On behalf of the board of directors (the "Board") of SSY Group Limited (the "Company"), I hereby present the annual report of the Company and its subsidiaries (the "Group") for the year ended 31 December 2021.


In 2021, faced with the adjustments in the pharmaceutical market and industrial policy amidst the normality under novel coronavirus epidemic, the Group made concerted efforts to overcome the various adverse effects brought by the epidemic and market competition with its endeavor in operation and implementation of various measures to ensure market support, and thus achieved sustainable growth in volume and revenue of its main businesses. Over the past year, as the Group made strenuous efforts to promote scientific research, innovation and structural optimisation, new products and product types under evaluations have been approved successively, and the Group demonstrated strong advantage in winning tenders of national and local centralised procurement of preparation products. With the accelerated utilisation of the production capacity of main bulk pharmaceuticals and preparations, continuous improvement in the market condition and increasing market shares, the Group delivered favourable performance in promoting the integrated development in relation to the whole industry chain and diversified forms from medical materials, bulk pharmaceuticals to high value-added preparations, providing sufficient momentum for the future development of the Group.

In 2021, the Group achieved a revenue of HK$5,357 million, representing an increase of 25.7% compared to last year, and the gross profit margin was 59.2%, representing a decrease of 4.4 percentage points compared to last year. The net profit was HK$786 million, representing an increase of 28.4% compared to last year. The Directors resolved to pay a final dividend of HK$0.07 per share on 8 June 2022 to the shareholders named in the register of members of the Company on 26 May 2022. Total dividends for the year were HK$0.12 per share, representing an increase of 20% compared to last year.


(1) Sales of Products

In response to the new situation of further implementation of reform to the centralised medicines procurement and under the epidemic normality, the Group increased its effort in promoting market development for conventional preparations and main preparations. At the same time, in light of changes in demands from the industrial chain and upholding the principle of overall planning and key breakthrough, the Group stepped up efforts in increasing the production and sales of its major bulk pharmaceuticals and medical materials, so as to ensure a continuously and consistently favourable operation performance overall. Taking the opportunity brought by National Centralised Medicines Procurement as well as provincial and regional Group Purchasing Organisation Programme, the Group continuously expanded the market accessibility of its products. During the year, the Group actively participated in the fourth and fifth round of National Centralised Medicines Procurement and renewal of previous National Centralised Procurement contracts, as well as the tendering of provincial and municipal procurement programmes, price integration and tendering for hospital medicines procurements. 2 types with 4 specifications, namely Ambroxol Hydrochloride Injection (1ml: 7.5mg, 2ml: 15mg, 4ml: 30mg) and Doxofylline Injection (10mg: 0.1g) were awarded the tenders in the fourth round of National Centralised Medicines Procurement. 2 product specifications, namely Fluconazole and Sodium Chloride Injection (100ml: 0.2g Fluconazole and 0.9g Sodium Chloride) and Ropivacaine Hydrochloride Injection (10ml: 100mg PP ampoule), were successfully selected in the fifth round of National Centralised Medicines Procurement. So far, a total of 6 types with 9 specifications of the Group's products have been selected in National Centralised Medicines Procurement, which were promptly put on the market and realised the sales increment, becoming a new growth driver for the benefit of the Group.

In addition, the Group carried out online tendering of main products such as Bromhexine Hydrochloride Injection, Metronidazole Injection, Ciprofloxacin Lactate and Sodium Chloride, Linezolid and Glucose Injection, Fluconazole and Sodium Chloride Injection, Medium-chain and Long-chain Triglycerides Lipid Emulsion Injection (C8~24Ve), Terbutaline Sulphate Nebuliser Solution, Lacosamide Tablets and Dexmedetomidine Hydrochloride Injection in over 20 provinces, creating good and accessible conditions to maintain market shares, strengthen its ability for overall development and market penetration of main products and new products, increase sale volume and expand market coverage of products with tenders awarded.

The production and sales of infusion solutions was stable with a slight increase, and the proportion of therapeutic products showed healthy growth. Amidst the normality under epidemic, the domestic pharmaceutical market restored a stable supply and demand condition. As the intravenous infusion solution industry has become increasingly concentrated, the Group continued to increase its market shares and remained its leading position in the infusion market. In 2021, the sales volume of infusion solutions reached approximately 1,358 million bottles (bags), representing an increase of approximately 13.8% compared to last year. The revenue of infusion solutions reached approximately HK$3,304 million, representing an increase of approximately 25.3%compared to last year. In particular, the sales volume of key infusion solution products such as Metronidazole, Levofloxacin Lactate, Ciprofloxacin, Moxifloxacin, Sodium Lactate Ringer and Peritoneal Dialysis Solution reached approximately 205.50 million bottles (bags), representing an increase of approximately 22.4% compared to last year. The sales volume of Metronidazole reached approximately 41.45 million bottles (bags), representing an increase of approximately 67% as compared to last year. The sales volume of Peritoneal Dialysis Solution products reached approximately 2.15 million bottles (bags), representing an increase of 877% as compared to last year.

Ampoule product line has become a powerful boost and new growth driver for the Group's injection segment as it has become increasingly rich in varieties with its production and sales gradually scaled up. The market expansion of ampoule products including Betahistine Hydrochloride Injection has been accelerated. At the same time, the Group's products including Ambroxol Hydrochloride, Doxofylline and Ropivacaine Hydrochloride were successively included for National Centralised Medicines Procurement, forming a new growth point for the Group's ampoule products to achieve rapid breakthrough in scale. Efforts have been made to accelerate the marketing of new ampoule products including Bromhexine Hydrochloride, Terbutaline Sulfate Nebuliser Solution, Dexmedetomidine and Adenosine Cyclophosphate, which have promising market prospect. During the year, the revenue of ampoule products of the Group was approximately HK$1,094 million, representing an increase of approximately 12.6% as compared to last year, which continued to maintain a good growth momentum.

In respect of bulk pharmaceuticals business, the Group achieved continuous improvement in sales revenue and substantial increase in sales volume of main products. A number of types of products were granted production approvals, and the product mix has become increasingly diversified. During the year, the revenue from bulk pharmaceuticals reached approximately HK$534 million, representing an increase of 131.9% as compared to last year. The market restored growth momentum with substantial increase in prices. After continuous optimisation of production process, improvement of quality standard as well as transformation and enhancement of environmental protection treatment capacity by the Group, the production capacities of the Group were effectively released, and the product advantages such as cost and quality were further demonstrated. Caffeine achieved a sales volume of 2,758 tonnes during the year, representing an increase of approximately 394% as compared to last year, and its products were sold to various markets such as America, Europe and Asia. Azithromycin achieved a sales volume of 223 tonnes, representing an increase of approximately 40% as compared to last year.

With the Group's continuous efforts in the bulk pharmaceuticals segment, the production capacities of major bulk pharmaceuticals including Caffeine, Theophylline, Aminophylline, Metronidazole, Nifedipine, Azithromycin and Hydroxyethyl starch have been enhanced and the trend of their production and sales was gratifying. New specialised bulk pharmaceuticals, including Terbutaline Sulfate (an anti-asthmatic drug), Linezolid Hydrochloride (an anti-bacterial drug), Cinacalcet Hydrochloride (the only calcium mimetic approved by the US FDA for use in humans), Dexmedetomidine Hydrochloride (providing sedation effect for patients receiving general anesthesia surgery), Lurasidone Hydrochloride and Blonanserin (antipsychotic drugs) and Ipratropium Bromide (a bronchitis drug), have been granted national production approval, and currently efforts have been made to accelerate the progress of industrialisation. Applications for 13 bulk pharmaceuticals, including Ornidazole, Levornidazole, Tinidazole, Tedizolid Phosphate, Urapidil Hydrochloride, Urapidil, Rosuvastatin Calcium, Safinamide Methansulfonate, Entacapone, Stiripentol, Theobromine, Tofacitinib Citrate and Doxofylline (in various fields such as antibacterial, antihypertensive, antilipemics, treatment of hypoglycemic and its complications, Parkinson's disease, asthma and psychoneurological), have been completed and were pending for approval. In addition, approval applications for a batch of newly-developed and high value-added specialised bulk pharmaceuticals, such as Formoterol Fumarate, Etomidate, Vortioxetine Hydrobromide, Benserazide Hydrochloride, Nicorandil, Trelagliptin Succinate, Alogliptin Benzoate, Collagen, Epinephrine and Gadobutrol Contrast Agents (in various fields such as treatment of asthma, anesthesia, psychiatry, cardiovascular and first aid), have been accelerated. New growth drivers for the future development of the bulk pharmaceuticals segment were strengthened.

Solid preparations business segment recorded a steady increase in production and sales. Leveraging on tender awarded for National Centralised Medicines Procurement of Cefdinir capsule and Prucalopride Succinate tablet, the Group connected closely the commercial chain with the end market by stepping up professional promotion and adjusting market layout, so as to promote product, channel and personnel penetration and further improve the product accessibility and brand penetration. Cefdinir capsule and Rosuvastatin Calcium tablet achieved sales in scale within a short period of time, and the market influence expanded to the whole of China, of which Cefdinir capsule achieved sales of HK$54.74 million, representing an increase of approximately 150% as compared to last year.

In respect of medical materials, the Group successfully extended its presence into the bioprocessing film industry. Jiangsu Best New Medical Material Co., Ltd. stepped up efforts to strengthen the product upgrade and technology advancement of major medical materials products such as rubber stoppers, infusion films and bioprocessing films, and enhanced the supporting ability of the leading products for production in downstream production chains, which facilitated the enhancement of its production capacity and market coverage, accumulating strength for enhancement of industrialisation scale and quality in the future. Newly developed multi-layer co-extrusion bioprocessing films for single-use system in liquid dosing has been put into industrial production and achieved sales, which is used to replace those imported bioprocessing films and has broad market development prospects. In addition, the Group also made positive progress with a number of new product development projects including bioprocessing films for cell culture, albumin liquid storage bag films and multi-layer co-extrusion high barrier films, playing an important role in accelerating the product upgrading of the medical materials segment and establishing the leading position of the Group in the production as well as research and development of bioprocessing films in the domestic market.

As the export of preparations to foreign countries were limited by multiple factors such as the global pandemic and the surge in international sea freight rates, the export of the Group's preparations to foreign countries were greatly affected. During the year, revenue from the export of preparations amounted to approximately HK$83.72 million, representing a decrease of approximately 50.3% compared to last year, and sales volume from export of infusion solutions was approximately 53.25 million bottles, representing a decrease of approximately 50.1% as compared to last year. During the year, the Group continued to maintain good relationship with international customers and carry out overseas product registration, adding 5 new countries and 11 product registration certificates, actively laying a foundation for future market recovery. Currently, the Group has obtained 322 product registration certificates in almost 100 countries.

(2) Research and Development of New Products

Upholding the innovation-driven strategy, the Group continuously increased the investments and gradience in technological innovation through the innovative platform integrating production, education, research and application, expedited and improved the progress, efficiency and level of R&D of new products. With the positive result from innovation achievements, the Group's product portfolio was increasingly enriched and improved, providing a strong driving force for the sustainable development of the Group. In 2021, based on the cooperation with several universities and scientific research institutes, the Group entered into a strategic cooperation agreement with China Pharmaceutical University(中國藥科大學)to improve the level and grade of scientific research and development and accelerate industrialisation of scientific and technological achievements. During the year, the Group joined hands with China Pharmaceutical University, Shenyang Pharmaceutical University, Lanzhou University and Hebei Medical University to establish several internship and practice bases for undergraduate and postgraduate, in an effort to actively build suitable technology talent reserve for the Group.

Taking into account of existing and potential markets, the Group is persistent in pushing forward the integrated research and development of innovative drugs and generic drugs as well as the consistency evaluation of generic drugs, and made great efforts in implementing the business strategy of "bulk pharmaceuticals + preparations", achieving remarkable innovation results. Due to the efforts made by the Group to promote the development of innovative drugs, Type I new drug NP-01, the first innovative drug type of the Group, has entered into the research of Phase I clinical trial. NP-01 is an innovative anti-tumor drug simultaneously targeting of KDR, Met and Axl. Currently, the Group has stepped up efforts to push forward the preliminary research on anti-liver fibrosis Type 1 innovative drug ADN-9, anti-epileptic compound QO-83, self-developed anti-pulmonary hypertension Type 1 innovative drug and anti-tumor Type 2 chemical innovative drug Miriplatin, aiming to apply for clinical trial by the end of 2022. During the year, a total of 20 national production approvals were obtained, including 7 infusion products approved for production namely Ciprofloxacin Lactate and Sodium Chloride Injection, Fluconazole and Sodium Chloride Injection, Metronidazole and Sodium Chloride Injection (100ml and 250ml), Levornidazole and Sodium Chloride Injection, Linezolid and Glucose Injection and Medium-chain and Long-chain Triglycerides Lipid Emulsion Injection (C8~24Ve); 3 types of ampoule namely Bromhexine Hydrochloride Injection, Terbutaline Sulfate Nebuliser Solution and Dexmedetomidine Hydrochloride Injection; 2 solid preparation products namely Lacosamide Tablets (50mg, 100mg); 2 powder injection products namely Azithromycin for Injection (0.25g, 0.5g); and 6 bulk pharmaceutical products namely Terbutaline Sulfate, Linezolid, Dexmedetomidine Hydrochloride, Lurasidone Hydrochloride, Blonanserin and Ipratropium Bromide. The following products were approved in the first three months of 2022: Fluconazole and Sodium Chloride Injection (50ml), Dexmedetomidine Hydrochloride Injection (1ml) Moxifloxacin Hydrochloride tablets, Sodium Chloride Injection, Moxifloxacin Hydrochloride Eye Drops, Cinacalcet Hydrochloride and Epalrestat raw materials have been approved.

During the year, 63 projects were applied for national production approval by the Group, including 39 new types of liquid and solid preparations and 13 bulk pharmaceuticals. In particular, Azithromycin Dry Suspension (a specialised type for children with high clinical demand), Stiripentol Dry Suspension, Blonanserin tablets (a psychotropic drug) and Pentoxifylline Injection and Pentoxifylline sustained-release tablets (cardio-cerebral vascular drugs) were the first of such products being submitted under the new type in China, among which Stiripentol Dry Suspension and Pentoxifylline Sustained-Release tablets were the only domestic one of its kind being submitted for application. Applications for Cefaclor for Suspension for children, Oseltamivir Phosphate for Suspension and Valsartan Amlodipine tablet (a compound preparation), etc. were completed. The continuous expansion of injection, solid preparation and bulk pharmaceuticals product line will help the diversification development of the Group's product mix.

Research results of products for passing consistency evaluations was convincing. During the year, 7 product specifications of the Group, namely Ciprofloxacin Lactate and Sodium Chloride Injection, Fluconazole and Sodium Chloride Injection, Metronidazole and Sodium Chloride Injection (100ml and 250ml) and Ambroxol Hydrochloride Injection (1ml, 2ml and 4ml), have passed the consistency evaluations. In particular, 2 products, namely Ciprofloxacin Lactate and Sodium Chloride Injection together with Metronidazole and Sodium Chloride Injection (250ml), were both the first one of passing such evaluation in China. From January to March of 2022, there are another 5 products which passed the consistency evaluation. Currently, 20 types with 28 product specifications of the Group have passed consistency evaluation or have been regarded as passing the consistency evaluation, which played a stronger facilitation and stimulation role in consolidating and expanding market shares.

Combining with fundamental and innovative researches, the protection of intellectual property rights is progressively achieved on the same pace. As of now, the Group has cumulatively applied for 288 patents and received authorisation of 170 patents, including 68 invention patents in China and 5 international invention patents.

(3) Development of Projects

Acceleration in reform and construction of industry infrastructure projects is essential to the enhancement of production capability of the Group, satisfaction of market demands and optimisation of product mix. The Group took advantage of the favorable opportunity to accelerate the commercialisation process for new products, actively integrated the development of technological transformation projects with business optimisation, intelligent manufacturing, refined management and channel development, constructed and built intelligent factories, enhanced the level of intelligent manufacturing, and realised the cost reduction, efficiency improvement, quality assurance as well as safety and environmental protection in an effective and consistent manner. In 2021, the Group's industrialisation projects for 15 new products, such as Lyophilized Powder Injection and Emulsion, were included in Thousands of Technological Transformation Projects(千項技改項目)in Hebei Province. With the support of preferential policies for the enterprises promulgated by the governments at all levels, efforts have been made to accelerate the implementation process for the major technology improvement projects, which began to show positive results.

The bulk pharmaceuticals segment of Hebei Guangxiang Pharmaceutical Co., Ltd. and Hebei Guolong Pharmaceutical Co., Ltd. strived to explore its development potential through technology improvement, and stepped up efforts in production process optimisation, equipment modification and environmental protection upgrade, leading to remarkable improvement in production capacity, environmental protection performance and safety protection level.

The construction project of bioprocessing film of Jiangsu Best began as scheduled. The new product, 7-layer bioprocessing barrier films of 1.6 metres width, has been put into trial production by the end of 2021, and samples were provided to customers for testing. Together with the second production line for 7-layer bioprocessing barrier films which is targeted to commence trial production in June 2022, the annual production capacity of bioprocessing films will increase by 20 million square metres, thus enhancing the Group's ability in market supply.

(4) Capital Operation

In light of the new development and new changes in the capital market as well as the actual needs of the Group to strengthen, expand and optimise its business operation, the Group proactively facilitated the spin-off listing of its medical materials segment and bulk pharmaceuticals segment in China during the year. Currently, application for listing on the National Equities Exchange and Quotations in respect of the medical materials segment has been accepted, and follow-up works are in progress orderly. In addition, in light of the current development of the industry, the Group completed the acquisition of 6.1% of the equity interest in Cisen Pharmaceutical Co., Ltd. in a timely manner in 2021, which is expected to bring long-term return and new development opportunity for the Group. To ensure stable supply and quality of raw materials for caffeine and to reduce raw material costs cost and create synergistic effects, the Group has acquired as a vertical integration of the whole of the equity interest in Cangzhou Lingang Youyi Chemical Co., Ltd. ("Youyi Chemical") in March 2022. The completion of the acquisition provided important supports and guarantees for the enhancement of stable supply for the caffeine production chain, optimisation of production costs and achievement of the goal of an annual production of 7,000 tonnes of caffeine.


Looking ahead in 2022, the economic situation will remain complicated and dynamic amidst the normality under global pandemic. Facing the combined pressure arising from external factors that may persist and bring various challenges to the Group's production and operation, the Group will push forward the supply-side structural reform. The Group will make effort to promote the dual circulation development of domestic and international markets, expand its operation advantages and mitigate the impacts and restraints from negative factors, so as to maintain the momentum of a positive cycle for its stable development and strive to achieve more solid operating results.

  1. The Group will make coordinated efforts to improve quality and enhance efficiency of the preparation segment by optimizing structure and increasing sales volume. By focusing on its core injection business of injections, the Group will further develop its existing market and make continuous effort to explore new markets, with an aim to establish a new development landscape. In 2022, the Group will make an in-depth and better systematic analysis on the national and local centralised procurement policies, seize good opportunity for precise market access with a key focus on price, and basically maintain steady price. Capitalizing on the radiation and driving effects of the Group Purchasing Organisation Programme, the Group will strive to increase market shares and expand the proportion of high value-added products in terms of production and sales volume, with an aim to improve its profitability and maintain its leading position in the market. Through various means including adjustment of market layout, tendering access and control model, the Group will focus to increase the sales volume of major types of therapeutic infusion products such as Levofloxacin Lactate, Sodium Bicarbonate, Ambroxol, Tinidazole, Fluconazole and Ciprofloxacin, with an aim to further improve the profitability of the infusion segment. In 2022, the target production and sales volume of infusion products is 1,500 million bottles (bags), representing an increase of approximately 10.5% as compared to last year. The Group will further expand, strengthen and optimise its ampoule liquid injection business, step up effort to increase sales of new ampoule products, and explore the market potential that may exceed RMB100 million revenue of ampoule types such as Betahistine Hydrochloride and Bromhexine, continuing to make a greater contribution to the development of the Group's injections segment. The Group will arrange its products that have passed the evaluation to participate in the seventh and eighth round of National Centralised Medicines Procurement activities. In addition, the Group will proactively push forward the industrialisation and marketisation of the solid preparation products that were recently approved. Leveraging on the National Centralised Medicines Procurement, the Group will accelerate the expansion of production capacity and market shares, with an aim to expand and strengthen its solid preparation segment. At the same time, the Group will push forward the promotion and usage of bioprocessing films in China, increase its market shares and strive to strengthen its industry position and product influence in the field of medical materials, creating good conditions for the listing of its medical materials segment.

  2. The Group will seize market opportunities to expand its bulk pharmaceuticals business for capturing market and making a greater contribution to the development of the Group. With the goal of improving capacity utilisation and reducing costs, the Group will strengthen fundamental management works such as technological advancement, safety and environmental protection. We will improve management ability of our team, speed up utilisation of production capacity, and enhance the overall level in terms of scale, modernisation and marketisation of the Group's bulk pharmaceuticals business. In 2022, production volumes of major products caffeine and Azithromycin are targeted to reach 7,000 tonnes and 450 tonnes, representing a year-on-year increase of approximately 154% and approximately 102%, respectively, and the annual target of Methylamine in the newly acquired company Youyi Chemical is 28,000 tonnes. The significant increase in production output of the above three major bulk pharmaceuticals and intermediate pharmaceuticals products will make substantial contribution to the benefits of the Group in 2022. In the meantime, we will seize the favorable opportunity brought by the recovery of international market demand for caffeine, and continue to secure orders from target customers in America, Europe, South Asia and Southeast Asia, etc. to achieve the expected target sales volume and revenue, in an effort to reach a 100% production to sales ratio and lay a solid foundation for pushing forward the listing of the bulk pharmaceuticals segment on the domestic A-share market.

  3. By benchmarking with advanced enterprises, the Group will establish innovative system and mechanism that are beneficial for the development of the Group, with an aim to push forward the Group's research & development and innovative business to a new stage.

    Firstly, the Group will proactively construct and develop an innovative high-energy ecosystem, explore the advantages of convergence of technology, talents and capital to continuously improve the levels and grades of innovation development. Leveraging on its advantage in cooperation and jointly-built think tank with universities, academicians, scientific research institutes, healthcare institutions and upstream and downstream enterprises of the industry, the Group will push forward the cooperation with national tertiary institutions in innovative drug research for new breakthroughs. In addition, the Group will promote the construction of an industrial ecosystem of organic innovation and cooperation, empower continuously the Group's innovation ability and efficiency of research and development business, and enhance the effectiveness of corporate innovation and core competitiveness of the Group.

    Secondly, adhering to the strategy of "combination of generic and innovative drugs", the Group will make concerted effort to enhance the efficiency in the research and development of its advantageous products in generic drugs, innovative drugs, bulk pharmaceuticals and medical materials, accumulating strength for the sustainable development of the Group. The Group will continue to step up efforts in the research and development of drugs for chronic diseases, circulatory systems, emergency anesthesia drugs, antipyretic and analgesic drugs, new anti-infective drugs, anti-viral drugs and anti-tumor drugs, as well as bulk pharmaceuticals and medical materials, building up innovation advantage to fit in the development of the Group and meet market demand. In 2022, the Group will strive to obtain national production approval for 40 products including 22 approvals for liquid preparations, 9 approvals for solid preparations and 9 approvals for bulk pharmaceuticals. The Group will strive to make new breakthroughs in the research and development of innovative drugs. The Group will push forward the phase I clinical trial of anti-tumor Type 1 innovative drug NP-01 and strive to apply for phase II clinical trials as soon as possible, and speed up preliminary researches on anti-liver fibrosis Type 1 innovative drug ADN-9, anti-epileptic compound QO-83, self-developed anti-pulmonary hypertension Type 1 innovative drug and anti-tumor Type 2 chemical innovative drug Miriplatin, so as to submit the application for registration of clinical trial as soon as possible. Meanwhile, the Group will make in-depth study of the development and technology of bioprocessing films, and accelerate the research and production of market-foresighting multi-layer co-extrusion high barrier films on the basis of improving the existing cell culture bag films and albumin liquid storage bag film product series, forming core advantages in research and development of domestic bioprocessing film production with comprehensive functions, full variety and leading technologies.

  4. The Group will continue to proactively push forward the spin-off listing of its medical materials segment and bulk pharmaceuticals segment on the domestic market. At the same time, the Group will actively seek opportunities of merger and acquisition as well as investment in the pharmaceutical industry. The intensifying market competition and the guidance of national policies will trigger more mergers and acquisitions in the pharmaceutical industry. Combining its own advantages, the Group will seize the opportunities of merger and acquisition as well as investment in order to strengthen its market position and product position so as to increase its return on investment.

Facing the persistent risks and challenges in the post-pandemic era, the pharmaceutical industry will be confronted with the greatest changes in this century. Self-developed innovation driven by market demand, the integration and collaboration based on controllable supply chain, and the enhanced efficiency brought by the trend of digital transformation will become the important drivers for the progress and breakthroughs of the overall industry and the Group. While accelerating the optimisation of industrial structure, improvement of sales of product and construction progress of infrastructure projects, the Group will expedite the progress of spin-off listing of the medical materials segment and bulk pharmaceuticals segment, and strive for a win-win situation in the product and capital market.

As one of the top 100 enterprises in China pharmaceutical industry and the top 30 best industrial enterprises with China pharmaceutical research and development product line, the Group will take full advantage of the excellent development opportunities arising from the positive changes in the domestic pharmaceutical market, the promotion of the construction and development of provincial capitals in Hebei Province, and the promotion of supporting the biopharmaceutical industry to make breakthroughs in Shijiazhuang and Cangzhou. We will grasp the initiative of development, maintain the resilience and vitality of innovative development, and strive for facilitating the quality development of the Group. By virtue of the scale, quality, management and brand advantages accumulated in the industry over the years and the continuous innovation momentum released by the Group, we firmly believe that we will be able to create new high record in terms of production output, sales and profit in 2022, and bring satisfactory returns to our investors with a stronger result of development.

I would like to take this opportunity to express our gratitude to our investors and all staff of the Group for their support to the development of the Company.

Qu Jiguang

Hong Kong, 29 March 2022