On August 16, 2025, Guangzhou Xiang Xue Pharmaceutical Co., Ltd. (Stock Code: 300147) released an "Announcement Regarding the Company and Related Parties' Receipt of Administrative Penalty Decision."

According to the investigation by the China Securities Regulatory Commission (CSRC), Xiang Xue Pharmaceutical was found to have violated information disclosure regulations in the following aspects:

First, the company's 2019 annual report contained false statements. In December 2019, five villas owned by Xiang Xue Pharmaceutical on Guangzhou Bio Island were demolished by relevant government authorities. The company failed to properly recognize the construction-in-progress losses from the villa demolition, resulting in an overstatement of profits by 53.8325 million yuan in the 2019 annual report, accounting for 45.98% of the disclosed total profit for that period. On April 30, 2024, Xiang Xue Pharmaceutical issued an announcement to adjust the related construction-in-progress costs.

Second, the company failed to disclose related parties' non-operating capital occupation as required. The annual reports from 2016 to 2020 had significant omissions. Between 2016 and 2020, Xiang Xue Pharmaceutical made payments under the guise of purchasing trust financial products and traditional Chinese medicine cooperative operations, which were ultimately transferred to related parties including controlling shareholder Guangzhou Kunlun Investment Co., Ltd., for purposes such as loan repayment and equity acquisition by related parties. From 2018 to 2020, Xiang Xue Pharmaceutical paid construction costs for Xianglán Guanzhou Hotel on behalf of related party Guangzhou Xianglán Health Industry Co., Ltd. (formerly Guangzhou Xiehe Precision Medical Co., Ltd.).

These transactions constituted non-operating capital occupation by related parties. From 2016 to 2020, the actual amounts of such non-operating capital occupation were 585 million yuan, 844.85 million yuan, 1.40838 billion yuan, 656.97 million yuan, and 1.35694 billion yuan respectively. Xiang Xue Pharmaceutical failed to disclose these amounts timely as required and did not include them in annual reports from 2016 to 2019, only disclosing 1.26232 billion yuan in non-operating capital occupation in the 2020 annual report.

The undisclosed capital occupation amounts in each year represented 15.88%, 21.75%, 35.10%, 15.98%, and 2.22% of the company's disclosed net assets for the respective periods. The corresponding non-operating capital occupation balances were 280 million yuan, 686 million yuan, 1.55638 billion yuan, 703.85 million yuan, and 958.79 million yuan respectively, which were not disclosed in annual reports from 2016 to 2019. Only 626.36 million yuan in occupation balance was disclosed in the 2020 annual report, with a difference of 332.43 million yuan from the actual balance.

On April 29, 2021, Xiang Xue Pharmaceutical announced that Kunlun Investment had settled the 2020 capital occupation balance of 626.36 million yuan through debt-to-asset conversion. On April 30, 2024, the company announced that it had paid a total of 325.69 million yuan in construction costs to contractors related to Xianglán Guanzhou Hotel before April 28, 2021, and that 21.5 million yuan in reciprocal funds had not been cleared timely during the April 2021 cleanup of controlling shareholder's non-operating capital occupation.

According to regulatory requirements, the related repayment plan requires approval from the shareholders' meeting, but Xiang Xue Pharmaceutical's aforementioned plan has not yet been approved by the shareholders' meeting.

Under relevant securities laws and regulations, these matters constitute significant events that should be disclosed timely and included in periodic reports. Xiang Xue Pharmaceutical's failure to disclose these matters as required resulted in significant omissions in annual reports from 2016 to 2020.

Consequently, the CSRC has decided to order Xiang Xue Pharmaceutical, Wang Yonghui, and related responsible parties to make corrections, issue warnings, and impose respective fines.

Previously, on April 30, 2024, Xiang Xue Pharmaceutical released an "Announcement on Prior Period Accounting Error Corrections and Retrospective Adjustments." On September 30, 2024, the company announced receipt of a case filing notice from the CSRC. On March 24, 2025, Xiang Xue Pharmaceutical released an "Announcement Regarding the Company and Related Parties' Receipt of Administrative Penalty Advance Notice."

According to the Civil Code, Securities Law, and Supreme People's Court judicial interpretations regarding civil compensation for false statements, listed companies, controlling shareholders, actual controllers, directors, supervisors, senior management, and intermediary institutions that cause harm to securities investors' rights through securities fraud such as false statements shall bear civil compensation liability, including investment losses, commissions, stamp duties, and interest losses.

Due to Xiang Xue Pharmaceutical's suspected information disclosure violations and CSRC's preliminary penalty decision, to protect securities investors' legitimate rights, legal representatives are collecting litigation cases for investors who purchased Xiang Xue Pharmaceutical securities, providing legal representation for compensation claims.

The compensation claim conditions for the Xiang Xue Pharmaceutical case are: investors who purchased Xiang Xue Pharmaceutical stocks, bonds, or other publicly issued securities products between March 25, 2017, and April 29, 2024, and sold them on or after April 30, 2024, or continue to hold them, may register for compensation claims.

**Legal Notices and Explanations:**

1. The above compensation conditions are for reference only and do not involve any securities investment decisions or trading recommendations. Final compensation conditions will be further adjusted based on CSRC's administrative penalty conclusions and determined according to the legal timepoints, compensation targets, scope, standards, and calculation methods recognized by relevant court judgments.

2. Although investors may file direct lawsuits after the removal of administrative penalty decisions as prerequisites, due to limited investigation means, filing lawsuits based on case filing notices or administrative regulatory measures carries risks of adverse judgments. Therefore, administrative penalty decisions should still be considered necessary prerequisites for litigation.

3. In proposed civil tort litigation cases, whether the listed company is delisted does not affect the civil compensation tort litigation process but may impact litigation progress. Entry into bankruptcy procedures (including reorganization, pre-reorganization, or liquidation) may significantly affect litigation progress. In case of representative litigation, investors may choose to participate or not participate, join or withdraw.

4. Investor compensation registration or pre-registration should provide the following materials: (1) Copy of ID card. (2) Original "Securities Account Opening Information Confirmation" (stamped by securities company branch). (3) Original "Securities Trading Record Statement" from first purchase of the stock/bond/warrant to present (stamped by securities company branch).