Table of Contents
- Audit Report: Pages 1–5
- Financial Statements: Pages 6–13 (1) Consolidated Balance Sheet: Page 6 (2) Parent Company Balance Sheet: Page 7 (3) Consolidated Income Statement: Page 8 (4) Parent Company Income Statement: Page 9 (5) Consolidated Cash Flow Statement: Page 10 (6) Parent Company Cash Flow Statement: Page 11 (7) Consolidated Statement of Changes in Equity: Page 12 (8) Parent Company Statement of Changes in Equity: Page 13
- Notes to Financial Statements: Pages 14–84
Audit Report
Tianjian Shen [2026] No. 7244
To the Shareholders of Shandong Boyuan Pharmaceutical Chemical Co., Ltd.:
I. Audit Opinion
We have audited the financial statements of Shandong Boyuan Pharmaceutical Chemical Co., Ltd. (hereinafter referred to as "Boyuan Pharmaceutical"), which comprise the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statements of changes in equity for the year 2025, as well as the related notes to the financial statements.
In our opinion, the accompanying financial statements have been prepared in all material respects in accordance with the Accounting Standards for Business Enterprises and fairly present the consolidated and parent company financial position of Boyuan Pharmaceutical as of December 31, 2025, and its consolidated and parent company operating results and cash flows for the year 2025.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities under these standards are further described in the "Certified Public Accountant's Responsibilities for the Audit of the Financial Statements" section of the audit report. In accordance with the "Code of Ethics for Certified Public Accountants of China No. 1 — Independence Requirements for Financial Statement Audit and Review Engagements" and the Code of Professional Ethics for Certified Public Accountants of China, we are independent of Boyuan Pharmaceutical and have fulfilled our other ethical responsibilities. We have complied with the independence requirements for the audit of public interest entities. 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 of the current period. These matters were addressed 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.
(I) Revenue Recognition
- Matter Description
For relevant information disclosure, please refer to Notes III (22) and V (II) 1 to the financial statements.
The operating revenue of Boyuan Pharmaceutical is mainly derived from iodides, special functional chemicals, etc., and operating revenue has been growing year by year. In 2025, the operating revenue of Boyuan Pharmaceutical was RMB 1,464,674,474.27.
Since operating revenue is one of the key performance indicators of Boyuan Pharmaceutical, there is an inherent risk that the management of Boyuan Pharmaceutical (hereinafter referred to as "management") may engage in inappropriate revenue recognition to achieve specific goals or expectations. Therefore, we have identified revenue recognition as a key audit matter.
- Audit Response
Our audit procedures for revenue recognition mainly include: