Shanghai Haohai Biotechnology Co., Ltd

2025 action plan of "improving quality, efficiency and return".

In order to actively practice the concept of investor-oriented and implement the Shanghai Stock Exchange's "Initiative on Carrying out the Special Action of 'Improving Quality, Efficiency and Returning' of Science and Technology Innovation Board Companies", Shanghai Haohai Biotechnology Co., Ltd

The Company (hereinafter referred to as the "Company") issued the "Shanghai Haohai Biotechnology Co., Ltd." on March 9, 2024

Co., Ltd.'s 2024 action plan of "improving quality and efficiency and emphasizing returns", and released the 2024 semi-annual evaluation report on time. In 2024, the company actively implemented the action plan, continued to focus on its main business, enhance its innovation capabilities, increase investor returns, and improve corporate governance. In order to continue the achievements of the 2024 action plan, further improve the company's quality, and help boost confidence, stabilize the capital market and develop the economy with high quality, the company has formulated the "Shanghai Haohai Biotechnology Co., Ltd. 2025 "Quality and Efficiency Improvement and Return" Action Plan", and conducted an annual evaluation of the 2024 "Quality and Efficiency Improvement and Return" Action Plan. The plan was deliberated and approved by the thirtieth meeting of the fifth board of directors of the company on March 21, 2025. The details are as follows:

1. Deepen the core business and demonstrate stable development with resilience

2024 is a crucial year for China to achieve the goals and tasks of the 14th Five-Year Plan. In the pharmaceutical and medical device industry, the continuous deepening of the linkage reform of medical insurance, medical treatment and pharmaceutical "three medicines", especially the reform of medical insurance payment methods and the normalization of the centralized procurement and expansion of drugs and high-value consumables, has had a great impact on the company's related business development. In the face of environmental changes and challenges, the company actively responded to the changes and challenges by accelerating the construction of innovative product lines, improving the quality of products and services, broadening marketing channels, and increasing market share, so that the overall business development was stable and improving, and showed resilience in the complex economic environment. In 2024, the company will achieve operating income of 2697.6579 million yuan, an increase of 43.6188 million yuan over the previous year, a year-on-year increase of 1.64%.

In the field of medical cosmetology and wound care, the company has formed a business matrix covering four categories: hyaluronic acid, epidermal repair genetic engineering preparations, radio frequency and laser equipment, and can meet the all-round medical aesthetic consumption needs of end customers for epidermis, dermis and subcutaneous tissues through a multi-level business layout. In July 2024, the world's first organic cross-linked hyaluronic acid product "Haimei Yuebai", independently developed by Shanghai Qisheng Biologics Co., Ltd., a wholly-owned subsidiary of the company, was approved by the National Medical Products Administration, further enriching the company's hyaluronic acid product line and forming a fourth-generation hyaluronic acid product portfolio of "Haiwei", "Jiaolan", "Haimei" and "Haimei Yuebai". In 2024, the total operating income of medical cosmetology and wound care products will be 1195.1148 million yuan, compared with the previous year

an increase of 138.2543 million yuan, or 13.08%. Among them, the sales revenue of hyaluronic acid products was 741.5144 million yuan, an increase of 139.7904 million yuan or 23.23% compared with the previous year. The third-generation hyaluronic acid product "Haimei" will continue to increase rapidly in 2024, contributing a considerable increase to the revenue of the hyaluronic acid product line, and also driving a significant increase in the revenue of the first-generation and second-generation hyaluronic acid products. The fourth-generation hyaluronic acid product "Haimei Yuebai", which was successfully launched at the end of 2024, has also begun to contribute to the revenue increment.

In the field of ophthalmology, the company focuses on the leading technology in the global ophthalmology field, and is committed to accelerating the localization process of China's ophthalmology industry through independent R&D and investment integration, and becoming an internationally renowned manufacturer of comprehensive ophthalmic products. The company's ophthalmology business has covered the fields of cataract treatment, myopia prevention and control, refractive correction and ocular surface therapy, and has laid out a number of products under development in the field of fundus disease treatment. The company is the largest manufacturer of ophthalmic viscoelastic products in China. According to the research report of Punctuation Medicine, the company's ophthalmic viscoelastic products

The market share in 2023 increased from 44.52% in 2022 to 46.98%, ranking in China for 17 consecutive years

The first place in field share. The company's 5 brands of intraocular lens products and 4 brands of ophthalmic viscoelastic products were all selected in the 2023 national centralized procurement of medical consumables, and will be gradually implemented in 2024. The company's bid-winning intraocular lens products have achieved a certain increase in sales, especially the mid-end prefabricated aspheric products and high-end regional refractive bifocal products, whose sales increased by 137% and 40% respectively compared with the previous year, but due to the sharp decline in the price of the selected intraocular lens products with volume procurement, the sales revenue of the company's intraocular lens products in this year still decreased year-on-year.

In the field of orthopedics, the company is the only company in China that has a full range of orthopedic sodium hyaluronate injection products and joint cavity viscoelastic supplement products registered as Class III medical devices. The company is the largest manufacturer of viscoelastic supplements for orthopedic joint cavity in China. According to the research report of Punctuation Pharma, in 2023, the company has ranked first in the market share of bone and joint cavity injection products in China for ten consecutive years, and the market share has increased significantly from 46.54% in 2022 to 50.44%. In 2024, the operating income of the company's orthopedic products will be 456.5311 million yuan, a decrease of 19.5565 million yuan, or 4.11%, from the previous year, mainly due to the decrease in the sales price of the company's sodium hyaluronate injection products in Zhejiang and other places in 2024.

According to the research report of Punctuation Pharmaceutical, in 2023, the Chinese market share of the surgical anti-adhesion products produced by the company will be 28.82%, ranking first in the market for 17 consecutive years. In the field of hemostasis, the company owns medical collagen

Sponge, porcine fibrin adhesive products, which can efficiently achieve surgical hemostasis. In 2024, the company's anti-adhesion and hemostatic products will achieve a total of 145.6416 million yuan in main business income, which is basically the same as that of the previous year.

In 2025, the company will continue to focus on its existing four business areas, consolidate and improve its business competitiveness by leveraging the advantages of its existing product portfolio, integrating its existing resources, expanding sales channels, and promoting the development and registration of high-end products.

In the field of medical cosmetology and wound care, the company will make use of the differentiated efficacy and price positioning of the four generations of hyaluronic acid "Haiwei", "Jiaolan", "Haimei" and "Haimei Yuebai", and continue to focus on building the brand image of "Haimei series" high-end hyaluronic acid products through a wide range of online and offline sales networks, as well as strengthen the product marketing of the new indication of "Jiaolan" hyaluronic acid product "Jiaolan Lip", and assist downstream medical aesthetic institutions to develop unique injection solutions using this indication. Further expand market penetration, increase the overall market share of the company's hyaluronic acid series products, and strengthen the company's leading position in the domestic hyaluronic acid brand for injection. The company will continue to promote the clinical trials of important R&D projects such as painless cross-linked hyaluronic acid as planned. The company will focus on the promotion of MediMed Gold Microneedling, a phased radiofrequency skin treatment platform for EndyMed 3Med, which has become a popular choice in the field of anti-aging and skin rejuvenation due to its advanced technology, remarkable results, high safety and comfort, and utilizes EndyMed's radiofrequency skin beautifying device in combination with sodium hyaluronate gel products to achieve a 1+1 >2 sales overlay. At the same time, the company will provide customers with all-round assistance through "training, marketing, and self-media", and will continue to adhere to standardized and professional development under the new situation of industry compliance.

In the field of ophthalmology, the company will continue to uphold the development strategy of improving quality and moving towards a new one, actively promote the research and development and registration of high-end products, and promote the optimization and upgrading of product portfolio. In 2025, the company expects to have a number of new products approved, among them, hydrophobic molded astigmatism corrected aspheric intraocular lenses, pre-assembled hydrophobic molded astigmatism corrected non

Spherical intraocular lenses were approved in January and February 2025, respectively. These new products will be in the same form as existing products

into a strong product portfolio to achieve the overall upgrade and optimization of the intraocular lens product line. In addition, the company will continue to promote the clinical trials of important R&D projects such as the second-generation aqueous humor permeable PRL products, new ultra-high oxygen permeable orthokeratology lens products, and continuous vision intraocular lenses. In terms of marketing, the company will focus on the changes in the industry policy environment, especially the follow-up implementation trend of the national intraocular lens centralized procurement, and make use of the company's multi-brand full product line advantages, channel advantages, and cost advantages to adjust the supply chain and sales strategy in a timely manner, and actively respond to the new marketing pattern in the era after the volume procurement. In the field of myopia prevention and control, the company will continue to deepen

Exploring the integrated marketing and brand operation of the product portfolios of "MyOK", "Hiline", "Tongxiang" and "Tongliang", according to the changes in the consumer market, accelerate the market penetration of the product line of orthokeratology lenses, stabilize the market share of the old brand "Hengtai Hiline", and expand the market share of the new brands "MyOK" and "Tongxiang". In the field of fundus therapy, the company will actively promote the registration and application of innovative biogel products for intraocular filling.

In addition, the company will continue to explore its main business areas, look for advanced technologies and excellent products, and take opportunities to increase product reserves and promote the company's high-quality development by means of technology introduction or investment cooperation.

Second, pay attention to the quality of operation, to achieve efficiency and efficiency

The company continues to strengthen its main business, continuously improves the quality and profitability of its operations through a series of refined management and innovative measures, and creates long-term and stable returns for investors. The company reduces operating costs and improves resource utilization efficiency by optimizing production processes, strengthening cost control, deepening technological innovation and improving supply chain management. At the same time, the company actively expands market share, optimizes product structure, promotes business diversification, and further enhances its core competitiveness. In addition, the company realizes the efficient use of assets and the improvement of investment returns through rational allocation of assets, optimization of capital structure and prudent investment activities.

1. Lean asset management to improve the efficiency of asset operation

In recent years, the company has actively strengthened the management of current assets and strengthened the management of inventory and accounts receivable. In terms of accounts receivable, we will increase collection efforts, continue to monitor the collection of overdue accounts receivable, and reduce or stop credit sales for customers with credit risks, so as to further increase cash inflow from operating activities. At the end of 2024, the balance of the Company's accounts receivable was approximately RMB316.1104 million, a decrease of RMB11.7509 million from the previous year, a year-on-year decrease

3.58%, and the accounts receivable turnover ratio in 2024 increased to 8.38 times from 7.48 times in 2023. this

In addition, the company continues to monitor the market sales and production of each product to maintain a reasonable inventory level. At the end of 2024, the Company's inventory balance was approximately RMB490.651 million, a decrease of RMB35.5227 million or 6.75% year-on-year from the previous year, and the inventory turnover ratio in 2024 increased from 1.55 times in 2023 to 1.60 times.

Since its establishment, the company has maintained a high level of profitability every year, and the operating cash flow has continued to be positive. In order to prevent the risk of uncertainty in business operations, the company continues to maintain high cash reserves, and by the end of 2024,

and pay more attention to investor returns to achieve a balance between capital security and returns.

In recent years, through a series of measures, the company's total asset turnover ratio has increased steadily every year, and the total asset turnover ratio in 2024 has increased from 0.21 times in 2020 to 0.38 times, and the asset operation efficiency has been steadily improved. In 2025, the company will continue to deepen fine management, further optimize asset allocation, and inject strong impetus into high-quality development.

2. Precision marketing management to improve sales returns

Over the years, the company has focused on the construction of a professional academic promotion system, attracted and cultivated a group of professionals with both clinical experience and marketing experience, with advanced technical strength, strict product quality management, professional marketing services and management team, through the dealer and direct sales network, the company has established a long-term and stable business partnership with thousands of secondary hospitals and above in the country, as well as major large-scale private medical beauty chain hospitals in the country. In 2024, the company's sales to the top five customers will be about 248.0081 million yuan, accounting for only 9.21% of the total annual sales, and there is no dependence on a few large customers.

In 2024, against the backdrop of a stable and improving domestic economic environment, the company's net profit margin attributable to the parent company will remain stable, although slightly adjusted from 15.68% in 2023, it will still reach 15.59%, demonstrating the company's resilience and sustained profitability in a complex market environment. In 2025, the company will continue to focus on its core business, drive continuous improvement in sales returns, and create greater value for shareholders.

3. Scientific leverage allocation to optimize capital efficiency

As of March 20, 2025, according to the disclosed pharmaceutical manufacturing industry (new SFC industry classification) public

According to the company's annual report, the median asset-liability ratio of the pharmaceutical manufacturing industry is 31.29%, and the company's asset-liability ratio remains at a low level of 16.91% in 2024 based on the principle of prudent operation. But from a longitudinal point of view, in recent years, leverage allocation

The debt-to-asset ratio has steadily increased year by year, with the debt-to-asset ratio at 15.31% in 2023 and 14.36% in 2022.

The Company has carefully evaluated the risks and benefits, and on December 31, 2024, the Company and its subsidiary, Qisheng Biotech

An additional credit loan of 111.50 million yuan was obtained, and as of December 31, 2024, the company had no overdue borrowings. The scientific allocation of leverage has effectively promoted the development of the company's performance and laid a solid foundation for the sustainable and stable future.

In 2025 and beyond, the company will continue to focus on its main business, deepen quality and efficiency, promote high-quality development, and pursue better value for investors in terms of quality and quantity.

4. Promote the completion of fundraising projects on schedule and enhance the company's profitability

The company actively and orderly promotes the construction of fund-raising and investment projects, standardizes the use of raised funds, and ensures the smooth implementation and production of fund-raising projects, so as to promote the growth of the company's main business and enhance the overall profitability of the company through the operation of fund-raising projects.

In 2024, the company will invest a total of 231.2088 million yuan in raised funds, and has invested in raising funds cumulatively

The total amount of funds is 127,596.44 million yuan, and the investment progress is 83.44%. The company's fundraising projects include "Shanghai Haohai Biotech International Pharmaceutical R&D and Industrialization Project", "Jianhua Biotech Fengxian Base Phase I Construction Project" and supplementary working capital. Among them, the "Jianhua Biotech Fengxian Base Phase I Construction Project" has been completed at the end of 2021 and will be put into use from 2022, with a cumulative amount of 47.4956 million yuan of raised funds. The commissioning of the project has contributed to the improvement of capacity utilization, and in 2024, the benefits of about 100 million yuan (including the revenue of all products produced by Jianhua Biotech in Fengxian plant) will be realized. The construction of the "Shanghai Haohai Bioscience International Pharmaceutical R&D and Industrialization Project" is being carried out in an orderly manner, with a total investment of 231.2088 million yuan in 2024, and a total of 1027.1109 million yuan of raised funds since the construction of the project, with an investment progress of 79.98%. At present, the project has completed the construction of the exterior master and the main building, and the process equipment and utility equipment have also been basically installed, and it is expected to reach a usable state by the end of 2025 as planned.

In order to improve the efficiency of the use of the raised funds, under the condition of ensuring that the construction and use of the raised funds are not affected, the safety of the raised funds and the use of the raised funds is not changed, the company has deliberated and approved the board of directors and the board of supervisors of the company, the company uses the temporarily idle raised funds to purchase cash management, and purchases large certificates of deposit with high security, good liquidity and guaranteed principal, with a balance of 390 million yuan at the end of 2024. Through the cash management of idle raised funds, it not only ensures the safety of raised funds, but also obtains considerable income, and by the end of 2024, it has achieved a cumulative income of 141.6912 million yuan.

In 2025, the company will continue to promote the construction of fundraising and investment projects, and orderly carry out the equipment commissioning, production verification, and application for relevant licenses for medical device and drug production of the "Shanghai Haohaishengke International Pharmaceutical R&D and Industrialization Project", so as to complete all fundraising projects as scheduled by the end of 2025, and gradually achieve a breakthrough in the company's production capacity bottleneck and improve production efficiency and product competitiveness with the commissioning and use of fundraising projects.

3. Adhere to the guidance of scientific and technological innovation to drive long-term development in the future

Innovation is the first driving force to lead development. In 2024, the company will actively look for new profit growth points, continue to increase R&D investment, and carry out product innovation around policy focus, core business, public demand, and industrial direction. In 2024, the company's 5 new products were approved, including the hydrophilic acrylate aspheric intraocular lens product "Flaevision", the sodium hyaluronate eye drop product "Hairunli", the orthokeratology lens product "Tongliang", the fourth-generation organic cross-linked hyaluronic acid "Haimei Yuebai", and the collagen solution product for skin care, which further enhanced the company's differentiated competitive advantage, consolidated its leading position in the industry, and drove the upward growth of sales returns. In addition, the company has made breakthroughs in a number of research projects, injecting source power into future performance growth.

The R&D pipeline is the lifeblood of a biotech company. The company continues to increase R&D investment, and in 2024, a total of The total investment in R&D expenses was 238.9293 million yuan, an increase of 18.831 million yuan or about 8.56% over the previous year.

R&D expenses accounted for 8.86% of operating revenue. As of the end of 2024, the company's R&D team consists of 350 R&D personnel, accounting for about 16.23% of the company's total employees, including 25 with doctoral degrees and 107 with master's degrees.

In 2024, the company will add a total of 59 authorized intellectual property rights, including 29 invention patents

23 new patents. By the end of 2024, the company has a total of 468 authorized intellectual property rights, including 136 invention patents, 231 utility model patents, 56 design patents, and 45 software copyrights. As of the end of 2024, among the company and its holding subsidiaries, a total of 1 enterprise has been recognized as a national-level specialized, special and new "little giant" enterprise, 1 enterprise has been rated as a "national intellectual property demonstration enterprise", 1 enterprise has been rated as a "national intellectual property advantage enterprise", 3 enterprises have been rated as a national or local "enterprise technology center", 4 enterprises have been rated as a national "technology-based small and medium-sized enterprise", 6 enterprises have passed the provincial "specialized, special and new small and medium-sized enterprise" certification, and 9 enterprises have been rated as "national high-tech enterprises".

In 2025, the company will continue to link its superior R&D resources in China, the United States, the United Kingdom, France, and Israel, improve the construction of the R&D system, adhere to the innovation of technology and products, and continuously cultivate new quality productivity through technological innovation, leading the company's high-quality development. The company will continue to promote the optimization and upgrading of its product portfolio, and in the field of medical aesthetics, it will focus on promoting the clinical trials of painless cross-linked sodium hyaluronate gel products for injection, enhanced water light injection products, medical cross-linked chitin gel (water light) products, as well as the registration and inspection of linear precision cross-linked water light injection products, intelligent cross-linked collagen products, and hydroxyapatite microsphere tissue fillers for injection; In the field of cataract treatment, we will focus on promoting hydrophilic aspheric multifocal intraocular lenses,

The registration and application of innovative hydrophobic molded aspheric trifocal intraocular lens products, and the clinical trial work of important projects such as hydrophilic continuous visual range intraocular lenses and hydrophobic molded extended depth of focus intraocular lens products; In the field of myopia prevention and control and refractive correction, we will focus on promoting the clinical trials of second-generation aqueous humor permeable PRL products, high oxygen permeability scleral lenses and new ultra-high oxygen permeability (DK180) orthokeratology lenses. In the field of ocular surface and fundus treatment, we will focus on promoting the registration and application of biogel products for intraocular filling, and the registration and inspection of new artificial vitreous. In addition, the research and development of new sodium hyaluronate injection products, long-acting cross-linked sodium hyaluronate injection products, and linear cross-linked chitin intra-articular injection in the field of orthopedics will also be carried out in an orderly manner.

Fourth, build a long-term dividend mechanism to strengthen the value sharing of investors

The company adheres to the investor-oriented concept and builds a "sustainable, stable and scientific" shareholder return mechanism.

In 2024, the Company actively responded to the call of the state to encourage qualified listed companies to pay dividends multiple times a year, revised the provisions of the relevant profit distribution policy of the Articles of Association from the institutional level, added provisions such as the authorization of medium-term dividends, and further improved the company's dividend policy. From the implementation level, we have actively implemented multiple dividends, and successfully completed the 2023 annual dividend and the 2024 semi-annual dividend.

After the deliberation and approval of the company's board of directors and the general meeting of shareholders, the company will complete the year 2023 by the end of July 2024

The distribution of cash dividends and the conversion of capital reserve into share capital totaled 166,956,729.00 yuan in cash dividends, accounting for 40.12% of the net profit attributable to shareholders of the parent company in the company's 2023 consolidated financial statements; 66,782,692 shares were converted, and the total share capital of the company increased to 235,489,895 shares after the completion of the conversion; The company completed the distribution of cash dividends for the half year of 2024 by the end of October 2024, with a total cash dividend of RMB 92,902,248.40, accounting for 39.49% of the net profit attributable to shareholders of listed companies in the company's 2024 semi-annual consolidated statements.

At the same time, the company actively carried out share repurchases. In 2024, the company cumulatively repurchased A shares

1,418,934 shares, accounting for 0.61% of the company's current total share capital of 233,193,695 shares, with a total transaction amount of about 106.2706 million yuan (excluding transaction taxes and fees); A total of 2,492,100 H shares have been repurchased, accounting for 1.07% of the company's current total share capital, with a total amount of approximately HK$75,709,000 (excluding transaction taxes), of which 2,296,200 shares have been cancelled.

In 2025, the company will continue to adhere to value creation, implement continuous and stable dividends, formulate and improve the company's dividend return plan, and carry out share repurchases in an orderly manner.

In terms of dividends, the company is based on its 2024 annual operating results, financial position and 2024 semi-annual dividends

In this case, the proposed implementation of the 2024 profit distribution plan is: based on the total share capital registered on the record date of the implementation of equity distribution, deducting the shares in the company's special securities account for repurchase, a cash dividend of 6.00 yuan will be distributed to all shareholders for every 10 shares, and a total cash dividend of 138,023,048.40 yuan will be distributed based on the share base on the date of the review of the profit distribution plan. At the same time, the board of directors of the company will ask the general meeting of shareholders to authorize the formulation of an interim dividend plan for 2025, so that under the condition of meeting the interim dividend, it can formulate and implement the interim dividend more flexibly according to the company and market conditions. Since its listing on the STAR Market in October 2019, the company's cash dividend ratio has generally shown an upward trend, as shown in the following chart:

Cash dividends for 2019-2024

2.5 54.92% 60.00%

2 50.00%

38.21% 37.96% 40.12%

33.46% 34.60% 40.00%

1.5

2.31 30.00%

1

1.67 20.00%

0.5 1.24 1.22

0.88 0.69 10.00%

0 0.00%

2019 2020 2021 2022 2023 2024

Total amount of cash dividends (100 million yuan) Proportion of cash dividends

Note: 1. The cash dividend ratio in the above table is the proportion of the total amount of cash dividends to the net profit attributable to shareholders of the listed company in the consolidated statements of the current year.

2. The total amount and proportion of cash dividends in 2024 include the amount of cash dividends in the semi-annual and 2024 annual cash dividends in 2024;

The annual profit dividend amount for 2024 is ultimately calculated based on the share base on the record date of equity distribution.

In terms of dividend policy, on the basis of the revision of the relevant dividend system of the Articles of Association in 2024, the board of directors of the company reviewed and approved the "Dividend Return Plan for Shareholders of Shanghai Haohai Biotechnology Co., Ltd. in the Next Three Years (2025-2027)" on March 21, 2025, which further standardizes the company's dividend policy and will be submitted to the 2024 annual general meeting of shareholders for deliberation. In terms of share repurchase, the company will make repurchase decisions and implement them according to the company and market conditions within the repurchase period in accordance with the disclosed share repurchase plan to ensure the smooth completion of the repurchase plan.

5. Build a solid foundation for standardized operation and promote the high-quality development of the company

Sound corporate governance is the foundation for ensuring the company's standardized operation, and it is also the core element to promote the company's high-quality development. As a company listed in Chinese mainland and Hong Kong, the company pays special attention to the improvement of governance level and the construction of internal control system.

In terms of the construction of the corporate governance system, in 2024, in accordance with the changes in domestic and foreign regulatory rules and in light of the company's operating conditions, the Company revised the Articles of Association and its annexes, the Rules of Procedure of the General Meeting of Shareholders, the Rules of Procedure of the Board of Directors, the Rules of Procedure of the Board of Supervisors, as well as the Working Rules of the Audit Committee of the Board of Directors, the Working Rules of the Strategy and Sustainable Development Committee of the Board of Directors, the Management System for Related Party Transactions, the Management System for External Guarantees, and the Special System for Preventing Major Shareholders and Related Parties from Occupying the Company's Funds. 11 systems of the management system for raised funds and the management measures for changes in the shareholding of directors, supervisors and senior managers. At the same time, based on the requirements of the new domestic and foreign regulations on ESG management and information disclosure of listed companies, the Board of Directors of the Company adjusted the responsibilities of the Audit Committee and the Strategy Committee, readjusted the ESG-related responsibilities originally authorized by the Audit Committee to the Strategy Committee, and further adjusted the responsibilities of the Strategy Committee, and renamed the Strategy Committee as the Strategy and Sustainability Committee.

In terms of improving the ability to perform duties, in 2024, the Company will organize intermediaries to provide training on "Interpretation of Sustainability Guidelines and Response Strategies" for major shareholders, directors, supervisors and senior "key minority", and carry out detailed interpretations of the background of the issuance of sustainability guidelines, disclosure framework, and corporate response actions, so as to help key minorities understand ESG regulatory requirements and further enhance their awareness of the importance and urgency of ESG management and ESG information disclosure. In addition, the company helped the "key minority" to sign up for training sponsored by the Shanghai Stock Exchange, the Hong Kong Stock Exchange, the Shanghai Securities Regulatory Bureau, etc., covering the performance of duties by INEDs, mergers and acquisitions, risk management and internal control.

At the end of 2024, the China Securities Regulatory Commission solicited public comments on the amendments to the relevant securities and futures rules after the implementation of the Company Law of the People's Republic of China, and required listed companies to abolish the board of supervisors in accordance with relevant regulations by January 1, 2026, and the audit committee to exercise the functions and powers of the board of supervisors. In 2025, the Company will pay close attention to changes in regulatory policies, strictly follow laws, regulations and regulatory requirements, revise the Articles of Association and other relevant systems in a timely manner, adjust the corporate governance structure, and clarify the boundaries of the powers of the general meeting of shareholders, the board of directors, various special committees of the board of directors, independent directors and senior management, so as to ensure that they perform their duties and effectively protect the interests of the company and minority shareholders. The company will help the "key minority" to go deeper through internal and external training

Understand the regulatory philosophy, regulatory situation, regulatory rules, etc., and continuously strengthen its compliance awareness and compliance concept. At the same time, the company will effectively provide necessary guarantees for directors, especially independent directors, to perform their duties in accordance with the law, and give full play to the role of independent directors in participating in decision-making, supervision, checks and balances, and professional consultation. The company will also continue to deepen the construction of the internal control system, optimize the internal control environment, comprehensively revise and improve the internal control system, improve the level of internal control management, and promote the healthy and sustainable development of the company.

6. Build a diversified communication mechanism to effectively convey the company's value

The company actively explores the construction of diversified investor communication channels, and has formed a diversified communication mechanism based on information disclosure, combined with investor hotlines, company mailboxes, SSE e-interactions, analyst meetings, on-site visits and performance briefings.

Information disclosure is the cornerstone of investor communication, and it is also the most important way for companies to convey value to the market and investors to make decisions. The company always attaches great importance to information disclosure, and strictly implements it in strict accordance with relevant laws, regulations, normative documents and the company's "Information Disclosure Management System" and other relevant regulations

Disclosure Obligations. In 2024, the company will issue a total of 4 periodic reports and 71 temporary announcements of A-shares

37 online documents and more than 100 overseas regulatory announcements. The temporary announcement covers share repurchase, profit distribution, equity incentives, performance forecasts, resolutions of the three meetings, product approval, etc. The company insists on starting from the needs of investors, continuously optimizes the preparation of regular reports and temporary announcements, and on the basis of ensuring the authenticity, accuracy, completeness and timeliness of disclosure documents, in order to convey the company's information to investors in a more concise, clear and easy-to-understand manner. Since the information disclosure assessment of the Science and Technology Innovation Board of the Shanghai Stock Exchange, the company has continuously entered the 2022-2023,

Received an A grade in 2023-2024. The company's 2023 ESG report received an ESG rating of A from China Securities Securities

level, WIND ESG rating A, etc.

The company also attaches great importance to two-way communication with investors, with the help of new media, through a variety of online and offline methods, actively collect feedback and opinions from investors, and strengthen two-way interaction with small and medium-sized investors. In 2024, the company held three performance briefings through the SSE Roadshow Center, among which it participated in the special session of "Improving Quality, Efficiency and Return" at the 2023 Collective Performance Briefing of the Science and Technology Innovation Board, and effectively communicated with investors on the operating results, financial status, development concepts, and measures related to improving quality, efficiency and return. The company organized a total of 50 online and offline exchange activities such as telephone conferences, strategy meetings, and investor reception days, and received a total of 575 investment institutions. The company arranges dedicated personnel to answer investors' calls, reply to investors' emails, and respond to investors' concerns through the "SSE E Interactive" platform. In addition, the company through the official network

Carriers, such as the website and WeChat public account, show the company's operation, research and development, and products to investors more vividly in an illustrated way, and invite investors to visit the company's production site to understand the company's production situation on the spot.

In 2025, we will continue to improve information disclosure and investor relations management, and continue to improve the quality and effectiveness of the company's information disclosure on the premise of ensuring the legality and compliance of information disclosure, so as to build a sound investor relationship. The company will hold at least 4 investor reception days/performance briefings, and according to the actual situation, the chairman or general manager of the company will lead a team to participate in face-to-face communication with investors. The company will further leverage the function of the new media platform to provide interactive functions such as online surveys and corporate visit appointments to improve the efficiency of investor communication. At the same time, the company actively explores the establishment of a scientific view of market value, and the board of directors of the company deliberated and approved the "market value management system" and "public opinion management system" on March 21, 2025, and the company will carry out market value management and public opinion management in accordance with relevant laws and regulations and the requirements of the aforementioned system, and strive to promote the matching of the company's market value and intrinsic value.

7. Other matters

The Company will continue to evaluate the implementation of the action plan of "Improving Quality and Efficiency, Emphasizing Returns", and fulfill its information disclosure obligations in a timely manner. The company will continue to focus on its main business and enhance its core competitiveness, profitability and risk management capabilities. Through good management, standardized corporate governance, timely information disclosure, and active investor communication and returns, we will effectively protect the interests of investors, fulfill the responsibilities and obligations of listed companies, maintain the company's good market image, and promote the stable and healthy development of the capital market.

The forward-looking statements of the company's planning and development strategy involved in this report are not fait accompli, and do not constitute the company's substantive commitment to investors, and investors are advised to pay attention to the relevant risks.

Board of Directors of Shanghai Haohai Biotechnology Co., Ltd

March 21, 2025