients +with CKD-SHPT Undergoing Maintenance Hemodialysis. Its objective was to +quantitatively analyze the total radioactivity and radioactive metabolite profile in excreta, +as well as the pharmacokinetic parameters and safety, after intravenous injection of +[ +14C]MT1013. +T rial design: A single-center, non-randomized, open-label study design. During the +first week, a single intravenous dose of [ 14C]MT1013 (comprising 10 mg of non-labeled +MT1013 and approximately 50 μCi of radiolabeled compound) was administered after the +first hemodialysis session. Beginning from Week 6, MT1013 was administered +intravenously after each of the three weekly hemodialysis sessions for a total duration of +three weeks, with the final dose given after the first hemodialysis session in Week 9, at a +dose of 5 mg per administration. Subjects entered a follow-up period of one week +thereafter. The study is planned to enroll 4-6 participants in the PRC with CKD-SHPT +Undergoing Maintenance Hemodialysis. +The key inclusion criteria included: (1) male or postmenopausal female participants +aged 18 years or above who were clearly diagnosed with CKD-SHPT; (2) BMI between 18.0 +kg/m² and 35.0 kg/m² (based on pre-dialysis body weight); and (3) subjects who had +received adequate and regular hemodialysis for at least 12 weeks prior to screening and +had undergone sufficient dialysis within four weeks prior to screening. The key exclusion +criteria included but were not limited to: (1) subjects who had undergone +parathyroidectomy within six months prior to screening, or who planned to undergo +parathyroidectomy, ablation, radiation or other related procedures during the study +period; (2) subjects with a history of gastrointestinal bleeding or peptic ulcer within six +months prior to screening; and (3) subjects who had experienced myocardial infarction or +undergone percutaneous coronary intervention or coronary artery bypass grafting within +six months prior to screening. +T rial status: The trial was initiated in July 2025. As of the Latest Practicable Date, all +subjects had completed the trial. +MT1013-II-C01 Phase II Single- and Multiple-Ascending Dose and 52-week Long-term Treatment +Study in the Target Population +Overview: This was a Phase II clinical study conducted in patients with CKD-SHPT +Undergoing Maintenance Hemodialysis, aiming to evaluate the safety, efficacy and +pharmacokinetics of MT1013 after a single dose, continuous dosing for 2-4 weeks, and +long-term continuous dosing for 52 weeks in HD subjects with CKD-SHPT. Safety +evaluation was the primary objective of the SAD and MAD studies, while the efficacy +evaluation was the primary objective of the long-term cohort. +T rial design: A multi-center, Phase II, randomized, double-blind, SAD and MAD +study, as well as a single-arm clinical study to evaluate the long-term efficacy and safety of +MT1013. The study population comprised patients with CKD-SHPT Undergoing +Maintenance Hemodialysis. The SAD study included 5 cohorts with doses of 5, 10, 20, 40, +and 60 mg. The MAD study included 3 cohorts with doses of 5, 10, and 20 mg. Each cohort +in the SAD and MAD studies included 8 subjects (6 subjects received the active +BUSINESS +– 157 – + + +--- page 166 --- +investigational drug and 2 subjects received matching placebo) and were conducted +sequentially. All subjects in the long-term dosing cohort underwent hemodialysis 3 times +a week and were administered the drug once after each hemodialysis session for a +duration of 52 weeks. Subjects in the SAD study underwent a follow-up visit on Day 8 (±1 +day), subjects in the MAD study underwent a follow-up visit within one week after the +last dose, and subjects in the long-term dosing cohort underwent follow-up for a total +period of 52 weeks. +The key inclusion criteria included: (1) male subjects aged 18 years or above and +below 80 years, and female subjects who were non-pregnant and non-lactating; (2) +patients who had received adequate hemodialysis and maintained stable treatment for +more than three months prior to screening; (3) subjects with an iPTH level of at least 300 +pg/mL; and (4) subjects with serum calcium (corrected for albumin <40 g/L) of no less +than 2.25 mmol/L (9.0 mg/dL). The key exclusion criteria included but were not limited +to: (1) subjects with a history of severe ventricular arrhythmia, symptomatic ventricular +arrhythmia at screening, or QTc interval> 470 ms for males or > 480 ms for females at +screening; (2) subjects with NYHA class II or V heart failure symptoms at screening; (3) +subjects with a history of myocardial infarction, percutaneous coronary intervention or +coronary artery bypass grafting within six months prior to screening; and (4) subjects with +a history of epileptic seizures or who had received treatment for seizures. +T rial status: SAD and MAD studies: The first subject signed the informed consent +form on April 7, 2023, and the last subject completed the trial on December 17, 2023. A +total of 65 subjects were actually enrolled (64 were randomized for dosing). Long-term +dosing cohort: The first subject signed the informed consent form on February 27, 2024, +and the last subject completed the trial on May 12, 2025. A total of 33 subjects were +actually enrolled. +Pharmacokinetics results: After intravenous bolus injection of MT1013 in the 5, 10, +20, 40, and 60 mg dose groups of the single ascending dose (SAD) study, the geometric +mean C +max values of MT1013 were 434.2, 1,008.8, 1,544.9, 3,311.3, and 4,580.5 ng/mL, +respectively; the geometric mean AUC 0-t values were 362.710, 856.968, 1,529.749, +3,329.690, and 4,281.925 ng·h/mL, respectively; and the geometric mean t 1/2 values were +1.492, 1.567, 1.857, 2.062, and 2.164 h, respectively. After intravenous bolus injection of +MT1013 in the 5, 10, and 20 mg dose groups of the multiple ascending dose (MAD) study, +the geometric mean C +max values of MT1013 at the last dose were 441.5, 1,115.8, and 1,896.4 +ng/mL, respectively; the geometric mean AUC 0-t values at the last dose were 373.110, +830.400, and 1,654.778 ng·h/mL, respectively; and the geometric mean t 1/2 values at the +last dose were 1.131, 1.896, and 2.175 h, respectively. Regression analysis using a power +model showed that the in vivo pharmacokinetic processes of dose and exposure in the +single-dose 5 mg to 60 mg groups and the multiple ascending dose 5 mg to 20 mg groups +exhibited linear pharmacokinetic characteristics. No significant accumulation of exposure +was observed after multiple doses. +Safety data: MT1013 demonstrated good safety and tolerability in target population +following treatment with single doses (5-60 mg) and multiple doses (5-20 mg, for 2-4 +weeks). The most common (observed in >2 subjects) adverse events related to the +investigational product were blood calcium decrease associated with the +pharmacodynamic effect of MT1013 (incidence of 30.0% in the SAD study and 38.9% in the +MAD study), hypocalcemia (incidence of 16.7% in the MAD study), and QT interval +prolongation (incidence of 16.7% in the MAD study). One participant permanently +discontinued due to a TEAE of moderate hypocalcemia in the MAD 20 mg cohort, which +did not meet the criteria for severe intensity, nor SAE. +In the long-term dosing (52-week) cohort, the most common (≥10%) adverse events +related to the investigational product were blood calcium decrease associated with the +pharmacodynamic effect of MT1013 (29 cases, 87.9%) and hypocalcemia (5 cases, 15.2%). +No severe TEAEs related to MT1013, no SAEs related to MT1013, no deaths related to +MT1013, and no adverse events leading to permanent drug discontinuation occurred +during the trial. In the long-term treatment (starting dose of 5 mg or 10 mg, titrated, for 52 +weeks) of patients with CKD-SHPT on hemodialysis, MT1013 demonstrated good overall +safety with manageable risks. +Efficacy data: After treatment with MT1013 in the target population, the SAD study +showed a significant decrease in serum parathyroid hormone in dose groups of 5 mg and +above compared to the placebo group, with the most significant effects observed in the 40 +mg dose group (percentage change from baseline: -79.114%) and the 60 mg dose group +(percentage change from baseline: -75.950%). In the MAD study, the number (proportion) +BUSINESS +– 158 – + + +--- page 167 --- +of patients with a >30% reduction from baseline in mean serum iPTH for the 5 mg to 20 mg +groups and the placebo group were 3 (50.0%), 4 (66.7%), 5 (100%), and 2 (33.3%), +respectively. Dose groups of 5 mg and above showed a significant decrease in serum +parathyroid hormone compared to the placebo group, with the most significant effect +observed in the 20 mg dose group. A comprehensive analysis showed that iPTH, serum +corrected calcium, and serum phosphorus decreased from baseline in all dose groups. +Furthermore, as the dose increased, iPTH and serum corrected calcium gradually +decreased, showing a clear dose-response relationship. +The trial results indicated that patients with CKD-SHPT on maintenance +hemodialysis received clinical benefits from a relatively long-term treatment of 52 weeks +with MT1013. In the long-term dosing cohort, among CKD-SHPT patients treated with +MT1013, from week 9 onwards, the mean reduction in iPTH from baseline reached 50%, +the proportion of subjects with a >30% reduction reached 80%, and the proportion with a +>50% reduction reached 60%. By week 52, these metrics were 57.2%, 93.1%, and 75.9%, +respectively. The proportion of subjects with iPTH <300 pg/mL was 65.6%, and the +proportion achieving the target range of 150-300 pg/mL was 53.1%. The study results +demonstrated that CKD-SHPT patients could generally achieve a stable +pharmacodynamic state after 9 weeks of MT1013 treatment and continued to benefit from +long-term therapy. +Week +Proportion of iPTH Reduction +> 30%/50% (%) +0 4 8 12 16 20 24 28 32 36 40 44 48 52 +0 +10 +20 +30 +40 +50 +60 +70 +80 +90 +100 +iPTH Reduction > 30% iPTH Reduction > 50% +78.1% +62.5% +81.3% +68.8% +87.1% +71.0% +93.1% +75.9% +32.3% +12.9% +Figure: Proportion of Subjects with >30% and >50% iPTH Reduction +at Each Visit Point in MT1013-II-C01 (%) +N=33 +The trial results showed that serum corrected calcium (cCa) decreased to its lowest +level at week 9 of MT1013 administration, then slowly recovered and began to stabilize, +decreasing from a relatively high calcium level to within the normal range and remaining +stable long-term, demonstrating that treatment can improve high calcium levels to the +physiological normal range with long-term stable benefits. +0 4 8 12 16 20 24 28 32 36 40 44 48 52 +10.8 +10.4 +10.0 +cCa(mg/dL) +Week +9.6 +9.2 +8.8 +8.4 +8.0 +7.6 +Figure: Mean Change in Serum Corrected Calcium (cCa) at Each Visit Point in +MT1013-II-C01 (mg/dL) +N=33 +BUSINESS +– 159 – + + +--- page 168 --- +The efficacy data showed that after long-term treatment with MT1013, bone +turnover markers shifted from a high-turnover state to a low-turnover state and remained +relatively stable long-term, which corroborates and aligns with the conclusion of stable +iPTH improvement after long-term MT1013 treatment. The bone mineral density +examination results further suggested potential bone benefits after a relatively long-term +treatment of 52 weeks, corroborating and aligning with the conclusion of bone marker +benefits suggested by the bone marker results. +0.0 +0.5 +1.0 +1.5 +2.0 +2.5 +3.0 +3.5 +4.0 +4.5 +5.0 +Increase of BMD (%) +Lumbar Vertebra Femur Neck +4.44% +0.88% +1.65% +0.16% +W24 +W52 +Figure: Change in Lumbar Spine and Femoral Neck Bone Mineral Density (BMD) in +Subjects with Baseline Osteoporosis in MT1013-II-C01 (%) +N=33 +6.6% +-14.5% +-27.1%** +-12.4%* -10.9% +-43.8%** +-31.1%** +-5.4% +-10.6% +-39.9%** +-32.0%** +-44.3%** +-45.6%** +-46.4%** +1.9% +b-ALP OC PINP CTX TRAP-5b +Increase of BMD (%) +W14 +W24 +W53 +-60 +-50 +-40 +-30 +-20 +-10 +0 +10 +Figure: Change from Baseline (%) in Bone T urnover Markers in Subjects of +MT1013-II-C01 +N=33, compared with baseline, *P<0.05, **P<0.01 +Source: Company data +MT1013-II-C02 PRC Long-Term Dosing Study (Supportive Phase III Clinical Study) +Overview: This is a Phase IIb clinical study (supportive Phase III clinical study) of +MT1013 for injection for the treatment of patients with CKD-SHPT Undergoing +Maintenance Hemodialysis. Its primary objective was to evaluate the safety, and the +secondary objective was to evaluate the efficacy and improvement in bone mineral density +of MT1013. +T rial design: A multi-center, open-label, single-arm clinical study in a population of +patients with CKD-SHPT Undergoing Maintenance Hemodialysis. It is planned to enroll +350 subjects who undergo hemodialysis 3 times a week or 5 times every two weeks. They +will receive MT1013 at the end of each hemodialysis session for 52 consecutive weeks. +After completing the aforementioned dosing, subjects will enter an extended treatment +period to continue receiving MT1013 until the trial sponsor decides to terminate the study. +Subjects will undergo a safety follow-up assessment 7 days (±3 days) after the last dose. +A total of 350 subjects are planned to be enrolled in this trial. The key inclusion +criteria included, among others: (1) subjects who had received maintenance hemodialysis +three times per week or five times every two weeks for at least three months prior to +BUSINESS +– 160 – + + +--- page 169 --- +screening; (2) subjects whose dialysate calcium concentration was no less than 2.5 mEq/L +(1.25 mmol/L), maintained at a stable level for at least four weeks prior to the laboratory +assessments during the screening period, and required to remain at no less than 2.5 +mEq/L (1.25 mmol/L) throughout the study; (3) subjects diagnosed with CKD-SHPT and +with an iPTH level of more than 300 pg/mL at screening; for subjects who were receiving +cinacalcet, etelcalcetide, MT1013 or other calcimimetics prior to screening, the +pre-dialysis iPTH level measured during screening was required to be greater than 100 +pg/mL. The key exclusion criteria included but were not limited to: (1) subjects with +primary hyperparathyroidism; (2) subjects who refused to discontinue cinacalcet, +etelcalcetide or other calcimimetics during the study; and (3) subjects who had received +denosumab or other receptor activator of nuclear factor kappa-B ligand (RANKL) +inhibitors within six months prior to screening. +T rial status: The Phase II clinical trial was initiated in March 2024. As of the Latest +Practicable Date, enrollment of all 350 subjects had been completed. +Safety data: An interim analysis of the 52-week data from the first 100 subjects in +this study showed that the most common adverse events related to the investigational +product were blood calcium decrease associated with the pharmacodynamic effect of +MT1013 (81 subjects, 234 events, 81%) and hypocalcemia (5 subjects, 5 events, 5%). There +were no cases of severe or serious hypocalcemia. In the adverse reaction, the incidences of +nausea (2 cases, 2%) and vomiting (2 cases, 2%) were low. No severe TEAEs related to +MT1013, no SAEs related to MT1013, no deaths related to MT1013, and no adverse events +leading to patient withdrawal or permanent drug discontinuation occurred during the +trial. In the long-term treatment (starting dose of 5 mg or 10 mg, titrated, for 52 weeks) of +patients with CKD-SHPT on hemodialysis, MT1013 demonstrated good overall safety +with manageable risks, and no unexpected safety signals or risks were identified. +Efficacy data: An interim analysis of the 52-week data from the first 100 subjects in +this study showed that, regardless of prior use of calcimimetics, the proportion of patients +achieving a >30% reduction in iPTH from baseline after 52 weeks of MT1013 treatment +reached 79.8%, and the proportion achieving a >50% reduction reached 64.3%. The +proportion achieving the target iPTH range of 150-300 pg/mL was 45.6%. Patients’ +relatively high calcium levels were reduced to within the normal range and remained +stable long-term. In summary, the study results demonstrated that, regardless of whether +patients were previously using calcimimetics, over 80% of patients experienced further +improvement in iPTH after using MT1013, and high calcium levels were significantly +improved and maintained within the physiological normal range long-term. +iPTH Reduction Profile: +70.1% +80.7% 85.6% +79.8% +64.3% +68.9% +59.1% +48.5% +40.4% +20.2% +Week +Proportion of iPTH Reduction +> 30%/50% (%) +0 +10 +0 4 8 12 16 20 24 28 32 36 40 44 48 52 +20 +30 +40 +50 +60 +70 +80 +90 +100 +iPTH Reduction > 30% iPTH Reduction > 50% +Figure: Proportion of Subjects with >30% and >50% iPTH Reduction +at Each Visit Point in MT1013-II-C02 (%) +N=100 +BUSINESS +– 161 – + + +--- page 170 --- +Corrected Serum Calcium Profile: +0 4 8 12 16 20 24 28 32 36 40 44 48 52 +Week +10.8 +10.4 +10.0 +cCa(mg/dL) +9.6 +9.2 +8.8 +8.4 +8.0 +7.6 +Figure: Mean Change in Serum Corrected Calcium (cCa) at Each Visit +Point in MT1013-II-C02 (mg/dL) +N=100 +Source: Company data +MT1013-II-C03 +Overview: A Phase II clinical study of MT1013 for injection for the treatment of +patients with CKD-SHPT Undergoing Maintenance Hemodialysis, with continuous +dosing for 26 weeks to evaluate the efficacy, safety, immunogenicity and pharmacokinetic +of MT1013. Efficacy evaluation was the primary objective of the study. +T rial design: A multi-center, randomized, active-controlled, and placebo-controlled +clinical study in a population of patients with CKD-SHPT Undergoing Maintenance +Hemodialysis. It is planned to enroll 112 subjects, who will be randomly assigned in a +2:2:1:1 ratio to MT1013 Group 1, MT1013 Group 2, the Etelcalcetide group, and the placebo +group. Stratified randomization will be performed based on the mean iPTH level during +the screening period (mean of two pre-dialysis measurements on different days within 14 +days before randomization) of ≤800 pg/ml or >800 pg/ml. The drug was administered via +intravenous injection through the venous line of the dialysis circuit after each +hemodialysis session, three times a week, for 26 consecutive weeks. Subjects will undergo +a safety follow-up assessment within one week (+3 days) after the last dose. +A total of 114 subjects were enrolled in this trial. The key inclusion criteria included, +among others: (1) male or female subjects aged 18 years or above at the time of signing the +informed consent form; (2) subjects who had received regular maintenance hemodialysis +three times per week for at least three months prior to screening, and had undergone +adequate dialysis within four weeks prior to screening, defined as a single-pool Kt/V +(spKt/V) ≥1.2 or urea reduction ratio (URR) ≥65%; and (3) subjects diagnosed with +CKD-SHPT with dialysate calcium concentration and pre-dialysis serum iPTH level +meeting the study requirements as specified in the protocol. The key exclusion criteria +included but were not limited to: (1) subjects who had undergone parathyroidectomy +within six months prior to screening or who planned to undergo parathyroidectomy, +ablation, radiation or other related treatments during the study period; (2) subjects with a +history of gastrointestinal bleeding or peptic ulcer within six months prior to screening; +and (3) subjects with a history of myocardial infarction, percutaneous coronary +intervention or coronary artery bypass grafting within six months prior to screening. +T rial status: The Phase II clinical trial was initiated in November 2024 and +completed in March 2026. +BUSINESS +– 162 – + + +--- page 171 --- +Safety data: In this study, MT1013 demonstrated good overall safety and +tolerability, with no unexpected safety signals or risks identified. There was no difference +in SAEs between groups, which were comparable to placebo. No severe TEAEs or SAEs +related to the investigational product were observed in the study. The incidence of +temporary drug discontinuation due to adverse reactions was higher in the Etelcalcetide +group (33.3%) than in the MT1013 groups (27.7%). No patients permanently discontinued +the drug due to adverse events. Regarding the incidence of hypocalcemia, a +pharmacodynamic effect of special concern for calcimimetics, the rate was significantly +lower for MT1013 (7.7%) compared to Etelcalcetide (12.1%), with no cases of severe or +serious hypocalcemia in either group. The MT1013 group showed a lower incidence of +gastrointestinal TRAEs compared with the Etelcalcetide group. Specifically, the +incidences of vomiting, nausea, diarrhea and abdominal discomfort were each 1.54% in +the MT1013 group, as compared with 6.06%, 3.03%, 0% and 3.03%, respectively, in the +Etelcalcetide group, suggesting that MT1013 may have a more favorable gastrointestinal +tolerability profile. +Two subjects (both in the Placebo group) withdrew from the study due to TEAEs, +including one case of weakness and one case of arthralgia. +Efficacy data: After 26 weeks of treatment in the target population, the number +(proportion) of patients with a >30% reduction from baseline in mean serum iPTH during +the EAP period for MT1013 Group 1, MT1013 Group 2 and the Etelcalcetide group was 25 +(80.65%), 28 (93.33%) and 29 (90.63%), respectively. The number (proportion) of patients +with a >50% reduction was 23 (74.19%), 24 (80.0%), and 24 (75%), respectively. For patients +with severe CKD-SHPT (baseline iPTH >600 pg/mL), MT1013 showed greater +improvement in iPTH compared to Etelcalcetide: during the EAP period, the number +(proportion) of patients with a >30% reduction from baseline in mean serum iPTH was 17 +(85.0%), 19 (100%), and 18 (85.71%) for MT1013 Group 1, MT1013 Group 2, and the +Etelcalcetide group, respectively. The number (proportion) of patients with a >50% +reduction was 15 (75.0%), 16 (84.21%), and 15 (71.43%), respectively. The iPTH +achievement rate (150-300 pg/mL) during the EAP period was higher for MT1013 +compared to Etelcalcetide (54.8% for MT1013 Group 1, 56.7% for Group 2, and 43.8% for +the Etelcalcetide group). +During the course of treatment, the proportion of patients whose serum calcium was +controlled within the normal range was slightly better in the MT1013 groups compared to +the Etelcalcetide group (71% for MT1013 Group 1, 80% for Group 2, and 68.8% for the +Etelcalcetide group). In terms of serum phosphorus control, MT1013 was more effective +than Etelcalcetide in lowering serum phosphorus (percentage reduction in serum +phosphorus from baseline at Week 27: 11.2% for MT1013 Group 1, 11.6% for Group 2, and +5.3% for the Etelcalcetide group). In terms of achieving the composite endpoint for all +three indicators (iPTH: 2-9 times the upper limit of normal (130-586 pg/mL); serum +calcium: 2.10-2.50 mmol/L; serum phosphorus: 1.13-1.78 mmol/L), MT1013 was also +more effective than Etelcalcetide (34.48%-39.29% for MT1013 groups vs. 15.63% for +Etelcalcetide). The composite endpoint achievement rates for the two MT1013 dose groups +were 220%-251% of that of Etelcalcetide. +-30 +-20 +-25 +-15 +-10 +-5 +0 +15 +Proportion for P Reduction +(%) -5.3% +-11.6% +MT1013-G1 MT1013-G2 Etelcalcetide +-11.2% +Placebo +0.081% +Higher than Etelcalcetide 211-222% +Figure: Reduction Rate (%) of Serum P from Baseline in Each Group at W27 +Treatment groups at W27 N=28-32/group, placebo group N=9 +BUSINESS +– 163 – + + +--- page 172 --- +1.0 +1.4 +1.8 +2.2 +2.6 +3.0 +2.07 +W27 +Baseline +MT1013-G1 MT1013-G2 Etelcalcetide Placebo +1.79 +P (mmol/L) +2.00 +1.70 +1.86 +1.73 +2.04 +1.92 +P=0.014 +P=0.013 +P=0.252 +P=0.512 +Figure: Change in Serum P (mmol/L) in Each Group Before and After T reatment +(Mean±SEM) +Note: treatment groups/28-32 subjects, placebo group/9 subjects +Source: Company data +The efficacy data showed that MT1013 demonstrated larger reductions compared +with Etelcalcetide in terms of absolute reduction in FGF-23 and a higher proportion of +subjects with a> 30% reduction in FGF-23. This trend is consistent with the trend of +composite achievement rate of iPTH/serum calcium/serum phosphorus over +Etelcalcetide. Showing that MT1013 has the potential to reduce the incidence of +cardiovascular events and the risk of death. +P=0.012-60 +-50 +-40 +-30 +-20 +-10 +0 +10 +Proportion for FGF23 Reduction +(%) +-22.8% +-8.8% +-39.9% +MT1013-G1 MT1013-G2 Etelcalcetide Placebo +-33.5% +Figure: Reduction Rate (%) of FGF23 from Baseline in Each Group at W27 +(Mean±SEM) +Notes: Treatment groups at W27 N=27-30/group, placebo group N=8 +Proportion of FGF23 Reduction +> 30% (%) +10 +20 +30 +40 +50 +60 +70 +80 +MT1013-G1 MT1013-G2 Etelcalcetide Placebo +)JHIFSUIBO&UFMDBMDFUJEFCZ117%~133% +58.6% +66.7% +50.0% +25.0% +Figure: Proportion of Subjects (%) with> 30% Reduction in FGF-23 from Baseline in +Each Group at W27 +Note: W27: treatment groups N=27-30 per group; placebo group N=8 +Source: Company Data +BUSINESS +– 164 – + + +--- page 173 --- +0 +500 +1,000 +1,500 +2,000 +2,500 +3,000 +3,500 +4,000 +4,500 +5,000 +2,667.3 +1,675.0 +3,722.2 +1,840.5 +3,318.8 +2,235.4 2,236.9 +3,318.8 +MT1013-G1 MT1013-G2 Etelcalcetide Placebo +FGF23 (pg/mL) +Baseline +W27 +P=0.013 +P=0.003 +P=0.211 P=0.242 +*P=0.046 +Figure: Change in FGF23 (pg/mL) in Each Group Before and After T reatment +(Mean±SEM) +Treatment groups at W27 N=27-30/group, placebo group N=7. *P=0.046: For the log value of change from baseline at +W27, MT1013 was more effective than etelcalcetide +Source: Company data +MT1013-III-C01 +Overview: This is a Phase III clinical study of MT1013 for injection for the treatment +of patients with CKD-SHPT Undergoing Maintenance Hemodialysis, aiming to evaluate +the safety and efficacy of MT1013. The primary endpoint 1 was the proportion of subjects +achieving a reduction of >50% in serum iPTH from baseline during the EAP with MT1013 +compared to Cinacalcet. The primary endpoint 2 was the proportion of subjects achieving +a reduction of> 30% in serum iPTH from baseline during the EAP with MT1013 compared +to Cinacalcet. +T rial design: A multi-center, randomized, double-blind, double-dummy clinical +study with cinacalcet as the active comparator. The study population comprises subjects +with CKD-SHPT Undergoing Maintenance Hemodialysis. It is planned to enroll 424 +subjects, randomized 1:1 into the MT1013 group and the cinacalcet group, to receive either +MT1013 + cinacalcet placebo or cinacalcet + MT1013 placebo, respectively. +MT1013/MT1013 placebo: Subjects undergo regular hemodialysis three times a week. +After each dialysis session, MT1013 is administered directly through the venous line of the +dialysis circuit or intravenously after the full flush is complete, for 26 consecutive weeks. +Cinacalcet/cinacalcet placebo: Except for the post-dialysis dose on D1, subjects take +cinacalcet orally with or after a meal once a day (QD). It is recommended to take the +medication at the same time each day, ensuring an interval of ≥12 hours before iPTH blood +sampling, for 26 consecutive weeks. Subjects will enter a 4-week safety follow-up period +after the last dose. +A total of 424 subjects are planned to be enrolled in this trial. The key inclusion +criteria included, among others: (1) subjects who fully understood and voluntarily agreed +to participate in the study and signed the informed consent form; (2) male or female +subjects aged 18 years or above at the time of signing the informed consent form, with BMI +between 18 kg/m² and 35 kg/m², calculated based on post-dialysis body weight; (3) +subjects who had been receiving regular maintenance hemodialysis three times per week +for at least 12 weeks prior to screening, and had undergone adequate dialysis within four +weeks prior to screening, defined as a urea clearance index (Kt/V) ≥1.2 or urea reduction +ratio (URR) ≥65%, with each dialysis session lasting 3 to 4.5 hours (inclusive). The key +exclusion criteria included but were not limited to: (1) subjects who had undergone +parathyroidectomy within six months prior to screening or who planned to undergo +parathyroidectomy, ablation, radiation or other related treatments during the study +period; (2) subjects with a history of gastrointestinal bleeding or peptic ulcer within six +months prior to screening; (3) subjects with a history of myocardial infarction, +percutaneous coronary intervention or coronary artery bypass grafting within six months +prior to screening. +T rial status: The Phase III clinical trial was initiated in July 2025 and as of the Latest +Practicable Date, enrollment of all 424 planned subjects had been completed. +BUSINESS +– 165 – + + +--- page 174 --- +Clinical Development Plan +In May 2025, MT1013 completed the Phase II-C01 clinical study for CKD-SHPT in +the PRC and has entered a Phase III clinical study with cinacalcet as a comparator. It is the +only dual-functional polypeptide drug to have completed Phase II clinical studies. The +ongoing Phase III clinical trial, in addition to evaluating the primary efficacy endpoints, +also places special focus on changes in bone metabolism-related parameters. We plan to +seek marketing approval for MT1013 with the treatment of CKD-SHPT Undergoing +Maintenance Hemodialysis. We expect to submit a Pre-NDA in late 2026, and an NDA in +early 2027. +Concurrently, we are actively expanding the indications for our Core Product +MT1013 into areas such as CKD-MBD with Osteoporosis and CKD-SHPT not on Dialysis. +MT1013 not only demonstrates performance in controlling mineral levels such as iPTH, +serum calcium, and serum phosphorus, but the results of the phase-II clinical trial also +show a positive effect on improving bone mineral density, particularly significant in +high-risk patients with osteopenia. For more information of the clinical results, see +“Business — Clinical Trial Overview of MT1013”. This clinical benefit not only validates +the potential clinical value of MT1013 in the treatment of bone diseases related to mineral +metabolism disorders but also lays the foundation for its development for broader +indications within CKD-MBD. We plan to leverage data collected from the phase II clinical +trials to seek IND approvals from competent regulatory authorities to conduct Phase III +clinical trial of MT1013 for the expanded indication of CKD-MBD with Osteoporosis. +The table below sets out our clinical development plan: +Indication Current Status/T rial Phase Location Upcoming Milestones +CKD-SHPT .... MT1013-I-C03 PRC Phase I Mass Balance Study PRC Expected to complete by mid-2026 +MT1013-II-C02 PRC Phase IIb Long-Term Dosing +Study (Supportive Phase III Clinical Study) +PRC Expected to complete by end of 2026 +MT1013-III-C01 Confirmatory Phase III Study +with Cinacalcet as Active Comparator +PRC Expected to complete by the end of 2026; Expected +to submit Pre-NDA in late 2026, and NDA in +early 2027. +CKD-SHPT .... I N D r eactivated (1) U.S. Potential advancement of Phase II clinical +development in the U.S., subject to identification +of suitable collaboration partner(s) +CKD-MBD with +Osteoporosis . . +IND in preparation PRC Expected to commence Phase III clinical trial in +early 2028 +CKD-SHPT not on +Dialysis +(2) .... +IND in preparation PRC Expected to file IND by the end of 2027 +Notes: +(1) Following completion of the MT1013-I-A01 U.S. Phase I trial, our Group faced financing +constraints amid a downturn in the global biopharmaceutical financing environment. As a result, +we prioritized resources on development activities in the PRC and suspended the U.S. +development program, which was not due to any safety or efficacy concerns relating to MT1013. +Consequently, the IND application for MT1013 in dialysis CKD-SHPT patients in the U.S. was +placed on inactive status in October 2023. Following improvements in the overall financing +environment and receipt of proceeds from our Group’s Series D financing in 2025, we reactivated +the IND for MT1013 in the U.S. primarily to facilitate the submission of an application for +Breakthrough Therapy Designation to the FDA and to maintain the possibility of potential future +development and collaboration opportunities in the U.S.. The IND was reactivated on February +13, 2026, and approval from the FDA was obtained on March 20, 2026 to proceed to a Phase II +clinical trial. In addition, we submitted an application to the FDA for Breakthrough Therapy +Designation on April 10, 2026. As of the Latest Practicable Date, we had not identified any +suitable collaboration partner and had not commenced any new clinical trials in the U.S.. +(2) We plan to further advance the clinical development of MT1013 for the treatment of CKD-SHPT in +patients not on dialysis and to develop an oral formulation for such indication, as oral +administration is more suitable for non-dialysis CKD-SHPT patients and may improve +compliance. We will rely on clinical data generated from existing clinical trials of MT1013 in +CKD-SHPT patients to further progress the clinical development of MT1013 for non-dialysis +CKD-SHPT patients, including data relating to the relationship between drug exposure and +efficacy, as well as safety profiles. +BUSINESS +– 166 – + + +--- page 175 --- +Material Communications +As of the Latest Practicable Date, we had not received any objection from any relevant regulatory authorities to our clinical +development plans. +The table below sets out our key regulatory communications with regulatory authorities regarding the development of MT1013 for +the treatment of CKD-SHPT: +Study Study number Phase +Competent +authorities Study sites Details of communications Status +CKD-SHPT . . MT1013-I-A01 I FDA US (i) In January 2021, we filed IND application with the FDA for MT1013 for the treatment of CKD-SHPT. The +FDA subsequently initiated the technical review of the IND submission and did not raise any further +comments on the clinical trial protocol during the review process. +Completed: we achieved +each objective set out +in the clinical trial +overview on June 21, +2022.(ii) In March 2021, the FDA issued Study May Proceed Letter to allow us to proceed the Phase I clinical study +to evaluate the safety, tolerability, pharmacokinetics and preliminary pharmacodynamics of MT1013 in +healthy subjects. +MT1013-I-C02 I NMPA PRC (i) In April 2021, we filed an IND application with the NMPA for the clinical development of MT1013 for the +treatment of CKD-SHPT, and the NMPA accepted our IND application in the same month. +Completed: we achieved +each objective set out +in the clinical trial +overview on +September 24, 2022. +(ii) In July 2021, the NMPA issued an umbrella IND approval +(1) for Phase I, Phase II and Phase III clinical +studies of MT1013 for the treatment of CKD-SHPT, and required us to (1) revise the Phase I clinical trial +protocol under this application with particular attention to the starting dose, which was recommended to +be set with at least a tenfold safety margin; (2) closely monitor the potential risks of the product and +strictly implement the risk management plan; (3) closely track the development progress of drugs with +similar targets and, based on the existing non-clinical and clinical data of the product, evaluate its efficacy +and safety profile and ensure adequate risk control and subject protection; and (4) apply for a +communication meeting with the CDE upon the completion of Phases I and II clinical trials before +commencing the Phase III clinical trial. +MT1013-I-C03 +(2) I NMPA PRC (i) In March 2025, we submitted a communication meeting application to the CDE for the mass balance study +of MT1013. +Ongoing (all subjects +completed the trial as +of the Latest +Practicable Date) and +is expected to be +completed by +mid-2026. +(ii) In August 2025, we reached a consensus with the CDE on the clinical trial protocol of the mass balance +study. +BUSINESS +– 167 – + + +--- page 176 --- +Study Study number Phase +Competent +authorities Study sites Details of communications Status +MT1013-II-C01 II NMPA PRC (i) In September 2022, the initial clinical study report (CSR) of MT1013-I-C02 was issued, marking the +completion of the Phase I clinical trial. In October 2022, we submitted an application to the CDE for an +end-of-Phase I (EOP1) communication meeting to seek guidance on the initiation of the Phase II clinical +trial of MT1013. +Completed: we achieved +each objective set out +in the clinical trial +overview for the SAD +and MAD studies on +April 8, 2025, and for +the long-term cohort +on August 25, 2025. +(ii) In January 2023, based on the results of our Phase I clinical study (MT1013-I-C02), the CDE, in its written +feedback, had no objection for the Company to proceed with the Phase II clinical study to further evaluate +the efficacy and safety of MT1013 in patients with CKD-SHPT, with a view to providing a basis for +determining the dosing regimen and dosage for the confirmatory Phase III clinical study. +MT1013-II-C02 IIb +(3) NMPA PRC Ongoing (4) (enrollment +of all 350 subjects +completed as of the +Latest Practicable +Date) and is expected +to be completed by +the end of 2026. +MT1013-II-C03 II NMPA PRC (i) In February 2024, upon completion of the single-ascending-dose and multiple-ascending-dose Phase II +clinical studies (the first part of MT1013-II-C01), we submitted the first end-of-Phase II (EOP2) +communication meeting application to the CDE to seek guidance on the initiation of the Phase III clinical +trial of MT1013. +Completed: we achieved +each objective set out +in the clinical trial +overview in March +2026. +(ii) In July 2024, based on the results of the existing Phase II clinical studies, the CDE recommended +conducting a small-scale comparative study of MT1013 in comparison with Etelcalcetide and placebo to +further justify the rationale of the starting dose, titration scheme and dose adjustment, and to provide +supportive data for the subsequent confirmatory Phase III clinical study. +(iii) In July 2024, we commenced preparatory work for the MT1013-II-C03 study based on the recommendation +of the CDE. +BUSINESS +– 168 – + + +--- page 177 --- +Study Study number Phase +Competent +authorities Study sites Details of communications Status +MT1013-III-C01 III NMPA PRC (i) In May 2025, upon completion of the Phase II clinical study (MT1013-II-C01) and obtaining part of the key +data from the MT1013-II-C02 and MT1013-II-C03 studies, we submitted another end-of-Phase II (EOP2) +communication meeting application to the CDE to seek guidance on the initiation of the Phase III clinical +trial of MT1013. +Ongoing and is +expected to be +completed by the end +of 2026. +(ii) In June 2025, based on the Phase II data submitted, including (a) the completed results of MT1013-II-C01, +(b) available data from MT1013-II-C02, and (c) data from the head-to-head study MT1013-II-C03, for which +22-week data had been obtained, which demonstrated efficacy comparable to the marketed calcimimetics, +the CDE confirmed that MT1013 demonstrated efficacy comparable with marketed drug product and +agreed that we could proceed to the Phase III clinical trial. The CDE did not impose any additional +requirements in respect of the Phase II clinical trials or required any additional communication before the +commencement of the Phase III clinical trial. Further, a consensus was reached with the CDE that, if the +Phase III clinical trial of MT1013 achieves the expected results, the subject exposure level would be +sufficient to support the subsequent NDA submission and approval. +Notes: +(1) In July 2021, the NMPA issued an umbrella IND approval for the clinical development of MT1013 for the treatment of CKD-SHPT, covering Phase I, Phase II +and Phase III clinical trials. According to the Announcement on Several Policies on Drug Registration Review and Approval (ഄ +ʮѓ‘) issued by the NMPA, the INDs of new drugs are subject to one-time approvals instead of phased declarations, reviews and approvals. Pursuant to +such IND approval, we are required to communicate with the CDE after completion of the Phase I and Phase II clinical trials and prior to commencement of +the Phase III clinical trial. +The IND approval issued by the NMPA in July 2021 does not cover endpoints including mass balance, long-term safety and patient exposure. Therefore, +MT1013-I-C03 and MT1013-II-C02 (the “ Ongoing T rials ”) were initiated voluntarily by our Company and not requested or mandated by the NMPA or any +other regulatory authority in light of results of earlier trials or as a condition for further development of MT1013 (i.e. Phase III). As the NMPA issued an +umbrella IND approval for the clinical development of MT1013 for the treatment of CKD-SHPT in July 2021, the Ongoing Trials do not require additional IND +approval. The Ongoing Trials are supportive in nature and will be submitted as part of the NDA package to supplement the overall clinical data package, and +do not constitute one of the phases of clinical trial for advancing MT1013 to the next phase of clinical trial. +(2) The ongoing Phase I clinical trial (MT1013-I-C03) is a mass balance study designed to quantitatively analyze the total radioactivity, radioactive metabolite +profiles, pharmacokinetic parameters and safety following intravenous administration of [ +14C] MT1013. This mass balance study is not intended to evaluate +clinical efficacy or to determine the optimal therapeutic dose. Instead, it focuses on the disposition of the drug in the human body, based on the principle of +mass conservation, to understand the fate of the drug and its metabolites following administration. The results from this study are intended to support the +overall clinical development of MT1013 by providing a comprehensive understanding of its pharmacokinetic and metabolic characteristics in humans, rather +than to inform efficacy or dose selection decisions. As confirmed by Frost & Sullivan, such mass balance study is an ADME (absorption, distribution, +metabolism and excretion)-related clinical pharmacology supporting study. It will not alter the established study design for the Phase I/II clinical trials, nor +will it delay or preclude the initiation of Phase III clinical trials. +BUSINESS +– 169 – + + +--- page 178 --- +(3) The MT1013-II-C02 trial is a long-term dosing study, the primary objective of which is to evaluate safety. According to Frost & Sullivan, Phase II clinical trials +are generally designed to generate preliminary efficacy data to inform key development decisions, including progression into Phase III clinical trials. +However, MT1013-II-C02 was not designed to establish confirmatory efficacy or to serve as a principal basis for such progression. Instead, its primary role is +to provide additional safety data and patient exposure information in accordance with ICH E1 guidance on the extent of population exposure to assess clinical +safety for drugs intended for long-term treatment of non-life-threatening conditions. MT1013-II-C02 does not form part of the basis for progression to +MT1013-III-C01 as the safety and efficacy profile necessary for advancement into the Phase III clinical trial had already been established by MT1013-I-C02, +MT1013-II-C01 and MT1013-II-C03. As further confirmed during the EOP2 communication meeting with the CDE in June 2025, based on the Phase II clinical +data already obtained, MT1013 demonstrated efficacy comparable with marketed drug product, and the CDE agreed that we could proceed to the Phase III +clinical trial. In the event that such study is not completed as scheduled or the study results are not satisfactory, it would not affect the validity of the existing +Phase III clinical trial data. +(4) The MT1013-II-C02 trial was initiated in March 2024 and enrollment of all 350 subjects was completed as of the Latest Practicable Date. The relatively +extended enrollment period was mainly due to the increase in the planned sample size to approximately 350 subjects following the feedback from the CDE +during the EOP2 communication, and we expanded the study to achieve the required patient exposure level. Although CKD-SHPT falls within the scope of +ICH E1 for chronic non-life-threatening conditions, the CDE has not issued specific guidance on patient exposure requirements for CKD-SHPT. Accordingly, +we voluntarily communicated with the CDE in relation to MT1013-II-C02 in order to align with the CDE on the adequacy of long-term patient exposure and +safety data for CKD-SHPT and to facilitate the effective continued conduct of MT1013-II-C02. It does not constitute a reassessment of the safety of the Core +Product as a result of any safety concern identified in earlier clinical trials. Rather, safety evaluation is a continuous process throughout the clinical +development of innovative drug candidates and continues to evolve with the accumulation of long-term dosing data and increased patient exposure. In +particular, given that CKD-SHPT is a chronic disease requiring long-term treatment, continuous safety monitoring and accumulation of patient exposure data +are routine components of the clinical development process for relevant therapeutic agents. According to Frost & Sullivan, our conduct of continuous safety +evaluation throughout the clinical development process (not limited to early-stage clinical trials), is consistent with the general clinical development practice +for therapeutic agents intended for chronic diseases. +BUSINESS +– 170 – + + +--- page 179 --- +Based on the completion of the Phase I clinical trial (MT1013-I-C02) for the +treatment of CKD-SHPT in the PRC, and CDE having no objection for the Company to +proceed into Phase II clinical trials, the Company’s clinical development demonstrates +that for CKD-SHPT, MT1013 has been developed beyond concept stage and is eligible as +Core Product. +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET MT1013 +SUCCESSFULLY +Our Key Product — XTL6001 +Our Key Product, XTL6001, is a GLP-1R/GCGR/MasR triple-agonist that has +received IND approval in both the PRC and the US and has entered the clinical trial stage, +with potential applications in the treatment of diseases such as obesity, chronic kidney +disease (CKD) with proteinuria, and MASH. Through its mechanism of action, XTL6001 is +expected to address issues associated with current GLP-1 weight-loss drugs, such as +muscle loss, appetite suppression or GI side effect, and rebound after drug withdrawal, +offering a new multi-organ protective therapeutic option for metabolic diseases. +Mechanism of Action +XTL6001 is a recombinant tri-target peptide-Fc fusion protein that activates GLP-1R, +GCGR and MasR to exert pharmacological effects. +Brain +XTL6001: +GLP1R/GCGR/ +MasR tri-target +agonist +GLP1R/GCGR +activated +BAT +Liver +Pancreas +Appetite +Food intake +Body weight +Glycemic control +Blood glucose +Insulin sensitivity +Cholesterol +Hepatosteatosis +Energy expenditure +MasR activated +Induces vasodilation +Vasodilation +Blood Pressure +Renal Circulation +Water and Sodium Retention +Fibrosis +Liver Inflammation +Oxidative Stress +Ameliorates lipid +metabolism disorder +Reduces +microcapillary damage +• Effect of XTL6001 on Chronic Weight Management in Obese or Overweight Populations +GLP-1R activation can slow down gastric emptying, and increase satiety signals to +reduce food intake; Upon activation, GCGR acts on the liver to inhibit insulin secretion +and stimulate hepatic gluconeogenesis and glycogenolysis, promoting fatty acid +oxidation, regulating purine metabolism, and stimulating lipid catabolism and metabolic +processes to reduce body fat. The energy expenditure effect from GCGR activation and the +food intake reduction effect from GLP-1 receptor activation can synergistically reduce +body weight. Activation of MasR also promotes brown adipose tissue mass, improves +thermogenesis, reduces lipid droplets, promotes lipolysis, reduces inflammation, +improves overall thermogenesis, and increases muscle mass. Upon activation, renal MasR +leads to vasodilation, lowers blood pressure, improves renal circulation, reduces water +and sodium retention, ameliorates liver and kidney inflammation, reduces fibrosis, and +alleviates oxidative stress. +BUSINESS +– 171 – + + +--- page 180 --- +Therefore, the GLP-1R, GCGR, and MasR triple-agonist XTL6001, through +multi-target synergy promotes lipolysis, increases muscle mass (fat reduction and muscle +gain), thereby potentially achieving sustained weight loss. +Source: +(1) Proença AB, et al. Adipose tissue plasticity mediated by the counterregulatory axis of the +renin-angiotensin system: Role of Mas and MrgD receptors. J Cell Physiol. 2024 Jun;239(6):e31265 +(2) Gironacci MM, et al. Unraveling the crosstalk between renin-angiotensin system receptors. Acta +Physiol (Oxf). 2024 May;240(5):e14134 +(3) Passos-Silva DG, Verano-Braga T, Santos RA. Angiotensin-(1-7): beyond the cardio-renal actions. +Clin Sci (Lond). 2013 Apr;124(7):443-56. doi: 10.1042/CS20120461. PMID: 23249272 +• Effect of XTL6001 on Proteinuric CKD +XTL6001 exerts synergistic effects after multi-target activation. It can +simultaneously regulate glomerular hemodynamics and protect mechanically sensitive +podocytes, directly targeting the pathophysiological mechanisms of CKD onset and +progression to protect renal function. It directly improves hemodynamics by activating +MasR and GLP-1R, reducing glomerular capillary pressure and protecting the filtration +barrier; It exerts stronger anti-inflammatory and anti-fibrotic effects by activating MasR +and GLP-1R, reducing glomerular and tubulointerstitial damage; Activation of MasR can +combat oxidative stress, directly protect podocytes, inhibit podocyte apoptosis and +nephrin loss, and repair the filtration barrier; In addition, GCGR/GLP-1R/MasR +activation can reduce weight and improve insulin resistance, inhibit uric acid synthesis, +and promote uric acid excretion, thereby ameliorating the hyperuricemia common in CKD +patients and further protecting renal function by mitigating kidney damage caused by +high uric acid; Other indirect effects stem from its potential beneficial effects on blood +glucose, lipids, and blood pressure. +Source: +(1) Kanbay M, Copur S, Bakir CN, Covic A, Ortiz A, Tuttle KR. Glomerular hyperfiltration as a +therapeutic target for CKD. Nephrol Dial Transplant. 2024 Jul 31;39(8):1228-1238 +(2) Simões E Silva AC, Teixeira MM. ACE inhibition, ACE2 and angiotensin-(1-7) axis in kidney and +cardiac inflammation and fibrosis. Pharmacol Res. 2016 May;107:154-162 +• Effect of XTL6001 on MASH +XTL 6001 combines the extrahepatic benefits of GLP-1 receptor agonism (glycemic +control, appetite reduction, and weight loss) with the direct hepatic effects of glucagon +receptor agonism (increased energy expenditure, lipolysis, and hepatic fat mobilization), +creating a powerful synergy of complementary advantages. Activation of Ang1-7/MasR +can activate AMP-activated protein kinase (AMPK), inhibit HSC activation, and accelerate +HSC apoptosis, thereby inhibiting and blocking the pathogenesis and progression of liver +fibrosis. Therefore, the GLP-1R, GCGR, and MasR triple-agonist XTL6001, through +synergistic effects, is expected to comprehensively improve MASH and block its +progression. +Source: +(1) Spezani R, Mandarim-de-Lacerda CA.The current significance and prospects for the use of dual +receptor agonism GLP-1/glucagon. Life Sci 2022;288:120188 +(2) Valdecantos MP , Pardo V , Ruiz L, Castro-Sánchez L, Lanzón B, Fernández-Millán E, +García-Monzón C, Arroba AI, González-Rodríguez Á, Escrivá F, Álvarez C, Rupérez FJ, Barbas C, +Konkar A, Naylor J, Hornigold D, Santos AD, Bednarek M, Grimsby J, Rondinone CM, Valverde +ÁM. A novel glucagon-like peptide 1/glucagon receptor dual agonist improves steatohepatitis +and liver regeneration in mice. Hepatology. 2017 Mar;65(3):950-968 +BUSINESS +– 172 – + + +--- page 181 --- +Market Opportunities and Competition +Overweight and Obesity +Overweight and obesity are chronic diseases characterized by excessive fat +accumulation that poses risks to health. These conditions are the major contributors to +various other health issues, such as diabetes and cardiovascular diseases. The global +prevalence of overweight and obesity patients is projected to reach 3,070.6 million by 2030 +and 3,477.2 million by 2035, while in the PRC it is projected to reach 756.5 million by 2030 +and 860.5 million by 2035. As of the Latest Practicable Date, there are 17 triple-target +GLP-1R peptide drug candidates for overweight and obesity in the clinical stage globally. +Among these, 12 drug candidates target GLP-1R,GCGR and GIPR, two drug candidates +target GLP-1R,GCGR and FGF21, one drug candidate targets GLP1R, GIPR, and AMYR, and +one drug candidate targets GLP1R, GIPR, and NPY2R. XTL6001, our GLP-1R drug candidate, +is the only triple-target GLP-1R peptide drug candidate targeting GLP-1R, GCGR and MasR. +Agonizing MasR can increase protein synthesis and preserve muscle mass. XTL6001 holds +the potential to eliminate the side effect of muscle loss associated with GLP-1R agonists +during weight loss. For more information, see “Industry Overview — Main treatment of +Overweight and Obesity” and “Industry Overview — Competitive landscape of GLP1R +polypeptide drugs.” +Proteinuric CKD +In the PRC, the prevalence of CKD with proteinuria grew from 76.0 million in 2020 +to 81.9 million in 2025 at a CAGR of 1.5% and is projected to reach 87.5 million by 2030 and +92.9 million by 2035. For more information on the treatment of Proteinuric CKD, see +“Industry Overview — Overview of CKD with Proteinuria.” +MASH +In the PRC, the prevalence of MASH grew from 38.7 million in 2020 to 45.5 million in +2025 at a CAGR of 3.3% and is projected to reach 53.7 million by 2030 and 63.1 million by +2035. For more information on the treatment of MASH, see “Industry Overview — +Overview of MASH.” +Competitive Advantages +Chronic Weight Management in Obese or Overweight Populations +(1) Focus on a weight-loss mechanism through enhanced energy metabolism +XTL6001 achieves weight loss primarily by increasing energy expenditure rather +than by strongly suppressing appetite. Compared to other GLP-1 class drugs that +primarily rely on delaying gastric emptying, XTL6001 has the potential to significantly +reduce gastrointestinal adverse reactions while achieving weight loss. +Preclinical studies have shown that XTL6001 can progressively, dose-dependently, +and significantly reduce the body weight of diet-induced obesity (DIO) mice without +significantly affecting food intake, attributable to its mechanism of promoting energy +expenditure to achieve weight control, which may improve tolerability and treatment +adherence while achieving weight reduction. +BUSINESS +– 173 – + + +--- page 182 --- +Time (Days) +rate of change (vs.Baseline) +0 +-20 +-40 +-60 +20 +Vehicle +Tirzepatide 0.13μmol/kg +XTL6001 0.07μmol/kg +XTL6001 0.13μmol/kg +XTL6001 0.26μmol/kg +0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 +5.68% +-14.22% +-25.04% +-32.64% +-39.95% +Food intake (g/d) +Time (Day) +0 +3 +2 +1 +0 +3 7 10 14 17 21 24 28 +Vehicle +Tirzepatide 0.13μmol/kg +XTL6001 0.07μmol/kg +XTL6001 0.13μmol/kg +XTL6001 0.26μmol/kg +Effects of XTL6001 vs. Tirzepatide on body weight and food intake +in a DIO mouse model (n=12) +Source: Company data +(2) Precise fat reduction and effective prevention of muscle loss +The preclinical study has shown that XTL6001 dose-dependently reduces body +weight and total fat mass, increases total lean body mass, and raises the total lean +mass/fat mass ratio to normal levels in DIO mice. +60 +50 +40 +30 +20 +40 +30 +20 +10 +0 +100 +80 +60 +40 +15 +10 +5 +0 +*** +### +-24.0% +20.63% +### +### +*** +### +### ### +###### +### +*** +### +##### +*** +-33.0% -40.6% +32.63% +Body weight (g)proportion of lean (%) +Lean/Fat Ratio proportion of fat (%) +Control Vehicle 0.07 0.13 +XTL6001 +0.26 +μmol/kg +Control Vehicle 0.07 0.13 +XTL6001 +0.26 +μmol/kg +Control Vehicle 0.07 0.13 +XTL6001 +0.26 +μmol/kg +Control Vehicle 0.07 0.13 +XTL6001 +0.26 +μmol/kg +24.50% +-44.08% +-55.44% -58.15% +Effect of XTL6001 on total lean body mass and fat mass (MRI) (n=10) +***P<0.001 vs. Control; ##P<0.01; ###P<0.001 vs. Vehicle +Source: Company data +Phase I clinical trial results further suggest that XTL6001 may reduce waist +circumference and waist-to-hip ratio (WHR), with effects observed to persist following +treatment discontinuation. For more information, see “— Clinical Trial Overview of +XTL6001” below in this section. +BUSINESS +– 174 – + + +--- page 183 --- +(3) Significantly lowers blood lipids, hepatic lipids, and uric acid; reverses fatty liver; +reduces proteinuria; and addresses obesity-related organ damage +Preclinical studies have shown that compared to Tirzepatide, XTL6001 shows a +greater reduction in reversing fatty liver (reducing hepatic fat by over 93.95%) (Figure 1). +In comparison with Finerenone, XTL6001 reduced urinary albumin-to-creatinine ratio +(UACR) by an additional 15% to 50% (Figure 2). +## +*** +&P<0.05 +-78.74% +0.13 +Tirzepatide +Control Vehicle +XTL6001 +0.07 0.13 0.26 +-53.54% +-85.36% -93.95% +μmol/kg +## ## +0 +1 +2 +3 +4 +5 +6 +Hepatic fat (%) + Control Vehicle Tirzepatide 0.13 μmol/kg +XTL6001 0.07 μmol/kg XTL6001 0.13 μmol/kg XTL6001 0.26 μmol/kg +Figure 1: Effect of XTL6001 on hepatic fat in DIO obese mice (vs. Tirzepatide, n=12) +400 +500 +600 +300 +200 +100 +0 +U-ALB mg/24h +*** +4W +### +-38.64% +*** +### +-64.49% ### +-55.85% +### +-58.34% +### +-81.65% +Control +Vehicle +Fine 1.6mg/kg +XTL6001-0.06mg/kg +XTL6001-0.17mg/kg +XTL6001-0.5mg/kg +XTL6001-4.5mg/kgVehicle +Fine 1.6mg/kg +XTL6001-0.06mg/kgXTL6001-0.17mg/kgXTL6001-0.5mg/kgXTL6001-4.5mg/kg +Control +40 +50 +60 +30 +20 +10 +0 +UACR mg/g +** +4W +-28.94% +-44.86% +-48.23% +-55.47% +-80.06% +Control +Vehicle +Fine 1.6mg/kg +XTL6001-0.06mg/kg +XTL6001-0.17mg/kg +XTL6001-0.5mg/kg +XTL6001-4.5mg/kgVehicle +Fine 1.6mg/kg +XTL6001-0.06mg/kgXTL6001-0.17mg/kgXTL6001-0.5mg/kgXTL6001-4.5mg/kg +Control +# +*** P<0.001 vs. control; #P<0.05e##P<0.01e###P<0.001vs. Vehicle +Figure 2: In a rat model of diabetic nephropathy with proteinuria induced by +alloxan combined with unilateral nephrectomy, the reduction rate of UACR by +XTL6001 was 15% to 50% higher than that of finerenone. +(n=12) +Source: Company data +Phase I clinical trial results further suggest that XTL6001 may improve lipid profiles +and reduce serum uric acid levels, with increases in uric acid clearance observed. For more +information, see “— Clinical Trial Overview of XTL6001” below in this section. +(4) Favorable safety and potential for long-acting administration +Phase I study results showed that XTL6001 exposure increases with dose escalation, +and once-weekly dosing maintained effective plasma drug concentrations for over one +week. Safety data showed that XTL6001 has a good overall safety profile, with no serious +adverse events (SAEs) occurring. Apart from the expected pharmacodynamically-related +gastrointestinal adverse reactions (which were transient and dose-dependent) associated +with GLP-1 class drugs at high doses, no other significant safety signals were observed. +For more information of the clinical results, see “— Clinical Trial Overview of XTL6001” +below in this section. +BUSINESS +– 175 – + + +--- page 184 --- +Clinical Trial Overview of XTL6001 +XTL6001-I-C01 PRC Phase I Clinical Study +Overview: This is a randomized, double-blind, placebo-controlled Phase I clinical +trial involving single ascending dose (SAD) and multiple ascending dose (MAD) in +healthy and obese subjects. Its primary objective was to evaluate the safety and +tolerability, and the secondary objective was to characterize the pharmacokinetics, +pharmacodynamics and immunogenicity of XTL6001, to inform optimal dose selection +and dosing regimen for Phase II studies. The trial covers both indications of weight +management for obesity and Proteinuric CKD. +T rial design: +A randomized, double-blind, SAD and MAD Phase I clinical study in healthy volunteers +SAD MAD +SRC +SRC +• Randomization: XTL6001:placebo=3:1 +• Primary Endpoint: Safety, PK,PD +D1 D8 D15 D22 D29 +Group 1 +Group 2 +N=10 +N=15 +• Randomization: XTL6001:placebo=4:1,QW +• Primary Endpoint: Safety, PK,PD +D: day +37.5 mg +75mg +150mg +300 mg +SRC +N=8 +N=8 +N=8 +N=8 +75mg 300mg150 mg 225mg +75mg 75mg 150 mg 150 mg 225 mg +•M ultiple Ascending Dose (MAD) evaluates the safety and accumulation +effects of continuous administration +• The dosing regimen design covers the step-wise escalation from the starting +dose to the expected maximum clinical dose +A total of 57 subjects are planned to be enrolled in this trial. The key inclusion +criteria included: (1) subjects aged 18 years or above and below 65 years at the time of +screening; (2) subjects with BMI of no less than 18.5 kg/m² and below 40.0 kg/m²; and (3) +subjects with a body weight of no less than 50.0 kg for males and no less than 45.0 kg for +females at screening. The key exclusion criteria included but were not limited to: (1) +subjects with a history of type I or type II diabetes mellitus, or with glycated hemoglobin +(HbA1c)> 6.5% or fasting plasma glucose> 7.0 mmol/L at screening; (2) subjects who had +used prescription or over-the-counter (OTC) medications known to cause weight loss +within three months prior to screening; (3) subjects with known clinically significant +gastric emptying disorders, chronic use of medications that directly affect gastrointestinal +motility, severe chronic gastrointestinal diseases, or who had undergone gastrointestinal +surgery; (4) subjects with a history of acute or chronic pancreatitis, symptomatic +gallbladder disease, malignancy within five years prior to screening, medullary thyroid +carcinoma, or multiple endocrine neoplasia syndrome type 2A or type 2B. +T rial status: The Phase I clinical trial was initiated in June 2025. As of the Latest +Practicable Date, the LPLV had occurred and the database lock had been completed. +Safety data: XTL6001 demonstrated an overall favorable safety profile. No serious +adverse events were reported. Gastrointestinal adverse events were all Grade 1-2, with no +treatment discontinuation due to such events, and were dose-related. The incidence of +such adverse events may be reduced with a prolonged dose titration period. +BUSINESS +– 176 – + + +--- page 185 --- +Efficacy data: +PK profile: XTL6001 exposure increases with dose escalation; Peak concentration is +reached 20-30 hours post-dose, with an elimination half-life of approximately 30 hours, +showing no significant differences between dose cohorts: +Time (h) +Conc. (ng/mL) +0 24 48 72 96 120 144 168 +0 +1000 +2000 +3000 +4000 +5000 +6000 +37.5 mg +75 mg +150 mg +300 mg +37.5 mg +75 mg +150 mg +300 mg +Effective Conc. +Time (h) +Log Conc. +0 24 48 72 96 120 144 168 +1 +2 +3 +4 +5 +Effective Conc. +Drug Time-Concentration and Semi-logarithmic Plots of XTL6001-I-C01 SAD Study (N=6/group) +Effective drug concentration maintained for >1 week: doses ≥150 mg can maintain +this effective concentration for over 168 hours (7 days), meeting the requirement for +once-weekly administration. +Reductions in Waist Circumference and Waist-to-Hip Ratio: in the MAD cohort, +after 4-5 weeks of treatment, subjects with BMI <28 kg/m² achieved a body weight +reduction of 2.06% to 2.21%. In obese subjects (BMI ≥28 kg/m²), waist circumference +decreased by approximately 2 cm, and waist-to-hip ratio (WHR) decreased by 0.015. The +reductions were sustained after treatment discontinuation: at two weeks following the last +dose, the total reduction reached 0.04 in WHR and 3.2cm in waist circumference. +The results indicate that XTL6001 leads to a substantially greater reduction in waist +circumference (visceral fat) compared to changes in hip circumference (subcutaneous fat +and muscle mass). +-0.05 +-0.04 +-0.03 +-0.02 +-0.01 +0 +D8 D15 D22 D29 D36 +Change in Waist-to-Hip Ratio +from baseline (%) +Day (s) +-0.4 +-1.58 +-1.98 -1.78 +-2.13 +-4 +-3 +-2 +-1 +0 +D8 D15 D22 D29 D36 +Change in Waist Circumference +from baseline (cm) +Day (s) +Mean Change in Waist -to-Hip Ratio (WHR) from Baseline +Mean Change in Waist Circumference (WC) from Baseline (cm) +End of Dosing +End of Dosing +Persistence of effect observed +post-discontinuation +WC: Waist Circumference; WHR: Waist-to-Hip Ratio +Persistence of effect observed post- +discontinuation +XTL6001: -3.2cm +XTL6001: -0.04 +D43 or Early Withdrawal +D43 or Early WithdrawalBaseline +Baseline +Source: Company data +BUSINESS +– 177 – + + +--- page 186 --- +Reductions in Atherogenic Lipid Parameters: Compared with baseline, in obese +subjects, XTL6001 reduced triglycerides (TG) by 41.4%, low-density lipoprotein +cholesterol (LDL-C) by 30%, and apolipoprotein B (ApoB) by 26.6% at Week 5, suggesting +a robust lipid-lowering effect. +-45 +-35 +-25 +-15 +-5 +D15 D29 D36 +Mean (%) +Day (s) +TG (Triglycerides) %: TC (Total Cholesterol) % +LDL-C (Low-Density Lipoprotein Cholesterol) % ApoB (Apolipoprotein B) % +-25 +-20 +-15 +-10 +-5 +0 +D15 D29 D36 +Mean (%) +Day (s) +-35 +-25 +-15 +-5 +D15 D29 D36 +Mean (%) +Day (s) -30 +-20 +-10 +0 +D15 D29 D36 +Mean (%) +Day (s) +XTL6001: 5W -41.4% +XTL6001: 5W -23.7% +XTL6001: 5W -30.0% XTL6001: 5W-26.6% +MAD Group 2 (BMI ≥ 28) | Mean Percent Change from Baseline (%), N=8 +Baseline +Baseline Baseline +Baseline +Note: The potent lipid-lowering signals observed in healthy volunteers with normal baseline levels +Reduction in Serum Uric Acid (sUA) Levels: Compared with baseline, after four +weeks of treatment with XTL6001, sUA levels in all subjects decreased by 18.4% to 23.2%, +as compared to a reduction of 3.1% in the placebo group. Uric acid clearance increased by +approximately 40% compared with placebo. These results suggest that XTL6001 may +reduce sUA levels by decreasing uric acid production and promoting its excretion. +-12.5% +-18.4% +0.8 +-5.1 +-3.1 +-25 +-20 +-15 +-10 +-5 +0 +5 +D8 D15 D22 +Mean change from baseline in sUA (%) +MAD_G1 BMI<28 +MAD_G1 BMI≥28 +Placebo +Baseline 12.9% 11.4% +-27.9%-30 +-25 +-20 +-15 +-10 +-5 +0 +5 +10 +15 +MAD G1_BMI<28 MAD G1_BMI≥28 Placebo +Mean change from baseline in Cua +(%) +Group +40% Improvement in UA Clearance vs. Placebo +XTL6001: 4W -23.2% +Source: Company data +BUSINESS +– 178 – + + +--- page 187 --- +Clinical Development Plan +The following table sets forth the planned clinical studies and plans for XTL6001 for +the treatment of obesity/weight loss, CKD with proteinuria, and MASH: +Indication Clinical T rial Location Upcoming Milestones +Chronic Weight +Management in +Obese or +Overweight +Populations ...... +A randomized, double-blind, +controlled Phase II clinical trial +to evaluate the efficacy, safety, +and pharmacokinetics of +XTL6001 for injection in +obese/overweight subjects. +Sample size of approximately +240 subjects. +PRC The trial is planned to be +initiated in the third +quarter of 2026 and is +expected to be +completed in the third +quarter of 2027. +Proteinuric CKD .... A randomized, double-blind, +controlled Phase II clinical trial +to evaluate the efficacy, safety, +and pharmacokinetics of +XTL6001 for injection in +subjects with chronic kidney +disease and proteinuria. Sample +size of approximately 150 +subjects +PRC The trial is planned to be +initiated in mid 2027 +and is expected to be +completed in the fourth +quarter of 2027. +MASH ........... I N Dp r eparation stage PRC IND application expected +in early 2027 +Material Communications +As of the Latest Practicable Date, we had not received any objection from any +relevant regulatory authorities to our clinical development plans. The following table sets +forth our important regulatory communications with regulatory authorities regarding the +development of XTL6001 for the treatment of obesity/weight loss and CKD with +proteinuria: +Indication Time +Regulatory +Authority Details +Chronic Weight +Management in +Obese or +Overweight +Populations ..... +2024.5 FDA IND Submission +2024.12.20 FDA IND Approval +2025.2.12 NMPA IND Submission +2025.4.22 NMPA IND Approval +Proteinuric CKD . . . 2025.4.21 NMPA IND Submission +2025.6.30 NMPA IND Approval +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET XTL6001 +SUCCESSFULLY +Our Key Product — MT1002 +Our Key Product, MT1002, is a dual antagonist of coagulation factor II and the GP +IIb/IIIa receptor, primarily targeting clinical needs in anticoagulation and +anti-thrombosis for indications such as ACS-PCI, Stroke, HD and HD-PF4. +BUSINESS +– 179 – + + +--- page 188 --- +Mechanism of Action +MT1002 simultaneously antagonizes coagulation factor II and GPIIb/IIIa, +possessing dual effects of anticoagulation and anti-platelet aggregation. It inhibits +thrombosis through dual pathways and has clinical advantages such as early onset, +convenient administration, no need for frequent monitoring, no dose adjustment required +in patients with hepatic or renal impairment, and prompt recovery of parameters after +discontinuation without affecting normal coagulation and platelet function. +MT1002 +TxA2 +FXa +TF +Prothrombin +Thrombin +Fibrinogen +Heparin +LMWH +Bivalirudin +Heparin +LMWH +Aspirin +ClopidogrelEptifibatide +Abciximab +Fibrin Thrombus +Thrombolytics +Platelets +Collagen WBC +Platelet +aggregation +Fibrinogen +crosslinking +Platelet +activation +Fibrin +degradation +TFPI +vWF ADP +Source: Company data +Coagulation factor II, namely thrombin (a serine protease in plasma), is generated +by activation of the liver-synthesized precursor prothrombin (the precursor of +coagulation factor II). It is a key enzyme in the coagulation cascade (a series of enzymatic +reactions leading to blood clot formation) that converts fibrinogen (a plasma protein +converted by thrombin into fibrin) into an insoluble fibrin mesh. It also promotes platelet +(cell fragments involved in hemostasis and thrombosis) activation and the activation of +other coagulation factors (enzymes and proteins involved in hemostasis), representing a +critical step in the formation of stable thrombus. +GPIIb/IIIa (integrin αIIbβ 3, an integrin receptor on the platelet membrane) is the +primary integrin receptor on the platelet surface. Upon activation of platelets by ADP +(adenosine diphosphate, a platelet activator), TXA +2 (thromboxane A 2, a platelet-secreted +pro-aggregatory substance), and vWF (von Willebrand factor, a glycoprotein mediating +platelet adhesion), this receptor undergoes a conformational change enabling it to bind +fibrinogen (fibrinogen, a plasma protein involved in thrombus formation) or vWF, +bridging multiple platelets to form aggregates — this is the core mechanism of white +thrombus formation (particularly arterial thrombosis). +Market Opportunities and Competition +ACS-PCI +ACS, a type of CHD, refers to a group of conditions that include ST-elevation +myocardial infarction (STEMI), non-ST elevation myocardial infarction (NSTEMI), and +unstable angina. ACS is related to sudden reduced blood flow to the heart. PCI is a +non-surgical, invasive procedure with a goal to relieve the narrowing or occlusion of the +coronary artery and improve blood supply to the ischemic tissue. From 2020 to 2025, the +volume of PCI procedures worldwide increased from 6.2 million to 10.7 million. It is +estimated that by 2030 and 2035, the volume of PCI procedures worldwide will reach 15.6 +million and 21.7 million, respectively. From 2020 to 2025, the volume of PCI procedures in +China increased from 1.0 million to 2.3 million. It is estimated that by 2030 and 2035, the +volume of PCI procedures in China will reach 4.0 million and 6.0 million, respectively. +BUSINESS +– 180 – + + +--- page 189 --- +PCI drugs are primarily used in patients with ACS who are scheduled to undergo +PCI. As of the Latest Practicable Date, there were three drugs with an indication for PCI +approved by the NMPA and three drugs with an indication for PCI approved by the FDA. +In addition, there were ten PCI drug candidates in the clinical stage globally, including +MT1002 (currently in Phase II). +Stroke +Stroke has become the leading cause of death and disability in China, posing a +significant threat to the health of residents as a major chronic disease. In China, the +prevalence of ischemic stroke grew from 18.6 million in 2020 to 23.5 million in 2025, and is +projected to reach 28.9 million by 2030 and 35.1 million by 2035. +HD +The number of patients receiving HD treatment worldwide increased from 3.3 +million in 2020 to 3.7 million in 2025. It is projected to reach 4.6 million by 2030 and 5.5 +million by 2035. In China, the number of patients receiving HD treatment grew from 0.7 +million in 2020 to 1.1 million in 2025 at a CAGR of 10.1% and is projected to reach 1.8 +million by 2030 and 2.8 million by 2035. +HD-PF4 +HIT is one of the major adverse effects associated with commonly used +anticoagulants in dialysis. Type II HIT occurs when heparin forms a complex with platelet +factor 4 (PF4), inducing conformational changes that trigger the production of +autoantibodies. These antibodies lead to platelet activation, aggregation, and +consumption, and may also damage the vascular endothelium, resulting in arterial and +venous thrombosis, which is heparin-induced thrombocytopenia and thrombosis, (HITT). +The incidence of Type II HIT following initial heparin exposure ranges from 3% to 5%, +making it a potentially life-threatening and severe complication. +Competitive Advantages +(1) A direct thrombin + GP IIb/IIIa dual-target antagonist addresses the challenge of balancing +bleeding and ischemia in ACS-PCI. +Unfractionated heparin has a high bleeding risk and large inter-individual +variability, and some patients are intolerant to heparin treatment, leading to +heparin-induced thrombocytopenia; Certain existing anticoagulants may have a high risk +of acute in-stent thrombosis, increasing ischemic risk; Combination therapy (e.g., an +anticoagulant plus a GP IIb/IIIa inhibitor) tends to increase bleeding risk, and without an +established dosing basis for combined use, it is difficult to balance the risks of bleeding +and ischemia. As a “direct thrombin + GP IIb/IIIa dual-target antagonist,” MT1002’s +dual-function polypeptide design may address the challenge of balancing bleeding and +ischemia in ACS-PCI. It has demonstrated a favorable efficacy and safety profile in +ACS-PCI patients, and has the potential to overcome the limitations of conventional +anti-thrombotic regimens. +In the Phase II clinical trials in the U.S. and the PRC, MT1002 has shown good +efficacy and safety at various dose levels. In the U.S. trial, all 6 enrolled patients in the 0.90 +mg/kg + 1.8 mg/kg/h × 4 hours dose group successfully completed the PCI procedure +without any MACE or major bleeding events. In the PRC trial, all 15 subjects who +underwent PCI successfully completed the procedure without any MACE or major +bleeding events. Combining the results of both trials, all subjects, under the effect of +MT1002’s anticoagulant and antiplatelet targets, successfully completed the PCI +procedure without any thrombotic or major bleeding events. There were no deaths, SAEs, +or early withdrawals due to TEAEs. All adverse events were mild or moderate, fully +validating its good safety and efficacy. +(2) MT1002 demonstrates dose-dependent anticoagulant and antiplatelet activity with early +onset and quick recovery after discontinuation. It can fill the therapeutic need in emergency +PCI where antiplatelet drugs have not taken effect or patients are unable to take oral +medication, while ensuring a good safety profile. +In the U.S. Phase II clinical trial, the treatment regimen of 0.90 mg/kg + 1.8 +mg/kg/h × 4 hours for MT1002 was able to stably maintain the clinical anticoagulation +target during the procedure. In the PRC Phase II clinical trial, the pharmacodynamic effect +showed anticoagulant activity closely related to the administered dose, taking effect +within 5 minutes of administration. PD indicators returned to near-normal levels within 2 +hours after discontinuation, validating MT1002’s characteristics of early onset and quick +recovery after withdrawal. For more information of the clinical results, see “— Clinical +Trial Overview of MT1002” below in this section. +BUSINESS +– 181 – + + +--- page 190 --- +(3) Stable pharmacokinetic properties and good population adaptability +MT1002 has demonstrated consistent and stable pharmacokinetic and +pharmacodynamic profiles across different populations. The Phase II clinical study +showed that the in vivo exposure (Cmax and AUC) of MT1002 in ACS patients increased +with dose, demonstrating good dose dependency. The PK curve was consistent with the +Phase I results, showing no significant difference at the same dose levels, which supports +its stable pharmacokinetic characteristics. PK/PD modeling results further showed that +the typical values of ACT and APTT and their 95% confidence intervals were highly +consistent between the PRC and U.S. populations under the same dosing regimen, +verifying its good comparability across different ethnic groups. Furthermore, MT1002 is +primarily metabolized via plasma enzymatic hydrolysis, consistent with the +characteristics of a typical polypeptide drug. It is not affected by ethnic differences and +demonstrates good population adaptability. +Clinical Trial Overview of MT1002 +MT1002-I-C01 U.S. Phase I Clinical Study +Overview: This is a randomized, open-label, sequential parallel-group, single-dose +escalation study. Its primary objective was to evaluate the safety and tolerability, and the +secondary objective was to characterize the pharmacokinetics and pharmacodynamics of +MT1002 in healthy subjects. +T rial design: 6 subjects were enrolled in each of the 5 cohorts (a total of 30 subjects) +to receive different bolus + infusion doses of MT1002. The total infusion time was 4 hours. +Pharmacokinetic and pharmacodynamic parameters were measured at different time +points after administration to assess the pharmacokinetic and pharmacodynamic +characteristics, while also evaluating the safety and tolerability of MT1002 in healthy +subjects. Subjects underwent follow-up until Day 8 from the initiation of dosing. No +additional administration was provided during the follow-up period. +A total of 30 healthy subjects were enrolled in this trial. The key inclusion criteria +included: (1) male or female subjects aged between 18 and 60 years; (2) BMI between 18.0 +and 34.0 kg/m +2; (3) abstinence from xanthine-, quinine- or caffeine-containing beverages +and avoidance of prolonged intense physical activity during the study period (from 72 +hours prior to dosing to the last visit). The key exclusion criteria included: (1) presence of +any medical condition, abnormal clinical laboratory findings or other circumstances that, +in the opinion of the investigator or designee, would render the subject unsuitable for the +study; (2) inability to tolerate venipuncture or poor venous access; (3) participation in +another investigational drug study and receipt of study treatment within 30 days or five +half-lives (whichever is longer) prior to the screening visit, or concurrent participation in +another clinical trial; (4) occurrence of acute illness within 14 days prior to the screening +visit; and (5) known hypersensitivity to MT1002 for injection. +T rial status: The Phase I clinical trial was initiated in April 2019 and is completed in +August 2019. A total of 30 healthy subjects completed the study drug administration in 5 +dose groups. In a dose-escalation design, the safety and tolerability of MT1002 in healthy +individuals were explored across 5 dose groups (6 subjects per group). The Phase I clinical +trial was completed by the Group on its own. +Safety data: MT1002 for injection showed good safety and tolerability. No SAEs +were reported. No life-threatening AEs occurred, nor did any AE lead to patient +withdrawal or study discontinuation. All TEAEs were Grade 1 in severity with mild +symptoms, none of which required clinical intervention, and all subjects fully +recovered/resolved in a short period. +BUSINESS +– 182 – + + +--- page 191 --- +Efficacy data: +infusion stopped +Cohort 1 (0.15+0.3) +Cohort 2 (0.3+0.6) +Cohort 3 (0.6+1.2) +Cohort 4 (0.9+1.8) +Cohort 5 (1.2+2.3) +ACT (S) +100 +120 +140 +160 +180 +200 +220 +240 +260 +280 +300 +Time (h) +012 345678 9 10 11 12012 345678 9 10 11 12 +Effect of MT1002 on anticoagulant indicator ACT +(N=6/group, dose unit: mg/kg + mg/kg/h) +01 23 +Time (h) +45678 9 10 11 12 +Cohort 1 (0.15+0.3) +Cohort 2 (0.3+0.6) +Cohort 3 (0.6+1.2) +Cohort 5 (1.2+2.3) +Cohort 4 (0.9+1.8) +infusion stopped infusion stopped +01 23 +Time (h) +45678 9 10 11 12 +Cohort 1 (0.15 +0.3) +Cohort 2 (0.3+0.6) +Cohort 3 (0.6+1.2) +Cohort 4 (0.9+1.8) +Cohort 5 (1.2+2.3) +Fold increase for APTT +0 +10 +20 +30 +40 +50 +60 +70 +80 +90 +100APTT (S) +4.0 +3.5 +3.0 +2.5 +2.0 +1.5 +1.0 +0.0 +0.5 +Effect of MT1002 on anticoagulant indicator APTT and the fold of its prolongation +(N=6/group, dose unit: mg/kg + mg/kg/h) +Source: Company data +Anticoagulant effect: MT1002 demonstrated a dose-dependent anticoagulant +activity by prolonging APTT, ACT, INR, PT, and TT. These parameters returned to the +normal range after discontinuation, with no impact on the human coagulation function. +0123456789 10 11 12 +30 +60 +90 +120 +150 +180 +210 +240 +270 +300 +330 Cohort 1 (0.15+0.3) +Cohort 2 (0.3+0.6) +Cohort 3 (0.6+1.2) +Cohort 4 (0.9+1.8) +Cohort 5 (1.2+2.3) +infusion stopped +PA (S) +Time (h) +Effect of MT1002 on the anti-platelet indicator, platelet aggregation (PA) function +Note: The PA results for cohort 3 were not accurately obtained as most reported values were >134s due +to an equipment malfunction during sample testing. +Source: Company data +Anti-platelet effect: MT1002 prolonged platelet aggregation time, demonstrating a +dose-dependent anti-platelet activity. Platelets were immediately inhibited after +administration, and the function returned to the normal range after discontinuation, with +no impact on human platelet function. +BUSINESS +– 183 – + + +--- page 192 --- +Results from the Phase I study demonstrated that MT1002 exhibited a favorable +safety profile, with pharmacokinetic and pharmacodynamic parameters showing a +consistent correlation. Dose-dependent anticoagulant and antiplatelet activities were +observed. Coagulation and platelet function returned to within normal ranges following +treatment discontinuation. The objectives set out in the overview were achieved. +MT1002-I-C02 PRC Phase I Clinical Study +Overview: This study adopted a single-center, randomized, double-blind, +placebo-controlled, single-dose escalation design. Its primary objective was to evaluate +the safety and tolerability, and the secondary objective was to characterize the +pharmacokinetics and pharmacodynamics of MT1002 for injection in healthy subjects in +the PRC. +T rial design: The study included a dose escalation/de-escalation study with 2 dose +groups. Each group consisted of 10 healthy subjects, with 8 receiving MT1002 and 2 +receiving placebo. MT1002 was administered as a bolus injection followed by a continuous +4-hour infusion. Subjects underwent follow-up until Day 7 from the initiation of dosing. +No additional administration was provided during the follow-up period. +A total of 20 healthy subjects were enrolled in this trial. The key inclusion criteria +included: (1) aged 30 years or above, with children and no plans for future reproduction or +sperm/egg donation at the time of signing the informed consent form; (2) body weight not +less than 50.0 kg for males and 45.0 kg for females; and (3) BMI within the range of 18.0 to +28.0 kg/m². The key exclusion criteria included: (1) history of severe allergy or known +hypersensitivity to any component of the investigational product or its excipients; (2) +inability to comply with standardized meals or fasting requirements; and (3) history or +presence of clinically significant cardiovascular, cerebrovascular, hepatic, renal, +endocrine, metabolic, gastrointestinal, hematological, respiratory, infectious, oncological +or psychiatric disorders, as determined by the investigator. +T rial status: The Phase I clinical trial was initiated in September 2021 and is +completed in April 2022. A total of 6 subjects in dose group 1 and 7 subjects in dose group +2 completed the trial. All 4 subjects in the placebo group completed the trial. The Phase I +clinical trial was completed by the Group on its own. +Safety data: All TEAEs were Grade 1 or 2 in severity, with no clinical symptoms, and +did not require corresponding measures. No drug-related SAEs were reported. No +life-threatening AEs occurred, nor did any AE lead to patient withdrawal or study +discontinuation. +Efficacy data: After administration, coagulation indicators and platelet aggregation +time showed dose-dependent anticoagulant and anti-platelet activities. These functions +returned to the normal range after discontinuation, with no impact on human coagulation +or platelet function. +Phase I results showed good safety, linear pharmacokinetics with +dose-proportionality, and a clear PK/PD relationship. The objectives set out in the +overview were achieved. +MT1002-II-C01 U.S. Phase II Efficacy Study in NSTEMI-PCI Patients +Overview: A dose escalation/de-escalation study was conducted in the U.S. in +NSTEMI-PCI patients to evaluate the efficacy and safety of MT1002. +T rial design: The target population was patients with non-ST-segment elevation +myocardial infarction (NSTEMI) undergoing PCI. A total of 18 patients were planned for +enrollment into 3 dose groups of 6 patients each. All patients were to receive MT1002 via +bolus injection + 4-hour infusion during the peri-procedural period of PCI. Safety and +efficacy endpoints included BARC type 3-5 bleeding events and MACE events. PD +endpoints included coagulation-related indicators. Subjects underwent follow-up until +Day 30 from the initiation of dosing. No additional administration was provided during +the follow-up period. +A total of 6 subjects were enrolled in this trial. The key inclusion criteria included: +(1) male or female subjects aged ≥18 years and ≤85 years; (2) confirmed diagnosis of +NSTEMI; and (3) patients who were hospitalized for this episode of NSTEMI and planned +to undergo PCI. The key exclusion criteria included: (1) cardiogenic shock or a history of +prolonged cardiopulmonary resuscitation (CPR); (2) active bleeding, bleeding diathesis or +coagulopathy; (3) history of intracranial hemorrhage or structural abnormalities in the +brain; and (4) history of transient ischemic attack (TIA) or stroke within the past six +months. +BUSINESS +– 184 – + + +--- page 193 --- +T rial status: The Phase II clinical trial was initiated in December 2020 and the study +for the first dose group has been completed, with a total of 6 subjects enrolled who +received MT1002 via bolus injection + continuous 4-hour infusion. The study was +terminated due to commercial considerations, primarily relating to the prioritization of +financial resources, and was not related to any safety or efficacy concerns. In March 2024, +we submitted an application to the FDA to terminate the trial, at which time one cohort of +six patients had completed dosing, all of whom successfully completed the procedure +without bleeding or thrombotic events, and no safety concerns were identified. We had +determined by the end of 2023 to prioritize clinical development in the PRC and initiated +a Phase II clinical trial. The Company intends to adopt a bridging strategy to potentially +waive the requirement for a separate Phase II trial in the U.S. and to consider conducting +an MRCT at the Phase III stage, with simultaneous implementation in both the PRC and +the U.S. and joint patient enrolment, with a view to reducing overall clinical development +costs, maintaining continuity of development and ultimately achieving concurrent +development in both markets. Our Directors confirm that the termination has no adverse +impact on the corresponding clinical development in the PRC and was not related to any +safety or efficacy concerns. +Safety data: Interim results showed that all 6 patients successfully completed the +PCI procedure without any thrombotic or major bleeding events. A total of 9 AEs were +reported by 2 subjects, the majority (66.7%) of which were mild. No drug-related SAEs +were reported. No life-threatening AEs occurred, nor did any AE lead to patient +withdrawal or study discontinuation. +Efficacy data: Interim results showed that after administration of MT1002, the +pharmacodynamic effect was exerted within 5 minutes, with anticoagulant indicators +reaching desired levels. All 6 patients successfully completed the PCI procedure without +any thrombotic or MACE events. MT1002 demonstrated early-onset characteristics, +meeting the urgent need for anticoagulation during the peri-procedural period of PCI and +providing timely and reliable protection against thrombosis. +MT1002-II-C04 PRC Phase II Efficacy Study in ACS-PCI Patients +Overview: This is a dose escalation/de-escalation study conducted in the PRC in +ACS-PCI patients. Its primary objective was to identify the safe and well-tolerated dose of +MT1002, and the secondary objective was to evaluate the safety and tolerability. +T rial design: The target population was ACS patients undergoing PCI, including +those with ST-segment elevation myocardial infarction (STEMI), non-ST-segment +elevation myocardial infarction (NSTEMI), and unstable angina (UA). A total of 53 to 65 +patients are planned to be enrolled in six cohorts, including five dose-exploration cohorts +and one dose-expansion cohort. All patients are to receive MT1002 via bolus injection + +4-hour infusion during the peri-procedural period of PCI. Safety and efficacy endpoints +included BARC type 3-5 bleeding events and MACE events. PD endpoints included +indicators related to coagulation and platelet function. Subjects underwent follow-up +until Day 30 from the initiation of dosing. No additional administration was provided +during the follow-up period. +The key inclusion criteria included: (1) male or female subjects aged between 18 and +85 years; (2) subjects diagnosed with ACS who were hospitalized and planned to undergo +PCI; (3) subjects who were able to understand and willing to sign a written informed +consent form prior to any study-related procedures. The key exclusion criteria included: +(1) subjects with cardiogenic shock or those who had undergone CPR; (2) subjects +suspected of having aortic dissection, pericarditis or endocarditis; (3) subjects with a +history of intracranial hemorrhage or structural abnormalities in the brain; (4) subjects +who experienced TIA or stroke within the past six months; and (5) subjects with a history +of gastrointestinal or genitourinary bleeding within the past month. +T rial status: The Phase II clinical trial was initiated in February 2024. As of the +Latest Practicable Date, five dose-exploration cohorts involving a total of 24 subjects had +been completed, and enrollment of 26 subjects in the dose-expansion cohort was +completed. +BUSINESS +– 185 – + + +--- page 194 --- +The relatively long interval between the Phase I and Phase II clinical trials was +primarily attributable to the prioritization of internal resources, with a focus on our Core +Product. In addition, MT1002 is an anticoagulant and antiplatelet drug, and its Phase III +clinical trial is expected to require a large sample size and significant investment. +Accordingly, the early-stage cohorts of the Phase II trial (MT1002-II-C04) employed a +small sample size (n=6 per cohort) appropriately designed to explore dose-level trends +and safety signals primarily in light of limited financial resources. Given the small sample +size and inherent inter-subject variability, such exploratory cohorts were not primarily +designed to establish a conclusive correlation between dose levels and clinical events. +Therefore, following improvements in our Company’s funding position, an +adequately-sized Phase IIb trial — forming part of the same MT1002-II-C04 study — is +being conducted to build upon these initial findings, enabling a robust assessment of the +exposure-response relationship between PD biomarkers and drug exposure, as well as a +preliminary exploration of MACE and bleeding events, which is necessary for informing +the subsequent large-scale Phase III trial. +Safety data: MT1002 demonstrated good safety and tolerability. As of the Latest +Practicable Date, one thrombotic event that was assessed as unrelated to the study drug +was reported, and no MACE events, NACE events, or BARC type 3-5 bleeding events +occurred. With the exception of one moderate AE unrelated to the study drug, all other +AEs were mild. +Efficacy data: After administration of MT1002, the pharmacodynamic effect was +exerted within 5 minutes. All 28 subjects successfully completed the PCI procedure +without any drug-related thrombotic or MACE events. The study showed that PCI +procedures could be successfully completed and thrombotic events prevented even with +an ACT of 200s or below, suggesting MT1002’s good ability to balance ischemic and +bleeding risks. It demonstrates the characteristic of preventing thrombosis at lower ACT +levels, thereby avoiding the high risk of major bleeding associated with traditional +anticoagulants. Unlike existing standard therapies, the synergistic anticoagulant and +anti-platelet effects of MT1002 ensure anti-thrombosis while avoiding the high risk of +major bleeding associated with traditional anticoagulants. After exploring the optimal +balanced dose in Phase II studies, a large-sample validation will be conducted in a Phase +III study. +Change of ACT-Time Mean±SEM +ACT=180s +Groups +Time (min) +ACT Mean (S)±SEM +Effect of MT1002 on +Activated Clotting Time (ACT) +in the PRC Phase II Clinical Study +Post-administration ATT/ +Baseline APTT=1.5 +Change of APTT from Baseline – Over Time Mean±SEM +Post-administration ATT/ +Baseline APTT=2.5 +Groups +Change of APTT from Baseline (fold) Mean±SEM +Time (min) +Effect of MT1002 on Activated +Partial Thromboplastin Time (APTT) +in the PRC Phase II Clinical Study +Source: Company data +Clinical Development Plan +For ACS-PCI: We plan to further communicate with the CDE in an EOP II meeting +after completing the PRC Phase II MT1002-II-C04 study, to advance a large-sample +confirmatory Phase III clinical study with NACE and MACE events as efficacy endpoints, +in support of a subsequent NDA filing. +For Stroke: We have obtained the PRC Phase II clinical trial approval and plan to +commence the Phase II clinical trial +(1) in the PRC by June 2026. +For HD: We have obtained the PRC Phase II clinical trial approval and plan to +commence the Phase II clinical trial (1) in the PRC by July 2026. +For HD-PF4: We have obtained the PRC Phase II clinical trial approval and plan to +initiate the PRC Phase II clinical trial (1) by the end of 2027. +BUSINESS +– 186 – + + +--- page 195 --- +Note: +(1) The Phase I clinical trial of MT1002 had conducted adequate safety and dose-ranging evaluation +to support the therapeutic dose range for the treatment of stroke, HD and HD-PF4 in the PRC, +thereby providing the basis for directly commencing the respective Phase II clinical trials. The +relatively long interval between obtaining regulatory approval and commencing the relevant +clinical trials was primarily attributable to pipeline prioritization and the allocation of financial +resources. The Phase II clinical trial preparation was initiated in March 2026, including the +finalization of the clinical trial protocol. +Material Communications +As of the Latest Practicable Date, we had not received any objection from any +relevant regulatory authorities to our clinical development plans. The table below sets +forth our key regulatory communications with regulatory agencies regarding the +development of MT1002 for ACS-PCI, Stroke, HD, and HD-PF4: +Indication Time +Regulatory +Authority Details +ACS-PCI ......... 2019.1 FDA IND Submission +2019.3.1 FDA IND Approval +2021.3.10 NMPA IND Submission +2021.6.2 NMPA IND Approval +2022.12.27 NMPA EOP1 Meeting +2024.8.15 NMPA EOP2 Meeting +S t r o k e ........... 2023.4.17 NMPA IND Submission +2023.6.25 NMPA IND Approval +H D ............. 2023.10 FDA IND Submission +2023.11.13 FDA IND Approval (1) +2023.5.18 NMPA IND Submission +2023.7.27 NMPA IND Approval +HD-PF4 .......... 2023.3.22 NMPA IND Submission +2023.6.6 NMPA IND Approval +Notes: +(1) For the treatment of HD in the U.S., we have not yet formulated a definitive clinical development +plan and has not commenced any clinical trials as of the Latest Practicable Date despite obtaining +IND approval from the FDA in 2023. We are exploring potential collaboration opportunities with +overseas partners and may initiate clinical development upon securing an appropriate +collaboration arrangement. +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET MT1002 +SUCCESSFULLY +Our Key Product — MT200605 +Our Key Product, MT200605, is a neuroprotectant for injection. Its core +breakthrough lies in a dual synergistic mechanism of action — by simultaneously +activating the TrkB receptor and eliminating oxygen radicals, it blocks the post-acute AIS +pathological cascade via dual pathways, offering a therapeutic solution for patients with +currently unmet clinical needs. +Mechanism of Action +MT200605 has a dual mechanism of action: on one hand, by activating the TrkB +receptor, it initiates the BDNF signaling pathway, further activating signaling pathways +such as ERK, PI3K/Akt, and PLC. This promotes the growth, repair, and regeneration of +neural cells, counteracts damage from toxic substances, enhances learning and memory +functions, and demonstrates a significant neuroprotective effect in stroke models. On the +other hand, it exerts the anti-oxygen free radical effect of flavonoids. Acute ischemic +stroke leads to the release of a large number of reactive oxygen species, triggering +inflammatory responses and ischemia-reperfusion injury. Flavonoid compounds possess +multiple mechanisms, including directly blocking or scavenging free radicals, inhibiting +lipid peroxidation, and chelating with metal ions, thereby exerting antioxidant and +neuroprotective effects. +BUSINESS +– 187 – + + +--- page 196 --- +4USPLF +4ZOBQUJDQ MBTUJDJUZ +/FVSPQMBTUJDJUZ +&YDJUPUPYJDJUZ 0YZHFOOVUSJFOU +EFQSJWBUJPO +$FMME FBUI /FVSPHFOFTJT +MT200605 +1-$Z 1*,",U . "1,&3, +TrkB activation +Blood-brain barrier +.JUPDIPOESJB +"51T ZOUIFTJT +"OUJPYJEBUJPO +PYZSBEJDBMJ OIJCJUJPO +/FSWFD FMME FBUI +e40% (4)1Y +Source: Company data +TrKB receptor is a transmembrane receptor with tyrosine kinase activity in the Trk +family, which mainly binds to brain-derived neurotrophic factor and neurotrophin-4/5. +After binding to ligands, TrKB receptor activates the downstream signaling pathways +such as PI3K/Akt, MAPK/ERK, and PLCγ by dimerization, and regulates neuronal +survival, proliferation and differentiation, axonal dendritic development, and synaptic +plasticity, which is essential for the development of the nervous system, It is a core +molecule in the development of the nervous system, maintenance of function and repair of +damage. +TrKB receptor agonist binds to TrKB and exerts neuroprotective effects through +multiple mechanisms: activating the PI3K/Akt pathway to inhibit neuronal apoptosis and +reduce ischemic or toxic injury; promoting axonal regeneration and synaptic +reconstruction via the MAPK/ERK pathway to facilitate the repair of the neural network; +enhancing the regulation of PLCγ -mediated calcium signaling to improve synaptic +transmission and alleviate cognitive impairment; down-regulating proinflammatory +drugs; and down-regulating the calcium signaling pathway to improve synaptic +transmission and alleviate cognitive impairment. It also enhances PLC γ-mediated calcium +signaling and improves synaptic transmission to alleviate cognitive deficits; +down-regulates the pro-inflammatory pathway to inhibit glial over-activation and reduce +inflammatory damage; and stimulates neurogenesis in the hippocampus and other +regions to facilitate functional recovery. These potential multiple therapeutic mechanisms +make TrKB agonists have the potential to treat stroke, neurodegenerative diseases, +depression and other neurological disorders. +Market Opportunities and Competition +AIS is the most common type of stroke, accounting for about 70%-80% of strokes. +The global prevalence of ischemic stroke grew from 65.7 million in 2020 to 85.3 million in +2025, and is projected to reach 105.8 million by 2030 and 127.4 million by 2035. In China, +the prevalence of ischemic stroke grew from 18.6 million in 2020 to 23.5 million in 2025, +and is projected to reach 28.9 million by 2030 and 35.1 million by 2035. +As of the Latest Practicable Date, there are three neuroprotective drugs approved by +NMPA. In addition, there were a total of 12 neuroprotective drug candidates for AIS in the +clinical stage in the PRC, including our Key Product MT200605 (currently in phase II). For +more information, see “Industry Overview — Main treatment of Ischemic Stroke” and +“Industry Overview — Competitive landscape of neuroprotective drugs.” +BUSINESS +– 188 – + + +--- page 197 --- +Competitive Advantages +(1) Favorable safety and tolerability profile +MT200605 has successfully completed Phase I clinical studies in both the PRC and +the U.S. Study results showed that MT200605 has good safety and tolerability in healthy +subjects. All TEAEs related to MT200605 were Grade 1, with no SAEs or events leading to +subject withdrawal. All adverse events were resolved or recovered, further validating the +safety foundation of MT200605 as a neuroprotective agent for stroke in the early clinical +stage. Furthermore, results from the Phase I single and multiple dose studies indicated +that the in vivo exposure of MT200605 is clearly linearly correlated with the dose, +demonstrating a good dose-exposure relationship. There was no accumulation after +multiple administrations, providing support for subsequent dose exploration and clinical +application. For more information of the clinical results, see “— Clinical Trial Overview of +MT200605” below in this section. +(2) Synergistic neuroprotective effect via dual pathways +MT200605 has a well-defined dual mechanism of action, which is supported by +existing clinical data. On one hand, the drug promotes neurogenesis by activating the +TrkB receptor; on the other hand, it leverages the antioxidant properties of flavonoids to +inhibit free radical damage, thereby achieving a synergistic neuroprotective effect. +Existing preclinical pharmacodynamic studies (MCAO-CIR rat model) show that +MT200605 is well-distributed in brain tissue and has the ability to cross the blood-brain +barrier; it is more effective existing neuroprotective agents in improving stroke-related +behavioral indicators, increasing brain SOD and GSH-Px content, reducing cerebral +infarction volume, prolonging the survival rate of model mice, and delaying the time of +animal death, demonstrating significant therapeutic advantages and good development +potential. +Sham +Vehicle +Edaravone 4.9 mg/kg +MT200605 0.45 mg/kg +MT200605 1.35 mg/kg +MT200605 4.05 mg/kg +MT200605 sc 1.35 mg/k +g +Percent survival +day +0 +0 +50 +100 +150 +2468 1 0 +Sham Vehicle Edaravone 4.9 0.45 1.35 4.05 sc 1.35 +0 +1 +2 +3 +MT200605 +mg/kg +*** +## +# ## +# +Behavior score +MT200605 can significantly prolong the +survival rate of model rats and delay the +time of death. +(79.2% vs. Edar 44.8%, n=10~29) +MT200605 can reduce the behavioral +scores of rats in a dose-dependent +manner. +(n=10~29) +Sham Vehicle Edaravone 4.9 0.45 1.35 4.05 sc 1.35 +0 +10 +20 +30 *** +#### +MT200605 +mg/kg +### +Percentage of infarct volume (%) +Vehicle (97”) +MT200605 0.45mg/kg (77”) +MT200605 4.05mg/kg (118”) +MT200605 1.35mg/kg (75”) +MT200605 sc 1.35mg/kg (120”) +Sham (279”) +Edaravone (81”) +Effect on the percentage of cerebral +infarction volume in rats +(n=10-19) ***P<0.001 vs. Sham; #P<0.05, +##P<0.01 vs. Vehicle +Typical photos of cerebral infarction +BUSINESS +– 189 – + + +--- page 198 --- +Sham Vehicle Edaravone 4.9 0.45 1.35 4.05 sc 1.35 +0 +20 +40 +60 +80 +MT200605 +mg/kg +SOD (U/ml) +Sham Vehicle Edaravone 4.9 0.45 1.35 4.05 sc 1.35 +0 +100 +200 +300 +MT200605 +mg/kg +** +# ## +### ### +GSH-Px (nmol/min/mL) +MT200605 increases SOD content +(44.7% vs. Edar 13.7%, n=10~29) +MT200605 increases GSH-Px content +(52.6% vs. Edar 31.3%, n=10~29) +Source: Company data +Clinical Trial Overview of MT200605 +MT200605-I-C01 PRC Phase I Clinical Study +Overview: We conducted a randomized, double-blind, placebo-controlled Phase I +clinical trial in healthy subjects in the PRC to evaluate single ascending dose (SAD) and +multiple ascending dose (MAD) administration of MT200605 for injection. Its primary +objective was to evaluate the safety and tolerability, and the secondary objective was to +characterize the pharmacokinetic of MT200605 in healthy individuals in the PRC, and to +recommend the optimal dosing regimen and dose for Phase II clinical trials. +T rial design: This was a single-center, Phase I, randomized, double-blind, +placebo-controlled, sequential-dosing SAD and MAD study. The SAD study consisted of 5 +cohorts (MT200605 0.15mg/Kg, 0.3mg/Kg, 0.6mg/Kg, 0.9mg/Kg, and 1.2mg/Kg, single +dose). The 4 subjects in the first cohort all received MT200605, while the remaining cohorts +each had 8 subjects (6 on MT20060 5+2o nplacebo). A total of 36 healthy subjects were +enrolled in the entire SAD study. The MAD study comprised 3 cohorts (0.3mg/Kg, +0.6mg/Kg, and 1.2mg/Kg, dosed every 12 hours for 7 consecutive days), with 8 subjects in +each cohort (6 on MT20060 5+2o nplacebo), for a total of 24 subjects. Subjects in the SAD +study will undergo follow-up 11 days after dosing, while those in the MAD study will +undergo follow-up 7 days after completion of dosing. The primary endpoint of the study +was the safety and tolerability of MT200605 in healthy subjects, with its pharmacokinetic +characteristics as a secondary endpoint. +A total of 60 subjects were enrolled in the PRC in this trial. The key inclusion criteria +included: (1) subjects aged between 18 and 50 years at the time of screening, with a BMI of +no less than 18.0 kg/m² and no more than 28.0 kg/m²; (2) healthy subjects without +clinically significant medical history or conditions; (3) subjects with no plan for +conception, sperm donation or egg donation within six months following screening, who +voluntarily agree to use effective contraceptive measures, and for female subjects, with a +negative serum pregnancy test result; and (4) subjects who are able to understand the +study procedures and have signed the informed consent form prior to participation in the +study. The key exclusion criteria included but were not limited to: (1) any clinically +significant abnormal findings identified during physical examination; (2) any clinically +significant abnormalities in laboratory test results at screening, or positive findings for +HBsAg, anti-HCV antibody, HIV antibody, serological testing, or active infection; (3) +female subjects with a positive pregnancy test result or who are lactating; (4) positive +results in urine drug screening or breath alcohol test; and (5) a clinically significant +history of allergic reactions, such as anaphylaxis, hypersensitivity or angioedema, as +determined by the investigator. +T rial status: The Phase I clinical trial was initiated in July 2023 and completed in +December 2023 with 60 subjects enrolled in the PRC. We completed the Phase I clinical +trial on our own. +Safety data: The PRC Phase I clinical study showed a good safety profile. No +drug-related TEAEs of Grade 3 or above were observed, and no drug-related SAEs were +reported. No life-threatening AEs occurred, nor did any AE lead to patient withdrawal or +study discontinuation. The objective set out in the overview was achieved. +Pharmacokinetic data: The SAD study showed that within the 0.15mg/kg to +1.2mg/kg range, the pharmacokinetic (PK) characteristics of both total MT200605 and free +MT200605 showed a clear positive dose-exposure correlation, and the main +pharmacokinetic parameters followed linear kinetic characteristics. The MAD study +BUSINESS +– 190 – + + +--- page 199 --- +showed that within the 0.3mg/kg to 1.2mg/kg range, there was no significant +accumulation after multiple doses of MT200605, and steady state trough concentration +was reached on day 5. The main pharmacokinetic parameters of free MT200605 followed +linear kinetic characteristics, while the increase in exposure (AUC0-t,ss) of total MT200605 +was slightly higher than dose-proportional (approximately 1.85-fold). +0.15mg/kg +0.3mg/kg +0.6mg/kg +0.9mg/kg +1.2mg/kg +0.15mg/kg +0.3mg/kg +0.6mg/kg +0.9mg/kg +1.2mg/kg +Infusion stopped Infusion stopped +Conc. (ng/ml) +Log Conc. +1500 +1200 +900 +600 +300 +0 +4.0 +3.5 +3.0 +2.5 +2.0 +1.5 +1.0 +0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8 +Time (h) Time (h) +Time-Concentration and Semi-logarithmic Plots of MT200605 Parent Drug in Each +Dose Group of the MT200605 SAD Study +(N=6/group) +0.15+0.15mg/kg/d +0.3+0.3mg/kg/d +0.6+0.6mg/kg/d +Infusion stopped +0 1 2 3 4 5 72 144 168 170 172 +Conc. (ng/ml) +Time (h) +900 +800 +700 +600 +500 +400 +300 +200 +100 +0 +Time-Concentration Plots of MT200605 Parent Drug in Each Dose Group of the +MT200605 MAD Study +(N=6/group) +Source: Company data +Results from the Phase I study demonstrated a favorable safety profile of MT200605, +with pharmacokinetic parameters showing a linear correlation with the administered +dose. The objectives set out in the overview were achieved. +MT200605-101-US U.S. Phase I Clinical Study +Overview: We conducted a randomized, double-blind, Phase I clinical trial in the +U.S. to evaluate the safety, tolerability, and pharmacokinetics of single ascending doses +(SAD) of MT200605 for injection in healthy subjects. Its primary objective was to evaluate +the safety and tolerability, and the secondary objective was to characterize the +pharmacokinetic of MT200605 in healthy subjects in the U.S., and to recommend the +optimal dosing regimen and dose for Phase II clinical trials. +T rial design: The U.S. Phase I clinical study included 2 cohorts (MT200605 +0.1mg/Kg and 0.3mg/Kg), both with single-dose administration. Each cohort comprised 8 +subjects (6 on MT20060 5+2o nplacebo). Subjects will undergo a safety follow-up +assessment 7 days after dosing. A total of 16 healthy subjects were enrolled in the study. +A total of 16 subjects were enrolled in the US in this trial. The key inclusion criteria +included: (1) male or non-childbearing potential female, ≥ 18 and ≤ 65 years of age with +BMI ≥ 18.0 and ≤ 32.0 kg/m +2 at screening; (2) healthy subject without clinically significant +medical history or conditions; (3) female subjects of non-childbearing potential; (4) female +subjects (except for post-menopausal women) must have agreed to use two forms of +acceptable non-hormonal methods of contraception, for the duration of the study and for +30 days following the completion of the study; and (5) subjects able to understand the +BUSINESS +– 191 – + + +--- page 200 --- +study procedures and provide signed informed consent to participate in the study. The +key exclusion criteria included but were not limited to: (1) any abnormalities identified +during physical examination (including examination of the administration site); (2) +abnormal laboratory test results at screening, or positive findings for hepatitis B surface +antigen (HBsAg), anti-hepatitis C virus (HCV) antibody, HIV antigen or antibody, or +evidence of active infection; (3) positive pregnancy test result or lactation at screening; (4) +positive urine drug screening, positive urinary cotinine test or positive breath alcohol test; +and (5) a history of severe allergic reactions (e.g., anaphylaxis, hypersensitivity or +angioedema) considered clinically significant by the investigator. +T rial status: The Phase I clinical trial was initiated in October 2022 and completed in +January 2023 with 16 subjects enrolled in the US. +Safety data: The U.S. Phase I clinical study showed a good safety profile. No +drug-related TEAEs of Grade 3 or above were observed, and no drug-related SAEs were +reported. No life-threatening AEs occurred, nor did any AE lead to patient withdrawal or +study discontinuation. +Pharmacokinetic data: The increase in pharmacokinetic exposure of free MT200605 +was dose-proportional, whereas the increase in pharmacokinetic exposure of total +MT200605 was slightly greater than dose-proportional. MT200605 is minimally excreted +in urine. At doses of 0.1 mg/kg and 0.3 mg/kg, the percentage of urinary excretion was +0.07% and 0.10% for free MT200605, and 2.46% and 5.39% for total MT200605, respectively. +The Phase I study demonstrated that MT200605 had a favorable safety profile and +exhibited linear pharmacokinetic characteristics with dose-proportional exposure. The +objectives set out in the overview were achieved. +MT200605-II-C01 PRC Phase II Clinical Study +Overview: This is a multi-center, randomized, double-blind, placebo-controlled +study in patients with acute ischemic stroke in the PRC. Its purpose is to investigate the +efficacy, safety, and pharmacokinetic characteristics of different doses of MT200605 in +patients with acute ischemic stroke, and to explore an appropriate dose for the Phase III +confirmatory trial. Efficacy evaluation was the primary objective of the study. +T rial design: The study will select 360 patients with acute ischemic stroke within 24 +hours of onset and an NIHSS score between 6 and 25 (inclusive), including those who have +or have not received intravenous thrombolysis or reperfusion therapy. They will be +randomized in a 1:1:1:1 ratio into low, medium, and high dose groups of MT200605 and a +placebo group, to receive intravenous infusions of MT200605 at 10 mg BID, 20 mg BID, 40 +mg BID, or placebo for 14 consecutive days, followed by a follow-up period up to day 90 +from the first dose. The primary efficacy endpoint of the study is the proportion of +subjects with a modified Rankin Scale (mRS) score of ≤1 on day 90 after onset. A secondary +efficacy endpoint is the change in NIHSS score from baseline within 14 days of treatment. +A total of 360 subjects are planned to be enrolled in this trial. The key inclusion +criteria included: (1) male or female subjects aged 18 years or above and no more than 80 +years; (2) subjects diagnosed with ischemic stroke in accordance with the Guidelines for +the Diagnosis and Treatment of Acute Ischemic Stroke in China (2023); (3) subjects whose +onset of symptoms and expected administration of the investigational product occurred +within 24 hours, including those who had not received reperfusion therapy or who had +received intravenous thrombolytic therapy; and (4) subjects who were able to understand +and comply with the study procedures and voluntarily signed the informed consent form. +The key exclusion criteria included but were not limited to: (1) subjects with intracranial +hemorrhagic diseases confirmed by imaging examinations; (2) subjects presenting with +significant disturbance of consciousness after onset, defined as a score greater than 1 on +item 1a (level of consciousness) of the NIHSS; (3) subjects with TIA; and (4) subjects +requiring endovascular therapy for the current acute ischemic stroke, including +intra-arterial thrombolysis, mechanical thrombectomy or angioplasty. +T rial status: The Phase II clinical trial was initiated in July 2025 and enrollment of +360 subjects has been completed as of the Latest Practicable Date. The gap between the +completion of our Phase I clinical trial and the initiation of the Phase II clinical trial was +primarily due to our prioritization of financial resources toward our Core Product +MT1013. +BUSINESS +– 192 – + + +--- page 201 --- +Clinical Development Plan +The Phase II study of MT200605 is a randomized, double-blind, placebo-controlled, +multi-center Phase II clinical study designed to explore the efficacy, safety, and +pharmacokinetic characteristics of MT200605 in patients with acute ischemic stroke. We +expect to complete this study in August 2026, with EOP2 communications planned +thereafter. +We have not yet formulated a definitive clinical development plan in the U.S., and +are exploring potential collaboration opportunities with overseas partners. The absence of +a U.S. plan is primarily due to financial resource allocation considerations rather than any +safety or efficacy concerns. Based on available data to as of the Latest Practicable Date, +MT200605 has demonstrated an acceptable safety profile and preliminary efficacy signals. +Material Communications +As of the Latest Practicable Date, we had not received any objection from any +relevant regulatory authorities to our clinical development plans. +The table below sets forth our key regulatory communications with regulatory +agencies regarding the development of MT200605 for the treatment of ischemic stroke: +Time Regulatory Authority Details +2021.11 ............. F D A I N DSubmission +2021.12.29 .......... F D A I N DA p p roval +2023.1.5 ............ N M P A I N DSubmission +2023.3.24 ........... N M P A I N DA p p roval +2025.3.13 ........... N M P A E O P 1Meeting +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET MT200605 +SUCCESSFULLY +MT2004 +MT2004 adopts a prodrug design, leveraging concentration gradients inside and +outside hepatocytes to achieve targeted delivery to the liver. Non-clinical studies +demonstrated that the parent compound MT2004 does not activate FXR, while its +metabolite MT2004-met1 significantly activates the FXR receptor, with an efficacy +approximately 10 times stronger than chenodeoxycholic acid (CDCA), thereby validating +the rationale of its prodrug design. +Following hepatic metabolism by CYP3A4 and CYP3A5 into the active metabolite +MT2004-met1, the compound specifically and locally activates hepatic FXR receptors in +situ. By modulating bile acid metabolism (inhibiting bile acid synthesis, reducing bile acid +reabsorption, and promoting bile acid excretion) as well as glucose and lipid metabolism, +MT2004 is designed to alleviate cholestasis and its clinical symptoms, slow disease +progression, and repair liver damage. This targeted design avoids the high systemic +exposure of FXR agonists in peripheral blood, which has been associated with adverse +events, and has the potential to substantially reduce side effects observed with existing +FXR agonists in clinical use. As a result, MT2004 may provide a more favorable safety +profile and improve patient compliance. +Preclinical studies have demonstrated therapeutic potential in DILI, NASH, and +CLD. MT2004 has obtained IND approval in the United States for the treatment of NASH +and in the PRC for the treatment of DILI, MASLD, and CLD. For DILI in the PRC, we +independently completed the Phase I clinical trial in January 2023, and initiated the Phase +II clinical trial in July 2023. For MASLD in the U.S., the Phase I clinical trial commenced in +January 2020 and was completed in April 2022. Phase I clinical trials of MT2004 has +demonstrated favorable safety and tolerability profile, with no pruritus or related adverse +events reported. +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET MT2004 +SUCCESSFULLY +MT1009 +MT1009 is a novel bi-specific fusion peptide with dual functional domains of +parathyroid hormone-related peptide (PTHrP) and OGP . MT1009 exerts the effects of +PTHrP by enhancing bone formation, activating the PTH1 receptor, and reproducing most +BUSINESS +– 193 – + + +--- page 202 --- +of the functions of iPTH, including promoting bone resorption and mobilizing calcium +and phosphorus into the bloodstream. In addition, through activation of the OGP +pathway, MT1009 increases the number of osteoblasts and stimulates the release of +osteogenic growth factors from osteoblasts, thereby further promoting bone formation. +MT1009 is intended for the prevention of glucocorticoid-induced osteoporosis in +patients at moderate to high risk with long-term glucocorticoid use, as well as for the +treatment of postmenopausal osteoporosis and primary or hypogonadism-induced +osteoporosis. Compared with conventional anti-osteoporosis therapies (such as +bisphosphonates, teriparatide, and abaloparatide), MT1009 has demonstrated the +potential to significantly increase bone mineral density (BMD), improve bone quality (by +rebuilding trabeculae, thickening cortical bone, and repairing microfractures), and +achieve a more pronounced reduction in fracture risk. MT1009 has obtained IND +approvals in both the PRC and the United States. The Phase I clinical trial of MT1009 +obtained informed consent from the first subject in January 2026. As of the Latest +Practicable Date, the clinical trials for both GIOP and PMO are temporarily suspended +pending further formulation optimization, primarily due to our Company’s focus on the +development of an oral formulation, instead of the current daily injectable formulation, +which may provide improved convenience for long-term administration and product +differentiation. Such suspension was not related to any safety or efficacy concerns. +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET MT1009 +SUCCESSFULLY +MT1011 +MT1011 is a novel synthetic small-molecule broad-spectrum anticoagulant reversal +agent targeting both thrombin factor IIa inhibitors and factor Xa inhibitors. MT1011 binds +directly to anticoagulant molecules through non-covalent hydrogen bonding without +binding to coagulation factors or other plasma proteins. This direct antagonistic +mechanism neutralizes the anticoagulant activity and restores normal coagulation. +MT1011 is intended for use in patients receiving anticoagulant therapy (such as +factor Xa inhibitors rivaroxaban or apixaban) who require urgent reversal of +anticoagulation due to life-threatening or uncontrolled bleeding. MT1011 addresses the +significant unmet clinical need for a broad-spectrum reversal agent by antagonizing all +NOACs as well as heparin/enoxaparin in cases of life-threatening or uncontrolled +bleeding. +MT1011 demonstrates a favorable safety profile by directly binding to +anticoagulants without interacting with coagulation factors or other plasma proteins, +thereby avoiding off-target effects. MT1011 also offers a wider therapeutic window, with a +significantly lower effective dose for antagonizing factor Xa inhibitors (demonstrating +equivalent effects at doses approximately 380 times lower than ciraparantag). The Phase I +clinical trial of MT1011 in the PRC commenced in April 2025. As of the Latest Practicable +Date, the LPLV had been completed. +WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET MT1011 +SUCCESSFULLY +OUR NON-PIPELINE PRODUCT CANDIDATES +XTL3602 +XTL3602 is designed as a tri-agonist targeting GLP-1R, GCGR, and GIPR with +balanced activity across the three receptors. The molecule incorporates fatty acid chain +modification to achieve an extended half-life for long-acting activity, while maintaining +activity and balance across all three targets. XTL3602 is intended for the treatment of +metabolic diseases, including obesity, diabetes, and obstructive sleep apnea associated +with obesity; non-alcoholic fatty liver disease by reducing hepatic fat deposition through +weight loss; secondary prevention of cardiovascular events by exploring the role of +weight reduction in lowering cardiovascular risk. We expect to submit an IND application +in 2027 to advance XTL3602 into clinical development. +XTL3710 +XTL3710 is designed as a tri-agonist targeting GLP-1R and GCGR with the +introduction of MasR to achieve balanced activity across three receptors. The molecule +incorporates fatty acid chain modification to extend half-life and enable once-weekly +administration, while maintaining activity and balance across all three targets. XTL3710 is +intended for the treatment of metabolic diseases caused by multiple risk factors, including +BUSINESS +– 194 – + + +--- page 203 --- +diabetes and diabetic kidney disease (DKD). IND submission is planned in 2026 to +advance XTL3710 into clinical development. +MT1016 +MT1016 is a selective peripheral kappa opioid receptor (KOR) agonist and a +long-acting peptide (administered via subcutaneous injection) designed for more effective +and safer treatment of pain and pruritus. We expect to submit an IND application in 2027 +to advance MT1016 into clinical development. We believe MT1016 has the potential to +offer more effective management of visceral pain and promotes faster postoperative +gastrointestinal function recovery. MT1016 may also reduce central nervous +system-related adverse effects and provides long-acting analgesia, thereby decreasing the +need for frequent use of analgesic pumps. +XTL1018 +XTL1018 is a bi-specific peptide–drug conjugate (PDC) candidate targeting +complement C3 and TrkB. The design links a peptide targeting complement C3 with a +small molecule modulator of TrkB, which exerts neuroprotective activity. By inhibiting +excessive activation of the complement cascade and suppressing inflammatory responses, +while simultaneously modulating the BDNF/TrkB signaling pathway, XTL1018 is +expected to exert biological effects that prevent downstream inflammation and cell +damage associated with geographic atrophy (GA) and restore impaired neuroprotective +signaling in GA. Accordingly, XTL1018 is intended for the treatment of late-stage dry +AMD with GA. We expect to submit the IND application for XTL1018 in 2028 to initiate +clinical development. +WE MAY NOT ULTIMATELY BE SUCCESSFUL IN DEVELOPING AND +MARKETING OUR NON-PIPELINE PRODUCT CANDIDATES. +OUR TECHNOLOGY PLATFORMS +We have self-developed four core technology platforms including (i) +Bi-/Multi-Specific Peptide and Peptide-based Macromolecule Technology Platform, (ii) +Computer-Aided Peptide Design Platform, (iii) Oral Peptide Delivery Platform, and (iv) +Druggability Evaluation Platform. These platforms collectively span the entire R&D +continuum from basic research, drug discovery research, drug development research to +NDA submission and serve as the foundational engine driving the advancement of our +differentiated peptide-based pipeline. +R&D process +Basic Research Discovery Research +Bi-/Multi-specific Peptide and +Peptide-based Macromolecule +Technology Platform +Computer-aided Peptide +Design Platform +Oral Peptide Delivery Platform +Druggability Evaluation Platform +Drug Development +Research NDA Submission +Bi-/Multi-specific Peptide and Peptide-based Macromolecule T echnology Platform +The pathogenesis of diseases often involves the interplay of multiple targets. Unlike +the traditional drug development pathway, which typically begins with a single target +followed by high-throughput screening to identify hit compounds, optimization into lead +compounds, advancement into PCCs, pre-clinical development and ultimately clinical +studies, our Bi-/Multi-specific Peptide Platform has established a novel R&D paradigm, +covering key stages including target selection, structure–activity relationship analysis, +design optimization, computer-based modeling, synthesis and target validation. +BUSINESS +– 195 – + + +--- page 204 --- +Lead compound design and optimization: In the design and optimization of lead +compounds, we adopt a dual approach. On the one hand, we leverage structural +information from reported drugs and clinically validated active compounds and apply +classical medicinal chemistry principles in conjunction with computer-aided drug design +molecular simulation to rationally construct novel molecules. On the other hand, we +conduct screening of our compound list to identify hit or lead compounds with +development potential. For the design of bi-/multi-functional peptides, we primarily +adopt the following three strategies: (i) linker fusion technology, to maximize biological +activity, reduce adverse effects, optimize pharmacokinetic profiles, enhance stability, +extend half-life, and improve dosage form and patient compliance; (ii) chimeric +technology, to enhance bioactivity, reduce immunogenicity, and prolong half-life; and (iii) +conjugation-extension technology, to construct extended molecular conformations with +multiple physiological functions, thereby addressing clinical needs across various +therapeutic areas. +Diversified molecular entity design to meet druggability requirements: Starting +from clinical application scenarios, we select the most suitable molecular structures by +evaluating the characteristics of linear peptides, monocyclic peptides, and bicyclic +peptides. (i) linear peptides are easy to synthesize and highly amenable to chemical +modification, allowing generation of structurally diverse candidate compounds. (ii) cyclic +peptides demonstrate significant advantages in both pharmacological and +pharmacokinetic properties, such as enhanced metabolic stability, improved target +specificity and selectivity, as well as favorable biophysical attributes. (iii) bicyclic +peptides combine cell membrane permeability with a large interaction interface, allowing +them to bind to protein targets independently of conventional binding pockets, thereby +enabling precise targeting of previously undruggable targets. +Peptide chemical modification technologies: We apply strategies such as +non-natural amino acid substitution, site-specific mutagenesis, cyclization, PEGylation, +and long-chain fatty acid esterification to improve druggability, including enhancing +resistance to proteolytic degradation, reducing antigenicity, prolonging in vivo half-life, +and increasing bioavailability. +Although peptide-based therapeutics offer high target specificity and favorable +safety profiles, their clinical applications are limited by poor metabolic stability and short +biological half-life, particularly in indications requiring long-term administration such as +chronic diseases, which may affect patient adherence and treatment experience. To +address these limitations, we have established a macromolecule platform based on +functional peptides as an extension of our Bi-/Multi-Specific Peptide Platform. This +platform leverages macromolecular modification to significantly extend the half-life of +peptide drugs, improve their metabolic stability, enable targeted delivery, enhance drug +specificity and reduce adverse drug reactions. +Based on this technology platform, we have generated and developed a number of +clinically promising candidate molecules with diverse molecular formats and mechanisms +of action. Among them, four candidates — MT1013, MT1002, XTL6001 and MT1009 have +entered clinical development. Another three candidates — XTL3710 and XTL3602 — have +completed hit-to-lead validation, and peptide-drug conjugate MT1018 has completed PCC +selection. +Computer-aided Peptide Design Platform +Our Computer-aided Peptide Design Platform integrates multiple functional +modules, including virtual screening, molecular dynamics simulation, SAR prediction +and ADMET prediction, and is supported by advanced hardware, enabling operation +without compromising accuracy to meet our needs in compound virtual screening. Built +on the principles of computational chemistry, structural biology and biophysics, and +supported by various open-source databases, the platform is operated by an experienced +domestic peptide early research team, thereby reducing time and cost, enhancing R&D +efficiency and improving the clinical success rate of candidate molecules. +AI-enhanced peptide molecule design: One of the key features of this platform is +AI-enhanced computer-aided drug design. The platform integrates artificial +intelligence-generated content algorithms, enabling the from-scratch design of novel +peptide molecules targeting specific biological targets. At the initial screening stage, the +platform is capable of producing batches of candidate molecules, which, upon in vitro +cell-based validation, demonstrated target activity at the micromolar level. +BUSINESS +– 196 – + + +--- page 205 --- +Molecule virtual screening method based on effective activity prediction: In the +process of molecule virtual screening, we skip the traditional affinity-based screening step +and directly predict the more challenging in vitro activity. This method predicts the +activity of linear peptides or cyclic peptide compounds at specific targets by analyzing +key features such as intermolecular interactions, physicochemical properties of binding +pockets and changes in binding free energy, and further guides molecule design and +optimization through integration with in vitro activity validation and preliminary +pharmacological results. This approach not only reduces manpower, resources and time +required for affinity validation, but also lowers the resource consumption associated with +validating and optimizing high-affinity molecules. +Diversified molecule design to improve candidate success rate: New drug +development is typically characterized by long cycles, high investment and significant +risk. Leveraging peptide drug design expertise, this platform conducts multi-form +peptide molecule design based on target and binding pocket characteristics, and performs +diversified molecular screening through the platform. In candidate selection, in addition +to effective activity, druggability is also a critical factor influencing the success rate of +Phase I and Phase II clinical trials. This platform is further capable of conducting early +ADMET prediction on different forms of peptide molecules, thereby bringing forward the +assessment of druggability risks, improving the likelihood of candidates advancing from +the pre-clinical stage into clinical trials, and enhancing the overall transition efficiency of +PCCs. +Based on this platform, we have advanced multiple candidate molecules into in +vitro activity validation, significantly improving molecular design efficiency and early +development success rates for several projects, including MT1016, MT1019 and XTL3710. +As of the Latest Practicable Date, the candidate molecules of MT1016 and XTL3710 had +advanced to the PCC stage and obtained preliminary druggability evaluation data. +Oral Peptide Delivery Platform +Peptide drugs generally suffer from susceptibility to enzymatic degradation and +low intestinal absorption, leading low oral bioavailability and long-term reliance on +injections, which compromise patient adherence and convenience. The Oral Peptide +Delivery Platform we are developing is dedicated to addressing this issue. Our platform +adopts solid-dosage manufacturing processes, including solid dispersion, inclusion +complexation, dry granulation and direct compression. To promote the absorption of +protein and peptide drugs, we incorporate permeation-enhancement approaches that use +permeation enhancers and inclusion complexation to encapsulate the drug and to adjust +local pH, thereby suppressing enzymatic degradation and molecular aggregation, +stabilizing the microenvironment at the administration site, protecting the active +conformation, increasing mucosal permeability and enhancing overall formulation +stability. The platform supports two delivery routes: oral and sublingual. Oral tablets +incorporate permeation enhancers, inclusion complexation and stabilizers and are +designed to achieve therapeutically relevant systemic exposure following gastrointestinal +absorption. Sublingual tablets disintegrate in the oral cavity and deliver peptides via the +oral mucosa, enabling a faster onset while bypassing first-pass metabolism, thereby +offering flexible options to accommodate different patient needs. +Based on this platform, we have advanced the oral formulation development of five +peptide candidates (XTL3710, XTL3602, MT1013, MT1009 and MT200605), with XTL3710 +and MT1013 achieving effective in vivo exposure. +Druggability Evaluation Platform +Our druggability evaluation platform is centered on animal model–based +assessments. This platform runs through the entire process of new drug development, +from target identification, hit discovery, lead generation and optimization, to the selection +of preclinical candidate (PCC) and clinical candidate (CC). Our evaluation system adopts +a phased and progressive decision-making mechanism, covering early-stage screening of +efficacy, toxicity, metabolism and physicochemical properties, IND-enabling studies such +as safety assessment, toxicology, formulation and quality control, as well as clinical-stage +validation of human efficacy, safety, and evaluation of carcinogenicity and genotoxicity. +At each stage, key go/no-go decisions are made based on the compound’s druggability, +safety and efficacy profile, ensuring scientific, risk-managed advancement of new drug +candidates. +BUSINESS +– 197 – + + +--- page 206 --- +Multi-model evaluation framework with translational focus: Focusing on +metabolic diseases (particularly renal-related) and cardiovascular and cerebrovascular +diseases, this platform has established approximately 100 pharmacodynamic animal +evaluation models and more than 100 blood and urine biochemical testing capabilities to +support the pharmacological assessment needs of its pipeline assets. Model selection is +based on the alignment between the drug’s mechanism of action and the characteristics of +the intended indication, ensuring high relevance and translational value of the results. +Building on this, we have developed an integrated evaluation system covering key aspects +including in vitro biological studies, in vivo efficacy in disease models, safety evaluation +and DMPK. This system provides comprehensive validation support across both in vitro +and in vivo stages, facilitating a seamless data transition from animal studies to human +trials and enhancing the translational reliability of preclinical findings. +Infrastructure supporting multidimensional druggability assessment: We have +established a standardized druggability evaluation system, which includes standardized +animal facilities (SPF) and a range of research and functional platforms, covering +functional laboratories, ex vivo organ and tissue research laboratories, behavioral +pharmacology evaluation laboratories, clinical testing laboratories, and pathology +diagnostic platforms. Equipped with medical diagnostic and analytical instruments, the +system supports a wide range of assessments. +This platform has been continuously optimized and iterated to comprehensively +support the druggability evaluation of all our self-developed pipelines. All seven +clinical-stage candidates have undergone druggability evaluation via this proprietary +platform. +RESEARCH AND DEVELOPMENT +For the years ended December 31, 2024 and 2025, our R&D expenses amounted to +RMB107.0 million and RMB130.1 million, respectively. We have been focusing our +in-house R&D efforts on the development of our Core Product, MT1013. For the years +ended December 31, 2024 and 2025, we incurred R&D expenses for MT1013 of RMB66.7 +million and RMB84.4 million respectively, representing 62.3% and 64.9% of our total R&D +expenses for the same period, respectively. +R&D T eam +As of the Latest Practicable Date, we had a team of 117 R&D professionals, +representing approximately 80.7% of our total staff count. Among them, over 48.7% held +doctoral or master’s degrees in fields primarily including pharmacy, pharmaceutical +sciences, chemistry, biology and biotechnology, as well as related disciplines such as +chemical engineering and public health and clinical medicine. Our core R&D personnel +consisted of eight members, who collectively possess extensive experience across the +entire drug R&D process, including discovery, pre-clinical studies, CMC development, +clinical trials and registration, with an average of approximately 19 years of experience in +the biopharmaceutical industry. +The following table sets forth a breakdown of the number of R&D team by function +as of the Latest Practicable Date: +Function of R&D team Number +CMC R&D Center ..................................... 3 7 +Pre-Clinical R&D Center ................................ 1 7 +Clinical R&D Center ................................... 6 3 +T otal ................................................ 117 +The following table sets forth the identities, positions, expertise of our eight core +R&D personnel and their involvement and contributions to the R&D activities since the +discovery of the Core Product and up to the Latest Practicable Date. All the key employees +involved in the development of the Core Product MT1013 remained employed by us +during the Track Record Period and as of the Latest Practicable Date. +BUSINESS +– 198 – + + +--- page 207 --- +Identities Positions Expertise +Involvement and +contributions to the R&D +activities since the discovery +of the Core Product +Date of joining +our Group +Dr. Wang Bing (ˮΏ) . . Chairman of our Board +and Executive +Director +Over 20-year experience in the medical +and pharmaceutical industry +Steered key development +directions of the Core +Product +December 2019 +Dr. Yu Weiping ..... Executive Director, +Senior Vice President +Over 40-year experience of drug R&D +with a doctoral degree of University +of Paris-Sud +CMC of the Core Product August 2019 +Ms. Wang Xiangling +(ޛ) +1) ...... +Chief Medical Officer Nearly 20-year experience of drug +R&D with education experience in +Xiangya School of Medicine and +Shantou University Medical College +Clinical trials of the Core +Product +October 2024 +Dr. Wang Linyuan +(ˮ೙ధ)....... +Senior Medical +Director +(2) +Over 15-year experience of drug R&D +with education experience in New +York University, and Peking +University +Clinical development of the +Core Product +August 2024 +Dr. Liu Xingxin +(ᄎጳอ)....... +Senior Director of API +Department +(2) +Over 10-year experience of drug R&D +with education experience in +Northwestern University, Institute of +Chemistry, Shanghai Institute of +Organic Chemistry, Chinese +Academy of Sciences, Lehigh +University and Clarkson University +Raw material process R&D +and industrial technology +transfer of the Core +Product +August 2019 +Dr. Liu Yongzhen +(ޜ.......) +Director of Non-clinical +Department +(2) +Over 20-year experience of drug R&D +with education experience in China +Medical University, Shanghai Jiao +Tong University and Shanghai +University of Traditional Chinese +Medicine +Non-clinical work related to +the pharmacology, +toxicology and other +aspects of of the Core +Product +September 2023 +Mr. Yu Zhi +(Яқ)........ +Chief Operating Officer Over 15-year experience of drug R&D +with education experience in Bengbu +Medical University +Clinical operations +management of the Core +Product +January 22, 2024 +Dr. Kong Lingna +(ࢆ.......) +Vice President of +Regulatory Affairs +Over 10-year experience of drug R&D +with education experience in Peking +Union Medical College +Registration of the Core +Product +July, 2025 +Notes: +(1) Ms. Wang Xiangling focused on clinical development and the related functions. At the time of her +appointment, MT1013-II-C02 was ongoing, MT1013-II-C03 and MT1013-III-C01 was under +preparation. Given the increasing complexity of late-stage clinical trials, we consider it essential +to strengthen our clinical development leadership. Ms. Wang’s extensive experience in clinical +operations and regulatory communication enables us to enhance our capabilities in managing +large-scale clinical trials and advancing our Core Product in an efficient and compliant manner. +Prior to the joining of Ms. Wang Xiangling, the rest of R&D personnel had sufficient experience to +support the R&D of our Core Product and had been contributing to the R&D of the Core Product +throughout the process under the leadership of Dr. Wang Bing and Dr. Yu Weiping, including but +not limited to drug discovery and clinical trial management. For biographies of Dr. Wang Bing, +Dr. Yu Weiping and Ms. Wang Xiangling, please see “Directors and Senior Management”. +(2) The term “director” refers to the working title of the employee, not the member of the Board. +R&D Facilities +As of the Latest Practicable Date, our R&D activities were primarily conducted in +our headquarters Xi’an in the PRC. Our R&D facilities are equipped with advanced +equipment and workspace to facilitate the R&D activities covering basic research, drug +discovery, pharmaceutical development as well as regulatory matters. +BUSINESS +– 199 – + + +--- page 208 --- +R&D Process +The flowchart below illustrates the key stages of our R&D process, from basic +research, drug discovery research, drug development research to NDA submission: +/g57/g3Functional Genes +/g57/g3Disease Mechanism +/g57/g3Drug Target +/g57/g3Preclinical Evaluation: + Pharmaceutical Dr uggability Assessment + Pharmacological Dr uggability Assessment +/g57/g3Clinical Evaluation: + Clinical Efficacy and Side Effects Assessment + Industrialisation Feasibility Assessment +/g57/g3Searching for Drug Candidates: + Pharmacodynamics Evaluation + Preliminary Toxicology Evaluation + Preliminary Pharmacokinetics Evaluation +Basic +Research +Discovery +Research +Development +Research +New Drug +Launch +Basic Research. At the basic research stage, efforts are primarily focused on the +identification of functional genes, elucidation of disease mechanisms, and discovery of +potential drug targets, providing the biological foundation and target rationale for +subsequent drug development. +Drug Discovery Research. The drug discovery phase begins with developability assessment, +where we conduct iterative cycles of therapeutic indication evaluation, target validation, +competitor benchmarking, and risk-benefit analysis to identify promising opportunities. +During this critical stage, our early-stage R&D department of Pre-Clinical R&D team +focuses on scaffold design and optimization, systematically progressing compounds +through hit identification and hit-to-lead-to-candidate optimization. Concurrently, our +biology team of early-stage R&D department performs essential target verification along +with preliminary assessments of pharmacological activity, pharmacokinetic properties, +and toxicity profiles. This multidisciplinary approach ensures we select only the most +viable candidates for further development while mitigating potential risks early in the +process. +Drug Development Research. The subsequent drug development phase represents a +comprehensive druggability evaluation stage where drug candidates undergo extensive +preclinical and clinical assessment: +— Our preclinical evaluations include integrated druggability assessments featuring +complete pharmacological characterization, pharmacokinetic/pharmacodynamic +studies, and toxicological profiling, as well as pharmaceutical druggability +assessment covering process development, quality standard establishment, and +early formulation technology assessment. +— As drug candidates progress, we conduct clinical studies focused on administration +route/dose exploration and efficacy/safety profiling, while simultaneously +advancing industrialization research to optimize API processes, refine dosage form +manufacturing, and enhance quality standards. +Application for marketing of new drugs. If the safety and effectiveness of a drug have been +proved in clinical trials. Once the requirements for the manufacturing process, quality +control and GMP are met, we can then apply for an NDA with the regulatory authority. +Collaboration with Third Parties in R&D +We collaborate with third parties such as SMOs and CROs to conduct and support +our preclinical and clinical studies, which is in line with the general practice in the +industry. We select our SMO and CRO partners by weighing various factors, such as their +qualifications, academic and professional experience, industry reputation and service +fees. +BUSINESS +– 200 – + + +--- page 209 --- +In terms of the involvement and contributions of each of the major SMOs and CROs +to the development of our drug candidates, the SMO partners provide a comprehensive +suite of services to assist us in implementing and managing clinical trials, including trial +preparation and trial conduct management. The preclinical CRO partners mainly provide +us with services related to preclinical toxicity and safety evaluations, such as animal +studies, of our product candidates in accordance with agreed study design and under our +supervision. The clinical CRO partners provide us with an array of services necessary for +complex clinical trials in accordance with agreed trial design and under our supervision. +We carefully supervise our SMO and CRO partners to ensure that they perform their +duties in a manner that complies with our protocols and applicable laws and protects the +data integrity. +Our cooperative relationship with SMO and CRO partners is based on specific +projects, depending on the type of services needed, we enter into service agreements +which set out detailed work scope, work plan and technical requirements, deliverables +and payment schedule. Key terms of our agreements that we typically enter into with our +SMO and CRO partners are set forth below: +Agreements with SMOs +• Services. According to China’s GCP common practice, we engage SMOs, working +together with trial sites in trial site management, including assisting in recruiting +trial participants, coordinating site staff to confirm site process compliance, +collecting clinical trial documents and maintaining data integrity at each site. +• Term. Our SMO partners are required to perform their services and complete the +clinical trial project within the prescribed time limit set out in each agreement, with +service fees settled based on actual enrollment. +• Payments. We typically make an initial payment within a specified timeframe upon +the execution of the agreement and make subsequent payments through monthly or +quarterly settlement. We generally settle payments upon receipt of deliverables at +the conclusion of project. +• Intellectual property. All clinical results, reports, publications, and related rights +and interests, including all intellectual property rights in connection with the +performance of the agreements, are owned by us. +• Confidentiality. SMOs are obligated to keep all non-public information and data +from clinical trials confidential. +• GCP compliance. We require our SMO partners to coordinate clinical trials in +accordance with GCP standards. Typically, we require the clinical research +coordinator to have GCP training experience and hold relevant certification. +Agreements with CROs +• Services. Our CRO partners are required to conduct comprehensive +implementation, management, and monitoring of clinical trials as specified in the +agreement. +• Term. Our CRO partners are required to perform their services and complete the +clinical trial project within the prescribed time limit set out in each agreement. +• Payments. We are required to make payments to CRO partners in accordance with +the payment schedule agreed by the parties. +• Intellectual property rights. All intellectual property rights arising from preclinical +and clinical trials are owned by us. +• Confidentiality. Our CRO partners are required to keep confidential all the data, +information or contents we distributed to them related to the project specified in the +agreement, and such obligation may survive the termination of the cooperation +agreement. +• GCP compliance. We require our CRO partners to conduct clinical trials in +accordance with GCP standards. Typically, we require the CRO personnel handling +our clinical trials to have GCP training experience or hold relevant certification. +We engaged in strategic R&D collaborations with a university in the U.S., which +provide us with valuable insights into industry trends and emerging technologies, +thereby enabling us to focus our current and future R&D efforts more effectively and +maintain our competitive edge. Set out are the details of the collaboration: +BUSINESS +– 201 – + + +--- page 210 --- +• Statement of Work. This university shall conduct a pre-clinical study entitled “The +neuroprotection of MT1006 and MT2006 series compound in Huntington’s disease +mouse model”; test if a high (10 mg/kg) and a low (2.5 mg/kg) dose compound +MT200605 continue show protection on Huntington’ disease mice; and add MRI +scan and analysis to MT200605 or vehicle treated HD and WT mice. +• Intellectual Property. We acted as the sponsor and retained the sole patent rights and +future applications related to the MT1006 and MT2006 series compounds, and all +inventions developed under the research agreement shall be owned by us. +• Payment. We are responsible for paying the university in accordance with the budget +set out in the agreement. +PRODUCTION +At current stage, as all our manufactured products are investigational drugs for +clinical trial use, we arrange production schedules in accordance with clinical +development plans and outsource the manufacturing of both APIs and drug products to +third-party CDMOs. +CMC +Our CMC R&D center, comprising the CMC quality department, API department, +formulation department and analytical department, provides support throughout the +drug development process. Our CMC platform covers the key CMC development stages +for APIs, formulations and sustained-release preparations. It encompasses the core +capabilities required across the peptide drug development cycle, including process +development and optimization from the preclinical to commercial stages, comprehensive +quality studies, and technology transfer in support of regulatory submissions. Leveraging +this platform, our CMC R&D team is capable of independently conducting key activities +including API process development, formulation process development and API scale-up +at kilogram level. As of the Latest Practicable Date, our CMC team consisted of 37 +members. +Collaboration with CDMO +As of the Latest Practicable Date, we had not established any manufacturing facility +for commercialization scale. We currently collaborate with industry recognized CDMOs in +China and have simultaneously commenced the construction of our Taizhou formulation +plant. Upon completion of the construction and obtaining the requisite approvals from the +relevant authorities, we plan to utilize the Taizhou formulation plant for the +commercial-scale production of MT1013 following commercialization, as well as the +pilot-scale production of our other pipeline candidates. We intend to maintain +collaboration with the CDMOs after the Taizhou formulation plant is in use, as the +production capacity of the Taizhou formulation plant may not fully satisfy the expected +commercial production demand for MT1013, and external CDMOs may also provide +additional production capacity and manufacturing flexibility for our pipeline products. +Our CDMO partners have established a set of GMP and cGMP-compliant +biopharmaceutical R&D and production system which is recognized by the CDE, FDA and +EMA. We believe it is cost-effective to engage CDMO for certain manufacturing activities +as it reduces the capital expenditure required for setting up and maintaining the necessary +production lines and allows us to optimize resource allocation to focus on the drug R&D at +current stage. We rigorously select CDMO partners in accordance with our Code of +Conduct for Procurement Operations, employing a comprehensive evaluation framework +that assesses seven key dimensions: Technology (T), Quality control and after-sales +service capabilities (Q), Responsiveness and cooperation willingness (R), Delivery +capacity (D), Cost (C), Environment (E), and Social responsibility (S) collectively forming +our TQRDCES supplier assessment methodology. To monitor and evaluate the services of +our CDMO partners, we have adopted MAH system by entering into manufacturing +agreements and quality agreements with our CDMO partners, wherein the respective +responsibilities and obligations of all parties are clearly stipulated throughout the entire +product lifecycle including manufacturing, quality testing, product release, logistics and +end-use applications, ensuring full compliance with applicable regulatory requirements. +We did not experience any product quality issues in respect of the products manufactured +by our CDMO partners during the Track Record Period. +BUSINESS +– 202 – + + +--- page 211 --- +Salient terms of our collaboration agreement with our CDMO partners are set forth +below: +• Scope of services. The CDMO is responsible for providing services including +process development, GMP manufacturing of APIs and production of clinical trial +materials. +• Payments. We typically make an initial payment within a specified timeframe upon +the execution of the agreement. As the CDMO delivers the agreed-upon goods, we +will inspect and approve them. After approval, the CDMO will issue invoices based +on the delivered quantities. We will make the corresponding payment after +receiving the invoice. +• Intellectual property. Any new technological documents, product verification +(including process and method verification), quality standards, records, technical +achievements, and intellectual property (including patents, copyrights, and +non-patented technology) generated by the CDMO under this contract will belong +to us. This includes all written deliverables provided by the CDMO under this +agreement. +• Term. The agreement becomes effective immediately upon both parties signing and +stamping it. +• Exclusivity. The CDMO promises not to develop or manufacture similar or identical +products related to this project for themselves, nor will they sell the raw materials or +finished products to third parties. +Quality Assurance and Quality Control +In accordance with applicable pharmaceutical regulatory requirements, we have +established a Quality Assurance (QA) Department and a Quality Control (QC) +Department to oversee quality management. The QA function is responsible for: (i) +establishing, implementing and supervising our quality management system to ensure +ongoing compliance with the PRC Drug Administration Law, Good Manufacturing +Practices and other relevant regulatory requirements; (ii) managing key quality events +and independently performing core functions including product release, supplier audits, +CDMO oversight, validation activities and regulatory inspection preparedness; and (iii) +carrying out GMP training, regulatory communication, product recall and complaint +handling, as well as conducting annual product quality reviews, risk assessments and +internal audits. The QC function is responsible for: (i) developing and implementing +quality control systems to ensure that our products meet applicable legal and regulatory +requirements, industry standards and customer specifications; (ii) overseeing full-process +quality testing, including sampling and analysis of raw materials, intermediates and +finished products manufactured by third-party CDMOs; and (iii) conducting quality data +analysis and risk identification, facilitating continuous improvement, and maintaining a +traceable quality data management system. +COMMERCIALIZATION +Our Marketing Strategy +As of the Latest Practicable Date, we had not obtained marketing approval for any +drug candidates, nor had we generated any revenue from product sales. Anticipating +commercialization of our MT1013 in early 2028, we will implement a dual-track +commercialization approach: domestically through collaborations with third party +Contract Sales Organizations (CSOs) and internationally via license-out partnerships. +Considering the potentially significant sales cost, we have not built our internal sales +team. Instead, we plan to form cooperation with selected CSO partners to leverage their +access to a wide range of pharmacies, clinics and hospitals, to better capture the market +potential and maximize the value of our Core Product. In particular, we prioritize CSO +partners with: (i) demonstrated success in the nephrology therapeutic area, (ii) +established nephrology-focused commercialization teams, and (iii) proven capabilities in +hospital network development and coverage. +In February 2026, we entered into an agreement (the “ Agreement”) with Everest +Medicines (China) Co., Ltd. (“ Everest”), a wholly-owned subsidiary of Everest Medicines +Limited (Hong Kong Stock Code: 1952), both of which are Independent Third Parties, save +for being a Cornerstone Investor of the Company. Pursuant to the Agreement, we granted +Everest an exclusive right to sell, commercialize and promote our self-developed drug +candidate MT1013 for the treatment of CKD-SHPT in Chinese Mainland, Hong Kong, +BUSINESS +– 203 – + + +--- page 212 --- +Macau, and Taiwan as well as Asia-Pacific (excluding Japan) (the “ T erritory ”). +Accordingly, Everest acts as an exclusive CSO responsible for the commercialization of +MT1013 for the treatment of CKD-SHPT in the Territory, while we reserved the rights to (i) +research, develop and manufacturing MT1013 globally; (ii) commercialize MT1013 for any +indications outside Territory; and (iii) commercialize MT1013 in the Territory for any +indications other than CKD-SHPT. The following sets forth the salient terms of the +Agreement. +R&D As MT1013 is our self-developed drug candidate, we retain full +responsibility for all development activities for MT1013 in the +Territory, including conducting CMC studies and pre-clinical +studies, and continuing to conduct and complete the clinical trials +for MT1013 in Chinese Mainland for CKD-SHPT; +MAH We shall be responsible for applying for, obtaining, renewing and +maintaining the marketing authorization for MT1013 in Chinese +Mainland in accordance with applicable laws, and we or our +affiliates shall act as the MAH; +IP rights We shall own all IP rights relating to MT1013 and are responsible +for the maintenance and enforcement of such IP rights, including +bringing legal actions, infringement proceedings and defending +against infringement claims; +Production We shall be responsible for manufacturing and supplying +MT1013, either by ourselves or through third parties, to Everest or +its designated distributors. +Commercialization To facilitate sales and marketing and in line with general practice +in the industry, Everest shall be entitled to handle general matters +with respect to the routine and day-to-day marketing of MT1013 +in the Territory for the treatment of CKD-SHPT, including +formulating and implementing market access and reimbursement +negotiation strategies, while giving good faith consideration our +Company’s reasonable suggestions. Everest shall also prepare and +submit an annual commercialization plan for MT1013 for the +treatment of CKD-SHPT, subject to our Company’s review, and +provide periodic reports on its implementation. In addition, +Everest shall undertake annual minimum sales target with our +Company, which will be subjected to negotiation between our +Company and Everest. +Joint steering +committee (“JSC”) +A JSC shall be established to coordinate and communicate the +commercialization activities of MT1013 in the Territory for the +treatment of CKD-SHPT. The JSC shall consist of four members, +with two representatives appointed by each party; +Payment We are entitled to receive (i) an upfront payment of RMB200 +million; (ii) potential regulatory and commercial milestone +payments of up to RMB1,040 million; and (iii) royalty payments +under this Agreement. As of the Latest Practicable Date, we have +received the upfront payment of RMB200 million and expect to +receive further milestone and royalty payments. Such royalty +payments are calculated on a tiered basis as a percentage of the +net sales of MT1013, with applicable rates ranging from 35% to +40%. We are not required to pay any forms of fees to Everest under +this Agreement. +BUSINESS +– 204 – + + +--- page 213 --- +Pricing Prior to the inclusion in the NRDL, pricing of MT1013 in the +Territory will be reviewed by the JSC and agreed to by the +parties. +(1) Following the inclusion in the NRDL, the pricing and +reimbursement arrangements of MT1013 will be subject to the +pricing and reimbursement mechanisms administered by the +relevant PRC governmental authorities. +Termination The Agreement may be terminated under certain circumstances, +including if Everest fails to achieve a specified percentage of the +annual minimum sales target for three consecutive years, in which +case we have the right to terminate the Agreement. +Notes: +(1) To maximize the commercialization of MT1013 in the Territory during the term of the Agreement, we +decided to, among relevant factors, focus on the sales performance of MT1013. Accordingly, we retain (i) +the right to agree to the annual sales target which shall be part of the matters subject to mutual consent in +the annual commercialization plan, (ii) the minimum guarantee from Everest to purchase from us no less +than 60% of the annual sales target each year unless there is circumstances not attributable to them, and +(iii) (among the other termination rights either party is entitled to) a unilateral right to early terminate +the Agreement if Everest shall fail to purchase from us at least 80% of the annual sales target for three +consecutive years. If there’s any disagreements, the Company has the right to terminate the collaboration +with Everest unconditionally and unilaterally without any penalty or additional payment obligations on +our part, and following such termination, as the MAH of the Core Product would remain with our Group, +we may, depending on market conditions, continue the commercialization of the Core Product by +engaging distributors or alternative CSOs, or by our own sales team. We believe such mechanism to be +able to incentivize Everest to maximize the commercialization of the Core Product within the Territory +while at the same time preserving our right to terminate the collaboration should Everest fail to perform, +thereby protecting the interests of our Company. Our Directors confirm that any such termination would +not affect the Group’s rights in relation to the Core Product (including any commercialization rights). +We anticipate MT1013, a dual-target polypeptide agonist of CaSR and OGP , will be +competitively positioned in the marketplace in light of its multiple clinical benefits. Given +that CaSR agonists currently achieve a comprehensive control rate of only approximately +7.5%, there remains an urgent clinical need for new treatment options capable of achieving +higher target rates and reducing mortality risk. In a Phase II head-to-head comparison +with Etelcalcetide, after 26 weeks of treatment, the proportion of subjects in the MT1013 +group achieving simultaneous control of iPTH, serum calcium and serum phosphorus was +approximately 2.5 times that of Etelcalcetide. Clinical results also showed its fast-acting +profile, and sustained efficacy, potential cardiovascular benefits, favorable safety and +tolerability profile, and improvements in bone mineral density and bone mineral +metabolism. In particular, upon the marketing approval of our Core Product MT1013, we +plan to adopt tailored business strategies at different stages of its commercial cycle. Prior +to its inclusion in the NRDL, we aim to increase the accessibility of MT1013 and gradually +accumulates the patient base by leveraging our future commercialization partner’s sales +network and experience and collaborating with the partner to conduct significant +promotion activities to improve market awareness and our brand recognition by +physicians and patients. +In the overseas markets, we plan to unlock the value of our assets through +commercialization collaborations with multinational corporations (MNCs), and we plan +to seek out-licensing opportunities with such MNCs for the development of our product +candidates. We plan to select such MNCs who have proven track record of +commercializing products with experience in the nephrology franchises, their local +presence including clinical access and network coverage as well as brand recognition, to +achieve market penetration and maximize commercial opportunities of our drug +products. We expect such MNCs to share the potentially significant development costs +with us and leverage their local network to facilitate various aspects of the clinical +development, such as clinical site establishment, patient enrollment, material supplies +and regulatory communications. For the overseas market, we generally plan to take a +step-wise approach and plan to formulate a more concrete plan after we commercialize +MT1013 in the PRC, to ensure we allocate our resources and focus on the most important +and imminent milestones. Save for the CSO collaboration arrangement in Asia (excluding +Japan) under the Agreement with Everest, we had not identified any specific partner for +licensing-out of our product candidates, nor had we identified any specific overseas +jurisdiction targeted under such collaboration plans, as of the Latest Practicable Date. +BUSINESS +– 205 – + + +--- page 214 --- +Pricing +During the Track Record Period and up to the Latest Practicable Date, we had no +commercialized drugs on the market either in China or overseas. We have not formulated +any definitive pricing policy for our drug candidates yet. When our drug candidates +progress to commercialization in the future, we will determine their prices based on +various factors, such as current medical needs, our drugs’ pharmacoeconomic evaluation, +our production costs, prices of prior line treatment options, competitive landscape and +prices of competing drugs, differences in features between our drugs and competing +drugs, and health economics in the country to market in. +Our Core Product, MT1013, is expected to be launched in the PRC first, then in the +U.S. and other regions. We will determine the price of MT1013 in the PRC considering the +factors including estimated demand, production costs, affordability of patients, and the +prices of second generation CaSR agonists, such as Etelcalcetide (with the price of +USD2,684 and RMB3,640 per 30-day treatment cycle in the U.S. and China, respectively). +We will also take into consideration that MT1013 is the dual-targeting receptor agonist +polypeptide that simultaneously targets the CaSR and the OGP receptor, and has +demonstrated significant clinical benefits, as shown by clinical studies indicating a +marked improvement in the comprehensive control rate of iPTH, serum calcium and +serum phosphorus levels. We will further assess the differences in safety and efficacy and +respective benefits between MT1013 and any such potential competing drugs. In addition, +we will actively negotiate with government authorities for MT1013 to be included in the +NRDL to enhance our product affordability. However, inclusion into the NRDL is +evaluated and determined by the relevant government authorities and we may face +significant competition for successful inclusion. For more information, see “Risk Factors +— Risks Relating to Our Business and Operation — If our products are not included in or +are removed from national, provincial or other government sponsored medical insurance +programs, our business, financial condition, results of operations and prospects could be +materially and adversely affected.” +INTELLECTUAL PROPERTY +We own all intellectual property rights relating to our product candidates including +the Core Product. As of the Latest Practicable Date, we owned (i) 10 granted patents in the +PRC, three granted patents in Hong Kong, 23 granted patents overseas, and (ii) three +patent applications in the PRC, three patent applications in Hong Kong, 9 patent +applications overseas and one PCT patent application. As of the Latest Practicable Date, +with respect to our Core Product MT1013, we owned (i) four granted patents, including +one in the PRC, one in Hong Kong, one in Japan and one in Australia, and (ii) four patent +applications, including one in the U.S., one in Europe, one in Canada and one in Korea. +The following table sets forth the patents and patent applications of our Core Product as of +the Latest Practicable Date. For details, see “Appendix IV — Statutory and General +Information — Further Information About our Business. According to our PRC +Intellectual Property Legal Advisor, there is no material impediment in obtaining such +patents. +Title of Invention +Application +Number Jurisdiction Status +Expiration +Date +Patent Holder/ +Applicant +Bispecific fusion polypeptide compound +(ي..........) +CN202180014524.4 PRC Granted April 20, 2041 Our Company +Bispecific fusion polypeptide compound . . . US18044668 U.S. Pending N/A Our Company +Bispecific fusion polypeptide compound +(ي..........) +HK62022059523.0 Hong Kong Granted April 20, 2041 Our Company +يJP2022-558554 Japan Granted April 20, 2041 Our Company +Bispecific fusion polypeptide compound . . . AU2021338639 Australia Granted April 20, 2041 Our Company +BUSINESS +– 206 – + + +--- page 215 --- +Title of Invention +Application +Number Jurisdiction Status +Expiration +Date +Patent Holder/ +Applicant +Bispecific fusion polypeptide compound . . . EP21865532.2 Europe Pending N/A Our Company +Bispecific fusion polypeptide compound . . . CA3194729 Canada Pending N/A Our Company +?????쬲 ?왢쳂 . . . KR1020237011659 Korea Pending N/A Our Company +As of the Latest Practicable Date, we had 32 registered trademarks in the PRC and +six registered trademarks overseas. We are also the registered owner of four domain name. +See “Risk Factors — Risks Relating to Our Intellectual Property Rights” for a description +of risks related to our intellectual property. +During the Track Record Period and up to the Latest Practicable Date, we had not +been involved in any material proceedings in respect of, and we had not received notice of +any material claims of infringement of, any intellectual property rights of third parties +that may be threatened or pending. A freedom-to-operate searches and analyses (“ FTO +Analysis”) has been conducted in the PRC and the U.S. in relation to our Core Product and +Key Products up to the Latest Practicable Date. Based on the FTO Analysis and as advised +by our PRC Intellectual Property Legal Advisor, Tian Yuan Law Firm, our Directors are of +the view that we have not infringed any valid and enforceable patents or other IP rights of +any third parties in the PRC and the U.S. The Joint Sponsors are of the view that the PRC +Intellectual Property Legal Advisor is competent to issue the FTO opinion based on its +professional qualifications and relevant track record. +SUPPLIERS AND PROCUREMENT +During the Track Record Period, our suppliers primarily consisted of (i) providers +of clinical services, including SMO, CRO and CDMO partners, (ii) providers of pre-clinical +services, and (iii) providers of administrative and operational management services. +We have implemented supplier management procedures and internal control +measures to prevent incidents such as clinical data integrity issues, serious quality issues +and interruption of supply, including (i) conducting supplier qualification and due +diligence procedures prior to engagement, including assessment of suppliers’ +qualifications, compliance track record and industry reputation; (ii) disqualify and cease +further collaboration with suppliers in the event of material data authenticity or other +quality management issues; and (iii) incorporating breach and indemnification provisions +in our contracts to protect the interests of the Company. +For the years ended December 31, 2024 and 2025, the aggregate purchases +attributable to our five largest suppliers in each year during the Track Record Period +amounted to RMB31.3 million and RMB26.8 million, respectively, representing 39.5% and +27.6% of our total purchases for the respective periods. Purchases attributable to our +single largest supplier in each year amounted to RMB7.6 million and RMB8.6 million for +the same years, accounting for 9.6% and 8.9% of our total purchases for the respective +periods. We believe that we maintain stable relationships with our major suppliers. +Our suppliers are mainly CROs, CMOs, CDMOs. See “— Collaboration with Third +Parties in R&D” and “— Collaboration with CDMO” in this section for key terms of our +agreements that we typically enter into with a CRO, CMO, or CDMO partner. +BUSINESS +– 207 – + + +--- page 216 --- +The following table sets forth details of our five largest suppliers in each year +during the Track Record Period: +Year ended December 31, 2024 +Supplier Background +Products/ +Services +Commencement +of business +relationship Credit terms +Purchase +amount +(RMB’000) +% of total +purchases for +the respective +year +Supplier A . . . . . . . . . A public company founded in 2000 in +China with approximately +RMB2,933 million in registered +capital that mainly engages in new +drug R&D, pharmaceutical +technology services and medical +product wholesale. +CRO services 2019 15-30 days 7,587.8 9.6% +Supplier B ......... A p rivate company founded in 2009 +in China with approximately +RMB185 million in registered +capital that mainly engaged in +research and experimental +development. +CDMO +services, +CRO +services +2021 10 days 7,242.4 9.1% +Supplier C ......... A p rivate company founded in 2019 +in China with USD47 million in +registered capital that mainly +engages in consulting services, +information technology services, +bio-energy technology services and +medical device circulation. +CRO services 2022 15-30 days 7,027.8 8.9% +Thousand Oaks Biologics INC* +(΅ +ʮ̡) ......... +A private company founded in 2017 +in China with approximately +RMB49 million in registered capital +that mainly engages in +pharmaceutical manufacturing. +CDMO +services +2022 7-15 days 5,333.2 6.7% +Zhejiang Haorecruit +Pharmaceutical Technology +Co., Ltd.* (෍ᔼᖹ +ʮ̡ ) ....... +A private company founded in 2021 +in China with RMB10 million in +registered capital that mainly +engages in research and +experimental development. +Subject +recruitment +services +2023 10 days 4,144.3 5.2% +Total ............ 31,335.5 39.5% +BUSINESS +– 208 – + + +--- page 217 --- +Year ended December 31, 2025 +Supplier Background +Products/ +Services +Commencement +of business +relationship Credit terms +Purchase +amount +(RMB’000) +% of total +purchases for +the respective +year +Supplier A ......... P lease see above. CRO services 2019 15-30 days 8,636.8 8.9% +Beijing Fengy Technology +Co., Ltd.* (ࠢ +ʮ̡) ........... +A private company founded in 2023 +in China with approximately RMB5 +million in registered capital that +mainly engages in technology +promotion and application +services. +Subject +recruitment +services +2024 30 days 5,152.7 5.3% +Supplier D ......... A c omprehensive Grade III Level A +hospital located in Beijing. +Participation +in clinical +trials +2021 20 days 4,744.8 4.9% +Zhongling Huizhi Technology +Service (Xi’an) Co., Ltd.* +(ਕ €Гτ +ʮ̡) ......... +A private company founded in 2015 +in China with approximately RMB5 +million in registered capital that +mainly engages in comprehensive +management services, technology +and software services,etc. +Clinical +monitoring +services +2024 30 days 4,395.0 4.5% +Tianjin Wanze Pharmacy Chain +Co., Ltd.* (ஹ +ʮ̡ ) ........ +A private company founded in 2023 +in China with approximately RMB5 +million in registered capital that +mainly engages in retail industry. +Drug supply +services +2024 20 days 3,917.6 4.0% +Total ............ 26,846.9 27.6% +All of our five largest suppliers in each year during the Track Record Period are +independent third parties. To the best knowledge of our Directors, none of our Directors, +their respective associates or, or any Shareholder with over 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 during the Track Record Period. +COMPETITION +Our industry is highly competitive and subject to significant change. While we +believe that our technology platforms, our drug candidates and our experienced +management team provide us with competitive advantages, we face potential competition +from many others working to develop therapies targeting the same indications. These +include major biopharmaceutical companies, specialty pharmaceutical and biotechnology +companies, and academic institutions, government agencies and research institutions. +Any drug candidates that we successfully develop and commercialize will compete both +with existing drugs and with any new drugs that may become available in the future. We +are committed to the development of innovative drug candidates with a focus on +metabolic diseases (particularly renal-related conditions) and cardiovascular and +cerebrovascular diseases, targeting indications such as CKD-SHPT, CKD-MBD with +Osteoporosis, CKD-SHPT not on Dialysis, Chronic Weight Management in Obese or +Overweight Populations, ACS-PCI and AIS. Our efforts to bring innovative drug to the +market for these indications face intense competition from a burgeoning landscape of +pharmaceutical companies. For more information on the competitive landscape of our +drug candidates, see “Industry Overview” in this prospectus. +BUSINESS +– 209 – + + +--- page 218 --- +EMPLOYEES +As of the Latest Practicable Date, we had 145 full-time employees, all of whom were +based in China, and approximately 44.8% of whom held doctoral or master’s degrees. The +following table sets forth the details of our employees by function: +Function Number % of T otal +R & D.................................. 1 1 7 80.7% +Finance & Legal ......................... 6 4.1% +Others (Administrative, IP , +Procurement & Public Affairs, etc.) ........ 2 2 15.2% +T otal ................................. 145 100% +We enter into individual employment contracts with our employees covering +matters such as salaries, bonuses, employee benefits, workplace safety, confidentiality +obligations, work product assignment clause and grounds for termination. Our employee +contracts specify that employees are obligated to strictly safeguard our commercial and +technical secrets. Additionally, any intellectual property created by employees during +their employment while performing their duties, other assigned tasks, or through the use +of our resources, funding, or technology, will belong to us. We place a high value on +recruiting and training qualified employees. We maintain high standards on selecting and +recruiting talent and provide competitive compensation packages. The remuneration +package of our employees includes salary and bonus, which are generally determined by +their performance review. We also offer share incentives and promotion opportunities to +motivate our employees. During the Track Record Period and up to the Latest Practicable +Date, we did not experience any material labor disputes or strikes that may have a +material and adverse effect on our business, financial condition or results of operations. +During the Track Record Period, we failed to pay social insurance premiums and +housing provident funds in full for and on behalf of some of our employees. See “Business +— Non-compliance” for more information. +INSURANCE +We maintain insurance policies that are required under PRC laws and regulations as +well as based on our assessment of our operational needs and industry practice. Our +existing insurance policies cover adverse events in our clinical trials. We maintain +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. For more information, see “Risk Factors — 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.” +LAND AND PROPERTIES +Owned Land and Properties +As of the Latest Practicable Date, we owned the land use right of one land parcel in +Taizhou, the PRC (specifically on the north side of Donghai Sixth Avenue, Taizhou Bay +Economic and Technological Development Zone), with an aggregate land area of +approximately 28,397 sq.m., which is planned for potential development of production +facilities, including the construction of a formulation plant. Our PRC Legal Adviser +confirmed that, as of the Latest Practicable Date, we had obtained all relevant land use +rights certificates for this property in the PRC. +Leased Properties +As of the Latest Practicable Date, we leased four properties for office and R&D uses +in the PRC, with an aggregate GFA of approximately 3,863.54 sq.m. The following table +sets forth the details of our leased properties as of the Latest Practicable Date. +Usage Location GFA (sq.m.) Lease T erm +Office and R&D .... Xi’an, China 2,958.15 July 1, 2025 to June 30, 2027 +Office .......... Beijing, China 221.5 November 1, 2023 to October 31, 2027 +BUSINESS +– 210 – + + +--- page 219 --- +Usage Location GFA (sq.m.) Lease T erm +Office and R&D .... Shanghai, China 563.89 May 1, 2026 to April 30, 2030 +Office and R&D .... Suzhou, China 120.0 Up to September 4, 2026 +As of the Latest Practicable Date, we had not completed the relevant property +leasing registration for two of our leased properties. See “Business — Non-compliance” +for more information. +As of December 31, 2025, none of the properties leased by us had a carrying amount +of 15% or more of our consolidated total assets. According to Chapter 5 of the Hong Kong +Listing Rules and section 6(2) of the Companies Ordinance (Exemption of Companies and +Prospectuses from Compliance with Provisions) Notice, this prospectus is exempt from +the requirements of section 342(1)(b) of the Companies (Winding up and Miscellaneous +Provisions) Ordinance to include all interests in land or buildings in a valuation report. +AWARDS AND RECOGNITIONS +The table below sets forth a summary of the major awards and recognition we +received during the Track Record Period. +Year of +Grant Award/Recognition Issuing Authority +2023 .... “2022 Shaanxi Provincial Innovative +Small and Medium-sized Enterprise”* +(˜2022ʕʃΆุ™ ) +Ministry of Industry and Information +Technology of the PRC (ʕശɛ͏΍ +ʷ௅) +2024 ..... Shaanxi Province “Unique and Innovative +Small and Medium-sized Enterprises in +Shaanxi Province”* +(˜ਖ਼ၚतอ™ ʕʃΆุ) +Shaanxi Province Industrial and +Information Technology Bureau* +(ʷᝂ) +2025 ..... “Third Prize in the National Finals +(Biomedicine Sector) of the 14th China +Innovation and Entrepreneurship +Competition” (ୋ 14ʕ਷௴อ௴ุɽᒄ +ᔼᖹΌ਷ᒄɧഃᆤ) +Torch High Technology Industry +Development Center, Ministry of +Industry and Information +Technology (৷Ҧ +ஔପุක೯ʕː) +ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT +As a pharmaceutical technology company focusing on the R&D of new drugs, our +Company is committed to integrating ESG concepts into its corporate strategy and +operations, actively responding to the concerns of its stakeholders, and creating long-term +value for human health in a sustainable manner. +1. ESG Governance +The Company has established an ESG governance structure with clear +responsibilities. The members of the Board of Directors have diversified professional +knowledge in areas including medicine, biochemistry, pharmacology, biology, business +administration, economics and accounting, and possess the appropriate skills and +professional capabilities to understand and oversee the impact of ESG risks and +opportunities. They are responsible for coordinating ESG-related matters, undertaking +ESG strategic decision-making and supervisory functions, approving key matters such as +ESG strategic goals and management policies, and reviewing and publishing ESG reports, +to align with the Company’s business strategy and development goals. To support the +Board of Directors in implementing ESG-related work, the Company has established an +ESG working group comprising members from departments such as EHS and human +resources. This group is responsible for assisting in the formulation and review of the ESG +strategic framework, coordinating the advancement of the entire ESG management +process, implementing ESG objectives, data collection, performance evaluation, and +cross-departmental coordination, etc. The Board of Directors supervises the related work +of the ESG working group. In addition, the Company has established risk identification, +assessment and response mechanisms that cover environmental and social dimensions, +and fully integrates ESG factors into its daily corporate operations. +BUSINESS +–2 1 1– + + +--- page 220 --- +We have adopted a board diversity policy, which sets out the objectives and +approaches to achieve and maintain diversity on the Board of Directors to enhance its +effectiveness. Our Company seeks to achieve diversity among the members of the Board +of Directors by considering a number of factors, including but not limited to gender, age, +cultural and educational background, professional experience, skills, knowledge and/or +length of service. Our Board of Directors currently comprises two female Directors and +seven male Directors, with ages ranging from 36 to 67. We attach great importance to the +expectations and demands of stakeholders and continuously improves its ESG +management structure. Currently, our Company has conducted specialized ESG training +for all employees (including directors and senior management) and holds regular +cross-departmental ESG promotion meetings to strengthen internal consensus and +executive synergy. Our Company plans to further optimize its risk identification and +assessment mechanisms after listing, enhance its risk management capabilities, and +periodically disclose ESG-related reports in accordance with regulatory requirements, to +continuously improve its ESG governance level and sustainable development +performance. +ESG Materiality Assessment and Risk Management +In accordance with the Environmental, Social and Governance Reporting Guide of +the Hong Kong Stock Exchange, and in combination with the industry’s characteristics +and the Company’s actual operating conditions, it systematically identifies ESG issues +and related risks that have a substantive impact on the business and are of concern to +stakeholders, and continuously optimises relevant management work. In terms of +material issue identification, we have identified key issues from two dimensions: +importance to sustainable development and importance to stakeholders. These issues are: +supply chain management, patents and intellectual property, and climate change, which +are incorporated into its ESG management strategy and policies. +• Supply Chain Management: At the business operations level, supply chain +disruptions or quality instability could lead to delays in the R&D of drug +candidates, impede the progress of clinical studies, and halt the production of +commercialised products, thereby affecting drug approvals and market supply. +Financially, supply disruptions or supplier compliance issues may trigger +significant expenditures such as product recalls, liability claims or compliance +rectifications, which could have a potential adverse impact on overall profitability +and financial condition. The Company incorporates supply chain management into +its ESG management and business to enhance the sustainability and risk resilience +of its supply chain. +• Patents and Intellectual Property: In terms of business operations, patent +challenges or invalidation may impede the commercialisation process of drug +candidates, resulting in R&D investments failing to yield expected returns; in terms +of financial performance, legal disputes such as patent litigation will generate high +rights protection costs; the leakage of trade secrets of core technologies will lead to +a decline in product competitiveness, affecting revenue and profit margins; in terms +of R&D investment, significant intellectual property disputes may render years of +R&D investment unrecoverable, resulting in asset impairment losses. The Company +diversifies its intellectual property risks by exploring the development of +technological diversity and open cooperation, ensuring that its technological +capabilities continue to support its business development. +• Climate Change: In terms of business operations, the potential impacts of climate +change on supply chain logistics efficiency and energy costs have been observed, +but as of now, there has been no material disruption to normal operations. At the +strategic level, the Company is actively incorporating climate factors into its +long-term planning to enhance operational resilience and seize opportunities in the +low-carbon transition. In terms of financial performance, although climate change is +classified as a highly important issue, based on current assessments, it has not yet +had a significant impact on the Company’s profitability or financial condition, and +its actual financial impact is low. +As of the Latest Practicable Date, we had not experienced any material ESG-related +risk incidents, nor had it been subject to any penalties for violating ESG-related laws and +regulations. We will continue to improve our ESG materiality assessment and risk +management mechanisms, maintain dynamic monitoring of potential risks, and ensure +continued and stable operations. +2. Environment +2.1 Environmental Management +Our Company strictly complies with national and local environmental laws and +regulations such as the Environmental Protection Law of the People’s Republic of China (ʕശ +BUSINESS +– 212 – + + +--- page 221 --- +‘), and continuously optimises its environmental management +system with reference to international standard systems. In 2024 and 2025, the expenses +incurred by our Company for environmental protection and compliance were RMB78,000 +and RMB50,200, respectively. As of the Latest Practicable Date, our Company had not +recorded any environmental pollution incidents. When formulating its sustainable +development goals, the Company has fully considered its current development status and +future operational trends, and has made comprehensive reference to the requirements of +international standards such as ISSB, GRI, and SASB, as well as the performance of +industry peers. Currently, its measurable targets are at an average level within the +industry. Guided by scientific emission reduction, efficient resource utilization, and +low-carbon transition, and considering our characteristics of the industry and our +Company’s actual operations, the Company has established the following environmental +management goals: +• Emission Reduction Goals: We strictly comply with national environmental +regulations, ensuring that 100% of air pollutants such as nitrogen oxides (NO +x), +sulfur dioxide (SO 2), and volatile organic compounds (VOCs) generated during its +production and operation processes are discharged in compliance with standards. +To achieve greater emission reduction benefits, our Company, using its 2024 +emission data as a baseline, aims to reduce the total emission of air pollutants by 5% +by 2030. +• Greenhouse Gas Emission Reduction Goals: We have incorporated the vision of +carbon neutrality into its long-term development plan and systematically manages +Scope 1, Scope 2, and Scope 3 greenhouse gas emissions in its operations. Our +Company has set a target to reduce its greenhouse gas emission intensity by 5% by +2030, using 2024 as the baseline. On this basis, our Company will focus on +optimising its energy structure and improving energy efficiency, and is committed +to achieving carbon neutrality at the operational level by 2050. +• Waste Reduction Goals: Through measures such as promoting green procurement, +improving material utilization efficiency, and ensuring end-of-pipe compliant +disposal and resource utilization, our Company, using the generation intensity of +2024 as a baseline, aims to reduce the emission intensity of hazardous waste by 3% +by 2030; for general waste, the target for the same period is a 5% reduction. +• Energy Use Efficiency Goals: Using the energy consumption level of 2024 as a +baseline, our Company has set a target to achieve a 5% reduction in electricity +consumption by 2030 through measures including phasing out +high-energy-consumption equipment, optimizing production scheduling and +process flows, reducing no-load and standby energy consumption, raising +energy-saving awareness among all employees, and building a comprehensive +energy-saving management system. +• Water Use Efficiency Goals: Using its water consumption performance in 2024 as a +baseline, our Company has set a target to reduce total water consumption by 3% by +2030. +2.2 Emissions Management +Our Company strictly complies with laws and regulations such as the Law of the +People’s Republic of China on the Prevention and Control of Atmospheric Pollution and +the Water Pollution Prevention and Control Law of the People’s Republic of China ( ʕശ +‘ ), adheres to the classification standards of the National +Catalogue of Hazardous Wastes (Τ፽‘ ), and achieves compliant +management throughout the waste generation and transfer stage: All hazardous and +medical waste are temporarily stored in dedicated leak-proof containers. Our Company +strictly distinguishes between hazardous waste and general solid waste, and implements +end-to-end control over their classified collection, temporary storage, transfer, and +disposal. Our Company entrusts qualified third-party organizations to carry out the +transfer of hazardous waste, medical waste, and sharps. All transfer manifests are filed for +record and inspection to achieve traceable management. +2.3 Resource Use Management +Our Company actively practices the concept of green office, improves energy use +efficiency from multiple dimensions, and builds a low-carbon office environment: +• Energy-Saving Lighting and Air Conditioning Management: Our Company has +fully adopted LED energy-saving lighting systems. In addition, our Company +implements a strict air conditioning temperature control system, effectively +reducing the electricity load from air conditioning. +BUSINESS +– 213 – + + +--- page 222 --- +• Water Conservation Management and Efficiency Improvement: Our Company has +comprehensively improved water resource utilization efficiency by promoting +water-saving appliances and strengthening employees’ water conservation +awareness. To date, no incidents of water scarcity or wastage have occurred. +• Paperless Office and Double-Sided Printing: For documents that must be printed, a +double-sided printing policy is promoted, significantly reducing paper +consumption. +• Promoting an Energy-Saving Culture: Our Company advocates for energy-saving +behaviors among employees, requires that lighting, water supply equipment, and +other electronic facilities be turned off during non-use periods. +The table below summarizes the resource use performance of our Company during +the Track Record Period: +Metrics Unit 2024 2025 +Electricity Consumption ..................... k W h 310,174 388,516 +Electricity Consumption Intensity ............... kWh/person 3,737.04 3,210.88 +Water Consumption ........................ m 3 643 1,910 +Water Consumption Intensity .................. m 3/person 7.75 15.79 +2.4 Responding to Climate Change +Our Company has systematically identified the potential impacts of climate change +on its operations, including transition risks such as changes in policies and regulations, +and physical risks such as disruptions to production and the supply chain from extreme +weather events. To this end, our Company will continue to assess climate-related risks and +opportunities, ensure its operational resilience, and steadily advance its goals of peaking +carbon emissions by 2030 and achieving carbon neutrality by 2050. As of the end of the +reporting period, our Company has initially observed the potential impacts of climate +change on certain business segments, such as supply chain logistics and energy costs, but +these impacts do not yet constitute significant operational or financial risks, and the +impact on our existing assets is low. +The table below lists the relevant risks identified to date: +Risk Type Specific Impact +Physical +Risks +Acute Risks • Power outages, network disruptions or +physical damage to R&D laboratories or +data centres caused by extreme weather +events such as heavy rain +Chronic Risks • Prolonged high temperatures and heat +affecting the stability of raw materials +during transportation and storage +• Continuous increase in cooling energy +consumption costs to maintain a constant +temperature and humidity in the +laboratory environment +Transition +Risks +Policy and Legal +Changes +• Stricter requirements for laboratory waste +disposal +• Carbon regulation leading to additional +expenses for purchasing carbon +allowances and tax payments +Market and +Technology +Risks +• Low-carbon R&D methods such as green +chemistry changing traditional R&D +models +BUSINESS +– 214 – + + +--- page 223 --- +The table below sets out the greenhouse gas (GHG) emissions of our Company +during the Track Record Period: +Metrics Unit 2024 2025 +Total Greenhouse Gas Emissions (Scope 1+Scope 2) tCO 2e 174.75 219.24 +Greenhouse Gas Emissions Intensity (Scope 1+ Scope 2) tCO 2e/person 2.11 1.81 +Scope 1 GHG Emissions tCO2e 8.31 10.76 +Scope 1 GHG Emissions Intensity tCO2e/person 0.10 0.09 +Scope 2 GHG Emissions tCO2e 166.44 208.48 +Scope 2 GHG Emissions Intensity tCO2e/person 2.01 1.72 +Scope 3 GHG Emissions tCO2e 9,562.51 9,932.83 +Category 1 tCO2e 8,433.81 7,612.02 +Category 5 tCO2e 7.56 41.3 +Category 6 tCO2e 1,068.29 2,215.75 +Category 7 tCO2e 52.85 63.76 +Scope 3 GHG Emissions Intensity tCO2e/person 115.21 82.09 +Note: The calculation method for GHG emissions is based on the *Sixth Assessment Report* issued by the +Intergovernmental Panel on Climate Change (IPCC) and the *Announcement on the Release of 2022 CO 2 +Emission Factors for the Power Grid* (೯б 2022ʮѓ‘ ) issued by the +Ministry of Ecology and Environment. +3. Social +3.1 Employment +Our Company strictly complies with laws and regulations such as the Labour Law +of the People’s Republic of China (‘) and the Labour Contract Law +of the People’s Republic of China (‘), has formulated internal +management systems such as the Employee Handbook, and resolutely prohibits child +labour and forced labour. It also strictly verifies the age information of applicants, +communicates fully with employees before they work overtime, and strictly controls the +duration of such overtime. As of the Latest Practicable Date, our Company had not had +any incidents of child labour or forced labour. Our Company is committed to creating a +diverse, equal, and inclusive work environment. It avoids discriminatory language and +prejudice in recruitment and explicitly states that it does not discriminate against +employees in recruitment and actual work based on age, gender, race, disability, marital +status, etc., to ensure that employees are free from harassment and illegal discrimination. +Metrics Unit 2024 2025 +Total Number of Employees Person 83 121 +By Gender Male Person 36 56 +Female Person 47 65 +By Age 30 years old and under Person 19 25 +31-50 years old Person 59 89 +Over 50 years old Person 5 7 +3.2 Health and Safety +Our Company strictly complies with relevant laws and regulations such as the Work +Safety Law of the People’s Republic of China (‘) and the Law +of the People’s Republic of China on the Prevention and Control of Occupational Diseases +(‘ ). It has formulated systems such as the “Environmental, +Occupational Health and Safety Management System”, and “Management System for +Detecting Occupational Hazard Factors in the Workplace”. To protect personnel from +harm when in contact with irritating, corrosive and toxic chemical substances (such as +pyridine and hydrochloric acid), our Company equips its laboratories with compliant +workwear, boots, gloves, masks and protective eyewear. Our Company formulates an +annual safety training plan, and conducts safety training in an orderly manner. During the +Track Record Period and up to the Latest Practicable Date, the Company did not +experienced any workplace accidents, and the number of workdays lost due to +work-related injuries was 0. +BUSINESS +– 215 – + + +--- page 224 --- +3.3 Development and Training +Our Company has established differentiated training courses for employees of +different types and from different business departments, created an online learning +platform, and offered various categories of training content. Our Company safeguards +employees’ career development paths, providing a dual-track promotion mechanism for +management and professional development for employees at different functions and +levels, allowing them to grow and advance in a fair and just environment. +Metrics Unit 2024 2025 +Percentage of Trained Employees by +Gender +Male % 43 46 +Female % 57 54 +Percentage of Trained Employees by +Employment Category +Senior Management % 25 26 +Middle Management % 34 26 +General staff % 41 48 +Average Hours of +Training of Employees +by Gender +Male Hours 1,546 1,771 +Female Hours 1,815 1,992 +Average Hours of +Training of Employees +by Category +Senior Management Hours 504 651 +Middle Management Hours 471 553 +General staff Hours 2,442 2,653 +3.4 Clinical Trials +Our Company complies with the principles of the Declaration of Helsinki of the +World Medical Association and relevant ethical requirements, ensures the implementation +of ethical review and informed consent procedures, and protects the rights of subjects. In +terms of data protection, our Company is committed to protecting the information of trial +participants in accordance with applicable laws, regulations, and industry standards, and +properly records, processes, and preserves participants’ clinical trial data to ensure the +security and confidentiality of their data and privacy. +3.5 Animal Welfare +Our Company strictly complies with key laws and regulations concerning animal +welfare and is committed to providing experimental animals with humane care, +psychological support, and professional veterinary care. Through ethical reviews, +personnel training, and full-process compliance supervision, it ensures that every study +reflects respect and responsibility for life. +3.6 Supply Chain Management +Our Company has established a comprehensive supply chain management system +and formulated management systems such as the “Code of Conduct for Procurement +Business” and “Cross-departmental Workflow for Bidding and Tendering by Procurement +Expert Group”. We are committed to fully integrating environmental, social and +governance factors into its supplier screening process. In 2024 and 2025, our Company +collaborated with a total of 322 and 409 suppliers, respectively. Our Company always +upholds a “zero tolerance” principle and resolutely prevents any unfair competition and +corrupt practices in the procurement and supplier fulfillment processes. +3.7 Business Ethics and Anti-corruption +Our Company strictly complies with laws and regulations such as the Anti-Unfair +Competition Law of the People’s Republic of China (‘ ) +and the Anti-Money Laundering Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ +‘), and has formulated internal management systems such as the “Guidelines on +Business Gifts and Anti-Commercial Bribery” to urge employees to adhere to business +ethics. In 2024 and 2025, there were no concluded legal proceedings against our Company +or its employees in relation to corruption. Our Company has established a comprehensive +whistleblower protection mechanism, and is committed to strictly protecting the +confidentiality of whistleblowers’ identities and the content of their reports, and +effectively safeguarding their legal rights and interests. Our Company organizes +specialized training on professional integrity to enhance the integrity and compliance +BUSINESS +– 216 – + + +--- page 225 --- +awareness of all employees, and strengthens the internal consensus on maintaining an +atmosphere of integrity and uprightness. +IMPACT OF THE COVID-19 OUTBREAK +The outbreak of the COVID-19 and its recurrence had caused temporary disruption +to our operations to the extent that certain on-site meetings, deployment and technical +support had to be delayed or cancelled. As of the Latest Practicable Date, however, +COVID-19 had not had any material adverse impact on our R&D activities, clinical +development, daily operation, supply chain and regulatory affairs. Given that the PRC +government has substantially lifted its COVID-19 prevention and control policies since +December 2022, our Directors are of the view that it is unlikely that the COVID-19 will +have a material adverse impact on our business going forward. +LICENSES AND PERMITS +Our PRC Legal Advisor has advised that during the Track Record Period and up to +the Latest Practicable Date, we have obtained all material licenses, permits, approvals and +certificates from the relevant government authorities that are material for the business +operations of our Group. There is no material legal impediment in renewing such licenses, +permits, approvals and certificates as they expire in the future as long as we are in +compliance with applicable laws, regulations and rules. +The following table sets forth the details of our material licenses, permits and +approvals as of the Latest Practicable Date: +License/Permit Issuing Authority Holder Grant Date Expiration Date +Certificate for Utilization of Laboratory +Animals (SYXK-( ৯) 2026-009) +(Դ͜஢̙ᗇ €ᇜ໮j +SYXK-(৯ ) 2026-009).......... +Shaanxi Provincial +Department of +Science and +Technology +(ኪҦஔᝂ) +The Company March 26, 2026 March 18, 2031 +Notice of Approval for Clinical Drug Trial +(2025LP01688) (ࣣٝ +€ᇜ໮j2025LP01688 ) .......... +NMPA Shanghai Xitaili +Biomedical Technology +Co., Ltd.* (ɪऎГइл͛ +ʮ̡) +June 30, 2025 N/A +Notice of Approval for Clinical Drug Trial +(2025LP01148) (ࣣٝ +€ᇜ໮j2025LP01148 ) .......... +NMPA Shanghai Xitaili +Biomedical Technology +Co., Ltd.* (ɪऎГइл͛ +ʮ̡) +April 21, 2025 N/A +Notice of Approval for Clinical Drug Trial +(2025LP01314) (ࣣٝ +€ᇜ໮j2025LP01314 ) ......... +NMPA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +February 20, +2025 +N/A +Notice of Approval for Clinical Drug Trial +(2025LP01315) (ࣣٝ +€ᇜ໮j2025LP01315 ) ......... +NMPA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +February 20, +2025 +N/A +Approval for XTL6001 Clinical Trial for +Weight Management ........... +FDA Shanghai Xitaili +Biomedical Technology +Co., Ltd.* (ɪऎГइл͛ +ʮ̡) +December 20, +2024 +N/A +Approval for MT1002 Clinical Trial for +H D .................... +FDA The Company December 13, +2023 +N/A +Notice of Approval for Clinical Drug Trial +(2023LP01508) (ࣣٝ +€ᇜ໮j2023LP01508 ) ......... +NMPA The Company July 27, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP01509) (ࣣٝ +€ᇜ໮j2023LP01509 ) ......... +NMPA The Company July 27, 2023 N/A +BUSINESS +– 217 – + + +--- page 226 --- +License/Permit Issuing Authority Holder Grant Date Expiration Date +Notice of Approval for Clinical Drug Trial +(2023LP01200) (ࣣٝ +€ᇜ໮j2023LP01200 ) ......... +NMPA The Company June 25, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP01201) (ࣣٝ +€ᇜ໮j2023LP01201 ) ......... +NMPA The Company June 25, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP01038) (ࣣٝ +€ᇜ໮j2023LP01038 ) ......... +NMPA The Company June 6, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP01039) (ࣣٝ +€ᇜ໮j2023LP01039 ) ......... +NMPA The Company June 6, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP00534) (ࣣٝ +€ᇜ໮j2023LP00534 ) ......... +NMPA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +March 29, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP00535) (ࣣٝ +€ᇜ໮j2023LP00535 ) ......... +NMPA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +March 29, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP00489) (ࣣٝ +€ᇜ໮j2023LP00489 ) ......... +NMPA The Company March 24, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2023LP00341) (ࣣٝ +€ᇜ໮j2023LP00341 ) ......... +NMPA The Company March 14, 2023 N/A +Notice of Approval for Clinical Drug Trial +(2022LP01267) (ࣣٝ +€ᇜ໮j2022LP01267 ) ......... +NMPA The Company August 16, 2022 N/A +Notice of Approval for Clinical Drug Trial +(2021LP01920) (ࣣٝ +€ᇜ໮j2021LP01920 ) ......... +NMPA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +November 30, +2021 +N/A +Notice of Approval for Clinical Drug Trial +(2021LP01921) (ࣣٝ +€ᇜ໮j2021LP01921 ) ......... +NMPA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +November 30, +2021 +N/A +Notice of Approval for Clinical Drug Trial +(2021LP01020) (ࣣٝ +€ᇜ໮j2021LP01020 ) ......... +NMPA The Company July 6, 2021 N/A +Notice of Approval for Clinical Drug Trial +(2021LP00813) (ࣣٝ +€ᇜ໮j2021LP00813 ) ......... +NMPA The Company June 2, 2021 N/A +Approval for MT1013 Clinical Trial for +CKD-SHPT ................ +FDA The Company March 5, 2021 N/A +Approval for MT2004 Clinical Trial for +NASH .................. +FDA Xi’an Biocare Pharma Ltd. +(ࠢ +ʮ̡) +November 12, +2019 +N/A +Approval for MT1002 Clinical Trial for +ACS-PCI ................. +FDA The Company March 1, 2019 N/A +BUSINESS +– 218 – + + +--- page 227 --- +License/Permit Issuing Authority Holder Grant Date Expiration Date +Fixed Pollution Source +Discharge Permit +(91320505MA228WRPXE001W) +(๕રϮ೮াΫੂ €ᇜ໮j +91320505MA228WRPXE001W ) ..... +N/A Micot (Suzhou) +Pharmaceutical Co., Ltd. +(ࠢ +ʮ̡) +September 8, +2023 +September 7, +2028 +LITIGATIONS +We are subject to legal proceedings and claims arising in the ordinary course of our +business from time to time. See “Risk Factors — Risks Relating to Our Operations — We +may become involved in lawsuits or other legal proceedings, which could adversely affect +our business, financial conditions, results of operations and reputation.” During the Track +Record and up to the Latest Practicable Date, our Directors confirmed that we were not +involved in any litigation or arbitration proceedings pending or, to the best knowledge of +our Directors, threatened against us or any of our Directors that could have a material +adverse effect on our business, results of operations or financial condition. +COMPLIANCE WITH LAWS AND REGULATIONS +During the Track Record Period and up to the Latest Practicable Date, we did not +commit any material non-compliance of the laws and regulations which individually or in +the aggregate, in the opinion of our Directors, would have a material and adverse effect on +our business, financial condition or results of operations. As advised by our PRC Legal +Advisor, during the Track Record Period and up to the Latest Practicable Date, we had +complied with the applicable PRC laws and regulations in all material respects. Our U.S. +Legal Advisor, King and Wood LLP , confirmed that it is not aware of any incompliance or +violation by any of our U.S. subsidiary of the applicable U.S. federal and state laws during +the Track Record Period and up to the Latest Practicable Date. Our Directors further +confirm that, we have complied with all applicable laws and regulations in all +jurisdictions in which we had business operations during the Track Record Period and up +to the Latest Practicable Date. +Non-compliance +Failure to make full and timely social insurance and housing provident fund +During the Track Record Period, we failed to pay social insurance premiums and +housing provident funds in full for and on behalf of some of our employees in accordance +with applicable PRC laws and regulations. The primary reason thereof is that we +determined the contribution base for social insurance and housing provident fund based +on the employees’ salaries at the time of their onboarding and by reference to local +standards, and adjustments to such contribution bases in subsequent years in line with +employees’ annual actual salaries were not duly implemented where applicable, as our +human resources staff did not fully familiarise themselves with the applicable laws and +regulations in this regard. Based on our estimate, the shortfall of our social insurance and +housing provident fund contributions during the Track Record Period amounted to +RMB0.6 million and RMB0.9 million for 2024 and 2025, respectively. Our PRC Legal +Advisor is of the view that the risk of incurring material administrative penalties issued +by the relevant government authorities is remote, provided that there are no significant +changes in current policies, regulations, local government supervision, and law +enforcement requirements related to social insurance and housing provident fund and +based on the following reasons: (i) during the Track Record Period and up to the Latest +Practicable Date, we had not received any notification from the relevant government +authorities requiring us to settle any payment shortfall; (ii) based on the Special Credit +Reports for Market Entities issued by the competent government authorities of our +Company, we had not been subject to any administrative penalties with respect to social +insurance premiums and housing provident funds; (iii) based on telephone consultations +with several relevant authorities in the principal locations where our employees are +based, such authorities typically do not proactively require enterprises to make +retrospective contributions for all employees for historical underpayments unless +prompted by employee complaints; and (iv) if any notice related to the payment of social +insurance and housing provident funds is received from government authorities in the +future, we undertake that we will make up the required amount within the stipulated +period. +BUSINESS +– 219 – + + +--- page 228 --- +Our Directors confirm that if we receive a notice from the relevant authorities +requiring us to rectify, pay or make up social insurance and housing provident funds +within a specified period, we will promptly comply with the requirements of such notice. +In respect of our social insurance and housing provident funds contributions, we have +adopted or plan to adopt remedial measures, including: (i) we have enhanced our +compliance policy with respect to social insurance and housing provident fund +contribution in accordance with the PRC laws and regulations; (ii) we have designated our +human resources department to review and monitor the reporting and contributions of +social insurance and housing provident fund on a monthly basis; (iii) we will consult our +PRC Legal Advisor on a regular basis for advice on the relevant PRC laws and regulations +to keep us abreast of relevant regulatory development; (iv) new joiners of us are informed +the latest social insurance and housing provident laws, regulations and company policies; +and (v) we conduct regular trainings on social and housing provident laws and +regulations for our employees to enhance the awareness of compliance. +We plan to progressively adjust the contribution bases for social insurance and +housing provident fund to comply with applicable regulatory requirements. Given that +the social insurance contribution and housing provident fund base is generally subject to +annual adjustment during the certain window determined by the local authorities, we +intend to commence the rectification process during the upcoming adjustment window in +July 2026 and expect to substantially complete such adjustment within one year. +Therefore, our Directors believe that our failure to fully pay social insurance +premiums and housing provident funds will not have an adverse impact on our financial +condition and business operations. +Non-registration of leased properties +As of the Latest Practicable Date, we had not completed the relevant property leasing +registration for two of our leased properties, mainly because: (i) the agreement of one of our +properties was executed in May 2026 and we have required the landlord to cooperate with us +in completing the lease registration within six months following execution of the lease +agreement; (ii) the non-registration of the other property was due to circumstances beyond +our control, as the registration process requires the owner’s personal cooperation, and we +will continue our engagement with the owner and endeavor to complete the registration as +soon as practicable. For details of the risk associated with the unregistered lease agreements, +please refer to “Risk Factors — Risks Relating to Our Business and Industry — We are subject +to risks associated with leasing space.” According to the Urban Real Estate Administration +Law of the PRC (جand the Commercial Building Leasing +Administrative Measures (جthe relevant local governments may +require the rectification of the non-registration of lease agreements within a certain period +of time. If rectification is not made within the specified time, we may be subject to a fine +ranging from RMB1,000 to RMB10,000 for each unregistered lease agreement and the +maximum aggregate amount of fines that may be imposed due to such defects is +RMB20,000. According to our PRC Legal Advisor, under the Civil Code of the PRC ( ʕശɛ +Պ), the non-registration of the lease agreements does not affect the validity +and enforceability of the lease agreements. During the Track Record Period and up to the +Latest Practicable Date, we had not been subject to any penalties arising from the +non-registration of our lease agreement and had not experienced any dispute arising out +of, or in relation to, our leased properties. In addition, the unregistered leased properties +were solely for the office use, and we can easily find the alternative properties in +replacement. +Therefore, our Directors believe that such non-registration would not materially +and adversely affect our business operations, and will not materially impact our ability to +use the properties, as the leases remain valid, and sufficient alternative premises are +available in the market should relocation become necessary. We will continue to liaise +with the respective lessors to complete the registrations where feasible. +BUSINESS +– 220 – + + +--- page 229 --- +RISK MANAGEMENT AND INTERNAL CONTROL +We have adopted a series of risk management policies which set out a risk +management framework to identify, assess, evaluate, and monitor key risks associated +with our strategic objectives on an ongoing basis. Risks identified by management will be +analyzed based on likelihood and impact and will be properly followed up, mitigated and +rectified by our Company and reported to our Directors. Our audit committee, and +ultimately our Directors supervise the implementation of our risk management policies. +To monitor the ongoing implementation of our risk management policies and +corporate governance measures after the Listing, we have adopted or will continue to +adopt, among other things, the following risk management measures: (i) establish an +Audit Committee to review and supervise our financial reporting process and internal +control system; (ii) adopt various policies to ensure compliance with the Listing Rules, +including but not limited to aspects related to risk management, connected transactions +and information disclosure; (iii) formulate the Anti-fraud System and other institutional +documents to clarify the concepts and forms of fraud, the attribution of anti-fraud duties, +the prevention and control of fraud, the accountability for fraud, remedial measures and +penalties; (iv) provide anti-corruption and anti-bribery compliance training periodically +to our senior management and employees to enhance their knowledge and compliance +with applicable laws and regulations; and (v) attend training sessions by our Directors +and senior management in respect of the relevant requirements of the Listing Rules and +duties of directors of companies listed in Hong Kong. +Internal Control +Our Board is responsible for establishing our internal control system and reviewing +its effectiveness. We have engaged an internal control consultant (the “ Internal Control +Consultant”) to perform certain agreed-upon procedures (the “ Internal Control +Review”) in connection with the internal control of our Company in certain aspects, +including entity-level controls, financial reporting and disclosure controls, purchase and +payment management, inventory management, fixed assets management, human +resources and payroll management and other procedures of our operations. +The Internal Control Consultant performed the Internal Control Review covering +the period from July 2024 to June 2025, identified internal control deficiencies and +provided recommendations accordingly. We have adopted the corresponding remediation +actions to improve the effectiveness of the internal control system. The Internal Control +Consultant performed a follow-up review with regard to those actions taken by us and +there are no 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. After considering the remedial actions we have taken, our +Directors are of the view that our internal control system is adequate and effective for our +current operations. +BUSINESS +– 221 – + + +--- page 230 --- +Data Privacy Protection +During clinical development, collaboration, and operation in the PRC, we mainly +collect and process personal information of subjects based on clinical trials. The specific +content, nature of the personal information collected and processed by us are set out in the +table below: +Nature of Personal +information Content of Personal information Purpose of Collection Special Notes +Basic Personal +Information .... +Name, date of birth, gender, +ethnicity, address, personal +telephone number, email address, +etc. +Basic information that must be +provided by subjects participating +in clinical trials to ensure they +meet the eligibility criteria and +can be contacted during their +participation in the trial. +1. The basic personal information and +personal identification information +collected and processed by us as the +clinical trial Sponsor are de-identified +personal information, which cannot +directly identify or be associated with +a specific subject. Such basic +information and data are provided to +us by clinical trial institutions in the +form of subject identification codes. +2. Certain employees dispatched by us, +such as Clinical Research Associates +(CRAs) and Quality Assurance (QA) +personnel, may review and verify +subject information at the research +centers, but will not provide the +specific content of such information to +us. +3. During the clinical trial process, the +personal information collected and +processed for each clinical trial varies +according to the specific clinical trial +protocol. Therefore, the Personal +information described herein may not +be collected and processed in every +trial. +4. The personal information described +herein includes sensitive personal +information. +Personal +Identification +Information .... +ID card, Social Security card, etc. Basic information that must be +provided by subjects participating +in clinical trials to ensure they +meet the eligibility criteria and +can participate in the trial +normally. +Personal Health and +Physiological +Information .... +Records generated from medical +treatment, such as symptoms, +hospitalization records, +laboratory reports, medication +records, drug/food allergy +information, reproductive +information, past medical history, +diagnosis and treatment +information, history of present +illness, etc.; and information +related to personal physical +health status, such as height, +weight, etc. +Other Information . . Such as information regarding +sexual life. +In the process of collecting personal information, we have complied with the +principles and requirements of legality, minimum necessity, and informed consent under +applicable laws and regulations such as the Civil Code of the PRC, the Personal +Information Protection Law of the PRC, and the Good Practice for Clinical Trials of Drugs. +(1) Legality: During clinical research, we legally collect personal information of +subjects via our partners (such as clinical trial institutions). There is no +instance of collecting personal information through fraud, deception, or +inducement, nor is there any instance of obtaining personal information from +illegal channels. +(2) Minimum Necessity: The personal information collected by us is strictly +limited to materials that subjects must provide to participate in clinical +research, for the purpose of assessing whether subjects meet the eligibility +criteria for participation in clinical trials and ensuring their normal +participation in the trial. Furthermore, the basic personal information and +identification information collected by us are de-identified personal +information provided by clinical trial institutions, thereby minimizing the +specific content of personal information collected to the greatest extent +possible. +BUSINESS +– 222 – + + +--- page 231 --- +(3) Informed Consent: When collecting personal information from subjects, we +through clinical trial institutions, informs the subjects of the specific content +of the information to be collected, the purpose and scope of its use, the rights +of the personal information subjects, and contact methods for enquiries and +exercising rights, in the form of an Informed Consent Form, and obtains +written, signed informed consent forms from the subjects. +We have strictly limited the use of collected personal information of subjects to the +purposes and scopes of related clinical trials, such as trial conduct and information +verification. Our Directors and U.S. Data Legal Advisor, Concord & Sage PC, confirm that +no new clinical trials have been initiated in the U.S. since 2023 by the Company. +Consequently, throughout the Track Record Period and up to the Latest Practicable Date, +the collection of trial subjects’ personal information has been strictly confined to +Mainland China, with no further data gathered from the U.S. As confirmed by our PRC +Data Legal Advisors, Grandall Law Firm (Shenzhen), the collection and processing of +subjects’ personal information by us during clinical development, collaboration, and +operation has complied, in all material respects, with all applicable laws and regulations +regarding data privacy and security in Mainland China during the Track Record Period +and up to the Latest Practicable Date. +From April 2019 to December 2022, we have engaged CROs to conduct clinical trials +in the U. S. for MT1002, MT1013, MT200605 and MT2004. According to our U.S. Data Legal +Advisors, they are not aware of any matter concerning the CROs’ data privacy and +protection practices under U.S. law that would be reasonably likely to have a material +adverse effect on the business, financial condition, or results of operations of our +Company. +BUSINESS +– 223 – + + +--- page 232 --- +OUR CONTROLLING SHAREHOLDERS +As of the Latest Practicable Date, Dr. Wang Bing ( ˮΏ), Dr. Wang Mei (ˮૠ) and +Xi’an Zhongrui directly held 40.56%, 6.60% and 5.48% of the interest in our Company, +respectively. Dr. Wang Bing and Dr. Wang Mei are spouses. Dr. Wang Mei and Dr. Wang +Bing held 99.00% and 1.00% of the equity interest, respectively, in Xi’an Zhongrui Zekang +Enterprise Management Consulting Co., Ltd.* (ʮ̡) +(“Zhongrui Zekang ”), which acts as the general partner of Xi’an Zhongrui. Xi’an +Zhongrui directly held 5.48% of the equity interest in the Company, such that Dr. Wang +Mei and Dr. Wang Bing are deemed to be the beneficial owners of the 5.48% equity interest +in the Company held by Xi’an Zhongrui. Therefore, Dr. Wang Bing, Dr. Wang Mei, Xi’an +Zhongrui and Zhongrui Zekang will be regarded as our Controlling Shareholders under +the Listing Rules before the Listing. Immediately upon completion of the Global Offering +(assuming the Over-allotment Option is not exercised), Dr. Wang Bing, Dr. Wang Mei, +Xi’an Zhongrui and Zhongrui Zekang will collectively be entitled to exercise +approximately 43.43% voting rights in our Company and thus remain as our Controlling +Shareholders. For background and biographical details of Dr. Wang Bing and Dr. Wang +Mei, please refer to the section headed “Directors and Senior Management — Board of +Directors” in this prospectus. +Our Controlling Shareholders have confirmed that, as of the Latest Practicable Date, +they did not have any interest in other business, apart from the business of our Company, +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 OUR CONTROLLING SHAREHOLDERS +Our Directors consider that we are capable of carrying on our business +independently of our Controlling Shareholders and their close associates after the Listing, +taking into consideration of the factors below. +Management Independence +Our Board comprises nine Directors, including two executive Directors, four non- +executive Directors and three independent non-executive Directors. We believe that our +Board as a whole, together with our senior management, is able to perform the managerial +role in our Group independently from our Controlling Shareholders for the following +considerations: +(a) each of our Directors is aware of his/her fiduciary duties as a Director which +require, among others, that he/she acts for the benefit of and in the best +interests of our Company and not allow any conflict between his/her duties as +a Director and his/her personal interests; +(b) our daily management and operation decisions are made by all our executive +Directors and senior management, all of whom have substantial experience in +the industry in which we are engaged and will be able to make business +decisions that are in the best interest of our Group. For details of the industry +experience of our senior management, please see the section headed +“Directors and Senior Management” in this prospectus; +(c) we have appointed three independent non-executive Directors, comprising +one-third of the total members of our Board, who have sufficient knowledge, +experience and competence with a view to bringing independent judgment to +the decision-making process of our Board; +(d) 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 shall abstain from voting and shall not be counted +towards the quorum for the voting; and +(e) we have adopted a series of corporate governance measures to manage +conflicts of interest, if any, between our Group and our Controlling +Shareholders which would support our independent management. For +further details, please refer to the paragraph headed “Corporate Governance +Measures” in this section. +In light of the above, our Directors believe that our Company has sufficient and +effective control mechanisms to ensure that our Directors perform their respective duties +properly and safeguard the interests of our Company and our Shareholders as a whole. +RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS +– 224 – + + +--- page 233 --- +Operational Independence +We have full rights to make all decisions on, and to carry out, our own business +operations independently. We have our own departments specializing in these respective +areas which have been in operation and are expected to continue to operate independently +from our Controlling Shareholders and their close associates. We hold all the requisite +licenses, intellectual property rights and qualifications that are material to carry on our +principal business. We also have independent access to suppliers and customers and have +sufficient capital, facilities and employees to operate our business independently from +our Controlling Shareholders and their close associates. +Based on the above, our Directors believe that we will be able to operate +independently from our Controlling Shareholders and their close associates. +Financial Independence +We have an independent financial system. We make financial decisions according to +our own business needs and neither our Controlling Shareholders nor their close +associates intervene with our use of funds. We have established an independent finance +department with a team of financial staff and an independent audit, accounting and +financial management system. +In addition, we have been and are capable of obtaining financing from third parties +without relying on any guarantee or security provided by our Controlling Shareholders or +their close associates. As of the Latest Practicable Date, our Group had no loan, advance or +guarantee provided by our Controlling Shareholders or their close associates. +Based on the above, our Directors believe that we are capable of carrying on our +business independently of and do not place undue reliance on our Controlling +Shareholders and their close associates after the Listing. +CORPORATE GOVERNANCE MEASURES +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 our Controlling Shareholders or any of their associates +has a material interest, our Controlling Shareholders or their associate will not +vote on the relevant resolutions and shall not be counted in the quorum for the +voting; +(b) our Company has established internal control mechanisms to identify +connected transactions. Upon the Listing, if our Company enters into +connected transactions with our Controlling Shareholders or any of their +associates, our Company will comply with the applicable Listing Rules; +(c) our Board consists of a balanced composition of executive Directors, +non-executive Directors and independent non-executive Directors, with +independent non-executive Directors representing not less than one-third of +our Board 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 +duties. They will review whether there is any conflict of interests between our +Group and our Controlling Shareholders and provide impartial and +professional advice to protect the interests of our minority Shareholders; +(d) where our Directors reasonably request the advice of independent +professionals, such as financial advisers, the appointment of such +independent professionals will be made at our Company’s expenses; and +(e) we have appointed Halcyon Capital Limited as our compliance adviser to +provide advice and guidance to us in respect of compliance with the +applicable laws and the Listing Rules, including various requirements +relating to corporate governance. +Based on the above, our Directors believe that sufficient corporate governance +measures have been put in place to manage conflicts of interest that may arise between our +Group and our Controlling Shareholders and to protect our Shareholders’ interests as a +whole after the Listing. +RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS +– 225 – + + +--- page 234 --- +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 +RMB5,473,719 divided into 273,685,950 Unlisted Shares with a nominal value of RMB0.02 +each. +UPON COMPLETION OF THE SHARE SUBDIVISION AND THE GLOBAL +OFFERING +Immediately following the completion of the Share Subdivision the conversion of +certain Unlisted Shares into H Shares and the Global Offering, assuming that the +Over-allotment Option is not exercised, the share capital of our Company will be as +follows: +Description of Shares +Number of +Shares +Approximate +percentage of +the total +share capital +Unlisted Shares in issue .................. 51,669,250 15.58% +H Shares to be issued under the Global +Offering ............................. 58,054,400 17.50% +H Shares converted from Unlisted Shares ..... 222,016,700 66.92% +T otal ................................. 331,740,350 100% +Immediately following completion of the Global Offering and the conversion of +certain Unlisted Shares into H Shares, assuming the Over-allotment Option is fully +exercised, the issued share capital of our Company will be as follows: +Description of Shares +Number of +Shares +Approximate +percentage of +the total +share capital* +Unlisted Shares ......................... 51,669,250 15.18% +H Shares to be issued under the Global +Offering ............................. 66,762,400 19.61% +H Shares converted from Unlisted Shares ..... 222,016,700 65.21% +T otal ................................. 340,448,350 100% +* Any discrepancies in the table between the total shown and the sum of the amounts listed are due to +rounding. +SHARE CAPITAL +– 226 – + + +--- page 235 --- +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 +Our Company has filed for a “full circulation” of 222,016,700 existing Unlisted +Shares (taking into account the Share Subdivision) into H Shares on a one-for-one basis, +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 222,016,700 Unlisted +Shares held by the existing Shareholders into H Shares on a one-for-one basis have been +completed on March 27, 2026. +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. +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 despatch 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 +following the Global Offering could materially and adversely affect the price of our H +Shares.” +SHARE CAPITAL +– 227 – + + +--- page 236 --- +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 +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 or +members of the senior management in our Company. +See “Underwriting — 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 III — Summary of Articles of Association.” +PRE-IPO SHARE INCENTIVE PLAN +We adopted the Pre-IPO Share Incentive Plan, details of which are set forth in +“Appendix IV — Statutory and General Information — Further Information about our +Directors and Substantial Shareholders — Pre-IPO Share Incentive Plan.” +GENERAL MANDATES TO ISSUE SHARES, SELL AND/OR TRANSFER TREASURY +SHARES AND REPURCHASE SHARES +Subject to the completion of the Global Offering, pursuant to the Shareholders +resolutions of our 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 IV — Statutory and +General Information — Further Information about our Group — Resolutions of the +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 ( Hஷ™ุ +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 +– 228 – + + +--- page 237 --- +THE CORNERSTONE INVESTMENT +We have entered into cornerstone investment agreements (each a “Cornerstone +Investment Agreement” , and together the “Cornerstone Investment Agreements” ) with +the cornerstone investors set out below (each a “Cornerstone Investor” , and together the +“Cornerstone Investors” ), pursuant to which the Cornerstone Investors have agreed to, +subject to certain conditions, subscribe for such number of Offer Shares (rounded down to +the nearest whole board lot of 200 H Shares) which may be purchased at the Offer Price +with an aggregate amount of HK$449.19 million (exclusive of brokerage, SFC transaction +levy, AFRC transaction levy and Stock Exchange trading fee) (the “Cornerstone +Investment”). +Pursuant to paragraph 3.2 of Practice Note 18 to the Listing Rules, at least 40% of the +total number of Offer Shares initially offered in the Global Offering must be allocated to +investors in the placing tranche (other than Cornerstone Investors). As the Company is +initially offering approximately 10% of the total number of Offer Shares in the Hong Kong +Public Offering, no more than 50% of the total number of the Offer Shares initially offered +in the Global Offering can be allocated to all Cornerstone Investors (the “Cornerstone +Investment Allocation Limit” ). Each of the Cornerstone Investors has agreed in their +respective Cornerstone Investment Agreements that the Company, the Joint Sponsors and +the Overall Coordinators shall have the right to, in their sole and absolute discretion, +adjust the allocation of the number of Offer Shares to be subscribed for by the relevant +Cornerstone Investor to ensure compliance with the Listing Rules, including the +Cornerstone Investment Allocation Limit. Accordingly, the Company, the Joint Sponsors +and the Overall Coordinators will adjust the allocation of the number of Offer Shares to be +subscribed for by the Cornerstone Investors in proportion to their respective initial +subscription amounts set out in their respective Cornerstone Investment Agreements to +ensure compliance with the Cornerstone Investment Allocation Limit, and will disclose +the number of the Offer Shares finally allocated to each of the Cornerstone Investors in the +allotment results announcement of the Company to be published on or around Tuesday, +June 23, 2026. +Assuming an Offer Price of HK$18.20, being the low-end of the indicative Offer +Price range set out in this Prospectus, the total number of Offer Shares to be subscribed by +the Cornerstone Investors would be 24,681,000 Offer Shares, representing approximately +(i) 42.51% of the Offer Shares and 7.44% of our total issued share capital immediately upon +completion of the Global Offering (assuming the Over-allotment Option is not exercised); +and (ii) 36.97% of the Offer Shares and 7.25% of our total issued share capital immediately +upon completion of the Global Offering (assuming the Over-allotment Option is fully +exercised). +Assuming an Offer Price of HK$19.60, being the mid-point of the indicative Offer +Price range set out in this Prospectus, the total number of Offer Shares to be subscribed by +the Cornerstone Investors would be 22,918,000 Offer Shares, representing approximately +(i) 39.48% of the Offer Shares and 6.91% of our total issued share capital immediately upon +completion of the Global Offering (assuming the Over-allotment Option is not exercised); +and (ii) 34.33% of the Offer Shares and 6.73% of our total issued share capital immediately +upon completion of the Global Offering (assuming the Over-allotment Option is fully +exercised). +Assuming an Offer Price of HK$21.00, being the high-end of the indicative Offer +Price range set out in this Prospectus, the total number of Offer Shares to be subscribed by +the Cornerstone Investors would be 21,390,200 Offer Shares, representing approximately +(i) 36.85% of the Offer Shares and 6.45% of our total issued share capital immediately upon +completion of the Global Offering (assuming the Over-allotment Option is not exercised); +and (ii) 32.04% of the Offer Shares and 6.28% of our total issued share capital immediately +upon completion of the Global Offering (assuming the Over-allotment Option is fully +exercised). +Our Company is of the view that, (i) the Cornerstone Investment 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 healthcare and biopharmaceutical sectors, as well as the active participation of +state-owned capital, the Cornerstone Investment 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 relationship of our Group or through our existing Shareholders. +CORNERSTONE INVESTORS +– 229 – + + +--- page 238 --- +Among the Cornerstone Investors, Qiyuan Hong Kong is ultimately controlled by +Shaanxi Provincial SASAC, it is a close associate of existing Shareholders of the Company. +Qiyuan Hong Kong has been permitted to participate in the Cornerstone Investment +pursuant to a written consent under paragraph 1C(2) of Appendix F1 to the Listing Rules +granted by the Stock Exchange. For further details of the abovementioned consent, 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” in this prospectus. +The Cornerstone Investment will form part of the International Offering and, save +as otherwise obtained consent from the Stock Exchange, the Cornerstone Investors and +their respective close associates 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 (except for Qiyuan Hong Kong) will be counted towards the public +float of our Company under Rule 8.08 of the Listing Rules. Other than a guaranteed +allocation of the relevant Offer Shares at the Offer Price, the Cornerstone Investors do not +have any preferential rights in the Cornerstone Investment Agreements compared with +other public Shareholders. Immediately following the completion of the Global Offering, +(i) none of the Cornerstone Investors (except for Qiyuan Hong Kong) will become a +substantial shareholder of our Company; (ii) none of the Cornerstone Investors will have +any Board representation in our Company solely by virtue of its cornerstone investment; +and (iii) equity interests in our 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. Each of the Cornerstone Investors are independent with each other. +The Cornerstone Investors have agreed that the Overall Coordinators may in their +sole discretion defer the delivery of all or part of the Offer Shares it will subscribe to on a +date later than the Listing Date. Such delayed delivery arrangement is in place to facilitate +the over-allocation in the International Offering. All Cornerstone Investors have agreed to +pay for the relevant Offer Shares that they have subscribed before dealings in the Shares +commence on the Stock Exchange. If there is over-allocation in the International Offering, +the settlement of such over-allocation may be effected through delayed delivery of the +Offer Shares to be subscribed by certain Cornerstone Investors under the Cornerstone +Investment. Where delayed delivery takes place, each Cornerstone Investor that may be +affected by such delayed delivery has agreed that it shall nevertheless pay for the relevant +Offer Shares in full before the Listing. If there is no over-allocation in the International +Offering, delayed delivery will not take place. As such, there will be no deferred +settlement of the investment amount for the Offer Shares to be subscribed by the +Cornerstone Investors pursuant to the Cornerstone Investment Agreements. +Save as disclosed above and to the best knowledge, information and belief of our +Company, (i) each of the Cornerstone Investors and its ultimate beneficial owners is an +independent third party (save for their respective interests in our Company); (ii) none of +the Cornerstone Investors is accustomed to taking instructions from our Company, the +Directors, chief executive of the Company, the Controlling Shareholders, substantial +Shareholders, existing Shareholders or any of its subsidiaries or their respective close +associates; and (iii) none of the subscription for the relevant Offer Shares by the +Cornerstone Investors is financed by our Company, the Directors, chief executive of our +Company, the Controlling Shareholders, the substantial Shareholders, existing +shareholders or any of its subsidiaries or their respective close associates for the purpose +of subscription of the Offer Shares. +Save as disclosed above and to the best knowledge of our 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 themselves. 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. +Other than a guaranteed allocation of the relevant Offer Shares at the Offer Price, the +Cornerstone Investors do not have any preferential rights in the Cornerstone Investment +Agreements compared with other public Shareholders. Other than the Cornerstone +Investment Agreements, as confirmed by each of the Cornerstone Investors, there are no +side agreements or arrangements between us and the Cornerstone Investors or any +benefit, direct or indirect, conferred on the Cornerstone Investors by virtue of or in +CORNERSTONE INVESTORS +– 230 – + + +--- page 239 --- +relation to the Listing, other than a guaranteed allocation of the relevant Offer Shares at +the Offer Price following the principle as set out in Chapter 4.15 of the Guide for New +Listing Applicants. To the best knowledge of the Company and as confirmed by each of +the Cornerstone Investors, their subscriptions under the Cornerstone Investment would +be financed by their own internal resources. +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 as well as the discretion of the Overall Coordinators (for themselves and +on behalf of the International Underwriters) to exercise the Over-allotment Option. +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 our +Company on or around Tuesday, June 23, 2026. +All of the Cornerstone Investors have confirmed that they have sufficient funds to +settle the investment amounts and they will pay and settle in full for the relevant Offer +Shares that they have subscribed before dealings in the Offer Shares commence on the +Stock Exchange. As such, there will be no deferred settlement of payment of the +investment amounts. +THE CORNERSTONE INVESTORS +The table below sets forth details of the Cornerstone Investment: +Based on the Offer Price of HK$18.20 (being the low-end of the indicative Offer Price +range) +Assuming the Over-allotment +Option is not exercised +Assuming the Over-allotment +Option is exercised in full +Cornerstone Investor +Investment +amount (1) +Number of +Offer Shares (2) +Approximate % +of the +Offer Shares +Approximate % +of the total +issued share +capital +immediately +upon completion +of the Global +Offering +Approximate % +of the +Offer Shares +Approximate % +of the total +issued share +capital +immediately +upon completion +of the Global +Offering +(HKD in millions) +Qiyuan Hong Kong . . 341.36 18,756,200 32.31% 5.65% 28.09% 5.51% +Everest Medicine . . . 100.00 5,494,400 9.46% 1.66% 8.23% 1.61% +Summit Capital .... 7.83 430,400 0.74% 0.13% 0.64% 0.13% +Total ......... 449.19 24,681,000 42.51% 7.44% 36.97% 7.25% +Notes: +(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC +transaction levy, and are to be converted to Hong Kong dollars based on the exchange rate as disclosed in +this prospectus; +(2) Subject to rounding down to the nearest whole board lot of 200 Offer Shares. Calculated based on the +exchange rate set out in the section headed “Information about this Prospectus and the Global Offering — +Exchange Rate Conversion”. +CORNERSTONE INVESTORS +– 231 – + + +--- page 240 --- +Based on the Offer Price of HK$19.60 (being the mid-point of the indicative Offer Price +range) +Assuming the Over-allotment +Option is not exercised +Assuming the Over-allotment +Option is exercised in full +Cornerstone Investor +Investment +amount (1) +Number of +Offer Shares (2) +Approximate % +of the +Offer Shares +Approximate % +of the total +issued share +capital +immediately +upon completion +of the Global +Offering +Approximate % +of the +Offer Shares +Approximate % +of the total +issued share +capital +immediately +upon completion +of the Global +Offering +(HKD in millions) +Qiyuan Hong Kong . . 341.36 17,416,400 30.00% 5.25% 26.09% 5.12% +Everest Medicine . . . 100.00 5,102,200 8.79% 1.54% 7.64% 1.50% +Summit Capital .... 7.83 399,600 0.69% 0.12% 0.60% 0.12% +Total ......... 449.19 22,918,000 39.48% 6.91% 34.33% 6.73% +Notes: +(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC +transaction levy, and are to be converted to Hong Kong dollars based on the exchange rate as disclosed in +this prospectus; +(2) Subject to rounding down to the nearest whole board lot of 200 Offer Shares. Calculated based on the +exchange rate set out in the section headed “Information about this Prospectus and the Global Offering — +Exchange Rate Conversion”. +Based on the Offer Price of HK$21.00 (being the high-end of the indicative Offer Price +range) +Assuming the Over-allotment +Option is not exercised +Assuming the Over-allotment +Option is exercised in full +Cornerstone Investor +Investment +amount (1) +Number of +Offer Shares (2) +Approximate % +of the +Offer Shares +Approximate % +of the total +issued share +capital +immediately +upon completion +of the Global +Offering +Approximate % +of the +Offer Shares +Approximate % +of the total +issued share +capital +immediately +upon completion +of the Global +Offering +(HKD in millions) +Qiyuan Hong Kong . . 341.36 16,255,400 28.00% 4.90% 24.35% 4.77% +Everest Medicine . . . 100.00 4,761,800 8.20% 1.44% 7.13% 1.40% +Summit Capital .... 7.83 373,000 0.64% 0.11% 0.56% 0.11% +Total ......... 449.19 21,390,200 36.85% 6.45% 32.04% 6.28% +Notes: +(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC +transaction levy, and are to be converted to Hong Kong dollars based on the exchange rate as disclosed in +this prospectus; +(2) Subject to rounding down to the nearest whole board lot of 200 Offer Shares. Calculated based on the +exchange rate set out in the section headed “Information about this Prospectus and the Global Offering +Exchange Rate Conversion”. +The information about our Cornerstone Investors set forth below has been provided +by the Cornerstone Investors in connection with the Cornerstone Investment. +CORNERSTONE INVESTORS +– 232 – + + +--- page 241 --- +Qiyuan Hong Kong +Qiyuan Hong Kong is a limited company incorporated under the laws of Hong +Kong, which is directly and wholly owned by Shaanxi Qiyuan Gaotou Enterprise +Management Partnership (Limited Partnership) (Υྫ) +(“Qiyuan Gaotou”). The general partner of Qiyuan Gaotou is Shaanxi Qinchuang Qiyuan +Private Equity Fund Management Co., Ltd. (ʮ̡ ), holding +approximately 0.03% of the partnership interest, which is ultimately controlled by +Shaanxi Provincial SASAC. +As of the Latest Practicable Date, Qiyuan Gaotou has two limited partners, +comprising (i) Shaanxi Provincial Science and Technology Innovation Fund of Funds +Partnership (Limited Partnership) (Υྫ), which +holds approximately 83.31% of the partnership interest in Qiyuan Gaotou and is +ultimately controlled by Shaanxi Provincial SASAC and Shaanxi Provincial Department of +Finance; and (ii) Xi’an Xigaotou Zhiyuan Investment Fund Partnership (Limited +Partnership) (Υྫ), which holds approximately +16.66% of the partnership interest in Qiyuan Gaotou and is ultimately controlled by Xi’an +High-tech Industries Development Zone Administration Committee. +As Qiyuan Hong Kong is ultimately controlled by government bodies of Shaanxi +Province, it is a close associate of existing Shareholders of the Company. The Company has +sought, and the Stock Exchange has given, a consent under paragraph 1C(2) of Appendix +F1 to the Listing Rules to permit Qiyuan Hong Kong to participate in the Global Offering +as cornerstone investors subject to certain conditions. For further details of the +abovementioned consent, 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” in this prospectus. +Everest Medicines Limited +Everest Medicines Limited ( “Everest Medicine” ) is a limited company incorporated +under the laws of Cayman Islands and listed on the Stock Exchange (stock code: 1952.HK). +The Controlling Shareholder of Everest Medicine is CBC Group which mainly comprises +C-Bridge Healthcare Fund II, L.P ., C-Bridge Investment Everest Limited, C-Bridge II +Investment Eight Limited, C-Bridge Healthcare Fund IV , L.P ., C-Bridge IV Investment Two +Limited, C-Bridge IV Investment Nine Limited, C-Bridge Capital Investment +Management, Ltd., CBC Group Investment Management, Ltd., C-Bridge Joint Value +Creation Limited and Everest Management Holding Co., Ltd. The aforementioned entities +are directly and indirectly controlled by Nova Aqua Limited, the entire interest of which is +held by Vistra Trust (Singapore) Pte. Limited as trustee for a trust established by Mr. Wei +Fu (as settlor) for the benefit of Mr. Wei Fu and his family. Everest Medicines is a fully +integrated biopharmaceutical company spanning discovery, licensing, clinical +development, manufacturing, and commercialization of differentiated therapies +addressing significant unmet medical needs. +Summit Capital Limited +Summit Capital Limited (ʮ̡) (“Summit Capital”) is a limited +company incorporated under the laws of Hong Kong, 40% of which is held by Hong Kong +Fengming Investment Management Co., Limited (ʮ̡ ) (“Fengming +Investment ”), and the remaining 24%, 18% and 18% interests are held by three +independent individuals respectively. Fengming Investment was founded and is +ultimately controlled by Dr. CHOI Siu Wai ( ᇹˇਃ), Vice President of the Hong Kong +Biopharmaceutical Innovation Association (ᔼᖹ௴อ՘ึ) who holds 55% +interest in Fengming Investment. The remaining 33% and 12% interests in Fengming +Investment are respectively held by Mr. Lei Duo ( ཤε) and Mr.ZHANG YuXiao (ᔅ), +who are independent third parties. Summit Capital is currently focused on equity +investments in the biopharmaceutical and hard technology sectors. +CORNERSTONE INVESTORS +– 233 – + + +--- page 242 --- +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 our Company and the +Overall Coordinators (for themselves and on behalf of the Underwriters); +(c) the Listing Committee of the Stock Exchange having granted the listing of, +and permission to deal in, the H Shares (including the Offer Shares under the +Cornerstone Investment as well as other applicable waivers and approvals +(including those in connection with the subscription by the Cornerstone +Investors of the Offer Shares)) and such approval, permission or waiver +having not been revoked prior to the commencement of dealings in the H +Shares on the Stock Exchange; +(d) the CSRC having accepted the CSRC filings and published the filing results in +respect of the CSRC filings on its website, and such notice of acceptance +and/or filing results published not having otherwise been rejected, +withdrawn, revoked or invalidated prior to the commencement of dealings in +the H Shares on the Stock Exchange; +(e) no laws 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 +(f) the representations, warranties, undertakings, acknowledgements and +confirmations of the Cornerstone Investors under the respective Cornerstone +Investment Agreements are (as of the date of the Cornerstone Investment +Agreements) and will be (as of the Listing Date) accurate, true and complete in +all respects and not misleading or deceptive and that there is no breach of any +of the Cornerstone Investment Agreements on the part of the 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 Joint Sponsors and the Overall Coordinators, it will not, +whether directly or indirectly, at any time during the period of six months from and +including 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 +– 234 – + + +--- page 243 --- +SUBSTANTIAL SHAREHOLDERS +So far as our Directors are aware, immediately following the completion of the +Global Offering and assuming the Over-Allotment Option is not exercised, the following +persons will have interests and/or short positions in the Shares or underlying shares of +our Company which would fall to be disclosed pursuant to 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 nominal value of any class of our share capital carrying rights to vote in all +circumstances at general meetings of our Company: +As of the Latest Practicable Date without +taking into account the Share Subdivision +Immediately following the completion of the Share +Subdivision and the Global Offering (1) +Name of Shareholder Nature of Interest +Number of +Shares +Description +of Shares +Approximate +percentage of +shareholding +in our total +share capital +Number of +Shares +Description +of Shares +Approximate +percentage of +shareholding +in the +relevant class +of Shares +Approximate +percentage of +shareholding +in our total +share +capital +(1) +Dr. Wang Bing (2)(3) ....... Beneficial owner; +Interest of spouse +2,881,201 Unlisted +Shares +52.64% 99,660,050 +44,400,000 +H Shares +Unlisted +Shares +35.58% +85.93% +43.43% +Dr. Wang Mei +(2)(3) ....... Beneficial owner; +Interest of spouse; +Interest in controlled +corporations +2,881,201 Unlisted +Shares +52.64% 99,660,050 +44,400,000 +H Shares +Unlisted +Shares +35.58% +85.93% +43.43% +The People’s Government of +Shaanxi Province +(4) ...... +Interest in controlled +corporations +476,179 Unlisted +Shares +8.71% 35,295,900 H Shares 12.60% 12.82% +7,269,250 Unlisted +Shares +14.07% +Junying Growth (4) ....... Beneficial owner 79,647 Unlisted +Shares +1.46% 3,982,350 H Shares 1.42% 1.20% +Listing Reserve Fund (4) ..... Beneficial owner 72,635 Unlisted +Shares +1.33% 3,631,750 H Shares 1.30% 1.09% +Junying Jiacheng (4) ....... Beneficial owner 40,353 Unlisted +Shares +0.74% 2,017,650 H Shares 0.72% 0.61% +Xi’an Huiyu (4) ......... Beneficial owner 18,159 Unlisted +Shares +0.33% 907,950 H Shares 0.32% 0.27% +Shaanxi Innovation Relay (4) . . . Beneficial owner 83,077 Unlisted +Shares +1.52% 4,153,850 Unlisted +Shares +8.04% 1.25% +Shaanxi Jingang (4) ....... Beneficial owner 62,308 Unlisted +Shares +1.14% 3,115,400 Unlisted +Shares +6.03% 0.94% +New Materials Fund (4) ..... Beneficial owner 120,000 Unlisted +Shares +2.19% 6,000,000 H Shares 2.14% 1.81% +Qiyuan Hong Kong (4)(5) ..... Beneficial owner – – – 18,756,200 H Shares 6.69% 5.65% +Suzhou Mainiv ........ Beneficial owner 546,667 Unlisted +Shares +9.99% 27,333,350 H Shares 9.76% 8.24% +Beta Achieve Limited +(ʮ̡) +(“Beta Achieve”) (4) ...... +Beneficial owner 354,667 Unlisted +Shares +6.48% 17,733,350 H Shares 6.33% 5.35% +Northern Light Venture Fund V , +L.P . (“NLVF”)(4) ....... +Interest in controlled +corporations +354,667 Unlisted +Shares +6.48% 17,733,350 H Shares 6.33% 5.35% +Northern Light Partners V , L.P . +(“NL Partners”) (4) ...... +Interest in controlled +corporations +354,667 Unlisted +Shares +6.48% 17,733,350 H Shares 6.33% 5.35% +Northern Light Venture Capital V , +Ltd. (4) ........... +Interest in controlled +corporations +354,667 Unlisted +Shares +6.48% 17,733,350 H Shares 6.33% 5.35% +Mr. Deng Feng (4) ........ Interest in controlled +corporations +354,667 Unlisted +Shares +6.48% 17,733,350 H Shares 6.33% 5.35% +SUBSTANTIAL SHAREHOLDERS +– 235 – + + +--- page 244 --- +Notes: +(L) All the interests stated are long positions. +(1) The calculation is based on the completion of the Share Subdivision and the assumption that (i) +the Over-Allotment Option is not exercised, (ii) the 222,016,700 Unlisted Shares (taking into +account the Share Subdivision) will be converted into H Shares, and (iii) the total number of the +Shares in issue will be 331,740,350 H Shares immediately after completion of the Global Offering. +(2) Immediately following the completion of the Global Offering, (assuming the Over-allotment +Option is not exercised and taking into account the Share Subdivision), Xi’an Zhongrui shall +directly hold 4.52% of the interest in our Company. Dr. Wang Mei has control over Xi’an Zhongrui +Zekang Enterprise Management Consulting Co., Ltd.* (ʮ̡) +(“Zhongrui Zekang”), and Zhongrui Zekang is the general partner of Xi’an Zhongrui. +Accordingly, Xi’an Zhongrui is controlled indirectly by Dr. Wang Mei. By virtue of the SFO, Dr. +Wang Mei is deemed to be interested in the Shares held by Xi’an Zhongrui. +(3) Dr. Wang Bing and Dr. Wang Mei are spouses. Accordingly, Dr. Wang Bing and Dr. Wang Mei are +deemed to be interested in the Shares held by each other under the SFO. +(4) Each of Junying Growth, Listing Reserve Fund, Junying Jiacheng, Xi’an Huiyu, Shaanxi +Innovation Relay, Shaanxi Jingang and New Materials Fund are ultimately controlled by the +People’s Government of Shaanxi Province . Qiyuan Hong Kong, one of our Cornerstone Investors, +is also ultimately controlled by Shaanxi Provincial SASAC. Therefore, the People’s Government +of Shaanxi Province is deemed to be interested in the Shares held by Junying Growth, Listing +Reserve Fund, Junying Jiacheng, Xi’an Huiyu, Shaanxi Innovation Relay, Shaanxi Jingang, New +Materials Fund and Qiyuan Hong Kong. +(5) Immediately following the completion of the Global Offering (assuming the Over-allotment +Option is not exercised), Qiyuan Hong Kong, as a Cornerstone Investor, will subscribe for +18,756,200 Offer Shares at the indicative Offer Price of HK$18.20 (being the low end of the +indicative Offer Price range). For further details, please refer to the section headed “Cornerstone +Investors” in this prospectus. +(6) As of the Latest Practicable Date, Beta Achieve Limited (ʮ̡)€“Beta Achieve”) was held +as to 91.67% by NLVF. None of the other shareholders of Beta Achieve held more than 30% of the +shareholding interest in Beta Achieve. NLVF is an exempted limited partnership established in +the Cayman Islands, whose general partner is NL Partners. NL Partners is an exempted limited +partnership established in the Cayman Islands, whose general partner is Northern Light Venture +Capital V , Ltd., a company controlled by Mr. Deng Feng, an independent third party to our +Company. Therefore, each of NLVF, NL Partners, Northern Light Venture Capital V , Ltd. and Mr. +Deng Feng is deemed to be interested in the Shares held by Beta Achieve. +For details of the substantial shareholders who will be, directly or indirectly, +interested in 10% or more of the value of any class of Shares carrying rights to vote in all +circumstances at general meetings of any member of our Group, see “Statutory and +General Information — Further Information about our Directors and Substantial +Shareholders — Disclosure of Interests” in Appendix IV to this Prospectus. +Save as disclosed herein, our Directors are not aware of any persons who will, +immediately following completion of the Global Offering (assuming the Over-Allotment +Option is not exercised), have interests and/or short positions in Shares or underlying +shares which would fall to be disclosed 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 nominal +value of any class of our share capital carrying rights to vote in all circumstances at +general meetings of our Company or any other member of our Group. +SUBSTANTIAL SHAREHOLDERS +– 236 – + + +--- page 245 --- +DIRECTORS +Upon Listing, our Board will consist of nine Directors, including two executive +Directors, four non-executive Directors and three 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 our +Group +Relationship(s) +with other +Directors and +senior +management +Dr. Wang Bing +(ˮΏ) ...... +55 Chairman of our +Board, Chief +Executive Officer, +Executive Director +Responsible for the overall +strategic planning of our +Group and business +operations and making +key business and +operational decisions of +our Group +December +2020 +December +2019 +Spouse of +Dr. Wang Mei +Dr. Yu Weiping . . 67 Executive Director, +Senior Vice +President +Responsible for the strategic +planning, overseeing the +CMC activities and the +overall operation +management of our Group +August 2019 July 2017 Nil +Dr. Wang Mei +(ˮૠ) ...... +52 Non-executive +Director +Responsible for +participating in major +decisions on our Group’s +operations and +development +August 2019 August 2019 Spouse of +Dr. Wang Bing +Mr. You Xiangdong +(؇.....) +62 Non-executive +Director +Responsible for +participating in major +decisions on our Group’s +operations and +development +August 2025 August 2025 Nil +Dr. Song Gaoguang +(҂৷ᄿ) ..... +42 Non-executive +Director +Responsible for +participating in major +decisions on our Group’s +operations and +development +July 2021 July 2021 Nil +Dr. Wang Nayi +(❙) ..... +36 Non-executive +Director +Responsible for +participating in major +decisions on our Group’s +operations and +development +August 2025 August 2025 Nil +Dr. Xiangli Liuxu +(Ԣʬᚃ) .... +62 Independent +Non-executive +Director; Lead +Independent +Non-executive +Director +Responsible for supervising +and offering independent +judgment to the Board +Listing Date September +2025, with +effect from +the Listing +Date +Nil +Mr. Zhang +Wenqiang +(ੵ˖੶) ..... +41 Independent +Non-executive +Director +Responsible for supervising +and offering independent +judgment to the Board +Listing Date September +2025, with +effect from +the Listing +Date +Nil +Mr. Wang Kaifeng +(ࢤ.....) +44 Independent +Non-executive +Director +Responsible for supervising +and offering independent +judgment to the Board +Listing Date September +2025, with +effect from +the Listing +Date +Nil +Executive Directors +Dr. Wang Bing (ˮΏ) , aged 55, has served as Director, Chief Executive Officer and +Chairman of the Board since December 2020. He is primarily responsible for overseeing +the strategic planning, business direction and daily operations and management of our +group. +DIRECTORS AND SENIOR MANAGEMENT +– 237 – + + +--- page 246 --- +Dr. Wang also holds multiple directorships and management positions across our +subsidiaries, including (i) executive director at Micot (Suzhou) Technology Co., Ltd.* ( ௥ +ʮ̡) since August 2020, a company principally engaged in medical +research and experimental development; (ii) executive director and general manager at +Micot (Suzhou) Pharmaceutical Co., Ltd.* (ʮ̡) since August +2022; (iii) executive Director and general manager at Shanghai Xitaili Biomedical +Technology Co., Ltd.* (ʮ̡ ), a biotechnology company +focusing on the research, development and application of innovative biopharmaceutical +technologies since November 2022; and (iv) director and manager at Micot (Taizhou) +Pharmaceutical Technology Co., Ltd.* (ʮ̡) which is +principally engaged in medical research and experimental development, pharmaceutical +technology development and related technical services since May 2025. In these roles, he +has been primarily responsible for overseeing the management of pharmaceutical R&D as +well as the related operational activities. +Dr. Wang is a sophisticated and resourceful veteran in China’s biotech industry with +scientific, academic and business acumen. Dr. Wang has over 20 years of experience in the +medical and pharmaceutical industry. From July 1994 to July 2001, he worked at Xi’an +Medical University* (ɽኪ) as a teaching assistant. During his tenure at Xi’an +Jiaotong University* ( Гτʹஷɽኪ) as a professor from August 2001 to December 2019, he +dedicated himself to medical teaching and research. +Dr. Wang obtained a Bachelor of Clinical Medicine degree from Xi’an Medical +University* (ɽኪ) in July 1994. He obtained a master’s degree in Pathology from +Xi’an Jiaotong University* ( Гτʹஷɽኪ) in July 1999. He further obtained a doctoral +degree in Pharmacology from Xi’an Jiaotong University* ( Гτʹஷɽኪ) in November +2007. +Dr. Wang was awarded the title of “Xi’an High-tech Zone Investment Promotion +Ambassador (2023-2024)” by the Administrative Committee of Xi’an High-tech Zone* ( Г +τ̹৷อਜ၍։ึ) in January 2023. He was also conferred the title of “Hard Technology +Innovation Talent of Xi’an High-tech Zone” by the Working Committee of Xi’an High-tech +Zone* (Гτ̹৷อਜʈ։). In June 2021, Dr. Wang received the title of “Entrepreneurial +Leader (Leading)” under the “2021 Suzhou High-tech Zone Science and Technology +Innovation and Entrepreneurship Leading Talents” program, awarded by the Working +Committee and Administrative Committee of Suzhou National High-tech Zone* (࢕ +৷อਜʈ։ึʿ၍։ึ). Additionally, he was honored with the title of “Sanqin Talent”* ( ɧ +ॢɛʑ) by the Organization Department of the Shaanxi Provincial Party Committee* ( ʕ΍ +։ଡ଼ᔌ௅) and the Shaanxi Provincial Department of Finance* (ᝂ) in +August 2012. +Dr. Wang was a vice chairman, manager and supervisor of certain companies +established in the PRC below prior to their dissolution/revocation. +Name of the company +Principal +business +Reasons for +the dissolution/ +revocation +Date of +dissolution/ +revocation Position +Xi’an Puren Biotechnology +Engineering Co., Ltd.* +(ʈ೻ +ப΂ʮ̡).......... +Research and +experimental +development +Revocation of +business license +December 11, 2013 Vice Chairman, +Manager +Xi’an Hiers Biomedical +Technology Co., Ltd.* +(Ҧ +ப΂ʮ̡).......... +Research and +experimental +development +Revocation of +business license +June 22, 2021 Supervisor +Xi’an Puren Biotechnology Engineering Co., Ltd.* (ப΂ʮ̡ ) +(“Xi’an Puren”) was a company principally engaged in bioengineering technology. Xi’an +Hiers Biomedical Technology Co., Ltd.* (ப΂ʮ̡ ) (“Xi’an +Hiers”) was a company principally engaged in the research, development, technical +consultancy and sale of biomedicine, medical devices, medical diagnostic products, +cosmetics and other biotechnology and healthcare-related products (excluding +pharmaceuticals). +DIRECTORS AND SENIOR MANAGEMENT +– 238 – + + +--- page 247 --- +As shown in the Administration of Industry and Commerce (AIC), the business +licences of Xi’an Puren and Xi’an Hiers were revoked solely due to their failure to +complete the requisite annual inspection, and such revocations were administrative in +nature. Such failure was attributable to the fact that neither entity had commenced any +actual business operations, acquired any assets, or incurred any liabilities or obligations +following their incorporation, which resulted in the annual inspection filings not being +completed within the prescribed timeframes. Other than the foregoing administrative +matters, none of the two entities was involved in any non-compliance incident prior to +their respective dissolution or licence revocation. +Our PRC Legal Advisers have further confirmed that, save for the failure to +complete the annual inspection leading to the revocation of their business licences, Xi’an +Puren and Xi’an Hiers had fully complied with all applicable PRC laws and regulations +before revocation. In particular, no violations relating to product quality, operational +compliance, taxation, employee matters or any other regulatory issues were identified +through public records searches or internal compliance enquiries. +To the best knowledge, information and belief of Dr. Wang, he confirmed that (i) +there was no wrongful act on his part leading to the dissolution/revocation of the above +companies; (ii) he is not aware of any actual or potential claim that has been or will be +made against him as a result of the dissolution/revocation of the above companies; (iii) no +misconduct or misfeasance has been involved in the dissolution/revocation of the above +companies; (iv) the above companies were solvent immediately prior to +dissolution/revocation (as the case may be); and (v) the deregistration or the revocation of +business license of the above companies had not resulted in any liability or obligation +imposed against him. +Dr. Yu Weiping, aged 67, is an executive Director, our senior vice president. He is +primarily responsible for the strategic planning, overseeing the CMC activities and +overall operation management of our Group. Dr. Yu was first appointed as an executive +Director and senior vice president in August 2019 and served until now. +Dr. Yu has over 40 years of experience in pharmaceutical research, development and +executive management. Dr. Yu served as Senior Director of Product and Process +Development at Celsion Corporation, USA, a U.S.-based biopharmaceutical company +principally engaged in the R&D of oncology therapeutics. From September 2010 to June +2014, Dr. Yu served as Vice President of research and subsequently from June 2014 to June +2017, he held the position of Chief Executive Officer and President in Lipont +Pharmaceuticals (Canada), a biopharmaceutical company engaged in the research, +development and production of pharmaceutical products. +Dr. Yu obtained a bachelor’s degree from Shanghai University of Traditional +Chinese Medicine* (ɪऎʕᔼᖹɽኪ) from 1978 to 1982. He obtained a master’s degree +from Shanghai Institute of Pharmaceutical Industry* (Ӻ৫) from 1982 to +1984. He further obtained a doctoral degree from University of Paris-Sud from 1987 to +1990. +Non-executive Directors +Dr. Wang Mei (ˮૠ), aged 52, has served as our non-executive Director since +August 2019. Dr. Wang is primarily responsible in formulating major decisions regarding +our Group’s operations and development. +Dr. Wang possesses over 30 years of expertise and in-depth engagement in the +medical and academic arenas. From July 1994 to September 1996, she worked at Xi’an +Medical University* (ɽኪ) as a teacher in the Physiology Teaching and Research +Section, where she was engaged in physiology teaching and basic medical research. Since +November 2002, Dr. Wang has been serving as a Chief Physician in the Department of +Dermatology at the Second Affiliated Hospital of Xi’an Jiaotong University* ( Гτʹஷɽኪ +᙮ᔼ৫), dedicated to clinical diagnosis and treatment in dermatology, as well as +medical research and academic promotion in related fields. +Dr. Wang obtained a bachelor’s degree in Clinical Medicine from Xi’an Medical +University* (ɽኪ) from September 1989 to July 1994. She obtained a master’s +degree in Oncology from Xi’an Medical University* (ɽኪ) from September 1996 +to July 1999. She further obtained a doctoral degree in Dermatology from Xi’an Jiaotong +University* (Гτʹஷɽኪ) from September 1999 to November 2002. +DIRECTORS AND SENIOR MANAGEMENT +– 239 – + + +--- page 248 --- +Dr. Wang was awarded the First Prize of Shaanxi Provincial Patent by the People’s +Government of Shaanxi Province* (ִ݁She was also conferred with the +Second Prize of Shaanxi Provincial Science and Technology Progress (as the second +completed person) by the People’s Government of Shaanxi Province* (ִ݁.) +Dr. Wang was a supervisor and legal representative of certain companies +established in the PRC below prior to their dissolution/revocation. +Name of the company Principal business +Reasons for +the dissolution/ +revocation +Date of +dissolution/ +revocation Position +Xi’an Puren .......... Research and +experimental +development +Revocation of +business license +December 11, 2013 Supervisor +Xi’an Hiers ........... Research and +experimental +development +Revocation of +business license +June 22, 2021 Legal +Representative +To the best knowledge, information and belief of Dr. Wang, she confirmed that (i) +there was no wrongful act on her part leading to the dissolution/revocation of the above +companies; (ii) she is not aware of any actual or potential claim that has been or will be +made against her as a result of the dissolution/revocation of the above companies; (iii) no +misconduct or misfeasance has been involved in the dissolution/revocation of the above +companies; (iv) the above companies were solvent immediately prior to +dissolution/revocation (as the case may be); and (v) the deregistration or the revocation of +business license of the above companies had not resulted in any liability or obligation +imposed on her. +The Company is of the view that, given that Xi’an Puren and Xi’an Hiers had not +commenced any actual business operations since their establishment, and that Dr. Wang +Bing and Dr. Wang Mei, in their capacity as senior management of both the Group and the +above companies, were only involved in high-level decision-making and were not +responsible for the execution of day-to-day administrative matters, neither Dr. Wang Bing +nor Dr. Wang Mei was involved in the said non-compliance, nor were they the persons +responsible for the administrative oversight that led to the failure to complete the +requisite annual inspections. +Mr. You Xiangdong (؇,)aged 62, was appointed as our non-executive Director +in August 2025. Mr. You is primarily responsible for participating in major decisions on +our Group’s operations and development. +Mr. You has over 30 years of experience spanning the medical and investment +sectors. From July 1989 to May 1990, he served as the person in charge of the Preparatory +Office at Sir Run Run Shaw Hospital* (අ˃ᔼ৫ ), affiliated with the +School of Medicine, Zhejiang University. From June 1990 to December 2015, at the Second +Affiliated Hospital of Zhejiang University School of Medicine* (᙮ɚ৫ ), +he held various positions, including resident physician, attending physician, associate +chief physician, chief physician, office director, and hospital vice president. He is a +cardiovascular ultrasound medical expert and a master’s supervisor. Since January 2016, +he has successively held positions including president and director at Zheshang Capital +Co., Ltd.* (ʮ̡), an investment management company principally +engaged in private equity fund management, asset management and investment advisory +services. +Mr. You obtained a bachelor’s degree in Clinical Medicine from Zhejiang Medical +University (now the School of Medicine, Zhejiang University)* (ɽኪdତएϪɽኪ +ᔼኪ৫) from September 1982 to July 1987. He further obtained a master’s degree in +Hospital Management jointly from Nankai University* (කɽኪ) and the Flinders +University of South Australia from August 2006 to August 2008. +Dr. Song Gaoguang (҂৷ᄿ) , aged 42, was appointed as our non-executive Director +in July 2021. Dr. Song is primarily responsible for participating in major decisions on our +Group’s operations and development. +DIRECTORS AND SENIOR MANAGEMENT +– 240 – + + +--- page 249 --- +Dr. Song previously worked in the Department of Strategic Research at Staidson +Biopharmaceutical Co., Ltd. (Stock code: 300204.SZ), a biopharmaceutical company +principally engaged in the research, development and commercialisation of innovative +therapeutics from July 2012 to August 2016, ultimately helping develop our Company’s +long-term strategy. Before joining the Strategic Research team, Dr. Song worked in the +Staidson’s Department of Pharmacology. +Dr. Song joined Northern Light Venture Capital in August 2016, a venture capital +firm focusing on private equity and venture investments in technology, healthcare and +biopharmaceutical sectors and brought with him a understanding of China’s +pharmaceutical industry. From December 2020 to November 2025, Dr. Song served as a +director at GenFleet Therapeutics (Shanghai) (ʮ̡), a +company listed on the Stock Exchange (stock code: 2595.HK), which is dedicated to +developing novel drug candidates spanning small molecules and biologics. He has +extensive experience in corporate strategic planning and implementation, along with a +background in clinical trial applications, business development, team building, and +marketing management. His primary areas of focus at NLVC are biotech and +biopharmaceuticals, with notable investments including SHIP , Connect Biopharma, Belief +Biomed, and NGGT. +Dr. Song holds a PhD in Biophysics from the Chinese Academy of Medical Sciences* +(ኪ৫), a PhD in Biophysics from Peking Union Medical College* ( ̏ԯ՘ձᔼኪ +৫) in July 2012, and a master’s degree in Biochemical Engineering from the Beijing +Institute of Technology* ( ̏ԯଣʈɽኪ) in July 2008. +Dr. Wang Nayi (❙) , aged 36, was appointed as our non-executive Director in +August 2025. Dr. Wang is primarily responsible for participating in major decisions on our +Group’s operations and development. +Dr. Wang has over 7 years of experience in medical investment and strategic +consulting fields. From January 2018 to October 2019, Dr. Wang worked as a Consultant at +Siemens China Co., Ltd* (ɿʕ਷), a company principally engaged in electrification, +automation and digitalisation solutions, including the provision of industrial automation +systems, smart infrastructure technologies and related technical services in the PRC. From +October 2019 to May 2022, Dr. Wang served as an Investment Manager at WuXi AppTec +Co., Ltd* (ੰᅃ) (Stock code: 603259.SH; 2359.HK),a global pharmaceutical and +biotechnology R&D service platform company principally engaged in laboratory testing, +contract R&D and manufacturing services for pharmaceutical and biotech customers. +Since June 2022, Dr. Wang has been serving as an Investment Director at NRL Capital* ( ॲ +ဧл༟͉), an investment management firm focusing on equity and venture capital +investments in biomedical and healthcare enterprise, dedicated to investing in biomedical +enterprises. +Dr. Wang obtained a bachelor’s degree in Biomedical Engineering from the +University of Minnesota, Twin Cities in May 2012. She further obtained a master’s degree +and a doctoral degree from Yale University in May 2018. +Independent Non-executive Directors +Dr. Xiangli Liuxu (Ԣʬᚃ) , aged 62, was appointed as an independent +non-executive Director and lead independent non-executive Director in September 2025 +with effect upon the Listing. He is responsible for supervising and offering independent +judgment to the Board. His primary responsibility is also to facilitate and strengthen +communication (i) among independent non-executive Directors; (ii) between independent +non-executive Directors and the Board; and (iii) with shareholders (in particular, minority +shareholders). +Dr. Xiangli has over 38 years of experience in industrial economics and academic +management. He worked at Shaanxi University of Finance and Economics* ( ৯Гৌ຾ኪ৫) +(currently known as Xi’an Jiaotong University ( Гτʹஷɽኪ)) as a Teaching Assistant, +Lecturer, and Associate Professor in the Department of Industrial Economics from July +1987 to April 2000. During this period, he concurrently served as the Director of Enterprise +Management at Meixian Agricultural Machinery Repair Factory (Shaanxi)* (ጤ༵ዚ +ிᅀ) from September 1987 to August 1988 for practical training. He subsequently held +positions at Xi’an Jiaotong University* ( Гτʹஷɽኪ) as an Associate Professor, Full +Professor, and Chairman of the Labor Union in the School of Management from April 2000 +to December 2024. From January 2018 to January 2024, he served as an Independent +Director at Shaanxi Beiyuan Chemical Group* ( ৯Г̏ʩʷʈණྠ ), a chemical +manufacturing enterprise principally engaged in the production of polyvinyl chloride and +related chemical products and as the Vice Dean of the School of Economics and +Management at Xinjiang University* ( อᖛɽኪ) (Seconded to Xinjiang) from December +2017 to December 2020. +DIRECTORS AND SENIOR MANAGEMENT +– 241 – + + +--- page 250 --- +Dr. Xiangli has been serving as an independent director at Shaanxi Meinen Clean +Energy Group Co., Ltd.* (΅ʮ̡) (Stock code: 001299.SZ), a +company engaged in natural gas sales, since March 2023. +Dr. Xiangli obtained a bachelor’s degree in business management from Shaanxi +University of Finance and Economics* ( ৯Гৌ຾ኪ৫) from September 1983 to July 1987 +and further obtained a master’s degree in business management from December 1996 to +October 1998. Dr. Xiangli further obtained a Doctoral degree in Business Administration +from Xi’an Jiaotong University* ( Гτʹஷɽኪ) from September 2003 to July 2009. +Dr. Xiangli was awarded the First Prize in the Teaching Competition* ( Гτʹஷɽኪ +౷ஷሙੀ઺ኪᘩᒄɓഃᆤ ) of Xi’an Jiaotong University* ( Гτʹஷɽኪ) in January 2005. He +further received the first prize for the consulting project on state-owned difficult +enterprises from the Shaanxi Provincial Government* (ִ݁޲He also received four +teaching results awards, one award for teaching from the China Financial Education +Fund* (ږand was honored with the title of Excellent Teacher of the +School four times. +Mr. Zhang Wenqiang ( ੵ˖੶) , aged 41, was appointed as an independent +non-executive Director in September 2025 with effect upon the Listing. He is responsible +for supervising and offering independent judgment to the Board. +Mr. Zhang has over 15 years of experience in auditing, corporate consulting and +investment management. From September 2008 to September 2009, he worked at KPMG +Huazhen Certified Public Accountants (Special General Partnership)* (ࢪࠇ +౷ஷΥྫ), an accounting firm principally engaged in providing audit, +assurance and related professional services as an Auditor in the Audit Department. From +October 2009 to May 2012, Mr. Zhang served as an Assistant Manager in the Transaction +and Restructuring Department at KPMG Advisory (China) Limited* (Άุፔ༔ €ʕ +ʮ̡), a professional services firm engaged in corporate advisory, including +transaction consulting, restructuring and financial advisory services. In May 2012, he +joined Aerospace Industry Investment Fund Management (Beijing) Co., Ltd.* ( ঘ˂ପุҳ +ʮ̡), an investment management company principally engaged in +managing industrial investment funds focusing on aerospace and high-technology sectors +and currently hold the position of Executive Director. +Mr. Zhang obtained a Bachelor of Economics degree in Finance from Renmin +University of China ( ʕ਷ɛ͏ɽኪ) from September 2004 to June 2008. +Mr. Zhang holds the qualification of Chinese Certified Public Accountant (CPA) in +April 2012. +Mr. Wang Kaifeng (ࢤ) aged 44, was appointed as an independent +non-executive Director in September 2025 with effect upon the Listing. He is responsible +for supervising and offering independent judgment to the Board. +Mr. Wang has over 20 years of experience in pharmaceutical production +management, corporate strategy, and biomedical investment. From February 2003 to +March 2009, he worked at GlaxoSmithKline (Tianjin) Co., Ltd.* (ʮ +̡), a pharmaceutical company engaged in the manufacturing and quality management of +pharmaceutical products as a Chemist and Operational Excellence Expert. From March +2009 to April 2012, Mr. Wang served at Sino-US Tianjin SmithKline & French +Pharmaceutical Co., Ltd.* (ʮ̡), a joint venture pharmaceutical +manufacturer engaged in the production and supply of prescription medicines as an +Operational Excellence Supervisor, EHS Manager, and Production Manager. From July +2012 to February 2020, he held the position of Business Director in the Group Strategic +Management Department at China Resources (Holdings) Co., Ltd.* (ʮ̡), +a conglomerate with operations in consumer products, healthcare, energy and industrials. +From March 2020 to October 2020, Mr. Wang worked as General Manager of the +Investment and Development Department at China Resources Life Science Group Co., +Ltd.* (ʮ̡ ), a company focuses on life science research, healthcare +product development and related strategic investments. From October 2020 to July 2022, +he served as Health-care business partner and managing director at Qianhai International +(HK) Limited.* (ʮ̡), an investment and asset management company +focusing on healthcare and high-technology sectors. Since August 2022, Mr. Wang has +been a Partner at Efung Capital (HK) Management Co., Ltd.* (ʮ +̡), a company specialising in healthcare and biomedical investments. +DIRECTORS AND SENIOR MANAGEMENT +– 242 – + + +--- page 251 --- +Mr. Wang has also been serving as an independent non-executive Director at +Hangzhou Diagens Biotechnology Co., Ltd.* (ʮ̡ ), a company +engages in the research, development and manufacturing of medical and biotechnology +products, which is engaged in AI medical R&D as well as operation (in the process of +submitting a listing application on the Hong Kong Stock Exchange), since June 2025. +Additionally, Mr. Wang has been serving as director at Hangzhou Adamerck Pharmlabs +Inc.* (ʮ̡ ), a company focuses on new drug R&D since June 2025. +Mr. Wang obtained a Bachelor’s degree in Pharmaceuticals from China +Pharmaceutical University* (ɽኪ) from September 1999 to July 2003. During the +same period, he also studied a second major in Business Administration at China +Pharmaceutical University* (ɽኪ ) from September 2000 to July 2002. He +graduated from the University of Barcelona with a Master's degree in Economics and +Business Administration. +SENIOR MANAGEMENT +The senior management consists of four 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 our Company. +Name Age Position Responsibilities +Date of the +first +appointment +as a senior +management +Date of +joining our +Group +Relationship(s) +with other +Directors and +senior +management +Dr. Wang Bing +(ˮΏ) ...... +55 Chairman of our +Board, Chief +Executive Officer +and Executive +Director +Responsible for the overall +strategic planning of our +Group and business +operations and making +key business and +operational decisions of +our Group +December +2020 +December +2019 +Spouse of +Dr. Wang Mei +Dr. Yu Weiping . . 67 Executive Director, +Senior Vice +President +Responsible for the strategic +planning, overseeing the +CMC activities and the +overall operation +management of our Group +August 2019 August 2019 Nil +Ms. Wang Xiangling +(ޛ.....) +54 Chief Medical Officer Responsible for leading all +the clinical development +and the related functions +October 2024 October 2024 Nil +Mr. Zou Ran +(ཅ್) ...... +39 Chief Financial +Officer +Responsible for the business +development and +formulation of financial +and development +strategies and overseeing +the overall financial +management and +corporate development of +our Group +April 2024 April 2024 Nil +For the biographical details of Dr. Wang Bing and Dr. Yu Weiping, see “— Directors” +in this section. +Ms. Wang Xiangling (ޛ)aged 54, was appointed as our Chief Medical Officer +since October 2024. Ms. Wang is responsible for leading all the clinical development and +the related functions. +Ms. Wang assumed the role of Clinical Research Director in the Global Medical +Operations Department at Sanofi (China) Investment Co., Ltd.* (ʮ +̡), a subsidiary of a global pharmaceutical company principally engaged in managing +and supporting Sanofi’s pharmaceutical business and clinical development activities in +the PRC, serving in this capacity from April 2016 to March 2019. From April 2019 to April +2022, Ms. Wang held the position of Vice President of Clinical Medicine at Visen +Pharmaceutical, a biopharmaceutical company focusing on the research, development +and commercialisation of therapies for endocrine and metabolic diseases. She +subsequently served as the Chief Medical Officer at Hope Medicine inc.* ( ձՉ๿ᔼᖹ +ʮ̡) from July 2020 to February 2022, a biopharmaceutical company engaged +in the R&D of innovative drug candidates in dermatology and other therapeutic areas. +From February 2022 to October 2024, Ms. Wang was appointed as Executive Vice President +DIRECTORS AND SENIOR MANAGEMENT +– 243 – + + +--- page 252 --- +of Clinical Development at Shanghai Bio Genuine Biotech Co., Ltd.* (ҦϞ +ʮ̡), a biotechnology company principally engaged in the R&D of innovative +biologics. +Ms. Wang obtained her bachelor’s degree in clinical medicine from Hunan Medical +University* (ɽኪ) (currently known as Xiangya School of Medicine, Central +South University* (ɽኪಱඩᔼኪ৫)) in July 1993. She further obtained her master’s +degree in clinical medicine from Shantou University Medical College* ( ϭ᎘ɽኪᔼኪ৫) in +July 2007. +Mr. Zou Ran (ཅ್) , aged 39, has served as our Chief Financial Officer (CFO) since +April 2024. Mr. Zou is primarily responsible for financing, business development, the +formulation of financial and development strategies, and overseeing the overall financial +management and corporate development of our Group. +Mr. Zou has more than 17 years of experience in corporate finance, management, +and equity investment. From September 2008 to July 2010, Mr. Zou served as an Analyst in +the Transaction Service Department at KPMG Advisory (China) Limited* (Άุፔ༔ +ʮ̡). From August 2010 to June 2017, Mr. Zou served as a Senior Investment +Manager at Hony Capital* ( ̾ᆇҳ༟). From July 2017 to March 2019, Mr. Zou served as the +Chief Financial Officer at Hospital Corporation of China Limited* ( ̾ձʠฌᔼᐕණྠ) +(Stock code: 03869.HK), a company principally engaged in hospital investment, +management and operation in the PRC. From April 2019 to May 2022, Mr. Zou served as an +Investment Director at Hony Capital* ( ̾ᆇҳ༟). Mr. Zou was on a career break between +June 2022 to March 2024. +Mr. Zou obtained his bachelor’s degree in management with a major in accounting +from University of International Business and Economics* (ɽኪ) in July +2008. He further obtained his Executive Master of Business Administration (EMBA) +degree from China Europe International Business School (CEIBS)* ( ʕᆄ਷ყʈਠኪ৫) in +November 2022. +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 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) save as disclosed above, none of the Directors or members of the senior management +of our Company was related to any other Directors and members of the senior +management; +(iii) save as disclosed in “Appendix IV — Statutory and General Information”, none of +the Directors or general manager of our 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 +(iv) there was no additional matter with respect to the appointment of the Directors that +needs to be brought to the attention of the Shareholders, and there was no additional +information relating to the Directors that is required to be disclosed pursuant to +Rules 13.51(2)(h) to (v) 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. +DIRECTORS AND SENIOR MANAGEMENT +– 244 – + + +--- page 253 --- +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 September 23, 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 +our Company or its subsidiary or any connection with any core connected person of our +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. +JOINT COMPANY SECRETARIES +Mr. Zou Ran (ཅ್) was appointed as a joint company secretary of our Company in +September 2025 and such appointment will be effective from the Listing Date. He is +primarily responsible for financing, business development, the formulation of financial +and development strategies, and overseeing the overall financial management and +corporate development of our Group. For the biographical details of Mr. Zou, see “ { +Senior Management” in this section. +Ms. Chan Yee Lam (௓ၥᔝ) , is our joint company secretary. Ms. Chan is an executive +of the listing services division at TMF Hong Kong Limited and is responsible for provision +of corporate secretarial and compliance services to listed company clients. Ms. Chan is an +associate member of both The Hong Kong Chartered Governance Institute and The +Chartered Governance Institute in the United Kingdom. Ms. Chan received a Bachelor’s +Degree in Corporate Governance from Hang Seng University of Hong Kong in December +2020 and a Master of Corporate Governance from The Hong Kong Polytechnic University +in October 2025. +BOARD COMMITTEES +We have established three Board Committees in accordance with the relevant PRC +laws and regulations, the Articles of Association and the Corporate Governance Code, +namely the Audit Committee, the Nomination Committee and the Remuneration +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 Wenqiang, Mr. Wang +Kaifeng and Dr. Wang Mei with Mr. Zhang Wenqiang currently serving as the chairperson. +Mr. Zhang Wenqiang 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 our Company and reviewing financial +reports and statements of our Company; +(iii) examining the financial reporting system, the risk management and internal +control system of our 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. +DIRECTORS AND SENIOR MANAGEMENT +– 245 – + + +--- page 254 --- +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 five Directors, namely Dr. Wang Bing, Dr. Wang Mei, +Mr. Zhang Wenqiang, Dr. Xiangli Liuxu and Mr. Wang Kaifeng with Dr. Wang Bing +currently serving 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 our 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 Dr. Xiangli Liuxu, Mr. Wang +Kaifeng and Dr. Wang Bing with Dr. Xiangli Liuxu currently serving 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 our Company; +(ii) monitoring the implementation of the remuneration system of our Company; +(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. +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. +T erms +We normally enter into a three-year to five-year employment contract 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 R&D etc.) of our Company in +confidence. +DIRECTORS AND SENIOR MANAGEMENT +– 246 – + + +--- page 255 --- +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 +All intellectual property related to an employee’s duties, created during their period +of employment and including, but not limited to, patent rights, rights to patent +applications, trademark rights, rights to trademark registration applications, and +copyrights, shall be exclusively owned by our Company. Employees shall retain the right +of authorship. +CORPORATE GOVERNANCE CODE +Our Company is committed to achieving a high standard of corporate governance +with a view to safeguarding the interests of our Shareholders. To accomplish this, our +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. +Pursuant to code provision C.2.1 of the Corporate Governance Code, companies +listed on the Stock Exchange are expected to comply with, but may choose to deviate from +the requirement that the responsibilities between the chairman and the chief executive +officer should be segregated and should not be performed by the same individual. We do +not have a separate chairman and chief executive officer and Dr. Wang Bing currently +performs these two roles. The Board believes that vesting the roles of both chairman and +chief executive officer in the same person has the benefit of ensuring consistent leadership +within our Group and enables more effective and efficient overall strategic planning for +our Group. The Board considers that given the size of the board, the supervision of +independent non-executive directors and a solid senior management team, the balance of +power and authority for the present arrangement will not be impaired and this structure +will enable our Company to make and implement decisions promptly and effectively. The +Board will continue to review and consider splitting the roles of chairman of the Board +and the chief executive officer of our Company if and when it is appropriate taking into +account the circumstances of our Group as a whole. Save as disclosed above, our +Company intends to comply with all code provisions under the Corporate Governance +Code 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, our 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 our 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, biochemistry, pharmacology, +biology, business administration, economics, and accounting. Furthermore, our Board has +a diverse age and gender representation. Our Board currently comprises two female +Directors and seven male Directors, ranging from 36 years old to 67 years old. +Given that two out of nine of our Directors are female upon Listing, we will continue +to take steps to promote gender diversity of our Board. After the Listing, we will strive to +achieve gender balance of our Board through the following measures to be implemented +by our Nomination Committee in accordance with our Board Diversity Policy. We will +actively identify female individuals suitably qualified to become our Board members. In +addition, we target to achieve a gender diversity in the composition of our Board by +having female representation of 30% of the members of our Board within three years upon +Listing. With regards to gender diversity on the Board, we recognize the particular +DIRECTORS AND SENIOR MANAGEMENT +– 247 – + + +--- page 256 --- +importance of gender diversity. We have taken and will continue to take steps to promote +and enhance gender diversity at all levels of our 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 mid to senior level so as to develop a pipeline of +potential female successors to our Board. Our 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. Our +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’ AND GENERAL MANAGER’S REMUNERATION AND REMUNERATION +OF THE FIVE HIGHEST-PAID INDIVIDUALS +The Directors and senior management members who receive remuneration from our +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 and senior management members is determined with +reference to the remuneration paid by comparable companies and the achievement of +major operating indicators of our Company. +The aggregate amount of remuneration (including salaries, allowances and benefits +in kind and retirement benefits) paid to the Directors for the two years ended December +31, 2024 and 2025 amounted to RMB3.4 million and RMB3.3 million, respectively. +The five highest paid individuals of our Group in the two years ended December 31, +2024 and 2025 included two and two Directors, respectively. The aggregate amount of +remuneration (including salaries, wage and allowances performance related bonuses and +retirement benefits) incurred by the five highest-paid individuals of our Group (excluding +Directors) for the two years ended December 31, 2024 and 2025 amounted to RMB4.0 +million and RMB5.9 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 for the year ending December 31, 2026 to be approximately RMB3.3 million. The +actual remuneration of Directors in 2026 may be different from the expected +remuneration. +We confirmed that during the Track Record Period, no remuneration was paid by +our Company to, or receivable by, our Directors or the five highest paid individuals as an +inducement to join or upon joining our Company or as compensation for loss of office in +connection with the management positions of our Company or any subsidiary of our +Company. +During the Track Record Period, none of our Directors waived any remuneration. +Save as disclosed above, no other payments have been paid, or are payable, by our +Company or our subsidiary to our Directors or the five highest-paid individuals during +the Track Record Period. +COMPLIANCE ADVISER +Our Company has appointed Halcyon Capital 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 our 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 and share repurchases; +DIRECTORS AND SENIOR MANAGEMENT +– 248 – + + +--- page 257 --- +(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 our 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 our Company of any amendment or supplement to the Listing Rules +that are announced by the Stock Exchange. The Compliance Adviser will also inform our +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 our 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 AND SENIOR MANAGEMENT +– 249 – + + +--- page 258 --- +You should read the following discussion and analysis with our consolidated +financial information, including the notes thereto, included in the Accountants’ +Report in Appendix I to this prospectus. Our consolidated financial information has +been prepared in accordance with International Financial Reporting Standards issued +by the International Accounting Standards Board, which may differ in material +aspects from generally accepted accounting principles in other jurisdictions, +including the United States. You should read the entire Accountants’ Report and not +merely rely on the information contained in this section. +The following discussion and analysis contain forward-looking statements +that reflect our current views with respect to future events and financial performance. +These statements are based on our assumptions and analysis 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, whether actual outcomes and developments will meet our +expectations and predictions depends on a number of risks and uncertainties. In +evaluating our business, you should carefully consider the information provided in +the section headed “Risk Factors” and “Business” in this prospectus. +For the purpose of this section, unless the context otherwise requires, references +to the year of 2024 or 2025 refer to our financial year ended December 31 of such year. +Unless the context otherwise requires, financial information described in this section +is described on a consolidated basis. Discrepancies between totals and sums of +amounts listed in this section in any table or elsewhere in this prospectus may be due +to rounding. +OVERVIEW +We are a biotechnology company specializing in the discovery, development and +commercialization of bi-/multi-specific peptide drugs for the treatment of metabolic +diseases as well as cardiovascular and cerebrovascular diseases, with our Core Product in +Phase III clinical trials. +BASIS OF PRESENTATION +Our historical financial information has been prepared based on the accounting +policies which conform with IFRS Accounting Standards as issued by International +Accounting Standards Board (the “IASB”). Further details of the basis of presentation of +historical financial information are set out in Note 2 to the Accountants’ Report in +Appendix I to this prospectus. +The historical financial information has been prepared on the historical cost basis +except for certain financial instruments that are measured at fair values at the end of each +reporting period, as explained in the material accounting policy information set out in +Note 4 to the Accountants’ Report in Appendix I to this prospectus. +KEY FACTORS AFFECTING OUR PERFORMANCE +Our historical results of operations have been affected by a number of important +factors, many of which are out of our control and we believe will continue to affect our +financial position and results of operations in the future. Our results are principally +affected by the following factors: +Unmet Medical Needs and Attractive Market Opportunities +Globally, the peptide drug market has been developing, with several products +approved and therapeutic applications extending beyond metabolic diseases to +cardiovascular, central nervous system, endocrine, gastrointestinal, hematologic, +ophthalmic and orthopedic conditions. The global peptide drug market increased from +US$61.7 billion in 2019 to US$109.6 billion in 2024, representing a CAGR of 12.2% and is +expected to reach US$233.8 billion by 2030, representing a CAGR of 13.5%. In China, the +peptide drug market increased from RMB53.9 billion in 2019 to RMB60.2 billion in 2024, +representing a CAGR of 2.3% and is expected to reach RMB165.2 billion by 2030, +representing a CAGR of 18.3%. With advantages in efficacy, safety and broad-spectrum +attribute, peptide drugs are well positioned to address a substantial amount of unmet +medical needs and support continued market growth. +FINANCIAL INFORMATION +– 250 – + + +--- page 259 --- +Our financial performance and future growth are closely tied to the peptide drug +market, and we believe we are well positioned to capitalize on the expanding peptide +market. Our Core Product, MT1013, is being developed for CKD-SHPT, and it has the +potential to expand to indications such as CKD-MBD with Osteoporosis and CKD-SHPT +not on Dialysis. The global prevalence of CKD reached 1,065.5 million in 2024 and is +expected to reach 1,289.7 million by 2030. In China, the prevalence of CKD reached 161.5 +million in 2024 and is expected to reach 175.0 million by 2030. For details of peptide drug +and relative disease drug markets, see “Industry Overview” in this prospectus. +Development and Commercialization of Our Drug Candidates +The success of our Company and the outcomes of our operations rely on our +capacity to effectively progress our drug development initiatives, achieve satisfactory +safety and efficacy outcomes in clinical trials, secure necessary regulatory approvals, and +successfully commercialize our pipeline products. With a strategic focus on metabolic +diseases (kidney-related in particular) and cardiovascular diseases, as of the Latest +Practicable Date, we had established a diversified pipeline of bi-specific and +multi-specific peptide product candidates, including one Core Product, MT1013, three +Key Products, XTL6001, MT1002 and MT200605, as well as other product candidates at +various stages of development. For details of our drug candidates, see “Business — Our +Candidate Drugs and Pipeline” in this prospectus. +Currently, our Core Product, MT1013, is undergoing the Phase III-C01 clinical trial +for the treatment of CKD-SHPT in CKD patients receiving maintenance hemodialysis. We +expect to complete this trial by the end of 2026 and submit the NDA in early 2027. Looking +forward, we expect to commercialize one or more of our drug candidates over the coming +years as they move towards the final stages of development. However, our ability to +generate revenue from our pipeline products to cover R&D expenses and other expenses +will depend on multiple factors, including but not limited to our ability to secure +adequate manufacturing capacity, collaboration with competent third-party partners, as +well as making our products accessible to, affordable for and accepted by the addressable +patient population who are in need of high-quality products that bring comprehensive +benefits for metabolic and cardiovascular diseases. +Our Cost Structure +Our results of operations are significantly affected by our cost structure, which has +historically consisted primarily of R&D expenses, finance costs, and administrative +expenses, details of which are set out below: +Research and development expenses. Our R&D expenses primarily consist of (i) +experiments and tests expenses, (ii) staff costs and welfare expenses, (iii) depreciation and +amortization expenses, (iv) material costs, (v) utility expenses, (vi) travel expenses, and +(vii) other expenses allocable to our R&D activities. Our R&D expenses amounted to +RMB107.0 million and RMB130.1 million for 2024 and 2025, respectively. +Finance costs. Our finance costs primarily consist of interest expenses on bank +borrowings, lease liabilities, and redemption liabilities. Our finance costs amounted to +RMB37.6 million and RMB67.0 million for 2024 and 2025, respectively. +Administrative expenses. Our administrative expenses primarily consist of (i) staff +costs and welfare expenses, (ii) professional service fees, (iii) depreciation and +amortization expenses, (iv) travel expenses, (v) utility expenses, and (vi) other expenses +allocable to our administrative activities. Our administrative expenses amounted to +RMB18.8 million and RMB23.5 million for 2024 and 2025, respectively. +Funding for Our Operations +During the Track Record Period, we funded our operations primarily through +equity and debt financing. Going forward, subject to obtaining NDA approval for our +Core Product MT1013 for the treatment of CKD-SHPT in CKD patients receiving +maintenance hemodialysis, and assuming the successful commercialization of one or +more of our drug candidates, we expect to fund our operations primarily with revenue +generated from the sale of commercialized drug products. However, with the continuing +expansion of our business, we may require further funding through public or private +offerings, debt financing, collaboration and licensing arrangements or other funding +sources. Any fluctuation in the funding for our operations will impact our cash flow and +our results of operations. +FINANCIAL INFORMATION +– 251 – + + +--- page 260 --- +MATERIAL ACCOUNTING POLICY INFORMATION AND CRITICAL ACCOUNTING +JUDGMENTS +Our discussion and analysis of our financial position and results of operations is +based on our historical financial information, which have been prepared in accordance +with accounting principles that conform with IFRS Accounting Standards. The +preparation of historical financial statements requires us to make judgments that affect +the reported amounts of assets, liabilities, costs and expenses. We evaluate our judgments +on an ongoing basis, and our actual results may differ from these estimates. We base our +estimates on historical experience, known trends and events, contractual milestones and +other various factors that are believed to be reasonable under the circumstances, the +results of which form the basis for making judgments about the carrying values of assets +and liabilities that are not readily apparent from other sources. +Our material accounting policy information and critical accounting judgments, +which are important for an understanding of our financial position and results of +operations, are set forth in detail in Notes 4 and 5 to the Accountants’ Report in Appendix +I to this prospectus. +Among them, we believe the accounting policy information and accounting +judgments in respect of the following are of particularly critical importance to us or +involve the most significant estimates and judgments used in the preparation of our +financial statements: (i) leases, our Group as lessee, (ii) foreign currencies (including the +accounting treatments for exchange differences arising on the translation of monetary +items and the translation of income and expenses items, respectively), (iii) borrowing +costs, (iv) R&D expenditure, (v) government grants, (vi) employee benefits, (vii) +share-based payments, (viii) plant and equipment, (ix) cash and cash equivalents, and (x) +financial instruments. +For details, please refer to Notes 4 and 5 to the Accountants’ Report in Appendix I to +this prospectus. +FINANCIAL INFORMATION +– 252 – + + +--- page 261 --- +DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS +OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME +The selected financial information set out below has been extracted from our +historical financial information set out in the Accountants’ Report in Appendix I to this +prospectus: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Other income ........................... 4,002 2,301 +Other gains and losses, net ................ 2,670 43,268 +Administrative expenses .................. (18,812) (23,490) +Research and development expenses ......... (107,022) (130,089) +Listing expenses ......................... – (9,901) +Finance costs ........................... (37,646) (67,003) +Loss before tax .......................... (156,808) (184,914) +Income tax expense ...................... (24) – +Loss for the year ........................ (156,832) (184,914) +Other comprehensive income for the year +Item that will be reclassified to profit or loss: +Exchange difference arising on translation of +foreign operations ...................... 9 2 +T otal comprehensive expense for the year .... (156,823) (184,912) +Loss for the year attributable to: +– Owners of the Company ............... (154,632) (182,507) +– Non-controlling interests ............... (2,200) (2,407) +(156,832) (184,914) +Total comprehensive expense for the year +attributable to: +– Owners of the Company ............... (154,623) (182,505) +– Non-controlling interests ............... (2,200) (2,407) +(156,823) (184,912) +Loss per share (RMB) +Basic and diluted ........................ (0.66) (0.75) +FINANCIAL INFORMATION +– 253 – + + +--- page 262 --- +Other Income +During the Track Record Period, our other income primarily consisted of (i) interest +income on bank deposits, and (ii) government grants, which mainly represent subsidies +from local government authorities to compensate expenditures arising from our R&D +activities and are generally one-off in nature. The following table sets forth a breakdown +of our other income for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Interest income on bank deposits ............ 3,235 2,008 +Government grants ...................... 7 6 7 2 9 3 +4,002 2,301 +Other Gains and Losses, Net +During the Track Record Period, our other gains and losses, net primarily consisted +of (i) gain on non-substantial modification of redemption liabilities arising from an +extension of the redemption date in relation to our Pre-IPO Investment, (ii) gain on early +termination of a lease, (iii) gain on fair value changes from financial assets at FVTPL, +which mainly represent gains resulting from changes in the fair value of our structured +deposits purchased from banks, and (iv) net foreign exchange gains. The following table +sets forth a breakdown of our other gains and losses, net for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Gain on non-substantial modification of +redemption liabilities ................... – 42,081 +Gain on early termination of a lease ......... 4 1 4 – +Gain on fair value changes from +financial assets at FVTPL ................ 2,028 865 +Net foreign exchange gains ................ 2 2 8 4 8 0 +Others (1) ............................... – (158) +2,670 43,268 +Note: +(1) Others primarily consisted of a monetary damage of RMB157 thousand paid to a supplier for +settling the termination of a contract. +FINANCIAL INFORMATION +– 254 – + + +--- page 263 --- +Administrative Expenses +During the Track Record Period, our administrative expenses primarily consisted of +(i) staff costs and welfare expenses, primarily including salaries, bonuses and benefits of +our management and administrative personnel, (ii) professional service fees, primarily +including fees for recruitment, financing advisory, employee training, (iii) depreciation +and amortization expenses for plant and equipment and right-of-use assets for +administrative purpose, (iv) travel expenses, (v) utility expenses, and (vi) other expenses +allocable to our administrative activities, such as maintenance expenses, service charges, +and entertainment expenses. The following table sets forth a breakdown of our +administrative expenses for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Staff costs and welfare expenses ............ 11,220 14,672 +Professional service fees .................. 3,438 5,219 +Depreciation and amortization expenses ..... 1,374 1,051 +Travel expenses ......................... 6 8 7 6 2 6 +Utility expenses ......................... 7 5 0 9 7 8 +Others ................................ 1,343 944 +T otal ................................. 18,812 23,490 +Research and Development Expenses +During the Track Record Period, our R&D expenses mainly consisted of (i) +experiments and tests expenses, primarily representing expenses in relation to our +pre-clinical studies and clinical trials, (ii) staff costs and welfare expenses, primarily +including salaries, bonuses and benefits of our R&D personnel, (iii) depreciation and +amortization expenses for plant and equipment and right-of-use assets for R&D purpose, +(iv) material costs, primarily in relation to fees for raw material procurement for the +clinical development of our drug candidates; (v) utility expenses, (vi) travel expenses, and +(vii) other expenses allocable to our R&D activities, such as intellectual property agency +fees, document translation fees, and maintenance expenses. The following table sets forth +a breakdown of our R&D expenses for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Experiments and tests expenses ............ 67,274 78,813 +Staff costs and welfare expenses ............ 28,115 35,749 +Depreciation and amortization expenses ..... 7,014 5,523 +Material costs .......................... 1,582 5,174 +Utility expenses ......................... 6 6 3 8 7 4 +Travel expenses ......................... 1,977 3,211 +Others ................................ 3 9 7 7 4 5 +T otal ................................. 107,022 130,089 +For 2024 and 2025, we incurred R&D expenses for our Core Product MT1013 +amounting to RMB66.7 million and RMB84.4 million, respectively, representing 62.3% and +64.9% of our total R&D expenses for the same year, respectively. The R&D expenses for our +Core Product increased from RMB66.7 million in 2024 to and RMB84.4 million in 2025, +primarily due to an increase in experiments and tests expenses in connection with the +Phase III-C01 clinical trial of our Core Product, including expenses related to patient +enrollment. +FINANCIAL INFORMATION +– 255 – + + +--- page 264 --- +Finance Costs +During the Track Record Period, our finance costs mainly consisted of interest +expenses on bank borrowings, lease liabilities, and redemption liabilities. The following +table sets forth a breakdown of our finance costs for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Interest expense on: +– bank borrowings ..................... 6 6 9 9 8 5 +– lease liabilities ....................... 2 0 2 6 6 +– redemption liabilities ................. 36,775 65,952 +37,646 67,003 +PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS +Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 +Other income +Our other income decreased by 42.5% from RMB4.0 million for 2024 to RMB2.3 +million for 2025. The decrease was primarily attributable to a decrease in interest income +on bank deposits mainly resulting from (i) a decrease in bank deposits balance following +withdrawals for R&D purposes, and (ii) a decrease in interest rates. +Other gains and losses, net +Our other gains and losses, net increased by 1,503.7% from RMB2.7 million for 2024 +to RMB43.3 million for 2025, primarily due to gain on non-substantial modification of +redemption liabilities arising from an extension of the redemption date in relation to our +Pre-IPO Investment, partially offset by (i) a decrease in gain on fair value changes from +financial assets at FVTPL which was in turn primarily due to a decrease in interest rates +applicable to our financial assets at FVTPL, and (ii) a decrease in gains of early +termination of a lease. +Administrative expenses +Our administrative expenses increased by 25.0% from RMB18.8 million for 2024 to +RMB23.5 million for 2025, primarily due to (i) an increase in staff costs and welfare +expenses of RMB3.5 million due to an expansion of our administrative related teams such +as our finance team and legal team, and (ii) an increase in professional service fees of +RMB1.8 million due to the engagement of professional services such as financial advisory +and due diligence investigations in connection with the Series D financing. +Research and development expenses +Our R&D expenses increased by 21.6% from RMB107.0 million for 2024 to RMB130.1 +million for 2025, primarily due to (i) an increase in experiments and tests expenses of +RMB11.5 million, and (ii) an increase in staff costs and welfare expenses for our R&D +personnel of RMB7.6 million, in connection with our R&D activities with respect to, in +particular, our Core Product, MT1013, and a Key Product, MT200605. Among our product +candidates, (a) MT1013 launched Phase III-C01 clinical trial in the second half of 2025, +including commencing patient enrollment and treatment in September 2025, and (b) +MT200605 launched Phase II clinical trial in 2025 as well. +FINANCIAL INFORMATION +– 256 – + + +--- page 265 --- +Finance costs +Our finance costs increased by 78.2% from RMB37.6 million for 2024 to RMB67.0 +million for 2025, primarily due to the increase in interest expenses on redemption +liabilities. Further details of redemption liabilities are set out in Note 25 to the +Accountants’ Report in Appendix I to this prospectus. +Loss for the year +For the reasons described above, our loss for the year increased by 17.9% from +RMB156.8 million for 2024 to RMB184.9 million for 2025. +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, +2024 2025 +RMB’000 RMB’000 +Non-current assets +Plant and equipment ..................... 9,216 6,622 +Right-of-use assets ....................... 2,842 18,775 +Term deposits ........................... 30,300 31,020 +Other receivables ........................ 18,923 11,283 +Restricted bank deposits .................. – 1,560 +61,281 69,260 +Current assets +Prepayments and other receivables .......... 5,513 24,186 +Financial assets at fair value through +profit or loss (“FVTPL”) ................. 54,611 95,209 +Amount due from a related party ........... 6 5 2 1,087 +Restricted bank deposits .................. – 8 6 3 +Term deposits ........................... 60,540 60,300 +Cash and cash equivalents ................. 64,661 80,556 +185,977 262,201 +Current liabilities +Trade and other payables .................. 45,580 82,627 +Bank borrowings ........................ 1,760 48,100 +Amount due to the Controlling Shareholder . . . 28,333 – +Lease liabilities .......................... 2,259 1,399 +Redemption liabilities .................... – 134,281 +77,932 266,407 +Net current assets (liabilities) ............. 108,045 (4,206) +T otal assets less current liabilities .......... 169,326 65,054 +FINANCIAL INFORMATION +– 257 – + + +--- page 266 --- +As of December 31, +2024 2025 +RMB’000 RMB’000 +Non-current liabilities +Bank borrowings ........................ 42,253 – +Lease liabilities .......................... 2 8 0 2 0 2 +Redemption liabilities .................... – 1,024,737 +42,533 1,024,939 +Net assets/(liabilities) .................... 126,793 (959,885) +Capital and reserves +Paid-in capital/share capital ............... 4,985 5,474 +Reserves/(deficits) ....................... 106,826 (977,934) +Equity/(deficits) attributable to owners of +the Company .......................... 1 1 1,811 (972,460) +Non-controlling interests .................. 14,982 12,575 +T otal equity/(deficits) .................... 126,793 (959,885) +Plant and Equipment +During the Track Record Period, our plant and equipment primarily consisted of (i) +machinery and equipment, (ii) motor vehicles, (iii) computer equipment and software, (iv) +office equipment, and (v) leasehold improvements. Our plant and equipment decreased +from RMB9.2 million as of December 31, 2024 to RMB6.6 million as of December 31, 2025, +primarily due to the depreciation of our plant and equipment. The following table sets +forth a breakdown of our plant and equipment as of the dates indicates: +As of December 31, +2024 2025 +RMB’000 RMB’000 +Machinery and equipment ................. 8,034 5,919 +Motor vehicles .......................... 6 9 6 9 +Computer equipment and software .......... 6 1 7 4 3 7 +Office equipment ........................ 1 5 8 7 9 +Leasehold improvement ................... 3 3 8 1 1 8 +T otal.................................. 9,216 6,622 +Right-of-use Assets +During the Track Record Period, our right-of-use assets primarily related to the +lease of properties and leasehold land. Our right-of-use assets increased from RMB2.8 +million as of December 31, 2024 to RMB18.8 million as of December 31, 2025, primarily due +to the completion of the acquisition of a leasehold land in Taizhou by our Group. +Impairment Assessment for Non-financial Assets +At the end of each reporting period, we assess the carrying amounts of our +non-financial assets to determine whether there is any indication of impairment, in +accordance with the accounting policy set out in Note 4 to the Accountants’ Report in +Appendix I to this prospectus. During the Track Record Period, we recorded net losses +primarily because we remained in the R&D stage and made significant investments in our +R&D activities, which was within the expectation of our Directors. As we progress toward +the commercialization of our product candidates, we expect to narrow our losses in the +foreseeable future. Having reviewed both internal and external sources of information, we +did not identify any indicators of impairment for our non-financial assets. Accordingly, +we concluded that there was no impairment needed for our non-financial assets as of +December 31, 2024 and 2025. +FINANCIAL INFORMATION +– 258 – + + +--- page 267 --- +Impairment Assessment for Investment in the Subsidiaries +Where our carrying amount invested in the subsidiary materially exceed that +subsidiary net asset values, our management will consider whether there is any need for +impairment. Management team has performed impairment assessments of the investment +in subsidiaries throughout the Track Record Period and have concluded that no +impairment charge was required. +T erm Deposits +As of December 31, +2024 2025 +RMB’000 RMB’000 +T erm deposits +– Non-current ......................... 30,300 31,020 +– Current ............................ 60,540 60,300 +Our non-current deposits remained relatively stable at RMB31.0 million as of +December 31, 2025 compared to RMB30.3 million as of December 31, 2024. +Our current deposits remained relatively stable at RMB60.3 million as of December +31, 2025 compared to RMB60.5 million as of December 31, 2024. +Prepayments and Other Receivables +During the Track Record Period, our prepayments and other receivables primarily +consisted of (i) deferred issue costs, (ii) prepaid listing expenses, (iii) value-added tax +recoverable, representing value-added tax paid by us on purchases that are deductible +against future value-added tax payable, (iv) prepayments for R&D services, (v) rental +deposits for right-of-use assets, (vi) other receivables such as deposits paid to our +suppliers, and (vii) other prepayments such as prepayment for property management +services. The following table sets forth the components of our prepayments and other +receivables as of the dates indicated: +As of December 31, +2024 2025 +RMB’000 RMB’000 +Deferred issue costs ...................... – 2,435 +Prepaid listing expenses ................... – 8 +Other receivables ........................ 2 0 4 3 7 4 +Rental deposits for right-of-use assets ....... 2 8 1 2 8 1 +Prepayments for research and +development services .................. 4,900 9,150 +Value added tax (“VAT”) recoverable ........ 18,723 22,604 +Other prepayments ...................... 3 2 8 6 1 7 +24,436 35,469 +Less: Amounts recoverable within one year +shown under current assets ......... (5,513) (24,186) +Amounts shown under non-current assets .... 18,923 11,283 +Our prepayments and other receivables increased from RMB24.4 million as of +December 31, 2024 to RMB35.5 million as of December 31, 2025, primarily due to the +increase in prepayments for R&D services and the increase in VAT recoverable. +FINANCIAL INFORMATION +– 259 – + + +--- page 268 --- +As of April 30, 2026, RMB9.5 million, representing 26.8% of our prepayments and +other receivables as of December 31, 2025, had been settled. +Financial Assets at FVTPL +During the Track Record Period, our financial assets at FVTPL primarily +represented the structured deposits we purchased from banks in the PRC. Our financial +assets at FVTPL increased from RMB54.6 million as of December 31, 2024 to RMB95.2 +million as of December 31, 2025, primarily due to an increase in our structured deposits +following the completion of the Series D financing. +We purchase low-risk wealth management products as a supplemental means to +improve utilization of our cash on hand. We believe that investment in low-risk financial +products helps us make better use of our cash, expand our source of income while +ensuring sufficient cash flow for business operation or capital expenditures. The +purchases of wealth management products are carefully reviewed and assessed by our +finance department and are subject to the approval of our senior management team. +Additionally, we have established a set of risk management and capital preservation +investment policy and have implemented a series of internal control measures regarding +our investment in wealth management products. These policies and measures include: +• we make investment decisions after thoroughly considering several factors, +including but not limited to the macro-economic environment, general market +conditions, risk control and credit of issuing financial institutions, our +working capital conditions and the expected returns; +• we only purchase low-risk wealth management products issued by qualified +financial institutions; and +• after making an investment, we closely monitor its performance and fair value +on a regular basis. +Our investment in financial assets will be subject to compliance with Chapter 14 of +the Listing Rules after Listing. +Amount Due from a Related Party +As of December 31, 2024 and 2025, we recorded amounts due from a related party, +Zhongrui Zekang, amounting to RMB0.7 million and RMB1.1 million, respectively. These +amounts represent funds collected by Zhongrui Zekang on our behalf pursuant to our +share incentive scheme, specifically relating to employees’ payments of exercise or +subscription prices for share options or shares. The outstanding balance will be settled +prior to the Listing. See Note 23 to the Accountants’ Report in Appendix I to this +prospectus for a detailed description of the transaction. +Cash and Cash Equivalents +During the Track Record Period, our cash and cash equivalents primarily +represented deposits for the purpose of meeting our short-term cash commitments. Our +cash and cash equivalents increased from RMB64.7 million as of December 31, 2024 to +RMB80.6 million as of December 31, 2025, primarily due to the completion of the Series D +financing, partially offset by cash outflows from our business operations including R&D +activities. +T rade and Other Payables +During the Track Record Period, our trade and other payables primarily consisted of +(i) trade payables and accruals for R&D expenses in connection with our purchase of +materials and third-party contracting services for our R&D activities, (ii) payroll payable, +(iii) other tax payables, (iv) government grant collected on behalf of employees, applied +for by our Group and to be distributed to eligible employees in accordance with local +government policies, (v) accrued listing expenses, (vi) accrued issue costs, (vii) cash +FINANCIAL INFORMATION +– 260 – + + +--- page 269 --- +received in respect of restricted shares, and (viii) others such as employee +reimbursements. The following table sets forth a breakdown of our trade and other +payables as of the dates indicated: +As of December 31, +2024 2025 +RMB’000 RMB’000 +Trade payables and accruals for research and +development expenses .................. 33,371 53,690 +Payroll payable ......................... 6,491 8,818 +Other tax payables ....................... 4 0 8 6 7 6 +Government grant collected on behalf of +employees ............................ 3,157 3,053 +Accrued listing expenses .................. – 4,226 +Accrued issue costs ...................... – 1,105 +Cash received under the Share +Incentive Scheme ...................... – 7,268 +Others ................................. 2,153 3,791 +45,580 82,627 +Our trade and other payables increased from RMB45.6 million as of December 31, +2024 to RMB82.6 million as of December 31, 2025, primarily due to (i) an increase in trade +payables and accruals for R&D expenses, (ii) accrual of listing expenses, and (iii) cash +received in respect of restricted shares from employees to whom share incentives were +granted in the form of restricted shares. +Our trade payables are non-interest-bearing and our average credit term of trade +payables is generally ranged between 15 to 90 days. The following table sets forth an aging +analysis of our trade payables based on the invoice date and accruals which have not yet +been billed as of the dates indicated: +As of December 31, +2024 2025 +RMB’000 RMB’000 +1-90 days .............................. 1,158 630 +91-365 days ............................. 1,575 319 +1 to 2 years ............................. 4,351 20 +2 to 3 years ............................. 4 4 0 1,925 +Over 3 years ............................ 2 0 7 6 4 4 +Subtotal ............................... 7,731 3,538 +Not yet billed ........................... 25,640 50,152 +T otal.................................. 33,371 53,690 +As of April 30, 2026, RMB6.4 million, representing 11.9% of our trade payables and +accruals for R&D expenses as of December 31, 2025, had been settled. +Amount Due to the Controlling Shareholder +As of December 31, 2024 and 2025, we recorded amounts due to the Controlling +Shareholder of RMB28.3 million and nil, respectively, representing consideration payables +for Dr. Wang Bing’s equity interest in Xi’an Biocare acquired by us in August 2023. See +Note 23 to the Accountants’ Report in Appendix I to this prospectus for a detailed +description of the transaction. +FINANCIAL INFORMATION +– 261 – + + +--- page 270 --- +LIQUIDITY AND CAPITAL RESOURCES +During the Track Record Period, our primary uses of cash were for R&D activities, +procurement of materials and equipment, and general operating expenses. We recorded +net cash used in operating activities of RMB107.7 million and RMB137.1 million for 2024 +and 2025, respectively. During the Track Record Period and up to the Latest Practicable +Date, we had financed our operations primarily through equity and debt financing and we +had not experienced any difficulty in obtaining such financing. As of April 30, 2026, the +latest practicable date for determining our indebtedness, we had cash and cash +equivalents of RMB101.2 million. +Current Assets and Current Liabilities +The following table sets forth our current assets and current liabilities as of the dates +indicated: +As of December 31, +As of +April 30, +2024 2025 2026 +RMB’000 RMB’000 RMB’000 +(Unaudited) +Current assets +Prepayments and other +receivables ................. 5,513 24,186 14,726 +Financial assets at FVTPL ....... 54,611 95,209 160,209 +Amount due from a related party. 652 1,087 387 +Restricted bank deposits ....... – 8 6 3 2 0 0 +Term deposits ................ 60,540 60,300 70,300 +Cash and cash equivalents ...... 64,661 80,556 101,200 +T otal current assets 185,977 262,201 347,022 +Current liabilities +Trade and other payables ....... 45,580 82,627 94,754 +Bank borrowings .............. 1,760 48,100 – +Amount due to the Controlling +Shareholder ............... 28,333 – – +Lease liabilities ............... 2,259 1,399 762 +Redemption liabilities .......... – 134,281 139,648 +T otal current liabilities ........ 77,932 266,407 235,164 +Net current assets (liabilities) ... 108,045 (4,206) 111,858 +As of April 30, 2026, we recorded net current assets of RMB111.9 million, compared +to net current liabilities of RMB4.2 million as of December 31, 2025, primarily due to (i) an +increase in financial assets at FVTPL arising from our purchase of wealth management +products, (ii) an increase in term deposits, and (iii) an increase in cash and cash +equivalents, all in connection with our receipt of a non-refundable upfront payment of +RMB200 million pursuant to an agreement we entered into with Everest in February 2026, +as partially offset by an increase in trade and other payables in connection with our +business operations in the first four months of 2026. +As of December 31, 2025, we recorded net current liabilities of RMB4.2 million, +compared to net current assets of RMB108.0 million as of December 31, 2024, primarily +because (i) part of the non-current portion of our bank borrowings became current, and (ii) +redemption liabilities of RMB134.3 million arising from certain investors’ conditional +redemption rights were classified as current liabilities. +FINANCIAL INFORMATION +– 262 – + + +--- page 271 --- +We expect our net current liabilities position to substantially improve upon Listing, +as certain investors’ redemption rights will automatically terminate and the redemption +liabilities will be transferred to equity upon Listing. We also maintain banking +relationships and may, where appropriate, raise long-term borrowings to replace our +short-term borrowings to secure more stable funding resources. +Cash Flows +The following table sets forth key items of our consolidated statements of cash flows +for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Operating activities +Loss before tax .......................... (156,808) (184,914) +Adjustments for: +Interest income .......................... (3,235) (2,008) +Gain on fair value changes from financial +assets at FVTPL ........................ (2,028) (865) +Depreciation of plant and equipment ........ 4,853 3,463 +Depreciation of right-of-use assets .......... 3,535 3,111 +Gain on early termination of a lease ......... (414) – +Foreign exchange gains ................... (228) (480) +Finance costs ........................... 37,646 67,003 +Gain on non-substantial modification of +redemption liabilities ................... – (42,081) +Operating cash flows before movements +in working capital ...................... ( 1 16,679) (156,771) +Decrease/(increase) in amounts due from +a related party ......................... 4 9 (435) +Increase in prepayments and +other receivables ....................... (1,970) (8,598) +Increase in trade and other payables ......... 10,890 28,674 +Cash used in operations ................... (107,710) (137,130) +Income tax paid ......................... (32) – +NET CASH USED IN OPERATING +ACTIVITIES .......................... (107,742) (137,130) +Investing activities +Interest received ........................ 10,095 1,528 +Payments of right-of-use assets ............. – (16,076) +Purchase of plant and equipment ........... (1,302) (878) +Purchase of financial assets at FVTPL ........ (634,900) (391,500) +Redemption on maturity of financial assets +at FVTPL ............................. 690,910 351,767 +Placement of term deposits ................ (90,000) (60,000) +Withdrawal of term deposits ............... 80,000 60,000 +Placement of restricted bank deposit ......... – (2,423) +NET CASH FROM/(USED IN) INVESTING +ACTIVITIES .......................... 54,803 (57,582) +FINANCIAL INFORMATION +– 263 – + + +--- page 272 --- +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Financing activities +Proceeds from issue of shares .............. – 235,500 +Payments for accrued issue costs ........... – (1,330) +Purchase of additional interest in a subsidiary +from the Controlling Shareholder ......... – (28,333) +Proceeds from subscription price of restricted +share units ........................... – 7,268 +Drawdown of bank borrowings ............ 25,463 5,147 +Repayment of bank borrowings ............ (650) (1,060) +Interest paid for bank borrowings .......... (669) (985) +Repayment of lease liabilities .............. (2,819) (3,906) +Interest paid for lease liabilities ............ (202) (66) +NET CASH FROM FINANCING +ACTIVITIES .......................... 21,123 212,235 +Net (decrease)/increase in cash and cash +equivalents ........................... (31,816) 17,523 +Cash and cash equivalents at the beginning of +the year .............................. 95,942 64,661 +Effect of foreign exchange rate changes ....... 5 3 5 (1,628) +Cash and cash equivalents at the end of +the year .............................. 64,661 80,556 +Operating activities +For 2025, we had net cash used in operating activities of RMB137.1 million, which +was primarily attributable to our loss before tax of RMB184.9 million, adjusted by certain +non-cash and working capital items, including (i) finance costs of RMB67.0 million, and +(ii) an increase in trade and other payables of RMB28.7 million, partially offset by gain on +non-substantial modification of redemption liabilities of RMB42.1 million. +For 2024, we had net cash used in operating activities of RMB107.7 million, +primarily attributable to our loss before tax of RMB156.8 million, adjusted by certain +non-cash and working capital items, including (i) finance costs of RMB37.6 million, and +(ii) an increase in trade and other payables of RMB10.9 million. +We monitor and maintain a level of cash and cash equivalents deemed adequate to +finance our operations and mitigate the effects of fluctuations in cash flows. In view of our +net operating cash outflows throughout the Track Record Period, we plan to improve such +position by: +• Advancing our portfolio product candidates towards commercialization to +generate revenue. For our Core Product MT1013, which is undergoing the +Phase III-C01 clinical trial, we plan to complete this trial by the end of 2026 +and submit the NDA in early 2027 and expect to generate inflow of cash from +its commercialization in China after obtaining NDA approval. In addition to +our Core Product, we have been optimizing our product portfolio and +propelling it from preclinical stage toward clinical studies. As we achieve +regulatory approvals for more pipeline products, we expect to generate a +steady inflow of cash from sales of pipeline products in the foreseeable future; +FINANCIAL INFORMATION +– 264 – + + +--- page 273 --- +• Forming value-accretive partnerships with pharmaceutical companies to +out-license or co-develop our pipeline products. In addition to advancing +our ongoing clinical trials of product candidates with a view to obtaining +NDA approval and achieving commercialization, we also plan to actively +pursue co-development opportunities or out-licensing arrangements for our +pipeline products, under which we may receive a share of profits from +licensees in connection with the sales and marketing of future approved +products; and +• Adopting comprehensive measures to effectively control our cost and +operating expenses. We plan to prudently monitor the growth of operating +expenses to ensure that they increase in a cost-efficient manner. We expect to +enhance our R&D efficiency by leveraging our in-house R&D team, while +seeking mutually beneficial strategic cooperations to further manage our R&D +costs. In addition, we intend to further strengthen our financial management +by securing appropriate bank credit facilities, adopting diversified payment +methods to optimize our cash flow, and maintaining a prudent level of +financial buffer as a safety margin. We also plan to enhance supplier +management to improve cost control and operational efficiency. +Investing activities +For 2025, we had net cash used in investing activities of RMB57.6 million, primarily +attributable to (i) payments of right-of-use assets of RMB16.1 million, and (ii) the purchase +of financial assets at FVTPL of RMB391.5 million, partially offset by the redemption on +maturity of financial assets at FVTPL of RMB351.8 million. +For 2024, we had net cash from investing activities of RMB54.8 million, primarily +attributable to (i) the redemption on maturity of financial assets at FVTPL of RMB690.9 +million, and (ii) the withdrawal of term deposits of RMB80.0 million, partially offset by (a) +the purchase of financial assets at FVTPL of RMB634.9 million, and (b) the placement of +term deposits of RMB90.0 million. +Financing activities +For 2025, we had net cash from financing activities of RMB212.2 million, primarily +attributable to the proceeds from issue of shares of RMB235.5 million, partially offset by +the purchase of additional interest in a subsidiary from Dr. Wang Bing of RMB28.3 million. +For 2024, we had net cash from financing activities of RMB21.1 million, primarily +attributable to drawdown of bank borrowings of RMB25.5 million, partially offset by the +repayment of lease liabilities of RMB2.8 million. +FINANCIAL INFORMATION +– 265 – + + +--- page 274 --- +CASH OPERATING COSTS +The following table sets forth key information relating to our cash operating costs +for the years indicated: +For the Year Ended +December 31, +2024 2025 +RMB’000 RMB’000 +Costs relating to research and +development of our Core Product +Staff costs and welfare expenses ............ 13,984 18,977 +Clinical trial and testing expenses .......... 27,321 31,952 +Raw material expenses ................... 5,961 5,394 +Pre-clinical trial and other R&D expenses .... 3,686 4,811 +Others ................................ 2 4 9 1 3 4 +Subtotal .............................. 51,201 61,268 +Costs relating to research and +development of our other drug candidates +Staff costs and welfare expenses ............ 14,131 16,772 +Clinical trial and testing expenses .......... 8,382 12,007 +Raw material expenses ................... 5,345 6,944 +Pre-clinical trial and other R&D expenses .... 9,288 5,199 +Others ................................ 8 0 6 4 0 7 +Subtotal .............................. 37,952 41,329 +Workforce employment costs .............. 11,220 14,672 +T otal ................................. 100,373 117,269 +WORKING CAPITAL +Our Directors are of the view that, taking into account the financial resources +available to us, including cash and cash equivalents, and the estimated net proceeds from +the Global Offering, we have sufficient working capital to cover at least 125% of our costs, +including R&D expenses, administrative expenses, other operating expenses and +necessary capital expenditure, for at least the next 12 months from the date of this +prospectus. +Our cash burn rate refers to the average monthly (i) net cash used in operating +activities, (ii) capital expenditures, and (iii) lease payments. We estimate that we will +receive net proceeds of approximately HK$989.3 million, equivalent to RMB860.7 million, +after deducting the underwriting fees and expenses payable by us in the Global Offering, +assuming an Offer Price of HK$18.2 per Offer Share, being the low-end of the indicative +Offer Price range of HK$18.2 to HK$21.0 per Offer Share set out in this prospectus, and +assuming the Over-allotment Options is not exercised. Assuming an average cash burn +rate going forward of 1.5 times of the level for 2025, we estimate that our cash and cash +equivalents and term deposits of RMB202.5 million as of April 30, 2026 will be able to +maintain our financial viability for approximately 10 months or, if we take into account +10% of the estimated net proceeds from the Global Offering (namely, the portion used for +working capital and general corporate purposes), approximately 15 months or, if we also +take into account the estimated net proceeds from the Global Offering, approximately 54 +months. Our Directors will continue to monitor our working capital, cash flows and our +business development progress. +FINANCIAL INFORMATION +– 266 – + + +--- page 275 --- +INDEBTEDNESS +The following table sets forth the breakdown of our indebtedness as of the dates +indicated: +As at December 31, +As at +April 30, +2024 2025 2026 +RMB’000 RMB’000 RMB’000 +(Unaudited) +Current +Lease liabilities ............. 2,259 1,399 762 +Amount due to the Controlling +Shareholder .............. 28,333 – – +Bank borrowings ........... 1,760 48,100 – +Redemption liabilities ....... – 134,281 139,648 +Subtotal .................... 32,352 183,780 140,410 +Non-current +Redemption liabilities ....... – 1,024,737 1,062,132 +Lease liabilities ............. 2 8 0 2 0 2 – +Bank borrowings ........... 42,253 – – +Subtotal .................... 42,533 1,024,939 1,062,132 +T otal ....................... 74,885 1,208,719 1,202,542 +As at December 31 +As at +April 30, +2024 2025 2026 +RMB’000 RMB’000 RMB’000 +(Unaudited) +Redemption liabilities ......... – 1,159,018 1,201,780 +Lease liabilities .............. 2,539 1,601 762 +Bank borrowings ............. 44,013 48,100 – +Amount due to the Controlling +Shareholder ................ 28,333 – – +T otal ....................... 74,885 1,208,719 1,202,542 +Redemption Liabilities +As of December 31, 2024, December 31, 2025 and April 30, 2026, our redemption +liabilities, which were unsecured and unguaranteed, amounted to nil, RMB1,159 million +and RMB1,202 million, respectively. Our redemption liabilities primarily represent our +obligation to purchase our equity instruments, which is conditional on the exercise by +certain investors of the right to require their investments to be redeemed. We recognized +such obligation to the investors as financial liabilities measured initially at fair value +(representing the present value of the expected cash flows for settling the related +obligations if these rights are exercised by the investors) and subsequently at amortized +cost with interest charged in finance costs. See Note 25 to the Accountants’ Report in +Appendix I to this prospectus. +FINANCIAL INFORMATION +– 267 – + + +--- page 276 --- +Lease Liabilities +Our lease liabilities are in relation to properties that we leased for our business +operations. We recognized lease liabilities in respect of all of our operating leases, except +for short-term leases and leases of low-value assets. +As of December 31, 2024, December 31, 2025 and April 30, 2026, we had lease +liabilities of: +• RMB1.2 million, RMB0.7 million and RMB0.4 million, respectively, that were +unsecured and unguaranteed; and +• RMB1.3 million, RMB0.9 million and RMB0.4 million, respectively, that were +secured by rental deposits and unguaranteed. +Lease liabilities are measured at the present value of the lease payments that are not +yet paid. The weighted average incremental borrowing rates applied to lease liabilities +range from 2.5% to 4.7% as of December 31, 2024, 3.5% to 4.5% as of December 31, 2025 and +3.5% to 4.5% as of April 30, 2026. +Bank Borrowings +During the Track Record Period, we had bank borrowings from the Bank of China. +They increased from RMB44.0 million as of December 31, 2024 to RMB48.1 million as of +December 31, 2025, primarily due to the drawdown of bank borrowings of RMB5.1 million +and the repayment of RMB1.0 million in 2025. The drawdown was mainly to support our +business operations including R&D activities. The interest rate was 115 basis points below +the one-year loan prime rate in the PRC and reset every twelve months. These borrowings +were credit-based and were not subject to pledge, mortgage, guarantee or other security +interest. +During the Track Record Period and up to the Latest Practicable Date, we had not +breached any material covenants or undertakings under the loan agreements we entered +into with the Bank of China, and there was no default in the repayment of borrowings. +As of April 30, 2026, the latest practicable date for determining our indebtedness, +we had repaid all our bank borrowings and we had RMB477.3 million of committed +unutilized bank facilities. Since April 30, 2026 and up to the Latest Practicable Date, there +had been no material change in our indebtedness. +During the Track Record Period and up to the Latest Practicable Date, we had not +had any guarantee or any pledge over key assets. +During the Track Record Period and up to the Latest Practicable Date, we had not +experienced any difficulties in obtaining additional debt or equity financing. +CONTINGENT LIABILITIES +During the Track Record Period, we had not had any contingent liabilities. We +confirm that up to the Latest Practicable Date, there had been no material changes or +arrangements to our contingent liabilities. +Saved as otherwise disclosed above, as of April 30, 2026, being the latest practicable +date for determining our indebtedness, we did not have any other loan agreed to be +issued, bank overdrafts, loans and other similar indebtedness, liabilities under +acceptances or acceptance credits or hire purchase commitments, debentures, mortgages, +charges, guarantees or other material contingent liabilities. +OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS +As of the Latest Practicable Date, we had not entered into any off-balance sheet +transactions. +FINANCIAL INFORMATION +– 268 – + + +--- page 277 --- +RELATED PARTY TRANSACTIONS +During the Track Record Period, we entered into several transactions with our +related parties: (i) our Company entered into an agreement with Dr. Wang Bing to acquire +his equity interest in Xi’an Biocare in August 2023; as of December 31, 2024 and 2025, the +balance was RMB28.3 million and nil, respectively, (ii) Zhongrui Zekang, on behalf of our +Company, collected employees’ payments of exercise or subscription prices for share +options or shares under our share incentive scheme; as of December 31, 2024 and 2025, the +balance was RMB0.7 million and RMB1.1 million, respectively; as of the Latest Practicable +Date, the amount due from Zhongrui Zekang had been settled, and (iii) we recognized +RMB7.0 million and RMB10.5 million in 2024 and 2025, respectively, for the compensation +of our key management personnel. See Notes 23 and 34 to the Accountants’ Report in +Appendix I to this prospectus for a detailed description of our related party transactions. +Our Directors believe that our transactions with related parties during the Track Record +Period were conducted on an arm’s length basis, and they did not distort our results of +operations or make our historical results not reflective of our future performance. +KEY FINANCIAL RATIOS +The following table sets forth the current ratio of our Group as of the dates +indicated: +As of December 31, +2024 2025 +Current ratio (1) ......................... 2 . 4 1 . 0 +Note: +(1) Current ratio equals current assets divided by current liabilities as of the same date. +Our current ratio decreased from 2.4 as of December 31, 2024 to 1.0 as of December +31, 2025, primarily due to an increase in our current liabilities resulting from (i) the +classification of certain redemption liabilities as current liabilities, and (ii) part of the +non-current portion of our bank borrowings becoming current. For more details, see “— +Discussion of Certain Selected Items from the Consolidated Statements of Financial +Position” in this section. +QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT FINANCIAL RISK +We are exposed to market risk, credit risk and impairment assessment, and liquidity +risk arising in the normal course of our business. We manage and monitor these exposures +to ensure appropriate measures are implemented on a timely and effective manner. +Further details of our financial risk management are set out in Note 32 to the Accountants’ +Report in Appendix I to this prospectus. +Market Risk +Currency Risk +Certain financial assets and liabilities are denominated in foreign currencies of +respective group entities which are exposed to foreign currency risk. We currently do not +have a foreign currency hedging policy. However, our management monitors foreign +exchange exposure and will consider hedging significant foreign currency exposure +should the need arise. +Interest Rate Risk +We are exposed to fair value interest rate risk in relation to term deposits, +redemption liabilities and lease liabilities. We are also exposed to cash flow interest rate +risk in relation to variable-rate bank balances and variable-rate bank borrowings. The cash +flow interest rate risk is mainly concentrated on the fluctuation of interest rates on bank +balances and bank borrowings. As our management considers that the exposure of cash +flow interest rate risk arising from variable-rate bank balances and variable-rate bank +borrowings is insignificant, therefore no sensitivity analysis on such risk has been +prepared. +Credit Risk and Impairment Assessment +Credit risk refers to the risk that our counterparties’ default on their contractual +obligations resulting in financial losses to us. Our credit risk exposures are primarily +FINANCIAL INFORMATION +– 269 – + + +--- page 278 --- +attributable to other receivables, amounts due from subsidiaries and bank balances and +term deposits. We do not hold any collateral or other credit enhancements to cover our +credit risks associated with our financial assets. We performed impairment assessment for +financial assets under expected credit loss model. For more information about our credit +risk management, maximum credit risk exposures and the related impairment assessment, +see Note 32 to the Accountants’ Report in Appendix I to this prospectus. +Liquidity Risk +In the management of the liquidity risk, we closely monitor our cash position +resulting from our operations and maintain a level of cash and cash equivalents deemed +adequate by the management to enable us to meet in full our financial obligations as they +fall due for the foreseeable future. Our management monitors the utilization of bank +borrowings and ensures compliance with loan covenants. +DIVIDEND POLICY +No dividend has been proposed, paid or declared by our Company since its +incorporation. As of the Latest Practicable Date, we did not have a formal dividend policy +or fixed dividend payout ratio. We do not have any plan to declare or pay any dividends in +the foreseeable future. The determination of whether to pay a dividend and in which +amount is based on factors the Board may deem relevant. Any dividend distribution will +also be subject to the approval of the Shareholders in the Shareholder’s meeting. Under +the PRC law and the Articles of Association, the general reserve requires annual +appropriations of 10% of after-tax profits at each year-end until the balance reaches 50% of +the relevant PRC entity’s registered capital. In view of our accumulated losses, as advised +by our PRC Legal Advisor, according to the relevant PRC laws and regulations and the +Articles of Association, we shall not declare or pay dividend until the accumulated losses +are covered by our after-tax profits and sufficient statutory common reserve are drawn in +accordance with the relevant laws and regulations, and Articles of Association. +DISTRIBUTABLE RESERVES +As of December 31, 2025, we did not have any distributable reserves. +LISTING EXPENSES +Listing expenses to be borne by us are estimated to be approximately RMB61.4 +million (including underwriting commission, at the Offer Price of HK$19.60 per H Share, +being the midpoint of the indicative Offer Price range of HK$18.20 to HK$21.00 per H +Share), which represent 6.2% of the gross proceeds from the Global Offering, assuming no +Shares are issued pursuant to the Over-allotment Option. The above listing expenses are +comprised of (i) underwriting-related expenses, including sponsor fee and underwriting +commission, of RMB39.6 million, and (ii) non-underwriting-related expenses of RMB21.8 +million, including (a) the legal advisors and the reporting accountants’ expenses of +RMB13.0 million, and (b) other fees and expenses of RMB8.8 million. Approximately +RMB19.4 million of our listing expenses shall be charged to our consolidated statements of +profit or loss, among which, approximately RMB9.9 million has been charged during the +Track Record Period, and approximately RMB42.0 million is expected to 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. +UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET +TANGIBLE ASSETS (LIABILITIES) +For details, please see “Unaudited Pro Forma Financial Information” in Appendix II +to this prospectus. +NO MATERIAL ADVERSE CHANGE +Our Directors confirm that there has been no material adverse change in our +financial or trading position or prospects since December 31, 2025, and up to the date of +this prospectus and there has been no event since December 31, 2025, and up to the date of +this prospectus which would materially affect the information shown in our consolidated +financial statements included in the Accountants’ Report in Appendix I to this prospectus. +DISCLOSURE REQUIRED UNDER 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 +– 270 – + + +--- page 279 --- +FUTURE PLANS +See “Business — Our Strategies” for a detailed description of our future plans. +USE OF PROCEEDS +We estimate that we will receive net proceeds of approximately HK$1,067.2 million +after deducting the underwriting fees and expenses payable by us in the Global Offering +assuming an Offer Price of HK$19.60 per Offer Share, being the mid-point of the indicative +Offer Price range of HK$18.20 to HK$21.00 per Offer Share set out in this prospectus. We +intend to use the net proceeds from the Global Offering for the following purposes: +(i) approximately 39.1%, or HK$417.3 million, will be used for ongoing and planned +clinical trials and planned commercial launch of our Core Product, of which: +(a) approximately 7.5%, or HK$80.0 million, will be used for the Phase III-C01 +clinical trial of MT1013 for the treatment of CKD-SHPT. We initiated the Phase +III clinical trial for this indication in China in July 2025 and plan to enroll +approximately 424 subjects. As of the Latest Practicable Date, all 424 planned +subjects had been enrolled. We expect to complete this trial by the end of 2026 +and submit the NDA in early 2027; +(b) approximately 5.9%, or HK$63.0 million, will be used for the planned +commercial launch of MT1013 for the treatment of CKD-SHPT, covering fees +related to registration with relevant regulatory agencies and production of +MT1013. We plan to commence commercialization activities in early 2028 after +obtaining NDA approval; +For more information of our commercialization strategy, see “Business — +Commercialization”. +(c) approximately 17.0%, or HK$181.4 million, will be used for the indication +expansion of MT1013, of which: +• approximately 14.5%, or HK$154.7 million, will be used for clinical +trials of MT1013 for the treatment of CKD-MBD with Osteoporosis in +China. We have completed Phase II clinical trial of MT1013 for the +indication of CKD-SHPT, and plan to leverage data collected from +respective trials to seek IND approvals from competent regulatory +authorities to conduct Phase III clinical trial of MT1013 for the expanded +indication of CKD-MBD with Osteoporosis. We expect to initiate the +Phase III clinical trial for this indication in early 2028; +• approximately 2.5%, or HK$26.7 million will be used for clinical trials of +MT1013 for the treatment of CKD-SHPT not on Dialysis in China. We +expect to submit an IND application for the clinical trial of MT1013 for +the treatment of CKD-SHPT not on Dialysis by the end of 2027. +(d) approximately 8.7%, or HK$92.8 million, will be used for other ongoing and +planned clinical trials of MT1013 to further evaluate its potential therapeutic +benefits and administration methods for the treatment of CKD-SHPT, of +which: +• approximately 0.3%, or HK$3.2 million will be used for the Phase I-C03 +clinical trial of MT1013 in China, which was initiated in July 2025. As of +the Latest Practicable Date, all subjects completed the trial; +• approximately 4.4%, or HK$47.0 million will be used for the Phase +II-C02 clinical trial of MT1013 in China, which was initiated in March +2024 with all 350 subjects enrolled as of the Latest Practicable Date, and +is expected to be completed by end of 2026; +• approximately 0.5%, or HK$5.3 million will be used for the Phase II-C03 +clinical trial of MT1013 in China, which was initiated in November 2024; +• approximately 3.5%, or HK$37.4 million will be used for the Phase II +clinical trial of MT1013 for the treatment of CKD-SHPT in the U.S. The +IND was reactivated on February 13, 2026, and approval from the FDA +was obtained on March 20, 2026 to proceed to a Phase II clinical trial. +FUTURE PLANS AND USE OF PROCEEDS +– 271 – + + +--- page 280 --- +For more information of our future development plans, see “Business — Our Drug +Candidates — Our Core Product MT1013 — Clinical Development Plan”. +(ii) approximately 36.3%, or HK$387.4 million, will be used for ongoing and planned +clinical trials and planned commercial launch of our Key Products, of which: +(a) approximately 6.8%, or HK$72.6 million, will be used for ongoing and +planned clinical trials of XTL6001, of which: +• approximately 3.5%, or HK$37.4 million, will be used for clinical trials +of XTL6001 for the treatment of chronic weight management in obese or +overweight populations in China, including approximately 1.5%, or +HK$16.0 million for the Phase II clinical trial of XTL6001, and +approximately 2.0%, or HK$21.3 million for the Phase III clinical trial of +XTL6001. The Phase II trial in China is expected to be initiated in the +third quarter of 2026 and completed in the third quarter of 2027; and +• approximately 3.3%, or HK$35.2 million, will be used for clinical trials +of XTL6001 for the treatment of proteinuric CKD and MASH in China, +including approximately 0.9%, or HK$9.6 million, for the Phase II +clinical trial of XTL6001 for Proteinuric CKD, which we expect to +initiate in China in mid-2027, approximately 1.5%, or HK$16.0 million, +for the Phase III clinical trial of XTL6001 for proteinuric CKD, as well as +approximately 0.9%, or HK$9.6 million, for the Phase II clinical trial of +XTL6001 for the treatment of MASH, for which we expect to submit an +IND application in early 2027; +For more information of our future development plans, see “Business — Our +Drug Candidates — Our Key Product XTL6001 — Clinical Development +Plan”. +(b) approximately 14.5%, or HK$154.7 million, will be used for ongoing and +planned clinical trials of MT1002, of which: +• approximately 6.5%, or HK$69.4 million, will be used for the Phase +II-C04 and IIb clinical trials of MT1002 for the treatment of ACS-PCI in +China. As of the Latest Practicable Date, five dose-exploration cohorts +have been completed, and enrollment of 26 subjects in the +dose-expansion cohort was completed. We expect to complete the Phase +II-C04 clinical trial in mid-2026 and the Phase IIb clinical trial in +mid-2028; +The Phase IIb clinical trial forms part of MT1002-II-C04 and was +conducted to further evaluate the selected dose(s) in a larger patient +population. For more information on reasons to conduct the Phase IIb +clinical trial, see “Business — Our Key Product MT1002 — Clinical Trial +Overview of MT1002 — MT1002-II-C04 PRC Phase II Efficacy Study in +ACS-PCI Patients”. +• approximately 6.9%, or HK$73.6 million, will be used for the Phase III +clinical trial of MT1002 for the treatment of ACS-PCI in China. We +expect to initiate the Phase III clinical trial in the end of 2028; and +• approximately 1.1%, or HK$11.7 million, will be used for the Phase II +clinical trials of MT1002 for the treatment of Stroke and HD in China. We +expect to commence Phase II clinical trials for the treatment of Stroke +and HD by June 2026 and July 2026, respectively. +(c) approximately 15.0%, or HK$160.1 million, will be used for ongoing and +planned clinical trials and planned commercial launch of MT200605, of which: +• approximately 1.4%, or HK$14.9 million, will be used for the Phase +II-C01 clinical trial of MT200605 for the treatment of AIS in China. As of +the Latest Practicable Date, enrollment of 360 subjects has been +completed. Looking forward, we expect to complete this trial in 2026; +• approximately 6.8%, or HK$72.6 million, will be used for the Phase III +clinical trial of MT200605 for the treatment of AIS. We expect to initiate +the Phase III clinical trial in China in mid-2027; and +FUTURE PLANS AND USE OF PROCEEDS +– 272 – + + +--- page 281 --- +• approximately 6.8%, or HK$72.6 million, will be used for the planned +commercial launch of MT200605, covering fees related to registration +with relevant regulatory agencies and production and sales of +MT200605. We plan to commence commercialization activities for +MT200605 in 2029 after obtaining NDA approval. +(iii) approximately 14.6%, or HK$155.8 million, will be used for the R&D of our other +product candidates and technology platforms, of which: +(a) approximately 4.1%, or HK$43.8 million, will be used for the ongoing and +planned clinical trials of our other product candidates, such as MT2004, +MT1009, and MT1011, of which: +• approximately 0.9%, or HK$9.6 million, will be used for ongoing and +future clinical trials of MT1011, a universal anticoagulant reversal +agent, including approximately 0.4%, or HK$4.3 million, for the Phase +I-C02 clinical trial in China, and approximately 0.5%, or HK$5.3 million, +for the subsequent Phase II clinical trial in China; +• approximately 1.8%, or HK$19.2 million, will be used for ongoing and +future clinical trials of MT2004 for the treatment of DILI, including +approximately 0.8%, or HK$8.5 million, for the Phase II clinical trial in +China, and approximately 1.0%, or HK$10.7 million, for the subsequent +Phase III clinical trial in China; +• approximately 1.4%, or HK$14.9 million, will be used for ongoing and +future clinical trials of MT1009 for the treatment of GIOP and PMO in +China, including approximately 1.0%, or HK$10.7 million, for the Phase +I clinical trial, which we initiated in January 2026 in the PRC, and +approximately 0.4%, or HK$4.3 million, for the subsequent Phase II +clinical trial in China; +(b) approximately 3.5%, or HK$37.4 million, will be used for the R&D of novel +drug candidates, including XTL3602, XTL3710, MT1016 and XTL1018 as well +as other potential candidates. We intend to further strengthen and expand our +product pipeline for metabolic diseases, with an emphasis on kidney-related +indications, as well as cardiovascular and cerebrovascular diseases; +Specifically, approximately 1.5%, or HK$16.0 million, will be used for +kidney-related indications; approximately 1.0%, or HK$10.7 million, for other +endocrine diseases beyond kidney-related indications; and approximately +1.0%, or HK$10.7 million, for cardiovascular and cerebrovascular diseases and +other diseases. We expect to submit an IND application for XTL3710 in 2026, +for XTL3602 and MT1016 in 2027, and for XTL1018 in 2028, for advancement +into clinical development; and +For more information of our implementation plans and timelines for the novel +drug candidates proposed to be developed, see “Business — Our non-pipeline +product candidates”. +FUTURE PLANS AND USE OF PROCEEDS +– 273 – + + +--- page 282 --- +(c) approximately 7.0%, or HK$74.7 million, will be used for the development, +upgrade and operation of our four core technology platforms, including the +recruitment of talent and the securing of intellectual property protection +through platform patenting. These platforms will serve the Core Product as +well as our other products. Among them: +• approximately 2.5%, or HK$26.7 million, will be used for +Bi-/Multi-specific Peptide and Peptide-based Macromolecule +Technology Platform — we expect to improve its ability to screen +candidate molecules with diverse molecular formats and novel +mechanisms of action, aiming to accelerate the R&D and translation of +our preclinical candidates; +• approximately 2.5%, or HK$26.7 million, will be used for +Computer-aided Peptide Design Platform — we expect to, through +collaboration with mainstream vendors, develop it into an AI-assisted +self-owned intellectual property; +• approximately 1.0%, or HK$10.7 million, will be used for Oral Peptide +Delivery Platform — we expect to, through the continuing R&D of it, +develop a proprietary patent system and advance the development of +oral formulation of drug candidates, aiming to improve patient +compliance and convenience; +• approximately 1.0%, or HK$10.7 million, will be used for Druggability +Evaluation Platform — we expect to continue optimizing and +upgrading it, further improve our in vitro biological evaluation models, +and enhance the druggability evaluation capabilities for our pipeline +products, thereby improving our overall translation efficiency. +(iv) approximately 10.0%, or HK$106.7 million, will be used for working capital and +general corporate purposes. +The above allocation of the proceeds will be adjusted on a pro rata basis in the event +that the Offer Price is fixed at a higher or lower level compared to the mid-point of the +indicative Offer Price range. If the Offer Price is set at HK$21.00 per Share, being the high +end of the indicative Offer Price range, the net proceeds from the Global Offering will +increase by approximately HK$77.9 million. If the Offer Price is set at HK$18.20 per Share, +being the low end of the indicative Offer Price range, the net proceeds from the Global +Offering will decrease by approximately HK$77.9 million. +If the net proceeds are not immediately applied to the above purposes, we will +deposit those net proceeds into short-term interest-bearing accounts at licensed +commercial banks and/or other authorized financial institutions (as defined under the +Securities and Futures Ordinance, and the relevant applicable laws in the relevant +jurisdiction). We will make an appropriate announcement if there is any change to the +above proposed use of proceeds. +FUTURE PLANS AND USE OF PROCEEDS +– 274 – + + +--- page 283 --- +HONG KONG UNDERWRITERS +CCB International Capital Limited +China Merchants Securities (HK) Co., Limited +Jakota Securities Group Limited +Ruibang Securities Limited +Sinolink Securities (Hong Kong) Company Limited +Skyvast Securities Limited +Somerley Capital Limited +Tiger Brokers (HK) Global Limited +uSmart Securities Limited +Webull Securities Limited +Zhongtai International Securities Limited +ZMF Asset Management Limited +UNDERWRITING ARRANGEMENTS AND EXPENSES +Hong Kong Public Offering +Hong Kong Underwriting Agreement +Pursuant to the Hong Kong Underwriting Agreement, our Company is offering the +Hong Kong Offer Shares for subscription on the terms and conditions set out in this +prospectus and the Hong Kong Underwriting Agreement at the Offer Price. +Subject to (a) the Stock Exchange granting approval for the listing of, and +permission to deal in, the H Shares in issue and to be issued under the Global Offering and +such approval not having been subsequently withdrawn, revoked or withheld prior to the +commencement of trading of the H Shares on the Stock Exchange and (b) certain other +conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong +Underwriters have agreed severally but not jointly to procure subscribers for, or +themselves to subscribe for, their respective applicable proportions of the Hong Kong +Offer Shares being offered which are not taken up under the Hong Kong Public Offering +on the terms and conditions set out in this prospectus and the Hong Kong Underwriting +Agreement. +The Hong Kong Underwriting Agreement is conditional on, among other things, the +International Underwriting Agreement having been executed and becoming +unconditional and not having been terminated in accordance with its terms. +Grounds for termination +The Joint Sponsors and the Sponsor-Overall Coordinators (for themselves and on +behalf of the Hong Kong Underwriters) shall be entitled, in their sole and absolute +discretion, by notice in writing to the Company, terminate the Hong Kong Underwriting +Agreement with immediate effect if, at any time at or prior to 8:00 a.m. on the Listing Date: +(1) there develops, occurs, exists or comes into effect: +(i) any change or prospective change (whether or not permanent) in the +business or in the financial or trading position of our Group taken as a +whole; or any event, circumstance, 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, political change, calamity, crisis, epidemic, pandemic, outbreaks, +escalation, adverse mutation or aggravation of diseases, comprehensive +sanctions, strikes, lock-outs, other industrial actions, fire, explosion, +flooding, earthquake, tsunami, volcanic eruption, civil commotion, +riots, rebellion, public disorder, acts of war, outbreak or escalation of +hostilities (whether or not war is declared), acts of God, acts of terrorism +(whether or not responsibility has been claimed), paralysis in +government operations, interruptions or accidents or delay in +transportation) or other state of emergency in whatever form, in or +affecting, directly or indirectly the PRC, Hong Kong, Japan, the United +States, Singapore, the United Kingdom, the European Union (or any +UNDERWRITING +– 275 – + + +--- page 284 --- +member thereof), the United Kingdom, Taiwan, Cayman Islands or any +other jurisdiction relevant to our Group and/or the Global Offering +(each a “Relevant Jurisdiction” and collectively, the “Relevant +Jurisdictions”); or +(ii) any change or development involving a prospective change or +development, or any event, circumstance or series of events likely to +result in or representing any change or development involving a +prospective change, in local, national, regional or international +financial, economic, political, military, industrial, fiscal, legal, +regulatory, currency, credit or market matters or conditions, equity +securities or exchange control or any monetary or trading settlement +system or other financial markets (including, without limitation, +conditions in the stock and bond markets, money and foreign exchange +markets, the interbank markets and credit markets), in or affecting any +Relevant Jurisdictions; or +(iii) the imposition or declaration of any moratorium, suspension or +restriction (including, without limitation, any imposition of or +requirement for any minimum or maximum price limit or price range) +in or on trading in securities generally on the Hong Kong Stock +Exchange, the New York Stock Exchange, the NASDAQ Global Market, +the London Stock Exchange, the Tokyo Stock Exchange, the Singapore +Exchange, the Beijing Stock Exchange, the Shenzhen Stock Exchange +and the Shanghai Stock Exchange or the trading in any securities of the +Company listed or quoted on a stock exchange or an over-the-counter +market; or +(iv) the imposition or declaration of any general moratorium on commercial +banking activities in the PRC, Hong Kong (imposed by the Financial +Secretary or the Hong Kong Monetary Authority or other competent +authority), New York (imposed at the U.S. Federal or New York State +level or by any other competent authority) or affecting any Relevant +Jurisdictions or any disruption in commercial banking or foreign +exchange trading or securities settlement or clearing services, +procedures or matters in or affecting any of the Relevant Jurisdictions; +or +(v) the commencement by any governmental authority or other regulatory +or political body or organization of any public action or investigation +against any Group company or a director, supervisor or senior +management member of any Group company in his/her capacity as +such or announcing an intention to take any such action; or +(vi) any new law, or any change or any development involving a prospective +change or any event or circumstance likely to result in a change or a +development involving a prospective change in (or in the interpretation +or application by any court or other competent authority of) existing +laws, in each case, in or affecting any of the Relevant Jurisdictions; or +(vii) the imposition of sanctions or export controls in whatever form, directly +or indirectly, on any Group company or any of the Warranting +Shareholders (as defined in the Hong Kong Underwriting Agreement) +or by or on any Relevant Jurisdiction, 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; or +(viii) any valid demand by creditors for repayment of indebtedness of any +Group company or in respect of which any Group company is liable +prior to its stated maturity; or +(ix) any non-compliance of this prospectus (or any other documents used in +connection with the contemplated offering, allotment, issue, +subscription or sale of any of the Offer Shares), the CSRC filings or any +aspect of the Global Offering with the Listing Rules or any other +applicable Laws; or +UNDERWRITING +– 276 – + + +--- page 285 --- +(x) any change or development involving a prospective change or +amendment in or affecting taxes or exchange control, currency exchange +rates or foreign investment regulations (including, without limitation, a +material devaluation of the RMB, Hong Kong dollar or the USD against +any foreign currencies, a change in the system under which the value of +the Hong Kong dollar is linked to that of the USD or RMB is linked to +any foreign currency or currencies), or the implementation of any +exchange control, in any of the Relevant Jurisdictions or affecting an +investment in the Offer Shares; or +(xi) any litigation, dispute, legal action, claim, or regulatory or +administrative investigation or legal proceeding or action being +threatened or instigated or announced against any Group company, any +Director, any member of the senior management of the Company as +named in the prospectus or any Warranting Shareholders (as defined in +the Hong Kong Underwriting Agreement); or +(xii) any contravention by any Group company or any Director or any +member of the senior management of the Company as named in the +prospectus or any Warranting Shareholders (as defined in the Hong +Kong Underwriting Agreement) of any applicable Laws including the +Listing Rules; or +(xiii) any valid demand by creditors for repayment of indebtedness or an +order or petition for the winding up or liquidation of any Group +company or any composition or arrangement made by any Group +company with its creditors or a scheme of arrangement entered into by +any Group company or any resolution for the winding-up of any Group +company or the appointment of a provisional liquidator, receiver or +manager over all or part of the assets or undertaking of any Group +company or anything analogous thereto occurring in respect of any +Group company; or +(xiv) any change or prospective change or development, or any +materialization of any of the risks set out in the section headed “Risk +Factors” in this prospectus; or +(xv) other than with the prior written consent of the Joint Sponsors, the +Sponsor-Overall Coordinators, the Overall Coordinators and the Joint +Global Coordinators, the issue or requirement to issue by the Company +of any supplement or amendment to this prospectus or to any other +documents used in connection with the contemplated offering and sale +of the offer Shares pursuant to the Companies Ordinance, the +Companies (Winding Up and Miscellaneous Provisions) Ordinance or +the Listing Rules or any other applicable Laws or any requirement or +request of the Hong Kong Stock Exchange, the SFC and/or the CSRC; or +which, individually or in the aggregate, in the sole and absolute opinion of the +Joint Sponsors and the Sponsor-Overall Coordinators (for themselves and on +behalf of the Hong Kong Underwriters): +(a) has or will have or may have a material adverse effect on the assets, +liabilities, business, general affairs, management, prospects, +shareholders’ equity, profits, losses, results of operations, position or +condition, financial or otherwise, or performance of the Group as a +whole or to any present or prospective shareholder of the Company in +its capacity as such; or +(b) has or will have or may have a material adverse effect on the success of +the Global Offering or the level of applications under the Hong Kong +Public Offering or the level of interest under the International Offering; +or +(c) makes or will make or may make it inadvisable or inexpedient or +impracticable for the Global Offering to proceed or to market the Global +Offering or the delivery or distribution of the Offer Shares on the terms +and in the manner contemplated by the Offer Related Documents (as +defined below); or +UNDERWRITING +– 277 – + + +--- page 286 --- +(d) has or will have or may 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 or delaying the +processing of applications and/or payments pursuant to the Global +Offering or pursuant to the underwriting thereof; or +(2) any of the Joint Sponsors and the Sponsor-Overall Coordinators (for +themselves and on behalf of the Hong Kong Underwriters and the Capital +Market Intermediaries) shall become aware of the fact that, or have reasonable +cause to believe that: +(i) any statement contained in any of this prospectus, the disclosure +package, the preliminary offering circular, the final offering circular, the +CSRC filings, the formal notice, the Overall Coordinators +announcement and/or in any notices, announcements, advertisements, +communications or other documents (including any announcement, +circular, document or other communication pursuant to the Hong Kong +Underwriting Agreement) in connection with the Global Offering +(including any supplement or amendment thereto) (the “ Offer Related +Documents”) was, when it was issued, or has become, untrue, incorrect, +incomplete, inaccurate in any material respect or, misleading or +deceptive, or that any forecast, estimate, expression of opinion, +intention or expectation contained in any such documents is not fair and +honest and based on reasonable assumptions or reasonable grounds, +when taken as a whole; or +(ii) 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 from, or material misstatement in, any of +Offer Related Documents (including any supplement or amendment +thereto); or +(iii) any br each of, or any event or circumstance rendering untrue or +incorrect, incomplete or misleading in any respect, any of the +Warranties; or +(iv) any event, act or omission which gives rise or is likely to give rise to any +liability of any of the Indemnifying Parties (as defined in the Hong +Kong Underwriting Agreement) pursuant to Clause 13 of the Hong +Kong Underwriting Agreement; or +(v) any breach of any of the obligations or undertakings imposed upon any +party to the Hong Kong Underwriting Agreement or the International +Underwriting Agreement (other than upon any of the Hong Kong +Underwriters or the International Underwriters); or +(vi) there is any change or development constituting or having an adverse +effect; or +(vii) that the Chairman of the Board, any Director, the chief executive officer, +the chief financial officer, or any member of senior management of the +Company named in this prospectus seeks to retire, or is removed from +office or vacating his/her office; or +(viii) an Authority or a political body or organization in any Relevant +Jurisdiction commencing any investigation or other action, or +announcing an intention to investigate or take other action, against any +Director; or +(ix) any Director or any member of senior management of the Company +named in this prospectus is being charged with an indictable offense or +prohibited by operation of Law or otherwise disqualified from taking +part in the management or taking directorship of a company or there is +the commencement by any governmental, political or regulatory body +of any investigation or other action against any Director or member of +senior management of the Company in his or her capacity as such or any +member of the Group or an announcement by any governmental, +political or regulatory body that it intends to commence any such +investigation or take any such action; or +UNDERWRITING +– 278 – + + +--- page 287 --- +(x) any material adverse change or effect, or any development involving a +prospective material adverse change or effect, in or affecting (1) the +assets, liabilities, business, properties, general affairs, management, +prospects, shareholders’ equity, profits, losses, results of operations, +position or condition (financial, operational or otherwise) or +performance of our Group taken as a whole, and (2) the ability of the +Company to perform its obligations under the Hong Kong +Underwriting Agreement and the International Underwriting +Agreement, including the issuance and sale of the Offer Shares, or to +consummate the transactions contemplated under this prospectus +(collectively, the “Material Adverse Change”) (whether or not +permanent); or +(xi) the approval by the Listing Committee of the Hong Kong Stock +Exchange of the listing of, and permission to deal in, the H Shares to be +issued or sold (including any additional H Shares that may be issued or +sold pursuant to the exercise of the Over-allotment Option) under the +Global Offering is refused or not granted (other than subject to +customary conditions), on or before the date of the Listing, or if granted, +the approval is subsequently withdrawn, cancelled, qualified (other +than by customary conditions), revoked or withheld; or +(xii) the CSRC filings, the notice of acceptance of the CSRC filings issued by +the CSRC and/or the published filing results in respect of the CSRC +filings on its website have been revoked, withdrawn, rejected or +terminated; or +(xiii) other than with the prior written consent of the Joint Sponsors and the +Sponsor 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 +(xiv) any non-compliance of the CSRC filings with the CSRC rules or any +other applicable Laws; or +(xv) the Company withdraws this prospectus (and/or any other Offer +Related Documents) or the Global Offering; or +(xvi) any person has withdrawn its consent to the issue of this prospectus +with the inclusion of its report, letters, and/or opinions (as the case may +be) and references to its name included in the form and context in which +it respectively appears; or +(xvii) any prohibition on the Company for whatever reason from offering, +allotting, issuing or selling any of the Offer Shares (including pursuant +to any exercise of the Over-allotment Option) pursuant to the terms of +the Global Offering; or +(xviii) any person has withdrawn or sought to withdraw its consent to being +named in any of the Offering Documents or the CSRC filings or to the +issue of any of the Offering Documents or the CSRC filings; or +(xix) an order or petition is presented for the winding-up of any Group +company, or any composition or arrangement made by any Group +company with its creditors or a scheme of arrangement entered into by +any Group company or any resolution for the winding-up of any Group +company or the appointment of a provisional liquidator, receiver or +manager over all or a material part of the material assets or undertaking +of any Group company or anything analogous thereto occurs in respect +of any Group company; or +(xx) (A) 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 (B) 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 (C) any non-compliance of the CSRC filings with +the CSRC rules or any other applicable Laws; or +UNDERWRITING +– 279 – + + +--- page 288 --- +(xxi) (A) a material portion of the orders placed or confirmed in the +book-building process has been withdrawn, terminated or cancelled or +(B) any investment commitment made by any cornerstone investors +under the Cornerstone Investment Agreements signed with such +cornerstone investors, have been withdrawn, terminated or cancelled, +or with respect to which the payment of the relevant orders and/or +investment commitment has not been received or settled in the +stipulated time and manner or otherwise. +Undertakings to the Stock Exchange pursuant to the Listing Rules +(A) Undertakings by our Company +Pursuant to Rule 10.08 of the Listing Rules, our Company has undertaken to the +Stock Exchange that it will not exercise its power to issue any further Shares, or securities +convertible into equity securities of our Company (whether or not of a class already listed) +or enter into any agreement to such an issue within six months from the Listing Date +(whether or not such issue of Shares or securities will be completed within six months +from the Listing Date), except (a) pursuant to the Global Offering and the Over-allotment +Option, (b) pursuant to any capitalization issue, capital reduction or consolidation or +sub-division of shares, or (c) under any of the circumstances provided under Rule 10.08 of +the Listing Rules. +(B) Undertakings by our group of Controlling Shareholders +Pursuant to Rule 10.07 of the Listing Rules, each of the Controlling Shareholders has +undertaken to the Stock Exchange and our Company that, he/she/she/it will not and will +procure that the relevant registered holder(s) will not: +(i) in the period commencing on the date by reference to which disclosure of +his/her/its holding of Shares is made in this prospectus and ending on the +date which is six months from the Listing Date, dispose of, nor 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; and +(ii) in the period of six months commencing on the date on which the period +referred to in paragraph (i) above expires, dispose of, nor enter into any +agreement to dispose of or otherwise create any options, rights, interests or +encumbrances in respect of, any of the Shares referred to in paragraph (i) +above if, immediately following such disposal or upon the exercise or +enforcement of such options, rights, interests or encumbrances, he/she/it +would cease to be a Controlling Shareholder of our Company (as defined in +the Listing Rules) or one of the Controlling Shareholders of our Company, or +would together with the other Controlling Shareholders, cease to be the +Controlling Shareholders of our Company (as defined in the Listing Rules), in +each case, save as permitted under the Listing Rules. +Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of the Controlling +Shareholders has undertaken to the Stock Exchange and our Company that, within the +period commencing on the date by reference to which disclosure of his/her/its holding of +Shares is made in this prospectus and ending on the date which is 12 months from the +Listing Date, he/she/it will: +(i) when he/she/it pledges or charges any Shares beneficially owned by him/it +in favor of an authorized institution (as defined in the Banking Ordinance +(Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial loan +pursuant to Note 2 to Rule 10.07(2) of the Listing Rules, immediately inform +our Company in writing of such pledge or charge together with the number of +Shares so pledged or charged; and +(ii) when he/she/it receives indications, either verbal or written, from the +pledgee or chargee of any Shares that any of the pledged or charged Shares +will be disposed of, immediately inform our Company of such indications. +Our Company will inform the Stock Exchange in writing as soon as we have been +informed of matters referred in above by any of our Controlling Shareholders and disclose +such matters by way of announcement pursuant to the requirements under the Listing +Rules as soon as possible. +UNDERWRITING +– 280 – + + +--- page 289 --- +Undertakings pursuant to the Hong Kong Underwriting Agreement +(A) Undertakings by our Company +Our Company has undertaken 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 CMIs and the Hong Kong Underwriters not to +(except for the offer, allotment and issue of the Offer Shares pursuant to the Global +Offering, including any exercise of the Over-allotment Option), at any time during the +period commencing on the date of the Hong Kong Underwriting Agreement and ending +on, and including, the date that is six months after the Listing Date (the “ First Six-Month +Period”), without the prior written consent of the Joint Sponsors and the Sponsor-Overall +Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless in +compliance with the requirements of the Listing Rules: +(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, contract or right to subscribe for or +purchase, grant or purchase any option, warrant, contract or right to allot, +issue or sell, or otherwise transfer or dispose of or create any 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 any +other securities of our Company, or any interest in any of the foregoing +(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 H Shares), or deposit any 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 of H Shares or any +other securities of the Company, or any interest in any of the foregoing +(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 H Shares); +(iii) enter into any transaction with the same economic effect as any transaction +specified in paragraphs (i) or (ii) above; or +(iv) offer to or agree to or announce any intention to effect any transaction +specified 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 securities of the Company, or in cash or +otherwise (whether or not the issue of H Shares or such other shares or securities 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 transactions specified in paragraphs (i), (ii) or (iii) above or offers or agrees to or +announces any intention to effect any such transactions, our Company shall take all +reasonable steps to ensure that it will not create a disorderly or false market in the +securities of our Company. Each of the Controlling Shareholders undertakes to each of the +Joint Sponsors, the Sponsor Overall Coordinators, the Joint 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 Hong Kong Underwriting Agreement. +(B) Undertakings by our Controlling Shareholders +Each of the Controlling Shareholders hereby jointly and severally undertake to each +of the Company and the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall +Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead +Managers, the CMIs and the Hong Kong Underwriters that without the prior written +consent of the Joint Sponsors and the Sponsor-Overall Coordinators (for themselves and +on behalf of the Hong Kong Underwriters) or unless otherwise in compliance with the +requirements of the Listing Rules: +(i) at any time during the First Six-Month Period, it shall not, and shall procure +that the relevant registered holder(s), any nominee or trustee holding on trust +UNDERWRITING +– 281 – + + +--- page 290 --- +for it shall not, (a) 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, grant or agree to grant any option, right or warrant to +purchase or subscribe for, lend 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 (including by way of altering +the composition or classes of beneficiaries of any trust), conditionally or +unconditionally, any Shares or other equity securities of the Company or any +interest therein (including, without limitation, any equity 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 equity securities of the Company or any interest in any of the foregoing) +beneficially owned by it (the “ Relevant Securities ”); or (b) enter into any +swap or other arrangement that transfers to another, in whole or in part, any +of the economic consequences of ownership of the Relevant Securities; (c) +enter into or effect any transaction with the same economic effect as any of the +transactions referred to in sub-paragraphs (a) or (b) above; or (d) offer to or +agree to or announce any intention to enter into or effect any of the +transactions referred to in sub-paragraphs (a), (b) or (c) above, which any of +the foregoing transactions referred to in sub-paragraphs (a), (b), or (c) is to be +settled by delivery of Shares or such other equity securities of the Company or +in cash or otherwise (whether or not the issue of such Shares or other +securities will be completed within the First Six-Month Period); +(ii) at any time during the Second Six-Month Period, it shall not enter into any of +the transactions referred to in paragraph (i)(a), (b) or (c) above or offer to or +agree to or announce any intention to enter into any such transaction if, +immediately following any sale, transfer or disposal or upon the exercise or +enforcement of any option, right, interest or encumbrance pursuant to such +transaction, it would cease to be a “controlling shareholder” (as defined in the +Listing Rules) of the Company or would together with the other Controlling +Shareholders cease to be “controlling shareholders” (as defined in the Listing +Rules) of the Company; +(iii) in the event that it enters into any of the transactions specified in paragraph +(i)(a), (b) or (c) above or offers to or agrees to or announce or publicly disclose +any intention to effect any such transaction within the Second Six-Month +Period, it shall take all steps to ensure that it will not create a disorderly or +false market for any Shares or other equity securities of the Company; and +(iv) at any time during the First Six-Month Period and the Second Six-Month +Period, it shall, and shall procure that the relevant registered holder(s), +comply with all the restrictions and requirements under the Listing Rules on +the sale, transfer or disposal by it or by the registered holder(s) of any Shares +or other equity securities of the Company. +Each of the Controlling Shareholders further undertakes to each of the Company +and the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the +Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the CMIs and +the Hong Kong Underwriters that, at any time during the First Six-Month Period and the +Second Six-Month Period, it will: +(i) when it pledges or charges any equity securities or interests in the Relevant +Securities in favour of an authorised institution pursuant to Note 2 to Rule +10.07(2) of the Listing Rules, immediately inform the Company, the Joint +Sponsors and the Sponsor-Overall Coordinators (for themselves and on behalf +of the Hong Kong Underwriters)in writing of such pledges or charges +together with the number of securities and nature of interest so pledged or +charged; and +(ii) when it receives indications, either verbal or written, from any pledgee or +chargee that any of the pledged or charged equity securities or interests in the +securities of the Company will be sold, transferred or disposed of, +immediately inform the Company, the Joint Sponsors and the Sponsor-Overall +Coordinators (for themselves and on behalf of the Hong Kong Underwriters) +in writing of such indications. +The Company shall, if required pursuant to the Listing Rules, inform the Stock +Exchange in writing as soon as practicable, when it has been informed of any of the +UNDERWRITING +– 282 – + + +--- page 291 --- +matters referred to above (if any) by the Controlling Shareholders and disclose such +matters by way of an announcement to be published in accordance with the Listing Rules. +Joint Sponsors’ and Hong Kong Underwriters’ interests in our Company +Save as disclosed in this prospectus and for their respective obligations under the +Hong Kong Underwriting Agreement, as of the Latest Practicable Date, none of the Joint +Sponsors or the Hong Kong Underwriters was interested, legally or beneficially, directly +or indirectly, in any Shares or any securities of any member of our Group or had any right +or option (whether legally enforceable or not) to subscribe for or purchase, or to nominate +persons to subscribe for or purchase, any Shares or any securities of 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 respective obligations under the Hong Kong Underwriting Agreement. +International Offering +International Underwriting Agreement +In connection with the International Offering, our Company expect to enter into the +International Underwriting Agreement with the International Underwriters on or around +the Price Determination Date. Under the International Underwriting Agreement and +subject to the Over-allotment Option, the International Underwriters would, subject to +certain conditions set out therein, agree severally but not jointly to procure subscribers +for, or themselves to subscribe for, their respective applicable proportions of the +International Offer Shares initially being offered pursuant to the International Offering. It +is expected that the International Underwriting Agreement may be terminated on similar +grounds as the Hong Kong Underwriting Agreement. Potential investors should note that +in the event that the International Underwriting Agreement is not entered into, the Global +Offering will not proceed. See “Structure of the Global Offering — The International +Offering”. +Over-allotment Option +Our Company is expected to grant to the International Underwriters the +Over-allotment Option, exercisable by the Overall Coordinators on behalf of the +International Underwriters at any time from the Listing Date until 30 days after the last +day for lodging applications under the Hong Kong Public Offering, pursuant to which our +Company may be required to issue up to an aggregate of 8,708,000 H Shares, representing +not more than 15.0% of the number of Offer Shares initially available under the Global +Offering, at the Offer Price, to cover over-allocations in the International Offering, if any. +See “Structure of the Global Offering — Over-allotment Option”. +Commissions and Expenses +All Capital Market Intermediaries participating in the Global Offering will receive +an aggregate underwriting commission of 2.5% of the aggregate proceeds from the Global +Offering (including any proceeds arising from the exercise of the Over-allotment Option) +(the “Gross Proceeds”) (the “Underwriting Commission ”). In addition, the Company +may, in its sole discretion, pay to all Capital Market Intermediaries an incentive fee in an +aggregate of up to 1.5 % of the Gross Proceeds (the “ Discretionary Fee”). For any +unsubscribed Hong Kong Offer Shares reallocated to the International Offering, we will +pay the underwriting commission for such Shares to the International Underwriters (but +not the Hong Kong Underwriters). +Assuming full payment of the Discretionary Fee, the fixed fees and the discretionary +fees payable to the Underwriters represent approximately 62.5% and 37.5%, respectively, +of the aggregate fees payable to the Capital Market Intermediaries in total in connection +with the Global Offering. +The aggregate underwriting commissions and fees together with the Stock +Exchange listing fees, the SFC transaction levy, the AFRC transaction levy and the Stock +Exchange trading fee, legal and other professional fees and printing and all other +expenses relating to the Global Offering are estimated to be approximately HK$70.6 +million (assuming an Offer Price of HK$19.60 per Offer Share (which is the mid-point of +the Offer Price range), the full payment of the discretionary incentive fee and the +Over-allotment Option is not exercised) and will be paid by the Company. +INDEPENDENCE OF THE JOINT SPONSORS +The Joint Sponsors satisfy the independence criteria applicable to sponsors as set +out in Rule 3A.07 of the Listing Rules. +UNDERWRITING +– 283 – + + +--- page 292 --- +ACTIVITIES BY SYNDICATE MEMBERS +The underwriters of the Hong Kong Public Offering and the International Offering +(together, the “Syndicate Members ”) and their affiliates may each individually undertake +a variety of activities (as further described below) which do not form part of the +underwriting or stabilizing process. +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 account of others. In the +ordinary course of their various business activities, the Syndicate Members and their +respective affiliates may purchase, sell or hold a broad array of investments and actively +trade securities, derivatives, loans, commodities, currencies, credit default swaps and +other financial instruments for their own account and for the accounts of their customers. +Such investment and trading activities may involve or relate to assets, securities and/or +instruments of our Company and/or persons and entities with relationships with our +Company and may also include swaps and other financial instruments entered into for +hedging purposes in connection with our Group’s loans and other debt. +In relation to the Shares, the activities of the Syndicate Members and their affiliates +could include acting as agent for buyers and sellers of the Shares, entering into +transactions with those buyers and sellers in a principal capacity, including as a lender to +initial purchasers of the Shares (which financing may be secured by the Shares) in the +Global Offering, proprietary trading in the Shares, and 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 as +their underlying assets, assets including the Shares. Such transactions may be carried out +as bilateral agreements or trades with selected counterparties. Those activities may +require hedging activity by those entities involving, directly or indirectly, the buying and +selling of the Shares, which may have a negative impact on the trading price of the Shares. +All such activities 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 +Shares, in baskets of securities or indices including the Shares, in units of funds that may +purchase the Shares, or in derivatives related to any of the foregoing. +In relation to issues by Syndicate Members or their affiliates of any listed securities +having the Shares as their underlying securities, whether on the Stock Exchange or on any +other stock exchange, the rules of the stock 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 Shares in most cases. +All such activities may occur both during and after the end of the stabilizing period +described in “Structure of the Global Offering”. Such activities may affect the market price +or value of the Shares, the liquidity or trading volume in the Shares and the volatility of +the price of the Shares, and the extent to which this occurs from day to day cannot be +estimated. +It should be noted that when engaging in any of these activities, the Syndicate +Members will be subject to certain restrictions, including the following: +(a) the Syndicate Members (other than the Stabilization Manager or any person +acting for it) must not, in connection with the distribution of the Offer Shares, +effect any transactions (including issuing or entering into any option or other +derivative transactions relating to the Offer Shares), whether in the open +market or otherwise, with a view to stabilizing or maintaining the market +price of any of the Offer Shares at levels other than those which might +otherwise prevail in the open market; and +(b) the Syndicate Members 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. +Certain of the Syndicate Members or their respective affiliates have provided from +time to time, and expect to provide in the future, investment banking and other services to +our Company and each of its affiliates for which such Syndicate Members or their +respective affiliates have received or will receive customary fees and commissions. +In addition, the Syndicate Members or their respective affiliates may provide +financing to investors to finance their subscriptions of Offer Shares in the Global Offering. +UNDERWRITING +– 284 – + + +--- page 293 --- +THE GLOBAL OFFERING +This prospectus is published in connection with the Hong Kong Public Offering as +part of the Global Offering. +The listing of the H Shares on the Stock Exchange is sponsored by the Joint +Sponsors. The Joint Sponsors have made an application on behalf of our Company to the +Stock Exchange for the listing of, and permission to deal in, the H Shares in issue and to be +issued pursuant to the Global Offering (including the additional H Shares which may be +issued pursuant to the exercise of the Over-allotment Option). +58,054,400 Offer Shares will initially be made available under the Global Offering +comprising: +(a) the Hong Kong Public Offering of initially 5,805,600 Offer Shares in Hong +Kong as described in “— The Hong Kong Public Offering” in this section; and +(b) the International Offering of initially 52,248,800 Offer Shares (subject to the +Over-allotment Option) outside the United States (including to professional +and institutional investors within Hong Kong) in offshore transactions in +reliance on Regulation S, as described in “— The International Offering” in +this section. +Investors may either: +(i) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or +(ii) apply for or indicate an interest for International Offer Shares under the +International Offering, but may not do both. +The Offer Shares will represent approximately 17.5% of the total Shares in issue +immediately following the completion of the Global Offering, assuming the +Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, +the Offer Shares will represent approximately 19.6% of the total Shares in issue +immediately following the completion of the Global Offering. +References in this prospectus to applications, application monies or the procedure +for applications relate solely to the Hong Kong Public Offering. +THE HONG KONG PUBLIC OFFERING +Number of Offer Shares initially offered +Pursuant to paragraph 4.2(b) of Practice Note 18 of the Listing Rules, our Company +selected Mechanism B as its initial allocation and clawback mechanism, namely our +Company is initially offering 5,805,600 H Shares for subscription by the public in Hong +Kong at the Offer Price, representing approximately 10.0% of the total number of Offer +Shares initially available under the Global Offering with no clawback mechanism. +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 that regularly invest +in shares and other securities. +Completion of the Hong Kong Public Offering is subject to the conditions set out in +“— Conditions of the Global Offering” in this section. +Allocation +Allocation of Offer Shares to investors under the Hong Kong Public Offering will be +based solely 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. Such allocation could, where appropriate, consist +of balloting, which could 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 Hong Kong Offer Shares available +under the Hong Kong Public Offering will be divided equally (to the nearest board lot) +into two pools: pool A and pool B (with any odd lot being allocated to pool A). The Hong +Kong Offer Shares in pool A will be allocated on an equitable basis to applicants who have +applied for Hong Kong Offer Shares with an aggregate subscription price of HK$5 million +STRUCTURE OF THE GLOBAL OFFERING +– 285 – + + +--- page 294 --- +(excluding the brokerage, the SFC transaction levy, the AFRC transaction levy and the +Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares in pool B will be +allocated on an equitable basis to applicants who have applied for Hong Kong Offer +Shares with an aggregate subscription price of more than HK$5 million (excluding the +brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock Exchange +trading fee payable) and up to the total value in pool B. +Investors should be aware that applications in pool A and applications in pool B +may receive different allocation ratios. If any Hong Kong Offer Shares in one (but not +both) of the pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be +transferred to the other pool to satisfy demand in that other pool and be allocated +accordingly. For the purpose of the immediately preceding paragraph only, the “price” for +Hong Kong 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 and not from both pools. Multiple or +suspected multiple applications under the Hong Kong Public Offering and any +application for more than 2,902,800 Offer Shares (being 50% of the Hong Kong Offer +Shares initially available under the Hong Kong Public Offering) is liable to be rejected. +Reallocation +The Offer Shares to be offered in the Hong Kong Public Offering and the +International Offering may, in certain circumstances, be reallocated as between these +offerings at the discretion of the Overall Coordinators. Subject to the allocation cap +described in the subsequent paragraph, the Overall Coordinators may in their discretion +reallocate Offer Shares from the International Offering to the Hong Kong Public Offering +to satisfy valid applications under the Hong Kong Public Offering. In addition, if the +Hong Kong Public Offering is not fully subscribed, the Overall Coordinators will have the +discretion (but shall not be under any obligation) to reallocate to the International +Offering all or any unsubscribed Hong Kong Offer Shares in such amounts as they deem +appropriate. In each case, the additional Offer Shares reallocated to the Hong Kong Public +Offering will be allocated between Pool A and Pool B and the number of Offer Shares +allocated to the International Offering will be correspondingly reduced in such manner as +the Overall Coordinators deem appropriate. +In the event of reallocation of Offer Shares between the International Offering and +the Hong Kong Public Offering in the circumstances where (a) the International Offer +Shares are fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully +subscribed or oversubscribed irrespective of the number of times; or (b) the International +Offer Shares are undersubscribed and the Hong Kong Offer Shares are fully subscribed or +oversubscribed irrespective of the number of times, then up to 2,902,400 Offer Shares may +be reallocated from the International Offering to the Hong Kong Public Offering, so that +the total number of Offer Shares available for subscription under the Hong Kong Public +Offering will increase up to 8,708,000 Offer Shares, representing approximately 15% of the +number of Offer Shares initially available under the Global Offering (before exercise of the +Over-allotment Option) in accordance with Chapter 4.14 of the Guide for New Listing +Applicants provided the final Offer Price shall be fixed at HK$18.20 per Offer Share (being +the low-end of the indicative Offer Price range stated in this prospectus) or the downward +adjusted final Offer Price if a downward Offer Price adjustment is made in accordance +with Chapter 4.14 under the Guide for New Listing Applicants. In the circumstance where +the International Offer Shares are fully subscribed or oversubscribed and the Hong Kong +Offer Shares are undersubscribed, there will be no reallocation from the International +Offering to the Hong Kong Public Offering, and no over-allocation of H Shares to the +Hong Kong Public Offering. +Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and +the International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 +of the Guide for New Listing Applicants and 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. +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 in their discretion consider appropriate. +STRUCTURE OF THE GLOBAL OFFERING +– 286 – + + +--- page 295 --- +In the event that both the Hong Kong Public Offering and International Offering are +undersubscribed, the Global Offering will not proceed unless the Underwriters would +subscribe or procure subscribers for their respective applicable proportions of the Offer +Shares being offered which are not taken up under the Global Offering on the terms and +conditions of this prospectus and the Underwriting Agreements. +Applications +Each applicant under the Hong Kong Public Offering will be required to give an +undertaking and confirmation in the application submitted by him that he and any +person(s) for whose benefit he is making the application has 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 International Offer Shares under the International Offering. Such applicant’s +application is liable to be rejected if such undertaking and/or confirmation is/are +breached and/or untrue (as the case may be) or if he has been or will be placed or +allocated International Offer Shares under the International Offering. +Applicants under the Hong Kong Public Offering may be required to pay, on +application (subject to application channels), the Offer Price of HK$21.0 per Offer Share in +addition to the brokerage, the SFC transaction levy, the AFRC transaction levy and the +Stock Exchange trading fee payable on each Offer Share, amounting to a total of +HK$4,242.36 for one board lot of 200 H Shares. Further details are set out in “How to +Apply for Hong Kong Offer Shares”. +THE INTERNATIONAL OFFERING +Number of Offer Shares initially offered +The International Offering will consist of an offering of initially 52,248,800 H Shares, +representing approximately 90.0% of the total number of Offer Shares initially available +under the Global Offering (subject to the Over-allotment Option) and approximately +15.7% of our enlarged issued share capital immediately after completion of the Global +Offering (assuming the Over-allotment Option is not exercised). +Allocation +The International Offering will include selective marketing of Offer Shares to +institutional and professional investors and other investors anticipated to have a sizeable +demand for such Offer Shares in Hong Kong and 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 that regularly invest in shares and +other securities. Allocation of Offer Shares pursuant to the International Offering will be +effected in accordance with the “book- building” process described in “— Pricing and +Allocation” in this section and 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 Shares and/or hold or sell its Shares after the Listing. Such allocation is +intended to result in a distribution of the Shares on a basis which would lead to the +establishment of a solid professional and institutional shareholder base to the benefit of +our Group and the Shareholders as a whole. +The Overall Coordinators (for themselves and on behalf of the Underwriters) may +require any investor who has been offered 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 them to identify the +relevant applications under the Hong Kong Public Offering and to ensure that they are +excluded from any allocation of Offer Shares under the International Offering. +Reallocation +The total number of Offer Shares to be issued or sold pursuant to the International +Offering may change as a result of the exercise of the Over-allotment Option in whole or in +part and/or any reallocation of unsubscribed Offer Shares originally included in the Hong +Kong Public Offering. +OVER-ALLOTMENT OPTION +In connection with the Global Offering, our Company is expected to grant the +Over-allotment Option to the International Underwriters, exercisable by the Overall +Coordinators (for themselves and on behalf of the International Underwriters). +STRUCTURE OF THE GLOBAL OFFERING +– 287 – + + +--- page 296 --- +Pursuant to the Over-allotment Option, the International Underwriters will have +the right, exercisable by the Overall Coordinators (for themselves and on behalf of the +International Underwriters) at any time from the Listing Date until 30 days after the last +day for lodging applications under the Hong Kong Public Offering to require our +Company to issue up to an aggregate of 8,708,000 additional H Shares, representing not +more than 15.00% of the total number of Offer Shares initially available under the Global +Offering, at the Offer Price under the International Offering to cover over-allocations in +the International Offering, if any. +If the Over-allotment Option is exercised in full, the additional Offer Shares to be +issued pursuant thereto will represent approximately 2.6% of the total Shares in issue +immediately following the completion of the Global Offering. If the Over-allotment +Option is exercised, an announcement will be made. +STABILIZATION +Stabilization is a practice used by underwriters in some markets to facilitate the +distribution of securities. To stabilize, the underwriters may bid for, or purchase, the +securities in the secondary market during a specified period of time, to retard and, if +possible, prevent a decline in the initial public market price of the securities below the +offer price. Such transactions may be effected in all jurisdictions where it is permissible to +do so, in each case in compliance with all applicable laws and regulatory requirements, +including those of Hong Kong. In Hong Kong, the price at which stabilization is effected is +not permitted to exceed the offer price. +In connection with the Global Offering, the Stabilizing Manager (or any person +acting for it), on behalf of the Underwriters, may over-allocate or effect transactions with +a view to stabilizing or supporting the market price of the H Shares at a level higher than +that which might otherwise prevail for a limited period after the Listing Date. However, +there is no obligation on the Stabilizing Manager (or any person acting for it) to conduct +any such stabilizing action. Such stabilizing action, if taken, (a) will be conducted at the +absolute discretion of the Stabilizing Manager (or any person acting for it) and in what the +Stabilizing Manager reasonably regards as the best interest of our Company, (b) may be +discontinued at any time and (c) is required to be brought to an end within 30 days of the +last day for lodging applications under the Hong Kong Public Offering. +Stabilization action permitted in Hong Kong pursuant to the Securities and Futures +(Price Stabilizing) Rules of the SFO includes (a) over-allocating for the purpose of +preventing or minimizing any reduction in the market price of the H Shares, (b) selling or +agreeing to sell the H Shares so as to establish a short position in them for the purpose of +preventing or minimizing any reduction in the market price of the H Shares, (c) +purchasing, or agreeing to purchase, the H Shares pursuant to the Over-allotment Option +in order to close out any position established under paragraph (a) or (b) above, (d) +purchasing, or agreeing to purchase, any of the H Shares for the sole purpose of +preventing or minimizing any reduction in the market price of the H Shares, (e) selling or +agreeing to sell any H Shares in order to liquidate any position established as a result of +those purchases and (f) offering or attempting to do anything as described in paragraph +(b), (c), (d) or (e) above. +Specifically, prospective applicants for and investors in the Offer Shares should note +that: +(a) the Stabilizing Manager (or any person acting for it) may, in connection with +the stabilizing action, maintain a long position in the H Shares; +(b) there is no certainty as to the extent to which and the time or period for which +the Stabilizing Manager (or any person acting for it) will maintain such a long +position; +(c) liquidation of any such long position by the Stabilizing Manager (or any +person acting for it) and selling in the open market may have an adverse +impact on the market price of the H Shares; +(d) no stabilizing action can be taken to support the price of the H Shares for +longer than the stabilization period, which will begin on the Listing Date, and +is expected to expire on Saturday, July 18, 2026, being the 30th day after the +last day for lodging applications under the Hong Kong Public Offering. After +this date, when no further stabilizing action may be taken, demand for the H +Shares, and therefore the price of the H Shares, could fall; +(e) the price of the H Shares cannot be assured to stay at or above the Offer Price +by any stabilizing action; and +STRUCTURE OF THE GLOBAL OFFERING +– 288 – + + +--- page 297 --- +(f) stabilizing bids or transactions effected in the course of the stabilizing action +may be made at any price at or below the Offer Price and can, therefore, be +done at a price below the price paid by applicants for, or investors in, the Offer +Shares. +Our Company will ensure or procure that an announcement in compliance with the +Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days +of the expiration of the stabilization period. +Over-Allocation +Following any over-allocation of H Shares in connection with the Global Offering, +the Stabilizing Manager (or any person acting for it) may cover such over-allocations by, +among other methods, exercising the Over-allotment Option in full or in part, by using H +Shares purchased by the Stabilizing Manager (or any person acting for it) in the secondary +market at prices that do not exceed the Offer Price, or by a combination of these methods. +PRICING AND ALLOCATION +The Offer Price will not be more than HK$21.0 per Offer Share and is expected to be +not less than HK$18.20 per Offer Share, unless otherwise announced, as further explained +below, not later than the morning of the last day for lodging applications under the Hong +Kong Public Offering. +The International Underwriters will be soliciting from prospective investors their +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 about, 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 they deem appropriate, based on the level of interest expressed by prospective +investors during the book-building process in respect of the International Offering, and +with the consent of our Company, reduce the number of Offer Shares offered and/or the +Offer Price below that stated in this prospectus at any time on or prior to the morning of +the last day for lodging applications under the Hong Kong Public Offering. In such a case, +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, cause to be published on the websites of our Company +and the Stock Exchange at www.micot.cn and www.hkexnews.hk , respectively, notices of +the reduction. Upon the issue of such a notice, the revised number of Offer Shares and/or +the Offer Price will be final and conclusive and the Offer Price, if agreed upon by the +Overall Coordinators (for themselves and on behalf of the Underwriters) and our +Company, will be fixed at such revised Offer Price. The Company will also, as soon as +practicable following the decision to make such change, issue a supplemental prospectus +updating investors of the change in the number of Offer Shares being offered under the +Global Offering and/or the Offer Price. Upon the issue of such a notice and supplemental +prospectus, the revised number of Offer Shares and/or the Offer Price will be final and +conclusive and the Offer Price, if agreed upon by the Overall Coordinators (for itself and +on behalf of the Underwriters) and the Company, will be fixed within such revised Offer +Price range. The Global Offering must first be canceled and subsequently relaunched on +FINI pursuant to the supplemental prospectus. +Before submitting applications for the Hong Kong Offer Shares, applicants should +have regard to the possibility that any announcement 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. +The level of indications of interest in the International Offering, the level of +applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong +Offer Shares and the results of allocations in the Hong Kong Public Offering are expected +to be made available through a variety of channels in the manner described in “How to +Apply for Hong Kong Offer Shares — B. Publication of Results”. +STRUCTURE OF THE GLOBAL OFFERING +– 289 – + + +--- page 298 --- +If there is any change to the offer size due to change in the number of Offer Shares +offered in the Global Offering (other than pursuant to the reallocation mechanism as +disclosed in this prospectus), or change to the Offer Price which leads to the resulting +price falling outside the indicative Offer Price range as stated in this prospectus, or if the +Company becomes aware that there has been a significant change affecting any matter +contained in this prospectus or a significant new matter has arisen, the inclusion of +information in respect of which would have been required to be in this prospectus if it had +arisen before this prospectus was issued, after the issue of this prospectus and before the +commencement of dealings in our Offer Shares as prescribed under Rule 11.13 of the +Listing Rules, our Company is required to cancel the Global Offering and issue a +supplemental prospectus or a new prospectus and subsequently relaunched on FINI +pursuant to the supplemental prospectus. +UNDERWRITING +The Hong Kong Public Offering is fully underwritten by the Hong Kong +Underwriters under the terms and conditions of the Hong Kong Underwriting Agreement +on a conditional basis. +Our Company expects to enter into the International Underwriting Agreement +relating to the International Offering on or about the Price Determination Date. +These underwriting arrangements, including the Underwriting Agreements, are +summarized in “Underwriting”. +CONDITIONS OF THE GLOBAL OFFERING +Acceptance of all applications for Offer Shares will be conditional on: +(a) the Stock Exchange granting approval for the listing of, and permission to +deal in, the H Shares in issue and to be issued (including the additional H +Shares which may be issued pursuant to the exercise of the Over-allotment +Option under the Global Offering), on the Main Board of the Stock Exchange +and such approval not subsequently having been withdrawn, revoked or +withheld prior to the Listing Date; +(b) the execution and delivery of the International Underwriting Agreement on or +about the Price Determination Date; and +(c) the obligations of the Hong Kong Underwriters under the Hong Kong +Underwriting Agreement and the obligations of the International +Underwriters under the International Underwriting Agreement becoming and +remaining 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 respective Underwriting +Agreements (unless and to the extent such conditions are validly waived on or before such +dates and times) and, in any event, not later than the date which is 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 dates and times +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 websites of our Company and the Stock Exchange at www.micot.cn +and www.hkexnews.hk , respectively, on the next day following such lapse. In such a +situation, all application monies will be returned, without interest, on the terms set out in +“How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share +Certificates and Refund of Application Monies”. In the meantime, all application monies +will be held in separate bank account(s) with the receiving bank(s) or other bank(s) in +Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong +Kong). +H Share certificates for the Offer Shares will only become valid evidence of title at +8:00 a.m. on Wednesday, June 24, 2026, provided that the Global Offering has become +unconditional in all respects at or before that time. +STRUCTURE OF THE GLOBAL OFFERING +– 290 – + + +--- page 299 --- +DEALINGS IN THE H SHARES +Assuming that the Hong Kong Public Offering becomes unconditional at or before +8:00 a.m. in Hong Kong on Wednesday, June 24, 2026, it is expected that dealings in the H +Shares on the Stock Exchange will commence at 9:00 a.m. on Wednesday, June 24, 2026. +The H Shares will be traded in board lots of 200 H Shares each and the stock code of +the H Shares will be 2335. +STRUCTURE OF THE GLOBAL OFFERING +– 291 – + + +--- page 300 --- +IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES +FULLY ELECTRONIC APPLICATION PROCESS +The Company has adopted a fully electronic application process for the Hong +Kong Public Offering and below are the procedures for application. +This document is available at the website of the Stock Exchange at +http://www.hkexnews.hk/ under the “HKEXnews > New Listings > New Listing +Information” section, and the Company’s website at www.micot.cn. +The contents of this document 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 +You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit +you are applying for: +(i) are 18 years of age or older; (ii) have a Hong Kong address (for the HK eIPO White +Form service only); and (iii) are outside the United States (within the meaning of +Regulation S) or are a person described in paragraph (h)(3) of Rule 902 of Regulation S. +Unless permitted by the Listing Rules or a waiver and/or consent has been granted +by the Stock Exchange to the Company, 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 its close associates; or +• are a Director or any of his/her close associates. +2. Application Channels +The Hong Kong Public Offering period will begin at 9:00 a.m. on Monday, June +15, 2026 and end at 12:00 noon on Thursday, June 18, 2026 (Hong Kong time). +To apply for Hong Kong Offer Shares, you may use one of the following application +channels: +Application Channel Platform T arget Investors Application Time +HK eIPO White Form +service ........ +www.hkeipo.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 Monday, June +15, 2026 until 11:30 a.m. on +Thursday, June 18, 2026 and the +latest time for completing full +payment of application monies +in respect of such applications +will be 12:00 noon on Thursday, +June 18, 2026. +HKSCC EIPO channel . Your broker or custodian who is a +HKSCC Participant will submit +electronic application +instruction 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. +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 292 – + + +--- page 301 --- +The HK eIPO White Form 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. +For those applying through the HK eIPO White Form service, once you complete +payment in respect of any application instructions given by you or for your benefit +through the HK eIPO White Form 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 HK eIPO +White Form service more than once and obtaining different application numbers without +effecting full payment in respect of a particular reference number will not constitute an +actual application. +If you apply through the HK eIPO White Form service, you are deemed to have +authorized the HK eIPO White Form Service Provider to apply on the terms and +conditions in this document, as supplemented and amended by the terms and conditions +of the HK eIPO White Form 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 document 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 document. +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 293 – + + +--- page 302 --- +3. Information Required to Apply +You 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 HK eIPO White Form service, you are required to provide a valid +e-mail address, a contact telephone number and a Hong Kong address. You 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. The number of joint applicants may not exceed four. If you are a firm, +the applicant must be in the individual members’ names. +(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 H shares in a Hong Kong Public Offering. 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 in accordance with market +practice. +(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: +(i) control the composition of the board of directors of the company; (ii) control more than half of +the voting power of the company; or (iii) 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). +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 294 – + + +--- page 303 --- +For those applying through HKSCC EIPO channel, and making an application +under a power of attorney, the Company and the Overall Coordinators, as the Company’s +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: ............................. 200 Shares +Permitted number of Hong +Kong Offer Shares for +application and amount +payable on application/ +successful allotment ............... +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 maximum Offer Price is HK$21.0 per H +Share. +If you are applying through the HKSCC EIPO +channel, your broker or custodian may +require you to pre-fund your application in +such amount as determined by the broker or +custodian, based on the applicable laws and +regulations in Hong Kong. You are +responsible for complying with any such +pre-funding requirement imposed by your +broker or custodian with respect to the +Hong Kong Offer Shares you applied for. +By instructing your broker or custodian to +apply for the Hong Kong Offer Shares on +your behalf through the HKSCC EIPO +channel, you (and, if you are joint +applicants, each of you jointly and severally) +are deemed to have instructed and +authorized HKSCC to cause HKSCC +Nominees (acting as nominee for the +relevant HKSCC Participants) to arrange +payment of the final Offer Price, brokerage, +SFC transaction levy, the Stock Exchange +trading fee and the AFRC transaction levy by +debiting the relevant nominee bank account +at the designated bank for your broker or +custodian. +If you are applying through the HK eIPO +White Form service, you may refer to the +table below for the amount payable for the +number of Hong Kong Offer Shares you have +selected. You must pay the respective +maximum amount payable on application in +full upon application for Hong Kong Offer +Shares. +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 295 – + + +--- page 304 --- +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +No. of Hong +Kong Offer +Shares +applied for +Maximum +Amount +payable (2) on +application/ +successful +allotment +HK$ HK$ HK$ HK$ +200 4,242.36 3,000 63,635.35 40,000 848,471.40 500,000 10,605,892.50 +400 8,484.71 4,000 84,847.15 50,000 1,060,589.26 600,000 12,727,071.00 +600 12,727.07 5,000 106,058.93 60,000 1,272,707.10 700,000 14,848,249.50 +800 16,969.43 6,000 127,270.71 70,000 1,484,824.96 800,000 16,969,428.00 +1,000 21,211.79 7,000 148,482.50 80,000 1,696,942.80 900,000 19,090,606.50 +1,200 25,454.14 8,000 169,694.28 90,000 1,909,060.66 1,000,000 21,211,785.00 +1,400 29,696.49 9,000 190,906.06 100,000 2,121,178.50 2,000,000 42,423,570.00 +1,600 33,938.86 10,000 212,117.86 200,000 4,242,357.00 2,902,800 (1) 61,573,569.50 +1,800 38,181.22 20,000 424,235.70 300,000 6,363,535.50 +2,000 42,423.56 30,000 636,353.56 400,000 8,484,714.00 +Notes: +(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer +Shares initially offered. +(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) or to the HK eIPO White Form Service Provider (for +applications made through the application channel of the HK eIPO White Form service) while the SFC +transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to the SFC, +the Stock Exchange and the AFRC, respectively. +5. Multiple Applications Prohibited +You 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 HK eIPO White Form service, (ii) +HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be +rejected. If you have made an application through the HK eIPO White Form 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. T erms and Conditions of An Application +By applying for Hong Kong Offer Shares through the HK eIPO White Form 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 the +Company and/or the Overall Coordinators, as the Company’s 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; +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 296 – + + +--- page 305 --- +(ii) confirm that you have read and understand the terms and conditions and +application procedures set out in this document and the designated website of +the HK eIPO White Form 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 Hong +Kong Offer Shares set out in this document and they do not apply to you, or +the person(s) for whose benefit you have made the application; +(v) confirm that you have read this document 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 Company, the Joint Sponsors, the Overall Coordinators, the +Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, +the Capital Market Intermediaries, the Underwriters, any of their respective +directors, officers, employees, partners, agents, advisors and any other parties +involved in the Global Offering (the “ Relevant Persons ”), the H Share +Registrar and HKSCC will not be liable for any information and +representations not in this document 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 the Company, 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 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 You 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; +(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 the Company 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 document; +(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 +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 297 – + + +--- page 306 --- +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 the Company 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 HK eIPO White Form service 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 or to the HK eIPO White Form Service Provider and (2) you have +due authority to give electronic application instructions on behalf of that +other person as its agent. +B. PUBLICATION OF RESULTS +Results of Allocation +You can check whether you are successfully allocated any Hong Kong Offer Shares +through: +Platform Date/Time +Applying through the HK eIPO White Form service or HKSCC EIPO channel: +Website . . . . . From the “Allotment Results” page at +www.hkeipo.hk/IPOResult +(alternatively: www.tricor.com.hk/ipo/result ) +with a “search by ID” function. +24 hours, from 11:00 p.m. on +Tuesday, June 23, 2026 to 12:00 +midnight on Monday, June 29, +2026 (Hong Kong time) +The full list of (i) wholly or partially successful +applicants using the HK eIPO White Form +service and HKSCC EIPO channel, and (ii) the +number of Hong Kong Offer Shares +conditionally allotted to them, among other +things, will be displayed at +www.hkeipo.hk/IPOResult (alternatively: +www.tricor.com.hk/ipo/result ) +The Stock Exchange’s website at +www.hkexnews.hk and the Company’s +website at www.micot.cn which will provide +links to the above mentioned websites of the H +Share Registrar. +No later than 11:00 p.m. on Tuesday, +June 23, 2026 +Telephone . . . +852 3691 8488 — the allocation results telephone +enquiry line provided by the H Share Registrar +between 9:00 a.m. and 6:00 p.m. +from Wednesday, June 24, 2026 to +Monday, June 29, 2026 (Hong +Kong time) on a business day +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 298 – + + +--- page 307 --- +For those applying through HKSCC EIPO channel, you may also check with your +broker or custodian from 6:00 p.m. on Monday, June 22, 2026 (Hong Kong time). +HKSCC Participants can log into FINI and review the allotment result from 6:00 +p.m. on Monday, June 22, 2026 (Hong Kong time) on a 24-hour basis and should report any +discrepancies on allotments to HKSCC as soon as practicable. +Allocation Announcement +The Company expects to announce the results of the final Offer Price, 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 the Company’s website at www.micot.cn +by no later than 11:00 p.m. on Tuesday, June 23, 2026 (Hong Kong time). +C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG +OFFER SHARES +You 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: +Your 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 the Company or its agents exercise their discretion to reject your application: +The Company, 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 H 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 the Company 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. You 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; +• the Underwriting Agreements do not become unconditional or are +terminated; +• the Company or the Overall Coordinators believe that by accepting your +application, it or the Company would violate applicable securities or other +laws, rules or regulations. +5. If there is money settlement failure for allotted Offer 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 +banks 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 Offer 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. +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 299 – + + +--- page 308 --- +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 the Company, 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 H SHARE CERTIFICATES AND REFUND OF +APPLICATION MONIES +You will receive one H 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 H Share certificates will be deposited into CCASS as +described below). +No temporary document of title will be issued in respect of the Hong Kong Offer +Shares. No receipt will be issued for sums paid on application. +H Share certificates will only become valid evidence of title at 8:00 a.m. on +Wednesday, June 24, 2026 (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 H Shares prior to the receipt +of H Share certificates or the H Share certificates becoming valid do so entirely at their +own risk. +The right is reserved to retain any H Share certificate(s) and (if applicable) any +surplus application monies pending clearance of application monies. +The following sets out the relevant procedures and time: +HK eIPO White Form service HKSCC EIPO channel +Despatch/collection of H Share certificate 1 +For application of +equal or over +1,000,000 +Hong Kong +Offer Shares ..... +Collection in person from the H +Share Registrar, Tricor Investor +Services Limited, at 17/F, Far +East Finance Centre, 16 +Harcourt Road, Hong Kong +Time: from 9:00 a.m. to 1:00 p.m. +on Wednesday, June 24, 2026 +(Hong Kong time), or any other +place or date notified by the +Company +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 +H 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 +No action by you is required +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 300 – + + +--- page 309 --- +HK eIPO White Form service HKSCC EIPO channel +Note: If you do not collect your H +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 application of less +than 1,000,000 Offer +Shares ........... +Your H Share certificate(s) will be sent +to the address specified in your +application instructions by ordinary +post at your own risk +Date: ............. T uesday, June 23, 2026 +Refund mechanism for surplus application monies paid by you +Date ............. W ednesday, June 24, 2026 Subject to the arrangement between +you and your broker or custodian +Responsible party .... H Share Registrar Your broker or custodian +Application monies paid +through single bank +account .......... +HK eIPO White Form e-Auto Refund +payment instructions to your +designated bank account +Your 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 ......... +Refund cheque(s) will be despatched +to the address as specified in your +application instructions by ordinary +post at your own risk +(1) Except in the event any Severe Weather Signals (as defined below) in force in Hong Kong in the morning +on Tuesday, June 23, 2026 rendering it impossible for the relevant H 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 H Share certificates in accordance with the contingency arrangements as +agreed between them. You may refer to “— E. Severe Weather Arrangements” in this section. +E. SEVERE WEATHER ARRANGEMENTS +The Opening and Closing of the Application Lists +The application lists will not open or close on Thursday, June 18, 2026 if, there +is/are: +a tropical cyclone warning signal number 8 or above; a black rainstorm warning; +and/or Extreme Conditions, +(collectively, “ Severe Weather Signals ”), +in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, June 18, +2026. +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 +document, an announcement will be made and published on the Stock Exchange’s website +at www.hkexnews.hk and the Company’s website at www.micot.cn of the revised +timetable. +If a Severe Weather Signal is hoisted on Tuesday, June 23, 2026, the H Share Registrar +will make appropriate arrangements for the delivery of the H Share certificates to the +CCASS Depository’s service counter so that they would be available for trading on +Wednesday, June 24, 2026. +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 301 – + + +--- page 310 --- +If a Severe Weather Signal is hoisted on Tuesday, June 23, 2026, for application of +less than 1,000,000 Hong Kong Offer Shares, the despatch of physical H Share certificate(s) +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, June 23, 2026 or on +Wednesday, June 24, 2026). +If a Severe Weather Signal is hoisted on Wednesday, June 24, 2026, for application of +1,000,000 Hong Kong Offer Shares or more, physical H Share certificate(s) will be available +for collection in person at the H Share Registrar’s office after the Severe Weather Signal is +lowered or cancelled (e.g. in the afternoon of Wednesday, June 24, 2026 or on Thursday, +June 25, 2026). +Prospective investors should be aware that if they choose to receive physical H +Share certificates issued in their own name, there may be a delay in receiving the H +Share certificates. +F . ADMISSION OF THE H SHARES INTO CCASS +If the Stock Exchange grants the listing of, and permission to deal in, the Shares on +the Stock Exchange and the 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 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 the +HKSCC Operational Procedures in effect from time to time. +All necessary arrangements have been made enabling the H Shares to be admitted +into CCASS. +You 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. +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 +H 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. +HOW TO APPLY FOR THE HONG KONG OFFER SHARES +– 302 – + + +--- page 311 --- +3. Purposes +Your personal data may be used, held, processed, and/or stored (by whatever +means) for the following purposes: +(i) processing your application and refund cheque and HK eIPO White Form +e-Auto Refund payment instruction(s), where applicable, verification of compliance +with the terms and application procedures set out in this document and announcing +results of allocation of Hong Kong Offer Shares; (ii) compliance with applicable +laws and regulations in Hong Kong and elsewhere; (iii) registering new issues or +transfers into or out of the names of the holders of the H Shares including, where +applicable, HKSCC Nominees; (iv) maintaining or updating the register of members +of the Company; (v) verifying identities of applicants for and holders of the H +Shares and identifying any duplicate applications for the H Shares; (vi) facilitating +Hong Kong Offer Shares balloting; (vii) establishing benefit entitlements of holders +of the H Shares, such as dividends, rights issues, bonus issues, etc.; (viii) +distributing communications from the Company and its subsidiaries; (ix) compiling +statistical information and profiles of the holder of the H Shares; (x) disclosing +relevant information to facilitate claims on entitlements; and (xi) 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 H Shares and/or regulators and/or any other purposes to which +applicants and holders of the H Shares may from time to time agree. +4. T ransfer 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: +(i) the Company’s appointed agents such as financial advisors, receiving bank +and overseas principal share registrar; (ii) HKSCC or HKSCC Nominees, who will +use the personal data and may transfer the personal data to the H Share Registrar, in +each case 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); (iii) 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; (iv) 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 (v) 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). +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 document +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 THE HONG KONG OFFER SHARES +– 303 – + + +--- page 312 --- +The following is the text of a report set out on pages I-1 to I-47 received from the Company’s +reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, for +the purpose of inclusion in this Prospectus. +ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE +DIRECTORS OF SHAANXI MICOT PHARMACEUTICAL TECHNOLOGY CO., LTD., +CCB INTERNATIONAL CAPITAL LIMITED AND CHINA MERCHANTS SECURITIES +(HK) CO., LIMITED +Introduction +We report on the historical financial information of Shaanxi Micot Pharmaceutical +Technology Co., Ltd. (ʮ̡) (the “Company”) and its +subsidiaries (together, the “ Group”) set out on pages I-3 to I-47 which comprises the +consolidated statements of financial position of the Group as at December 31, 2024 and +2025, the statements of financial position of the Company as at December 31, 2024 and +2025, and the consolidated statements of profit or loss and other comprehensive income, +the consolidated statements of changes in equity and the consolidated statements of cash +flows of the Group for each of the two years ended December 31, 2025 (the “ T rack Record +Period”) and material accounting policy information and other explanatory information +(together, the “Historical Financial Information ”). The Historical Financial Information +set out on pages I-3 to I-47 forms an integral part of this report, which has been prepared +for inclusion in the prospectus of the Company dated June 15, 2026 (the “ Prospectus”) in +connection with the initial listing of 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 to the Historical Financial Information, and for such internal +control as the directors of the Company 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 (the “ 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. +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 assessment, 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 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 +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 of the Company, as well as evaluating the overall presentation of the Historical +Financial Information. +APPENDIX I ACCOUNTANTS’ REPORT +– I-1 – + + +--- page 313 --- +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 Group’s financial position as at December +31, 2024 and 2025, of the Company’s financial position as of December 31, 2024 and 2025 +and of the Group’s financial performance and cash flows for the Track Record Period in +accordance with the basis of preparation set out in Note 2 to the Historical Financial +Information. +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-3 have been made. +Dividends +We refer to Note 13 to the Historical Financial Information which states that no +dividend has been declared or paid by the Company and its subsidiaries in respect of the +Track Record Period. +Deloitte T ouche T ohmatsu +Certified Public Accountants +Hong Kong +June 15, 2026 +APPENDIX I ACCOUNTANTS’ REPORT +– I-2 – + + +--- page 314 --- +HISTORICAL FINANCIAL INFORMATION OF THE GROUP +Preparation of Historical Financial Information +Set out below is the Historical Financial Information which forms an integral part of +this accountants’ report. +The consolidated financial statements of the Group for the Track Record Period, on +which the Historical Financial Information is based, have been prepared in accordance +with the accounting policies which conform with IFRS Accounting Standards as issued by +International Accounting Standards Board (the “IASB”) and were audited by us in +accordance with International Standards on Auditing as issued by the International +Auditing and Assurance Standards Board (“ Underlying Financial Statements ”). +The Historical Financial Information is presented in Renminbi (“ RMB”), which is +also the functional currency of the Company and its subsidiaries, and all values are +rounded to the nearest thousand (RMB’000) except when otherwise indicated. +CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE +INCOME +For the year ended +31 December +NOTES 2024 2025 +RMB’000 RMB’000 +Other income ........................ 6 4,002 2,301 +Other gains and losses, net ............. 7 2,670 43,268 +Administrative expenses ............... (18,812) (23,490) +Research and development expenses ..... (107,022) (130,089) +Listing expenses ..................... – (9,901) +Finance costs ........................ 8 (37,646) (67,003) +Loss before tax ....................... 9 (156,808) (184,914) +Income tax expense ................... 10 (24) - +Loss for the year ..................... (156,832) (184,914) +Other comprehensive income for the year +Item that will be reclassified to +profit or loss: +Exchange difference arising on +translation of foreign operations ....... 9 2 +T otal comprehensive expense +for the year ....................... (156,823) (184,912) +APPENDIX I ACCOUNTANTS’ REPORT +– I-3 – + + +--- page 315 --- +For the year ended +31 December +NOTE 2024 2025 +RMB’000 RMB’000 +Loss for the year attributable to: +– Owners of the Company ............ (154,632) (182,507) +– Non-controlling interests ........... (2,200) (2,407) +(156,832) (184,914) +Total comprehensive expense for the year +attributable to: +– Owners of the Company ............ (154,623) (182,505) +– Non-controlling interests ........... (2,200) (2,407) +(156,823) (184,912) +Loss per share (RMB) +– Basic and diluted .................. 14 (0.66) (0.75) +APPENDIX I ACCOUNTANTS’ REPORT +– I-4 – + + +--- page 316 --- +CONSOLIDATED STATEMENTS OF FINANCIAL POSITION +As at December 31, +NOTES 2024 2025 +RMB’000 RMB’000 +NON-CURRENT ASSETS +Plant and equipment .................. 15 9,216 6,622 +Right-of-use assets .................... 16 2,842 18,775 +Term deposits ....................... 18 30,300 31,020 +Other receivables ..................... 19 18,923 11,283 +Restricted bank deposits ............... – 1,560 +61,281 69,260 +CURRENT ASSETS +Prepayments and other receivables ....... 19 5,513 24,186 +Financial assets at fair value through profit +or loss (“FVTPL” ) .................. 20 54,611 95,209 +Amount due from a related party ........ 23(d) 652 1,087 +Restricted bank deposits ............... – 8 6 3 +Term deposits ....................... 18 60,540 60,300 +Cash and cash equivalents ............. 18 64,661 80,556 +185,977 262,201 +CURRENT LIABILITIES +Trade and other payables .............. 21 45,580 82,627 +Bank borrowings ..................... 22 1,760 48,100 +Amount due to the Controlling +Shareholder (as defined in Note 1) ....... 23(a) 28,333 – +Lease liabilities ...................... 24 2,259 1,399 +Redemption liabilities ................. 25 – 134,281 +77,932 266,407 +NET CURRENT ASSETS (LIABILITIES) .. 108,045 (4,206) +TOTAL ASSETS LESS CURRENT +LIABILITIES ...................... 169,326 65,054 +APPENDIX I ACCOUNTANTS’ REPORT +– I-5 – + + +--- page 317 --- +As at December 31, +NOTES 2024 2025 +RMB’000 RMB’000 +NON-CURRENT LIABILITIES +Bank borrowings ..................... 22 42,253 – +Lease liabilities ...................... 24 280 202 +Redemption liabilities ................. 25 – 1,024,737 +42,533 1,024,939 +NET ASSETS (LIABILITIES) ........... 126,793 (959,885) +CAPITAL AND RESERVES +Paid-in capital/share capital ............ 29 4,985 5,474 +Reserves (deficits) .................... 106,826 (977,934) +Equity (deficits) attributable to +owners of the Company .............. 1 11,811 (972,460) +Non-controlling interests ............... 14,982 12,575 +TOTAL EQUITY (DEFICITS) ........... 126,793 (959,885) +APPENDIX I ACCOUNTANTS’ REPORT +– I-6 – + + +--- page 318 --- +STATEMENTS OF FINANCIAL POSITION OF THE COMPANY +As at December 31, +NOTES 2024 2025 +RMB’000 RMB’000 +NON-CURRENT ASSETS +Plant and equipment .................. 15 3,221 2,736 +Right-of-use assets .................... 16 1,295 2,405 +Investments in subsidiaries ............. 17 256,778 311,478 +Term deposits ....................... 18 30,300 31,020 +Other receivables ..................... 19 13,647 5,404 +305,241 353,043 +CURRENT ASSETS +Prepayments and other receivables ....... 19 2,981 23,609 +Financial assets at FVTPL .............. 20 20,056 95,209 +Amount due from subsidiaries .......... 23(c) 23,756 33,690 +Restricted bank deposits ............... – 8 6 3 +Term deposits ....................... 18 60,540 60,300 +Cash and cash equivalents ............. 18 57,696 41,733 +165,029 255,404 +CURRENT LIABILITIES +Trade and other payables .............. 21 30,999 61,217 +Bank borrowings ..................... 22 1,760 48,100 +Amount due to the Controlling +Shareholder ....................... 23(a) 28,333 – +Amount due to a subsidiary ............ 23(b) – 26,500 +Lease liabilities ...................... 24 1,165 1,119 +Redemption liabilities ................. 25 – 134,281 +62,257 271,217 +NET CURRENT ASSETS (LIABILITIES) .. 102,772 (15,813) +TOTAL ASSETS LESS CURRENT +LIABILITIES ...................... 408,013 337,230 +NON-CURRENT LIABILITIES +Bank borrowings ..................... 22 42,253 – +Lease liabilities ...................... 24 – 202 +Redemption liabilities ................. 25 – 1,024,737 +42,253 1,024,939 +NET ASSETS (LIABILITIES) ........... 365,760 (687,709) +CAPITAL AND RESERVES +Paid-in capital/share capital ............ 29 4,985 5,474 +Reserves (deficits) .................... 360,775 (693,183) +TOTAL EQUITY (DEFICITS) ........... 365,760 (687,709) +APPENDIX I ACCOUNTANTS’ REPORT +– I-7 – + + +--- page 319 --- +CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY +Attributable to owners of the Company +Paid-in +capital/ +Share +capital +Capital +reserve +Statutory +reserve +T ranslation +reserve +Accumulated +losses +Shares +issued for +share +incentive +scheme Subtotal +Non- +controlling +interests T otal +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +(Note) +At January 1, 2024 .... 4,985 73,268 1,500 (244) (594,905) (300) (515,696) 17,182 (498,514) +Loss for the year ..... – – – – (154,632) – (154,632) (2,200) (156,832) +Other comprehensive +income for the year . . . – – – 9 – – 9 – 9 +Total comprehensive income +(expense) for the year . . – – – 9 (154,632) – (154,623) (2,200) (156,823) +Conversion into a joint +stock company (Note 29) . – (267,399) (1,500) – 268,899 – – – – +Reclassification from +redemption liabilities +(Note 25) ....... – 782,130 – – – – 782,130 – 782,130 +At December 31, 2024 . . . 4,985 587,999 – (235) (480,638) (300) 111,811 14,982 126,793 +Loss for the year ..... – – – – (182,507) – (182,507) (2,407) (184,914) +Other comprehensive +income for the year . . . – – – 2 – – 2 – 2 +Total comprehensive income +(expense) for the year . . – – – 2 (182,507) – (182,505) (2,407) (184,912) +Capital injection from +shareholders (Note 29) . . 489 235,011 – – – – 235,500 – 235,500 +Recognition of redemption +liabilities (Note 25) . . . – (1,137,266) – – – – (1,137,266) – (1,137,266) +At December 31, 2025 ... 5,474 (314,256) - (233) (663,145) (300) (972,460) 12,575 (959,885) +Note: +Pursuant to the relevant laws in the People’s Republic of China (the “ PRC”), each of the entities established in +the PRC is required to transfer 10% of its profit after tax as per statutory financial statements (as determined by +the management of the group entities) to statutory reserve (including the general reserve fund and enterprise +development fund where appropriate). The general reserve fund is discretionary when the fund balance reaches +50% of the registered capital of the respective company and can be used to make up for previous years’ losses or, +expand the existing operations or can be converted into additional capital of the entity. +APPENDIX I ACCOUNTANTS’ REPORT +– I-8 – + + +--- page 320 --- +CONSOLIDATED STATEMENTS OF CASH FLOWS +For the year ended +31 December +2024 2025 +RMB’000 RMB’000 +OPERATING ACTIVITIES +Loss before tax ............................... (156,808) (184,914) +Adjustments for: ............................. +Interest income ............................. (3,235) (2,008) +Gain on fair value changes from financial +assets at FVTPL ........................... (2,028) (865) +Depreciation of plant and equipment ........... 4,853 3,463 +Depreciation of right-of-use assets .............. 3,535 3,111 +Gain on early termination of a lease ............ (414) – +Foreign exchange gains ...................... (228) (480) +Finance costs .............................. 37,646 67,003 +Gain on non-substantial modification of +redemption liabilities ...................... – (42,081) +Operating cash flows before movements in +working capital ............................ ( 1 16,679) (156,771) +Decrease (increase) in an amount due from +a related party ............................. 4 9 (435) +Increase in prepayments and other receivables ...... (1,970) (8,598) +Increase in trade and other payables .............. 10,890 28,674 +Cash used in operations ....................... (107,710) (137,130) +Income tax paid .............................. (32) – +NET CASH USED IN OPERATING ACTIVITIES ... (107,742) (137,130) +INVESTING ACTIVITIES +Interest received ............................. 10,095 1,528 +Payments of right-of-use assets .................. – (16,076) +Purchase of plant and equipment ................ (1,302) (878) +Purchase of financial assets at FVTPL ............. (634,900) (391,500) +Redemption on maturity of financial assets at +FVTPL .................................... 690,910 351,767 +Placement of term deposits ..................... (90,000) (60,000) +Withdrawal of term deposits .................... 80,000 60,000 +Placement of restricted bank deposit ............. – (2,423) +NET CASH FROM (USED IN) INVESTING +ACTIVITIES .............................. 54,803 (57,582) +APPENDIX I ACCOUNTANTS’ REPORT +– I-9 – + + +--- page 321 --- +For the year ended +31 December +2024 2025 +RMB’000 RMB’000 +FINANCING ACTIVITIES +Proceeds from issue of shares (Note 25) ............ – 235,500 +Payments for accrued issue costs (Note 33) ......... – (1,330) +Purchase of additional interest in a subsidiary from +the Controlling Shareholder ................... – (28,333) +Proceeds from subscription price of +restricted share units ........................ – 7,268 +Drawdown of bank borrowings .................. 25,463 5,147 +Repayment of bank borrowings .................. (650) (1,060) +Interest paid for bank borrowings ................ (669) (985) +Repayment of lease liabilities ................... (2,819) (3,906) +Interest paid for lease liabilities ................. (202) (66) +NET CASH FROM FINANCING ACTIVITIES ..... 21,123 212,235 +NET (DECREASE) INCREASE IN CASH AND +CASH EQUIV ALENTS ...................... (31,816) 17,523 +CASH AND CASH EQUIV ALENTS AT +THE BEGINNING OF THE YEAR ............. 95,942 64,661 +EFFECT OF FOREIGN EXCHANGE RATE +CHANGES ................................ 535 (1,628) +CASH AND CASH EQUIV ALENTS AT +THE END OF THE YEAR .................... 64,661 80,556 +APPENDIX I ACCOUNTANTS’ REPORT +– I-10 – + + +--- page 322 --- +NOTES TO THE HISTORICAL FINANCIAL INFORMATION +1. GENERAL +The Company was established in the PRC on January 19, 2007 as a limited liability company. On +December 9, 2024, the Company was converted into a joint stock company with limited liability under the +Company Law of the PRC, with its name changed from Shaanxi Micot Technology Co., Ltd.* (ෳ +ʮ̡) to Shaanxi Micot Pharmaceutical Technology Co., Ltd. (ʮ +̡). +The controlling shareholder (the “ Controlling Shareholder ”) of the Company is Dr. Wang Bing. Dr. Wang +Bing is also the founder of the Company. +The respective address of the registered office and the principal place of business of the Company are set +out in the section headed “Corporate Information” in the Prospectus. +The Group is a biotechnology company specializing in the discovery, development and +commercialization of bi-/multi-specific peptide drugs for the treatment of metabolic diseases as well as +cardiovascular and cerebrovascular diseases. Particulars and principal activities of the subsidiaries are +disclosed in Note 35. +The statutory financial statements of the Company for the year ended December 31, 2024 were prepared +in accordance with the Accounting Standards for Business Enterprises of the PRC and were audited by +Shaanxi Branch of China Audit Asia Pacific Certified Public Accountants LLP*ה +הCertified Public Accountants registered in the PRC. The statutory financial +statements for the year ended December 31, 2025 have not yet been issued. +The Historical Financial Information is presented in Renminbi (“ RMB”), which is also the functional +currency of the Company and its subsidiaries. +* English name for identification purpose only +2. BASIS OF PREPARATION OF HISTORICAL FINANCIAL INFORMATION +The Historical Financial Information has been prepared based on the accounting policies which conform +with IFRS Accounting Standards as issued by the IASB. For the purpose of preparation of the Historical +Financial Information, information is considered material if such information is reasonably expected to +influence decisions made by primary users. In addition, the Historical Financial Information include +applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange +of Hong Kong Limited (“Listing Rules”) and by the Hong Kong Companies Ordinance. +The Historical Financial Information has been prepared on the historical cost basis except for certain +financial instruments that are measured at fair values at the end of each reporting period, as explained in +the material accounting policy information set out in Note 4 below. +As at December 31, 2025, the Group and the Company had net current liabilities of RMB4,206,000 and +RMB15,813,000 and net liabilities of RMB959,885,000 and RMB687,709,000, respectively. The net current +liabilities and net liabilities primarily arise from the redemption liabilities recognized for the shares with +preferential rights amounting to RMB134,281,000 and RMB1,024,737,000 classified under current and +non-current liabilities, respectively, as at December 31, 2025, of which the key terms are detailed in Note +25. +As disclosed in Note 25, all preferential rights including the redemption right shall be suspended upon +the submission of the listing application to the Stock Exchange and be reinstated if the Company fails to +complete the application. Based on the working capital forecast of the Group for the next twelve months, +taking into account (1) the financial resources available to the Group, including cash and cash +equivalents, term deposits, restricted bank deposits and structured bank deposits on hand, (2) a +non-refundable upfront payment amounting to RMB200,000,000 received in February 2026 pursuant to +the license agreement (Note 37), and (3) the extension of the redemption date to June 30, 2027 upon the +submission of the listing application to the Stock Exchange in September 2025, the directors of the +Company believe that the Group will have sufficient cash resources to satisfy its future working capital in +the next twelve months from December 31, 2025. Accordingly, the directors of the Company consider that +it is appropriate that the Historical Financial Information is prepared on a going concern basis. +3. ADOPTION OF IFRS ACCOUNTING STANDARDS +For the purpose of preparing the Historical Financial Information for the Track Record Period, the Group +has consistently applied the accounting policies which conform with IFRS Accounting Standards, which +are effective for the accounting period beginning on January 1, 2025, throughout the Track Record Period. +APPENDIX I ACCOUNTANTS’ REPORT +– I-11 – + + +--- page 323 --- +New and amendments to IFRS Accounting Standards in issue but not yet effective +At the date of this report, the following new and amendments to IFRS Accounting Standards have been +issued which are not yet effective: +Amendments to IAS 21 ........... T ranslation to a Hyperinflationary Presentation Currency 3 +Amendments to IFRS 9 and IFRS 7 .... Amendments to the Classification and Measurement of +Financial Instruments 2 +Amendments to IFRS 9 and IFRS 7 .... Contracts Referencing Nature dependent Electricity 2 +Amendments to IFRS 10 and IAS 28 . . . Sale or Contribution of Assets between an Investor and its +Associate or Joint Venture 1 +Amendments to IFRS Accounting +Standards .................. +Annual Improvements to IFRS Accounting Standards – +Volume 11 2 +IFRS 18 ..................... P r esentation and Disclosure in Financial Statements 3 +IFRS 20 ..................... Regulatory Assets and Regulatory Liabilities 4 +1 Effective for annual periods beginning on or after a date to be determined. +2 Effective for annual periods beginning on or after January 1, 2026. +3 Effective for annual periods beginning on or after January 1, 2027. +4 Effective for annual periods beginning on or after January 1, 2029. +Except for the new IFRS Accounting Standard set out below, the directors of the Company anticipate that +the application of all the other new and amendments to IFRS Accounting Standards will have no material +impact on the consolidated financial statements in the foreseeable future. +IFRS 18 Presentation and Disclosure in Financial Statements +IFRS 18 Presentation and Disclosure in Financial Statements, which sets out requirements on presentation +and disclosures in financial statements, will replace IAS 1 Presentation of Financial Statements . This new +IFRS Accounting Standard, while carrying forward many of the requirements in IAS 1, introduces new +requirements to present specified categories and defined subtotals in the statement of profit or loss; +provide disclosures on management-defined performance measures in the notes to the financial +statements and improve aggregation and disaggregation of information to be disclosed in the financial +statements. In addition, some IAS 1 paragraphs have been moved to IAS 8 Accounting Policies, Changes in +Accounting Estimates and Errors (the title of which will be changed to Basis of Preparation of Financial +Statements upon effective of IFRS 18) and IFRS 7 Financial Instruments: Disclosures . Minor amendments to +IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share are also made. +IFRS 18, and amendments to other standards, will be effective for annual periods beginning on or after +January 1, 2027, with early application permitted. The Group does not plan to early adopt IFRS 18. IFRS +18 will impact the presentation of financial statements (including aggregation and disaggregation of +items within statement of financial position and statement of comprehensive income) of the Group, but in +terms of recognition and measurement, IFRS 18 is not expected to have significant impact on the financial +performance and positions of the Group. +4. MATERIAL ACCOUNTING POLICY INFORMATION +Basis of consolidation +The Historical Financial Information incorporates the financial statements of the Company and its +subsidiaries. Control is achieved when the Company: +• has the power over the investee; +• is exposed, or has rights, to variable returns from its involvement with the investee; and +• has the ability to use its power to affect its returns. +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 listed above. +Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases +when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary +acquired or disposed of during the year are included in the consolidated statements of profit or loss and +other comprehensive income from the date the Group gains control until the date when the Group ceases +to control the subsidiary. +Profit or loss and each item of other comprehensive income are attributed to the owners of the Company +and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the +owners of the Company and to the non-controlling interests even if this results in the non-controlling +interests having a deficit balance. +When necessary, adjustments are made to the financial statements of subsidiaries to bring their +accounting policies in line with the Group’s accounting policies. +All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions +between members of the Group are eliminated in full on consolidation. +Non-controlling interests in subsidiaries are presented separately from the Group’s equity therein, which +represent present ownership interests entitling their holders to a proportionate share of net assets of the +relevant subsidiaries upon liquidation. +Investments in subsidiaries +Investments in subsidiaries are included in the statements of financial position of the Company at cost +less any accumulated impairment loss, if any. +APPENDIX I ACCOUNTANTS’ REPORT +– I-12 – + + +--- page 324 --- +Leases +The Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 Leases +at inception of the contract. Such contract will not be reassessed unless the terms and conditions of the +contract are subsequently changed. +The Group as a lessee +Allocation of consideration to components of a contract +For a contract that contains a lease component and one or more additional lease or non-lease components, +the Group allocates the consideration in the contract to each lease component on the basis of the relative +stand-alone price of the lease component and the aggregate stand-alone price of the non-lease +components, including non-lease building components, unless such allocation cannot be made reliably. +Short-term leases +The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 +months or less from the commencement date and do not contain a purchase option. Lease payments on +short-term leases are recognized as expense on a straight-line basis unless another systematic basis is +more representative of the time pattern in which economic benefits from the leased assets are consumed. +Right-of-use assets +The cost of right-of-use assets includes the amount of the initial measurement of the lease liability. +Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and +adjusted for any remeasurement of lease liabilities. +Right-of-use assets are depreciated on a straight-line basis over the lease term. +The Group presents right-of-use assets as a separate line item on the consolidated statements of financial +position. +Refundable rental deposits +Refundable rental deposits paid are accounted under HKFRS 9 Financial Instruments and initially +measured at fair value. +Lease liabilities +At the commencement date of a lease, the Group recognizes and measures the lease liability at the present +value of lease payments that are unpaid at that date. In calculating the present value of lease payments, +the Group uses the incremental borrowing rate at the lease commencement date if the interest rate +implicit in the lease is not readily determinable. The incremental borrowing rate depends on the term, +currency and start date of the lease and is determined based on a series of inputs including the risk-free +rate based on government bond rates. +The lease payments include fixed payments. +After the commencement date, lease liabilities are adjusted by interest accretion and lease payments. +The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use +assets) whenever: +• the lease term has changed in which case the related lease liability is remeasured by discounting +the revised lease payments using a revised discount rate at the date of reassessment. +• the lease payments change due to changes in which cases the related lease liability is remeasured +by discounting the revised lease payments using the initial discount rate. +• a lease contract is modified and the lease modification is not accounted for as a separate lease (see +below for the accounting policy for “lease modifications”). +The Group presents lease liabilities as a separate line item on the consolidated statements of financial +position. +Lease modifications +The Group accounts for a lease modification as a separate lease if: +• the modification increases the scope of the lease by adding the right to use one or more +underlying assets; and +• the consideration for the leases increases by an amount commensurate with the stand-alone price +for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the +circumstances of the particular contract. +For a lease modification that is not accounted for as a separate lease, the Group remeasures the lease +liability, based on the lease term of the modified lease by discounting the revised lease payments using a +revised discount rate at the effective date of the modification. +The Group accounts for the remeasurement of lease liabilities by making corresponding adjustments to +the relevant right-of-use assets. +Foreign currencies +In preparing the financial statements of each individual group entity, transactions in currencies other +than the functional currency of that entity (foreign currencies) are recognized at the rates of exchanges +prevailing on the dates of the transactions. At the end of each reporting period, monetary items +denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary +items carried at fair value that are denominated in foreign currencies are retranslated at the rates +prevailing on the date when the fair value was determined. Non-monetary items that are measured in +terms of historical cost in a foreign currency are not retranslated. +Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary +items, are recognized in profit or loss in the period in which they arise. +APPENDIX I ACCOUNTANTS’ REPORT +– I-13 – + + +--- page 325 --- +For the purposes of presenting the Historical Financial Information, the assets and liabilities of the +Group’s operations are translated into the presentation currency of the Group (RMB) using exchange +rates prevailing at the end of each reporting period. Income and expenses items are translated at the +average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in +which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, +are recognized in other comprehensive income and accumulated in equity under the heading of +translation reserve. +Borrowing costs +All borrowing costs are recognized in profit or loss in the period in which they are incurred as the Group +does not have any qualifying asset. +Research and development expenditure +Expenditure on research activities is recognized as an expense in the period in which it is incurred. Where +no internally generated intangible asset can be recognized, development expenditure is recognized in +profit or loss in the period in which it is incurred. +Government grants +Government grants are not recognized until there is reasonable assurance that the Group will comply +with the conditions attaching to them and that the grants will be received. +Government grants related to income that are receivable as compensation for expenses or losses already +incurred or for the purpose of giving immediate financial support to the Group with no future related +costs are recognized in profit or loss in the period in which they become receivable. Such grants are +presented under “other income”. +Employee benefits +Retirement benefit costs +The Group participates in government-managed retirement benefit schemes, which are defined +contribution schemes, pursuant to which the Group pays a fixed percentage of its staff’s wages as +contributions to the plans. Payments to defined contribution retirement benefit plans are recognized as +an expense when employees have rendered service entitling them to the contributions. +Short-term employee benefits +Short-term employee benefits are recognized at the undiscounted amount of the benefits expected to be +paid as and when employees rendered the services. All short-term employee benefits are recognized as +an expense unless another IFRS Accounting Standard requires or permits the inclusion of the benefit in +the cost of an asset. +A liability is recognized for benefits accruing to employees (such as wages and salaries) after deducting +any amount already paid. +Share-based payments +Equity-settled share-based payment transactions +Share awards/share options granted to employees and others providing similar services +Equity-settled share-based payments to employees and others providing similar services are measured at +the fair value of the equity instruments at the grant date. +The fair value of the equity-settled share-based payments determined at the grant date without taking +into consideration all non-market vesting conditions is expensed on a straight-line basis over the vesting +period, based on the Group’s estimate of equity instruments that will eventually vest, with a +corresponding increase in equity (share-based payments reserve). At the end of each reporting period, +the Group revises its estimate of the number of equity instruments expected to vest based on assessment +of all relevant non-market vesting conditions. The impact of the revision of the original estimates, if any, +is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a +corresponding adjustment to the share-based payments reserve. +When share options are exercised, the amount previously recognized in share-based payments reserve +will be transferred to capital reserve. When the share options are forfeited after the vesting date or are +still not exercised at the expiry date, the amount previously recognized in share-based payments reserve +will be transferred to accumulated losses. +When shares awards granted are vested, the amount previously recognized in shares issued for share +incentive scheme will be transferred to capital reserve. +Modification to the terms and conditions of the share-based payment arrangements +When the terms and conditions of an equity-settled share-based payment arrangement are modified, the +Group recognizes, as a minimum, the services received measured at the grant date fair value of the equity +instruments granted, unless those equity instruments do not vest because of failure to satisfy a vesting +condition (other than a market condition) that was specified at grant date. In addition, if the Group +modifies the vesting conditions (other than a market condition) in a manner that is beneficial to the +employees, for example, by reducing the vesting period, the Group takes the modified vesting conditions +into consideration over the remaining vesting period. +The incremental fair value granted, if any, is the difference between the fair value of the modified equity +instruments and that of the original equity instruments, both estimated as at the date of modification. +If the modification occurs during the vesting period, the incremental fair value granted is included in the +measurement of the amount recognized for services received over the period from modification date +until the date when the modified equity instruments are vested, in addition to the amount based on the +grant date fair value of the original equity instruments, which is recognized over the remainder of the +original vesting period. +APPENDIX I ACCOUNTANTS’ REPORT +– I-14 – + + +--- page 326 --- +If the modification reduces the total fair value of the share-based arrangement, or is not otherwise +beneficial to the employee, the Group continues to account for the original equity instruments granted as +if that modification had not occurred. +T axation +Income tax expense represents the sum of current and deferred income tax expense. +The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit (loss) +before tax because of income or expense that are taxable or deductible in other years and items that are +never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have +been enacted or substantively enacted by the end of each reporting period. +Deferred tax is recognized on temporary differences between the carrying amounts of assets and +liabilities in the Historical Financial Information and the corresponding tax bases used in the +computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary +differences. Deferred tax assets are generally recognized for all deductible temporary differences to the +extent that it is probable that taxable profits will be available against which those deductible temporary +differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary +difference arises from the initial recognition (other than in a business consolidation) of assets and +liabilities in a transaction that affects neither the taxable profit nor the accounting profit and at the time +of the transaction does not give rise to equal taxable and deductible temporary differences. In addition, +deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of +goodwill. +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 profits will be available to allow all or part +of the asset to be recovered. +Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in +which the liability is settled or the asset realized, based on tax rate (and tax laws) that have been enacted +or substantively enacted by the end of each reporting period. +The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow +from the manner in which the Group expects, at the end the reporting period, to recover or settle the +carrying amount of its assets and liabilities. +For the purposes of measuring deferred tax for leasing transactions in which the Group recognizes the +right-of-use assets and the related lease liabilities, the Group first determines whether the tax deductions +are attributable to the right-of-use assets or the lease liabilities. +For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group +applies IAS 12 Income Taxes requirements to the lease liabilities and the related assets separately. The +Group recognizes a deferred tax asset related to lease liabilities to the extent that it is probable that +taxable profit will be available against which the deductible temporary difference can be utilized and a +deferred tax liability for all taxable temporary differences. +Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax +assets against current tax liabilities and when they relate to income taxes levied to the same taxable entity +by the same taxation authority. +Current and deferred tax are recognized in profit or loss. +Plant and equipment +Plant and equipment are tangible assets that are held for use in the production or supply of goods or +services, or for administrative purposes. Plant and equipment (other than construction in progress) are +stated in the consolidated statements of financial position at cost less subsequent accumulated +depreciation and subsequent accumulated impairment losses, if any. +Plant and equipment in the course of construction for production, supply or administrative purposes are +carried at cost, less any recognized impairment loss. Costs include any costs directly attributable to +bringing the asset to the location and condition necessary for it to be capable of operating in the manner +intended by management. Depreciation of these assets, on the same basis as other plant and equipment, +commences when the assets are ready for their intended use. +Depreciation is recognized so as to write off the cost of assets less their residual values over their +estimated useful lives, using the straight-line method. The estimated useful lives, residual values and +depreciation method are reviewed at the end of each reporting period, with the effect of any changes in +estimate accounted for on a prospective basis. +An item of plant and equipment is derecognized upon disposal or when no future economic benefits are +expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or +retirement of an item of plant and equipment is determined as the difference between the sales proceeds +and the carrying amount of the asset and is recognized in profit or loss. +Impairment on plant and equipment and right-of-use assets +At the end of each reporting period, the Group reviews the carrying amounts of its plant and equipment +and right-of-use assets with finite useful lives to determine whether there is any indication that those +assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the +relevant asset is estimated in order to determine the extent of the impairment loss (if any). +The recoverable amount of plant and equipment and right-of-use assets are estimated individually. When +it is not possible to estimate the recoverable amount individually, the Group estimates the recoverable +amount of the cash-generating unit to which the asset belongs. +In testing a cash-generating unit for impairment, corporate assets are allocated to the relevant +cash-generating unit when a reasonable and consistent basis of allocation can be established, or +otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and +APPENDIX I ACCOUNTANTS’ REPORT +– I-15 – + + +--- page 327 --- +consistent allocation basis can be established. The recoverable amount is determined for the +cash-generating unit or group of cash-generating units to which the corporate asset belongs, and is +compared with the carrying amount of the relevant cash-generating unit or group of cash-generating +units. Recoverable amount is the higher of fair value less costs of disposal and value in use. 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 (or a cash-generating unit) for which the estimates of future cash flows have not been adjusted. +If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying +amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. +For corporate assets or portion of corporate assets which cannot be allocated on a reasonable and +consistent basis to a cash-generating unit, the Group compares the carrying amount of a group of +cash-generating units, including the carrying amounts of the corporate assets or portion of corporate +assets allocated to that group of cash-generating units, with the recoverable amount of the group of +cash-generating units. In allocating the impairment loss, the impairment loss is allocated first to reduce +the carrying amount of any goodwill (if applicable) and then to the other assets on a pro-rata basis based +on the carrying amount of each asset in the unit or the group of cash-generating units. The carrying +amount of an asset is not reduced below the highest of its fair value less costs of disposal (if measurable), +its value in use (if determinable) and zero. The amount of the impairment loss that would otherwise have +been allocated to the asset is allocated pro rata to the other assets of the unit or the group of +cash-generating units. An impairment loss is recognized immediately in profit or loss. +Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating +unit or a group of cash-generating units) is increased to the revised estimate of its recoverable amount, +but so that the increased carrying amount does not exceed the carrying amount that would have been +determined had no impairment loss been recognized for the asset (or a cash-generating unit or a group of +cash-generating units) in prior years. A reversal of an impairment loss is recognized immediately in +profit or loss. +Cash and cash equivalents +Cash and cash equivalents presented on the consolidated statements of financial position include: +(a) cash, which comprises of cash on hand and demand deposits; and +(b) cash equivalents, which comprises of short-term deposits (generally with original maturity of +three months or less). Cash equivalents are held for the purpose of meeting short-term cash +commitments rather than for investment or other purposes. +For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash +and cash equivalents as defined above. +Financial instruments +Financial assets and financial liabilities are recognized when a group entity becomes a party to the +contractual provisions of the instrument. All regular way purchases or sales of financial assets are +recognized and derecognized on a settlement date basis. Regular way purchases or sales are purchases or +sales of financial assets that require delivery of assets within the time frame established generally by +regulation or convention in the market place concerned. +Financial assets and financial liabilities are initially measured at fair value except for trade receivables +arising from contracts with customers which are initially measured in accordance with IFRS 15 Revenue +from Contracts with Customers . Transaction costs that are directly attributable to the acquisition or issue of +financial assets and financial liabilities (other than FVTPL) are added to or deducted from the fair value +of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs +directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized +immediately in profit or loss. +The effective interest method is a method of calculating the amortized cost of a financial asset or financial +liability and of allocating interest income and interest expense over the relevant period. The effective +interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all +fees and points paid or received that form an integral part of the effective interest rate, transaction costs +and other premiums or discounts) through the expected life of the financial asset or financial liability, or, +where appropriate, a shorter period, to the net carrying amount on initial recognition. +Financial assets +Classification and subsequent measurement of financial assets +Financial assets that meet the following conditions are subsequently measured at amortized cost: +• the financial asset is held within a business model whose objective is to collect contractual cash +flows; and +• the contractual terms give rise on specified dates to cash flows that are solely payments of +principal and interest on the principal amount outstanding. +All other financial assets are subsequently measured at FVTPL. +(i) Amortized cost and interest income +Interest income is recognized using the effective interest method for financial assets measured +subsequently at amortized cost. Interest income is calculated by applying the effective interest +rate to the gross carrying amount of a financial asset, except for financial assets that have +subsequently become credit-impaired (see below). For financial assets that have subsequently +become credit-impaired, interest income is recognized by applying the effective interest rate to +the amortized cost of the financial asset from the next reporting period. If the credit risk on the +credit-impaired financial instrument improves so that the financial asset is no longer +credit-impaired, interest income is recognized by applying the effective interest rate to the gross +carrying amount of the financial asset from the beginning of each reporting period following the +determination that the asset is no longer credit-impaired. +APPENDIX I ACCOUNTANTS’ REPORT +– I-16 – + + +--- page 328 --- +(ii) Financial assets at FVTPL +Financial assets that do not meet the criteria for being measured at amortized cost or designated +as fair value through other comprehensive income are measured at FVTPL. +Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any +fair value gains or losses recognized in profit or loss. The net gain or loss recognized in profit or +loss includes any dividend or interest earned on the financial asset and is included in the “other +gains and losses, net” line item. +Impairment of financial assets subject to impairment assessment under IFRS 9 +The Group performs impairment assessment under expected credit loss (“ ECL”) model on financial +assets (including other receivables, amount due from a related party, amounts due from subsidiaries, +restricted bank deposits, terms deposits, and cash and cash equivalents) which are subject to impairment +assessment under IFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit +risk since initial recognition. +Lifetime ECL represents the ECL that will result from all possible default events over the expected life of +the relevant instrument. In contrast, 12-month ECL (“ 12m ECL”) represents the portion of lifetime ECL +that is expected to result from default events that are possible within 12 months after the reporting date. +Assessment are done based on the Group’s historical credit loss experience, and factors that are specific +to the debtors, general economic conditions and an assessment of both the current conditions at the +reporting date as well as the forecast of future conditions. +The Group always recognizes lifetime ECL for trade-related amounts due from subsidiaries. +For all other instruments, the Group measures the loss allowance equal to 12m ECL, unless there has been +a significant increase in credit risk since initial recognition, in which case the Group recognizes lifetime +ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in +the likelihood or risk of a default occurring since initial recognition. +(i) Significant increase in credit risk +In assessing whether the credit risk has increased significantly since initial recognition, 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. In +making this assessment, the Group considers both quantitative and qualitative information that is +reasonable and supportable, including historical experience and forward-looking information +that is available without undue cost or effort. Forward-looking information considered includes +the future prospects of the industries in which the Group’s debtors operate, obtained from +economic expert reports and financial analysts reports, as well as consideration of various +external sources of actual and forecast economic information that relate to the Group’s core +operations. +In particular, the following information is taken into account when assessing whether credit risk +has increased significantly: +• existing or forecast adverse changes in business, financial or economic conditions that are +expected to cause a significant decrease in the debtor’s ability to meet its debt obligations; +• an actual or expected significant deterioration in the operating results of the debtor; +• an actual or expected significant adverse change in the regulatory, economic, or +technological environment of the debtor that results in a significant decrease in the +debtor’s ability to meet its debt obligations. +Irrespective of the outcome of the above assessment, the Group presumes that the credit risk has +increased significantly since initial recognition when contractual payments are more than 30 days +past due, unless the Group has reasonable and supportable information that demonstrates +otherwise. +The Group regularly monitors the effectiveness of the criteria used to identify whether there has +been a significant increase in credit risk and revises them as appropriate to ensure that the criteria +are capable of identifying significant increase in credit risk before the amount becomes past due. +(ii) Definition of default +For internal credit risk management, the Group considers an event of default occurs when +information developed internally or obtained from external sources indicates that the debtor is +unlikely to pay its creditors, including the Group, in full (without taking into account any +collaterals held by the Group). +Irrespective of the above, the Group considers that default has occurred when a financial asset is +more than 90 days past due unless the Group has reasonable and supportable information to +demonstrate that a more lagging default criterion is more appropriate. +(iii) Credit-impaired financial assets +A financial asset is credit-impaired when one or more events that have a detrimental impact on +the estimated future cash flows of that financial asset have occurred. Evidence that a financial +asset is credit-impaired includes observable data about the following events: +(a) significant financial difficulty of the issuer or the borrower; and +(b) a breach of contract, such as a default or past due event. +APPENDIX I ACCOUNTANTS’ REPORT +– I-17 – + + +--- page 329 --- +(iv) Write-off policy +The Group writes off a financial asset when there is information indicating that the counterparty +is in severe financial difficulty and there is no realistic prospect of recovery, for example, when +the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. +Financial assets written off may still be subject to enforcement activities under the Group’s +recovery procedures, taking into account legal advice where appropriate. A write-off constitutes a +derecognition event. Any subsequent recoveries are recognized in profit or loss. +(v) Measurement and recognition of ECL +The measurement of ECL is a function of the probability of default, loss given default (i.e. the +magnitude of the loss if there is a default) and the exposure at default. The assessment of the +probability of default and loss given default is based on historical data and forward-looking +information. Estimation of ECL reflects an unbiased and probability-weighted amount that is +determined with the respective risks of default occurring as the weights. +Generally, the ECL is the difference between all contractual cash flows that are due to the Group +in accordance with the contract and the cash flows that the Group expects to receive, discounted +at the effective interest rate determined at initial recognition. +Interest income is calculated based on the gross carrying amount of the financial asset unless the +financial asset is credit-impaired, in which case interest income is calculated based on amortized +cost of the financial asset. +The Group recognizes an impairment gain or loss in profit or loss for all financial instruments by +adjusting their carrying amount, with the exception of other receivables where the corresponding +adjustment is recognized through a loss allowance account. +Derecognition of financial assets +The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset +expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of +the asset to another entity. +On derecognition of a financial asset measured at amortized cost, the difference between the asset’s +carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. +Financial liabilities and equity +Classification as debt or equity +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 a financial liability and an equity +instrument. +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. Equity instruments issued by the Group are recognized at the proceeds +received, net of direct issue costs. +Financial liabilities +All financial liabilities are subsequently measured at amortized cost using the effective interest method +or at FVTPL. +Financial liabilities at amortized cost +Financial liabilities including bank borrowings, trade and other payables, lease liabilities and amount +due to the Controlling Shareholder are subsequently measured at amortized cost using the effective +interest method. +Redemption liabilities +A contract that contains an obligation to purchase the Group’s equity instruments for cash gives rise to a +financial liability for the present value of the redemption amount, even if the Group’s obligation to +purchase is conditional on the counterparty exercising a right to redeem. The redemption liabilities are +initially recognized as financial liabilities at the present value of the redemption amount, with the +corresponding amount charged against capital reserves within equity. Subsequently, the redemption +liabilities are measured at amortized cost with interest charged in finance costs. If the Group’s obligation +to purchase is terminated, the carrying amount of the financial liability is reclassified to equity. +Derivative financial instruments +Derivatives are initially recognized at fair value at the date when derivative contracts are entered into +and are subsequently remeasured to their fair value at the end of the reporting period. The resulting gain +or loss is recognized in profit or loss. +Derecognition/modification of financial liabilities +The Group derecognizes financial liabilities when, and only when, the Group’s obligations are +discharged, cancelled or have expired. The difference between the carrying amount of the financial +liability derecognized and the consideration paid and payable is recognized in profit or loss. +APPENDIX I ACCOUNTANTS’ REPORT +– I-18 – + + +--- page 330 --- +When the contractual terms of a financial liability are modified, the Group assess whether the revised +terms result in a substantial modification from original terms taking into account all relevant facts and +circumstances including qualitative factors. If qualitative assessment is not conclusive, the Group +considers that the terms are substantially different if the discounted present value of the cash flows under +the new terms, including any fees paid net of any fees received, and discounted using the original +effective interest rate, is at least 10 per cent different from the discounted present value of the remaining +cash flows of the original financial liability. Accordingly, such modification of terms is accounted for as +an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the +extinguishment. The exchange or modification is considered as non-substantial modification when such +difference is less than 10 per cent. +For non-substantial modifications of financial liabilities that do not result in derecognition, the carrying +amount of the relevant financial liabilities will be calculated at the present value of the modified +contractual cash flows discounted at the financial liabilities’ original effective interest rate. +Transaction costs or fees incurred are adjusted to the carrying amount of the modified financial liabilities +and are amortized over the remaining term. Any adjustment to the carrying amount of the financial +liability is recognized in profit or loss at the date of modification. +5. CRITICAL ACCOUNTING JUDGEMENT +In the application of the Group’s accounting policies, the directors of the Company are required to make +judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not +readily apparent from other sources. The estimates and underlying assumptions are based on historical +experience and other factors that are considered to be relevant. Actual results may differ from these +estimates. +The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting +estimates are recognized in the period in which the estimate is revised if the revision affects only that +period, or in the period of the revision and future periods if the revision affects both current and future +periods. +Critical judgement in applying accounting policies +The following is the critical judgement that the directors of the Company have made in the process of +applying the Group’s accounting policies and that has the most significant effect on the amounts +recognized in the Historical Financial Information. +Research and development expenditures +Development expenses incurred on the Group’s product pipelines are capitalized and deferred only +when the Group can demonstrate the technical feasibility of completing the intangible assets 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 pipeline and the +ability to measure reliably the expenditure during the development. Development expenses which do not +meet these criteria are expensed when incurred. The management of the Group assesses the progress of +each of the research and development projects and determines that the Group’s product pipelines do not +meet the above said capitalization criteria. During the Track Record Period, all the development costs are +expensed when incurred. +6. OTHER INCOME +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Interest income on bank deposits ..................... 3,235 2,008 +Government grants (Note) .......................... 7 6 7 2 9 3 +4,002 2,301 +Note: The government grants mainly comprise industry-related subsidies and incentives received upon +fulfilling the conditions for compensation of research and development expenses and other costs +or losses already incurred, or as immediate financial support with no future related costs and not +related to any assets. +7. OTHER GAINS AND LOSSES, NET +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Gain on non-substantial modification of redemption liabilities . . . – 42,081 +Gain on early termination of a lease ................... 4 1 4 – +Gain on fair value changes from financial assets at FVTPL ..... 2,028 865 +Net foreign exchange gains ......................... 2 2 8 4 8 0 +Others ...................................... – (158) +2,670 43,268 +APPENDIX I ACCOUNTANTS’ REPORT +– I-19 – + + +--- page 331 --- +8. FINANCE COSTS +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Interest expense on: +– bank borrowings ............................. 6 6 9 9 8 5 +– lease liabilities .............................. 2 0 2 6 6 +– redemption liabilities ........................... 36,775 65,952 +37,646 67,003 +9. LOSS BEFORE TAX +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Loss before tax for the year has been arrived at after charging: +Auditor’s remuneration ........................... 3 0 3 0 +Depreciation of plant and equipment ................... 4,853 3,463 +Depreciation of right-of-use assets ..................... 3,535 3,111 +T otal depreciation .............................. 8,388 6,574 +Staff costs +Directors’ and chief executive’s remuneration (Note 11) ....... 3,390 3,344 +Other staff costs +– salaries and other benefit ........................ 33,370 43,743 +– retirement benefits ............................ 2,575 3,334 +T otal staff costs ................................ 39,335 50,421 +10. INCOME TAX EXPENSE +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +PRC Enterprise Income Tax (“ EIT” ).................... +– current tax ................................. 2 6 – +– over provision in prior years ...................... ( 2 ) – +Deferred tax (Note 26) ............................ – – +24 – +Under the Law of the PRC on Enterprise Income Tax (the “ EIT Law”) and Implementation Regulation of +the EIT Law, the tax rate of the group entities established in the PRC (other than those as described +below) is 25% during the Track Record Period. +Certain subsidiaries of the Company qualified as a Small and Micro Enterprise, and relevant taxable +income was calculated at a reduced base of 25% and EIT was levied at the preferential rate of 20% during +the Track Record Period. +The Group had no estimated assessable profit that was subject to Hong Kong Profits Tax during Track +Record Period. +APPENDIX I ACCOUNTANTS’ REPORT +– I-20 – + + +--- page 332 --- +The taxation expense for the Track Record Period can be reconciled to the loss before tax per the +consolidated statements of profit or loss and other comprehensive income as follows: +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Loss before tax ................................. (156,808) (184,914) +Tax credit at the applicable income tax rate of 25% .......... (39,202) (46,229) +Over provision in prior years ........................ ( 2 ) – +Tax effect of expenses not deductible for tax purposes ........ 7,199 16,574 +Tax effect of income not taxable for tax purposes ............ – (10,520) +Tax effect of super deduction on research and +development expenses ........................... (17,285) (13,556) +Income tax at concessionary rate ...................... (32) – +Tax effect of tax losses not recognized ................... 49,346 53,731 +Income tax expense .............................. 24 – +11. DIRECTORS’, CHIEF EXECUTIVE’S’ AND EMPLOYEES’ EMOLUMENTS +Directors’ and Chief Executive’s emoluments +Details of the emoluments paid to the individuals who were appointed as the executive and +non-executive directors of the Company for the service provided to the Group during the Track Record +Period are as follows: +Salaries, +allowance +and +benefits +in kind +Performance- +related +bonuses +Retirement +benefits T otal +RMB’000 RMB’000 RMB’000 RMB’000 +For the year ended December 31, 2024 +Executive directors: +Dr. Wang Bing (Note i) .............. 1,600 442 38 2,080 +Dr. Yu Weiping ................... 1,208 102 – 1,310 +Non-executive directors: +D r . W a n g M e i ................... – – – – +Mr. Wang Yiqiang ................. – – – – +Mr. Ju Hangsheng ................. – – – – +Dr. Song Gaoguang ................ – – – – +Mr. Lin Xianghong ................ – – – – +2,808 544 38 3,390 +APPENDIX I ACCOUNTANTS’ REPORT +– I-21 – + + +--- page 333 --- +Salaries, +allowance +and +benefits +in kind +Performance- +related +bonuses +Retirement +benefits T otal +RMB’000 RMB’000 RMB’000 RMB’000 +For the year ended December 31, 2025 +Executive directors: +Dr. Wang Bing (Note i) .............. 1,605 401 38 2,044 +Dr. Yu Weiping ................... 1,200 100 – 1,300 +Non-executive directors: +D r . W a n g M e i ................... – – – – +Mr. Wang Yiqiang (Note ii) ............ – – – – +Mr. Ju Hangsheng (Note ii) ........... – – – – +Dr. Song Gaoguang ................ – – – – +Mr. Lin Xianghong (Note ii) ........... – – – – +Mr. You Xiangdong (Note iii) .......... – – – – +Dr. Wang Nayi (Note iii) ............. – – – – +2,805 501 38 3,344 +Notes: +i Dr. Wang Bing is an executive director and the Chief Executive Officer of the Company +throughout the Track Record Period. His emoluments disclosed above include those for services +rendered by him as the Chief Executive Officer of the Company. +The emoluments of executive directors shown above were mainly for their services in connection +with the management of the affairs of the Company and the Group. The performance related +bonuses were determined by the management of the Group by reference to the performance. +ii. Mr. Wang Yiqiang, Mr. Lin Xianghong and Mr. Ju Hangsheng resigned as non-executive directors +of the Company on 28 August 2025. +iii. Mr. You Xiangdong and Dr. Wang Nayi were appointed as non-executive directors of the +Company on 28 August 2025. +Dr. Wang Mei did not receive any emoluments from the Group during the Track Record Period. Mr. Wang +Yiqiang, Mr. Ju Hangsheng, Dr. Song Gaoguang, Mr. Lin Xianghong, Mr. Youxiangdong and Dr. Wang +Nayi did not receive emoluments during the Track Record Period, and they also held positions in the +corporate shareholders of the Company (“ Shareholder’s Entities ”), and their emoluments were borne by +the respective Shareholder’s Entities for the services rendered to those entities. In the opinion of the +directors of the Company, it is not practicable to allocate their remuneration to the Group. +There was no arrangement under which a director waived or agreed to waive any emoluments during the +Track Record Period. +12. FIVE HIGHEST PAID EMPLOYEES +Five individuals with the highest emoluments +The five highest paid employees of the Group during the Track Record Period included two and two +directors, details of whose remuneration are set out in Note 11 above. Details of the remuneration for the +year of the remaining three and three highest paid employees who are not directors of the Company are +as follows: +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Salaries, wages and allowance ....................... 3,532 4,792 +Performance related bonuses ........................ 2 7 3 8 7 8 +Retirement benefits .............................. 1 9 0 1 8 8 +3,995 5,858 +APPENDIX I ACCOUNTANTS’ REPORT +– I-22 – + + +--- page 334 --- +The number of the highest paid employees who are not the directors whose remuneration fell within the +following bands is as follows: +For the year ended +December 31, +2024 2025 +Number of +employees +Number of +employees +HK$1,000,001 to HK$1,500,000 ....................... 2 1 +HK$1,500,001 to HK$2,000,000 ....................... 1 1 +HK$2,000,001 to HK$2,500,000 ....................... – 1 +33 +No emoluments were paid by the Group to the directors or the five highest paid individuals (including +directors and employees), as an inducement to join or upon joining the Group or as compensation for loss +of office during the Track Record Period. +13. DIVIDENDS +No dividend was declared or paid by the Company and its subsidiaries during the Track Record Period, +nor has any dividend been proposed since the end of the Track Record Period. +14. LOSS PER SHARE +The calculation of the basic and diluted loss per share attributable to owners of the Company is based on +the following analysis: +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Loss for the year attributable to owners of the Company for the +purpose of basic and diluted loss per share .............. (154,632) (182,507) +’000 ’000 +Number of shares +Weighted average number of ordinary shares for the purpose of +basic and diluted loss per share ..................... 234,250 242,950 +The Company was converted from a limited liability company to a joint stock company with limited +liability on December 5, 2024, 4,985,000 ordinary shares with par value of RMB1 each were issued and +allotted to the respective shareholders of the Company according to the paid-in capital registered under +these shareholders on that day. For the purpose of calculating basic loss per share, the number of shares +in issue was deemed to be the weighted average number of ordinary shares, excluding the 300,000 shares +held for share incentive scheme as disclosed in Note 28, as if the Company’s conversion into a joint stock +limited liability company and share subdivision as disclosed in Note 37 had occurred on January 1, 2024. +For the purpose of calculation of diluted loss per share for the years ended December 31, 2024 and 2025, +the potential ordinary shares and the effect of the redemption liabilities were not included as their +inclusion would result in a decrease in loss per share. +APPENDIX I ACCOUNTANTS’ REPORT +– I-23 – + + +--- page 335 --- +15. PLANT AND EQUIPMENT +The Group +Machinery +and +equipment +Motor +vehicles +Computer +equipment +and software +Office +equipment +Leasehold +improvement +Construction +in progress T otal +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +Cost +At January 1, 2024 ...... 20,796 1,337 2,557 735 5,227 154 30,806 +Additions .......... 5 6 8 – 6 2 4 7 – 1 0 3 1,302 +Transfer ........... 2 57–––– (257) – +Exchange adjustments .... 12–1––– 1 3 +At December 31, 2024 .... 21,633 1,337 3,182 742 5,227 – 32,121 +Additions .......... 6 4 0 – 2 326–– 8 78 +Exchange adjustments .... (21) – (1) – – – (22) +At December 31, 2025 .... 22,252 1,337 3,413 748 5,227 – 32,977 +Depreciation +At January 1, 2024 ...... 10,035 1,268 2,021 465 4,257 – 18,046 +Provided for the year .... 3,558 – 544 119 632 – 4,853 +Exchange adjustments .... 6–––––6 +At December 31, 2024 .... 13,599 1,268 2,565 584 4,889 – 22,905 +Provided for the year .... 2,746 – 412 85 220 – 3,463 +Exchange adjustments .... (12) – (1) – – – (13) +At December 31, 2025 .... 16,333 1,268 2,976 669 5,109 – 26,355 +Carrying values +At December 31, 2024 .... 8,034 69 617 158 338 – 9,216 +At December 31, 2025 .... 5,919 69 437 79 118 – 6,622 +The Company +Machinery and +equipment Motor vehicles +Computer +equipment and +software +Office +equipment +Leasehold +improvement T otal +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +Cost +At January 1, 2024 ...... 9,488 1,337 2,038 505 5,227 18,595 +Additions .......... 5 4 3 – 6 2 4 7 – 1,174 +At December 31, 2024 ..... 10,031 1,337 2,662 512 5,227 19,769 +Additions .......... 5 8 8 – 2 3 2 6 – 8 2 6 +At December 31, 2025 ..... 10,619 1,337 2,894 518 5,227 20,595 +Depreciation +At January 1, 2024 ...... 6,296 1,268 1,691 356 4,257 13,868 +Provided for the year ..... 1,538 – 434 76 632 2,680 +At December 31, 2024 ..... 7,834 1,268 2,125 432 4,889 16,548 +Provided for the year . . . . . 672 – 378 41 220 1,311 +At December 31, 2025 ..... 8,506 1,268 2,503 473 5,109 17,859 +Carrying values +At December 31, 2024 ..... 2,197 69 537 80 338 3,221 +At December 31, 2025 ..... 2,113 69 391 45 118 2,736 +APPENDIX I ACCOUNTANTS’ REPORT +– I-24 – + + +--- page 336 --- +The above items of plant and equipment, after taking into account the residual values, are depreciated on +a straight-line basis over their estimated useful lives at the following: +Machinery and equipment ......................... 5 years +Motor vehicles ................................. 4 years +Computer equipment and software .................... 3 years +Office equipment ............................... 5 years +Leasehold improvement ........................... 5 years or the shorter of +the relevant lease terms +16. RIGHT-OF-USE ASSETS +The Group +Leasehold +land +Leased +properties T otal +RMB’000 RMB’000 RMB’000 +Carrying amount +As at December 31, 2024 ................... – 2,842 2,842 +As at December 31, 2025 ................... 15,915 2,860 18,775 +Depreciation charge +For the year ended December 31, 2024 .......... – 3,535 3,535 +For the year ended December 31, 2025 .......... 1 6 1 2,950 3,111 +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Expense relating to short-term leases ................... 1 8 1 2 7 +Total cash outflow for leases ......................... (3,202) (20,075) +The Company +Leased +properties +RMB’000 +Carrying amount +As at December 31, 2024 ....................................... 1,295 +As at December 31, 2025 ....................................... 2,405 +Depreciation charge +For the year ended December 31, 2024 .............................. 2,036 +For the year ended December 31, 2025 .............................. 1,858 +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Expense relating to short-term leases ................... 1 4 9 2 7 +Total cash outflow for leases ......................... (2,324) (2,871) +For the Track Record Period, the Group and the Company lease properties for its operations and research +activities. Lease contracts are entered into for fixed term of 1 year to 3 years. Lease terms are negotiated +on an individual basis and contain different terms and conditions. In determining the lease term and +assessing the length of the non-cancellable period, the Group and the Company apply the definition of a +contract and determines the period for which the contract is enforceable. +APPENDIX I ACCOUNTANTS’ REPORT +– I-25 – + + +--- page 337 --- +The Group and the Company regularly entered into short-term leases for machinery and equipment. As +at December 31, 2024 and 2025, the portfolio of short-term leases is similar to the portfolio of short-term +leases to which the short-term lease expense disclosed above. +17. INVESTMENTS IN SUBSIDIARIES +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Cost of investments .............................. 256,778 311,478 +18. CASH AND CASH EQUIV ALENTS/TERM DEPOSITS/RESTRICTED BANK DEPOSITS +The Group +Cash and cash equivalents include demand deposits and short-term deposits (with original maturity of +three months or less) for the purpose of meeting the Group’s short term cash commitments. +As at December 31, 2024 and 2025, cash and cash equivalents carry interest at market rates ranging from +0.05% to 0.65% and 0.01% to 0.65% per annum, respectively. The term deposits are within a term from 1 +year to 3 years and carry interest rates ranging from 1.80% to 2.40% and 1.20% to 2.40% per annum, +respectively. The restricted bank deposits are within a term from 1 year to 8 years and carry interest at +rates ranging from 0.70% to 1.1% per annum as at 31 December 2025. +The Company +Cash and cash equivalents include demand deposits and short-term deposits (with original maturity of +three months or less) for the purpose of meeting the Company’s short term cash commitments. +As at December 31, 2024 and 2025, cash and cash equivalents carry interest at market rates ranging from +0.05% to 0.65% and 0.05% to 0.65% per annum, respectively. The term deposits are within a term from 1 +year to 3 years and carry interest rates ranging from 1.80% to 2.40% and 1.20% to 2.40% per annum, +respectively. The restricted bank deposits are within a term of 1 year and carry interest rates ranging from +0.7% to 0.8% per annum as at 31 December 2025. +Details of the impairment assessment are set out in Note 32. +19. PREPA YMENTS AND OTHER RECEIV ABLES +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Deferred issue costs .............................. – 2,435 +Prepaid listing expenses ........................... – 8 +Other receivables ................................ 2 0 4 3 7 4 +Rental deposits for right-of-use assets ................... 2 8 1 2 8 1 +Prepayments for research and development services ......... 4,900 9,150 +Value added tax (“VAT ”) recoverable ................... 18,723 22,604 +Other prepayments .............................. 3 2 8 6 1 7 +24,436 35,469 +Less: Amounts recoverable within one year shown under +current assets ............................. (5,513) (24,186) +Amounts shown under non-current assets ................ 18,923 11,283 +APPENDIX I ACCOUNTANTS’ REPORT +– I-26 – + + +--- page 338 --- +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Deferred issue costs .............................. – 2,435 +Prepaid listing expenses ........................... – 8 +Other receivables ................................ 1 2 2 2 8 4 +Rental deposits for right-of-use assets ................... 8 1 8 1 +Prepayments for research and development services ......... 2,524 8,898 +VAT recoverable ................................ 13,647 16,725 +Others ...................................... 2 5 4 5 8 2 +16,628 29,013 +Less: Amounts recoverable within one year shown under +current assets ............................. (2,981) (23,609) +Amounts shown under non-current assets ................ 13,647 5,404 +20. FINANCIAL ASSETS AT FVTPL +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Structured bank deposits (Note) ...................... 54,611 95,209 +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Structured bank deposits (Note) ...................... 20,056 95,209 +Note: The balance of structured bank deposits has a flexible maturity period of no more than six +months. The yield rate stipulated in the contract is floating and linked to the performance of the +underlying assets, such as gold market price and certain exchange rates. +APPENDIX I ACCOUNTANTS’ REPORT +– I-27 – + + +--- page 339 --- +21. TRADE AND OTHER PA YABLES +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Trade payables and accruals for research +and development expenses ........................ 33,371 53,690 +Payroll payable ................................ 6,491 8,818 +Other tax payables .............................. 4 0 8 6 7 6 +Government grant collected on behalf of employees ......... 3,157 3,053 +Accrued listing expenses .......................... – 4,226 +Accrued issue costs .............................. – 1,105 +Cash received under the Share Incentive Scheme (Note) ....... – 7,268 +Others ...................................... 2,153 3,791 +45,580 82,627 +Note: The balance represents the cash received for the subscription price of the restricted share units +granted under the Share Incentive Scheme (as defined in Note 28) to certain employees and key +management personnel. Since the restricted share units granted haven’t yet vested, the +subscription price received may be returned to the grantees if they cease employment prior to the +satisfaction of the vesting conditions, in which case the Company has the right to repurchase the +relevant restricted share units. +The average credit term of trade payables is generally ranged between 15 to 90 days. +The following is an aging analysis of trade payables presented based on the invoice date and accruals +which have not yet been billed at the end of each reporting period: +As at December 31, +2024 2025 +RMB’000 RMB’000 +1-90 days .................................... 1,158 630 +91-365 days ................................... 1,575 319 +1-2 years ..................................... 4,351 20 +2-3 years ..................................... 4 4 0 1,925 +Over 3 years .................................. 2 0 7 6 4 4 +7,731 3,538 +Not yet billed .................................. 25,640 50,152 +33,371 53,690 +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Trade payables and accruals for research and +development expenses ........................... 25,664 46,132 +Payroll payable ................................ 4,422 6,280 +Other tax payables .............................. 2 0 5 5 3 4 +Accrued listing expenses .......................... – 4,226 +Accrued issue costs .............................. – 1,105 +Others ...................................... 7 0 8 2,940 +30,999 61,217 +The normal credit term of trade payables is generally ranged between 15 to 90 days. +APPENDIX I ACCOUNTANTS’ REPORT +– I-28 – + + +--- page 340 --- +The following is an aging analysis of trade payables presented based on the invoice date and accruals +which have not yet been billed at the end of each reporting period: +As at December 31, +2024 2025 +RMB’000 RMB’000 +1-90 days .................................... 4 1 8 5 3 5 +91-365 days ................................... 1,575 102 +1-2 years ..................................... 4 6 7 2 0 +2-3 years ..................................... 4 4 0 1 +Over 3 years .................................. 4 4 4 8 0 +2,944 1,138 +Not yet billed .................................. 22,720 44,994 +25,664 46,132 +22. BANK BORROWINGS +The Group and the Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Bank borrowings +– Unsecured and unguaranteed ..................... 44,013 48,100 +The carrying amount of the above borrowings are analyzed based on contractual repayment date as +follows: +As at December 31, +2024 2025 +RMB’000 RMB’000 +The carrying amounts of the borrowing are repayable: +Within one year ............................... 1,760 48,100 +Within a period of more than one year but not +exceeding two years ........................... 42,253 – +44,013 48,100 +Less: Amounts due within one year shown under +current liabilities .......................... (1,760) (48,100) +Amounts shown under non-current liabilities ............. 42,253 – +The ranges of effective interest rate of the Group and the Company’s bank borrowings are as follows: +As at December 31, +2024 2025 +Effective interest rate per annum: +– Variable-rate borrowings ........................ 2.30%-2.50% 1.85%-1.95% +The Group’s and the Company’s variable-rate borrowings carry interest at 115 basis points below the +one-year loan prime rate in the PRC. Interest rate is reset every twelve months. +In respect of bank borrowings with carrying amount of RMB44,013,000 and RMB48,100,000 as at +December 31, 2024, and 2025, respectively, the Company may be required to make immediate repayment +of bank borrowings if any of the following events occurs during the borrowing term: +• A change in the ownership structure or the controlling shareholder; +• A transfer of ownership of the pipeline(s); +• Fails to complete an initial public offering by December 31, 2025 and trigger share redemption +obligation under the relevant agreements as at December 31, 2024. An extension was +subsequently obtained in 2025, extending the initial public offering deadline to June 30, 2026. +The Company has complied with the relevant covenants on or before the end of each reporting period. +APPENDIX I ACCOUNTANTS’ REPORT +– I-29 – + + +--- page 341 --- +23. AMOUNT(S) DUE FROM (TO) THE CONTROLLING SHAREHOLDER/(A) SUBSIDIARY/ +SUBSIDIARIES/A RELATED PARTY +(a) Amount due to the Controlling Shareholder +The Group and the Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Dr. Wang Bing ............................ 28,333 – +Note: The balance as at January 1, 2024 is RMB28,333,000. On August 22, 2023, the Company +entered into an agreement with Dr. Wang Bing, the Controlling Shareholder of the +Company, to acquire his equity interest in Xi’an Biocare for a total consideration of +RMB58,300,000. The outstanding amount of RMB28,333,000 as at December 31, 2024 has +been paid in cash during the year ended December 31, 2025. +The balances as at December 31, 2024 is non-trade related, unsecured, unguaranteed, repayable +on demand and non-interest bearing. +(b) Amount due to a subsidiary +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +ʮ̡ +(Micot (Suzhou) Pharmaceutical Co., Ltd*) +(“Suzhou Pharmaceutical ” ) .................. – 26,500 +Note: The balance as at January 1, 2024 is nil. The balance as at December 31, 2025 is non-trade +related, unsecured, unguaranteed, repayable on demand and non-interest bearing. +* English name for identification purpose only +(c) Amounts due from subsidiaries +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +T rade in nature (Note a) +ʮ̡ +(Shanghai Xitaili Biomedical Technology Co., Ltd.*) +(“Shanghai Xitaili ” ) ....................... 12,303 18,103 +Xi’an Biocare ............................. 8,598 9,732 +20,901 27,835 +Non-trade in nature (Note b) +ʮ̡(Micot (Suzhou) Technology +Co., Ltd.*) (“Suzhou T echnology ” ) .............. – 3,000 +Xi’an Biocare ............................. 2,855 2,855 +2,855 5,855 +23,756 33,690 +Notes: +(a) The total balance as at January 1, 2024 is amounted to RMB30,945,000. The balances as at +December 31, 2024, and 2025 are trade related, unsecured, interest free and the credit +period granted is 30 days. +APPENDIX I ACCOUNTANTS’ REPORT +– I-30 – + + +--- page 342 --- +(b) The total balance as at January 1, 2024 is amounted to RMB2,855,000. The balance as at +December 31, 2024, and 2025 are non-trade related, unsecured, interest free and +repayment on demand. +Its maximum amounts outstanding during the years ended December 31, 2024 and 2025 +are RMB2,855,000 and RMB5,855,000, respectively. +* English name for identification purpose only +The following is an aging analysis of trade related amounts due from subsidiaries presented +based on the dates of services delivery at the end of each reporting period: +As at December 31, +2024 2025 +RMB’000 RMB’000 +1-30 days ................................ 9 7 4 3,869 +30-365 days .............................. 3,551 3,065 +1-2 years ................................ 16,376 4,525 +2-3 years ................................ – 16,376 +20,901 27,835 +(d) Amount due from a related party +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +ʮ̡ +(Xi’an Zhongrui Zekang Enterprise Management +Consulting Co., Ltd.*) (“ Zhongrui Zekang” ) ........ 6 5 2 1,087 +Note: The balance as at January 1, 2024 is RMB701,000. Zhongrui Zekang is the general partner +of the Employee Incentive Platform (as defined in Note 28), collecting the employees’ +payments of exercise or subscription prices for the share options/shares under the share +incentive scheme on behalf of the Company. The balances as at December 31, 2024 and +2025 are non-trade related, unsecured, interest free and repayment on demand. +Its maximum amounts outstanding during the years ended December 31, 2024 and 2025 +are RMB709,000 and RMB1,087,000, respectively. +The amount due from Zhongrui Zekang had been settled as of the date of this prospectus. +24. LEASE LIABILITIES +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Within one year ................................ 2,259 1,399 +Within a period of more than one year but not more than +two years ................................... 2 8 0 2 0 2 +2,539 1,601 +Less: Amount due for settlement within one year +shown under current liabilities .................. (2,259) (1,399) +Amount shown under non-current liabilities .............. 2 8 0 2 0 2 +The weighted average incremental borrowing rates applied to the Group’s lease liabilities range from +2.50% to 4.65% per annum as at December 31, 2024, and 3.50% to 4.45% per annum as at December 31, +2025. +APPENDIX I ACCOUNTANTS’ REPORT +– I-31 – + + +--- page 343 --- +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Within one year ................................ 1,165 1,119 +Within a period of more than one year but not more than +two years ................................... – 2 0 2 +1,165 1,321 +Less: Amount due for settlement within one year +shown under current liabilities .................. (1,165) (1,119) +Amount shown under non-current liabilities .............. – 2 0 2 +The weighted average incremental borrowing rates applied to lease liabilities range from 2.50% to 4.45% +per annum as at December 31, 2024 and 3.50% to 4.45% per annum as at December 31, 2025. +25. REDEMPTION LIABILITIES +The Group and the Company +Since the date of incorporation, the Company has completed several rounds of financing by issuing +shares with preferential rights to investors (the “ Investors”). Details of shares with preferential rights are +set out below. +Date of agreement +Subscription +price per share +Number of +ordinary shares +issued +T otal +consideration +RMB or +equivalent to +RMB +Series A .... July 30, 2019 RMB166.6667/ +United States Dollar +(“USD”) 23.5833 +690,000 115,000,000 +Series B .... February 21, 2021 RMB365.8537/USD56.1582 984,000 360,000,000 +Series B1 . . . August 30, 2021 RMB470.6889 138,095 65,000,000 +Series C .... January 16, 2023 RMB550.6957 172,509 95,000,000 +Series D .... June 27, 2025/ +September 19, 2025/ +September 24, 2025/ +September 26, 2025 +RMB481.4819 489,115 235,500,000 +2,473,719 870,500,000 +The key terms of preferential rights are as follows: +(a) Redemption right +The Investors have the right to require the Company and/or the founder to redeem their +investments for cash upon certain events, including (i) a non-completion of a qualified initial +public offering of the Company by June 30, 2027 (extended from June 30, 2026 after the Company +submitted its listing application to the Stock Exchange in September 2025 and the application is +still under review); or (ii) a change of control of the ultimate controller; or (iii) if the Company, +existing shareholders, or the ultimate controller seriously violate the provision of the transaction +documents; or (iv) if the representations, warranties, and covenants made by the Company, its +existing shareholders, or ultimate controllers to the Investors to be found to contain materially +false, misleading, or omitted information, and such inaccuracies cause a material adverse effect +on the Company; (v) if the ultimate controller or the Company becomes involved in any disputes +due to the infringement of third-party intellectual property rights related to certain research and +development projects, causing significant adverse effects on the Company or leading to +substantial compensation. +In addition to the foregoing events, certain Series D investor has the right to require the Company +and/or the founder to redeem its investment upon certain events including if the Company fails +to obtain the construction permit for the Company’s construction project in Taizhou Bay +Economic and Technological Development Zone within 10 months after acquiring the land use +right in that area. Such event results in the Company’s redemption liabilities to this investor being +classified as current liabilities. +The redemption amount is the original investment principal from the investors, plus a simple +interest of 8% per annum calculated on for Series D investors, or 12% per annum for Series A, +Series B, Series B1 and Series C investors. +APPENDIX I ACCOUNTANTS’ REPORT +– I-32 – + + +--- page 344 --- +(b) Liquidation preference +In the event of a legal liquidation (refers to the liquidation, dissolution or winding up of the +Company) or a deemed liquidation (refers to the change of control of the Company or the sale of +all or substantially all properties of the Company), after paying the liquidation expenses, +employee salaries, social insurance, statutory severance payments, unpaid taxes, and all +creditors’ claims and claims that may be preferred by applicable law, the higher of (1) the original +investment principal, plus a simple interest of 8% per annum calculated on for Series D investors, +or 12% per annum for Series A, Series B, Series B1 and Series C investors, (2) the distributable +liquidation property can be distributed according to the equity proportion at that time, and in the +priority order of Series D, Series C, Series B1, Series B to Series A. +No dividend was paid to the Investors during the Track Record Period. +(c) Anti-dilution right +If the Company issues new shares at a price lower than the price paid by the Investors, the +Investors shall have the right to require: (1) the Company to issue new shares at a nominal price of +RMB1 or the lowest consideration permitted by law, (2) the founder to transfer shares at the +lowest consideration permitted by law, or (3) the Company to settle the difference in cash to +investors, so that the equity portion held by the Investors can reach that can be subscribed +according to the adjusted subscription price per unit. +All preferential rights shall be terminated on the date immediately before the date of the submission of +the listing application to the Hong Kong Stock Exchange and be reinstated and restored in the event of +rejection, return and/or termination of the listing application. Provided the redemption rights shall be +reinstated upon the occurrence of certain agreed uncontrollable events, all redemption liabilities were +still being recognized. +T ermination and regrant of preferential rights +The Company and the Series A, B, B1 and C investors entered into a preferential rights termination +agreement on April 29, 2024, pursuant to which the Company’s obligation for the redemption rights, +anti-dilution rights and liquidation preference rights held by these investors shall be terminated since +April 30, 2024 while the founders’ obligation remained effective. On June 27, 2025, the Company and the +Investors entered into shareholding agreements for Series D financing (the “ Series D Shareholding +Agreements”), pursuant to which the preferential rights including the redemption rights, anti-dilution +rights and liquidation preference rights were regranted to investors of Series A, Series B, Series B1 and +Series C, effective June 27, 2025. Consequently, the Company’s corresponding obligation was reinstated +as of that date. Meanwhile, the preferential rights for the Series D investors became effective in July 2025 +upon the closing of the Series D financing.The Company has not provided any guarantee in relation to the +preferential rights, and as the Company has no obligations in this regard, no liabilities from any +preferential right have been recorded between April 30, 2024 and June 27, 2025. +Presentation and classification +The redemption rights and liquidation preference rights granted to the Investors constitute as the +Company’s obligations to repurchase its own equity instruments for cash. These obligations were +recognized as redemption liabilities which are initially measured at fair value (representing the present +value of the expected maximum cash flows for settling the related obligations if these rights are exercised +by the Investors) and subsequently measured at amortized cost. The Company applied a redemption +discount rate ranged from 12.37% to 16.12% to determine the initial recognition amount of the +redemption liabilities. The anti-dilution right is accounted for as a derivative financial instrument +measured at FVTPL. Its fair value was considered insignificant. +Pursuant to the preferential rights termination agreement entered into by the Company and the Series A, +B, B1 and C investors on April 29, 2024, the redemption liabilities of RMB782,130,000 were reclassified +and credited against the capital reserve within equity, accordingly. +On June 27, 2025, pursuant to the Series D Shareholding Agreements, the preferential rights including the +redemption rights, liquidation preference rights and anti-dilution rights were regranted to investors of +Series A, Series B, Series B1 and Series C. The redemption liabilities were recognized at fair value on the +date of modification from equity instruments, with the corresponding amount charged against capital +reserve within equity. The redemption liabilities are subsequently measured at amortized cost. +APPENDIX I ACCOUNTANTS’ REPORT +– I-33 – + + +--- page 345 --- +The movement of the redemption liabilities is set out as below: +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +At January 1 ................................... 745,048 – +Recognition ................................... – 1,137,266 +Charge to finance costs ............................ 36,775 65,952 +Reclassification to equity ........................... (782,130) – +Modification of redemption liabilities (Note i) ............. – (42,081) +Foreign exchange losses (gains) ...................... 3 0 7 (2,119) +At December 31 ................................ – 1,159,018 +Less: Amount due for settlement within one year shown +under current liabilities (Note ii) ................. – (134,281) +Amount shown under non-current liabilities .............. – 1,024,737 +Notes: +i According to the Series D shareholders agreement, upon the submission of the listing application +to the Stock Exchange in September 2025, the redemption date has extended from June 30, 2026 to +June 30, 2027. The extension of the redemption date does not constitute a substantial modification +and the Company adjusted the amortized cost of the financial liabilities by discounting the +modified cash flows using the original effective interest rate and recognizes the changes in other +gain and losses at the modification date. +ii. As disclosed in (a) above, due to that the redemption event for certain Series D investor might +occur within 12 months after the year end, the Company’s redemption liabilities to this investor +have been classified as current liabilities. +26. DEFERRED TAX ASSETS/LIABILITIES +For the purpose of presentation in the statements of financial position, certain deferred tax assets and +liabilities have been offset. The following is the analysis of the deferred tax balances for financial +reporting purposes: +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Deferred tax assets .............................. 7 0 4 7 6 7 +Deferred tax liabilities ............................ (704) (767) +–– +The followings are the major deferred tax assets (liabilities) and movements thereon during the Track +Record Period: +Right-of- +use assets +Lease +liabilities +Fair value +changes of +financial +assets at +FVTPL +Ta x +losses T otal +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +At January 1, 2024 ............ (2,010) 1,860 (99) 249 - +Credit (charge) to profit or loss .... 1,299 (1,224) 85 (160) - +At December 31, 2024 .......... ( 7 1 1 ) 6 3 6 (14) 89 – +(Charge) credit to profit or loss .... ( 5 ) (235) (38) 278 – +At December 31, 2025 .......... (716) 401 (52) 367 – +APPENDIX I ACCOUNTANTS’ REPORT +– I-34 – + + +--- page 346 --- +At December 31, 2024 and 2025, the Group has unused tax losses of RMB888,803,000 and +RMB1,103,265,000 respectively, available to offset against future profits. At December 31, 2024 and 2025, +unused tax losses of RMB356,000 and RMB1,468,000 had been recognized as deferred tax assets, while +RMB888,447,000 and RMB1,101,797,000 had not been recognized as deferred tax assets due to the +unpredictability of future profit streams. For these unrecognized tax losses, pursuant to the relevant laws +and regulations in the PRC, these tax losses will be carried forward and expired in years as follows: +As at December 31, +2024 2025 +RMB’000 RMB’000 +2025 ........................................ 4 6 2 – +2026 ........................................ 24,268 23,691 +2027 ........................................ 39,623 39,088 +2028 ........................................ 60,231 60,231 +2029 ........................................ 126,636 126,636 +2030 ........................................ 49,849 81,005 +2031 ........................................ 143,408 143,408 +2032 ........................................ 175,687 175,687 +2033 ........................................ 107,698 107,698 +2034 ........................................ 151,896 151,896 +2035 ........................................ – 183,562 +Indefinite .................................... 8,689 8,895 +888,447 1,101,797 +Note: In accordance with the relevant laws and regulations in the PRC, the Company and its subsidiary, +Xi’an Biocare, as technology-based SMEs, are entitled to a carryforward period of up to ten years +for unrecognized tax losses. Subsidiaries registered in the United States are permitted an +indefinite carryforward period for unrecognized tax losses, in accordance with applicable local +laws and regulations. For all other subsidiaries, the carryforward period for unrecognized tax +losses is five years. +The Company +Right-of- +use assets +Lease +liabilities +Fair value +changes of +financial +assets at +FVTPL T ax losses T otal +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +At January 1, 2024 ............ (761) 743 (98) 116 – +Credit (charge) to profit or loss .... 4 3 7 (452) 84 (69) – +At December 31, 2024 .......... (324) 291 (14) 47 – +(Charge)credit to profit or loss .... (278) 39 (38) 277 – +At December 31, 2025 .......... (602) 330 (52) 324 – +At December 31, 2024 and 2025, the Company has unused tax losses of RMB608,763,000 and +RMB790,488,000 respectively, available to offset against future profits. At December 31, 2024 and 2025, +unused tax losses of RMB188,000 and RMB1,296,000 had been recognized as deferred tax assets, while +RMB608,575,000 and RMB789,192,000 had not been recognized as deferred tax assets due to the +unpredictability of future profit streams. For these unrecognized tax losses, pursuant to the relevant laws +and regulations in the PRC, these tax losses will be carried forward and expired in years as follows: +APPENDIX I ACCOUNTANTS’ REPORT +– I-35 – + + +--- page 347 --- +The unrecognized tax losses will be carried forward and expire in years as follows: +As at December 31, +2024 2025 +RMB’000 RMB’000 +2026 ........................................ 5 7 3 – +2027 ........................................ 4,826 4,291 +2028 ........................................ 2,485 2,485 +2029 ........................................ 52,291 52,291 +2030 ........................................ 43,086 43,086 +2031 ........................................ 131,175 131,175 +2032 ........................................ 138,759 138,759 +2033 ........................................ 88,119 88,119 +2034 ........................................ 147,261 147,261 +2035 ........................................ – 181,725 +608,575 789,192 +27. RETIREMENT BENEFIT PLANS +The employees of the Group are members of the state-managed retirement benefits schemes operated by +government. The Group is required to contribute a certain percentage of payroll costs to the retirement +benefits schemes to fund the benefits. The only obligation of the Group with respect to the retirement +benefits schemes is to make the specified contributions. +The total expense recognized in profit or loss of RMB2,613,000 and RMB3,372,000 for the years ended +December 31, 2024 and 2025, respectively. +28. SHARE-BASED PA YMENT TRANSACTIONS +The Group and the Company +Share Incentive Scheme +The Company’s employee share incentive scheme (the “ Share Incentive Scheme ”) was adopted pursuant +to a resolution passed by the board of directors meeting on June 11, 2020 for the primary purpose of +providing incentives to eligible employees and the parties working for the interests of the Group +(collectively the “grantees”). According to the resolution, a limited partnership, Xi’an Zhongrui +Hongyuan Information Technology Partnership (Limited Partnership)* (ҦΥྫΆุ +Υྫ) (the “Employee Incentive Platform ”), was established and 300,000 shares of the registered +capital of the Company were transferred from the founder and founder’s family members to the +platform. The incentives are granted to the eligible grantees in the form of share options or restricted +shares to subscribe the interests of the Employee Incentive Platform. +* English name for identification purpose only +Each of the incentive awards needs to meet service requirement from the grant date to the later of (1) four +or five years since the grant date (the “ Service Period”) and (2) successful IPO of the Company. In the +Service Period, 60% and 20% of the total number of awards shall be released to the eligible grantees on +second anniversary date and each of the third to fourth anniversary dates of the grant date upon meeting +certain individual performance targets or 40% and 20% of the total number of awards shall be released to +eligible grantees on the second anniversary date and each of the third to fifth anniversary dates of the +grant date upon meeting certain individual performance targets. The eligible grantees may be repaid +with original exercise/subscription price plus single digit interest, at the Company’s sole discretion, if +employment were terminated within the Service Period or before the successful listing of the Company. +After taking into account the best estimation of the listing date, the management determined the +share-based payment expenses should be recognized when the successful listing is probable and +amortized during vesting period which is from the grant date to the later of the Service Period and +estimated listing date. +Modification of Share Incentive Scheme +Pursuant to a resolution passed by the shareholders meeting on August 28, 2025, the Share Incentive +Scheme was amended and all the share options and restricted shares granted have been transferred to +restricted share units (the “ RSUs”) with the grantees, quantities, subscription price and vesting term +unchanged. Accordingly, the modification is a replacement of the original incentives. Since the +modification is not beneficial to the grantees and there is no incremental fair value due to the +modification, the Company continued to recognize the services received over the original vesting period. +APPENDIX I ACCOUNTANTS’ REPORT +– I-36 – + + +--- page 348 --- +Share options/RSUs +The movements of the share options granted to the directors, consultant and employees of the Group and +the Company during the year ended December 31, 2024 are as follows: +Type of +option holders Date of grant +Exercise +price +Outstanding +at January 1, +2024 +Granted +during the +year +Forfeited +during the +year +Outstanding +at December +31, 2024 +Executive director: +Dr. Yu Weiping .... July 3, 2020 RMB0 89,982 – – 89,982 +89,982 – – 89,982 +Consultants ...... July 3, 2020 RMB25 14,080 – – 14,080 +14,080 – – 14,080 +Employees: ....... July 3, 2020 RMB20-25 20,696 – (2,400) 18,296 +July 3, 2022 RMB70.6 9,666 – – 9,666 +July 3, 2023 RMB82.6 4,721 – (2,270) 2,451 +35,083 – (4,670) 30,413 +139,145 – (4,670) 134,475 +Upon the modification in 2025, the options have been transferred to RSUs with the same quantities. The +movements of the share options/RSUs granted to the directors, consultants and employees of the Group +and the Company during the year ended December 31, 2025 are as follows: +Type of option/ +RSU holders Date of grant +Exercise +price/ +Subscription +price +Outstanding at +January 1, 2025 +Granted during +the period +Forfeited +during the +period +Outstanding at +December 31, +2025 +Executive director: +Dr. Yu Weiping ..... July 3, 2020 RMB0 89,982 – – 89,982 +89,982 – – 89,982 +Consultants ....... July 3, 2020 RMB25 14,080 – – 14,080 +September 18, 2025 RMB72.77 – 623 – 623 +14,080 623 – 14,703 +Employees: ........ July 3, 2020 RMB20-25 18,296 – (2,028) 16,268 +July 3, 2022 RMB70.60 9,666 – (1,945) 7,721 +July 3, 2023 RMB82.60 2,451 – (228) 2,223 +May 13, 2025 RMB82.60 – 12,584 – 12,584 +September 18, 2025 RMB72.77 – 62,105 – 62,105 +30,413 74,689 (4,201) 100,901 +134,475 75,312 (4,201) 205,586 +APPENDIX I ACCOUNTANTS’ REPORT +– I-37 – + + +--- page 349 --- +Share options +The binomial model has been used to estimate the fair value of the options. The variables and +assumptions used in computing the fair value of the share options are based on the Group’s best estimate. +The inputs into the binomial model were as follows: +As at July 3, +As at +May 13, +Grant date 2020 2022 2023 2025 +Fair value of underlying ordinary +shares (RMB per share) . . . . . . . . . 241 451 457 441 +Exercise price (RMB) ............ 0-25 70.6 82.6 82.6 +Risk-free interest rate ........... 2.61% 2.60% 2.33% 1.50%-1.54% +Expected volatility ............. 56.75% 59.59% 62.08% 65.28%-66.58% +Dividend yield ............... – – – – +Exercise multiples ............. 2.2-2.8 2.2 2.2 2.2 +Life of options (years) ........... 5 4 4 4 - 5 +Fair value of options (RMB per option) 219-241 386 382 366-371 +RSUs +For the RSUs granted on September 18, 2025, the grant date fair value was RMB371.74 per share +determined by reference to the fair value of the Company’s ordinary shares priced using the equity +allocation model and the subscription prices. +Restricted shares +In addition to the above, on July 3, 2020, 11,998 restricted shares were granted to two consultants, who +provide services similar to employees, at subscription prices of RMB25 per share and RMB0.0002 per +share. The grant date fair value of restricted shares was RMB216 and RMB241 per share determined by +reference to the fair value of the Company’s ordinary shares priced using the equity allocation model and +the subscription prices. +As at December 31, 2024 and 2025, 300,000 shares held by Employee Incentive Platform under the Share +Incentive Scheme were recognized as treasury shares by the Company and had been deducted from +shareholders’ equity as shown in the consolidated statements of changes in equity under “Shares issued +for share incentive scheme”. The exercise price or subscription price received by the Company amounted +to RMB7,268,000 has been recognized under other payables as the Company may repurchase the granted +shares if they were subsequently forfeited or not vested. +No share-based payment expenses in respect of the share options and restricted shares have been +recognized during the Track Record Period as the successful listing has not been determined to be +probable during the Track Record Period. +29. PAID-IN CAPITAL/SHARE CAPITAL +The Group and the Company +Paid-in +capital +Number of +shares +Share +capital +RMB’000 RMB’000 +Issued and fully paid: +At January 1, 2024 ...................... 4,985 – – +Conversion into a joint stock company (Note a) .... (4,985) 4,984,604 4,985 +At December 31, 2024 .................... – 4,984,604 4,985 +Issuance of Series D shares (Note b) ............ – 489,115 489 +At December 31, 2025 .................... – 5,473,719 5,474 +Notes: +(a) Pursuant to the shareholders’ resolutions and the promoters’ agreement dated December 5, 2024, +the shareholders of the Company agreed to convert the Company into a joint stock limited +liability company. The net assets of the Company as of the conversion base date, which is April 30, +2024, including paid-in capital, capital reserve, statutory reserve and accumulated losses were +converted into 4,985,000 ordinary shares of RMB1.00 each. The excess of the net assets converted +over the nominal value of the ordinary shares was credited to the Company’s capital reserves. The +Company was converted into a joint-stock limited liability company under PRC Company Law, +and changed its name to Shaanxi Micot Pharmaceutical Technology Co., Ltd. (ٰ +ʮ̡) on December 9, 2024. +APPENDIX I ACCOUNTANTS’ REPORT +– I-38 – + + +--- page 350 --- +(b) The Company completed Series D financing in 2025. The paid-in capital and share capital at the +end of reporting date include those attributable to Series A to D financing as disclosed in Note 25. +30. RESERVES OF THE COMPANY +Capital +reserve +Statutory +reserve +Accumulated +losses T otal +RMB’000 RMB’000 RMB’000 RMB’000 +At January 1, 2024 ................ 131,334 1,500 (436,067) (303,233) +Loss and total comprehensive expense +for the year ................... – – ( 1 18,122) (118,122) +Reclassification from redemption liabilities +(Note 25) ..................... 782,130 – – 782,130 +Conversion into a joint stock company .... (267,399) (1,500) 268,899 – +At December 31, 2024 .............. 646,065 – (285,290) 360,775 +Loss and total comprehensive expense +for the year ................... – – (151,703) (151,703) +Recognition of redemption liabilities +(Note 25) ..................... (1,137,266) – – (1,137,266) +Capital injection from shareholders ...... 235,011 – – 235,011 +At December 31, 2025 .............. (256,190) – (436,993) (693,183) +31. CAPITAL RISK MANAGEMENT +The Group manages its capital to ensure that the entities in the Group will be able to continue as a going +concern while maximising the return to shareholders through the optimisation of the debt and equity +balance. The Group’s overall strategy remains unchanged throughout the Track Record Period. +The capital structure of the Group consists of net debt, which includes bank borrowings, lease liabilities, +redemption liabilities, net of cash and cash equivalents and equity of the Group, comprising issued share +capital, reserves and non-controlling interests. +The management of the Group reviews the capital structure from time to time. As a part of this review, the +management considers the cost of capital and the risks associated with the capital. Based on +recommendations of the management, the Group will balance its overall capital structure through the +issue of new shares and new debts. +32. FINANCIAL INSTRUMENTS +(a) Categories of financial instruments +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Financial assets +Financial assets measured at FVTPL ............... 54,611 95,209 +Financial assets measured at amortized cost .......... 156,638 176,041 +211,249 271,250 +As at December 31, +2024 2025 +RMB’000 RMB’000 +Financial liabilities +Financial liabilities measured at amortized cost ....... 85,387 1,222,831 +APPENDIX I ACCOUNTANTS’ REPORT +– I-39 – + + +--- page 351 --- +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Financial assets +Financial assets measured at FVTPL ............... 20,056 95,209 +Financial assets measured at amortized cost .......... 172,495 167,971 +192,551 263,180 +As at December 31, +2024 2025 +RMB’000 RMB’000 +Financial liabilities +Financial liabilities measured at amortized cost ....... 75,998 1,243,027 +(b) Financial risk management objectives and policies +The Group’s and the Company’s major financial instruments include cash and cash equivalents, +term deposits, restricted bank deposits, financial assets at FVTPL, other receivables, redemption +liabilities, trade and other payables, amount due from a related party, amount due to the +Controlling Shareholder, bank borrowings and amounts due from/to subsidiaries of the +Company. Details of these financial instruments are disclosed in the respective notes. The risks +associated with these financial instruments and the policies on how to mitigate these risks are set +out below. The directors of the Group and the Company manage and monitor these exposures to +ensure appropriate measures are implemented on a timely basis and in an effective manner. +Market risk +The Group’s and the Company’s activities expose it primarily to market risk (currency risk and +interest rate risk), credit risk and liquidity risk. There has been no change in the Group’s and the +Company’s exposure to these risks or the manner in which it manages and measures the risks. +(i) Currency risk +Certain financial assets and liabilities are denominated in foreign currencies of respective +group entities which are exposed to foreign currency risk. The Group currently does not +have a foreign currency hedging policy. However, the management monitors foreign +exchange exposure and will consider hedging significant foreign currency exposure +should the need arise. +The carrying amounts of the Group’s and the Company’s foreign currencies denominated +monetary assets and liabilities at the end of each reporting period are as follows: +The Group +As at December 31, +2024 2025 +RMB’000 RMB’000 +Assets +U S D............................. 30,439 28,087 +Liabilities +U S D............................. – 1 17,539 +The Company +As at December 31, +2024 2025 +RMB’000 RMB’000 +Assets +U S D............................. 30,417 28,081 +Liabilities +U S D............................. – 1 17,539 +APPENDIX I ACCOUNTANTS’ REPORT +– I-40 – + + +--- page 352 --- +Sensitivity analysis +The following table details the Group’s and the Company’s sensitivity to a 2% increase +and decrease in RMB against USD, the foreign currencies with which the Group and the +Company may have a material exposure. 2% represents management’s assessment of the +reasonably possible change in foreign exchange rates. The sensitivity analysis uses +outstanding foreign currencies denominated monetary items as a base and adjusts their +translation at the end of each reporting period for a 2% change in foreign currency rates. A +positive/negative number below indicates a decrease/an increase in loss where RMB +strengthens 2% against USD. For a 2% weakening of RMB against USD, there would be an +equal and opposite impact on the profit or loss for the respective years. +The Group +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Profit or loss ......................... 4 5 7 (1,342) +The Company +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Profit or loss ......................... 4 5 6 (1,342) +(ii) Interest rate risk +The Group and the Company are exposed to fair value interest rate risk in relation to term +deposits, redemption liabilities and lease liabilities. The Group and the Company are also +exposed to cash flow interest rate risk in relation to variable-rate bank balances and +variable-rate bank borrowings. The cash flow interest rate risk is mainly concentrated on +the fluctuation of interest rates on bank balances and bank borrowings. As the +management considers that the exposure of cash flow interest rate risk arising from +variable-rate bank balances and variable-rate bank borrowings is insignificant, therefore +no sensitivity analysis on such risk has been prepared. +Credit risk and impairment assessment +Credit risk refers to the risk that the Group’s and the Company’s counterparties default on their +contractual obligations resulting in financial losses to the Group and the Company. The Group’s +and the Company’s credit risk exposures are primarily attributable to other receivables, amounts +due from subsidiaries and bank balances and term deposits. The Group and the Company do not +hold any collateral or other credit enhancements to cover its credit risks associated with its +financial assets. +The Group and the Company performed impairment assessment for financial assets under ECL +model. Information about the Group’s and the Company’s credit risk management, maximum +credit risk exposures and the related impairment assessment, if applicable, are summarized as +below: +Other receivables and amount due from a related party +For other receivables and amount due from a related party, with the aggregate gross carrying +amounts of RMB1,137,000 and RMB1,742,000 for the Group, and RMB203,000 and RMB365,000 for +the Company as at December 31, 2024 and 2025, respectively, the management makes periodic +individual assessment on the recoverability of other receivables based on historical settlement +records, past experience, and also quantitative and qualitative information that is reasonable and +supportive forward-looking information. The management believes that there are no significant +increase in credit risk of these amounts since initial recognition and the Group provided +impairment based on 12m ECL. During the Track Record Period, the Group assessed the ECL on +other receivables and amount due from a related party are insignificant and thus no loss +allowance is recognized. +Amounts due from subsidiaries +For amounts due from subsidiaries with gross carrying amounts of RMB23,756,000 and +RMB33,690,000 for the Company as at December 31, 2024 and 2025, respectively, the ECL on +amounts due from subsidiaries are assessed individually based on the probability of defaults of +amounts due from subsidiaries, the management has taken into account the financial position of +the counterparties as well as forward looking information that is available without undue cost or +effort. During the Track Record Period, the Company assessed the ECL on amounts due from +subsidiaries is insignificant and thus no loss allowance is recognized. +APPENDIX I ACCOUNTANTS’ REPORT +– I-41 – + + +--- page 353 --- +Bank balance, term deposits and restricted bank deposits +For bank balance, term deposits and restricted bank deposits with the aggregate gross carrying +amounts of RMB155,501,000 and RMB174,299,000 for the Group, and RMB148,536,000 and +RMB133,916,000 for the Company as at December 31, 2024 and 2025, respectively, the credit risk +on bank balances and term deposits is limited because the counterparties are banks with high +credit ratings assigned by international credit-rating agencies. The Group assessed 12m ECL for +bank balances and term deposits by reference to information relating to probability of default and +loss given default of the respective credit rating grades published by external credit rating +agencies. Based on the average loss rates, the 12m ECL on bank balances and term deposits is +considered to be insignificant and therefore no loss allowance was recognized. +Liquidity risk +In the management of the liquidity risk, the Group and the Company closely monitor its cash +position resulting from its operations and maintains a level of cash and cash equivalents deemed +adequate by the management to enable the Group and the Company to meet in full its financial +obligations as they fall due for the foreseeable future. The management of the Group monitors the +utilization of bank borrowings and ensures compliance with loan covenants. +The Group and the Company rely on bank borrowings as a significant source of liquidity. The +Group and the Company had unutilized bank facilities of approximately RMB5,147,000 and +RMB59,200,000 as at December 31, 2024 and 2025, respectively. +The following tables detail the Group’s and the Company’s remaining contractual maturity for its +financial liabilities and lease liabilities. The table has been drawn up based on the undiscounted +cash flows of financial liabilities and lease liabilities based on the earliest date on which the +Group can be required to pay. The maturity dates for financial liabilities are based on the agreed +repayment dates. The table includes both interest and principal cash flows. +The Group +As at December 31, 2024 +Interest rate +On +demand +or within +3 months +3 months +to 1 year +1 year to 2 +years T otal +Carrying +amounts +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +Trade and other payables ..... – 13,041 – – 13,041 13,041 +Amount due to the +Controlling Shareholder ..... – 28,333 – – 28,333 28,333 +Bank borrowings ......... 2.30%-2.50% 673 1,087 43,382 45,142 44,013 +Lease liabilities .......... 2.50%-4.65% 1,115 1,186 282 2,583 2,539 +43,162 2,273 43,664 89,099 87,926 +As at December 31, 2025 +Interest rate +On +demand +or within +3 months +3 months +to 1 year +1 year to 2 +years T otal +Carrying +amounts +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +Trade and other payables ..... – 15,713 – – 15,713 15,713 +Bank borrowings ......... 1.85%-1.95% 48,396 – – 48,396 48,100 +Lease liabilities .......... 3.50%-4.45% 649 775 204 1,628 1,601 +Redemption liabilities ....... 12.37%-16.12% – 143,919 1,094,666 1,238,585 1,159,018 +64,758 144,694 1,094,870 1,304,322 1,224,432 +APPENDIX I ACCOUNTANTS’ REPORT +– I-42 – + + +--- page 354 --- +The Company +As at December 31, 2024 +Interest rate +On +demand +or within 3 +months +3 months +to 1 year +1 year to 2 +years T otal +Carrying +amounts +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +Trade and other payables ..... – 3,652 – – 3,652 3,652 +Amount due to the +Controlling Shareholder ..... – 28,333 – – 28,333 28,333 +Bank borrowings ......... 2.30%-2.50% 673 1,087 43,382 45,142 44,013 +Lease liabilities .......... 2.50%-4.45% 832 339 – 1,171 1,165 +33,490 1,426 43,382 78,298 77,163 +As at December 31, 2025 +Interest rate +On +demand +or within +3 months +3 months +to 1 year +1 year to 2 +years T otal +Carrying +amounts +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +Trade and +other payables .......... – 9,409 – – 9,409 9,409 +Amount due to a subsidiary .... – 26,500 – – 26,500 26,500 +Bank borrowings ......... 1.85%-1.95% 48,396 – – 48,396 48,100 +Lease liabilities .......... 3.50%-4.45% 367 775 204 1,346 1,321 +Redemption liabilities ....... 12.37%-16.12% – 143,919 1,094,666 1,238,585 1,159,018 +84,672 144,694 1,094,870 1,324,236 1,244,348 +(c) Fair value measurements of financial instruments +Some of the Group’s financial instruments are measured at fair value for financial reporting +purposes. In estimating the fair value, the Group uses market-observable data to the extent it is +available. +(i) Fair value of the Group’s financial assets that are measured at fair value on a recurring +basis +Some of the Group’s and the Company’s financial assets are measured at fair value at the +end of each reporting period. +The following table gives information about how the fair values of these financial assets +are determined (in particular, the valuation technique(s) and inputs used). +The Group +Fair value at +December 31, Fair value +hierarchy +V aluation techniques +and key inputsFinancial assets 2024 2025 +RMB’000 RMB’000 +Financial assets at FVTPL . . 54,611 95,209 Level 2 Discounted cash flow. +Future cash flows are +estimated based on +discount rate observed +in the contract and +available market +information. +APPENDIX I ACCOUNTANTS’ REPORT +– I-43 – + + +--- page 355 --- +The Company +Fair value at +December 31, Fair value +hierarchy +V aluation techniques +and key inputsFinancial assets 2024 2025 +RMB’000 RMB’000 +Financial assets at FVTPL . . 20,056 95,209 Level 2 Discounted cash flow. +Future cash flows are +estimated based on +discount rate observed +in the contract and +available market +information. +(ii) Fair value of the Group’s financial assets and financial liabilities that are not measured +at fair value on a recurring basis (but fair value disclosures are required) +The Directors consider that the carrying amounts of financial assets and financial +liabilities recorded at amortized cost in the Historical Financial Information approximate +their respective fair values at the end of each reporting period. +33. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES +The table below details changes in the Group’s liabilities arising from financing activities, including both +cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows +were, or future cash flows will be, classified in the Group’s consolidated statements of cash flows as cash +flows from financing activities. +Bank +borrowings +Lease +liabilities +Cash +received in +respect of +restricted- +shares +Amount +due to the +Controlling +Shareholder +Redemption +liabilities +Accrued +issue cost T otal +RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 +At January 1, 2024 ........ 19,200 7,433 – 28,333 745,048 – 800,014 +Financing cash flows ....... 24,144 (3,021) –––– 21,123 +New leases entered ....... – 2 87–––– 2 87 +Reclassification to capital reserve –––– (782,130) – (782,130) +Early termination of a lease . . . – (2,362) –––– (2,362) +Foreign exchange adjustments . . – – – – 307 – 307 +Finance costs recognized . . . . 669 202 – – 36,775 – 37,646 +At December 31, 2024 ...... 44,013 2,539 – 28,333 – – 74,885 +Financing cash flows ....... 3,102 (3,972) 7,268 (28,333) – (1,330) (23,265) +New leases entered ....... – 2,968–––– 2,968 +Recognition of redemption +liabilities ........... –––– 1,137,266 – 1,137,266 +Deferred issue costs recognized . ––––– 2,435 2,435 +Gain on non-substantial +modification of redemption +liabilities ........... –––– (42,081) – (42,081) +Foreign exchange adjustments . . –––– (2,119) – (2,119) +Finance costs recognized . . . . 985 66 – – 65,952 – 67,003 +At December 31, 2025 ...... 48,100 1,601 7,268 – 1,159,018 1,105 1,217,092 +APPENDIX I ACCOUNTANTS’ REPORT +– I-44 – + + +--- page 356 --- +34. RELATED PARTIES’ TRANSACTIONS +Other than the transactions and balances with related parties disclosed in Note 23, the Group has the +following transactions and balances with the related parties during the Track Record Period. +Compensation of key management personnel +The remuneration of directors and other member of key management personnel of the Group during the +Track Record Period was as follows: +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Salaries and allowance ............................ 5,619 8,392 +Discretionary bonuses ............................. 1,186 1,834 +Retirement benefits .............................. 2 0 6 3 0 0 +7,011 10,526 +The remuneration of directors and key executives is determined by the remuneration committee having +regard to the performance of individuals and market trends. +35. PARTICULARS OF SUBSIDIARIES +General information of subsidiaries +During the Track Record Period and as at the date of this report, the Company has direct and indirect +shareholding interests in the following subsidiaries: +Shareholding interest +attributable the Company as at +Place/date of +establishment +Issued and fully +paid capital/ +registered +capital +December 31, +As at +the date +of this +report Principal activities2024 2025 +%%% +Directly held: +Shanghai Xitaili (Note a) ...... PRC +November 22, +2022 +RMB28,683,333/ +RMB33,683,333 +89.06 89.06 89.06 Medical and cellular +technology research and +development (“ R&D”), +technical services, and +sales of medical +equipment +Suzhou Pharmaceutical (Note a) . . PRC +September 2, +2022 +RMB10,000,000/ +RMB10,000,000 +100 100 100 Medical and engineering +technology R&D, +technology services and +transfers, and sales of +medical equipment +Micot (Suzhou) Technology +Co., Ltd.* (Ҧ +ʮ̡) (“Suzhou T echnology ”) +(Note a) ............. +PRC +August 20, +2020 +RMB80,000,000/ +RMB80,000,000 +100 100 100 Medical research and +experimental +development; technology +services, development, +consultation, exchange, +transfer, and promotion +Xi’an Biocare (Note a) ....... PRC +August 11, +2017 +RMB48,000,000/ +RMB60,000,000 +100 100 100 Biopharmaceutical R&D, +manufacturing, and +commercial distribution +Micot Taizhou (Note a) ....... P R C +May 16, 2025 +RMB45,700,000/ +RMB50,000,000 +N/A 100 100 Medical R&D, and drug +production, clinical trial +services and distribution +Micot (Hong Kong) Technology +Limited (ಥ +ʮ̡ ) (“Micot HK”) +(Note c) ............. +Hong Kong +October 29, +2021 +HK$10,000/ +HK$10,000 +100 100 100 Pharmaceuticals and +medical devices R&D, +production, promotion +and distribution +Indirectly held: +Micot (U.S.) Technology Co., Ltd +(ʮ̡) +(Note b) ............. +The U.S. +November 29, +2021 +USD20,000/ +USD20,000 +100 100 100 Overseas R&D and +operations +APPENDIX I ACCOUNTANTS’ REPORT +– I-45 – + + +--- page 357 --- +Shareholding interest +attributable the Company as at +Place/date of +establishment +Issued and fully +paid capital/ +registered +capital +December 31, +As at +the date +of this +report Principal activities2024 2025 +%%% +Micot (U.S.) Biopharmaceutics +Co., Ltd (਷ ᔼᖹ +ʮ̡) (Note b) ........ +The U.S. +September 21, +2022 +USD1,000/ +USD1,000 +100 100 100 Overseas R&D and +operations +Notes: +(a) No statutory financial statements were required for the subsidiaries in the PRC since there are no +statutory audit requirements in the PRC. +(b) No audited financial statements of these subsidiaries have been prepared since its date of +incorporation as it is incorporated in the jurisdiction where there are no statutory audit +requirements. +(c) The statutory financial statements of Micot HK for the years ended December 31, 2024 and 2025 +are not yet due to be issued. +* English name for identification purpose only +Details of a non-wholly owned subsidiary that have material non-controlling interests +The table below shows details of a non-wholly-owned subsidiary of the Group that have material +non-controlling interests: +Name of subsidiary +Place of +incorporation +and principal +place of +business +Proportion of ownership +interests and voting +rights held by +non-controlling interests +Loss allocated to +non-controlling interests +for the year ended +Accumulated +non-controlling interests +December 31, December 31, As at December 31, +2024 2025 2024 2025 2024 2025 +% % RMB’000 RMB’000 RMB’000 RMB’000 +Shanghai Xitaili ....... P R C 10.94 10.94 (2,200) (2,407) 14,982 12,575 +(2,200) (2,407) 14,982 12,575 +Summarized financial information in respect of the Group’s subsidiary that has material non-controlling +interests is set out below. The summarized financial information below represents amounts before +intragroup eliminations. +As at December 31, +2024 2025 +RMB’000 RMB’000 +Current assets ................................. 9,209 5,845 +Non-current assets .............................. 2,688 2,060 +Current liabilities ............................... 35,890 47,907 +Equity attributable to owners of the Company ............. (38,975) (52,577) +Non-controlling interests .......................... 14,982 12,575 +APPENDIX I ACCOUNTANTS’ REPORT +– I-46 – + + +--- page 358 --- +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Other income .................................. 2 0 4 3 +Other gains and losses ............................ 3 9 – +Expenses .................................... (20,177) (22,052) +Loss for the year ................................ (20,118) (22,009) +Loss attributable to owners of the Company .............. (17,918) (19,602) +Loss attributable to the non-controlling interests ........... (2,200) (2,407) +For the year ended +December 31, +2024 2025 +RMB’000 RMB’000 +Net cash outflow from operating activities ............... (31,161) (7,106) +Net cash outflow from investing activities ................ (25) (50) +Net cash inflow from financing activities ................ 9,000 6,000 +Net cash outflow ................................ (22,186) (1,156) +36. MAJOR NON-CASH TRANSACTIONS +The Group and the Company +During the years ended December 31, 2024 and 2025, the Group entered into new lease agreements for the +use of leased properties for 2 years. On the lease commencements, the Group recognized right-of-use +assets and lease liabilities of RMB287,000 each in 2024, and RMB2,968,000 each in 2025, respectively. +In addition, during the year ended December 31, 2024, the Group early terminated a lease, resulting in +the derecognition of right-of-use assets of RMB1,949,000 and lease liabilities of RMB2,362,000. A gain of +RMB414,000 was recognized in the profit or loss (Note 7). +37. SUBSEQUENT EVENTS +Save as elsewhere disclosed in this report, events and transactions took place subsequent to December 31, +2025 are detailed as below: +a) On February 4, 2026, the Company entered into an agreement with Everest Medicines (China) Co., +Ltd. (ʮ̡) (“Everest”), pursuant to which the Company irrevocably +granted Everest an exclusive license to commercialize MT1013 in China and Asia-Pacific +(excluding Japan). MT1013 has entered Phase III clinical trial in China and the relevant +development expenses will be covered by the Group. +The Company received a non-refundable upfront payment of RMB200,000,000 in February 2026 +and recognized it as a contract liability. +b) Pursuant to the resolutions of the shareholders meeting dated April 2, 2026, the shares had been +split on a one-for-fifty basis, and the nominal value of the shares had been changed from RMB1.0 +each to RMB0.02 each, details of which are set out in the section headed “History, Development +and Corporate Structure — Share Subdivision before the Listing” in the Prospectus. +38. SUBSEQUENT FINANCIAL STATEMENTS +No audited financial statements of the Company, any of its subsidiaries or the Group have been prepared +in respect of any period subsequent to December 31, 2025. +APPENDIX I ACCOUNTANTS’ REPORT +– I-47 – + + +--- page 359 --- +The information set out in this Appendix does not form part of the accountants’ report on +the historical financial information of the Group for each of the two years ended December 31, 2025 +(the “ Accountants’ Report ”) prepared by Deloitte Touche Tohmatsu, Certified Public +Accountants, Hong Kong, the Reporting Accountants of the Company, as set forth in Appendix I +to 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 out in +Appendix I to this prospectus. +A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED +NET TANGIBLE ASSETS (LIABILITIES) OF THE GROUP ATTRIBUTABLE TO +OWNERS OF THE COMPANY +The following unaudited pro forma statement of adjusted consolidated net tangible +assets (liabilities) of the Group attributable to owners of the Company which has been +prepared in accordance with paragraph 4.29 of the Listing Rules is for illustration only, +and is set out to illustrate the effect of the proposed Global Offering (as defined in this +prospectus) on the consolidated net tangible liabilities of the Group attributable to owners +of the Company as at December 31, 2025 as if the Global Offering had taken place on such +date. +The unaudited pro forma statement of adjusted consolidated net tangible assets +(liabilities) of the Group attributable to owners of the Company has been prepared for +illustrative purposes only and, because of its hypothetical nature, it may not give a true +picture of the consolidated net tangible assets (liabilities) of the Group attributable to +owners of the Company had the Global Offering been completed as at December 31, 2025 +or as at any subsequent dates following the Global Offering. +The following unaudited pro forma statement of adjusted consolidated net tangible +assets (liabilities) of the Group attributable to owners of the Company is prepared based +on the audited consolidated net tangible liabilities of the Group attributable to owners of +the Company as at December 31, 2025 as derived from the Accountants’ Report as set out +in Appendix I to this prospectus, and adjusted as described below: +Audited +consolidated +net tangible +liabilities of +the Group +attributable +to the owners +of the +Company as +at December +31, 2025 +Estimated +net proceeds +from the +Global +Offering +Unaudited +pro forma +adjusted +consolidated +net tangible +(liabilities) +assets of the +Group +attributable +to the owners +of the +Company as +at December +31, 2025 +Unaudited pro forma +adjusted consolidated +net tangible (liabilities) +assets of the Group +attributable to the owners of +the Company per Share as at +December 31, 2025 +RMB’000 RMB’000 RMB’000 RMB HK$ +Note 1 Note 2 Note 3 Note 4 +Based on the Offer Price of +HK$18.2 per H Share .... (972,460) 870,630 (101,830) (0.32) (0.37) +Based on the Offer Price of +HK$21.0 per H Share .... (972,460) 1,006,248 33,788 0.11 0.12 +APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION +– II-1 – + + +--- page 360 --- +Notes: +(1) The amount is based on the audited consolidated net tangible liabilities of the Group attributable +to owners of the Company as at December 31, 2025 of RMB972,460,000, extracted from the +Accountants’ Report of the Group set out in Appendix I to this prospectus. +(2) The estimated net proceeds from the issue of Offer Shares pursuant to the Global Offering are +based on 58,054,400 Shares at the Offer Price of HK$18.2 (equivalent to RMB15.8) and HK$21.0 +(equivalent to RMB18.3) per Offer Share, after deduction of underwriting fees and commissions +and other listing related expenses paid or payable by the Company (excluding listing expenses +recognised in profit or loss prior to December 31, 2025). The calculation of such estimated net +proceeds does not take into account any Shares (i) which may be allotted and issued upon the +exercise of the Over-Allotment Option, (ii) which may be allotted and issued pursuant to the +grant of awards under the Share Incentive Scheme, or (iii) which may be allotted and issued or +repurchased by the Company under the general mandates for the allotment and issue or +repurchase of Shares granted to the directors of the Company. +For the purpose of calculating the estimated net proceeds from the Global Offering, the amount +denominated in HK$ has been converted into RMB at the rate of HK$1 to RMB0.87005, which was +the exchange rate prevailing on June 7, 2026 with reference to the rate published by the People’s +Bank of China. No representation is made that the HK$ amounts have been, could have been or +could be converted to RMB, or vice versa, at that rate or at any other rates or at all. +(3) The unaudited pro forma adjusted consolidated net tangible liabilities of the Group attributable +to owners of the Company as at December 31, 2025 per Share is arrived at on the basis of +316,740,350 Shares in total, comprising 258,685,950 Shares in issue as at December 31, 2025 (after +the effect of the Subdivision), and 58,054,400 H Shares to be issued pursuant to the Global +Offering, assuming that Share Subdivision and the Global Offering had been completed on +December 31, 2025 and without taking into account any Shares (i) which may be allotted and +issued upon the exercise of the Over-Allotment Option, (ii) which may be allotted and issued +pursuant to the grant of awards under the Share Incentive Scheme, or (iii) which may be allotted +and issued or repurchased by the Company under the general mandates for the allotment and +issue or repurchase of Shares granted to the directors of the Company, or (iv) the 15,000,000 shares +(after the effect of the Subdivision) held for Share Incentive Scheme, which represent treasury +shares held by the Company. +(4) For the purpose of the unaudited pro forma adjusted consolidated net tangible assets (liabilities) +of the Group attributable to owners of the Company as at December 31, 2025 per Share, the +amount denominated in RMB has been converted into HK$ at the rate of RMB0.87005 to HK$1, +which was the exchange rate prevailing on June 7, 2026 with reference to the rate published by the +People’s Bank of China. No representation is made that the RMB amounts have been, could have +been or may be converted to HK$, or vice versa, at that rate or any other rates or at all. +(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible +assets (liabilities) of the Group attributable to owners of the Company as at December 31, 2025 to +reflect any trading result or other transactions of the Group entered into subsequent to December +31, 2025. In particular, the unaudited pro forma adjusted consolidated net tangible liabilities of +the Group attributable to owners of the Company as shown on II-1 have not been adjusted to +illustrate the effect of the termination of the redemption and other preferential rights granted to +the investors of Series A, B, B1, C and D Financings upon completion of the Global Offering +(“ T ermination of Preferential Rights ”), which would result in the reclassification of the +redemption liabilities with carrying amount of RMB1,159,018,000 as at December 31, 2025 to +equity. +Assuming the Series D Financing, Termination of Preferential Rights, Share Subdivision and +Global Offering had been completed on December 31, 2025, the unaudited pro forma adjusted +consolidated net tangible liabilities of the Group attributable to owners of the Company would +have adjusted by RMB1,159,018,000, resulting in unaudited pro forma adjusted consolidated net +tangible assets of the Group attributable to the owners of the Company of RMB1,057,188,000 and +RMB1,192,806,000, based on an Offer Price of HK$18.2 and HK$21.0 per H Share, respectively. The +unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to +owners of the Company as at December 31, 2025 per Share after Termination of Preferential Rights +would have been RMB3.34 per Share (approximately HK$3.84 per Share) and RMB3.77 per Share +(approximately HK$4.33 per Share), respectively, calculated on the basis of 316,740,350 Shares in +issue and based on an Offer Price of HK$18.2 and HK$21.0 per H Share. +APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION +– II-2 – + + +--- page 361 --- +The following is the text of the independent reporting accountants’ assurance report +received from Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the reporting +accountants of the Company, in respect of the Group’s unaudited pro forma financial information +prepared for the purpose of incorporation in this prospectus. +B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON +THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL +INFORMATION +T o the Directors of Shaanxi Micot Pharmaceutical T echnology Co., Ltd. +We have completed our assurance engagement to report on the compilation of +unaudited pro forma financial information ofʮ̡ (Shaanxi +Micot Pharmaceutical Technology 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 statement of adjusted consolidated net +tangible assets (liabilities) as at December 31, 2025 and related notes as set out on pages +II-1 to II-2 of Appendix II to the prospectus issued by the Company dated June 15, 2026 +(the “Prospectus ”). The applicable criteria on the basis of which the Directors have +compiled the unaudited pro forma financial information are described on pages II-1 to II-2 +of Appendix II to the Prospectus. +The unaudited pro forma financial information has been compiled by the Directors +to illustrate the impact of the Global Offering (as defined in the Prospectus) on the +Group’s financial position as at December 31, 2025 as if the Global Offering had taken +place at December 31, 2025. As part of this process, information about the Group’s +financial position has been extracted by the Directors from the Group’s historical financial +information for each of the two years ended December 31, 2025, on which an accountants’ +report set out in Appendix I to the Prospectus has been published. +Directors’ Responsibilities 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 7 “Preparation of Pro Forma Financial Information for +Inclusion in Investment Circulars” (“ AG 7”) 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. +Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1 +“Quality Management for Firms that Perform Audits or Reviews of Financial Statements, +or Other Assurance or Related Services Engagements” issued by the HKICPA, which +requires the firm to design, implement and operate a system of quality management +including policies and procedures regarding compliance with ethical requirements, +professional standards and applicable legal and regulatory requirements. +APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION +– II-3 – + + +--- page 362 --- +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 unaudited pro forma financial information included in an +investment circular is solely to illustrate the impact of a significant event or transaction on +unadjusted financial information of the Group as if the event had occurred or 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 +event or transaction at December 31, 2025 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 event or +transaction, and to obtain sufficient appropriate evidence about whether: +• the related pro forma adjustments give appropriate effect to those criteria; and +• 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 event +or 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. +APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION +– II-4 – + + +--- page 363 --- +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 purposes of the unaudited pro forma +financial information as disclosed pursuant to paragraph 4.29(1) of the Listing +Rules. +Deloitte T ouche T ohmatsu +Certified Public Accountants +Hong Kong +June 15, 2026 +APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION +– II-5 – + + +--- page 364 --- +The Articles of Association, which is adopted by the shareholders in the general +meeting held on September 19, 2025, will become effective on the date that the H shares of +the Company are listed on the Stock Exchange. The primary purpose of this appendix is to +provide potential investors with an overview of the Articles of Association of the +Company. Accordingly, it may not contain all the information that may be considered +material or relevant by potential investors. +1. DIRECTORS AND BOARD OF DIRECTORS +(1) Power to allocate and issue shares +The Articles of Association provide that the shareholders may authorize the +board of directors through a general mandate at a general meeting to allocate or +issue shares of no more than 20% of all outstanding shares. The board of directors +shall prepare suggestions for share allotment or issue, which are subject to approval +by the shareholders at the general meeting in the form of a special resolution. +Any such allotment or issue shall be in accordance with the procedures +stipulated in appropriate laws, administrative regulations and supervision rules of +shares listed region. +(2) Power to dispose assets of the Company or any subsidiary +The sale of substantial assets that exceeds 30% of total assets of the latest +audited financial statement are subject to approval by the shareholders at the +general meeting in the form of a special resolution. The boards of directors may +decide on the disposal of assets of the Company as authorized by the shareholders +in a general meeting. +(3) Emoluments or compensation for directors’ loss of office +If a director is removed before the expiration of his term of office without due +cause, the director may claim for damages from the Company. +(4) Provide financial assistance for acquiring the shares of the Company +The Company or its subsidiaries (including affiliates of the Company) shall +not provide any financial assistance in the form of gifts, advances, guarantees, +compensation or loans for the acquisition of the Company’s or its parent company’s +shares by third parties, except for employee shareholding schemes. +The Company may provide financial assistance for the acquisition of the +Company’s or its parent company’s shares by third parties provided that such +financial assistance is for the benefit of the Company and has been duly approved +either by a resolution of shareholders in general meeting or by a resolution of the +board of directors acting pursuant to authority granted under the Articles of +Association or by shareholders. The aggregate amount of any such financial +assistance shall in no event exceed 10% of the Company’s total issued share capital. +Any resolution of the board of directors approving such financial assistance must be +passed by a super majority of not less than two-thirds of all directors then in office. +(5) Disclosure of interests in contracts with the Company and/or its affiliates +No director shall, without prior disclosure to and approval by either the board +of directors or the general meeting in accordance with the Articles of Association, +directly or indirectly enter into any contract or transaction with the Company. +(6) Remuneration +The remuneration of directors shall be approved by the shareholders at the +general meeting in the form of an ordinary resolution. +(7) Appointment, resignation and dismissal +The board of directors consists of nine directors, including executive +directors, non-executive directors and independent non-executive directors. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-1 – + + +--- page 365 --- +Directors are elected or replaced by the general meeting. The general meeting +may remove any director whose term has not expired by an ordinary resolution +without affecting any claim for damages that may be made pursuant to any contract, +provided that such removal is in compliance with relevant laws and regulations. +The board of directors has one chairman. The chairman of the board shall be +elected and dismissed by a vote of more than one half of the directors. +The term of office of a director shall be calculated from the date of assumption +of office until the expiration of the current term of office of the board of directors, +which is a three-year term. Upon expiration of the term, the director may be +re-elected in accordance with the relevant regulatory rules where the Company’s +shares are listed. +In the event 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 the +number of the board of directors being less than the minimum number required by +law, before the re-elected director assumes his/her office, the original director shall +still perform the duties of a director in accordance with the provisions stipulated by +laws, administrative regulations, departmental rules, and the Articles of +Association. +In the event a director resigns, the director shall notify the Company in +writing, and the resignation shall take effect on the date the Company receives the +notification; however, if the circumstances set forth in the preceding paragraph +exist, the director shall continue to perform the duties. +None of the following persons shall serve as our director: +i. A person who has no civil capacity or has limited civil capacity; +ii. A person who has been imposed penalty for the offense of corruption, +bribery, embezzlement, larceny, disrupting the socialist economic order +or has been deprived of political rights because of this conviction and is +within five years of the expiry date of the sentence; in the case of a +probation, less than two years have elapsed since the date of expiration +of the probationary period; +iii. A person who is a former director, factory manager or general manager +of a company or enterprise that is bankrupt and liquidated, was +personally liable for the bankruptcy of such company or enterprise, and +is within three years of the date of completion of bankruptcy and +liquidation of such company or enterprise; +iv. A person who has served as the legal representative of a company or +enterprise whose business license was revoked or was ordered to close +due to violation of laws, was personally liable, and is within three years +of the date on which the business license of such company or enterprise +was revoked; +v. A person listed by the people’s court as dishonest judgment debtors, +who has a relatively large sum of debt, which was not paid at maturity; +vi. A person who is prohibited by relevant securities regulator from +entering into the securities market and is still in such prohibition +period; or +vii. A person who has been publicly determined by the stock exchange to be +not suitable to serve as a director or senior management of a listed +company, and the period has not elapsed; or +viii. Any other person who is otherwise not eligible under laws, +administrative regulations, regulatory documents and other conditions +set out by the Listing Rules. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-2 – + + +--- page 366 --- +The election, appointment or engagement of a director shall be invalid if such +election, appointment or engagement violates the above-mentioned provisions. If a +director falls into the situations provided in the above-mentioned situations during +their term of office, they would be dismissed by the Company. +(8) Borrowing powers +The Articles of Association do not contain any specific provisions regarding +directors’ power of borrowing money. +The board of directors shall be entitled to develop proposals for the Company +to issue bonds and to list its Shares, and that such bond issues must be approved by +the shareholders by a special resolution at the general meeting. +2. MODIFICATION OF THE ARTICLE OF ASSOCIATION +The Company may amend the Articles of Association based on the provisions of the +laws, administrative regulations and Articles of Association. +In the event that the amendments to the Articles of Association passed by a general +meeting need the examination and approval of the competent authorities, these +amendments shall be submitted hereto for approval. Where the amendment of the Articles +of Association involves registration, it shall be necessary to carry out the lawfully +prescribed procedures for registration change. +3. SPECIAL RESOLUTIONS NEEDED TO BE ADOPTED BY ABSOLUTE +MAJORITY VOTE +The resolutions of the general meeting shall be divided into ordinary resolutions +and special resolutions. +An ordinary resolution may be adopted by a simple majority of the votes held by the +shareholders (including proxies of shareholders) attending the general meeting. +A special resolution can be adopted by a two-thirds majority of the votes held by the +shareholders (including proxies of shareholders) attending the general meeting. +4. VOTING RIGHTS +When shareholders (including proxies) vote at the general meeting, they exercise +their voting rights based on the number of voting shares they represent, and each share +has one voting right. When voting, shareholders (including proxies) holding two or more +votes are not required to cast all their votes in favour, against or as abstentions. +The shares held by the Company itself shall have no voting right and shall not be +counted in the total number of voting shares at the general meeting. +Any shareholder who is required by the Listing Rules to abstain from voting on a +matter or is limited to an affirmative or negative vote shall abstain from voting or be +required to so vote; any vote cast by or on behalf of relevant shareholder which is cast in +violation of such requirement or restriction shall not be counted in the voting result. +5. RULES ON ANNUAL GENERAL MEETINGS +The general meetings are divided into an annual general meeting and an +extraordinary general meetings. The annual general meeting shall be convened once a +year and be held within six months of the end of the previous fiscal year. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-3 – + + +--- page 367 --- +6. ACCOUNTS AND AUDITS +(1) Financial and accounting policies +The Company shall develop its financial accounting policies pursuant to laws, +administrative regulations and rules developed by the competent department. +The Company shall publish the financial reports twice in each accounting +year. Interim financial reports shall be published within 2 months of the end of the +first six months of a fiscal year, while the annual financial report shall be published +within 4 months of the end of each accounting year. +(2) Appointment and dismissal of accountants +The Company shall engage a reputable accounting firm that meets +appropriate requirements of the relevant laws, regulations and regulatory +requirements to be responsible for auditing its annual financial report, conduct +accounting statement audit, net asset verification and other related consulting +services, and the term of service shall be one year, which is renewable upon expiry +of the term. +The appointment and removal of an accounting firm providing regular audit +services to the Company shall be determined by resolution of the shareholders in +general meeting. +Prior to the removal or the non-reappointment of an accounting firm, notice of +such removal or non-reappointment shall be given to the firm concerned 30 days in +advance and such firm shall be entitled to make representation at the general +meeting when voting on the dismissal of such firm at the general meeting. +In the event the accounting firm resigns from its post, it shall make clear to the +general meeting whether there has been any impropriety on the part of the +Company. +If the position of an appointed accounting firm is vacant, the board of +directors may appoint an accounting firm before the start of general meeting. +However, if during the vacant period, the Company has other incumbent accounting +firm, such accounting firm may take the vacant. +7. NOTICE AND AGENDA OF GENERAL MEETINGS +Under any of the following circumstances, the board of directors shall convene an +extraordinary general meeting within two months: +i. The number of directors is less than the number specified in the Company +Law or less than two thirds of the number required in the Articles of +Association; +ii. The uncovered losses of the Company reach one-third of its total paid-in +registered capital; +iii. The shareholders with 10% or more shares of the Company (including +preference shares with restored voting rights) separately or jointly request to +convene an extraordinary general meeting in writing; +iv. The board of directors considers it necessary; +v. The audit committee makes such proposal; +vi. Any other circumstances stipulated in laws, regulations, the Articles of +Association. +In the event that the general meeting is convened, the board of directors and +shareholders who separately or jointly hold more than 1% of the shares of the Company +(including preference shares with restored voting rights) may submit a proposal. +When convening an annual general meeting, the Company shall notify shareholders +by announcement 21 days before it is convened. When convening an extraordinary +general meeting, the Company shall send a written notice 15 days before it is convened. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-4 – + + +--- page 368 --- +The notice of the general meeting shall be made in writing, including the following +contents: +i. The time, venue, and duration of the meeting; +ii. The matters and proposals to be discussed at the meeting; +iii. Conspicuous statement that all shareholders are entitled to attend the meeting +and appoint proxy to attend and vote and that proxy need not be a +shareholder; +iv. The date of shareholding registration for the shareholders who are entitled to +attend the meeting; +v. The name and telephone number of the contact person for the meeting; +vi. The voting time and voting procedure for internet or other alternative voting +methods; +vii. Other requirements stipulated by laws, administrative regulations, +department rules, Listing Rules. +The notice of general meeting and any supplementary notice shall contain full and +complete disclosure of all substantive details of every proposed resolution. +The resolution of the general meeting includes ordinary resolution and special +resolution. The following matters shall be approved by the general meeting through +ordinary resolutions: +i. Work report of the board of directors; +ii. Plans of earnings distribution and loss make-up schemes drafted by the board +of directors; +iii. Appointment or dismissal of the members of the board of directors and their +enumeration and payment methods; +iv. Other matters other than those approved by special resolution stipulated in +the laws, administrative regulations, Listing Rules or the Articles of +Association. +The following matters shall be approved by special resolution at the general +meeting: +i. The increase or decrease of the registered capital; +ii. Division, split, merger, dissolution and liquidation of the Company; +iii. Amendment of the Articles of Association; +iv. The purchase or sale of material assets of the Company or provision of +guarantees to others by the Company within one year exceeding 30% of the +latest audited total assets of the Company; +v. Share incentive scheme; +vi. Other matters recognized by ordinary resolution of the general meeting that +could materially affect the Company and need to be approved by special +resolution or as required by the laws, administrative regulations, Listing +Rules or the Articles of Association. +In the event that any resolution of the general meeting or resolution of the board of +directors violates laws or administrative regulations, any shareholder is entitled to +request the court to deem it as invalid. +In the event that the convening procedure or voting formula of the general meeting +or meeting of the board of directors violates any of laws, administrative regulations or the +Articles of Association, or the content of resolution violates the Articles of Association, +any shareholder is entitled to request the court to revoke the relevant resolution within 60 +days after the resolution was adopted, unless there is only a minor defect in the +procedures for convening a general meeting or a meeting of the board of directors or in the +manner of voting, which does not materially affect the resolution. +8. SHARES TRANSFERS +The shares issued before the public issuance of shares by the Company shall not be +transferred within one year of the date on which the stocks of the Company are listed and +traded on a stock exchange. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-5 – + + +--- page 369 --- +The directors and senior managements of the Company shall declare, to the +Company, information on their holdings of the shares of the Company and the changes +thereto. The shares transferable by them during each year of their term of office shall not +exceed 25% of the total shares of the Company held by them. The shares of the Company +held by them shall not be transferred within one year of the date on which the stocks of the +Company are listed and traded on a stock exchange. The aforesaid persons shall not +transfer their shares of the Company within six months from the date of their resignation. +In the event the securities regulatory authorities in the place where the Company’s +shares are listed and CSRC (if applicable) have any other provisions on the transfer +restrictions of H shares, such provisions shall prevail. +9. POWERS OF OUR COMPANY TO REPURCHASE ITS SHARES +The Company shall not repurchase its shares except under any of the following +circumstances provided that such repurchase does not violate laws, regulations, the +Listing Rules, and the Articles of Association: +i. Reduce the Company’s registered capital; +ii. Merger with other companies which hold our shares; +iii. Granting shares to the staff of the Company as incentives; +iv. Requesting the Company to buy back its shares from shareholders who vote +against any resolution adopted at the general meeting concerning the merger +and division of the Company; +v. To convert shares into bond issued by the Company which is convertible to +stock of the Company; +vi. Necessary for the Company to maintain the Company’s value and +shareholders’ interests. +10. DIVIDEND AND OTHER DISTRIBUTION METHODS +The Company may distribute dividends in the manner of cash or stock. +The Company shall implement the specific distribution plan within six months after +the general meeting has passed a resolution on the profit distribution plan. +11. SHAREHOLDER PROXIES +Shareholders may attend the general meeting in person or authorize one or more +representatives, who is not a shareholder, to attend and vote on their behalf. +Any proxy statement issued by a Shareholder who authorizes a proxy to attend the +general meeting on his/her behalf shall include the following details: +i. the name or title of the appointer, class and number of the company shares +held; +ii. the name or title of the proxy; +iii. the shareholder’s specific instructions, including respective instructions on +for, against or abstention voting on each item for deliberation listed in the +general meeting agenda; +iv. the issuance date and valid period of the proxy statement; +v. the signature (or seal) of the appointer. Where the appointer is a corporate +shareholder, the corporate seal of the legal entity shall be affixed. +12. INSPECTION OF THE REGISTER OF SHAREHOLDERS +The Company establishes the register of Shareholders according to the certificate +provided by the securities registration authority. The register of Shareholders is sufficient +evidence to prove that the Shareholders hold the Company’s shares. Shareholders enjoy +rights and assume obligations according to the type and number of shares they hold. +Registered shareholders or prospective registrants who lose their shares may apply to the +Company for replacement certificates. Replacement applications by H-share shareholders +shall be handled in accordance with the laws, stock exchange rules and other relevant +provisions of the place where the original H-share register is kept. +Shareholders holding the same type of Shares shall enjoy the same rights and +undertake the same obligations. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-6 – + + +--- page 370 --- +The original register of the shareholders of the H Shares listed in Hong Kong shall +be kept in Hong Kong. +When the Company convenes the general meeting, pays dividends, goes into +liquidation or is involved in other actions that require the confirmation of identities, the +board of directors shall fix a date as the equity registration date, upon expiration of which +the shareholders whose names registered on the register of shareholders shall be the +shareholders entitled to relevant equity. +13. RIGHTS OF MINORITIES IN RELATION TO FRAUD OR OPPRESSION +If any director or senior management (other than a member of the Audit Committee) +violates laws, administrative regulations or the Articles of Association in fulfilling +his/her duties, thereby causing any loss to the Company, the shareholder(s) severally or +jointly holding 1% or more shares of the Company for more than 180 consecutive days +shall have the right to request the Audit Committee in writing to institute legal +proceedings at the People’s Court; if the member of the Audit Committee violates laws, +administrative regulations or the Articles of Association in fulfilling his/her duties, +thereby causing any loss to the Company, the aforementioned Shareholders shall have the +right to request the board of directors in writing to institute legal proceedings at the +People’s Court. +If the Audit Committee or the board of directors refuses to institute legal +proceedings after receipt of the aforesaid written request or fails to institute legal +proceedings within 30 days after receipt of the aforesaid written request, or if under +urgent circumstances that any delay of legal proceedings may cause irrecoverable +damages to the interests of the Company, the Shareholders specified above shall have the +right to directly institute legal proceedings at the People’s Court in their own names for +the interest of the Company. +If any other person infringes upon the legitimate rights and interests of the +Company, thereby causing any loss to the Company, the Shareholders specified in +paragraph 1 may institute legal proceedings at the People’s Court pursuant to the +preceding provisions. +Where a director or senior management of a wholly-owned subsidiary of the +Company violates laws and administrative regulations or the Articles of Association in +fulfilling his/her duties, thereby causing any loss to the Company, or where a third party +infringes upon the lawful rights and interests of such wholly-owned subsidiary thereby +causing losses, any shareholders who individually or jointly holding no less than 1% of +the Company’s shares for no less than 180 consecutive days shall have the right to submit +a written request to the Audit Committee or the board of directors of the wholly-owned +subsidiary to initiate legal proceedings with the People’s Court in accordance with the +relevant provisions of the Corporate Law or directly initiate legal proceedings with the +People’s Court in their own name. +If a wholly-owned subsidiary of the Company does not set up a board of supervisors +or does not have a supervisor, and sets up an Audit Committee instead, the relevant +procedure specified in paragraph 1 and 2 above shall be followed. +If any director or senior management violates the laws, administrative regulations +or the Articles of Association, thereby causing any loss to the Shareholders’ interests, the +Shareholders may institute legal proceedings at the People’s Court. +14. LIQUIDATION PROCEDURES +The Company shall be dissolved under any of the following circumstances: +(i) the expiration of the business period as stipulated in the Articles of +Association or the occurrence of other grounds for dissolution as stipulated in +the Articles of Association; +(ii) the general meeting resolves to dissolve the Company; +(iii) dissolution is necessary as a result of the merger or division of the Company; +(iv) the business license of the Company is revoked, or the Company is ordered to +be closed down, or it is deregistered according to law; and +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-7 – + + +--- page 371 --- +(v) the Company is confronted with serious difficulties in operation and +management, and its continued existence may cause material loss to the +interests of its shareholders, and the difficulties cannot be resolved through +other means, in which case the Shareholders holding 10% or more of the +voting rights held by all the Shareholders of the Company may request a +People’s Court to dissolve the Company. +Where any ground for dissolution as specified in the preceding paragraph arises in +respect of the Company, the Company shall within 10 days publish such ground for +dissolution via the National Enterprise Credit Information Publicity System. +Where the Company is to be dissolved pursuant to items (1), (2), (4) or (5) above, it +shall undergo liquidation. Directors shall act as the liquidation obligor and establish a +liquidation committee within 15 days from the date when the event of dissolution occurs. +The members of the liquidation committee shall be composed of the directors or the +personnel appointed by the general meeting. +Within 10 days of the establishment of the liquidation committee, the creditors shall +be notified and an announcement shall be published within 60 days. Creditors shall file +their claims with the liquidation committee within 30 days of receiving the notice, or +within 45 days from the publication if any such creditor has not received the notice. +After identifying the Company’s assets and preparing the balance sheet and +schedule of assets, the liquidation committee shall formulate a liquidation plan and +submit it to the general meeting or the People’s Court for confirmation. +Upon completion of the company’s liquidation, the liquidation committee shall +prepare a liquidation report, submit it to the general meeting or the People’s Court for +confirmation, and file it with the company registry to apply for deregistration of the +company. +15. OTHER IMPORTANT PROVISIONS FOR OUR COMPANY OR +SHAREHOLDERS +(1) General provisions +The Company is a permanently existing joint stock limited company. +According to the Articles of Association, any shareholder may bring a lawsuit +against another shareholder, a director, or the senior management, any shareholder +may bring a lawsuit against the Company, and the Company may bring a lawsuit +against any shareholder, director or the senior management. +(2) Capital increase and capital reduction +The Company may increase stock capital by the following means in +accordance with laws and regulations, subject to the approval by the general +meeting, for management and operation needs: +i. Issuing shares in a public offering; +ii. Issuing shares via a private placement; +iii. Giving bonus shares to existing shareholders; +iv. Converting reserve funds into shares; and +v . Other means approved by the laws, administrative regulations, +departmental rules and relevant regulatory authorities where the +Company’s shares are listed and the CSRC (if necessary). +The Company may decrease our registered capital and shall comply with the +procedures stipulated in Company Law of the PRC, the Listing Rules, other relevant +regulations and the Articles of Association. +(3) Shareholders +Shareholder is entitled to rights and assumes obligations pursuant to the +classification of his or her shares. Shareholder holding the same classified share has +the same rights and assumes the same obligations. +The rights of our ordinary shareholders are as follows: +i. To receive distribution of dividends and other forms of benefits +according to the number of shares held; +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-8 – + + +--- page 372 --- +ii. To legally require, convene, preside over, participate in or authorize +proxies of shareholders to participate in and exercise corresponding +voting rights at the general meeting; +iii. To supervise and manage business and operational activities of the +Company, and to provide suggestions or submit queries; +iv . To transfer, grant or pledge the Company’s shares he/she held +according to the provisions of the laws, administrative regulations, +regulatory rules where the Company’s shares are listed and the Articles +of Association; +v . To obtain relevant information according to the provisions of the +Articles of Association, including reading and coping the Articles of +Association, register of shareholders, minutes of general meetings, +resolutions of meetings of the board of directors; eligible Shareholders +may inspect the accounting books and accounting vouchers; +vi. To participate in the distribution of residual properties of the company +in proportion to the number of shares held in the event of the +termination or liquidation of the Company; +vii. To r equest the Company to buy back their shares as dissenting +shareholders voting against any resolutions adopted at the general +meeting concerning the merger and division the Company; +viii. Other rights conferred by laws, administrative regulations, +departmental rules, the Listing Rules, and the Articles of Association. +(4) The board of directors +The board of directors is responsible to the general meeting. +The board of directors exercises the following powers: +i. To convene the general meeting and report on its work to the general +meeting; +ii. Implement the resolutions of the general meeting; +iii. Determine the business and investment plans of the Company; +iv . Formulate the earnings distribution and loss offset plans of the +Company; +v. Formulate the proposals for increasing or decreasing the Company’s +registered capital, issuance of corporate bonds or other securities and +the listing plan of the Company; +vi. Prepare plans for major acquisition, stocks buy-back, corporate merger, +separation, dissolution and change corporate form of the Company; +vii. Determine, in accordance with the Articles of Association or within the +scope authorized by the general meeting, such matters as the +Company’s external investments, the purchase and sale of assets, asset +mortgages, external guarantees, entrusted management of finance, +related-party transactions and external donations; +viii. Decide on the setup of the Company’s internal management +organization; +ix. Appoint or dismiss the general manager, secretary of the board, and +other senior managers of the Company; based on the nomination of the +general manager, appoint or dismiss senior managements of the +Company such as deputy general manager, Chief financial officer (CFO) +and other senior managers and determine their remuneration, reward +and disciplinary matters; +x. Formulate the basic internal management systems of the Company; +xi. Review the compensation system and compensation structure of the +Company and/or its subsidiaries; +xii. Formulate the modification plan to the Articles of Association; +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-9 – + + +--- page 373 --- +xiii. Managing the information disclosure of the Company; +xiv . Make proposals to the general meeting on the appointment or +replacement of the accounting firm that provides audit services to the +Company; +xv . Listen to work report of general manager and inspect the general +manager’s work; and +xvi. Other powers and duties authorized by the laws, administrative +regulations, regulations of the authorities, the Listing Rules and the +Articles of Association. +Board meeting shall be held only if more than one half of the directors are +present. Unless otherwise provided in the Articles of Association, resolutions of the +board of directors shall be passed by a simple majority of all directors. +The board of directors of the Company shall give an explanation to the general +meeting on the non-standard audit report issued by the certified public accountants +on the financial reports of the Company. +(5) Independent non-executive director +At least one independent non-executive director shall have applicable +professional qualification or are equipped with applicable accounting or relevant +financial management expertise. +(6) Secretary of the board of directors +The Secretary of the board of directors, as a senior management officer of the +Company, shall be responsible for organizing the shareholders’ general meetings +and board meetings, maintaining corporate records, managing shareholder +information, and handling disclosure matters, while complying with all applicable +laws, administrative regulations, departmental rules, and the provisions of these +Articles of Association. The Company has one secretary of the board of directors. +(7) Audit committee +The Company shall set up an audit committee. +The audit committee consists of three directors. +The audit committee shall consist of directors who are not senior +managements of the company, among them there are two independent directors, +and an accounting professional among these independent directors shall act as the +convener. +The audit committee shall be responsible for review of the company’s +financial information and disclosure thereof, supervision and evaluation of internal +and external audit work and internal control. The following matters shall, upon +consent by more than half of all the members of the audit committee, be present to +board meeting for deliberation: +i. Disclosure of financial information in financial accounting reports and +periodic reports, internal control evaluation report; +ii. Engagement or dismissal of accounting firm which undertakes audit +business of a listed company; +iii. Engagement or dismissal of the financial controller of a listed company; +iv. Change in accounting policies or accounting estimates or correction of +material accounting error for a reason other than change in accounting +standards; and +v. Any other matters stipulated by laws, administrative regulations, the +CSRC and the articles of association. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-10 – + + +--- page 374 --- +(8) General manager +The Company has one general manager, appointed or dismissed by the board +of directors. The general manager of the Company is responsible to the board of +directors and exercises the following powers: +i. Be in charge of the producing and operational management of the +Company, organize the implement of resolutions of the board of +directors and report to the board of directors on his/her work; +ii. Organize the implementation of the Company’s annual operation plans +and investment schemes; +iii. Formulate the plans for establishment of the Company’s internal +management organization; +iv. Formulate the fundamental management policies of the Company; +v . Formulate the specific management regulations and rules of the +Company; +vi. Propose the board of directors of engagement or dismissal of the +Company’s deputy general manager, Chief financial officer and other +senior managements; +vii. Decide to engage or dismiss other managements except those who shall +be appointed or dismissed by the board of directors; +viii. Other responsibilities authorized by the Articles of Association and the +board of directors. +(9) Reserve fund +When the annual after-tax profits of the Company are distributed, the +Company shall allocate 10% of the profits to the statutory reserve fund of the +Company. Allocations to the Company’s statutory reserve fund may be waived once +the cumulative amount of funds therein exceeds 50% of the Company’s registered +capital. +If the Company’s statutory reserve fund is insufficient to offset our losses +during the previous year, the profits generated during the current year shall be used +to cover such losses before allocating the statutory reserve in accordance with the +requirements set forth above. +After allocation to the statutory reserve fund from the after-tax profits of the +Company, we may also allocate to the discretionary reserves fund will from after-tax +profits in line with the resolution(s) adopted at the general meeting. +After the Company has covered for its losses and made allocations to its +statutory reserve fund, the remaining profits are distributed in proportion to the +number of shares held by the shareholders, unless otherwise specified by the +Articles of Association. +If the general meeting violates the above provisions and profits are +distributed to the shareholders, the profits distributed in violation of the provisions +shall be returned by such shareholders to the Company. If the Company suffers +losses, the shareholders and responsible directors, senior managements shall be +liable for compensation. +The shares held by the Company itself shall not be subject to profit +distribution. +The Company’s reserve fund shall be used to offset losses of the Company, +expanding the scale of business and operations or for conversion into and increase +our capital. +Where reserve fund is used to offset loss of the Company, the discretionary +reserve fund and statutory reserve fund shall be firstly used; in the event they are +insufficient for offsetting loss, the capital reserve fund may be applied to cover the +company’s losses. +Where the statutory reserve fund converses into the registered capital, the +remaining statutory reserve shall not be less than 25% of the registered capital of the +Company before such conversion. +APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION +– III-11 – + + +--- page 375 --- +FURTHER INFORMATION ABOUT OUR GROUP +Incorporation of our Company +Our Company was established as a limited liability company in January 2007 under +the laws of the PRC and was converted into a joint stock limited company in January 2025. +Our registered office is located at Room B06, 26th Floor, Building 5, Digital China Science +and Technology Park, No. 20, Zhangba 4th Road, High-tech Development Zone, Xi’an, +Shaanxi, PRC. +Our Company has established a place of business in Hong Kong at 31/F, Tower Two, +Times Square, 1 Matheson Street, Causeway Bay, Hong Kong and has been registered as a +non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance on +September 18, 2025. Mr. Zou Ran ( ཅ್) and Ms. Chan Yee Lam ( ௓ၥᔝ) have been +appointed as our authorized representatives for acceptance of service of process and +notices in Hong Kong, and their correspondence address is the same as our place of +business in Hong Kong. +As our Company was established in the PRC, we 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 III to this prospectus. +Changes in the Share Capital of our Company +The following sets out the changes in the share capital of our Company during the +two years immediately preceding the date of this prospectus: +(i) In March 2024, Junying Growth transferred 0.81% equity interest in our +Company, being 40,353 Shares, to Junying Jiacheng. +(ii) In January 2025, our Company was converted into a joint stock limited +company. +(iii) In September 2025: +(i) Linhai Qize injected RMB138.5 million into our Company in return for +287,653 Shares; +(ii) Maicheng Century injected RMB15.0 million into our Company in +return for 31,154 Shares; +(iii) Jinan Liuji injected RMB12.0 million into our Company in return for +24,923 Shares; +(iv) Shaanxi Jingang injected RMB30.0 million into our Company in return +for 62,308 Shares; and +(v) Shaanxi Innovation Relay injected RMB40.0 million into our Company +in return for 83,077 Shares. +For details of changes in the share capital of our Company, see “History, +Development and Corporate Structure.” +Changes in the Share Capital of our Subsidiaries +The list of our major subsidiaries is set out under the financial statements in the +Accountants’ Report as included in Appendix I to this prospectus. The following +alterations in the share capital of our subsidiaries have taken place within the two years +immediately preceding the date of this prospectus: +(i) On June 14, 2023, the registered share capital of Shanghai Xitaili increased +from RMB30.0 million to approximately RMB33.7 million. +(ii) On February 14, 2025, the registered share capital of Xi’an Biocare increased +from RMB9.6 million to RMB60.0 million. +(iii) On February 24, 2025, the registered share capital of Suzhou Technology +increased from RMB50 million to RMB80.0 million. +(iv) On March 3, 2026, the registered share capital of Suzhou Pharmaceutical +decreased from RMB238 million to RMB10 million. +Save as disclosed above, there had been no other alterations of share capital of our +subsidiaries within the two years preceding the date of this prospectus. +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-1 – + + +--- page 376 --- +Resolutions of the Shareholders +Pursuant to a general meeting held on September 19, 2025, the Shareholders +resolved that, among others: +(a) the issuance by our Company of H Shares with a nominal value of RMB1.00 +each (or with a nominal value of RMB0.02 each upon the completion of the +Share Subdivision) and such H Shares being listed on the Stock Exchange; +(b) the number of H Shares to be issued shall not be more than 25% of the total +issued share capital of our 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 of the Over-allotment +Option in respect of not more than 15% of the number of H Shares initially +available under the Global Offering; +(c) subject to the CSRC’s approval, upon completion of the Global Offering, +222,016,700 Unlisted Shares in aggregate held by 24 Shareholders will be +converted into H Shares on a one-for-one basis; +(d) 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 +(e) 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. +FURTHER INFORMATION ABOUT OUR BUSINESS +Summary of Our 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 Hong Kong Underwriting Agreement; +(b) the Deed of Indemnity; +(c) the cornerstone investment agreement dated June 9, 2026, entered into among +the Company, Everest Medicines Limited, CCB International Capital Limited +and China Merchants Securities (HK) Co., Limited with respect to a +subscription of H Shares at the Offer Price in the aggregate amount of +HK$100.00 million; +(d) the cornerstone investment agreement dated June 9, 2026, entered into among +the Company, Qiyuan High-tech Innovation Investment (Hong Kong) Limited +(ʮ̡), CCB International Capital Limited and +China Merchants Securities (HK) Co., Limited, with respect to a subscription +of H Shares at the Offer Price in the aggregate amount of HK$341.36 million; +(e) the cornerstone investment agreement dated June 9, 2026, entered into among +the Company, Summit Capital Limited (ʮ̡), CCB International +Capital Limited and China Merchants Securities (HK) Co., Limited, with +respect to a subscription of H Shares at the Offer Price in the aggregate +amount of HK$7.83 million; +(f) a capital contributions agreement dated June 27, 2025, entered into between, +amongst others, our Company and Linhai Qize, under which Linhai Qize +agreed to subscribe and our Company agreed to issued 287,653 Shares to +Linhai Qize at a total consideration of RMB138.5 million; +(g) a capital contributions agreement dated September 19, 2025, entered into +between, amongst others, our Company and Maicheng Century, under which +Maicheng Century agreed to subscribe and our Company agreed to issue +31,154 Shares to Maicheng Century at a total consideration of RMB15.0 +million; +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-2 – + + +--- page 377 --- +(h) a capital contributions agreement dated September 19, 2025, entered into +between, amongst others, our Company and Jinan Liuji, under which Jinan +Liuji agreed to subscribe and our Company agreed to issue 24,923 Shares to +Jinan Liuji at a total consideration of RMB12.0 million; +(i) a capital contributions agreement dated September 24, 2025, entered into +between, amongst others, our Company and Shaanxi Jingang, under which +Shaanxi Jingang agreed to subscribe and our Company agreed to issue 62,308 +Shares to Shaanxi Jingang at a total consideration of RMB30.0 million; and +(j) a capital contributions agreement dated September 26, 2025, entered into +between, amongst others, our Company and Shaanxi Innovation Relay, under +which Shaanxi Innovation Relay agreed to subscribe and our Company agreed +to issue 83,077 Shares to Shaanxi Innovation Relay at a total consideration of +RMB40.0 million. +Intellectual Property Rights +Trademarks +As of the Latest Practicable Date, we have registered the following trademarks, +which we consider to be material to our business: +No. T rademark Class Owner +Place of +Registration +Registration +No. Expiry date +1... +5 Our Company Hong Kong 306072822 September 29, 2032 +2... + 42 Our Company PRC 78894863 November 20, 2034 +3... + 10 Our Company PRC 78486854 December 20, 2034. +4... + 5 Our Company PRC 74424768 April 20, 2034 +5... + 5 Our Company PRC 69265343 July 13, 2033 +6... + 5 Our Company PRC 69258685 September 20, 2033 +7... + 5 Our Company PRC 69257898 September 20, 2033 +8... + 5 Our Company PRC 69260760 July 13, 2033 +9... + 5 Our Company PRC 69266533 July 27, 2033 +10 . . + 5 Our Company PRC 67566942 April 13, 2033 +11 . . + 5 Our Company PRC 67549391 April 13, 2033 +12 . . + 5 Our Company PRC 67548564 April 13, 2033 +13 . . + 5 Our Company PRC 56176082 February 20, 2032 +14 . . + 42 Our Company PRC 50739779 July 20, 2031 +15 . . + 44 Our Company PRC 50572621 June 27, 2031 +16 . . + 35 Our Company PRC 50578479 April 6, 2032 +17 . . + 10 Our Company PRC 50582155 June 20, 2031 +18 . . + 42 Our Company PRC 50577241 June 20, 2031 +19 . . + 42 Our Company PRC 50560005 July 6, 2031 +20 . . + 5 Our Company PRC 50576908A September 6, 2031 +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-3 – + + +--- page 378 --- +No. T rademark Class Owner +Place of +Registration +Registration +No. Expiry date +21 . . +35 Our Company PRC 50549904 May 27, 2032 +22 . . + 5 Our Company PRC 50578883A September 6, 2031 +23 . . + 44 Our Company PRC 50549881 April 13, 2032 +24 . . + 44 Our Company PRC 50562701 July 6, 2031 +25 . . + 35 Our Company PRC 50582167 May 27, 2032 +26 . . + 10 Our Company PRC 50577297 June 27, 2031 +27 . . + 5 Our Company PRC 50556505 August 6, 2031 +28 . . + 10 Our Company PRC 15078968 September 20, 2035 +29 . . + 5 Our Company PRC 15078731 November 13, 2035 +30 . . + 5 Our Company PRC 15078862 November 13, 2035 +31 . . + 10 Shanghai Xitaili PRC 82995234 July 6, 2035 +32 . . + 42 Shanghai Xitaili PRC 80060829 January 27, 2035 +33 . . + 5 Shanghai Xitaili PRC 78907637 November 20, 2034 +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-4 – + + +--- page 379 --- +Patents +As of the Latest Practicable Date, we had registered the following patents which we +considered to be material to our business: +No Owner Description Patent No. +Type of +Patents +Application +date +Authorization +announcement +date +1 . . Our Company Bispecific fusion polypeptide +compound +(ي) +CN202180014524.4 Invention April 20, +2021 +September 26, +2023 +2 . . Our Company Active polypeptide compound +(ي) +CN202080071421.7 Invention June 19, +2020 +August 25, +2023 +3 . . Our Company Multi-target compound +with anticoagulant and +antiplatelet activities, +its preparation method +and use +(ٙ׌ݺؐ +ձ͜௄) +CN202110662995.8 Invention August 5, +2015 +November 8, +2022 +4 . . Our Company Multi-target compound +with anticoagulant and +antiplatelet activities, +its preparation method +and use +(ٙ׌ݺؐ +ձ͜௄) +CN202110662996.2 Invention August 5, +2015 +October 4, +2022 +5 . . Our Company Multi-target compound with +anticoagulant and +antiplatelet activities, +its preparation method and +use +(ٙ׌ݺؐ +ձ͜௄) +CN202110661682.0 Invention August 5, +2015 +October 4, +2022 +6 . . Our Company Compound for treating +neurological diseases and its +application +(ʷ +ʿՉᏐ͜) +CN201910704350.9 Invention July 31, +2019 +October 1, +2021 +7 . . Our Company Multi-target compound +with anticoagulant and +antiplatelet activities, +its preparation method and +use +(ٙ׌ݺؐ +ձ͜௄) +CN201580082185.8 Invention August 5, +2015 +July 13, 2021 +8 . . Our Company Peptide for preventing and +treating acute coronary +syndrome and anticoagulant +and antithrombotic therapy, +and its application +(এၝ +ε㹻 +ʿՉᏐ͜) +CN201110171267.3 Invention June 23, +2011 +January 22, +2014 +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-5 – + + +--- page 380 --- +No Owner Description Patent No. +Type of +Patents +Application +date +Authorization +announcement +date +9 . . Xi’an Biocare +Pharma Ltd. +Bile acid derivative salts, their +crystalline forms, and +preparation methods and +applications thereof +(ഐ +ձᏐ͜) +CN202180006768.8 Invention April 7, +2021 +August 2, 2024 +10 . . Xi'an Biocare +Pharma Ltd. +Compound for the treatment +of metabolic diseases, +its preparation method and +application +(ʷΥ +ձᏐ͜) +CN201810930184.X Invention August 15, +2018 +October 30, +2020 +Domain names +No. Domain name +Name of +Registered Proprietor Expiry date +1 . . . micot.cn Our company March 20, 2031 +2 . . . micot.com Our company June 24, 2031 +3 . . . micot.com.cn Our company May 21, 2031 +4 . . . micot.net Our company January 14, 2032 +Save as disclosed above, till the Latest Practicable Date, there was no other trade or +service mark, patent, intellectual or industrial property right which was material in +relation to our business. +FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL +SHAREHOLDERS +Particulars of Directors’ Service Contracts +We have entered into a service contract or a letter of appointment with each of the +Directors 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 and letters of appointment 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 has or is proposed to have a service +contract with any member of our Group. +Remuneration of Directors +For details of the remuneration of our Directors, see “Directors and Senior +Management — Directors’ Remuneration and Remuneration of the Five Highest-paid +Individuals” and “Appendix I — Notes to the Historical Financial Information — +Directors’ and Chief Executive’s Remuneration”. +Disclosure of interests +Interests of the Directors and Chief Executive of our Company +Save as disclosed below, immediately following the completion of the Global +Offering (assuming the Over-allotment Option is not exercised and taking into amount the +Share Subdivision) and the conversion of the Unlisted Shares into H Shares, so far as the +Directors are aware, none of the Directors or chief executive of our Company will have any +interest and/or short position (as applicable) in the Shares, underlying Shares or +debentures of our Company or our associated corporation (within the meaning of Part XV +of the SFO) which will be required to be notified to our 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 our Company and the Stock Exchange, once the H Shares are listed on the Stock +Exchange. +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-6 – + + +--- page 381 --- +Name Position Nature of interest +Number and +description of +Shares held +Approximate +percentage of +shareholding in +the relevant type +of Shares +(1) +Approximate +percentage of +shareholding in +the total share +capital of our +Company (1) +Dr. Wang Bing ..... Chairman of our Board, +Executive Director and +Chief Executive Officer +Beneficial owner 99,660,050 H Shares 35.58% 43.43% +Interest of spouse +(2) 44,400,000 Unlisted +Shares +85.93% +Interest in controlled +corporations (3) +Dr. Wang Mei . . . . . Non-executive Director Beneficial owner 99,660,050 H Shares 35.58% 43.43% +Interest of spouse (2) 44,400,000 Unlisted +Shares +85.93% +Interest in controlled +corporations (3) +1. The calculation is based on the completion of the Share Subdivision and the assumption that (i) +the Over-Allotment Option is not exercised, (ii) the 222,016,700 Unlisted Shares (taking into +account the Share Subdivision) will be converted into H Shares, and (iii) the total number of the +Shares in issue will be 331,740,350 H Shares immediately after completion of the Global Offering. +2. Immediately following the completion of the Global Offering, (assuming the Over-allotment +Option is not exercised and taking into account the Share Subdivision), Xi’an Zhongrui shall +directly hold 4.52% of the interest in our Company. Dr. Wang Mei has control over Xi’an Zhongrui +Zekang Enterprise Management Consulting Co., Ltd.* (ʮ̡) +(“Zhongrui Zekang”), and Zhongrui Zekang is the general partner of Xi’an Zhongrui. +Accordingly, Xi’an Zhongrui is controlled indirectly by Dr. Wang Mei. By virtue of the SFO, Dr. +Wang Mei is deemed to be interested in the Shares held by Xi’an Zhongrui. +3. Dr. Wang Bing and Dr. Wang Mei are spouses. Accordingly, Dr. Wang Bing and Dr. Wang Mei are +deemed to be interested in the Shares held by each other under the SFO. +Interests of Substantial shareholders +Save as disclosed in “Substantial Shareholders” in this prospectus, the Directors are +not aware of any other person (other than the Directors or chief executive of our +Company) who will, immediately following the completion of the Global Offering +(assuming no exercise of the Over-allotment Option) 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 our 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 nominal value of any class of share capital carrying rights +to vote in all circumstances at general meetings of our Company or any other member of +our Group. +Pre-IPO Share Incentive Plan +Our Company adopted an employee incentive scheme (the “ Xi’an Zhongrui +Employee Incentive Scheme ”) on June 11, 2020 (and amended the same in August 2025) +with the primary purpose to improve corporate governance and to incentivize and reward +eligible persons who have contributed to the success of our Company. In establishing the +Xi’an Zhongrui Employee Incentive Scheme, our Company aims to fully mobilize the +enthusiasm of management and employees of our Company, further aligning interests of +Shareholders, our Company and its employees to jointly foster long-term development, +thereby allowing all parties to share the benefits derived from our Company’s growth. The +following is a summary of the principal terms of the Xi’an Zhongrui Employee Incentive +Scheme. +Principal Terms +Implementation structure and platform +Xi’an Zhongrui was established in the PRC as a limited partnership on July 18, 2019 +to serve as our Company’s employee incentive platform, with Zhongrui Zekang (a limited +partnership established in the PRC, owned as to approximately 99.0% by Dr. Wang Mei) +being their General Partner. As of the Latest Practicable Date, Xi’an Zhongrui subscribed +for approximately 5.63% of the shareholding in our Company. For more details, please +refer to the paragraphs headed “History, Development and Corporate Structure — +Employee Incentive Scheme — Xi’an Zhongrui” in this prospectus. +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-7 – + + +--- page 382 --- +Eligible participants and grants of awards +Under the Xi’an Zhongrui Employee Incentive Scheme, eligible participants are +determined by our Company’s chairperson, Dr. Wang Bing, and may hold positions as +Directors, supervisors, senior and middle management, key employees and external +consultants or expert advisors of our Company and our Group. +The participants of the Xi’an Zhongrui Employee Incentive Scheme will be granted +awards under the scheme, where they are given a right to obtain partnership interest in +Xi’an Zhongrui as limited partners, such that participants indirectly hold Shares in our +Company. Under the Xi’an Zhongrui Employee Incentive Scheme, participants will have +rights to cash dividends distributed by our Company from time to time (if any), but will +not have voting rights in and control over our Company and/or our Group. +Lock-up Period +The Xi’an Zhongrui Employee Incentive Scheme is subject to a strict lock-up period +from the date of the grant to 12 months after the Listing Date. During the strict lock-up +period, participants may not transfer, gift or otherwise dispose of their awards. +Notwithstanding the foregoing, subject to prior approval from Dr. Wang Bing, +participants may transfer, gift or otherwise dispose of their awards to Xi’an Zhongrui, Dr. +Wang Bing or their designated entities, or otherwise dispose of awards in the manner as +approved by Dr. Wang Bing. +Vesting of awards +Awards vest in the participants over a five-year period, in five equal 20% tranches +on each anniversary of the grant date, and are subject to the following conditions: +(1) The participant was and remains employed by our Company or our Group for +the relevant annual period; and +(2) The participant had achieved a minimum performance rating of “C” or above +in the appraisal for the previous year. +The amount of awards vested will also be affected by actual performance of +participants in the previous year. In particular, for participants that receive a performance +rating of: +– “A” or “B”: 100% of the annual 20% tranch will be vested in the participant; +– “C”: 80% of the annual 20% tranch will be vested in the participant, and the +remaining 20% of the annual 20% tranch will be forfeited; +– Below “C”: the entire annual 20% tranch does not vest in the participant and is +forfeited. +Disposal of awards and realizing gains +After the strict lock-up period expires and the awards are vested, participants may +dispose of their awards and realize gains by submitting sale requests to Dr. Wang Bing +during the submission window. Submission windows open quarterly, and should sale +requests be submitted, Xi’an Zhongrui will process the sales of corresponding Shares in +our Company so that net proceeds from such sale of Shares are distributed to the relevant +participant. +Repurchase of Shares by our Company upon termination +Our Company shall have the right to repurchase Shares should employment of any +participant terminate. The repurchase price for the relevant Shares will be determined by +the reason for termination of employment: +– Termination by misconduct: Company to repurchase all vested and unvested +Shares at cost; +– Termination by resignation (without fault): Company to repurchase all vested +Shares at cost plus 7% interest per annum (if length of employment is over two +years but under five years), cost plus 9% interest per annum (if length of +employment is over five years and during pre-IPO), and all unvested Shares at +cost. +– Termination by retirement or death (without fault): Company to repurchase +all unvested Shares at cost, and all vested Shares at cost plus 9% interest per +annum (if employment is terminated prior to Listing). Should such +termination occur after the Listing Date, the participant may retain the vested +Shares. +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-8 – + + +--- page 383 --- +Details of the granted awards +As of the Latest Practicable Date, Xi’an Zhongrui held 300,000 Shares of our +Company. For details on the awards granted to Director(s), consultant(s) and employees +of our Company and our Group for the years ended December 31, 2024 and 2025, please +refer to Note 28 of the Accountants’ Report included in Appendix I of this prospectus. The +following table sets out the particulars of the partnership interest in Xi’an Zhongrui as of +the Latest Practicable Date: +No. Name +Type of +partnership +interest +Approximate +Partnership +interest (%) +1. Zhongrui Zekang General Partner 27.46 +2. Nexarcana Limited (1) Limited Partner 29.99 +3. Wang Shangling (ޛLimited Partner 6.92 +4. Zou Ran (ཅ್) Limited Partner 6.92 +5. Shao Wenji (ࢊLimited Partner 4.21 +6. Niu Enguo (਷) Limited Partner 2.77 +7. Wei Ruibin (ᕧ๿ⅳ) Limited Partner 2.11 +8. Li Jiaolun (ࡐLimited Partner 2.00 +9. Wang Pengfei (࠭Limited Partner 2.00 +10. Yu Zhi (Яқ) Limited Partner 1.99 +11. Liu Yongzhen (ޜLimited Partner 1.95 +12. Liu Xingxin (ᄎጳอ) Limited Partner 1.50 +13. Song Lanlan (҂ᚆᚆ) Limited Partner 1.31 +14. Wang Ruiling (ޛLimited Partner 1.21 +15. Fu Guoqin (˹਷ೞ) Limited Partner 1.14 +16. Ren Pengliang (ڥ؃Limited Partner 0.81 +17. Zhao Zhiyang Limited Partner 0.69 +18. Wang Ying (ߵLimited Partner 0.69 +19. Huang Zhian (τ) Limited Partner 0.42 +20. Wang Linyuan (ˮ೙ధ) Limited Partner 0.38 +21. Wen Jierong (๝ẘႂ) Limited Partner 0.32 +22. Zheng Du (ቍே) Limited Partner 0.30 +23. Sun Xin (ᢊ) Limited Partner 0.24 +24. Qi Li (ᘆ) Limited Partner 0.22 +25. Zhang Xiaofa (جLimited Partner 0.21 +26. Zhang Haibo (تLimited Partner 0.20 +27. Zhang Jianing (ྐྵ) Limited Partner 0.20 +28. Wang Ying (ˮᆦ) Limited Partner 0.19 +29. Zhang Shuyang ( ੵബජ) Limited Partner 0.14 +30. Yu Hao (ɲख) Limited Partner 0.12 +31. Zhang Yuanhui (ੵధሾ) Limited Partner 0.11 +32. Li Bin (ҽႷ) Limited Partner 0.10 +33. Ma Siying (ڎܠLimited Partner 0.10 +34. Liu Ximei (ᄎГૠ) Limited Partner 0.10 +35. Zhang Ying (ੵᆦ) Limited Partner 0.09 +36. Zhu Yingying (ϡᆦᆦ) Limited Partner 0.09 +37. Zhu Yu (ϡρ) Limited Partner 0.07 +38. Mei Ying (ૠᆦ) Limited Partner 0.07 +39. Yin Tingting (ʙణణ) Limited Partner 0.07 +40. Fu Yu (˹ຄ) Limited Partner 0.07 +41. Chong Jiali (၇Գ஁) Limited Partner 0.07 +42. Yang Meng (เଛ) Limited Partner 0.07 +43. Mi Yuan (Ϸʩ) Limited Partner 0.06 +44. Zheng Lingling (ޛޛLimited Partner 0.06 +45. Zhao Chenxi (Ⴛોᘙ) Limited Partner 0.06 +46. Liu Lei (ᄎᆾ) Limited Partner 0.06 +47. Ding Qian (ɕᙛ) Limited Partner 0.06 +48. Wu Shifei (࠭Limited Partner 0.05 +49. Pan Zhaoyang ( ᆙಃජ) Limited Partner 0.03 +T otal 100.00 +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-9 – + + +--- page 384 --- +Note: +(1) Nexarcana Limited is a company incorporated in Hong Kong in November 2024. It is wholly +owned by Dr. Yu Weiping, an Executive Director and Senior Vice President of the Company. +Agency Fees or Commissions Received +The Underwriters will receive an underwriting commission in connection with the +Underwriting Agreements. See “Underwriting — Underwriting Arrangements and +Expenses — Commissions and Expenses.” Save in connection with the Underwriting +Agreements, no commissions, discounts, brokerages or other special terms have been +granted by our Group to any person (including the Directors, promoters and experts +referred to in “— Other Information — Qualifications of Experts” below) in connection +with the issue or sale of any capital or security of our Company or any member of our +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 our +Company. +Disclaimers +(a) None of the Directors 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 our +Group, or are proposed to be acquired or disposed of by, or leased to, any +member of our Group. +(b) Save in connection with the Underwriting Agreements, none of the Directors +nor any of the experts referred to “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 our 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 our Group; and +(c) 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 top five customers or suppliers +during the Track Record Period. +OTHER INFORMATION +Estate Duty and Other Indemnities +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. +Other Indemnities +Our Controlling Shareholders, Dr. Wang Bing and Dr. Wang Mei, have entered into +the Deed of Indemnity with, and in favor of, our Company (for ourselves and as trustee +for each of our subsidiaries) to provide indemnities on a joint and several basis in respect +of, among other matters, any fines, penalties, claims, costs, expenses and losses (to the +extent that provision, reserve or allowance has not been made for such fines, penalties, +claims, costs, expenses or losses in the audited consolidated financial statements included +in the Accountants’ Report as set out in Appendix I to this prospectus) incurred by any +member of our Group after the Listing resulting from any non-compliance incidents of +any member of our Group with applicable laws and regulations on or before the Listing +Date. +The Deed of Indemnity shall become effective on the Listing Date and shall continue +in full force and effect until it is terminated. +Litigation +As of the Latest Practicable Date, no member of our 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 our +Group. +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-10 – + + +--- page 385 --- +Joint Sponsors +Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors +set out in Rule 3A.07 of the Listing Rules. +The Joint Sponsors will receive an aggregate fee of US$400,000 to act as the sponsors +to our Company in connection with the Listing. +Compliance Adviser +Our Company has appointed Halcyon Capital Limited as the compliance adviser +upon Listing in compliance with Rule 3A.19 of the Listing Rules. +Preliminary Expenses +As of the Latest Practicable Date, our company did not incur any material +preliminary expenses. +Promoters +Our Company converted into a joint stock company with limited liability on +January 17, 2025, and the promoters of our Company are our then 21 shareholders. 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 promoters in connection with the Global Offering or the related transactions +described in this prospectus. +Qualification of Experts +The qualifications of the experts who have given opinions or advice in this +prospectus are as follows: +Name Qualification +CCB International +Capital Limited .............. +A licensed corporation under the SFO to +conduct type 1 (dealing in securities), type 4 +(advising on securities) and type 6 (advising on +corporate finance) regulated activities as +defined under the SFO +China Merchants Securities +(HK) Co., Limited ........... +A licensed corporation to conduct type 1 +(dealing in securities), type 2 (dealing in futures +contracts), type 4 (advising on securities), type +6 (advising on corporate finance) and type 9 +(asset management) regulated activities as +defined under the SFO +JunHe LLP .................... P R C Legal Advisor +Tian Yuan Law Firm ............ P R CI n tellectual Property Legal Advisor +Deloitte Touche Tohmatsu ...... Certified Public Accountants and Registered +Public Interest Entity Auditor +Frost & Sullivan (Beijing) Inc., +Shanghai Branch Co. ......... +Independent Industry Consultant +Grandall Law Firm (Shenzhen). . Legal adviser to our Company as to PRC data +compliance laws +King and Wood LLP ............ U.S. Legal Advisor in relation to our business +operation in the U.S. +Concord & Sage PC ............ Legal adviser to our Company as to US data +compliance laws +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-11 – + + +--- page 386 --- +Consents of Experts +Each of the experts referred to in “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. +T axation 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 seller and purchaser is 0.1% of the consideration +or, if higher, the fair value of the H Shares being sold or transferred. +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. +Miscellaneous +Save as otherwise disclosed in this prospectus: +(a) within the two years preceding the date of this prospectus, (i) our Company +has not issued nor agreed to issue any share or loan capital fully or partly paid +either for cash or for a consideration other than cash; and (ii) no commission, +discount, brokerage or other special term has been granted in connection with +the issue or sale of any shares of our Company; +(b) no Share or loan capital of our Company, if any, is under option or is agreed +conditionally or unconditionally to be put under option; +(c) our Company has not issued nor agreed to issue any founder shares, +management shares or deferred shares; +(d) our Company has no outstanding convertible debt securities or debentures; +(e) there is no arrangement under which future dividends are waived or agreed to +be waived; +(f) there has been no interruption in our business which may have or have had a +significant effect on the financial position in the last 12 months; +(g) our Company is not presently listed on any stock exchange or traded on any +trading system; +(h) our Company is a joint stock limited company and is subject to the PRC +Company Law. Neither our company nor any of its subsidiaries is listed in any +stock exchange; and +(i) the English text of this prospectus shall prevail over its respective Chinese +text. +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 (Exemption of Companies and Prospectuses from Compliance with +Provisions) Notice (Chapter 32L of the Laws of Hong Kong). +APPENDIX IV STATUTORY AND GENERAL INFORMATION +– IV-12 – + + +--- page 387 --- +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: +(a) a copy of each of the material contracts referred to in the paragraph headed +“Appendix IV — Statutory and General Information — Further Information +about our Business — Summary of Our Material Contracts”; and +(b) the written consents referred to in “Appendix IV — Statutory and General +Information — Other information — Consents of Experts”. +DOCUMENTS A V AILABLE ON DISPLA Y +Copies of the following documents will be available on display on the websites of +the Stock Exchange at www.hkexnews.com and our website at www.micot.cn during a +period of 14 days from the date of this prospectus: +(a) Articles of Association; +(b) the Accountants’ Report prepared by Deloitte Touche Tohmatsu, the text of +which is set out in Appendix I to this prospectus; +(c) the audited consolidated financial statements of our Company for the years +ended December 31, 2024 and 2025; +(d) the report prepared by Deloitte Touche Tohmatsu on the unaudited pro forma +financial information of our Group, the text of which is set out in Appendix II +to this prospectus; +(e) The PRC legal opinion issued by JunHe LLP , our PRC legal advisor, on the +matters of, among other things, the general corporate matters of our Group; +(f) the written consents referred to in “Appendix IV — Statutory and General +Information — Other information — Consents of Experts”; +(g) the material contracts referred to in “Appendix IV — Statutory and General +Information — Further Information about our Business — Summary of Our +Material Contracts”; +(h) the service contracts and appointment letters referred to in “Appendix IV — +Statutory and General Information — Further Information about Our +Directors and Substantial Shareholders — Particulars of Directors’ Service +Contracts”; +(i) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch +Co., the summary of which is set forth in the section headed “Industry +Overview”; +(j) the PRC Company Law, the PRC Securities Law, the Trial Measures and +Guidelines for the Articles of Association of Listed Companies issued by the +CSRC, together with their unofficial English translations; +(k) the legal opinions from Tian Yuan Law Firm, the legal advisor to the Company +as to PRC intellectual property laws; +(l) the legal opinions from Grandall Law Firm (Shenzhen), the legal advisor to +the Company as to PRC data compliance laws; +(m) the legal opinions from King and Wood LLP , the legal advisor to the Company +as to U.S. laws in relation to the Company’s business operation in the U.S.; +(n) the legal opinions from Concord & Sage PC, the legal advisor to the Company +as to U.S. data compliance laws; and +(o) the terms of the Employee Incentive Scheme. +APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF +COMPANIES AND A V AILABLE ON DISPLA Y +–V - 1– + + +--- page 388 --- +Shaanxi Micot Pharmaceutical Technology Co., Ltd. +ʮ̡ +;=*10=1SPKFDU.BST=DPWFS +MPHP +=1SPKFDU.BSTGVMMDPWFS &$ diff --git a/data/hk_ipo.sqlite b/data/hk_ipo.sqlite index 2a25dd6..40dda8b 100644 Binary files a/data/hk_ipo.sqlite and b/data/hk_ipo.sqlite differ diff --git a/data/raw/02335/prospectus_2026-06-15_2026061500009.pdf b/data/raw/02335/prospectus_2026-06-15_2026061500009.pdf new 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