Securities code: 688098 Securities abbreviation: Shenlian Biotechnology Announcement No.: 2025-005

Shenlian Biopharmaceutical (Shanghai) Co., Ltd

Announcement on Overseas Investment and Related Party Transactions of Wholly-owned Subsidiaries

The board of directors and all directors of the company guarantee that there is no false record, misleading statement or material omission in the content of this announcement, and assume legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law.

Important Content Notes:

Name of investment target: Yangzhou Shizhiyuan Biotechnology Co., Ltd. (hereinafter referred to as "Shizhiyuan").

Overview of this foreign investment: The company focuses on the layout and development of cutting-edge biotechnology, on the one hand, it continues to deepen the field of animal protection, expand and strengthen the animal protection business, and on the other hand, it uses the company's advantages in cutting-edge biotechnology platform and vaccine preparation process to expand into the field of human biological products, and gradually develops into a world-class high-tech biological group company. The company intends to increase or borrow from its wholly-owned subsidiary, Shanghai Ben Tiancheng Biopharmaceutical Co., Ltd. (hereinafter referred to as "Ben Tiancheng"), and Ben Tiancheng will subscribe to the new registered capital of Shizhiyuan of RMB 37,339,056 at RMB 60 million, accounting for 20.48% of the equity of Shizhiyuan in this transaction.

This foreign investment involves a joint investment with a related party, Monitide (Shanghai) Biotechnology Co., Ltd. (hereinafter referred to as "Manitide"), which constitutes a related party transaction, but does not constitute a major asset restructuring as stipulated in the Administrative Measures for the Material Asset Restructuring of Listed Companies.

There are no major legal obstacles to the implementation of this transaction.

The transaction has been deliberated and approved by the second meeting of the fourth board of directors and the second meeting of the fourth board of supervisors of the company, and needs to be submitted to the general meeting of shareholders of the company for deliberation.

Related risk warning: Shizhiyuan is an enterprise dedicated to the development and production of innovative drugs such as AIDS monoclonal antibody and anti-allergic monoclonal antibody, innovative drugs have the characteristics of large investment, long cycle, high income and high risk, and the return on investment cycle is long, and may face the impact of many factors such as macroeconomic environment, pharmaceutical industry development and related industrial policies, market demand changes in the future, therefore, there is uncertainty about the future operation and income of Shizhiyuan. The company's foreign investment income and expansion of human drug business may be less than expected risks, please pay attention to the investment risks.

I. Overview of Foreign Investment and Related Party Transactions

(1) Basic information

On February 5, 2025, the company held the second meeting of the fourth board of directors and the second meeting of the fourth board of supervisors of the company, at which the meeting deliberated and passed the "Proposal on Foreign Investment and Related Party Transactions of Wholly-owned Subsidiaries", and agreed that the company would increase or borrow money from its wholly-owned subsidiary, Ben Tiancheng, and Ben Tiancheng would invest 60 million yuan to increase the capital of Shizhiyuan, and after the completion of the capital increase, the company indirectly held 20.48% of the equity of Shizhiyuan through this Tiancheng, and Shizhiyuan became a shareholding company of the company. For the synthetic peptide and peptide drugs to be developed in the future, the company will provide exclusive and exclusive contract production services for it, and if the stock solution or preparation of other drugs (including monoclonal antibodies) of the world is outsourced at that time, the company should be given priority to provide process scale-up and contract production services.

Prior to this transaction, Manipeptide held 100% equity of Shizhiyuan. Ms. Lin Shujing, the former director of the company, served as a director of manitide, Ms. Lin Shujing has been leaving the company for less than 12 months, according to the provisions of the "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules" (hereinafter referred to as the "Listing Rules"), manitide is a related party of the company, and this transaction involves joint investment with related party manitide, constituting a connected transaction.

In addition to the above-mentioned related party transactions, in the past 12 months, the company has not had related party transactions with the same related person or with different related parties related to this transaction category, the amount of the above related party transactions exceeds 30 million yuan, and accounts for more than 1% of the company's latest audited total assets, according to the "Listing Rules" and the company's "related party transaction management system" and other relevant regulations, the related party transactions still need to be submitted to the general meeting of shareholders for deliberation.

(2) Decision-making approvals and agreement signing

1. On February 5, 2025, the company held the second meeting of the fourth board of directors and the second meeting of the fourth board of supervisors to deliberate and pass the "Proposal on Foreign Investment and Related Party Transactions of Wholly-owned Subsidiaries".

2. Shizhiyuan held a shareholders' meeting on January 24, 2025 and agreed to this capital increase.

3. On February 5, 2025, Tiancheng, Manitide and Shizhiyuan signed the "Investment Agreement on Yangzhou Shizhiyuan Biotechnology Co., Ltd."

(3) Other explanations

This transaction does not constitute a major asset restructuring as stipulated in the Administrative Measures for the Material Asset Restructuring of Listed Companies, and there is no major legal obstacle to the implementation of this transaction.

2. Basic information of related persons

(1) Explanation of the affiliation

Ms. Lin Shujing, a former director of the Company, served as a director of Manitide, and Ms. Lin Shujing has been a director of the Company for less than 12 months, and according to the relevant provisions of Item 7 of Rule 15.1(15) of the Listing Rules, Manitide is an affiliated legal person of the Company.

(2) Basic information of related parties

Basic information about related parties

Name: Manitide (Shanghai) Biotechnology Co., Ltd

Company Type: Limited Liability Company (Foreign Investment, Non-Sole Proprietorship)

Legal representative: Ruan Niansheng

The registered capital is 150 million RMB

Date of establishment June 19, 2017

Registered address: Room 2119, Building 5, No. 215, Union North Road, Fengxian District, Shanghai

Technology development, technical consulting, and technical services in the field of biotechnology and medical technology

business, self-owned technology transfer (investment in human stem cells, genetic diagnosis and treatment technology

development and application); Chemical products (excluding hazardous chemicals, controlled chemicals,

Fireworks, precursor chemicals, civil explosives), first-class medical devices,

Business scope Wholesale and import of computers, software and auxiliary equipment, laboratory equipment, instruments and meters

Export, commission agency (except auctions), and provide related supporting services (not involved

State-run trade management commodities, involving quota and license management commodities, are available by country

the relevant regulations to handle the application; If it involves administrative licensing, it shall operate with a license). [According to law.]

For projects subject to approval, business activities can only be carried out after approval by relevant departments]

Major shareholders: Shanghai World Trade Group Co., Ltd. (68.96%), Biologics Greater China Holding Co., Ltd. (23.20%), etc.

The latest financial data (unaudited): As of December 31, 2024, the total assets of monitide are 272.3594 million yuan, the net assets are 129.675 million yuan, and the operating income of monitide in 2024 is 0.0 million yuan, and the net profit is -1.6885 million yuan.

Except for this joint investment in Shizhiyuan, the company has no other relationship with manitide in terms of property rights, business, assets, creditor's rights and debts. Manipeptide has a good credit status, and there is no dishonesty in the execution and other dishonest situations, and its credit status does not affect this joint investment.

3. Basic information on the subject matter of related party transactions

(1) The name and category of the subject of the transaction

The subject of this transaction is 20.48% of the equity of Shizhiyuan, which was obtained by Tiancheng through the subscription of new registered capital through monetary contribution, and the transaction type belongs to "foreign investment" in the Listing Rules.

(2) The basic information of the subject matter of the transaction

As an enterprise focusing on the development and production of innovative drugs, Shizhiyuan has always focused on patients with major diseases whose medical needs have not been met, and has made every effort to explore disease solutions. The company has built an advanced vertical integration platform for monoclonal antibodies, covering all aspects from precise cell selection, pilot and efficient production, to smooth clinical approval, and with innovative proprietary technology, it has made concerted efforts to achieve seamless connection and efficient advancement of antibody R&D and product development. In addition, Shizhiyuan also actively cooperates with external scientific research units to dig deep into the potential of disease targets, and with the help of its self-developed defucosylation technology, it has finely optimized the cell-dependent poisoning effect, targeted efforts, deeply improved existing products, solved the key problems of poor efficacy of some monoclonal antibodies, and always insisted on promoting the development of original drugs to a new height.

Shizhiyuan holds the commercialization rights of three new drugs under development in Chinese mainland, namely the innovative anti-allergy Anti-IgE monoclonal antibody drug (UB-221), the HIV treatment monoclonal antibody drug (UB-421) and the anti-herpes simplex virus monoclonal antibody drug (UB-621). Three new drugs have been studied in different stages in many countries or regions. At present, three new drugs in China have obtained Phase II or Phase III clinical approvals, among which UB-221 has fully started Phase II clinical trials, and UB-421 and UB-621 will flexibly adjust the domestic clinical strategy and implementation progress according to the company's strategy and global clinical data.

The basic information and related financial data of the origin of the world are as follows:

Basic information about the subject matter of the transaction

Name: Yangzhou Shizhiyuan Biotechnology Co., Ltd

Company Type: Limited Liability Company (Wholly Foreign-Invested Enterprise Legal Person-Owned)

Legal representative: Li Min

The registered capital is RMB 145 million

Date of Establishment: October 9, 2020

Registered address: No. 2, Health 1st Road, Hanjiang District, Yangzhou City, Jiangsu Province

Licensed Items: Pharmaceutical Production; contract production of drugs; pharmaceutical wholesale; import and export of medicines; medicine

Business Scope: Retail; Inspection and testing services (projects subject to approval in accordance with the law shall be approved by relevant departments.)

business activities can be carried out, and the specific business projects are subject to the approval results) General projects: Sheng

technology research and development of physical and chemical products; R&D and application of cell technology; Technical services, technology development

development, technical consultation, technology exchange, technology transfer, technology promotion; Medical research and trials

Development (except for projects subject to approval in accordance with the law, independently carry out business activities with a business license in accordance with the law.)

moving)

Financial data for the latest year and the first period (audited): as of December 31, 2023, the total assets of Shizhiyuan are 155.4784 million yuan, the net assets are 7.4309 million yuan, the operating income of Shizhiyuan in 2023 is 347,600 yuan, and the net profit is -2.1026 million yuan, and as of October 31, 2024, the total assets of Shizhiyuan are 138.0915 million yuan and the net assets are 129.8866 million yuan. From January to October 2024, Shizhiyuan achieved an operating income of 164,300 yuan and a net profit of -12.5442 million yuan.

Note: The basic information of the above transaction targets comes from the information provided by the National Enterprise Credit Information Publicity System and Shizhiyuan, and the above main financial data of "December 31, 2023/2023" and "October 31, 2024/January-October 2024" have been audited by Dahua Certified Public Accountants (Special General Partnership).

(3) The proportion of capital contribution before and after the transaction

Pre-Transaction Shareholding Structure Post-Transaction Shareholding Structure

Serial No. Name of Shareholder Subscribed Capital Contribution Subscribed Capital Contribution

(RMB/RMB) Shareholding Ratio (RMB/RMB) Shareholding Ratio

1 Manipeptide 14,500.00 100.00% 14,500.0000 79.52%

2 Ben Tiancheng - - 3,733.9056 20.48%

Total 1,000.00 100.00% 18,233.9056 100.00%

(4) Other explanations

As of the disclosure date of this announcement, the property rights of Shizhiyuan are clear, there is no mortgage, pledge and any other restrictions on transfer, and there are no pending or foreseeable major litigation, arbitration and administrative punishment cases. Shizhiyuan's credit status is good, and there is no dishonesty listed as a dishonest person subject to execution and other dishonest situations, and its credit status does not affect the company's capital increase.

Fourth, the pricing of the foreign investment and related party transactions

(1) Pricing basis

Shizhiyuan holds the commercialization rights of three new drugs under development in Chinese mainland, namely the innovative anti-allergy Anti-IgE monoclonal antibody drug (UB-221), the HIV treatment monoclonal antibody drug (UB-421) and the anti-herpes simplex virus monoclonal antibody drug (UB-621). The three new drugs have completed different stages of research in many countries or regions, and the three innovative drugs have good market potential. At present, UB-221 has been fully clinically launched in China

In the Phase II trial, UB-421 and UB-621 will flexibly adjust the domestic clinical strategy and implementation schedule based on the company's strategy and global clinical data.

The company hired Jiangsu Tianjian Huachen Asset Appraisal Co., Ltd., an appraisal agency that meets the provisions of the Securities Law of the People's Republic of China, to evaluate the value of all the equity of the shareholders of Shizhiyuan, and issued a Huachen appraisal report

(2024) No. 0299 Asset Appraisal Report. As of the appraisal base date, the appraisal value of all the equity of the shareholders of Shizhiyuan was 233.3204 million yuan, which was 103.4338 million yuan higher than the book value of net assets of 129.8866 million yuan, with an appreciation rate of 79.63%. The price of this capital increase is based on the evaluation report on October 31, 2024, and the value of the target company is determined to be 233.30 million yuan after negotiation by all parties.

(2) Other explanations

This investment is made by Tiancheng in the form of monetary capital, and enjoys the corresponding equity share according to the amount of capital contribution, and there is no harm to the interests of the company and all shareholders.

5. The main content and performance arrangements of the foreign investment and related party transaction agreement

(1) The subject of the agreement

Target company: The source of the world

Existing shareholders of the target company ("controlling shareholders"): monitide

Investor: Ben Tiancheng

(2) Arrangements for this transaction

Shizhiyuan agreed to increase its registered capital from RMB145 million to RMB182,339,056 after the signing date of the capital increase agreement. The parties agreed that, based on the pre-transaction valuation of RMB233 million, the investors will subscribe for a total of RMB37,339,056 of the new registered capital of Origins at a price of RMB60 million (the "Capital Increase"), accounting for 20.48% of the equity of Origin.

(3) The use of the capital increase

The target company and its controlling shareholder unanimously agreed to use all the capital increase funds for the research and development and clinical trials of innovative drugs such as innovative anti-allergy anti-IgE monoclonal antibody drug (UB-221), HIV treatment monoclonal antibody drug (UB-421) and herpesvirus monoclonal antibody drug (UB-621). The controlling shareholder of the target company shall be responsible for raising the insufficient funds required for the R&D and clinical trials of innovative drugs.

(4) Payment of capital increase

The investor plans to invest 60 million yuan to pay in stages to the target company according to the relevant capital needs of the target company: (1) After the effective date of this agreement and before the end of 2025, the capital increase will be paid

$20 million, of which $10 million will be paid within 7 working days after the agreement comes into effect and the conditions precedent agreed in the agreement are met; (2) to pay a capital increase of $20 million by the end of 2026; (3) Pay a capital increase of RMB 20 million by the end of 2027.

(5) The special rights of the investor

1. Priority of commissioned production

Based on the company's leading advantages in technology and production in the field of synthetic peptides, for the synthetic peptides and peptide drugs to be carried out by Shizhiyuan in the future, the controlling shareholder and the target company exclusively and exclusively entrust the company to provide the process scale-up, quality control, testing method establishment, clinical sample production and commercial production services of relevant peptide raw materials and peptide drugs for the project, and the target company will sign a separate entrustment agreement with the investor or its affiliates.

For the production of stock solutions or preparations of other drugs (including monoclonal antibodies) of the target company, if the target company implements outsourced production at that time, the target company shall give priority to entrusting the investor or its affiliates to provide process scale-up and commissioned production services for the entrusted manufacturer or the target company, and the target company shall sign a separate entrusted service agreement with the investor or other entities designated by the target company.

2. Pre-emptive subscription and pre-emptive acquisition rights

After the effective date of this agreement, if the target company increases its registered capital or issues shares again, the investor will have the right to enjoy the right of first refusal according to its equity ratio. In the event of a merger or acquisition of the target company, the investor shall have the right of first refusal under the terms and conditions of the same price.

3. More preferential rights

If any subsequent investor of the target company enjoys any priority or privilege (hereinafter referred to as the "more favorable rights") in accordance with any documents (including articles of association, investment agreement, shareholders' agreement, etc.) after this transaction, the investor will automatically enjoy more favorable rights in respect of the equity held by the target company.

4. Corporate governance

After the completion of this capital increase, the board of directors of Shizhiyuan consists of 3 directors, of which Ben Tiancheng has the right to nominate 1 director. The shareholders' meeting, the board of directors and the board of supervisors (boards) shall exercise their functions and powers in accordance with laws and regulations and the articles of association of the company.

6. The necessity of this outbound investment and related party transaction and the impact on the listed company

(1) The necessity of related party transactions

The company continues to expand the field of human medicine, especially in the field of preventive and therapeutic drugs with long-term market potential, by taking advantage of its advantages in the operation and management of the biomedical field, cutting-edge biotechnology and vaccine production technology.

(2) The impact of related party transactions

With the vision of "building a world-class high-tech biological company", the company continues to deepen the biomedical industry, and has formed a world-leading technology platform such as peptide synthesis, nucleic acid (mRNA) vaccine, genetic engineering and so on through years of R&D and innovation. Jointly promote the R&D and marketing of a number of innovative drugs, and strive to achieve win-win cooperation.

The funds come from the company's own funds or self-raised funds, which will not have a significant adverse impact on the company's financial situation and operating results in the short term, and are expected to have a positive impact on the company's business development in the long term, which is in line with the company's development strategy and does not harm the interests of all shareholders.

7. Risk Warning of the Outbound Investment and Related Party Transaction

Shizhiyuan is an enterprise dedicated to the development and production of innovative drugs, its innovative drugs are in the clinical research stage, innovative drug research and development has the characteristics of large investment, long cycle, high returns, high risk, long return on investment cycle, the future may face the impact of macroeconomic environment, pharmaceutical industry development and related industrial policies, market demand changes, enterprise management and other factors, therefore, the future operation and income of Shizhiyuan is uncertain, and the company's foreign investment income may be less than expected risk. The company will pay close attention to the operation and management of Shizhiyuan, do a good job in post-investment management, try to reduce investment risks, and strictly comply with the relevant provisions of information disclosure to fulfill the obligation of information disclosure in a timely manner, please pay attention to investment risks.

8. Deliberation procedures for this outbound investment and related party transaction

(1) Deliberations at the special meeting of independent directors

On January 22, 2025, the company held the first special meeting of the independent directors of the fourth board of directors, and deliberated and passed the "Proposal on Foreign Investment and Related Party Transactions of Wholly-owned Subsidiaries" with 3 votes in favor, 0 votes against and 0 abstentions, and all independent directors agreed that the company's wholly-owned subsidiary, Ben Tiancheng, and the company's related party monitide jointly invested in Shizhiyuan, which is in line with the company's long-term development strategy, and the company and related parties should contribute according to their respective capital contributions

Enjoy the corresponding equity share, and there is no harm to the interests of the company and shareholders. Therefore, all independent directors agreed to the company's foreign investment and related party transactions, and submitted this proposal to the board of directors of the company for deliberation.

(2) Deliberations of the Board of Directors

On February 5, 2025, the Company convened the second meeting of the fourth session of the Board of Directors and deliberated and passed the "Proposal on Overseas Investment and Related Party Transactions of Wholly-owned Subsidiaries" with 9 votes of unanimity, 0 votes against and 0 abstentions. The board of directors believes that the company's wholly-owned subsidiary, Ben Tiancheng, and the company's related party monitide jointly invest in Shizhiyuan, which is the embodiment of the company's use of advanced biomedical technology advantages and production process advantages to extend to human drugs, in line with the company's long-term development strategy, will not have a significant adverse impact on the company's cash flow and operating performance, the review and decision-making procedures of the foreign investment and related party transactions are legal and compliant, and there is no harm to the interests of the company and shareholders, and submit this proposal to the company's general meeting of shareholders for deliberation.

(3) The deliberations of the board of supervisors

On February 5, 2025, the Company held the second meeting of the fourth session of the Board of Supervisors, and deliberated and passed the "Proposal on Foreign Investment and Related Party Transactions of Wholly-owned Subsidiaries" with 3 votes in favor, 0 votes against and 0 abstentions. The Board of Supervisors believes that the company's wholly-owned subsidiary, Ben Tiancheng, and the company's related party manipeptide jointly invested in Shizhiyuan, which is in line with the company's long-term development strategy and will not have a significant adverse impact on the company's cash flow and operating performance.

The transaction is subject to the approval of the company's general meeting of shareholders.

The announcement is hereby made.

Board of Directors of Shenlian Biopharmaceutical (Shanghai) Co., Ltd

February 6, 2025