Securities Code: 688363 Securities Abbreviations: Huaxi Bio Announcement No.: 2022-040

Huaxi Biotechnology Co., Ltd.

Announcement on the use of some idle raised funds for cash management.

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and completeness of its contents.

On December 7, 2022, Huaxi Biotechnology Co., Ltd. (hereinafter referred to as "the company" or "Huaxi biology") held the fourth meeting of the second board of directors and the fourth meeting of the second board of supervisors, deliberated and passed the proposal on continuing to use idle raised funds for cash management, It is agreed that the company will not affect the construction of investment projects and the use of raised funds, and effectively control the risk, within 12 months from the date of deliberation and approval by the board of directors, the temporarily idle raised funds up to 0.3 billion RMB shall be managed in cash, and the capital guaranteed investment products sold by financial institutions with high security, good liquidity and legal business qualifications shall be purchased. The 0.3 billion RMB quota can be used in a circular and rolling manner.

1. the basic situation of this fund raising.

The application for registration of the Company's initial public offering of shares and listing on the CRE Board was made on September 29, 2019.

The State Securities Regulatory Commission agreed to register (Securities Regulatory Commission [2019] No. 1796 "Approval on Approving the Registration of the Initial Public Offering of Huaxi Biotechnology Co., Ltd."), the company adopted a combination of allotment to strategic investors, offline allotment to qualified investors, and online pricing and issuance to qualified public investors. 49,562,556 shares were publicly issued. The total amount of funds raised is RMB 2368.5946 million. After deducting the issuance expenses (excluding VAT), the net amount of funds raised is RMB 2248.9544 million.

On October 30, 2019, to the same accounting firm (special general partnership) issued to the same inspection word (2019)

Capital Verification Report No. 110ZC0182. After the raised funds have been received, they have all been deposited in the special account for the raised funds, and the company has signed with the sponsor Huatai United Securities Co., Ltd. and the commercial bank that stores the raised funds in the special account.

A special fund-raising account supervision agreement was entered. For details, please refer to the Shanghai Stock Exchange on November 5, 2019.

The Securities Exchange website (www.sse.com.cn) disclosed the "Announcement on the Listing of the Initial Public Offering of Shares of Huaxi Biotechnology Co., Ltd.".

Investment Projects with Funds Raised by 2.

The Company disclosed in the Prospectus for the Initial Public Offering of Shares of Huaxi Biotechnology Co., Ltd. and Listing on the Science and Technology Board that the proceeds, after deducting the issuance costs, will be invested in the construction of the following projects in accordance with the priority:

Unit: RMB 10,000

No. Project Name Total Proposed Investment Amount Proposed to Use Funds Raised

1 Upgrading and renovation project of Huaxi Biological Research and Development Center 40,066.90 40,066.90

2 Huaxi Tianjin Sodium Hyaluronate and Related Projects 110,692.43 110,692.43

3 Huaxi Biological Life and Health Industrial Park Project 164,678.50 74,136.11

Total 315,437.83 224,895.44

Use of 3. Funds Raised

For the use of raised funds as of June 30, 2022, please refer to the special report on the deposit and actual use of raised funds of Huaxi Biotechnology Co., Ltd. (Announcement No.: 2022-029) disclosed by the company on the website of Shanghai Stock Exchange (www.sse.com.cn) on August 30, 2022. 4. the use of temporarily idle funds for cash management.

(I) investment purpose

In order to improve the efficiency of the use of raised funds, rationally use part of the temporarily idle raised funds, and ensure that the construction of the raised funds investment project and the use of raised funds are not affected, and the risk is effectively controlled, part of the temporarily idle raised funds are managed in cash. Conducive to reducing the company's financial expenses and increasing the company's income.

Variety of (II) Investment Products

The company will strictly control risks in accordance with relevant regulations, and use temporarily idle raised funds to purchase capital-guaranteed investment products sold by financial institutions with high security, good liquidity, and legal business qualifications that have an investment period of no more than 12 months (including but not limited to) Guaranteed financial products, structured deposits, time deposits, notice deposits, large deposit certificates, income certificates, etc.), and shall not be used for pledges and investments for the purpose of investing in securities.

Validity period of (III) resolution

Effective for 12 months from the date of approval by the Board.

(IV) Investment Amount and Term

The company intends to carry out cash management of temporarily idle raised funds up to 0.3 billion RMB, and carry out cash management within 12 months from the date of deliberation and approval by the board of directors, and the RMB quota of the 0.3 billion can be used in a circular and rolling manner.

(V) implementation

The board of directors authorizes the management to exercise the decision-making power of cash management and sign relevant contract documents within the validity period and the amount of funds. The financial center is responsible for organizing and implementing the specific matters.

(VI) information disclosure

The company will follow the "Guidelines for the Supervision of Listed Companies No. 2-Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies", "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules (Revised in December 202020)" and "Shanghai Stock Exchange Science and Technology Innovation Board" The company's self-discipline supervision guidelines No. 1-Standardized Operation "and other relevant regulations and regulatory documents, timely fulfill the obligation of information disclosure, and will not change the use of raised funds in disguise.

Distribution of (VII) Cash Management Income

The proceeds from the cash management of the fund-raising funds of each project shall be owned by the project implementation company, and will be used first to make up for the insufficient investment amount of the fund-raising project. After the cash management expires, it will be returned to the fund-raising account together with the cash management principal.

The Impact of 5. on the Company's Daily Operations

The company uses part of the temporarily idle raised funds for cash management this time, which will be carried out on the premise of ensuring that the construction of the raised funds investment project and the use of the raised funds will not be affected, and the risk will be effectively controlled. It will not affect the development of the company's raised funds investment projects, nor Will affect the normal development of the company's main business. At the same time, through reasonable cash management of some temporarily idle raised funds, the efficiency of the use of funds can be improved, the company's income can be increased, and more investment returns can be obtained for the company and shareholders, which is in the interests of the company and all shareholders.

6. Investment Risks and Risk Control Measures

(I) investment risk

Although the company intends to purchase capital-guaranteed investment products sold by financial institutions with high security, good liquidity and legal business qualifications, the financial market is greatly affected by the macro economy, and it is not ruled out that the investment is affected by market fluctuations.

(II) risk control measures

1. The company will choose capital-guaranteed investment products with high security and good liquidity issued by financial institutions with good reputation, large scale, strong capital operation ability and legal business qualifications. The company's financial center will analyze and track the investment products in real time. If the assessment finds that there are risk factors such as may affect the safety of funds, corresponding measures will be taken in time to control investment risks.

2. Independent directors and the board of supervisors have the right to supervise and inspect the use of funds, and may hire professional institutions to conduct audits when necessary.

3. The company will strictly follow the "Guidelines for the Supervision of Listed Companies No. 2-Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies", "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules (revised in December 2020)", "Shanghai Stock Exchange Science and Technology Innovation Board Listed Companies Self-discipline Supervision Guidelines No. 1-Standardized Operation" and the company's "Raised Funds Management System" and other relevant regulations handle relevant cash management businesses and regulate the use of raised funds.

Explanation of 7. Special Opinions

Opinions of Independent Directors of (I)

The independent directors believe that the company uses part of the temporarily idle raised funds for cash management, which is carried out without affecting the construction of the raised funds investment project and the arrangement of the use of raised funds, and effectively controlling risks, which will help improve the efficiency of capital use and increase The company's investment income is in the interests of the company and all shareholders. There is no disguised change in the use of the proceeds and harm the interests of shareholders, the relevant contents and procedures comply with the "Guidelines for the Supervision of Listed Companies No. 2-Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies", "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules (revised in December 2020)" and "Shanghai Stock Exchange Science and Technology Innovation Board" The relevant provisions of the "Guidelines for the Self-Regulation of Listed Companies No. 1-Standardized Operation", "Articles of Association" and the company's "Raised Funds Management System. We agree that the company will use temporarily idle raised funds up to 0.3 billion RMB for cash management and purchase capital-guaranteed investment products sold by financial institutions with high security, good liquidity and legal business qualifications.

Opinions of the (II) Board of Supervisors

The Board of Supervisors believes that: on the premise of ensuring that the construction of raised funds investment projects and the use of raised funds will not be affected, and the risk is effectively controlled, the use of some temporarily idle raised funds for cash management can improve the efficiency of the use of raised funds and increase the company's investment income. There is no disguised change in the use of raised funds, which is in the interests of the company and all shareholders. The board of supervisors agreed that the company should use temporarily idle raised funds up to 0.3 billion RMB for cash management and purchase financial institutions with high security, good liquidity and legal business qualifications for sale.

capital-guaranteed investment products.

Opinions of (III) Sponsors

Upon verification, the sponsor believes that:

The company's use of part of the idle raised funds for cash management has been reviewed and approved by the company's board of directors and the board of supervisors. The independent directors have expressed clear consent and fulfilled the necessary legal procedures, comply with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business", "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules (Revised in December 2020)", "Listed Company Supervision Guidelines No. 2-Supervision of the Management and Use of Funds Raised by Listed Companies" Requirements "," Measures for the Continuous Supervision of Listed Companies on the Science and Technology Innovation Board (Trial) "and other relevant laws and regulations and exchange rules.

Under the premise of ensuring the normal operation and capital demand of the company, and not affecting the normal implementation of the investment projects of raised funds, the company can improve the efficiency of the use of funds and obtain certain investment income through cash management, which is in the interests of the company and all shareholders. There is no disguised change in the use of raised funds, which will not affect the normal implementation of the company's raised funds investment plan.

In summary, the sponsor has no objection to the company's use of part of the idle raised funds for cash management. 8. Internet Announcement Attachment

1. Independent opinions of independent directors of Huaxi Biotechnology Co., Ltd. on the relevant proposals of the fourth meeting of the second board of directors of the company;

2, Huatai United Securities Co., Ltd. on the use of part of the idle raised funds for cash management of Huaxi Biotechnology Co., Ltd.

It is hereby announced.

Director of Huaxi Biotechnology Co., Ltd.Will

8 December 2022