CSPC Pharmaceutical Group Limited — Interim / Quarterly Report 2020

May 27, 2020

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.

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CSPC PharmaCeutiCal GrouP limited 石藥集團有限公司

(Incorporated in Hong Kong under the Companies Ordinance)

(Stock code: 1093)

QuarterlY reSultS For the three moNthS eNded 31 marCh 2020

FiNaNCial hiGhliGhtS

Revenue by business units: Finished drugs Vitamin C Antibiotics Others Total revenue Gross profit Operating profit Profit attributable to shareholders Basic earnings per share	For the three months ended 31 march 2020 2019 RMB’000 RMB’000 Change (unaudited) (Unaudited) 5,021,745 4,244,972 +18.3% 426,297 523,610 -18.6% 207,772 346,963 -40.1% 469,419 377,685 +24.3% 6,125,233 5,493,230 +11.5% 4,529,281 3,841,465 +17.9% 1,162,749 1,156,154 +0.6% 1,159,450 951,831 +21.8% rmB18.59 cents RMB15.26 cents +21.8%

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The Board of Directors of CSPC Pharmaceutical Group Limited (the “Company”) is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the “Group”) for the three months ended 31 March 2020 as follows:

CoNdeNSed CoNSolidated StatemeNt oF ProFit or loSS

For the three months ended 31 March 2020

Revenue Cost of sales Gross profit Other income Other gains or losses Selling and distribution expenses Administrative expenses Research and development expenses Other expenses Operating profit Finance costs Share of results of joint ventures Share of results of an associate Gain on disposal of a subsidiary Profit before tax Income tax expense Profit for the period Profit for the period attributable to: Owners of the Company Non-controlling interests Earnings per share Basic Diluted

For the three months ended 31 march 2020 2019 RMB’000 RMB’000 (unaudited) (Unaudited) 6,125,233 5,493,230 (1,595,952) (1,651,765) 4,529,281 3,841,465 35,025 31,533 34,973 (10,101) (2,550,933) (2,063,738) (277,784) (175,875) (568,138) (461,010) (39,675) (6,120) 1,162,749 1,156,154 (2,177) (14,274) 8,412 15,741 96 — 286,232 — 1,455,312 1,157,621 (283,175) (210,460) 1,172,137 947,161 1,159,450 951,831 12,687 (4,670) 1,172,137 947,161 RMB cents RMB cents 18.59 15.26 18.59 15.26

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CoNdeNSed CoNSolidated StatemeNt oF ProFit or loSS aNd other ComPreheNSive iNCome

For the three months ended 31 March 2020

Profit for the period other comprehensive income (expense) Item that will not be reclassified to profit or loss: Fair value gain (loss) on investments in financial assets measured at fair value through other comprehensive income Item that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Other comprehensive income (expense) for the period, net of income tax Total comprehensive income for the period Total comprehensive income for the period attributable to: Owners of the Company Non-controlling interests

For the three months ended 31 march 2020 2019 RMB’000 RMB’000 (unaudited) (Unaudited) 1,172,137 947,161 63,045 (16,918) (1,663) 320 61,382 (16,598) 1,233,519 930,563 1,220,832 935,233 12,687 (4,670) 1,233,519 930,563

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NoteS:

1. Principal accounting Policies

The principal accounting policies and methods of computation used in the preparation of the financial data for the three months ended 31 March 2020 are consistent with those followed in the preparation of the Group’s financial statements for the year ended 31 December 2019.

2. Profit for the Period

Profit for the period has been arrived at after charging (crediting): Amortisation of other intangible assets Depreciation of right-of-use assets Depreciation of property, plant and equipment Total depreciation and amortisation Fair value changes on structured bank deposits (included in other gains or losses) Government grant income (included in other income) Interest income on bank balances (included in other income) Net foreign exchange (gain) loss (included in other gains or losses)

For the three months ended 31 march 2020 2019 RMB’000 RMB’000 (unaudited) (Unaudited) 3,132 4,296 22,222 18,734 168,260 142,955 193,614 165,985 (18,021) (25,378) (29,935) (15,073) (13,913) (15,208) (17,674) 15,508

Note: Cost of inventories recognised as an expense approximated cost of sales as shown in the condensed consolidated statement of profit or loss for the three months ended 31 March 2020 and 2019.

3. Gain on disposal of a Subsidiary

During the period, the Group entered into sales and purchase agreements with an independent third party to dispose of its 99.39% equity interest in Shijiazhuang Zhongrun Pharmaceutical Technology Limited for a total cash consideration of approximately RMB503,046,000, resulting in a gain of RMB286,232,000.

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4. earnings Per Share

The calculation of basic and diluted earnings per share attributable to the owners of the Company is based in the following data:

earnings Earnings for the purposes of basic and diluted earnings per share Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share Effect of dilutive potential ordinary shares: Unvested shares under share award scheme Weighted average number of ordinary shares for the purpose of diluted earnings per share	For the three months ended 31 march 2020 2019 RMB’000 RMB’000 (unaudited) (Unaudited) 1,159,450 951,831 For the three months ended 31 march 2020 2019 ’000 ’000 6,236,338 6,236,338 1,038 2,126 6,237,376 6,238,464	For the three months ended 31 march 2020 2019 RMB’000 RMB’000 (unaudited) (Unaudited) 1,159,450 951,831 For the three months ended 31 march 2020 2019 ’000 ’000 6,236,338 6,236,338 1,038 2,126 6,237,376 6,238,464
		6,238,464

The weighted average number of ordinary shares for the calculation of basic earnings per share has been adjusted for the effect of shares held by the Trustee pursuant to the share award scheme.

SeGmeNt iNFormatioN

Information reported to executive directors, being collectively the chief operating decision maker (“CODM”), for the purposes of resources allocation and assessment of segment performance focuses on types of goods delivered.

The Group’s reportable segments under HKFRS 8 Operating Segments are as follows:

• (a) Finished Drugs — research and development, manufacture and sale of pharmaceutical products;

• (b) Vitamin C — manufacture and sale of vitamin C products in bulk form;

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• (c) Antibiotics — manufacture and sale of antibiotic products in bulk form; and

• (d) Others — manufacture and sale of functional food products (including caffeine additives and vitamin supplements), glucose products and provision of healthcare services.

The following is an analysis of the Group’s revenue and results by operating and reportable segment.

For the three months ended 31 March 2020 (Unaudited):

Finished drugs RMB’000 SEGMENT REVENUE External sales 5,021,745 Inter-segment sales — TOTAL REVENUE 5,021,745 SEGMENT PROFIT 1,007,060 Unallocated income Unallocated expenses Operating profit Finance costs Share of results of joint ventures Share of results of an associate Gain on disposal of a subsidiary Profit before tax	vitamin C RMB’000 426,297 1,484 427,781 43,479	antibiotics RMB’000 207,772 47,856 255,628 2,826	others RMB’000 469,419 4,102 473,521 95,869	Segment total eliminations Consolidated RMB’000 RMB’000 RMB’000 6,125,233 — 6,125,233 53,442 (53,442) — 6,178,675 (53,442) 6,125,233 1,149,234 1,149,234 42,797 (29,282) 1,162,749 (2,177) 8,412 96 286,232 1,455,312

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For the three months ended 31 March 2019 (Unaudited):

Finished Drugs RMB’000 SEGMENT REVENUE External sales 4,244,972 Inter-segment sales — TOTAL REVENUE 4,244,972 SEGMENT PROFIT 913,063 Unallocated income Unallocated expenses Operating profit Finance costs Share of results of joint ventures Profit before tax	Vitamin C RMB’000 523,610 559 524,169 165,615	Antibiotics RMB’000 346,963 14,408 361,371 25,314	Others RMB’000 377,685 987 378,672 57,520	Segment Total RMB’000 5,493,230 15,954 5,509,184 1,161,512	Eliminations RMB’000 — (15,954) (15,954)	Consolidated RMB’000 5,493,230 — 5,493,230 1,161,512 40,586 (45,944) 1,156,154 (14,274) 15,741 1,157,621

Segment profit represents the profit earned by each segment without allocation of interest income, fair value changes on structured bank deposits, finance costs, central administrative expenses, share of results of joint ventures and an associate and gain on disposal of a subsidiary. This is the measure reported to the CODM for the purposes of resources allocation and performance assessment.

Inter-segment sales are charged at prevailing market rates.

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BuSiNeSS revieW

The nationwide implementation of closed-off management amid the novel coronavirus outbreak has affected both the outpatient visits and hospitalization rates, and hindered marketing activities and drug distribution. As a result, sales of the Group’s finished drug products have been affected to various degrees. During the epidemic, the Group actively responded to various prevention and control measures of the government, and made the best effort to manufacture products with urgent clinical needs such as arbidol. On the other hand, the Group has stepped up online academic meetings and lectures in order to alleviate the impact on sales from the epidemic.

The results for the first quarter of the year have inevitably been negatively impacted by the epidemic, with growth of sales and core profit both below expectation. During the period under review, the Group has recorded revenue of RMB6,125 million and profit attributable to shareholders of RMB1,159 million, representing increase of 11.5% and 21.8% over the same period of last year respectively.

Finished drug Business

For the first quarter, the finished drug business has recorded sales of RMB5,022 million, representing an increase of 18.3% over the same period of last year. The sales performance of products by major therapeutic area is as follows.

Nervous system disease products, major products including NBP (butylphthalide soft capsules and injections) and Oulaining (oxiracetam capsules and lyophilised powder injections), have achieved sales of RMB1,654 million, representing a year-on-year decrease of 4.3%. Among which, the sales of NBP have increased by 18.1% whereas Oulaining has suffered a significant sales decline of 63.7% due to the impact from the key drug monitoring list and removal from provincial reimbursement lists.

Oncology products, major products including Jinyouli (PEG-rhGCSF injections), Duomeisu (doxorubicin hydrochloride liposome injections) and Keaili (paclitaxel for injection (albuminbound)), have achieved sales of RMB1,552 million, representing a year-on-year increase of 53.7%. Among which, the sales of Keaili and Jinyouli have increased by 114.0% and 64.5% respectively.

Anti-infective products, major products including Shuluoke (meropenem for injection), Nuomoling (amoxicillin capsules), Xianqu/Shiyao (ceftriaxone sodium for injection), Zhongnuo Lixin (cefuroxime sodium for injection), Xinweihong (azithromycin tablets) and Weihong (azithromycin dispersible tablets/capsules/enteric-coated tablets), have achieved sales of RMB775 million, representing a year-on-year decrease of 3.2%.

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Cardiovascular disease products, major products including Xuanning (maleate levamlodipine tablets and dispersible tablets), Encun (clopidogrel bisulfate tablets), Abikang (aspirin enteric-coated tablets) and Meiluolin (ticagrelor tablets), have achieved sales of RMB582 million, representing a year-onyear increase of 66.5%. During the period, Encun contributed new sales revenue with its wining at the nationwide expansion tender of the “4+7” centralized procurement last year. Sales growth of Xuanning has also returned to a more desirable level with sales increase of 25.8%.

Respiratory disease products, major products including Qixiao (arbidol hydrochloride tablets), Zhongnuo Like (ambroxol hydrochloride oral solution) and Zhongnuoping (ambroxol hydrochloride extended-release tablets), have achieved sales of RMB191 million, representing a year-on-year increase of 98.9%. Due to the epidemic outbreak, Qixiao has recorded substantial sales during the period after relaunch.

Diabetes products, major products including Linmeixin (glimepiride dispersible tablets) and Shuanglexin (metformin hydrochloride tablets/extended-release tablets), have achieved sales of RMB88 million, representing a year-on-year increase of 56.3%.

Products in other therapeutic areas, major products including Gubang (alendronate sodium tablets/ enteric-coated tablets), Debixin/Ouyi (omeprazole enteric-coated capsules), Xianpai (omeprazole injections) and Qimaite (tramadol hydrochloride tablets), have achieved sales of RMB180 million, representing a year-on-year decrease of 11.9%.

vitamin C Business

With product prices at a lower level as compared with the same period of last year, sales of this quarter have declined by 18.6% to RMB426 million. However, as a result of the epidemic, the market has witnessed a stronger overseas demand and an increase in order price since this March.

antibiotics Business

The overall market demand and prices of antibiotics have remained at a low level as a result of the national policy of restricting the use of antibiotics over the years. The performance of this business remained weak during the period with sales decreasing by 40.1% to RMB208 million.

other Businesses

Sales for the period amounted to RMB469 million, representing a year-on-year increase of 24.3%, with both caffeine and glucose products achieving satisfactory growth.

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research and development

The Group has continued to scale up its investment in research and development, with its R&D expenses reaching RMB568 million (charged to profit or loss statement) during the period, representing an increase of 23.2% and accounting for approximately 11.3% of the finished drug business revenue. At present, the Group has more than 300 projects in the pipeline, of which over 40 are innovative small molecule drugs, over 50 are innovative macromolecule drugs and over 20 are drugs of new preparation, primarily focusing on the therapeutic areas of oncology, autoimmunity, psychiatry and neurology, digestion and metabolism, cardio-cerebrovascular system and antiinfectives.

Since the beginning of the year, the Group has obtained drug registration approvals for rivaroxaban tablets, montelukast sodium tablets, montelukast sodium chewable tablets and ornithine aspartate injections in China, as well as ANDA approval for omega-3-acid ethyl esters capsules in the U.S.. Currently, there are 26 drug candidates pending drug registration approval, 39 products under clinical trials (including 28 innovative drugs and 11 new preparations) and 7 products under bioequivalence tests.

In the three years ahead, the Group is expected to launch more than 50 new products, over 15 of which will be key products with a market potential exceeding RMB1 billion each, providing strong support for the high quality growth of the Group in the future.

divideNd

The board of directors of the Company does not declare the payment of an interim dividend for the three months ended 31 March 2020.

revieW oF reSultS

The financial data for the three months ended 31 March 2020 is based on the internal records and management accounts of the Group and has not been reviewed or audited by the external auditor of the Company.

By order of the Board CSPC Pharmaceutical Group limited Cai dongchen Chairman

Hong Kong, 27 May 2020

As at the date of this announcement, the Board comprises Mr. CAI Dongchen, Mr. ZHANG Cuilong, Mr. WANG Zhenguo, Mr. PAN Weidong, Mr. WANG Huaiyu, Dr. LU Hua, Dr. LI Chunlei, Dr. WANG Qingxi and Mr. CHAK Kin Man as executive directors; Mr. LEE Ka Sze, Carmelo as non-executive director; and Mr. CHAN Siu Keung, Leonard, Mr. WANG Bo, Prof. LO Yuk Lam, Dr. YU Jinming and Mr. CHEN Chuan as independent non-executive directors.

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