On March 17, 2022, Tonghua Dongbao Pharmaceutical Co., Ltd. (the "Company" or "Tonghua Dongbao") announced its plan to transfer 20.5 million shares (or 5.04% of total share capital) in Xiamen Amoytop Biotech Co., Ltd. ("Amoytop"), at a price of RMB 20.16 per share, for a total transaction of RMB 410 million. This is the second time the Company transfers its shares this year, following a transfer of its shares worth RMB 460 million in January. Together, the two share transfers bring in RMB 870 million for the Company, and will markedly boost its net profit and earnings per share in Q1.

Tonghua Dongbao transfers its shares in Amoytop for the sake of the Company's long-term development strategy. Through share transfer, the Company will get large sums of money and improve asset utilization. With ample money in reserve, the Company can invest more in innovation, R&D, and promising cooperative projects, and turn itself into an innovative pharmaceutical company. At the same time, the Company will continue to increase cash dividends and carry out well-timed share buybacks to enhance the interests of all shareholders.

In recent years, the Company has made an ongoing effort to improve its innovation and R&D system by establishing and enhancing relevant mechanisms to expand its innovation and R&D capabilities in a comprehensive and systematic manner. The Company expanded its business both in depth and breadth over the past year. Dedicated to the R&D of diabetes drugs, the Company has also tapped into the gout and hyperuricemia treatment domain to expand its R&D pipeline of therapies for endocrine diseases.

On the one hand, the Company continues stepping up R&D in the diabetes care segment to create a comprehensive and forward-looking product pipeline. In its multi-level product portfolio are long-acting, intermediate-acting, rapid-acting, and ultra-rapid-acting insulins, basal-bolus insulins (BBIs), GLP-1 receptor agonists, and insulin/GLP-1 combinations. In addition, the Company is also developing three industry-leading novel drugs for diabetes, namely, the world's first SGLT1/SGLT2/DPP4 triple-target inhibitor, GIP/GLP dual-target agonist, and small-molecule GLP-1 receptor agonist.

On the other hand, the Company strategically expands into the gout/hyperuricemia treatment domain, focusing on the R&D of Class 1 novel drugs. Two Class 1 novel drugs are currently in development, i.e., a URAT1 inhibitor and a dual-target combination, the former of which has entered clinical trials. As a veteran player in the chronic disease management market, the Company aims at developing first-in-class and best-in-class drugs for gout/hyperuricemia which as a chronic disease, represents a huge market to tap, and achieving coordinated development of its business segments.

Open to external cooperation, the Company keeps an eye on high-quality projects in the industry, and seeks to expand its business by means including but not limited to project cooperation and equity investment. The whopping sum of money earned from the share transfer will unlock more possibilities for future cooperation and expand the growth potential of the Company. The Company values both in-house R&D and external cooperation. It will use a variety of means to increase R&D efficiency, improve the R&D system, and expand the business to achieve greater growth.

Going forward, the Company will make full use of its capital resources and set its sight on the long-term development in planning. Committed to becoming an innovative pharmaceutical company, it will continue to develop internationally competitive new and effective drugs to enhance its investment value and social value.