On the evening of March 9, 2022, Tonghua Dongbao Pharmaceutical Co., Ltd. (the "Company" or "Tonghua Dongbao") announced its plan to buy back no fewer than 12 million and no more than 240 million shares with its own funds through centralized bidding transactions, accounting for 0.60% to 1.19% of the Company's total share capital. The repurchase is expected to last 6 months from the date when the repurchase plan is approved at the shareholders meeting. As planned, the unit price of the repurchased shares will not exceed RMB 15, and the total repurchase amount will be no more than RMB 360 million.

This is another share buyback plan following the repurchase and cancellation of about 24 million shares of RMB 264 million in February 2022. The repurchased shares will also be canceled this time to reduce the registered capital and listed shares of the Company. The repurchase can help increase the earnings per share, net asset value per unit, and return to shareholders.

The plan demonstrated the management's confidence in the Company's future development and the recognition of the Company's value. The management made the decision based on the recent performance of the Company's stock in the secondary market and the Company's business conditions, with a view to matching the stock price with the Company's value, maintaining the brand image, enhancing investors' confidence, and increasing return on equity.

Tonghua Dongbao resumed rapid growth and improved profitability in 2021. The 2021 annual performance report disclosed that the Company achieved operating revenue of RMB 3.252 billion, up 12.45% YoY, and a net profit attributable to shareholders of the listed company of RMB 1.334 billion, up 43.40% YoY.

The Company's innovation performance also remained strong in 2021. As for novel drug development, Tonghua Dongbao initiated research into three Class 1 new diabetes drugs and two Class 1 new drugs for the treatment of gout. So far, the Company has enrolled the first subject in a Phase I clinical trial of the world's first triple-target inhibitor (SGLT1/ SGLT2/ DPP4) and obtained approval for a clinical trial of the URAT1 inhibitor. The Company also got the nod for the marketing of many proprietary products under research, such as insulin aspart, sitagliptin phosphate tablets, and sitagliptin metformin tablets. In addition, it is gaining momentum in the R&D of ultra-rapid-acting insulin, GLP-1, oral anti-diabetic drug, and the combination of insulin and GLP-1RA, among others. The Company boasts the broadest portfolio in China's diabetes treatment market, serving to meet the medication needs of patients of different stages and characteristics. At the same time, the Company is making inroads into the field of treatment for endocrine diseases such as gout and hyperuricemia to seek growth opportunities and expand the market.

Tonghua Dongbao attaches great importance to return on equity. It not only increases dividends and buys back shares for cancellation to elevate returns, but also continuously improves innovative R&D capabilities and pursues quality partnerships to enhance core competitiveness and financial and social value. Tonghua Dongbao will keep improving business quality and creating value for shareholders and the public.