On 29 November 2023, YiChang HEC ChangJiang Pharmaceutical Co., Ltd. and Sunshine Lake Pharma entered into a drug R&D pipeline cooperation project framework agreement in relation to the proposed cooperation between the Company and Sunshine Lake Pharma on the R&D and commercialization of the undergoing and future R&D pipeline cooperation projects of Sunshine Lake Pharma in the PRC (the ``Framework Agreement''). At present, the domestic pharmaceutical industry is undergoing rapid growth and the industrial competition is increasingly fierce. As a domestic platform for pharmaceutical preparation under the HEC Group, in order to maintain its long-term competitive advantages in the industry, the Company not only ensures the continuous business expansion of its existing products, but also needs to continuously consolidate its product pipeline and introduce new products to ensure its long-term growth potential.

As the controlling shareholder of the Company, Sunshine Lake Pharma has leading pharmaceutical R&D capabilities in the PRC, including pre-clinical R&D and clinical development of small molecule and large molecule new drugs, as well as the development of small molecule innovative preparations and biosimilars. It has outstanding innovative R&D capabilities and currently has a rich pipeline of drug candidates, thereby providing the Company with pharmaceutical products with potential market competitiveness. The Company is principally engaged in drug production, sales of drugs in the PRC and the re- development of existing drugs, yet its R&D capability for new products is limited.

In consideration of enhancing its long-term competitive advantages, the Company intends to enter into a Framework Agreement with Sunshine Lake Pharma, pursuant to which the Company will bear part of the R&D expenses, and both parties will collaborate on new drugs, innovative preparations and biological drugs (17 in total) and small molecule generic drugs (tentatively 20) by way of sharing sales with reference to the R&D investment amount of the relevant products in the domestic commercialization stage. The cooperation is conducive to accelerating the R&D progress of relevant products, increasing diversity of the Company's commercialized products, and enhancing the Company's long-term growth potential and comprehensive competitiveness.