Core Viewpoint - The company anticipates a significant fair value loss of approximately RMB 16.3 million related to its investment in ERX Pharmaceuticals Inc. due to recent shifts in the U.S. capital market, which have favored AI and tech sectors over traditional drug development [1][2] Group 1: Fair Value Loss and Market Conditions - The fair value loss is primarily attributed to a decline in financing activities for traditional drug development and clinical research, impacting ERX's new drug development due to a lack of external funding [1] - The board believes that this fair value loss will not have a significant adverse effect on the company's existing business, operations, or financial condition, as the group's liquidity remains strong and overall financial health is stable [1] Group 2: Investment in ERX Pharmaceuticals - ERX focuses on innovative drug discovery and clinical development for obesity and related metabolic diseases, which aligns synergistically with the company's core business segments [1] - ERX has recently proposed a capital increase of $6 million to strengthen its financial position and support ongoing operations, and the board has resolved to participate in this capital increase to maintain its approximately 3% stake in ERX [1][2] Group 3: Strategic Importance of Further Investment - The board believes that further investment will prevent dilution and protect the book value of the company's investment, especially given ERX's leading non-GLP-1 therapy for patients who do not respond well to semaglutide [2] - ERX's drug for Prader-Willi syndrome has received orphan drug designation and fast track designation from the FDA, reinforcing the board's confidence in the long-term development of ERX [2] - Maintaining the stake in ERX is seen as crucial for preserving strategic partnerships in core business areas, ensuring consistency in technology, supply chain, and market opportunities, which will benefit the company's strategic development and long-term growth [2]

Core Viewpoint - The company anticipates a significant fair value loss of approximately RMB 16.3 million related to its investment in ERX Pharmaceuticals Inc. due to a shift in the U.S. capital market environment, which has led to a decline in funding for traditional drug development and clinical research [1][2] Group 1 - The fair value loss is primarily attributed to a lack of external funding for ERX's new drug development activities, resulting in downward pressure on ERX's short-term valuation [1] - The board believes that the fair value loss will not have a significant adverse impact on the company's existing business, operations, or financial condition, as the group's liquidity remains strong and overall financial and operational status is stable [1] - ERX focuses on the discovery and clinical development of innovative drugs for obesity and obesity-related metabolic diseases, which aligns synergistically with the company's core business segments [1] Group 2 - ERX has recently proposed a capital increase of $6 million to strengthen its financial position and provide funding for ongoing business operations [1] - The board has resolved to participate in this capital increase to maintain its approximately 3% stake in ERX, aiming to prevent further dilution of its investment value [1][2] - The board believes that further investment aligns with the overall interests of the company and its shareholders, as it can avoid immediate erosion of the investment's book value and supports ERX's long-term development [2]