Livzon Pharmaceutical Group Inc. released its unaudited first-quarter results for 2026, showing a contraction in both top- and bottom-line metrics amid softer demand for respiratory products and pricing pressure from national procurement policies.

Revenue and Profitability • Operating income fell 9.73 % year-on-year to RMB 2.87 billion. • Net profit attributable to shareholders declined 9.39 % to RMB 576.91 million. • After stripping out extraordinary items, attributable profit slid 6.48 % to RMB 578.66 million. • Basic and diluted earnings per share both decreased to RMB 0.65, compared with RMB 0.71 a year earlier. • Weighted average ROE eased to 4.06 % from 4.55 %.

Management cited three primary headwinds: a lower incidence of influenza and respiratory infections compared with Q1 2025, transitional price adjustments under China’s 11th round of volume-based procurement, and seasonally weaker active pharmaceutical ingredient (API) orders.

Cash Flow and Balance Sheet • Net cash from operating activities rose 12.80 % to RMB 817.49 million, reflecting tighter cost control and improved working-capital management. • Cash and cash equivalents declined by RMB 522.43 million during the quarter to RMB 6.92 billion, as investing and financing outflows outweighed operating inflows. • Total assets edged up 0.87 % to RMB 24.19 billion, while owners’ equity attributable to shareholders increased 4.47 % to RMB 14.51 billion. • Short-term borrowings expanded to RMB 2.72 billion from RMB 2.12 billion, whereas long-term loans contracted to RMB 158.01 million from RMB 749.36 million, shifting the debt mix toward the short end.

Extraordinary Items Extraordinary gains and losses produced a net expense of RMB 1.75 million, with government grants (+RMB 13.66 million) largely offset by fair-value changes in financial assets (-RMB 8.50 million) and tax effects.

Operational Highlights The company is prioritising three initiatives to stabilise future performance: 1. Scaling recently listed innovative drugs—including Aripiprazole and Triptorelin microspheres—after their inclusion in the national reimbursement catalogue. 2. Advancing late-stage R&D assets such as Lecankitug Injection, JP-1366 tablets and Recombinant Human Follicle-Stimulating Hormone toward commercialisation. 3. Accelerating overseas expansion, with the Vietnam-based IMP acquisition and broader international registration activities progressing as scheduled.

Audit Status The Q1 2026 financial statements have not been audited and were prepared under Chinese Accounting Standards for Business Enterprises.