Audit Report on the Custody, Management, and Actual Use of Raised Funds
To the Shareholders of Hubei Hengdi Pharmaceutical Co., Ltd.:
We have been engaged to audit the accompanying "Special Report on the Custody, Management, and Actual Use of Raised Funds for 2025" (hereinafter referred to as the "Special Report on Raised Funds") prepared by Hubei Hengdi Pharmaceutical Co., Ltd. (hereinafter referred to as "the Company").
I. Responsibilities of the Board of Directors
The responsibility of the Company's Board of Directors is to prepare the Special Report on Raised Funds in accordance with the "Supervisory Rules for Raised Funds of Listed Companies" issued by the China Securities Regulatory Commission and other relevant documents, and to ensure that its content is true, accurate, and complete, without any false records, misleading statements, or material omissions.
II. Responsibilities of Certified Public Accountants
Our responsibility is to express an audit opinion on the Special Report on Raised Funds prepared by the Company based on our audit work. We performed our audit in accordance with the "Other Assurance Services Standard No. 3101—Assurance Services Other Than Audits or Reviews of Historical Financial Information" of the Chinese Institute of Certified Public Accountants. This standard requires us to plan and perform our audit to obtain reasonable assurance about whether the Special Report on Raised Funds prepared by the Company is free from material misstatement. During the audit, we performed procedures including inquiries, examination of relevant materials and documents, and sampling of accounting records, which we considered necessary. We believe that our audit work provides a reasonable basis for our audit opinion.
III. Audit Opinion
We are of the opinion that the Special Report on Raised Funds prepared by the Company complies with relevant regulations and, in all material respects, fairly reflects the custody, management, and actual use of raised funds for 2025.
IV. Other Explanatory Matters
This report is only for use in the Company's annual report disclosure and may not be used for any other purpose. We agree that this report will be included as an essential document in the Company's annual report and disclosed along with other documents. The consequences arising from improper use are not related to the certified public accountants and the accounting firm that performed this audit engagement.
WUYIGE CERTIFIED PUBLIC ACCOUNTANTS LLP.
Certified Public Accountant: [blank] Certified Public Accountant: [blank]
March 30, 2026
Special Report on the Custody, Management, and Actual Use of Raised Funds for 2025
I. Basic Situation of Raised Funds
According to the "Approval of the Registration of Initial Public Offering of Stocks of Hubei Hengdi Pharmaceutical Co., Ltd." (Zheng Jian Xu Ke [2021] No. 3639) issued by the China Securities Regulatory Commission, the Company issued 60 million ordinary shares (A shares) to the public at an offering price of RMB 25.80 per share, raising a total of RMB 1,548,000,000.00. After deducting issuance expenses, the net amount of raised funds is RMB 1,400,732,340.85. The raised funds were deposited into the Company's designated account on December 16, 2021. Daxin Certified Public Accountants (Special General Partnership) audited the capital verification of the Company's initial public offering of stocks on December 16, 2021, and issued the Capital Verification Report (Daxin Yan Zi [2021] No. 2-10059).
As of December 31, 2025, the Company had cumulatively used RMB 60,630.84 million of raised funds, of which RMB 7,940.36 million was used in the current year, all of which were invested in raised fund projects. The balance of unused raised funds at the end of the period was RMB 91,455.09 million (including net interest income of RMB 12,012.71 million after deducting handling fees), of which RMB 89,926.34 million was used for cash management of idle raised funds, and RMB 1,528.75 million was deposited in the special account for raised funds.