I. Overview of the Investment
Jiangsu Hualan Pharmaceutical New Materials Co., Ltd. (hereinafter referred to as "Hualan") held its 17th meeting of the 6th Board of Directors on May 29, 2026, where it approved the proposal for external investment by its wholly-owned subsidiary, Hainan Lingqing Smart Pharmaceutical Technology Co., Ltd. (hereinafter referred to as "Lingqing Smart"). To further expand Hualan's business layout, optimize its industrial structure, and enhance its core competitiveness, the Board agreed to allow Lingqing Smart to use its own funds of RMB 205 million to increase its capital investment in Wuxi Natural Constant Technology Co., Ltd. (hereinafter referred to as "Natural Constant" or "the Company").
Lingqing Smart will subscribe to the newly increased registered capital of Natural Constant with its own funds of RMB 205 million (corresponding to a registered capital of RMB 1.025 million after the completion of this transaction, with the remainder recorded as capital reserve). After the completion of this transaction, Lingqing Smart will hold a 34.17% equity stake in Natural Constant on a fully diluted basis. As of the date of this announcement, Lingqing Smart has signed the "Investment Agreement on Wuxi Natural Constant Technology Co., Ltd." (hereinafter referred to as "this Agreement") with Natural Constant, Mr. Huang Xiaolu, Jingtai Smart Pharmaceutical Technology (Shanghai) Co., Ltd. (hereinafter referred to as "Jingtai Technology"), Wuxi Natural Constant Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as "Core Team Shareholding Platform"), Wuxi Natural Constant Biotechnology Partnership (Limited Partnership) (hereinafter referred to as "Employee Shareholding Platform"), Hete Energy (Fujian) Co., Ltd. (hereinafter referred to as "Hete Energy"), and Zhejiang Litiao Information Consulting Service Co., Ltd. (hereinafter referred to as "Zhejiang Litiao").
According to the relevant laws, regulations, and normative documents such as the "Shenzhen Stock Exchange Growth Enterprise Market Stock Listing Rules" and "Shenzhen Stock Exchange Listed Companies Self-Regulatory Guidelines No. 7 - Transactions and Related Transactions," this investment matter falls within the approval authority of Hualan's Board of Directors and does not require submission to the shareholders' meeting for approval. This investment does not constitute a related party transaction, nor does it constitute a major asset restructuring as defined by the "Measures for the Administration of Major Asset Restructuring of Listed Companies."
II. Background and Purpose of the Investment
Currently, the domestic pharmaceutical industry is undergoing a critical period of digital transformation. In April 2025, the Ministry of Industry and Information Technology and six other departments jointly issued the "Implementation Plan for the Digital Transformation of the Pharmaceutical Industry (2025-2030)," which clearly proposes to deepen the integration of artificial intelligence with new industrialization, promote the deep integration of new generation information technology with the pharmaceutical industry chain, accelerate the digital transformation of the pharmaceutical industry, further enhance the core competitiveness of enterprises, improve the quality and safety level of drugs, strengthen supply guarantee capabilities, cultivate and develop new productive forces, and promote high-quality development of the pharmaceutical industry.
This investment aims to optimize the business structure and promote industrial upgrades while ensuring the normal operation of Hualan's existing main business, thereby enhancing Hualan's overall competitiveness and sustainable development capabilities, and effectively safeguarding the long-term interests of Hualan and all shareholders.