China Traditional Chinese Medicine Holdings Co. Limited (China Traditional Chinese Medicine) disclosed that on 15 September 2026 two subsidiaries—Shandong Yifang Pharmaceutical and Sinopharm Group Zhonglian Pharmaceutical—signed engineering, procurement and construction (EPC) contracts with Sino Pharmengin Corporation, a fellow subsidiary of China National Pharmaceutical Group (CNPGC).

Shandong Yifang contract • Scope: Renovation of a 4,800 sq m Traditional Chinese Medicine (TCM) decoction pieces workshop, covering design, equipment procurement, construction, installation, testing and commissioning. • Value: RMB10.56 million. • Schedule: 120 days (15-day design phase; 105-day construction and procurement phase). • Retentions: 3 % of construction and 3 % of equipment costs held as warranty deposits, released on receipt of defect-liability guarantees; defect-liability period lasts 12 months after completion acceptance.

Zhonglian Pharmaceutical contract • Scope: Capacity-enhancement and technical renovation of the gel workshop (formerly powder workshop), cool and hazardous-goods warehouses, methadone warehouse, and site utilities; includes design optimisation, construction, installation and outdoor ancillary works. • Value: RMB11.35 million. • Schedule: 105 days (15-day design phase; 90-day construction and procurement phase). • Retentions mirror the Shandong Yifang terms.

Financial and regulatory context • Aggregate contract value: RMB21.91 million. • Funding: self-owned funds of the two subsidiaries. • Tender process: open bidding with at least three participants; selection based on price ceiling, technical capability, qualifications and past performance. • Listing Rules: Transactions constitute connected transactions under Chapter 14A due to Pharmengin’s affiliation with CNPGC (which holds 33.46 % of China Traditional Chinese Medicine). Applicable percentage ratios exceed 0.1 % but remain below 5 %, triggering announcement, reporting and annual review requirements without necessitating independent shareholder approval. • Board vote: Directors nominated by CNPGC abstained; remaining directors—including all independent non-executive directors—consider the terms fair, on normal commercial terms and in the ordinary course of business.

Strategic rationale • Shandong Yifang’s renovation addresses rising demand for TCM decoction pieces amid expanding centralised procurement. • Zhonglian Pharmaceutical’s upgrade boosts output of isotretinoin erythromycin gel—its third-largest product—while resolving fire-safety issues and supporting sustainable growth. • Leveraging Pharmengin’s Grade-II/Grade-I construction and engineering qualifications is expected to generate cost synergies within the CNPGC group.