RemeGen Co., Ltd. — Capital/Financing Update 2021

Nov 28, 2021

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.

This announcement is for information only and is not intended to and does not constitute, or form part of, an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

==> picture [169 x 52] intentionally omitted <==

RemeGen Co., Ltd.* 榮昌生物製藥（煙台）股份有限公司

(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9995)

UPDATE OF A SHARE OFFERING FINANCIAL INFORMATION IN RELATION TO PROSPECTUS OF A SHARE OFFERING

This announcement is made by RemeGen Co., Ltd. (the “ Company ”, together with its subsidiaries, the “ Group ”) pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules* ”) and Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

References are made to the announcements of the Company dated May 10, 2021, June 21, 2021, November 8, 2021 and November 11, 2021, and the circular of the Company dated May 14, 2021, which include, among other things, matters related to the proposed A share offering by the Company (the “ A Share Offering ”). Unless otherwise defined, capitalized terms used in this announcement shall have the meanings as defined in the above announcements and circular.

The Company has submitted a prospectus of the A Share Offering (Registration Proof) (the “ Registration Proof Prospectus ”) to the Shanghai Stock Exchange (the “ SSE ”) in connection with its application for A Share Offering. According to the relevant regulations of the PRC, the Registration Proof Prospectus and related materials have been published on the website of the Review and Approval of the Issuance and Listing of Stocks on the Sci-Tech Innovation Board of the Shanghai Stock Exchange (上交所科創板股票發行上市審核網站) at kcb.sse.com.cn on November 26, 2021. The Registration Proof Prospectus contains, among other things, the key financial data in the consolidated financial statements of the Group for the nine months ended September 30, 2021 (the “ Consolidated Financial Statements ”) and the annual results estimate for the year ending December 31, 2021.

1

Key Financial Information and Operating Results in the Consolidated Financial Statements

(1) Review Opinion of the Accountant

The audit closing date of the financial report of the Company is June 30, 2021. Ernst & Young Hua Ming LLP reviewed the financial information of the Company as of September 30, 2021 and for the period from January to September 2021, and issued a review report of “Ernst & Young Hua Ming (2021) Zhuan Zi No. 61486761_J12”.

Based on their review, Ernst & Young Hua Ming LLP considers that nothing has come to their attention that causes them to believe that the Consolidated Financial Statements are not prepared in all material respects in accordance with the Chinese Accounting Standards for Business Enterprises No. 32 – Interim Financial Reporting.

(2) Key Financial Information

The reviewed key financial information of the Company as of 30 September, 2021 and for the period from January to September 2021 is as follows:

1. Key Data of the Consolidated Balance Sheet

Unit: RMB0’000

	As of	As of
	September 30,	December 31,
Item	2021	2020	Growth rate
Current assets	145,165.95	297,734.23	-51.24%
Non-current assets	167,638.84	114,035.01	47.01%
Total assets	312,804.78	411,769.24	-24.03%
Current liabilities	51,412.88	42,508.15	20.95%
Non-current liabilities	10,927.16	9,799.04	11.51%
Total liabilities	62,340.04	52,307.20	19.18%
Total equity of shareholders	250,464.74	359,462.04	-30.32%
Total equity attributable to shareholders of
the parent company	250,464.74	359,462.04	-30.32%

As of September 30, 2021, the asset structure of the Company remained relatively stable, and the asset quality and liquidity were maintained at a healthy level. The total assets of the Company amounted to RMB3,128,047,800, representing a decrease of 24.03% as compared with the end of the previous year, of which: (1) the current assets decreased by 51.24% as compared with the end of the previous year, mainly due to the decrease in bank deposits as a result of the Company’s expenditure on various business activities and the repurchase of H shares for the First H Share Award and Trust Scheme, (2) the non-current assets increased by 47.01% as compared to the end of the previous year, mainly due to the increase in the balance of construction in progress as a result of the long-term assets investment required by the Company for the expansion of business scale and the enhancement of capacity for research and development and commercial production.

2

As of 30 September, 2021, the Company’s equity attributable to shareholders of the parent company was RMB2,504,647,400, representing a decrease of 30.32% as compared to the end of the previous year, mainly due to the Company’s net profit attributable to shareholders of the parent company for the period from January to September 2021 of RMB-688,259,400, which resulted from further increase in its uncovered deficit.

1. Key Data of the Consolidated Income Statement

		Unit: RMB0’000	Unit: RMB0’000
	For the	For the
	period from	period from
	January to	January to
	September	September
Item	2021	2020	Growth rate
Revenue	11,450.68	214.02	5,250.27%
Research and development expenses	52,462.45	31,628.74	65.87%
Total loss	-68,825.94	-42,713.21	-61.14%
Net loss	-68,825.94	-42,713.21	-61.14%
Net loss attributable to shareholders of
the parent company	-68,825.94	-42,713.21	-61.14%
Net loss attributable to the shareholders of
the parent company after deducting
non-recurring gains and losses	-68,795.60	-46,709.71	-47.28%

Note: The data for the period from January to September 2020 in the above table has not been audited or reviewed.

The revenue of the Company for the period from January to September 2021 has increased significantly as compared with the same period last year, mainly due to the sales of the core products of the Company, namely, telitacicept and disitamab vedotin, after the domestic conditional marketing approval was obtained in March and June 2021, respectively, while the Company did not launch any product during the same period in 2020, and the revenue from principal business was RMB0. The Company’s total loss, net loss attributable to shareholders of the parent company and net loss attributable to shareholders of the parent company after deducting non-recurring gains and losses increased significantly for the period from January to September 2021 over the same period of the previous year, mainly due to the Company’s continuous large-scale investment in research and development activities resulting in the increase of approximately 65.87% in research and development expenses for the period from January to September 2021 as compared with the same period last year, and that the sales revenue can not make up the Company’s overall costs and expenses as the launch of the Company’s commercialized products as abovementioned is still very recent.

3

3. Key Data of the Consolidated Statement of Cash Flows

Unit: RMB0’000

	For the	For the
	period from	period from
	January to	January to
	September	September
Item	2021	2020	Growth rate
Net cash flows from operating activities	-71,980.85	-34,477.31	-108.78%
Net cash flows from investing activities	-47,064.06	-37,196.17	-26.53%
Net cash flows from financing activities	-56,925.65	72,480.60	-178.54%
Net increase in cash and cash equivalents	-176,526.76	796.10	-22,274.04%

Note: The data for the period from January to September 2020 in the above table has not been audited or reviewed.

For the period from January to September 2021, the net increase in cash and cash equivalents of the Company decreased significantly as compared with the corresponding period of last year, mainly due to (1) the net cash flows from operating activities decreased by 108.78% year-on-year, which was mainly due to the year-on-year increase of cash payment of the Company on procurement of commodities/labour services, staff remunerations and related management activities, sales activities and research and development activities based on its daily operating needs; (2) the net cash flows from the financing activities of the Company was changed from net inflows to net outflows, which was mainly due to the completion of the Company’s equity financing for the period from January to September 2020 resulting in a large net cash inflow from financing activities in the same period, while the repayment of bank borrowings and the repurchase of H shares for the First H Share Award and Trust Scheme under the trust scheme during the period from January to September 2021 caused a significant net cash outflow from financing activities in the same period.

4

4. Key Data of the Statement of Non-recurring Gains and Losses

Unit: RMB0’000

Item Gains or losses from the retirement and disposal of non-current assets Government grants recorded in current profit or loss Reduction or exemption of social security contributions due to the pandemic Investment gains from wealth management products Gains from structured deposits Donation expenses Other non-operating income and expenses except for the aforementioned items Impact of income tax Impact of minority interests (after tax) Total	For the period from January to September 2021 -26.95 2,098.36 – – – -2,114.78 13.03 – – -30.34	For the period from January to September 2020 -12.95 2,848.34 1,213.27 16.37 12.38 -93.39 12.48 – – 3,996.50

Note: The data for the period from January to September 2020 in the above table has not been audited or reviewed.

For the period from January to September 2021, the non-recurring gains and losses of the Company decreased significantly, primarily due to (1) the Company incurred more donation expenses during the period from January to September 2021, which increased by 2,164.46% year-on-year; (2) the current amount of reduction or exemption of social security contributions due to the pandemic of the Company for the period from January to September 2020 was significant, while no relevant income was realized during the same period in 2021.

(3) Annual Results Estimate for the Year ending December 31, 2021

According to the preliminary estimation, the Company is expected to record a revenue of approximately RMB1,416 million to RMB1,562 million for the year ending December 31, 2021(inclusive of the upfront payment receivable from Seagen Inc. in relation to the license agreement between the Company and Seagen Inc. to develop and commercialize disitamab vedotin), representing a year-on-year increase of approximately 46,409.22% to 51,194.83%; the net profit attributable to the shareholders of the parent company is expected to be RMB234 million to RMB351 million, with a year-on-year increase of 133.57% to 150.35%; the net profit attributable to the shareholders of the parent company after deducting non-recurring gains and losses is expected to be RMB154 million to RMB230 million, representing a year-on-year increase of 119.57% to 129.36%.

The above estimated results for the year 2021 are only the preliminary estimation results of the Company, which have not been audited or reviewed by the auditors, and do not represent the final revenue and net profit to be realized by the Company, nor do they constitute a profit forecast or performance commitment of the Company.

5

The above English version of the key financial figures and analysis of change is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

As the A Share Offering is subject to certain conditions precedent, it may or may not proceed to completion and the shareholders and potential investors of the Company are advised to exercise caution when dealing in the H shares of the Company. Further announcement(s) will be published by the Company as and when appropriate in respect of any material development relating to the A Share Offering.

By order of the Board RemeGen Co., Ltd.* Mr. Wang Weidong Chairman and executive director

Yantai, The PRC November 28, 2021

As at the date of this announcement, the Board of the Company comprises Mr. Wang Weidong, Dr. Fang Jianmin, Dr. He Ruyi and Mr. Lin Jian as the executive directors, Dr. Wang Liqiang and Dr. Su Xiaodi as the non-executive directors, and Ms. Yu Shanshan, Mr. Hao Xianjing and Dr. Ma Lan as the independent non-executive directors.

• For identification purposes only

6