Livzon Pharmaceutical : 2022 FIRST QUARTERLY REPORT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

ᘆमᔼᖹණྠٰ΅Ϟࠢʮ̡

LIVZON PHARMACEUTICAL GROUP INC.*

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 1513)

2022 FIRST QUARTERLY REPORT

This announcement is made by ᘆमᔼᖹණྠٰ΅Ϟࠢʮ̡Livzon Pharmaceutical Group Inc.* (the "Company", together with its subsidiaries collectively, the "Group") pursuant to Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).

The Company and all members of the board of directors (the "Board") warrant that the contents of the information disclosure are true, accurate and complete without containing any false representations, misleading statements or material omissions.

IMPORTANT NOTICE:

• 1. The Board, supervisory committee and the directors, supervisors and senior management of the Company warrant the truthfulness, accuracy and completeness of the 2022 First Quarterly Report (the "Quarterly Report") which does not contain false representations, misleading statements or material omissions, and accept joint and several legal liabilities for its contents.

• 2. Mr. Zhu Baoguo (ϡڭ਷΋͛), the person-in-charge of the Company, Ms. Si Yanxia (̡ዲ ᒳɾɻ), the person-in-charge of accounting work, and Ms. Zhuang Jianying (୿਄ᆦɾɻ), the person-in-charge of the accounting department (the head of the accounting department), declare that they warrant the truthfulness, accuracy and completeness of the financial information contained in the Quarterly Report.

• 3. The Quarterly Report covering the unaudited financial results of the Company from 1 January 2022 to 31 March 2022 (the "Reporting Period" or "Period") has been prepared in both Chinese and English. Where any discrepancies arise between the Chinese version and the English version, the Chinese version shall prevail. The financial statements and corresponding information as contained in the Quarterly Report have been prepared in accordance with the China Accounting Standards for Business Enterprises (ʕ਷Άุึࠇ๟ۆ'), unless otherwise stated, the currency denominations herein are in Renminbi (RMB).

• 4. Whether the financial report of the first quarter has been audited

  ½ Yes √ No

I.

PRINCIPAL FINANCIAL DATA

(I)

Principal Accounting Data and Financial Indicators

Unit: RMB
Corresponding
period of	Period-to-
last year	period change
Operating income	3,479,027,465.92	3,349,814,145.87	3.86%
Net profit attributable to shareholders of the Company	553,293,797.77	519,651,078.57	6.47%
Net profit attributable to shareholders of the	561,046,433.69	485,302,200.16	15.61%
Company after deducting extraordinary gains or losses
Net cash flow from operating activities	710,308,938.96	514,620,182.77	38.03%
Basic earnings per share (RMB/share)	0.59	0.56	5.36%
Diluted earnings per share (RMB/share)	0.59	0.55	7.27%
Weighted average return on net assets	4.17%	4.22%	Decreased
by 0.05
percentage point
As at the end
of the Reporting	As at the end
Period	of last year	Change
Total assets	23,729,888,204.20	22,371,915,590.82	6.07%
Owners' equity attributable to shareholders of the Company	13,561,769,257.68	13,003,763,631.47	4.29%

Reporting

Period

(II) Items and Amounts of Extraordinary Gains or Losses

Unit: RMB

Amount for the ReportingItem

PeriodDescription

Profit or loss on disposal of non-current assets (including writing-off of accrued impairment provision of assets) Government grants included in the profit or loss for the

-370,357.71 49,973,167.93

-

-

Reporting Period (except for government grants closely related to the corporate business and entitled according to the national standards on a fixed amount or fixed volume basis)

Gains or losses on fair value changes in financial assets held for trading and financial liabilities held for trading, and investment income on disposal of financial assets held for trading, financial liabilities held for trading and held-for-sale financial assets, except for effective hedging activities related to the ordinary operating business of the Company

-46,786,135.59

-

Other non-operating income and expenses excluding the above items

290,555.94

-

Less: Effect of income tax

Effect on minority interests (after tax)

Total

7,824,708.19 3,035,158.30 -7,752,635.92

- - -

Explanation on defining the items of extraordinary gains or losses as set out in the "Interpretative Announcement for Information Disclosure of Companies that Issue Securities to the Public No. 1 - Extraordinary Gains or Losses" as items of recurring gains or losses

The Company has not defined any items of extraordinary gains or losses as set out in the "Interpretative Announcement for Information Disclosure of Companies that Issue Securities to the

Public No. 1 - Extraordinary Gains or Losses" as items of recurring gains or losses.

(III) Information and Reasons of Changes in Principal Accounting Data and Financial

Indicators

1.

Substantial changes of items in consolidated balance sheet and reasons thereof

Item

Amount at the end of the Period

(RMB)Amount at the beginning of the year (RMB)

Change in percentageDescription

Right-of-use assets

Short-term loans

Contract liabilitiesTaxes payables

Long-term loans

Lease liabilitiesOther comprehensive income

22,312,354.95 1,405,807,901.10

92,205,147.45

270,115,285.91 1,626,661,809.48

10,119,399.23

32,356,471.55

14,588,322.60 2,043,048,023.71

167,796,768.82

160,385,251.99 636,780,252.78

5,274,240.80

52.95%

• -31.19% Mainly due to repayment of loans by subsidiaries in the Period.

• -45.05% Mainly because part of the contract payments received in advance in the Period which met the conditions for revenue recognition were transferred to revenue.

• 68.42% Mainly due to an increase in enterprise income tax payables.

• 155.45% Mainly due to an increase of new long-term loans by subsidiaries in the

  Period.

• 91.86% Mainly due to an increase in lease contracts signed in the Period which led to an increase in lease payments payables for more than one year.

• 46,548,997.70 -30.49%Mainly due to an increase in lease contracts signed in the Period.

Mainly due to changes in the fair value of other equity instrument investments and changes in exchange rates which led to changes in translation differences in foreign currency statements.

2. Substantial changes of items in consolidated income statement and reasons thereof

Amount for the corresponding

Amount for the period of last Change in

Item

Period (RMB) year (RMB) percentageDescription

Finance expenses

-37,928,486.80 -23,336,581.96 -62.53%Mainly due to an increase in interest income in the Period as compared with the previous period.

Gains from changes in fair value

-53,502,658.48

-36,631,085.76

• -46.06% Mainly due to fluctuations in the market value of subject securities investment held.

  Credit impairment loss

  789,451.79

  -3,207,016.48

• -124.62% Mainly due to the recovery of the receivables with relatively long ages in the Period which offset the expected credit losses accrued in the previous period.

  Asset impairment loss

  -5,309,013.21

  -22,804,347.40

• -76.72% Mainly due to a decrease in the provision for inventory depreciation in the Period as compared with the previous period.

Gains from disposal of assets Non-operating income

-370,357.71 1,882,370.35

21,927.78 6,297,187.09

-1,788.99%Mainly due to losses occurred from disposal of fixed assets in the Period.

• -70.11% Mainly due to the transfer of the accounts that have been outstanding for a long time and do not need to be paid to non-operating income during the previous period.

  Non-operating expenditure

  1,591,814.41

  2,817,423.55

• -43.50% Mainly due to that the expenditure of charitable donation of the previous period was relatively high.

Other comprehensive net income after taxation

-14,442,932.04

-123,910,341.14

88.34%Mainly due to the disposal of other equity instrument investments and the other comprehensive gains that were previously recognized by them were transferred to retained earnings during the previous period.

Note: From January to March 2022, the Group recorded operating income of RMB3,479.03 million, representing a period-to-period increase of 3.86%. Chemical drug preparation products recorded income of RMB2,109.73 million, representing a period-to-period increase of 10.90%. Among them, gastroenterology products recorded income of RMB1,070.43 million, representing a period-to-period increase of 5.90%; gonadotropic hormones products recorded income of RMB737.48 million, representing a period-to-period increase of 22.84%; psychiatry products recorded income of RMB133.45 million, representing a period-to-period increase of 30.87%; anti-infection products recorded income of RMB114.56 million, representing a period-to-period increase of 8.02%. APIs and intermediate products recorded income of RMB899.95 million, representing a period-to-period increase of 16.13%. Traditional Chinese medicine preparation products recorded income of RMB271.62 million, representing a period-to-period decrease of 36.14%. Diagnostic reagent and equipment products recorded income of RMB162.50 million, representing a period-to-period decrease of 30.77%.