上海医药发布2026年中期业绩：收入小增、归母净利下滑但扣非改善

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.

上海醫藥集團股份有限公司
Shanghai Pharmaceuticals Holding Co., Ltd.*
(A joint stock company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 02607)

ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2026
The board of directors (the “Board”) of Shanghai Pharmaceuticals Holding Co., Ltd. (the “Company”) is
pleased to announce the interim results of the Company and its subsidiaries (collectively, the “Group”)
for the six months ended 30 June 2026. These interim results are prepared in accordance with the
Chinese Accounting Standards for Business Enterprises and have not been audited. The Board and the
Audit Committee have reviewed and confirmed the interim results.
The full content of the Company’s interim report for the six months ended 30 June 2026 is attached to
this announcement. The formal interim report will be published on the websites of The Stock Exchange
of Hong Kong Limited (www.hkexnews.hk) and the Company (www.sphchina.com) at an appropriate
time.
By order of the Board
Shanghai Pharmaceuticals Holding Co., Ltd.*
YANG Qiuhua
Chairman
Shanghai, the PRC, 28 August 2026
As of the date of this announcement, the executive Directors of the Company are Mr. YANG Qiuhua,
Mr. SHEN Bo, Mr. LI Yongzhong and Mr. DONG Ming; the non-executive Director is Mr. ZHANG
Wenxue; the employee representative Director is Mr. ZHAO Yong and the independent non-executive
Directors are Mr. WANG Zhong, Ms. MAN Kwan, Mr. XUE Yunkui, and Mr. WANG Qian.

*

For identification purpose only

Important Notice
1.

The board of directors, the directors and senior management of the Company hereby warrant that
the information contained in this interim report is true, accurate and complete and contains no false
representations, misleading statements or material omissions and assume joint and several legal liabilities
therefor.

2.

All directors of the Company attended the meeting of the board of directors.

3.

This interim report is unaudited.

4.

Yang Qiuhua, the person in charge of the Company, Shen Bo, the principal in charge of accounting, and
Zhou Yadong, head of the Accounting Department (Chief Financial Officer), hereby declare that they
warrant the truthfulness, accuracy and completeness of the financial report contained in this interim report.

5.

The plan for profit distribution or conversion of capital reserve fund into share capital for the Reporting
Period considered by the board of directors
The profit distribution plan for the half year of 2026: the Company’s consolidated net profit attributable
to shareholders of the listed company for the half year of 2026 was RMB3,504,447,475.63 (unaudited). The
Company proposes to distribute cash dividend of RMB1.00 (tax inclusive) per 10 shares to all shareholders
based on 3,708,361,809 shares of the total share capital as of 30 June 2026. Total proposed cash dividend
of RMB370,836,180.90 (tax inclusive) shall be distributed, accounting for 10.58% of consolidated net profit
attributable to shareholders of the listed company for the half year of 2026. During the Reporting Period,
there is no conversion of capital reserve into share capital of the Company.
If the total share capital of the Company changes during the period up to the record date regarding
execution of the profit distribution, the Company intends to maintain distribution amount per share
unchanged based on the total share capital on the record date regarding execution of profit distribution
and the total profit distribution amount will be adjusted accordingly.

6.

Risk statements regarding the forward-looking statements
√Applicable   Not applicable
The forward-looking statements, such as future plans and development strategies, contained in this report
do not constitute any substantive commitment by the Company to the investors. Investors are advised to
be aware of the investment risks involved.

7.

Is there any appropriation of funds by the controlling shareholders and their connected parties that is
unrelated to operation
No

8.

Is there any instance of providing external guarantee that is in breach of the established decision making
procedure
No

9.

Is there an existence of more than half of the directors being unable to warrant the truthfulness, accuracy
and completeness of the content of this interim report
No

10.

Significant Risks
During the Reporting Period, there are no significant risks that have substantive significant effect on
production and operation of the Company. The Company has already explained all the risks that the
Company might face in the operation and management and corresponding measures in this report. Please
refer to the “Potential Risk Factors” set out in the Management Discussion and Analysis, Chapter 3.

Contents
CHAPTER 1 DEFINITIONS

2

CHAPTER 2 BASIC CORPORATE INFORMATION
AND MAJOR FINANCIAL INDICATORS

4

CHAPTER 3 MANAGEMENT DISCUSSION AND ANALYSIS

9

CHAPTER 4 CORPORATE GOVERNANCE, ENVIRONMENTAL AND SOCIETY

44

CHAPTER 5 SIGNIFICANT EVENTS

51

CHAPTER 6 CHANGES IN SHARES AND INFORMATION
ABOUT SHAREHOLDERS

66

CHAPTER 7 RELEVANT INFORMATION OF THE CORPORATE BONDS

73

CHAPTER 8 FINANCIAL REPORT

77

The financial statements signed and sealed by the legal
Catalogue of
Documents

representative, the principal in charge of accounting and
head of accounting department

Available for

The original documents of the Company and the original

Inspection

draft announcements disclosed in the designated
newspapers of CSRC during the Reporting Period

Chapter 1 Definitions

In this report, unless the context otherwise requires, the following terms shall have the following meanings:
Definitions of Common Terms
“the Group”, “Group”, “the

Shanghai Pharmaceuticals Holding Co., Ltd. (上海醫藥集團股份有限

Company”, “Company” or “Shanghai

公司), a joint stock company incorporated in the PRC with limited

Pharmaceuticals”

liability (shares of which are listed on the Shanghai Stock Exchange
with stock code 601607, and on the Main Board of the Hong Kong
Stock Exchange with stock code 02607) or Shanghai Pharmaceuticals
Holding Co., Ltd. and its subsidiaries, where applicable

“Articles of Association” or “Articles”

the articles of association of Shanghai Pharmaceuticals (as amended
from time to time)

“the Reporting Period”, “Reporting

the 6-month period from 1 January 2026 to 30 June 2026

Period” or “Period”
“YOY”

year-on-year

“PRC”, “China” or “State”

the People’s Republic of China; unless the context otherwise requires,
references to the PRC or China in this report do not include Hong
Kong, Macau or Taiwan

“Shares”

shares of Shanghai Pharmaceuticals with a nominal value of RMB1.00
each, comprising both A Shares and H Shares

“A Shares”

domestic shares of the Company, with a nominal value of RMB1.00
each, which are listed on the Shanghai Stock Exchange and traded
in RMB

“H Shares”

overseas shares of the Company, with a nominal value of RMB1.00
each, which are listed on the Hong Kong Stock Exchange and traded
in Hong Kong dollars

“RMB” or “Renminbi”

Renminbi, the lawful currency of the PRC

“US$”

US dollars, the lawful currency of the United States of America

“AUD”

Australian dollars, the lawful currency of Australia

“Hong Kong Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Hong Kong Listing Rules”

the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited (as amended, supplemented or otherwise
modified from time to time)

“Shanghai Listing Rules”

the Rules Governing the Listing of Securities on the Shanghai Stock
Exchange (as amended, supplemented or otherwise modified from
time to time)

“SFO”

the Securities and Futures Ordinance, Chapter 571, the Laws of Hong
Kong, as amended from time to time

“NHSA”

National Healthcare Security Administration of the People’s Republic
of China (中華人民共和國國家醫療保障局)

2

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 1 Definitions

“CSRC”

China Securities Regulatory Commission (中國證券監督管理委員會)

“SIIC”

Shanghai Industrial Investment (Holdings) Co., Ltd. (上海實業(集團)
有限公司)

“Shanghai Shangshi”

Shanghai Shangshi (Group) Co., Ltd. (上海上實(集團)有限公司)

“Golden Bell”

Golden Bell International Holdings Limited (金鐘國際控股有限公司)

“Shanghai Pharmaceutical (Group)”

Shanghai Pharmaceutical (Group) Co., Ltd. (上海醫藥(集團)有限公司)

“Yunnan Baiyao”

Yunnan Baiyao Group Co., Ltd. (雲南白藥集團股份有限公司)

“Finance Company”

Shanghai Shangshi Group Finance Co., Ltd. (上海上實集團財務有限
公司)

“SIIC Dongtan”

Shanghai Industrial Dongtan Investment and Development (Group)
Co., Ltd. (上海實業東灘投資開發(集團)有限公司)

“NMPA”

National Medical Products Administration of the People’s Republic of
China (中華人民共和國國家藥品監督管理局)

“CDE”

Center For Drug Evaluation of NMPA (中華人民共和國國家藥品監督
管理局藥品審評中心)

“WHO”

World Health Organization

“FDA”

Food and Drug Administration of the United States

"Fudan-Zhangjiang"

Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (上海復旦
張江生物醫藥股份有限公司)

“Shanghai Frontier”

Shanghai Biomedical Frontier Industry Innovation Center

“SPH Youpin”

Shanghai SPH Youpin Technology Co., Ltd. (上海上藥優品科技有限
公司)

“SPH Dragon & Tiger”

Shanghai SPH Dragon & Tiger Pharmaceutical Sales Co., Ltd. (上海上
藥龍虎醫藥銷售有限公司)

Interim Report 2026

3

Chapter 2 Basic Corporate Information and Major Financial Indicators

I.

CORPORATE INFORMATION
Name of the Company in Chinese

上海醫藥集團股份有限公司

Chinese abbreviation of the name of the Company

上海醫藥

Name of the Company in English

Shanghai Pharmaceuticals Holding Co., Ltd.

English abbreviation of the name of the Company

Shanghai Pharma

Legal representative of the Company

Yang Qiuhua

II. CONTACT PERSON AND CONTACT DETAILS
Secretary of the board of directors

Securities Affairs Representative

Name

Zhong Tao

Liu Yongtao, Sun Shiyi

Contact address

Shanghai Pharmaceutical Building, No.

Shanghai Pharmaceutical Building, No.

200 Taicang Road, Shanghai, China

200 Taicang Road, Shanghai, China

Telephone

+8621-63730908

+8621-63730908

Facsimile

+8621-63289333

+8621-63289333

E-mail

boardoffice@sphchina.com

boardoffice@sphchina.com

III. CHANGES IN BASIC CORPORATE INFORMATION
Registered address of the Company

No. 92 Zhangjiang Road, Pilot Free Trade
Zone, China (Shanghai)

Historical changes in the registered address

Nil

of the Company
Office address of the Company

Shanghai Pharmaceutical Building, No. 200
Taicang Road, Shanghai, China

4

Postal code for office address of the Company

200020

Website of the Company

http://www.sphchina.com

E-mail

pharm@sphchina.com

Search index for changes during the Reporting Period

Not involved

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 2 Basic Corporate Information and Major Financial Indicators

IV. INFORMATION DISCLOSURE AND PLACE WHERE INFORMATION IS
AVAILABLE FOR INSPECTION
Newspapers designated by the Company

China Securities Journal, Shanghai Securities

for disclosure of information

News, Securities Times, Securities Daily

Websites for publishing interim reports

http://www.sse.com.cn
http://www.hkexnews.hk

Places where the Company’s interim report

Office of the Board of Directors of the

is available for inspections

Company, Shanghai Stock Exchange

Search index for changes during the Reporting Period

Not involved

V. STOCK INFORMATION OF THE COMPANY
Stock exchange on

Stock

Type of stock

which shares are listed

abbreviation

Stock code

Prior to the change
of stock code

A Shares

Shanghai Stock Exchange

上海醫藥

601607

600849

H Shares

Hong Kong Stock Exchange

SH PHARMA

02607

Not Applicable

VI. OTHER RELEVANT INFORMATION
□Applicable

Not applicable

Interim Report 2026

5

Chapter 2 Basic Corporate Information and Major Financial Indicators

VII. MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE
COMPANY
(I)

Major Accounting Data
Unit: Yuan Currency: RMB
Increase/decrease
of the Reporting
Period compared to
the corresponding
Reporting Period

Corresponding

period of last year

Major accounting data

(January to June)

period of last year

(%)

Operating revenue

147,469,729,395.20

141,592,782,502.79

4.15

5,631,382,957.72

6,820,820,702.73

-17.44

3,504,447,475.63

4,458,864,876.61

-21.40

equity holders of the listed company

2,477,230,508.87

2,099,764,932.53

17.98

Net cash flows from operating activities

4,449,509,248.10

989,256,988.89

349.78

Total profit
Net profit attributable to equity
holders of the listed company
Net profit after deduction of nonrecurring profit or loss attributable to

Increase/decrease
as at the end
of the Reporting
Period compared to
As at the end of the

As at the end

the end of last year

Reporting Period

of last year

(%)

78,347,955,897.37

75,891,327,824.17

3.24

240,769,418,449.23

233,148,766,767.21

3.27

Net assets attributable to equity
holders of the listed company
Total assets

6

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 2 Basic Corporate Information and Major Financial Indicators

(II) Major Financial Indicators
Increase/decrease
of the Reporting
Period compared to
the corresponding
Major financial indicators
Basic earnings per share (RMB per share)

Reporting Period

Corresponding

period of last year

(January to June)

period of last year

(%)

0.95

1.20

-20.83

0.95

1.20

-20.83

0.67

0.57

17.54

Diluted earnings per share
(RMB per share)
Basic earnings per share after
deduction of non-recurring
profit or loss (RMB per share)

Decreased by 1.52

Weighted average return on
net assets (%)

4.51

6.03

percentage points

Weighted average return on
Increased by 0.35

net assets after deduction of
non-recurring profit or loss (%)

3.19

2.84

percentage point

Note on major accounting data and financial indicators of the Company
□Applicable

Not applicable

VIII. DISCREPANCIES IN ACCOUNTING DATA UNDER THE DOMESTIC AND
INTERNATIONAL ACCOUNTING STANDARDS
□Applicable

Not applicable

Interim Report 2026

7

Chapter 2 Basic Corporate Information and Major Financial Indicators

IX. NON-RECURRING PROFIT OR LOSS ITEMS AND AMOUNTS
Applicable

□Not applicable

Unit: Yuan Currency: RMB
Non-recurring profit or loss items

Amount

Profit or loss on disposal of non-current assets, including write-off of provision
for asset impairment

1,041,798,844.96

Government grants recognised in profit or loss for the current period excluding
those closely related to the Company’s ordinary operations and granted under
the national policies according to established standards, and which have a
continuing impact on the profit or loss of the Company

168,304,870.06

Except for the effective hedging activities related to the Company’s ordinary
operations, profit or loss arising from changes in fair value of financial assets
and financial liabilities held by non-financial enterprises and profit or loss from
disposal of financial assets and financial liabilities

-87,738,048.42

Reversal of provisions on impairment for receivables assessed for impairment on
an individual basis

24,353,703.46

Other non-operating income and expenses other than the aforesaid items

-8,380,156.17

Less: Effect on income tax

-61,022,477.78

Effect on minority interests (after tax)
Total

-50,099,769.35
1,027,216,966.76

Explanation on the reasons for the Company’s identification of items not listed under the Explanatory
Announcement on Information Disclosure for Companies Offering Their Securities to the Public No. 1
– Non-recurring Profit or Losses as non-recurring profit or loss items with significant amount, and the
identification of non-recurring profit or loss items listed in the Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public No. 1 – Non-recurring Profit or Losses as
recurring profit or loss items.
□Applicable

Not applicable

X. COMPANIES THAT HAVE EQUITY INCENTIVE OR EMPLOYEE SHARE
SCHEMES MAY CHOOSE TO DISCLOSE THE NET PROFIT AFTER DEDUCTING
THE IMPACT OF SHARE-BASED PAYMENTS
□Applicable

Not applicable

XI. OTHERS
□Applicable
8

Not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

I.

INTRODUCTION OF INDUSTRY SITUATION AND THE MAIN BUSINESSES
OF THE COMPANY FOR THE REPORTING PERIOD
(I)

Main business and operating mode
The Company’s main business covers both pharmaceutical manufacturing and pharmaceutical service.
During the Reporting Period, the Company continued to accelerate innovation and transformation,
deepened intensive development, achieved the steady improvement of business quality, profitability,
operation efficiency and industry status, and created value for people’s health constantly.

1.

Pharmaceutical manufacturing
The Company adheres to the orientation of satisfying clinical needs and continuously provides
patients and consumers with high-quality drugs, medical devices and big health products by
constructing an industrial system with advantages in drug R&D, clinical research, drug pilot
production, industrialization manufacturing and marketing and promotion. In order to respond
to the national “Healthy China 2030” strategy actively and the call for accelerating innovation
of the biomedical industry, the Company has continuously optimized its product structure by
developing product strategy, increasing investment in innovation, implementing open innovation
modes, utilizing combination of industry and finance, and focusing on international development,
enriching its product system of innovative drugs and improved new drugs with differentiated
advantages to promote the sustained and healthy development of the Company’s pharmaceutical
manufacturing.

2.

Pharmaceutical service
Pharmaceutical service is the core force to ensure the efficient and stable supply of medical
materials and drugs. With business channels and retail networks covering 25 provincial-level
administrative regions in the PRC, the Company, as the second largest pharmaceutical commercial
enterprise and the largest service provider of imported drugs, vaccines and medical devices in
China, continuously provides efficient, convenient and reliable services to medical institutions,
retailers, partners and patients at all levels. The Company has established strategic partnerships
with major pharmaceutical manufacturers at home and abroad. With its strong supply chain
service network to provide integrated pharmaceutical supply chain solutions, the Company has
become the preferred partner for domestic pharmaceutical distribution and innovative product
launch. In addition, the Company actively promotes the upgrade of the supply chain of drugs,
medical devices and big health products, and continues to explore and innovate models for
the supply and payment of medical and health products by means of information technology.

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Chapter 3 Management Discussion and Analysis

(II) Industry situation
China has taken the biopharmaceutical as an emerging pillar industry. Such industry is an important
industry related to the national economy and people’s livelihood and national security, and it is an
important support for building a healthy China. At present, the pharmaceutical industry in China is at
a critical stage of industrial restructuring and innovation capability enhancement. In the medium and
long term, with the accelerated construction of a multi-level medical security system and industrial
ecology and under the influence of multiple factors such as national policies, economic development,
population aging and biopharmaceutical technology development, the pharmaceutical industry will
continuously achieve high-quality development.
Explanations on new major non-principal business of the Company during the Reporting Period
□Applicable

Not applicable

II. DISCUSSION AND ANALYSIS ON OPERATIONS
(I)

Details of Results
The year 2026 marks the opening year of the “15th Five-Year” Plan. Shanghai Pharmaceuticals fully
implemented the deployment requirements of the “Year of United Efforts”, focused on serving national
strategies and the development of Shanghai’s leading biomedical industry, and made every effort to
achieve its business objectives and key tasks. The Company was selected again into the Fortune Global
500 and the “Pharm Exec” 2026 Top 50 Global Pharmaceuticals, ranking 411th and 39th respectively.
During the Reporting Period, the operating income of the Company amounted to RMB147.470 billion
(the currency is RMB, the same below), representing a year-on-year increase of 4.15%, of which,
the sales revenue from pharmaceutical manufacturing amounted to RMB13.186 billion, representing
a year-on-year increase of 8.44%, and the sales revenue from pharmaceutical service amounted to
RMB134.283 billion, representing a year-on-year increase of 3.75%.
During the Reporting Period, the Company recorded the net profit attributable to shareholders of the
listed company of RMB3.504 billion, representing a year-on-year decrease of 21.40%, mainly due to
the fact that net profit attributable to the owner of parent company after deduction of one-off special
profit or loss amounted to RMB2.828 billion as a result of the fluctuation of one-off special profit or
loss, representing a year-on-year increase of 1.65%. Among them, the pharmaceutical manufacturing
contributed profits of RMB1.343 billion, representing a year-on-year increase of 1.51%; pharmaceutical
service contributed profits of RMB1.794 billion, which remained unchanged year-on-year; the major
shareholding enterprises contributed profits of RMB78 million; net profit after deduction of nonrecurring profit or loss attributable to shareholders of the listed company amounted to RMB2.477
billion, representing a year-on-year increase of 17.98%.
During the Reporting Period, the operating net cash inflow of the Company amounted to RMB4.450
billion, continuously maintaining a high-quality development.

10

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

(II) Operating Highlights
•

Took steady and solid steps in R&D and innovation
During the Reporting Period, the Company’s R&D investment reached RMB1.053 billion,
accounting for 7.98% of the sales revenue from pharmaceutical manufacturing. The R&D
expenditure amounted to RMB971 million.

1.

Steadily promoted the pipeline of new drug research and development
As of the end of the Reporting Period, the Company had a total of 61 new drug
pipelines that had either been accepted for clinical trial applications or entered
subsequent clinical trial stages, including 49 innovative drug pipelines. Among which:
BCD-085 Project: BCD-085 is an innovative recombinant humanized anti-interleukin-17
(IL-17) monoclonal antibody. Specifically, for the ankylosing spondylitis indication, following
the submission and acceptance of the New Drug Application (NDA), it is currently in the
core stage of technical evaluation by the Center for Drug Evaluation (CDE) of the National
Medical Products Administration, and successfully underwent the on-site inspection for drug
registration clinical trial during the Reporting Period. The key results of phase III clinical trial
have been selected for poster presentation at the APLAR 2026 Annual Congress. For the
plaque psoriasis indication, the database lock of the phase III clinical trial and the finalization
of the clinical study report were completed during the Reporting Period.
Shenqi Sherong Pill: Shenqi Sherong Pill is a new drug of class 1.1 of traditional
Chinese medicine, which is clinically intended to be used to treat mild and moderate
cervical spondylotic myelopathy (the syndrome of qi deficiency, blood stasis and kidney
depletion). Cervical spondylotic myelopathy accounts for approximately 10% to 15% of
all cervical spondylosis cases, and it imposes the most severe adverse impacts on patients;
surgical treatment is required when the condition progresses to moderate to severe stages.
Currently, there is a lack of effective drugs on the market to control the progression of
cervical spondylotic myelopathy and promote functional recovery in patients. This project
is dedicated to reducing local inflammation, improving spinal cord ischemia or blood
stasis, and alleviating further damage to the spinal cord, thereby helping to fill the gap in
Chinese patent medicine treatments for cervical spondylotic myelopathy. As of the end of
the Reporting Period, the project has completed the statistical analysis of phase III clinical
trial data, and on this basis, initiated the drafting of the clinical study report.
B001 Project/B007 Project: B001 (intravenous injection) and B007 (subcutaneous injection)
were independently developed by Shanghai Pharmaceuticals. They are highly humanized,
globally innovative anti-CD20 antibody drugs. B007 injection is expected to address clinical
pain points associated with traditional intravenous CD20 monoclonal antibodies, such as
lengthy administration times, low patient satisfaction and difficulties in nursing care. As of
the end of the Reporting Period, the phase II clinical trial for the myasthenia gravis indication
of B007 had completed the release of all subjects and finalized the clinical study report.

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11

Chapter 3 Management Discussion and Analysis

In addition, the phase III clinical trials of the Company’s new drug of class 1.1 of traditional
Chinese medicine SRD4610 (Huoling Shengji Granules, used to treat amyotrophic
lateral sclerosis, ALS) and new drug of class 1 of chemical drug SHPL-49 injection
(clinically intended to treat acute ischemic stroke, AIS) were both steadily advanced
during the Reporting Period, with enrollment progress meeting expectations. Among
them, the phase II clinical study results of SRD4610 for the treatment of ALS have been
officially published in Neurotherapeutics, an internationally renowned journal (the official
journal of the American Society for Experimental Neurotherapeutics, IF=7.4, Category 1
in Pharmacology of Chinese Academy of Sciences). The study results demonstrated that
after 48 weeks of treatment, SRD4610 was significantly superior to standard therapy in
slowing the decline of ALS functions, with a favorable safety profile.
In addition to new drug R&D, in terms of generic drug R&D, during the Reporting Period,
the Company had a total of 6 preparation products approved for production, and 5 varieties
(6 specifications) approved for passing the consistency evaluation of quality and efficacy.

2.

Continued to deepen the R&D innovation system
(1)

Top-level planning set the reform direction
During the Reporting Period, Shanghai Pharmaceuticals formulated the work plan
for deepening innovation reform and supporting documents including the reform
plan for the R&D innovation system and the innovative drug development plan.
The Company defined the medium- and long-term development path and product
portfolio for innovative drugs, defined the optimization direction of the “four-tier
innovation system” (decision-making, origination, execution, and translation), clarified
the positioning and coordination mechanisms of various innovation entities, and
established the innovation PMO workflow, so as to accelerate innovation-driven
transformation and development and consolidate the foundation for high-quality
development.

(2)

Innovation ecosystem achieved functional iteration
During the Reporting Period, Shanghai Frontier focused on building a “wall-less”
R&D innovation and incubation-transformation platform, officially launched the
“INNO Agile” agile venture capital model, and established a platform of “scientist
PI + incubation manager + frontier team” featuring tripartite collaboration, clearly
defined responsibilities, and asset-light pre-verification, bridging the transformation
channel from academic concepts to industrial-grade data. It deepened cooperation
with universities and research institutes such as Shanghai Jiao Tong University School
of Medicine and Fudan University, promoted the collection and selection of the third
batch of 18 projects, signed cooperation verification agreements for key proof-ofconcept projects and launched research. It steadily promoted the implementation and
operation of exclusive laboratory projects with two major multinational pharmaceutical
companies, Lilly and Bayer, with the benchmark model for cooperation with
multinational pharmaceutical companies gradually taking shape.

12

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

•

Deeply advanced the foundation consolidation and quality enhancement of
the pharmaceutical manufacturing
1. Deepened quality improvement and efficiency enhancement in manufacturing
The Company persisted in normalized lean management, conducted systematic review,
analysis, and dynamic supervision of the entire product production process through methods
such as VSM value stream analysis to deeply explore the potential for cost reduction,
quality improvement, and efficiency enhancement across the entire production chain,
focused on pain points in production operations and core performance indicators, and
took the lead in implementing various lean project breakthroughs. During the Reporting
Period, the Company continued to focus on multiple areas such as energy consumption
cost reduction, technical and economic indicator improvement, and production process
optimization, and established 20 lean Black Belt projects and key improvement projects,
and 111 Green Belt projects.

2.

Expanded the range of products in the essential drug list continuously
In the course of update of the national essential drug list, the Company had a total of 17
varieties newly included in the list. As of now, the Company has a total of 486 varieties
selected in the national essential drug list. The rich reserve of essential drug products is one
of the Company’s core competitive advantages, which helps improve product accessibility
across medical institutions at all levels, continuously solidify its distribution network within
hospitals, fully capitalize on development opportunities arising from growing demand in
primary healthcare and public medical institutions, and drive steady growth in sales of
related products.

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Chapter 3 Management Discussion and Analysis

3.

Made remarkable achievements in evidence-based research of traditional Chinese
medicine
During the Reporting Period, the Company continued to adhere to evidence-based medical
research on large varieties of traditional Chinese medicine and made the following progress:
Shexiang Baoxin Pill: During the Reporting Period, four new articles were published,
focusing on its clinical efficacy of the product in therapeutic areas such as diabetes and
myocardial infarction. Among them, “Exploring the Mechanism of Shexiang Baoxin Pill in
the Treatment of Ischemic Stroke: A Study Integrating Network Pharmacology, Machine
Learning, Molecular Docking, and Molecular Dynamics Simulation” was published in the
SCI journal BioMed Research International. The study demonstrated that Shexiang Baoxin
Pill can intervene in ischemic stroke through a multi-component, multi-target, multipathway mechanism, with related potential targets significantly enriched in inflammation
and immune regulation pathways.
Danning Tablet: During the Reporting Period, a review article titled “Research Progress
on the Role of Nitric Oxide in Slow Transit Constipation and Traditional Chinese Medicine
Intervention” was published in the core science and technology journal Central South
Pharmacy. The study demonstrated that Danning Tablet can improve the clinical symptoms of
elderly patients with slow transit constipation by regulating intestinal microbiota, serological
indicators, and gastrointestinal hormones.
Weifuchun: The RCT clinical study of Weifuchun Capsules has entered the data collation
and summary stage. As of the end of the Reporting Period, the multi-center, randomized,
double-blind, double-dummy, parallel-controlled post-marketing clinical trial on the efficacy
and safety of Weifuchun Capsules in the treatment of chronic atrophic gastritis has been
completed, and the clinical study report has been finalized.
GBE50: During the Reporting Period, the national multi-center clinical and pharmacological
research project on the prevention and treatment of vascular cognitive impairment with
GBE50 was advanced in an orderly manner. The pharmacological research article published
in the Journal of Ethnopharmacology (2025 IF=6.8) demonstrated that GBE50 ameliorates
vascular calcification by inhibiting NF-KB and NLRP3 inflammasome, providing a scientific
basis for the clinical application of GBE50 preparations in improving cardiovascular and
cerebrovascular diseases.
Yangxinshi Tablet: During the Reporting Period, the Company continued to advance
the evidence-based medical research on Yangxinshi Tablet in the treatment of myocardial
infarction, chronic coronary artery disease, and other indications, and published an SCI
article in Chinese Journal of Natural Medicines titled “Yangxinshi Tablet protects against
post-myocardial infarction heart failure with reduced ejection fraction by improving energy
metabolism through inhibition of FOXO1/PDK4 signaling”. The study showed that Yangxinshi
Tablet can improve cardiac function, exercise tolerance, and hemodynamic indexes in rats
with a post-myocardial infarction heart failure with reduced ejection fraction (post MI
HFrEF) model, and alleviate myocardial inflammatory infiltration and collagen deposition.

14

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

4.

Accelerated cultivation of the “Second Growth Curve”
During the Reporting Period, the Company adhered to the principle of “pharmaceuticals as
the foundation, big health as the wing”, focused on health consumption and specialized
ophthalmology, and continuously expanded the “Second Growth Curve”. Among which:
SPH Youpin relied on the dual-core tracks of Bifico non-pharmaceutical products and OTC
drugs, focusing on product iteration and building an integrated online-offline operation
platform. In terms of business model cultivation, it focused on establishing presence in
mainstream e-commerce channels and carried out strategic cooperation with platforms
such as Tencent Health. As of the end of the Reporting Period, SPH Youpin has initially
established an agile e-commerce response mechanism covering product portfolio, supply
chain system, channel development, digital infrastructure, and cooperation ecosystem,
consolidating the foundation for its business development.
SPH Micro-ecological reshaped the consumer health track with pharmaceutical-grade
barriers. Focusing on three high-growth tracks of probiotics for infants and children,
essential nutrients, and anti-aging products for women, it translated clinically validated strain
capabilities into differentiated competitiveness in the consumer health sector, maintaining
its leadership in these segments.
SPH Dragon & Tiger focused on three product lines including pharmaceuticals, daily
chemicals, and overseas markets and was committed to product iteration and establishing
an integrated online-offline growth path. During the Reporting Period, it launched several
new non-pharmaceutical products and implemented a differentiated packaging strategy for
overseas markets; simultaneously, through online and offline marketing and promotion, it
continued to revitalize its time-honored brand. In addition, Dragon & Tiger Qingliang You
Regular, Dragon & Tiger Qingliang You Ultra and Dragon & Tiger Fengyou Jing Oil of the
Company have recently been officially granted the natural and health product licence by
Natural and Non-prescription Health Products Directorate of Health Canada, achieving a
crucial breakthrough in market access in North American market and laying the qualification
foundation for the international expansion of the time-honored brand.

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Chapter 3 Management Discussion and Analysis

The ophthalmology segment achieved a key leap from strategic planning to substantive
operation. During the Reporting Period, the Company used sodium hyaluronate to penetrate
the primary care market for dry eye syndrome and re-entered the myopia prevention and
control field with “only sodium hyaluronate-containing” Raceanisodamine Eye Drops (Trade
name: Xinliuding®), fully leveraging its differentiated competitive advantages. While gradually
expanding the market, the Company also made appearances at industry conferences such
as the China Import and Export Fair, PHARMCHINA, and the “BrightChina 2026” Myopia
Prevention and Control Conference, reshaping brand influence.

•

Comprehensively drove transformation and efficiency enhancement of the
pharmaceutical service
Facing the complex and volatile external environment, Shanghai Pharmaceuticals’ pharmaceutical
service segment has always adhered to the core philosophy of innovation as the principle,
service as the honor, and hard work as the foundation, closely followed the three main lines
of marketing, innovative drugs, and digitalization, persisted in innovation-driven transformation
and upgrading, accelerated the digital intelligence transformation of the pharmaceutical service
business, accelerated the construction of a digital comprehensive pharmaceutical service system,
and striven to transform into an international world-class health service enterprise. During the
Reporting Period, all innovative businesses maintained good growth.

1.

CSO business
The Company provides partners with high-quality and reliable commercialization
solutions, promoting the integrated and coordinated development of CSO businesses in
pharmaceuticals, vaccines, medical aesthetics and other areas. During the Reporting Period,
the number of cooperative products in the Company’s contract sales organization (CSO)
business continued to increase, and the service system construction was continuously
enhanced.

2.

Import under general agency
During the Reporting Period, the Company built an integrated and professional global
supply chain comprehensive service system, added 16 product specifications under general
import agency, and achieved sales revenue of over RMB20 billion, representing a year-onyear increase of over 15%.

3.

Innovative drugs business
The Company focused on the full life-cycle service system for innovative drugs and
strengthened full-chain capability building. During the Reporting Period, the innovative
drug business of the pharmaceutical service segment achieved sales revenue of over RMB33
billion, representing a year-on-year increase of over 29%.

16

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

4.

Devices and big health business
Through continuously deepening SPD services, the Company upgraded from a “material
supplier” to a “medical safety partner”. During the Reporting Period, the devices and big
health business achieved sales revenue of over RMB24 billion, representing a year-on-year
increase of over 6%. The Company fully participated in the implementation of the Global
Innovative Medical Device Exhibition and Training Center in Shanghai, pooling efforts to
create a new ecosystem for the innovative development of medical devices.

5.

New retail business
The Company gradually implemented the “SPH New Retail Integration Strategy”. During the
Reporting Period, the Company phased the integrated consolidation of specialty pharmacies
to further unlock the value of Shanghai Pharmaceuticals’ specialty pharmacy segment.

6.

Collaboration of pharmaceutical manufacturing and pharmaceutical service to
create a new landscape
Leveraged the integrated and coordinated advantages of the two segments of industrial
production and commercial distribution, the Company deepened the linkage of
pharmaceutical manufacturing and pharmaceutical service, and fully released the combined
momentum of the entire industrial chain. During the Reporting Period, the Company
officially implemented CSO strategic cooperation in four high-quality industrial varieties
such as Xinliuding®, and explored and built overseas expansion system for innovative
drugs and devices, aiming to create a new benchmark for the coordinated development
of pharmaceutical manufacturing and pharmaceutical service.

Significant changes in the Company’s operations during the Reporting Period and matters that
had or expected to have significant influence in the future on the Company’s operations during
the Reporting Period
□Applicable

Not applicable

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Chapter 3 Management Discussion and Analysis

III. CORE COMPETITIVENESS ANALYSIS DURING THE REPORTING PERIOD
Applicable

1.

□Not applicable

Integrated advantages of the industrial chain
Shanghai Pharmaceuticals is a leading integrated industrial group in China’s pharmaceutical industry
and commerce industry. Its businesses cover pharmaceutical manufacturing, distribution and retail,
which enable the Company to create synergistic effects in major links of the value chain of the
pharmaceutical industry, and have unique comprehensive advantages of the industrial chain and
sustainable development momentum. The Company is able to integrate resources to break through
the industry development bottlenecks, continuously provide quality product, service and solution for
patients, medical institutions and partners, constantly create synergetic value for its shareholders and
the society and lower the risks and uncertainties of individual fields.

2.

Innovation transformation advantages
The Company has established an open-source innovation system of “independence + collaboration +
integration” and proactively deepened its strategic cooperation with universities, research institutes,
medical institutions and innovative enterprises. The Company carried out strategic cooperation with
colleges and universities, jointly established a “national key laboratory for innovative immunotherapy”,
collaborated on key technology research, discovered and incubated more original new drugs, new
technologies and new therapies and promoted the transformation and transfer of technological
innovative achievements of colleges and universities to industrialization. Relying on the Shanghai
Biomedical Frontier Industry Innovation Center, integrating resource elements of “industries, universities,
research institutes, hospitals and capital” and through in-depth cooperation with scientific research
institutes, medical institutions and translational medicine centers, the Company accelerates the
introduction of outstanding projects at home and abroad. In addition, it undertakes joint development,
technical support, auxiliary tests and equity investment, and provides first-class experimental sites,
equipment and operation services to expedite the incubation and transformation of innovation projects.

18

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

3.

Green intelligent manufacturing advantages
Guided by the basic principles of quality first, cost optimization, green development and intelligent
manufacturing and driven by system capabilities, the Company aims to achieve operational excellence
and intelligent manufacturing, consistently promoting the transformation and upgrade of the entire
value chain in industrial manufacturing. The Company coordinately establishes technical research
institutes for “APIs, anti-infection, biochemistry, preparations”, creating distinctive technology
platforms. Leveraging the construction of “green factory” as the key driver, the Company focuses
on cost reduction and quality improvement and strengthens the resilience of its supply chain, driving
the transformation and upgrade of pharmaceutical manufacturing towards the “high-end, intelligent
and green” direction.

4.

Service innovation advantages
Based on a national terminal network and by offering innovative pharmaceutical supply chain services
and extended medical services, the Company has strong industrial competitiveness in new business
areas, such as drug import distribution, vaccine marketing and supply chains, drug marketing services,
medical health insurance, high-end consumables, and in-hospital logistics services for pharmaceutical
products. The Company continuously explores new models and fields with partners, providing lifecycle
services for innovative drugs at different stages. This includes package solutions for pre-marketing
services, integrated supply chains, integrated marketing and innovative payment, enhancing the
accessibility and affordability of innovative products.

5.

Brand culture advantages
Building on a fine culture steeped in history, the Company upholds the fundamental principles of
safety, reliability and innovation, and adheres to the main brand-driven development strategy. It owns
a group of established brands with long history and rich connotation, which create effective synergy
with the main brand, “Shanghai Pharmaceuticals”.

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Chapter 3 Management Discussion and Analysis

IV. MAJOR OPERATIONS DURING THE REPORTING PERIOD
(I)

Analysis of principal business
1.

Analysis on changes in relevant items of financial statements
Unit: Yuan Currency: RMB
Amount for the
Amount for the same period of last
Items

current period

year

Change (%)

Operating income

147,469,729,395.20

141,592,782,502.79

4.15

Operating cost

131,209,436,636.44

126,660,060,598.69

3.59

Selling expenses

6,538,197,377.23

6,164,987,968.04

6.05

Administration expenses

2,739,550,557.74

2,662,454,335.70

2.90

Finance costs

694,508,600.01

749,774,716.63

-7.37

R&D expenditure

970,861,155.68

958,949,406.87

1.24

Asset impairment loss

28,045,168.32

410,078,463.89

-93.16

Credit impairment loss

507,826,641.26

423,970,881.72

19.78

Other income

313,509,813.34

313,695,950.14

-0.06

Investment income

827,279,350.09

3,257,333,100.37

-74.60

1,951,396.44

75,751,833.73

-97.42

Gains on disposal of assets

179,699,818.59

39,986,393.32

349.40

Non-operating income

36,939,069.19

21,837,269.63

69.16

Non-operating expenses

45,319,225.36

34,636,191.45

30.84

4,449,509,248.10

989,256,988.89

349.78

393,596,393.28

-1,240,265,624.86

131.73

-948,390,046.60

3,753,377,137.76

-125.27

Gains arising from changes
in fair value

Net cash flow generated from
operating activities
Net cash flow generated from
investing activities
Net cash flow generated from
financing activities

20

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

Reasons for changes in operating income: Increase in sales income during the Reporting Period
Reasons for changes in operating cost: Increase in sales income during the Reporting Period
Reasons for changes in selling expenses: Increase in selling expenses during the Reporting Period
Reasons for changes in administration expenses: Increase in operation and administration expense
during the Reporting Period
Reasons for changes in finance costs: Decrease in interest expense during the Reporting Period
Reasons for changes in R&D expenditure: Increase in investment in R&D during the Reporting
Period
Reasons for changes in asset impairment losses: Decrease in provisions for assets impairment
during the Reporting Period
Reasons for changes in credit impairment loss: Increase in provision for bad debts of receivables
during the Reporting Period
Reasons for changes in other income: Decrease in government grants received during the
Reporting Period
Reasons for changes in investment income: Decrease in investment gains arising from disposal
of equity interest during the Reporting Period
Reasons for changes in gains arising from changes in fair value: Decrease in fair value of financial
assets measured at fair value during the Reporting Period
Reasons for changes in gains on disposal of assets: Increase in gains from disposal of fixed assets
and intangible assets during the Reporting Period
Reasons for changes in non-operating income: Increase in compensation received during the
Reporting Period
Reasons for changes in non-operating expenses: Increase in non-operating expenses during the
Reporting Period
Reasons for changes in net cash flow generated from operating activities: Increase in cash relating
to operating activities received during the Reporting Period
Reasons for changes in net cash flow generated from investing activities: Decrease in cash paid
for investment in financial assets held for trading during the Reporting Period
Reasons for changes in net cash flow generated from financing activities: Decrease in cash
receipts from borrowings during the Reporting Period

2.

Detailed Explanations on Significant Changes in the Business Type, the Composition
of Profits or the Source of Profits of the Company during the Period
□Applicable

Not applicable

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Chapter 3 Management Discussion and Analysis

(II) Explanations on Significant Changes in Profit Resulting from Non-principal Business
□Applicable

Not applicable

(III) Analysis on Assets and Liabilities
Applicable

1.

□Not applicable

Assets and Liabilities
Unit: Yuan Currency: RMB
Percentage Change Ratio
Percentage

of Last

of Current

of Ending

Ending

Ending

Amount
Current Ending
Items
Derivative financial assets

to Total

Amount Assets (%)
7,530,453.55

0.003

Amount

Amount to

to Total

Last Ending

Amount Assets (%)

Amount (%)

Last Ending
721,010.06

0.0003

944.43

Description
Increase in fair value of forward
foreign exchange contracts held
during the Reporting Period

Derivative financial

18,954,922.41

0.008

13,294,428.53

0.006

42.58

liabilities

Increase in fair value of foreign
currency swap contracts
liabilities held during the
Reporting Period

Investments in other

20,954,561.79

0.009

32,683,905.48

0.01

-35.89

equity instruments

Decrease in fair value of
financial assets at fair value
through other comprehensive
income held during the
Reporting Period

Non-current liabilities due 1,703,541,380.83
within one year

0.71

2,809,599,313.10

1.21

-39.37

Decrease in long-term
borrowings due within one year
during the Reporting Period

Other information
Nil

22

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

2.

Overseas assets
Applicable

(1)

□Not applicable

Asset size
Among which, overseas assets amounted to 47.91 (Unit: ’00 million Currency: RMB), the
proportion to the total assets is 1.99%.

(2)

Explanation on high proportion of overseas assets
□Applicable

Not applicable

Other information
Nil

3.

Major assets restriction as at the end of the Reporting Period
Applicable

□Not applicable

As at 30 June 2026, the balance of the Group’s other monetary funds was RMB4,289 million,
among which, RMB1,845 million was the margin deposit for security for applying to the bank
for issuing bank acceptance bills, RMB35 million was the margin deposit for security for applying
to the bank for issuing letters of credit, RMB1,755 million was the Group’s time deposits with
banks due over three months, and other restricted monetary funds amounted to RMB654 million.
As at 30 June 2026, houses, buildings, machinery and equipment with a book value of RMB1,445
million (original price: RMB1,569 million) and land use rights of 429,900 square meters (book
value: RMB523 million, original price: RMB586 million,) were used as collateral for RMB135
million of short-term borrowings, RMB1,319 million of long-term borrowings, and RMB27 million
of long-term borrowings due within one year.
As at 30 June 2026, the bank pledged borrowings of RMB530 million were short-term borrowings
obtained by discounting commercial acceptance bills of RMB9 million, the short-term borrowings
obtained by discounting bank acceptance bills of RMB90 million and the short-term borrowings
obtained by using the accounts receivable with book value of RMB636 million as collaterals.
As at 30 June 2026, guaranteed borrowings of RMB10 million were mainly guaranteed by the
minority shareholders of subsidiaries of the Group.
As at 30 June 2026, the Group pledged the accounts receivable with the book value of RMB132
million to the bank as collateral for borrowings of RMB81 million and long-term borrowings due
within one year of RMB52 million.

4.

Other information
□Applicable

Not applicable

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Chapter 3 Management Discussion and Analysis

(IV) Analysis on Investment Conditions
1.

Overall Analysis on External Equity Investments
Applicable

□Not applicable

Unit: 0’000 Yuan Currency: RMB
Amount of Investments during the Reporting Period

59,549.92

Increase or Decrease in Amount of Investment

-103,506.48

Amount of Investment in the Same Period over Prior Year

163,056.40

Percentage of Increase/decrease in Amount of Investments (%)

(1)

Significant Equity Investments
□Applicable

(2)

Not applicable

Significant Non-equity Investments
□Applicable

(3)

-63.48

Not applicable

Financial Assets Measured at Fair Value
Applicable

□Not applicable

Unit: 0’000 Yuan Currency: RMB
Profit
or Loss
Arising
from the
Changes
in Fair Accumulated

Sales/

Values

Changes in Impairment

during

Fair Value

Provision Amount for Amount for

Purchase Redemption

Opening

the

Included in

for the

the Current

Category of Assets

Amount

Period

Equity

Period

Period

Share

3,684.15

-47.02

-6,689.73

–

–

–

–

2,464.20

154,115.31 -9,643.60

–

–

–

–

57.23

144,414.48

held for trading)

1,036,093.89

9,356.12

–

–

381,390.00

485,151.94

–

941,688.07

Total

1,193,893.35

-334.50

-6,689.73

–

381,390.00

485,151.94

the Current

Other

Closing

Period Changes

Amount

Others (Other noncurrent financial
assets — equity in
unlisted companies)
Others (Financial assets

24

Shanghai Pharmaceuticals Holding Co., Ltd.

57.23 1,088,566.75

Chapter 3 Management Discussion and Analysis

Investment in Securities
□Not applicable

Applicable

Unit: 0’000 Yuan Currency: RMB

Types of
Securities Stock code Short name
Shares

601328

Initial
Investment
Cost

Sources
of
capital

Opening
Carrying
Amount

Profit
or Loss
Arising
from the
Changes
in Fair
Values
during
the
Period

137.30

Selfowned
funds

415.76

-47.02

BANK OF
COMMUNICATIONS

Accumulated
Changes in
Fair Value
Included in
Equity

Purchase
Amount
for the
Current
Period

/

–

Sales Investment
Amount Gains or
for the Losses for Closing
Current the Current Carrying Accounting
Period
Period Amount Items
–

30.71

368.74 Other noncurrent
financial
assets

Shares

00455(HK) Tianda Pharma

8,785.19

Selfowned
funds

3,268.39

/

-6,689.73

Total

/

8,922.49

/

3,684.15

-47.02

-6,689.73

/

–

–

/ 2,095.46 Investments
in other
equity
instruments
30.71 2,464.20 /

Explanation on Securities Investment
Applicable

□Not applicable

For details of other financial assets measured at fair value, please refer to Note (12) to
the Financial Statements.
Investment in Private Funds
□Applicable

Not applicable

Investment in Derivatives
Applicable

□Not applicable

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Chapter 3 Management Discussion and Analysis

①

Investment in Derivatives for Hedging Purposes during the Reporting Period
Applicable

□Not applicable

Unit: 0’000 Yuan Currency: RMB

26

Category of Investment in
Derivatives

Initial
Investment
Amount

Profit
or Loss
Arising
from the
Changes
in Fair
Values
Opening
during
Carrying
the
Amount
Period

Forward contract

101,643.69

43,210.76

811.21

99.37

58,432.93

-35,920.79

66,633.48

0.72%

Swap deposits

9,174.70

–

129.88

–

9,174.70

-9,304.58

–

–

Swap borrowings

-53,062.29

–

-411.45

–

-53,062.29

–

-53,473.74

-0.58%

Total

57,756.10

43,210.76

529.64

99.37

14,545.34

-45,225.37

13,159.74

0.14%

Explanation as to whether there
has been a material change
in the accounting policy and
specific accounting and auditing
principles for the hedging
business during the Reporting
Period as compared to last
reporting period

The calculation was conducted in accordance with the “Accounting Standards for Business Enterprises No. 22 – Recognition
and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 37 – Presentation of Financial
Instruments”, “Accounting Standards for Business Enterprises No. 39 – Fair Value Measurement” and other relevant provisions.
There were no significant changes in accounting policies.

Explanation of actual profit or
loss during the Reporting Period

The actual profit for the period was RMB5.2964 million.

Explanation of hedging
effectiveness

The transactions of the Company’s foreign exchange derivatives were conducted around its actual foreign exchange revenue
and expenditure business, adopting the principle of exchange rate neutrality and relying on specific business operations to
prevent the adverse impact of large exchange rate fluctuations on the Company and avoid foreign exchange market risks.

Source of funds for investment
in derivatives

Self-owned funds

Shanghai Pharmaceuticals Holding Co., Ltd.

Accumulated
Changes in
Fair Value
Included in
Equity

Purchase
Amount
for the
Reporting
Period

Sales
Amount
for the
Reporting
Period

Percentage
of Closing
Carrying
Amount to Net
Assets of the
Company as
Closing at the End of
Carrying the Reporting
Amount
Period (%)

Chapter 3 Management Discussion and Analysis

Category of Investment in
Derivatives
Risk analysis of positions in
derivatives during the Reporting
Period and explanations of risk
control measures (including
but not limited to market
risk, liquidity risk, credit risk,
operational risk, legal risk, etc.)

Initial
Investment
Amount

Profit
or Loss
Arising
from the
Changes
in Fair
Values
Opening
during
Carrying
the
Amount
Period

Accumulated
Changes in
Fair Value
Included in
Equity

Purchase
Amount
for the
Reporting
Period

Sales
Amount
for the
Reporting
Period

Percentage
of Closing
Carrying
Amount to Net
Assets of the
Company as
Closing at the End of
Carrying the Reporting
Amount
Period (%)

The Company conducted foreign exchange hedging business based on the prudent principle, and did not conduct foreign
exchange transactions for the purpose of speculation. All foreign exchange hedging businesses were based on normal
production and operation, and relied on specific business, aiming at avoiding and preventing exchange rate risks. However,
there are certain risks in conducting the foreign exchange hedging business, mainly including:
1. Market risk: Unpredictability exists in the changes of domestic and international economic situation, which may lead to
significant deviations between exchange rate or interest rate trends and expectations, thus causing the corresponding
businesses to face certain price fluctuations and market judgment risks.
2. Transaction default risk: When the counterparty of financial derivatives defaults, it can’t pay the Company’s hedging
profit as agreed, so the Company’s actual exchange loss cannot be hedged, which will cause losses to the Company.
3. Customer default risk: The accounts receivable by the customers are overdue, and the loans cannot be recovered within
the predicted payback period, which will lead to delayed closing, thus causing losses to the Company.
4. Internal control risk: The financial derivatives business is highly specialized and complicated, and losses may still be caused
by imperfect internal control system and improper operation in the process of handling the foreign exchange hedging
business.
5. Legal risk: The changes in laws, regulations or administrative rules or the counterparty’s violation of relevant laws and
regulations may cause the contract to be unable to be performed normally, thus causing losses to the Company.
6. Operational risk: The derivatives trading is highly specialized, and in the course of conducting a specific business, if the
operator fails to examine and approve the business according to the prescribed procedures, or the transaction is not
accurately and timely conducted, it may result in losses or loss of the transaction opportunity.
The risk control plan formulated by the Company:
1. The transaction business of all the financial derivatives of the Company is based on the actual businesses of the Company,
relies on the specific business and adopts hedging means, aiming at avoiding and preventing exchange rate risks, and
prohibiting the financial derivatives trading business that is purely for profit and has risky speculation.
2. At present, the Company has selected low-risk financial derivatives with simple structure to carry out the above business,
and the counterparties are all financial institutions with legal business qualifications, good credit and long-term cooperation
with the Company.
3. In order to prevent the financial derivatives business from defaulting, the Company will further strengthen the management
of foreign exchange-related accounts receivable to avoid overdue accounts receivable.
4. The Company has established a foreign exchange-related management system, clearly stipulating the transaction
examination and approval authority, internal audit process, decision-making procedures, information confidentiality,
risk prevention and other matters. The Company will strictly require enterprises and relevant personnel to operate in
accordance with the provisions of the above system.
5. The Company will continue to pay attention to the market information of the financial derivatives business, track
the changes in the open market price or fair value of derivatives, and timely assess the risk exposure of the financial
derivatives trading businesses that have been carried out. The Company will check the actual operations, fund use and
profits and losses of financial derivatives transactions regularly or irregularly, and check whether the transactions are
conducted according to internal rules and regulations.

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Chapter 3 Management Discussion and Analysis

Category of Investment in
Derivatives

②

Accumulated
Changes in
Fair Value
Included in
Equity

Purchase
Amount
for the
Reporting
Period

Sales
Amount
for the
Reporting
Period

Percentage
of Closing
Carrying
Amount to Net
Assets of the
Company as
Closing at the End of
Carrying the Reporting
Amount
Period (%)

Changes in market price or
product fair value of derivatives
invested during the Reporting
Period, where specific methods
and relevant assumptions
and parameters used shall be
disclosed in the analysis of
derivatives’ fair value

The fair value changes of the Company during the Reporting Period were calculated based on the difference between contract
price and the price of the financial institution as at the balance sheet date determined according to the trading data on the
public market, so as to determine the profits or losses of derivatives for the period.

Litigation involved (if applicable)

Not applicable

Date of announcement
regarding the approval of
investment in derivatives by the
Board (if any)

31 March 2026

Date of announcement
regarding the approval of
investment in derivatives at the
shareholders’ general meeting
(if any)

Not applicable

Investment in Derivatives for Speculation Purposes during the Reporting Period
□Applicable

Other information
Nil

28

Initial
Investment
Amount

Profit
or Loss
Arising
from the
Changes
in Fair
Values
Opening
during
Carrying
the
Amount
Period

Shanghai Pharmaceuticals Holding Co., Ltd.

Not applicable

Chapter 3 Management Discussion and Analysis

(V) Disposal of Major Assets and Equities
Applicable
1.

□Not applicable

On 4 February 2026, the Company held the 28th meeting of the 8th session of the Board,
at which the “Proposal on the Proposed Public Listing and Transfer of 30% Equity Interest in
Sino-American Shanghai Squibb Pharmaceuticals Ltd.” was considered and approved. The Board
agreed that the Company would transfer its 30% equity interest in the shareholding subsidiary,
Sino-American Shanghai Squibb Pharmaceuticals Ltd., through a public listing on a property rights
exchange. The transfer of the equity interest was completed in April 2026, with a transaction
price of RMB1,023.192 million.

2.

In order to promote the overall development of the new retail business and further enhance
its overall competitiveness, optimize resource allocation of the new retail business, strengthen
resource synergy and value realization of the specialty pharmacy segment, and comprehensively
improve its retail terminal service capabilities, operational efficiency, market value and core
competitiveness, the Company advanced the transfer and integration of specialty pharmacies in
batches during the Reporting Period. As of the end of the Reporting Period, the transfer of such
specialty pharmacies has not been completed, and there is uncertainty as to whether all of the
transactions will be completed. For details, please refer to the announcements of the Company
(Lin No. 2026-054 and Lin No. 2026-063).

(VI) Analysis on Companies under Control or in which the Company has Shares
Applicable

□Not applicable

Major subsidiaries and shareholding companies affecting 10% or more of the Company’s net profit
Applicable

□Not applicable

Unit: ’00 million Yuan Currency: RMB
Company Name

Company
Type
Principal Business

Registered
Capital

Total
Assets

Net Operating Operating
Assets
Income
Profit

Net
Profit

Shanghai Pharmaceutical Co., Ltd.

Subsidiary Sales of drugs

50.00

1,009.58

229.61

834.43

19.64

12.52

SPH Sine Pharmaceutical Factory Co., Ltd.

Subsidiary Production and sales
of drugs

11.92

77.20

47.09

21.35

4.37

3.50

SPH No. 1 Biochemical & Pharmaceutical
Co., Ltd.

Subsidiary Production and sales
of drugs

3.24

26.10

7.05

9.52

1.95

1.51

SPH New Asia Pharmaceutical Co., Ltd.

Subsidiary Production and sales
of drugs

10.52

12.99

6.27

3.01

-0.04

-0.04

Shanghai TCM Co., Ltd.

Subsidiary Production and sales
of drugs

16.66

75.17

46.37

29.25

3.67

3.42

Chiatai Qingchunbao Pharmaceutical Co., Ltd. Subsidiary Production and sales
of drugs

1.29

38.45

27.67

6.29

0.23

0.23

SPH Changzhou Pharmaceutical Co., Ltd.

1.58

57.76

32.60

32.03

1.55

1.29

Subsidiary Production and sales
of drugs

Interim Report 2026

29

Chapter 3 Management Discussion and Analysis

Company
Type
Principal Business

Registered
Capital

Total
Assets

Net Operating Operating
Assets
Income
Profit

Net
Profit

SPH Zhongxi Sunve Pharmaceutical Co., Ltd.

Subsidiary Production and sales
of drugs

5.46

33.67

25.63

3.99

1.51

1.19

SPH Qingdao Guofeng Pharmaceutical
Co., Ltd.

Subsidiary Production and sales
of drugs

0.93

24.09

17.32

11.81

1.95

1.73

Hangzhou Huqingyutang Pharmaceutical
Co., Ltd.

Subsidiary Production and sales
of drugs

1.35

18.78

14.97

7.16

2.10

1.81

Xiamen TCM Factory Co., Ltd.

Subsidiary Production and sales
of drugs

2.00

6.57

5.80

2.41

0.13

0.13

Liaoning Herbpex Pharmaceutical (Group)
Co., Ltd.

Subsidiary Production and sales
of drugs

1.02

11.76

5.84

2.95

0.37

0.33

Shanghai Zhonghua Pharmaceutical Co., Ltd.

Subsidiary Production and sales
of drugs

0.94

5.49

2.77

1.88

0.23

0.22

Shanghai Medical Instruments Co., Ltd.

Subsidiary Production and sales of
medical instruments

3.27

5.58

4.14

1.92

-0.12

-0.13

Shanghai Pharma Sales Co., Ltd.

Subsidiary Sales of drugs

0.50

13.76

1.06

5.58

0.44

0.44

TECHPOOL Bio-pharma Co., Ltd.

Subsidiary Production and sales
of drugs

1.00

30.93

25.22

9.05

2.68

2.28

SPH Changzhou Kony Pharmaceutical
Co., Ltd.

Subsidiary Production and sales
of drugs

0.15

3.73

2.79

1.34

0.25

0.21

Shanghai Hutchison Pharmaceuticals Co., Ltd. Subsidiary Production and sales
of drugs

2.29

54.13

37.33

17.71

5.07

4.17

Company Name

Acquisition and disposal of subsidiaries during the Reporting Period
□Applicable

Not applicable

Other information
□Applicable

Not applicable

(VII) The Structural Entity Controlled by the Company
□Applicable

Not applicable

V. OTHER DISCLOSURES
(I)

Potential risk factors
Applicable

□Not applicable

Under the policy direction of “ensuring basic demands, strengthening innovation and tightening
regulation”, the competitive landscape of the pharmaceutical market is undergoing accelerated
adjustment. The Company will closely monitor policy changes, proactively optimize its market strategies,
and promote the launch of key new products as scheduled and value realization.
30

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

In terms of the pharmaceutical manufacturing and pharmaceutical service segments, with further
implementation of industry regulatory policies such as centralized procurement and price governance,
the Company will further optimize its product structure, continue to reduce costs and improve
efficiency, enhance management standards, and promote the development of innovative businesses,
thereby achieving sustainable and high-quality development of its main business.
In terms of the pharmaceutical research and development, innovative drug research and development
projects have long lead time and large investment, the related progress and approval results and time
to market are subject to certain uncertainties, and there is a risk that the progress or clinical trial
results of the project are not as expected. The Company will vigorously introduce market-oriented
innovative talents, and steadily improve its innovation competitiveness by paying close attention to
changes in the industry, and optimizing the allocation of innovation resources.

(II) Other disclosures
□Applicable

Not applicable

VI. DISCLOSURES REQUIRED BY THE HONG KONG LISTING RULES
(I)

Capital Structure
As at the end of the Reporting Period, the asset-liability ratio (total liabilities/total assets) of Shanghai
Pharmaceuticals was 61.46%, representing a decrease of 0.03 percentage point over the beginning
of the period. The interest coverage ratio (EBIT/interest expenses) was 8.98 times (same period of
2025: 8.68 times). The gearing ratio (net amount of debts/total capital) of the Company was 22.36%.
During the Reporting Period, Shanghai Pharmaceuticals had a good liquidity and financial resources.
As at the end of the Reporting Period, the balance of bank loans of the Company was RMB50.927
billion and the balance of extra short-term financing bill was RMB6.021 billion, of which the balance
of loans in US dollar amounted to RMB503 million, the balance of loans in AUD amounted to RMB309
million, the balance of loans and extra short-term financing bill at a fixed interest rate amounted
to approximately RMB52.456 billion. The net amount of accounts receivable and notes receivable
(including receivables financing) was RMB93.522 billion, representing an increase of 8.92% on a
YOY basis. The increase in accounts receivable was mainly due to the expanded operation scale of
the Company. The balance of accounts payable and notes payable of the Company was RMB63.585
billion, representing an increase of 3.55% on a YOY basis.
The Group’s objective on capital management is to safeguard the Group’s ability to continue as a going
concern and provide returns for shareholders and benefits for other stakeholders, and also to maintain
an optimal capital structure to lower capital cost. In order to maintain or adjust capital structure, the
Group may adjust dividends amount payable to shareholders, return capital to shareholders, issue
new shares or dispose of assets to reduce debts.

(II) Exchange Rate Fluctuation Risk and Any Related Hedging
Shanghai Pharmaceuticals conducts its operations mainly in China and makes settlements in RMB for
its principal businesses. However, foreign exchange risks still exist in recognized assets and liabilities
denominated in foreign currencies and future foreign currency transactions (the main currencies
denominating are US dollar, Hong Kong dollar, Australian dollar and New Zealand dollar). The Company
is not involved in any related hedging.
Interim Report 2026

31

Chapter 3 Management Discussion and Analysis

(III) Contingent Liabilities
During the Reporting Period, the Company had no major action or arbitration pending to be disclosed.

(IV) Significant Investment
As at 30 June 2026, the Company did not have any significant investment under paragraph 32(4A)
of Appendix D2 to the Hong Kong Listing Rules.

(V) Employees, Remuneration Policy and Training Scheme
As of 30 June 2026, Shanghai Pharmaceuticals had a total of 48,640 employees (including 1,715
R&D personnel).
The Company adheres to the payment concept of “Position, Ability, Performance and Market” which
improved annual and term performance evaluation system of senior management of the Company and
management of the subsidiaries, with upgraded performance-based incentive and restraint mechanism.
Based on the characteristics of positions, the Company constructs differentiated remuneration systems
for management staff, marketing staff, R&D staff, technical quality management staff and production
staff with reasonable docking between the various remuneration systems, so as to effectively motivate
the employees and stimulate their creativity, continually improve the Company’s business results and
enhance the achievement of the Company’s strategic goals. The Company carries out market research
on remuneration, improving the staff revenue growth and underpinning mechanisms related to the
Company’s operating performance, so that employees can share the achievements of enterprise
development.
The remuneration and compensation package of the employees generally includes salary, allowance
and bonus, as well as pension, medical insurance, housing fund, work-related injury insurance and
other benefits from the Company. The Company participates in various employee welfare schemes,
such as pension, medical insurance, housing fund, maternity and unemployment insurance organized
by the provincial and municipal governments in accordance with the relevant regulations of China.
Moreover, the Company establishes the enterprise pension system and improves the corporate welfare
system, which will enhance the cohesion and competitiveness of the enterprise.
During the Reporting Period, in close alignment with the Group’s strategic plan, the Company continued
to carry out multi-dimensional training and empowerment programs, and focused on enhancing the
capabilities of employees of the Group, updating the knowledge of professional teams and optimizing
the operation of digital learning platforms, and strengthened the construction of learning-oriented
organizations.
During the Reporting Period, the Company made steady progress in building its training system, and
successfully held the third training courses for young and middle-aged cadres. Trainings on functional
lines such as research and development, marketing, manufacturing, quality, safety and environmental,
investment, legal affairs, information technology and human resources were progressed as planned,
providing a solid talent support for the high-quality development of the Group.

32

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

(VI) Option Incentive Scheme
On 18 December 2019, the Company’s 2019 share option incentive scheme (the “Option Incentive
Scheme”) was considered and approved by the shareholders of the Company at the 2019 first
extraordinary general meeting, the 2019 second H-share class meeting, and the 2019 second A-share
class meeting (the “Shareholders’ General Meetings”) and adopted by the Company. On 19 December
2019 (the “Initial Options Grant Date”) pursuant to the authorization at the shareholders’ general
meeting, the Board approved the grant of 25,680,000 share options to 211 participants. Due to the
resignation of employee, the Company considered and approved at the meeting of the Board on 10
February 2020 to adjust the number of the initial participants from 211 to 210 and the number of
initial granted options was adjusted from 25,680,000 to 25,600,000 accordingly. On 15 December
2020 (“Reserved Options Grant Date”, together with “Initial Options Grant Date” collectively referred
to as “Grant Date”), pursuant to the authorization of shareholders, the Board approved the grant of
2,730,000 share options to 28 participants.
Due to the resignation or unfulfillment of performance assessment requirements of some employees,
on 5 January 2022, the Board considered and approved to adjust the number of the initial participants
from 210 to 190 and the number of initial granted options was adjusted from 25,600,000 to 23,258,120
accordingly; on 9 January 2023, the Board considered and approved to adjust the number of the initial
participants from 190 to 182 and the number of initial granted options was adjusted from 23,258,120
to 22,735,520 accordingly and on 9 January 2023, the Board considered and approved to adjust the
number of participants of reserved options from 28 to 23 and the number of reserved options was
adjusted from 2,730,000 to 2,290,000 accordingly; on 21 December 2023, the Board considered and
approved to adjust the number of the initial participants from 182 to 170 and the number of initial
granted options was adjusted from 22,735,520 to 22,065,720 accordingly; on 31 December 2024,
the Board considered and approved to adjust the number of participants of reserved options from 23
to 20 and the number of reserved options was adjusted from 2,290,000 to 2,191,400 accordingly.
Due to fulfillment of the exercise conditions for the first exercise period, the second exercise period and
the third exercise period of the initial granted share options and fulfillment of the exercise conditions
for the first exercise period, the second exercise period and the third exercise period of the reserved
share options of the Option Incentive Scheme, on 5 January 2022, the Company considered and
approved at the Board meeting that 190 participants can exercise 7,667,220 share options during the
first exercise period of the initial granted share options; on 9 January 2023, the Company considered
and approved at the Board meeting that 182 participants can exercise 7,421,700 share options during
the second exercise period of the initial granted share options and 23 participants can exercise 755,700
share options during the first exercise period of reserved share options; on 21 December 2023, the
Company considered and approved at the Board meeting that 170 participants can exercise 6,976,800
share options during the third exercise period of the initial granted share options and 23 participants
can exercise 755,700 share options during the second exercise period of reserved options; on 31
December 2024, the Company considered and approved at the Board meeting that 20 participants
can exercise 680,000 share options during the third exercise period of the reserved share options.

Interim Report 2026

33

Chapter 3 Management Discussion and Analysis

The exercise and share transfer registration in respect of total 3,342,561 shares have completed
during the first exercise period for the initial granted share options under the Option Incentive Scheme
which has expired on 13 February 2023. On 30 March 2023, the Company considered and approved
at the Board meeting that 4,324,659 share options that had expired but not been exercised during
the first exercise period for the initial granted options have been cancelled. The exercise and share
transfer registration in respect of total 4,972,629 shares have completed during the second exercise
period for the initial granted share options under the Option Incentive Scheme which has expired
on 13 February 2024. The exercise and share transfer registration in respect of total 269,746 shares
have completed during the first exercise period for the reserved share options which has expired on 7
February 2024. On 28 March 2024, the Company considered and approved at the Board meeting that
2,449,071 share options that had expired but not been exercised during the second exercise period
for the initial granted options and 485,954 share options that had expired but not been exercised
during the first exercise period for the reserved options have been cancelled. The exercise and share
transfer registration in respect of total 4,828,870 shares have completed during the third exercise
period for the initial granted share options under the Option Incentive Scheme which has expired on
13 February 2025. The exercise and share transfer registration in respect of total 231,885 shares have
completed during the second exercise period for the reserved share options which has expired on 7
February 2025. On 27 March 2025, the Company considered and approved at the Board meeting that
2,147,930 share options that had expired but not been exercised during the third exercise period for
the initial granted options and 523,815 share options that had expired but not been exercised during
the second exercise period for the reserved options have been cancelled. Participants did not exercise
shares options during the third exercise period for the reserved options under the Option Incentive
Scheme which has expired on 7 February 2026. On 30 March 2026, the Company considered and
approved at the Board meeting that 680,000 share options that had expired but not been exercised
during the third exercise period for the reserved options have been cancelled. For the six months
ended 30 June 2026, no A-share share options were exercised.
In conclusion, as of 30 June 2026, there are no outstanding A-share share options under the Option
Incentive Scheme that remain to be granted, vested, or exercised, and the validity period of the Option
Incentive Scheme has been expired upon completion of the cancellation of the reserved share options.

1.

PURPOSE OF THE OPTION INCENTIVE SCHEME
To further optimize the corporate governance structure of the Company, create long-term
incentive and restrictions on the senior management, mid-level management and key technical
and business staff and other employee participants of the Company, fully encourage their initiative
and creativity, effectively align their interests with the Company’s long-term development, prevent
the loss of talents, and achieve sustainable development of the Company, as proposed by the
Remuneration and Assessment Committee of the Board, Shanghai Pharmaceuticals formulated
the Option Incentive Scheme in accordance with relevant laws, administrative regulations and
regulatory documents, and the Articles of Association.

34

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

2.

DETERMINATION OF AND DISTRIBUTION TO PARTICIPANTS UNDER THE OPTION
INCENTIVE SCHEME
The participants under the Option Incentive Scheme, comprise the senior management, midlevel management and key technical and business staff of the Company. The participants do
not include non-executive Directors, independent non-executive Directors, members of the
Remuneration and Assessment Committee, Supervisors, and any substantial shareholders or
actual controller individually or jointly holding more than 5% of the Shares of the Company and
their respective spouse, parents and children. All participants are employed by the Company or
its holding subsidiaries and branches, and have entered into labour contracts with and received
remuneration from the Company or its holding subsidiaries.
As at 30 June 2026, the distribution of the share options to participants is as follows:
Number of
Percentage
the share Percentage to
to total share
options total number
capital of the
of the share
granted (in
options Company as of
10,000 A
granted the Grant Date
Shares)

Name

Position(s)

Cho ManNote 1

Executive Director, President
(resigned)

48.00

1.979%

0.017%

Shen Bo

Executive Director, President

39.00

1.608%

0.014%

Li Yongzhong

Executive Director, Executive
President

39.00

1.608%

0.014%

Zhao Yong Note 2

Employee Representative
Director, Vice President

33.00

1.360%

0.012%

Mao Jianyi Note 3

Vice President (resigned)

33.00

1.360%

0.012%

Gu Haoliang

Vice President (resigned)

33.00

1.360%

0.012%

Zhang Yaohua Note 5 Vice President (resigned)

33.00

1.360%

0.012%

Note 4

Chen Jinzhu Note 6

Vice President, Secretary to
the Board, Joint Company
Secretary (resigned)

33.00

1.360%

0.012%

Pan Deqing Note 7

Vice President (resigned)

18.00

0.742%

0.006%

Maimaiti Aili

Vice President

8.00

0.330%

0.003%

1,889.572

77.898%

0.665%

219.14

9.034%

0.077%

2,425.712

100.000%

0.853%

Note 8

Middle level management and core employees
of the Company (160 persons in total after
adjustment) under the initial grant
Middle level management and core employees (20
persons in total) under the reserved options grant
Total

Any discrepancies between the total shown and the breakdowns of the amounts listed in the
table are due to rounding.
Interim Report 2026

35

Chapter 3 Management Discussion and Analysis

Note 1: Mr. Cho Man ceased to be the executive director and vice president of the Company from 29
June 2023. For details, please refer to the Company’s announcement dated 30 June 2023. As of
30 June 2026, his share options that granted but not exercised during the first exercise period,
the second exercise period and the third exercise period for the initial granted options have been
cancelled by the Company, and he shall no longer hold any share options.
Note 2: On 11 February 2026, Mr. Zhao Yong was elected as the employee representative Director by the
employee representative meeting. For details, please refer to the Company’s announcement on
Election of Employee Director dated 11 February 2026 (A share announcement Lin No. 2026-013).
He served as the vice president upon the grant of share options. For details, please refer to the
Company’s announcement dated 20 December 2019 (A share announcement Lin No. 2019-097). As
of 30 June 2026, his share options that granted but not exercised during the first exercise period,
the second exercise period and the third exercise period of the initial granted options have been
cancelled by the Company, and he shall no longer hold any share options.
Note 3: Mr. Mao Jianyi ceased to be the vice president of the Company on 25 September 2025. For details,
please refer to the Company’s announcement dated 26 September 2025. As of 30 June 2026, his
share options that granted but not exercised during the first exercise period, the second exercise
period and the third exercise period of the initial granted options have been cancelled by the
Company, and he shall no longer hold any share options.
Note 4: Mr. Gu Haoliang ceased to be the vice president of the Company from 29 March 2022. For details,
please refer to the Company’s overseas regulatory announcement dated 30 March 2022 (A share
announcement Lin No. 2022-025). His share options that granted but not exercised during the first
exercise period and the second exercise period for the initial granted options have been cancelled
by the Company. Due to unfulfillment of exercise conditions, his share options granted during
the third exercise period for the initial granted options have been cancelled by the Company, for
details, please refer to the Company’s overseas regulatory announcement dated 22 December 2023
(A share announcement Lin No. 2023-100).
Note 5: Mr. Zhang Yaohua has resigned from all positions including the vice president of the Company
since 5 August 2024. For details, please refer to the Company’s overseas regulatory announcement
dated 6 August 2024 (A share announcement Lin No. 2024-074). As of 30 June 2026, his share
options that granted but not exercised during the first exercise period, the second exercise period
and the third exercise period for the initial granted options have been cancelled by the Company,
and he shall no longer hold any share options.
Note 6: Ms. Chen Jinzhu ceased to be the vice president of the Company from 29 March 2022, and ceased
to be the secretary to the Board and joint company secretary of the Company from 29 August 2022.
For details, please refer to the Company’s overseas regulatory announcement dated 30 March 2022
(A share announcement Lin No. 2022-025) and the Announcement on Proposed Re-election and
Election of Directors and Supervisors, etc dated 29 August 2022 (A share announcement Lin No.
2022-066). Her share options that granted but not exercised during the first exercise period and
the second exercise period for the initial granted options have been cancelled by the Company. Due
to unfulfillment of exercise conditions, her share options granted during the third exercise period
for the initial granted options have been cancelled by the Company, for details, please refer to the
Company’s overseas regulatory announcement dated 22 December 2023 (A share announcement
Lin No. 2023-100).

36

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

Note 7: Mr. Pan Deqing ceased to be the vice president of the Company on 2 September 2023. For details,
please refer to the Company’s overseas regulatory announcement dated 2 September 2023 (A
share announcement Lin No. 2023-071). His share options that granted but not exercised during
the first exercise period and the second exercise period for the initial granted options have been
cancelled by the Company. Due to unfulfillment of exercise conditions, his share options granted
during the third exercise period for the initial granted options have been cancelled by the Company,
for details, please refer to the Company’s overseas regulatory announcement dated 22 December
2023 (A share announcement Lin No. 2023-100).
Note 8: Mr. Maimaiti Aili was appointed as the vice president of the Company on 5 November 2024.
For details, please refer to the Company’s overseas regulatory announcement dated 6 November
2024 (A share announcement Lin No. 2024-100). His share options that granted but not exercised
during the first exercise period and the second exercise period for the initial granted options have
been exercised by the Company and share options that granted but not exercised during the third
exercise period for the initial granted options have been cancelled by the Company. As of 30 June
2026, he shall no longer hold any share options.

3.

NUMBER OF SHARE OPTIONS GRANTED UNDER THE OPTION INCENTIVE SCHEME
The number of A-share share options granted under the Option Incentive Scheme is 24,257,120,
representing not more than 1% of the total number of Shares of the Company in issue as of
the date of this report.

4.

MAXIMUM NUMBER OF SHARE OPTIONS GRANTED TO EACH PARTICIPANT UNDER
THE OPTION INCENTIVE SCHEME
The total number of Shares to be granted to the participants under the Option Incentive Scheme
which are still in the Validity Period of the Option Incentive Scheme shall not exceed 1% of the
Company’s total share capital at the time of the approval of the Option Incentive Scheme by
the General Meetings (being 18 December 2019) on a cumulative basis.

5.

VESTING PERIOD
The vesting period shall be the period commencing from the registration date of the grant of
share options to the first exercise date. The vesting period for the Option Incentive Scheme
shall be 24 months.

Interim Report 2026

37

Chapter 3 Management Discussion and Analysis

6.

EXERCISE PERIOD AND EXERCISE DATE
The share options granted to the participants can be exercised after the vesting period. The
exercise date must be a trading day and shall not fall into the following periods:
the period commencing on 30 days prior to the announcements of periodic reports of the

(i)

Company, or in the event of postponement in publishing the periodic reports for special
reasons, 30 days prior to the original announcement date and end on one day prior to
the actual announcement date;
the period commencing on 10 days prior to the announcements of results forecast and

(ii)

preliminary results of the Company;
(iii)

the period commencing on the date of the occurrence of material events that may have
significant impacts on price of Shares and derivatives of the Company, or the date of
entering into the decision-making process, and end on two business days after such events
have been lawfully disclosed; and

(iv)

other periods prescribed by the CSRC and the Shanghai Stock Exchange.

During the exercise period, the participants are able to exercise the options according to the
following exercising arrangement upon the fulfillment of the exercise conditions under the Option
Incentive Scheme. The exercise period of the share options and timetable for each exercise are
set out below:
Proportion of
Exercisable
Share Option
to the Number
of Share Option
Exercise Period

Time Arrangement

First exercise period Commencing from the first trading day upon the expiry of

Granted
33%

24 months from the Grant Date to the last trading day
upon the expiry of 36 months from the Grant Date
Second exercise
period

Commencing from the first trading day upon the expiry of

33%

36 months from the Grant Date to the last trading day
upon the expiry of 48 months from the Grant Date

Third exercise period Commencing from the first trading day upon the expiry of
48 months from the Grant Date to the last trading day
upon the expiry of 60 months from the Grant Date

38

Shanghai Pharmaceuticals Holding Co., Ltd.

34%

Chapter 3 Management Discussion and Analysis

The participants shall exercise the share options during the exercise period. If the exercise
conditions are not fulfilled, such share options shall not be exercised. If the exercise conditions
are fulfilled nevertheless not all of the relevant share options have been exercised during the
above period, such share options shall be cancelled by the Company.

7.

EXERCISE PRICE
The exercise price of the share options under the Option Incentive Scheme is RMB18.41 per A
Share for the initial grant, i.e. upon the fulfillment of the exercise conditions, the participants
are able to purchase the A Shares issued by the Company to the participants at the price of
RMB18.41 per A Share. In cases of capitalization of capital reserves, bonus issue and shares
subdivision, rights issue, and share consolidation, exercise price of the share options shall be
adjusted accordingly.
The exercise price of the share options for the initial grant under the Option Incentive Scheme
shall not be less than the nominal value of the A Shares and shall not be lower than the higher of:
(i)

the average trading price of the A Shares on the trading day immediately preceding the
date of the announcement in relation to the Option Incentive Scheme, being RMB18.20
per A Share;

(ii)

the average trading price of the A Shares for 60 trading days immediately preceding the
date of the announcement in relation to the Option Incentive Scheme, being RMB18.41
per A Share.

The share options for the reserved grant shall be approved by the meetings of the Board before
each grant, among whom, the directors who are proposed to be participants or directors in
relation thereto shall abstain from voting. The exercise price shall be not be less than the nominal
value of the A Shares and determined with reference to the higher of:
(i)

the average trading price of the A Shares on the trading day immediately preceding the
date of the announcement of the Board’s resolution of granting the reserved options;

(ii)

the average trading price of the A Shares for 20, 60 or 120 trading days immediately
preceding the preceding the date of the announcement of the Board’s resolution of granting
the reserved options.

8.

VALIDITY PERIOD
(1) Validity period of the Option Incentive Scheme
The Option Incentive Scheme will take effect after it has been considered and approved
by the General Meetings, and will expire on the date on which the share options granted
under the Option Incentive Scheme have been exercised or cancelled.

(2)

Validity period of the share options
The validity period of the share options granted under the Option Incentive Scheme
commences from the registration date of the grant, which shall not exceed 60 months.
Interim Report 2026

39

Chapter 3 Management Discussion and Analysis

9.

CHANGES IN OPTIONS GRANTED UNDER THE OPTION INCENTIVE SCHEME
Details of changes in options granted under the Option Incentive Scheme as of 30 June 2026
are as follows:

Number
of options
outstanding
at the
beginning of
the Reporting
Period (in
10,000
A Shares

Number
of options
granted
during the
Reporting
Period (in
10,000
A Shares)

Number of
exercisable
options
during the
Reporting
Period (in
10,000
A Shares)

Number
Number
Number Number of options
of options of options of options outstanding
Exercised cancelled
lapsed at the end
during the during the during the
of the
Reporting Reporting Reporting Reporting
Period (in Period (in Period (in Period (in
10,000
10,000
10,000
10,000
A Shares) A Shares) A Shares) A Shares) Grant date

Exercise
period

Name

Position(s)

Shen Bo

Executive
Director,
President

0

0

0

0

0

0

Li Yongzhong Executive
Director,
Executive
President

0

0

0

0

0

0

Zhao Yong

Employee
Representative
Director, Vice
President

0

0

0

0

0

0

0

Maimaiti Aili Vice President

0

0

0

0

0

0

0

Resigned senior executives
(6 members)

0

0

0

0

0

0

0

Middle level management

0

0

0

0

0

0

0

Middle level management and
core employees
(20 persons in total) under
the reserved options grant

68.0000

0

68.0000

0

-68.0000

0

0 15 December From
2020
8 February
2023 to
7 February
2026

Total

68.0000

0

68.0000

0

-68.0000

0

0

The
weighted
average
closing price
of A Shares
of the
Company
immediately
before the
exercise
date
during the
Exercise Reporting
price
Period

0 19 December From
RMB18.41
2019
14 February per A Share
2022 to
13 February
0
2025

N/A(1)

and core employees (160
persons in total) under the
initial grant

40

Shanghai Pharmaceuticals Holding Co., Ltd.

RMB20.16
per A Share

N/A(1)

Chapter 3 Management Discussion and Analysis

Note:

Immediately prior to the Initial Options Grant Date (namely 18 December 2019), the closing price
of the Company’s A Shares was RMB18.07 per A Share; immediately prior to the Reserved Options
Grant Date (namely 14 December 2020), the closing price of the Company’s A Shares was RMB19.22
per A Share.

(1)

It is not applicable, as there were no A-share share options exercised during the Reporting Period.

According to the Option Incentive Scheme, please refer to the paragraphs above for the Grant
Date, validity period, vesting period, exercise period, and exercise price of the above share options.
As of 30 June 2026, there are no outstanding A-share share options under the Option Incentive
Scheme that remain to be granted, vested, or exercised. As of the beginning and end of the
Reporting Period, there were no options available for grant under the Option Incentive Scheme.

10. VALUE OF SHARE OPTIONS AND ACCOUNTING POLICIES IN RELATION THERETO
(1) Value of share options
According to the relevant requirements of the Accounting Standards for Business Enterprises
No. 11 – Share-based Payments and Accounting Standards for Business Enterprises No.
22 – Recognition and Measurement of Financial Instruments issued by the Ministry of
Finance, the Company elected the Black-Scholes model (B-S model) for the calculation of
the fair value of shares options. As the valuation of options are subject to a number of
assumptions and with regard to the limitation of the B-S model, the Company would like
to remind all the shareholders and potential investors of the Company that the estimation
of such value is subjective and uncertain.

Initial Grant
The Company estimated the fair value of shares options initially granted using B-S model
on 19 December 2019 (Initial Options Grant Date). Particulars are as follows:
The initial options granted by Shanghai Pharmaceuticals on 19 December 2019 were
vested in three batches. The fair values per share of the first, second and third batch
of vested options are RMB3.21 per A Share, RMB3.53 per A Share, and RMB5.04 per A
Share, respectively.
Based on various data on 19 December 2019, the values and descriptions of the parameters
of the valuation model are as follows:
(i)

Market price of underlying shares: RMB18.08 per A Share (the closing price of the
Company’s Shares on the Initial Options Grant Date is RMB18.08 per A Share

(ii)

Exercise price: RMB18.41 per A Share

(iii)

Validity period: 2.5 years, 3.5 years, and 4.5 years (depending on the weighted
average exercise period of options vested in each period)

Interim Report 2026

41

Chapter 3 Management Discussion and Analysis

(iv)

Volatility rate: 29.14%, 26.86%, and 34.76% (using the Company’s volatility rate
in the past 2.5 years, 3.5 years, and 4.5 years)

(v)

Risk-free interest rates: 2.76%, 2.86%, and 2.96% (using the 2.5-year, 3.5-year, and
4.5-year benchmark deposit interest rate of government bonds)

(vi)

Expected dividend yield: 1.72% (using the Company’s average dividend yield in the
past three years)

Reserved Options Grant
The Company estimated the fair value of reserved options granted using B-S model on 15
December 2020 (Reserved Options Grant Date). Particulars are as follows:
The options granted by Shanghai Pharmaceuticals on 15 December 2020 were vested in
three batches. The fair values per share of the first, second and third batch of vested options
are RMB3.37 per A Share, RMB3.83 per A Share, and RMB4.06 per A Share, respectively.
Based on various data on 15 December 2020, the values and descriptions of the parameters
of the valuation model are as follows:
(i)

Market price of underlying shares: RMB19.00 per A Share (the closing price of the
Company’s Shares on the Reserved Options Grant Date is RMB19.00 per A Share)

(ii)
(iii)

Exercise price: RMB20.16 per A Share
Validity period: 2.5 years, 3.5 years, and 4.5 years (depending on the weighted
average exercise period of options vested in each period)

(iv)

Volatility rate: 32.20%, 30.71% and 28.66% (using the Company’s volatility rate in
the past 2.5 years, 3.5 years, and 4.5 years)

(v)

Risk-free interest rates: 2.94%, 3.02%, and 3.09% (using the 2.5-year, 3.5-year, and
4.5-year benchmark deposit interest rate of government bonds)

(vi)

Expected dividend yield: 2.03% (using the Company’s average dividend yield in the
past three years)

(2)

Accounting policies in relation to share options
According to the Accounting Standards for Business Enterprises No. 11 – Share-based
Payments, the Company will measure and account for the cost of the Company’s Option
Incentive Scheme as per the following accounting methods:

42

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 3 Management Discussion and Analysis

(i)

Grant Date
As share options are not exercisable on the Grant Date, accounting treatment is not
required. The Company shall determine the fair value of the share options on the
Grant Date.

(ii)

Vesting period
On each balance sheet date during the vesting period, the services obtained in the
current period shall, based on the best estimate of the number of the exercisable share
options, be included in cost of the relevant assets or expenses and the other capital
reserves in capital reserves at the fair value of the share options on the Grant Date.

(iii)

Exercise period
No adjustment shall be made to the relevant costs or expense, and the total amount
of the owner’s equities, which have been recognized.

(iv)

Exercise date
Share capital and share premium shall be recognized with reference to the actual
exercise of the share options, and upon which, the amount recognized as “Capital
Reserves – Other capital reserves” during the vesting period shall be transferred to
“Capital Reserves – Capital premium”.

11. Shares to be issued due to grant of share options and awards under all share
schemes
During the Reporting Period, there were 680,000 A Shares to be issued under all schemes of
the Company, representing 0.024% of the weighted average number of issued A Shares during
the Reporting Period.

(VII) Outlook for the Second half of 2026
In the second half of the year, the Company will insist on the general business policy of “strengthening
foundation and improving quality to enhance efficiency; advancing innovation and overcoming
challenges to promote transformation”. Closely following the requirements of the opening year
of the “15th Five-Year” Plan and centering on the main line of high-quality development, the
Company will focus on “ensuring stable operations, promoting reform, strengthening innovation
and fostering new drivers”, reinforce its internal foundation and expand external strengths, further
consolidate the foundation for the development of pharmaceutical manufacturing and service, advance
integration of pharmaceutical manufacturing and service and marketing transformation, accelerate
the implementation of the innovation system reform plan, enhance R&D and innovation capabilities,
and strengthen operational compliance and risk management. The Company is fully committed to
achieving its annual operating targets and key tasks, thereby laying a solid foundation for a successful
start of the “15th Five-Year Plan” and the Company’s innovation-driven transformation.

Interim Report 2026

43

Chapter 4 Corporate Governance, Environmental and Society

I.

CHANGES IN DIRECTORS AND SENIOR MANAGEMENT OF THE COMPANY
Applicable

Name

□not applicable

Position

GU Zhaoyang Independent

Change

Reason

situation

for change reason for change

Resignation

Re-election

Director
FOK Manson

Independent

Description of
On 25 June 2026, due to the expiry of
the eighth session of the Board of the

Resignation

Re-election

Director

Company, Mr. GU Zhaoyang and Mr. FOK
Manson, having served as the independent
directors for two consecutive sessions,
ceased to act as the independent directors
of the Company.

XUE Yunkui

Independent

Election

Re-election

Director
WANG Qian

Independent

Company’s 2025 annual general meeting,
Election

Re-election

Director
ZHAO Yong

Employee

On 25 June 2026, upon election at the
Mr. XUE Yunkui and Mr. WANG Qian were
elected as the independent directors of the
ninth session of the Board of the Company.

Election

Re-election

Mr. ZHAO Yong was appointed as the

Representative

employee representative director of the

Director

eighth session of the Board of the Company
upon election at employee representative
meeting on 11 February 2026, and
appointed as the employee representative
director of the ninth session of the Board
of the Company upon election at employee
representative meeting on 16 June 2026.

Information on changes in Directors and Senior Management of the Company
□Applicable

44

not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 4 Corporate Governance, Environmental and Society

II. PROPOSAL FOR PROFIT DISTRIBUTION OR CONVERSION OF CAPITAL
RESERVE FUND INTO SHARE CAPITAL
Profit Distribution Proposal, Proposal for the Conversion of Capital Reserve Fund into
Share Capital for the Half Year
Profit distribution or conversion of capital reserve fund into share capital

Yes

Bonus share for every 10 Shares (shares)

N/A

Dividend for every 10 Shares (Yuan) (tax inclusive)

1.00

Conversion into share capital for every 10 Shares (shares)

N/A

Explanation on proposal for profit distribution or conversion of capital reserve fund into share capital
On 25 June 2026, the Company considered and approved the “Proposal on Interim Dividend Arrangements
for 2026” at 2025 annual general meeting. Subject to fulfillment of the corresponding interim dividend
conditions and proportions, the Board was approved to authorize to formulate a specific interim dividend
plan after comprehensively considering factors such as the profitability, development stage, capital
arrangements, future growth requirements and reasonable returns to shareholders of the Company at
the shareholders’ general meeting. For details, please refer to the announcements of the Company (Lin
No. 2026-039 and Lin No. 2026-045).
On 27 August 2026, the fourth meeting of the ninth session of the Board of the Company considered and
approved the Profit Distribution Plan for the Half Year of 2026. The profit distribution plan for the half
year of 2026: the Company’s consolidated net profit attributable to shareholders of the listed company
for the half year of 2026 was RMB3,504,447,475.63 (unaudited). The Company proposes to distribute
cash dividend of RMB1.00 (tax inclusive) per 10 shares to all shareholders based on 3,708,361,809 shares
of the total share capital as of 30 June 2026. Total proposed cash dividend of RMB370,836,180.90
(tax inclusive) shall be distributed, accounting for 10.58% of consolidated net profit attributable to
shareholders of the listed company for the half year of 2026. During the Reporting Period, there is no
conversion of capital reserve into share capital of the Company.
If the total share capital of the Company changes during the period up to the record date regarding
execution of the profit distribution, the Company intends to maintain distribution amount per share
unchanged based on the total share capital on the record date regarding execution of profit distribution
and the total profit distribution amount will be adjusted accordingly.

Interim Report 2026

45

Chapter 4 Corporate Governance, Environmental and Society

III. EQUITY INCENTIVE PLANS, EMPLOYEE SHARE SCHEMES AND OTHER
EMPLOYEE INCENTIVE SCHEMES OF THE COMPANY AND THEIR IMPACT
(I)

Relevant equity incentive matters disclosed in the interim announcement without
subsequent development or changes during implementation
Applicable

□not applicable

Description

Search Index

In the fourth quarter of 2025, the participants of the third exercise period

For details, please refer

of reserved share options under the 2019 A-Share Stock Option Incentive

to the announcement

Plan of the Company did not exercise the share options.

of the Company (Lin
No. 2026-001)

The number of share options available for exercise during the third exercise

For details, please refer

period of reserved shares options was 680,000, with the exercise period

to the announcement

commencing from 8 February 2025 and ending on 7 February 2026. During

of the Company (Lin

the exercise period, the participants of the third exercise period of reserved

No. 2026-014)

share options of the Company did not exercise the share options.
680,000 share options that had expired but not been exercised during

For details, please refer

the third exercise period of reserved share options of the Company have

to the announcement

been cancelled.

of the Company (Lin
No. 2026-023)

(II) Incentives not disclosed in the interim announcement or with subsequent
development
Equity incentives
□Applicable

not applicable

Other explanation
□Applicable

not applicable

Employee share schemes
□Applicable

not applicable

Other incentive measures
□Applicable

46

not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 4 Corporate Governance, Environmental and Society

IV. ENVIRONMENTAL INFORMATION OF THE LISTED COMPANY AND ITS
MAJOR SUBSIDIARIES INCLUDED IN THE LIST OF ENTERPRISES THAT ARE
LEGALLY REQUIRED TO DISCLOSE ENVIRONMENTAL INFORMATION
Applicable

□not applicable

Number of enterprises included in the list
of enterprises that are legally required to
disclose environmental information

22
Search Index for the report on disclosure of

No.

Company name

environmental information in accordance with laws

1

General factory of SPH Sine

System for enterprise environmental information

Pharmaceutical Factory Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

2

Shanghai Sine Wanxiang

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

3

Shanghai Sine Tianping

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

4

SPH Pharmaceutical Technology

System for enterprise environmental information

Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

5

SPH Xing Ling Sci. & Tech.

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

6

SPH New Asia Pharmaceutical Co.,

System for enterprise environmental information

Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

7

Shanghai SPH Biological Medicine

System for enterprise environmental information

Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

8

Shanghai Zhongxi Sunve

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

9

Shanghai SPH Zhong Xi

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

Interim Report 2026

47

Chapter 4 Corporate Governance, Environmental and Society

Search Index for the report on disclosure of
No.

Company name

environmental information in accordance with laws

10

Shanghai Jinhe Bio-pharmaceutical

System for enterprise environmental information

Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

11

Shanghai Zhonghua Pharmaceutical

System for enterprise environmental information

Co., Ltd.

disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

12

Shanghai Sunve Bio-Tech Co., Ltd.

System for enterprise environmental information
disclosure in accordance with law (Shanghai)
https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp

13

Tianjin Jinjin Pharmaceutical Co.,

System for enterprise environmental information

Ltd.

disclosure in accordance with law (Tianjin)
https://hjxxpl.sthj.tj.gov.cn:10800/#/gkwz/jcym

14

Shandong Sine Pharmaceutical Co.,

System for enterprise environmental information

Ltd.

disclosure in accordance with law (Shandong)
http://221.214.62.226:8090/EnvironmentDisclosure/

15

Changzhou Pharmaceutical Factory

System for enterprise environmental information

Co., Ltd.

disclosure in accordance with law (Jiangsu)
http://ywxt.sthjt.jiangsu.gov.cn:18181/
spsarchive-webapp/web/viewRunner.
html?viewId=http://218.94.78.91:18181/spsarchivewebapp/web/sps/views/yfpl/views/home/index.js

16

Nantong Chanyoo Pharmatech Co.,

System for enterprise environmental information

Ltd.

disclosure in accordance with law (Jiangsu)
http://ywxt.sthjt.jiangsu.gov.cn:18181/
spsarchive-webapp/web/viewRunner.
html?viewId=http://218.94.78.91:18181/spsarchivewebapp/web/sps/views/yfpl/views/home/index.js

17

Chifeng Aike Pharmaceutical

System for enterprise environmental information

Technology Co., Ltd.

disclosure in accordance with law (Inner Mongolia)
http://111.56.142.62:40010/support-yfpl-web/web/
viewRunner.html?viewId=http://111.56.142.62:40010/
support-yfpl-web/web/sps/views/yfpl/views/
yfplHomeNew/index.js&cantonCode=150000

48

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 4 Corporate Governance, Environmental and Society

Search Index for the report on disclosure of
No.

Company name

environmental information in accordance with laws

18

SPH Changzhou Kony

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Jiangsu)
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchivewebapp/web/viewRunner.html?viewId=http://218.
94.78.91:18181/spsarchive-webapp/web/sps/views/
yfpl/views/home/index.js

19

SPH Qingdao Guofeng

System for enterprise environmental information

Pharmaceutical Co., Ltd.

disclosure in accordance with law (Shandong)
http://221.214.62.226:8090/EnvironmentDisclosure/

20

SPH (Benxi) North Pharmaceuticals

System for enterprise environmental information

Co., Ltd.

disclosure in accordance with law (Liaoning)
https://qyxxpl.ywzh.lnsthj.cn:8802/home/index

21

TECHPOOL Bio-Pharma Co., Ltd.

Department of Ecology and Environment of Guangdong
Province – System for enterprise environmental
information disclosure in accordance with law
https://www-app.gdeei.cn/gdeepub/front/dal/dal/
newindex

22

Chiatai Qingchunbao (Deqing)

Zhejiang enterprise environmental information

Pharmaceutical

disclosure in accordance with law

Co., Ltd.

https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-search

Other explanation
□Applicable

not applicable

Interim Report 2026

49

Chapter 4 Corporate Governance, Environmental and Society

V. PARTICULARS OF CONSOLIDATING AND EXPANDING THE ACHIEVEMENTS
OF POVERTY ALLEVIATION AND RURAL REVITALIZATION
□Applicable

not applicable

VI. DISCLOSURES REQUIRED BY THE HONG KONG LISTING RULES
(I)

Compliance with the Corporate Governance Code
During the Reporting Period, the Company has strictly complied with all applicable code provisions of
the Corporate Governance Code as set out in Appendix C1 to the Hong Kong Listing Rules.

(II) Compliance with the Model Code
The board of directors of the Company has confirmed that the Company has adopted the Model Code
for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules
(the “Model Code”) for securities transactions by Directors. After sufficient enquiry, all the directors
have confirmed that they complied with the Model Code in all aspects during the Reporting Period.

(III) Change in Details of Biographies
Latest biographical details of Mr. Shen Bo: Born in March 1973. He obtained a master degree in
professional accountancy from Chinese University of Hong Kong and is a Chinese Certified Public
Accountant. He is currently the executive director and president of the Company, and holds directorships
in subsidiaries of the Company. He has served as the non-executive director of Shanghai FudanZhangjiang Bio-Pharmaceutical Co., Ltd. (a company listed on the Hong Kong Stock Exchange and
the science and technology innovation board of the Shanghai Stock Exchange with stock codes 01349
and 688505, respectively), the non-executive director of Tianda Pharmaceuticals Limited (a company
listed on the Hong Kong Stock Exchange) (stock code 00455), the general manager of the finance
department of Shanghai Pharmaceutical (Group) Co., Ltd., the chief financial officer of Shanghai
Industrial Pharmaceutical Investment Co., Ltd. and the deputy manager of the finance department of
Shanghai Jinling Co., Ltd., etc.

(IV) Audit Committee’s Review on the Interim Report
The audit committee under the board of directors of the Company has reviewed the Company’s 2026
interim report and agreed with the accounting treatment adopted by the Company.

(V) Articles of Association
During the Reporting Period, the Company did not make any amendments to the Articles of Association.

50

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 5 Significant Events

I.

FULFILMENT STATUS OF COMMITMENTS
(I)

Commitments by De Facto Controller, Shareholders, Related Parties, Acquirers and
the Company to Relevant Parties during or lasting to the Reporting Period
Applicable

Background of
commitments

□Not applicable

Type of
Undertaking
commitments party

Undertakings stated Other
in acquisition
report or report
of changes in
equity

Shanghai
Shangshi and
Golden Bell

Details of commitments

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

1. After the completion of the equity adjustment, the 29 December
company and other enterprises under its control will 2025
continue to actively maintain independence from
Shanghai Pharmaceuticals in terms of personnel,
assets, business, finance and organization.
2. The company shall exercise its shareholders’ rights
in accordance with applicable laws and regulations
as well as the Articles of Association of Shanghai
Pharmaceuticals and strictly comply with the
relevant requirements of regulatory authorities
on the independence of listed companies. It shall
not use its position as a shareholder to affect the
independence of Shanghai Pharmaceuticals or violate
the standardized operating procedures of other listed
companies, intervene in the operating decisions of
Shanghai Pharmaceuticals and damage the legitimate
rights and interests of Shanghai Pharmaceuticals and
other shareholders.
3. If the company causes any loss to Shanghai
Pharmaceuticals as a result of its failure to fulfill the
above commitments, it shall bear the compensation
liabilities by law accordingly.
4. This commitment letter shall take effect from the
date of issuance and shall continue to be valid during
the period of control of the company over Shanghai
Pharmaceuticals.

Yes

Whether the
Commitment
is fulfilled in
a timely and
strict manner

This commitment Yes
shall continue
to be valid
during the
period of control
of Shanghai
Shangshi and
Golden Bell
over Shanghai
Pharmaceuticals.

Interim Report 2026

51

Chapter 5 Significant Events

Background of
commitments

Type of
Undertaking
commitments party
Shanghai
Solving
Shangshi and
horizontal
competition Golden Bell

52

Shanghai Pharmaceuticals Holding Co., Ltd.

Details of commitments

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

1. The company undertakes that neither the company 29 December
nor other enterprises under its control are engaged 2025
in production and operation activities that constitute
substantial competition with the principal business
of Shanghai Pharmaceuticals.
2. After the completion of the equity adjustment, the
company will take legal and effective measures to
procure that other enterprises under its control
do not engage in any new activities that would
constitute competition with and have a material
adverse impact on the principal business of Shanghai
Pharmaceuticals. If the company and enterprises
under its control engage in any new business or
activity that would constitute competition with and
have a material adverse impact on the business of
Shanghai Pharmaceuticals, the company shall, to the
extent permitted by applicable laws, regulations and
relevant policies, take legal and effective measures
to resolve such competition.
3. If the company causes any loss to Shanghai
Pharmaceuticals as a result of its failure to fulfill the
above commitments, it shall bear the compensation
liabilities by law accordingly.
4. This commitment letter shall take effect from the
date of issuance and shall continue to be valid during
the period of control of the company over Shanghai
Pharmaceuticals.

Yes

Whether the
Commitment
is fulfilled in
a timely and
strict manner

This commitment Yes
shall continue
to be valid
during the
period of control
of Shanghai
Shangshi and
Golden Bell
over Shanghai
Pharmaceuticals.

Chapter 5 Significant Events

Background of
commitments

Type of
Undertaking
commitments party
Solving related Shanghai
Shangshi and
party
transactions Golden Bell

Details of commitments

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

1. Without adversely affecting the interests of Shanghai 29 December
Pharmaceuticals and all shareholders, the company 2025
will avoid and minimize possible related party
transactions with Shanghai Pharmaceuticals and its
subordinated companies in the future.
2. For any related party transactions that are indeed
necessary or have reasonable grounds for existence,
the company will determine the prices of related
party transactions based on market principle or
other reasonable principles and sign standardized
related party transaction agreements with Shanghai
Pharmaceuticals in accordance with laws to ensure
the fairness of the prices of related party transactions.
The company has committed to carry out review
procedures and fulfil the corresponding information
disclosure obligations in accordance with relevant
laws and regulations and the Articles of Association
of Shanghai Pharmaceuticals.
3. The company undertakes not to take advantage of
related party transactions to illegally misappropriate
or transfer funds, capital, profits or other resources
of Shanghai Pharmaceuticals, or damage the interests
of Shanghai Pharmaceuticals and other shareholders.
4. If the company causes any loss to Shanghai
Pharmaceuticals as a result of their failure to fulfill the
above commitments, it shall bear the compensation
liabilities by law accordingly.
5. This commitment letter shall take effect from the
date of issuance and shall continue to be valid during
the period of control of the company over Shanghai
Pharmaceuticals.

Yes

Whether the
Commitment
is fulfilled in
a timely and
strict manner

This commitment Yes
shall continue
to be valid
during the
period of control
of Shanghai
Shangshi and
Golden Bell
over Shanghai
Pharmaceuticals.

Interim Report 2026

53

Chapter 5 Significant Events

54

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

Whether the
Commitment
is fulfilled in
a timely and
strict manner

Background of
commitments

Type of
Undertaking
commitments party

The commitment
in relation to
major assets
restructuring

1. In the event it acquires, procures or otherwise comes 22 December
Shanghai
Solving
to possess businesses or assets that compete or could 2009
Pharmaceutical
horizontal
potentially compete with the businesses of the
competition (Group) and
Company, it shall, pursuant to its non-competition
SIIC
deed, irrevocably grant the Company the pre-emptive
right to acquire all of such businesses or assets at
any time;
2. It and its subsidiaries shall avoid any business or
operations that may compete with the Company;
3. It shall avoid investing in equity interests of other
companies or enterprises that compete with the
business and operations of the Company; and
4. It shall bear all losses and expenses directly and
indirectly incurred by the Company as a result of a
breach by it of its undertakings set forth in its noncompetition deed.

Yes

Long term

Yes

The commitment
in relation to
the initial public
offering

Please refer to “The commitment in relation to major 22 December
Shanghai
Solving
assets restructuring” described above for details.
2009
Pharmaceutical
horizontal
competition (Group) and
SIIC

Yes

Long term

Yes

Shanghai Pharmaceuticals Holding Co., Ltd.

Details of commitments

Chapter 5 Significant Events

Background of
commitments

Type of
Undertaking
commitments party

The commitment in Other
relation to the
refinancing·

Other

Details of commitments

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

Whether the
Commitment
is fulfilled in
a timely and
strict manner

SIIC, Shanghai 1. The company undertakes not to exceed its authority 11 May 2021
to interfere with the operation and management
Shangshi and
activities of the Company and not to encroach on
Shanghai
the interests of the Company;
Pharmaceutical
2. If the company violates such commitments and causes
(Group)
losses to the Company or investors, the company is
willing to bear the responsibility of compensation to
the Company or investors in accordance with the law;
3. From the issue date of the commitment to the
completion of the implementation of the Company’s
non-public issuance of A Shares, if the CSRC makes
other new regulatory provisions on the remedial
measures on returns and its commitment, and if
the above commitment cannot meet such provisions
of the CSRC, the company undertakes to issue
additional commitment in accordance with the
latest provisions of the CSRC at that time; as one of
the responsible subjects in relation to the remedial
measures on returns, if the company violates the
above commitments or refuses to fulfill the above
commitments, the company agrees that the CSRC,
the Shanghai Stock Exchange and other securities
regulatory authorities shall impose relevant penalties
or take relevant regulatory measures against the
company in accordance with the relevant regulations
and rules formulated or issued by them.

Yes

Long term

Yes

1. Strictly implements the management system of the 11 May 2021
proceeds to prevent the risk of using the proceeds;
2. Further strengthens the Company’s operation
management and internal control to improve
operational efficiency and profitability;
3. Strictly implements the profit distribution policy and
ensure the implementation of the investor return
mechanism.

Yes

Long term

Yes

The Company

Interim Report 2026

55

Chapter 5 Significant Events

Background of
commitments

Type of
Undertaking
commitments party
Other

56

Directors
and senior
management
of the
Company

Shanghai Pharmaceuticals Holding Co., Ltd.

Details of commitments

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

1. Undertake not to transfer benefits to other units 11 May 2021
or individuals without compensation or on unfair
terms, or use other means to harm the interests of
the Company;
2. Undertake to exercise restraint on my official
consumption behavior;
3. Undertake not to use the Company’s assets to engage
in investment or consumption activities unrelated to
the performance of duties;
4. Undertake to link the remuneration system
formulated by the Board or the Remuneration
and Assessment Committee of the Board to the
implementation of the Company’s remedial measures
on returns;
5. Undertake that if the Company subsequently
launches the equity incentive policy, the exercise
conditions of the Company’s equity incentive to be
announced will be linked to the implementation of
the Company’s remedial measures on returns;
6. From the issue date of the commitment to the
completion of the implementation of the Company’s
non-public issuance of A Shares, if the CSRC makes
other new regulatory provisions on the remedial
measures on returns and its commitment, and if
the above commitment cannot meet such provisions
of the CSRC, I undertake to issue additional
commitment in accordance with the latest provisions
of the CSRC at that time;
7. Undertake to effectively implement the relevant
return remedial measures formulated by the
Company and any commitments made by me in
relation to return remedial measures, and if I violate
such commitments and cause losses to the Company
or investors, I am willing to bear the compensation
to the Company or investors in accordance with
the law; as one of the responsible subjects in
relation to the remedial measures on returns, if I
violate the above commitments or refuse to fulfill
the above commitments, I agree that the CSRC,
the Shanghai Stock Exchange and other securities
regulatory authorities shall impose relevant penalties
or take relevant regulatory measures against me in
accordance with the relevant regulations and rules
formulated or issued by them.

Yes

Long term

Whether the
Commitment
is fulfilled in
a timely and
strict manner
Yes

Chapter 5 Significant Events

Background of
commitments

Type of
Undertaking
commitments party

The commitment in Other
relation to the
option incentive

The Company

Details of commitments

Whether
there is a
term for
Term of
Time of
commitments commitments commitments

Not to provide loans and financial support in other 30 September Yes
forms, including providing guarantee for loans to 2019
the participants for acquiring the relevant entitlement
under the Scheme.

Whether the
Commitment
is fulfilled in
a timely and
strict manner

Yes
The completion
date of the
2019 A-share
Option Incentive
Scheme.

II. APPROPRIATION OF FUNDS BY THE CONTROLLING SHAREHOLDERS AND
OTHER RELATED PARTIES FOR NON-OPERATIONAL PURPOSE DURING THE
REPORTING PERIOD
□Applicable

Not applicable

III. IRREGULAR GUARANTEES
□Applicable

Not applicable

IV. AUDIT OF THE INTERIM REPORT
□Applicable

Not applicable

V. CHANGES AND SETTLEMENTS OF MATTERS INVOLVED IN THE NONSTANDARD AUDIT OPINION SET OUT IN THE ANNUAL REPORT OF LAST
YEAR
□Applicable

Not applicable

VI. ISSUES RELEVANT TO INSOLVENCY AND RESTRUCTURING
□Applicable

Not applicable

Interim Report 2026

57

Chapter 5 Significant Events

VII. MATERIAL LITIGATIONS AND ARBITRATIONS
Material litigations and arbitrations occurred during the Reporting Period
□No material litigations and arbitrations occurred during the Reporting Period

(I)

Litigations and arbitrations disclosed in the interim announcements without
subsequent development
Applicable

□Not applicable

Overview and Type of Events

Search Index

Case of Techpool Bio-Pharma Co., Ltd. (the “Plaintiff”) against

Please

refer

to

the

Guangzhou Baotian Biotechnology Co., Ltd. (the “Defendant”)

Announcement

of

for dispute over private lending. On 5 November 2021,

Shanghai Pharmaceuticals

Guangzhou Tianhe District People’s Court handed down its

Holding Co., Ltd. in relation

first-instance judgment in respect of the case, ruling that the

to Material Litigations and

Defendant shall repay the principal amount of RMB83.50 million

Arbitrations and interim

and the interests accrued on within 15 days from the date when

announcement (Lin No.

this judgement takes effect, and dismissed other requests of the

2021-091) disclosed by

Plaintiff. The case is still in progress.

the Company on the
website of Shanghai Stock
Exchange for details.

Case of Techpool Bio-Pharma Co., Ltd. (the “Plaintiff”) against

to

the

two parties including Guangzhou Tianhe Hi-tech Industrial

Announcement

of

Zone Industrial Development Corporation (the “Defendant”)

Shanghai Pharmaceuticals

for dispute over recovery of unpaid capital contribution. The

Holding Co., Ltd. in relation

second-instance court supported the requests of the Plaintiff.

to Material Litigations and

Since the case did not meet the conditions for continuous

Arbitrations disclosed by

enforcement, the court ruled to terminate the enforcement

the Company on the

procedure. When the conditions for applying for enforcement

website of Shanghai Stock

are met, an application can be made to the court for resumption

Exchange for details.

of enforcement.

58

Shanghai Pharmaceuticals Holding Co., Ltd.

Please

refer

Chapter 5 Significant Events

(II) Litigations and arbitrations not disclosed in the interim announcement or with
subsequent development
□Applicable

Not applicable

(III) Other information
□Applicable Not applicable

VIII. ALLEGED VIOLATION OF LAWS AND REGULATIONS, PUNISHMENT AND RECTIFICATION
OF THE LISTED COMPANY AND ITS DIRECTORS, SENIOR MANAGEMENT, CONTROLLING
SHAREHOLDERS AND DE FACTO CONTROLLER
□Applicable

Not applicable

IX. STATEMENTS ON THE INTEGRITY OF THE COMPANY, ITS CONTROLLING
SHAREHOLDERS AND DE FACTO CONTROLLER DURING THE REPORTING
PERIOD
□Applicable

Not applicable

X. SIGNIFICANT RELATED TRANSACTIONS
(I)

Related transactions relating to daily operations
1.

Events disclosed in the interim announcement without subsequent development or
changes during implementation
□Applicable

Not applicable

Interim Report 2026

59

Chapter 5 Significant Events

2.

Events disclosed in interim announcement with subsequent development or changes
during implementation
Applicable

□Not applicable

Unit: 0'000 Yuan
Proportion
in the
amount of
transaction
of the same
type (%)

Currency: RMB

Settlement
Available
method of market price
the related
of similar
transaction transactions

Reason
for the
difference
between
trading price
and market
price

Pricing principle
of the related
transaction

Amount of
the related
transaction

Selling products and
Negotiated based
offering labor services
on the market
to the related party
price

27.67

100.00 Cash

27.67 N/A

Purchase of goods and
receipt of services from
the related party

338.61

100.00

338.61

Leasing housing to related
parties

267.03

100.00

267.03

Purchase of goods and
receipt of distribution
services from the
related party

1,058.51

100.00

1,058.51

Shanghai
Leasing housing and
Pharmaceutical
equipment and
(Group) Co., Ltd.
receiving property
and its subsidiaries
services from related
party

1,850.98

1,850.98

Wing Fat Printing
Co., Ltd. and its
subsidiaries

Purchase of raw materials
from the related party

2,640.97

2,640.97

Fudan Zhangjiang

Receipt of entrusted sales
of the products for the
related party

2,743.27

100.00

2,743.27

Yunnan Baiyao

Selling products to the
related party

36,323.93

100.00

36,323.93

Purchase of goods from
the related party

24,811.93

100.00

24,811.93

Related party
SIIC and its
subsidiaries

Tianda
Pharmaceuticals
Limited

Particulars of the
related transaction

Note: For details about matters not disclosed in interim announcements, please refer to Note (VII) to financial
statements.

60

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 5 Significant Events

3.

Events not disclosed in interim announcements
□Applicable

Not applicable

(II) Related transactions relating to acquisition and disposal of assets and equity
1.

Events disclosed in the interim announcement without subsequent development or
changes during implementation
□Applicable

2.

Not applicable

Events disclosed in interim announcement with subsequent development or changes
during implementation
Applicable

□Not applicable

On 25 July 2025, the Company considered and approved the Proposal regarding the Acquisition of
10% Equity Interest in Shanghai Shangshi Group Finance Co., Ltd. and the Related Transactions/
Connected Transactions at the twenty-third meeting of the eighth session of the Board of
Directors. The Company acquired 10% equity interest in Finance Company held by SIIC Dongtan
with its own funds of approximately RMB143 million.
As of 12 January 2026, the Company, SIIC Dongtan and Finance Company jointly applied for and
completed the registration procedures in respect of the change of equity, and the Company paid
all the consideration for equity transfer to SIIC Dongtan in one lump sum pursuant to the Share
Transfer Agreement. The percentage of shareholding of Finance Company held by the Company
increased to 40% from 30%, which has not led to any change in the scope of consolidated
financial statements of the Company.
For details, please refer to the connected transaction announcement regarding proposed
acquistion of 10% equity interest in Finance Company and the update announcement of the
Company dated 26 July 2025 and 14 January 2026 (A share announcement Lin No. 2025-072
and Lin No. 2026-004).

3.

Events not disclosed in interim announcement
□Applicable

4.

Not applicable

Performance with agreed target shall be disclosed during the Reporting Period
□Applicable

Not applicable

Interim Report 2026

61

Chapter 5 Significant Events

(III) Material related transactions relating to joint external investment
1.

Events disclosed in the interim announcement without subsequent development or
changes during implementation
□Applicable

2.

Events disclosed in interim announcement with subsequent development or changes
during implementation
□Applicable

3.

Not applicable

Not applicable

Events not disclosed in interim announcement
□Applicable

Not applicable

(IV) Credits and liabilities with related parties
1.

Events disclosed in the interim announcement without subsequent development or
changes during implementation
□Applicable

2.

Events disclosed in interim announcement with subsequent development or changes
during implementation
□Applicable

3.

Not applicable

Not applicable

Events not disclosed in interim announcement
□Applicable

Not applicable

(V) Financial business between the Company and related financial companies, holding
financial companies and related parties
Applicable

62

□Not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 5 Significant Events

1.

Deposit business
Applicable

□Not applicable

Unit: 0'000 Yuan

2.

Related party

Related
relationship

Daily maximum
deposit limit

Shanghai Shangshi Group
Finance Co., Ltd. (上海上
實集團財務有限公司)

Subsidiary of
Controlling
Shareholder

550,000

Deposit The balance at
interest rate the beginning
range of the Period

0.15%-1.25%

484,560.18

The amount for the Period
Total amount
Total amount
deposited during withdrew during
the Period
the Period
6,939,633.83

6,999,340.58

424,853.43

□Not applicable

Unit: 0'000 Yuan

Related party

Related
relationship

Shanghai Shangshi Group
Finance Co., Ltd. (上海上
實集團財務有限公司)

Subsidiary of
Controlling
Shareholder

Loan limit

700,000

The balance at
Loan interest the beginning
rate range of the Period

2.11%-3.50%

472,173.61

Currency: RMB

The amount for the Period
Total amount
Total amount
lent during
repaid during
the Period
the Period
225,645.95

245,458.00

The balance
at the end
of the
Period

452,361.56

Credit business or other financial business
Applicable

□Not applicable

Unit: 0'000 Yuan

4.

The balance
at the end
of the
Period

Loan business
Applicable

3.

Currency: RMB

Related party

Related
relationship

Shanghai Shangshi Group
Finance Co., Ltd. (上海上
實集團財務有限公司)

Subsidiary of
Controlling
Shareholder

Business type
Liquidity loans, project loans, discount of
bank acceptance notes, discount of
trade acceptance notes, factoring of
trade receivables, bill acceptance and
entrust loans

Currency: RMB

Total
amount

Actual
amount

927,500.00

225,645.95

Other information
□Applicable

Not applicable

Interim Report 2026

63

Chapter 5 Significant Events

(VI) Other significant related transaction
□Applicable

Not applicable

(VII) Others
□Applicable

Not applicable

XI. MATERIAL CONTRACTS AND PERFORMANCE THEREOF
(I)

Trusteeship, contracting and leasing
□Applicable

Not applicable

(II) Material guarantees fulfilled and to be fulfilled during the Reporting Period
Applicable

□Not applicable

Unit: Yuan Currency: RMB
External guarantees provided by the Company (excluding those provided to its subsidiaries)
Relationship
between the

Date of

Guarantee

guarantor

guarantee

provided

and the listed Guaranteed
Guarantor
/

Value of

(date of

company

party

guarantee agreement)

/

/

/

Commencement date Expiry date of

/

Type of

Principal

Collateral

Guarantee

Guarantee

of guarantee

guarantee

guarantee

debts

(if any)

fully fulfilled

overdue

of guarantee

Guarantee

parties

relationship

/

/

/

/

/

/

/

/

/

/

/

Total value guaranteed during the Reporting Period

Overdue amount Any counter to related

Connected

–

(excluding those provided to its subsidiaries)
Total remaining balance guaranteed at the end of the Reporting

–

Period (A) (excluding those provided to its subsidiaries)
Guarantees provided by the Company to its subsidiaries
Total value guaranteed for its subsidiaries during the

955,395,514.88

Reporting Period
Total remaining balance guaranteed for its subsidiaries
at the end of the Reporting Period (B)

64

Shanghai Pharmaceuticals Holding Co., Ltd.

1,069,716,628.60

Chapter 5 Significant Events

Total value guaranteed by the Company (including guarantees to subsidiaries)
Total value guaranteed (A+B)
Proportion of total value guaranteed in the Company’s

1,069,716,628.60
1.37%

net assets (%)
Among which:
Value guaranteed for shareholders, de facto controller and

–

related parties (C)
Value directly or indirectly guaranteed for guaranteed parties

795,371,149.42

whose gearing ratio exceeds 70% (D)
Amount of total value guaranteed exceeding 50% of net assets (E)
Total of value guaranteed for the above three items (C+D+E)

–
795,371,149.42

Details of possible joint settlement liabilities for undue guarantee

/

Details of guarantee

/

(III) Other material contracts
□Applicable

Not applicable

XII. PROGRESS OF THE USE OF FUND RAISED
□Applicable

Not applicable

XIII. STATEMENT ON OTHER SIGNIFICANT EVENTS
□Applicable

Not applicable

Interim Report 2026

65

Chapter 6 Changes in Shares and Information about Shareholders

I.

CHANGES IN SHARE CAPITAL
(I)

Table of changes in Shares
1.

Table of changes in Shares
During the Reporting Period, there was no change in the total number of shares and share
capital structure of the Company.

2.

Explanation of changes in Shares
□Applicable

3.

Impacts (if any) of changes in Shares occurred during the Period from the end of the
Reporting Period to disclosure date of the interim report on financial indicators such
as earnings per share and net asset per share
□Applicable

4.

Not applicable

Not applicable

Other information that the Company deems necessary or the securities regulators
require disclosing
□Applicable

Not applicable

(II) Changes in trade-restricted Shares
□Applicable

66

Not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 6 Changes in Shares and Information about Shareholders

II. INFORMATION ABOUT SHAREHOLDERS
(I)

Number of shareholders:
The total number of ordinary shareholders as at the end of the Reporting Period

95,340

The total number of shareholders of preference Shares with voting rights restored
as at the end of the Reporting Period

0

(II) Shareholdings of top ten shareholders and top ten shareholders for shares in
circulation (or without trade restrictions) at the end of the Reporting Period
Unit: share
Shareholdings of the top ten shareholders (excluding the shares lent under refinancing business)
Increase/

Pledged, labelled

Decrease

Number of

during the

shares held Shareholding

Reporting at the end of

Number
percentage

Name of shareholder (in full)

Period

the Period

(%)

HKSCC NOMINEES LIMITED

17,400

918,271,749

24.762

Note 1

or frozen

of traderestricted
Shares held Status
0 Unknown

Nature of
Number shareholders
Foreign legal
person

Shanghai Pharmaceutical (Group) Co., Ltd.

0

716,516,039

19.322

0 Nil

State-owned legal
person

Yunnan Baiyao Group Co., Ltd.

0

665,626,796

17.949

0 Nil

Domestic nonstate-owned
legal person

SIIC International Investment Company Limited

62,920,000

374,438,000

10.097

0 Nil

State-owned legal
person

Shanghai Shangshi (Group) Co., Ltd.

0

221,801,798

5.981

0 Nil

State-owned legal
person

Shanghai Tandong Enterprise Consulting Services

0

187,000,000

5.043

0 Nil

Co., Ltd.
New China Life Insurance Company Ltd. –

State-owned legal
person

6,951,500

160,984,326

4.341

0 Nil

Traditional – General Insurance Products – 018L

State-owned legal
person

– CT001Hu
Hong Kong Securities Clearing Company
Limited

17,454,446

57,131,186

1.541

0 Unknown

New China Life Insurance Company Ltd. –

Foreign legal
person

Note 2

0

29,020,495

0.783

0 Nil

Dividends – Individual Dividends – 018L –

State-owned legal
person

FH002Hu
Shanghai Guosheng Group Assets Co., Ltd.

0

25,289,600

0.682

0 Nil

State-owned legal
person

Interim Report 2026

67

Chapter 6 Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders without trade restrictions (excluding the shares lent under refinancing business)

Name of shareholders

68

Number of Shares in
circulation without
trade restrictions

Class and number of Shares
Class

Number

HKSCC NOMINEES LIMITED

918,271,749

Overseas listed foreign
Shares

918,271,749

Shanghai Pharmaceutical (Group) Co., Ltd.

716,516,039

RMB ordinary Shares

716,516,039

Yunnan Baiyao Group Co., Ltd.

665,626,796

RMB ordinary Shares

665,626,796

SIIC International Investment Company Limited

374,438,000

Overseas listed foreign
Shares

374,438,000

Shanghai Shangshi (Group) Co., Ltd.

221,801,798

RMB ordinary Shares

221,801,798

Shanghai Tandong Enterprise Consulting Services Co., Ltd.

187,000,000

RMB ordinary Shares

187,000,000

New China Life Insurance Company Ltd. – Traditional – General
Insurance Products – 018L – CT001Hu

160,984,326

RMB ordinary Shares

122,145,326

Overseas listed foreign
Shares

38,839,000

Hong Kong Securities Clearing Company Limited

57,131,186

RMB ordinary Shares

57,131,186

New China Life Insurance Company Ltd. – Dividends – Individual
Dividends – 018L – FH002Hu

29,020,495

RMB ordinary Shares

29,020,495

Shanghai Guosheng Group Assets Co., Ltd.

25,289,600

RMB ordinary Shares

21,117,000

Overseas listed foreign
Shares

4,172,600

Description of special account for repurchase among the top ten
shareholders

Not available

Explanations on the entrusting voting right, entrusted voting
right and waive of voting right of the above shareholders

Not available

Note on connected relations or concerted actions of the above
shareholders

As of the end of the Reporting Period, Shanghai Shangshi (Group) Co.,
Ltd. held 100% equity interest in Shanghai Pharmaceutical (Group) Co.,
Ltd.; Shanghai Shangshi (Group) Co., Ltd. held 100% equity interest
in Golden Bell International Holdings Limited; Golden Bell International
Holdings Limited held 100% equity interest in Shanghai Industrial
Investment (Holdings) Co., Ltd.; Shanghai Industrial Investment
(Holdings) Co., Ltd. held 100% equity interest in SIIC International
Investment Company Limited; SIIC International Investment Company
Limited held 100% equity interest in Shanghai Tandong Enterprise
Consulting Services Co., Ltd.

Note on shareholders of preference Shares with voting rights
restored and number of Shares held

Not available

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 6 Changes in Shares and Information about Shareholders

Note 1:

Shares held by HKSCC NOMINEES LIMITED are held on behalf of its clients and the number of Shares it
holds as shown in the table above includes 374,438,000 H Shares held by SIIC International Investment
Company Limited, 38,839,000 H Shares held by New China Life Insurance Company Ltd. – Traditional
– General Insurance Products – 018L – CT001Hu and 4,172,600 H Shares held by Shanghai Guosheng
Group Assets Co., Ltd..

Note 2:

Hong Kong Securities Clearing Company Limited is the nominee holder of the RMB ordinary Shares
under Shanghai-Hong Kong Stock Connect.

Note 3:

As at the end of the Reporting Period, the total number of Shares of the Company amounted to
3,708,361,809, comprising 2,789,289,105 A Shares and 919,072,704 H Shares.

Shares lent under refinancing business by shareholders holding 5% shares or above, top ten shareholders
and top ten shareholders for shares in circulation with trade restrictions
□Applicable

Not applicable

Change compared to the previous period as a result of lending/return under refinancing by top ten
shareholders and top ten shareholders for shares in circulation with trade restrictions
□Applicable

Not applicable

Number of and the trade restrictions on the Shares held by the top ten shareholders holding traderestricted shares
Applicable

□Not applicable

Unit: share
The listing and trading of
trade-restricted Shares
Number of
additional
Number of
Name of shareholders holding
No.

trade-restricted Shares

1

Hainan Zhong Wang Investment and

Shares available

trade-restricted

Time available for

for listing and

Shares held

listing and trading

trading

81,600

To be confirmed

Management Company Limited

0

Trade restrictions
The consideration payable to Shanghai
Pharmaceutical (Group) in the equity
division reform remained outstanding.

Note on connected relations or concerted

Not available

actions of the above shareholders

Interim Report 2026

69

Chapter 6 Changes in Shares and Information about Shareholders

(III) Strategic investors or general legal person becoming top ten shareholders because
of new share placing
Applicable

□Not applicable

Name of strategic investors or

Stipulated start date of

Stipulated end date of

general legal person

shareholding

shareholding

Yunnan Baiyao

8 April 2022

Nil

Explanation on agreed

Yunnan Baiyao undertakes that the subscribed additional

shareholding period of strategic

shares of Shanghai Pharmaceuticals under non-public

investors or general legal persons

issuance in 2021 shall be subject to a lock-up period of

participating in placing of new

36 months from the date of completion of the issuance.

shares

Any shares to be acquired by Yunnan Baiyao after the
completion of the above transaction due to bonus
issue, conversion of capital reserve into share capital of
Shanghai Pharmaceuticals, etc. shall also subject to the
lock-up arrangement mentioned above.

III. INFORMATION ABOUT DIRECTORS AND SENIOR MANAGEMENT
(I)

Changes in shareholdings of existing and resigned directors and senior management
during the Reporting Period
□Applicable

Not applicable

Explanation on other situations
□Applicable

Not applicable

(II) Equity incentives granted to directors and senior management during the Reporting
Period
□Applicable

Not applicable

(III) Other information
□Applicable

Not applicable

IV. CHANGES IN CONTROLLING SHAREHOLDERS OR DE FACTO CONTROLLER
□Applicable

Not applicable

V. INFORMATION RELATED TO PREFERENCE SHARES
□Applicable

70

Not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 6 Changes in Shares and Information about Shareholders

VI. DISCLOSURES PURSUANT TO THE REQUIREMENTS OF THE SFO AND THE
HONG KONG LISTING RULES
(I)

Interests and short positions of directors, chief executive, substantial shareholders
and other persons in the Shares and underlying Shares
As at 30 June 2026, according to the information available to the Company and to the knowledge of
the directors, the following shareholders had interests or short positions in the Shares or underlying
Shares which were subject to disclosure by the Company under the provisions of Divisions 2 and 3 of
Part XV of the SFO or were directly or indirectly interested in 5% or more of the voting rights of the
total number of the issued H Shares or A Shares at the shareholders’ general meetings of the Company.
Percentage of
A Shares/H Shares

Class of

held as at the end of

Percentage in total

the Reporting Period

share capital of the

to the entire issued

Company as at the

A Shares/H Shares end of the Reporting

Name of shareholder

Shares

Nature of interests in Shares

Number of Shares

(%)

Period (%)

Shanghai Shangshi

A Shares/

Interests of controlled corporation,

1,125,817,837(L)/

40.36/

40.46

Group Note 1(1), Note 2(1)

H Shares

beneficial owner

374,438,000(L)

40.74

Golden Bell Group Note 1(1), Note 2(1)

A Shares/

Interests of controlled corporation,

187,500,000(L)/

6.72/

H Shares

beneficial owner

374,438,000(L)

40.74

A Shares/

Interests of controlled corporation,

187,500,000(L)/

6.72/

H Shares

beneficial owner

374,438,000(L)

40.74

A Shares

Interests of controlled corporation,

716,516,039(L)

25.69

19.32

SIIC Group Note 1(1), Note 2(1)
Shanghai Pharmaceutical
(Group)

15.15

beneficial owner

Note 1(1), Note 2(1)

Yunnan Baiyao

15.15

A Shares

Beneficial owner

665,626,796(L)

23.86

17.95

New China Life Insurance

A Shares/

Beneficial owner, interests

167,440,100(L)/

6.00/

5.75

Company Ltd. Note 1(2), Note 2(2)

H Shares

of controlled corporation/

45,954,600(L)

5.00

167,357,500(L)/

6.00/

45,954,600(L)

5.00

Note 2(1)

beneficial owner
New China Asset Management

A Shares/

Co., Ltd.

H Shares

Note 1(2), Note 2(2)

Investment manager

5.75

(L) represents long position, (S) represents short position, (P) represents shares in lending pool

Interim Report 2026

71

Chapter 6 Changes in Shares and Information about Shareholders

Note 1:

(1)

Shanghai SASAC is the Company’s de facto controller. As of the end of the Reporting Period,
Shanghai SASAC controlled the Company through following entities: Shanghai SASAC held
100% equity interest in Shanghai Shangshi (Group) Co., Ltd. (“Shanghai Shangshi”). ① Shanghai
Shangshi held 100% equity interest in Golden Bell International Holdings Limited (“Golden Bell”),
and Golden Bell held 100% equity interest in Shanghai Industrial Investment (Holdings) Co.,
Ltd. (“SIIC”). SIIC indirectly held 500,000 A Shares, 187,000,000 A Shares and 374,438,000 H
Shares of the Company through Shanghai Shangshi Investment Management Consulting Co.,
Ltd., Shanghai Tandong Enterprise Consulting Services Co., Ltd. and SIIC International Investment
Company Limited, respectively; ② Shanghai Shangshi directly held 221,801,798 A Shares of
the Company; ③ Shanghai Shangshi held 100% equity interest in Shanghai Pharmaceutical
(Group) Co., Ltd. (“Shanghai Pharmaceutical (Group)”), and Shanghai Pharmaceutical (Group)
held 716,516,039 A Shares of the Company.



(2)

According to the disclosure of interests published on the website of the Hong Kong Stock
Exchange, New China Asset Management Co., Ltd. is the asset manager of certain investors,
including but not limited to New China Life Insurance Company Ltd.

Note 2:

(1)

Figures disclosed above are based on the knowledge of the Company.



(2)

Figures disclosed above are based on the information provided on the website of the Hong
Kong Stock Exchange (www.hkexnews.hk).



(3)

Pursuant to Section 336 of the SFO, the shareholders of the Company are required to file a
disclosure of interests form when certain conditions are fulfilled. When a shareholding in the
Company changes, it is not necessary for the Shareholder to notify the Company and the Hong
Kong Stock Exchange unless certain conditions have been fulfilled, therefore a shareholder’s
latest shareholding in the Company at the end of the Reporting Period may be different from
the shareholding filed with the Hong Kong Stock Exchange.



(4)

Save as disclosed above, as at the end of the Reporting Period, the Company was not aware
of any other person (other than the Directors and Chief Executive of the Company) who had
interests or short positions in the Shares or underlying Shares of the Company which were
required, pursuant to Section 336 of the SFO, to be entered in the register maintained by the
Company.

As at 30 June 2026, Mr. Shen Bo, the executive director and the president, held 71,700 A Shares
of the Company. Save as disclosed in this report, as at 30 June 2026, according to the information
available to the Company and to the knowledge of the directors, none of the directors and chief
executive of the Company has interests or short positions in the Company or its associated corporation
(within the meaning of Part XV of the SFO) which will be required, pursuant to section 352 of the
SFO, to be entered in the register maintained by the Company, or will be required, pursuant to the
Model Code to be notified to the Company and the Hong Kong Stock Exchange.

(II) Purchase, sales or redemption of Shares
During the Reporting Period, none of the Company or its subsidiaries purchased, sold or redeemed
any listed Shares of Shanghai Pharmaceuticals (including sales of treasury shares). As at 30 June 2026,
the Company did not hold any treasury shares.

72

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 7 Relevant Information of the Corporate Bonds

I.

CORPORATE BONDS (INCLUDING ENTERPRISE BONDS) AND NONFINANCIAL ENTERPRISE DEBT FINANCING INSTRUMENTS
Applicable

(I)

□Not applicable

Corporate bonds (including enterprise bonds)
□Applicable

Not applicable

(II) Fund raised from corporate bonds
□ Corporate bonds involved in the use or rectification of funds raised during the Reporting Period
All the corporate bonds of the Company did not involve in the use or rectification of funds raised
during the Reporting Period

(1)

Use of fund raised for specific project
□Applicable

Not applicable

(III) Other events for special variety bonds that shall be disclosed
□Applicable

Not applicable

(IV) Significant events related to corporate bonds during the Reporting Period
□Applicable

Not applicable

Interim Report 2026

73

Chapter 7 Relevant Information of the Corporate Bonds

(V) Inter-bank bond market debt-financing instruments of non-financial businesses
Applicable

1.

□Not applicable

Basic situation of debt-financing instruments of non-financial businesses
Unit: ’00 million Yuan Currency: RMB

Name of bonds

Abbreviation

Code

Issue
date

Value
date

Maturity
Bond
date
balance

2026 extra short- 26 SPH SCP002 012681032 2026-4-17 2026-4-20 2027-1-15
term financing bill
(second tranche)
issued by Shanghai

Interest
rate (%)

10.00

1.49%

2026 extra short- 26 SPH SCP003 012681465 2026-6-15 2026-6-16 2027-3-12
term financing
bill (third tranche)
issued by Shanghai
Pharmaceuticals
Holding Co., Ltd.

20.00

1.50%

2026 extra short- 26 SPH SCP004 012682072 2026-8-18 2026-8-19 2027-4-30
term financing bill
(fourth tranche)
issued by Shanghai
Pharmaceuticals
Holding Co., Ltd.

30.00

1.47%

Pharmaceuticals
Holding Co., Ltd.

Method for
repayment
of principal Trading
and interest place

Appropriate
arrangements
of the investor Trading
(if any)
mechanism

The principal Inter-bank Trading with
and interest bond
qualified
shall be
market
investors
payable
in a lump
sum upon
expiry

Is there
any risk of
termination
of listing
and trading

The extra
No
short-term
financing bill
can be traded
and transferred
in the national
interbank bond
No
market on the
next working
day following
the registration
date, which will
be carried out
in accordance No
with relevant
requirement
promulgated
by the National
Interbank
Funding
Center.

The Company’s response measures to the risks of termination of listing and trading of bonds
□Applicable

Not applicable

Overdue bonds
□Applicable

Not applicable

Notes on overdue debts
□Applicable

74

Not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

Chapter 7 Relevant Information of the Corporate Bonds

2.

Trigger and execution of issuer or investor option terms and investor protection
terms
□Applicable

3.

Not applicable

Adjustment of credit rating results
□Applicable

Not applicable

Other explanations
None

4.

Execution, changes and the impact of guarantees, debt repayment plans and other
debt repayment guarantee measures during the Reporting Period
□Applicable

Not applicable

Other explanations
None

5.

Other situation of debt-financing instruments of non-financial businesses
□Applicable

Not applicable

(VI) Loss of the Company in consolidated statement during the Reporting Period exceeds
10% of net assets at the end of last year
□Applicable

Not applicable

(VII) Violation of regulations and agreements
Violation of laws, regulations, self-regulatory rules, the articles of association, the administration
policies on information disclosure and other provisions, as well as the agreements or undertakings
in the prospectus of bonds, and the impact of related situations on the rights and interests of bond
investors during the Reporting Period
□Applicable

Not applicable

Interim Report 2026

75

Chapter 7 Relevant Information of the Corporate Bonds

(VIII) Key accounting data and financial indicators
Applicable

□Not applicable

Unit: Yuan Currency: RMB
Increase or decrease
at the end of the
Reporting Period
compared to the
At the end

At the end

end of the

of the

of the

previous year

Reporting Period

previous year

(%)

for change

Current ratio

1.34

1.33

0.50

/

Quick ratio

1.03

0.99

4.04

/

Assets-liabilities ratio (%)

61.46

61.49

Decreased by 0.03

/

Primary indicators

Reasons

percentage point
Increase or decrease
for the
Reporting Period
compared to the
The Reporting

Same period

same period of the

Period

of the

previous year

(January to June)

previous year

(%)

for change

2,477,230,508.87

2,099,764,932.53

17.98

/

EBITDA-Debt ratio

0.05

0.06

/

/

Interest coverage ratio

8.98

8.68

3.46

/

Cash interest coverage ratio

9.78

3.77

159.42

Net profit after deducting

Reasons

non-recurring profit or loss

Increase in cash received
from sales of goods during
the Reporting Period

EBITDA interest coverage ratio

11.13

10.33

7.74

/

Loan repayment ratio (%)

100%

100%

/

/

Interest repayment ratio (%)

100%

100%

/

/

II. CONVERTIBLE CORPORATE BONDS
□Applicable

76

Not applicable

Shanghai Pharmaceuticals Holding Co., Ltd.

SHANGHAI PHARMACEUTICALS
HOLDING CO., LTD.
FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO
30 JUNE 2026

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026

CONTENTS

PAGE(S)

THE CONSOLIDATED AND THE COMPANY'S BALANCE SHEETS

1-2

THE CONSOLIDATED AND THE COMPANY'S INCOME STATEMENTS

3

THE CONSOLIDATED AND THE COMPANY'S CASH FLOW STATEMENTS

4

THE CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY

5

THE COMPANY'S STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY

6

NOTES TO THE FINANCIAL STATEMENTS

7 - 147

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS

148 - 149

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

THE CONSOLIDATED AND THE COMPANY'S BALANCE SHEETS
AT 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
ASSETS
Current Assets:
Cash and bank balances
Held-for-trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable
Receivables financing
Prepayments
Other receivables
Including: Interest receivable
Dividends receivable
Inventories
Non-current assets due within
one year
Other current assets
Total Current Assets
Non-current Assets:
Long-term receivables
Long-term equity investments
Investments in other equity
instruments
Other non-current financial
assets
Investment properties
Fixed assets
Construction in progress
Bearer biological assets
Right-of-use assets
Intangible assets
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred tax assets
Other non-current assets
Total Non-current Assets
TOTAL ASSETS

30 June 2026
The Consolidated

31 December 2025
The Consolidated

30 June 2026
The Company

31 December 2025
The Company

(IV)9

36,572,968,513.83
9,416,880,703.56
7,530,453.55
811,204,037.83
90,767,878,560.85
1,942,680,670.90
1,474,185,217.36
3,466,234,473.71
41,282,898.66
42,684,986,108.40

32,721,763,351.58
10,360,938,931.51
721,010.06
1,030,570,879.31
82,306,400,629.83
2,528,730,548.02
1,621,546,115.42
3,113,104,316.93
18,742,898.66
45,358,947,550.04

7,397,450,146.12
9,416,880,703.56
1,677,369.80
826,464.73
15,870,970,350.28
82,845,645.02
123,636,815.66
-

5,103,623,231.43
10,360,938,931.51
147,402.28
2,245,158.84
448,329.53
16,199,318,697.02
84,330,431.64
123,636,815.66
-

(IV)13

103,838,480.76

87,403,889.78

10,256,540.49

10,040,484.54

(IV)10

1,133,063,640.33
188,381,450,861.08

1,333,568,015.30
180,463,695,237.78

4,959,027.93
32,703,020,602.91

305,490.20
31,677,067,725.35

(IV)13
(IV)14, (XIV)3

279,918,426.65
6,965,584,305.64

307,934,020.34
7,010,202,458.66

10,702,700.00
32,509,176,193.32

10,477,245.63
32,711,122,760.17

(IV)11

20,954,561.79

32,683,905.48

-

-

(IV)12

1,447,832,164.69

1,545,310,713.45

1,352,252,293.88

1,449,264,888.49

(IV)15
(IV)16
(IV)17
(IV)18
(IV)19
(IV)20
(IV)21
(IV)22
(IV)23
(IV)24
(IV)26

384,867,643.19
15,292,222,316.37
1,965,059,575.33
5,602,950.32
2,011,573,780.50
8,498,378,931.44
92,274,735.55
12,652,944,172.72
509,757,083.34
1,864,369,354.88
396,627,585.74
52,387,967,588.15

411,930,954.28
15,493,395,192.45
1,994,094,180.71
4,774,514.95
1,793,806,208.10
8,743,750,239.23
103,244,846.29
12,665,615,569.87
546,294,913.19
1,640,049,019.47
391,984,792.96
52,685,071,529.43

2,341,760.01
103,029,942.95
12,975,623.39
55,528,605.41
53,371,467.01
27,114,874.62
236,259.00
34,126,729,719.59

2,514,828.54
96,221,449.24
12,448,897.94
73,912,728.23
52,883,997.51
33,424,601.40
6,460,330.00
34,448,731,727.15

240,769,418,449.23

233,148,766,767.21

66,829,750,322.50

66,125,799,452.50

NOTES
(IV)1
(IV)2
(IV)3
(IV)4
(IV)5, (XIV)1
(IV)6
(IV)7
(IV)8, (XIV)2

-1-

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

THE CONSOLIDATED AND THE COMPANY'S BALANCE SHEETS - continued
AT 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings
Derivative financial liabilities
Notes payable
Accounts payable
Contract liabilities
Employee benefits payable
Taxes payable
Other payables
Including: Dividends payable
Non-current liabilities due
within one year
Other current liabilities
Total Current Liabilities
Non-current Liabilities:
Long-term borrowings
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total Non-current Liabilities

30 June 2026
The Consolidated

31 December 2025
The Consolidated

30 June 2026
The Company

31 December 2025
The Company

(IV)27
(IV)3
(IV)28
(IV)29
(IV)30
(IV)31
(IV)32
(IV)33

46,528,516,265.24
18,954,922.41
6,979,977,892.10
56,604,672,321.33
1,190,757,061.89
1,699,845,354.02
1,449,580,785.89
18,092,756,678.90
1,838,911,496.65

44,091,821,016.96
13,294,428.53
8,810,206,222.12
52,594,352,033.44
1,504,248,413.81
1,922,236,416.36
1,486,244,282.39
16,731,913,987.12
1,074,213,335.02

1,495,501,258.09
5,411,036.95
31,585,466.42
30,474,547.66
56,901,678.19
5,154,314.43
17,645,023,158.67
1,297,926,633.15

2,001,227,657.75
44,096,709.39
20,097,189.17
68,312,446.00
9,857,300.26
16,002,988,746.02
445,003,417.08

(IV)35

1,703,541,380.83

2,809,599,313.10

25,940,916.69

1,928,374,215.49

(IV)36

6,153,140,784.01
140,421,743,446.62

5,234,190,156.67
135,198,106,270.50

6,021,156,164.38
25,317,148,541.48

5,036,081,369.86
25,111,035,633.94

(IV)37
(IV)38
(IV)39

3,277,066,729.23
1,473,819,650.08
9,000,000.00

4,235,875,600.03
1,149,374,250.76
9,000,000.00

23,615,468.05
-

35,843,639.38
-

(IV)41

41,578,510.09

43,678,918.22

-

-

(IV)34
(IV)40
(IV)24
(IV)42

69,615,676.72
576,986,019.26
1,984,063,259.81
129,765,338.66
7,561,895,183.85

74,699,932.37
573,376,479.16
1,945,081,137.22
132,280,455.35
8,163,366,773.11

42,167,986.27
5,859,736.77
71,643,191.09

48,001,001.81
5,859,736.77
89,704,377.96

147,983,638,630.47

143,361,473,043.61

25,388,791,732.57

25,200,740,011.90

3,708,361,809.00
29,970,316,212.43
(566,060,526.77)
2,306,949,383.63
42,928,389,019.08

3,708,361,809.00
29,687,120,114.88
(532,971,659.94)
2,306,949,383.63
40,721,868,176.60

3,708,361,809.00
32,365,528,273.92
(496,033.73)
1,931,158,581.45
3,436,405,959.29

3,708,361,809.00
32,365,512,955.44
(361,929.78)
1,931,158,581.45
2,920,388,024.49

78,347,955,897.37

75,891,327,824.17

41,440,958,589.93

40,925,059,440.60

14,437,823,921.39

13,895,965,899.43

N/A

N/A

92,785,779,818.76

89,787,293,723.60

41,440,958,589.93

40,925,059,440.60

240,769,418,449.23

233,148,766,767.21

66,829,750,322.50

66,125,799,452.50

NOTES

TOTAL LIABILITIES
SHAREHOLDERS' EQUITY:
Share capital
Capital reserve
Other comprehensive income
Surplus reserve
Retained profits
Total equity attributable to
shareholders of the Company
Minority interests
TOTAL SHAREHOLDERS'
EQUITY
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY

(IV)43
(IV)44, (XIV)4
(IV)45, (XIV)5
(IV)46
(IV)47, (XIV)6

The accompanying notes form an integral part of these financial statements.

Legal representative:
Yang Qiuhua

Principal in charge of accounting:
Shen Bo

-2-

Head of accounting department:
Zhou Yadong

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

THE CONSOLIDATED AND THE COMPANY'S INCOME STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
ITEMS

NOTES

I. Operating income
Less: Operating costs
Taxes and levies
Selling expenses
Administrative expenses
R&D expenses
Financial expenses
Including: Interest expenses
Interest income
Add: Other income
Investment income
Including: Investment income (loss) in associates
and joint ventures
Losses on derecognition of financial assets at
amortised cost
Gains (Losses) on changes in fair value
Impairment (losses) gains of credit
Impairment losses of assets
Gains (Losses) on disposal of assets

(IV)48, (XIV)7
(IV)48, (XIV)7
(IV)49
(IV)50
(IV)51
(IV)52
(IV)53

(IV)56
(IV)57, (XIV)8

For the period from
1 January 2026 to
30 June 2026
The Consolidated
147,469,729,395.20
(131,209,436,636.44)
(463,980,523.09)
(6,538,197,377.23)
(2,739,550,557.74)
(970,861,155.68)
(694,508,600.01)
(706,031,998.94)
84,939,789.19
313,509,813.34
827,279,350.09

For the period from
1 January 2025 to
30 June 2025
The Consolidated
141,592,782,502.79
(126,660,060,598.69)
(415,653,784.26)
(6,164,987,968.04)
(2,662,454,335.70)
(958,949,406.87)
(749,774,716.63)
(887,687,766.56)
176,380,262.05
313,695,950.14
3,257,333,100.37

For the period from
1 January 2026 to
30 June 2026
The Company
9,605,180.45
(326,570.03)
(243,635.03)
(135,373,245.07)
(155,305,387.27)
(82,439,798.57)
(71,665,378.87)
3,226,940.98
2,960,924.31
2,175,158,437.49

For the period from
1 January 2025 to
30 June 2025
The Company
1,325,708.46
(1,092,765.65)
(134,398,777.65)
(185,527,458.12)
(129,746,245.37)
(136,301,661.03)
14,161,231.69
16,825,223.00
1,111,595,353.11

48,792,099.87

380,664,499.15

(24,301,619.11)

78,087,850.31

(62,770,648.60)

(73,800,728.05)

-

-

(IV)58
(IV)55
(IV)54
(IV)59

1,951,396.44
(507,826,641.26)
(28,045,168.32)
179,699,818.59

75,751,833.73
(423,970,881.72)
(410,078,463.89)
39,986,393.32

(6,197,606.35)
190,049.36
(41,834.37)

79,062,753.79
(2,129,114.85)
(453,918.16)

II. Operating profit
Add: Non-operating income
Less: Non-operating expenses

(IV)60
(IV)61

5,639,763,113.89
36,939,069.19
(45,319,225.36)

6,833,619,624.55
21,837,269.63
(34,636,191.45)

1,807,986,514.92
5,958,053.03
-

755,460,758.56
164,745.51
(332,968.80)

III. Total profit
Less: Income tax expenses

(IV)62

5,631,382,957.72
(1,289,726,644.68)

6,820,820,702.73
(1,826,036,672.44)

1,813,944,567.95
-

755,292,535.27
-

4,341,656,313.04

4,994,784,030.29

1,813,944,567.95

755,292,535.27

4,341,656,313.04
-

4,994,784,030.29
-

1,813,944,567.95
-

755,292,535.27
-

3,504,447,475.63

4,458,864,876.61

N/A

N/A

837,208,837.41

535,919,153.68

N/A

N/A

IV. Net profit
(I) Classified by the continuity of operations
1. Net profit from continuing operations
2. Net profit from discontinued operations
(II) Classified by the ownership
1. Net profit attributable to shareholders of
the Company
2. Profit or loss attributable to minority interests
V. Other comprehensive income, net of tax
(I) Other comprehensive income attributable
to shareholders of the Company, net of tax
1. Other comprehensive income that cannot be
reclassified to profit or loss
(1) Changes in fair value of investments in other
equity instruments
2. Other comprehensive income that will be reclassified
to profit or loss
(1) Share of other comprehensive income of
the investee accounted for using equity method
that will be reclassified to profit or loss
(2) Allowance for credit impairment of
receivables financing
(3) Effective portion of gains or losses on
hedging instruments in a cash flow hedge
(4) Exchange differences on translation of financial
statements denominated in foreign currencies
(II) Other comprehensive income attributable to minority
interests, net of tax

(IV)45

VI. Total comprehensive income
(I) Total comprehensive income attributable
to shareholders of the Company
(II) Total comprehensive income attributable to
minority interests
VII. Earnings per share
(I) Basic earnings per share (RMB/share)
(II) Diluted earnings per share (RMB/share)

(33,890,811.10)

19,680,758.31

(134,103.95)

58,844.37

(33,088,866.83)

4,161,971.75

(134,103.95)

58,844.37

(11,729,343.69)

(9,361,998.52)

-

-

(11,729,343.69)

(9,361,998.52)

-

-

(21,359,523.14)

13,523,970.27

(134,103.95)

58,844.37

(174,358.64)

52,257.08

(134,103.95)

58,844.37

(1,473,194.85)

(218,133.48)

-

-

592,355.80

(851,521.98)

-

-

(20,304,325.45)

14,541,368.65

-

-

(801,944.27)

15,518,786.56

-

-

4,307,765,501.94

5,014,464,788.60

1,813,810,464.00

755,351,379.64

3,471,358,608.80

4,463,026,848.36

N/A

N/A

836,406,893.14

551,437,940.24

N/A

N/A

0.95
0.95

1.20
1.20

N/A
N/A

N/A
N/A

(IV)63

The accompanying notes form an integral part of these financial statements.

Legal representative:
Yang Qiuhua

Principal in charge of accounting:
Shen Bo
-3-

Head of accounting department:
Zhou Yadong

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

THE CONSOLIDATED AND THE COMPANY'S CASH FLOW STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
ITEMS

For the period from
1 January 2026 to
30 June 2026
The Consolidated

For the period from
1 January 2025 to
30 June 2025
The Consolidated

154,053,366,202.30

148,688,702,663.69

36,022,637.30

11,224,026.46

109,855,354.64
2,556,708,318.27
156,719,929,875.21

106,985,906.88
2,295,146,319.36
151,090,834,889.93

11,422,489.08
47,445,126.38

24,002,867.48
35,226,893.94

(135,698,209,949.94)

(133,530,822,206.41)

(56,315,510.42)

(70,274,076.04)

(IV)65(1)

(5,831,131,741.99)
(4,363,036,457.17)
(6,378,042,478.01)
(152,270,420,627.11)
4,449,509,248.10

(5,836,065,054.48)
(3,962,697,333.33)
(6,771,993,306.82)
(150,101,577,901.04)
989,256,988.89

(187,181,018.05)
(243,635.03)
(45,853,881.90)
(289,594,045.40)
(242,148,919.02)

(192,149,318.36)
(1,165,106.02)
(58,612,117.35)
(322,200,617.77)
(286,973,723.83)

(IV)64(3)

25,040,393,817.51

36,312,602,000.00

25,038,193,313.27

36,312,602,000.00

113,641,416.00

169,259,831.45

1,366,911,480.05

1,088,888,509.09

171,004,797.66

67,276,784.19

5,850.00

9,275.94

NOTES

For the period from
1 January 2026 to
30 June 2026
The Company

For the period from
1 January 2025 to
30 June 2025
The Company

I. Cash Flows from/(Used in) Operating
Activities:
Cash receipts from the sale of goods and
the rendering of services
Receipts of tax refunds
Other cash receipts relating to operating activities
Sub-total of cash inflows from operating activities
Cash payments for goods purchased and
services received
Cash payments to and on behalf of employees
Payments of various types of taxes
Other cash payments relating to operating activities
Sub-total of cash outflows from operating activities
Net Cash Flow from/(Used in) Operating Activities

(IV)64(1)

(IV)64(2)

II. Cash Flows from/(Used in)/Investing
Activities:
Cash receipts from disposal and recovery
of investments
Cash receipts from investment income
Net cash receipts from disposals of fixed assets,
intangible assets and other long-term assets
Net cash receipts from disposals of subsidiaries
and other business units
Other cash receipts relating to investing activities
Sub-total of cash inflows from investing activities
Cash payments to acquire or construct fixed assets,
intangible assets and other long-term assets
Cash payments to acquire investments
Net cash payments for acquisitions of subsidiaries
and other business units
Other cash payments relating to investing activities
Sub-total of cash outflows from investing activities
Net Cash Flow from/(Used in) Investing Activities

2,617,197.94

16,865,471.79

-

71,883,359.34

(IV)64(5)

1,342,676,726.49
26,670,333,955.60

1,125,180,875.51
37,691,184,962.94

144,317,257.78
26,549,427,901.10

437,772,165.21
37,911,155,309.58

(1,040,988,005.60)

(1,124,571,482.54)

(24,647,882.80)

(22,056,671.28)

(IV)64(4)

(23,805,749,556.72)

(36,028,414,840.00)

(23,693,268,954.72)

(36,027,696,000.00)

(IV)65(2)

-

(626,709,265.26)

-

(1,262,982,485.00)

(IV)64(6)

(1,430,000,000.00)
(26,276,737,562.32)
393,596,393.28

(1,151,755,000.00)
(38,931,450,587.80)
(1,240,265,624.86)

(290,604,805.04)
(24,008,521,642.56)
2,540,906,258.54

(3,234,358,207.99)
(40,547,093,364.27)
(2,635,938,054.69)

392,000,000.00

7,378,175.70

-

7,378,175.70

392,000,000.00

-

-

-

32,255,426,049.54
5,999,628,055.56
30,310,263.93
38,677,364,369.03
(37,835,602,901.08)

35,773,622,565.68
5,997,825,000.00
176,698,086.40
41,955,523,827.78
(36,315,299,388.00)

1,495,761,480.00
5,999,628,055.56
1,324,388,802.77
8,819,778,338.33
(8,894,000,000.00)

2,000,000,000.00
5,997,825,000.00
1,279,310,511.31
9,284,513,687.01
(8,678,342,147.90)

(1,386,699,569.06)

(1,347,824,733.59)

(408,352,963.33)

(141,266,102.44)

(393,103,543.05)

(488,040,452.90)

-

-

(403,451,945.49)
(39,625,754,415.63)
(948,390,046.60)

(539,022,568.43)
(38,202,146,690.02)
3,753,377,137.76

(22,356,587.34)
(9,324,709,550.67)
(504,931,212.34)

(17,183,273.89)
(8,836,791,524.23)
447,722,162.78

(8,971,209.55)

(13,772,678.98)

(6,512.84)

(1,724.35)

3,885,744,385.23

3,488,595,822.81

1,793,819,614.34

(2,475,191,340.09)

28,398,360,540.82

31,881,272,794.87

5,103,623,231.43

9,052,842,915.74

32,284,104,926.05

35,369,868,617.68

6,897,442,845.77

6,577,651,575.65

III. Cash Flows from/(Used in)
Financing Activities:
Cash receipts from capital contributions
Including: Cash receipts from capital contributions
from minority shareholders
of subsidiaries
Cash receipts from borrowings
Cash receipts from issue of bonds
Other cash receipts relating to financing activities
Sub-total of cash inflows from financing activities
Cash repayments of borrowings
Cash payments for distribution of dividends or
profits or settlement of interest expenses
Including: Payments for distribution of dividends or
profits to minority shareholders
of subsidiaries
Other cash payments relating to financing activities
Sub-total of cash outflows from financing activities
Net Cash Flow from/(Used in) Financing Activities

(IV)64(7)

(IV)64(8)

IV. Effect of Foreign Exchange Rate Changes
on Cash and Cash Equivalents
V. Net Increase/(Decrease) in Cash and
Cash Equivalents
Add: Opening balance of cash and
cash equivalents
VI. Closing Balance of Cash and
Cash Equivalents

(IV)65(1)

(IV)65(4)

The accompanying notes form an integral part of these financial statements.

Legal representative:
Yang Qiuhua

Principal in charge of accounting:
Shen Bo
-4-

Head of accounting department:
Zhou Yadong

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
THE CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
ITEMS

NOTES

Attributable to shareholders of the Company
Other
Less: Treasury
comprehensive
shares
income

Total shareholders'
equity

Capital reserve

3,707,971,839.00

29,647,771,271.51

-

(534,279,925.88)

2,306,949,383.63

36,547,207,403.71

12,066,743,749.10

83,742,363,721.07

389,970.00

47,743,359.80

-

4,161,971.75

-

3,367,737,249.81

1,695,508,291.22

5,115,540,842.58

(IV)47
(IV)45

-

-

-

4,161,971.75
4,161,971.75

-

4,458,864,876.61
4,458,864,876.61

535,919,153.68
15,518,786.56
551,437,940.24

4,994,784,030.29
19,680,758.31
5,014,464,788.60

(IV)43

389,970.00

21,586,605.15

-

-

-

-

-

21,976,575.15

(IV)44

-

(14,797,227.45)

-

-

-

-

-

(14,797,227.45)

(IV)44

-

40,953,982.10

-

-

-

-

1,488,341,893.57

1,529,295,875.67

(IV)46
(IV)47
(IV)47

-

-

-

-

-

(1,075,424,924.61)
(15,702,702.19)

(344,271,542.59)
-

(1,419,696,467.20)
(15,702,702.19)

Balance at 30 June 2025

3,708,361,809.00

29,695,514,631.31

-

(530,117,954.13)

2,306,949,383.63

39,914,944,653.52

13,762,252,040.32

88,857,904,563.65

Balance at 1 January 2026

3,708,361,809.00

29,687,120,114.88

-

(532,971,659.94)

2,306,949,383.63

40,721,868,176.60

13,895,965,899.43

89,787,293,723.60

-

283,196,097.55

-

(33,088,866.83)

-

2,206,520,842.48

541,858,021.96

2,998,486,095.16

(IV)47
(IV)45

-

-

-

(33,088,866.83)
(33,088,866.83)

-

3,504,447,475.63
3,504,447,475.63

837,208,837.41
(801,944.27)
836,406,893.14

4,341,656,313.04
(33,890,811.10)
4,307,765,501.94

(IV)43

-

2,360,484.00

-

-

-

-

392,000,000.00

394,360,484.00

(IV)44

-

(2,360,484.00)

-

-

-

-

-

(2,360,484.00)

(IV)44

-

283,196,097.55

-

-

-

-

(367,179,717.98)

(83,983,620.43)

(IV)46
(IV)47
(IV)47

-

-

-

-

-

(1,297,926,633.15)
-

(319,369,153.20)
-

(1,617,295,786.35)
-

3,708,361,809.00

29,970,316,212.43

-

(566,060,526.77)

2,306,949,383.63

42,928,389,019.08

14,437,823,921.39

92,785,779,818.76

Balance at 1 January 2025

Changes for the period from 1 January 2025 to
30 June 2025
Total comprehensive income
Net profit

Other comprehensive income
Total comprehensive income
Shareholders' contributions and reduction
in capital
Capital contributions from shareholders
Share-based payments recognised in
shareholders' equity
Others
Profit distribution
Transfer to surplus reserve
Distribution to shareholders
Others

Changes for the period from 1 January 2026 to
30 June 2026
Total comprehensive income
Net profit
Other comprehensive income
Total comprehensive income
Shareholders' contributions and reduction in capital
Capital contributions from shareholders

Share-based payments recognised in
shareholders' equity
Others
Profit distribution
Transfer to surplus reserve
Distribution to shareholders
Others
Balance at 30 June 2026

Surplus reserve

Minority interests

Share capital

Retained profits

The accompanying notes form an integral part of these financial statements.
Legal representative: Yang Qiuhua

Principal in charge of accounting: Shen Bo
-5-

Head of accounting department: Zhou Yadong

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
THE COMPANY'S STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
ITEMS

NOTES

Balance at 1 January 2025

Changes for the period from 1 January 2025 to
30 June 2025
Total comprehensive income
Net profit
Other comprehensive income
Total comprehensive income
Shareholders' contributions and reduction
in capital
Capital contributions from shareholders
Share-based payments recognised in
shareholders' equity
Others
Profit distribution
Transfer to surplus reserve
Distribution to shareholders

(XIV)6
(XIV)5

Share capital

Capital reserve

Other comprehensive
income

Less: Treasury shares

Surplus reserve

Total shareholders'
equity

Retained profits

3,707,971,839.00

32,479,270,792.86

-

(420,774.15)

1,931,158,581.45

2,333,058,032.95

40,451,038,472.11

389,970.00

6,731,073.81

-

58,844.37

-

(320,132,389.34)

(312,952,501.16)

-

-

-

58,844.37
58,844.37

-

755,292,535.27
755,292,535.27

755,292,535.27
58,844.37
755,351,379.64

389,970.00

21,586,605.15

-

-

-

-

21,976,575.15

(XIV)4

-

(14,797,227.45)

-

-

-

-

(14,797,227.45)

(XIV)4

-

(58,303.89)

-

-

-

-

(58,303.89)

(XIV)6
(XIV)6

-

-

-

-

-

(1,075,424,924.61)

(1,075,424,924.61)

Balance at 30 June 2025

3,708,361,809.00

32,486,001,866.67

-

(361,929.78)

1,931,158,581.45

2,012,925,643.61

40,138,085,970.95

Balance at 1 January 2026

3,708,361,809.00

32,365,512,955.44

-

(361,929.78)

1,931,158,581.45

2,920,388,024.49

40,925,059,440.60

-

15,318.48

-

(134,103.95)

-

516,017,934.80

515,899,149.33

(XIV)6
(XIV)5

-

-

-

(134,103.95)
(134,103.95)

-

1,813,944,567.95
1,813,944,567.95

1,813,944,567.95
(134,103.95)
1,813,810,464.00

-

2,360,484.00

-

-

-

-

2,360,484.00

(XIV)4

-

(2,360,484.00)

-

-

-

-

(2,360,484.00)

(XIV)4

-

15,318.48

-

-

-

-

15,318.48

(XIV)6
(XIV)6

-

-

-

-

-

(1,297,926,633.15)

(1,297,926,633.15)

3,708,361,809.00

32,365,528,273.92

-

(496,033.73)

1,931,158,581.45

3,436,405,959.29

41,440,958,589.93

Changes for the period from 1 January 2026 to
30 June 2026

Total comprehensive income
Net profit
Other comprehensive income
Total comprehensive income
Shareholders' contributions and reduction
in capital
Capital contributions from shareholders
Share-based payments recognised in
shareholders' equity
Others
Profit distribution
Transfer to surplus reserve
Distribution to shareholders
Balance at 30 June 2026

The accompanying notes form an integral part of these financial statements.
Legal representative: Yang Qiuhua

Principal in charge of accounting: Shen Bo
-6-

Head of accounting department: Zhou Yadong

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(I)

BASIC INFORMATION ABOUT THE COMPANY
Shanghai Pharmaceuticals Holding Co., Ltd. (the "Company") was formerly known as Shanghai
No. 4 Pharmaceutical Co., Ltd. ("No. 4 Pharmaceutical"). In October 1993, Shanghai
Pharmaceutical (Group) Corporation, now known as Shanghai Pharmaceutical (Group) Co., Ltd.
("Shanghai Pharma Group") initiated solely and issued 15,000,000 ordinary shares (A shares) to
public with par value of RMB1 per share upon the approval of the Hu Zheng Ban (1993) No. 119,
a document issued by Shanghai Securities Management Office. After that, No. 4 Pharmaceutical
was established through fundraising on 18 January 1994. On 24 March 1994, shares of No. 4
Pharmaceutical were listed on the Shanghai Stock Exchange, the stock code of which was 600849.
In 1998, No. 4 Pharmaceutical was renamed as Shanghai Pharmaceutical Co., Ltd.
Pursuant to the "Approval on Shanghai Pharmaceutical Co., Ltd. Issuing Shares to Purchase Assets
from Shanghai Pharmaceutical (Group) Co., Ltd. and Merging with Shanghai Industrial
Pharmaceutical Investment Co. Ltd. and Shanghai Zhongxi Pharmaceutical Co. Ltd." (Zheng Jian
Xu Ke [2010] No.132 document) issued by China Securities Regulatory Commission ("CSRC"),
the Company merged with Shanghai Industrial Pharmaceutical Investment Co. Ltd. ("Shangshi
Pharmaceutical") and Shanghai Zhongxi Pharmaceutical Co. Ltd.("Zhongxi Pharmaceutical"), and
issued shares to purchase pharmaceutical assets from Shanghai Pharma Group, and issued shares to
raise funds from Shanghai Shangshi (Group) Co., Ltd. ("Shanghai Shangshi") and used the funds
to purchase the pharmaceutical assets from Shanghai Industrial Holdings Limited ("Shangshi
Holdings"). After the completion of above significant asset restructuring, the total share capital of
the Company was increased to 1,992,643,338 shares. Shanghai Pharmaceutical Co., Ltd. was
renamed as Shanghai Pharmaceuticals Holding Co., Ltd. The Company's stock code was changed
from 600849 to 601607. The Company's shares were referred to as "Shanghai Pharmaceuticals".
As at 17 June 2011, the Company has completed the issuance of 696,267,200 shares (including
32,053,200 shares of overallotment) listed overseas (H shares) at RMB1 per share to overseas
investors. The shares were listed on the Stock Exchange of Hong Kong Limited on 20 May 2011,
the stock code of which was 02607, and the shares were referred to as "Shanghai Pharmaceuticals".
On 26 January 2018, the Company issued 153,178,784 H shares to overseas investors, and was
listed on the Stock Exchange of Hong Kong.
Pursuant to the "Approval on the Non-public Issuance of Shares by Shanghai Pharmaceuticals
Holding Co., Ltd." (Zheng Jian Xu Ke [2022] No. 584 document) issued by CSRC on 22 March
2022, the Company was approved to issue 852,626,796 A shares to Yunnan Baiyao Group Co., Ltd.
and Shanghai Tandong Enterprise Consulting Service Co., Ltd. (hereinafter referred to as "Shanghai
Tandong") at RMB16.39 per share. On 25 March 2022, Yunnan Baiyao and Shanghai Tandong
completed the non-public issuance payments. PricewaterhouseCoopers Zhong Tian LLP has issued
a report, PwC ZT Yan Zi (2022) No. 0271, for capital verification. As at 8 April 2022, the Company
completed the share registration of non-public issuance of A shares.
As at 30 June 2026, according to the stock option incentive plan, the Company has totally issued
13,645,691 A shares, with 13,144,060 shares at an exercise price of RMB18.41 per share and
501,631 shares at an exercise price of RMB20.16 per share.
-7-

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(I)

BASIC INFORMATION ABOUT THE COMPANY - continued
At 30 June 2026, the Company's share capital was RMB3,708,361,809.00, with a total number of
3,708,361,809 shares, with 2,789,289,105 RMB-denominated ordinary shares (A shares) listed in
China and 919,072,704 overseas listed foreign shares (H shares).
The unified social credit code of the Company is 9131000013358488X7; the legal representative is
Yang Qiuhua; the place of registration is No. 92 Zhangjiang Road, China (Shanghai) Pilot Free
Trade Zone; headquarters of the Company is Shanghai Pharmaceutical Building, No.200 Taicang
Road, Shanghai; industry of the Company is pharmaceuticals.
Business operations of the Company and its subsidiaries (collectively, "the Group") are mainly as
follows:




research and development, manufacturing and sale of a broad range of pharmaceutical and
healthcare products;
distribution, warehousing, logistics and other value-added pharmaceutical supply chain
solutions and related services to pharmaceutical manufacturers and dispensers, such as
hospitals, distributors and retail pharmacies; and
operation and franchising of a network of retail pharmacy stores.

The parent company of the Company is Shanghai Pharmaceutical Group. Shanghai Industrial
Investment (Holdings) Co., Ltd. ("SIIC") is registered in Hong Kong SAR, and its former actual
investor was Assets Supervision and Administration Commission of Shanghai Municipal
Government (the "Shanghai SASAC"). Shanghai Shangshi is also a state-owned enterprise
established by SASAC. Shanghai Shangshi is the controlling shareholder of Shanghai Pharma
Group and Shanghai Tandong. SIIC was authorised to manage Shanghai Shangshi by Shanghai
SASAC. Therefore, SIIC indirectly held equity interests in the Company through its subordinate
companies, Shanghai Shangshi, Shanghai Tandong and Shanghai Pharmaceutical Group, and SIIC
was the ultimate holding company of the Company.
On 30 May 2025, Shanghai Shangshi established a wholly-owned subsidiary, Golden Bell
International Holdings Limited (hereinafter referred to as the "Golden Bell Holdings"), in Hong
Kong. On 13 October 2025, the Shanghai SASAC issued the "Notice of the Shanghai SASAC on
Matters Concerning the Equity Adjustment of Shanghai Industrial Investment (Holdings) Co., Ltd."
(Hu Guo Zi Wei Chan Quan [2025] No. 192), requiring the adjustment of all equity interests held
by SIIC to Golden Bell Holdings. Therefore, Shanghai Shangshi directly holds, and indirectly holds
through SIIC's subordinate companies and Shanghai Pharmaceutical Group, equity interests in the
Company, making it the ultimate holding company of the Company.
Significant subsidiaries which are included in the scope of consolidation in the current period are
disclosed in Note (V).
The financial statements were authorised for issue by the Board of Directors of the Company on 27
August 2026.
-8-

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
The Group applies the accounting policies and accounting estimates based on its business operating
characteristics, including allowance for expected credit loss ("ECL") on accounts receivable (Note
(II)10), valuation of inventories (Note (II)11), valuation of investment properties (Note (II)13),
depreciation of fixed assets and amortisation of intangible assets and right-of-use assets (Note (II)14,
Note (II)18, Note (II)27), recognition and measurement of revenue (Note (II)24), etc.
Significant judgements, accounting estimates and key assumptions to determine the significant
accounting policies are disclosed in Note (II)32.
1. Basis of preparation of financial statements
The financial statements are prepared in accordance with the Accounting Standards for Business
Enterprises - Basic Standard, as well as the specific accounting standards and other relevant
regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods
(collectively, "the Accounting Standards for Business Enterprises"), while follow the Preparation
Convention of Information Disclosure by Companies Offering Securities to the Public No.15 General Rules on Financial Reporting (2023 Revised) issued by CSRC to disclose relevant financial
information.
The financial statements have been prepared on a going concern basis.
The new Hong Kong Companies Ordinance has come into force since 3 March 2014. Certain
disclosures in the financial statements have been included to reflect the requirements under the new
Hong Kong Companies Ordinance.
2. Statement of compliance with the Accounting Standards for Business Enterprises
("ASBE")
The financial statements of the Company for the period from 1 January 2026 to 30 June 2026 have
been prepared in accordance with the ASBE, and present truly and completely, the consolidated
and the Company's financial position as at 30 June 2026, the consolidated and the Company's results
of operations, and the consolidated and the Company's cash flows for the period then ended.
3. Accounting period
The Group has adopted the calendar year as its accounting year, i.e., from 1 January to 31 December.
4. Functional currency
The Company's functional currency is Renminbi (RMB). The functional currency of the Company's
subsidiaries is determined based on the primary economic environment in which they operate. The
financial statements are presented in RMB.

-9-

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Methodology for determining materiality and basis for selection
Item
Significant construction in progress
Significant non-wholly owned
subsidiaries
Significant joint ventures or
associates

Criteria for materiality
The amount is more than RMB30 million at the beginning
or end of the period
Net assets attributable to minority shareholders account
for more than 1% of the Group's net assets
Investment gains or losses under the equity method
account for more than 2% of the Group's net profit or the
significance of the relevant business to the Group after the
management's comprehensive consideration

6. Business combinations
6.1 Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the Group in a business combination are measured
at the carrying amount. If the merged party was acquired by the ultimate controlling party from a
third party in the previous year, then the consideration was measured based on carrying amount of
assets and liabilities of the merged party (including the goodwill arising from acquisition by the
ultimate controlling party) in the ultimate controlling party's consolidated financial statements. The
difference between the carrying amount of the net assets obtained from the combination and the
carrying amount of the consideration paid for the combination is treated as an adjustment to capital
reserve (share premium). If the capital reserve (share premium) is not sufficient to absorb the
difference, the remaining balance is adjusted against retained earnings. Costs directly attributable
to the combination are included in profit or loss for the period in which they are incurred.
Transaction costs associated with the issue of equity or debt securities for the business combination
are included in the initially recognised amounts of the equity or debt securities.
6.2 Business combinations not involving enterprises under common control
The cost of combination and identifiable net assets obtained by the Group in a business combination
are measured at fair value at the acquisition date. Where the cost of the combination exceeds the
acquirer's interest in the fair value of the acquiree's identifiable net assets, the difference is
recognised as goodwill; where the cost of combination is lower than the acquirer's interest in the
fair value of the acquiree's identifiable net assets, the difference is recognised in profit or loss for
the current period. Costs directly attributable to the combination are included in profit or loss for
the period in which they are incurred. Transaction costs associated with the issue of equity or debt
securities for the business combination are included in the initially recognised amounts of the equity
or debt securities.

- 10 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Business combinations - continued
6.2 Business combinations not involving enterprises under common control - continued
When the Group becomes capable of exercising control over an investee not under common control
due to additional investment or other reasons, the equity interest held in the acquiree before the
acquisition date shall be remeasured at fair value on the acquisition date, with any difference
between fair value and carrying amount recognised as investment income in the current period.
Where the equity interest held in the acquiree before the acquisition date relates to other
comprehensive income measured under the equity method and other changes in owners' equity
except net profit or loss, other comprehensive income and profit distribution ("other changes in
owners' equity"), corresponding other comprehensive income and other changes in owners' equity
(excluding other comprehensive income from changes arising from remeasurement on net liabilities
or net assets of defined benefit plans of the acquiree or from changes in fair value of investments in
other equity instruments) shall be transferred to income for the period in which the acquisition date
falls.
7. Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all its
subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are deconsolidated from the date when such control ceases. For a subsidiary that is acquired in a business
combination involving enterprises under common control, it is included in the consolidated
financial statements from the date when it, together with the Company, comes under common
control of the ultimate controlling party. The portion of the net profits realised before the
combination date is presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the accounting
periods of the Company and subsidiaries are inconsistent, the financial statements of the
subsidiaries are adjusted in accordance with the accounting policies and the accounting period of
the Company. For subsidiaries acquired from business combinations not involving enterprises under
common control, the individual financial statements of the subsidiaries are adjusted based on the
fair value of the identifiable net assets at the acquisition date.

- 11 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Preparation of consolidated financial statements - continued
All significant intra-group balances, transactions and unrealised profits are eliminated in the
consolidated financial statements. The portion of subsidiaries' shareholders' equity and the portion
of subsidiaries' net profits and losses and comprehensive income for the period not attributable to
the Company are recognised as minority interests, net profit attributed to minority interests and total
comprehensive income attributed to minority interests, and presented separately in the consolidated
financial statements under shareholders' equity, net profits and total comprehensive income
respectively. If the loss of current period shared by the minority shareholders of a subsidiary
exceeds the minority shareholders' share of the beginning balance of owners' equity of the
subsidiary, the balance shall be offset against the minority shareholders' equity. Unrealised profits
and losses resulting from the sale of assets by the Company to its subsidiaries are fully eliminated
against net profit attributable to shareholders of the parent. Unrealised profits and losses resulting
from the sale of assets by a subsidiary to the Company are eliminated and allocated between net
profit attributable to shareholders of the parent and net profit attributed to minority interests in
accordance with the allocation proportion of the parent in the subsidiary. Unrealised profits and
losses resulting from the sale of assets by one subsidiary to another are eliminated and allocated
between net profit attributable to shareholders of the parent and net profit attributed to minority
interests in accordance with the allocation proportion of the parent in the subsidiary.
If the accounting treatment of a transaction is inconsistent in the financial statements at the Group
level and at the Company or its subsidiary level, adjustment will be made from the perspective of
the Group.
The difference between additional long-term equity investments for purchase of minority interests
in subsidiaries and shares of net assets calculated at the proportion of increased part of shares which
the Group is entitled to as at the date of purchase or consolidation is treated as an adjustment to
capital reserve (share premium). If the capital reserve (share premium) is not sufficient to absorb
the difference, the remaining balance is adjusted against retained earnings. Under the circumstance
that the Group partially disposed its long-term equity investments in subsidiaries without losing
control, the difference between disposal proceeds and shares of net assets which the Group is
entitled to from disposal of long-term equity investments is treated as an adjustment to capital
reserve (share premium) in the consolidated financial statements. If the capital reserve (share
premium) is not sufficient to cover the difference, retained earnings are adjusted.
If an enterprise loses control over an investee due to the disposal of a portion of equity investment
or other reasons, the remaining equity investment shall be remeasured at fair value in the
consolidated financial statements at the date when control is lost. The sum of consideration received
from the disposal of equity investment and the fair value of the remaining equity investment, net of
the sum of the share of net assets of the former subsidiary based on continuous calculation since the
acquisition date at previous proportion of shareholding and goodwill, is recognised as investment
income for the current period when the control is lost. The other comprehensive income related to
the original subsidiary is included in investment income for the current period or retained earnings
at the date of losing control.
- 12 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
8. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdrawn on
demand, and short-term (generally due within three months from the acquisition date), highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
9. Foreign currency translation
9.1 Transactions denominated in foreign currencies
Transactions denominated in foreign currencies are translated into functional currency using the
exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into
functional currency using the spot exchange rates on the balance sheet date. Exchange differences
arising from these translations are recognised in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for acquisition or
construction of qualifying assets, which are capitalised as part of the cost of those assets. Nonmonetary items denominated in foreign currencies that are measured at historical costs are
translated at the balance sheet date using the spot exchange rates at the date of the transactions. The
effect of exchange rate changes on cash is presented separately in the cash flow statement.
9.2 Translation of financial statements denominated in foreign currencies
The asset and liability items in the balance sheets for overseas operations are translated at the spot
exchange rates on the balance sheet date. Among the shareholders' equity items, the items other
than "retained profits" are translated at the spot exchange rates of the transaction dates. The income
and expense items in the income statements of overseas operations are translated at the spot
exchange rates of the transaction dates. The differences arising from the above translation are
presented in other comprehensive income. The cash flows of overseas operations are translated at
the spot exchange rates on the dates of the cash flows. The effect of exchange rate changes on cash
is presented separately in the cash flow statements.
10. Financial instruments
A financial instrument refers to any contract that gives rise to a financial asset of one party and a
financial liability or equity instrument of another. The Group recognises a financial asset, a financial
liability or equity instrument when the Group becomes a party to the contractual provisions of the
financial instrument.

- 13 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Financial assets
10.1.1 Classification and measurement
Based on the entity's business model for managing the financial assets and the contractual terms of
the cash flows, the Group classifies its financial assets in the following measurement categories:1)
financial assets at amortised cost; 2) financial assets at fair value through other comprehensive
income ("FVTOCI"); and 3) financial assets at fair value through profit or loss ("FVTPL").
Financial assets are initially measured at fair value. For financial assets at FVTPL, transaction costs
are immediately recognised in profit or loss. For other financial assets, transaction costs are included
in their initial recognised amounts. The Group measures accounts receivable and notes receivable
arising from sales of goods or provision of services based on the consideration that the Group is
expected to be entitled, if the notes receivable and accounts receivable do not contain a significant
financing component.
10.1.1.1 Debt instruments
Debt instruments held by the Group are instruments that meet the definition of financial liabilities
from the perspective of the issuers, and are measured by the following three ways:
At amortised cost:
A financial asset is measured at amortised cost if both of the following conditions are met: it is held
within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding. Interest
income of such financial asset is calculated by using the effective interest method. Such financial
assets mainly include cash and bank balances, notes receivable, accounts receivable, other
receivables, debt investments and long-term receivables, etc. Debt investments and long-term
receivables due within one year (inclusive) at the balance sheet date are presented as non-current
assets due within one year; debt investments with maturities within one year (inclusive) at acquiring
date are presented as other current assets.

- 14 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Financial assets - continued
10.1.1 Classification and measurement - continued
10.1.1.1 Debt instruments - continued
At FVTOCI:
A financial asset is measured at FVTOCI if both of the following conditions are met: it is held
within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets and the contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.
If a financial asset is measured at FVTOCI, all changes in fair value should be included in other
comprehensive income, except for the recognition of impairment gains or losses, foreign exchange
gains and losses, and interest income calculated with the effective interest method, which are
recognised in profit or loss. Such financial assets are presented as other debt investments. The debt
investments with maturity within one year (inclusive) since the balance sheet date are presented as
non-current assets due within one year; at acquiring date, debts investments with maturity within
one year (inclusive) are presented as other current assets and receivables financing.
At FVTPL:
If the financial asset does not meet the criteria for amortised cost or FVTOCI, it is measured at
FVTPL. At initial recognition, the Group designates part of financial assets as measured at FVTPL
in order to eliminate or significantly reduce an accounting mismatch. The financial assets with
maturity more than one year and expected to be held for more than one year are presented as other
non-current financial assets, and others are presented as held-for-trading financial assets.
10.1.1.2 Equity instruments
The Group measures its equity instruments that have no control, joint control or significant
influence at FVTPL and presents such equity instruments as held-for-trading financial assets. The
financial assets expected to be held for more than one year since the balance sheet date are presented
as other non-current financial assets.
Besides, the Group designates part of financial assets which are not held for trading at FVTOCI and
presents them as investments in other equity instruments. The dividend income is recognised in
profit or loss.

- 15 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Financial assets - continued
10.1.2 Impairment
For financial asset at amortised cost, debt investments at FVTOCI, contract assets, lease receivable,
financial liabilities that are not at FVTPL and financial guarantee contracts that are not qualified for
derecognition due to the transfer of financial assets or financial liabilities arising from continuing
involvement of the transferred financial assets, the Group accounts for the impairment and
recognises the loss allowance on the basis of expected credit loss ("ECL").
Giving consideration to reasonable and supportable information on past events, current conditions
and forecasts of future economic conditions, and using default risk as weight, the Group recognises
the ECL as the probability-weighted amount of the present value of the difference between the cash
flows receivable from the contract and the cash flows expected to collect.
For notes receivable, accounts receivable, receivables financing and contract assets arising from the
sales of goods and rendering of services in the ordinary course of operating activities, the Group
recognises the lifetime ECL regardless of whether a significant financing component exists. For
lease receivable, the Group measures the loss allowance according to the lifetime ECL.
At each balance sheet date, the ECL of financial instruments other than aforesaid notes receivable,
accounts receivable, receivables financing, contract assets and lease receivable are measured based
on different stages. A 12-month ECL allowance is recognised for financial instruments in Stage 1,
that have not had a significant increase in credit risk since initial recognition, lifetime ECL
allowance is recognised for financial instruments in Stage 2, that have had a significant increase in
credit risk without credit impairment since initial recognition, and lifetime ECL allowance is
recognised for financial instruments in Stage 3, that have had a credit impairment since initial
recognition.
For the financial instruments with low credit risk as at the balance sheet date, the Group assumes
there is no significant increase in credit risk since initial recognition. The Group determines them
as the financial instruments in Stage 1 and recognises the 12-month ECL allowance.
For the financial instruments in Stage 1 and Stage 2, the Group calculates the interest income by
applying the effective interest rate to the gross carrying amount (before net of ECL allowance). For
the financial instruments in Stage 3, the interest income is calculated by applying the effective
interest rate to the amortised cost (net of ECL allowance).

- 16 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Financial assets - continued
10.1.2 Impairment - continued
10.1.2.1 Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with the
risk of a default occurring on the financial instrument as at the date of initial recognition.
In particular, the following information is taken into account when assessing whether credit risk has
increased significantly:
(1)
(2)
(3)
(4)
(5)
(6)
(7)

An actual or expected significant change in the financial instrument's external credit rating;
An actual or expected decrease in the internal credit rating for the debtor;
Adverse changes in business, financial or economic conditions that are expected to cause a
significant decrease in the debtor's ability to meet its debt obligations;
An actual or expected significant change in the operating results of the debtor;
Significant adverse changes in regulatory, economic, or technological environment of the
debtor;
Significant changes in the value of collaterals or the quality of guarantees or credit
enhancements provided by third parties, which are expected to reduce the debtor's economic
motives to repay within the time limit specified in contract or affect the probability of default;
Significant changes in expected performance and repayment of the debtor.

Irrespective of the outcome of the above assessment, the Group presumes that the credit risk has
increased significantly when contractual payments are more than 30 days (inclusive) past due.
10.1.2.2 Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is
credit-impaired includes observable data about the following events:
(1)
(2)

Significant financial difficulty of the issuer or debtor;
It is becoming probable that the debtor will enter bankruptcy or other financial
reorganisation;

Irrespective of the outcome of the above assessment, the Group presumes that an event of default
on the financial instrument has occurred if the contractual payment of the financial instrument has
been more than 90 days (inclusive) past due, unless the Group has reasonable and supportable
information to demonstrate that a more lagging default criterion is more appropriate.
- 17 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Financial assets - continued
10.1.2 Impairment - continued
10.1.2.3 Determination of ECL
The various types of financial assets that are calculated for ECL on an individual basis have credit
risk characteristics that are significantly different from those of other financial assets in the same
category. In cases where the ECL of an individually assessed financial asset cannot be evaluated
with reasonable cost, the Group categorises the receivables into different groups based on their
shared risk characteristics, and calculates the ECL for each group respectively. The basis for the
determination of grouping and the method of provision are as follows:
Group 1
Group 2
Group 3
Group 4
Group 5
Group 6
Group 7
Group 8

Accounts receivable ageing, taken initial recognition time as ageing
calculation start
Notes receivable - bank acceptances
Notes receivable - commercial acceptances
Receivables financing
Compensation receivable from suppliers
Guarantees (including deposits)
Other receivables
Amount due from subsidiaries

For accounts receivable, notes receivable and receivables financing resulting from transactions of
daily operations such as sales of goods and provision of services on grouping basis, the Group
considers the historical credit loss experience, current situation and forecasts of economic
conditions to measure the ECL based on exposure at default and lifetime ECL ratio.
For notes receivable, receivables financing not resulting from transactions of daily operation, other
receivables and long-term receivables in groups, the Group considers the historical credit loss
experience, current situation, and forecasts of economic conditions to measure the ECL based on
exposure at default and 12-month or lifetime ECL ratio.
Loss allowance (and reversal of loss allowance) are recognised in profit or loss. For debt
investments measured at FVTOCI, the Group recognises loss allowance (and reversal of loss
allowance) in profit or loss and adjusts other comprehensive income in the meanwhile.

- 18 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Financial assets - continued
10.1.3 Derecognition
The Group derecognises a financial asset if one of the following conditions is satisfied: (1) the
contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has
been transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (3) the financial asset has been transferred and the Group has not
retained control of the financial asset, although the Group neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset.
On derecognition of investments in other equity instruments, the difference between the carrying
amount and the sum of the consideration received and the accumulated changes in fair value
recognised directly in other comprehensive income, shall be transferred to retained earnings. On
derecognition of other financial assets, the difference between the carrying amount and the sum of
the consideration received and the accumulated changes recognised in other comprehensive income,
shall be recognised in profit or loss.
10.2 Financial liabilities
Financial liabilities are classified into financial liabilities at amortised cost and financial liabilities
at FVTPL at initial recognition.
The financial liabilities of the Group are mainly measured at amortised cost, including notes payable,
accounts payable, other payables, borrowings, bonds payable and long-term payables, etc. These
financial liabilities are measured at its fair value minus transaction costs at initial recognition and
subsequently measured using effective interest rate method. Financial liabilities with maturity
within one year (inclusive) are presented as current liabilities. Financial liabilities with maturity
more than one year but due within one year (inclusive) since the balance sheet date are presented
as non-current liabilities due within one year. Other financial liabilities are presented as non-current
liabilities.
A financial liability is derecognised or partly derecognised when the current obligation is
discharged or partly discharged. The difference between the carrying amount of the derecognised
part of the financial liability and the consideration paid is recognised in profit or loss.

- 19 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.3 Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is based on quoted market
prices at the balance sheet date. The fair value of a financial instrument that is not traded in an active
market is determined by using a valuation technique when it is applicable under current conditions
and there are enough available data and other information to support. Those inputs should be
consistent with the inputs that a market participant would use when pricing the asset or liability,
and should maximise the use of relevant observable inputs. When related observable inputs cannot
be acquired or are not feasible to be acquired, then unobservable inputs are used.
11. Inventories
11.1 Classification
Inventories include raw materials, turnover materials, finished goods, work in progress, consigned
processing materials and consumable biological assets, which are measured at the lower of cost and
net realisable value.
11.2 Valuation method of inventories upon delivery
Cost is determined using the first-in-first-out method or weighted average method. The Company
uses the individual valuation method to determine the cost of inventories that cannot be used as
substitutes and that are purchased or manufactured specifically for a specific project. The cost of
finished goods and work in progress comprise raw materials, direct labour and systematically
allocated production overhead based on the normal production capacity.
11.3 Basis for determining net realisable value of inventories and provision methods for decline in
value of inventories
Provision for decline in the value of inventories is determined at the excess amount of the carrying
amounts of the inventories over their net realisable value. Net realisable value is determined based
on the estimated selling price in the ordinary course of business, less the estimated costs to
completion and estimated costs necessary to make the sale and related taxes. For inventories that
are produced and sold in the same region and have the same or similar use, the Group makes a
consolidated provision for inventory valuation. For finished goods, the Group makes provision for
decline in value of inventories based on factors such as the period of near expiration, state of storage,
historical sales discounts and expected future sales.
11.4 The Group adopts the perpetual inventory system.

- 20 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Inventories - continued
11.5 Amortisation method of turnover materials
Turnover materials include low value consumables and packaging materials. Low value
consumables and packaging materials are amortised using the immediate write-off method.
12. Long-term equity investments
Long-term equity investments comprise the Company's long-term equity investments in its
subsidiaries, and the Group's long-term equity investments in its joint ventures and associates.
Subsidiaries are the investees over which the Company is able to exercise control. A joint venture
is a joint arrangement which is structured through a separate vehicle over which the Group has joint
control together with other parties and only has rights to the net assets of the arrangement based on
legal forms, contractual terms and other facts and circumstances; An associate is the investee over
which the Group has significant influence on its financial and operating policy decisions.
Investments in subsidiaries are presented in the Company's financial statements using the cost
method and are adjusted to the equity method when preparing the consolidated financial statements.
Investments in joint ventures and associates are accounted for using the equity method.
12.1 Determination of investment cost
For long-term equity investment acquired through a business combination involving enterprises
under common control, the investment cost is the ultimate controlling party's share of the carrying
amount of owners' equity of the merged party at the combination date; For long-term equity
investments acquired through a business combination not involving enterprises under common
control, the investment cost shall be the cost of combination.
For the long-term equity investments acquired through other means other than business
combinations and long-term equity investments acquired through cash payments, the initial
investment cost is the actually paid purchase price; Long-term equity investments acquired through
the issuance of securities are recognised at initial investment cost based on the fair value of the
securities issued.
12.2 Subsequent measurement and recognition of profit or loss
Long-term equity investments accounted for using the cost method are measured at initial
investment cost, and cash dividends or profit distributions declared by the investees are recognised
as investment income in profit or loss.

- 21 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
12. Long-term equity investments - continued
12.2 Subsequent measurement and recognition of profit or loss - continued
For long-term equity investments accounted for using the equity method, where the initial
investment cost of a long-term equity investment exceeds the Group's share of the fair value of the
investee's identifiable net assets at the acquisition date, the long-term equity investment is initially
measured at that cost; where the initial investment cost is less than the Group's share of the fair
value of the investee's identifiable net assets at the acquisition date, the difference is included in
profit or loss for the current period and the cost of the long-term equity investment is adjusted
upwards accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the
investment income or loss according to its share of net profit or loss of the investee. The Group
discontinues recognizing its share of net loss of an investee after the carrying amount of the longterm equity investment together with any long-term interests that, in substance, form part of the
investor's net investment in the investee are reduced to zero. However, if the Group has obligations
for additional losses and the criteria with respect to recognition of provisions are satisfied, the Group
continues recognizing the expected losses. For changes in owners' equity of the investee other than
those arising from its net profit or loss, other comprehensive income, and profit distribution, the
Group records its proportionate share directly into capital reserve. The carrying amount of the
investment is reduced by the Group's share of the profit distribution or cash dividends declared by
an investee.
The unrealised profit or loss arising from the intra-group transactions amongst the Group and its
investees is eliminated in proportion to the Group's equity interests in the investees, and then based
on which the investment income or loss of the Company's financial statements is recognised. When
preparing the consolidated financial statements, for unrealised gains or losses attributable to the
Group on downstream transactions from the Group to investees on investment or sale of assets, the
Group eliminates the transactions on the Company's financial statements, eliminates the unrealised
revenues and costs or gains or losses on disposal of assets attributable to the Group, and adjust the
investment income accordingly. For unrealised gains or losses attributable to the Group on upstream
transactions from investees to the Group on investment or sale of assets, the Group eliminates the
transactions on the Company's financial statements, eliminates the unrealised gains or losses
attributable to the Group in the carrying amount of the related assets, and adjust the carrying amount
of long-term equity investments accordingly. For the loss on the intra-group transactions amongst
the Group and its investees attributable to asset impairment, any unrealised loss is not eliminated.
12.3 Basis for determining existence of control, joint control, and significant influence over
investees
Control is the power to govern an investee, so as to obtain variable returns from its involvement
with the investee, and has the ability to affect those returns through its power over the investee.
- 22 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
12. Long-term equity investments - continued
12.3 Basis for determining existence of control, joint control, and significant influence over
investees - continued
Joint control is a contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control
Significant influence is the power to participate in the financial and operating policy decisions of
the investee, but is not control or joint control over those policies.
12.4 Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries, joint ventures and associates
are reduced to the recoverable amounts when the recoverable amounts are below their carrying
amounts (Note (II) 20).
12.5 Disposal of long-term equity investments
When the Group ceases the use of the equity method, the Group shall account for all amounts
previously recognised in other comprehensive income in relation to that investment on the same
basis as would have been required if the investee had directly disposed of the related assets or
liabilities. Any movements of owner's equity are transferred to investment income in the period
with the exception of net profit or loss, other comprehensive income and retained earning shared
by investees when the equity method is terminated. For a portion of long-term equity investment
accounted for using the equity method by the Group, the relevant other comprehensive income
under equity method previously is determined as if the relevant assets or liabilities are derecognised
directly by the Group if the equity method is applied to the residual part of the equity investments
on a pro-rata basis according to the proportion of disposal; other owner's equity with the exception
of net profit or loss, other comprehensive income and retained earning shared by investees is
transferred to investment income in the current period on a pro-rata basis.
12.6 Partial disposal of a subsidiary or other reason resulting in loss of control of a subsidiary
On disposal of a long-term equity investment in the Group's separate financial statements, the
difference between the proceeds actually received and its carrying amount is recognised in profit or
loss for the current period; meanwhile, for the remaining equity investment, it shall be recognised
as a long-term equity investment at its carrying amount or other relevant financial assets at its fair
value. If the remaining equity after disposal can exercise joint control or have a significant influence
over the original subsidiary, it shall be accounted for in accordance with the relevant provisions of
the transfer of the cost method to the equity method.

- 23 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
13. Investment properties
Investment properties, including land use rights and buildings that have already been leased out,
and land use rights that are held for transfer upon capital appreciation, are initially recognised at
cost. Subsequent expenditures incurred in relation to an investment property are included in the cost
of the investment property when it is probable that the associated economic benefits will flow to
the Group and their costs can be reliably measured; otherwise, the expenditures are recognised in
profit or loss for the period in which they are incurred.
The Group applies the cost model for subsequent measurement of investment properties. For
buildings and land use rights, depreciation or amortisation is made based on their estimated useful
lives and net residual value rates. As for investment properties measured by cost model,
depreciation policy on similar fixed assets is applicable to buildings for lease purpose, and
amortisation policy on similar intangible assets is applicable to land use rights for lease purpose.
When an investment property is transferred to owner-occupied property, it is reclassified to a fixed
asset or intangible asset at the date of the transfer. When an owner-occupied property is transferred
out for earning rentals or for capital appreciation, the fixed asset or intangible asset is transferred to
investment properties at the date of the transfer. The carrying amount before and after transfer is
the same at the date of the transfer.
The estimated useful lives and estimated net residual values of investment properties and
depreciation (amortisation) methods applied to the investment properties are reviewed, and adjusted
as appropriate, at each balance sheet date.
An investment property is derecognised on disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from its disposal. The net amount
of proceeds from sale, transfer, retirement or damage of an investment property after its carrying
amount and related taxes and expenses is recognised in profit or loss for the current period.
The carrying amount of investment properties shall be reduced to the recoverable amount if the
recoverable amount is lower than the carrying amount. (Note (II)20).
14. Fixed assets
14.1 Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, transportation vehicles, electronic
equipment and other equipment.

- 24 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
14. Fixed assets - continued
14.1 Recognition and initial measurement of fixed assets - continued
Fixed assets are recognised when the economic benefits associated with them are likely to flow into
the Group and their costs can be measured reliably. Fixed assets purchased or constructed by the
Group are initially measured at cost at the time of acquisition. Fixed assets injected by the stateowned shareholders during the restructuring are initially recorded at the valuated amount approved
by the relevant authorities managing state-owned assets.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when
it is probable that the associated economic benefits will flow to the Group and the related cost can
be reliably measured. The carrying amount of the replaced part is derecognised. All the other
subsequent expenditures are recognised in profit or loss for the period in which they are incurred.
14.2 Depreciation method of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their
estimated residual values over their estimated useful lives. For the fixed assets that have been
provided for impairment loss, the related depreciation charge is prospectively determined based
upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated net residual values and the annual depreciation rates of
fixed assets are as follows:
Estimated useful
lives (year(s))
Buildings
Machinery and equipment
Transportation vehicles
Electronic equipment
Other equipment

5-50
4-20
4-14
3-14
2-20

Estimated net
residual value rates
(%)
2-10
2-10
2-10
2-10
2-10

Annual depreciation
rates (%)
1.80-19.60
4.50-24.50
6.43-24.50
6.43-32.67
4.50-49.00

The estimated useful lives and the estimated net residual values of fixed assets and the depreciation
method applied to the assets are reviewed, and adjusted as appropriate at each year-end.
14.3 The carrying amount of the fixed assets shall be reduced to the recoverable amount if the
recoverable amount is lower than the carrying amount (Note (II)20).

- 25 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
14. Fixed assets - continued
14.4 Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are expected from
its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage
of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or
loss for the current period.
15. Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,
installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to
bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed
assets when the assets are ready for their intended use, and depreciation is charged starting from the
following month. When the recoverable amount of construction in progress is lower than its
carrying amount, the carrying amount is reduced to the recoverable amount (Note (II)20).
16. Borrowing costs
The borrowing costs that are directly attributable to acquisition and construction of an asset that
needs a substantially long period of time for its intended use commence to be capitalised and
recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have
been incurred, and the activities relating to the acquisition and construction that are necessary to
prepare the asset for its intended use have commenced. Other borrowing costs are expensed in the
period in which they are incurred.
The capitalisation of borrowing costs ceases when the asset under acquisition or construction
becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in
profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods
in which the acquisition or construction of an asset is interrupted abnormally, and the interruption
lasts for more than 3 months, until the acquisition or construction is resumed.
If the borrowing is specific to the qualifying asset, the borrowing costs eligible for capitalisation
are the actual cost during the period of construction less any investment income or interest income
on the temporary investment of the borrowings.
The amount of borrowing costs eligible for capitalisation, in cases where the funds are borrowed
generally, should be determined based on the weighted average of the expenditures incurred in
obtaining a qualifying asset. The costs incurred should first be allocated to the specific borrowings.
The capitalisation rate relating to general borrowings should be the weighted average effective
interest rate applicable to the entity's borrowings. The effective interest rate is the interest rate used
when the future cash flows of the borrowings over the estimated remaining deposit period or a
shorter applicable period are discounted into the initial recognised amount of the borrowings.
- 26 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
17. Biological assets
Biological assets comprise bearer biological assets and consumable biological assets. A biological
asset is initially measured at cost.
Expenditures incurred are included in the cost of the bearer biological assets before achieving the
expected operation purpose. Subsequent expenditures such as maintenance or administration cost
after achieving the expected operation purpose are recognised in profit or loss for the period in
which they are incurred.
The actual expense of the consumable biological assets before closure constitutes the cost of the
consumable biological assets, and the subsequent expenses such as management and protection
after closure shall be recognised in profit or loss for the period.
Bearer biological assets are depreciated using the straight-line method over their estimated useful
lives after achieving the expected operation purpose. The estimated useful life and the estimated
net residual value of a bearer biological asset and the depreciation method applied to the asset are
reviewed, and adjusted as appropriate if the useful life and the estimated net residual value differ
from the previous estimates, or there are significant changes in the pattern in which the asset's
economic benefits are expected to be realised, the Group will adjust the useful life, estimated net
residual value, or the depreciation method as changes in accounting estimate.
At the end of each reporting period, bearer biological assets and consumable biological assets are
reviewed and the carrying amount shall be reduced to the recoverable amount or net realisable value
if the recoverable amount of bearer biological assets or the net realisable value of the consumable
biological assets is lower than the carrying amount. The reduction is an impairment loss which is
recognised in profit or loss. Once the provision for bearer biological assets impairment is made, it
will not be reversed; when the factor of depreciation of consumable biological asset disappears, it
shall be reversed within the amount of provision for depreciation originally withdrawn, and the
reversal amount shall be recognised in profit or loss for the period.
18. Intangible assets
Intangible assets include land use rights, business network, brands and trademarks, know-how,
patent rights, software and others, and are measured at cost method. Intangible assets injected by
the state-owned shareholders during the restructuring were initially recorded at the valuated amount
approved by the relevant authorities managing state-owned assets.
18.1 Land use rights
Land use rights are amortised on the straight-line basis over the useful lives of 30-50 years. If the
acquisition costs of the land use rights and the buildings located thereon cannot be reasonably
allocated between the land use rights and the buildings, all of the acquisition costs are recognised
as fixed assets.
- 27 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. Intangible assets - continued
18.2 Business network
Business network acquired in a business combination are recognised at fair value at the acquisition
date. Business network is amortised using the straight-line method over its estimated useful lives of
5-10 years.
18.3 Brands and trademarks
Brands acquired in a business combination are recognised at fair value at the acquisition date.
Brands have indefinite useful life as there is no foreseeable limit to the period over which they are
expected to generate net cash inflows. Brands with indefinite useful lives are not amortised and are
assessed for impairment on an annual basis. Trademarks are amortised using the straight-line
method over their estimated useful lives of 10-20 years.
18.4 Know-how
Know-how is amortised using the straight-line method over its estimated useful lives of 2-20 years.
18.5 Patent rights
Patent rights are amortised using the straight-line method over its protection period of 10-20 years
as stipulated by law.
18.6 Software
Software is amortised using the straight-line method over its estimated useful lives of 2-10 years.
18.7 Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method is
performed at each year-end, with adjustment made as appropriate.
The useful life of an intangible asset that is not being amortised shall be reviewed each period to
determine whether events and circumstances continue to support an indefinite useful life assessment
for that asset.

- 28 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. Intangible assets - continued
18.8 Research and development
The Group's research and development expenditures mainly include expenditures on materials
consumed for the implementation of the Group's research and development activities, salaries of
employees in the research and development department, depreciation and amortisation of assets
used in research and development, such as equipment and software, research and development
inspection fees, outsourcing of licensing rights and research and development technical service fees.
Expenditure on the research phase is recognised in profit or loss in the period in which it is incurred.
Expenditure on the development phase is capitalised only if all of the following conditions are
satisfied:






it is technically feasible to complete the intangible asset so that it will be available for use
or sale;
the management has the intention to complete the intangible asset and use or sell it;
it can be demonstrated how the intangible asset will generate economic benefits;
there are adequate technical, financial and other resources to complete the development and
the ability to use or sell the intangible asset; and
the expenditure attributable to the intangible asset during its development phase can be
reliably measured.

Other development expenditures that do not meet the conditions above are recognised in profit or
loss in the period in which they are incurred. Development costs previously recognised as expenses
are not recognised as an asset in a subsequent period. Capitalised expenditure on the development
phase is presented as development costs in the balance sheet and transferred to intangible assets at
the date that the asset is ready for its intended use.
18.9 Impairment of intangible assets
When the recoverable amount of an intangible asset is lower than its carrying amount, the carrying
amount is reduced to the recoverable amount (Note (II)20).
19. Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to right-of-use assets, and
other expenditures that have been incurred but should be recognised as expenses over more than
one year in the current year and subsequent periods. Long-term prepaid expenses are amortised on
the straight-line basis over the expected beneficial period and are presented at actual expenditure
net of accumulated amortisation.

- 29 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
20. Impairment of long-term assets
Fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives,
bearer biological assets carried at cost model, investment properties carried at cost model and longterm equity investments in subsidiaries, joint ventures and associates are tested for impairment if
there is any indication that the assets may be impaired at the balance sheet date; intangible assets
that are not yet available for their intended use are tested for impairment at least annually,
irrespective of whether there is any indication of impairment. If the result of the impairment test
indicates that the recoverable amount of an asset is less than its carrying amount, a provision for
impairment and an impairment loss are recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and the present value of the future cash flows expected to be derived from
the asset. Provision for asset impairment is determined and recognised on the individual asset basis.
If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount
of a group of assets to which the asset belongs is determined. A group of assets is the smallest group
of assets that is able to generate independent cash inflows. For intangible assets with uncertain
useful lives, the useful lives of intangible assets shall be reviewed at least annually. If there is any
indication that the useful lives of the intangible assets are finite, the intangible assets shall be
amortised over its estimated useful lives in the future periods.
Goodwill and intangible assets with indefinite lives that is separately presented in the financial
statements is tested at least annually for impairment, irrespective of whether there is any indication
that it may be impaired. In conducting the test, the carrying value of goodwill is allocated to the
related asset group or groups of asset groups which are expected to benefit from the synergies of
the business combination. If the result of the test indicates that the recoverable amount of an asset
group or a group of asset groups, including the allocated goodwill, is lower than its carrying amount,
the corresponding impairment loss is recognised. The impairment loss is first deducted from the
carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then
deducted from the carrying amounts of other assets within the asset group or group of asset groups
in proportion to the carrying amounts of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered
in the subsequent periods.
21. Employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group in
exchange for service rendered by employees or for termination of employment relationship, which
include short-term employee benefits, post-employment benefits and termination benefits, etc.

- 30 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Employee benefits - continued
21.1 Short-term employee benefits
Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff
welfare, medical insurance, work injury insurance, maternity insurance, housing funds, union
running costs and employee education costs and others. The short-term employee benefits actually
occurred are recognised as a liability in the accounting period in which the service is rendered by
the employees, with a corresponding charge to the profit or loss for the current period or the cost of
relevant assets. Non-monetary benefits are measured at fair value.
21.2 Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or defined
benefit plans. Defined contribution plans are post-employment benefit plans under which the Group
pays fixed contributions into a separate fund and will have no obligation to pay further contributions;
and defined benefit plans are post-employment benefit plans other than defined contribution plans.
During the reporting period, the Group's post-employment benefits mainly include the basic
pensions and unemployment insurance, both of which belong to defined contribution plans.
21.2.1 Basic pensions
The Group's employees participate in the basic pension plan set up and administered by local
authorities of Ministry of Human Resource and Social Security. Monthly payments of basic
pensions are calculated according to the bases and percentage prescribed by the relevant local
authorities. When employees retire, the relevant local authorities are obliged to pay the basic
pensions to them. The amounts based on the above calculations are recognised as liabilities in the
accounting period in which the service has been rendered by the employees, with a corresponding
charge to profit or loss for the current period or the cost of relevant assets.
21.3 Termination benefits
The Group provides compensation for terminating the employment relationship with employees
before the end of the employment contracts or as an offer to encourage employees to accept
voluntary redundancy before the end of the employment contracts. The Group recognises a liability
arising from compensation for termination of the employment relationship with employees, with a
corresponding charge to profit or loss for the current period at the earlier of the following dates: 1)
when the Group cannot unilaterally withdraw an employment termination plan or a curtailment
proposal; 2) when the Group recognises costs or expenses for a restructuring that involves the
payment of termination benefits.

- 31 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Employee benefits - continued
21.3 Termination benefits - continued
21.3.1 Early retirement benefits
The Group offers early retirement benefits to those employees who accept early retirement
arrangements. The early retirement benefits refer to the salaries and social security contributions to
be paid to and for the employees who accept voluntary retirement before the normal retirement date
prescribed by the State, as approved by the management. The Group pays early retirement benefits
to those early retired employees from the early retirement date until the normal retirement date. The
Group accounts for the early retirement benefits in accordance with the treatment for termination
benefits, in which the salaries and social security contributions to be paid to and for the early retired
employees from the off-duty date to the normal retirement date are recognised as liabilities with a
corresponding charge to the profit or loss for the current period. The differences arising from the
changes in the respective actuarial assumptions of the early retirement benefits and the adjustments
of benefit standards are recognised in profit or loss in the period in which they occur.
The termination benefits expected to be settled within one year since the balance sheet date are
classified as employee benefits payable.
22. Profit distribution
Proposed cash profit distribution is recognised as a liability in the period in which it is approved by
the shareholders' meeting.
23. Provisions
Provisions for product warranties, onerous contracts and etc., are recognised when the Group has a
present obligation, it is probable that an outflow of economic benefits will be required to settle the
obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related
present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time
value of money, are taken into account as a whole in reaching the best estimate of a provision.
Where the effect of the time value of money is material, the best estimate is determined by
discounting the related future cash outflows. The increase in the discounted amount of the provision
arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the
best estimate for the current period.
Loss allowance for financial guarantee contracts and allowance for loan commitments as
determined based on the ECL model are recognised as provisions.
The provisions expected to be settled within one year since the balance sheet date are classified as
current liabilities.
- 32 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
24. Revenue recognition
Sales are recognised when control of goods or provision of services has been transferred to
customers. The amount of revenue is determined in accordance with the consideration that the
Group is expected to be entitled.
24.1 Sales of goods
Revenue is recognised when the products have been shipped to the specific location in accordance
with the sales contract and the customers have inspected and accepted the products. The sales are
made with a credit term varied by customers' credit risk characteristics, which is consistent with
market practices. The Group's obligation to transfer goods to customers for consideration received
or receivable from customers is presented as contract liabilities in the balance sheet.
Any consideration payable to customers with no distinct good or service received from those
customers, the consideration is recognised as a reduction of the revenue.
24.2 Rendering services
Revenue from providing services to external parties is recognised over a period of time based on
the stage of completion of such service, which is determined by the proportion of costs incurred to
the estimated total costs. As at the balance sheet date, the Group reassesses the stage of completion
so as to better reflect the changes in obligation performance.
Revenue is recognised by the proportion that costs incurred to date bear to the estimated total costs
of the transaction. Trade receivables are recognised when the Group has an unconditional right to
collection. For the remaining part of the services, a contract asset is recognised. The Group
recognises the loss allowance using the ECL model (Note (II)10) for its accounts receivable and
contract assets. If the payments received or receivable exceed the services rendered, a contract
liability is recognised for the excess. Contract assets and contract liabilities under the same contract
are presented on a net basis.
25. Government grants
Government grants refer to the monetary or non-monetary assets obtained by the Group from the
government at no consideration, including tax return, financial subsidy and etc., excluding capital
invested in the Group by the government as a business owner.
Government grants are recognised when the grants can be received, and the Group can comply with
all attached conditions. If a government grant is a monetary asset, it will be measured at the amount
received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair
value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount.

- 33 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Government grants - continued
Government grants related to assets refer to government grants which are obtained by the Group
for the purposes of purchase, construction or acquisition of the long-term assets. Government grants
related to income refer to the government grants other than those related to assets.
Government grants related to assets are recorded as deferred income and recognised in profit or loss
on a systemic basis over the useful lives of the assets. Government grants related to income that
compensate the future costs, expenses or losses are recorded as deferred income and recognised in
profit or loss in reporting the related expenses; government grants related to income that compensate
the incurred costs, expenses or losses are recognised in profit or loss directly in current period. The
Group applies the presentation method consistently to the similar government grants in the financial
statements.
Government grants that are related to ordinary activities are included in operating profit, otherwise,
they are recorded in non-operating income or expenses.
For the policy loans with favourable interest rates, the Group records the loans at the actual amounts
and calculates the borrowing expenses by loan principals and the favourable interest rates. The
fiscal interest discounts directly received by the Group offset the relevant borrowing expenses.
26. Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the
differences arising between the tax bases of assets and liabilities and their carrying amounts
(temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried
forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No
deferred tax liability is recognised for a temporary difference arising from the initial recognition of
goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences
resulting from the initial recognition of assets or liabilities due to a transaction other than a business
combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the
balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that
are expected to apply to the period when the asset is realised, or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and
tax credits to the extent that it is probable that taxable profit will be available in the future against
which the deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in
subsidiaries, associates and joint ventures, except where the Group is able to control the timing of
reversal of the temporary difference, and it is probable that the temporary difference will not reverse
in the foreseeable future. When it is probable that the temporary differences arising from
investments in subsidiaries, associates and joint ventures will be reversed in the foreseeable future
and that the taxable profit will be available in the future against which the temporary differences
can be utilised, the corresponding deferred tax assets are recognised.
- 34 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
26. Deferred tax assets and deferred tax liabilities - continued
Deferred tax assets and liabilities are offset when:



the deferred taxes are related to the same taxpayer within the Group and the same taxation
authority; and,
that taxpayer within the Group has a legally enforceable right to offset current tax assets
against current tax liabilities.

27. Leases
A lease is a contract whereby the lessor conveys to the lessee in return for a consideration the right
to use an asset for an agreed period of time.
27.1 The Group as the lessee
At the commencement date, the Group shall recognise the right-of-use asset and measure the lease
liability at the present value of the lease payments during the lease term that are not paid at that date.
Lease payments include fixed payments, the exercise price of a purchase option if the lessee is
reasonably certain to exercise that option, and payments of penalties for terminating the lease if the
lessee exercises an option to terminate the lease. Rents that are variable based on the revenue are
not included in the lease payments and are recognised in the profit or loss of the period when the
revenue is earned. Lease liabilities that are due within one year (inclusive) as from the balance sheet
date are presented as non-current liabilities due within one year.
Right-of-use assets of the Group include buildings, machinery and equipment, etc. Right-of-use
assets are measured initially at cost which consists of the amount of the initial measurement of lease
liabilities, any lease payments made at or before the commencement date and any initial direct costs,
less any lease incentives received. If there is reasonable certainty that the Group will obtain
ownership of the underlying asset by the end of the lease term, the asset is depreciated over its
remaining useful life; otherwise, the asset is depreciated over the shorter of the lease term and its
remaining useful life. The carrying amount of the right-of-use asset is reduced to the recoverable
amount when the recoverable amount is lower than the carrying amount.
For short-term leases with a term of twelve months or less and leases of an individual asset (when
new) of low value, the Group may, instead of recognising right-of-use assets and lease liabilities,
recognise on a straight-line basis over the period of the lease, and either capitalise as part of the cost
of related assets, or charge as an expense for the current period.
The Group shall account for a lease modification as a separate lease if both: (1) the modification
increases the scope of the lease by adding the right to use of one or more underlying assets; (2) the
consideration for the lease increases by an amount commensurate with the stand-alone price for the
increase in scope and any appropriate adjustments to that stand-alone price to reflect the
circumstances of the contract.
- 35 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Leases - continued
27.1 The Group as the lessee - continued
For a lease modification that is not accounted for as a separate lease, the Group shall redetermine
the lease term at the effective date of the lease modification and remeasure the lease liability by
discounting the revised lease payments using a revised discount rate, except that the contract
changes directly resulting from conditions permitted by the Ministry of Finance are accounted for
by applying the practical expedient. For a lease modification which decreases the scope of the lease
or shortens the lease term, the Group decreases the carrying amount of the right-of-use asset and
recognises in profit or loss any gain or loss relating to the partial or full termination of the lease.
For other leases which lead to the remeasurement of lease liabilities, the Group correspondingly
adjusts the carrying amount of the right-of-use asset.
27.2 The Group as the lessor
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a
finance lease. An operating lease is a lease other than a finance lease.
When the Group's rents its self-owned buildings, rental income from an operating lease is
recognised on a straight-line basis over the period of the lease. Rental income that are variable based
on the revenue of the lessee is recognised when the revenue is earned.
27.2.1 Operating leases
When a lease is changed, the Group regards it as a new lease from the effective date of the change
and treats the advance or receivable lease payments related to the lease before the charge as the
receipts for the new lease.
27.2.2 Finance lease
At the commencement date, finance lease receivable is recognised as long-term receivables and the
relevant asset is derecognised. Finance lease receivable due within one year (inclusive) as from the
balance sheet date are presented as non-current assets due within one year.
28. Debt restructuring
Debt restructuring refers to a transaction where the terms of debt repayment, such as timing, amount,
or method, are renegotiated through an agreement between the creditor and debtor or a court ruling
without changing the counterparty to the transaction.

- 36 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Debt restructuring - continued
28.1 The Group as creditor
For debtors to offset the debt of the Group using non-financial assets such as inventory and fixed
assets, the initial cost of the acquired non-financial assets is determined based on the fair value of
the abandoned claims, as well as other costs directly attributable to the asset that occur before it
reaches its current location and condition or its intended use, including taxes and other relevant
expenses. The difference between the fair value and the carrying amount of the claims abandoned
by the Group is recognised in profit or loss for the period.
In addition, when debt restructuring is carried out by modifying other terms, resulting in the
derecognition of the original claim, the Group initially measures the restructured claim at fair value
in accordance with the modified terms. The difference between the amount recognised for the
restructured claim and the carrying amount of the original claim on the derecognition date is
recognised in profit or loss for the period. If the modification of other terms does not lead to the
derecognition of the original claim, the original claim continues to be measured subsequently in its
original classification, and any gains or losses arising from the modification are recognised in profit
or loss for the period.
28.2 The Group as debtor
If the Group as debtor conducts debt restructuring through asset repayment of debts, it shall be
derecognised when the relevant assets and settled debts meet the derecognition conditions. The
difference between the carrying amount of settled debts and the carrying amount of transferred
assets shall be recognised in profit or loss for the period.
In addition, when debt restructuring is conducted by modifying other terms, leading to the
derecognition of the original debt, the Group initially measures the restructured debt at fair value in
accordance with the modified terms. The difference between the amount recognised for the
restructured debt and the carrying amount of the original debt on the derecognition date is
recognised in the profit or loss for the period. If the modification of other terms does not result in
the derecognition of the original debt, the original debt continues to be measured subsequently in
its original classification, and any gains or losses arising from the modification are recognised in
profit or loss for the period.
29. Share-based payments
Share-based payments are categorised into equity-settled share-based payment transactions and
cash-settled share-based payment transactions. The share-based payment transactions implemented
by the Group is accounted for as equity-settled.

- 37 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Share-based payments - continued
The equity-settled share-based payments in exchange for employee services shall be measured at
the fair value of the equity instruments granted to the employees. Where the equity-settled sharebased payments are exercisable immediately after the grant is completed, the payments shall be
recognised in profit or loss for the current period at the fair value of the equity instruments at the
grant date, with capital reserve increased accordingly; where the equity-settled share-based
payments are exercisable after the service in the waiting period is completed or specified
performance conditions are met, the service obtained in the current period shall be recognised in
profit or loss for the current period at the fair value of the equity instruments at the grant date based
on the best estimate on the quantity of exercisable equity instruments made by the Group in
accordance with the latest changes in the number of exercisable employees, satisfaction of specified
performance conditions and other subsequent information at each balance sheet date within the
waiting period.
Where the equity-settled share-based payments cannot be exercised in the end, its costs or expenses
shall not be recognised by the Group unless that the payments are exercisable under the market
conditions or non-exercisable conditions. In this regard, whether the market conditions or nonexercisable conditions are satisfied or not, the payments are deemed to be exercisable only when
the non-market conditions among all of the exercisable conditions are satisfied.
When the Group modifies the terms of the share-based payment plan, if the modification increases
the fair value of the granted equity instruments, the Group shall recognise the increase in services
received based on the difference between the fair value of the equity instruments before and after
the modification on the modification date. If the Group revises the exercisable conditions in a
manner favourable to employees, the Group shall account for the payment according to the revised
exercisable conditions; if the Group revises the exercisable conditions in a manner unfavourable to
employees, the Group shall not consider that in the accounting, unless the Group cancels part or all
of the granted equity instruments. If the Group cancels the granted equity instruments, the payments
shall be accelerated for exercise on the cancellation date, and the amount that should have been
recognised during the remaining waiting period shall be immediately included in profit or loss for
the current period, and capital reserve shall be also recognised.
30. Held for sale and discontinued operations
A non-current asset or a disposal group is classified as held for sale when all of the following
conditions are satisfied: (1) the non-current asset or the disposal group is available for immediate
sale in its present condition subject only to terms that are usual and customary for sales of such noncurrent asset or disposal group; (2) the Group has entered a legally enforceable sales agreement
with other party and obtained relevant approval, and the sales transaction is expected to be
completed within one year.

- 38 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
30. Held for sale and discontinued operations - continued
Non-current assets (except for financial assets, investment properties measured at fair value and
deferred tax assets) that meet the recognition criteria for held for sale are recognised at the amount
equal to the lower of the fair value less costs to sell and the carrying amount. Any excess of the
original carrying amount over the fair value less costs to sell is recognised as asset impairment
losses.
Such non-current assets and assets and liabilities included in disposal groups classified as held for
sale are classified as current assets and current liabilities respectively and are separately presented
in the balance sheet.
A discontinued operation is a component of the Group that either has been disposed of or has been
classified as held for sale, and is separately identifiable and satisfies one of the following conditions:
(1) it represents a separate major line of business or geographical area of operations; (2) it is part of
a single coordinated plan to dispose of a separate major line of business or geographical area of
operations; and (3) it is a subsidiary acquired exclusively with a view to resale.
The net profit from discontinued operations in the income statement includes operating profit or
loss and disposal gains or losses of discontinued operations.
31. Segment information
The Group determines operating segments based on internal organisational structure, management
requirements and internal reporting systems, and determines reporting segments and discloses
segment information on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1)
the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose
operating results are regularly reviewed by the Group's management to make decisions about
resources to be allocated to the segment and to assess its performance, and (3) for which the
information on financial position, operating results and cash flows is available to the Group. Two
or more operating segments that have similar economic characteristics and satisfy certain conditions
can be aggregated into one single operating segment.
32. Significant accounting estimates and judgements
The Group continually evaluates the significant accounting estimates and key judgements applied
based on historical experience and other factors, including expectations of future events that are
believed to be reasonable.

- 39 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Significant accounting estimates and judgements - continued
32.1 Significant accounting estimates and key assumptions
The significant accounting estimates and key assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next accounting year
are outlined below:
32.1.1 Estimated useful lives and estimated net residual values of fixed assets
The management of the Group reviews the estimated useful lives, estimated net residual values and
depreciation methods of fixed assets at each financial year-end. The estimated useful lives are
determined by reference to the Group's business model, asset management policy and expected
lifespan of the assets. The estimated useful lives could change significantly as a result of certain
factors. Management will increase the depreciation expense where useful lives are less than
previously estimated lives, or it will write down technically obsolete or non-strategic assets that
have been abandoned or sold. The estimated residual values are determined based on all relevant
factors (including but not limited to by reference to the industry practice and estimated residual
values).
The depreciation expense will change where the estimated useful lives or estimated residual values
of the assets are different from the previous estimates.
32.1.2 Estimated useful lives of business network
The Group needs to determine the estimated useful lives and consequently the related amortisation
charges for its business network. These estimates are based on the historical experience of the actual
useful lives of business network of similar nature and functions. Management will increase the
amortisation charges where useful lives are less than previously estimated lives, which may also
result in impairment of intangible assets. Actual economic lives may differ from estimated useful
lives.
The amortisation charges will change where the estimated useful lives of the intangible assets are
different from the previous estimates.
32.1.3 Accounting estimates on impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount
of asset groups or groups of asset groups is the higher of fair value less the cost of disposal and the
present value of the future cash flows expected to be derived from them. These calculations require
use of accounting estimates (Note (IV)22). There are uncertainties in the following parameters when
the Group determines the recoverable amount based on the present value of the expected future cash
flows.
- 40 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Significant accounting estimates and judgements - continued
32.1 Significant accounting estimates and key assumptions - continued
32.1.3 Accounting estimates on impairment of goodwill - continued
If management revises the growth rate that is used in the calculation of the future cash flows of
asset groups or groups of asset groups, and the revised growth rate is lower than the one currently
used, the Group may need to recognise further impairment against goodwill.
If management revises the gross margin that is used in the calculation of the future cash flows of
asset groups or groups of asset groups, and the revised gross margin is lower than the one currently
used, the Group may need to recognise further impairment against goodwill.
If management revises the pre-tax discount rate applied to the discounted cash flows, and the revised
pre-tax discount rate is higher than the one currently applied, the Group may need to recognise
further impairment against goodwill.
If the actual revenue growth rate and gross margin is higher or the pre-tax discount rate is lower
than management's estimates, the impairment loss of goodwill previously recognised is not allowed
to be reversed by the Group.
32.1.4 Net realisable value of inventories
Net realisable value of inventories is the estimated selling price in the ordinary course of business,
less estimated costs to completion, selling expense and related tax. For inventories with expiration
management, management determined the provision for decline in value of inventories based on
the level of inventories close to expiration date taking into consideration of good return arrangement
with suppliers and estimated probability of selling. These estimates are based on the current market
condition and the historical experience of manufacturing and selling products of similar nature. It
could change significantly as a result of technical innovations, changes in customer taste and
competitor actions in response to severe industry cycle. Management reassesses these estimates at
each balance sheet date.
32.1.5 Measurement of ECL
The Group determines ECL based on assumptions about risk of default and ECL rates. The Group
determines the ECL rates based on the probability of default and default loss rate. In determining
the ECL rates, the Group uses data such as internal historical credit loss experience, and adjusts the
historical data based on current condition and forward-looking information.

- 41 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Significant accounting estimates and judgements - continued
32.1 Significant accounting estimates and key assumptions - continued
32.1.5 Measurement of ECL - continued
When considering forward-looking information, the Group takes into account different
macroeconomic scenarios. The Group regularly monitors and reviews important macroeconomic
assumptions and parameters related to the calculation of ECL, including the risk of economic
downturn, external market environment, technological environment, Gross Domestic Product
("GDP") and Consumer Price Index ("CPI"), etc. The key macroeconomic parameters are set
differently in favourable, benchmark and unfavourable economic scenario. For the mostly used
parameter GDP, are 5.00%, 4.60% and 4.00% respectively (for the period from 1 January 2025 to
30 June 2025: 5.20%, 4.50% and 3.40%). The Group monitors and reviews assumptions related to
the calculation of ECL on a regular basis. For the period from 1 January 2026 to 30 June 2026, the
Group had considered the uncertainties arising from different macroeconomic scenarios and
updated relevant assumptions and parameters accordingly.
32.1.6 Income tax and deferred income tax
The Group is subject to income taxes in numerous jurisdictions. In the normal course of operations,
the ultimate tax determination is uncertain for some transactions and events. The Group needs to
make significant judgements when calculating the income tax expenses in numerous jurisdictions.
Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax expenses and deferred tax expenses in the
period in which such determination is made.
As stated in Note (III)2, some subsidiaries of the Group are high-tech enterprises. The "High-Tech
Enterprise Certificate" is effective for three years. Upon expiration, application for high-tech
enterprise assessment should be submitted again to relevant government authorities. Based on the
past experience of reassessment for high-tech enterprises upon expiration and the actual condition
of the subsidiaries, the Group considers that the subsidiaries are able to obtain the qualification for
high-tech enterprises in future years, and therefore a preferential tax rate of 15% is used to calculate
the corresponding deferred income tax. If some subsidiaries cannot obtain the qualification for hightech enterprises upon expiration, then the subsidiaries are subject to a statutory tax rate of 25% for
the calculation of the income tax, which further influences the recognised deferred tax assets,
deferred tax liabilities and income tax expenses.

- 42 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Significant accounting estimates and judgements - continued
32.1 Significant accounting estimates and key assumptions - continued
32.1.6 Income tax and deferred income tax - continued
Deferred tax assets are recognised for the deductible losses that can be carried forward to subsequent
years to the extent that it is probable that the taxable profit will be available in the future period
against which the deductible losses can be utilised. Taxable profit that will be available in the future
period includes the taxable income that will be realised through normal production and operation
and the taxable income that will be increased in the future period upon the reversal of taxable
temporary differences incurred in the previous period. Estimates and judgements are required to
determine the time and amount of taxable profit in the future period. Any difference between the
actual amounts and the estimate may result in adjustment to the carrying amount of deferred tax
assets.
32.2 Key judgements in applying the accounting policies
32.2.1 Classification of financial assets
Significant judgements involved in the classification of financial assets include the business model
within which they are held and their contractual cash flow characteristics.
The Group uses judgements when it assesses its business model for managing financial assets on
financial assets grouping basis. The assessment is determined by relevant evidence such as how the
performance the financial assets are evaluated and reported to the Group's key management
personnel; the risks that affect the performance of the business model and the financial assets held
within that business model and the way in which those risks are managed; and how managers of the
business are compensated etc.
When the Group assesses contractual cash flows are consistent with a basic lending arrangement,
significant judgements used are as below: the possibility of changes in time schedule or amount of
the principal during the lifetime due to reasons such as repayment in advance, whether the interest
only reflects consideration for the time value of money, for the credit risk associated with the
instrument during the term of the instrument and for other basic lending risks and costs, as well as
a profit margin. For example, prepayments represent unpaid amounts of principal and interest on
the principal amount outstanding, which may include reasonable compensation for the early
termination of the contract.

- 43 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(II)

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Significant accounting estimates and judgements - continued
32.2 Key judgements in applying the accounting policies - continued
32.2.2 Determination of significant increase in credit risk and credit impairment
When the Group classifies the stages of financial instruments into different stages, its determination
for significant increase in credit risk and credit impairment are as follows:
The Group considers the 30 days past due as main indicator in determining a significant increase in
credit risk. Also, the Group considers a significant increase in credit risk if there is significant
change in one or several indicators, such as significant change in the business conditions of the
borrower, the internal or external credit rating for the borrower and actual or expected operating
results of the borrower; and significant decrease in the value of collateral or the credit rating of the
guarantor, which will influence the possibility of default.
The Group considers the 90 days past due as main indicator that a financial asset is credit-impaired
(i.e., the default of the financial asset occurs). Also, the Group considers that a financial asset is
credit-impaired if one or several indicators as below is met: significant financial difficulty of the
borrower; it is becoming probable that the borrower will enter bankruptcy or other financial
reorganisation.
33. Changes in significant accounting policies
The Ministry of Finance issued Interpretation No. 19 of the Accounting Standards for Business
Enterprises ("Interpretation No. 19") and Interpretation No. 20 of the Accounting Standards for
Business Enterprises ("Interpretation No. 20") on 5 December 2025 and 4 June 2026, respectively.
Interpretation No. 19 specifies the accounting treatment of compensatory assets in business
combinations not involving enterprises under common control, accounting treatment of capital
reserve arising from disposal of subsidiaries previously acquired through business combinations
involving enterprises under common control, derecognition of financial liabilities settled using an
electronic payment system, and assessment of the contractual cash flow characteristics of financial
assets. It came into effect from 1 January 2026.
Interpretation No. 20 specifies the assessment of the contractual cash flow characteristics of
financial assets, as well as the accounting treatment when a currency lacks exchangeability. It came
into effect from 1 January 2026.
Upon assessment, the Group believes that the adoption of these provisions will have no significant
impact on the financial statements of the Group and the Company.

- 44 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(III)

TAXATION
1. The main categories and rates of taxes applicable to the Group are set out below:
Category
Enterprise income
tax (1)
Value-added taxes
("VAT") (2)

Taxation basis
Taxable income

15%, 16.5%, 25%, 30%

Taxable value-added amount (Tax payable
is calculated using the taxable sales amount
3%, 5%, 6%, 9%, 10%, 13%
multiplied by the applicable tax rate less
deductible input VAT of the current period)

City maintenance
The payment amount
and construction
consumption tax
tax
(1)

Tax rate

of

VAT

and

1%, 5%, 7%

In accordance with the "Announcement on the Relevant Enterprise Income Tax Policies for
the Deduction of Equipment and Instruments" (Announcement No. 37 [2023] of the
Ministry of Finance and the State Taxation Administration) issued by the Ministry of
Finance and the State Taxation Administration, during the period from 1 January 2024 to
31 December 2027, the cost of newly purchased equipment and instruments with unit value
no more than RMB5 million can be fully deducted against taxable profit and recorded in
expenses for the current period, instead of being depreciated annually; the cost of newly
purchased equipment and instruments with unit value more than RMB5 million shall be
accounted for in accordance with relevant provisions such as "Regulation on the
Implementation of the Enterprise Income Tax Law", "Notice of the Ministry of Finance and
the State Taxation Administration on Improving the Enterprise Income Tax Policies for the
Accelerated Depreciation of Fixed Assets" (Cai Shui No.75 [2014]), "Notice of the Ministry
of Finance and the State Taxation Administration on Further Improving the Enterprise
Income Tax Policies for the Accelerated Depreciation of Fixed Assets" (Cai Shui No.106
[2015]).

- 45 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(III)

TAXATION - continued
1. The main categories and rates of taxes applicable to the Group are set out below: - continued
(2) In accordance with the "Announcement on the Policy of Value Added Tax Deduction for
Advanced Manufacturing Enterprises" issued by the Ministry of Finance and the State Taxation
Administration (Announcement No. 43 [2023] of the Ministry of Finance and the State Taxation
Administration), the Group's main subsidiaries, Shanghai SPH Zhong Xi Pharmaceutical Co.,
Ltd., Shanghai Zhonghua Pharmaceutical Co., Ltd., Shanghai SPH Shen Xiang Health
Pharmaceutical Co., Ltd., SHP Xingling Sci.&Tech. Pharmaceutical Co., Ltd., Shanghai
Leiyunshang Pharmaceutical Co., Ltd., Shandong Sine Pharmaceutical Co., Ltd., SPH Sine
Pharmaceutical Factory Co., Ltd., Shanghai Sine Jinzhu Pharmaceutical Co., Ltd., Shanghai
Sine Wanxiang Pharmaceutical Co., Ltd., SPH New Asia Pharmaceutical Co., Ltd., Shanghai
SPH New Asiatic Minghang Pharmaceutical Co., Ltd., Hangzhou Huqingyutang
Pharmaceutical Co., Ltd., Liaoning SPH Herbapex Pharmaceutical (Group) Co., Ltd., Xiamen
TCM Factory Co., Ltd., SPH Qingdao Guofeng Pharmaceutical Co., Ltd., Shanghai Pharma
Group Changzhou Kony Pharmaceutical Co., Ltd., Guangdong Techpool Biochemical
Pharmaceutical Co., Ltd., SPH No. 1 Biochemical & Pharmaceutical Co., Ltd., Changzhou
Pharmaceutical Factory Co., Ltd., Chia Tai Qingchunbao Pharmaceutical Co. Ltd., Shanghai
Hutchison Pharmaceutical Co., Ltd. as advanced manufacturing enterprises, from 1 January
2023 to 31 December 2027, offset the VAT payable by deductible input VAT for the current
period plus 5%.
2. Preferential tax rate policy and approval documents
Enterprise income tax
The actual income tax rate applicable to the Company was 25% for the period from 1 January 2026
to 30 June 2026 (for the period from 1 January 2025 to 30 June 2025: 25%).

- 46 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(III)

TAXATION - continued
2. Preferential tax rate policy and approval documents - continued
Enterprise income tax - continued
Main subsidiaries of the Group enjoy preferential enterprise income tax policies as follows:
Subsidiaries Shanghai SPH Zhong Xi Pharmaceutical Co., Ltd., Shanghai Zhonghua
Pharmaceutical Co., Ltd., Shanghai SPH Shen Xiang Health Pharmaceutical Co., Ltd., SHP
Xingling Sci.&Tech. Pharmaceutical Co., Ltd., Shanghai Leiyunshang Pharmaceutical Co., Ltd.,
Shandong Sine Pharmaceutical Co., Ltd., SPH Sine Pharmaceutical Factory Co., Ltd., Shanghai
Sine Jinzhu Pharmaceutical Co., Ltd., Shanghai Sine Tianping Pharmaceutical Co., Ltd., Shanghai
Sine Wanxiang Pharmaceutical Co., Ltd., SPH New Asia Pharmaceutical Co., Ltd., Shanghai SPH
New Asiatic Minghang Pharmaceutical Co., Ltd., Hangzhou Huqingyutang Pharmaceutical Co.,
Ltd., Liaoning SPH Herbapex Pharmaceutical (Group) Co., Ltd., Xiamen TCM Factory Co., Ltd.,
SPH Qingdao Guofeng Pharmaceutical Co., Ltd., Shanghai Pharma Group Changzhou Kony
Pharmaceutical Co., Ltd., Guangdong Techpool Biochemical Pharmaceutical Co., Ltd., SPH No. 1
Biochemical & Pharmaceutical Co., Ltd., Changzhou Pharmaceutical Factory Co., Ltd., Chia Tai
Qingchunbao Pharmaceutical Co. Ltd., Shanghai Hutchison Pharmaceutical Co., Ltd. have been
recognised as high-tech enterprises. In accordance with Article 28 of the "Enterprise Income Tax
Law of the People's Republic of China", the applicable enterprise income tax rate for these
companies for the period from 1 January 2026 to 30 June 2026 was 15%.

(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Cash on hand
Bank deposits
Finance company deposits
Other cash and bank balances
Total
Including: Total amount deposited overseas

30 June 2026
1,830,767.64
28,033,739,812.34
4,248,534,346.07
4,288,863,587.78
36,572,968,513.83
2,296,381,714.41

31 December 2025
1,595,897.72
23,551,162,819.12
4,845,601,823.98
4,323,402,810.76
32,721,763,351.58
2,267,050,873.48

As at 30 June 2026, the Group has no restricted cash and bank balances in bank deposits and finance
company deposits (31 December 2025: Nil); other cash and bank balances of
RMB1,845,210,135.03 are pledged as collateral by the Group for the purpose of bank acceptances
(31 December 2025: RMB2,247,592,689.01); other cash and bank balances of RMB35,098,983.26
are pledged as collateral by the Group for the purpose of letters of credit (31 December 2025:
RMB56,177,055.44); other cash and bank balances of RMB1,755,000,000.00 are time deposits due
over three months (31 December 2025: RMB1,905,000,000.00); other restricted cash and bank
balances are RMB653,554,469.49 (31 December 2025: RMB114,633,066.31).
- 47 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Held-for-trading financial assets
30 June 2026
9,416,880,703.56

Structured deposits

31 December 2025
10,360,938,931.51

3. Derivative financial assets and derivative financial liabilities
30 June 2026

31 December 2025

Derivative financial assets
- Forward exchange contracts

7,530,453.55

721,010.06

Derivative financial liabilities
- Forward exchange contracts
- Foreign exchange swap contracts
Total

13,543,885.46
5,411,036.95
18,954,922.41

13,294,428.53
13,294,428.53

30 June 2026
476,987,918.55
338,646,469.85
(4,430,350.57)
811,204,037.83

31 December 2025
512,435,784.08
523,401,743.16
(5,266,647.93)
1,030,570,879.31

4. Notes receivable
Bank acceptances
Commercial acceptances
Less: Bad debt allowance
Total

(1) As at 30 June 2026, notes receivable endorsed or discounted but unmatured for the Group are
listed as follows:
Not derecognised
164,486,946.68
9,333,176.65
173,820,123.33

Bank acceptances
Commercial acceptances
Total

For the period from 1 January 2026 to 30 June 2026, the commercial acceptances receivable
unqualified for derecognition were endorsed or discounted by the Group, and were categorised as
financial assets at amortised cost. Bank acceptances were grouped based on bank types, credit level,
etc. for management. Bank acceptances unqualified for derecognition were categorised as notes
receivable at amortised cost to hold for collection of contractual cash flows.

- 48 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Notes receivable - continued
(2) Bad debt allowance
For notes receivable generated from business activities such as sales of goods and rendering of
services, regardless of whether there is a significant financing component, the Group measures loss
allowance based on lifetime ECL.
The bad debt allowance for notes receivable is analysed by category as follows:
30 June 2026
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)
Bad debt allowance
made on an
individual basis (i)
Bad debt allowance
made on a portfolio
basis (ii)
Toal

31 December 2025
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

-

-

-

-

-

-

-

-

815,634,388.40

100.00

(4,430,350.57)

0.54

1,035,837,527.24

100.00

(5,266,647.93)

0.51

815,634,388.40

100.00

(4,430,350.57)

0.54

1,035,837,527.24

100.00

(5,266,647.93)

0.51

(i) As at 30 June 2026, the Group has no notes receivable with bad debt allowance made on an
individual basis (31 December 2025: Nil).
(ii) As at 30 June 2026, notes receivable for which the bad debt allowance is made on a portfolio
basis is analysed as follows:
Portfolio - Bank acceptances:
As at 30 June 2026, the Group measures the bad debt allowance for bank acceptances based on
lifetime ECL, amounting to RMB2,851,609.31 (31 December 2025: RMB2,995,025.81), including
RMB-143,416.50 (for the period from 1 January 2025 to 30 June 2025: RMB-2,100,411.74)
recognised in profit or loss for the period. The Group considers that the bank acceptances within
the portfolio has no significant credit risk and there will be no significant losses due to bank defaults.
Portfolio - Commercial acceptances:
As at 30 June 2026, the Group measures the bad debt allowance for commercial acceptances based
on lifetime ECL, amounting to RMB1,578,741.26 (31 December 2025: RMB2,271,622.12),
including RMB-692,880.86 (for the period from 1 January 2025 to 30 June 2025: RMB1,331,569.27) recognised in profit or loss for the period.
(iii) The amount of bad debt allowance reversed for the current period is RMB836,297.36.
(iv) No notes receivable are written off by the Group in the current period.

- 49 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Accounts receivable
30 June 2026
94,123,310,848.98
(3,355,432,288.13)
90,767,878,560.85

Accounts receivable
Less: Bad debt allowance
Total

31 December 2025
85,179,729,191.18
(2,873,328,561.35)
82,306,400,629.83

Retail sales at the Group's medicine and pharmaceutical chain stores are usually made in cash or by
debit or credit cards. For medicine and pharmaceutical distribution and manufacturing business
segments, credit periods no more than 360 days are usually granted to customers.
(1) The ageing analysis of accounts receivable is as follows:
30 June 2026
88,713,324,385.25
3,312,928,996.69
2,097,057,467.04
94,123,310,848.98

Within 1 year
1 to 2 years
Over 2 years
Total

31 December 2025
81,027,892,052.38
2,254,395,044.13
1,897,442,094.67
85,179,729,191.18

(2) As at 30 June 2026, the top five accounts receivable based on the balance of the debtors are
summarised and analysed as follows:
Proportion to total Closing balance of
accounts
bad debt
receivable (%)
allowance
6,180,764,165.11
6.57
(14,121,835.06)
Closing balance

Total top five accounts receivable

(3) Accounts receivable derecognised due to the transfer of financial assets are analysed as follows:
For the period from 1 January 2026 to 30 June 2026, the Group conducted non-recourse factoring
for a few accounts receivable, and almost all risks and rewards of ownership were transferred to
other parties. The cost of accounts receivable that were derecognised due to factoring without
resource was RMB2,571,995,592.32, and related losses of RMB62,770,648.60 were included in
investment loss (for the period from 1 January 2025 to 30 June 2025: RMB7,209,227,165.53 and
RMB73,800,728.05) (Note (IV)57).
(4) Bad debt allowance
For accounts receivable, regardless of whether there is a significant financing component, the Group
measures loss allowance based on lifetime ECL.

- 50 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Accounts receivable - continued
(4) Bad debt allowance - continued
The bad debt allowance for accounts receivable is analysed by category as follows:

Bad debt allowance
made on an individual
basis (i)
Bad debt allowance
made on a portfolio
basis (ii)
Total

30 June 2026
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

31 December 2025
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

912,125,791.56

0.97

(781,990,273.95)

85.73

889,248,053.20

1.04

(613,853,770.21)

69.03

93,211,185,057.42

99.03

(2,573,442,014.18)

2.76

94,123,310,848.98

100.00

(3,355,432,288.13)

3.56

84,290,481,137.98

98.96

(2,259,474,791.14)

2.68

85,179,729,191.18

100.00

(2,873,328,561.35)

3.37

(i) As at 30 June 2026, accounts receivable for which bad debt allowance is made on an individual
basis are analysed as follows:
Gross carrying amount

Lifetime ECL rate (%)

Accounts receivable 1

285,903,828.34

100.00

Bad debt allowance
(285,903,828.34)

Accounts receivable 2

140,856,696.59

20.00

(28,171,339.32)

Accounts receivable 3

119,953,445.32

100.00

(119,953,445.32)

Accounts receivable 4

32,217,861.48

100.00

(32,217,861.48)

Others

333,193,959.83

94.76

(315,743,799.49)

Total

912,125,791.56

Reasons
Upon assessment, it is expected to
be unrecoverable
Provided based on estimated
recoverable amount
Upon assessment, it is expected to
be unrecoverable
Upon assessment, it is expected to
be unrecoverable
Provided based on estimated
recoverable amount

(781,990,273.95)

As at 31 December 2025, accounts receivable for which bad debt allowance is made on an
individual basis are analysed as follows:
Gross carrying amount

Lifetime ECL rate (%)

Bad debt allowance

Accounts receivable 1

285,903,828.34

50.00

(142,951,914.17)

Accounts receivable 2

149,352,123.14

18.00

(26,883,382.17)

Accounts receivable 3

119,953,445.32

100.00

(119,953,445.32)

Accounts receivable 4

32,217,861.48

100.00

(32,217,861.48)

Others

301,820,794.92

96.70

(291,847,167.07)

Total

889,248,053.20

(613,853,770.21)

- 51 -

Reasons
Provided based on estimated
recoverable amount
Provided based on estimated
recoverable amount
Upon assessment, it is expected to
be unrecoverable
Upon assessment, it is expected to
be unrecoverable
Provided based on estimated
recoverable amount

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Accounts receivable - continued
(4) Bad debt allowance - continued
The bad debt allowance for accounts receivable is analysed by category as follows: - continued
(ii) As at 30 June 2026 and 31 December 2025, accounts receivable for which bad debt allowance
is made on a portfolio basis are analysed as follows:

Within 6 months
6 - 12 months
1 - 2 years
Over 2 years
Total

Within 6 months
6 - 12 months
1 - 2 years
Over 2 years
Total

30 June 2026
Accounts receivable Lifetime ECL rate (%)
75,536,946,212.33
0.26
13,128,619,433.47
2.07
3,226,063,896.86
25.38
1,319,555,514.76
97.51
93,211,185,057.42
Accounts receivable
66,495,479,900.71
14,482,403,967.46
2,163,417,879.33
1,149,179,390.48
84,290,481,137.98

31 December 2025
Lifetime ECL rate (%)
0.39
2.05
26.33
98.52

Bad debt allowance
(196,246,052.55)
(271,827,503.01)
(818,675,191.40)
(1,286,693,267.22)
(2,573,442,014.18)
Bad debt allowance
(260,928,286.87)
(296,696,517.82)
(569,661,474.15)
(1,132,188,512.30)
(2,259,474,791.14)

(iii) For the period from 1 January 2026 to 30 June 2026, the bad debt allowance made on an
individual basis amounts to RMB192,642,983.16 (for the period from 1 January 2025 to 30 June
2025: RMB19,593,519.35), including recovery or reversal of bad debt allowance of
RMB24,168,150.46 (for the period from 1 January 2025 to 30 June 2025: RMB35,630,063.43),
with corresponding gross carrying amount of RMB59,281,697.71 (for the period from 1 January
2025 to 30 June 2025: RMB59,816,268.19). The accounts receivable with significant recovery
or reversal are as follows:

Accounts receivable 1
Accounts receivable 2
Accounts receivable 3
Others

Reasons for
reversal/recovery
Recovered in the current
period
Recovered in the current
period
Recovered in the current
period
Recovered in the current
period

Basis and appropriateness for determining
the original bad debt allowance
Provided based on estimated recoverable
amount
Upon assessment, it is expected to be
unrecoverable
Upon assessment, it is expected to be
unrecoverable
Provided based on estimated recoverable
amount

Total

Amount reversed
or recovered
43,948,177.51

Cash

7,697,234.03

Cash

1,674,054.00

Cash

5,962,232.17

Cash

59,281,697.71

- 52 -

Recovery method

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Accounts receivable - continued
(5) For the period ended 30 June 2026, the gross carrying amount of accounts receivable written
off amounts to RMB951,563.46, and the bad debt allowance amounts to RMB951,563.46.
Therein, the significant accounts receivable are analysed as follows:

Accounts
receivable 1
Total

Nature

Write-off

Payment for
goods

951,563.46

Reasons for
write-off
Long age and
unrecoverable

Write-off procedures
performed
Management approval,
special audit

Caused by related party
transactions or not

30 June 2026
1,942,680,670.90

31 December 2025
2,528,730,548.02

No

951,563.46

6. Receivables financing
Bank acceptances

Certain bank acceptances of the Group are discounted and endorsed for the purpose of daily capital
management, and are qualified for derecognition. Therefore, such bank acceptances are classified
as financial assets at FVTOCI. For the period from 1 January 2026 to 30 June 2026, the Group
derecognised bank acceptances with carrying amount of RMB3,794,583,850.64 and
RMB6,912,597,199.77 (for the period from 1 January 2025 to 30 June 2025: RMB4,548,480,835.52
and RMB5,057,924,845.48) due to endorsement and discounting, and almost all risks and rewards
of ownership have been transferred to other parties. The related discounting losses amounted to
RMB31,331,410.91 and were included in investment loss (for the period from 1 January 2025 to
30 June 2025: RMB20,454,522.59) (Note (IV)57).
As at 30 June 2026, the Group believes that the bank acceptances held are with common credit risk
characteristics, and there are no bank acceptances for which loss allowance is made on an individual
basis. In addition, the Group believes that the bank acceptances held have no significant credit risks
and will not incur significant losses due to bank defaults. The Group measures bad debt allowance
based on lifetime ECL and the related amount is RMB8,394,783.98 (31 December 2025:
RMB10,244,200.95), and RMB-1,849,416.97 is included in profit or loss for the period (for the
period from 1 January 2025 to 30 June 2025: RMB-292,672.09).
For the period from 1 January 2026 to 30 June 2026, the Group has no write-off of significant
receivables financing (for the period from 1 January 2025 to 30 June 2025: Nil).
As at 30 June 2026, the receivables financing endorsed or discounted but unmatured are as follows:
Derecognised
1,915,924,539.33

Bank acceptances

As at 30 June 2026, the Group has no pledged receivables financing (31 December 2025: Nil).
- 53 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Prepayments
(1) The ageing analysis of prepayments is as follows:

Within 1 year
Over 1 year
Total

30 June 2026
Proportion to
Amount
total amount
(%)
1,368,873,615.35
92.86
105,311,602.01
7.14
1,474,185,217.36
100.00

31 December 2025
Proportion to
total amount (%)

Amount
1,525,816,729.29
95,729,386.13
1,621,546,115.42

94.10
5.90
100.00

As at 30 June 2026, prepayments aged over 1 year are RMB105,311,602.01 (31 December 2025:
RMB95,729,386.13), which are mainly prepayments for raw materials.
(2) As at 30 June 2026, the top five prepayments based on the balance of the debtors are summarised
and analysed as follows:

113,129,874.15

Proportion to total
prepayments (%)
7.67

30 June 2026
1,644,746,038.85
1,016,757,837.76
399,327,708.95
41,286,523.66
1,298,901,984.99
4,401,020,094.21
(934,785,620.50)
3,466,234,473.71

31 December 2025
1,474,966,919.76
915,991,237.26
314,183,040.92
18,746,523.66
1,278,625,044.71
4,002,512,766.31
(889,408,449.38)
3,113,104,316.93

Amount
Total top five prepayments
8. Other receivables
Compensation receivable from suppliers
Guarantees (including deposits)
Receivables from enterprises
Dividends receivable
Others
Gross carrying amount
Less: Bad debt allowance
Carrying amount

The Group has no funds pooled with other parties and classified as other receivables due to
centralised fund management.

- 54 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Other receivables - continued
(1) The ageing analysis of other receivables is as follows:
30 June 2026
2,960,595,554.20
194,573,928.04
1,245,850,611.97
4,401,020,094.21

Within 1 year
1 to 2 years
Over 2 years
Total

31 December 2025
2,584,555,084.13
262,235,145.52
1,155,722,536.66
4,002,512,766.31

(2) Loss allowance and movements in gross carrying amount
The bad debt allowance for other receivables is analysed by category as follows:

Bad debt allowance
made on an
individual basis (i)
Bad debt allowance
made on a portfolio
basis (ii)
Total

30 June 2026
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

31 December 2025
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

667,306,259.64

15.16

(667,306,259.64)

100.00

664,365,660.33

16.60

(664,365,660.33)

100.00

3,733,713,834.57

84.84

(267,479,360.86)

7.16

3,338,147,105.98

83.40

(225,042,789.05)

6.74

4,401,020,094.21

100.00

(934,785,620.50)

21.24

4,002,512,766.31

100.00

(889,408,449.38)

22.22

(i) As at 30 June 2026, other receivables for which bad debt allowance is made on an individual
basis are analysed as follows:
Gross carrying amount

Stage 3 - Lifetime ECL
rate (%)

Other receivables 1

120,000,000.00

100.00

(120,000,000.00)

Other receivables 2

46,975,257.94

100.00

(46,975,257.94)

Other receivables 3

42,750,000.00

100.00

(42,750,000.00)

Other receivables 4

42,669,467.35

100.00

(42,669,467.35)

Others

414,911,534.35

100.00

(414,911,534.35)

Total

667,306,259.64

Bad debt allowance

(667,306,259.64)

- 55 -

Reasons
It is expected to be
unrecoverable
It is expected to be
unrecoverable
It is expected to be
unrecoverable
It is expected to be
unrecoverable
It is expected to be
unrecoverable

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Other receivables - continued
(2) Loss allowance and movements in gross carrying amount - continued
The bad debt allowance for other receivables is analysed by category as follows: - continued
(i) As at 30 June 2026, other receivables for which bad debt allowance is made on an individual
basis are analysed as follows: - continued
As at 31 December 2025, other receivables for which bad debt allowance is made on an individual
basis are analysed as follows:
Gross carrying amount

Stage 3 - Lifetime ECL
rate (%)

Other receivables 1

120,000,000.00

100.00

(120,000,000.00)

Other receivables 2

46,975,257.94

100.00

(46,975,257.94)

Other receivables 3

42,750,000.00

100.00

(42,750,000.00)

Other receivables 4

42,669,467.35

100.00

(42,669,467.35)

Others

411,970,935.04

100.00

(411,970,935.04)

Total

664,365,660.33

Bad debt allowance

Reasons
It is expected to be
unrecoverable
It is expected to be
unrecoverable
It is expected to be
unrecoverable
It is expected to be
unrecoverable
It is expected to be
unrecoverable

(664,365,660.33)

(ii) As at 30 June 2026 and 31 December 2025, other receivables for which bad debt allowance is
made on a portfolio basis are analysed as follows:
30 June 2026

Stage 1 - 12-month ECL
Compensation receivable
from suppliers
Guarantees
(including deposits)
Dividends receivable
Receivables from
enterprises
Others
Sub-total
Stage 3 - Lifetime ECL
Receivables from
enterprises
Compensation receivable
from suppliers
Others
Sub-total
Total

Gross carrying
amount
Amount

Amount

1,441,237,327.63

(8,293,541.72)

998,822,246.76

31 December 2025
Gross carrying
amount
Amount

Amount

0.58

1,392,217,134.23

(4,369,161.16)

0.31

(13,657,848.24)

1.37

907,698,238.66

(15,242,142.08)

1.68

Loss allowance
Proportion (%)

Loss allowance
Proportion (%)

41,286,523.66

(3,625.00)

0.01

18,746,523.66

(3,625.00)

0.02

333,920,530.21

(1,602,590.46)

0.48

251,727,555.72

(1,090,646.63)

0.43

652,008,437.19
3,467,275,065.45

(4,566,185.72)
(28,123,791.14)

0.70

558,213,729.16
3,128,603,181.43

(4,493,646.60)
(25,199,221.47)

0.81

18,778,078.12

(18,391,917.88)

97.94

33,829,347.52

(32,930,370.16)

97.34

66,812,336.28

(63,847,864.98)

95.56

30,699,557.10

(30,033,132.39)

97.83

180,848,354.72
266,438,769.12

(157,115,786.86)
(239,355,569.72)

86.88

145,015,019.93
209,543,924.55

(136,880,065.03)
(199,843,567.58)

94.39

3,733,713,834.57

(267,479,360.86)

3,338,147,105.98

(225,042,789.05)

As at 30 June 2026 and 31 December 2025, the Group has no other receivables at stage 2.
- 56 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Other receivables - continued
(3) For the period from 1 January 2026 to 30 June 2026, the reversal of and bad debt allowance for
other receivables at stage 1 and stage 3 amount to RMB3,028,962.24 and RMB35,495,232.66
respectively, mainly representing the loss allowance for other receivables added during the
current period and the impact on the measurement of ECL arising from other receivables
transferred from stage 1 to stage 3 due to changes in the loss rate for the current period.
For the period from 1 January 2026 to 30 June 2026, the Group has reversal or recovery of bad debt
allowance made on an individual basis amounting to RMB185,553.00, with corresponding gross
carrying amount of RMB185,553.00. Other receivables with significant amount of recovery or
reversal are as follows:

Other receivables 1

Reasons for
reversal/recovery
Recovered in the current
period

Basis and appropriateness for determining
the original bad debt allowance
Upon assessment, it is expected to be
unrecoverable

Amount reversed or
recovered
185,553.00

Total

Recovery
method
Cash

185,553.00

(4) The Group has no other receivables written off in the current period.
(5) As at 30 June 2026, the top five other receivables based on the balance of the debtors are
summarised and analysed as follows:

Other receivables 1
Other receivables 2
Other receivables 3
Other receivables 4
Other receivables 5
Total

Over 5 years
Over 5 years

Proportion to total
other receivables
(%)
2.73
1.93

(120,000,000.00)
(51,030.00)

73,064,733.66

Within 1 year

1.66

(379,936.61)

46,975,257.94
42,750,000.00
367,839,991.60

4 -5 years
Over 5 years

1.07
0.97
8.36

(46,975,257.94)
(42,750,000.00)
(210,156,224.55)

Nature

Balance

Ageing

Others
Guarantees
Compensation
from suppliers
Others
Others

120,000,000.00
85,050,000.00

Bad debt
allowance

(6) As at 30 June 2026 and 31 December 2025, the Group has no overdue dividends receivable.

- 57 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Inventories
(1) Inventories are classified as follows:

1,727,880,042.24
57,482,636.56

30 June 2026
Provision for
decline in value of
inventories
(164,317,048.98)
-

21,710,126.73

-

21,710,126.73

8,139,386.98

-

8,139,386.98

1,133,238,753.52
41,046,841,197.60

(1,138,235,220.11)

1,133,238,753.52
39,908,605,977.49

1,128,963,604.28
43,729,329,914.82

(1,148,113,381.59)

1,128,963,604.28
42,581,216,533.23

Gross carrying
amount
Raw materials
Turnover materials
Consigned processing
materials
Work in progress
Finished goods
Consumable
biological assets
Total

Carrying amount

Gross carrying
amount

1,563,562,993.26
57,482,636.56

1,750,397,112.73
53,416,610.15

31 December 2025
Provision for
decline in value of
inventories
(163,571,318.17)
-

Carrying amount
1,586,825,794.56
53,416,610.15

385,620.84

-

385,620.84

385,620.84

-

385,620.84

43,987,538,377.49

(1,302,552,269.09)

42,684,986,108.40

46,670,632,249.80

(1,311,684,699.76)

45,358,947,550.04

(2) The analysis of provision for decline in value of inventories is as follows:
Raw materials
Finished goods (i)
Total

31 December 2025
163,571,318.17
1,148,113,381.59
1,311,684,699.76

Provision
950,538.54
14,021,880.43
14,972,418.97

Write-off
(204,807.73)
(23,900,041.91)
(24,104,849.64)

30 June 2026
164,317,048.98
1,138,235,220.11
1,302,552,269.09

(i) Among which, the near-expired finished goods for which the provision for decline in value is
made on a portfolio basis are analysed as follows:
Gross carrying
amount
Amount
Within 1 year
Over 1 year
Total

3,923,191,291.52
33,623,253,173.95
37,546,444,465.47

30 June 2026
Provision for decline in value of
inventories
Proportion
Amount
(%)
8.57
(336,273,192.76)
0.04
(13,170,271.49)
(349,443,464.25)

31 December 2025
Provision for decline in value of
inventories
Proportion
Amount
Amount
(%)
4,881,575,878.20
8.06
(393,361,405.67)
35,125,664,362.95
0.69
(241,341,021.37)
40,007,240,241.15
(634,702,427.04)
Gross carrying
amount

10. Other current assets
Taxes to be deducted and prepaid
Input VAT to be certified
Total

30 June 2026
1,037,508,397.78
95,555,242.55
1,133,063,640.33

31 December 2025
1,214,033,124.20
119,534,891.10
1,333,568,015.30

30 June 2026
20,954,561.79

31 December 2025
32,683,905.48

11. Investments in other equity instruments
Investments in equity instruments (i)

- 58 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Investments in other equity instruments - continued
30 June 2026
Investments in equity instruments
Shares of listed companies
- Tianda Pharmaceuticals Limited
("Tianda Pharma")

20,954,561.79
30 June 2026

Tianda Pharma
- Cost
- Accumulated changes in fair value

87,851,852.85
(66,897,291.06)
20,954,561.79

31 December 2025

32,683,905.48
31 December 2025
87,851,852.85
(55,167,947.37)
32,683,905.48

(i) The Group, out of strategic investment concern, designated such equity investments as financial
assets at FVTOCI under investments in other equity instruments.
12. Other non-current financial assets
Investments in equity instruments
- Shares of listed companies (a)
- Equity of unlisted companies (b)

30 June 2026

31 December 2025

3,687,386.38
1,444,144,778.31
1,447,832,164.69

4,157,628.50
1,541,153,084.95
1,545,310,713.45

Details of other non-current financial assets are as follows:
30 June 2026
(a) Shares of listed companies
- Cost
- Accumulated changes in fair value
(b) Equity of unlisted companies
- Cost
- Accumulated changes in fair value

- 59 -

31 December 2025

1,372,977.16
2,314,409.22
3,687,386.38

1,372,977.16
2,784,651.34
4,157,628.50

1,506,030,076.72
(61,885,298.41)
1,444,144,778.31

1,506,602,429.26
34,550,655.69
1,541,153,084.95

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term receivables
30 June 2026
175,239,892.00
77,833,431.80
224,688,894.03
(46,551,766.11)
(47,453,544.31)
(103,838,480.76)
279,918,426.65

Guarantees receivable (Note) - total amount
Medical equipment receivable - total amount
Receivables from enterprises - total amount
Unrealised finance income
Less: Bad debt allowance
Less: Long-term receivables due within one year
Long-term receivables due after one year

31 December 2025
174,975,160.42
95,924,662.50
226,284,582.23
(47,056,380.84)
(54,790,114.19)
(87,403,889.78)
307,934,020.34

Note: The amounts are the Group's paid guarantees with recovery period of over one year.
(1) Loss allowance and movements in gross carrying amount
The bad debt allowance for long-term receivables is analysed by category as follows:

Bad debt allowance
made on an
individual basis (i)
Bad debt allowance
made on a
portfolio basis (ii)
Total

30 June 2026
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

31 December 2025
Gross carrying amount
Bad debt allowance
Proportion
Proportion
Amount
to total
Amount
(%)
amount (%)

12,893,490.33

2.99

(12,893,490.33)

100.00

12,893,490.33

2.86

(12,893,490.33)

100.00

418,316,961.39

97.01

(34,560,053.98)

8.26

437,234,533.98

97.14

(41,896,623.86)

9.58

431,210,451.72

100.00

(47,453,544.31)

11.00

450,128,024.31

100.00

(54,790,114.19)

12.17

(i) As at 30 June 2026, long-term receivables for which bad debt allowance is made on an
individual basis are analysed as follows:
Gross carrying
amount
Long-term receivables 1

Stage 3 - Lifetime ECL
rate (%)

Bad debt allowance

100.00

(12,893,490.33)

12,893,490.33

Reasons
It is expected to be
unrecoverable

(ii) As at 30 June 2026 and 31 December 2025, long-term receivables of the Group on a portfolio
basis are all at stage 1.
14. Long-term equity investments
Joint ventures (1)
Associates (2)
Less: Provision for impairment of long-term
equity investments
Total

- 60 -

30 June 2026
834,314,465.03
6,351,933,562.84

31 December 2025
762,152,837.49
6,468,713,343.40

(220,663,722.23)

(220,663,722.23)

6,965,584,305.64

7,010,202,458.66

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Long-term equity investments - continued
(1) Joint ventures
31 December
2025
Jiangxi Nanhua Medicines
Co., Ltd.
GEN8 (HK) LIMITED
Shanghai Shangshi
Biomedical Phase II
Innovation and
Transformation Private
Investment Fund LLP
Zhejiang Shangyao Jiuzhou
Biopharmaceutical
Co., Ltd.
Others
Total

Investment
made in the
current period

Net profit or loss
adjusted using
equity method

Decrease in
investment

Changes for the period
Adjustment to
other
Other equity
comprehensive
changes
income

Impairment provision
Cash
dividends
declared

Impairmen
t provision

30 June 2026

Others

31 December
2025

30 June 2026

491,313,180.65

-

-

20,816,965.34

-

-

-

-

(8,256,231.37)

503,873,914.62

-

-

122,604,812.24

-

-

(9,214,321.85)

-

-

-

-

(3,676,225.25)

109,714,265.14

-

-

96,626,613.21

75,000,000.00

-

(1,999,500.40)

-

-

-

-

-

169,627,112.81

-

-

-

-

-

-

-

-

-

-

-

-

(25,428,136.44)

(25,428,136.44)

24,432,729.59
734,977,335.69

75,000,000.00

-

67,439.92
9,670,583.01

-

-

(576,000.00)
(576,000.00)

-

(498.85)
(11,932,955.47)

23,923,670.66
807,138,963.23

(1,747,365.36)
(27,175,501.80)

(1,747,365.36)
(27,175,501.80)

Related information of equity in joint ventures of the Group is set out in Note (V) 2.

- 61 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Long-term equity investments - continued
(2) Associates
Changes for the period
31 December
2025
Shanghai Pharma Health
Commerce Co., Ltd.
Shanghai Roche
Pharmaceutical Co.,
Ltd.
Shanghai Industrial Group
Finance Co., Ltd.
Shanghai FudanZhangjiang BioPharmaceutical Co.,
Ltd. (ii)
Shanghai Biomedical
Merger & Acquisition
Private Equity Fund
Partnership (Limited
Partnership)
Beijing Lianxin
Pharmaceutical Co.,
Ltd.
Shanghai Lianyi
Investment Center
(Limited Partnership)
Shanghai Tsumura
Pharmaceuticals Co.,
Ltd.
Sino-American Shanghai
Squibb Pharmaceuticals
Ltd. (iii)
Hangzhou Huqing Yutang
Pharmaceutical Co.,
Ltd.
Shanghai Bracco Sine
Pharmaceutical Corp.,
Ltd.

Investment
made in the
current period

Net profit or
loss adjusted
using equity
method

Decrease in
investment

Impairment provision

Adjustment to
other
comprehensive
income

Other equity
changes

Cash dividends
declared

Impairmen
t provision

Disposals

30 June 2026

Others

31 December
2025

30 June 2026

1,477,552,431.31

-

-

(6,088,038.58)

-

1,016,176.56

-

-

-

(276,583.21)

1,472,203,986.08

-

-

1,138,075,138.00

-

-

10,535,585.39

-

3,183,000.00

-

-

-

(2,641,985.39)

1,149,151,738.00

-

-

-

15,630,929.19

-

-

-

-

-

5,916,191.15

594,515,922.30

-

-

572,968,801.96

-

428,977,167.14

-

-

7,481,358.61

(174,358.64)

20,917.73

-

-

-

-

436,305,084.84

-

-

425,161,805.31

-

-

(84,326,897.80)

-

-

(5,021,307.92)

-

-

-

335,813,599.59

-

-

312,660,138.19

-

-

16,838,725.18

-

-

-

-

-

-

329,498,863.37

-

-

225,186,128.74

-

47,549,401.08

-

-

(9,522,479.61)

-

-

-

262,220,473.21

-

-

257,427,545.32

-

-

11,767,288.71

-

-

-

-

-

-

269,194,834.03

-

-

171,949,604.60

-

-

(2,970,889.03)

-

-

-

-

(161,045,803.82)

(7,932,911.75)

-

-

-

161,102,457.74

-

-

10,930,756.12

-

-

-

-

-

-

172,033,213.86

-

-

161,973,486.54

-

-

32,418,929.22

-

-

-

-

-

3,986,194.82

198,378,610.58

-

-

(992,577.00)

- 62 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Long-term equity investments - continued
(2) Associates - continued
Changes for the period
31 December
2025
Shanghai Ajinomoto
Amino Acid Co., Ltd.
Shanghai Shangshi
Biomedical Innovation
and Transformation
Private Investment
Fund LLP
West China Precision
Medicine Industrial
Innovation Center
Shanghai Leiyunshang
Northern Area
Medicine General Co.,
Ltd.
Shanghai Good Health
Capital LLP
Sichuan Greentech Biotechnology Co., Ltd.
Chongqing
Pharmaceuticals
Shanghai Medicine
Sales Co., Ltd.
Shanghai Chest Medical
Instruments Co., Ltd.
Shanghai Xunyao
Biotechnology Co.,
Ltd.
Beijing Yiyao Keyuan
Pharmacy Co., Ltd.
Shanghai Huashi
Pharmaceutical Storage
& Transportation Co.,
Ltd.

Investment
made in the
current period

Net profit or
loss adjusted
using equity
method

Decrease in
investment

Adjustment to
other
comprehensive
income

Other equity
changes

Impairment provision
Cash dividends
declared

Impairmen
t provision

Disposals

30 June 2026

Others

31 December
2025

30 June 2026

135,774,594.58

-

-

6,547,616.69

-

-

(6,506,092.57)

-

-

-

135,816,118.70

-

-

116,311,574.53

-

-

238,298.19

-

-

-

-

-

-

116,549,872.72

-

-

93,528,357.20

-

-

(1,757,487.13)

-

-

-

-

-

-

91,770,870.07

-

-

77,716,513.39

-

-

(3,982,585.22)

-

-

(2,079,280.00)

-

-

-

71,654,648.17

-

-

74,772,936.89

-

-

(6,535,138.73)

-

-

(4,802,990.50)

-

-

-

63,434,807.66

-

-

67,621,309.03

-

-

1,132,767.06

-

-

-

-

-

-

68,754,076.09

-

-

62,899,907.45

-

-

265,919.67

-

-

(42,140,000.00)

-

-

-

21,025,827.12

-

-

58,870,334.76

-

-

4,330,019.53

-

-

(3,600,000.00)

-

-

-

59,600,354.29

-

-

50,876,708.85

-

-

(7,634,413.55)

-

10,717,380.70

-

-

-

-

53,959,676.00

-

-

47,647,657.75

-

-

589,467.53

-

-

-

-

-

-

48,237,125.28

-

-

42,388,265.81

-

-

(5,403,526.78)

-

-

-

-

-

-

36,984,739.03

-

-

- 63 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Long-term equity investments - continued
(2) Associates - continued
Changes for the period
31 December
2025
Shanghai Sine Promod
Pharmaceutical Co.,
Ltd.
A.M.Pappas Life Science
Venture V,LP
Shanghai Huiyong
Medicine
Research Co., Ltd.
Shangshi Commercial
Factoring Co., Ltd.
Shanghai Shangyao
Kangxinuo
Biopharmaceutical Co.,
Ltd.
Yiyao Pharmaceutical
(Henan) Co., Ltd.
Shanghai Zhanpei Global
Innovation Medical
Device Service Co.,
Ltd.
Other investments
Total

Investment
made in the
current period

Net profit or
loss adjusted
using equity
method

Decrease in
investment

Adjustment to
other
comprehensive
income

Other equity
changes

Impairment provision
Cash dividends
declared

Impairmen
t provision

Disposals

30 June 2026

Others

31 December
2025

30 June 2026

21,087,332.78

-

-

(1,538,533.38)

-

-

-

-

-

-

19,548,799.40

-

-

9,047,918.33

-

-

(1,272,105.34)

-

-

-

-

-

-

7,775,812.99

-

-

5,606,856.56

-

-

(5,606,856.56)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(154,799,830.72)

(154,799,830.72)

-

-

-

-

-

-

-

-

-

-

-

(25,874,404.13)

(25,874,404.13)

-

19,799,500.00

-

-

-

-

-

-

-

-

19,799,500.00

-

-

-

45,000,000.00

-

(376,571.88)

-

-

-

-

-

-

44,623,428.12

-

-

78,040,150.21
6,275,225,122.97

1,200,000.00
65,999,500.00

(992,577.00)

357,498.67
39,121,516.86

(174,358.64)

14,937,474.99

(73,672,150.60)

-

(161,045,803.82)

(4,287.97)
(953,382.35)

79,593,360.91
6,158,445,342.41

(12,813,985.58)
(193,488,220.43)

(12,813,985.58)
(193,488,220.43)

(i) Related information of equity in the associates of the Group is set out in Note (V) 2.
(ii) Shanghai Fudan-Zhangjiang Bio-pharmaceutical Co., Ltd. is a domestic and Hong Kong listed company. As at 30 June 2026, the market value of
the equity investments held by the Group amounts to RMB1,175,343,191.21.
(iii) Sino-American Shanghai Squibb Pharmaceuticals Ltd. has completed the equity transfer in April 2026.

- 64 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
15. Investment properties
Buildings
Cost
31 December 2025
Transfer from fixed assets
Transfer to fixed assets
Disposals
Translation differences of
financial statements
denominated in foreign
currencies
30 June 2026

Land use rights

Total

777,421,604.62
37,752,037.35
(735,534.05)
(17,937,073.00)

25,835,071.05
-

803,256,675.67
37,752,037.35
(735,534.05)
(17,937,073.00)

(327,013.76)

-

(327,013.76)

796,174,021.16

25,835,071.05

822,009,092.21

(373,472,741.29)
(14,852,346.75)
(18,381,488.61)
523,225.42
2,233,957.41

(9,601,589.48)
(240,962.70)
-

(383,074,330.77)
(15,093,309.45)
(18,381,488.61)
523,225.42
2,233,957.41

124,637.37

-

124,637.37

(403,824,756.45)

(9,842,552.18)

(413,667,308.63)

Impairment provision
31 December 2025
Transfer from fixed assets
30 June 2026

(8,251,390.62)
(15,222,749.77)
(23,474,140.39)

-

(8,251,390.62)
(15,222,749.77)
(23,474,140.39)

Carrying amount
30 June 2026
31 December 2025

368,875,124.32
395,697,472.71

15,992,518.87
16,233,481.57

384,867,643.19
411,930,954.28

Accumulated depreciation
31 December 2025
Charged for the period
Transfer from fixed assets
Transfer to fixed assets
Disposals
Translation differences of
financial statements
denominated in foreign
currencies
30 June 2026

For the period from 1 January 2026 to 30 June 2026, the depreciation of investment properties
amounted to RMB15,093,309.45 (for the period from 1 January 2025 to 30 June 2025:
RMB9,290,828.66).

- 65 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Fixed assets

Cost
31 December 2025
Increase in the current period
Additions
Transfer from construction in
progress
Transfer from investment
properties
Decrease in the current period
Disposals
Transfer to investment
properties
Other changes
Exchange differences on
translation of financial
statements denominated in
foreign currencies
30 June 2026
Accumulated depreciation
31 December 2025
Increase in the current period
Charged for the period
Transfer from investment
properties
Decrease in the current period
Disposals
Transfer to investment
properties
Exchange differences on
translation of financial
statements denominated in
foreign currencies
30 June 2026

Buildings

Machinery and
equipment

Transportation
vehicles

Electronic
equipment

Other equipment

Total

14,588,077,064.24

8,688,388,582.95

399,114,210.93

1,465,180,771.10

1,578,694,097.19

26,719,454,726.41

4,084,442.87

154,666,186.46

4,637,849.02

19,464,255.51

39,933,772.73

222,786,506.59

126,885,566.11

164,044,377.68

58,203.72

27,540,685.36

4,164,034.23

322,692,867.10

735,534.05

-

-

-

-

735,534.05

(4,646,262.62)

(59,439,506.38)

(13,445,589.67)

(21,363,747.47)

(12,915,100.99)

(111,810,207.13)

(37,752,037.35)

-

-

-

-

(37,752,037.35)

(1,963,134.81)

-

-

206,160.20

-

(1,756,974.61)

(280,164.11)

(10,449,251.23)

(25,873.75)

(1,753,715.59)

(3,518,441.52)

(16,027,446.20)

14,675,141,008.38

8,937,210,389.48

390,338,800.25

1,489,274,409.11

1,606,358,361.64

27,098,322,968.86

(3,953,341,652.51)

(4,603,335,072.50)

(299,958,134.85)

(1,072,720,787.38)

(986,739,559.22)

(10,916,095,206.46)

(240,184,454.40)

(319,361,629.91)

(14,980,788.28)

(80,748,203.39)

(83,995,256.82)

(739,270,332.80)

(523,225.42)

-

-

-

-

(523,225.42)

4,468,635.92

67,766,792.80

12,326,182.56

20,101,950.24

11,667,685.80

116,331,247.32

18,381,488.61

-

-

-

-

18,381,488.61

238,954.73

6,893,591.93

24,759.96

1,304,717.15

2,009,992.71

10,472,016.48

(4,170,960,253.07)

(4,848,036,317.68)

(302,587,980.61)

(1,132,062,323.38)

(1,057,057,137.53)

(11,510,704,012.27)

(121,949,690.62)

(132,877,269.70)

(696,855.15)

(3,819,426.60)

(50,621,085.43)

(309,964,327.50)

-

(60,564.31)

(825,884.30)

(44,689.76)

-

(931,138.37)

Impairment provision
31 December 2025
Increase in the current period
Charged for the period
Decrease in the current period
Disposals
Transfer to investment
properties
30 June 2026

-

276,075.88

-

-

-

276,075.88

15,222,749.77

-

-

-

-

15,222,749.77

(106,726,940.85)

(132,661,758.13)

(1,522,739.45)

(3,864,116.36)

(50,621,085.43)

(295,396,640.22)

Carrying amount
30 June 2026
31 December 2025

10,397,453,814.46
10,512,785,721.11

3,956,512,313.67
3,952,176,240.75

86,228,080.19
98,459,220.93

353,347,969.37
388,640,557.12

498,680,138.68
541,333,452.54

15,292,222,316.37
15,493,395,192.45

As at 30 June 2026, buildings, machinery and equipment with carrying amount of
RMB1,445,069,059.58 (Cost: RMB1,569,413,882.55) and 429,925.00 square metres of land use
rights (Carrying amount: RMB522,867,138.24; Cost: RMB585,543,205.30) (Note (IV)20) are
pledged as collaterals for short-term borrowings of RMB135,350,000.00 (Note (IV)27(1)), longterm borrowings of RMB1,319,462,021.18 (Note (IV)37(1)) and long-term borrowings due within
one year of RMB26,867,123.00 (Note (IV) 37(1)).

- 66 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Fixed assets - continued
As at 31 December 2025, buildings, machinery and equipment with carrying amount of
RMB1,310,459,405.52 (Cost: RMB1,405,634,618.70) and 345,947.00 square metres of land use
rights (Carrying amount: RMB494,939,040.15; Cost: RMB539,050,962.72) (Note (IV)20) are
pledged as collaterals for short-term borrowings of RMB129,988,501.08 (Note (IV)27(1)), longterm borrowings of RMB1,304,980,897.93 (Note (IV)37(1)), and long-term borrowings due within
one year of RMB17,498,544.00 (Note (IV) 37(1)).
For the period from 1 January 2026 to 30 June 2026, depreciation charged to fixed assets amounted
to RMB739,270,332.80 (for the period from 1 January 2025 to 30 June 2025: RMB758,205,314.18),
of
which
RMB364,157,670.02,
RMB114,206,173.48,
RMB194,136,529.45
and
RMB66,769,959.85 (for the period from 1 January 2025 to 30 June 2025: RMB353,258,770.62,
RMB99,848,731.89, RMB205,905,902.45 and RMB99,191,909.22) were charged to operating
costs, selling expenses, administrative expenses and R&D expenses respectively.
For the period from 1 January 2026 to 30 June 2026, the cost of fixed assets transferred from
construction in progress amounted to RMB322,692,867.10 (for the period from 1 January 2025 to
30 June 2025: RMB217,525,336.25).
(1) Temporarily idle fixed assets
As at 30 June 2026, the Group has no significant temporarily idle fixed assets (31 December 2025:
Nil).
(2) Fixed assets with pending certificates of ownership:
Carrying
amount
Buildings

334,974,389.00

Reasons for not
obtaining certificates
of ownership yet
Still in process

17. Construction in progress
30 June 2026
Construction
in progress

Gross carrying
amount

Impairment
provision

2,164,290,026.28

(199,230,450.95)

31 December 2025
Carrying amount

Gross carrying
amount

Impairment
provision

Carrying amount

1,965,059,575.33

2,193,324,631.66

(199,230,450.95)

1,994,094,180.71

- 67 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress - continued
(1) Changes in significant construction in progress projects
Proportion
of
construction
input to
budget (%)

Construction
progress (%)

Accumulative
amount of
capitalised
borrowing
costs

Including:
Capitalised
borrowing
costs in the
current period

Capitalisati
on rate in
the current
period (%)

Sources of
funds

590,131,335.21

51.43

51.43

-

-

-

Self-owned
funds

-

-

77.34

100.00

22,119,568.69

911,540.22

2.27

-

-

180,805,399.65

29.95

32.10

-

-

-

-

(193,161.89)

-

335,300,550.55

64.82

70.00

13,272,087.01

2,903,492.63

2.80

263,099,685.79

-

-

(32,724,870.95)

230,374,814.84

58.67

63.24

3,145,028.47

1,637,313.46

2.35

27,345.46

2,558,297.39

33,376,204.02

(7,409,393.77)

-

28,525,107.64

80.58

80.58

-

-

-

19,675.00

181,903,884.14

3,553,192.62

-

-

185,457,076.76

94.26

94.26

-

-

-

17,850.00

1,814,193.48

778,362.82

(479,823.01)

-

2,112,733.29

29.63

31.93

-

-

-

18,899.00

107,382,510.75

13,885,333.44

-

-

121,267,844.19

64.17

84.35

2,721,132.53

1,045,481.37

2.60

482,930,868.40
2,193,324,631.66

181,080,954.85
382,014,753.92

(118,065,037.85)
(322,692,867.10)

(55,631,621.25)
(88,356,492.20)

490,315,164.15
2,164,290,026.28

Budget
(RMB 0'000)

31 December
2025

Increase in the
current period

Transfer to fixed
assets

114,742.00

523,519,058.97

66,612,276.24

-

-

84,921.25

113,817,020.65

82,728,429.93

(196,545,450.58)

64,884.55

180,805,399.65

-

SPH Lingang Phase I Project

57,180.00

335,493,712.44

SPH Shandong Holdings Head
Office Construction Project

44,178.00

Name
Hangzhou Qingchun Zhechuang
Industrial Investment Co., Ltd.
Project Land
Suide Road Phase II Project of
Shanghai Pharmaceutical Logistics
Center
Liaoning Meiya Pharmaceutical
Co., Ltd. relocation project

Nantong Changyou Chemicals
Co., Ltd. Phase III Project
SPH Sine Microecological
Innovation Drug Transformation
Center and Industrialisation
Project
SPH Cloud Data Center Construction
Project
SPH Anhui Logistics Phase II
Construction Project
Others
Total

Other decrease

- 68 -

30 June 2026

Self-owned
funds/
Borrowings
Self-owned
funds
Self-owned
funds/
Borrowings
Self-owned
funds/
Borrowings
Self-owned
funds
Self-owned
funds
Self-owned
funds
Self-owned
funds/
Borrowings

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress - continued
(2) Provision for impairment of construction in progress
31 December 2025
Liaoning Meiya Pharmaceutical Co., Ltd. relocation
project
Others
Total

Increase in the
current period

Decrease in the
current period

30 June 2026

(180,805,399.65)

-

-

(180,805,399.65)

(18,425,051.30)
(199,230,450.95)

-

-

(18,425,051.30)
(199,230,450.95)

(3) As at 30 June 2026, the progress of the construction in progress in the Group is estimated based on the proportion of construction input to budget.

- 69 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Bearer biological assets

Cost
31 December 2025
Increase in the current period
Others
Decrease in the current period
Disposal and retirement
30 June 2026
Accumulated depreciation
31 December 2025
Increase in the current period
Charged for the period
Decrease in the current period
Disposal and retirement
30 June 2026
Impairment provision
31 December 2025
30 June 2026
Carrying amount
30 June 2026
31 December 2025

Mature biological
assets

Immature
biological assets

439,198,609.90

9,782,386.56

448,980,996.46

-

2,039,247.59

2,039,247.59

(57,263.37)
439,141,346.53

(886,283.72)
10,935,350.43

(943,547.09)
450,076,696.96

(54,749,045.13)

-

(54,749,045.13)

(275,425.17)

-

(275,425.17)

8,160.04
(55,016,310.26)

-

8,160.04
(55,016,310.26)

(381,133,516.18)
(381,133,516.18)

(8,323,920.20)
(8,323,920.20)

(389,457,436.38)
(389,457,436.38)

2,991,520.09
3,316,048.59

2,611,430.23
1,458,466.36

5,602,950.32
4,774,514.95

- 70 -

Total

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets
Buildings
Cost
31 December 2025
Increase in the current period
New lease contracts
Decrease in the current period
Decrease in lease contracts
Exchange differences on
translation of financial
statements denominated
in foreign currencies
30 June 2026
Accumulated depreciation
31 December 2025
Increase in the current period
Charged for the period
Decrease in the current period
Decrease in lease contracts
Exchange differences on
translation of financial
statements denominated
in foreign currencies
30 June 2026
Impairment provision
31 December 2025 and
30 June 2026
Carrying amount
30 June 2026
31 December 2025

Machinery and
equipment

Total

4,230,501,431.96

65,489,683.76

4,295,991,115.72

594,379,228.60

5,737,940.67

600,117,169.27

(374,683,466.40)

(6,291,451.66)

(380,974,918.06)

(19,266,704.64)

-

(19,266,704.64)

4,430,930,489.52

64,936,172.77

4,495,866,662.29

(2,451,418,667.70)

(36,787,602.94) (2,488,206,270.64)

(344,522,644.25)

(11,218,156.39)

(355,740,800.64)

359,226,758.96

6,291,451.66

365,518,210.62

8,114,615.85

-

8,114,615.85

(2,428,599,937.14)

(41,714,307.67) (2,470,314,244.81)

(13,978,636.98)

-

(13,978,636.98)

1,988,351,915.40
1,765,104,127.28

23,221,865.10
28,702,080.82

2,011,573,780.50
1,793,806,208.10

- 71 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets
Land use rights
Cost
31 December 2025
Increase in the current period
Additions
Transfer from development
expenditure
Transfer from construction
in progress
Decrease in the current period
Disposals and write-off
Exchange differences on
translation of financial
statements denominated
in foreign currencies
30 June 2026
Accumulated amortisation
31 December 2025
Increase in the current period
Charged for the period
Decrease in the current period
Disposals and write-off
Exchange differences on
translation of financial
statements denominated
in foreign currencies
30 June 2026
Impairment provision
31 December 2025
Increase in the current period
Charged for the period
Decrease in the current period
Exchange differences on
translation of financial
statements denominated
in foreign currencies
30 June 2026
Carrying amount
30 June 2026
31 December 2025

Business network

Brands and
trademarks

Know-how and
patents

Software and
others

Total

4,782,927,955.00

3,340,319,558.80

1,185,039,754.53

2,375,169,265.94

1,898,519,733.86

13,581,976,268.13

-

-

-

1,400,000.00

64,792,241.42

66,192,241.42

-

-

-

-

17,166,046.39

17,166,046.39

-

-

-

-

13,014,934.65

13,014,934.65

-

-

-

(756,574.97)

(7,324,456.27)

(8,081,031.24)

-

(107,230.47)

(3,916,252.49)

(873,200.01)

(696,964.30)

(5,593,647.27)

4,782,927,955.00

3,340,212,328.33

1,181,123,502.04

2,374,939,490.96

1,985,471,535.75

13,664,674,812.08

(883,455,733.44)

(1,887,143,353.28)

(50,109,052.57)

(705,513,048.97)

(891,111,395.48)

(4,417,332,583.74)

(52,447,995.65)

(119,761,985.33)

-

(82,893,789.02)

(69,055,799.06)

(324,159,569.06)

-

-

-

567,431.17

3,374,580.74

3,942,011.91

-

78,759.49

2,976,586.26

623,188.29

419,294.35

4,097,828.39

(935,903,729.09)

(2,006,826,579.12)

(47,132,466.31)

(787,216,218.53)

(956,373,319.45)

(4,733,452,312.50)

(66,085,577.52)

(13,530,000.02)

(105,506,250.80)

(194,844,096.37)

(40,927,520.45)

(420,893,445.16)

(12,141,610.98)

-

-

-

-

(12,141,610.98)

-

-

191,488.00

-

-

191,488.00

(78,227,188.50)

(13,530,000.02)

(105,314,762.80)

(194,844,096.37)

(40,927,520.45)

(432,843,568.14)

3,768,797,037.41
3,833,386,644.04

1,319,855,749.19
1,439,646,205.50

1,028,676,272.93
1,029,424,451.16

1,392,879,176.06
1,474,812,120.60

988,170,695.85
966,480,817.93

8,498,378,931.44
8,743,750,239.23

As at 30 June 2026, the Group has no certificates of ownership for land use rights whose application
is still in progress (31 December 2025: Carrying amount: RMB229,238,263.27 (Cost:
RMB259,295,165.31)).
As at 30 June 2026 and 31 December 2025, details of land use rights, buildings and machinery and
equipment pledged as collateral for short-term borrowings, long-term borrowings and long-term
borrowings due within one year are set out in Note (IV)16.
As at 30 June 2026, the proportion of intangible assets formed through internal research and
development within the Group to the carrying amount of intangible assets is 2.37% (31 December
2025: 2.31%).

- 72 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Development expenditure
The analysis of changes in development expenditure qualified for capitalisation for the period from
1 January 2026 to 30 June 2026 is as follows:

R&D project

31 December 2025

Input in the current
period

103,244,846.29

6,195,935.65

Transfer to
intangible assets in
the current period
(17,166,046.39)

Impairment
provision

30 June 2026
-

92,274,735.55

22. Goodwill
31 December 2025
Goodwill Shanghai Pharma Co., Ltd.'s subsidiaries
China Health System Ltd. and its
subsidiaries
Shanghai Pharmaceuticals (HK)
Investment Limited's subsidiaries
Shanghai Hutchison Pharmaceutical
Co., Ltd. and its subsidiaries (Note (V)1)
Guangdong Techpool Biochemical
Pharmaceutical Co., Ltd. and its
subsidiaries
Zeus Investment Limited and its subsidiaries
Big Global Limited and its subsidiaries
Shanghai TCM Co., Ltd.'s subsidiaries
Liaoning Pharmaceutical Foreign Trading
Co., Ltd. and its subsidiaries
Star Fountain Global Limited and
its subsidiaries
SPH Sine Pharmaceutical Factory
Co., Ltd.'s subsidiaries
Shanghai Medical Instruments
Co., Ltd.'s subsidiaries
Shanghai Pharma Group Changzhou
Kony Pharmaceutical Co., Ltd.
Others

Less: Impairment provision (1)
Zeus Investment Limited and its subsidiaries
Big Global Limited and its subsidiaries
Star Fountain Global Limited and
its subsidiaries
Shanghai Pharma Co., Ltd.'s subsidiaries
Shanghai TCM Co., Ltd.'s subsidiaries
Shanghai Medical Instruments
Co., Ltd.'s subsidiaries
Shanghai Pharma Group Changzhou
Kony Pharmaceutical Co., Ltd.
Others
Total

Increase in the
current period

Decrease in the
current period

Other changes

30 June 2026

3,679,245,949.91

-

-

-

3,679,245,949.91

2,862,388,863.45

-

-

-

2,862,388,863.45

2,543,895,939.53

-

-

-

2,543,895,939.53

1,846,347,601.54

-

-

-

1,846,347,601.54

1,399,888,707.64

-

-

-

1,399,888,707.64

978,771,105.00
445,109,447.21
322,265,997.71

-

-

(44,598,639.73)
-

934,172,465.27
445,109,447.21
322,265,997.71

231,799,384.99

-

-

-

231,799,384.99

188,057,733.96

-

-

-

188,057,733.96

36,532,600.21

-

-

-

36,532,600.21

138,131,837.94

-

-

-

138,131,837.94

107,285,726.91

-

-

-

107,285,726.91

157,094,963.30
14,936,815,859.30

-

-

(44,598,639.73)

157,094,963.30
14,892,217,219.57

(891,362,300.84)
(445,109,447.21)

-

-

31,927,242.58
-

(859,435,058.26)
(445,109,447.21)

(188,057,733.96)

-

-

-

(188,057,733.96)

(84,010,914.29)
(322,265,997.71)

-

-

-

(84,010,914.29)
(322,265,997.71)

(138,131,837.94)

-

-

-

(138,131,837.94)

(90,468,682.53)

-

-

-

(90,468,682.53)

(111,793,374.95)
(2,271,200,289.43)
12,665,615,569.87

-

-

31,927,242.58
(12,671,397.15)

(111,793,374.95)
(2,239,273,046.85)
12,652,944,172.72

- 73 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill - continued
(1) Impairment
The Group's goodwill was allocated to related asset groups and groups of asset groups at acquisition
date. The allocation is summarised by reporting segments (Note VI) as follows:
Cost
Production Shanghai Hutchison Pharmaceutical
Co., Ltd. and its subsidiaries
Guangdong Techpool Biochemical
Pharmaceutical Co., Ltd. and its
subsidiaries
Zeus Investment Limited and its subsidiaries
Big Global Limited and its subsidiaries
Star Fountain Global Limited and
its subsidiaries
Shanghai TCM Co., Ltd.'s subsidiaries
Shanghai Medical Instruments
Co., Ltd.'s subsidiaries
Others
Distribution Distribution business of Shanghai
Pharma Co., Ltd. and Cardinal
Health (L) Co., Ltd.
Distribution business of China Health
System Ltd. and Liaoning Pharmaceutical
Foreign Trading Co., Ltd.
Others

Retail and others
Total

30 June 2026
Impairment

Cost

31 December 2025
Impairment

1,846,347,601.54

-

1,846,347,601.54

-

1,399,888,707.64

-

1,399,888,707.64

-

934,172,465.27
445,109,447.21

(859,435,058.26)
(445,109,447.21)

978,771,105.00
445,109,447.21

(891,362,300.84)
(445,109,447.21)

188,057,733.96

(188,057,733.96)

188,057,733.96

(188,057,733.96)

322,265,997.71

(322,265,997.71)

322,265,997.71

(322,265,997.71)

138,131,837.94

(138,131,837.94)

138,131,837.94

(138,131,837.94)

200,452,286.52
5,474,426,077.79

(120,275,932.04)
(2,073,276,007.12)

200,452,286.52
5,519,024,717.52

(120,275,932.04)
(2,105,203,249.70)

5,932,900,005.59

-

5,932,900,005.59

-

3,094,188,248.44

-

3,094,188,248.44

-

153,798,838.87
9,180,887,092.90

(153,798,838.87)
(153,798,838.87)

153,798,838.87
9,180,887,092.90

(153,798,838.87)
(153,798,838.87)

236,904,048.88

(12,198,200.86)

236,904,048.88

(12,198,200.86)

14,892,217,219.57

(2,239,273,046.85)

14,936,815,859.30

(2,271,200,289.43)

When conducting a goodwill impairment test, the Group compares the carrying amount of related
assets or groups of asset groups (including goodwill) with their recoverable amount. If the
recoverable amount is lower than the carrying amount, the related difference is recognised in profit
or loss for the period.
The Group determines the revenue growth rate and gross margin on the basis of historical
experience and forecast of market development, and adopts a pre-tax interest rate reflecting the
specific risks of relevant asset group or portfolio of asset groups as the discount rate. The growth
rate for forecast period is based on the five-year budget as approved, while the growth rate for stable
period is the growth rate adopted subsequent to the forecast period, which is consistent with the
predicted data in authoritative industry reports and does not exceed the long-term average growth
rate of each product. The discount rate is the pre-tax discount rate reflecting the specific risks of
relevant asset group and portfolio of asset groups.

- 74 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses
Increase in the
current period

Amortisation in
the current
period

Other changes

398,435,799.86

7,609,920.96

(16,072,064.44)

(85,928.98)

389,887,727.40

147,859,113.33
546,294,913.19

45,655,154.97
53,265,075.93

(68,246,060.89)
(84,318,125.33)

(5,398,851.47)
(5,484,780.45)

119,869,355.94
509,757,083.34

31 December
2025
Improvement of
right-of-use assets
Others
Total

30 June 2026

24. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
30 June 2026
Deductible
temporary
Deferred tax assets
differences
Provision for impairment
of assets
Accrued expenses
Lease liabilities
Elimination of intra-group
unrealised profit
Deductible losses
Others
Total

31 December 2025
Deductible
temporary
Deferred tax assets
differences

4,404,453,454.10

1,022,270,467.81

4,131,765,272.98

936,938,503.59

2,695,176,734.33
1,791,056,970.38

607,887,814.33
442,458,690.76

2,539,812,563.39
1,619,137,665.89

569,064,709.30
393,605,655.29

645,778,821.95

141,907,224.27

541,517,331.09

124,365,649.17

516,715,225.00
460,900,134.30
10,514,081,340.06

130,283,367.80
100,086,426.21
2,444,893,991.18

651,513,780.01
413,024,784.41
9,896,771,397.77

137,822,439.01
95,949,180.75
2,257,746,137.11

(2) Deferred tax liabilities before offset
30 June 2026
Taxable temporary
Deferred tax
differences
liabilities
Differences between the fair value
and the carrying amount of the
identifiable net assets of the
acquiree arising from business
combinations not involving
enterprises under common
control
Temporary differences arising from
the deemed disposal of joint
ventures
Right-of-use assets
Investment income arising from
disposal of subsidiaries
Depreciation of fixed assets
Changes in fair value of other noncurrent financial assets
Others
Total

31 December 2025
Taxable temporary
Deferred tax
differences
liabilities

5,236,018,222.12

942,580,746.17

5,475,948,370.87

1,024,800,013.75

2,953,335,553.61

738,333,888.40

2,953,335,553.61

738,333,888.40

2,011,573,780.50

497,988,161.56

1,793,806,208.10

438,795,431.68

936,796,982.27

234,199,245.57

940,193,205.88

235,048,301.47

631,080,934.20

79,009,248.19

661,802,424.38

84,379,664.15

2,686,086.92

671,521.73

3,156,329.02

789,082.26

287,661,852.11
12,059,153,411.73

71,805,084.49
2,564,587,896.11

165,163,748.15
11,993,405,840.01

40,631,873.15
2,562,778,254.86

- 75 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred tax assets and deferred tax liabilities - continued
(3) The net amounts of deferred tax assets and liabilities after offset are as follows:

Deferred tax assets
Deferred tax liabilities

30 June 2026
Offsetting amount
Amount after offset
(580,524,636.30)
1,864,369,354.88
580,524,636.30
1,984,063,259.81

31 December 2025
Offsetting amount
Amount after offset
(617,697,117.64)
1,640,049,019.47
617,697,117.64
1,945,081,137.22

(4) Deductible losses, for which no deferred tax assets are recognised, are analysed as follows:
30 June 2026
8,555,707,717.21

Deductible losses

31 December 2025
9,147,094,993.91

(5) Deductible losses, for which no deferred tax assets are recognised, will be expired in following
years:
30 June 2026
1,217,965,279.09
1,124,141,322.61
1,587,628,936.85
1,477,736,745.19
1,679,421,484.77
431,809,783.72
1,037,004,164.98
8,555,707,717.21

2026
2027
2028
2029
2030
2031
2032 and subsequent years
Total

- 76 -

31 December 2025
1,776,876,379.51
1,446,698,628.84
1,607,809,220.98
1,479,814,701.20
1,924,033,634.82
107,030,388.45
804,832,040.11
9,147,094,993.91

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Asset impairment and loss allowance

5,266,647.93

Increase in the
current period
4,430,350.57

Decrease in the
current period
(5,266,647.93)

Other changes in
the current period
-

-

-

-

-

31 December 2025
Bad debt allowance for notes receivable
Including: Bad debt allowance made on an
individual basis
Bad debt allowance made on a
portfolio basis
Bad debt allowance for accounts receivable
Including: Bad debt allowance made on
an individual basis
Bad debt allowance made on a
portfolio basis
Bad debt allowance for receivables financing
Bad debt allowance for other receivables
Bad debt allowance for long-term receivables
Sub-total
Provision for decline in value of inventories
Provision for impairment of long-term equity
investments
Provision for impairment of fixed assets
Provision for impairment of investment properties
Provision for impairment of construction in
progress
Provision for impairment of intangible assets
Provision for impairment of goodwill
Provision for impairment of right-of-use assets
Provision for impairment of long-term prepaid
expenses
Provision for impairment of bearer biological assets
Provision for impairment of development
expenditure
Sub-total
Total

Provision for decline in value of inventories
Provision for impairment of long-term equity
investments
Provision for impairment of fixed assets
Provision for impairment of construction in progress
Provision for impairment of intangible assets
Provision for impairment of goodwill
Provision for impairment of right-of-use assets
Provision for impairment of long-term prepaid
expenses
Provision for impairment of bearer biological assets
Sub-total
Total

4,430,350.57
-

5,266,647.93

4,430,350.57

(5,266,647.93)

-

4,430,350.57

2,873,328,561.35

506,610,206.20

(24,168,150.46)

(338,328.96)

3,355,432,288.13

613,853,770.21

192,642,983.16

(24,168,150.46)

(338,328.96)

781,990,273.95

2,259,474,791.14

313,967,223.04

-

-

2,573,442,014.18

10,244,200.95
889,408,449.38
54,790,114.19
3,833,037,973.80

8,394,783.98
38,621,384.97
1,761,090.88
559,817,816.60

(10,244,200.95)
(3,214,515.24)
(9,097,660.76)
(51,991,175.34)

9,970,301.39
9,631,972.43

8,394,783.98
934,785,620.50
47,453,544.31
4,350,496,587.49

1,311,684,699.76

14,972,418.97

-

(24,104,849.64)

1,302,552,269.09

220,663,722.23

-

-

-

220,663,722.23

309,964,327.50
8,251,390.62

931,138.37
-

-

(15,498,825.65)
15,222,749.77

295,396,640.22
23,474,140.39

199,230,450.95

-

-

-

199,230,450.95

420,893,445.16
2,271,200,289.43
13,978,636.98

12,141,610.98
-

-

(191,488.00)
(31,927,242.58)
-

432,843,568.14
2,239,273,046.85
13,978,636.98

3,705,981.40

-

-

-

3,705,981.40

389,457,436.38

-

-

-

389,457,436.38

46,642,184.69

-

-

-

46,642,184.69

5,195,672,565.10
9,028,710,538.90

28,045,168.32
587,862,984.92

(51,991,175.34)

(56,499,656.10)
(46,867,683.67)

5,167,218,077.32
9,517,714,664.81

6,994,443.32

Increase in the
current period
3,562,462.31

Decrease in the
current period
(6,994,443.32)

Other changes in
the current period
-

-

-

-

-

31 December 2024
Bad debt allowance for notes receivable
Including: Bad debt allowance made on
an individual basis
Bad debt allowance made on a
portfolio basis
Bad debt allowance for accounts receivable
Including: Bad debt allowance made on
an individual basis
Bad debt allowance made on a
portfolio basis
Bad debt allowance for receivables financing
Bad debt allowance for other receivables
Bad debt allowance for long-term receivables
Sub-total

30 June 2026

30 June 2025
3,562,462.31
-

6,994,443.32

3,562,462.31

(6,994,443.32)

-

3,562,462.31

2,422,522,271.81

473,544,103.16

(35,630,063.43)

1,214,207.99

2,861,650,519.53

555,921,695.63

19,593,519.35

(35,630,063.43)

(215,881.24)

539,669,270.31

1,866,600,576.18

453,950,583.81

-

1,430,089.23

2,321,981,249.22

9,361,859.07
795,690,702.72
53,656,818.78
3,288,226,095.70

9,069,186.98
7,456,466.16
5,933,753.70
499,565,972.31

(9,361,859.07)
(11,145,047.99)
(12,463,676.78)
(75,595,090.59)

1,304,068.91
(1,513,855.53)
1,004,421.37

9,069,186.98
793,306,189.80
45,613,040.17
3,713,201,398.79

1,426,570,249.01

-

(77,208,569.91)

(47,196,736.08)

1,302,164,943.02

220,663,722.23

-

-

-

220,663,722.23

199,740,653.32
12,796,135.30
208,510,003.62
2,030,840,107.91
101,702,699.66

25,648,344.88
124,820,000.87
49,434,738.75
164,543,389.88
-

-

(11,875,211.05)
3,503,174.00
33,208,435.15
(4,275,235.84)

213,513,787.15
137,616,136.17
261,447,916.37
2,228,591,932.94
97,427,463.82

3,347,859.94

-

-

-

3,347,859.94

258,292,956.76
4,462,464,387.75
7,750,690,483.45

122,840,559.42
487,287,033.80
986,853,006.11

(77,208,569.91)
(152,803,660.50)

(26,635,573.82)
(25,631,152.45)

381,133,516.18
4,845,907,277.82
8,559,108,676.61

- 77 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Asset impairment and loss allowance - continued
The Group performs impairment tests on long-term assets for which there are indications of
impairment as at the balance sheet date, and assesses the recoverable amount of the assets taking
into account the current usage of the assets and the future business plans. If the results of the
impairment tests indicate that the recoverable amount of an asset is less than its carrying amount,
provision for impairment is made for the difference and recognised as asset impairment loss.
26. Other non-current assets
Prepayments for construction and equipment
Others
Total

30 June 2026
163,012,481.58
233,615,104.16
396,627,585.74

31 December 2025
134,445,908.03
257,538,884.93
391,984,792.96

30 June 2026
135,350,000.00
529,811,357.55
10,000,000.00
45,805,036,310.16
48,318,597.53
46,528,516,265.24

31 December 2025
129,988,501.08
507,405,391.37
43,000,000.00
43,342,807,092.99
68,620,031.52
44,091,821,016.96

27. Short-term borrowings
Mortgaged borrowings (1)
Pledged borrowings (2)
Guaranteed borrowings (3)
Credit loans
Accrued interest
Total

(1) As at 30 June 2026 and 31 December 2025, details of land use rights, buildings and machinery
and equipment pledged as collateral for short-term borrowings, long-term borrowings and longterm borrowings due within one year are set out in Note (IV) 16.
(2) As at 30 June 2026, pledged bank borrowings of RMB529,811,357.55 are short-term
borrowings secured by commercial acceptances of RMB8,589,663.62, bank acceptances of
RMB90,424,954.36 and accounts receivable with carrying amount of RMB636,272,188.41.
As at 31 December 2025, pledged bank borrowings of RMB507,405,391.37 are short-term
borrowings secured by commercial acceptances of RMB111,441,396.32, bank acceptances of
RMB1,213,606.39 and accounts receivable with carrying amount of RMB572,374,821.92.
(3) As at 30 June 2026, guaranteed borrowings of RMB10,000,000.00 (31 December 2025:
RMB43,000,000.00) are mainly guaranteed by the minority shareholders of subsidiaries of the
Group.
(4) As at 30 June 2026, the Group has no overdue short-term borrowings, and the interest rate of
short-term borrowings ranges from 1.00% to 6.00% (31 December 2025: 1.20% to 5.50%).
- 78 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28. Notes payable
30 June 2026
1,943,899.84
6,978,033,992.26
6,979,977,892.10

Commercial acceptances
Bank acceptances
Total

31 December 2025
9,497,989.47
8,800,708,232.65
8,810,206,222.12

As at 30 June 2026, the Group has no overdue unpaid notes payable (31 December 2025: Nil).
29. Accounts payable
30 June 2026
56,604,672,321.33

Purchase payable

31 December 2025
52,594,352,033.44

(1) As at 30 June 2026, accounts payable aged over one year are RMB3,626,731,688.73 (31
December 2025: RMB3,646,861,370.43).
(2) The ageing analysis of accounts payable is as follows:
Within 1 year
1 to 2 years
Over 2 years
Total

30 June 2026
52,977,940,632.60
1,193,939,244.12
2,432,792,444.61
56,604,672,321.33

31 December 2025
48,947,490,663.01
1,676,325,533.34
1,970,535,837.09
52,594,352,033.44

30 June 2026
1,190,757,061.89

31 December 2025
1,504,248,413.81

30. Contract liabilities
Advance received from customers

For the period from 1 January 2026 to 30 June 2026, contract liabilities at the beginning of the
period with carrying amount of RMB1,384,609,004.42 (for the period from 1 January 2025 to 30
June 2025: RMB1,403,011,683.19) were transferred to operating income, all of which were income
from sales of goods.
31. Employee benefits payable
30 June 2026
1,671,018,790.89
28,643,760.13
182,803.00
1,699,845,354.02

Short-term employee benefits payable (1)
Defined contribution plan payable (2)
Termination benefits payable (3)
Total

- 79 -

31 December 2025
1,889,901,569.81
29,935,831.68
2,399,014.87
1,922,236,416.36

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable - continued
(1) Short-term employee benefits
31 December 2025

Increase in the
current period

Decrease in the
current period

30 June 2026

1,678,266,856.63

4,260,066,087.07

(4,483,382,357.18)

1,454,950,586.52

14,660,178.46
13,644,396.86
812,134.14
203,647.46
4,712,569.89

136,056,351.57
271,301,443.28
251,658,051.36
15,311,867.05
4,331,524.87
283,721,069.61

(136,056,351.57)
(271,095,877.88)
(251,441,699.17)
(15,319,529.96)
(4,334,648.75)
(284,419,862.11)

14,865,743.86
13,860,749.05
804,471.23
200,523.58
4,013,777.39

77,866,123.23

70,826,339.20

(64,601,223.81)

84,091,238.62

114,395,841.60
1,889,901,569.81

35,031,903.30
5,057,003,194.03

(36,330,300.40)
(5,275,885,972.95)

113,097,444.50
1,671,018,790.89

Increase in the
current period
476,558,740.88
16,592,812.49
493,151,553.37

Decrease in the
current period
(477,845,952.67)
(16,597,672.25)
(494,443,624.92)

Wages and salaries, bonus,
allowances and subsidies
Staff welfare
Social insurance
Including: Medical insurance
Work injury insurance
Maternity insurance
Housing funds
Union running costs and
employee education costs
Others
Total

(2) Defined contribution plan
31 December 2025
Basic pension insurance
Unemployment insurance
Total

28,520,865.70
1,414,965.98
29,935,831.68

30 June 2026
27,233,653.91
1,410,106.22
28,643,760.13

Monthly payments of basic pension insurance and unemployment insurance are calculated
according to prescribed bases and percentage by the relevant local authorities, which cannot be used
to offset any future payments that the Group is required to make for employees.
(3) Termination benefits payable
Termination benefits payable (current portion)

30 June 2026
182,803.00

31 December 2025
2,399,014.87

30 June 2026
995,598,614.01
250,276,139.44
28,233,728.19
37,463,659.13
40,266,129.87
29,711,975.17
68,030,540.08
1,449,580,785.89

31 December 2025
875,119,386.02
368,270,034.33
57,000,911.39
36,842,476.10
35,752,974.92
30,090,735.99
83,167,763.64
1,486,244,282.39

32. Taxes payable
Enterprise income tax payable
VAT payable
Individual income tax payable
City maintenance and construction tax payable
Property tax payable
Education surcharge payable
Others
Total
- 80 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables
30 June 2026
10,223,338,083.34
2,096,095,364.30
1,838,911,496.65
705,551,351.02
598,358,485.30
40,333,402.33
2,590,168,495.96
18,092,756,678.90

Accrued expenses
Deposits and guarantees payable
Dividends payable
Construction and equipment payable
Amounts due to other companies
Equity acquisition payable
Others
Total

31 December 2025
9,603,380,162.39
2,068,188,648.37
1,074,213,335.02
1,036,807,476.86
549,673,428.58
175,861,359.05
2,223,789,576.85
16,731,913,987.12

(1) As at 30 June 2026, other payables aged over one year are RMB4,561,714,089.11 (31 December
2025: RMB3,913,094,646.47).
34. Provisions
31 December
2025
Pending litigations and
matters in dispute
Others
Total

Increase in the
current period

Decrease in the
current period

30 June 2026

59,063,098.89

627,778.21

-

59,690,877.10

15,636,833.48
74,699,932.37

627,778.21

(5,712,033.86)
(5,712,033.86)

9,924,799.62
69,615,676.72

35. Non-current liabilities due within one year
Stock repurchase option due within one year
Long-term borrowings due within one year
(Note (IV)37)
Lease liabilities due within one year (Note (IV)38)
Total

30 June 2026
98,851,631.25

31 December 2025
98,851,631.25

1,121,799,288.13

2,125,374,630.45

482,890,461.45
1,703,541,380.83

585,373,051.40
2,809,599,313.10

30 June 2026

31 December 2025

6,021,156,164.38

5,036,081,369.86

131,984,619.63
6,153,140,784.01

198,108,786.81
5,234,190,156.67

36. Other current liabilities
Super & Short-term Commercial Paper
("SCP") (1)
Output VAT to be transferred
Total

- 81 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Other current liabilities - continued
(1) Details of the SCP are as follows:
Amortisation of
premiums or
discounts

Repayment for the
period

30 June 2026

7,167,945.21
16,201,643.84
16,984,109.59
2,939,178.08
1,232,876.71
44,525,753.43

147,500.00
75,000.00
149,444.44
371,944.44

(3,033,701,917.81)
(2,025,749,041.10)
(5,059,450,958.91)

3,016,984,109.59
1,002,939,178.08
2,001,232,876.71
6,021,156,164.38

Bond maturity
268 days
267 days
177 days
270 days
269 days

Issuing amount
2,998,883,333.33
1,999,258,333.33
2,999,852,500.00
999,925,000.00
1,999,850,555.56

Coupon rate (%)
1.53
1.76
1.64
1.49
1.50

Default or not
N
N
N
N
N

31 December
2025

Issuance for the
period

Accrued
interest

2025 SCP stage 2
2025 SCP stage 3
2026 SCP stage 1
2026 SCP stage 2
2026 SCP stage 3
Total

3,026,533,972.60
2,009,547,397.26
5,036,081,369.86

2,999,852,500.00
999,925,000.00
1,999,850,555.56
5,999,628,055.56

2025 SCP stage 2
2025 SCP stage 3
2026 SCP stage 1
2026 SCP stage 2
2026 SCP stage 3

Face value
3,000,000,000.00
2,000,000,000.00
3,000,000,000.00
1,000,000,000.00
2,000,000,000.00

Issuing date
3 June 2025
23 September 2025
24 February 2026
17 April 2026
15 June 2026

37. Long-term borrowings
Mortgaged borrowings (1)
Credit borrowings
Pledged borrowings (2)
Accrued interest
Sub-total

30 June 2026
1,346,329,144.18
2,919,580,413.98
132,485,643.64
470,815.56
4,398,866,017.36

31 December 2025
1,322,479,441.93
4,908,787,329.68
127,736,057.64
2,247,401.23
6,361,250,230.48

Less: Long-term borrowings due within one year
Mortgaged borrowings (1)
Credit borrowings
Pledged borrowings (2)
Accrued interest
Sub-total
Total

(26,867,123.00)
(1,043,024,220.50)
(51,736,495.64)
(171,448.99)
(1,121,799,288.13)
3,277,066,729.23

(17,498,544.00)
(2,020,865,611.09)
(84,941,029.63)
(2,069,445.73)
(2,125,374,630.45)
4,235,875,600.03

(1) As at 30 June 2026 and 31 December 2025, details of land use rights, buildings and machinery
and equipment pledged as collaterals for short-term borrowings, long-term borrowings and
long-term borrowings due within one year are set out in Note (IV)16.
(2) As at 30 June 2026, pledged bank borrowings of RMB80,749,148.00 and long-term borrowings
due within one year of RMB51,736,495.64 (Note (IV)35) are secured by accounts receivable
with carrying amount of RMB132,485,643.64.
As at 31 December 2025, pledged bank borrowings of RMB42,795,028.01 and long-term
borrowings due within one year of RMB84,941,029.63 (Note (IV)35) are secured by accounts
receivable with carrying amount of RMB127,736,057.64.
- 82 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Long-term borrowings - continued
(3) As at 30 June 2026, the Group has no overdue long-term borrowings, and the interest rate of
long-term borrowings ranges from 1.90% to 5.00% (31 December 2025: 1.65% to 5.00%).
38. Lease liabilities
Lease liabilities
Less: Non-current liabilities due within one year
(Note (IV)35)
Net amount

30 June 2026
1,956,710,111.53

31 December 2025
1,734,747,302.16

(482,890,461.45)

(585,373,051.40)

1,473,819,650.08

1,149,374,250.76

As at 30 June 2026, the Group has no lease payments related to lease contracts that are signed but
not yet commenced (31 December 2025: RMB64,284,260.40).
39. Long-term payables
Payables for investments
Less: Long-term payables due within one year
Net amount

30 June 2026
9,000,000.00
9,000,000.00

31 December 2025
9,000,000.00
9,000,000.00

40. Deferred income
31 December
2025
Compensation for
demolition and
construction
Government grants (1)
Total

Increase in the
current period

Decrease in the
current period

30 June 2026

66,309,183.05

-

(2,502,575.87)

63,806,607.18

507,067,296.11
573,376,479.16

35,937,137.90
35,937,137.90

(29,825,021.93)
(32,327,597.80)

513,179,412.08
576,986,019.26

Increase in the
current period

Amount included
in other income

30 June 2026

238,237,853.91

10,949,885.52

(16,982,073.69)

232,205,665.74

268,829,442.20

24,987,252.38

(12,842,948.24)

280,973,746.34

507,067,296.11

35,937,137.90

(29,825,021.93)

513,179,412.08

(1) Government grants
31 December
2025
Government grants related
to assets
Government grants related
to income
Total

- 83 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Long-term employee benefits payable
Termination benefits payable
Less: Portion to be paid within one year
(Note (IV)31)
Net amount

30 June 2026
41,661,313.09

31 December 2025
45,456,482.59

(82,803.00)

(1,777,564.37)

41,578,510.09

43,678,918.22

Termination benefits payable to be paid within one year are disclosed in employee benefits payable.
42. Other non-current liabilities
30 June 2026
87,614,921.23
42,150,417.43
129,765,338.66

Medical reserve funds
Other
Total

31 December 2025
90,366,976.15
41,913,479.20
132,280,455.35

43. Share capital
31 December
2025
Shares subject to trading
restriction Ordinary shares
denominated in RMB
Shares not subject to trading
restriction Ordinary shares
denominated in RMB
Foreign shares listed
overseas
Total

Total

30 June 2026

Sub-total

81,600.00

-

-

-

-

81,600.00

2,789,207,505.00

-

-

-

-

2,789,207,505.00

919,072,704.00

-

-

-

-

919,072,704.00

3,708,280,209.00
3,708,361,809.00

-

-

-

-

3,708,280,209.00
3,708,361,809.00

31 December
2024
Shares subject to trading
restriction Ordinary shares
denominated in RMB
Shares not subject to trading
restriction Ordinary shares
denominated in RMB
Foreign shares listed
overseas

Changes for the period
Unlock nonOthers
tradable shares

Issue new
shares

Changes for the period
Unlock nonOthers
tradable shares

Issue new
shares (1)

30 June 2025

Sub-total

852,708,396.00

-

(852,626,796.00)

-

(852,626,796.00)

81,600.00

1,936,190,739.00

389,970.00

852,626,796.00

-

853,016,766.00

2,789,207,505.00

919,072,704.00

-

-

-

-

919,072,704.00

2,855,263,443.00
3,707,971,839.00

389,970.00
389,970.00

852,626,796.00
-

-

853,016,766.00
389,970.00

3,708,280,209.00
3,708,361,809.00

(1) For the periods from 1 January 2025 to 30 June 2025, the increase in share capital represents
the share capital issued by the exercise of share options under the Group's A-share share
incentive plan.
- 84 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Capital reserve

29,645,417,346.71

Increase in the
current period
270,873,150.70

370,391,189.31
2,360,484.00
(331,048,905.14)
29,687,120,114.88

31 December 2025
Share premium (1)
Other capital reserve Share of changes in equity other than
comprehensive income and profit
distribution of investees under the
equity method (2)
Share-based payment (3)
Others
Total

Share premium (1)
Other capital reserve Share of changes in equity other than
comprehensive income and profit
distribution of investees under the
equity method (2)
Share-based payment (3)
Others
Total

30 June 2026
-

29,916,290,497.41

14,683,430.85

-

385,074,620.16

285,556,581.55

(2,360,484.00)
(2,360,484.00)

(331,048,905.14)
29,970,316,212.43

29,587,725,772.78

Increase in the
current period
57,691,573.94

374,301,695.22
17,157,711.45
(331,413,907.94)
29,647,771,271.51

31 December 2024

Decrease in the
current period

Decrease in the
current period

30 June 2025
-

29,645,417,346.72

2,770,473.32

-

377,072,168.54

2,078,539.99
62,540,587.25

(14,797,227.45)
(14,797,227.45)

2,360,484.00
(329,335,367.95)
29,695,514,631.31

(1) For the period from 1 January 2026 to 30 June 2026, the increase in capital reserve was mainly
the difference between the consideration paid for the transaction between the Group and its
minority shareholders and identifiable net assets of the subsidiaries based on continuous
calculation from the acquisition date at proportion of shareholding after transaction, and the
difference between the total funds receivable from the exercise of stock options under the
Group's A-share incentive plan, less the total nominal value of the shares issued.
For the period from 1 January 2025 to 30 June 2025, the increase in capital reserve was mainly
the difference between the total funds receivable from the exercise of stock options under the
Group's A-share incentive plan, less the total nominal value of the shares issued, and the
difference between the consideration paid for the transaction between the Group and its minority
shareholders and identifiable net assets of the subsidiaries based on continuous calculation from
the acquisition date at proportion of shareholding after transaction.
(2) For the periods from 1 January 2026 to 30 June 2026 and from 1 January 2025 to 30 June 2025,
the change in the capital reserve was mainly the share of changes in equity other than
comprehensive income and profit distribution of investees under the equity method.

- 85 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Capital reserve - continued
(3) Share-based payment
(i) Summary
According to the 2019 Stock Option Incentive Plan of Shanghai Pharmaceuticals Holding Co., Ltd.
("Incentive Plan") approved by the resolution of the 2019 first extraordinary shareholders' meeting
held on 18 December 2019, the Company would grant stock options to its directors, senior
management, middle management and core technical and business backbones ("incentive
recipients"), and it was estimated that approximately 28,420,000.00 stock options would be granted.
On 19 December 2019, 25,680,000.00 stock options were granted for the first time ("First
Granting").
Pursuant to the Proposal of Granting Reserved Stock Options to Incentive Recipients approved by
resolutions of the 15th meeting of the 7th Board of Directors and the 12th meeting of the 7th Board
of Supervisors held on 15 December 2020, the Company granted a total of 2,730,000.00 stock
options to incentive recipients ("Reserved Granting").
Pursuant to the Announcement on Adjusting the List of Incentive Objects and the Quantity of
Options in the 2019 A-Share Stock Option Incentive Plan and Cancelling of Part of Options
approved by resolutions of the 28th meeting of the 7th Board of Directors held on 5 January 2022,
the Company adjusted the total number of stock options of First Granting to 23,258,120.00 shares.
Pursuant to the Proposal on Adjusting the List of Incentive Objects and the Quantity of Options
Granted in the 2019 A-Share Stock Option Incentive Plan and Cancelling of Part of Options
approved by resolutions of the 36th meeting of the 7th Board of Directors held on 9 January 2023,
the Company adjusted the total number of stock options of First Granting to 22,735,520.00 shares
and adjusted the total number of stock options of Reserved Granting to 2,290,000.00 shares.
Pursuant to the Proposal on Cancellation of Expired and Unexercised Stock Options for the First
Exercise Period of First Granting of the Company's 2019 A-share Stock Option Incentive Plan
approved by resolutions of the 37th meeting of the 7th Board of Directors held on 30 March 2023,
the Company cancelled a total of 4,324,659.00 expired and unexercised stock options for the first
exercise period of First Granting.
Pursuant to the Proposal on Adjusting the List of Incentive Objects and the Quantity of Options
Granted in the 2019 A-Share Stock Option Incentive Plan and Cancelling of Part of Options
approved by resolutions of the 5th meeting of the 8th Board of Directors held on 21 December 2023,
the Company adjusted the number of stock options for the third exercise period of First Granting
from 7,646,600.00 shares to 6,976,800.00 shares.

- 86 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Capital reserve - continued
(3) Share-based payment - continued
(i) Summary - continued
Pursuant to the Proposal on Cancellation of Expired and Unexercised Stock Options for the Second
Exercise Period of First Granting and the First Exercise Period of Reserved Granting of the
Company's 2019 A-share Stock Option Incentive Plan approved by resolutions of the 8th meeting
of the 8th Board of Directors held on 28 March 2024, the Company cancelled the expired and
unexercised stock options of 2,449,071.00 shares for the second exercise period of First Granting
and 485,954.00 shares for the first exercise period of Reserved Granting.
Pursuant to the Proposal on Adjusting the List of Incentive Recipients and the Number of Options
Granted of the 2019 A-Share Stock Option Incentive Plan and Cancelling Part of Options approved
by resolutions of the 16th meeting of the 8th Board of Directors held on 31 December 2024, the
Company adjusted the number of stock options for the third exercise period of Reserved Granting
from 778,600.00 shares to 680,000.00 shares.
Pursuant to the Proposal on Cancelling Expired and Unexercised Stock Options for the Third
Exercise Period of First Granting and the Second Exercise Period of Reserved Granting of the
Company's 2019 A-share Stock Option Incentive Plan approved by resolutions of the 20th meeting
of the 8th Board of Directors held on 27 March 2025, the Company cancelled the expired and
unexercised stock options of 2,147,930.00 shares for the third exercise period of First Granting and
523,815.00 shares for the second exercise period of Reserved Granting.
Pursuant to the Proposal on Cancelling Expired and Unexercised Stock Options for the Third
Exercise Period of Reserved Granting of the Company's 2019 A-share Stock Option Incentive Plan
approved by resolutions of the 29th meeting of the 8th Board of Directors held on 30 March 2026,
the Company cancelled the expired and unexercised stock options of 680,000.00 shares for the third
exercise period of Reserved Granting.
The Company's and incentive recipients' performance will be assessed in the above Incentive Plan.
The percentage of stock options can be exercised is 33%, 33% and 34% respectively since working
for 2 years, 3 years and 4 years from the granting date.

- 87 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Capital reserve - continued
(3) Share-based payment - continued
(ii) Statement of changes in stock options during the period
For the period from
1 January 2026 to 30 June 2026
Number
Amount
Outstanding stock options issued at the
beginning of the period
Stock options exercised in the
current period
Stock options expired in the
current period
Outstanding stock options
issued at the end of the period
Including: stock options that met the
exercisable conditions
at the end of the period

For the period from
1 January 2025 to 30 June 2025
Number
Amount

680,000.00

13,708,800.00

3,741,715.00

70,991,649.40

-

-

(389,970.00)

(7,179,347.70)

(680,000.00)

(13,708,800.00)

(2,671,745.00)

(50,103,501.70)

-

-

680,000.00

13,708,800.00

-

-

680,000.00

13,708,800.00

Share-based payment expenses in the
current period
Accumulated share-based payment
expenses

-

-

94,175,289.20

94,175,289.20

For the period from 1 January 2026 to 30 June 2026, the amount of share-based payment expenses
included in administrative expenses is RMB0.00 (for the period from 1 January 2025 to 30 June
2025: RMB0.00).
As at 30 June 2026, the outstanding stock options issued are those from Reserved Granting (30 June
2025: Reserved Granting). The exercise price of stock options from First Granting is RMB18.41.
As at 30 June 2026, the stock option contracts have been expired. The exercise price of stock options
from Reserved Granting is RMB20.16. As at 30 June 2026, the stock option contracts have been
expired.

- 88 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Capital reserve - continued
(3) Share-based payment - continued
(iii) Method for determining the fair value of stock options at the grant date
The Group adopts the Black-Scholes option pricing model to determine the fair value of stock
options. The main parameters are as follows:
Exercise price of stock options
Price of the underlying stocks at the grant date
Estimated volatility of the share price
Estimated dividend yields
Risk-free interest rate
Validity period of options

Reserved Granting
First Granting
20.16
18.41
19.00
18.08
28.65%~32.18%
29.14%~34.76%
2.03%
1.72%
2.92%~3.06%
2.75%~2.95%
The validity period of options is from the
registration date of granting to the date of
exercise or cancellation of all options in each
batch and shall not exceed 5 years.

The estimated volatility is based on the volatility of the Group's share price over the last 2.5, 3.5
and 4.5 years.

- 89 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Other comprehensive income
Other comprehensive income in the balance sheet

Other comprehensive income that cannot be
reclassified subsequently to profit or loss
Changes in fair value of investments in other
equity instruments
Other comprehensive income that will be
reclassified to profit or loss
Share of the other comprehensive income
under the equity method that will be
reclassified to profit and loss
Effective portion of hedging instruments in a
cash flow hedge
Allowance for credit impairment of
receivables financing
Translation differences arising on translation
of financial statements denominated in
foreign currencies
Total

31 December 2025

Converted from
other comprehensive
income into retained
earnings

(55,167,947.37)

Other comprehensive income in the consolidated income statement
for the period from 1 January 2026 to 30 June 2026
Less: other
comprehensive
Less: Income tax
Attributable to the
income transferred
expenses
Company after tax
out for the period

Attributable to
minority
shareholders after
tax

30 June 2026

Amount before
income tax

-

(66,897,291.06)

(11,729,343.69)

-

-

(11,729,343.69)

-

(4,340,268.61)

-

(4,514,627.25)

(174,358.64)

-

-

(174,358.64)

-

(2,637,115.70)

-

(2,044,759.90)

592,355.80

-

-

592,355.80

-

6,790,898.07

-

5,317,703.22

4,941,481.10

(6,790,898.07)

382,636.03

(1,473,194.85)

6,413.91

(477,617,226.33)

-

(497,921,551.78)

(21,112,683.63)

-

-

(20,304,325.45)

(808,358.18)

(532,971,659.94)

-

(566,060,526.77)

(27,482,549.06)

(6,790,898.07)

382,636.03

(33,088,866.83)

(801,944.27)

- 90 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Other comprehensive income - continued
Other comprehensive income in the balance sheet

Other comprehensive income that cannot be
reclassified subsequently to profit or loss
Changes in fair value of investments in other
equity instruments
Other comprehensive income that will be
reclassified to profit or loss
Share of the other comprehensive income
under the equity method that will be
reclassified to profit and loss
Effective portion of hedging instruments in a
cash flow hedge
Allowance for credit impairment of
receivables financing
Translation differences arising on translation
of financial statements denominated in
foreign currencies
Total

Other comprehensive income in the consolidated income statement
for the period from 1 January 2025 to 30 June 2025
Less: other
comprehensive
Less: Income tax
Attributable to the
income transferred
expenses
Company after tax
out for the period

31 December 2024

Converted from
other comprehensive
income into retained
earnings

(43,952,512.15)

-

(53,314,510.67)

(9,361,998.52)

-

-

(9,361,998.52)

-

(4,399,112.98)

-

(4,346,855.90)

52,257.08

-

-

52,257.08

-

7,449,071.88

-

6,597,549.90

(851,521.98)

-

-

(851,521.98)

-

6,003,223.17

-

5,785,089.69

5,710,551.08

(6,003,223.17)

73,168.02

(218,133.48)

(1,370.59)

(499,380,595.80)

-

(484,839,227.15)

30,061,525.80

-

-

14,541,368.65

15,520,157.15

(534,279,925.88)

-

(530,117,954.13)

25,610,813.46

(6,003,223.17)

73,168.02

4,161,971.75

15,518,786.56

30 June 2025

- 91 -

Amount before
income tax

Attributable to
minority
shareholders after
tax

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Surplus reserve
Increase in the
current period

Statutory surplus reserve
Discretionary surplus
Total

31 December
2025
2,189,186,256.07
117,763,127.56
2,306,949,383.63

Increase in the
current period

Statutory surplus reserve
Discretionary surplus
Total

31 December
2024
2,189,186,256.07
117,763,127.56
2,306,949,383.63

Decrease in the
current period
-

30 June 2026
-

Decrease in the
current period
-

2,189,186,256.07
117,763,127.56
2,306,949,383.63
30 June 2025

-

2,189,186,256.07
117,763,127.56
2,306,949,383.63

According to the Company Law of the People's Republic of China and Articles of Association, the
Company makes appropriation to statutory surplus reserve at 10% of the net profit for the year, and
may cease the appropriation when the accumulated statutory surplus reserve reaches 50% and more
of the registered capital. The statutory surplus reserve may be used to make up for losses or increase
the share capital upon approval. For the current period, the Company makes no more appropriation
to surplus reserve (For the period from 1 January 2025 to 30 June 2025: Nil).
47. Retained profits

Retained profits at the beginning of the period
Add: Net profit attributable to shareholders of
the Company
Less: Appropriation to statutory surplus reserve
Dividends declared (1)
Others
Retained profits at the end of the period

For the period from
1 January 2026 to
30 June 2026
40,721,868,176.60

For the period from
1 January 2025 to
30 June 2025
36,547,207,403.71

3,504,447,475.63

4,458,864,876.61

(1,297,926,633.15)
42,928,389,019.08

(1,075,424,924.61)
(15,702,702.19)
39,914,944,653.52

(1) On 26 June 2026, through consideration and approval at the Company's Annual General
Meeting of year 2025, based on the total share capital on the date of equity distribution
registration, cash dividends of RMB1,297,926,633.15 were distributed to all shareholders at
RMB0.35 per share (including tax).

- 92 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
48. Operating income and operating costs

Income from main operating activities
Income from other operating activities
Total

For the period from
1 January 2026 to
30 June 2026
146,866,098,976.11
603,630,419.09
147,469,729,395.20

For the period from
1 January 2025 to
30 June 2025
141,111,630,865.92
481,151,636.87
141,592,782,502.79

Costs of main operating activities
Costs of other operating activities
Total

For the period from
1 January 2026 to
30 June 2026
130,960,077,012.88
249,359,623.56
131,209,436,636.44

For the period from
1 January 2025 to
30 June 2025
126,401,542,369.91
258,518,228.78
126,660,060,598.69

(1) Income from main operating activities and costs of main operating activities

Domestic sales
Foreign sales
Total

For the period from
1 January 2026 to 30 June 2026
Income from main
Costs of main
operating activities
operating activities
144,461,413,253.20
129,232,918,093.92
2,404,685,722.91
1,727,158,918.96
146,866,098,976.11
130,960,077,012.88

For the period from
1 January 2025 to 30 June 2025
Income from main
Costs of main
operating activities
operating activities
139,069,119,631.78
124,794,613,152.87
2,042,511,234.14
1,606,929,217.04
141,111,630,865.92
126,401,542,369.91

(2) Income from main operating activities and costs of main operating activities are analysed by
industry as follows:

Production
Distribution
Retail
Others
Elimination
Total

For the period from
1 January 2026 to 30 June 2026
Income from main
Costs of main
operating activities
operating activities
13,186,349,381.77
5,309,502,571.33
134,411,106,586.92
126,742,412,668.99
4,091,938,471.26
3,687,065,250.90
161,935,505.18
124,150,381.69
(4,985,230,969.02)
(4,903,053,860.03)
146,866,098,976.11
130,960,077,012.88

For the period from
1 January 2025 to 30 June 2025
Income from main
Costs of main
operating activities
operating activities
12,160,381,107.04
5,376,310,988.39
129,563,548,476.20
122,057,100,240.39
4,208,274,231.11
3,729,819,143.07
114,419,578.44
87,227,132.87
(4,934,992,526.87)
(4,848,915,134.81)
141,111,630,865.92
126,401,542,369.91

The Company and its subsidiaries are mainly engaged in sale of products and recognise revenue
when control of goods has been transferred to customers.
The Company and its subsidiaries primarily generate other operating income from services provided
to third parties, which is recognised over a period of time based on the progress of the completed
services.
- 93 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Taxes and levies

City maintenance and construction tax
Education surcharge
Stamp duty
Property tax
Land use tax
Others
Total

For the period from
1 January 2026 to
30 June 2026
161,327,695.99
127,778,646.06
83,419,530.41
72,909,927.44
14,117,823.89
4,426,899.30
463,980,523.09

For the period from
1 January 2025 to
30 June 2025
146,290,138.95
115,165,320.33
80,393,040.46
53,888,429.18
13,823,043.05
6,093,812.29
415,653,784.26

For the period from
1 January 2026 to
30 June 2026
2,655,883,508.53
2,338,124,068.61
427,185,835.16
171,182,226.23
128,947,134.64
114,206,173.48
112,318,123.22
84,150,678.23
66,019,307.35
440,180,321.78
6,538,197,377.23

For the period from
1 January 2025 to
30 June 2025
2,284,625,166.06
2,223,446,574.41
349,193,418.82
168,118,074.86
91,736,160.84
99,848,731.89
108,698,339.33
89,386,877.76
95,670,340.02
654,264,284.05
6,164,987,968.04

50. Selling expenses

Promotion and advertising costs
Employee benefits expenses
Travelling and meeting expenses
Depreciation of right-of-use assets
Amortisation of intangible assets
Depreciation of fixed assets
Storage costs
Rental fees
Office expenses
Others
Total

- 94 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
51. Administrative expenses

Employee benefits expenses
Depreciation of fixed assets
Depreciation of right-of-use assets
Travelling and meeting expenses
Amortisation of intangible assets
Office expenses
Maintenance expenses
Rental fees
Others
Total

For the period from
1 January 2026 to
30 June 2026
1,587,752,086.80
194,136,529.45
136,943,114.66
90,005,927.37
79,120,726.85
61,961,925.79
33,250,547.23
17,076,480.54
539,303,219.05
2,739,550,557.74

For the period from
1 January 2025 to
30 June 2025
1,593,632,428.56
205,905,902.45
105,618,757.44
105,907,166.33
77,466,150.09
66,865,042.62
43,892,014.29
47,999,119.18
415,167,754.74
2,662,454,335.70

For the period from
1 January 2026 to
30 June 2026
413,469,962.68
176,474,073.55
100,510,155.19
79,769,411.10
88,470,332.00
112,167,221.16
970,861,155.68

For the period from
1 January 2025 to
30 June 2025
434,708,879.42
161,603,439.56
142,171,102.42
89,723,494.98
39,952,681.36
90,789,809.13
958,949,406.87

For the period from
1 January 2026 to
30 June 2026
622,463,940.47
44,897,697.87
38,670,360.60
706,031,998.94
(84,939,789.19)
46,183,390.18
27,233,000.08
694,508,600.01

For the period from
1 January 2025 to
30 June 2025
782,366,543.04
58,803,413.25
46,517,810.27
887,687,766.56
(176,380,262.05)
8,698,261.39
29,768,950.73
749,774,716.63

52. R&D expenses

Employee benefits expenses
Technical development expenses
Depreciation and amortisation
Materials consumption fee
Test fees
Others
Total
53. Financial expenses

Loan interest expenses (1)
Debenture interest expenses
Lease liabilities interest expenses
Less: Interest income
Exchange losses
Others
Total
- 95 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
53. Financial expenses - continued
(1) The Group recognised the cash obtained from the discount of notes receivable that did not
satisfy the derecognition criteria as short-term borrowings (Note (IV)27), calculated the interest
expense according to the effective interest rate method and included it in the loan interest
expenses.
54. Impairment losses of assets

Loss on (reversal of) decline in value
of inventories
Impairment loss on fixed assets
Impairment loss on intangible assets
Impairment loss on construction in progress
Impairment loss on goodwill
Impairment loss on bearer biological assets
Total

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

14,972,418.97

(77,208,569.91)

931,138.37
12,141,610.98
28,045,168.32

25,648,344.88
49,434,738.75
124,820,000.87
164,543,389.88
122,840,559.42
410,078,463.89

For the period from
1 January 2026 to
30 June 2026
482,442,055.74
35,406,869.73
(7,336,569.88)
(836,297.36)
(1,849,416.97)
507,826,641.26

For the period from
1 January 2025 to
30 June 2025
437,914,039.73
(3,688,581.83)
(6,529,923.08)
(3,431,981.01)
(292,672.09)
423,970,881.72

For the period from
1 January 2026 to
30 June 2026
16,982,073.69
296,527,739.65
313,509,813.34

For the period from
1 January 2025 to
30 June 2025
20,381,730.15
293,314,219.99
313,695,950.14

55. Impairment losses of credit

Impairment loss on accounts receivable
Impairment loss (gain) on other receivables
Impairment gain on long-term receivables
Impairment gain on notes receivable
Bad debt gain on receivables financing
Total
56. Other income

Government grants related to assets
Other government grants and subsidies
Total

- 96 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
57. Investment income

Income from long-term equity investments under
equity method
Dividend income from holding other non-current
financial assets
Investment gain on disposal of subsidiaries,
associates and joint ventures and other
business units
Loss on discount of receivables financing
Loss on derecognition of financial assets
measured at amortised cost (1)
Others
Total

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

48,792,099.87

380,664,499.15

6,312,444.53

269,100.00

862,099,026.37

2,953,335,553.61

(31,331,410.91)

(20,454,522.59)

(62,770,648.60)

(73,800,728.05)

4,177,838.83
827,279,350.09

17,319,198.25
3,257,333,100.37

(1) As stated in Note (IV) 5(3), the Group conducted non-recourse factoring for a few accounts
receivable. The loss included in investment income for the period from 1 January 2026 to 30
June 2026 was RMB62,770,648.60 (For the period from 1 January 2025 to 30 June 2025:
RMB73,800,728.05).
58. Gains on changes in fair value
For the period from
1 January 2026 to
30 June 2026
93,561,210.79
(2,815,732.15)
(96,906,196.22)
8,112,114.02
1,951,396.44

Structural deposits
Foreign exchange swap contracts
Other non-current financial assets
Forward exchange contracts
Total

- 97 -

For the period from
1 January 2025 to
30 June 2025
83,560,578.38
21,660.97
(6,950,510.17)
(879,895.45)
75,751,833.73

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
59. Gains on disposal of assets
For the period from
1 January 2026 to
30 June 2026
Gains on disposal of
right-of-use assets
Gains on disposal of
fixed assets and
intangible assets
Others
Total

Amount classified to
non-recurring profit or
loss for the period
from 1 January 2026
to 30 June 2026

For the period from
1 January 2025 to
30 June 2025

12,351,515.98

-

12,351,515.98

162,719,769.57

37,297,500.40

162,719,769.57

4,628,533.04
179,699,818.59

2,688,892.92
39,986,393.32

4,628,533.04
179,699,818.59

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

Amount classified to
non-recurring profit or
loss for the period
from 1 January 2026
to 30 June 2026

7,262,228.01

2,716,257.00

7,262,228.01

29,676,841.18
36,939,069.19

19,121,012.63
21,837,269.63

29,676,841.18
36,939,069.19

60. Non-operating income

Penalty and
compensation from
suppliers
Others
Total
61. Non-operating expenses

For the period from 1
January 2026 to 30
June 2026
Penalty cost
Donation
Late fee expense
Others
Total

2,108,525.04
6,078,376.23
12,989,573.95
24,142,750.14
45,319,225.36

- 98 -

Amount classified to
For the period from 1 non-recurring profit or
January 2025 to 30
loss for the period
June 2025
from 1 January 2026
to 30 June 2026
7,490,979.78
2,108,525.04
8,387,173.17
6,078,376.23
5,855,482.60
12,989,573.95
12,902,555.90
24,142,750.14
34,636,191.45
45,319,225.36

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
62. Income tax expenses

Current income tax calculated according to tax
law and related regulations
Deferred income tax
Total

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

1,478,325,355.16

1,248,470,059.68

(188,598,710.48)
1,289,726,644.68

577,566,612.76
1,826,036,672.44

The reconciliation from income tax calculated based on the applicable tax rates and total profit
presented in the consolidated financial statements to the income tax expenses is listed below:

Total profit
Income tax expenses calculated at applicable tax
rate
Effect of favourable tax rates
Income not subject to tax
Costs, expenses and losses not deductible for tax
purposes
Additional deduction
Utilisation of deductible losses previously not
recognised as deferred tax assets
Deductible losses and temporary differences for
which no deferred tax assets were recognised
Income tax expenses

- 99 -

For the period from
1 January 2026 to
30 June 2026
5,631,382,957.72

For the period from
1 January 2025 to
30 June 2025
6,820,820,702.73

1,407,845,739.43

1,705,205,175.68

(249,001,635.31)
(96,405,531.10)

(210,628,274.77)
(120,329,145.20)

339,652,705.22

212,768,880.76

(54,044,446.20)

(34,162,204.67)

(182,416,632.13)

(12,961,999.56)

124,096,444.77

286,144,240.20

1,289,726,644.68

1,826,036,672.44

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Earnings per share
(1) Basic earnings per share
Basic earnings per share are calculated by dividing the consolidated net profit attributable to the
ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding:

Consolidated net profit attributable to ordinary
shareholders of the Company
Weighted average numbers of the Company's
ordinary shares outstanding
Basic earnings per share

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

3,504,447,475.63

4,458,864,876.61

3,708,361,809.00

3,708,262,536.17

0.95

1.20

(2) Diluted earnings per share
Diluted earnings per share are calculated by dividing the consolidated net profit attributable to
ordinary shareholders of the Company adjusted based on the dilutive potential ordinary share by
the adjusted weighted average numbers of ordinary shares outstanding. For the period from 1
January 2026 to 30 June 2026, the Company has no potentially diluted ordinary shares (For the
period from 1 January 2025 to 30 June 2025: no potentially diluted ordinary shares). The diluted
and basic earnings per share are 0.95.
64. Notes to items in the cash flow statement
The Group's significant cash flow items are set out below:
(1) Other cash receipts relating to operating activities

Guarantees, deposits, current accounts and
advances
Interest income
Special subsidy and government grants
Non-operating income
Others
Total

- 100 -

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

2,023,942,793.37

1,722,578,286.79

92,034,515.18
368,595,324.15
33,286,194.72
38,849,490.85
2,556,708,318.27

181,116,844.50
346,907,176.15
11,308,105.22
33,235,906.70
2,295,146,319.36

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
64. Notes to items in the cash flow statement - continued
The Group's significant cash flow items are set out below: - continued
(2) Other cash payments relating to operating activities

Daily expenses
Guarantees, deposits, current accounts and
advances
Bank charges
Non-operating expenses
Others
Total

For the period from
1 January 2026 to
30 June 2026
3,584,988,721.99

For the period from
1 January 2025 to
30 June 2025
3,942,601,368.36

2,678,848,307.86

2,700,258,366.06

21,656,483.91
40,217,858.05
52,331,106.20
6,378,042,478.01

25,895,654.86
33,837,377.70
69,400,539.84
6,771,993,306.82

(3) Cash receipts from disposals and recovery of investments

Cash receipts from redemption of held-for-trading
financial assets
Cash receipts from disposal of associates
Others
Total

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

24,013,245,000.00

36,312,602,000.00

1,023,142,000.00
4,006,817.51
25,040,393,817.51

36,312,602,000.00

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

23,527,145,000.00

36,027,696,000.00

278,604,556.72

718,840.00

23,805,749,556.72

36,028,414,840.00

(4) Cash payments to acquire investments

Cash payments to acquire held-for-trading
financial assets
Investment and additional capital contribution to
associates and joint ventures
Total

- 101 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
64. Notes to items in the cash flow statement - continued
The Group's significant cash flow items are set out below: - continued
(5) Other cash receipts relating to investing activities

Withdrawal of time deposits due over three months
Others
Total

For the period from
1 January 2026 to
30 June 2026
1,342,341,295.91
335,430.58
1,342,676,726.49

For the period from
1 January 2025 to
30 June 2025
1,108,348,675.99
16,832,199.52
1,125,180,875.51

(6) Other cash payments relating to investing activities

Time deposits due over three months
Total

For the period from
1 January 2026 to
30 June 2026
1,430,000,000.00
1,430,000,000.00

For the period from
1 January 2025 to
30 June 2025
1,151,755,000.00
1,151,755,000.00

For the period from
1 January 2026 to
30 June 2026

For the period from
1 January 2025 to
30 June 2025

30,310,263.93

21,548,086.40

30,310,263.93

155,150,000.00
176,698,086.40

For the period from
1 January 2026 to
30 June 2026
35,394,737.93
358,876,427.56
9,180,780.00
403,451,945.49

For the period from
1 January 2025 to
30 June 2025
34,243,995.75
334,335,756.49
135,676,971.94
34,765,844.25
539,022,568.43

(7) Other cash receipts relating to financing activities

Subsidiaries' borrowings from their minority
shareholders
Others
Total
(8) Other cash payments relating to financing activities

Subsidiaries' repayment to their shareholders
Cash payments for settlement of lease liabilities
Acquisition of minority interests
Repayment of amounts due to related parties
Total

- 102 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Reconciliation from net profit to cash flows from operating activities:

Net profit
Add: Impairment losses of assets
Impairment losses of credit
Depreciation of right-of-use assets
Depreciation of fixed assets and investment
properties
Amortisation of intangible assets
Amortisation of long-term prepaid expenses
Depreciation of biological assets
Gain on disposal of fixed assets, intangible
assets and other long-term assets
Gains on changes in fair value
Financial expenses
Investment income
(Increase) in deferred tax assets
Increase in deferred tax liabilities
Decrease (increase) in inventories
(Increase) in operating receivables
Increase in operating payables
Net cash flow from operating activities

For the period from
1 January 2026 to
30 June 2026
4,341,656,313.04
28,045,168.32
507,826,641.26
355,740,800.64

For the period from
1 January 2025 to
30 June 2025
4,994,784,030.29
410,078,463.89
423,970,881.72
341,740,005.61

754,363,642.25

767,496,142.84

324,159,569.06
84,318,125.33
275,425.17

255,283,712.67
98,405,948.12
2,043,836.37

(179,699,818.59)

(39,986,393.32)

(1,951,396.44)
692,661,912.58
(921,381,409.60)
(224,320,335.41)
38,982,122.59
2,635,897,136.23
(6,504,749,025.29)
2,517,684,376.96
4,449,509,248.10

(75,751,833.73)
894,866,769.55
(3,353,837,518.88)
(41,775,560.74)
614,055,777.38
(727,190,985.67)
(7,208,369,490.15)
3,633,443,202.94
989,256,988.89

For the period from
1 January 2026 to
30 June 2026
32,284,104,926.05

For the period from
1 January 2025 to
30 June 2025
35,369,868,617.68

28,398,360,540.82

31,881,272,794.87

3,885,744,385.23

3,488,595,822.81

Net changes in cash and cash equivalents

Closing balance of cash and cash equivalents
Less: Opening balance of cash and
cash equivalents
Net increase in cash and cash equivalents

- 103 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Supplementary information to the cash flow statement - continued
(2) Acquisition of subsidiaries
Price of acquiring the subsidiaries for the current period.
Shanghai Hutchison Pharmaceutical Co., Ltd.

4,324,940,338.28

(3) Changes in liabilities arising from financing activities
Item
Bank borrowings
(including
amounts due
within one year)
SCP (Including
amounts due
within one year)
Lease liabilities
(Including
amounts due
within one year)
Total

31 December 2025

Increase in the current period
Cash changes
Non-cash changes

Decrease in the current period
Cash changes
Non-cash changes

30 June 2026

50,453,071,247.44

32,255,426,049.54

1,663,430,873.36

33,444,545,887.74

-

50,927,382,282.60

5,036,081,369.86

5,999,628,055.56

44,897,697.87

5,059,450,958.91

-

6,021,156,164.38

1,734,747,302.16

-

638,787,529.87

358,876,427.56

57,948,292.94

1,956,710,111.53

57,223,899,919.46

38,255,054,105.10

2,347,116,101.10

38,862,873,274.21

57,948,292.94

58,905,248,558.51

(4) Cash and cash equivalents
Cash
Including: Cash on hand
Bank deposits that can be readily
drawn on demand
Cash and cash equivalents at the end of the period

30 June 2026
32,284,104,926.05
1,830,767.64

31 December 2025
28,398,360,540.82
1,595,897.72

32,282,274,158.41

28,396,764,643.10

32,284,104,926.05

28,398,360,540.82

As stated in Note (IV) 1, at 30 June 2026, other cash and bank balances of RMB4,288,863,587.78
(31 December 2025: RMB4,323,402,810.76), were not classified as cash and cash equivalents.

- 104 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Foreign currency monetary items
30 June 2026
Balance in foreign
currency
Cash and bank balances USD
EUR
HKD
AUD
SDG
Others

Exchange rate

Balance in RMB

16,858,524.95
2,499,728.83
121,966,766.96
4,250,483.91
621,312,982.12
54,558,386.83

6.8109
7.7671
0.8686
4.6804
0.0113

114,821,727.58
19,415,643.80
105,940,333.78
19,893,964.89
7,020,836.70
24,961,222.86
292,053,729.61

11,222,029.66
1,465,831.48
1,916,373.36
21,459,443.88
2,741,098,983.94
18,223,721.23
49,044,035.80

6.8109
7.7671
0.8686
4.6804
0.0113
3.8414

76,432,121.81
11,385,259.69
1,664,561.90
100,438,781.14
30,974,418.52
70,004,602.73
8,422,719.01
299,322,464.80

Other receivables USD
EUR
HKD
AUD
Others

459,208.10
3,462,083.23
3,541,594.84
4,426,176.14
2,932,862.44

6.8109
7.7671
0.8686
4.6804

3,127,620.45
26,890,346.66
3,076,229.28
20,716,274.81
2,173,740.98
55,984,212.18

Short-term borrowings USD
AUD
THB

73,800,000.00
65,949,252.78
1,418,215.40

6.8109
4.6804
0.2042

502,644,420.00
308,668,882.71
289,599.58
811,602,902.29

Accounts receivable USD
EUR
HKD
AUD
SDG
NZD
Others

- 105 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Foreign currency monetary items - continued
30 June 2026
Balance in foreign
currency

Exchange rate

Balance in RMB

Accounts payable USD
EUR
AUD
NZD
Others

12,980,140.28
3,639,568.14
3,721,366.05
18,146,865.06
6,545,427.76

6.8109
7.7671
4.6804
3.8414

88,406,437.43
28,268,889.70
17,417,481.66
69,709,367.44
275,202.51
204,077,378.74

Other payables HKD
SDG
NZD
AUD
Others

24,791,704.08
393,495,481.79
11,491,827.32
12,703,482.26
808,370.30

0.8686
0.0113
3.8414
4.6804

21,534,074.16
4,446,498.94
44,144,705.47
59,457,378.37
2,354,056.95
131,936,713.89

Lease liabilities due within one
year USD
NZD
AUD

159,838.18
4,328,301.33
306,341.47

6.8109
3.8414
4.6804

1,088,641.86
16,626,736.73
1,433,800.62
19,149,179.21

Lease liabilities NZD
AUD

59,896,991.21
127,867.49

3.8414
4.6804

230,088,302.03
598,471.00
230,686,773.03

Foreign currencies in which the above monetary items are denominated refer to all currencies other
than RMB (the scope of which is different from those in Note (XI) 1(1)).
67. Lease
(1) The Group as lessee
Lease expenses for short-term leases or low-value assets that are treated under simplified methods:
Rental fees for short-term leases and low-value leases that are treated under simplified methods and
recognised in profit or loss for the period from 1 January 2026 to 30 June 2026 amounted to
RMB175,854,175.29 (For the period from 1 January 2025 to 30 June 2025: RMB167,641,029.24).

- 106 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IV)

NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Lease - continued
(1) The Group as lessee - continued
As at 30 June 2026, the Group's future minimum lease payable for short-term leases and low-value
asset leases that are treated under simplified methods amounted to RMB99,603,939.61 and
RMB479,922.58 (31 December 2025: RMB95,333,315.38 and RMB251,386.76), respectively,
both of which are payable within one year.
For the period from 1 January 2026 to 30 June 2026, the total cash outflows paid by the Group
related to leases amounted to RMB534,730,602.85 (for the period from 1 January 2025 to 30 June
2025: RMB501,976,785.73), and the cash outflows were included in operating activities, except for
the amount paid for the lease liabilities which was included in financing activities.
The Group has leased several assets, mainly including buildings and machinery equipment. The
lease terms are negotiated on an individual basis, encompassing various clauses and conditions. In
determining the lease term and assessing the length of the non-cancellable period, the Group applies
the contract's definition and identifies the period during which the contract is enforceable.
As at 30 June 2026, apart from the deposits paid by the Group to the lessors as security interests for
the leased assets, the lease agreements do not include any other security provisions. The right-ofuse assets cannot be used for purposes such as collateral for borrowing or guarantees.
(2) The Group as lessor
The undiscounted cash amount of lease payments receivable by the Group as lessor after the balance
sheet date is summarised below:
30 June 2026
22,295,302.24
18,833,268.45
34,987,745.70
18,754,831.84
94,871,148.23

Within 1 year
1 to 2 years
2 to 5 years
Over 5 years

31 December 2025
19,334,797.49
18,001,089.50
35,201,766.98
22,840,910.19
95,378,564.16

The business operations of the Group as a lessor are primarily related to the leasing of buildings
and structures. The Group believes that the unsecured balance of these assets does not pose a
significant risk to the Group.

- 107 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES
1. Equity in significant subsidiaries
(1) The structure of the Group
Name of significant subsidiaries

Place of
operation

Place of
incorporation

Shanghai Pharma Co., Ltd.

Shanghai

Shanghai

Shanghai Pharma Sales Co., Ltd.

Shanghai

Shanghai

China International Pharmaceutical (Holding)
Corporation Limited

Hong Kong

Hong Kong

SPH Sine Pharmaceutical Factory Co., Ltd.

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

SPH Changzhou Pharmaceutical Co., Ltd.

Changzhou

Changzhou

SPH New Asia Pharmaceutical Co., Ltd.

Shanghai

Shanghai

Shanghai Pharma Group Changzhou Kony
Pharmaceutical Co., Ltd.

Changzhou

Changzhou

Shanghai TCM Co., Ltd.

Shanghai

Shanghai

Shanghai Hutchison Pharmaceutical Co., Ltd.

Shanghai

Shanghai

Shanghai Leiyunshang Pharmaceutical Co.,
Ltd.

Shanghai

Shanghai

Shanghai Zhonghua Pharmaceutical Co., Ltd.

Shanghai

Shanghai

Qingdao

Qingdao

Huzhou

Huzhou

Hangzhou

Hangzhou

SPH No. 1 Biochemical & Pharmaceutical
Co., Ltd.
Shanghai Zhongxi Sunve Pharmaceutical Co.,
Ltd.

SPH Qingdao Guofeng Pharmaceutical Co.,
Ltd.
Chia Tai Qingchunbao Pharmaceutical Co.
Ltd.
Hangzhou Huqingyutang Pharmaceutical Co.,
Ltd.

Nature of business
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products

- 108 -

Registered capital

Shareholding proportion (%)
Direct
Indirect

Acquisition method

5,000,000,000.00

100.00

-

50,000,000.00

100.00

-

HKD21,160,000.00

100.00

-

1,191,611,911.81

100.00

-

323,800,000.00

100.00

-

545,800,000.00

65.13

34.87

157,580,506.00

57.36

18.53

1,052,429,132.53

96.90

-

14,946,380.00

100.00

-

1,666,070,000.00

100.00

-

229,000,000.00

10.00

50.00

465,070,000.00

-

100.00

93,641,789.00

100.00

-

93,000,000.00

67.52

-

128,500,000.00

20.00

55.00

135,000,000.00

-

51.01

Subsidiaries established through establishment or
investment
Subsidiaries established through establishment or
investment
Subsidiaries established through establishment or
investment
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries established through establishment or
investment
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
1. Equity in significant subsidiaries - continued
(1) The structure of the Group - continued
Place of
operation

Place of
incorporation

Xiamen TCM Factory Co., Ltd.

Xiamen

Xiamen

Liaoning SPH Herbapex Pharmaceutical
(Group) Co., Ltd.

Benxi

Benxi

Shanghai Sunve Bio-Tech Co., Ltd.

Shanghai

Shanghai

Guangdong Techpool Biochemical
Pharmaceutical Co., Ltd.

Guangzhou

Guangzhou

Zeus Investment Limited

Hong Kong

Hong Kong

Name of significant subsidiaries

Shanghai Medical Instruments Co., Ltd.

Shanghai

Shanghai

Shanghai Sine Jinzhu Pharmaceutical Co., Ltd.

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Dezhou

Dezhou

Shanghai

Shanghai

Chongqing

Chongqing

Shanghai

Shanghai

Shanghai Pharmaceutical Import and Export
Co., Ltd.
Shanghai Shangyao Ruier Pharmaceutical Co.,
Ltd.
Shanghai Innovation Center for
Biopharmaceuticals
Shanghai Sine Tianping Pharmaceutical Co.,
Ltd.
Shanghai Sine Wanxiang Pharmaceutical Co.,
Ltd.
Shandong Sine Pharmaceutical Co., Ltd.
Shanghai SPH New Asiatic Minghang
Pharmaceutical Co., Ltd.
SPH Chongqing Huiyuan Pharmaceutical Co.,
Ltd.
Shanghai SPH Zhong Xi Pharmaceutical Co.,
Ltd.

Nature of business
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Equity investment
Production and sales of
medical instruments
Production and sales of
pharmaceutical products
Sales of pharmaceutical
products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products

- 109 -

Registered capital

Shareholding proportion (%)
Direct
Indirect

Acquisition method

200,000,000.00

-

61.00

102,000,000.00

55.00

-

USD15,343,300

-

100.00

100,000,000.00

39.28

27.86

AUD319,208,249.99

-

59.61

350,000,000.00

99.21

0.79

50,000,000.00

-

100.00

90,140,000.00

100.00

-

100,000,000.00

100.00

-

500,000,000.00

48.08

-

154,700,000.00

-

100.00

100,000,000.00

-

89.92

177,406,158.51

-

67.00

57,500,000.00

-

100.00

23,809,522.00

-

100.00

148,200,000.00

-

90.00

Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries established through establishment or
investment
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries established through establishment or
investment
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries established through establishment or
investment
Subsidiaries established through establishment or
investment
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries established through establishment or
investment

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
1. Equity in significant subsidiaries - continued
(1) The structure of the Group - continued
Place of
operation

Place of
incorporation

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Shanghai

Jinhua

Jinhua

Changzhou Pharmaceutical Factory Co., Ltd.

Changzhou

Changzhou

Chifeng Aike Pharmaceutical Technology Co.,
Ltd.

Chifeng

Chifeng

SPH Jiangsu Co., Ltd.

Wuxi

Wuxi

SPH Shandong Pharmaceutical Co., Ltd.

Jinan

Jinan

Shanghai Pharma Zhejiang Co., Ltd.

Hangzhou

Hangzhou

Liaoning Pharmaceutical Foreign Trading Co.,
Ltd.

Shenyang

Shenyang

SPH Guangdong Pharmaceutical Co., Ltd.

Guangzhou

Guangzhou

SPH KDL Health Shanghai Pharmaceutical
Co., Ltd.

Shanghai

Shanghai

Shanghai Huashi Pharmacy Co., Ltd.

Shanghai

Shanghai

Name of significant subsidiaries
Shanghai SPH Hua Yu Pharmaceutical Co.,
Ltd.
Shanghai SPH Shen Xiang Health
Pharmaceutical Co., Ltd.
SHP Xingling Sci.&Tech. Pharmaceutical Co.,
Ltd.
Zhejiang Jiuxu Pharmaceutical Co., Ltd.

Sichuan Guojia Pharmaceuticals Technology
Co., Ltd.

Chengdu

Chengdu

SPH Hubei Pharmaceutical Co., Ltd.

Wuhan

Wuhan

SPH (Shaanxi) Pharmaceutical Co., Ltd.

Xi'an

Xi'an

SPH (Henan) Pharmaceutical Co., Ltd.

Zhengzhou

Zhengzhou

Nature of business
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Production and sales of
pharmaceutical products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Retailing of pharmaceuticals
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products
Sales of pharmaceutical
products

- 110 -

Registered capital

Shareholding proportion (%)
Direct
Indirect

Acquisition method

270,600,000.00

-

100.00

150,000,000.00

-

100.00

80,000,000.00

-

86.74

25,000,000.00

-

51.00

108,000,000.00

-

77.78

40,900,000.00

-

58.19

119,224,505.00

-

98.11

200,000,000.00

-

75.00

106,780,000.00

-

67.00

282,012,500.00

53.86

-

76,880,200.00

-

94.91

98,634,700.00

-

100.00

350,000,000.00

-

100.00

300,000,000.00

-

51.00

100,000,000.00

-

60.00

200,000,000.00

-

100.00

100,000,000.00

-

100.00

Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries established through establishment or
investment
Subsidiaries established through establishment or
investment
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control
Subsidiaries obtained through business combinations
not involving enterprises under common control

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
1. Equity in significant subsidiaries - continued
(1) The structure of the Group - continued
Note 1: Except SPH Changzhou Pharmaceutical Co., Ltd., SPH Qingdao Guofeng Pharmaceutical Co., Ltd., Guangdong Techpool Biochemical
Pharmaceutical Co., Ltd., Shanghai Sine Wanxiang Pharmaceutical Co., Ltd., SHP Xingling Sci.&Tech. Pharmaceutical Co., Ltd., Shanghai
Medical Instruments Co., Ltd., Chifeng Aike Pharmaceutical Technology Co., Ltd. and SPH Jiangsu Co., Ltd., whose corporate category is
incorporated company by shares, all of the above-mentioned subsidiaries are limited liability companies. As at 30 June 2026, none of the
subsidiaries of the Company has issued bonds.
(2) Subsidiaries with significant minority interests
The Group has comprehensively considered factors such as whether the subsidiary is a listed company, the proportion of minority shareholder equity
to the consolidated shareholder equity of the Group, and the proportion of minority shareholder gains and losses to the consolidated net profit of the
Group. The subsidiaries with significant minority shareholder equity are determined as follows:

Name of significant subsidiaries

Shareholding proportion of
minority interests (%)

SPH Changzhou Pharmaceutical Co., Ltd. and its subsidiaries
Sichuan Guojia Pharmaceuticals Technology Co., Ltd. and its subsidiaries
Shanghai Hutchison Pharmaceutical Co., Ltd. and its subsidiaries

24.11
49.00
40.00

- 111 -

Comprehensive income
attributable to minority
interests for the period
from 1 January 2026 to
30 June 2026
56,216,728.26
25,248,001.69
166,886,148.32

Dividends distributed to
minority interests for
period from 1 January
2026 to
30 June 2026
22,260,000.00
143,632,205.01

Minority interests as at
30 June 2026
1,239,950,956.91
1,089,909,711.35
1,493,346,305.55

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
1. Equity in significant subsidiaries - continued
(2) Subsidiaries with significant minority interests - continued
The key financial information of the above significant non-wholly-owned subsidiaries is as follows:

SPH Changzhou Pharmaceutical Co., Ltd. And
its subsidiaries
Sichuan Guojia Pharmaceuticals Technology
Co., Ltd. and its subsidiaries
Shanghai Hutchison Pharmaceutical Co., Ltd. And
its subsidiaries

SPH Changzhou Pharmaceutical Co., Ltd. and
its subsidiaries
Sichuan Guojia Pharmaceuticals Technology
Co., Ltd. and its subsidiaries
Shanghai Hutchison Pharmaceutical Co., Ltd. and
its subsidiaries

30 June 2026
Total assets
Current liabilities

Current assets

Non-current assets

Non-current liabilities

Total liabilities

3,938,142,988.66

1,837,562,100.46

5,775,705,089.12

(2,303,148,285.26)

(212,599,680.81)

(2,515,747,966.07)

2,797,141,742.38

458,880,706.70

3,256,022,449.08

(1,045,897,088.58)

(9,330,581.45)

(1,055,227,670.03)

1,568,794,998.86

3,844,082,637.24

5,412,877,636.10

(1,146,016,295.10)

(533,495,577.12)

(1,679,511,872.22)

Current assets

Non-current assets

Non-current liabilities

Total liabilities

3,738,983,836.17

1,812,245,815.96

5,551,229,652.13

(2,111,578,036.64)

(286,175,944.32)

(2,397,753,980.96)

2,793,759,884.43

483,827,361.90

3,277,587,246.33

(1,119,255,571.48)

(7,564,617.19)

(1,126,820,188.67)

1,656,467,044.76

3,989,901,560.70

5,646,368,605.46

(1,421,781,188.03)

(549,356,510.36)

(1,971,137,698.39)

31 December 2025
Total assets
Current liabilities

Note 1: As at 30 June 2026, the equity and comprehensive income of SPH Changzhou Pharmaceutical Co., Ltd. attributable to minority interests
presented in the consolidated financial statements were RMB598,201,732.17 and RMB33,100,917.67, respectively.
Note 2: As at 30 June 2026, the equity and comprehensive income of Sichuan Guojia Pharmaceuticals Technology Co., Ltd. attributable to minority
interests presented in the consolidated financial statements were RMB22,588,763.95 and RMB1,440,035.70, respectively.
- 112 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
1. Equity in significant subsidiaries - continued
(2) Subsidiaries with significant minority interests - continued
The key financial information of the above significant non-wholly-owned subsidiaries is as follows:
- continued
For the period from 1 January 2026 to 30 June 2026
Total
Net cash flow
Operating income
Net profit
comprehensive
from operating
income
activities
SPH Changzhou
Pharmaceutical Co., Ltd.
and its subsidiaries
Sichuan Guojia
Pharmaceuticals
Technology Co., Ltd.
and its subsidiaries
Shanghai Hutchison
Pharmaceutical Co., Ltd.
and its subsidiaries

3,202,580,926.02

129,125,477.90

128,977,361.41

47,702,546.40

2,743,427,054.63

50,014,944.79

50,027,721.39

(7,040,207.70)

1,771,307,381.91

417,215,370.59

417,215,370.59

527,491,766.35

For the period from 1 January 2025 to 30 June 2025
Total
Net cash flow
Operating income Net profit (loss)
comprehensive
from operating
income
activities
SPH Changzhou
Pharmaceutical Co., Ltd.
and its subsidiaries
Sichuan Guojia
Pharmaceuticals
Technology Co., Ltd.
and its subsidiaries
Shanghai Hutchison
Pharmaceutical Co., Ltd.
and its subsidiaries (i)

3,242,648,515.16

122,965,453.03

122,851,712.49

(32,596,748.51)

2,548,715,822.41

47,961,915.03

47,967,508.22

(27,405,371.75)

518,381,366.82

(80,315,222.24)

(80,315,222.24)

82,028,344.56

(i) On 25 April 2025, the Group obtained control of Shanghai Hutchison Pharmaceutical Co., Ltd.
and its subsidiaries (Hereinafter referred to as “Hutchison Pharmaceutical”) and included it in
the scope of consolidation of the consolidated financial statements. Therefore, the disclosed
period is from 25 April 2025 to 30 June 2025.

- 113 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
2. Equity in joint ventures and associates
(1) Summarised basic information of significant joint ventures and associates
The Group identifies significant associates, as set out below:

Associates Shanghai Roche
Pharmaceutical
Co., Ltd.

Place of
Place of
operation incorporation

Nature of business

Strategic for
group activities

Shanghai

Production and sales
of pharmaceutical
products

Yes

Shanghai

Shareholding
proportion (%)
Direct
Indirect
-

30.00

(2) Summarised financial information of significant associates

Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Owners' equity
Share of net assets in proportion
of shareholdings (i)
Carrying amount of equity investments
in associates
Fair value of investments in associates
with quoted price

- 114 -

30 June 2026
Shanghai Roche
Pharmaceutical Co.,
Ltd.
5,005,190
1,675,789
6,680,979
2,812,013
38,460
2,850,473
3,830,506

RMB'000
31 December 2025
Shanghai Roche
Pharmaceutical Co.,
Ltd.
5,555,314
1,744,385
7,299,699
3,458,940
47,175
3,506,115
3,793,584

1,149,152

1,138,075

1,149,152

1,138,075

N/A

N/A

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
2. Equity in joint ventures and associates - continued
(2) Summarised financial information of significant associates - continued

Operating income
Net profit
Total comprehensive income
Dividends declared by the associates to
the Group

For the period from
1 January 2026 to 30
June 2026
Shanghai Roche
Pharmaceutical Co.,
Ltd.
3,234,678
26,312
26,312

RMB'000
For the period from
1 January 2025 to 30
June 2025
Shanghai Roche
Pharmaceutical Co.,
Ltd.
4,892,206
282,151
282,151

-

-

(i) The Group calculates share of assets in proportion of the shareholdings based on the amount
attributable to the parent company of associates in their consolidated financial statements. The
impacts of fair value of identifiable assets and liabilities of associates at the time of acquisition
and the unification of accounting policies are considered for the amount in the consolidated
financial statements of associates. None of the assets involved in transactions between the
Group and its associates constitute business.
(3) Summarised financial information of non-significant joint ventures and associates
For the period from
1 January 2026 to
30 June 2026

RMB'000
For the period from
1 January 2025 to 30
June 2025

807,139

728,127

9,671
9,671

183,816
183,816

5,009,294

4,716,290

28,586
(174)
28,412

70,529
52
70,581

Joint ventures:
Total carrying amount of investments
Total of the following by shareholding ratio
Net profit (i)
Total comprehensive income
Associates:
Total carrying amount of investments
Total of the following by shareholding ratio
Net profit (i)
Other comprehensive income (i)
Total comprehensive income

- 115 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(V)

EQUITY IN OTHER ENTITIES - continued
2. Equity in joint ventures and associates - continued
(3) Summarised financial information of non-significant joint ventures and associates - continued
(i) The impacts of fair value of identifiable assets and liabilities at the time of investment and the
unification of accounting policies are considered for the net profit and other comprehensive
income.

(VI)

SEGMENT INFORMATION
The Group derives its business primarily from the PRC and determines its operating segments on a
business perspective. Different businesses require different technologies and marketing strategies,
the Group, therefore, separately manages the production and operation of each operating segment
and evaluates their operating results respectively, in order to make decisions about resources to be
allocated to these segments and to assess their performance.
The Group identified 4 reportable segments as follows:





Production segment, which is mainly engaged in research and development, production and
sales of a broad range of pharmaceutical and healthcare products;
Distribution segment, which is mainly engaged in distribution, warehousing, and other
value-added pharmaceutical supply chain solutions and related services to pharmaceutical
manufacturers and dispensers;
Retail segment, which is mainly engaged in operation of a network of retail pharmacy stores;
and
Other segment, which is mainly engaged in other businesses.

Inter-segment transfer prices are measured by reference to selling prices to third parties. The assets
are allocated based on the operations of the segment and the physical location of the asset. The
liabilities are allocated based on the operations of the segment. Expenses indirectly attributable to
each segment are allocated to the segments based on the proportion of each segment's revenue.

- 116 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VI)

SEGMENT INFORMATION - continued
(1) Segment information for the period from 1 January 2026 to 30 June 2026 and at 30 June 2026
is as follows:
Operating income
Including: External
income
Inter-segment income
Less: Operating costs
Taxes and levies
Selling expenses
Administrative
expenses
R&D expenses
Segment profit
Unallocated:
Financial expenses
Impairment losses
of assets
Impairment losses
of credit
Add: Gains on changes in
fair value
Investment income
Other income
Gains on disposal
of assets
Operating profit
Depreciation and
amortisation
Capital expenditures
Long-term equity
investments
- associates - net
Long-term equity
investments - joint
ventures - net
Other assets
Unallocated:
Deferred tax assets
Total assets
Liabilities
Unallocated:
Deferred tax liabilities
Income tax payable
Total liabilities

Production
13,186,349,381.77

Distribution
134,411,106,586.92

Retail
4,091,938,471.26

Other
864,044,139.90

11,305,761,088.14

131,402,194,653.18

4,091,706,906.20

670,066,747.68

1,880,588,293.63
3,008,911,933.74
(5,309,502,571.33) (126,742,412,668.99)
(178,450,826.50)
(261,606,821.86)
(3,874,662,852.33)
(2,456,821,059.02)

231,565.06
(3,687,065,250.90)
(10,371,293.50)
(249,647,994.31)

193,977,392.22
(434,636,024.80)
(13,551,581.23)
(25,349,524.18)

Elimination
(5,083,709,184.65)

Total
147,469,729,395.20

-

147,469,729,395.20

(5,083,709,184.65)
4,964,179,879.58 (131,209,436,636.44)
(463,980,523.09)
68,284,052.61
(6,538,197,377.23)

(1,026,823,353.87)

(1,288,682,396.51)

(89,788,553.41)

(354,608,150.24)

20,351,896.29

(2,739,550,557.74)

(970,861,155.68)
1,826,048,622.06

3,661,583,640.54

55,065,379.14

35,898,859.45

(30,893,356.17)

(970,861,155.68)
5,547,703,145.02
(694,508,600.01)
(28,045,168.32)
(507,826,641.26)
1,951,396.44
827,279,350.09
313,509,813.34
179,699,818.59
5,639,763,113.89

856,414,180.62

533,510,029.87

45,535,678.58

83,397,673.38

-

1,518,857,562.45

329,797,311.69

329,862,645.65

47,351,099.38

1,928,117.13

-

708,939,173.85

2,964,405,845.67

1,847,661,635.95

70,495,583.71

1,275,882,277.08

-

6,158,445,342.41

130,034,934.79

504,787,094.57

-

172,316,933.87

-

807,138,963.23

44,203,989,236.12

170,957,838,930.61

2,952,926,149.26

41,102,653,242.39

(27,277,942,769.67)

231,939,464,788.71

(37,494,605,447.28)

1,864,369,354.88
240,769,418,449.23
145,003,976,756.65

23,347,247,919.98

130,308,989,171.11

2,308,858,968.05

26,533,486,144.79

1,984,063,259.81
995,598,614.01
147,983,638,630.47

- 117 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VI)

SEGMENT INFORMATION - continued
(2) Segment information for the period from 1 January 2025 to 30 June 2025 and at 31 December
2025 is as follows:
Operating income
Including: External
income
Inter-segment
income
Less: Operating costs
Taxes and levies
Selling expenses
Administrative
expenses
R&D expenses
Segment profit
Unallocated:
Financial expenses
Impairment losses
of assets
Impairment losses
of credit
Add: Gains on changes in
fair value
Investment income
Other income
Gains on disposal
of assets
Operating profit
Depreciation and
amortisation
Capital expenditures
Long-term equity
investments
- associates - net
Long-term equity
investments - joint
ventures - net
Other assets
Unallocated:
Deferred tax assets
Total assets
Liabilities
Unallocated:
Deferred tax liabilities
Income tax payable
Total liabilities

Production
12,160,381,107.04

Distribution
129,563,548,476.20

Retail
4,208,274,231.11

Other
704,872,268.07

Elimination
(5,044,293,579.63)

Total
141,592,782,502.79

10,261,269,230.33

126,722,202,438.40

4,186,149,618.51

423,161,215.55

-

141,592,782,502.79

1,899,111,876.71

2,841,346,037.80

22,124,612.60

281,711,052.52

(5,044,293,579.63)

-

(5,376,310,988.39) (122,057,100,240.39)
(143,750,551.57)
(248,477,523.70)
(3,434,511,248.24)
(2,448,781,369.72)

(3,729,819,143.07)
(10,680,476.54)
(310,216,109.02)

(419,697,208.07)
(12,745,232.45)
(24,896,620.86)

4,922,866,981.23 (126,660,060,598.69)
(415,653,784.26)
53,417,379.80
(6,164,987,968.04)

(1,077,195,069.76)

(1,255,937,131.73)

(121,805,693.64)

(230,663,127.69)

23,146,687.12

(2,662,454,335.70)

(958,949,406.87)
1,169,663,842.21

3,553,252,210.66

35,752,808.84

16,870,079.00

(44,862,531.48)

(958,949,406.87)
4,730,676,409.23
(749,774,716.63)
(410,078,463.89)
(423,970,881.72)
75,751,833.73
3,257,333,100.37
313,695,950.14
39,986,393.32
6,833,619,624.55

659,373,089.80

667,512,465.00

55,826,411.02

82,257,679.79

-

1,464,969,645.61

530,731,170.19

284,032,978.35

10,620,206.11

100,541,735.13

-

925,926,089.78

3,053,154,455.19

1,850,120,301.30

48,541,145.02

1,323,409,221.46

-

6,275,225,122.97

142,994,525.15

492,239,958.37

-

99,742,852.17

-

734,977,335.69

47,720,437,530.25

164,481,414,545.60

2,996,326,013.34

40,164,422,008.75

(30,864,084,808.86)

224,498,515,289.08

(36,955,693,021.50)

1,640,049,019.47
233,148,766,767.21
140,541,272,520.37

23,767,326,401.56

125,536,525,053.65

2,256,621,475.49

25,936,492,611.17

1,945,081,137.22
875,119,386.02
143,361,473,043.61

(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS
1. The parent company
(1) General information of the parent company

Shanghai Pharma Group

Place of incorporation
No 92, Zhangjiang Road,
Shanghai

Nature of business
Pharmaceutical products
manufacture

The Company's ultimate controlling party is Shanghai Shangshi, incorporated in Shanghai.

- 118 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
1. The parent company - continued
(2) Registered capital and changes in registered capital of the parent company
31 December
2025
Shanghai Pharma
Group

Increase in the
current period

3,158,720,000.00

Decrease in the
current period
-

30 June 2026
-

3,158,720,000.00

(3) The percentages of shareholding and voting rights in the Company held by the parent company
30 June 2026
Shareholding
Voting rights
proportion (%)
proportion (%)
Shanghai Pharma
Group

19.32

19.32

31 December 2025
Shareholding
Voting rights
proportion (%)
proportion (%)
19.32

19.32

2. Subsidiaries
For basic and related information of significant subsidiaries, please refer to Note (V)1.
3. Joint ventures and associates
Except for the important joint ventures and associates disclosed in Note (IV)14, the other joint
ventures and associates that have related party transactions with the Group are as follows:
Shanghai Huaren Pharmaceutical Co., Ltd.
Shanghai Huayu Saffron Planting Professional
Cooperative
Jiangsu Runtian Pharmaceutical Chain
Pharmacy Co., Ltd.
Chongqing Pharmaceuticals Shanghai
Medicine Sales Co., Ltd.
Qingdao Tongdarong Industrial Co., Ltd.

- 119 -

Relationship with the Group
Associate
Associate
Associate
Associate
Joint venture

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
4. Other related parties

Yunnan Baiyao Group Co., Ltd. and its subsidiaries
Wing Fat Printing Limited and its subsidiaries
Shanghai Industrial Dongtan Investment & Development
(Group) Co., Ltd.
Shanghai Biomedical Industry Equity Investment Fund
Partnership (Limited Partnership)

Relationship with the Group
Shareholder with more than 5% of
the Company's shares
Controlled by the same ultimate
controlling party
Controlled by the same ultimate
controlling party
Significantly influenced by the
ultimate controlling party

5. Related party transactions
Except for the items disclosed in other items of the financial statements, other related party
transactions of the Group include:
(1) Purchase and sales of goods, rendering and receipts of services
Purchase of goods and receipts of services:
RMB'000
Related party
transaction
Shanghai Roche Pharmaceutical Co., Ltd.

Purchase of goods

Yunnan Baiyao Group Co., Ltd. and its subsidiaries

Purchase of goods

Shanghai Bracco Sine Pharmaceutical Corp., Ltd.

Purchase of goods

Sino-American Shanghai Squibb Pharmaceuticals
Ltd. (Note 1)
Shanghai Pharma Health Commerce Co., Ltd. and
its subsidiaries
Shanghai Fudan-Zhangjiang Bio-Pharmaceutical
Co., Ltd.
Wing Fat Printing Limited and its subsidiaries
Shanghai Leiyunshang Northern Area Medicine
General Co., Ltd. and its subsidiaries
Shanghai Sine Promod Pharmaceutical Co., Ltd.
and its subsidiaries
Chongqing Pharmaceuticals Shanghai Medicine
Sales Co., Ltd.
Shanghai Hutchison Pharmaceutical Co., Ltd. and
its subsidiaries (Note 2)
Others

Purchase of goods
Purchase of goods
Purchase of goods
Purchase of goods
Purchase of goods
Purchase of goods
Purchase of goods
Purchase of goods
Purchase of goods
and receipts of
services

Pricing
policies
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation
By
negotiation

Total

- 120 -

Amount of
transactions
approved

Exceeding
the
transaction
limit?

For the period
from 1 January
2026 to 30 June
2026

For the period
from 1 January
2025 to 30 June
2025

N/A

N/A

288,223.26

445,142.47

700,000.00

No

248,119.34

282,839.62

N/A

N/A

200,924.97

147,457.77

N/A

N/A

127,977.92

207,917.79

N/A

N/A

74,877.87

98,903.13

N/A

N/A

27,432.74

47,821.92

90,000.00

No

26,409.73

24,260.53

N/A

N/A

6,278.69

11,967.01

N/A

N/A

4,188.85

6,488.22

N/A

N/A

315.69

6,569.53

N/A

N/A

-

140,072.18

N/A

N/A

31,686.09

23,211.88

1,036,435.15

1,442,652.05

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
5. Related party transactions - continued
(1) Purchase and sales of goods, rendering and receipts of services - continued
Purchase of goods and receipts of services: - continued
Note 1: On 28 April 2026, Sino-American Shanghai Squibb Pharmaceuticals Ltd. had transferred
out its equity; accordingly, the disclosed related-party transactions occurred prior to 28
April 2026.
Note 2: On 25 April 2025, the Group acquired control of Hutchison Pharmaceuticals and included
it in the scope of consolidation of the consolidated financial statements; accordingly, the
disclosed related-party transactions occurred prior to 25 April 2025.
Sales of goods and rendering of services:
RMB'000
Related party
transaction
Jiangxi Nanhua Medicines Co., Ltd. and its
subsidiaries

Sales of goods

Shanghai Pharma Health Commerce Co., Ltd. and
its subsidiaries

Sales of goods

Yunnan Baiyao Group Co., Ltd. and its subsidiaries

Sales of goods

Beijing Lianxin Pharmaceutical Co., Ltd.

Sales of goods

Shanghai Leiyunshang Northern Area Medicine
General Co., Ltd. and its subsidiaries

Sales of goods

Chongqing Pharmaceuticals Shanghai Medicine
Sales Co., Ltd.

Sales of goods

Shanghai Roche Pharmaceutical Co., Ltd.

Sales of goods

Shanghai Hutchison Pharmaceutical Co., Ltd. and
its subsidiaries (Note 1)

Sales of goods

Others

Sales of goods
and
rendering of services

Pricing
policies
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n
By
negotiatio
n

Total

- 121 -

Amount of
transactions
approved

Exceeding
the
transaction
limit?

For the period
from 1 January
2026 to 30 June
2026

For the period
from 1 January
2025 to 30 June
2025

N/A

N/A

1,798,879.35

2,118,456.43

N/A

N/A

1,188,481.73

864,910.61

1,200,000.00

No

363,239.33

330,329.27

N/A

N/A

58,713.85

67,673.85

N/A

N/A

38,917.14

29,000.10

N/A

N/A

22,872.84

35,331.78

N/A

N/A

17,019.11

-

N/A

N/A

-

38,097.00

N/A

N/A

44,023.63

15,963.58

3,532,146.98

3,499,762.62

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases
The rental income recognised by the Group as the lessor:
RMB'000
Lessee
Shanghai Bracco Sine Pharmaceutical
Corp., Ltd.
Shanghai Pharma Group and
its subsidiaries
Total

Leased asset

Rental income
recognised for the
period from 1 January
2026 to 30 June 2026

Rental income
recognised for the
period from 1 January
2025 to 30 June 2025

Buildings

3,610.31

3,714.60

Buildings

2,670.28

2,315.25

6,280.59

6,029.85

Lease payable for the
period from 1 January
2025 to 30 June 2025

The Group as lessee:
RMB'000
Lessor

Leased asset

Lease payable for the
period from 1 January
2026 to 30 June 2026

Shanghai Pharma Group and its
subsidiaries

Buildings

18,509.75

18,570.46

Leased asset

For the period from 1
January 2026 to
30 June 2026

For the period from 1
January 2025 to
30 June 2025

Buildings

11,314.40

5,899.47

Leased asset

For the period from 1
January 2026 to
30 June 2026

For the period from 1
January 2025 to
30 June 2025

Buildings

836.54

670.15

Right-of-use assets added by the Group as lessee during the period:
RMB'000
Lessor
Shanghai Pharma Group and
its subsidiaries

Interest expense on lease liabilities assumed by the Group as lessee:
RMB'000
Lessor
Shanghai Pharma Group and
its subsidiaries

- 122 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
5. Related party transactions - continued
(3) Research and development expenses
RMB'000
Services provider
Shanghai Huiyong Medicine
Research Co., Ltd.

Pricing principles of
related party
transactions
The amount incurred
shall be determined
through negotiation by
both parties

For the period from 1
January 2026 to
30 June 2026

For the period from 1
January 2025 to
30 June 2025

(2,015.09)

754.72

For the period from 1
January 2026 to
30 June 2026
5,008.76

For the period from 1
January 2025 to
30 June 2025
5,708.42

For the period from 1
January 2026 to
30 June 2026
11,689.89

For the period from 1
January 2025 to
30 June 2025
18,147.00

For the period from 1
January 2026 to
30 June 2026
58,401.63

For the period from 1
January 2025 to
30 June 2025
63,665.14

(4) Key management compensation
RMB'000

Salary, bonus and other compensation

(5) Interest
Interest income
RMB'000

Shanghai Industrial Group Finance Co., Ltd.

Interest expenses
RMB'000

Shanghai Industrial Group Finance Co., Ltd.

- 123 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
5. Related party transactions - continued
(6) Deposits and borrowings
RMB'000
For the period from 1
January 2026 to
30 June 2026

For the period from 1
January 2025 to
30 June 2025

Changes in
deposit
balances

Shanghai Industrial Group Finance Co., Ltd.

(597,067.47)

(1,582,648.72)

Loan received
from related
party

Shanghai Industrial Group Finance Co., Ltd.

2,256,459.59

2,300,579.13

2,454,580.00

2,044,580.25

2,454,580.00

34,765.84
2,079,346.09

335.43

348.31

30 June 2026
Gross
Bad debt
carrying
allowance
amount

31 December 2025
Gross
Bad debt
carrying
allowance
amount

863,784.41

(1,021.30)

895,429.04

(1,144.85)

164,828.69

(441.88)

235,628.34

(371.76)

141,312.95
84,371.47

(153.46)
(328.19)

112,393.50
71,911.98

(119.90)
(243.74)

27,901.11

(2,475.67)

11,010.81

(661.98)

19,284.42
15,047.25

(21.21)
(55.67)

23,361.93
15,095.93

(27.01)
(55.85)

6,564.91

(2,253.76)

9,531.15

(2,255.83)

15,683.24
1,338,778.45

(1,801.50)
(8,552.64)

24,563.77
1,398,926.45

(1,637.21)
(6,518.13)

Loan repayment
to related
Shanghai Industrial Group Finance Co., Ltd.
parties
GEN8 (HK) LIMITED
Total
Funds
recovered
from related
parties

Shanghai Huaren Pharmaceutical Co., Ltd.

6. Balance of receivables and payables of related parties
RMB'000

Accounts
receivable

Jiangxi Nanhua Medicines Co., Ltd. and its subsidiaries
Shanghai Pharma Health Commerce Co., Ltd. and
its subsidiaries
Jiangsu Runtian Pharmaceutical Chain Pharmacy Co., Ltd.
Yunnan Baiyao Group Co., Ltd. and its subsidiaries
Shanghai Leiyunshang Northern Area Medicine General
Co., Ltd. and its subsidiaries
Shanghai Roche Pharmaceutical Co., Ltd.
Beijing Lianxin Pharmaceutical Co., Ltd.
Chongqing Pharmaceuticals Shanghai Medicine Sales
Co., Ltd.
Others
Total

- 124 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
6. Balance of receivables and payables of related parties - continued
RMB'000
30 June 2026
Gross
Bad debt
carrying
allowance
amount
Other
receivables

Prepayments

Chongqing Pharmaceuticals Shanghai Medicine Sales
Co., Ltd.
Shanghai Huayu Saffron Planting Professional Cooperative
Hangzhou Huqing Yutang Pharmaceutical Co., Ltd.
Shanghai Roche Pharmaceutical Co., Ltd.
Shanghai Shangyao Kangxinuo Biopharmaceutical Co., Ltd.
Sino-American Shanghai Squibb Pharmaceuticals Ltd.
Others
Total
Yunnan Baiyao Group Co., Ltd. and its subsidiaries
Others
Total

31 December 2025
Gross
Bad debt
carrying
allowance
amount

22,540.00

-

-

-

17,703.81
16,800.00
14,095.19
123.01
16,892.38
88,154.39

(11,385.40)
(74.49)
(0.08)
(3,183.66)
(14,643.63)

19,068.27
16,800.00
16,098.30
35,818.51
97.21
11,818.96
99,701.25

(11,385.40)
(382.08)
(35,818.51)
(0.50)
(1,482.05)
(49,068.54)

4,226.03
369.76
4,595.79

-

11,031.55
753.74
11,785.29

-

RMB'000
30 June 2026
Accounts
payable

Notes
payable

31 December 2025

Jiangxi Nanhua Medicines Co., Ltd. and its subsidiaries

50,285.82

98,795.06

Wing Fat Printing Limited and its subsidiaries
Shanghai Bracco Sine Pharmaceutical Corp., Ltd.
Shanghai Leiyunshang Northern Area Medicine General
Co., Ltd. and its subsidiaries
Yunnan Baiyao Group Co., Ltd. and its subsidiaries
Shanghai Roche Pharmaceutical Co., Ltd.
Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd.
Shanghai Pharma Health Commerce Co., Ltd. and its
subsidiaries
Sino-American Shanghai Squibb Pharmaceuticals Ltd.
Others
Total

21,986.10
18,878.37

17,955.60
24,327.10

12,392.15

12,834.08

11,922.92
10,966.21
8,455.78

15,165.86
101,896.48
6,693.88

2,303.19

59,006.77

15,570.24
152,760.78

17,100.13
11,791.37
365,566.33

Shanghai Roche Pharmaceutical Co., Ltd.

37,223.88

25,435.53

Jiangxi Nanhua Medicines Co., Ltd. and its subsidiaries
Yunnan Baiyao Group Co., Ltd. and its subsidiaries
Wing Fat Printing Limited and its subsidiaries
Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd.
Total

18,959.40
1,927.03
712.80
58,823.11

8,377.33
580.17
1,430.08
35,823.11

- 125 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(VII) RELATED PARTIES AND RELATED PARTY TRANSACTIONS - continued
6. Balance of receivables and payables of related parties - continued
RMB'000
Other payables

Other noncurrent
liabilities due
within one year
Contract
liabilities

Shanghai Shangshi
Shanghai Pharma Group and its subsidiaries
Yunnan Baiyao Group Co., Ltd. and its subsidiaries
Shanghai Tandong
Qingdao Tongdarong Industrial Co., Ltd.
Shanghai Sine Promod Pharmaceutical Co., Ltd. And
its subsidiaries
Shanghai Industrial Dongtan Investment & Development
(Group) Co., Ltd.
Others
Total

30 June 2026
394,020.63
253,850.61
232,969.38
65,450.00
15,481.70

31 December 2025
343,006.22
86,854.08
79,875.22
22,440.00
15,481.70

16.82

9,120.11

-

138,805.06

9,950.25
971,739.39

15,505.13
711,087.52

70,229.83

70,229.83

6,509.04

12,370.85

3.19
1,341.83
7,854.06

118.87
1,855.88
121.02
14,466.62

Shanghai Biomedical Industry Equity Investment Fund
Partnership (Limited Partnership)
Shanghai Pharma Health Commerce Co., Ltd. And
its subsidiaries
Jiangxi Nanhua Medicines Co., Ltd. and its subsidiaries
Shanghai Xunyao Biotechnology Co., Ltd.
Others
Total

Lease liabilities

Shanghai Pharma Group and its subsidiaries

49,201.72

54,491.35

Employee
benefits
payable

Key management personnel

5,708.86

8,687.92

Short-term and
long-term
borrowings

Shanghai Industrial Group Finance Co., Ltd.

4,523,615.64

4,721,736.06

Cash and bank
balances

Shanghai Industrial Group Finance Co., Ltd.

4,248,534.35

4,845,601.82

(VIII) CONTINGENCIES
The Group has no significant contingencies that need to be disclosed.

- 126 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(IX)

COMMITMENTS
1. Capital expenditure commitments
30 June 2026
Capital commitments that have been entered into
but have not been recognised in the financial
statements:
- Commitment for acquisition and construction
of long-term assets
- External investment commitment
Including: Unrecognised commitments
related to investments in
associates and joint ventures
Total

(X)

31 December 2025

728,053,253.89

769,279,564.92

865,359,018.20

940,359,018.20

1,593,412,272.09

1,709,638,583.12

EVENTS AFTER THE BALANCE SHEET DATE
Explanation of distribution of profits
According to the resolution of Board of Director dated 27 August 2026, the Board of Directors
proposes to distribute cash dividends of RMB1.00 per 10 shares (inclusive of tax) to all shareholders.

(XI)

RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The Group's operating activities expose it to a variety of financial risks: market risk (primarily
including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The
Group's overall risk management programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group's financial performance.
1. Market risk
(1) Currency risk
The Group's major operating activities are carried out in Mainland of China and a majority of the
transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from
the recognised assets and liabilities, and future transactions denominated in foreign currencies,
primarily with respect to USD and HKD. The Group continuously monitors the size of the Group's
transactions, assets and liabilities denominated in foreign currencies to minimise exposure to
foreign exchange risk.

- 127 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XI)

RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Market risk - continued
(1) Currency risk - continued
As at 30 June 2026 and 31 December 2025, the foreign currency financial assets and the financial
liabilities, which are held by intra-group companies intra‑group companies that adopt RMB as their
functional currency, are translated to RMB as follows:
USD and HKD
Financial assets denominated
in foreign currency Cash and bank balances
Accounts receivable
Total
Financial liabilities denominated
in foreign currency Accounts payable
Total

Total

81,700,226.12
75,662,320.92
157,362,547.04

27,905,657.86
31,530,634.43
59,436,292.29

109,605,883.98
107,192,955.35
216,798,839.33

50,996,463.60
50,996,463.60

30,854,800.77
30,854,800.77

81,851,264.37
81,851,264.37

USD and HKD
Financial assets denominated in
foreign currency Cash and bank balances
Accounts receivable
Total
Financial liabilities denominated
in foreign currency Accounts payable
Total

30 June 2026
Others

31 December 2025
Others

Total

90,145,285.92
24,745,853.78
114,891,139.70

29,208,530.10
1,160,381.95
30,368,912.05

119,353,816.02
25,906,235.73
145,260,051.75

64,438,467.39
64,438,467.39

1,540,034.63
1,540,034.63

65,978,502.02
65,978,502.02

As at 30 June 2026, for the Group's various financial assets and liabilities denominated in USD and
HKD, if the USD and HKD strengthen/weaken by 5% against the RMB with all other variables
held constant, the Group's profit before income tax would have been lower/higher by approximately
RMB5,318,304.17 (31 December 2025: lower/higher by approximately RMB2,522,633.62).

- 128 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XI)

RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Market risk - continued
(2) Interest rate risk
The Group's interest rate risk mainly arises from interest-bearing debts, including short-term
borrowings, borrowings due within one year and long-term bank borrowings. Financial liabilities
issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued
at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative
proportions of its fixed rate and floating rate contracts depending on the prevailing market
conditions. As at 30 June 2026, the Group's short-term, due within one year and long-term interestbearing debts mainly include floating rate contracts, amounting to RMB4,492,423,975.92 (31
December 2025: RMB2,567,605,038.65).
Increases in interest rates will increase the cost of new interest-bearing debts and the interest
expenses with respect to the Group's outstanding floating rate interest-bearing debts, and therefore
could have a material adverse effect on the Group's financial performance. The Management makes
adjustments timely with reference to the latest market conditions. For the period from 1 January
2026 to 30 June 2026 and for the period from 1 January 2025 to 30 June 2025, the Group did not
enter into any interest rate swap agreements.
As at 30 June 2026, if interest rates on the floating rate borrowings rise/fall by 10% while holding
all other variables constant, the Group's profit before tax would decrease/increase by approximately
RMB5,829,951.32 (31 December 2025: approximately RMB6,253,625.25).
(3) Other price risk
The Group's other price risk arises mainly from other non-current financial assets and other equity
instruments held by the Group.
As at 30 June 2026, if the price of above various investments rise/fall by 10% with all other variables
held constant, the Group's profit before tax would increase/decrease by approximately
RMB144,783,216.47 (31 December 2025: approximately RMB154,531,071.35), other
comprehensive income would increase/decrease by approximately RMB2,095,456.18 (31
December 2025: approximately RMB3,268,390.55).
2. Credit risk
The Group's credit risk mainly arises from bank deposits, notes receivable, accounts receivable,
other receivables, financial guarantee contracts, receivables financing, long-term receivables, etc.

- 129 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XI)

RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
2. Credit risk - continued
The Group expects that there is no significant credit risk associated with bank deposits and on hand
since they are deposited at state-owned banks, finance company and other medium or large size
listed banks with good reputation and high credit rating. Management does not expect that there
will be any significant losses from non-performance by these counterparties.
The Group has policies to limit the credit exposure on notes receivable, accounts receivable, other
receivables, receivables financing and long-term receivables, the Group sets relevant policies to
control credit risk exposure. The Group assesses the credit quality of and sets credit limits on its
customers by taking into account their financial position, the availability of guarantee from third
parties, their credit history and other factors such as current market conditions. The credit history
of the customers is regularly monitored by the Group. In respect of customers with a poor credit
history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure
the overall credit risk of the Group is limited to a controllable extent.
In addition, financial guarantees and loan commitments may pose risks due to the default of the
counterparty. The Group has established strict application and approval requirements for financial
guarantees and loan commitments, taking into account a comprehensive set of information
including internal and external credit ratings. The Group continuously monitors the credit risk
exposure, changes in the credit ratings of counterparties, and other relevant information to ensure
that the overall credit risk remains within a controllable range.
As at 30 June 2026, the Group has no significant collateral or other credit enhancements held as a
result of the debtor's mortgage (31 December 2025: Nil).
3. Liquidity risk
Each subsidiary within the Group is responsible for its own cash flow forecasts. On the basis of
summarizing the cash flow forecasts of subsidiaries, the finance department of the headquarters
continuously monitors short-term and long-term funding requirements at the Group level to ensure
that adequate cash reserves and readily realisable marketable securities are maintained, and
continuously monitors compliance with the borrowing agreements and obtains commitments from
major financial institutions to provide sufficient standby funds to meet both short-term and longterm funding requirements.

- 130 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XI)

RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
3. Liquidity risk - continued
As at the balance sheet date, the financial liabilities of the Group are presented below based on the
undiscounted contractual cash flows by maturity date:

Short-term borrowings
Derivative financial
liabilities
Notes payable
Accounts payable
Other payables
Long-term borrowings
due within one year
Lease liabilities due
within one year
Stock repurchase
option due within
one year
Other current
liabilities
Long-term borrowings
Lease liabilities
Long-term payables
Borrowing interests
Total

Short-term borrowings
Derivative financial
liabilities
Notes payable
Accounts payable
Other payables
Long-term borrowings
due within one year
Lease liabilities due
within one year
Stock repurchase
option due within
one year
Other current liabilities
Long-term borrowings
Lease liabilities
Long-term payables
Borrowing interests
Total

Within 1 year
46,528,516,265.24

30 June 2026
2 to 5 years

1 to 2 years
-

-

Over 5 years
-

Total
46,528,516,265.24

18,954,922.41

-

-

-

18,954,922.41

6,979,977,892.10
56,604,672,321.33
18,092,756,678.90

-

-

-

6,979,977,892.10
56,604,672,321.33
18,092,756,678.90

1,121,799,288.13

-

-

-

1,121,799,288.13

588,376,435.55

-

-

-

588,376,435.55

98,851,631.25

-

-

-

98,851,631.25

6,021,156,164.38

-

-

-

6,021,156,164.38

306,806,032.20
136,361,867,631.49

1,253,160,859.60
585,367,154.55
9,000,000.00
54,767,378.66
1,902,295,392.81

324,428,870.00
767,236,086.78
152,736,909.67
1,244,401,866.45

1,699,476,999.63
563,393,215.99
382,794,285.77
2,645,664,501.39

3,277,066,729.23
1,915,996,457.32
9,000,000.00
897,104,606.30
142,154,229,392.14

Within 1 year
44,091,821,016.96

1 to 2 years

31 December 2025
2 to 5 years

Over 5 years

Total
44,091,821,016.96

-

-

-

13,294,428.53

-

-

-

13,294,428.53

8,810,206,222.12
52,594,352,033.44
16,731,913,987.12

-

-

-

8,810,206,222.12
52,594,352,033.44
16,731,913,987.12

2,125,374,630.45

-

-

-

2,125,374,630.45

695,718,752.77

-

-

-

695,718,752.77

98,851,631.25

-

-

-

98,851,631.25

5,036,081,369.86
321,107,365.09
130,518,721,437.59

2,439,330,121.83
434,747,462.53
57,182,509.45
2,931,260,093.81

111,274,740.00
446,174,917.75
9,000,000.00
150,116,117.57
716,565,775.32

1,685,270,738.20
430,889,892.75
412,220,482.34
2,528,381,113.29

5,036,081,369.86
4,235,875,600.03
1,311,812,273.03
9,000,000.00
940,626,474.45
136,694,928,420.01

As at the balance sheet date, the Group has no financial guarantees provided to external parties.

- 131 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XI)

RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
3. Liquidity risk - continued
Bank and other borrowings are analysed by repayment terms as follows:

Within 1 year
1 to 2 years
2 to 5 years
Over 5 years

30 June 2026
Bank borrowings
Other borrowings
47,650,315,553.37
6,021,156,164.38
1,253,160,859.60
324,428,870.00
1,699,476,999.63
50,927,382,282.60
6,021,156,164.38

31 December 2025
Bank borrowings
Other borrowings
46,217,195,647.41
5,036,081,369.86
2,439,330,121.83
111,274,740.00
1,685,270,738.20
50,453,071,247.44
5,036,081,369.86

(XII) FAIR VALUE DISCLOSURES
The level of fair value measurement results is determined by the lowest level of inputs that are
significant to the fair value measurement as a whole:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
1. Assets and liabilities measured at fair value on a recurring basis
As at 30 June 2026, the financial assets measured at fair value on a recurring basis by the above
three levels are analysed below:
Financial assets
Derivative financial assets Forward exchange contracts
Foreign exchange swap contracts
Held-for-trading financial assets
Receivables financing
Other non-current financial assets
Investments in other equity
instruments
Total financial assets

Level 1

Level 2

3,687,386.38
20,954,561.79
24,641,948.17

- 132 -

Level 3

Total

7,530,453.55
-

9,416,880,703.56
1,942,680,670.90
1,444,144,778.31

7,530,453.55
9,416,880,703.56
1,942,680,670.90
1,447,832,164.69

-

-

20,954,561.79

7,530,453.55 12,803,706,152.77 12,835,878,554.49

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XII) FAIR VALUE DISCLOSURES - continued
1. Assets and liabilities measured at fair value on a recurring basis - continued
As at 30 June 2026, the financial liabilities measured at fair value on a recurring basis by the above
three levels are analysed below:
Level 1
Financial liabilities
Derivative financial liabilities Forward exchange contracts
Stock repurchase option
Total financial liabilities

Level 2

-

Level 3

18,954,922.41
18,954,922.41

Total

98,851,631.25
98,851,631.25

18,954,922.41
98,851,631.25
117,806,553.66

As at 31 December 2025, the financial assets measured at fair value on a recurring basis by the
above three levels are analysed below:
Financial assets
Derivative financial assets Forward exchange contracts
Foreign exchange swap contracts
Held-for-trading financial assets
Receivables financing
Other non-current financial assets
Investments in other equity
instruments
Total financial assets

Level 1

Level 2

4,157,628.50

721,010.06
721,010.06
- 10,360,938,931.51 10,360,938,931.51
- 2,528,730,548.02 2,528,730,548.02
- 1,541,153,084.95 1,545,310,713.45

32,683,905.48
36,841,533.98

Level 3

-

Total

-

32,683,905.48

721,010.06 14,430,822,564.48 14,468,385,108.52

As at 31 December 2025, the financial liabilities measured at fair value on a recurring basis by the
above three levels are analysed below:
Level 1
Financial liabilities
Derivative financial liabilities Forward exchange contracts
Stock repurchase option
Total financial liabilities

Level 2

-

13,294,428.53
13,294,428.53

Level 3

98,851,631.25
98,851,631.25

Total

13,294,428.53
98,851,631.25
112,146,059.78

The Group takes the date on which events causing the transfers between the levels take place as the
timing specific for recognising the transfers. There was no transfer between Level 1 and Level 2 for
the current year.
The fair value of financial instruments traded in an active market is determined at the quoted market
price; and the fair value of those not traded in an active market is determined by the Group using
valuation technique. The valuation models used mainly comprise discounted cash flow model and
market comparable corporate model. The inputs of the valuation technique mainly include expected
return, estimated discount rate, EV, EBIT, stock volatility, etc.

- 133 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XII) FAIR VALUE DISCLOSURES - continued
1. Assets and liabilities measured at fair value on a recurring basis - continued
The changes in Level 3 assets and liabilities are as follows:
Gain or loss for the current period
31 December
2025

Held-for-trading
financial assets
Receivables financing
Other non-current
financial assets
Stock repurchase
option
Total

Increase

Transfer
into Level
3

Decrease

Transfer
out of
Level 3

Gain or loss
recognised in
other
comprehensive
income

Gain or loss
recognised in
profit or loss

30 June 2026

Changes in unrealised gains
or losses included in profit or
loss for the period from 1
January 2026 to 30 June 2026
with respect to assets still
held as at 30 June 2026 gains or losses on changes in
fair value

10,360,938,931.51

3,813,900,000.00

(4,851,519,438.74)

-

-

93,561,210.79

-

9,416,880,703.56

42,041,772.05

2,528,730,548.02

37,559,516,924.89

(38,114,235,391.10)

-

-

(31,331,410.91)

-

1,942,680,670.90

-

1,541,153,084.95

-

(572,352.54)

-

-

(96,435,954.10)

-

1,444,144,778.31

(96,435,954.10)

(98,851,631.25)

-

-

-

-

-

-

(98,851,631.25)

-

14,331,970,933.23

41,373,416,924.89

(42,966,327,182.38)

-

-

(34,206,154.22)

-

12,704,854,521.52

(54,394,182.05)

- 134 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XII) FAIR VALUE DISCLOSURES - continued
1. Assets and liabilities measured at fair value on a recurring basis - continued
Information about the Level 3 fair value measurement is as follows:
Inputs

Held-for-trading financial
assets
Receivables financing
Other non-current financial
assets
Stock repurchase option due
within one year

Fair value as at 30
June 2026

Valuation technique

9,416,880,703.56

Discounted cash flow

Expected return rate

1,942,680,670.90

Discounted cash flow

Estimated discount
rate

1,444,144,778.31

Market method

EV/EBIT, EV/S, etc.

98,851,631.25

Equity value
distribution method

Stock volatility

Fair value as at 31
December 2025

Valuation technique

10,360,938,931.51

Discounted cash flow

Expected return rate

2,528,730,548.02

Discounted cash flow

Estimated discount
rate

1,541,153,084.95

Market method

EV/EBIT, EV/S, etc.

98,851,631.25

Equity value
distribution method

Stock volatility

Relationship
with fair
value

Observable/U
nobservable

1.85%-1.97%

Positive

Unobservable

0.05%-3.00%

Negative

Unobservable

0.23-9.38

Positive

Unobservable

27.80%-56.53%

Positive

Unobservable

Relationship
with fair
value

Observable/U
nobservable

1.85%-1.97%

Positive

Unobservable

0.05%-3.00%

Negative

Unobservable

0.23-9.38

Positive

Unobservable

27.80%-56.53%

Positive

Unobservable

Name

Scope

Inputs

Held-for-trading financial
assets
Receivables financing
Other non-current financial
assets
Stock repurchase option due
within one year

Name

Scope

Information about the Level 2 fair value measurement is as follows:
Fair value as at 30
June 2026

Valuation
technique

Name

Observable inputs
Scope/weighted average value

Assets
Derivative financial
assets Forward exchange
contracts

7,530,453.55

Market method

Exchange
rate

AUDUSD: 0.6923-0.7097
USDCNY: 6.7740-6.9621
AUDEUR: 0.5945-0.5987
AUDNZD: 0.8317-0.8334

Market method

Exchange
rate

AUDUSD: 0.6438-0.6648
AUDEUR: 0.5462-0.5540
AUDNZD: 0.8343-0.9215
CNYUSD: 6.8210-6.9034

Liabilities
Derivative financial
liabilities Forward exchange
contracts

18,954,922.41

- 135 -

SHANGHAI PHARMACEUTICALS HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2026 TO 30 JUNE 2026
(IN RMB, UNLESS OTHERWISE STATED)
(XII) FAIR VALUE DISCLOSURES - continued
1. Assets and liabilities measured at fair value on a recurring basis - continued
Information about the Level 2 fair value measurement is as follows: - continued
Fair value as at
31 December 2025

Valuation
technique

Name

Observable inputs
Scope/weighted average value

Assets
Derivative financial
assets Forward exchange
contracts
Liabilities
Derivative financial
liabilities Forward exchange
contracts

72