BAIYUNSHAN PH (00874) has announced that on April 27, 2026, Guangzhou Pharmaceutical entered into a "Xingye Yuanrong-Guangzhou Pharmaceutical Receivables Phase 5 Asset-Backed Special Plan Underlying Asset Purchase Agreement" with Industrial Securities Asset Management, with an issuance scale of RMB 10 billion. Subsequently, on May 22, 2026, Guangzhou Pharmaceutical signed a "Settlement Confirmation Letter" with Industrial Securities Asset Management, confirming the sale of the initial underlying assets to the asset manager and receiving a purchase price of RMB 10 billion.

Guangzhou Pharmaceutical is a non-wholly owned subsidiary of the company, incorporated in China, in which BAIYUNSHAN PH holds a 90.92% equity stake. Guangzhou Pharmaceutical and its subsidiaries are primarily engaged in the distribution and retail of various pharmaceutical products and are committed to providing supply chain services to partners across the pharmaceutical industry value chain. The company offers comprehensive, integrated distribution services primarily to hospitals, other medical institutions, distributors, and retail pharmacies across China.

By securitizing its accounts receivable through these transactions, Guangzhou Pharmaceutical can convert receivables into cash assets with higher liquidity. This initiative aims to revitalize existing assets, broaden financing channels, and optimize its own financial structure.

In light of the aforementioned reasons and the terms of these transactions as disclosed in the announcement, the Board of Directors considers the terms to be fair and reasonable, aligning with the overall interests of the Group and its shareholders.