Hebei Changshan Biochemical Pharmaceutical Co., Ltd. Audit Report Zhongxi Cai Shen No. 2026S02336
Zhongxi CPAs (Special General Partnership) Address: 11th Floor, Block A, Xincheng Cultural Building, 11 Chongwenmenwai Street, Beijing Postal Code: 100062 Tel: 010-67085873 Fax: 010-67084147 Email: zhongxi@zhongxicpa.net
Zhongxi CPAs (Special General Partnership) ZHONGXI CPAS (SPECIAL GENERAL PARTNERSHIP)
Audit Report
Zhongxi Cai Shen No. 2026S02336
To all shareholders of Hebei Changshan Biochemical Pharmaceutical Co., Ltd.:
I. Audit Opinion
We have audited the financial statements of Hebei Changshan Biochemical Pharmaceutical Co., Ltd. (hereinafter referred to as "Changshan Pharmaceutical Company"), which comprise the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements for the year ended December 31, 2025, the consolidated and parent company cash flow statements, the consolidated and parent company statements of changes in owners' equity, and the notes to the financial statements.
In our opinion, the accompanying financial statements, in all material respects, are prepared in accordance with the provisions of the enterprise accounting standards and fairly present the consolidated and parent company financial position of Changshan Pharmaceutical Company as of December 31, 2025, and the consolidated and parent company operating results and cash flows for the year ended December 31, 2025.
II. Basis for Audit Opinion
We conducted our audit in accordance with the requirements of the Chinese Certified Public Accountants' Auditing Standards. The section "Responsibilities of the Registered Accountant for the Audit of Financial Statements" in this audit report further elaborates on our responsibilities under these standards. In accordance with the independence requirements of the Chinese Certified Public Accountants' Independence Standards for audits of financial statements of entities of public interest and the Chinese Certified Public Accountants' Code of Professional Ethics, we are independent of Changshan Pharmaceutical Company and have fulfilled our other responsibilities under the Code of Professional Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the current period. Our response to these matters was in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
Address: 11th Floor, Block A, Xincheng Cultural Building, 11 Chongwenmenwai Street, Beijing Tel: 010-67085873 Fax: 010-67084147 Postal Code: 100062
(I) Revenue Recognition
- Description of the Matter As disclosed in Note V.40 to the financial statements, Changshan Pharmaceutical Company achieved operating revenue of RMB 87,513.23 million in 2025, a decrease of 15.10% compared to the same period last year. As revenue is one of the key performance indicators of Changshan Pharmaceutical Company, there is an inherent risk of management manipulating the timing of revenue recognition to achieve specific targets or expectations. Therefore, we have identified the recognition of operating revenue as a key audit matter. The accounting policy for revenue recognition of Changshan Pharmaceutical Company is detailed in Note III.29 to the financial statements.