Shandong Xinhua Pharmaceutical Company Limited (Stock Code: 00719) announced entering into a new trademark licence agreement with Shandong Xinhua Pharmaceutical Branch of Hualu Holdings Co. Ltd. The agreement addresses renewal of the “Xinhua” trademark use and will be effective from January 1, 2026, to December 31, 2028.

The renewed arrangement stipulates an annual licence fee of RMB14.39 million, paid in quarterly installments. This fee marks an increase from the RMB10 million annual fee set under the previous agreements and reflects growth in both the “Xinhua” trademark's goodwill and the expansion of Shandong Xinhua Pharmaceutical Company Limited’s sales volumes. According to the announcement, operating revenue rose from RMB6,055.9 million in 2020 to RMB8,466.31 million in 2024.

The transaction continues to be classified as a connected transaction due to Hualu Holdings Co. Ltd. being the controlling shareholder of Shandong Xinhua Pharmaceutical Company Limited. While one or more of the applicable percentage ratios exceed 0.1% but remain below 5% on an annual basis, the agreement is subject to reporting and announcement requirements but does not require independent shareholders’ approval. The board of directors has confirmed the fairness of the terms and deems the agreement to be in the ordinary and usual course of business. The initial term of this licence remains subject to possible early termination, provided three months’ prior written notice is given by either party.