Shandong Xinhua Pharmaceutical Company Limited announced that its has entered into a strategic cooperation agreement with Henan Zhenzhen Biotechnology Co., Ltd. on 26 April 2022 pursuant to which HZ Biotechnology has agreed to engage the Company for the manufacturing and distribution of certain products in China and other jurisdictions as may be mutually agreed. The Board considers the entering into of the Agreement would be beneficial to the Company as it could capitalise on its production capacity with the prospect of generation of revenue. However, the impact of entering into of the Agreement on the financial performance and operating results of the Company cannot be ascertained at present as it is subject to the negotiation, conclusion and entering into of further agreements for execution and implementation of underlying projects contemplated by the Agreement.

In particular, the Agreement merely serves as a preliminary framework for possible future strategic cooperation with HZ Biotechnology and no agreement has been reached to date in respect of the cooperation on any specific drug and pharmaceutical product. Further, the Agreement is non-exclusive in nature and the Company is not the only cooperative partner of HZ Biotechnology at present; is materially dependent on the actual implementation and promotion, if any, of the underlying projects contemplated by the Agreement; and may be affected by various factors such as changes in national polices, the prevailing industry and market environment and other risks and uncertainties. The Company will be required to, without limitation, comply with the necessary approval procedures and information disclosure obligations in accordance with the relevant provisions of the Listing Rules, the Rules Governing the Listing of Shares on the Shenzhen Stock Exchange and the articles of association of the Company concerning the implementation and performance of the Agreement and its related agreements and transactions.

Investors are advised to be aware of the investment risks involved.