Securities Code: 001367 Securities Abbreviation: Hysen Pharmaceutical Announcement Number: 2026-007 Zhejiang Hysen Pharmaceutical Co., Ltd. Announcement on Cash Management of Partially Idle Raised Funds and Own Funds The Company and all members of the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, and are free from any false representations, misleading statements, or material omissions. Key Information Highlights:
- Investment Type: Partially idle raised funds will be used for investment in principal-protected wealth management products with high safety, good liquidity, and low risk; idle own funds will be used for investment in wealth management products with high safety, good liquidity, and low risk.
- Investment Amount: Idle raised funds not exceeding RMB 30,000 million (inclusive) and idle own funds not exceeding RMB 40,000 million (inclusive).
- Special Risk Warning: The products for cash management of partially idle raised funds and idle own funds will be strictly evaluated and screened, with controllable risks. However, the financial market is significantly affected by the macro economy. It is not ruled out that this investment may be affected by market fluctuations. The Company will enter the market at an appropriate time and in an appropriate amount based on economic conditions and changes in the financial market to reduce investment risks caused by market volatility. Investors are kindly requested to pay attention to investment risks. Zhejiang Hysen Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") held the 19th meeting of the Third Board of Directors on March 24, 2026, and deliberated and passed the "Proposal on Using Part of the Idle Raised Funds for Cash Management" and the "Proposal on Using Idle Own Funds for Cash Management." It was agreed that the Company, while ensuring that the construction of raised fund investment projects and normal operations are not affected, will use idle raised funds not exceeding RMB 30,000 million (inclusive) and idle own funds not exceeding RMB 40,000 million (inclusive) for cash management, purchasing wealth management products with high safety, good liquidity, and low risk. The term of use is 12 months from the date of deliberation and approval by the Board of Directors. This quota, once effective, will cover the previous authorized quota. Within the above quota and the validity period of the resolution, the funds can be used in a revolving manner. Upon expiration, the idle raised funds will be returned to the special account for raised funds of the Company. The Board of Directors authorizes the Chairman of the Board to exercise the investment decision-making power for this cash management within the above investment quota and investment period and to sign relevant documents, including but not limited to: selecting qualified professional financial institutions, determining the amount and period of cash management, selecting product/business types, and signing contracts and agreements. Specific matters will be organized and implemented by the Company's finance department. The Audit Committee of the Board of Directors and the independent directors have expressed clear consent on this matter. CITIC Securities Co., Ltd. (hereinafter referred to as the "Sponsor") has issued a clear and undisputed verification opinion on this matter. I. Basic Situation of Raised Funds With the approval of the China Securities Regulatory Commission's "Approval on the Registration of Zhejiang Hysen Pharmaceutical Co., Ltd.'s Initial Public Offering of Shares" (Zheng Jian Xu Ke [2023] No. 588), and approved by the Shenzhen Stock Exchange, the Company made its initial public offering of RMB ordinary shares of 17.00 million shares, with an offering price of RMB 44.48 per share. The total raised funds amounted to RMB 75,616.00 million. After deducting relevant issuance expenses, the net raised funds were RMB 67,571.85 million. These funds were all in place on April 3, 2023. The "Capital Verification Report" (Xin Hui Shi Bao Zi [2023] No. ZF10312) issued by Lixin Certified Public Accountants (Special General Partnership) has been verified. The Company has implemented a special account deposit system for raised funds. Upon arrival, all funds have been deposited into the special raised fund account approved by the Company's Board of Directors. The Company has signed relevant supervision agreements for raised funds with the Sponsor and the commercial banks where the raised funds are deposited. II. Use of Raised Funds and Reasons for Idleness According to the "Prospectus for the Initial Public Offering of Shares of Zhejiang Hysen Pharmaceutical Co., Ltd." and the "Proposal on Changing Part of the Raised Fund Investment Projects, Adjusting the Total Investment Amount, and Supplementing Investment with Super-raised Funds and Own Funds" deliberated and approved at the First Extraordinary General Meeting of Shareholders in 2025, and the "Proposal on Terminating Part of the Raised Fund Investment Projects and Investing the Remaining Raised Funds in New Projects" deliberated and approved at the Third Extraordinary General Meeting of Shareholders in 2025, the changed raised fund investment projects and their usage plans are as follows: Unit: RMB million No. Project Name Total Investment Amount Planned Raised Fund Investment Amount 1 Production of 200 tons/year of A-40 (Atorvastatin Calcium) and other characteristic APIs Construction Project 41,438.76 36,644.94 2 R&D Center and Integrated Office Building Construction Project 7,604.23 7,604.23 3 New Area Quality R&D Building Construction Project 11,151.39 4,363.34 4 Supplementing Working Capital 16,500.00 16,500.00 Total 76,694.38 65,112.51 The Company held the First Extraordinary General Meeting of Shareholders in 2025 on March 7, 2025, and deliberated and approved the "Proposal on Changing Part of the Raised Fund Investment Projects, Adjusting the Total Investment Amount, and Supplementing Investment with Super-raised Funds and Own Funds." It was agreed that the "Production of 200 tons/year of Atorvastatin Calcium and other APIs Production Line Technical Improvement Project," an initial public offering raised fund investment project, would adjust the public utilities and supporting facilities construction project to be constructed with own funds. The Company would fully offset the raised funds already invested in the aforementioned project with its own funds, and the offset raised funds would be used for the "Production of 200 tons/year of A-40 (Atorvastatin Calcium) and other characteristic APIs Construction Project." The Company completed the offset of raised funds with its own funds on March 7, 2025. For details, please refer to the "Announcement on Completing the Offset of Raised Funds with Own Funds" (Announcement No.: 2025-008) disclosed by the Company on Juchao Information Network (www.cninfo.com.cn) on March 11, 2025. The Company held the Third Extraordinary General Meeting of Shareholders in 2025 on November 11, 2025, and deliberated and approved the "Proposal on Terminating Part of the Raised Fund Investment Projects and Investing the Remaining Raised Funds in New Projects." It was agreed that the initial public offering raised fund investment project "R&D Center and Integrated Office Building Construction Project" would be terminated, and the remaining raised funds would be fully invested in the new project "New Area Quality R&D Building Construction Project." The Company completed the opening of a new special account for raised funds and the transfer of funds on December 2025. For details, please refer to the "Announcement on Signing the Tripartite Supervision Agreement for the Special Account for Raised Funds" (Announcement No.: 2025-063) disclosed by the Company on Juchao Information Network (www.cninfo.com.cn) on December 18, 2025. As of February 28, 2026, the balance of unused raised funds (including investment income and interest) was RMB 47,518.69 million. Due to the construction period required for raised fund investment projects, the Company implements phased construction according to the project plan, resulting in a temporary idle situation of some raised funds. III. Previous Cash Management of Partially Idle Raised Funds and Own Funds On March 26, 2025, the Company held the 12th meeting of the Third Board of Directors and the 11th meeting of the Third Supervisory Board, and deliberated and approved the "Proposal on Using Part of the Idle Raised Funds for Cash Management" and the "Proposal on Using Idle Own Funds for Cash Management." It was agreed that the Company, while ensuring that the construction of raised fund investment projects and normal operations are not affected, would use idle raised funds not exceeding RMB 30,000 million (inclusive) and idle own funds not exceeding RMB 30,000 million (inclusive) for cash management, purchasing wealth management products with high safety, good liquidity, and low risk. The term of use is 12 months from the date of deliberation and approval by the Board of Directors (i.e., March 26, 2025, to March 25, 2026). Within the above quota and the validity period of the resolution, the funds can be used in a revolving manner. Within the above usage period, the Company strictly managed the temporarily idle raised funds and own funds for cash management according to the authorized quota. As of the disclosure date of this announcement, the balance of temporarily idle raised funds managed for cash management that has not yet matured is RMB 30,000.00 million, and the balance of idle own funds managed for cash management that has not yet matured is RMB 30,000.00 million. Given that the above authorized quota is about to expire, the Company has decided to continue to authorize the use of part of the idle raised funds and own funds for cash management (including the part of the previous use of idle raised funds and own funds for cash management that has not yet matured). IV. Basic Situation of Current Cash Management of Partially Idle Raised Funds and Idle Own Funds (I) Purpose of Cash Management To improve the efficiency of fund utilization, and without affecting the construction of raised fund investment projects and the Company's normal operations, the Company will reasonably utilize partially idle raised funds and idle own funds for cash management to increase fund returns and generate more investment returns for the Company and its shareholders. (II) Types of Investment for Cash Management
- Idle Raised Funds The types of investment for the Company's idle raised funds are principal-protected wealth management products with high safety, good liquidity, and low risk, which will not affect the normal progress of the raised fund investment plan, meet the principal protection requirements, and have a maximum investment period of no more than 12 months. These cash management products shall not be used for pledge. The settlement account for product use (if applicable) shall not hold non-raised funds or be used for other purposes. If a special settlement account for products is opened or cancelled, the Company will promptly report to the stock exchange for filing and announcement.
- Idle Own Funds The types of investment for the Company's idle own funds are low-risk wealth management products with high safety, good liquidity, and low risk, with a maximum investment period of no more than 12 months. Investment in high-risk investment products such as securities investment and derivative trading as defined in the "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guideline No. 7 - Transactions and Connected Transactions" is prohibited. (III) Cash Management Quota The Company plans to use an amount not exceeding RMB 30,000 million (inclusive) of idle raised funds and an amount not exceeding RMB 40,000 million (inclusive) of idle own funds for cash management. Within the period and quota, the funds can be used in a revolving manner. The transaction amount at any point in time within the period (including the reinvestment of income from the aforementioned investments) shall not exceed the investment quota. (IV) Validity Period of Resolution The resolution is valid for 12 months from the date of deliberation and approval by the 19th meeting of the Third Board of Directors. (V) Implementation Method The Board of Directors authorizes the Chairman of the Board to exercise the investment decision-making power for this cash management within the above investment quota and investment period and to sign relevant documents, including but not limited to: selecting qualified professional financial institutions, determining the amount and period of cash management, selecting product/business types, and signing contracts and agreements. Specific matters will be organized and implemented by the Company's finance department. (VI) Profit Distribution Method The income obtained by the Company from the cash management of partially idle raised funds and idle own funds belongs to the Company. The income from own funds will be used first to supplement the working capital required for the Company's daily operations. The income from raised funds will be managed and used strictly in accordance with the requirements of the China Securities Regulatory Commission and the Shenzhen Stock Exchange regarding the supervision of raised funds. (VII) Information Disclosure The Company will fulfill its information disclosure obligations in a timely manner in accordance with the "Regulations on the Supervision and Administration of Raised Funds of Listed Companies," the "Stock Listing Rules of the Shenzhen Stock Exchange," the "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guideline No. 1 - Standardized Operation of Main Board Listed Companies," and other relevant regulations. (VIII) Related Impact The Company's current use of partially idle raised funds and idle own funds for cash management does not constitute a related party transaction, does not involve disguised changes in the use of raised funds, and will not affect the normal progress of raised fund investment projects. V. Investment Risks and Control Measures (I) Investment Risks The products for cash management of partially idle raised funds and idle own funds will be strictly evaluated and screened, with controllable risks. However, the financial market is significantly affected by the macro economy. It is not ruled out that this investment may be affected by market fluctuations. The Company will enter the market at an appropriate time and in an appropriate amount based on economic conditions and changes in the financial market to reduce investment risks caused by market volatility. (II) Investment Risk Control Measures
- The Company will strictly comply with the "Stock Listing Rules of the Shenzhen Stock Exchange" and other relevant regulations, as well as the "Company Articles of Association" and the "Raised Funds Management System" and other company rules and regulations to manage the cash management business and strictly control the safety of funds.
- Relevant personnel of the Company's management will promptly analyze and track the investment direction and progress of investment products, strengthen risk control, and ensure fund safety. If any adverse factors are found or judged, corresponding measures will be taken promptly.
- The Company's internal audit department is responsible for auditing and supervising the use and custody of funds for the Company's current cash management. A comprehensive inspection of all investment products will be conducted every quarter. Based on the principle of prudence, the potential income and losses of various investments will be reasonably estimated and reported to the Company's Audit Committee.
- The Company's independent directors and the Audit Committee have the right to supervise and inspect the use and custody of funds for the current cash management, and may engage professional institutions to conduct audits when necessary.
- The Company will strictly comply with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange and fulfill its information disclosure obligations in a timely manner. VI. Impact on the Company's Operations While ensuring the construction of raised fund investment projects and the normal turnover of the Company's daily funds, the use of partially idle raised funds and idle own funds for cash management will not affect the normal operation of the Company's raised fund investment projects and the normal development of its main business. At the same time, it will improve the efficiency of fund utilization, increase the Company's asset returns, and generate more returns for the Company and its shareholders. The Company will perform corresponding accounting for the cash management activities in accordance with the "Enterprise Accounting Standards" issued by the Ministry of Finance and relevant regulations. VII. Review Procedures and Opinions (I) Audit Committee's Review Opinion The Audit Committee of the Third Board of Directors held its 18th meeting on March 23, 2026, and deliberated and approved the "Proposal on Using Part of the Idle Raised Funds for Cash Management" and the "Proposal on Using Idle Own Funds for Cash Management." The Audit Committee believes that:
- Under the premise of ensuring the construction of raised fund investment projects and the normal turnover of the Company's daily funds, the use of partially idle raised funds for cash management, investing in principal-protected wealth management products with high safety, good liquidity, and low risk, with an investment period not exceeding 12 months, is conducive to improving fund utilization efficiency, increasing the Company's asset returns, and generating more returns for the Company and its shareholders. It does not involve disguised changes in the use of raised funds, does not harm the interests of the Company's shareholders, and the relevant review procedures are legal and compliant. The Audit Committee agrees to the use of partially idle raised funds for cash management.
- Under the premise of ensuring the normal turnover of the Company's daily funds, the use of idle own funds for cash management, investing in low-risk wealth management products with high safety, good liquidity, and low risk, with an investment period not exceeding 12 months, is conducive to improving fund utilization efficiency, increasing the Company's asset returns, and generating more returns for the Company and its shareholders. It does not harm the interests of the Company's shareholders, and the relevant review procedures are legal and compliant. The Audit Committee agrees to the use of idle own funds for cash management. The Audit Committee unanimously agreed on the above proposals and agreed to submit them to the Board of Directors for deliberation. (II) Independent Directors' Special Meeting Review Opinion The independent directors of the Company held the 9th special meeting of the Third Board of Directors, deliberated and unanimously approved the "Proposal on Using Part of the Idle Raised Funds for Cash Management." The meeting formed the following opinions: The Company, while ensuring that the raised fund investment plan and the Company's normal operations are not affected, will use part of the idle raised funds for cash management, purchasing principal-protected wealth management products with high safety, good liquidity, and low risk. The decision-making procedures for the aforementioned matter comply with the "Regulations on the Supervision and Administration of Raised Funds of Listed Companies," the "Stock Listing Rules of the Shenzhen Stock Exchange," the "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guideline No. 1 - Standardized Operation of Main Board Listed Companies," and other laws, regulations, normative documents, and the Company's "Raised Funds Management System." It is conducive to improving fund utilization efficiency, will not affect the construction of raised fund investment projects and the normal use of raised funds and the Company's daily production and operation, and does not harm the legitimate rights and interests of the Company's shareholders, especially small and medium shareholders. All independent directors unanimously agreed on the above proposals and agreed to submit them to the Board of Directors for deliberation. (III) Board of Directors' Deliberation The Company held the 19th meeting of the Third Board of Directors on March 24, 2026, and deliberated and approved the "Proposal on Using Part of the Idle Raised Funds for Cash Management" and the "Proposal on Using Idle Own Funds for Cash Management." It was agreed that the Company, while ensuring that the construction of raised fund investment projects and normal operations are not affected, will use idle raised funds not exceeding RMB 30,000 million (inclusive) and idle own funds not exceeding RMB 40,000 million (inclusive) for cash management. (IV) Sponsor's Opinion After verification, the Sponsor, CITIC Securities Co., Ltd., believes that the matter of Hysen Pharmaceutical's proposed use of partially idle raised funds and idle own funds for cash management has been deliberated and approved by the Company's Board of Directors. The Company's Board of Directors' Audit Committee and independent directors have expressed clear consent. This complies with the "Regulations on the Supervision and Administration of Raised Funds of Listed Companies," the "Stock Listing Rules of the Shenzhen Stock Exchange," the "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guideline No. 1 - Standardized Operation of Main Board Listed Companies," and the "Company Articles of Association" and other relevant regulations. The Company's use of partially idle raised funds and idle own funds does not involve disguised changes in the use of raised funds, does not affect the normal progress of raised fund investment projects, and does not harm the interests of the Company and its shareholders. In summary, CITIC Securities has no objection to Hysen Pharmaceutical's proposed use of partially idle raised funds and idle own funds for cash management. VIII. Documents for Reference
- Resolution of the 18th meeting of the Audit Committee of the Third Board of Directors;
- Resolution of the 9th special meeting of independent directors of the Third Board of Directors;
- Resolution of the 19th meeting of the Third Board of Directors;
- Verification Opinion of CITIC Securities Co., Ltd. on Zhejiang Hysen Pharmaceutical Co., Ltd.'s Use of Partially Idle Raised Funds and Idle Own Funds for Cash Management. Hereby announced. Board of Directors of Zhejiang Hysen Pharmaceutical Co., Ltd. March 26, 2026