Zhejiang ZL Pharmaceutical Co., Ltd. (hereinafter referred to as "the Company") plans to issue convertible corporate bonds to unspecified targets (hereinafter referred to as "this Offering") to raise funds. The Board of Directors has analyzed the feasibility of the use of the raised funds for this Offering as follows:
I. Plan for the Use of Raised Funds
The planned fundraising for this Offering will not exceed RMB 1,370.9297 million (inclusive). After deducting issuance expenses, the net proceeds will be used for the following projects:
| No. | Project Name | Total Investment (RMB million) | Amount of Raised Funds Used (RMB million) |
|---|---|---|---|
| 1 | Intelligent Traditional Chinese Medicine Health Factory (Phase I) | 109,027.33 | 109,027.33 |
| 2 | "Wuling+X" Product R&D Project | 27,059.70 | 6,365.64 |
| 3 | Supplement Working Capital | 25,000.00 | 21,700.00 |
| Total | 161,087.03 | 137,092.97 |
If the net proceeds from this Offering after deducting issuance expenses are insufficient to meet the funding needs of the Company's projects, the Company will resolve the shortfall through self-raised funds.
Before the raised funds for this Offering are in place, the Company will make advance investments using self-raised funds based on the actual progress of the projects. These investments will be replaced after the raised funds are in place, in accordance with relevant laws and regulations. The raised funds for this Offering will be invested in the order of the above projects. Without altering the scope of the investment projects, the Company's Board of Directors may adjust the order and amount of investment in the raised funds for the above projects based on the actual needs of the projects.
II. Analysis of the Necessity and Feasibility of the Raised Funds Investment Projects
(I) Intelligent Traditional Chinese Medicine Health Factory (Phase I)
1. Project Overview
The implementing entity for this project is Zhejiang ZL Pharmaceutical Co., Ltd. The construction site is located in Deqing County, Zhejiang Province, with a project investment of RMB 1,090.2733 million.
This project integrates the Company's current production and operation status with future capacity growth needs. It involves constructing factory buildings and office buildings that meet GMP (Good Manufacturing Practice) requirements on existing and newly acquired land, and purchasing corresponding production equipment and auxiliary equipment. It will establish production lines for medicinal fungus fermentation and extraction, and pharmaceutical preparation. The implementation of this project will meet the Company's future growth demand from raw materials to finished products, and address the future production needs for Wuling capsules and Bailing capsules, thereby further enhancing the Company's core competitiveness in the pharmaceutical manufacturing industry and improving its profitability, profit level, and profit scale.
2. Project Necessity
(1) Implementing the Company's strategic goals, increasing core product capacity, and meeting rapidly growing market demand
The Wuling series and Bailing series are the Company's core products and are an important part of the "one body, two wings" strategy. The Wuling series is based on the unique raw material Wuling fungus powder, possessing exclusive advantages. The Company's Bailing capsule has obtained the first national registration certificate for traditional Chinese medicine with the same name and formula. With the advantages of centralized procurement bidding and more competitive pricing strategies, market development has been smooth.
In recent years, the coverage and sales volume of Wuling capsules in hospitals have continued to increase. In 2024, its production and sales volume reached 44.1776 million boxes and 41.7200 million boxes, respectively, an increase of 32.78% and 22.62% year-on-year. At the same time, the Company's Bailing series is expected to achieve a year-on-year revenue growth of 26.91% in 2025, showing strong growth potential.