Shandong Xinhua Pharmaceutical Company Limited announced that it has entered into a share subscription contract with Hualu Investment Development Co., Ltd. for not more than 36,284,470 A shares at a price of CNY 6.89 per share for gross proceeds of not more than CNY 250,000,000 on April 14, 2021. The shares cannot be transferred within 36 months from the issuance closing date. The transaction has been approved in the 2nd extraordinary meeting of the company's 10th directorate and is subject to the approvals of the shareholders, and the China Securities Regulatory Commission.