3-2 Letter of Sponsorship for the Listing of Sichuan Baili Tianheng Pharmaceutical Co., Ltd. (Application Draft) of Sichuan Baili Tianheng Pharmaceutical Co., Ltd. (Sichuan Baili Tianheng Pharmaceutical Co., Ltd.)

DATE: Apr 16 2025

CITIC Securities Co., Ltd

About Sichuan Baili Tianheng Pharmaceutical Co., Ltd

In FY2025, we will issue A shares to specific targets

Listing Sponsorship

Sponsor (Lead Underwriter)

North Block, Excellence Times Square (Phase II), No. 8, Center 3rd Road, Futian District, Shenzhen, Guangdong Province

April 2025

Declarations

CITIC Securities Co., Ltd. was entrusted by Sichuan Baili Tianheng Pharmaceutical Co., Ltd. to act as the sponsor for its issuance of A shares to specific targets in 2025.

CITIC Securities and its sponsor representatives are honest, trustworthy, diligent and conscientious in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing, the Administrative Measures for the Registration of Securities Issuance and Listing of Listed Companies, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Implementation Rules for the Securities Issuance and Underwriting Business of Listed Companies on the Shanghai Stock Exchange, and the regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange. In strict accordance with the business rules formulated in accordance with the law and industry self-discipline norms to issue a listing sponsorship, and ensure that the documents issued are true, accurate and complete.

Unless otherwise specified in this listing sponsorship, the relevant terms have the same meanings as in the "Sichuan Baili Tianheng Pharmaceutical Co., Ltd. 2025 Prospectus for the Issuance of A Shares to Specific Targets".

Table of Contents

Declaration...... 1

Table of Contents...... 2

I. Basic Information of the Issuer ...... 4

(1) Basic information of the issuer...... 4

(2) The issuer's main business ...... 4

(3) Main operating and financial data and indicators...... 12

(4) The main risks of the issuer...... 13

2. The issuer's issuance ...... 22

(1) The type and par value of the shares to be issued...... 22

(2) The method and time of issuance...... 22

(3) Issuance object and subscription method...... 22

(4) Pricing reference date, issue price and pricing principle...... 23

(5) Number of issuances...... 23

(6) The scale and purpose of the raised funds...... 24

(7) Restricted period...... 24

(8) Where the stock is listed...... 25

(9) Arrangements for the rollover of undistributed profits before the issuance...... 25

(10) The validity period of the issuance resolution...... 25

3. The sponsor representatives, co-organizers and other members of the project team of the securities issuance...... 25

(1) The practice of the main sponsor business of the project sponsor representative...... 25

(2) The practice of the main sponsorship business of the project co-organizer...... 25

4. Whether the sponsor has any circumstances that may affect the fair performance of the sponsor duties...... 26 (1) The sponsor or its controlling shareholder, actual controller, or important related party holds the issuer or its controlling shares

Shares...... of important related parties 26 (2) The issuer or its controlling shareholder or important related party holds the sponsor or its controlling shareholder and has actual control

Shares of persons and important related parties...... 26 (3) The sponsor representative of the sponsor and his or her spouse, directors, supervisors and senior management of the sponsor owns the issuer

equity, employment with the issuer, etc...... 26 (4) The controlling shareholder, actual controller, important related party and controlling shareholder of the issuer of the sponsor, and the actual controller

Circumstances such as the controller and important related parties providing guarantees or financing to each other...... 26

(5) Other related relationships between the sponsor and the issuer...... 27

V. Sponsor Commitments ...... 27

6. The decision-making procedures for the performance of the securities issuance and listing...... 28

(1) The board of directors deliberated and approved...... 28

(2) Deliberation and approval by the general meeting of shareholders...... 28

7. The sponsor's special opinions on the investment of the raised funds in the field of scientific and technological innovation...... 28

(1) The funds raised this time are mainly invested in the field of scientific and technological innovation...... 28

(2) The way to promote the improvement of the company's scientific and technological innovation level through the implementation of fund-raising projects...... 29

(3) Verification opinions...... 29

VIII. Arrangements for the Sponsor's Continuous Supervision of the Issuer...... 29

9. The sponsor's recommendation conclusion on the stock listing...... 30

1. Basic information of the issuer

(1) Basic information of the issuer

Company name: Sichuan Baili Tianheng Pharmaceutical Co., Ltd

Legal representative: Zhu Yi

The stock is listed on the Shanghai Stock Exchange

Stock abbreviation: Baili Tianheng

Stock code 688506.SH

Unified Social Credit Code 91510100792179570A

The company was established on August 17, 2006

The joint-stock company was established on November 29, 2011

Available: January 6, 2023

The total number of shares is 401,000,000 shares

Registered address: Building 1, No. 161, Baili Road, Chengdu Cross-Strait Science and Technology Industrial Park, Wenjiang District, Chengdu, Sichuan Province

number

Office address: Building 1, No. 161, Baili Road, Chengdu Cross-Strait Science and Technology Industrial Park, Wenjiang District, Chengdu, Sichuan Province

number

Zip Code 611130

Phone number 028-85321013

Fax number 028-85320270

Website http://www.baili-pharm.com/

Wholesale: biochemical drugs, biological products (excluding preventive biological products), chemical APIs,

antibiotic APIs, Chinese patent medicines, chemical preparations, antibiotic preparations; Sales: Cardboard capacity

Business Scope Ware, plastic films, rubber products, glass instruments and glass packaging containers, chemical raw materials (except

hazardous chemicals). (Projects subject to approval in accordance with the law can only be opened after approval by relevant departments.)

business activities).

(2) The issuer's main business

1. Overview of the issuer's main business

The issuer is a comprehensive biopharmaceutical enterprise focusing on the frontier fields of global biomedicine, based on solving unmet clinical needs, and has global early-stage R&D, global clinical development, large-scale production and commercialization capabilities. The issuer adheres to the strategic positioning of "taking root in China, going global, and becoming a multinational pharmaceutical company (MNC)", and is committed to becoming a global leading multinational pharmaceutical company (MNC) in the field of oncology drugs.

The issuer has a global R&D layout, with R&D centers in China and the United States, and has built a product pipeline system with rich types, echelon layout and global competitiveness, and has successfully launched a number of products under development around the world

scope to the clinical trial stage. The issuer focuses on the field of oncology treatment and has established: (1) an innovative ADC drug development platform (HIRE-ADC platform), and has successfully developed BL-B01D1

8 innovative ADC drugs in the clinical stage and a series of innovative ADC drugs in the preclinical stage; (2) Innovation

The multi-specific antibody R&D platform (GNC platform) has been successfully developed, including GNC-077

4 innovative GNC drugs in the bed-stage and a series of innovative GNC drugs in preclinical stages; (3) Increased specificity

Strong bispecific antibody platform (SEBA platform), successfully developed SI-B001 and SI-B003 have entered clinical trials

2 innovative bispecific antibody drugs in the stage and a series of innovative bispecific antibody drugs in preclinical stage; and (4) the innovative ARC (Nuclear Pharmaceutical) R&D Platform (HIRE-ARC Platform).

The issuer's BL-B01D1 is a first-in-class, new concept

It is also the only EGFR×HER3 bispecific antibody ADC that has entered the phase III clinical stage, which has significant global clinical value

and market potential. The issuer and BMS entered into a global strategic licensing and cooperation transaction for BL-B01D1 with a total amount of US$8.4 billion and an upfront payment of US$800 million, the largest global strategic license and cooperation transaction volume of a single asset in the global ADC field to date. BL-B01D1 has been tested in clinical trials for different oncology indications, including lung cancer, breast cancer, gastrointestinal cancer, urological cancer, gynecologic cancer, and head and neck cancer, and has the potential to become a cornerstone drug for pan-tumor treatment.

As of March 31, 2025, the issuer has 14 clinical-stage drug candidates and:

More than 70 clinical trials have been conducted around the world, including more than 10 phase III clinical studies conducted in China

6 clinical studies conducted in the United States. In the U.S., issuers are working with strategic partner BMS

BL-B01D1 co-conducts 2 clinical trials with the aim of advancing an international multi-center phase III clinical study; furthermore

4 clinical trials of the issuers BL-M07D1, BL-M17D1, BL-M11D1 and BL-M05D1 obtained

FDA approved and well underway in the U.S., laying a solid foundation for the issuer's globalization strategy. at

In China, the issuer is conducting more than 10 Phase III clinical trials for BL-B01D1, BL-M07D1 and SI-B001

trials, as well as Phase I/II clinical trials across multiple assets. The issuer has a rich and competitive clinical pipeline, demonstrating its deep strength and forward-looking layout in the field of innovative drug research and development.

The issuer has four production bases, namely Guorui Pharmaceutical (injections and oral preparations), Baili Pharmaceutical (oral solid preparations and lyophilized powder for injection), Hyate/Jingxi Pharmaceutical (intermediates and chemical APIs) and DotBio (innovative drugs). With a well-established and advanced manufacturing system and facilities, the issuer's production base is able to smoothly support the clinical trials of the drug candidates and supply the issuer's commercial products.

2. Main products and their uses

The issuer has two major business segments, namely the innovative biological drug business segment and the chemical drug preparation and Chinese patent medicine preparation business segment.

(1) Innovative biologics business segment

As of March 31, 2025, the issuer has a total of 14 innovative drug candidates in clinical trials,

Among them, 3 have entered the phase III registration clinical trial stage, and more than 70 clinical trials are being carried out for specific research and development

The pipeline is shown in the following figure:

Note: The clinical progress represents the trial phase with the fastest progress of the corresponding pipeline

1) ADC medications

① BL-B01D1

BL-B01D1 is the world's first-in-class, new concept and the only one

EGFR×HER3 bispecific antibody ADCs in Phase III clinical trials have significant global clinical value and market potential

Force. EGFR and HER3 are widely expressed in various epithelium-derived tumors, and through its bispecific antibody structure, BL-B01D1 can widely target a variety of solid tumors and be more enriched in tumor tissues, thereby enhancing tumor killing activity and reducing target toxicity.

BL-B01D1 has been conducted in more than 30 clinical trials in China and the United States for more than 10 tumor types

Among them, a number of phase I/II clinical trials are being carried out in the United States for the treatment of non-small cell lung cancer and advanced solid tumors

and 9 Phase III clinical trials for different cancer treatments in China (5 of which are suitable

It was included in the Breakthrough Therapy Variety List by the Center for Drug Evaluation of the National Medical Products Administration). BL-B01D1 has been tested in clinical trials for different oncology indications, including lung cancer, breast cancer, gastrointestinal cancer, urological cancer, gynecological cancer, and head and neck tumors, and has the potential to become a cornerstone drug for pan-tumor treatment.

In December 2023, the issuer entered into an exclusive licensing and collaboration agreement with BMS for the purpose of co-developing and

Co-commercialization BL-B01D1. According to the Collaboration Agreement, (1) the Issuer and BMS will jointly develop and commercialize BL-B01D1 in the United States, and both parties will share the expenses related to the development of BL-B01D1 in the United States and the net profit or loss from sales based on an agreed percentage; (2) the issuer is solely responsible for the development and commercialization of BL-B01D1 in Chinese mainland, and BMS will receive royalties from net sales in Chinese mainland; (3) BMS will be solely responsible for the development and commercialization of BL-B01D1 in the rest of the world, and the issuer will receive tiered royalties from net sales. Following the effective date of the Collaboration Agreement, BMS has made an irrevocable, non-deductible upfront payment of US$800 million to the Issuer and will make contingent near-term payments of up to US$500 million to the Issuer; Issuers will receive up to US$7.1 billion in additional payments upon achievement of certain development, registration and sales milestones; The total potential deal value could be up to $8.4 billion. According to CIC, this transaction is the largest global strategic licensing and partnership transaction in the global ADC space to date in terms of total transaction value of a single asset. Issuers are also eligible to receive tiered royalties on net sales outside Chinese mainland and the United States, while BMS is eligible to receive royalties on net sales in Chinese mainland.

② BL-M07D1

BL-M07D1 is an innovative HER2-targeting ADC with best-in-class

potential, which has demonstrated significant anti-tumor efficacy in clinical trials, is being actively promoted by the issuer globally

Advance to clinical trials of BL-M07D1. BL-M07D1 is underway in 11 clinical trials at home and abroad, of which 2

Phase III, 3 Phase II, 3 Phase I/II, and 3 Phase I clinical trials covering second-line and above HER2 positives

adjuvant postoperative therapy for sexual breast cancer, HER2-positive breast cancer and neoadjuvant therapy for HER2-positive breast cancer, as well as multiple indications such as lung cancer, gastrointestinal tumors, urological tumors and gynecological tumors; In the U.S., the issuer is advancing clinical trials of BL-M07D1 for the treatment of solid tumors in parallel.

③ BL-M11D1

The BL-M11D1 is from the same technology platform as the BL-B01D1 and shares the same "connection" with the BL-B01D1

Junction + Toxin" platform for CD33-targeting ADC drugs for the treatment of relapsed or refractory acute myeloid lines

Leukemia (r/rAML). In December 2024, the drug was held in San Diego, California for the 66th United States

The results of its first-in-human phase I clinical study in patients with relapsed/refractory acute myeloid leukemia (AML) were presented for the first time in the form of a poster at the annual meeting of the Society of Hematology (ASH). BL-M11D1 is undergoing a Phase Ib clinical trial in China and a Phase I clinical trial in the United States.

④ BL-M05D1

BL-M05D1 is an innovative ADC targeting Claudin18.2 independently developed by the issuer. BL-M05D1 is an ADC drug derived from the same technology platform as BL-B01D1 and sharing the same "linker + toxin" platform as BL-B01D1, and its indication is locally advanced solid tumors. The drug is in a phase Ib clinical trial in China and a concurrent phase I clinical trial in the United States.

⑤ BL-M14D1

BL-M14D1 is based on the same small molecule technology platform as BL-B01D1 and shares the same platform as BL-B01D1

An ADC drug with a "linker + toxin" platform for the treatment of advanced small cell lung cancer, neuroendocrine tumors and other solid tumors. The drug is undergoing a phase Ib clinical trial in the country.

⑥ BL-M08D1

BL-M08D1 is based on the same small molecule technology platform as BL-B01D1 and shares the same platform as BL-B01D1

An ADC drug of a "linker + toxin" platform for the indications of relapsed or refractory hematologic malignancies and locally advanced or metastatic solid tumors. The drug is undergoing phase Ia clinical trials in the country.

⑦ BL-B16D1

BL-B16D1 is a bispecific antibody ADC drug conjugated to a new generation of toxins independently developed by the issuer

Symptoms include lung cancer, breast cancer, head and neck squamous cell carcinoma and other solid tumors. The drug is undergoing a phase Ib clinical trial in the country.

⑧ BL-M17D1

BL-M17D1 is based on the same new small molecule technology platform as BL-B16D1

Enjoy ADC drugs from the same new "linker + toxin" platform for advanced breast cancer, gastrointestinal tumors, and other solid tumors. The drug is in phase Ib clinical trials in China and is progressing in phase I clinical trials in the United States.

2) Multi-specific antibody drugs

① GNC-077

GNC-077 is an innovative multi-specific antibody molecule with a molecular structure that includes antibody domains targeting T cell CD3 and T cell immune checkpoints, as well as antibody domains targeting tumor antigens. GNC-077 can effectively induce the activation, differentiation and proliferation of T cells, and mediate the specific targeting of activated T cells to kill tumor antigen-positive tumor cells for the indications of breast cancer, non-small cell lung cancer, gastrointestinal tumors and other solid tumors. The drug is undergoing phase Ia clinical trials in the country.

② GNC-038

GNC-038 is an innovative recombinant humanized tetra targeting CD3, 4-1BB, PD-L1, and CD19

Heterosexual antibody is the world's first tetraspecific therapeutic antibody to enter clinical development. The issuer received approval in 2024 for the drug to conduct clinical trials for systemic lupus erythematosus as well as rheumatoid arthritis indications. In addition to the 2 newly approved indications, GNC-038 has been studied in Phase Ib/II clinical studies in hematologic malignancies such as acute lymphoblastic leukemia and non-Hodgkin lymphoma.

③ GNC-035

GNC-035 is an innovative recombinant humanized tetra targeting CD3, 4-1BB, PD-L1, and ROR1

Heterosexual antibodies, the indications are solid tumors and hematologic tumors. The drug is in domestic Phase Ib/II clinical trials.

④ GNC-039

GNC-039 is an innovative recombinant humanization targeting CD3, 4-1BB, PD-L1, and EGFRvIII

Four-specific antibody, the indication of which is high-grade glioma. The drug is in a domestic phase Ib clinical trial.

3) Bispecific antibody drugs

① SI-B001

SI-B001, independently developed by the issuer, is an EGFR×HER3 bispecific antibody, which is currently the only one in the world

Clinical-stage bispecific antibodies targeting both EGFR and HER3 with the potential to achieve breakthrough efficacy. The drug is being studied in clinical studies in multiple indications such as non-small cell lung cancer and head and neck squamous cell carcinoma. Among them, the indication of non-small cell lung cancer has entered phase III clinical trials and is in the subject enrollment stage.

② SI-B003

SI-B003 is a bispecific antibody targeting both PD-1 and CTLA-4 with potential immunity

Epidemic checkpoint inhibition and antitumor activity. The drug is in Phase II clinical trials in China as a monotherapy for advanced solid tumors and in combination therapy to explore other pipeline candidates from the United Company.

(2) Chemical drug preparations and Chinese patent medicine preparations

The issuer's listed products include chemical drugs and proprietary Chinese medicine products, forming a product cluster with distinctive characteristics and advantages. The details of the products currently sold by the issuer are shown in the table below:

Therapeutic Areas Product Name Product Image Classification Indications

short-acting intravenous general anesthetic,

Propofol Emulsion Injection Rx can be used in adults and beyond 1 month

General anesthesia induction and dimension in children

hold

Anesthesia: short-acting intravenous general anesthetic,

Can be used in adults and over 1 month

General anesthesia induction and dimension of propofol medium/long-chain fat Rx in children

Milk injection holding, as well as intensive care for those over 16 years of age

When nursing patients to assist ventilation therapy

sedation

Therapeutic Areas Product Name Product Image Classification Indications

Full for adults and children

Inhalation of sevoflurane Rx body anesthesia for induction and maintenance, live

Applicable to both in-hospital and outpatients

Medium/long-chain lipid emulsion injections for oral or enteral nutrition are not possible

Liquid Rx is achieved or insufficient when energy and necessary

Fatty acid supplementation

Parenteral nutrition

Structural fat emulsion injection as a component of parenteral nutrition

(C6~24) Rx points, providing energy and essential fats

sour

Rx: Qi replenishment and solidification, diuresis, demoval

Poison drains pus, and builds muscle. Suitable for gas

Short-hearted palpitations, prostration, self-perspiration, body

Chinese patent medicine Astragalus granules Rx/OTC Hypoedema, prolonged diarrhea, prolapse of the anus, sub

Uterine prolapse, carbuncle ulcer, sores

It doesn't heal for a long time

OTC: Replenishment Meter. For gas

Short-hearted palpitations, self-perspiration

For the treatment of 6 years of age and older

Pediatric guanfacine hydrochloride extended-release tablets Rx Note deficiency hyperactivity disorder

（ADHD）

(3) Main operating and financial data and indicators

1. Main data of the consolidated balance sheet

Unit: 10,000 yuan

Project 2024.12.31 2023.12.31 2022.12.31

Total assets 713,735.77 142,509.93 199,143.34

Total liabilities 325,143.29 127,322.60 105,753.91

Total shareholders' equity 388,592.48 15,187.33 93,389.43

Total equity attributable to shareholders of the parent company 388,592.48 15,187.33 93,389.43

2. The main data of the consolidated income statement

Unit: 10,000 yuan

Project 2024 2023 2022

Operating income 582,271.78 56,187.07 70,328.16

Operating profit 397,888.44 -76,937.65 -28,763.48

Total profit 397,815.36 -76,901.30 -28,907.38

Net profit attributable to shareholders of the parent company was 370,750.46 -78,049.89 -28,237.91

3. Main data of the consolidated cash flow statement

Unit: 10,000 yuan

Main indicators 2024 2023 2022

Net cash flow from operating activities 405,867.01 -61,535.11 -25,864.91

Net cash flow from investing activities -256,544.44 -8,187.54 -3,454.61

Net cash flow from financing activities 127,389.04 9,084.30 113,941.11

Net increase in cash and cash equivalents 281,630.56 -60,900.21 84,647.27

4. Main financial indicators

Main indicators 2024.12.31/2024 2023.12.31/2023 2022.12.31/202

Year: Year 2 Year

Gross margin 95.46% 59.19% 66.91%

Weighted average return on equity (%) (net of non-184.86% -143.57% -148.18%)

former)

Weighted average return on equity (%) (181.27% -149.50% -176.63%)

After)

Basic earnings per share (before deduction) (RMB/share) 9.25 -1.95 -0.78

Basic earnings per share (after deducting non-profits) (RMB/share) 9.07 -2.03 -0.93

Current ratio (times) 3.19 0.74 1.93

Quick Ratio (Times) 3.10 0.60 1.80

Debt-to-asset ratio (consolidated) (%) 45.56% 89.34% 53.10%

Accounts receivable turnover ratio (times/year) 56.78 3.44 4.22

Inventory turnover ratio (times/year) 1.74 1.89 2.53

Total asset turnover ratio (times/year) 1.36 0.33 0.48

Note: 1. Gross profit margin = (operating income - operating cost) / operating income

2. Weighted average return on equity = P0/(E0+NP÷2+Ei×Mi÷M0-Ej×Mj÷M0±Ek×Mk÷M0) wherein: P0 corresponds to the net profit attributable to ordinary shareholders of the company and the net profit attributable to ordinary shareholders of the company after deducting non-recurring gains and losses;

NP is net profit attributable to common shareholders of the Company;

E0 is the opening net assets attributable to ordinary shareholders of the Company;

EI refers to the new net assets attributable to ordinary shareholders of the Company during the reporting period, such as the issuance of new shares or debt-to-equity swaps;

EJ is the net assets attributable to ordinary shareholders of the Company that have been reduced by repurchases or cash dividends during the reporting period;

M0 is the number of months in the reporting period; Mi is the cumulative number of months from the next month of new net assets to the end of the reporting period;

Mj is the cumulative number of months from the month following the decrease in net assets to the end of the reporting period;

EK is the increase or decrease in net assets attributable to ordinary shareholders of the Company as a result of other transactions or events;

MK is the cumulative number of months from the month following the change in other net assets to the end of the reporting period.

3. Basic earnings per share = P0÷S

S= S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0-Sk

Among them: P0 is the net profit attributable to ordinary shareholders of the Company or the net profit attributable to ordinary shareholders after deducting non-recurring gains and losses;

S is the weighted average number of common shares outstanding;

S0 Total number of shares at the beginning of the period;

S1 refers to the increase in the number of shares due to the conversion of provident fund into share capital or the distribution of stock dividends during the reporting period;

Si refers to the increase in the number of shares due to the issuance of new shares or debt-to-equity swaps in the reporting period;

Sj is the number of shares reduced due to repurchases, etc. in the reporting period;

SK is the number of shares reduced in the reporting period; M0 Number of months in the reporting period;

Mi is the cumulative number of months from the month following the increase in shares to the end of the reporting period;

Mj is the cumulative number of months from the month following the reduction of shares to the end of the reporting period.

4. Current ratio = current assets/current liabilities

5. Quick Ratio = (Current Assets - Inventory) / Current Liabilities

6. Asset-liability ratio = total liabilities/total assets

7. Accounts receivable turnover rate = operating income / average accounts receivable

8. Inventory turnover rate = operating cost / average inventory

9. Total asset turnover rate = operating income / average total assets

(4) The main risks of the issuer

1. Industry policy risks

As an industry related to the national economy and people's livelihood and people's health, the development status and business environment of enterprises are greatly affected by national policies. China has formulated laws and regulations in the research and development, production and operation of drugs, and strictly supervised. In recent years, in order to encourage the research and development of innovative drugs, deepen the reform of the medical system, and promote the long-term development of the pharmaceutical industry, the state has launched a number of industry policies, involving drug registration and approval, price circulation reform, medical insurance catalog management, centralized procurement and other aspects. At the same time, China is currently in a period of economic restructuring, and various reforms are gradually deepening. With the deepening of China's medical and health system reform and the gradual improvement of the social medical security system, industry-related regulatory policies will be adjusted accordingly, and the policy environment of China's medical and health market may face significant changes.

If the company cannot adjust its business strategy and take effective measures to deal with the changes in the regulatory environment and market rules brought about by the policy reform of the pharmaceutical industry, it will be difficult to achieve a balance between meeting market demand and adapting to industry policies, which will have an adverse impact on the company's operation.

2. Market risk

(1) Market competition risk

In terms of innovative drugs, the company faces competition from various biopharmaceutical companies around the world, and many large biopharmaceutical companies are already selling or developing drugs with the same or similar product pipelines as the company. If competitors discover, develop, or commercialize competing drugs faster or more successfully than the Company, or if competitors develop and commercialize safer, more effective, more convenient, or less expensive drugs, the Company's commercial opportunities may be significantly reduced or even eliminated.

If the company cannot continue to launch new products with market competitiveness, or can not invest more funds and manpower in marketing, or can not continue to invest in research and development for product upgrades, the company may not be able to effectively respond to the increasingly fierce competition in the pharmaceutical market, and then face the risk of declining market share and profitability.

(2) Risks in the macro environment

As a company with R&D centers in both China and the United States, the Company and its subsidiaries are required to comply with the relevant laws and regulations that may be issued or amended from time to time by the legislatures, government departments and other regulatory authorities of the country and region where the business and business activities are involved, which may have a material impact on the Company or its subsidiaries. In addition, the uncertainty of the international political, economic and market environment in the future may also have a certain adverse impact on the company's global operation.

3. Operational risks

(1) Drug R&D risks

The R&D of innovative drugs is characterized by high investment, high risk and long cycle. Before a drug is approved for marketing, various preclinical studies and clinical trials must be conducted to prove the safety and efficacy of the drug under development. The results of preclinical studies and early clinical trials cannot predict and guarantee the final clinical trial results, and the results of clinical trials may be poor, and the success of clinical trials does not guarantee that the drug will eventually receive regulatory approval and be successfully marketed. If the Company's drug candidates fail to achieve the expected results or delay in achieving the expected results in any of the above stages, the Company may not be able to successfully or timely complete the clinical trial, obtain regulatory approval or commercialize the drugs, which in turn will damage the Company's business and future earnings and have a material impact on the Company's business operations.

(2) The risk that the promotion of new products is less than expected

After the company's new products are successfully developed and approved for marketing, it is necessary to carry out market development and promotion, and transmit information such as mechanism of action, usage, safety, and comparison results of competing products to the market through a variety of means, so that the market is familiar with and accept the company's products. If the new product is not accepted by the market, or the company fails to effectively organize the appropriate sales team and partners to promote the product, it will affect the market development of the product, which will adversely affect the company's profitability. In addition, if the company's products are not included in the medical insurance catalog in the future, it will have an adverse impact on the sales of related products.

and (3) the risk of cooperating with BMS on BL-B01D1

In December 2023, the issuer entered into an exclusive licensing and collaboration agreement with BMS for the purpose of co-developing and

Co-commercialization BL-B01D1. According to the Collaboration Agreement, (1) the Company and BMS will jointly develop and commercialize BL-B01D1 in the United States, and the parties will share the expenses related to the development of BL-B01D1 in the United States and the net profit or net loss from sales based on an agreed percentage; (2) the Company is solely responsible for the development and commercialization of BL-B01D1 in Chinese mainland, and BMS will receive royalties from net sales in Chinese mainland; (3) BMS will be solely responsible for the development and commercialization of BL-B01D1 in the rest of the world, and the Company will receive tiered royalties from net sales. Following the effective date of the agreement, BMS has made an irrevocable, non-deductible upfront payment of $800 million to the company.

Suppose the collaboration between the issuer and BMS for BL-B01D1 does not materialize within the expected timeframe

The issuer may not be able to obtain milestone payments, royalties or earn profits, and may adversely affect the issuer's business operations by contributing part of the development expenses or incurring part of the net loss.

(4) Risks related to the chemical drug preparations and proprietary Chinese medicine preparations business segment

During the reporting period, in addition to the cooperation between the company and BMS on BL-B01D1 to achieve intellectual property licensing revenue, the company's main revenue came from the chemical drug preparation and Chinese patent medicine preparation business segment. Affected by factors such as centralized drug procurement and intensified market competition, the relevant operating income in each period of the reporting period was 701.8331 million yuan, 560.4156 million yuan and 486.7586 million yuan respectively, which was in a downward trend.

The business segment of chemical drug preparations and Chinese patent medicine preparations is faced with the failure to win the bid for the centralized procurement of national drugs, the failure to win the bid for the centralized procurement of local drugs, the reduction of product sales prices due to the centralized procurement of drugs, and the inability of generic drugs to pass or

Risks such as failure to pass the consistency evaluation within the time limit may adversely affect the company's operations. In addition, the R&D of the Company's chemical drug preparations also faces the risk of R&D failure, failure to be approved for marketing or failure to be approved for marketing within the expected time; At the same time, competitors may launch products to the market before the company, which will affect the company's market share after the commercialization of drug candidates, which will adversely affect the company's business.

(5) GMP standard production management risk

On December 1, 2019, the new Drug Administration Law came into effect. The GMP certification of the drug was officially withdrawn

Out of the stage of history. The cancellation of GMP certification marks the transformation of the regulatory function of the National Medical Products Administration and the clarification of regulatory thinking, from certification supervision to daily supervision, and more attention is paid to the whole process of supervision, and drug manufacturers will face more normalized and rigorous inspections. In the past two years since the cancellation of GMP certification, the frequency of unannounced inspections has increased significantly, showing a trend of normalization, and the inspection has become increasingly strict. As a pharmaceutical manufacturer, the company will face increasingly frequent unannounced inspections in the future, and needs to produce drugs more strictly in accordance with GMP standards in daily production activities, otherwise it will face the risk of stopping production due to production not meeting standard specifications.

(6) Management risks of distributors and promotion service providers

The company's sales are mainly based on the distribution model, and the products are finally sold to the terminal institutions through the pharmaceutical circulation enterprises that hold the drug business license. The company's revenue scale is large, the number of dealers is large, and the sales scope covers most of the provinces, autonomous regions and municipalities directly under the central government. In the future, with the continuous development of the company's business operations, the number of dealers may further increase, and the company's difficulty in organizing and managing dealers and risk management will also increase. If the company is unable to continue to effectively manage dealers, or cannot maintain the cooperative relationship with existing important dealers, or dealers misbehaved in the process of marketing promotion, distribution and maintenance, or dealers are not effective in promotion, it will have an adverse impact on the company's brand image and business performance in the corresponding region.

The company hires a promotion service provider to carry out promotion activities for the company's drugs. Although the company will take many measures to strengthen the management of promotion service providers and promotion activities, due to the large number of promotion service providers distributed throughout the country, the company's daily management depth of promotion service providers will still have certain restrictions. If the promotion service provider misbehaves or does not promote effectively in the process of marketing and promotion, it will have an adverse impact on the company's brand image and business performance in the corresponding region.

(7) Risk of misconduct by employees and partners

In the pharmaceutical industry, there have been many cases of corporate employees, distributors, promotion service providers or terminal organizations suspected of receiving kickbacks, bribes or other illegal gains related to drug prescriptions. The company's products under development are mainly innovative students

The products on sale are mainly chemical drug preparations and Chinese patent medicine preparations, and the business development process involves the communication and interaction between the company's employees, third-party institutions and medical institutions, doctors and patients. Improper conduct by the Company's employees or third parties that results in a violation of anti-commercial bribery laws in China or other jurisdictions may adversely affect the Company's business operations.

4. Financial risk

(1) The risk of continuous loss of performance

As of the end of the reporting period, all of the Company's innovative drug candidates were still in clinical trials and preclinical studies. In each period of the reporting period, the company's net profit was -282.3791 million yuan, -780.4989 million yuan and 3707.5046 million yuan respectively, and in 2024, the company generated a large amount of intellectual property licensing income for BL-B01D1 and achieved profit for the current period.

With the steady progress of the company's R&D projects, R&D expenditures will continue to increase in the coming period, and the company expects that the company may still experience performance losses in 2025 and subsequent years before commercializing drug candidates and generating large-scale profits, and there is a risk of continuous performance losses.

There is a risk that the Company will not be able to successfully or timely complete clinical trials, obtain regulatory approvals or commercialize drugs, which could materially damage the Company's business and future earnings if the Company fails to successfully or timely obtain regulatory approvals and complete the commercialization of drugs and drug candidates.

(2) The risk of declining gross profit margin of drug sales

During the reporting period, the gross profit margins of the company's chemical drug preparations were 74.92%, 69.46% and 52.75%, respectively, and the gross profit margins of Chinese patent medicine preparations were 41.65%, 37.80% and 34.24% respectively. The change in the gross profit margin of drug sales is mainly affected by the changes in product sales prices, changes in raw material purchase prices, labor costs, cost control capabilities and changes in product structure. With the advancement of the reform of the national medical insurance payment system and the implementation of the centralized drug procurement policy, the decline in the sales price of chemical drug preparations is an inevitable trend. Proprietary Chinese medicine preparations are also facing the risk of price reduction due to the reform of the medical insurance payment system.

If the sales price of the company's main drugs decreases, the purchase price of raw materials and labor costs rise, and the company cannot maintain competitiveness in technological innovation, production efficiency, cost control ability and product structure, the company's drug sales will face the risk of declining gross profit margin, which will reduce the company's profitability.

(3) Risk of changes in tax incentives and government subsidy policies

Some entities of the issuer enjoy preferential income tax policies, including preferential income tax policies for high-tech enterprises,

Preferential income tax policies for the development of the western region, preferential enterprise income tax policies for the employment of disabled persons, and government subsidies such as value-added tax refunds for the employment of disabled persons in enterprises.

If the relevant income tax incentives or government subsidy policies are adjusted by the competent state authorities in the future, or the company no longer meets the conditions for relevant recognition or subsidies due to other reasons, the company will not be able to continue to enjoy the preferential corporate income tax rate or face a reduction in government subsidies, which will have a certain impact on the company's operating performance and profit level.

(4) Risk of exchange rate fluctuations

With the advancement of the company's and its subsidiaries' global R&D and commercialization strategies, the company's operating results and cash flow are affected by fluctuations in foreign exchange rates, which may expose the company to foreign exchange risks. The value of RMB against the US dollar and other currencies may be affected by changes in global political and economic conditions, and although the Company can make reasonable use of foreign exchange tools to mitigate the impact of exchange rate fluctuations, it is still impossible to completely avoid the adverse effects that future foreign exchange fluctuations may have on the Company's financial condition, results of operations and cash flows.

5. Technical risks

(1) Risks related to intellectual property rights

In the process of R&D and production, the company has generated many intellectual property rights, including but not limited to patents, trademarks, copyrights and know-how. The Company relies on trade secrets and/or drug regulation to protect drug candidates and core technologies that the Company deems commercially significant. However, the Company cannot guarantee that the Company's intellectual property rights will not be illegally used or damaged by others, and competitors may independently develop similar or substitute intellectual property rights. If the Company fails to adequately protect its intellectual property rights on a global scale, or if the Company's intellectual property scope fails to adequately protect the Company's proprietary rights, other companies in the same industry may compete with the Company directly or indirectly, which may adversely affect the Company's business operations.

Second, with the dynamic changes in third-party patent applications and patent protection, and the continuous strengthening of patent protection in the field of development of the Company's drug candidates, the Company may be at risk of infringing third-party patent rights of which it is not currently aware, and may face intellectual property infringement claims, appeals or other potential legal disputes, which will adversely affect the R&D and continuous operation of the Company's related technologies and products.

Third, the company has formulated a confidentiality system and protected the core technology by signing relevant agreements with core technical personnel containing confidentiality clauses and non-competition clauses, applying for patents and other measures, but it cannot completely guarantee that the above-mentioned core technologies will not be disclosed. If the core technology is leaked due to the failure to effectively implement the company's relevant internal control system, it may adversely affect the sustainability of the company's core competitiveness, thereby causing a negative impact on the company

The company's production and operation have been adversely affected.

(2) Drug production risks

Due to the complexity of the drug production process, the drug production schedule and drug quality will be affected by many factors. If there is an occasional supply shortage, facility and equipment failure, human error, etc. in the procurement and production process of raw and auxiliary materials, the company will not be able to provide sufficient clinical samples and commercial products to meet the needs of clinical research and commercial sales in a timely manner or inability, thereby affecting the normal development of the company's clinical research and production and operation; In the event of a major quality and safety accident or adverse event, the company will face penalties from the regulatory authorities and cause serious damage to the company's reputation. All of these factors will adversely affect the Company's profitability and ability to continue as a going concern.

For the products under development, the company needs to break through various technical difficulties in large-scale production, including process, quality control, environmental protection, cost control and other aspects, in order to finally obtain safe, effective and controllable quality drugs. If the company is unable to overcome the technical difficulties of large-scale production after the completion of product research and development, or the cost of large-scale production is too high, it may affect the market performance and future operating performance of the company's products after they are launched.

6. Legal and internal control risks

(1) Product quality and medical dispute liability risks

Pharmaceutical products are directly related to the life safety of patients, so quality control is a crucial part of enterprise production and management. According to the needs of quality management and in strict accordance with the requirements of relevant laws and regulations such as the Drug Administration Law and the Good Manufacturing Practice for Drugs, the company has established a drug production quality management system that meets the requirements of GMP, covering the whole process from raw and auxiliary packaging material procurement, product development and production, product sales and after-sales, and managing and controlling the whole life cycle of drugs from R&D to post-marketing. At the same time, the company has also established a relevant management system for post-marketing quality and safety monitoring, and carried out pharmacovigilance activities to minimize drug quality and safety risks. Although the company has established a sound internal control over product quality and medical disputes, with the development of the company's business operations and the development and launch of new products, if the company cannot continuously evaluate and improve the quality control system and implement it effectively, it may face the risk that the quality control capability cannot adapt to the expansion of business scale and increasingly stringent regulatory requirements. If a patient uses the company's products and causes medical disputes, it may adversely affect the company's production and operation and market reputation.

(2) Environmental protection risks

The pharmaceutical manufacturing industry in which the company is located is a highly polluting industry and is subject to strict environmental protection policies. The company's main environmental pollutants are wastewater, exhaust gas, solid waste and noise generated in the production process. For this

For some pollutants, the company has established an environmental protection hardware equipment and personnel management system suitable for the scale of production, and the pollutants have been treated in an organized manner, and the main pollutants have been effectively treated. However, in the company's daily operation, there may still be a risk that the violation of laws, regulations and departmental rules related to environmental protection constitutes violations of laws and regulations, and is subject to administrative penalties as a result, which will adversely affect the company's production and business activities.

(3) Renewal risk of business qualifications

According to the "Measures for the Administration of Drug Business Licenses", "Good Practice for Drug Operation", "Regulations for the Implementation of the Drug Administration Law", "Good Manufacturing Practice for Drugs", "Measures for the Administration of Drug Registration" and other regulations, the company has obtained the relevant licenses, qualifications and certifications required for production and operation, including drug production licenses, drug business licenses, clinical trial approvals/clinical trial notices, etc. Upon the expiration of some certificates, the Company will be subject to re-assessment by the relevant authorities in order to extend the validity period of the Certificates. If the company fails to continue to meet the corresponding conditions for the renewal of the administrative license during the inspection or evaluation, fails to renew the new license or renew the registration in time when the validity period of the relevant license and approval document expires, or fails to obtain the re-registration approval of the product within the specified time, the company will not be able to continue to develop, produce or sell the relevant products, which will adversely affect the normal production and operation of the company.

7. Risk of the implementation of fundraising and investment projects

The issuer intends to use the funds raised this time for innovative drug R&D projects, which are often accompanied by a greater risk of failure in the R&D process due to the high technical requirements, difficult development, long R&D cycle and high cost of new drug R&D projects, so there is a risk of failure for such R&D projects as investment projects of raised funds. For details of the relevant risks, please refer to "3. (1) Drug R&D Risks" in this section.

At the same time, the feasibility analysis of the fundraising project is based on the current market environment, industry policies, industry development trends and other factors, and in the implementation of the fundraising project, it is also faced with many uncertainties such as market demand changes, relevant policy changes, and technology updates, which may lead to the delay or inability of the project to be implemented; Moreover, innovative drug R&D projects cannot directly bring economic benefits, and it will take some time to achieve economic benefits. Therefore, the new R&D expenses of the raised funds investment project will further affect the company's net profit, working capital, net assets and return on net assets, etc., and adversely affect the company's short-term profitability.

8. Risks associated with the Offering

(1) Review and issuance risks

The plan to issue shares to specific targets is subject to the approval of the Shanghai Stock Exchange and the approval of the China Securities Regulatory Commission before it can be implemented. There is uncertainty as to the outcome of these approvals and the timing of their final approval

Sex.

At the same time, the issuance of shares to specific targets is issued to no more than 35 (including 35) specific investors. Investors' subscription intentions and subscription ability are affected by various internal and external factors such as the overall situation of the securities market, the company's stock price trend, investors' recognition of the issuance plan and the market capital situation, and may face the risk of insufficient funds and even issuance failure.

(2) Risk of dilution of spot returns

After the completion of the issuance of shares to specific targets, the company's total share capital and net assets will increase, and the use and implementation of the raised funds will take a certain amount of time. According to estimates, the offering may not result in dilution of the company's earnings per share. However, if there is a significant change in the assumptions of the calculation or the company's operating conditions, the possibility that the immediate return will be diluted due to this issuance cannot be ruled out, and the company still has the risk that the immediate return will be diluted due to this issuance.

(3) Stock price fluctuation risk

The stock price not only depends on the company's operating conditions, but also affects the country's economic policies, economic cycles, supply and demand conditions in the stock market, the occurrence of major natural disasters, investors' psychological expectations and other factors. Therefore, there are certain uncertainties in the price of the company's shares, which may fluctuate due to the above-mentioned risk factors, which directly or indirectly bring uncertainty to investors about investment returns.

2. The issuer's issuance

(1) The type and par value of the shares to be issued

The types of shares to be issued to specific targets are domestically listed RMB ordinary shares (A shares), with a par value of RMB 1.00 per share.

(2) The method and time of issuance

The offering will be carried out entirely by way of issuing A shares to specific targets, and will be issued at an appropriate time within the validity period after the CSRC agrees to register.

(3) Issuance objects and subscription methods

The issuance of shares to specific targets is issued to no more than 35 (including 35) specific investors, including securities investment fund management companies, securities companies, and credit companies that meet the conditions stipulated by the China Securities Regulatory Commission

Trustee companies, finance companies, insurance institutional investors, qualified foreign institutional investors, and other legal persons, natural persons or other institutional investors that meet the conditions stipulated by relevant laws and regulations. Securities investment fund management companies, securities companies, qualified foreign institutional investors and RMB qualified foreign institutional investors shall be deemed to be one issuance target if they subscribe for two or more products under their management; As the object of issuance, the trust company can only subscribe with its own funds.

The final issuance object will be determined by the board of directors of the issuer and its authorized persons in accordance with the authorization of the general meeting of shareholders and the results of the inquiry with the sponsor (lead underwriter) after the issuance is approved by the Shanghai Stock Exchange and approved by the China Securities Regulatory Commission. If the laws, regulations or normative documents at the time of issuance have other provisions on the issuance object, follow those provisions.

All the issuers of this offering will subscribe for the shares issued in the form of RMB cash and at the same price.

(4) The pricing reference date, issue price and pricing principles

The issuance of shares to specific targets is issued by inquiry, and the pricing benchmark date for the issuance of shares to specific targets is the first day of the issuance period.

The offering price of this issue to a specific target shall not be lower than the company's shares in the 20 trading days before the pricing reference date

80% of the average transaction price. The above average price is calculated as follows: the average stock trading price in the 20 trading days before the pricing base date = the total stock trading volume in the 20 trading days before the pricing base date / the total stock trading volume in the 20 trading days before the pricing base date. The final issue price is subject to negotiation between the Company and the issuer.

If the issuer's shares are subject to dividends, share gifts, capital reserve conversion to share capital and other ex-rights and ex-dividends from the pricing basis date to the issuance date, the reserve price of the issuance will be adjusted accordingly according to the following methods: assuming that the issue floor price before the adjustment is P0, the number of shares to be given or converted into share capital per share is N, the dividend per share is D, and the adjusted issue floor price is P1, then:

Dividend: P1=P0-D

Grant or increase share capital: P1=P0/(1+N)

Two items at the same time: P1=(P0-D)/(1+N)

(5) The number of issuances

The number of shares to be issued to specific targets this time shall not exceed 20,050,000 shares (including the number of shares) and shall not exceed the number of shares issued

5% of the total share capital of the company before the trip, in line with the relevant regulations of the China Securities Regulatory Commission. The final maximum number of shares to be issued to specific targets is subject to the upper limit of the number of shares to be registered with the China Securities Regulatory Commission.

Within the scope of the foregoing, the final number of issuance shall be determined by the board of directors or its authorized person in accordance with the authorization of the general meeting of shareholders, after obtaining the decision of the China Securities Regulatory Commission to register the issuance, and the sponsor (lead underwriter) in accordance with the provisions of relevant laws, regulations and normative documents and the issuance inquiry.

If the company's shares are subject to bonus shares, capital reserve conversion to share capital and other ex-rights matters from the date of the announcement of the first board resolution of the issuance to the issuance date, and other matters lead to changes in the company's total share capital, the upper limit of the number of shares issued will be adjusted accordingly.

If the total number of shares issued to a specific target changes due to changes in regulatory policies or in accordance with the requirements of the issuance registration documents, the total number of shares issued to the specific target and the total amount of funds raised will change accordingly.

(6) The scale and use of the funds raised

The total amount of funds raised by the issuance of shares does not exceed 390,000.00 yuan (including the principal number), and after deducting the issuance expenses, the actual raised funds will be used for innovative drug research and development projects.

Within the scope of the above-mentioned raised funds investment projects, the company can make appropriate adjustments to the specific amount of the corresponding raised funds investment projects according to the actual situation such as the progress and capital needs of the projects. Before the raised funds are in place, the company can invest in advance with self-raised funds according to the actual situation of the investment project with the raised funds, and replace them after the raised funds are in place. After the raised funds are in place, if the actual net amount of raised funds after deducting the issuance costs is less than the total amount of funds to be invested, the shortfall shall be solved by the company by self-raising funds or other means.

If the total amount of funds raised from the issuance of A shares to specific targets is adjusted due to changes in regulatory policies or the requirements of the issuance of registration documents, it will be adjusted accordingly.

(7) Restricted period

After the completion of the issuance of shares to specific targets, the shares subscribed for by the issuer shall not be transferred within six months from the date of the end of the issuance (that is, from the date when the shares issued are registered to their names).

After the completion of the issuance, the shares issued by the listed company to a specific target based on the shares obtained by the listed company obtained in this transaction, and the shares derived from the distribution of stock dividends by the listed company and the conversion of capital reserve into share capital shall also comply with the above-mentioned share lock-up arrangement. Where laws, regulations, and normative documents have other provisions on the sales restriction period, follow them

Stipulate.

The shares of the listed company obtained by the issuer based on this transaction shall also comply with the relevant laws, regulations and normative documents such as the Company Law, the Securities Law, and the Listing Rules of the Science and Technology Innovation Board after the expiration of the lock-up period.

(8) The place where the stock is listed

The shares will be listed and traded on the Science and Technology Innovation Board of the Shanghai Stock Exchange.

(9) Arrangements for the rollover of undistributed profits before the issuance

The accumulated undistributed profits or uncovered losses before the issuance of shares to specific objects will be shared by the new and old shareholders of the company after the completion of the issuance in accordance with the proportion of shares after the issuance.

(10) The validity period of the issuance resolution

The issuance resolution is valid for 12 months from the date of approval by the general meeting of shareholders.

3. The sponsor representatives, co-organizers and other members of the project team of the securities issuance

CITIC Securities appointed Yang Qin and Chen Wei as the sponsor representatives of Sichuan Baili Tianheng Pharmaceutical Co., Ltd. to issue A-shares to specific targets in 2025; Zhou Zengjun was appointed as the project co-organizer of this offering; Xu Chenming, Li Yang, Gong Jie, Ma Xiang, Huang Yuming, Feng Xuan, Zhao Tianwei, Li Weihan, Tong Yinzheng and Niu Rui were designated as project team members.

(1) The practice of the project sponsor representative's main sponsor business

Yang Qin: Sponsor representative, currently the director of the medical and health industry group of the CITIC Securities Investment Bank Management Committee. He has presided over or participated in projects such as Allist's IPO, Navitas Technology IPO, Yahong Pharmaceutical IPO, Yifang Biotech IPO, Shangji CNC IPO, and Laimei Pharmaceutical's non-public offering.

Chen Wei, Sponsor Representative, is currently the Vice President of the Medical and Health Industry Group of the Investment Banking Committee of CITIC Securities. He has presided over or participated in projects such as Allist's IPO, Yahong Pharmaceutical's IPO, Sinopharm Hyundai's 2022 non-public offering, Shangji CNC's 2020 non-public offering, and Shangji CNC's 2019 convertible bonds.

(2) The practice of the project co-organizer's main sponsorship business

Zhou Zengjun is currently the Senior Vice President of the Medical and Health Industry Group of the Investment Bank Management Committee of CITIC Securities. He has presided over or participated in projects such as Allist IPO, Tianxin Pharmaceutical IPO, Yahong Pharmaceutical IPO, Yifang Biotech IPO, Bluesail Medical Convertible Bond and other projects.

4. An explanation of whether the sponsor has circumstances that may affect the fair performance of the sponsor's duties

(1) The shares held by the sponsor or its controlling shareholder, actual controller, or important related party in the issuer or its controlling shareholder or important related party

As of December 31, 2024, the sponsor's proprietary business stock account, credit and securities lending account, do

The shares of the issuer or its significant affiliates held by the municipal account, a wholly-owned subsidiary of CITIC Securities and China Asset Management Co., Ltd., a holding subsidiary of CITIC Securities, are as follows: 86,705 shares of the issuer are held in the proprietary business stock account of CITIC Securities; CITIC Securities' special account for credit and securities lending holds 1,900 shares of the issuer; The CITIC Securities market-making account holds 1,599 shares of the issuer. CITIC Securities' wholly-owned subsidiaries hold a total of 1,620,849 shares of the issuer; China Asset Management Co., Ltd., a subsidiary of CITIC Securities, holds 6,947,790 shares of the issuer.

After verification, the total number of shares held by the sponsor and its controlling shareholders, actual controllers and important related parties does not exceed 5% of the shares of the issuer or its controlling shareholders and important related parties.

(2) The issuer or its controlling shareholder or important related party holds shares of the sponsor or its controlling shareholder, actual controller or important related party

After verification, as of December 31, 2024, the issuer or its controlling shareholder, actual controller, heavy

The related party does not hold shares of the sponsor or its controlling shareholder, actual controller, or important related party. (3) The sponsor's sponsor representative, his or her spouse, directors, supervisors, and senior management have the rights and interests of the issuer and hold positions in the issuer

After verification, as of December 31, 2024, the sponsor's designated sponsor representative and his or her spouse, medium

The directors, supervisors and senior management of Credit Securities do not have the rights and interests of the issuer or hold positions in the issuer that may affect the fair performance of sponsor duties.

(4) The sponsor's controlling shareholder, actual controller, or important related party and the controlling shareholder, actual controller, or important related party of the issuer provide mutual guarantees or financing

After verification, as of December 31, 2024, the controlling shareholder, actual controller, and important of the sponsor

There is no guarantee or financing between the related party and the controlling shareholder, actual controller or important related party of the issuer that is different from the normal commercial conditions.

(5) Other related relationships between the sponsor and the issuer

As of 31 December 2024, there was no possible impact between the sponsor and the issuer

Other related relationships in which the sponsor performs its sponsor duties fairly.

5. Sponsor commitments

1. The sponsor has conducted due diligence and prudent verification of the issuer and its controlling shareholder and actual controller in accordance with the laws, administrative regulations and the provisions of the China Securities Regulatory Commission, and agreed to recommend the issuer's securities for issuance and listing, and accordingly issues this letter of sponsorship.

2. Through due diligence and prudent verification, the sponsor undertakes the following:

(1) There are sufficient reasons to believe that the issuer complies with laws and regulations and the relevant regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange on the issuance and listing of securities;

(2) There are sufficient grounds to believe that there are no false records, misleading statements or material omissions in the issuer's application documents and information disclosure materials;

(3) There are sufficient grounds to believe that the issuer and its directors have sufficient and reasonable grounds to express their opinions in the application documents and information disclosure materials;

(4) There are sufficient grounds to believe that there is no substantial difference between the application documents and information disclosure materials and the opinions issued by the securities service institution;

(5) ensure that the designated sponsor representative and the relevant personnel of the sponsor have diligently and prudently conducted due diligence and prudent verification of the issuer's application documents and information disclosure materials;

(6) Guarantee that there are no false records, misleading statements or major omissions in the sponsorship letter and other documents related to the performance of sponsorship duties;

(7) Ensure that the professional services provided to the issuer and the professional opinions issued comply with laws, administrative regulations, regulations of the China Securities Regulatory Commission and industry norms;

(8) Voluntarily accept the regulatory measures taken by the China Securities Regulatory Commission in accordance with the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing;

(9) Undertake to voluntarily accept the self-discipline supervision of the Shanghai Stock Exchange.

6. The decision-making procedures for the implementation of the securities issuance and listing

(1) The board of directors deliberates and approves

On March 9, 2025, the issuer held the 19th meeting of the fourth session of the board of directors and deliberated and approved this meeting

The board of directors of the issuer believes that the issuer has the conditions to issue A shares to specific objects, and makes resolutions on the type and par value of the shares to be issued, the issuance method and issuance time, the pricing reference date, the issue price and pricing principles, the number of shares, the issuance object and subscription method, the restricted period, the listing location, the scale and use of the raised funds, etc.

(2) Deliberation and approval by the general meeting of shareholders

On March 25, 2025, the issuer convened the first extraordinary general meeting of shareholders in 2025 to deliberate and approve each item

related to the issuance.

To sum up, the issuer has fulfilled the relevant laws, regulations, rules and normative documents such as the Company Law, the Securities Law and the Registration Management Measures, as well as the decision-making procedures stipulated by the China Securities Regulatory Commission and the Shanghai Stock Exchange. Matters related to this issuance have been deliberated and approved by the 19th meeting of the fourth board of directors of the company and the first extraordinary general meeting of shareholders in 2025; It still needs to be approved by the Shanghai Stock Exchange and the China Securities Regulatory Commission to make a decision on registration.

7. The sponsor's special opinions on the investment of the raised funds in the field of scientific and technological innovation

(1) The funds raised this time are mainly invested in the field of scientific and technological innovation

The issuer focuses on the frontier field of global biomedicine, based on solving unmet clinical needs, and its industry and its technological development trend are highly compatible with the national innovation-driven development strategy. The investment project of the funds raised by the issuer in the issuance of shares to specific targets is an innovative drug research and development project, which is in line with the key development areas supported by the "Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Long-Range Objectives Through the Year 2035" and the "14th Five-Year Plan for the Development of the Pharmaceutical Industry", "Healthy China 2030" Planning Outline, and "Decision on Accelerating the Cultivation and Development of Strategic Emerging Industries". It is mainly invested in the field of scientific and technological innovation that is supported by national industrial policies and funds.

The investment project aims to accelerate the R&D process of the issuer's innovative drugs, enrich the company's product pipeline, enhance the company's R&D and independent innovation capabilities, and serve the national strategy, which belongs to the field of scientific and technological innovation.

(2) The way to promote the improvement of the company's scientific and technological innovation level through the implementation of fund-raising projects

Issuers face competition from major pharmaceutical companies and biotechnology companies around the world, and maintaining a high level of R&D investment is the key to maintaining the company's core competitiveness and improving the company's level of scientific and technological innovation.

In order to promote the R&D process of the issuer's innovative drugs and further improve the company's core competitiveness, the issuer and its wholly-owned subsidiary, as the implementation body of the investment project of the raised funds, intend to use the raised funds of 390,000.00 yuan for the research and development of innovative drugs related to the innovative ADC drug R&D platform (HIRE-ADC platform), the innovative multi-specific antibody R&D platform (GNC platform) and the innovative ARC (nuclear medicine) R&D platform (HIRE-ARC platform), including: Clinical trials of ADC pipelines BL-B01D1, BL-M07D1, BL-M11D1, BL-B16D1, BL-M17D1, BL-M09D1, GNC pipelines GNC-038, GNC-077, ARC pipelines BL-ARC001, BL-ARC002 and other products.

Through the implementation of the investment project of the raised funds, the issuer will accelerate the research and development process of innovative drugs, expand the depth and breadth of its product development layout, and lay a solid foundation for the commercialization of more products. (3) Verification opinions

After verification, the sponsor believes that the investment of the funds raised by the issuer belongs to the field of scientific and technological innovation, which complies with the relevant provisions of Article 12, Item 4 of the Administrative Measures for the Registration of Securities Issuance of Listed Companies. At the same time, the implementation of this fundraising project has corresponding talent reserves and technical reserves, there is no major uncertainty or major risk, and the company has the ability to implement the fundraising project.

8. Arrangements for the sponsor's continuous supervision of the issuer

Main Matters Specific Plans

(1) Matters of continuous supervision The remainder of the year in which the securities are listed and the next 2 full fiscal years

1. Supervise the issuer's effective implementation (1) Supervise the issuer's effective implementation and further improve the existing system to prevent major shareholders and other related parties from illegally occupying the issuer's resources; (2) Establish a communication mechanism with the issuer on the regular illegal occupation of issuance by other related parties, and continue to pay attention to the implementation of the above-mentioned system and the disclosure of information on the performance of the issuer

Institutional obligations of human resources

2. Supervise the effective implementation of the issuer (1) Supervise the issuer to effectively implement and further improve the existing internal control system to prevent senior management from taking advantage of their position to damage the interests of the issuer; (2) Establish a regular communication mechanism with the issuer through the use of their positions, and continue to pay attention to the implementation of the above-mentioned system of the issuer and the fulfillment of the disclosure obligations of the internal control system for the interests of the issuer

Main Matters Specific Plans

3. Supervise the issuer's effective implementation (1) Supervise the issuer's effective implementation of the Articles of Association and the Management System for Related-Party Transactions, etc., and improve the system for ensuring the fairness and compliance of related-party transactions, and implement the system for information fairness and compliance of related-party transactions, and the disclosure system; (2) Supervise the issuer to inform the sponsor in a timely manner of the material related party transactions to be carried out, express opinions on the related party transactions, and express opinions on the related party transactions

4. Supervise the issuer to fulfill the information (1) Supervise the issuer to strictly follow the obligations of the Company Law, the Securities Law, and the Shanghai Securities Exchange Disclosure Obligations, review the requirements of relevant laws, regulations and normative documents such as the Listing Rules of the Science and Technology Innovation Board of the Information Disclosure Exchange, disclose the documents and fulfill the information disclosure obligations to the China Securities Regulatory Commission; (2) Other review information disclosure documents submitted by the stock exchange and other documents submitted to the China Securities Regulatory Commission and the Shanghai Stock Exchange after the issuer is required to disclose information

Files Files

(1) Supervise the issuer to implement the "Management System for Raised Funds" and other systems that have been formulated

5. Continue to pay attention to the security and specificity of the funds raised by the issuer's warrants; (2) Continue to pay attention to the issuer's commitments such as the storage of funds raised by the issuer, the storage of investment projects, and the implementation of investment projects; (3) If the issuer intends to change the commitments such as the implementation of the fundraising purpose, the sponsor requires the issuer to notify or consult the guarantee

recommend, and supervise them to fulfill their relevant information disclosure obligations

(2) The sponsor agreement shall pay a return visit to the issuer on a regular or irregular basis, review the rights required for the sponsor work, and perform the materials of the continuous supervision of the issuer; (2) attend shareholders' meetings, board of directors and board of supervisors of the issuer; （3）

Other main provisions of responsibility Verify the relevant matters of concern to the issuer of concern to the relevant departments, and may engage relevant matters if necessary

Cooperate with securities service institutions

(3) Issuers and other intermediaries (1) The issuer has undertaken to cooperate with the sponsor in the sponsorship agreement to perform the sponsor duties, and to cooperate with the sponsor in a timely manner to provide the sponsor with true, accurate and complete documents related to the sponsorship;

(2) Accept the sponsor's obligation to conduct due diligence and provide relevant information or

to cooperate

(4) Other arrangements None

9. The sponsor's recommendation conclusion on the stock listing

After due diligence and due diligence of the application documents, and communication with the issuer, the issuer's lawyers and accountants, the sponsor believes that:

The issuer's issuance of A shares to specific targets in 2025 is in accordance with the Company Law, the Securities Law, and the above

According to the relevant provisions of laws and regulations such as the Administrative Measures for the Registration of Securities Issuance of Municipal Companies, the Rules for the Examination and Approval of Securities Issuance and Listing of Listed Companies on the Shanghai Stock Exchange, the issuer's securities have the conditions for listing on the Shanghai Stock Exchange, and the relevant decision-making procedures have been fulfilled. The sponsor agreed to sponsor Baili Tianheng to issue A shares to specific targets.

(No text below)

(There is no text on this page, it is the signed and stamped page of the "Listing Sponsorship Letter of CITIC Securities Co., Ltd. on Sichuan Baili Tianheng Pharmaceutical Co., Ltd. Issuing A Shares to Specific Targets in 2025")

Sponsor Representative:

Yang Qin, Chen Wei

Project Co-Organizers:

Zhou Zengjun

CITIC Securities Co., Ltd

YYYYYYYYYYYYYYYYY

Kernel Lead:

Zhu Jie

Head of Sponsor Business:

Sun Yi

CITIC Securities Co., Ltd

YYYYYYYYYYYYYYYYY

Chairman of the Board of Directors and Legal Representative:

Zhang Youjun

CITIC Securities Co., Ltd

YYYYYYYYYYYYYYYYY

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