Core Points - The announcement details the compliance checks for traditional Chinese medicine (TCM) material production quality management standards in Heilongjiang Province, confirming that the inspected companies met the Good Agricultural Practices (GAP) requirements [3]. Group 1: Compliance Checks - The Heilongjiang Provincial Drug Administration conducted compliance checks on three companies: Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd., Harbin Fangsheng Pharmaceutical Technology Co., Ltd., and Qitaihe Kangcaotang Medicinal Materials Co., Ltd. [3] - The checks were carried out from October 24 to November 7, 2025, focusing on the cultivation bases of TCM materials [3]. Group 2: Companies Inspected - Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd. had a cultivation area of 108 acres for Ginkgo biloba leaves, and the inspection results confirmed compliance [3]. - Harbin Fangsheng Pharmaceutical Technology Co., Ltd. had a cultivation area of 202 acres for Shuxue Ning injection, also confirming compliance [3]. - Qitaihe Kangcaotang Medicinal Materials Co., Ltd. cultivated ginseng and red ginseng with a total area of 765 acres, meeting the GAP requirements [3].

Summary of Conference Call for Kangmei Pharmaceutical Co., Ltd. Company Overview - **Company**: Kangmei Pharmaceutical Co., Ltd. - **Industry**: Traditional Chinese Medicine (TCM) Key Points and Arguments Financial Performance - **2024 Revenue Growth**: The company reported a revenue increase of **6.47%** year-on-year, reaching **5.189 billion** yuan [2][12] - **Net Profit Improvement**: The net profit attributable to shareholders, after excluding non-recurring losses, saw a reduction in losses by **29.15%**, amounting to a loss of **533 million** yuan [2][12] - **Asset Health**: As of December 31, 2024, total assets were **13.798 billion** yuan, with a debt-to-asset ratio decreasing to **47.75%**, down **2.67 percentage points** [11][12] - **Cash Flow Improvement**: The cash outflow for 2024 was **1.13 billion** yuan, a reduction of **76.28%** compared to the previous year [12][13] Strategic Initiatives - **12355 Strategic Plan**: The company is guided by its **12355 strategic plan**, focusing on cost reduction and efficiency improvement [2][10] - **Core Business Focus**: The TCM segment remains the core business, contributing **53%** of total revenue in 2024, with a **17.94%** increase [14] - **Product Development**: The company has developed **211** national standard products in the TCM formula granule sector by the end of 2024 [3] Market Position and Brand Development - **Brand Expansion**: Kangmei has successfully participated in major procurement bids and expanded its brand influence through industry expos [4][10] - **E-commerce Performance**: The company has achieved significant sales through major e-commerce platforms, enhancing its market presence [10][11] Governance and Compliance - **Corporate Governance**: The company is enhancing its internal control systems and compliance management to support high-quality development [5][15] - **Independent Oversight**: The independent director emphasized the importance of governance and compliance, participating in **22** board meetings to ensure transparency and accountability [15][16] Future Outlook - **2025 Goals**: The company aims to transition from traditional to intelligent business models, focusing on supply chain optimization and deepening engagement with medical institutions [5][10] - **Innovation in TCM**: Kangmei is committed to modernizing TCM through technology and innovation, aiming to contribute significantly to public health [6][10] Additional Important Information - **Product Portfolio**: The company has a diverse product range, including **26** patented TCM products and **11** high-tech products recognized by Guangdong Province [3] - **Operational Efficiency**: The company is implementing measures to enhance production efficiency and reduce costs, including asset management strategies [4][12] - **Community Engagement**: Kangmei is actively involved in community health initiatives and promoting TCM culture [6][10] This summary encapsulates the key insights from the conference call, highlighting the company's financial performance, strategic initiatives, market positioning, governance practices, and future outlook.