PhiChem Corporation

PhiChem Corporation, listed on the Shenzhen Stock Exchange's ChiNext board in 2014, is a professional enterprise specializing in the research, development, production, and sales of materials and specialty chemicals essential for high-tech manufacturing. The company is committed to delivering high-quality materials that support various advanced manufacturing sectors, leveraging its technology-driven approach to enhance core competitiveness and operational quality. The company's core business encompasses the development of materials for semiconductor manufacturing, display screens, and organic synthetic materials. Its semiconductor product line includes solder balls, epoxy molding compounds, and photoresists, while its display screen materials feature photoresists and liquid crystal components. PhiChem has established a strong market position through vertical integration and horizontal expansion, particularly in the integrated circuit field, where it has developed a comprehensive material portfolio and accumulated numerous patents. Additionally, the company is actively innovating in liquid crystal technology and expanding into non-display applications, further solidifying its role as a significant supplier in the global materials market.

Here is the English translation of the company's specific operational measures for the fiscal year 2025: 1. Strengthening Capital Operations, Adhering to a Dual-Wheel Drive Strategy The company adheres to a dual-wheel drive model of "consolidating the foundation through physical operations and creating value through capital operations," precisely carrying out strategic investments along the upstream and downstream of the industrial chain. It is accelerating its deployment in high-end new materials and other fields, cultivating new profit growth points, continuously enhancing core competitiveness, and facilitating transformation and upgrading. At the same time, it actively explores equity cooperation, optimizes the asset-liability structure, revitalizes inefficient and idle assets, and disposes of non-performing assets to promote industrial upgrading and quality improvement, forming an industrial pattern where asset operations and capital operations promote and coordinate with each other. During the reporting period, the company orderly advanced several capital operation projects: (1) Optimizing asset structure: Sold the equity of Darui Technology to focus on the domestic solder ball business. (2) Deepening strategic deployment: Subsidiary Hecheng Display completed the acquisition of 100% equity of JNC Liquid Crystal Materials and JNC Advanced Materials, and purchased all display liquid crystal-related patents from JNC Corporation and its affiliates; JNC Corporation simultaneously subscribed for 5.10% equity of Hecheng Display, forming a deep strategic cooperation that significantly enhanced the company's technical strength and market competitiveness in the field of liquid crystal display materials. (3) Forward-looking industrial deployment: Increased capital investment in subsidiary Aikelong to strategically position itself in the polyimide (PI) material industry, laying the foundation for entering the photosensitive polyimide (PSPI) field for advanced semiconductor packaging and achieving business synergies. 2. Tackling R&D Innovation, Building an Innovation-Driven Core The company always adheres to an innovation-driven development strategy, leading transformation and upgrading through technological innovation and continuously enhancing core competitiveness. Based on market demands, the company builds high-level technology breakthrough platforms, continuously improves its R&D system, and steadily strengthens its technical capabilities. The company possesses a professional R&D team, a complete R&D system, and an efficient industrialization system, equipped with well-furnished R&D laboratories and pilot plants, and has full-chain technical capabilities from small-scale development and process optimization to large-scale production. At the same time, the company has established a collaborative communication and feedback mechanism involving multiple departments such as technology, production, engineering, and quality, providing a solid guarantee for efficiently realizing the industrialization of R&D achievements. Furthermore, the company actively promotes deep industry-university-research integration, extensively cooperating with research institutions and universities to facilitate the value transformation of diversified R&D results and accelerate the market application of innovative achievements. During the reporting period, the company continuously increased R&D investment, with R&D expenses of RMB 208.5910 million, a year-on-year increase of 14.83%, and R&D investment accounting for 6.47% of operating revenue. As of the end of 2025, the company held a total of 1,142 valid patents, of which invention patents accounted for over 97%. The company insists on empowering product quality improvement and core competitiveness enhancement through technological innovation, injecting strong momentum into high-quality development. 3. Strengthening Shareholder Returns, Enhancing Investment Value The company has always adhered to the philosophy of "emphasizing both development and returns." While continuously enhancing core value, it places great importance on rewarding investors, establishing a long-term mechanism for sharing development achievements with investors through equity distributions, share repurchases, and other means. Since its listing, the company's total cumulative dividends have exceeded RMB 420 million, fully reflecting its high regard for investor rights and interests. During the reporting period, the company successfully completed the 2024 annual equity distribution and the 2025 semi-annual equity distribution, distributing a total of approximately RMB 59.5294 million in cash dividends, effectively allowing shareholders to share in the company's operating results. Looking ahead, the company will balance the dynamic equilibrium between company development, performance growth, and shareholder returns according to its current development stage. Based on its actual operations and strategic goals, it will scientifically formulate profit distribution policies, actively implement cash dividends, continuously improve the level of investor returns, and continuously enhance the recognition and sense of gain among its broad base of investors. 4. Strengthening Corporate Governance, Enhancing Standardized Operations The company strictly complies with relevant laws and regulations, establishing a sound governance structure and internal systems, and building a decision-making and operation mechanism with clear rights, responsibilities, and standardized procedures. During the reporting period, to actively respond to the latest regulatory requirements, the company comprehensively revised its "Company Articles of Association" in accordance with the "Company Law," the "Model Articles of Association for Listed Companies," and other laws, regulations, and normative documents. The core content of this revision was to abolish the board of supervisors and correspondingly strengthen the functions of the audit committee, aiming to optimize the corporate governance structure and enhance supervisory effectiveness. In addition, the company systematically improved its internal management systems, organizing the revision of 33 systems including the "Company Articles of Association," "Shareholders' Meeting Rules of Procedure," "Board of Directors Rules of Procedure," and "Independent Director Working System," and newly formulated three systems: the "Compensation Management System for Directors and Senior Management," the "Resignation Management System for Directors and Senior Management," and the "Management System for External Donations," ensuring that the company's governance and operational activities fully comply with the latest laws, regulations, and regulatory requirements.