Company code: 688363 Company abbreviation: Bloomage Biotech

Bloomage Biotechnology Co., Ltd

Summary of the 2024 Annual Report

Section 1 Important Notice

1. The summary of this annual report is from the full text of the annual report, in order to fully understand the company's operating results, financial status and future development plan, investors should go to the http://www.sse.com.cn website to read the full text of the annual report carefully.

2. Major risk warning

During the reporting period, there was no significant risk that would have a substantial impact on the company's production and operation. The Company has described the relevant risks in detail in this report, as detailed in the corresponding section on the Company's risk factors in Section 3 Management Discussion and Analysis.

3. The Board of Directors, the Board of Supervisors, the directors, supervisors and senior management of the Company guarantee the authenticity, accuracy and completeness of the contents of the annual report, and that there are no false records, misleading statements or material omissions, and bear individual and joint legal liabilities.

4. All directors of the company attend the meeting of the board of directors.

5. Grant Thornton Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report for the company.

6. The company is not profitable and has not yet achieved profitability at the time of listing

□ Yes √ No

7. The profit distribution plan or the plan for the conversion of provident fund into share capital for the reporting period approved by the board of directors

In 2024, the company achieved a net profit attributable to shareholders of the listed company in the consolidated statement of 174,267,399.74 yuan, which was realized by the parent company

Net profit after tax was RMB510,437,943.04. The company's profit distribution plan for 2024 is: the company intends to distribute a cash dividend of 1.10 yuan (inclusive) for every 10 shares based on the total share capital registered on the record date of the implementation of equity distribution equity deducting the number of shares in the company's special securities account for repurchase

tax), no capital reserve to increase share capital, and no bonus shares will be distributed. Deduction is based on the total share capital of the company as of March 31, 2025

The total proposed cash dividend calculated from the base of 478,362,704 shares after the number of shares in the company's repurchase special securities account is 52,619,897.44 yuan (tax included), accounting for 30.19% of the company's net profit attributable to shareholders of listed companies in the company's consolidated statements for 2024. If there is a change in the total share capital of the company before the equity registration date for the implementation of equity distribution, the number of shares in the company's special securities account for repurchase changes, it is planned to maintain the amount of cash dividends distributed per share unchanged and adjust the total amount of distribution accordingly.

The company's 2024 profit distribution plan has been deliberated and approved at the 17th meeting of the second board of directors of the company, and it still needs to be reviewed and approved by the company's 2024 annual general meeting of shareholders.

8. Whether there are special arrangements for corporate governance and other important matters

□ Applicable √ Not applicable

Section 2 Basic information of the company

1. Company profile

1.1 Company Shares

√ Applicable □ Not applicable

Company stock profile

Stock Type Stock Listed Exchange Stock Abbreviation Stock Code Stock Abbreviation Before the change

and plates

A-share stock Shanghai Stock Exchange Bloomage Biotech 688363 Not applicable

Science and Technology Innovation Board

1.2 Brief description of the Company's Depositary Receipts

□ Applicable √ Not applicable

1.3 Contacts and Contact Details

Secretary of the Board of Directors and Representative of Securities Affairs

Name: Li Yizheng, Mao Qing

Address: Bloomage, No. 6, Jianguomenwai Street, Chaoyang District, Beijing Bloomage, No. 6, Jianguomenwai Street, Chaoyang District, Beijing

Board of Directors Office, 33rd Floor, Tower D, International Centre Board Office, 33rd Floor, Tower D, International Center

Tel: 010-85670603 010-85670603

Fax: 010-65630000 010-65630000

E-mail ir@bloomagebiotech.com ir@bloomagebiotech.com

2. Brief introduction of the company's main business during the reporting period

2.1 Main business, main products or services

The company is a world-renowned biotechnology company driven by synthetic biotechnology innovation, and a platform company for the whole industry chain of biomaterials, with eight R&D platforms, including synthetic biology R&D platform, functional sugar R&D platform, cell biology research platform, regenerative medicine research platform, pilot transformation platform, application mechanism R&D platform, material functionalization technology platform, and formula preparation platform, it has established eight R&D platforms for bioactive materials from raw materials to medical end products. The whole industry chain business system of skin science innovation transformation products and nutritional science innovation transformation products serves the global manufacturing enterprises, medical institutions and end users in the fields of medicine, cosmetics and food. The company's main products are as follows:

(1) Raw material products

Relying on the biological fermentation technology platform and industrialization advantages, the company has developed a series of bioactive products with hyaluronic acid as the core, which are mainly used in pharmaceutical materials, care products, nutrition and health and innovative business fields. Among them, hyaluronic acid includes more than 200 specifications of pharmaceutical-grade, cosmetic-grade and food-grade products, which are widely used in medicine, medical devices, cosmetics, care products, functional foods and general food fields, and involve new fields such as pet food, family planning, dentistry, textiles, and household paper. Other bioactive products include γ-aminobutyric acid, sodium polyglutamate, ectoin, ergothioneine, Cordyceps militaris ferment filtrate, natto extract, brown rice fermentation filtrate, Micro Beauty series, Micro True, recombinant type III humanized collagen, PDRN, lipopeptide, PQQ, etc.

The company's pharmaceutical material raw material business is mainly pharmaceutical-grade raw materials, and its production meets the requirements of cGMP in the United States, GMP in China, and ICHQ7.

Passed the US FDA, South Korea MFDS, Japan PMDA, China GMP on-site inspection. The company's care products raw materials business is mainly cosmetics

Grade raw materials, the production of which meets the requirements of ISO9001 and EFfCI (EU Cosmetic Raw Material Specification) system, the products have KOSHER,

HALAL, ECOCERT, COSMOS, Vegan, NaTrue and other registered qualification certifications, is a strategic partner of world-renowned cosmetics companies, providing customers with a full range of products, technical services and application solutions to meet various customized needs. The company's nutrition and health raw materials business is mainly food-grade raw materials, and its production has ISO9001, HACCP, ISO22000, FSSC22000 food safety system certification, and the products have obtained KOSHER and HALAL registration qualification certifications, while food-grade sodium hyaluronate has passed the approval of new food raw materials in China and Brazil, and food-grade GABA has obtained substantial equivalent certification from the National Health Commission. The company's innovative raw material business covers reproductive health, textiles, daily necessities, pet food and other fields, and the company is also constantly exploring emerging markets such as pet medical care, soil improvement, enzyme preparations, etc., and developing more application scenarios of bioactives.

Details of the Company's main products and the registration qualifications obtained during the reporting period are detailed in Section III of this report Management Discussion and Analysis

/5. Main business situation during the reporting period/(4) Analysis of industry business information Analysis of business information of pharmaceutical manufacturing industry/1.Basic situation of the industry and major drugs (products)/(2) Basic information of major drugs (products) and (3) Drugs (products) submitted to the regulatory authorities for approval and approval during the reporting period.

(2) Medical terminal products

The company independently develops and produces medical terminal products in the field of hyaluronic acid biomedical materials, which are mainly divided into two categories: medical beauty and medicine.

Medical cosmetology includes soft tissue fillers, medical skin protectors, etc. In 2012, the company "Runbaiyan (?) "Inject with modification

Sodium Mingate Gel was approved for marketing as the first domestic cross-linked hyaluronic acid soft tissue filler with NMPA approval number in China; In 2016, the company's modified sodium hyaluronate gel for injection containing lidocaine was the first to pass the NMPA certification; In 2019, the company launched the first self-developed monophasic hemp-containing hyaluronic acid soft tissue filler in China; In the second half of 2020, the company launched the "Runzhi Doll Needle", a micro-cross-linked hyaluronic acid product containing lidocaine, which is suitable for superficial to middle injection of facial dermal tissue for wrinkle removal; In 2022, the company will successively launch the brand "Runzhi Zhenhuo (?)" focusing on post-medical art restoration. ", covering products such as repair serums, spray dressings, skin repair patches and repair lotions; In 2024, the company will launch "Runzhi Gege" (sodium hyaluronate composite solution for injection) and "Runzhi Feiran" (cross-linked sodium hyaluronate gel for injection). As of the end of the reporting period, the company has obtained a total of 9 Class III medical device registration certificates in China in the direction of medical aesthetics.

At present, the company's medical beauty products mainly include two brands, "Runbaiyan" and "Runzhi", among which the core brand Runzhi has successively launched a variety of matrix products for different skin levels with the concept of layered anti-aging - Runzhi Natrual, No. 2, No. 3, No. 5, Gege Needle, Feiran Needle, as well as the products of the micro-cross league for skin rejuvenation and long-term solutions - Runzhi Doll Needle, etc., and at the same time, Runzhi Zhenhuo (? ) to market post-operative skincare. The company's medical beauty products meet the diversified needs of the whole cycle of postoperative care through the multi-product series matrix of "machinery + makeup", and improve customer and consumer satisfaction through overall solutions. In the future, the company will continue to rely on the advantages of synthetic biology materials and technology platforms, deeply integrate the cutting-edge research results of glycobiology and cell biology, based on the layout idea of "material technology breakthrough + product efficacy diversification", diversify products with hyaluronic acid as the core, and expand the scenario-based application of multi-dimensional new materials including proteins and regenerations, and continue to increase the product development and marketing promotion of diversified materials, diversified efficacy and refined indications, so as to provide customers and consumers with comprehensive, compliant, safe, efficient, Products with a high quality-to-price ratio.

Medicines include ophthalmic viscoelastic agents, medical lubricants and other medical device products, as well as drugs such as bone and joint cavity injection injections. As the sole distributor of RegenLab in China, the company continued to promote and sell the "Platelet-rich Plasma Preparation Kit" (PRP) products in orthopedics, sports medicine, plastic surgery and pain departments in China during the reporting period. As of the end of the reporting period, the company has obtained 2 Class III medical device registration certificates and 3 drug registration certificates in the pharmaceutical direction in China.

(3) Dermatology innovation and transformation products

Relying on eight R&D platforms, the company has conducted in-depth research on the efficacy of bioactive substances and their derivatives such as hyaluronic acid with different molecular weights, GABA, ectoin, ergothioneine and other bioactive substances on human skin, and has developed a series of skin care brands for different skin problems such as damaged skin barrier, anti-aging, and oily skin with simplified formula, high active ingredient content, strong efficacy, and good permeation promotion effect. At present, the company owns a number of brands such as "BIOHYALUX", "QUADHA", "Bio-MESO", "MEDREPAIR", etc., covering secondary serums, creams and lotions, facial masks, hand masks, eye masks, sprays, scalp care, etc. Thereinto:

BIOHYALUX: BIOHYALUX adheres to the company's professional research in glycobiology and cell biology, focuses on daily micro-damage of cells and skin dominance problems, and uses the unique "INFIHA Cell All-round Repair Technology" to accurately improve the internal and external states of cells and realize cells

Grade precision repair, continuing the scientific and technological route of "repairing healthy and beautiful skin with biotechnology", and constantly strengthening the brand positioning of "repairing a good foundation and achieving a good face" of Baiyan.

QUADHA: Quadha revolves around the theme of "Frozen Age? Relying on the research platform of cell biology and regenerative medicine, based on the mechanism of skin aging at the cellular level and the precise regulation technology of cells, the brand positioning of "anti-aging" focuses on the endogenous source of cells, rejuvenates skin energy, increases the weight of scientific content creation and dissemination, continues to consolidate the position of cell-level precision anti-aging, and enhances the brand market influence.

BM Bio-MESO: BM Bio-MESO is based on the company's cutting-edge scientific research in metabolomics and synthetic biology

Note: Develop metabolic regulation technology to solve a series of skin problems caused by skin metabolism imbalance, including oily skin, and upgrade the brand to "skin care brand focusing on cell metabolism and regulation".

MEDREPAIR: Based on the company's cell biology and dermatoneuroimmunology research platform, MEDREPAIR focuses on the development of neuroimmunomodulation technology, strengthens the brand mentality of damaged skin solutions with the power of biotechnology, and upgrades the brand to "a damaged skin care brand focusing on skin neuroimmunology".

As of the end of the reporting period, the company had a total of 36 administrative licenses for domestic special cosmetics for sunscreen, freckle removal and whitening, and anti-shedding.

(4) Nutritional science innovation transformation products

At present, the company has the nutrition and anti-aging brand "Bloomage Health" and the nutrition and metabolism brand "Dang".

Little Bloom", hyaluronic acid drinking water brand "Suijiquan" and other brands.

2.2 Main business model

1. Procurement mode

The main raw materials purchased by the company include peptone, yeast powder, glucose, ethanol, skin care products and food-related raw materials, pre-filled syringes and packaging materials. The company continues to improve the procurement management system and implements standardized, intensive and digital management. The company's procurement center consists of production materials procurement department, general materials procurement department, service procurement department, procurement execution department and procurement management department. The procurement management system is uniformly formulated by the procurement management department to formulate the supplier management system and procurement process specifications, and supervise the procurement implementation process; The production materials procurement department and the procurement execution department are responsible for the procurement and execution of the materials required in the company's production and R&D process.

2. Production mode

The company mainly adopts the production model of sales and production, and prepares safety stock according to market forecasts. The main products are produced by the company independently, and some skin care products and foods are outsourced by third parties; The products of the French subsidiary Revitacare are combined with outsourced processing and in-house production.

(1) Independent production

The company's biological fermentation raw material products, medical terminal products and most of the functional skin care products are produced using its own plants, production equipment and technical processes. The strains required for the company's biological fermentation raw material products are all passed and preserved by the company independently, and there is no need to purchase from other parties. In the production process, for APIs, drugs and medical device products, the company organizes production in strict accordance with the requirements of drug GMP and medical device GMP. For functional skincare products, the company organizes production in accordance with ISO22716 and cosmetic GMPC requirements; For other types of products, the company organizes production in accordance with the requirements of the ISO9001 quality management system to ensure product quality, safety, stability and reliability. The company mainly adopts the mode of sales and production, and the sales department formulates a demand plan based on the analysis of customer orders and submits it to the supply chain planning department; The supply chain planning department prepares the production plan according to the sales demand plan and production scheduling requirements, and sends it to the production departments; Each production workshop arranges production according to the monthly production plan, and completes it on schedule with quality and quantity.

(2) Outsourcing processing

Under the cooperation mode of third-party assisted processing, the two parties sign a contract to stipulate in detail the responsibilities of both parties to ensure product quality in accordance with the requirements of cosmetics and food-related laws and regulations. Some products are provided by a third party according to the company's needs to provide formulas, raw materials and packaging materials to complete the whole process of production; Some products are provided by the company to the third party according to the production needs of the product formula, raw materials and packaging materials, and the third party assists in the production in strict accordance with the company's quality standards.

3. Sales model

(1) Raw material products

The target market of the company's raw material business is manufacturers in the pharmaceutical, cosmetics, care products, food and other industries. The domestic sales model is based on direct sales and supplemented by dealer sales; In the overseas market, it has set up subsidiaries in the United States, France, Japan, South Korea, Singapore and other countries to cover overseas customers to the greatest extent and continuously increase the proportion of revenue from direct sales customers through localized operations.

(2) Medical terminal products

a. Pharmaceutical products

The company's pharmaceutical products are mainly sold in a combination of distribution and direct sales. Under the distribution model, the company sells the products to dealers in the form of outright, and the dealers then sell them to end customers. After reaching a cooperation intention with the dealer, the company signed a distribution agreement with it to agree on sales policies such as sales price and settlement method. When the dealer has a purchase demand, submit a purchase order to the company to determine the specific purchase items, quantity and model, and the company will issue the goods to the dealer in accordance with the sales price and settlement method agreed in the distribution agreement. At the same time, the company will conduct direct sales to public medical institutions and private medical institutions.

b. Medical aesthetic products

The company's medical aesthetic products are mainly sold in a direct sales mode, supplemented by distribution. The direct sales system is mainly divided into three management areas: eastern, southern and northern, covering 30 provinces, municipalities and autonomous regions across the country, and directly serving more than 5,000 core medical beauty institutions across the country. At present, the company has a perfect sales system, covering the target market across the country. Through the cooperation with online platforms such as Xinyang and Meituan, we will create a B2B2C marketing model and directly reach the C-end. The overseas market is mainly based on the distribution model, and the business covers many countries and regions such as Europe, Russian-speaking region, the Middle East, and the Americas.

(3) Dermatology innovation and transformation business

At present, it mainly combines offline and online sales channels. Online channel companies mainly use a direct sales model. The customers of the online direct sales model are mainly individual customers, and the company sells directly to consumers through the settlement model. The online direct sales model includes the platform cooperation model and the self-owned platform model, which means that the company signs platform service agreements with Tmall, Taobao, Douyin and other platforms, and opens stores (flagship stores, specialty stores, etc.) on the platform to sell to end users. The self-owned platform model means that the company uses WeChat applets, Youzan Mall and other technical service providers to build official channels to sell directly to individual consumers. During the reporting period, the company improved the omni-channel layout by opening offline physical stores and stationed in offline counters to achieve multi-scenario user reach.

(4) Nutritional science innovation and transformation business

The company's nutritional science innovation and transformation business adopts a combination of online and offline sales strategy. In terms of online, the company mainly focuses on e-commerce platforms such as Douyin and Tmall, and precipitates operational capabilities through self-broadcasting. In terms of offline, the company has set up a professional team to carry out precise promotion activities with science communication content as the core for specific groups of people, systematically excavated offline channel opportunities and user needs, deeply integrated science communication and channel strategy, accelerated the reach of core channels and customers, and achieved sales conversion.

2.3 The situation of the industry

(1). The development stage, basic characteristics and main technical thresholds of the industry

(1) The basic situation of the hyaluronic acid industry

Hyaluronic acid is a natural polymer mucopolysaccharide composed of N-acetylglucosamine and D-glucuronic acid as building blocks

It is ubiquitous in the vitreous humor, joints, umbilical cord, skin and other parts of the human body, and gradually decreases with age. Hyaluronic acid has good physical and biological properties such as water retention, lubricity, viscoelasticity, biodegradation and biocompatibility, and has a wide range of applications in the fields of medical, cosmetics and functional foods.

(2) The basic situation of the biomanufacturing industry

Biomanufacturing is a green production method that uses the functions of organisms to process and synthesize substances, which is expected to change the world's industrial manufacturing pattern in the fields of energy, chemical industry and medicine. The state and governments at all levels have successively introduced various policies to support and support the biomanufacturing industry. 《2024

The Government Work Report of the Year will "accelerate the development of new quality productivity" as the top task in 2024, and emphasize actively cultivating emerging industries and future industries, and actively building new growth engines such as biomanufacturing, commercial aerospace, new materials, and low-altitude economy. Vigorously developing the biomanufacturing industry will help China accelerate the construction of a green, low-carbon and circular economic system and promote the high-quality development of the bioeconomy.

China's "14th Five-Year Plan for the Development of Bioeconomy" points out that it is necessary to promote technological innovation in synthetic biology and break through key technologies such as computational design of biomanufacturing strains, high-throughput screening, efficient expression, and precise regulation. According to McKinsey, the global economic value of synthetic biology and biomanufacturing is expected to reach $100 billion by 2025.

(3) The basic situation of the subdivision to which the company's products belong

？ Raw material segments

With the world's leading synthetic biology, microbial fermentation technology and enzymatic digestion technology, the company takes basic research and applied basic research as the core, and ranks among the top in the world in the industrialization scale of bioactives, especially hyaluronic acid.

In terms of pharmaceutical-grade raw materials, pharmaceutical-grade raw materials have higher requirements for production technology, quality control, registration procedures, etc., and countries have strict standards for market access to pharmaceutical-grade raw materials, and the price of pharmaceutical-grade raw materials is much higher than that of cosmetic-grade and food-grade raw materials, and it is the raw material product with the highest added value, and its core advantages lie in technical barriers and qualification barriers. In terms of cosmetic-grade raw materials, it is necessary to meet the needs of specific functions according to different application scenarios. Taking hyaluronic acid as an example, the research and development of cosmetic-grade hyaluronic acid raw materials mainly comes from the basic research and application of hyaluronic acid, through the processing and modification of the original ingredients of hyaluronic acid, including the combination with other bioactives to play a synergistic effect. In November 2023, the State Food and Drug Administration issued the Announcement on Matters Concerning the Encouragement of Innovation and Standardized Management of New Cosmetic Raw Materials to encourage and support the research and innovation of new cosmetic raw materials by domestic enterprises. In terms of food-grade raw materials, on January 7, 2021, the National Health Commission issued an announcement approving sodium hyaluronate as a new food raw material and allowing it to be added to ordinary foods. At present, Chinese food and nutraceutical companies have developed a series of products containing sodium hyaluronate, such as dairy products, beverages and candies, and:

Successfully launched to the market, forming a certain market heat, and gaining the recognition of consumers. On August 5, 2024, the National Health Commission issued an announcement,

N-acetylglucosamine was approved as a new food ingredient for five categories: milk and dairy products, beverages, jellies, confectionery and confectionery.

In addition, with the successive promulgation of policies such as the "14th Five-Year Plan" for the development of the bioeconomy, China has promoted the innovation of cutting-edge biotechnology at the national level, focusing on the higher-level needs of the people in the fields of "medicine", "food", "beauty" and "safety", and proposing the development of four key areas of biomedicine, bioagriculture, biomass substitution and biosecurity; Encourage technological innovation in synthetic biology, and orderly promote the application of new drug development, disease treatment, agricultural production, material synthesis, environmental protection, energy supply and new material development, and usher in development opportunities for synthetic biology. Relying on synthetic biotechnology, the company focuses on the R&D, production and sales of six categories of bioactives, including functional sugars, proteins, peptides, amino acids, nucleotides, and natural active compounds, and gradually builds a "benchmark for bio-intelligent manufacturing, a benchmark for the whole industry chain, and a benchmark for green manufacturing" for synthetic biology.

？ Medical terminal product segmentation

With the gradual acceleration of the aging process of China's population, the prevalence of osteoarthritis and the number of cataract patients are showing a steady increase. With the deepening of the reform of the medical and health system, the normalization of centralized procurement of drugs and medical consumables is conducive to the development of enterprises with outstanding advantages in product quality control, production cost optimization and supply stability guarantee.

With the increasing abundance of supply-side materials and products, and the rising pursuit of beauty by demand-side consumers, the medical cosmetology industry has maintained a rapid industry growth rate, especially non-invasive or minimally invasive non-surgical projects are widely popular, and the penetration rate is increasing. In February 2024, the National Health Commission and other ten departments issued the "Opinions on Strengthening the Cross-departmental Law Enforcement Linkage of Medical Supervision", and the stricter policies and legislation and the implementation of regulatory measures are gradually guiding the entire medical cosmetology industry to develop in the direction of compliance. With the stricter regulation of the medical cosmetology industry, the standardization of the industry will be conducive to the further development of leading compliance enterprises.

？ Functional skin care products segment

According to statistics released by the National Bureau of Statistics, the total retail sales of consumer goods in 2024 will be 48,789.5 billion yuan, a year-on-year increase

3.5%, of which the retail sales of cosmetics by units above designated size reached RMB435.7 billion, down 1.1% year-on-year. According to the 2024 China Cosmetics Yearbook, the size of China's cosmetics market in 2024 will be RMB774.6 billion, down 2.8% year-on-year. Among them, online channels

sales of cosmetics were RMB405.5 billion, up 0.4% year-on-year; Cosmetics sales in offline channels were RMB369.1 billion, down 6.1% year-on-year.

In 2024, consumers' demand for personalized, natural, and healthy products will increase, rational consumption will become the norm, and more attention will be paid to "quality."

price ratio". At the channel level, the competition of e-commerce platforms is becoming more and more fierce, emerging social media platforms continue to divert traffic from traditional e-commerce platforms, traffic costs are gradually increasing, and the potential energy of super head anchors is decreasing. It poses higher challenges to enterprises in the industry, and also brings more opportunities to enterprises with strong self-operated channels and refined operation capabilities.

？ Functional food segments

In recent years, the state has continued to increase its support for the development of the health industry, and has introduced a number of policies to promote the research and development and promotion of functional foods. Among them, the "Healthy China 2030" Planning Outline emphasizes the importance of improving the health level of the whole people and promoting the innovation and development of the health industry. The "14th Five-Year Plan" further clarifies the goals and tasks of national health promotion and provides policy guarantees for the functional food industry. In addition, the Administrative Measures for the Registration of Special Foods and related guidelines issued by the State Administration for Market Regulation have simplified the approval process for new raw materials for functional foods and provided policy facilitation for enterprise innovation. And, with the increase in disposable income of residents, the enhancement of health awareness and the pursuit of high-quality life, the functional food industry is expected to usher in a golden period of rapid development, especially in enhancing immunity, improving sleep and anti-aging. In addition, the recognition of China's functional foods in the international market is gradually increasing, providing opportunities for domestic enterprises to expand overseas markets.

(4) Main technical thresholds

Build technical barriers based on cutting-edge basic research and applied basic research. "Frontier basic research" is the scientific foundation to achieve the 0-1 of material discovery, and "applied basic research" is a technical platform for undertaking scientific research, and its main role is to complete the 1-10 and 10-100 of material development. Scientific discoveries and technological inventions are the basis for enabling the application of biologically active substances. At present, after continuous accumulation and precipitation, the company has formed eight R&D platforms, including synthetic biology R&D platform, functional sugar R&D platform, cell biology research platform, regenerative medicine research platform, pilot transformation platform, application mechanism R&D platform, material functionalization technology platform, and formula preparation platform, and is equipped with professional talents, covering glycobiology, genetic engineering, bioengineering, microbiology, biochemistry, physical chemistry, materials science, applied chemistry and other fields, supporting product design, biological system construction, fermentation and purification The whole process of process development and amplification, efficacy application research and product re-upgrading has built the company's ability platform and technical barriers for the whole industry chain.

A technology platform system for the creation of bioactives using synthetic biology. Synthetic biology, as a fourth-generation biotechnology, is a combination of molecular biology and systems biology, using the principles of engineering to design biological systems and biofactories. Through modular design, standardized construction, and programmable control, the design and construction of biological systems can not only transform existing biological systems, but also create new biological systems. The technical competence in this field directly determines the efficiency and cost of bioactive substance creation, thus affecting its potential for application in the end product. At present, the company has built a synthetic biology platform, with the help of AI and high-throughput screening technology, to achieve the efficient operation of strain design, construction and trait screening, data analysis and biological system modeling, downstream process development and optimization, mechanism efficacy and application research in the field of synthetic biology. From the establishment of the innovation base and R&D team, the core construction of the platform, the R&D of the industry-university-research consortium to the pilot transformation platform, the company has completed all the links of platform-talent-technology-transformation required by synthetic biology, and has connected the whole industrial chain of R&D, pilot transformation and industrial production. At the same time, the company has professional safety regulations, product approval, intellectual property protection and other technical guarantees to support product development and marketing.

The key technology system of the multidisciplinary green biomanufacturing pilot achievement transformation platform. The company has built a key technology system for green biomanufacturing of bioactives based on key technologies such as glycobiology and synthetic biology, involving multiple disciplines such as molecular biology, fermentation engineering, enzyme engineering, cell engineering, and metabolic engineering. After long-term technical data accumulation and application practice, the company has built a pilot test achievement transformation platform, built an integrated solution service capability for industrial transformation through the iterative upgrading of the application research capability system in the process of technology amplification, and continued to build an innovative key technology system for green biomanufacturing. In the field of hyaluronic acid, chondroitin and other functional glycan product development, in view of the technical bottleneck of the large-scale preparation of glycans by synthetic biology technology, the company has established and industrialized the biomanufacturing and green preparation technology system of glycan bioactives through systematic optimization and technology integration of key links such as fermentation control, material extraction, separation and purification, and product classification. In the fields of various proteins, small molecule compounds, etc., the company relies on the synthetic biology platform to efficiently build high-yield strains, and continuously optimizes fermentation yield, purity, impurity residue, stability and production cost through metabolic regulation. In the process of cross-scale process scale-up, combined with the characteristics of chassis cells, the system solves key industry pain points such as insufficient dissolved oxygen, feedback inhibition of non-target substances, and poor matching of high-viscosity fermentation equipment.

Based on the in-depth understanding of bioactive substances, we will build an industry-leading application development system. By taking glycobiology, cell biology

Relying on independent research and development and industry-university-research collaborative innovation network, and making full use of AI technology tools, the company has formed a unique application capability in the process from basic research to terminal product development of bioactive substances. The company has established a technical system for the modification and application of biomaterials with independent intellectual property rights, for example, hyaluronic acid cross-linking technology leads the industry in safety and effectiveness indicators through innovative process design and precise process control, and the company won the 24th "China Patent Excellence Award" in 2024. Relying on the continuous accumulation of bioactive substance application data assets, the company has built a development model of "mechanism research-technology development-patent layout", and continues to build a technical moat for the industrial application of bioactive substances.

Pharmaceutical and medical device grade raw materials and medical end products have regulatory barriers. Pharmaceutical and medical device end products involve ophthalmology, orthopedics, plastic surgery, general surgery and other fields, and raw material products with stable quality and complete international qualifications have high regulatory barriers, and the process of obtaining market access qualifications in various countries is usually more than 2 years. The final performance of medical end products is the result of comprehensive regulation of multi-factor process conditions, such as different structural modification technologies directly affect the affinity, viscoelasticity, cohesion, support, biological activity and in vivo retention time of the product, etc., which requires a high technical level. At the same time, drugs and Class III medical devices have high requirements for production and quality control level, capital investment, production environment, product registration, etc.

(2). Analysis of the company's position in the industry and its changes

The company is the world's leading high-tech enterprise with hyaluronic acid microbial fermentation production technology as the core, and is the largest in the world

Hyaluronic acid production and sales enterprises. According to the June 2022 Global & China 2021 report by research firm Frost &Sullivan

Hyaluronic Acid (HA) Industry Market Research Report", the company's hyaluronic acid sales accounted for 44% of the world's sales in 2021. The company participated in the revision of the hyaluronic acid standards in the European Pharmacopoeia and the Chinese Pharmacopoeia, and submitted the hyaluronic acid monograph to the United States Pharmacopoeia; He has led or participated in the formulation of 6 national industry standards related to hyaluronic acid.

The company's scientific and technological innovation capabilities have been recognized by the state and governments at all levels for many times, and have been successively recognized as the National Enterprise Technology Center, the Key Laboratory of Quality Control of Cosmetic Raw Materials of the State Food and Drug Administration (joint declaration), the Key Laboratory of Bioactive Synthetic Biology of Shandong Province (in preparation) and other scientific research platforms, the Hainan Provincial Key Laboratory of Regenerative Medicine Technology and Material Transformation, the Tianjin Key Laboratory of Biosynthesis and Process Engineering and other scientific research platforms, and participated in the joint construction of the National Synthetic Biotechnology Innovation Center and the National Biomanufacturing Industry Innovation Center. By virtue of its technological leadership and industry-leading role, the company has won national and provincial honors such as the National Manufacturing Individual Champion Demonstration Enterprise, the National Intellectual Property Advantage Enterprise, the First Prize of Shandong Science and Technology Progress Award, the Shandong Provincial Governor Quality Award, and the Special Award of the China Federation of Commerce. In 2024, the company's scientific and technological innovation capabilities will continue to be recognized, and the main body of the Synthetic Biology International R&D Center has been recognized as Zhongguancun high-tech enterprise, national science and technology small and medium-sized enterprise, national high-tech enterprise, etc., and the Beijing postdoctoral research workstation was officially unveiled.

The company is an enterprise that has the registration and filing qualification for the production of sodium hyaluronate APIs and pharmaceutical excipients by fermentation, and realizes commercial production. The quality of pharmaceutical-grade products is higher than that of the European Pharmacopoeia, the Japanese Pharmacopoeia and the Chinese drug quality standards, and the impurity levels of the main quality parameters such as nucleic acid and endotoxin are 1/50 and 1/20 of the values specified in the international standards of the European Pharmacopoeia, respectively, reaching the international leading level. At the same time, the company's pharmaceutical-grade raw material products have comprehensive global registration qualifications, and have obtained 11 registration and filing qualifications in China (with both pharmaceutical excipients and API approval numbers) and 1 DMF registration in Taiwan, China, and internationally including the European Union, the United States, South Korea, Canada, Japan,

There are 32 registration and filing qualifications in Russia and India. At the beginning of January 2021, the food-grade hyaluronic acid led by the company was obtained

The qualification of new food raw materials in China has created the era of "domestic" hyaluronic acid terminal food in China. In 2024, the company led the formulation of the industry standard of "Sodium Hyaluronate Dressing for Medical Use" (standard number YY/T 1938-2024), which was officially approved and released by the National Medical Products Administration. At present, the company has successfully laid out six categories of substances such as functional sugars, amino acids, proteins, peptides, nucleotides and natural active compounds, especially in the research and development and production of core substances such as ectoin, ergothioneine, γ-aminobutyric acid, etc., consolidating the company's dominant position in the field of bioactives. Pharmaceutical-grade ectoin obtained the registration and filing qualification in the United States in 2022 and the domestic pharmaceutical excipient registration and filing qualification in 2024. Recombinant type III humanized collagen and polydeoxyribonucleic acid will be registered as medical device master files in 2024. Food grade γ-aminobutyric acid and N-acetylneuraminic acid

In 2018 and 2024, food-grade ergothioneine was approved in the United States in 2024

Self-GRAS Certified.

The company is the first in the world to use microbial enzymatic digestion to produce low-molecular-weight hyaluronic acid and oligomeric hyaluronic acid on a large scale

The patent for the technology of "method for preparing oligomeric hyaluronate by enzymatic digestion and the obtained oligomeric hyaluronate and its application" was obtained in 2019

The 21st China Patent Gold Award. Since 2006, the company has been researching gradient 3D crosslinking technology, based on which the hyaluronic material is developed

Acid end products include soft tissue fillers, ophthalmic viscoelastic agents, medical lubricants and other medical device products, as well as drugs such as bone and joint cavity injection injections, and finally become a leading provider of medical terminal products and functional skin care products with hyaluronic acid as the core in China. "Run Baiyan?" Modified sodium hyaluronate gel for injection was approved by the NMPA in 2012 and is the first domestic cross-linked hyaluronic acid soft tissue filler with an approval number in China, breaking the monopoly of foreign brands in the domestic market. The company uses self-produced hyaluronic acid and other bioactive substances as the core ingredients for reasonable compounding to improve the synergistic effect, so that the efficacy of the active ingredients can be maximized in skin care products. We have developed a series of functional skin care products for sensitive skin, damaged skin barrier, facial redness, acne and other skin problems, and have made progress in the development of products with special effects such as sun protection, freckle removal, and whitening.

(3) The development and future development trend of new technologies, new industries, new forms of business and new models during the reporting period

In 2024, China's biopharmaceutical industry will continue to be in a development environment where strategic opportunities and risks and challenges coexist, but the long-term will be positive

The underlying trend remains unchanged. The 2025 government work report pointed out that with the advancement of the national "dual carbon" goal and the deepening of green and low-carbon transformation, biomanufacturing, as an important path for sustainable production, has broad application prospects in chemical, materials, energy and other fields. The rapid development of synthetic biology technology has provided a powerful innovation engine for the biomanufacturing industry, promoting the R&D and industrialization of high-efficiency biocatalysts, new biomaterials and high value-added products. At the policy level, the state has increased its support for the fields of biomanufacturing and synthetic biology, and provided a solid guarantee for the development of the industry by optimizing the innovation ecology, strengthening the collaboration between industry, academia and research, and promoting the upgrading of the industrial chain. At the same time, the growing global demand for green economy has created favorable conditions for China's biomanufacturing industry to participate in international competition and seize the commanding heights of technology. In the future, China's biomanufacturing and synthetic biology industries will achieve high-quality development in technological innovation, industrial upgrading and international cooperation, injecting new momentum into the green transformation and sustainable development of the economy.

At the technical level, with the continuous development of synthetic biology technology, standardization and automation will become an important direction in the future. By developing standard engineering components and biocomponents, and establishing an automated synthetic biology platform, the design, construction, and testing of biological systems can be significantly improved, and the pace of innovation can be accelerated. At the same time, the deep integration of artificial intelligence (AI) and synthetic biology will continue to push the boundaries of technology. The application of AI in gene structure design and protein 3D structure prediction provides an accurate and rational design foundation for synthetic biology, and more innovative applications will be realized in the fields of precision medicine and environmental remediation in the future. The company will continue to deepen the application of AI technology in the design and screening of biomaterials, and promote the efficient transformation of technological achievements. With deep technology accumulation and strong industrial transformation capabilities, we continue to promote technological breakthroughs and industry changes in synthetic biology. At the same time, the company actively explores the deep integration of artificial intelligence (AI) and synthetic biology, and based on computational biology and synthetic biology technologies, it has established an artificial intelligence-aided design and high-throughput screening platform for recombinant collagen, and developed a high-stability recombinant collagen with a triple helix structure and high temperature treatment, showing broad application prospects.

At the product level, with the continuous improvement of the regulatory policies of the National Medical Products Administration for the medical aesthetic industry, the industry is moving towards high standards, high thresholds, and strong supervision. The classification and definition of water and light products are further clarified, and products that mainly play a moisturizing and hydrating role through materials such as sodium hyaluronate need to be managed in accordance with Class III medical devices. With its leading technical advantages and compliance layout, the company continues to promote the innovation and registration management of medical device products, and further consolidates its leading position in the field of medical cosmetology.

3. The company's main accounting data and financial indicators

3.1 Key accounting data and financial indicators for the past 3 years

Unit: Yuan Currency: RMB

2024 2023 This year is compared to 2022

Increase/decrease (%)

Total assets 8,656,731,837.99 8,470,008,293.83 2.20 8,681,754,350.57

Shares attributable to listed companies 6,810,170,453.97 6,944,100,603.15 -1.93 6,633,775,580.33

East's net worth

Operating income 5,370,770,254.64 6,075,923,853.74 -11.61 6,359,191,975.49

Shares attributable to listed companies 174,267,399.74 592,555,911.37 -70.59 970,918,593.78

East's net profit

Attributable to shares of listed companies

Non-recurring deductions for East 107,271,950.81 490,482,932.05 -78.13 852,144,424.61

Net profit from profit or loss

564,505,133.92 699,648,201.22 -19.32 635,188,642.10 from operating activities

Net gold flow

Weighted average net assets closed 2.55 8.31 decreased by 5.76 percentage points 15.75

Profit rate (%)

Basic earnings per share (RMB 0.36 1.23 -70.73 2.02

/share)

Diluted earnings per share (RMB 0.36 1.23 -70.73 2.01

/share)

R&D investment accounted for 8.68 7.35 percentage points of operating revenue, an increase of 1.33 percentage points and 6.10

Proportion of income (%)

3.2 Key accounting data by quarter in the reporting period

Unit: Yuan Currency: RMB

Q1 Q2 Q3 Q4

(January-March) (April-June) (July-September) (October-December)

Operating income 1,360,531,915.00 1,450,210,481.15 1,064,002,047.03 1,496,025,811.46

Attributable to listing

243,367,321.40 98,398,307.68 20,258,275.61 -187,756,504.95 of the company's shareholders

Net profit

Attributable to listing

of the shareholders of the company

Non-recurring 231,475,776.61 84,445,390.45 10,583,321.09 -219,232,537.34

After sexual gains and losses

Net profit

Business activities

Generated cash flow 34,851,268.21 229,771,253.10 9,433,742.96 290,448,869.65

Net amount

Explanation of the discrepancies between the quarterly data and the data disclosed in the periodic report

□ Applicable √ Not applicable

4. Shareholders

4.1 The total number of common shareholders, the total number of preferred shareholders whose voting rights have been restored, and the total number of shareholders holding special voting shares and the top 10

shareholders

Unit: Shares

The total number of ordinary shareholders (households) at the end of the reporting period was 33,055

The total number of ordinary shareholders at the end of the previous month prior to the disclosure date of the annual report was 32,746

The total number of preferred shareholders whose voting rights were restored as of the end of the reporting period (households) was 0

The total number of preferred shareholders whose voting rights were restored at the end of the previous month prior to the disclosure date of the annual report was 0

Number (Households)

The total number of shareholders holding special voting shares as of the end of the reporting period (households) 0

Shareholders holding special voting shares at the end of the previous month prior to the disclosure date of the annual report 0

Total (Households)

Shareholdings of the top 10 shareholders (excluding shares lent through refinancing)

Hold staking, tokens, or

Limited freeze cases

Name of Shareholder During the Reporting Period Number of Shares Held at the End of the Period Proportion Selling Shareholder

(Full name) increase or decrease (%) Shares Nature of shares

Number of copies, status, quantity

measure

Intra-border

Huaxi Xinyu Investment Co., Ltd. 0 283,500,000 58.86 0 No 0 National law

person

China Life Chengda (Shanghai) Health

Industrial Equity Investment Center (Yes -5,496,782 28,936,504 6.01 0 N/A 0 Other

Partnership Only)

China Merchants Bank Co., Ltd

-ChinaAMC SSE STAR Market 50 -1,583,510 12,773,556 2.65 0 None 0 Others

Component of a trading open-ended index

Securities investment funds

Industrial and Commercial Bank of China Co., Ltd

Company-E Fund SSE Science and Technology 3,832,025 8,062,433 1.67 0 N/A 0 Others

The board 50 components are open for trading

index securities investment funds

Hong Kong Securities Clearing Company Limited 1,709,853 7,695,996 1.60 0 No 0 Extraterritorial law

person

Beijing Tonghui Taihe Investment Management

Co., Ltd. - Beijing Guoshoutai -269,278 5,557,937 1.15 0 N/A 0 Other

and the first phase of equity investment partnership

Business (Limited Partnership)

Liu Zheng 3,829,200 4,748,000 0.99 0 No 0 Self

Ran

Bank of China Limited

-China Merchants CNI Biopharmaceuticals 690,222 3,253,773 0.68 0 N/A 0 Others

A number of graded securities investment funds

Agricultural Bank of China Co., Ltd

Company-CSI 500 Traded 2,860,316 2,860,316 0.59 0 N/A 0 Others

Open-ended index securities investment base

gold

Guo Wei -65,363 2,174,785 0.45 0 No 0 Realm Self

Ran

The above description of shareholder affiliation or concerted action does not apply

Explanation of preferred shareholders whose voting rights have been restored and the number of shares held is not applicable

Holders of depositary receipts

□ Applicable √ Not applicable

The top 10 shareholders in terms of the number of voting rights as of the end of the reporting period

□ Applicable √ Not applicable

4.2 Block diagram of the property rights and control relationship between the company and the controlling shareholder

√ Applicable □ Not applicable

4.3 Block diagram of the property rights and control relationship between the company and the actual controller

√ Applicable □ Not applicable

Note: Ms. Zhao Yan, the actual controller of the Company, and her wholly-owned holding company, Beijing Huaxihui Investment Management Co., Ltd., were announced on March 4, 2025

Shanghai Yanze Enterprise Management Partnership (Limited Partnership) (formerly known as Baixin Lida (Tianjin) Commercial Management Partnership (Limited Partnership), hereinafter referred to as "Shanghai Yanze") held 1,378,723 shares of the company before the initial public offering, accounting for about 0.29% of the company's total share capital, and the total number of shares held by Ms. Zhao Yan, the actual controller of the company, and her concerted actors before and after the transfer of the partnership shares did not change.

4.4 The total number of preferred shareholders and the top 10 shareholders of the company at the end of the reporting period

□ Applicable √ Not applicable

5. Corporate bonds

□ Applicable √ Not applicable

Section 3: Important Matters

1. The company shall, in accordance with the principle of materiality, disclose the major changes in the company's operation during the reporting period, as well as the events that have a significant impact on the company's operation during the reporting period and are expected to have a significant impact in the future.

During the reporting period, the company achieved operating income of 5.371 billion yuan, a year-on-year decrease of 11.61%, of which the revenue of raw material products was 12.36%.

100 million yuan, 1.440 billion yuan of revenue from medical terminal products, and 2.569 billion yuan from skin science innovation and transformation business; The consolidated gross margin was 74.07%; net profit attributable to shareholders of listed companies was 174 million yuan, down 70.59% year-on-year; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 107 million yuan, down 78.13% year-on-year; Net cash flow from operating activities was $565 million.

2. If there is a delisting risk warning or termination of listing after the disclosure of the company's annual report, the reasons for the delisting risk warning or termination of listing shall be disclosed.

□ Applicable √ Not applicable