Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Important Notice

Ⅰ The Board of Directors (the “Board”), the Board of Supervisors and directors,supervisors and senior management of the Company hereby warrant the truthfulness,accuracy and completeness of the contents of the interim report (the “Report”), and thatthere are no false representations, misleading statements or material omissions containedin the Report, and severally and jointly accept responsibility.Ⅱ All the directors of the Company attended the Board meeting.Ⅲ The interim report of the Company is unaudited.Ⅳ Mr. Zhu Baoguo (朱保国), the person-in-charge of the Company, Mr. Qiu Qingfeng(邱庆丰), the person-in-charge of the Company's accounting work, and Ms. Guo Chenlu(郭琛璐), the person-in-charge of the accounting department (the head of the accountingdepartment), declare that they hereby warrant the truthfulness, accuracy andcompleteness of the financial statements contained in the Report.Ⅴ Profit distribution plan or plan for conversion of capital reserve to share capitalapproved by the Board during the Reporting PeriodNot applicableVI Risk declaration for the forward-looking statements

√Applicable □N/A

The Report contains forward-looking statements which involve the future plans, developmentstrategies, etc. of the Company, yet do not constitute substantive undertakings of the Company toinvestors. Investors should exercise caution prior to making investment decisions.VII Whether there is non-operating use of funds by the controlling shareholder and theirrelated partiesNoVIII Whether there is a violation of the prescribed decision-making procedures to provideexternal guaranteesNoIX Whether more than half of directors cannot warrant the truthfulness, accuracy andcompleteness of the Report disclosed by the CompanyNo

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

X Significant risk warnings

There is no exceptionally significant risk that will have a material impact on the productionand operation of the Company during the Reporting Period. In this Report, the Company haselaborated on the risks and countermeasures that the Company may face in the course of productionand operation, including industry policy risk, market risk, risk of safety and environmentalprotection, risk in price and supply of raw materials and R&D risk. For more information, pleaserefer to “Potential risks” section in Chapter 3 Management Discussion and Analysis.XI Others

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Table of Contents

Important Notice ...... 2

Financial Highlights ...... 5

Chapter 1 Definitions ...... 6

Chapter 2 Company Profile and Major Financial Indicators ...... 8

Chapter 3 Management Discussion and Analysis ...... 12

Chapter 4 Corporate Governance, Environmental and Social ...... 42

Chapter 5 Major Events ...... 47

Chapter 6 Changes in Equity and Shareholders ...... 65

Chapter 7 Information on Bonds ...... 70

Chapter 8 Financial statements ...... 71

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Financial Highlights

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 1 Definitions

In this Report, unless the context otherwise requires, the following expressions shall have thefollowing meanings:

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

*For identification purpose only

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 2 Company Profile and Major Financial Indicators

I Company profile

II Contact persons and contact details

III Introduction of the Company's basic information

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

IV Introduction of changes in information disclosure and places for inspection

V Company Stock Profile

VI Other relevant information

□Applicable √N/A

VII Principal accounting data and financial indicators of the Company(I) Principal accounting data

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(II) Principal Financial Indicators

Description of principal accounting data and financial indicators of the Company

□Applicable √N/A

VIII Differences in accounting data under domestic and foreign accounting standards

□Applicable √N/A

IX Items and amounts of extraordinary gains and losses

√Applicable □N/A

Unit Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

For the items not listed in the “Explanatory Announcement No.1 for Public Company InformationDisclosures-Extraordinary Gains or Losses” that the company identifies as non-recurring gains and losses,especially those with significant amounts, as well as the extraordinary gain or loss items as illustrated inthe “Explanatory Announcement No.1 for Public Company Information Disclosures-Extraordinary Gainsor Losses” which has been defined as its recurring gain or loss items, the reasons for such classificationshould be explained.

□Applicable √N/A

X Companies with equity incentive plans or employee stock ownership plans may choose todisclose net profit after deducting the impact of share-based payments.

□Applicable √N/A

XI Others

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 3 Management Discussion and AnalysisI Description of the industry in which the Company operates and principal businesses of theCompany during the Reporting Period(I) Principal businesses and products of the CompanyThe Company is primarily engaged in the R&D, production and sales of pharmaceutical products andhealth care products. The business scope of the Company covers chemical pharmaceuticals, biologics,chemical active pharmaceutical ingredients (APIs) and intermediates, traditional Chinese medicine (TCM),diagnostic reagents and equipment, health care products, etc. The enriched product series and mix providelarger market and growth opportunities for the Company. Main products of the Company are as follows:

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(II) Business model of the Company

As a fully integrated pharmaceutical group encompassing research and development, manufacturing,sales, and services, the Company has, through years of development, established a comprehensive end-to-end system covering the entire value chain. Main business models of the Company are as follows:

1. R&D

The Company adopts a multi-pronged R&D model that integrates independent innovation, externallicensing, and collaborative development. In terms of in-house innovation, the Company has established

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

a multi-tiered R&D system covering a wide range of areas including chemical formulations andbiopharmaceuticals. Based on its proprietary technology platforms, the Company has developed a clearlydefined R&D pipeline focused on key therapeutic areas such as respiratory diseases and tumorimmunology. In terms of collaborative innovation, the Company actively engages in domestic andinternational scientific partnerships through commissioned or joint development. It also pursuestechnology transfer and in-licensing of strategic new technologies and products to facilitate industrialtransformation, strengthen its position in core therapeutic areas, and expand into emerging markets.

2. Procurement

The Company exercises strict control over procurement efficiency, quality, and cost, and hasestablished long-term, stable partnerships with multiple suppliers. Each manufacturing subsidiaryprocures raw and auxiliary materials, as well as packaging materials, in accordance with its productionschedule. The Company has implemented stringent quality standards and procurement policies, requiringall subsidiaries to conduct procurement in compliance with GMP standards. It has entered into long-termstrategic partnerships with bulk material suppliers, ensuring a balance between quality assurance and costcontrol. An internal evaluation system and pricing database have been established to monitor marketdynamics in real time. The Company practices a procurement approach based on both quality and pricecomparisons to ensure procurement transparency and efficiency.

3. Production

The Company organizes production based on market demand. The sales department conducts marketresearch and formulates sales plans. Production quantities and specifications are then determined by takinginto account inventory levels and production capacity. Procurement is arranged in accordance with theproduction plan and raw material availability, and all plans are subject to management review and approvalbefore execution. The Company strictly adheres to GMP requirements and has established acomprehensive quality management system, including the implementation of a Qualified Person (QP)system. A rigorous Quality Assurance (QA) framework has been put in place to ensure compliance withnational standards and alignment with international certifications. Regular GMP self-inspections, internaland external ISO 9001 audits, and third-party audits are conducted to ensure continuous improvement.The Company applies internationally advanced GMP management practices, with robust quality controlacross supplier selection, production processes, product release, and post-market surveillance—ensuringthe efficiency and integrity of the entire quality system.

4. Sales

(1) Drug formulation products

The Company’s Chemical pharmaceuticals, Biologics, and traditional Chinese medicineformulations are primarily sold to end customers such as hospitals, clinics, and retail pharmacies. In linewith common practices in the pharmaceutical industry, the Company primarily conducts sales throughpharmaceutical distribution enterprises. Distributors are selected and centrally managed based on criteriasuch as distribution capabilities, market familiarity, financial strength, credit history, and operational scale.All selected partners must hold valid pharmaceutical distribution licenses and certifications of compliance

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

with Good Supply Practice (GSP) standards. The typical sales process is as follows: end customers placepurchase orders with distribution enterprises, which then submit orders to the Company based on theirinventory levels, distribution agreements, and contractual terms. The Company delivers products to thedistributors and recognizes revenue accordingly.

(2) APIs and intermediates

The Company’s API products are primarily supplied to large-scale manufacturing enterprises. TheMarketing and Sales Department holds market analysis meetings every one to two weeks to assess pricetrends based on current sales performance. Product pricing is determined through a comprehensiveevaluation of market dynamics, production costs, and inventory levels, and is implemented upon approvalby the management team. In terms of sales strategy, the Company primarily adopts a direct sales model inthe domestic market, supplemented by distributor sales. For international markets, direct sales remain themain approach, while distributor partnerships are employed in higher-risk regions to mitigate potentialoperational challenges.

(3) Diagnostic reagents and equipment

The Company’s diagnostic reagents and equipment include both self-manufactured and importedproducts. End customers primarily consist of hospitals, Centers for Disease Control and Prevention(CDCs), and public health authorities. These products are marketed through a combination of direct salesand distribution via pharmaceutical circulation enterprises.

(4) Health care products

The Company adheres to a user-centric, brand-driven growth model and has established a new brandmarketing system alongside a comprehensive omni-channel sales network.

Online, the Company operates DTC (Direct-to-Consumer) sales primarily through flagship stores onplatforms such as Douyin, Tmall, and JD.com, enabling direct engagement with end users.

Offline, in the retail pharmacy channel, the Company leverages its commercial partners’ distributionnetworks and terminal coverage. It currently collaborates with 83 first-tier commercial distributors andnearly 4,000 key account (KA) pharmacy chains, reaching a total of 400,000 end-user outlets.

In the new retail channel, the Company distributes products to supermarkets and convenience storesthrough 38 distributors and 4 directly managed accounts (Walmart, Sam’s Club, Sinopec Easy Joy andZhongwan Petroleum). Our products have entered national supermarket chains such as Sam’s Club,Walmart, Rainbow, RT-Mart, Yonghui, CR Vanguard, and Ole, as well as national convenience storechains including Lawson, FamilyMart, 7-Eleven, and Easy Joy, covering more than 6,600 end-user outlets.(III) Analysis of industry development

In the first half of 2025, driven by both policy and market forces, China’s pharmaceutical innovationsector underwent multi-dimensional and in-depth structural changes, with innovative drug developmententering a period of accelerated growth in both quality and efficiency. At the policy level, the issuance ofthe Several Measures to Support the High-Quality Development of Innovative Drugs has provided strongsupport, injecting systemic momentum into the sector through initiatives such as guiding R&D with

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

medical insurance data, focusing national science and technology programs on key areas, and improvinga diversified payment system.

1. R&D output enters a period of rapid growth, with continuous expansion in breadth anddepth. From January to May 2025, the National Medical Products Administration approved more than 20Class 1 innovative drugs, a record high for the same period in the past five years. These drugs covermultiple therapeutic areas including oncology, metabolic diseases, and autoimmune diseases, marking atransition of China’s innovative drug R&D from single-point breakthroughs to multi-field collaborativeoutput.

2. Industry’s Internationalisation achieves a leap forward, with significantly enhanced globalcompetitiveness. In the first half of the year, the total value of overseas licensing deals exceeded USD 66billion, hitting a historical high. This growth is reflected not only in the scale of transactions, but also inthe diversification of cooperation models and breakthroughs in technology exports. Chinesepharmaceutical companies have established a global R&D and commercialisation network throughlicensing, joint R&D, equity cooperation, and other multi-layered arrangements, forming a deeplycollaborative innovation ecosystem with multinational pharmaceutical companies, and further enhancingtheir influence in the global pharmaceutical innovation landscape.

3. Real-world studies become a key link in innovation transformation, making R&D modelsmore scientific and efficient. The value transformation of real-world data in innovative drugs hasaccelerated significantly. By integrating efficacy, safety, and usage pattern data from clinical settings,these studies not only precisely validate the clinical value of innovative drugs, but also effectively shortenthe R&D cycle, driving efficient translation from laboratory to clinic and serving as a core lever forimproving R&D quality and efficiency.

4. The payment system continues to improve, safeguarding the realisation of innovation value.Deepened medical insurance reform has achieved notable breakthroughs: the latest catalogue includes 38“global FIC” innovative drugs, while the commercial health insurance innovative drug catalogue hasexpanded in parallel. Pilot measures such as price confidentiality mechanisms linked with medicalinsurance, and special case-by-case payment negotiations, have built a more flexible payment ecosystem,providing a solid foundation for accessibility and sustainable commercialisation of innovative drugs.

Collectively, these trends confirm that China is accelerating its transformation from a majorpharmaceutical producer to a powerhouse in pharmaceutical innovation. Domestic innovative drugs haveshifted from following to, in some cases, leading, playing an increasingly pivotal role in reshaping theglobal pharmaceutical industry landscape.(IV) Industry status of the Company

Thanks to years of development, the Company has become an integrated pharmaceutical enterprisecovering multiple areas including chemical pharmaceuticals, chemical APIs and intermediates, traditionalChinese medicine, diagnostic reagents and equipment as well as health care products. Chemical drugformulation products are the largest revenue generator of the Company, among which drugs for

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

gastroenterology and gonadotropic hormones are traditional competitive products of the Company, withkey products securing long-term leading positions in national drug formulation market segments.

The Company, leveraging its robust R&D capabilities, ranked Top 50 in “China's comprehensivestrength in drug R&D in 2025”.(V) Performance drivers in the Reporting Period

During the reporting period, notwithstanding changes in the market environment and the continuedintensification of industry competition, the Company’s overall performance remained on a steady growthtrajectory, fully demonstrating its strong operational resilience and risk resistance, and benefiting from theactive implementation of the Company’s core strategies across all business segments.

1. In the Chemical pharmaceuticals segment, following the inclusion of certain generic products involume-based procurement, market competition further intensified, resulting in a decline in revenues forthis segment. In response, the Company resolutely implemented its “innovation-driven” strategy,regarding this as an opportunity to deepen its transformation towards innovation, with a focus on clinicalneeds and the technological frontier. Efforts were made to enhance innovation capabilities, break throughhomogenised competition, and accumulate stronger momentum for achieving breakthrough developmentin the field of innovation in the future.

2. In the APIs and intermediates segment, although impacted by price fluctuations of certainindividual products and intensified market competition, the segment maintained overall stableperformance, underpinned by the Company’s deep strategic presence in the APIs sector and prudentoperations. Building upon this foundation, the Company continued to advance its internationalisationstrategy, actively promoting capacity expansion both domestically and overseas, steadily increasing itsmarket share and penetration in the global APIs market, and laying a solid foundation for the segment’slong-term development.

3. The health care products segment delivered outstanding results. Despite a relatively high base inthe same period of the previous year, it achieved a growth rate of 35% during the reporting period, fullyreflecting its exceptional market expansion capabilities and broad development prospects.

Explanation of newly added significant non-principal businesses during the reporting period

□ Applicable √ Not applicable

II Discussion and analysis of business conditions

1. Main business conditions during the Reporting Period

（1）Steady Overall Performance with Synergistic Momentum Across Core Segments

During the Reporting Period, the Company maintained a steady growth trajectory, with its corebusiness segments working in synergy and demonstrating strong resilience amid market fluctuations.Livzon Group, as our foundation of business and development, continued to deliver stable performance,supported by its mature product portfolio and long-established channel advantages, thereby providing a

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

solid underpinning for the Company’s overall operations. Livzon MAB’s operational improvementscontinued to take effect, with streamlined business operations and cost-efficiency initiatives narrowinglosses. The impact of losses on net profit attributable to the parent narrowed by RMB62 million year-on-year, further consolidating its development foundation and providing robust assurance for the stability ofthe Company’s performance.

In the chemical pharmaceuticals segment, sales in the respiratory therapeutic area experienced adecline, primarily due to the ongoing impact of volume-based procurement policies and intensified marketcompetition. In response, the Company actively implemented countermeasures: on the one hand, byexpanding the market penetration of Tobramycin Inhalation Solution, which recorded a year-on-year salesincrease of 112% in the first half, demonstrating strong growth momentum; on the other hand, byaccelerating innovative drug R&D and advancing product portfolio optimization, thereby accumulatinglong-term potential to enhance core competitiveness.Meanwhile, the health care products segment delivered an outstanding performance. Leveragingprecise market positioning and effective marketing strategies, it achieved a further 35% increase in saleson a high base from last year, becoming a key driver of performance and highlighting the positive effectsof a diversified business portfolio.

The API segment also maintained stable operations, with core products sustaining strongcompetitiveness. Prices of the key product 7-ACA remained at a favorable level, while Meropenem APIs,after experiencing earlier market volatility, stabilized and began to recover. By deepening cooperationwith strategic customers, optimizing capacity allocation and supply chain management, and activelyexpanding overseas markets along with advancing multiple API registration filings, the Company furtherconsolidated its leading market position and built momentum for a rebound in performance.

(2) Multiple Breakthroughs in R&D Innovation with Visible Pipeline Achievements AcrossTherapeutic AreasDuring the Reporting Period, the Company achieved multiple breakthroughs in R&D innovation,with pipeline development across therapeutic areas further enhanced and results progressivelymaterializing.In the respiratory therapeutic area, R&D advanced smoothly with continuous deepening ofinnovative efforts. To date, the Company has established a forward-looking portfolio of more than tenCategory I innovative drugs, particularly building a comprehensive target coverage network in anti-inflammatory therapies for COPD, thereby forming a differentiated competitive advantage. Among them,marapetsavir capsules for influenza treatment have entered the new drug application stage for production,while the pediatric formulation, Pixavir Marboxil dry suspension, obtained IND approval and is advancingsteadily through Phase I clinical study. The layered pipeline strategy of these two formulations is expectedto address influenza treatment needs across all age groups. In chronic respiratory diseases, the Phase IItrial of TSLP monoclonal antibody is progressing steadily as scheduled and remains among the leadingdomestic studies; moreover, the world’s first-in-class PREP inhibitor successfully completed Phase I

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

studies and is advancing into Phase II studies. The advancement of these innovative pipelines is expectedto offer patients with respiratory diseases broader treatment options.Other therapeutic areas also recorded positive progress:

? Autoimmune diseases: The recombinant anti-human IL-17A/F humanized monoclonal antibody

injection basically completed a Phase III clinical study in moderate-to-severe psoriasis, with head-to-headresults demonstrating superiority over Secukinumab.? Metabolism: The small nucleic acid drug LZHN2408 for the treatment of gout received clinical

trial approval and initiated Phase I study; Semaglutide Injection for diabetes indication is under regulatoryreview for market launch approval, while its obesity indication has progressed into the late stage of PhaseIII trials.? Psychiatry and Neurology: Aripiprazole microspheres for injection was approved for launching,becoming the world’s first long-acting sustained-release microsphere formulation for schizophrenia,providing a new clinical treatment option. Paliperidone palmitate injection and aripiprazolemicrocrystalline injection, both long-acting microsuspension products, were submitted for launchingapproval. Meanwhile, NS-041 tablets for epilepsy entered Phase II clinical study, gradually forming aPsychiatry & Neurology product cluster and strengthening the market foundation in this field.? Assisted reproduction: Progesterone injection was approved for market launch, while thelaunching application for Recombinant Human Follitropin Alfa Solution for Injection is progressing in anorderly manner, further completing the full-chain assisted reproduction solution and providing patientswith more comprehensive therapeutic support.

? Gastroenterology: JP-1366 tablets completed Phase III clinical trial and have been submitted forproduction (market launch) approval, while its injection is currently advancing to Phase I clinical trials.,consolidating the Company’s strategic positioning in this area.? Pain management: The non-opioid innovative NAV 1.8 inhibitor completed Phase I trials and

is advancing into Phase II studies. Designed to avoid the addictive risks of traditional opioids, this novelmechanism offers a safer clinical option for pain treatment and carries significant clinical value.

? Cardiovascular and cerebrovascular diseases: The anticoagulant H001 capsule completed

patient enrollment in its Phase II clinical trials.

(3) Accelerated Internationalization with a Global Industrial Footprint Taking Shape

In terms of overseas capacity expansion, the Company’s first overseas API plant has officiallycommenced construction in Jakarta, Indonesia. Leveraging local geographical advantages and industrialresources, the plant will focus on producing differentiated APIs in compliance with international standards,further strengthening the Company’s global supply chain system, enhancing its supply responsiveness toSoutheast Asian and global markets, and laying a solid foundation for the globalization of its API business.

Significant progress has also been made in the internationalization of finished dosage forms. TheJoincare Haibin manufacturing site successfully passed GMP inspections conducted by drug regulatoryauthorities in the Philippines and Malaysia. In particular, the site completed a compliance inspection underthe latest PIC/S standards, creating favorable conditions for product entry into the Malaysian market.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Through the mutual recognition mechanism of international regulatory frameworks, the Company haseffectively reduced registration costs and shortened approval timelines for entering multiple overseasmarkets.In terms of market presence, registration activities for multiple products in the Philippines, Malaysia,the European Union, and other regions are proceeding as planned. The Company’s subsidiary in thePhilippines has obtained a local FDA operating license, providing critical support for the expansion ofsales in Southeast Asia. Its Dutch subsidiary has successfully obtained both manufacturing and importlicenses, marking the establishment of the Company’s overseas operational system in Europe and servingas a strategic foothold for entering the high-end EU market. At the same time, the Company is pursuingthe acquisition of Imexpharm Corporation in Vietnam, aiming to strengthen its distribution network andmarket penetration in Southeast Asia. Relevant matters are actively progressing, and the Company willcontinue to advance its globalization strategy in a steady manner, creating favorable conditions for theimplementation of its long-term strategic objectives.

2.Business plans in the second half of 2025

In the second half of 2025, the major tasks in various business segments of the Company are set outas follows:

(1) R&D Center

R&D R&D innovation is the core driving force of the Company’s development. The Company willcontinue to deepen the R&D of innovative drugs, focusing on its core strengths in the respiratory, anti-infective, gastroenterology, assisted reproduction, and psychiatry fields, so as to consolidate its leadingposition in the industry and build a differentiated pipeline mix. First, the Company will concentrateresources on key products and accelerate the R&D and marketing progress of core projects such as PixavirMarboxil, TSLP monoclonal antibody, NAV1.8 inhibitor, PREP inhibitor, and PDE4 inhibitor. Second,the Company will promote the deep integration of AI into the entire R&D process, from multi-omics datamining in target discovery, molecular structure optimisation in compound design, to intelligent patientrecruitment and data monitoring in clinical trials, further advancing the application of CADD and AIDDtechnologies to achieve simultaneous improvements in R&D efficiency and innovation quality.Third, theCompany will adhere to a “self-development + BD” dual-track strategy, strengthening its independentR&D capabilities while broadening innovation sources through strategic cooperation, technologyintroduction, and project acquisition to improve pipeline layout; at the same time, it will accelerate theoverseas registration of key products, build a global commercialisation network, and promote therealisation of the international value of its innovation achievements.

(2) Production Center

Adhere to production, The Company is continuing to advance the transformation and upgrading ofits intelligent manufacturing, focusing on optimising the entire production chain and implementingsystematic measures to strengthen its development foundation. In terms of standardisation and intelligentconstruction, the Company has established a comprehensive standard system covering the entire process

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

from raw material procurement and production processing to finished product inspection, whilesimultaneously upgrading intelligent production equipment and production lines. This enables automation,precision, and traceability in production, providing a solid safeguard for product quality stability.Withrespect to safety and quality control, the Company strictly implements the production safety responsibilitysystem, enhances employee safety awareness through strengthened training, and continuously improvesits quality management system, thereby safeguarding safety and quality across all dimensions.To furtherenhance efficiency and cost advantages, on the one hand, the Company optimises production processesand improves equipment utilisation to reduce costs and increase efficiency; on the other hand, it appliesAI data analytics to build a production operation platform, enabling real-time collection of key data suchas equipment operation and energy consumption, and uses intelligent algorithms to optimise scheduling,thereby effectively improving production and operational efficiency. In addition, adhering to the conceptof green and sustainable development, the Company continuously improves its environmental protectionstandards, monitors environmental information, and implements energy-saving and emission-reductionmeasures. The Company also actively promotes international certification of its products to ensure thatexport products strictly comply with international standards such as ICH and PIC/S, thereby laying a solidfoundation for smooth entry into the global market.

(3) Sales Center

In the prescription drug marketing sector, the Company will place optimisation of product structureat the core and systematically advance a series of active measures to fully tap market potential. The mostcritical of these is the promotion of the marketing and sales of Pixavir Marboxil. As the Company’s firstpatented innovative drug in recent years, marpatisavir will, on the one hand, be promoted throughintensified publicity and multi-channel communication of its product value, and on the other hand, throughthe active exploration of out-of-hospital sales channels to precisely meet market demand during theinfluenza season, striving to achieve a breakthrough in the market. At the same time, refined operationswill be carried out separately by product line. The innovative drug segment will focus on academic-drivenpromotion and deep clinical penetration to continuously enhance professional influence; the generic drugsegment will focus on channel penetration and coverage of primary markets, accelerating thetransformation to “precision operations.” In addition, the Company will deepen the empowerment of AItechnology across the entire sales process, relying on intelligent management systems to strengthendynamic business monitoring, customer relationship management, and market trend analysis, therebyproviding precise data support for decision-making. Adhering to a patient-centred approach, the Companywill promote digital construction across multiple scenarios such as chronic disease management andprimary healthcare, building an integrated diagnosis-and-treatment and full-course disease managementdata loop, continuously improving disease management efficiency and effectively increasing patientbenefits.In the marketing and promotion of APIs and intermediates, the Company anchors industryopportunities with a global perspective, expanding development space through coordinated efforts ininternational and domestic markets. In the international market, strategic cooperation will serve as the core

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

link, with continued deepening of the scope and depth of cooperation with global core customers. Throughprecise customer development and refined relationship management, the Company will continuouslyexpand its high-quality customer base, while fully demonstrating its core strengths and brandaccumulation in technology R&D and quality control, jointly building a long-term, stable, and mutuallybeneficial collaborative ecosystem with strategic partners. Leveraging close cooperation with world-classenterprises, the Company’s brand reputation in the global market will continue to improve; at the sametime, close attention will be paid to exchange rate fluctuations and market changes, with timelyadjustments to sales strategies to ensure the steady advancement of international business. Meanwhile,domestic market expansion will also progress steadily. The Company will closely monitor industrydevelopment trends, actively seize opportunities arising from national policies, and proactively explorenew business breakthroughs. By developing new customers and new markets to increase coverage, whilecontinuously optimising cost control and product quality, the Company will lay a solid foundation forstable profitability and long-term development.

In the marketing of health care products and OTC drugs, the Company will focus on “brand upgradingand enhancement of user value” to stimulate growth momentum from multiple dimensions. 1)It willexpand business growth by linking online and offline channels to penetrate the brand into consumers'minds: offline, by advancing organisational structure reform to inject new vitality into market expansion;online, by developing diversified channels and deepening digital marketing, leveraging sales events atconsumption peaks to drive product sales, while expanding cooperation with key opinion leaders (KOLs)to break through existing circles, optimising the internal business loop, and introducing brandlivestreaming and influencer livestreaming to accelerate the establishment of an all-domain traffic matrix.

2)Brand building will be strengthened to enhance market penetration: through deep collaboration withoffline chain enterprises, constructing a sell-through system, adopting innovative means to facilitateproduct circulation, strengthening professional capability building, and enhancing brand exposure andsales performance through co-branding initiatives.3) User operations will be focused on to consolidate thebusiness foundation: improving user experience, building a service system to enhance user stickiness, andconcurrently optimising core business processes, advancing organisational restructuring, and enhancingtalent capabilities to safeguard strategy implementation and drive sustainable business growth

(4) Functions and strategies

The key priorities in the Company’s functional areas acre as follows: First, to continuously improveand enhance the corporate governance system, establishing systematic management in internal control,risk management, and compliance, and comprehensively advancing lean management to achieve costreduction and efficiency enhancement. Second, to further strengthen talent and system development,adhering to the parallel implementation of the OKR and KPI target management systems, with quarterlydynamic tracking and adjustment, and ensuring interdepartmental collaboration in supporting R&D,production, and sales.Third, to deepen the empowerment of AI technology, actively applying AI tools tooptimise various workflows in functional areas, enhance organisational operational efficiency andmanagement precision, and comprehensively improve organisational effectiveness through technology-

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

driven initiatives. Fourth, to promote corporate culture development, optimise the working environmentand facilities, strengthen cultural promotion and implementation, and enhance corporate cohesion andunity. Fifth, to solidly fulfil corporate social responsibility, taking ESG system development as the entrypoint, improving the full-dimensional indicator system for environmental management, socialresponsibility, and corporate governance, and implementing social responsibility practices through greenoperations, public welfare projects, and employee volunteer services. The ESG philosophy will be deeplyintegrated with business development, enhancing overall competitiveness through responsible corporateconduct, with the ultimate goal of delivering long-term returns to shareholders and contributingsustainable value to society, thereby achieving high-quality development.

Material changes in business conditions of the Company during the Reporting Period and mattersoccurred during the Reporting Period that had and are expected to have significant impacts onbusiness conditions of the Company

□Applicable √N/A

III Analysis of core competitive strengths during the Reporting Period

√Applicable □N/A

1. Strategic Leadership: The Driving Force Behind Steady Progress

As a long-term value creator in the healthcare and pharmaceutical industry, Joincare hasdemonstrated strong resilience and sustainable growth. Since the strategic integration with Livzon Groupin 2002, the Company has maintained a compound annual revenue growth rate of 15.4% over 22 years,navigating through multiple industry cycles and macro challenges such as the global financial crisis, theCOVID-19 pandemic, and volume-based procurement reform. This resilience is rooted in themanagement’s keen foresight into industry transformations and unwavering strategic discipline.Accurate strategic foresight has been one of Joincare’s key advantages. In 2013, anticipating theimmense potential of the respiratory disease market driven by an aging population, the Company made adecisive move to enter the field. After six years of dedicated research and development, Joincare overcamesignificant technological barriers in high-end inhalation formulations. Following the market launch of itsfirst product in 2019, sales of respiratory products grew 22-fold over four years, firmly establishingJoincare as a pioneer and leader in China’s respiratory sector.Thanks to its forward-looking strategy, Joincare has established strong competitive advantages infields such as respiratory, gastroenterology, and assisted reproduction.In the respiratory field, Joincare has taken a first-mover advantage with an early and diverse productportfolio, having successfully launched 10 products. The company has broken the long-standing monopolyof multinational pharmaceutical companies and established itself in the top tier of market share. In addition,by closely aligning with clinical needs, Joincare has built a pipeline of over 10 Class 1 innovative drugcandidates, laying a solid foundation for long-term growth.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

In the gastroenterology field, Ilaprazole, as a domestically developed innovative PPI, has stood outin the market with its remarkable efficacy advantages, securing a leading position. The company's in-development Potassium Ion Competitive Acid Blocker (P-CAB) product holds strong growth potential,laying a solid foundation for technological advancement and market expansion in this area.In the assisted reproduction field, the company has established a comprehensive product portfolio,with its flagship products maintaining a leading position in their respective sub-markets for consecutiveyears. Leveraging the strengths of its microsphere formulation technology platform, the company hasstrategically planned for long-acting formulations, and its pipeline projects are progressing steadily,providing strong support for sustained development in this field.Artificial intelligence (AI) is another core strategic focus. Joincare is deploying AI to empowerpharmaceutical innovation, achieving full-chain digital transformation across four key areas: R&D,production and quality control, precision marketing, and functional management—further solidifying itscompetitive advantages. In R&D, the Company utilizes world-class AI models such as DeepSeek to buildan intelligent R&D system covering key phases from disease target identification and drug discovery topharmaceutical research, clinical trials, and post-marketing surveillance, injecting powerful momentuminto new drug development.

2. Organizational Execution: The High-Efficiency Engine Driving Strategy Implementation

Organizational execution is the key enabler of Joincare’s strategic implementation. The Companyhas built a young, dynamic, and highly capable management team covering core functions across R&D,manufacturing, sales, and marketing. Joincare places a strong emphasis on organizational synergy and hasestablished efficient communication and collaboration mechanisms. These systems foster closecoordination and seamless integration among departments, breaking down information silos, minimizingcommunication losses, and significantly improving the scientific rigor of decision-making and theeffectiveness of execution—thus laying a solid organizational foundation for the realization of strategicgoals.

From 2022 to 2024, a critical phase of transformation, Joincare achieved a major leap forward acrossseveral therapeutic areas, particularly in respiratory, pain management, gastrointestinal, andneuropsychiatric fields by successfully transitioning from a generic-drug-focused model to one centeredon innovative drug development. By leveraging sharp market insight and precise identification of industrytrends and unmet needs, and building upon strong R&D capabilities, the Company rapidly established aninnovative pipeline of over 20 drug candidates targeting key indications such as asthma, chronicobstructive pulmonary disease (COPD), depression, and gout.

This rapid strategic pivot from generics to innovation and its efficient execution reflect Joincare’soutstanding organizational capabilities. Through highly coordinated teamwork and precise resourceallocation, the Company has successfully developed a wide-reaching innovative drug pipeline, drivinginnovation-led growth and steadily advancing toward higher strategic goals.

3. Brand Equity: The Power of Quality and Ecosystem Development

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

In an increasingly competitive healthcare market, Joincare has remained deeply focused on buildingbrand equity. With forward-looking strategic vision and strong execution, the Company has cultivated aunique and powerful brand ecosystem.

Taita (太太) and Eagle's(鹰牌), two national brands under Joincare with more than 30 years ofheritage, represent the Company’s strong brand foundation. Leveraging these well-established brands, theCompany has advanced a dual-engine strategy of quality heritage + digital innovation. From 2023 to 2024,refined and professional digital operations provided strong momentum for the sustained and rapid growthof the health supplement business.

In the API segment, Joincare and its subsidiary Livzon Group have deeply integrated advancedintelligent manufacturing systems across their production bases in Zhuhai, Jiaozuo, and other locations.This enables precise digital and automated control over the entire production process. Through stringentquality assurance, the Company has earned the trust of global pharmaceutical giants such as Pfizer, EliLilly, and Teva, establishing long-term and stable partnerships. Today, Joincare’s high-quality and reliableAPI products are exported to over 60 countries and regions worldwide, positioning the Company as abenchmark of Intelligent Manufacturing in China in the high-end API sector and a model of innovationand quality leadership in the industry.

In the prescription drug segment, the Company is actively advancing its digital marketing strategyby building a user-centered digital ecosystem. Through its professional platform Respiratory Experts’View, Joincare collaborates with leading medical experts to share academic insights and strengthencommunication with physicians and patients. This initiative has significantly enhanced theprofessionalism and credibility of the brand. Meanwhile, by harnessing big data analytics and AItechnologies, the Company accurately identifies market demand and user preferences, formulates targetedstrategies, and has successfully established an efficient “physician–patient–company” service loop. As aresult, Joincare’s brand awareness and reputation continue to rank among the industry leaders.

4. End-to-End Operational Strength: Three Decades of Integrated R&D, Manufacturing, andCommercial Excellence

Over the past 30 years, Joincare has built a fully integrated value chain centered around research anddevelopment, manufacturing, and commercialization—forming a robust competitive edge anddemonstrating remarkable resilience and integrated capabilities.

In R&D, the Company has developed advanced technology platforms through years of dedication toinnovative drugs and high-barrier complex formulations. These platforms empower the Company toovercome technical challenges in drug development and manufacturing. In particular, Joincare hasachieved multiple national “firsts” in complex formulation technologies—such as China’s first and onlyinhaled antibiotic (Tobramycin Inhalation Solution) and the country’s first approved generic of SalmeterolXinafoate-Fluticasone Propionate Powder for Inhalation. These technological achievements have laid astrong foundation for driving forward the Company’s innovation strategy.

In manufacturing, Joincare has established 18 modern production bases across China, enablingoptimal allocation of manufacturing resources. Among them, Joincare Haibin has become one of the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

world’s leading inhalation manufacturing sites. Equipped with cutting-edge technologies such as KUKArobotics and highly automated production lines, the facility has significantly improved productionefficiency and reduced safety risks. In 2024, the Company further expanded its global footprint byinvesting in its first overseas facility in Jakarta, Indonesia—strengthening its international supply chaincapabilities. Going forward, the Jakarta plant will serve as a strategic hub to drive partnerships inperipheral regions and expand into high-end markets in Europe and the U.S., enhancing the Company’sglobal competitiveness and brand influence.In commercialization, Joincare possesses world-class capabilities. Its sales network spans allprovinces in China and reaches over 80 countries and regions globally. The Company places strongemphasis on academic-driven marketing and has built a specialized commercial team to support refined,targeted market expansion. It also leverages digital tools to support market education and brand building,forming a diversified and robust marketing system. With a well-established distribution network, broadend-user coverage, advanced digital marketing capabilities, and strong brand recognition, Joincare is well-positioned to achieve rapid product sales post-approval and effectively transform R&D outcomes intocommercial success.IV Overview of business operations during the Reporting Period(I) Analysis of principal businesses1 Table for analysis of changes in items related to financial statements

Unit: Yuan Currency: RMB

Reasons for changes in financial expenses: Mainly due to an increase in deposit interest income and

a decrease in borrowing interest expenses during the Period.Reasons for changes in net cash flow from investing activities: Mainly due to the increase instructured deposits during the Period.

2 Details of material changes in business type, components or source of profits during the currentperiod

□Applicable √N/A

3 Analysis of revenues and costsPrincipal businesses by industry, product and region

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

4. Investment in R&D

(1) Table for investment in R&D

Unit: Yuan Currency: RMB

(2) Description

As of the date of this report, the Company has established a diversified product portfolio in its coretherapeutic areas of respiratory, gastrointestinal, and psychiatry/neurology diseases, and has graduallyexpanded and strengthened its presence in pain management, cardiovascular and cerebrovascular diseases,and metabolic disorders. The progress of the key products is as follows:

1) Respiratory diseases

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

2) Other disease areas

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(II) Description of material changes in profits arising from non-principal businesses

√Applicable □N/A

Unit: Yuan Currency: RMB

(III) Analysis of assets and liabilities

√Applicable □N/A

1. Analysis of assets and liabilities

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

2. Overseas assets

√Applicable □N/A

(1) Asset size

Among them: Overseas assets were 56.58(Unit: 100 million, Currency: RMB), representing 15.92% ofthe total assets.

(2) Statement on high proportion of overseas assets

□Applicable √N/A

3. Restrictions on assets entitlements as at the end of the Reporting Period

√Applicable □N/A

4. Others

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

（IV）Analysis of investment

1. Overall analysis of equity investments

√Applicable □N/A

During the Reporting Period, the Company carried out strategic investments according to developmentplans and schedules as follows:

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(1) Major equity investments

√Applicable □N/A

Unit: yuan Currency: RMB

(Continued)

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Note 1: For details, please refer to the Announcement on the Capital Increase of the Holding Sub-Subsidiary – LivzonBio (Lin 2025-019) disclosed by the Companyon 8 April 2025.

(2) Major non-equity investment

□Applicable√N/A

(3) Financial assets measured at fair value

√Applicable □N/A

Unit: Yuan Currency: RMB

Information on investment in securities

√Applicable □N/A

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Statement of investments in securities

□Applicable √N/A

Information on investment in private equity fund

√Applicable □N/A

The Company had no new private equity funds invested during the reporting period. As at the end of the reporting period, the book balance of private equity fundsinvested by the Company amounted to approximately RMB507 million.

Information on investment in derivatives

√Applicable □N/A

(1) Derivative investments for hedging purposes during the reporting period.

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Unit: 10,000 Yuan Currency: RMB

Forward foreign exchange(sell/short)

Explanation of actual gain or loss duringthe Reporting Period

Explanation of hedging effect

Risk analysis of derivatives positionheld during the Reporting Period andexplanation of control measures(including but not limited to market risk,liquidity risk, credit risk, operationalrisk, legal risk, etc.)

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(2). Derivative investments for speculative purposes during the reporting period.

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(V)Sale of major assets and equity

□Applicable √N/A

(VI) Analysis of major controlled companies and invested companies affecting 10% or more to theCompany’s net profit

√Applicable □N/A

Unit: 10,000 Yuan

Notes: 1. The companies listed above are companies where the Company directly or indirectly held 100% equity interest, except for Livzon Groupand Shanghai Frontier; financial data thereof are data of individual accounting statements and that attributed toparent companies; as there aretransactions between subsidiaries or between a subsidiary and the Company, data of individual financial statements are not separately analyzed.

2. For business conditions of Livzon Group, please refer to the 2025 Interim Report of Livzon Pharmaceutical Group Inc.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Acquisition and disposal of subsidiaries during the Reporting Period

□ Applicable √ Not applicable

Other information

□ Applicable √ Not applicable

(VII) Structured entities controlled by the Company

□ Applicable √N/A

V.Other matters for disclosure

(I) Potential risks

√Applicable □N/A

1. Risks of changes in industrial policies

As a vital component of the national economy, the pharmaceutical industry is closely tied togovernment policies and regulations. China is continuously deepening its reform of the healthcare system,with relevant policy and regulatory frameworks undergoing further revision and improvement. Keydevelopments—such as the implementation and adjustment of the national reimbursement drug list,refinement of volume-based procurement mechanisms, enhanced support for innovative drugs and clinicaltrials, and intensified industry-wide compliance inspections—are expected to have a profound impact onthe future development of the pharmaceutical sector. These changes also affect the Company’s R&D,manufacturing, and commercial operations to varying degrees.

In addition, external policy factors such as geopolitical dynamics and macroeconomic policies mayalso exert influence on the operational landscape of pharmaceutical enterprises.

Response measures: The Company will pay close attention to industry dynamics and reforms, copewith major changes in policies of the pharmaceutical industry through early planning, transformation andcompliance, and further establish and improve its compliant operation mechanism and system. Meanwhile,the Company actively engages in the access to the national reimbursement drug list and negotiation, andcontinue to increase the coverage of hospitals and sales, to realize the objective of “price for quantity”,so as to reduce the impact of price adjustment on the Company’s steady growth. Moreover, the volume-based drug procurement is becoming a regular practice. In response to the potential impact of nationalvolume-based procurement on the Company’s performance, Joincare remains committed to strengtheninginnovation by continuously developing high-value-added innovative drugs that address urgent clinicalneeds. The Company will further explore and cultivate existing products with strong market potential andtechnological barriers, while actively advancing post-marketing re-evaluation and consistency evaluationof key products. By continuously optimizing its product portfolio and proactively exploring internationalmarkets, the Company strives to enhance its core competitiveness and ensure stable and sustainablebusiness growth.

2. Market risk

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

With advancement of supply-side structural reform in the pharmaceutical manufacturing industry andtwo invoice policy in circulation domain, pharmaceutical market structure is deeply changed. With thegradual standardization and centralization of the market, competition in the pharmaceutical industrybecomes increasingly fierce. Affected by increasingly stricter drug regulation, policy-based drug pricereduction, price cutting during bidding, medical insurance premium control, and minimum procurementcommitment of the pharmaceutical industry in current stage, bid winning price of drugs will be furtherlowered, competition among enterprises in the industry will be intensified, and price war will occurfrequently, thus the Company will be at the risk of drug price reduction.

Response measures: The Company will establish a more reasonable market system through strictcompliance operation so as to maintain its dominant position and core competitive strengths, and ensurethat it can achieve sustainable and steady development and improve its profitability by reinforcingmarketing. Meanwhile, the Company will offset the impact of product price reduction by means of pricesupplement based on quantity, and optimize technical process and reduce production costs through internalexploration and transformation. Moreover, the Company will speed up the R&D and marketing of newproducts, spread risks of the Company while expanding the range of existing products in segment markets,improve sales and form new profit growth drivers by increasing product varieties in the future.

3. Risk of safety and environmental protection

The Company is an integrated pharmaceutical manufacturing enterprise. During production, itimplements relevant chemical synthesis process and uses a large number of acid and alkali and otherchemical components, which are inflammable, explosive, toxic, irritant and corrosive, and have hiddenhazards of fire, explosion and poisoning, posing certain risks to the production and operation of theCompany. As environmental protection policies and regulations have been constantly issued in recentyears, environmental protection standards have become more stringent, and the state has strengthened itscontrol over pollutants, risks of environmental protection of the Company are increasing.

Response measures: The Company has always obeyed the safety work concept of “Putting PeopleFirst” and the guideline of “Safety First, Precaution Crucial and Comprehensive Treatment”. It willstrengthen the construction of safe production infrastructure and ensure a sound environment for safeproduction of the Company through regular internal audit of safety and environment systems as well asemployee safety education and training. The Company will carry out discharge after treatment andreaching standards in accordance with environmental protection provisions, actively accept supervisionand inspection of environmental protection authorities, and try to reduce emission and increaseexpenditures in environmental protection by improving production process and promptly updatingenvironmental protection technology.

4. Risk in price and supply of raw materials

There is a larger fluctuation in the supply price of some raw materials of the Company due to changesin material prices, especially the materials of traditional Chinese medicine, causing greater volatility orrise in production costs of the Company. Meanwhile, the quantity and category of raw material suppliers

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

of the Company are various, thus quality of final products of the Company will be directly affected by theselection of raw material suppliers and the guarantee and control of quality of raw materials.Response measures: In terms of selection of suppliers, the Company will conduct an open tenderingand bidding based on the principle of selecting qualified suppliers, strengthen audit of suppliers, andeliminate the adulteration of adverse suppliers. The Quality Assurance Department and SupplyDepartment of the Company will directly conduct process control of products provided by suppliers ofkey raw materials and carry out quality inspection and control of final products

5. Risk of Quality Control

The quality of pharmaceutical products is directly linked to public health and safety. Regulatoryauthorities have placed increasingly stringent requirements on manufacturing quality, placing significantresponsibility on pharmaceutical manufacturers. Given that drug production involves numerous stages—including raw material supply, manufacturing processes, process controls, equipment management,production environment, transportation, warehousing, and testing—quality control must be integratedacross the entire product lifecycle.Response measures: The Company enforces rigorous quality control standards and continues tostrengthen its long-term quality assurance mechanisms and comprehensive quality management system.It ensures close coordination among R&D, production, and quality management departments, supportedby digital systems and end-to-end optimization of Standard Operating Procedures (SOPs). By enhancingthe quality management framework and reinforcing engineering controls and risk management in newproduct processes, the Company aims to improve operational quality and ensure product integrity. Inparallel, it continues to implement performance excellence models, introduce advanced internationalquality concepts and methodologies, and promote the adoption of quality management tools—furtheraligning its quality systems with global standards.

6. Risk of R&D for new drugs

New drug R&D is characterized by high investment, high risk, and long development cycles. In recentyears, the government has frequently introduced policies related to pharmaceutical innovation, withincreasingly stringent requirements for the review and approval of new drug applications. Thesedevelopments bring certain risks to the Company’s R&D efforts.

In addition, post-approval commercialization of new drugs is subject to the influence of nationalregulations, industry policies, market conditions, and competitive intensity. These factors may result inrevenues falling short of expectations after product launch, thereby exposing the Company to productdevelopment risk.

Response measures: The Company remains focused on innovative drug development, with a strongemphasis on addressing unmet clinical needs. It will continue to invest in innovation as a long-termstrategic priority. Moving forward, the Company will further strengthen its R&D innovation system,attract and develop high-caliber talent, and actively engage in collaboration and licensing of overseasinnovative drugs. It will also enhance market research and product evaluation, standardize projectinitiation procedures, and improve risk control mechanisms—channeling resources toward the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

breakthrough development of core products. A comprehensive R&D project risk management system willbe established to support full-cycle risk assessment and monitoring. This enables timely adjustment ofR&D strategies to reduce development risks. At the same time, the Company closely monitors emergingtechnology trends, actively explores cutting-edge research areas, and strategically plans relevant R&Dprojects in advance to maintain its technological competitiveness. Moreover, by leveraging the Group’sstrength in APIs, the Company will also strengthen API–formulation integration to ensure long-term,sustainable development.

(II) Other matters for disclosure

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 4 Corporate Governance, Environmental and Social

I Changes in directors, supervisors and senior management of the Company

√Applicable □N/A

Description of changes in directors, supervisors and senior management of the Company

√Applicable □N/A

On April 7, 2025, the Board of Directors of the Company received a written resignation letter fromMs. Huo Jing, an Independent Director. As Ms. Huo had served as an Independent Director of theCompany for six years, and pursuant to the Measures for the Administration of Independent Directors ofListed Companies, under which the consecutive term of an Independent Director could not exceed sixyears, she applied to resign from her position as Independent Director of the Company as well as from herpositions on the Board’s special committees and other related posts.On April 7, 2025, the Company convened the eighth meeting of the ninth session of the Board ofDirectors, at which it considered and approved the Proposal on the Nomination of Ms. Shen Xiaoxu as anIndependent Director Candidate of the Company. Upon qualification review by the NominationCommittee of the Board, the Board agreed to nominate Ms. Shen Xiaoxu as a candidate for IndependentDirector of the ninth session of the Board of Directors, with a term commencing from the date of approvalby the general meeting of shareholders until the expiry of the ninth session of the Board. This proposalwas approved at the 2024 annual general meeting of shareholders held by the Company on June 6, 2025.

II Profit distribution plan and plan for conversion of capital reserve into share capitalProfit distribution plan and plan for conversion of capital reserve into share capital proposed forthe first six months of 2025

III Equity incentive scheme, employee share ownership scheme or other employee incentives of theCompany and their effect(I) Matters related to equity incentive scheme have been disclosed in the Ad Hoc Announcementswith no progress or change in subsequent implementation

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(II) Incentives not disclosed in the Ad Hoc Announcements or with subsequent progressEquity incentives

□Applicable √N/A

Others

□Applicable √N/A

Employee share ownership scheme

□Applicable √N/A

Other incentive program

□Applicable √N/A

IV Environmental information of listed companies and their key subsidiaries that are included in

the list of enterprises subject to mandatory environmental information disclosure inaccordance with the law

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Other Notes

□Applicable √N/A

V Consolidation and expansion of achievements in poverty alleviation and rural revitalization

√Applicable □N/A

1. Industrial revitalization

To promote the sustainable development of the rural economy, the Company has fully implementedthe important instructions of the CPC Central Committee and the General Secretary and formulated andimplemented the "Astragalus Root （黄芪）Industry Revitalization" plan. Adopting the "Company +Base" and "Company + Professional Cooperative" models, the Company has established self-built and co-built astragalus root planting bases, driving local astragalus root cultivation and processing and developinga regional specialty astragalus root industry based on local conditions. This initiative supports theconstruction of an ecological traditional Chinese medicine (TCM) base, aiming to establish a long-termpillar industry for prosperity and explore new pathways for rural economic development through thefeatured astragalus root industry.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

The "Astragalus Root Industry Revitalization" plan has been ongoing since 2017. Datong LivzonQiyuan Medicine Co., Ltd.（大同丽珠芪源药材有限公司） (“Datong Livzon”), a subsidiary of theCompany, has established self-built and co-built astragalus root planting bases covering over 20,000 muin Hunyuan County, Tianzhen County, and Yanggao County of Datong City, Shanxi Province, as well asZizhou County and Suide County in Yulin City, Shaanxi Province. Datong Livzon provides regular on-site technical guidance and GAP training for base managers and major planters and conducts practicaltraining on the traceability of TCM materials. Currently, all bases have been incorporated into theCompany’s TCM GAP production management traceability system, allowing shared traceability resourceswithin the Company. In accordance with the national GAP requirements for Chinese medicinal materials,in the first half of 2025, the Company established a self-owned Astragalus GAP cultivation base of 680mu in Tianzhen County, Datong City, Shanxi Province.

2. Rural Revitalization Inclusive Chronic Disease Prevention and Control Public WelfareProject

To support rural revitalization and the consolidation and expansion of achievements in povertyalleviation, and to actively respond to the national policies on rural revitalization and common prosperity,Joincare Group has continued to implement the “Inclusive Chronic Disease Prevention and Control PublicWelfare Project” (普惠慢病防治公益项目), leveraging its industrial advantages to deliver tangible healthbenefits to grassroots communities. The program focuses on common chronic diseases, includinghypertension, hyperlipidemia, and cardiovascular and cerebrovascular diseases, and has donated treatmentmedications worth millions of RMB to remote areas, including Pravastatin Capsules (普伐他汀钠胶囊),Amlodipine Besylate Capsules (苯磺酸氨氯地平胶囊), Valsartan Capsules (缬沙坦胶囊), IsosorbideBononitrate Tablets (单硝酸异山梨酯片) and Bismuth Potassium Citrate Tablets（枸橼酸铋钾片）.These medications effectively help alleviate the economic burden of long-term medication for low-incomefamilies and address chronic disease medication challenges, while also raising awareness of chronicdisease prevention and health management. This initiative effectively prevents “poverty caused by illness”or “returning to poverty due to illness”, thereby contributing to the local rural revitalization efforts.

Since late 2018, with the support of local government agencies and relevant authorities at all levels,the "Inclusive Chronic Disease Prevention and Control Public Welfare Project" has been successfullycarried out in Chaotian District of Guangyuan City, Songpan County of Aba Tibetan and QiangAutonomous Prefecture, Jinkouhe District of Leshan City, Jiange County, and Pingwu County in SichuanProvince; Hunyuan County, Guangling County, and Lingqiu County in Datong City, Shanxi Province;Dongxiang County, Tianzhu County, Linze County, Shandan County, Huining County, and Sunan Countyin Gansu Province; Xianghai National Nature Reserve in Jilin Province; Macun District of Jiaozuo Cityin Henan Province; Huangshan District of Huangshan City in Anhui Province; Suining County in HunanProvince; Fenyi County in Jiangxi Province; Jiangshan City in Zhejiang Province; Chayu County, BomiCounty, and Gaize County in Tibet Autonomous Region; Kashgar City in Xinjiang Uygur Autonomous

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Region; Balinzuo Banner and Tuoketuo County in Inner Mongolia; Ziyuan County in Guangxi ZhuangAutonomous Region; and Rongjiang County in Guizhou Province.

As of the end of the reporting period, the Company had entered into a total of 32 agreements underthe “Inclusive Chronic Disease Prevention and Control Public Welfare Project” (including 28 agreementscovering remote areas in need of assistance), spanning 10 provinces and 4 autonomous regions nationwide,benefiting 31,002 low-income patients with chronic diseases.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 5 Major Events

I Fulfillment of undertakings(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the ReportingPeriod by the parties to the commitment such as de facto controllers, shareholders, related parties,acquirers of the Company and the Company

√Applicable □N/A

Note 1: Shenzhen Baiyeyuan Investment Co., Ltd., the controlling shareholder of the Company, undertook that itwould not be directly or indirectly engaged in or cause subsidiaries and branches under its control to be engaged in anybusiness or activity constituting horizontal competition with the Company after the founding of the Company, including butnot limited to the research, production and sales of any products that were the same as or similar to products under research,production and sales of the Company, and was willing to undertake compensation responsibility for economic losses to theCompany arising from violation of the said commitment.Note 2: Whereas the domestically listed foreign shares of Livzon Group, a controlled subsidiary of the Company,sought listing on the Main Board of the Stock Exchange of Hong Kong Limited, in order to fully ensure smooth completionof the said event and in compliance with relevant requirements of the Stock Exchange of Hong Kong Limited, the controllingshareholders, de facto controller of the Company and the Company entered into relevant undertakings with Livzon Groupas follows: 1. The controlling shareholders, de facto controller and persons acting-in-concert of the Company, the Companyand its controlled subsidiaries except for Livzon Group did not or would not be, directly or indirectly, engaged in any

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

business that constituted competitive relation or potential competitive relation with drug research, development, productionand sale businesses (“Restricted Businesses”) of Livzon Group from time to time. For the avoidance of doubt, the scope ofRestricted Businesses did not cover products that were researched, developed, manufactured and sold on the date of relevantletter of undertaking by the controlling shareholders and de facto controller of the Company, the Company and its controlledsubsidiaries except for Livzon Group; 2. If any new business opportunity was found to constitute competitive relation withRestricted Businesses, the controlling shareholders, de facto controllers and persons acting-in-concert of the Company, theCompany and its controlling subsidiaries except for Livzon Group would inform Livzon Group in written form immediatelyand firstly provide Livzon Group with the business opportunity in accordance with reasonable and fair terms and conditions.If Livzon Group gave up the business opportunity, the controlling shareholders and de facto controllers of the Company,the Company and its controlled subsidiaries except for Livzon Group may accept the business opportunity in accordancewith the terms and conditions that were not superior to those offered to Livzon Group; 3. If assets and businesses thatdirectly or indirectly constituted competitive relation and potential competitive relation with Restricted Businesses wereintended to be transferred, sold, leased, licensed to use or otherwise transferred or allowed to use (these Sales and Transfers),the controlling shareholders and de facto controllers of the Company, the Company and its controlled subsidiaries exceptfor Livzon Group would provide the right of first refusal for Livzon Group under the same condition. If Livzon Group gaveup the right of first refusal, the controlling shareholders, de facto controllers and persons acting-in-concert of the Company,the Company and its controlled subsidiaries except for Livzon Group would carry out these Sales and Transfers to a thirdparty in accordance with main terms that were not superior to those offered to Livzon Group; 4. The controlling shareholders,de facto controllers and persons acting-in-concert of the Company, the Company and its controlled subsidiaries except forLivzon Group would not be engaged in or involved in any business that might damage the interests of Livzon Group andother shareholders through the relation with shareholders of Livzon Group or the identity of shareholders of Livzon Group;

5. The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and itscontrolled subsidiaries except for Livzon Group would not or cause its contact persons (except for Livzon Group) to directlyor indirectly: (1) induce or attempt to induce any director, senior management or consultant of any member of Livzon Groupto terminate his/her employment with or to be an employee or consultant of Livzon Group at any time (whichever isapplicable), no matter if relevant acts of the person were against the Employment Contract or Consultancy Agreement (ifapplicable); (2) Within three years after any person terminated to be the director, senior management or consultant of anymember of Livzon Group, employ the person who had or might have any confidentiality information or business secret inrelation to Restricted Businesses (except for the director, senior management or consultant of the Company and/or itscontrolling subsidiaries except for Livzon Group on the date of issuance of relevant letter of undertaking); (3) Recruit orlobby any person carrying out business in any member of Livzon Group, accept orders, or carry out business separately,through any other person or as any person, firm, or manager, advisor, consultant, employee, agent or shareholder of anycompany (competitor of any member of Livzon Group), or lobby or persuade the person making transaction with LivzonGroup or negotiating with Livzon Group on Restricted Businesses to terminate its transaction with Livzon Group or reduceits normal business volume with Livzon Group, or ask for more favorable transaction terms to any member of Livzon Group.

6. The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and itscontrolled subsidiaries except for Livzon Group further undertook that: (1) They would allow and cause relevant contactpersons (except for Livzon Group) to allow independent directors of Livzon Group to review if the Company and itscontrolled subsidiaries except for Livzon Group obeyed the Letter of Undertaking at least once a year; (2) They wouldprovide all the data required for annual review and implementation of the Letter of Undertaking for independent directorsof Livzon Group; (3) They would allow Livzon Group to disclose the decision on whether the controlling shareholders andde facto controllers of the Company, the Company and its controlled subsidiaries except for Livzon Group obeyed andimplemented the Letter of Undertaking reviewed by independent directors of Livzon Group through the annual report orannouncement; (4) The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, theCompany (and its controlled subsidiaries except for Livzon Group) would provide Livzon Group with the Letter of

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Confirmation in relation to compliance with clauses of the Letter of Undertaking every year so as to be included in theannual report of Livzon Group. 7. The controlling shareholders, de facto controllers and persons acting-in-concert of theCompany, and the Company promise that they would bear corresponding legal responsibility and consequence arising fromviolation of any clause by the Company (or the Company's controlled subsidiaries except for Livzon Group or its contactpersons), starting from the date of issuance of relevant letter of undertaking. 8. The said undertakings would terminate incase of the following circumstances (whichever is earlier): (1) The controlling shareholders, de facto controllers and personsacting-in-concert of the Company, the Company and any of its controlled subsidiaries were not the controllingshareholders of Livzon Group anymore; (2) Livzon Group terminated the listing of its shares on the Hong Kong StockExchange and other overseas stock exchanges (except that shares of Livzon Group stopped to be traded temporarily for anyreason).Note 3: Do not interfere in the operation and management activities of Livzon Group or encroach on the interests ofLivzon Group.Note 4: Pursuant to the Guiding Opinions on Matters Relating to the Dilution of Current Returns as a Result of InitialPublic Offering, Refinancing and Major Asset Restructuring (Announcement of CSRC [2015] No. 31), the company shallundertake to adopt specific remedial measures relating to dilution of current returns as a result of the company's initialpublic offering, refinancing of the listed company, or major asset restructuring and shall fulfill such undertaking. Pursuantto relevant provisions of CSRC, Zhu Baoguo, the de facto controller of Shenzhen Baiyeyuan Investment Co., Ltd., acontrolling shareholder:1. Do not intervene in the operation and management activities or encroach on the interests of thecompany; 2. If CSRC issued other new regulatory provisions on the remedial measures in relation to returns and the relevantundertakings and the aforesaid undertakings did not conform to such provisions from the date of issuance of the undertakingto the completion of IPO share allotment, the Company/the de facto controller would undertake to issue a supplementalundertaking in accordance with the latest provisions of CSRC; 3. The Company/the de facto controller undertook topractically take the remedial measures in relation to returns formulated by the company and fulfill the undertakingconcerning the remedial measures. In case of violation of the undertaking, causing losses to the company or investors, theCompany/the de facto controller was willing to assume compensation responsibilities to the company or investors inaccordance with law. In case of violation of the said undertakings or rejection to fulfill the said undertakings, as one of theliability subjects relating to the remedial measures concerning returns, it was agreed that relevant punishment shall beimposed on or relevant management measures shall be taken against the Company/the de facto controller by CSRC, theSSE and other securities regulators in accordance with relevant provisions and rules set or issued by them.Note 5: After the proceeds for issuance of allotment were in place, the Company would use them according to thedisclosure in the announcement, and carry out the policies, including deposit in special account, approval by specially-assigned person, and special use of special funds in accordance with management measures for proceeds of the Company.The Board of the Company would regularly check the progress of projects invested with proceeds, issue a special report ondeposit and use of proceeds, engage an accounting firm during the annual audit to issue a verification report on deposit anduse of proceeds, would be supervised by regulators and sponsors at any time, and would not make major investment, assetpurchase or similar financial investment through proceeds in disguise.Note 6: (1) While transferring tradable shares subject to selling restrictions held by the company in Livzon Group,the company shall strictly obey relevant provisions of Guidelines of Listed Companies on Transfer of Stock Shares Subjectto Selling Restrictions ([2008] No. 15); (2) If the Company had shares subject to selling restrictions held by it in LivzonGroup that were planned to be sold through the bid trading system of Shenzhen Stock Exchange and reduced more than 5%shares within six months from the first share reduction, the Company would pass the Announcement on Sales disclosed byLivzon Group within two trading days before the first share reduction.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

II Non-operating use of funds by the controlling shareholder and their related parties during thereporting period

□Applicable √N/A

III Information on Illegal guarantees

□Applicable √N/A

IV Audit of interim report

□Applicable √N/A

V Information on changes and handling of matters related to non-standard audit opinions in theannual report for the previous year

□Applicable √N/A

VI Matters related to bankruptcy reorganization

□Applicable √N/A

VII Material Litigation and Arbitration Matters

□During the Reporting Period, the Company had material litigation and arbitration matters.

√ During the Reporting Period, the Company did not have any material litigation or arbitration matters.

VIII Information on punishment and rectification of the listed company and its directors,supervisors, senior management, controlling shareholders, and de facto controllers due toviolations of laws and regulations

□Applicable √N/A

IX Integrity of the Company and its controlling shareholders and de facto controllers duringthe Reporting Period

□Applicable √N/A

X Substantial related transactions(I) Related transactions in the ordinary course of business

1. Ad Hoc Announcements without progress or change in subsequent implementation

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

2. Matters that have been disclosed in the Ad Hoc announcements with progress or change insubsequent implementation

□Applicable √N/A

3. Matters that have not been disclosed in the Ad Hoc announcements

□Applicable √N/A

(II) Related transactions relating to assets or equity acquisition and sale

1. Ad Hoc announcements without progress or change in subsequent implementation

□Applicable √N/A

2. Matters that have been disclosed in the Ad Hoc announcements with progress or change insubsequent implementation

□Applicable √N/A

3. Matters that have not been disclosed in the Ad Hoc announcements

□Applicable √N/A

4. In case of performance agreement, information on performance realization during theReporting Period shall be disclosed

□Applicable √N/A

(III) Substantial related transactions of joint outbound investment

1. Ad Hoc announcements without progress or change in subsequent implementation

□Applicable √N/A

2. Matters that have been disclosed in the Ad Hoc announcements with progress or change insubsequent implementation

□Applicable √N/A

3. Matters that have not been disclosed in the Ad Hoc announcements

□Applicable √N/A

(IV) Credits and debts with related parties

1. Ad Hoc announcements without progress or change in subsequent implementation

□Applicable √N/A

2. Matters that have been disclosed in the Ad Hoc announcements with progress or change insubsequent implementation

□Applicable √N/A

3. Matters that have not been disclosed in the Ad Hoc announcements

√Applicable □N/A

Unit：Yuan Currency：RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(V) Financial businesses among the Company, related financial companies, financial companiescontrolled by the Company, and related parties

□Applicable √N/A

(VI) Other substantial related transactions

□Applicable √N/A

(VII) Others

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

XI Material contracts and their enforcement

1. Custody, contracting and leasing

□Applicable √N/A

2. Major guarantees that have been performed and outstanding during the Reporting Period

√Applicable □N/A

Unit：10,000 Yuan Currency：RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

3. Other material contracts

□Applicable √N/A

XII Progress of Proceeds Usage

√Applicable □N/A

(I) Overall Usage of Proceeds

√Applicable □N/A

Unit: 10,000 Yuan

Other Notes

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(II) Details of Investment Projects with Proceeds

√Applicable □N/A

1、Detailed Usage of Proceeds

√Applicable □N/A

Unit: 10,000 Yuan

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

（Continued）

Note 1:

At the 8th Board of Directors Meeting (8th Session) held on January 24, 2022, and the First Extraordinary General Meeting of 2022 held on February 11, 2022, the company resolved toreallocate the unused raised funds of RMB 735.88 million from the Zhuhai Healthcare Industry Base Construction Project, along with interest income and cash management gains (based onactual past and future occurrences), to the following projects: New Products R&D Project, Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion Project and InformationPlatform Construction Project. The feasibility of the Zhuhai Healthcare Industry Base Construction Project and its external environment underwent significant changes, as detailed below:

(1) Project Delays

The company completed its public offering in October 2018. Regarding the Zhuhai Healthcare Industry Base Construction Project, the company disclosed in its 2018 annual report, H1 2019report, and 2019 annual report on the storage and use of raised funds that the project site was not ready for construction due to the incomplete municipal infrastructure (three utilities and one

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

leveling – roads, water, electricity, and site leveling). As a result, the project could not commence. Furthermore, at the 22nd Meeting of the 7th Board of Directors on April 9, 2020, and the 2019Annual General Meeting on May 29, 2020, the company approved a postponement of the project commencement date. Similarly, at the 44th Meeting of the 7th Board of Directors on March 29,2021, and the 2020 Annual General Meeting on May 21, 2021, the company further postponed the project start date to the second half of 2021. As of December 31, 2021, the project site still didnot meet the conditions for construction.

(2) Changes in Market Environment and Project Feasibility

Due to market changes, the company adjusted its product development strategy, resulting in changes to the project’s feasibility. The Zhuhai Healthcare Industry Base Construction Projectwas originally planned for the production of health care products, OTC drugs, and a small amount of food products. Among these, health care products were the primary investment focus,accounting for an estimated 70% of projected revenue once the project reached full capacity. The company originally planned to expand production capacity for existing products and add newproduct lines through this project, aiming for rapid growth in the health care products and OTC drug sectors. However, in recent years, market competition in the domestic health supplementindustry has intensified, with many foreign brands entering the Chinese market and capturing a significant market share. While the health care products market continued to grow, competitionbecame increasingly fierce. Additionally, due to regulatory constraints such as national medical insurance policies, health supplement sales in pharmacies declined. Although the OTC drugmarket maintained steady growth, its contribution to this project was relatively small. From 2018 to the first half of 2021, the company's total revenue from health care supplements and OTCdrugs was RMB 327 million, RMB 300 million, RMB 327 million, and RMB 160 million, respectively, showing an overall stable development trend. However, health care products salesexhibited a downward trend, while OTC drug sales saw slight growth. Based on market conditions and the company's business development in these sectors, a reassessment determined thatcontinuing the investment project as originally planned would not yield favorable economic returns.

(3) Reallocation of Products and Production Facilities

Some products originally planned for production at the Zhuhai Healthcare Industry Base have been transferred to other locations, some will continue at existing facilities or throughoutsourcing, while others have been discontinued. The termination of the original project will not have a significant adverse impact on the company. Over the past three years, the health careproducts and OTC drug business has remained stable. The respiratory drugs originally planned for production at this base, including Budesonide Inhalation Aerosol, Ipratropium Bromide Aerosol,Budesonide Suspension, and Compound Ipratropium Bromide Solution, were transferred in February 2019 to another investment project, Haibin Pharma Pingshan PharmaceuticalIndustrialization Base.

The planned OTC drugs such as Dexamethasone Tablets and Dysmenorrhea Oral Liquid, as well as health care products such as Taita Oral Liquid, Jing Xin Oral Liquid, Sugar-FreeAmerican Ginseng Tea, American Ginseng Lozenges, and American Ginseng Beverage, will continue production at existing facilities. A few products, such as Probiotic Powder (a food product),will be outsourced for production. The planned production of Coenzyme Q10 Soft Capsules, Rhaponticum Total Sterol Capsules (pharmaceuticals), and Shenqi Oral Liquid, Dampness-Removingand Spleen-Tonifying Drink (health supplements and food products), has been discontinued.

Based on the company’s operational performance over the past three years, a reasonable forecast indicates that existing production facilities are sufficient to sustain the development of itshealth supplement and OTC drug business.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Note 2: On September 10, 2024, the company convened its 3rd meeting of the 9th Board of Directors and approved the proposal "Regarding the Transfer of Land Use Rights and Buildingsby a Wholly Owned Subsidiary, Involving the Transfer of a Raised Fund Investment Project."The proposal approved the transfer by the company’s wholly owned subsidiary, Joincare Pharmaceutical (China) Co., Ltd., of the state-owned construction land use rights for a plot locatedsouth of Hubin Road and east of Binhe Road in Sanzao Town, Jinwan District, Zhuhai, with a total area of 94,538㎡, along with all above-ground buildings under construction and otherattachments, to Zhuhai Yangyi Biopharmaceutical Co., Ltd. for a total price of RMB 79.52 million (tax included).The transferred asset pertains to the Zhuhai Healthcare Industry Base Construction Project, a fundraising investment project from the company’s equity offering. Since a total of RMB 33.86million in raised funds had been invested in this project, RMB 33.86 million from the transaction proceeds will be reallocated to the New Products R&D Project. Following this adjustment, theplanned investment amount for the New Products R&D Project will be increased from RMB 545.88 million to RMB 579.74 million.On December 30, 2024, the company convened its 7th meeting of the 9th Session of Board of Directors and approved the proposal "Regarding the Completion of Certain FundraisingInvestment Projects and the Reallocation of Surplus Raised Funds to Other Investment Projects."The proposal approved the completion and closure of the Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion Project and the Information Platform ConstructionProject, both fundraising investment projects from the equity offering. It also approved the reallocation of the remaining funds from these projects, along with surplus funds from the previouslycompleted Haibin Pharma Pingshan Pharmaceutical Industrialization Base Project, totaling RMB 26.70 million plus interest, to the New Products R&D Project.Following this adjustment, the planned investment amount for the New Products R&D Project increased from RMB 579.7402 million to RMB 606.4411 million.

2、Detailed Usage of over-allotment

□Applicable √N/A

(III) Changes in or termination of investment of proceeds during the Reporting Period

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(IV) Other information on the usage of proceeds during the Reporting Period

1、 Previous investment and replacement of projects invested with proceeds

√Applicable □N/A

Pursuant to the Proposal on Replacing Self-raised Funds Previously Invested in Projects withProceeds considered and approved at the 3rd Meeting of the 7th Session of the Board on 29 October2018, it was agreed that the Company could use the proceeds of RMB215.3282 million to replaceself-raised funds previously invested in projects. The replacement with proceeds did not exceed sixmonths from the date of payment of such proceeds, which complied with relevant laws andregulations, and did not affect the normal progress of the projects invested with the proceeds. Therewas no disguised change in the investment direction of proceeds, nor would it harm the interests ofshareholders. Minsheng Securities Co., Ltd., the sponsor of the Company, has issued the Opinionson the Verification of Replacing Self-raised Funds Previously Invested in Projects with Proceedsby Joincare Pharmaceutical Group Industry Co., Ltd.The companies implementing such projects have completed the replacement of self-raisedfunds previously invested in projects of RMB215.3282 million with the proceeds in December 2018.

2、 Information on temporary replenishment of working capital with idle proceeds

□Applicable √N/A

3、 Cash management of idle proceeds and investment in relevant products

□Applicable √N/A

4、 Others

√Applicable □N/A

(1) Information on using bank acceptance bills to pay for projects invested with proceeds

Pursuant to the Proposal on the Payment of Projects Invested with Proceeds with BankAcceptance Bills and the Equal Replacement with Proceeds considered and approved at the 25thMeeting of the 7th Session of the Board on 7 May 2020, it was agreed that during theimplementation of projects invested with proceeds, the Company could use bank acceptance bills(or endorsed transfer) to pay for the amount relating to projects invested with the proceeds and couldtransfer an equal amount of capital from the special account of proceeds to replenish working capital.For details, please refer to the “Announcement on the Payment of Projects Invested with Proceedswith Bank Acceptance Bills and the Equal Replacement with Proceeds of Joincare PharmaceuticalGroup Industry Co., Ltd.” (Lin 2020-054).

As at 30 June 2025, the Company’s cumulative amount of bank acceptance bills used to payfor projects invested with the proceeds was RMB210.9554 million, and the cumulative amount forthe equal replacement with the proceeds was RMB210.9554million.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(2) Using letters of credit to pay for projects invested with proceeds and equalreplacement with proceeds

Pursuant to the Proposal on the Payment of Projects Invested with Proceeds with Letters ofCredit and the Equal Replacement with Proceeds considered and approved at the 39th Meeting ofthe 8th Session of the Board on 25 April 2024, it was agreed that during the implementation ofprojects invested with proceeds, the Company could use letters of credit to pay for the amountrelating to projects invested with proceeds and could regularly replace it by transferring an equalamount of capital from the special account of proceeds to the Company's general account. For details,please refer to the “Announcement on the Using letters of credit to pay for projects invested withproceeds and equal replacement with proceeds of Joincare Pharmaceutical Group Industry Co., Ltd.”(Lin 2024-040).

As at 30 June 2025, the Company’s cumulative amount of letters of credit used to pay forprojects invested with the proceeds was RMB23.8145 million, and the cumulative amount for equalreplacement with the proceeds was RMB23.8145 million.

(3) Use of Surplus Proceeds from the Offering

On December 30, 2024, the Company convened the seventh meeting of the ninth session ofthe Board of Directors, at which it considered and approved the Proposal on the Completion ofCertain Proceeds-funded Projects and the Use of Surplus Proceeds for Other Proceeds-fundedProjects. It was agreed that the rights issue proceeds-funded projects — Haibin Pharma PingshanPharmaceutical Industrialization Base Expansion Project and the Informatization PlatformConstruction Project — be concluded, and that the surplus proceeds from the above projects,together with the surplus proceeds from the previously concluded Haibin Pharma PingshanPharmaceutical Industrialization Base Project, totaling RMB 26.7009 million and the accruedinterest thereon (the exact amount based on the actual amount after bank interest settlement on thedate of transfer), be transferred to the New Product R&D Project. For details, please refer to theAnnouncement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Completion of CertainProceeds-funded Projects and the Use of Surplus Proceeds for Other Proceeds-funded Projects (Lin2024-131).

(4) Change in the Use of Proceeds for Proceeds-funded Projects

On September 10, 2024, the company convened its 10th meeting of the 9th Board of Directorsand approved the proposal "Regarding the Transfer of Land Use Rights and Buildings by a WhollyOwned Subsidiary, Involving the Transfer of a Raised Fund Investment Project."

The proposal approved the transfer by the company’s wholly owned subsidiary, JoincarePharmaceutical (China) Co., Ltd., of the state-owned construction land use rights for a plot locatedsouth of Hubin Road and east of Binhe Road in Sanzao Town, Jinwan District, Zhuhai, with a totalarea of 94,538㎡, along with all above-ground buildings under construction and other attachments,to Zhuhai Yangyi Biopharmaceutical Co., Ltd. for a total price of RMB 79.52 million (tax included).

The transferred asset pertains to the Zhuhai Healthcare Industry Base Construction Project, afundraising investment project from the company’s equity offering. Since a total of RMB33.8629

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

million in raised funds had been invested in this project, RMB33.8629 million from the transactionproceeds will be reallocated to the New Products R&D Project.

As of the end of the reporting period, pursuant to the disposal agreement, the Company hadrecovered the full amount of RMB33.8629 million.

5、 Conclusive Opinions of Intermediary Institutions on the Special Verification andAssurance of the Storage and Use of Proceeds

□Applicable √N/A

Explanation of Irregularities Identified During the Verification

□Applicable √N/A

6、Rectification Measures Taken in Response to Unauthorized Changes in the Use ofProceeds or Misappropriation of Proceeds

□Applicable √N/A

XIII Other significant matters

√Applicable □N/A

(1) Share Repurchase through Secondary Market

On 2 September 2024 and 23 September 2024, the Company convened the second meeting ofthe ninth session of the Board of Directors and the fourth extraordinary general meeting ofshareholders in 2024, respectively, at which the proposals, including the Share Repurchase Plan viaCentralised Bidding Transactions, were considered and approved. It was resolved to repurchase theCompany’s shares via centralised bidding transactions using self-owned or self-raised funds. Therepurchased shares will be used for the purpose of reducing the registered capital.

The total repurchase amount shall not be less than RMB 300 million (inclusive) and not morethan RMB500 million (inclusive), at a repurchase price of no more than RMB 15.40 per share(inclusive). The repurchase period shall run from 23 September 2024 to 22 September 2025. Forfurther details, please refer to the Share Repurchase Plan via Centralised Bidding Transactions ofJoincare Pharmaceutical Group Industry Co., Ltd. (Lin 2024-085) and the Share Repurchase Reportof Joincare Pharmaceutical Group Industry Co., Ltd. via Centralised Bidding Transactions (Lin2024-096).

On 26 November 2024, the Company, through centralised bidding transactions, hadcumulatively repurchased 19,208,347 shares, representing 1.02% of the Company’s total share

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

capital of 1,874,200,420 shares. For details, please refer to the Announcement on the Repurchase ofShares Reaching 1% of the Total Share Capital and Progress of the Repurchase by JoincarePharmaceutical Group Industry Co., Ltd. (Lin 2024-123).On 14 January 2025, the Company had cumulatively repurchased 38,116,614 shares throughcentralised bidding transactions, representing 2.03% of the Company’s total share capital of1,874,200,420 shares. For details, please refer to the Announcement on the Repurchase of SharesReaching 2% of the Total Share Capital and Progress of the Repurchase by JoincarePharmaceutical Group Industry Co., Ltd. (Lin 2025-004).As of 6 March 2025, the Company had cumulatively repurchased 44,747,034 shares throughcentralised bidding transactions, representing 2.39% of the Company’s total share capital of1,874,200,420 shares, with a total consideration of RMB 499.9836 million (including transactionfees). The repurchase was thereby completed. For details, please refer to the Announcement on theResults of Share Repurchase and Changes in Shareholding Structure by Joincare PharmaceuticalGroup Industry Co., Ltd. (Lin 2025-013).

Upon the Company’s application, the above repurchased shares were cancelled on 10 March2025 at the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.Following the cancellation, the Company’s total share capital was reduced from 1,874,200,420shares to 1,829,453,386 shares.

(2) Acquisition of Equity Interests in Vietnam’s IMP by Controlled Subsidiary LivzonGroup

On 22 May 2025, LIAN SGP HOLDING PTE. LTD. (“LIAN SGP”), an overseas wholly-owned subsidiary of Livzon Pharmaceutical Group Inc. (“Livzon Group”), a controlled subsidiaryof the Company, entered into a Framework Agreement (the “Agreement”) with SK Investment VinaIII Pte. Ltd. (“SK”), Sunrise Kim Investment Joint Stock Company (“Sunrise”), and KBAInvestment Joint Stock Company (“KBA”, together with SK and Sunrise, the “Sellers”). Pursuantto the Agreement, LIAN SGP proposes to acquire 64.81% of the shares of Imexpharm Corporation(“IMP” or the “Target Company”), a listed company in Vietnam, held in aggregate by the Sellers(the “Transaction”). The equity purchase price for the Transaction is VND 5,730,815,426,000(equivalent to approximately RMB 1.587 billion, based on the central parity exchange rate on the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

date of signing the Agreement), representing 10.92% of the net assets attributable to shareholdersof the Company as per the most recent audited financial statements.

The Transaction does not constitute a connected transaction, nor does it constitute a materialasset restructuring as defined under the Administrative Measures for Material Asset Restructuringof Listed Companies. On 22 May 2025, the Company convened the tenth meeting of the ninthsession of the Board of Directors, at which the Proposal on the Proposed Acquisition of Shares inVietnam’s IMP by the controlled subsidiary Livzon Group was considered and approved. Pursuantto the Shanghai Stock Exchange Listing Rules and other relevant provisions, this matter falls withinthe approval authority of the Board of Directors and does not require submission to the generalmeeting of shareholders for approval. The implementation of the Transaction remains subject to thefulfilment of the conditions precedent stipulated in the Agreement and the completion of relevantapproval procedures in the jurisdiction of the Target Company in respect of the acquisition.The Transaction involves only the acquisition of equity and does not involve personnelresettlement, land lease, debt restructuring or other matters. Upon completion of the Transaction,IMP will become a controlled subsidiary of the Company and be included in the scope of theCompany’s consolidated financial statements.The implementation of the acquisition is subject to filings or approvals from all competentauthorities in accordance with the law, and therefore the Transaction remains subject to uncertaintiesin relation to policies and approvals. As the equity interest in the Target Company to be acquired islocated overseas, there are certain differences in regional culture and management practicescompared with the Company. Should mutual understanding of corporate culture and complementaryintegration of resources fail to be achieved effectively after completion of the Transaction, certainrisks may arise in respect of the Company’s operations, management, and business integration.For details of the Transaction, please refer to the Announcement on the Proposed Acquisitionof Shares in Vietnam’s IMP by the controlled subsidiary Livzon Group (Lin 2025-044) publishedby the Company on the website of the Shanghai Stock Exchange on 23 May 2025.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 6 Changes in Equity and ShareholdersI Changes in Share Capital(I) Table of changes in shares

1. Table of changes in shares

Unit: shares

2.Explanations on changes in shares

√Applicable □N/A

On 2 September 2024, the Company convened the 2nd Meeting of the 9th session of the Boardof Directors, at which it reviewed and approved the Proposal on the Share Repurchase Plan by Wayof Centralised Bidding and other related proposals. It was resolved to use the Company’s own funds

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

or self-raised funds to repurchase shares by way of centralised bidding, with the repurchased sharesto be used for reducing the registered capital.The total repurchase amount shall be not less than RMB 300 million (inclusive) and not morethan RMB 500 million (inclusive), at a repurchase price of no more than RMB 15.40 per share(inclusive). The repurchase period shall run from 23 September 2024 to 22 September 2025. Fordetails, please refer to the Share Repurchase Plan by Way of Centralised Bidding of JoincarePharmaceutical Group Industry Co., Ltd. (Lin 2024-085) and the Share Repurchase Report ofJoincare Pharmaceutical Group Industry Co., Ltd. by Way of Centralised Bidding (Lin 2024-096).

The above proposals were approved at the Company’s Fourth Extraordinary General Meetingof Shareholders in 2024, convened on 23 September 2024.On 6 March 2025, the Company completed the above share repurchase. Through centralisedbidding transactions, the Company had cumulatively repurchased 44,747,034 shares, with thehighest purchase price being RMB 11.90 per share, the lowest purchase price being RMB 10.57 pershare, and the average repurchase price being RMB 11.17 per share, for a total consideration ofRMB 499.9836 million (inclusive of transaction fees). The repurchased shares were cancelled infull on 10 March 2025.

3. Impact of changes in shares on earnings per share, net assets per share and other financialindicators from the Reporting Period to the date of disclosure of the interim report (if any)

□ Applicable √N/A

4. Other information deemed necessary by the Company or as required by the securitiesregulators

□ Applicable √N/A

(II) Changes in shares with selling restrictions

□ Applicable √N/A

II Shareholders(I) Total number of shareholders:

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(II) Shareholdings of the Top 10 shareholders and the Top 10 shareholders of tradable shares(or shareholders without selling restrictions) at the End of the Reporting Period

Unit: shares

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Participation of shareholders holding over 5%, the top 10 shareholders, and the top 10 shareholderswithout selling restriction in securities lending transactions of refinancing business

□Applicable √N/A

Changes in the top 10 shareholders and the top 10 shareholders without selling restriction due tosecurities lending/returning transactions of refinancing business compared to the previous period

□ Applicable √N/A

Number of shares held by the Top 10 shareholders with selling restrictions and selling restrictions

□ Applicable √N/A

(III) Strategic investors or general legal persons who became Top 10 shareholders throughplacement of new shares

□ Applicable √N/A

III Information on directors, supervisors, and senior management(I) Changes in shareholdings of current directors, supervisors, and senior management andthose who resigned during the Reporting Period

□ Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Description of other information

□ Applicable √N/A

(II) Equity incentive granted to directors, supervisors, and senior management during theReporting Period

√Applicable □N/A

Unit: 10,000 shares

(III) Others

□ Applicable √N/A

IV Changes in controlling shareholders or de facto controllers

□ Applicable √N/A

V. Information on Preferred Shares

□ Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 7 Information on Bonds

I Enterprise bonds, corporate bonds, and non-financial enterprise debt financing instruments

□ Applicable √N/A

II Information on convertible corporate bonds

□ Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Chapter 8 Financial statementsI. Auditor's report

□Applicable √N/A

II. Financial statements

Consolidated Balance Sheet

30 June 2025

Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of theCompany: Zhu Baoguo

Person-in-charge of theCompany’s accounting work:

Qiu Qingfeng

Person-in-charge of theaccounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Balance Sheet of the Parent Company

30 June 2025

Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of the

Company:

Zhu Baoguo

Person-in-charge of theCompany’s accounting work:

Qiu Qingfeng

Person-in-charge of theaccounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Consolidated Income Statement

January to June, 2025

Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of the

Company:

Zhu Baoguo

Person-in-charge of theCompany’s accounting work:

Qiu Qingfeng

Person-in-charge of theaccounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Income Statement of the Parent Company

January to June, 2025

Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of theCompany:

Zhu Baoguo

Person-in-charge of theCompany’s accounting work:

Qiu Qingfeng

Person-in-charge of theaccounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Consolidated Cash Flow Statement

January to June, 2025

Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of theCompany:

Zhu Baoguo

Person-in-charge of theCompany’s accounting work:

Qiu Qingfeng

Person-in-charge of theaccounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Cash Flow Statement of Parent Company

January to June, 2025

Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of the

Company:

Zhu Baoguo

Person-in-charge of theCompany’s accounting work:

Qiu Qingfeng

Person-in-charge of theaccounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Consolidated Statement of Changes in Owner's Equity

January to June, 2025Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of the Company:

Zhu Baoguo

Person-in-charge of the Company’s accounting work:

Qiu Qingfeng

Person-in-charge of the accounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Statement of Changes in Owner's Equity of the Parent Company

January to June, 2025Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Person-in-charge of the Company:

Zhu Baoguo

Person-in-charge of the Company’s accounting work:

Qiu Qingfeng

Person-in-charge of the accounting department:

Guo Chenlu

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Joincare Pharmaceutical Group Industry Co., Ltd

Notes to the financial statements（All amounts in RMB Yuan unless otherwise stated）

I Company Profile

1. Overview

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd., formerly known as Shenzhen Aimier FoodCo., Ltd. (深圳爱迷尔食品有限公司), was a Sino-foreign joint venture officially established on18 December 1992 with the approval from Shenzhen Administration for Industry and Commerce.On 24 November 1999, the Company was reorganized as a joint stock limited company.On 6 February 2001, the Company was approved by the China Securities RegulatoryCommission to issue domestically listed shares (A shares) to the public. On 8 June 2001, shares ofthe Company were listed and traded on Shanghai Stock Exchange.As of 30 June 2025, the total share capital of the Company was RMB1,829,453,386 and thetotal number of shares of the Company was 1,829,453,386. The controlling shareholder of theCompany is Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司), and theultimate controlling party is Zhu Baoguo (朱保国).

The company is registered and headquartered in Joincare Pharmaceutical Group Building, No.17, Langshan Road, North District, High-tech Zone, Nanshan District, Shenzhen.

The Company is engaged in the integrated pharmaceutical industry.

The Company and its subsidiaries primarily engaged in the R&D, production and sale ofpharmaceutical products and healthcare products, which covered drug preparation products, activepharmaceutical ingredients (“APIs”) and intermediates, diagnostic reagents and equipment as wellas healthcare products.

The financial statements and notes to the financial statements of the Company were approvedat the 12th Meeting of the 9th Session of the Board on 22 August 2025.II Basis of Preparation for the Financial Statements

1. Basis of preparation

The Company's financial statements have been prepared on the going-concern basis.

2. Continuing operation

√Applicable □N/A

The financial statements have been prepared in accordance with the Accounting Standards forBusiness Enterprises issued by the Ministry of Finance and its application guidance, interpretationsand the other related provisions (collectively, the “Accounting Standards for Business Enterprises”).

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

In addition, the Company also discloses relevant financial information in accordance with theInformation Disclosure and Presentation Rules for Companies Offering Securities to the Public No.15 – General Provisions on Financial Reporting (2023 Revision) issued by the China SecuritiesRegulatory Commission.The financial statements have been prepared on the going-concern basis.The Company's accounting is measured on an accrual basis. Except for certain financialinstruments, the financial statements are generally measured at historical cost. Non-current assetsheld for sale are stated at the lower of fair value less estimated selling costs and their originalcarrying amount if they qualify as held for sale. In case of asset impairment, the Company shallmake provisions for impairment in accordance with applicable provisions.III Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimate tips:

√Applicable □N/A

The Company has determined the conditions for capitalising research and developmentexpenses and its revenue recognition policy based on its own production and operationalcharacteristics. Details of accounting policies are set out in Note III.22 and Note III.29.

1. Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements comply with the Accounting Standards for Business Enterprises,which gave a true and complete view of the consolidated and the Company's financial positions asat 30 June 2025, and the consolidated and the Company’s operating results and the consolidated andthe Company’s cash flows and other relevant information for the 6 months period ending 30 June2025.

2. Accounting period

The fiscal year of the Company is from 1 January to 31 December in each calendar year.

3. Business cycle

√Applicable □N/A

The Company’s operating cycle is 12 months.

4. Functional currency

The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”).Overseas subsidiaries of the Company usually recognise Hong Kong Dollar, Macanese Pataca,Indonesian Rupiah, Singapore Dollar, Euro, Philippine Peso, and US Dollar as their functionalcurrencies according to the primary economic environment of which these subsidiaries operate. TheCompany prepares its financial statements in RMB.

5. Determination and selection basis of materiality criteria

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

6. Accounting treatment for business combinations involving enterprises under commoncontrol and business combinations involving enterprises not under common control

√Applicable □N/A

(1). Business combinations involving enterprises under common control

For the business combination involving entities under common control, the assets acquired andliabilities assumed are measured based on their carrying amounts in the consolidated financialstatements of the ultimate controlling party as at the combination date. The difference between thecarrying amount of the consideration paid for the combination and the net assets acquired is adjustedagainst share premium in the capital reserve, with any excess adjusted against retained earnings.Business combination involving enterprises under common control and achieved in a numberof transactions

In the separate financial statements, the initial investment cost will be recognised at thecarrying amount of the Company's share in the combined party's net assets in the consolidatedfinancial statements of the ultimate controlling party on the date of combination. The differencebetween the initial investment cost and the sum of the carrying amount of the investment held andthe carrying amount of consideration paid for the combination at the combination date is adjustedagainst share premium in the capital reserve, with any excess adjusted against retained earnings.

In the consolidated financial statements, the assets acquired and liabilities assumed aremeasured based on their carrying amounts in the consolidated financial statements of the ultimatecontrolling party as at the combination date. The difference between sum of the carrying amount ofthe investment held and the carrying amount of the consideration paid for the combination and the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

carrying amount of the net assets acquired is adjusted against share premium in the capital reserve,with any excess adjusted against retained earnings. For long-term equity investment held before thecontrol over the combined party is obtained, profit or loss, other comprehensive income and otherchanges to equity interest attributable to the owners recognised from the later of the acquisition ofthe original equity interest and the date when the combed party and the combined party are placedunder common control until the date of combination shall be offset against retained profit at thebeginning of the period of the comparative financial statements or profit or loss of the periodrespectively.

(2). Business combinations involving enterprises not under common controlFor the business combinations involving enterprises not under common control, thecombination cost shall be the fair value of the assets transferred, liabilities incurred or assumed, andequity securities issued by the acquirer for acquisition of control in the acquiree on the acquisitiondate. The assets, liabilities and contingent liabilities acquired or assumed on the date of acquisitionare recognised at fair value.

Where the combination cost exceeds the fair value of the acquiree's identifiable net assets inthe business combination, the difference is recognised as goodwill and is subsequently measured atcost less accumulated impairment provisions. Where the combination cost is less than the fair valueof the acquiree's identifiable net assets in the business combination, the difference shall be includedin profit or loss for the period after review.Business combination involving enterprises not under common control and achieved in anumber of transactionsIn the separate financial statements, the initial cost of the investment is the sum of the carryingamount of the acquiree's equity investment held before the acquisition date and the additionalinvestment cost on the acquisition date. In respect of the equity investment held prior to theacquisition date, other comprehensive income will not be recognised using equity method on theacquisition date, and such investment will be accounted for on the same accounting treatment asdirect disposal of relevant asset or liability by the investee at the time of disposal. Shareholder'sequity recognised due to the changes of other shareholder's equity other than the changes of net lossand profit, other comprehensive income and profit distribution shall be transferred to profit or lossfor current period when disposed. If the equity investment held prior to the acquisition date ismeasured at fair value, the cumulative changes in fair value recognised in other comprehensiveincome shall be transferred to retained earnings when accounted for using cost method.

In the consolidated financial statements, the combination cost is the sum of consideration paidon the acquisition date and fair value of the acquiree's equity held prior to the acquisition date. Theequity of the acquirees held before the acquisition date is re-measured at the fair value of the equityon the acquisition date and the differences between the fair value and the carrying amount arerecognised in the income for the current period; in respect of any other comprehensive incomeattributable to the equity interest in the acquiree held prior to the acquisition date and any changes

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

of other shareholder's equity shall be transferred to investment profit or loss for current period onthe acquisition date, except for the other comprehensive income arising from changes in netliabilities or net assets of defined benefit plans remeasured by investees and other comprehensiveincome related to non-derivative equity instrument investments designated at fair value throughother comprehensive income.

(3). Transaction fees attribution during the combination

The intermediary and other relevant administrative expenses such as audit, legal and valuationadvisory for business combinations is recognised in profit or loss when incurred. Transaction costsof equity or debt securities issued as the considerations of business combination are included in theinitial recognition amounts.

7. Basis in determination of control and preparation of the consolidated financial statements

√Applicable □N/A

(1) Basis in determination of control

The scope of consolidated financial statements is determined based on control. Control meansthe Company has exposures or rights to variable returns from its involvement with the investee andthe ability to affect those returns through power over such investee. When changes in relevant factsand circumstances lead to alterations in the elements involved in the definition of control, theCompany will conduct a reassessment.

In assessing whether to include structured entities within the consolidation scope, the companyintegrates all facts and circumstances, including evaluating the purpose and design of the structuredentity, identifying the types of variable returns, and assessing whether it bears some or all of thevariability of returns by participating in its related activities, to determine if control over thestructured entity exists.

(2) Method for preparation of the consolidated financial statements

The consolidated financial statements are based on the financial statements of the Companyand its subsidiaries, and are prepared by the Company in accordance with other relevant information.In preparing the consolidation financial statements, the Company and its subsidiaries are requiredto apply consistent accounting policy and accounting period, intra-group transactions and balancesshall be offset.

A subsidiary or a business acquired through a business combination involving entities undercommon control in the reporting period shall be included in the scope of the consolidation of theCompany from the date when it is under control of the ultimate controlling party, and then itsoperating results and cash flows will be included in the consolidated income statement and theconsolidated cash flow statement, respectively.

For a subsidiary or a business acquired through a business combination involving entities notunder common control in the reporting period, its income, expenses and profits are included in theconsolidated income statement, and its cash flows are included in the consolidated cash flowstatement from the acquisition date to the end of the reporting date.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

The shareholders' equity of the subsidiaries that are not attributable to the Company shall bepresented under shareholders' equity in the consolidated balance sheet as minority interests. Theportion of net profit or loss of subsidiaries for the period attributable to minority interest is presentedin the consolidated income statement under the “profit or loss of minority interest”. When theamount of loss attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amountshall be allocated against minority interest.

(3) Purchase of the minority stake in the subsidiary

The difference between the long-term equity investments costs acquired by the purchase ofminority interests and the share of the net assets that the subsidiaries have to continue to calculatefrom the date of purchase or the date of consolidation in proportion to the new shareholding ratio,and the difference between the disposal of the equity investment without losing control over itssubsidiary and the disposal of the long-term equity investment corresponding to the share of the netassets of the subsidiaries from the date of purchase or the date of consolidation, shall be adjusted tothe capital reserve (or share premium) , if the capital reserve is not sufficient, any excess will beadjusted to retained earnings.

(4) Treatment of loss of control of subsidiaries

Where the Company loses its control over the original subsidiary due to the disposal of someequity investment or other reasons, the remaining equity is re-measured at its fair value on the datewhen the Company loses its control. The difference between the sum of the consideration acquireddue to the disposal of the equity and the fair value of the remaining equity, and the Company's sharein the sum of carrying value of net assets of the original subsidiary and goodwill calculated on anongoing basis from the acquisition date based on the original shareholding proportion is recognisedin the investment income for the current period when the control is lost.

Other comprehensive income related to equity investments in the original subsidiary should beaccounted for using the same basis as the direct disposal of related assets or liabilities of the originalsubsidiary upon loss of control. Any equity changes related to the original subsidiary under theequity method of accounting should be transferred to the profit or loss for the current period whencontrol ceases.

(5) Treatment of disposal through several transactions until the loss of control ofsubsidiaries

Where the Company disposes of the equity interests in the subsidiary through severaltransactions until it loses control, and the transaction terms, conditions and economic effects satisfyone or several of the following circumstances, such several transactions shall be deemed as a basketof transactions in accounting treatment:

① Such transactions are entered into simultaneously or upon the consideration of the mutualimpacts;

② No complete commercial result will be realised without such transactions as a whole;

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

③ The occurrence of one transaction depends on the occurrence of at least another transaction;

④ The result of an individual transaction is not economical, but it would be economical aftertaken into account of other transactions in the series.In the separate financial statements, where the Company disposes of the equity investment inthe subsidiary through several transactions until the loss of control, and such transactions are notregarded as “a basket of transactions”, the carrying amount of the long-term equity investmentinvolving each disposal will be carried forward, with the difference between the disposal price andthe carrying amount of the long-term equity investment involving the disposal being accounted intothe investment income for the current period; where the transactions constitute “a basket oftransactions”, the difference between the consideration of each disposal and the carrying amount ofthe long-term equity investment involving the disposal before the loss of the control, is recognisedas the other comprehensive income and will be carried forward to the profit or loss for the currentperiod when the control is lost.In the consolidated financial statements, where the Company disposes of the equity investmentin the subsidiary through several transactions until the loss of control, the measurement of theremaining equity interest and the accounting treatment of the losses and gains of the disposal willbe made with reference to the “Treatment of loss of control of subsidiaries” as described above. Forthe difference between the consideration of each disposal before the loss of the control and thecarrying amount of the Company's share in the net assets involving the disposal of such subsidiarycalculated on an on-going basis from the acquisition date, the treatment will be made as follows:

① In case the transactions are “a basket of transactions”, such difference is recognised as theother comprehensive income and will be carried forward to the profit or loss for the current periodwhen the control is lost.

② In case the transactions are not “a basket of transactions”, such difference is accounted intothe capital reserve (or share premium) as equity, and shall not be carried forward to the profit orloss for the current period when the control is lost.

8. Classification of joint arrangement and accounting treatment for joint operation

√Applicable □N/A

A joint arrangement is an arrangement jointly controlled by two or more parties. TheCompany's joint arrangement is classified into the joint operation and the joint venture.

(1) Joint operation

A joint operation is a joint arrangement whereby the Company have rights and obligations tothe relevant assets and liabilities.

The Company recognises the following items in relation to its interest in a joint operation, andmakes corresponding accounting treatment in accordance with relevant accounting standards:

A. The solely-held assets, and the share of any assets held jointly;

B. The solely-assumed liabilities, and its share of any liabilities incurred jointly;

C. Its revenue from the sale of its share of the output arising from the joint operation;

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

D. Its share of the revenue from the sale of the output by the joint operation;E. The solely-incurred expenses, including its share of any expenses incurred jointly.

(2) Joint ventures

A joint venture is a joint arrangement whereby the Company only entitled to the net assets ofthe arrangements.

The Company's investment in joint ventures is accounted for using the equity methodaccording to the rules of the long-term equity investment.

9. Standards for determination of cash and cash equivalents

Cash and cash equivalents of the Company include cash on hand, bank deposits readilyavailable for payment and those investments held by the Company that are short-term (normallydue in three months since the acquisition date), highly liquid, readily convertible into knownamounts of cash and subject to an insignificant risk of change in value.

10. Foreign currency transactions and translation of financial statements in foreign currency

√Applicable □N/A

(1) Foreign currency transactions

Foreign currency transactions incurred by the Company are translated to the functionalcurrency at the spot exchange rates on the date of the transactions upon initial recognition.

Monetary items denominated in foreign currencies are translated to functional currency at thespot exchange rate on the balance sheet date. Exchange differences arising from the differencesbetween the spot exchange rate prevailing at the balance sheet date and those spot rates used oninitial recognition or at the previous balance sheet date are recognised in profit or loss for the currentperiod; non-monetary items denominated in foreign currencies that are measured at historical costare translated using the spot exchange rate on the transaction date. Non-monetary itemsdenominated in foreign currencies that are measured at fair value are translated using the spotexchange rate on the date the fair value is determined; The resulting exchange differences betweenthe amounts in functional currency upon translation and in original functional currency arerecognised in profit or loss or other comprehensive income for the current period based on the natureof non-monetary items.

(2) Translation of financial statements in foreign currency

At the balance sheet date, when translating the foreign currency financial statements ofoverseas subsidiaries, the assets and liabilities in the balance sheet are translated at the spot exchangerate at the balance sheet date; all items except for “Retained earnings” of the shareholders' equityare translated at the spot exchange rate on the transaction date.

The revenue and expenses in profit or loss are translated at the spot exchange rate on thetransaction date.

All items in the statement of cash flows are translated at the spot exchange rate on thetransaction date. The effect of exchange difference on cash is adjusted and separately presented as

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

“Effect of changes in foreign exchange rates on cash and cash equivalents” in the cash flowstatement.The exchange differences arising from translation of the financial statements are presented asthe “other comprehensive income” in the shareholders' equity of the balance sheet.When the Company disposes of the overseas operation and loses control, the differences arisingfrom the translation of the financial statements in foreign currency that have been presented underthe shareholders' equity in the balance sheet and involving such overseas operation are carriedforward to the profit or loss for the current period in whole or in the proportion of the disposal ofthe overseas operation.

11. Financial instruments

√Applicable □N/A

Financial instruments are contracts creating financial assets of a party and financial liabilitiesor equity instruments of other parties.

(1) Recognition and De-recognition of financial instruments

A financial asset or financial liability is recognised when the Company becomes one of theparties under a financial instrument contract.

The financial assets will be derecognised if any of the following conditions is satisfied:

① The contractual right to receive the cash flow of the financial assets is terminated;

② The financial assets have been transferred and the transferred financial asset satisfies thefollowing conditions of derecognition.

If the current obligation of a financial liability (or a part thereof) has been discharged, thefinancial liability (or that part of the financial liability) will be derecognised. When the Company(as the debtor) and the lender have signed an agreement which uses a new financial liability toreplace the existing financial liability, and the contract terms of the new financial liability aresubstantially different with the original financial liability, the original financial liability shall be de-recognised, and the new financial liability shall be recognised at the same time.

The regular transactions of the financial assets are recognised and derecognised at thetransaction date.

(2) Classification and measurement of financial assets

The Company classifies financial assets into three categories: financial assets at amortised cost;financial assets at fair value through other comprehensive income; and financial assets at fair valuethrough profit or loss based on the business model for managing financial assets and theircontractual cash flow characteristics upon initial recognition.

Financial assets are initially recognized at fair value. For financial assets at fair value throughprofit or loss, transaction costs are directly recognized in the profit or loss for the current period.For other categories of financial assets, transaction costs are included in the initial recognitionamount. Accounts receivable arising from the sale of products or services, which do not include or

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

consider a significant financing component, are initially recognized at the expected amount to bereceived.

Financial assets at amortised costThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss for the current period as financialassets measured at amortised cost:

? The Company's business model for managing the financial assets is to collect contractualcash flow;

? The terms of the financial asset contract stipulate that the cash flow generated on a specificdate is only the payment for principal and interest accrued on the outstanding principal.

After initial recognition, these financial assets are measured at amortised cost using theeffective interest method. Gains or losses arising from financial assets which are measured atamortised cost and not part of any hedging relationship is included in the profit and loss of thecurrent period upon de-recognition, amortisation using the effective interest method, or impairmentsrecognition.

Financial assets at fair value through other comprehensive income

The Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets measured at fair value through profit or loss for the current period asfinancial assets measured at fair value through other comprehensive income

? The Company's business model for managing the financial assets is both to collectcontractual cash flows and to sell the financial assets;

? The terms of the financial asset contract stipulate that the cash flow generated on a specificdate is only the payment for principal and interest accrued on the outstanding principal

After initial recognition, these financial assets are subsequently measured at fair value. Interest,impairment losses or gains and exchange losses and gains calculated using the effective interestmethod are recognised in profit or loss for the current period, while other gains or losses arerecognised in other comprehensive income. The cumulative profit or loss previously included inother comprehensive income will be transferred to the profit or loss for the current period uponderecognition of the financial assets.

Financial assets at fair value through profit or loss for the current period

In addition to the above financial assets which are measured at amortised cost or at fair valuea through other comprehensive income, the Company classifies all other financial assets as financialassets measured at fair value through profit or loss for the current period. When initial recognition,in order to eliminate or significantly reduce accounting mismatches, the Company irrevocablydesignates some financial assets that should have been measured at amortised cost or at fair valuethrough other comprehensive income as financial assets at fair value through profit or loss for thecurrent period.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

After initial recognition, these financial assets are subsequently measured at fair value, and theprofits or losses (including interest and dividend income) generated from which are recognised inprofit or loss for the current period, unless the financial assets are part of the hedging relationship.However, with respect to non-trading equity instrument investments, the Company mayirrevocably designate them as financial assets measured at fair value through other comprehensiveincome at initial recognition. The designation is made on the basis of individual investment, and therelevant investment conforms to the definition of equity instruments from the issuer's point of view.

After initial confirmation, financial assets are subsequently measured at fair value. Dividendincome that meets the requirements is recognised in profit and loss, and other gains or losses andchanges in fair value are recognised in other comprehensive gains. When derecognised, theaccumulated gains or losses previously recognised in other comprehensive gains are transferredfrom other comprehensive gains to retained earnings.

The business model of managing financial assets refers to how the Company manages financialassets to generate cash flow. The business model decides whether the source of cash flow offinancial assets managed by the Company is to collect contract cash flow, sell financial assets orboth of them. Based on objective facts and the specific business objectives of financial assetsmanagement decided by key managers, the Company determines the business model of financialassets management.

The Company evaluates the characteristics of the contract cash flow of financial assets todetermine whether the contract cash flow generated by the relevant financial assets on a specificdate is only to pay principal and interest based on the amount of unpaid principal. Among them,principal refers to the fair value of financial assets at the time of initial confirmation; interestincludes the consideration of time value of money, credit risk related to the amount of unpaidprincipal in a specific period, and other basic borrowing risks, costs and profits. In addition, theCompany evaluates the terms and conditions of the contracts that may lead to changes in the timedistribution or amount of cash flow in financial asset contracts to determine whether they meet therequirements of the above contract cash flow's characteristics.

Only when the Company changes its business model of managing financial assets, all thefinancial assets affected shall be reclassified on the first day of the first reporting period after thebusiness model changes, otherwise, financial assets shall not be reclassified after initialconfirmation.

(3) Classification and measurement of financial liabilities

On initial recognition, the Company's financial liabilities are classified into financial liabilitiesat fair value through profit or loss and financial liabilities at amortised cost. For financial liabilitiesnot classified as financial liabilities at fair value through profit or loss, the relevant transaction costsare included in the initially recognised amount.

Financial liabilities at fair value through profit or loss

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Financial liabilities at fair value through profit or loss include financial liabilities held fortrading and financial liabilities designated at fair value through profit or loss upon initial recognition.Such financial liabilities are subsequently measured at fair value, all gains and losses arising fromchanges in fair value and dividend and interest expense relative to the financial liabilities arerecognised in profit or loss for the current period.Financial liabilities at amortised costOther financial liabilities are subsequently measured at amortised cost using the effectiveinterest method; gains and losses arising from derecognition or amortisation is recognised in profitor loss for the current period.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that meets one of following criteria:

① Contractual obligation to deliver cash or other financial instruments to another entity.

② Under potential adverse condition, contractual obligation to exchange financial assets orfinancial liabilities with other parties.

③ A contract that will or may be settled in the entity's own equity instruments and is a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity's ownequity instruments.

④ A derivative that will or may be settled other than by the exchange of a fixed amount ofcash or another financial asset for a fixed number of the entity's own equity instruments.

An equity instrument is any contract that evidences a residual interest in the assets of an entityafter deducting all of its liabilities.

If the Company cannot unconditionally avoid fulfilling a contractual obligation by deliveringcash or other financial assets, the contractual obligation meets the definition of financial liability.

If a financial instrument must or are able to be settled by the Company's own equity instrument,the Company should consider whether the Company's equity instrument as the settlement instrumentis a substitute of cash or other financial assets or the residual interest in the assets of the Companyafter deducting all of its liabilities. If the former, the tool is the Company's financial liability; if thelatter, the tool is the equity instrument of the Company.

(4) Derivative financial instruments and embedded derivatives

The Company's derivative financial instruments include forward foreign exchange contracts,and are initially measured at fair value on the date of the derivative contract signed and aresubsequently measured at fair value. A derivative with positive fair value shall be recognised as anasset, otherwise that with negative fair value shall be recognised as a liability. Any profit or lossarising from changes of fair value and not compliance with the accounting provision of hedge shallbe recognised as profit or loss for current period.

For the hybrid instrument which includes embedded derivatives, where the host contract is afinancial asset, requirements in relation to the classification of financial assets shall apply to thehybrid instrument as a whole. Where the host contract is not a financial asset, and the hybrid

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

instrument is not measured at fair value and its changes are included in the profit and loss for thecurrent period for accounting purposes, there is no close relation between the embedded derivativesand the host contract in terms of economic features and risks, and the instrument that has the samecondition with the embedded derivatives and exists independently meets the definition ofderivatives, the embedded derivatives shall be separated from the hybrid instrument and treated asa separate derivative financial instrument. If it is unable to separately measure the embeddedderivatives upon acquisition or on the subsequent balance sheet date, the hybrid instrument shall beentirely designated as the financial assets or financial liabilities measured at fair value and whosemovements are included in the profit and loss of the current period.

(5) Fair value of the financial instrument

The methods for determining the fair value of the financial assets or financial liabilities are setout in Note III.12.

(6) Impairment of financial assets

The following items are subject to impairment accounting and recognition of loss allowancesbased on expected credit losses:

A. Financial assets measured at amortised cost;

B. Receivables and debt instrument investments that are measured at fair value through othercomprehensive income;

C. Contract assets as defined in the Accounting Standard for Business Enterprises No. 14 –Revenue;

D. Lease receivables;

E. Financial guarantee contracts, except for those carried at fair value through profit or loss,those which the transfer of financial assets does not satisfy the derecognition condition or thoseformed as a result of continued involvement of the transferred financial assets.

Measurement of expected credit loss (ECLs)

The ECL is a weighted average of credit losses on financial instruments weighted at the riskof default. Credit loss is the difference between all receivable contractual cash flows according tothe contract and all cash flows expected to be received by the Company discounted to present valueat the original effective interest rate, i.e. the present value of all cash shortfalls.

The Company takes into account reasonable and valid information on past events, currentconditions and forecasts of future economic conditions, with the risk of default as the weight, tocalculate the probabilistic weighted amount of the present value of the difference between the cashflow receivable from contract and the expected cash flow to be received and recognise the expectedcredit loss.

The Company respectively measures the expected credit losses of financial instruments bydifferent stages. If the credit risk of the financial instrument does not increase significantly since theinitial recognition, it would be classified in Stage 1, the Company would measure loss allowanceaccording to the future 12-month expected credit losses. If the credit risk of a financial instrument

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

has significantly increased since the initial recognition but not yet credit-impaired, it would beclassified in Stage 2, the Company would measure loss allowance according to the lifetime expectedcredit losses of that instrument. If the financial instrument has credit-impaired since the initialrecognition, it would be classified in Stage 3, and the Company would measure loss allowanceaccording to the lifetime expected credit losses of that instrument.

For financial instruments with lower credit risk on the balance sheet date, the Companyassumes that its credit risk has not increased significantly since the initial recognition, and measuresloss allowance according to the 12-month expected credit losses.

Lifetime ECLs are the ECLs that result from all possible default event over the expected lifeof a financial instrument. Future 12-month ECLs are the portion of ECL that results from defaultevents on a financial instrument that are possible within the 12 months after the balance sheet date(or the expected life of the instrument, if it is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual periodover which the Company is exposed to credit risk (including the option to renew).

For the financial instruments classified in Stage 1 and Stage 2 and those with lower credit risk,the Company would measure the interest income by the book balance (that is, without deduction forcredit allowance) and the effective interest rate. For financial instruments classified in Stage 3, theCompany would measure the interest income by the amortised cost (that is, book balance lessimpairment allowance) and the effective interest rate.

For accounts receivable such as notes receivable, trade receivables, receivables financing, otherreceivables, contract assets, etc., if the credit risk characteristics of a particular customersignificantly differ from those of other customers in the portfolio, or if there is a significant changein the credit risk characteristics of that customer, the Company individually provides for credit lossfor that receivable. Apart from individually providing for credit loss for specific receivables, theCompany divides receivables into portfolios based on credit risk characteristics and calculates creditlosses on a portfolio basis.

Notes receivable, trade receivables and contract assets

For notes receivable, trade receivables and contract assets, regardless whether it has significantfinancing components or not, the Company has always measured its loss allowance at an amountequal to lifetime expected credit losses.

If the expected credit losses of one individual financial asset cannot be estimated at areasonable cost, the Company classifies notes receivable and trade receivables into portfolios basedon credit risk characteristics, and measures expected credit losses on portfolios basis to determineportfolios by the following basis:

A. Notes receivable

? Bills receivable portfolio 1: Bank acceptance bills

? Bills receivable portfolio 2: Commercial acceptance bills

B. Accounts receivables

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

? Accounts receivables portfolio 1: Amount due from domestic customers? Accounts receivables portfolio 2: Amount due from overseas customers? Accounts receivables portfolio 3: Receivables of consolidated companiesContract assets? Contract assets portfolio: Sale of productsFor notes receivable or contract assets classified as portfolio, the Company measures expectedcredit losses based on the risk exposures of default and lifetime expected credit losses rate withreference to the historical credit loss experience, current situation and forecasts of future economicconditions.

For accounts receivables classified as portfolio, the Company measures expected credit lossesthrough preparing a table of concordance between the aging of trade receivables and lifetimeexpected credit losses rate with reference to the historical credit loss experience, current situationand forecasts of future economic conditions.Other receivablesThe Company classifies other receivables into certain portfolios based on credit riskcharacteristics, and measures expected credit losses on portfolios basis to determine portfolios bythe following basis:

? Other receivables portfolio 1: Receivables of export tax refund

? Other receivables portfolio 2: Receivables of deposits under guarantee and securitydeposits and lease expenses

? Other receivables portfolio 3: Other receivables

? Other receivables portfolio 4: Receivables of consolidated companies

For other receivables classified as portfolio, the Company measures expected credit lossesbased on the risk exposures of default and future 12-month or lifetime expected credit losses rate.For other receivables categorized by aging, the aging is calculated from the date of recognition.

Long-term receivables

The Company's long-term receivables include finance lease receivables and equity transferreceivables.

The Company classifies finance lease receivables and equity transfer receivables into certainportfolios based on credit risk characteristics, and measures expected credit losses on portfoliosbasis to determine portfolios by the following basis:

A. Finance lease receivables

? Portfolio of finance lease receivables: other receivables

B. Other long-term receivables

? Portfolio of other long-term receivables: equity transfer receivables

For finance lease receivables and equity transfer receivables, the Company measures expectedcredit losses based on the risk exposures of default and lifetime expected credit losses rate with

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

reference to the historical credit loss experience, current situation and forecasts of future economicconditions.

For other receivables and long-term receivables other than finance lease receivables and equitytransfer receivables that are classified as portfolio, the Company measures expected credit lossesbased on the risk exposures of default and future 12-month or lifetime expected credit losses rate.Debt investments and other debt investmentsFor debt investments and other debt investments, the Company measures expected credit lossesbased on the nature of investments, counterparties and various types of risk exposures and the riskexposures of default and future 12-month or lifetime expected credit losses rate.

Assessment of significant increase in credit riskBy comparing the risk of default of financial instruments occurring on the balance sheet date andon the initial recognition date, the Company determines the relative changes in risk of default overthe expected life of financial instruments and assesses whether the credit risk of financialinstruments have increased significantly since the initial recognition.When determine whether credit risks have significantly increased since the initial recognition, theCompany considers information that is reasonable and supportable, including forward-lookinginformation that is available without undue cost or effort. The information considered by theCompany includes:

? Failure to make payments of principal or interest on debtors' contractually due dates;? An actual or expected significant deterioration in a financial instrument's external or internalcredit rating (if any);? An actual or expected significant deterioration in the operating results of debtors;? Existing or forecast changes in the technological, market, economic or legal environment thathave significant adverse effect on the debtors' abilities to repay to the Company.Depending on the nature of the financial instruments, the Company assesses whether credit riskshave significantly increased on either an individual financial instrument basis or a collectivefinancial instrument basis. When the assessment is performed on a collective financial instrumentbasis, the Company can classify the financial instruments based on the shared credit riskcharacteristics, such as past due information and credit risk ratings.The Company determines that the credit risk on a financial instrument has increased significantlyif it is more than 30 days past due.

Credit-impaired financial assets

The Company assesses whether financial assets at amortised cost and debt investmentsmeasured at fair value through other comprehensive income are credit-impaired at balance sheetdate. A financial asset is 'credit-impaired' when one or more events that have an adverse impact onthe estimated future cash flows of the financial asset have occurred. Evidence that a financial assetis credit-impaired includes the following observable information:

? Significant financial difficulty of the issuer or debtor;

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

? A breach of contract by debtor, such as a default or delinquency in interest or principalpayments;? For economic or contractual reasons relating to the borrower's financial difficulty, theCompany having granted to the borrower a concession that would not otherwise consider;? It is probable that the borrower will enter bankruptcy or other financial reorganization;? The disappearance of an active market for that financial asset because of financialdifficulties.

Presentation of allowance for ECL

The Company re-measures the ECLs on each balance sheet date to reflect changes in thefinancial instruments' credit risk since initial recognition, and the increase or reversal of the lossprovision resulted therefrom is recognised as an impairment gain or loss in profit or loss. Forfinancial assets measured at amortised cost, the loss provision is offset against their carryingamounts in the balance sheet. For debt investments at FVOCI, the Company recognises the lossprovision in other comprehensive income and does not deduct the carrying amount of the financialassets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to theextent that there is no realistic prospect of recovery. A write-off constitutes a derecognition event.This is generally the case the Company determines that the debtor does not have assets or sourcesof income that could generate sufficient cash flows to repay the amounts subject to the write-off.However, financial assets that are written off could still be subject to enforcement activities in orderto comply with the Company's procedures for recovery of amounts due.

Subsequent recoveries of an asset that was previously written off are recognised as a reversalof impairment in profit or loss in the period in which the recovery occurs.

(7) Transfer of financial assets

Transfer of financial assets refers to the transfer or delivery of financial assets to the other party(the transferee) other than the issuer of financial assets.

The Company derecognises a financial asset only if it transfers substantially all the risks andrewards of ownership of the financial asset to the transferee; the Company should not derecognisea financial asset if it retains substantially all the risks and rewards of ownership of the financial asset.

The Company neither transfers nor retains substantially all the risks and rewards of ownership,shows as the following circumstances: if the Company has forgone control over the financial assets,derecognise the financial assets and verify the assets and liabilities; if the Company retains itscontrol of the financial asset, the financial asset is recognised to the extent of its continuinginvolvement in the transferred financial asset and recognise an associated liability is recognised.

(8) Offsetting financial assets and financial liabilities

When the Company has the legal right to offset recognised financial assets and financialliabilities, and the legal right can be executed at present, and the Company has a plan to settle the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

financial assets and financial liabilities at the same time or at net amount, the financial assets andfinancial liabilities can be presented on the balance sheet after offsetting. Except for the abovecircumstances, financial assets and financial liabilities cannot be offset and shall be presentedseparately on the balance sheet.

12. Fair value measurement

The fair value is defined as the price that would be received to sell an asset or paid to transfera liability in an orderly transaction between market participants at the measurement date.The Company measures the relevant assets or liability at fair value supposing the orderlytransaction of asset selling or liability transferring incurring in a principal market of relevant assetsor liabilities. In the absence of a principal market for the asset or liability, the Company assumesthat the transaction takes place at the most advantageous market of relevant asset or liability. Aprincipal market (or the most advantageous market) is the transaction market that the Company canenter into at measurement date. The Company implements the hypothesis used by the marketparticipants to realise the maximum economic benefit in assets or liabilities pricing.If there exists an active market for the financial assets or financial liabilities, the Company usesthe quotation on the active market as its fair value. For those in the absence of active market, theCompany uses valuation technique to recognise its fair value. However, under limited circumstances,the Company may use all information about the results and operation of the investee obtained afterthe date of initial recognition to determine whether cost represents fair value. Cost may representthe best estimate of fair value of the relevant financial asset within the scope of distribution, andsuch cost represents the appropriate estimate of fair value within the scope of distribution.

For non-financial assets measured at fair value, the Company should consider the capacity ofthe market participants to put the assets into optimal use thus generating the economic benefit, orthe capacity to sell assets to other market participants who can put the assets into optimal use andgenerate economic benefit.

The Company implements the valuation technique suitable for the current condition andsupported by enough available data and other information, gives priority in use of relevantobservable inputs, only the observable inputs cannot be obtained or impracticable before usingunobservable inputs.

For the assets and liabilities measured or disclosed at fair value on financial statements, fairvalue hierarchies are categorized into three levels as the lowest level input that is significant to theentire fair value measurement: Level 1: inputs are quoted prices (unadjusted) in active markets foridentical assets and liabilities. Level 2: inputs are inputs other than quoted prices included withinLevel 1 that are observable for the asset or liability, either directly or indirectly. Level 3: inputs areunobservable inputs for the asset or liability.

At each balance sheet date, the Company re-evaluates the assets and liabilities recognised tobe measured at fair value on the financial statements to make sure whether conversion occursbetween fair value hierarchies.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

13. Inventories

√Applicable □N/A

(1) Classification of inventories

The Company's inventories include raw materials, packaging materials, finished goods, Work-in-progress and semi-finished products, low-value consumables, subcontracting materials,merchandise goods, consumable biological assets and issued goods.

(2) Method of costing

The method of costing of the Company's inventories: Cost of finished goods are measured atplanned cost, and material cost differences are carried forward at the end of the period to adjustplanned cost to actual cost; other inventories are measured at actual cost on acquisition and rawmaterials received are accounted for by the weighted-average method; low-value consumables andpackaging materials are amortised in full upon the use.

(3) Determination basis and provision method for decline in value of inventories

On the balance sheet date, the inventories are calculated at the lower of cost and the netrealisable value. When its net realizable value is lower than its cost, a provision for inventoryimpairment is made

The net realizable value is the estimated selling price of inventory minus the estimated costs tocomplete, estimated selling expenses, and related taxes. In determining the net realizable value ofinventory, reliable evidence is used as a basis, while also considering the purpose of holding theinventory and the impact of subsequent events after the balance sheet date.

Provision for inventory impairment is made on an item-by-item basis. For inventory with largequantities and low unit prices, inventory impairment is provided based on inventory categories. Forinventory related to product lines produced and sold in the same region, with similar or identicalfinal uses or purposes, and difficult to measure separately from other items, inventory impairmentis combined.

On the balance sheet date, if the factors that previously impaired the value of inventory havedisappeared, the provision for inventory impairment is reversed within the originally providedamount.

(4) Inventory system

The Company maintains a perpetual inventory system.

(5) Amortisation methods of consumables

Low-value consumables and packaging materials of the Company are amortised in full whenused.

14. Held for sale and discontinued operations

√Applicable □N/A

(1) Recognition and accounting treatment of non-current assets or the disposal groupheld for sale

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Non-current assets and disposal groups are classified as held for sale if the Company recoversits book value mainly by selling (including the exchange of nonmonetary assets with commercialsubstance) rather than continuing to use it.

The aforesaid non-current assets do not include investment property measured with the basisof fair value; the biological assets measured with the basis of fair value less selling costs; the assetsformed by employee benefits; financial assets and the right arising from deferred income tax assetsand insurance contracts.

A disposal group is a group of assets to be disposed through sale or other means as a whole ina single transaction, and liabilities directly associated with those assets that will be transferred inthe transaction. In certain circumstance, disposal groups include the goodwill obtained throughbusiness combination.

Non-current assets and disposal groups that meet the following conditions are classified as heldfor sale: according to the practice of disposing of this type of assets or disposal groups in a similartransaction, a non-current asset or disposal group is available for immediate sale at its presentcondition; the sale is likely to occur, that is, a decision has been made on a sale plan and a determinedpurchase commitment is made, and the sale is expected to be completed within one year. Where theloss of control over the subsidiaries is due to the sales of investment in subsidiaries, no matterwhether the Company retains part of the equity investment after selling or not, the investment insubsidiaries shall be classified as held for sale in the separate financial statements when it satisfiesthe conditions for category of held for sale; all assets and liabilities of subsidiaries shall be classifiedas held for sale in the consolidated financial statements.

The difference between carrying amount of non-current assets or disposal groups classified asheld for sale and the net amount of fair value less selling costs shall be recognised as impairmentloss on assets upon initial measurement or when such noncurrent assets or disposal groups areremeasured at the balance sheet date. For the amount of impairment loss on assets recognised indisposal groups, the carrying amount of disposal groups' goodwill shall be offset against first, andthen offset against the carrying amount of non-current assets according to the proportion of carryingamount of the individual non-current assets in the disposal groups.

If on a subsequent balance sheet date, the net amount of the fair value of a held-for-sale disposalgroup less its selling costs increases, the amount reduced previously shall be recovered, and reversedin the asset impairment loss recognised on the noncurrent asset which is applicable to themeasurement requirements of Held-For-Sale Standards after the non-current asset is classified intoheld-for-sale category. The reversed amount is credited to current profit or loss. The carrying valueof goodwill which has been offset cannot be reversed.

No depreciation or amortisation is provided for the non-current assets in the held-for-sale andthe assets in the disposal group held for sale. The interest on the liabilities and other costs in thedisposal group held for sale is recognised continuously. As far as all or part of investment in theassociates and joint ventures is concerned, for the part classified into the held-for-sale category, the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

accounting with equity method shall be stopped, while the remaining part (which is not classifiedinto the held for- sale category) shall still be accounted for using the equity method. When theCompany loses the significant influence on the associates and joint venture due to the sale, the useof equity method shall be ceased.

When certain non-current asset or disposal group classified into the held-for-sale category nolonger meets the classification criteria for held-for-sale category, the Company shall stop classifyingit into the held-for-sale category and measure it according to the lower of the following two amounts:

① The carrying amount of the asset of disposal group before it was classified into the held-for-sale category after being adjusted with the depreciation, amortisation or impairment that couldhave been be recognised if it was not classified into the held-for-sale category;

② The recoverable amount.

(2) Determination of discontinued operation

Discontinued operation refers to the component meeting one of the following conditions thathas been disposed of by the Company or classified by the Company into the held-for-sale type andcan be identified separately:

① The component represents an independent principal business or a separate principalbusiness place.

② The component is a part of the related plan for the contemplated disposal of an independentprincipal business or a separate principal business place.

③ The component is a subsidiary acquired exclusively for the purpose of resale.

(3) Presentation

The Company presents the non-current assets held for sale and the assets in the disposal groupheld for sale under “assets classified as held for sale”, and the liabilities in the disposal group heldfor sale under “liabilities classified as held for sale” in the balance sheet.

The Company presents the profit and loss for continuing operation and profit and loss fordiscontinued operation in the income statement, respectively. The impairment loss and reversalamount and disposal profit and loss of the non-current assets held for sale or disposal group notmeeting the definition of discontinued operation will be presented as the profit and loss ofcontinuing operation. The operating profit and loss (such as impairment loss and reversal amount)and disposal profit and loss of the discontinued operation will be presented as the profit and loss ofthe discontinued operation.

The disposal group proposed for retirement rather than sale and meeting the condition aboutthe relevant component in the definition of the discontinued operation will be presented asdiscontinued operation from the date of retirement.

For the discontinued operation reported in the current period, the information formerlypresented as profit and loss of continuing operation will be presented as the profit and loss ofdiscontinued operation for the comparable accounting period in the financial statement of the currentperiod. If the discontinued operation no longer meets the classification criteria for held for- sale

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

category, the information formerly presented as profit and loss of discontinued operation will bepresented as the profit and loss of continuing operation for the comparable accounting period in thefinancial statement of the current period.

15. Long-term equity investment

√Applicable □N/A

The long-term equity investment includes the equity investment in the subsidiary, jointventures and associates. The investee over which the Company has significant influence is theassociates of the Company.

(1) Determination of initial investment cost

The long-term equity investment resulting from corporate merger: For the long-term equityinvestment resulting from merger of companies under the same control, the carrying amount of theownership equity of the merged party obtained on the merger date presented in the consolidatedfinancial statement of the final controlling party will be used as the investment cost. For the long-term equity investment resulting from merger of companies under different controls, the mergercost will be used as the investment cost of the long-term equity investment.

The long-term equity investment obtained by other means: For the long-term equity investmentobtained by paying cash, the actually paid purchase price will be used as the initial investment cost.For the long term equity investment obtained by issuing equity securities, the fair value of the issuedequity securities will be used as the initial investment cost.

(2) Subsequent measurement and recognition method of profit or loss

The investment in subsidiary will be accounted for using cost method, unless the investmentmeets the criteria of held-for-sale category. The investment in associates and joint venture will beaccounted with equity method.

For the long-term equity investment accounted for using cost method, except for the priceactually paid upon the investment or the cash dividend or profit in the consideration that has beendeclared but not released, the cash dividend or profit declared and distributed by the investee isrecognised as the investment income and recorded into the profit and loss for the current period.

For the long-term equity investment accounted for using equity method, the investment cost ofthe long-term equity investment shall not be adjusted if the initial investment cost of the long-termequity investment is higher than the Company's share in the fair value of the identifiable net valueof the investee at the time of investment; if the initial investment cost of the long-term equityinvestment is lower than the Company's share in the fair value of the identifiable net value of theinvestee at the time of investment, the carrying amount of the long-term equity investment will beadjusted, with the difference recorded into the profit and loss for the current period of investment.

When accounted for using the equity method, return on investment and other comprehensiveincome are recognised according to the share in the investee's realised net profit or loss and othercomprehensive income respectively, and the carrying amount of the long-term equity investment isadjusted. The carrying amount of the long-term equity investment will be deducted according to the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

profit distribution declared by the investee or cash dividend attributable to the Company. Thecarrying amount of long term equity investment will be adjusted for changes to equity interestattributable to the owners of the investee other than net profit or loss, other comprehensive incomeand profit distribution, and recorded into capital reserve (other capital reserve). The Company'sshare of the net profit or loss of the investees will be recognised after adjustment of the net profit ofthe investees according to the accounting policy and accounting period of the Company on the basisof fair value of all identifiable assets of the investee on acquisition.If the Company is able to exert significant influence or implement joint control (which doesnot constitute control) on the investee through additional investment or other reason, the sum of thefair value of the original equity plus the additional investment cost will be used as the initialinvestment cost, which will be accounted for with equity method, on the conversion date. If theoriginal equity has been classified as non-trading equity instrument investments measured at fairvalue through other comprehensive income, the related accumulated change of fair value originallyrecorded into other comprehensive income will be transferred into the retained earnings whenaccounted for using equity method.If an entity loses joint control or has no significant influence over investees due to theelimination of parts of the equity investment, the surplus equity after disposal shall be recognisedin accordance with “Accounting Standards for Business Enterprises No. 22 – Recognition andMeasurement of Financial Instruments”, and the difference between fair value and carrying amountshould be recognised as profit or loss for current period. Other comprehensive income of originalequity investment recognised under equity method shall be recognised in accordance with the samefoundation used by the investees when dispose the relevant assets or liabilities directly in thetermination of equity method. Other changes of owners' equity related to the original equityinvestment shall be transferred into profit or loss for current period.If an entity loses control over investees due to the elimination of parts of the equity investment,the surplus owners' equity that is able to implement joint control or have significant influence overinvestees shall be measured at equity method and are deemed to be recognised under equity methodsince the acquisition date. The surplus owners' equity that are unable to implement joint control orhave no significant influence over investees shall be processed in accordance with “AccountingStandards for Business Enterprises No. 22 – Recognition and Measurement of FinancialInstruments”, and the difference between fair value and carrying amount at the day of loss of controlshall be recognised as profit or loss for current period.If the shareholding ratio of the Company is reduced due to the increase of capital of otherinvestors, and thus the control is lost, but the joint control or significant influence can be exerted onthe invested entity, the Company should recognise net asset according to the new shareholding ratio.The difference between the original book value of the long-term equity investment correspondingto the decrease in the shareholding ratio should be included in the current profit and loss; then,according to the new shareholding ratio, the equity method is used to adjust the investment.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

The Company recognises the unrealised profit or loss of intra-transaction between the jointventures or associates that belongs to itself according to the proportion of the shares and recognisesthe investment income or loss after offset. However, the loss arising from the unrealised intra-transaction between the Company and investees, which belongs to the impairment loss of assetstransferred, cannot be offset.

(3) Basis of determining common control and significant influence on the investee

Joint control is the contractually agreed sharing of control over an arrangement under whichthe decisions relating to any activity require the unanimous consent of the parties sharing control.In determining whether there is a joint control, the first judge is to determine whether the relevantarrangement is controlled collectively by all the parties involved or the group of the parties involved.Secondly, and then determine whether the decisions related to the basic operating activities shouldrequire the unanimous consent of the parties involved. If the parties involved or the group of theparties involved must act consistently to determine the relevant arrangement, it is considered thatthe parties involved or the group of the parties involved control the arrangement. If two or moreparties involve in the collectively control of certain arrangement, it shall not be considered as jointcontrol. Protection of rights shall not be considered in determining whether there is joint control.

Significant influence refers to the power to participate in the decision making process forfinancial and operational policies of the investees without control or common control over theformulation of such policies. When determining whether it has significant influence over theinvestee, the influence of the voting shares of the investee held by the investor directly and indirectlyand the potential voting rights held by the investor and other parties which are exercisable in thecurrent period and converted to the equity of the investee, including the warrants, share options andconvertible bonds that are issued by the investee and can be converted in the current period, shallbe taken into account.

When the Company owns directly or indirectly through its subsidiaries more than 20%(including 20%) but less than 50% of the voting shares of the investee, it is generally considered tohave significant influence over the investee, unless there is clear evidence that it cannot participatein the production and operation decisions of the investee and does not have a significant influenceunder such circumstances. When the Company owns less than 20% (excluding) of the voting sharesof the investee, it is generally not considered to have significant influence on the investee unlessthere is clear evidence that it can participate in the production and operation decisions of the investeeand have significant influence under such circumstances.

(4) Held-for-sale equity investment

Refer to Note III. 14 for the relevant accounting treatment of the equity investment to jointventures or associates all or partially classified as assets held for sale.

The surplus equity investments that are not classified as assets held for sale shall be accountedfor using equity method.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

The equity investment to joint ventures or associates already classified as held for sale nolonger meets the conditions of assets held for sale shall be adjusted retroactively using equitymethod from the date of being classified as assets held for sale.

(5) Impairment test and impairment provision

Refer to note III. 23 for investment to subsidiaries, associates and joint ventures and theimpairment provision of assets.

16. Investment properties

Investment properties are properties held to earn rental or capital appreciation or both. Theinvestment properties of the Company include land use rights that have already been leased out,land use rights that are held for the purpose of sale after capital appreciation, buildings that havealready been leased out, etc.

Investment properties of the Company are measured initially at cost upon acquisition, andsubject to depreciation or amortisation in the relevant periods according to the relevant provisionson fixed assets or intangible assets.

The Company adopts the cost model for subsequent measurement of the investment properties.The method for asset impairment provision is set out in note III. 23.

The balance after the disposal income from the disposal, transfer, scrapping or destruction ofthe investment properties deducts the book value and the relevant taxes shall be recorded into theprofit and loss for the current period.

17. Fixed assets

(1) Conditions for recognition of fixed assets

√Applicable □N/A

The Company's fixed assets represent the tangible assets held by the Company using in theproduction of goods, rendering of services, rent and for operation and administrative purposes withuseful life over one year.

The fixed asset can be recognised only when the economic benefit related to the fixed asset isprobable to flow into the company and the cost of the fixed asset can be reliably measured.

The Company's fixed assets are initially measured at the actual cost at the time of acquisition.

Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed assetwhen it is probable that the related economic benefits will flow to the Company and the related costcan be reliably measured. The daily repair costs of fixed assets that do not meet the recognitioncriteria of subsequent expenditures of fixed assets are recorded in the profit or loss for the currentperiod or included in the cost of the relevant assets according to beneficiaries when incurred. Thecarrying amount of the replaced part is derecognised.

(2) Method of depreciation

√Applicable □N/A

The Company adopts the straight-line method to provision for depreciation. Depreciation offixed assets begins when they reach the status of intended use, and ceases to be depreciated when

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

they are derecognized or classified as non-current assets held for sale. Without taking into accountthe provision for impairment, the Company determines the annual depreciation rates of varioustypes of fixed assets according to the type of fixed assets, estimated useful life and estimated residualvalue as follows:

Where, for the fixed assets for which depreciation provision is made, to determine thedepreciation rate, the accumulated amount of the fixed asset depreciation provision that has beenmade shall be deducted.

(3) Refer to note III. 23 for the impairment testing and the impairment provision of fixedassets.

(4) The Company reviews the useful life and estimated net residual value of fixed asset andthe depreciation method applied annually at each of the period end.

The useful lives of fixed asset are adjusted if their expected useful lives are different from theoriginal estimates; the estimated net residual values are adjusted if they are different from theoriginal estimates.

(5) Overhaul costs

The overhaul costs occurred in regular inspection of fare recognised in the cost of property,plant and equipment if there is undoubted evidence to confirm that they meet the recognitioncriteria of fixed assets, otherwise, the overhaul costs are recognised in profit or loss for the currentperiod. Property, plant and equipment are depreciated during the intervals of the regular overhaul.

18. Construction in progress

√Applicable □N/A

Construction in progress is measured at actual cost. Actual cost comprises necessary projectexpenditure incurred during construction, borrowing cost that are eligible for capitalisation andother necessary cost incurred to bring the fixed assets ready for their intended use.

Basis for transferring construction in progress to fixed assets is as follows:

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

For provision for impairment of construction in progress, refer to note III. 23.In the balance sheet, the ending balance of construction materials is presented under“construction in progress”.

19. Borrowing costs

√Applicable □N/A

(1) Recognition principle of capitalisation of borrowing costs

For borrowing costs that are directly attributable to the acquisition, construction or productionof a qualifying asset, they shall be capitalised and included in the cost of related assets; otherborrowing costs are recognised as expenses and included in profit or loss when incurred.Capitalisation of such borrowing costs can commence only when all of the following conditions aresatisfied:

① Expenditures for the asset incurred, capital expenditure includes the expenditure in the formof cash payment, transfer of non-cash assets or the interest bearing liabilities for the purpose ofacquiring or constructing assets eligible for capitalisation;

② Borrowing costs incurred;

③ Activities relating to the acquisition, construction or production of the asset that arenecessary to prepare the asset for its intended use or sale have commenced.

(2) Capitalisation period of borrowing costs

Capitalisation of such borrowing costs ceases when the qualifying assets being acquired,constructed or produced become ready for their intended use or sale. The borrowing cost incurredafter that is recognised as an expense in the period in which they are incurred and included in profitor loss for the current period.

Capitalisation of borrowing costs is suspended during periods in which the acquisition,construction or production of a qualifying asset is interrupted abnormally and when the interruptionis for a continuous period of more than 3 months; the borrowing costs in the normally interruptedperiod continue to capitalise.

(3) Calculation of the capitalisation rate and amount of borrowing costs

The interest expense of the specific borrowings incurred at the current period, deducting anyinterest income earned from depositing the unused specific borrowings in bank or the investmentincome arising from temporary investment, shall be capitalised. The capitalisation rate of the generalborrowing is determined by applying the weighted average effective interest rate of general

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

borrowings, to the weighted average of the excess amount of cumulative expenditures on the assetover the amount of specific borrowings.

During the capitalisation period, exchange differences on foreign currency special borrowingsshall be capitalised; exchange differences on foreign currency special borrowings shall berecognised as current profits or losses.

20. Biological assets

√Applicable □N/A

(1) Determination of biological assets

Biological assets refer to assets comprising living animals and plants. No biological asset shallbe recognised unless it meets the conditions as follows simultaneously:

① An enterprise possesses or controls the biological asset as a result of past transaction orevent;

② The economic benefits or service potential concerning this biological asset are likely toflow into the enterprise;

③ The cost of this biological asset can be measured reliably.

(2) Classification of biological assets

The Company’s biological assets are consumable biological assets which include traditionalChinese medical herbal plant species.

The consumable biological assets refer to the biological assets held for sale, or biological assetsto be harvested as agricultural products in the future, consisting of growing traditional Chinesemedical herbal plant species. The consumable biological asset is initially measured at cost. The costof any consumable biological assets by way of self-planting, self-cultivating, self-breeding is thenecessary cost directly attributable to this asset prior to the harvest, consisting of borrowing coststhat meet the conditions of capitalisation. The subsequent expenses for the maintenance, protectionand cultivation of a consumable biological asset after the harvest shall be included in the currentprofits or loss.

The cost of a consumable biological asset shall, at the time of harvest or sale, be carried overat its book value by the weighted average method.

(3) Impairment of biological assets

If the net realisable value of the consumable biological assets is lower than their carryingamount, provision of impairment loss is made and recognised in the profit or loss for the currentperiod as the excess of the carrying amount over the net realisable value. If the factors affecting theimpairment of consumable biological assets no longer exist, the amount of write-down shall beresumed and shall be reversed from the original provision for the impairment loss before beingrecognised in the profit or loss for the current period.

21. Intangible assets

(1) Pricing methods, useful lives and impairment tests

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

An intangible asset is an identifiable non-monetary asset without physical substance owned orcontrolled by the Company. An intangible asset is recognised only when all of the followingconditions are satisfied: It is probable that the economic benefits associated with the intangibleassets will flow to the enterprise; The cost of the intangible asset can be reliably measured.Intangible assets are initially measured at actual cost.The Company's intangible assets include land use rights, patents and proprietary technologies,software, trademark rights, etc.

Intangible assets are initially measured at historical cost, and the Company shall makejudgement to determine the useful life of intangible assets upon acquisition. Intangible assets withfinite useful life are amortised in the profit or loss over the estimated useful life, using the methodthat reflects the expected realisation of economic benefits associated with the asset, and if theexpected realisation cannot be reliably determined, it is amortised using the straight-line method.Intangible assets with indefinite useful life are not amortised.

Amortisation of intangible assets with finite useful life is as follows:

The useful life for an intangible asset with a finite useful life and the method of amortisationare reviewed at least once at the end of each financial year. If the useful life and amortisation methodfor the intangible assets are different from the previous estimate, the change of amortisation isrecognised prospectively as the change of accounting estimate.

When the Company estimates an intangible asset can no longer bring future economic benefitsto the Company at the end of a period, the carrying amount in which should be reversed to profit orloss for the current period.

Please refer to note III. 23 for the provision of impairment of intangible assets.

22. Research and development expenditures

√Applicable □N/A

The research and development (R&D) expenses of our company consist of expenses directlyrelated to R&D activities, including salaries of R&D personnel, direct input costs, depreciation andamortization of long-term assets, equipment debugging costs, amortization of intangible assets,expenses for outsourcing research and development, clinical trial expenses, and other expenses.Among these, the salaries of R&D personnel are allocated to R&D expenses based on project hours.Equipment, production lines, and premises shared between R&D activities and other productionoperations are allocated to R&D expenses based on the proportion of hourly usage or space usage.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Expenditures on an internal research and development project are classified into expenditureson the research phase and expenditures on the development phase.Expenditures on the research phase shall be recognised in profit or loss for the current periodwhen incurred.Expenditures on the development phase will be capitalised only when all of the followingconditions are satisfied: it is technically feasible to complete the intangible asset so that it will beavailable for use or sale; the Company intends to complete the intangible asset and use or sell it; itcan be demonstrated how the intangible asset will generate economic benefits, including provingthat the intangible assets or the products produced by it will have markets, or the intangible assetsfor internal use will be useful; there are adequate technical, financial and other resources to completethe development and the Company is able to use or sell the intangible assets; and expenditures onthe development phase attributable to the intangible assets can be reliably measured. Thedevelopment expenditures that do not satisfy the above conditions shall be recognised in profit orloss for the current period.

Our research and development projects enter the development stage after meeting the aboveconditions and forming the project through the technical and economic feasibility studies.

Capitalised expenditures on the development phase are shown as development expenditures onthe balance sheet and reclassified as intangible assets on the date the project meets the intendedpurpose.

Capitalisation conditions for specific research and development projects are as follows:

① For research and development projects that are not required to obtain clinical approvals,the period from the beginning of research and development to the pilot phase is treated as theresearch phase, and all expenditures shall be recognised in profit or loss for the current period whenincurred; the period from the pilot phase to the obtaining of production approvals is treated as thedevelopment phase, and all expenditures shall be recognised as development expenditures andreclassified as intangible assets after the obtaining of production approvals.

② For research and development projects that require clinical approval, the period from thebeginning of research and development to the obtaining of clinical approval is treated as the researchphase, and all expenditures incurred shall be recognised in profit or loss for the current period whenincurred; the period from the obtaining of clinical approval to the obtaining of production approvalis treated as the development phase, and the expenditures shall be recognised as developmentexpenditures and reclassified as intangible assets after the obtaining of production approval.

③ Purchased technologies or formulas, etc., where the purchase price is recognised asdevelopment expenses, require subsequent R&D to be accounted for in accordance with theprocedures outlined in points ① and ② above.

④ The Company reviews the latest research and development status of each project at theend of each year and if the research and development project no longer qualifies for the development

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

stage, the corresponding development expenditure are recognised in profit or loss for the currentperiod.

⑤Where it is impossible to differentiate the expenditures on the research phase and theexpenditures on the development phase, all the research and development expenditures arerecognised in profit or loss for the current period.

23. Impairment of assets

√Applicable □N/A

The impairment of subsidiaries, associates and joint ventures in the long-term equityinvestments, investment properties subsequently measured at cost, fixed assets, construction inprogress, right-of-use assets, intangible assets, etc. (Excluding inventories, deferred income taxassets and financial assets) are determined as follows:

At the balance sheet date, the Company determines whether there may be evidence ofimpairment, if there is any, the Company will estimate the recoverable amount for impairment, andthen test for impairment. For goodwill arising from a business combination, intangible assets withindefinite useful life and the intangible assets that have not yet reached their intended use are testedfor impairment annually regardless of whether such evidence exists.

The recoverable amount of an asset is determined by the higher amount of fair value deductingdisposal costs and net present value of future cash flows expected from the assets. The Companyestimates the recoverable amount based on individual asset; for individual asset which is difficultto estimate the recoverable amount, the recoverable amount of the asset group is determined basedon the asset group involving the asset. The identification of the asset group is based on whether thecash flow generated from the asset group is independent of the major cash inflows from other assetsor asset groups.

When the asset or asset group’s recoverable amount is lower than its carrying amount, theCompany reduces its carrying amount to its recoverable amount, the reduced amount is included inprofit or loss, while the provision for impairment of assets is recognised.

In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising frombusiness combination, shall be allocated to the related asset group in accordance with a reasonablebasis at acquisition date. Those that are difficult to be allocated to related assets shall be allocatedto related asset group. Related assets or assets group refer to those that can benefit from the synergiesof business combination and are not larger than the Company’s recognised reporting segment.

When there is an indication that the asset and asset group are prone to impair, the Companyshould test for impairment for asset and asset group excluding goodwill and calculate therecoverable amount and recognise the impairment loss accordingly. The Company should test forimpairment for asset or the asset group including goodwill and compare the asset or asset group’srecoverable amount with its carrying amount, provision for impairment of assets shall be recognisedwhen the recoverable amount of assets is lower than its carrying amount.

Once impairment loss is recognised, it cannot be reversed in subsequent accounting periods.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

24. Long-term deferred expenses

√Applicable □N/A

The Company’s long-term deferred expenses measured at cost actually incurred and evenlyamortised on straight-line basis over the expected beneficial period. For the long-term deferredexpense items that cannot benefit in subsequent accounting period, their amortised value isrecognised through profit or loss.

25. Employee compensation

(1) The scope of employee compensation

Employee compensation are all forms of remuneration and compensation given by theCompany in exchange for service rendered by employees or the termination of employment.Employee compensation includes short-term employee compensation, post-employment benefits,termination benefits and other long-term employee benefits. Employee compensation includesbenefits provided to employees’ spouses, children, other dependants, survivors of the deceasedemployees or to other beneficiaries.

According to liquidity, employment compensations are presented separately as “accruedpayroll” item and “long-term employment compensation payable” item in the balance sheet.

(2) Short-term employee compensation

During the accounting period in which the employees render the related services, wages,bonuses, social security contributions (including medical insurance, injury insurance, maternityinsurance, etc.) and house funding are recognised as liability and included in the profit or loss forthe current period or related asset costs.

(3) Post-employment benefits

√Applicable □N/A

Post-employment benefit plans mainly include defined contribution plans. A definedcontribution plan refers to a post-employment benefit plan where the Company no longer bearsfurther payment obligations after depositing fixed costs into an independent fund. The Company isonly involved in defined contribution plans.

Defined contribution plans include basic pension insurance and unemployment insurance.

During the accounting period in which the employees provide services, the amount payablecalculated based on the defined contribution plan is recognized as a liability and is either recordedin the profit or loss of the current period or included in the cost of related assets.

(4) Termination benefits

√Applicable □N/A

The liability of employee compensation arising from termination benefits is recognised andincluded in profit or loss for the current period in the earlier date of the followings: The Companycannot unilaterally withdraw the offer of termination benefits because of an employmenttermination plan or a curtailment proposal; the Company recognises costs or expenses related to therestructuring that involves the payment of termination benefits.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

For the implementation of the internal retirement plan for employees, the economiccompensation before the official retirement date is a termination benefit. The wage of and socialinsurance contributions for the internally retired employee which would have incurred from the dateon which the employee cease rendering services to the Company to the scheduled retirement datewill be included in the profit or loss for the current period. Economic compensation after the officialretirement date (such as normal pension) should be treated as post-employment benefits

(5) Other long-term employee benefits

√Applicable □N/A

When other long-term employee benefits provided to the employees by the Company aresatisfied the conditions of a defined contribution plan, those benefits shall be accounted for inaccordance with the relevant provisions of the above defined contribution plans. When the benefitsare satisfied the conditions of a defined benefit plan, those benefits shall be accounted for inaccordance with the relevant provisions of the above defined benefit plans, except that the “changein remeasurement of the net liability or net assets of the defined benefit plans” in the cost of therelated employee compensation shall be included in profit or loss for the current period or relatedasset costs.

26. Provision for liabilities

√Applicable □N/A

An obligation related to a contingency is recognised as a provision when all of the followingconditions are satisfied:

(1) The obligation is a present obligation of the Company;

(2) It is probable that an outflow of economic benefits will be required to settle the obligation;

(3) The amount of the obligation can be measured reliably.

Provisions are initially measured at the best estimate of the payment to settle the associatedobligations and consider the relevant risk, uncertainty and time value of money. If the impact oftime value of money is significant, the best estimate is determined as its present value of future cashoutflow. The Company reviews the carrying amount of provisions at the balance sheet date andadjusts the carrying amount to reflect the best estimate.

If the expenses for clearing of provisions is fully or partially compensated by a third party, andthe compensated amount can be definitely received, it is recognised separately as asset. Thecompensated amount recognised shall not be greater than the carrying amount of the liabilityrecognised.

27. Share-based payment and equity instruments

√Applicable □N/A

(1) Category of share-based payment

Share-based payment of the Company is classified into equity-settled share-based payment andcash-settled share-based payment.

(2) Determination of fair value of equity instrument

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

For options and other equity instruments granted by the Company with active market, the fairvalue is determined at the active market quotations. For options and other equity instruments withno active market, option pricing model shall be used to estimate the fair value of the equityinstruments. Factors as follows shall be taken into account using option pricing models: A. theexercise price of the option; B. the validity period of the option; C. the current market price of theshare; D. the expected volatility of the share price; E. predicted dividend of the share; F.risk-freerate of the option within the validity period.

(3) Recognition basis for the best estimate of exercisable equity instruments

On each balance sheet date during the pending period, the Company, based on the latestsubsequent information such as the latest update on the change in the number of entitled employees,makes best estimate to adjust the expected number of equity instruments that can be exercised. Asat the exercise date, the final estimated number of exercisable equity instruments should equal theactual number of exercisable equity instruments.

(4) Accounting treatment for implementation, amendment and termination of share-based

Equity-settled share-based payment is measured at the fair value of the equity instrumentsgranted to employees. Instruments which are exercisable immediately upon the grant are includedin relevant costs or expenses at the fair value of equity instruments on the date of grant and capitalreserves are increased accordingly. If exercising is conditional upon completion of services in thepending period or fulfillment of performance conditions, on each balance sheet date during thepending period, based on the best estimate of the number of exercisable equity instruments, theservices received for the period are recognised as the costs or expenses and capital reserves at fairvalue of the equity instruments as at the date of grant. After the exercise date, relevant costs orexpenses and total shareholders’ equity have been recognised and will not be adjusted.

Cash-settled share-based payments are measured at the fair value of the liabilities (share-basedor other equity instrument-based) assumed by the Company. Instruments which are exercisableimmediately upon the grant are included in relevant costs or expenses at the fair value of liabilitiesassumed by the Company on the date of grant and liabilities are increased accordingly. If exercisingis conditional upon completion of services in the pending period or fulfillment of performanceconditions, on each balance sheet date during the pending period, based on the best estimate of theexercisable situation, the services received for the period are recognised as the costs or expensesand corresponding liabilities at fair value of the liabilities assumed by the Company. On eachbalance sheet date before the relevant liabilities are settled and settlement date, the fair value ofliabilities is remeasured and the resulting changes are included in the profit and loss for the currentperiod.

When the Company modifies the share-based payment plan, and if such modification increasesthe fair value of the equity instruments granted, the increase in services received will be recognisedaccordingly following the increase in fair value of the equity instruments; if such modification

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

increases the number of equity instruments granted, the increase in fair value of the equityinstruments is recognised as a corresponding increase in services received. The increase in fair valueof the equity instruments refers to the difference in fair values on the date of modification beforeand after the modification in respect of the equity instruments. If the modification reduces the totalfair value of the share-based payments or adopts any form that is unfavorable to employees tomodify the terms and conditions of the share-based payment plan, accounting treatment will becontinued to be conducted in respect of the services received and the modification will be deemedto have never occurred, unless the Company had cancelled part or all of the equity instrumentsgranted.During the pending period, if the equity instruments granted are cancelled (except for failureto meet the non-market conditions of the exercising conditions), the Company will undertake anaccelerated exercising in respect of the cancelled equity instruments that have been granted, includethe remaining amount that shall be recognised during the pending period in the profit and loss forthe current period immediately and recognise capital reserve accordingly. Where employees or otherparties are permitted to choose to fulfill non-exercising conditions but have not fulfilled during thepending period, the Company will treat the granted equity instruments as cancelled.

(5) Accounting treatment for share-based payment transactions involving the Companyand the shareholders or the actual controller of the CompanyFor share-based payment transactions involving the Company and the shareholders or theactual controller of the Company, the settlement enterprise and the enterprise receiving services(one under the Company while the other external to the Company) shall follow the requirementsbelow to conduct accounting treatment in the Company’s consolidated financial statements:

①For settlement enterprises settling through their own equity instruments, such share-basedpayment transaction will be treated as equity-settled share-based payment; except for this, suchshare-based payment transaction will be treated as cash-settled share-based payment.

Where a settlement enterprise is an investor of an enterprise receiving services, the fair valueof the equity instruments on the date of grant or the fair value of the liabilities that shall be assumedare recognised as long-term equity investment in the enterprise receiving services, at the same time,capital reserve (other capital reserve) or liabilities are recognised.

②Where an enterprise receiving services has no settlement obligations or grants its own equityinstruments to employees, such share-based payment transaction will be treated as equity-settledshare-based payment;

where an enterprise receiving services has settlement obligations and grants equity instruments(other than its own) to employees, such share-based payment transaction will be treated as cash-settled share-based payment.

For a share-based payment transaction occurring among enterprises under the Company wherethe enterprise receiving services and the settlement enterprise are not the same enterprise, suchshare-based payment transaction shall be recognised and measured in each of the respective

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

financial statements of the enterprise receiving services and the settlement enterprise by referenceto the above principles.

28. Preferred shares, perpetual bonds and other financial instruments

√Applicable □N/A

(1) Classification of financial liabilities and equity instruments

The Company classifies the financial instrument or its components as financial assets, financialliabilities or equity instruments at the initial recognition based on the contract terms of the issuedfinancial instrument and the economic substance it reflects, instead of only in legal form, andcombine the definition of financial assets, financial liabilities and equity instruments.

(2) Accounting treatment of preferred shares, perpetual bonds and other financialinstruments

The financial instruments issued by the Company are initially recognised and measured inaccordance with the financial instrument standards; thereafter, interest or dividends are accrued ordistributed on each balance sheet date and processed in accordance with relevant specific accountingstandards for enterprises. That is, on the basis of the classification of the financial instrument issued,the accounting treatment of interest expenses or dividend distributions of the instrument isdetermined. For financial instruments classified as equity instruments, interest expenses or dividenddistributions are treated as profit distribution of the Company, and repurchases and cancellationsare treated as changes in equity; for financial instruments classified as financial liabilities, interestexpenses or dividend distributions are in principle treated according to borrowing costs, and gainsor losses arising from repurchase or redemption are credited to profit or loss for the current period.

The transaction costs such as charges and commissions incurred by the Company when issuingfinancial instruments, if classified as debt instruments and measured at amortised cost, are includedin the initial measurement amount of the issued instrument; if classified as equity instruments, arededucted from equity.

29. Revenue

√Applicable □N/A

(1) General principle

The Company shall recognise revenue when the Company satisfies the performance obligationof the contract, that is, the customer obtains control of relevant goods or services.

When the contract contains two or more performance obligations, on the effective date of thecontract, the Company allocates the transaction price to each performance obligation based on thepercentage of respective unit price of a good or service guaranteed by each performance obligation,and the revenue is measured according to the transaction price allocated to each performanceobligation.

If one of the following conditions is fulfilled, the Company satisfies a performance obligationover time; otherwise, it satisfies a performance obligation at a point in time:

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

① When the customer simultaneously receives and consumes the benefits provided by theCompany when the Company performs its obligations under the contract.

② When the customer is able to control the commodity in progress in the course ofperformance by the Company under the contract.

③ The product produced by the Company under the contract is irreplaceable and the Companyhas the right to payment for performance completed to date during the term of the contract.

For a performance obligation satisfied over time, the Company shall recognise revenue overtime by measuring the process towards complete satisfaction of the performance obligation. Whenthe progress of performance cannot be reasonably determined, if the costs incurred by the Companyare expected to be recoverable, the revenue will be recognised to the extent of the costs incurreduntil the progress of performance can be reasonably determined.

For a performance obligation satisfied at a point in time, the Company shall recognise revenuewhen the customer obtains control of relevant goods or services. When determining whether thecustomer has obtained control of the goods and services, the Company will consider the followingindications:

① The Company has the current right to receive payment for the goods or services, which iswhen the customers have the current payment obligations for the goods.

② The Company has transferred the legal title of the goods to the client, which is when theclient possesses the legal title of the goods.

③ The Company has transferred the physical possession of goods to the customer, which iswhen the customer obtains physical possession of the goods.

④ The Company has transferred all of the substantial risks and rewards of ownership of thegoods to the customer, which is when the client obtains all of the substantial risks and rewards ofownership of the goods to the customer.

⑤ When the customer has accepted the goods or services.

⑥ When other information indicates that the customer has obtained control of the goods.

A contract asset represents the Company’s right to consideration in exchange for goods orservices that it has transferred to a customer when that right is conditioned on factors other thanpassage of time, for which the loss allowances for expected credit loss is recognised (see NoteIII.12(6)). The Company shall present any unconditional (i.e. if only the passage of time is required)rights to consideration separately as a receivable. A contract liability is the Company’s obligationto transfer goods or services to a customer for which the Company has received consideration (orthe amount is due) from the customer.

The contract assets and liabilities under the same contract shall be shown on a net basis. If thenet amount stated in debit balance, it will be presented under the items of “Contract assets” or “Othernon-current assets” according to its mobility; If the net amount stated in credit balance, it will bepresented under the items of “Contract liabilities” or “Other non-current liabilities” according to itsmobility.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(2) Specific method

The Company enters into sales contracts with customers. Revenue from sales is recognisedaccording to the invoiced amount upon the delivery of goods to the designated carrier or purchaseraccording to the orders received from customers; revenue from export sales is recognised mainly byadopting FOB mode according to custom declaration upon making declaration for goods andcompleting the export procedures.

The Company offers consistent credit terms to all types of customers, with no significantfinancing component involved.

The Company operates on a buyout sales model with distributors, and revenue recognitionunder the distribution model is consistent with the direct sales model.

For sales with sales return provisions, revenue recognition is limited to the amount expectednot to result in significant returns based on the cumulative revenue recognized. The Companyrecognizes liabilities based on the expected refund amount, while recognizing an asset for theexpected value of returned goods at the time of transfer, net of estimated costs (including the valueimpairment of returned goods).

30. Contract costs

√Applicable □N/A

Contract costs are either the incremental costs of obtaining a contract with a customer or thecosts to fulfil a contract with a customer.

Incremental costs of obtaining a contract are those costs that the Company incurs to obtain acontract with a customer that it would not have incurred if the contract had not been obtained e.g.an incremental sales commission. The Company recognises as an asset the incremental costs ofobtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining acontract are expensed when incurred.

If the costs to fulfil a contract with a customer are not within the scope of inventories or otheraccounting standards, the Company recognises an asset from the costs incurred to fulfil a contractonly if those costs meet all of the following criteria:

① The costs relate directly to an existing contract or to a specifically identifiable anticipatedcontract, including direct labour, direct materials, allocations of overheads (or similar costs) , coststhat are explicitly chargeable to the customer and other costs that are incurred only because theCompany entered into the contract;

② The costs generate or enhance resources of the Company that will be used in satisfying (orin continuing to satisfy) performance obligations in the future;

③ The costs are expected to be recovered.

Assets recognised for the incremental costs of obtaining a contract and assets recognised forthe costs to fulfil a contract (the “assets related to contract costs”) are amortised on a systematicbasis that is consistent with the transfer to the customer of the goods or services to which the assetsrelate and recognised in profit or loss for the current period.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

The Company recognises an impairment loss in profit or loss to the extent that the carryingamount of an asset related to contract costs exceeds:

① Remaining amount of consideration that the Company expects to receive in exchange forthe goods or services to which the asset relates;

② The cost estimated to be happened for the transfer of related goods or services.

The costs of contract performance recognised as assets, if the amortisation period is less thanone year or a normal operating cycle upon the initial recognition, are presented as “Inventories”item, and if the amortisation period is more than one year or a normal operating cycle upon theinitial recognition, are presented as “Other non-current assets” item.

The contract obtaining costs recognised as assets, if the amortisation period is less than oneyear or a normal operating cycle upon the initial recognition, are presented as “Other current assets”item, and if the amortisation period is more than one year or a normal operating cycle upon theinitial recognition, are presented as “Other non-current assets” item.

31. Government grants

√Applicable □N/A

A government grant shall be recognised only when the enterprise can comply with theconditions attaching to the grant and the enterprise can receive the grant.

If a government grant is in the form of a transfer of a monetary asset, the item is measured atthe amount received. If a government grant is in the form of a transfer of a non-monetary asset, theitem is measured at fair value, when fair value is not reliably determinable, the item is measured ata nominal amount of RMB1.

Government grant related to assets represents the government grant received for acquisitionand construction of long term assets, or forming long term assets in other ways. Except for these,all are government grant related to income.

Regarding to the government grant not clearly defined in the official documents and can formlong term assets, the part of government grant which can be referred to the value of the assets isclassified as government grant related to assets and the remaining part is government grant relatedto income. For the government grant that is difficult to distinguish, the entire government grant isclassified as government grant related to income.

The government grant related to assets is recognised as deferred income and would betransferred to profit or loss in reasonable and systematic manner within the period of use of therelevant assets. The government grant related to income which is used to compensate the relevantcosts or losses incurred should be recognised in the profit or loss for the current period; thegovernment grant related to income which is used to compensate the relevant costs or losses for thesubsequent period is recognised as deferred income and shall be recognised in profit or loss duringthe relevant cost or loss confirmation period. Government grants measured in nominal terms aredirectly included in the profit or loss for the current period. The Company has adopted a consistentapproach to the same or similar government grant business.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

The government grants related to daily activities are recognised as other gains in accordancewith the substance of economic business. Government grants that are not related to daily activitiesare recognised as non-operating income and expenses.

If the recognised government grants need to be refunded, adjust the carrying amount of assetswhen the carrying amount of assets is offset at the time of initial recognition; the balance of deferredincome is offset against the carrying amount of the balance of deferred income and the excess isrecognised in the profit or loss for the current period. Other circumstances, it is directly recognisedin the profit or loss for the current period.

32. Deferred tax assets and deferred tax liabilities

√Applicable □N/A

Income tax comprises of current tax and deferred tax. Current tax and deferred tax arerecognized in profit or loss except to the extent that they relate to transactions or items recognizeddirectly in equity and goodwill arising from a business combination.

Temporary differences arising from the difference between the carrying amount of an asset orliability and its tax base are recognized as deferred tax using the balance sheet liability method.

All the taxable temporary differences are recognized as deferred tax liabilities except for thoseincurred in the following transactions:

(1) Initial recognition of goodwill or initial recognition of an asset or liability in a transactionwhich is neither a business combination nor affects accounting profit or taxable profit (or deductibleloss) when the transaction occurs;

(2) The taxable temporary differences associated with investments in subsidiaries, associatesand joint ventures, and the Company is able to control the timing of the reversal of the temporarydifference and it is probable that the temporary difference will not reverse in the foreseeable future.

The Company recognizes a deferred tax asset for the carry forward of deductible temporarydifferences, deductible losses and tax credits to subsequent periods, to the extent that it is probablethat future taxable profits will be available against which the deductible temporary differences,deductible losses and tax credits can be utilized, except for those incurred in the followingtransactions:

(1) The transaction is neither a business combination nor affects accounting profit or taxableprofit (or deductible loss) when the transaction occurs (Except for single transactions resulting inequal temporary differences and deductible temporary differences arising from initially recognizedassets and liabilities);

(2) The deductible temporary differences associated with investments in subsidiaries,associates and joint ventures, the corresponding deferred tax asset is recognized when both of thefollowing conditions are satisfied: it is probable that the temporary difference will reverse in theforeseeable future and it is probable that taxable profits will be available in the future against whichthe temporary difference can be utilized.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at thetax rates that are expected to apply to the period when the asset is realized or the liability is settled,and their tax effect is reflected.At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. Ifit is probable that sufficient taxable profits will not be available in future periods to allow the benefitof the deferred tax asset to be utilized, the carrying amount of the deferred tax asset is reduced. Anysuch reduction in amount is reversed when it becomes probable that sufficient taxable profits willbe available.At the balance sheet date, deferred tax assets and deferred tax liabilities are presented as a netamount after offsetting when they simultaneously meet the following conditions:

(1) The legal right exists for the tax-paying entity within the Company to settle current incometax assets and current income tax liabilities on a net basis.

(2) Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxauthority on the same tax-paying entity within the Company.

33. Leases

(1) Identification of leases

At the inception of a contract, the Company, as a lessee or lessor, assesses if the customer in acontract has the right to obtain substantially all the economic benefits from use of the identifiedassets and the right to direct the use of the identified assets in the period of use. The Company wouldidentify that a contract is a lease, or contains a lease if a party of the contract transfers the right tocontrol the use of one or more identified assets for a period of time in exchange for consideration.

(2) The Company as the lessee

At the inception of a lease, the Company recognises all its leases as the right-of-use assets andlease liabilities, except for the short-term leases and the leases of low-value assets which are treatedwith a simplified approach.

For the accounting policies on the right-of-use assets, please refer to Note III. 34.

Lease liabilities are initially measured based on the present value of outstanding lease paymentat the inception of a lease, discounted using the interest rate implicit in the lease or the incrementalborrowing rate. Lease payment include: fixed payments and in-substance fixed payments, less anylease incentives (if there is a lease incentive) ; variable lease payment that are based on an index ora rate; the exercise price of a purchase option if the lessee is reasonably certain to exercise thatoption; payments of penalties for terminating the lease option, if the lease term reflects that thelessee will exercise that option; and amounts expected to be payable under the guaranteed residualvalue provided by the lessee. The Company shall subsequently calculate the interest expenses oflease liabilities over the lease term at the fixed periodic interest rate, and include it into the profit orloss for the current period. Variable lease payments not included in the measurement of leaseliabilities are charged to profit or loss in the period in which they actually arise.

Short-term lease

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Short-term lease refers to the lease that the lease term does not exceed 12 months from theinception of a lease, and the lease that includes the option of purchase is not a short-term lease.The Company recognises the amount of lease payments of short-term lease in the cost of therelated asset or the profit or loss for the current period, on a straight-line method over each periodof the lease term.Leases of low-value assetsA low-value asset lease refers to a lease where the value of a single leased asset is below RMB40,000 when it is a brand-new asset.

The Company recognised the lease payments for the leases of low-value assets in the relevantasset cost or the profit or loss for the current period on a straight-line basis over each period of thelease term.

Lease modification

When there is a lease modification and the following conditions are simultaneously met, theCompany accounts for the lease modification as a separate lease: ① the lease modification expandsthe scope of the lease by adding the right to use one or more leased assets; ② the additionalconsideration is equal to the separate price of the expanded scope of the lease as adjusted for thecircumstances of the contract.

If the lease modification is not accounted for as a separate lease, on the effective date of thelease modification,the Company reallocates the consideration of the modified contract, re-determines the lease term, and remeasures the lease liability based on the present value of themodified lease payment calculated at the revised discount rate.

If the lease modification results in a reduction in the scope of the lease or a shortened leaseterm, the Company reduces the carrying amount of the right-of-use assets accordingly, and includesthe gains or losses in relation to partial or complete termination of the lease in profit or loss for thecurrent period.

If other lease modifications result in the remeasurement of lease liabilities, the Companyadjusts the carrying amount of the right-of-use assets accordingly.

(3) The Company as the lessor

When the Company is the lessor, the lease that substantially transfers all the risks and rewardsrelated to the ownership of assets is recognised as a finance lease, and leases other than financeleases are recognised as operating leases.

Finance leases

In a financial lease, the Company uses the net investment in leases as the carrying amount offinance lease receivables at the inception of a lease. The net investment in leases is the sum of theunguaranteed residual value and the present value of the outstanding lease payment at the inceptionof a lease, discounted using the interest rate implicit in the lease. The Company, as the lessor,calculates and recognises the interest income over each period of the lease term at a fixed periodic

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

interest rate. Variable lease payments not included in the measurement of the lease liability, whichare obtained by the Company as a lessor, are recognised in profit or loss as incurred.The termination of recognition and impairment of financial lease receivables is accounted forin accordance with the provisions of “Accounting Standards for Business Enterprises No. 22 –Recognition and Measurement of Financial Instrument” and “Accounting Standards for BusinessEnterprises No. 23 – Transfer of Financial Assets”.

Operating leasesFor the rental of operating leases, the Company recognises it in the profit or loss for the currentperiod on a straight- line basis over each period of the lease term. The initial direct cost incurred inconnection with an operating lease shall be capitalised and amortised on the same basis forrecognition of rental income during the lease term, and shall be included in instalments in the profitor loss for the current period. The variable lease payment, which is obtained in connection with anoperating lease and not included in the lease receivables, shall be included in the profit and loss forthe current period when they actually occur.Lease modificationThe Company accounts for a modification to an operating lease as a new lease from theeffective date of the modification, considering any receipts in advance or lease receivable relatingto the original lease as part of the lease receivable for the new lease.When there is a modification to a finance lease and the following conditions are simultaneouslymet, the Company accounts for the modification as a separate lease:①the modification expands thescope of the lease by adding the right to use one or more leased assets;②the additional considerationis equal to the separate price of the expanded scope of the lease as adjusted for the circumstances ofthe contract.If the modification to finance lease is not accounted for as a separate lease, the Company willdeal with the modified lease under the following circumstances:①If the modification takes effecton the commencement date of the lease and the lease will be classified as an operating lease, theCompany will account for it as a new lease from the effective date of the lease modification, andtake the net lease investment before the effective date of the lease modification as the carryingamount of the leased assets;②If the modification takes effect on the commencement date of thelease and the lease will be classified as a finance lease, the Company will account for it in accordancewith the requirements on modifying or renegotiating a contract under the “Accounting Standardsfor Business Enterprises No. 22 –Recognition and Measurement of Financial Instrument”.

34. Right-of-use assets

√Applicable □N/A

(1) Recognition condition of right-of-use assets

The right-of-use assets of the Company are defined as the right of underlying assets in the leaseterm for the Company as a lessee.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Right-of-use assets are initially measured at cost as at the commencement date of the lease,which consists of: the amount of the initial measurement of the lease liability; any lease paymentsmade at or before the commencement date of the lease less any lease incentives received if any;initial direct expenses incurred by the Company as a lessee; costs to be incurred by the Company asa lessee in dismantling and removing a leased asset, restoring the site on which it is located orrestoring the leased assets to the condition required by the terms and conditions of the lease. TheCompany as a lessee recognises and measures the costs of demolition and restoration according to“Accounting Standards for Business Enterprises No.13 – Contingencies”, and subsequently adjustsfor any remeasurement of lease liability.

(2) Depreciation method of right-of-use assets

The Company calculates depreciation on a straight-line basis. Right-of-use assets in which theCompany as a lessee is reasonably certain to obtain ownership of the underlying leased assets at theend of the lease term are depreciated over the remaining useful life. Otherwise, right-of-use assetsare depreciated over the shorter of the lease term and its remaining useful life.

(3) For methods of impairment testing and provision for impairment for right-of-useassets, please refer to note III. 23.

35. Repurchase of shares

Prior to cancellation or transfer of shares repurchased, the Company recognises allexpenditures arising from share repurchase as cost of treasury shares in the treasury share account.Considerations and transaction fee incurred from the repurchase of shares shall lead to theelimination of owners’ equity and does not recognise profit or loss when shares of the Company arerepurchased, transferred or cancelled.

The difference between the actual amount received and the carrying amount of the treasurystock are recognised as capital reserve when the treasury stocks are transferred, if the capital reserveis not sufficient to be offset, the excess amount shall be recognised to offset surplus reserve andundistributed profit. When the treasury stocks are cancelled, the capital shall be eliminatedaccording to the number of shares and par value of cancellation shares, the difference between theactual amount received and the carrying amount of the treasury stock are recognised as capitalreserve, if the capital reserve is not sufficient to be offset, the excess amount shall be recognised tooffset surplus reserve and undistributed profit.

36. Significant accounting judgements and estimates

√Applicable □N/A

Significant accounting estimates and critical assumptions adopted by the Company arecontinually evaluated based on historical experience and other factors, including expectations offuture events that are believed to be reasonable. The significant accounting estimates and criticalassumptions that have a significant risk of causing a material adjustment to the carrying amounts ofassets and liabilities within the next accounting year are set out below:

(1) Classification of financial assets

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Significant judgements involved in determining the classification of financial assets includeanalysis of business mode and characteristics of the contractual cash flows.Factors considered by the Company in determining the business model of financial assetsmanagement for a group of financial assets include past experience on how financial asset’sperformance is evaluated and reported to key management personnel, how risks affecting theperformance of financial asset are assessed and managed and how managers of related businessesare compensated.

When assessing whether the contractual cash flows of financial assets are consistent with basiclending arrangement, the Company adopts the following significant judgements: whether the timedistribution or amounts of the principal within the duration may change due to early repayment andother reasons; whether the interest includes only the time value of money, credit risk, other basiclending risks and the consideration for cost and profit. For example, the amounts of early repaymentonly reflect principal unpaid, the interest based on principal unpaid and reasonable compensationpaid for early termination of a contract.

(2) Measurement of ECL for accounts receivables

The Company calculates ECL of accounts receivables according to their exposure at defaultand ECL rate, and determines ECL rate based on probability of default and loss given default. Whendetermining ECL rate, the Company adopts data like historical credit loss experience in combinationwith current situation and forward-looking information to adjust historical data. When consideringforward-looking information, the Company uses indicators including the risk of economic downturn,external market environment, technology environment and changes on customer situation. TheCompany periodically monitors and reviews assumptions relevant to the measurement of ECL.

(3) Impairment of non-current assets other than financial assets (other than goodwill)

On the balance sheet date, the Company assesses whether there are indications of impairmentfor non-current assets other than financial assets. For intangible assets that have not yet reached thestatus of use, impairment testing is conducted when there are indications of impairment, in additionto the annual impairment test. For non-current assets other than financial assets, impairment testingis conducted when there are indications that their carrying amounts may not be recoverable.Impairment is recognized when the carrying amount of an asset or asset group exceeds the higherof its recoverable amount, which is the net amount of fair value less disposal costs and the presentvalue of estimated future cash flows. The net amount of fair value less disposal costs is determinedby reference to the selling price in similar assets in fair transactions or observable market prices,minus incremental costs directly attributable to the asset disposal. In estimating the present value offuture cash flows, management estimates the expected future cash flows of the asset or asset groupand selects an appropriate discount rate to determine the present value of future cash flows.

(4) Impairment of goodwill

The Company evaluates whether goodwill is impaired at least once a year. This requires anestimate of the value in use of the asset groups to which the goodwill is allocated. In estimating the

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

value in use, the Company needs to estimate the future cash flows generated from the asset groupsand also to choose an appropriate discount rate in order to calculate the present value of the futurecash flows.

(5) Development costs

Determining the amounts to be capitalised requires the management to make assumptionsregarding the expected future cash flows generated from the relevant assets, discount rates to beapplied and the expected period of benefits.

(6) Deferred tax assets

The deferred income tax assets will be recognised for all unused tax losses to the extent that itis probable that there will be sufficient taxable profits against which the loss is utilised. This requiresthe management to exert numerous judgments to estimate the timing and amount of the futuretaxable profits so as to determine the amount of deferred income tax assets to be recognised withreference to the tax planning strategy.

(7) Revenue recognition

As stated in note III. 28, the Company makes the following significant accounting judgementsand estimates in terms of revenue recognition: identifying customer contracts; estimating therecoverability of the considerations that are entitled to be obtained by transferring goods tocustomers; identifying the performance obligation in the contract; estimating the variableconsideration in the contract and cumulative revenue recognised where it is highly probable that asignificant reversal therein will not occur when the relevant uncertainty is resolved; assessingwhether there is a significant financing component in the contract; estimating the individual sellingprice of the individual performance obligation in the contract, etc. The Company makes judgmentsprimarily based on historical experiences and works. Changes in these significant judgments andestimates may have significant impacts on the operating income, operating costs, and profit or lossof the current or subsequent periods.

(8) Determination of the fair value of unlisted equity investment

The fair value of unlisted equity investments represents the expected future cash flowsdiscounted at the prevailing discount rate of items with similar terms and risk characteristics. Itrequires the Company to estimate the expected future cash flows and discount rates, and thereforethere is uncertainty. Under limited circumstances, if the information used to determine the fair valueis insufficient, or the possible estimated amount of fair value is widely distributed, and costrepresents the best estimate of the fair value within such scope, the cost may represent an appropriateestimate of the fair value within such distribution scope.

37. Changes in significant accounting policies and accounting estimates and correction toaccounting errors

(1) Changes in significant accounting policies

□Applicable √N/A

(2) Changes in significant accounting estimates

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

□Applicable √N/A

IV. Taxation

1. Major taxes and their tax rates

√Applicable □N/A

Note 1: The Company and its subsidiaries that are incorporated in Shenzhen and Zhuhai shall paylocal education surcharges that are charged as 2% of the turnover tax payable. Other subsidiariesshall pay local education surcharges according to the tax rate as specified at their places ofincorporation on the basis of turnover tax payable.Note 2: The implementation of enterprise income tax rate is as follows:

Disclosure of taxpayers (if any) with different rates of enterprise income tax

√Applicable □N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Note 3: Companies registered in the British Virgin Islands and the Cayman Islands are not subjectto enterprise income tax.

2. Tax incentives

√Applicable □N/A

(1)Preferential value added tax

In accordance with the Announcement on Value Added Tax on Biological Products Sold byPharmaceutical Operation Enterprises issued by the State Administration of Taxation(Announcement of State Administration of Taxation 2012 No. 20) and the Notice of the Ministryof Finance, the General Administration of Customs, the State Administration of Taxation and theState Drug Administration on the Value-Added Tax Policies for Anti-Cancer Drugs (Caishui [2018]No. 47) , the biological products sold by the Company are subject to value added tax at 3% by thesimple approach.

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(2) Preferential enterprise income tax

The Company’s subsidiary, Joincare Haibin, has re-applied for the recognition as a high-techenterprise in this period. The Company and its subsidiary, Jiaozuo Joincare, have enjoyed thepreferential policies for high-tech enterprise income tax since 2022, for a period of three years. TheCompany’s subsidiaries, Taitai Pharmaceutical, Haibin Pharma, Xinxiang Haibin, and ShanghaiFrontier, have enjoyed the preferential policies for high-tech enterprise income tax starting from2023, for a period of three years.

Livzon Group and its subsidiaries, Livzon Group Limin Pharmaceutical ManufacturingFactory（丽珠集团利民制药厂）, Livzon Group Livzon Pharmaceutical Factory（丽珠集团丽珠制药厂）, Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.（珠海保税区丽珠合成制药有限公司）,Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd.（上海丽珠制药有限公司）, Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd.（四川光大制药有限公司）and Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.（丽珠集团福州福兴医药有限公司）have been entitled to the preferential income tax policies for high and new technologyenterprises since 2023 for a valid period of three years; Livzon Group Xinbeijiang PharmaceuticalManufacturing Inc.（丽珠集团新北江制药股份有限公司）and Zhuhai Livzon Diagnostics Inc.（珠海丽珠试剂股份有限公司）have re-applied for the recognition as a high-tech enterprise inthis period. Jiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.（焦作丽珠合成制药有限公司）and Shanghai Livzon Biotechnology Co., Ltd. （上海丽珠生物科技有限公司）have been entitled to the preferential income tax policies for high and new technology enterprisesince 2024 for a valid period of three years; Livzon Group (Ningxia) Pharmaceutical ManufacturingCo.,Ltd.（丽珠集团（宁夏）制药有限公司）was approved to enjoy the enterprise taxation preferenceof the Encouraged Industries in Western China.

The above-mentioned companies are applying a 15% enterprise income tax rate for this period.

In accordance with Article 27 of the enterprise income tax Law of the People's Republic ofChina and Article 86 of the Regulations for the Implementation of the enterprise income tax Lawof the People's Republic of China, the business of planting Chinese herbal medicines engaged bythe subsidiaries of the Livzon, Datong Livzon Qiyuan Medicine Co., Ltd. (大同丽珠芪源药材有限公司) and Longxi Livzon Shenyuan Medicine Co., Ltd. (陇西丽珠参源药材有限公司) areexempted from enterprise income tax.

According to the "Notice of the Ministry of Finance and the State Administration of Taxationon the Preferential Policies for enterprise income tax in the Hengqin Guangdong-Macao DeepCooperation Zone" (Cai Shui [2022] No. 19), enterprise income tax is levied at a reduced rate of15% for qualified industrial enterprises located in the Hengqin Guangdong-Macao DeepCooperation Zone. The Livzon Group’s subsidiaries, Zhuhai Lihe Medical Diagnostic Products Co.,Ltd. (珠海丽禾医疗诊断产品有限公司) and Zhuhai Livzon Chinese Medicine Modern

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Technology Co., Ltd. (珠海市丽珠中药现代化科技有限公司) meet the relevant conditions andare subjected to 15% enterprise income tax rate for the current period.

According to the tax preferential policy for small and micro enterprises, until 31 December2027, small and micro enterprises with annual taxable profits not exceeding RMB 3 million will besubject to a 5% enterprise income tax rate.According to Indonesia's tax policy for small and medium enterprises (SMEs), SMEs withtaxable income not exceeding 48 billion Indonesian Rupiah will be subject to an 11% enterpriseincome tax rate.

According to the Philippines' tax preferential policy for micro, small, and medium enterprises,enterprises with taxable revenue not exceeding 5 million Philippine pesos will be subject to a 15%tax rate.

3. Others

□Applicable √N/A

V. Notes to the items of consolidated financial statements

1.Cash and bank balances

√Applicable □N/A

Unit: Yuan Currency: RMB

Other descriptions:

①Other monetary funds are mainly deposits for investments, deposits for letter of credit andbank acceptance bills.

② Restricted funds relating to issuing letters of credit and bank acceptance bills in othermonetary funds were deducted from cash and cash equivalents in the cash flow statement. Apartfrom these restricted funds, there is no other charge, pledge or lock up on the cash at bank balancethat may limit its use, which is kept outside China and may have probable risks in its collection.Below are the details of the use of restricted monetary funds:

2. Financial assets held for trading

√Applicable □N/A

（1）Classification

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

Other descriptions:

√Applicable □N/A

①The equity instruments investments and debt instruments investments held by theCompany at the end of the period, which are listed and traded on exchanges such as Shenzhen,Hong Kong, and NASDAQ in the United States, have their fair value determined based on theclosing price of the last trading day of the reporting period.

② Derivative financial assets represent foreign currency forward contracts, futures contractsand gains from unexpired contracts measured at fair value which were recognised as financialassets as at the balance sheet date.

(2) No restrictive financial asset measured at fair value through profit or loss was included inthe closing balance.

(3) No hedging instruments in the closing balance and no hedging transactions have occurredduring the period.

3. Notes receivable

(1) Classified presentation of notes receivable

√Applicable □N/A

Unit: Yuan Currency: RMB

(2) Notes receivable pledged at period end

√Applicable □N/A

Unit: Yuan Currency: RMB

As at 30 June 2025, bank acceptance bills with carrying amount of RMB773,308,187.19 (31December 2024: RMB805,827,262.43) have been used as pledge for opening of bills.

(3) Bills endorsed or discounted to other parties but not yet expired at balance sheet date

√Applicable □N/A

Unit: Yuan Currency: RMB

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

In the current period, the Company discounted bank acceptance bills of RMB0.00 (previous year:

RMB 9,767,218.08);Factoring expenses incurred were RMB0.00 (previous year: RMB73,911.09).

(4) Disclosure by method of provision for bad debts

√Applicable □N/A

Unit: Yuan Currency: RMB

Provision for bad debts on individual item:

□Applicable √N/A

Provision for bad debt on a portfolio basis:

√Applicable □N/A

Provision for bad debts on portfolio basis: Bank acceptance bills

Explanation of bad debt provision calculated by combination:

□Applicable √N/A

Provision for bad debts is made according to the general model of expected credit losses

□Applicable √N/A

Explanation of significant changes in the book balance of notes receivable for which there werechanges in loss provisions during the current period:

□Applicable √N/A

(5) Provision for bad debts

□Applicable √N/A

Significant recovery or reversal of bad debt provision for the current period:

□Applicable √N/A

Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2025

(6) Actual write-off of notes receivable in the period

□Applicable √N/A

Other descriptions:

□Applicable √N/A

4. Accounts receivable

(1) Disclosed by aging

√Applicable □N/A

Unit: Yuan Currency: RMB