Changchun BCHT Biotechnology Co.Improving Quality and Efficacy, Enhancing Value Return
Corporate Action Plan 2024
Changchun BCHT Biotechnology Co（Hereinafter as "the company" or “BCHT”）,in order to implement the "investor-centered " philosophy by listed companies and protectthe interests of all shareholders of the company, articulates the “Improving Quality andEfficacy, Enhancing Value Return” Corporate Action Plan 2024 to further optimize thecompany’s management, standardize its governance, enhance its market competitiveness,and protect investors' rights and interests with active measures and better returns. ThisPlan is based on the company’s confidence in current operational status and futuredevelopment prospects and is mainly covered in the field of focusing on the main business,which also promoting scientific and technological innovation, and consolidatingcommunication with investors. The main measures are as follows:
1.Focusing on the main business development, capturing more market share
with better recognition
The company always persist “Devote Biotech Today, Create Health Tomorrow” asthe mission since its establishment in 2004. BCHT has been engaged in research anddevelopment, manufacturing and distribution of vaccines for human use. At present, thecompany has marketed includes Varicella Vaccine Live; Influenza Vaccine, Live, Nasal,Freeze-dried; Herpes Zoster Vaccine, Live etc. Among these products, the domesticmarket share of Varicella Vaccine Live has been in a leading position for many years,which is one of the company’s main sources of revenue; Furthermore, the InfluenzaVaccine, Live, Nasal, Freeze-dried has been included in the WHO Global PandemicInfluenza Action Plan, and also is the only live attenuated influenza vaccine administeredby nasal spray in China, which greatly improves the compliance of inoculators.
In January 2023, the company's zoster vaccine marketing license application was
approved, which becoming the first zoster vaccine applicable to people over 40 years oldin China. Meanwhile, this vaccine breaking the monopoly by imported vaccines indomestic zoster prevention products, filling the gap of domestic zoster vaccine market,and generating a new growth point of the company’s performance.
The company has established a professional marketing management team andextensive sales channels. At present, the products from BCHT have covering 31 provinces,autonomous regions, municipalities directly under the Central Government in Chinaexcept Hong Kong, Macao and Taiwan, and are exported to overseas countries.In 2024, the company will continue to focus on its main business in that to improvecontinuously leading position in its product technology and market share, also to promotecomprehensively the company's core competitiveness and industry recognition, focus onto reinforce promotion and education of vaccinees, and increase the products market share.Specific measures are as follows:
The company will keep an eye on industry policy and market trends, and timely adjustsales strategies according to market changes. Meanwhile, the company will rely on high-quality varieties with obvious advantages, continue to publicize product quality throughprofessional and efficient market services, actively promote the public to prevent diseases.In accordance with the annual brand promotion plan, through the community and newmedia such as Douyin and Meituan, BCHT will systematically carry out the publicitywork of disease and disease prevention knowledge, focusing on the core advantages oflisted varieties. It will help the company to establish high quality brand concept in thepublic consumption consciousness.In 2024, with the launch of the company's Herpes Zoster Vaccine, Live, thecompany's products cover both children vaccine and adult vaccine. The company willdevelop differentiated marketing strategies characterized by product features andapplicable demographics. In the tasks to consolidate the market position of existingproducts, the company will prioritize most of all to the promotion of zoster vaccine bytaking the first-mover advantage to increase the coverage of POV. From online marketingaspect, the company will improve constantly the digital reservation system, making fulluse of “online reservation+ offline vaccination”. The company will persistently explore
publicity and drainage channels, such as hospitals, communities, and elderly careinstitutions, to increase investment in science popularization education, improve productmarket penetration, and strive to return investors with better performance.
2. Accelerate progress of research pipeline and achieve innovation-driven
developmentSince its establishment, the company has always adhered to the development conceptof "standardization, innovation, focus, inclusiveness and sharing". After years ofaccumulation, the company has established a professional research and developmentsystem and has a relatively complete biological vaccine laboratory and pilot workshop,which has strong research and development and industrialization capabilities in thevaccine field. Besides that, BCHT has been awarded as High-tech Enterprise by JilinProvincial Science and Technology Agency, and approved the establishment of "JilinProvince Vaccine Science and Technology Innovation Center"; which also has beenidentified as "Changchun National Biological Industry Base Vaccine EngineeringResearch Center" by Changchun National Biological Industry Base; Jilin ProvinceDevelopment and Reform Commission approved the company to established "JilinProvince Vaccine Engineering Research Center"; Moreover, recognized as "ProvincialEnterprise Technology Center" by Jilin Provincial Department of Industry andInformation Technology.
BCHT has established five core technology platforms: Virus culture scale-uptechnology platform, Formulation and adjuvant technology platform, Genetic engineeringtechnology platform, Bacterial vaccine technology platform and mRNA VaccineTechnology Platform.
On the basis of independent research and development, the company attaches greatimportance to the construction of innovation environment, carries out various forms ofindustry-university-research cooperation with domestic and foreign universities andresearch and development institutions, establishes close research cooperation relations. Ithas established technical exchange and cooperation with Jilin University, Institute ofPathogen Biology, Chinese Academy of Medical Sciences and other research institutes.In addition, the introduction of technology from Intravacc, NIH and other international
partners has further improved the company's technical strength and scientific researchlevel.In 2024, while accelerate the project of Influenza vaccine, nasal, live (liquid) vaccineand Absorbed DTaP combined vaccine (three components), the following projects will bein safeguard to ensure progress:
Promote the registration of live attenuated nasal spray influenza vaccine series.Promote the clinical research of adsorbed acellular DTaP (three components)combined vaccine project.
The phase I clinical study of fully human monoclonal antibody against rabies viruswill be completed and phase II clinical trial will be conducted.
Conduct phase I clinical trials on Rabies vaccine (MRC-5 cell) for human use andfully human monoclonal antibody against tetanus.
Besides that, the company will complete preclinical studies of Influenza vaccine(split virion, BK-01 adjuvant), Recombinant herpes zoster vaccine, HSV-2 mRNA vaccine（herpes simplex virus-2）and Hib vaccine to submit IND to NMPA.
In addition, the company will continue to promote the preclinical study of multipleresearch and development projects, such as RSV vaccine and antibody, Alzheimer'sdisease therapeutic vaccine to enhance constantly its core competitiveness.
While continuing to dig deep in the field of vaccine research and development, thecompany continues to expand the boundaries of vaccine research and development, adhereto the characteristics of equal emphasis on research and development and production,based on innovative vaccines, monoclonal antibodies and other company advantages, toachieve the strategic layout of “production generation, research and developmentgeneration, reserve generation”, to get better meet the market demand in the future.
3.Improve corporate governance and operational quality and efficiency
The company attaches great importance to the sound governance structure and theeffectiveness of the internal control system. In 2023, The Company has revised a total of13 governance systems, including the “Articles of Association”, the “IndependentDirector Work System”, the “Related Party Transaction System” and the “Raised FundsManagement System” in accordance with the relevant governance rules of the China
Securities Regulatory Commission and the Shanghai Stock Exchange. The companyclosely integrates the corporate development strategy with the practice of businesssustainability and attaches great importance to the guiding and promoting role of ESG incorporate governance and production operations. In 2023, BCHT has released its firstenvironmental, social and governance (ESG) report (the third corporate socialResponsibility report). In the future, the company will continue to fulfill its corporatesocial responsibility, take into account the interests of shareholders, employees, customersand other relevant parties in operation and management, and promote the deep integrationof ESG concepts into corporate strategic decision-making, daily functional managementand business operations. The same year, the company won the "Top 50 Science andTechnology Leaders" award in the "First China New Cup ·ESG Golden Bull Award"organized by China Securities Journal; In the Securities Market Weekly's "Crystal BallAward for Listed Companies 2023", the company won the "Most Socially Responsible(ESG) Listed Company" award.In 2024, the Company will strengthen the implementation and process supervisionof the new system, the revised system and the important system by improving theefficiency of operation. At the same time, the company will formulate systematic publicityand implementation plans according to the execution. The company will alsocomprehensively review the original management system, focusing on the level of internalcontrol system and the matching of information system. Through these measures, thecompany will provide rigorous and orderly system and process support for the operationof the company. Further clarify the responsibilities and authority of relevant departments,form a benign internal drive for enterprise development, and build a solid foundation forthe sustainable development of enterprises.Besides, as “directors, supervisors and senior managers” play a vital role in corporategovernance, the Company will establish a continuous tracking and publicity mechanismfor regulatory regulations and developments in 2024, and actively organize directors,supervisors and senior managers to participate in various trainings held by CSRC,Shanghai Stock Exchange, Pujiang Auditorium, local securities regulatory Bureau andother regulatory bodies to ensure that these key roles are familiar with the knowledge of
the securities market. Keep abreast of relevant laws and regulations, constantly improvethe awareness of risk and self-discipline, and lead the company to sustainable high-qualitydevelopment.
4. Maintain steady performance growth and share the results of corporate
development with investorsThe company firmly establishes the investor-based concept, continuously focuses onthe main business, consolidates the dominant position of the industry, strives to improvethe company's performance, and makes full use of cash dividends and other measures toshare the dividends of the company's development with all shareholders.The company achieved operating income of 1,824.69 million yuan in 2023,compared with 1,071.45 million yuan in the same period of last year, that is an increaseof 753.24 million yuan, grow by 70.30%;Also, the net profit attributable to shareholdersof listed companies was 501.01 million yuan in 2023, compared with 181.54 million yuanin the same period of last year, it is an increase of 31.95 million yuan, the rate of increaseis 175.98%;Then, the net profit attributable to shareholders of listed companies afterdeducting non-recurring gains and losses amounted to 493.36 million yuan, compared to
166.75 million yuan in the same period of last year, an increase of 326.60 million yuan,
or 195.86%.Since its listing, the company has carried out stable and sustainable cash dividendsand has paid cash dividends every year, in strict accordance with the profit distributionpolicy formulated in “the Articles of Association.” Up to now, the company's totalaccumulated cash dividends reached 103.21 million yuan, of which the 2022 cashdividend amount accounted for 34.11% of the company's net profit attributable toshareholders of listed companies in the year.On March 18, 2024, the Company held the 23rd meeting of the fifth Board ofDirectors, and unanimously approved “the Motion on 2023 Annual Profit DistributionPlan”. In 2023, based on the total share capital, the Company intends to pay cash dividendsof 1.5 yuan (including tax) for every 10 shares, and cash dividends of 61,926,104.70 yuan(including tax). The company's 2023 profit distribution plan has yet to be submitted to theshareholders' meeting for consideration.
In 2024, BCHT will formulate a scientific production plan to ensure the orderlyproduction and approval of vaccine products. Actively carry out the process optimizationand improvement of existing products, strictly implement the product life cycle qualitymanagement, continue to promote the lean development of production quality, and ensurethat products are stable, timely and fully supplied to the market.The company will continue to balance the dynamic balance between performancegrowth and shareholder returns according to its own development stage and the capitalneeds of key research and construction projects. Besides that, BCHT will also explore thefeasibility of medium-term cash dividends.adhere to the "long-term, stable and sustainable" shareholder return mechanism, andshare the company's development results with shareholders.
5. Strengthen communications with investors and improve the quality of
information disclosure
Since the listing of the Company, the directors, supervisors and senior managementhave attached great importance to investor relations management, ensuring that theinformation disclosure is true, accurate, complete and timely, and treating all shareholdersand potential investors of the company fairly. BCHT will always following the principlesof honesty, high efficiency, low consumption and interactive communication, throughcompliance and efficient means to promote the positive relationship between the companyand investors, enhance investors' further understanding and familiarity with the company,under the premise of stable and good performance, which also establish a stable and high-quality investor base, so as to obtain long-term market support. In 2023, the companyissued a total of 104 announcements and related disclosure documents, including 13announcements related to investor relations management, accounting for 12.5% of thetotal announcements in the year.
The office of the Board of Directors is a specialized department for the company tocommunicate with investors, since listing, through "SSE E Interactive", investor emailand the telephone of the office of the Board of Directors, truthfully and sincerely reply toinvestors' questions, the response rate of investor questions is 100%. Based on this effort,the company establish a benign mechanism with investors.
In terms of information disclosure, through the comprehensive evaluation of theShanghai Stock Exchange, the company's information disclosure work evaluation resultsin the 2022-2023 year of information disclosure work evaluation of listed companies onthe Science and Technology innovation Board of the Shanghai Stock Exchange are A-level. In addition, the company also won the Jilin Provincial Securities IndustryAssociation "2023 Outstanding Practice of Investor Relations management ListedCompany in Jilin".In 2024, the Company will continue to strictly comply with laws, regulations andregulatory requirements, and fulfill its information disclosure obligations truthfully,accurately, completely, timely and fairly, including the following aspects:
a. The simplicity and clarity of information disclosure and its visualization
In 2024, BCHT will make full use of the online methods with greater coverage andpublicity influence, take the company's website and public number as the publicity carrier,pass on the company's information to the majority of investors through multiple channelsand forms, and constantly improve the transparency of the company's informationdisclosure. Besides that, during the company releases periodic reports, the company willalso interpret the periodic reports in visual forms such as performance presentations andgraphic presentations, and help investors understand the company's operating results moreintuitively and more simply and discover the company's value through visualization.
b. Smooth communication channels for investors
The company plans to arrange a series of investor relations activities, hold no lessthan 4 performance presentations, and the chairman/general manager will lead the teamto participate in investor interaction.
In addition, we will actively participate in the strategy meeting organized by theorganization, invite investors to visit the company's vaccine production base offline morethan 10 times, and have face-to-face communication with various investors to enhanceinvestors' understanding of the company's development strategy and business conditions.
6. Strengthen the responsibility of management and share the interests with
shareholders
The company formulated the "Executive Compensation and Assessment
Management Measures” and combined with the initial equity incentive plan implementedafter listing, formulated the "2022 Restricted Stock Incentive Plan ImplementationAssessment Management Measures", the relevant management measures stipulate that theperformance assessment of the company's senior management personnel and incentivizebusiness backbone should be combined with their own job responsibilities. Conductcomprehensive evaluation on the company's overall development goals such as R&Dproject progress, sales, customer development, production plan, product quality, andsafety guarantee, so as to effectively link the compensation and equity incentiveownership of senior management personnel and business backbone to the company'soperating performance, and ensure the company's healthy, sustainable and stabledevelopment.In 2023, based on the firm confidence in the company's future development prospectsand the high recognition of medium and long-term investment value, in order toeffectively safeguard the interests of small and medium-sized investors and the stabilityof the capital market, boost the confidence of the majority of investors, Mr. Kong Wei, ashareholder, director and general manager who holds more than 5% of the Company'sshares, increased his holdings of 187,913 shares of the Company by centralized biddingin April 2023, with an additional holding amount of 9,990,125.98 yuan. In October, Mr.Kong Wei voluntarily issued the "Commitment Letter on not reducing the Company'sshares in the next six months", promising not to reduce all the shares of the Company heldby him in any way during the period from October 18, 2023, to April 17, 2024.In 2024, the company will strictly follow the requirements of relevant laws,regulations and normative documents, strengthen the responsibility of the management,always adhere to the principle of good faith business, improve the governance structurewith complete functions and mutual checks and balances, establish a clear division ofresponsibilities, standardized and efficient work processes and procedures, clarify theresponsibilities and objectives of all levels and departments, and form a more perfectcorporate governance mechanism.It shall abide by the Company Law, the Securities Law, relevant laws and regulations,the rules and normative documents of the China Securities Regulatory Commission, and
the restrictive provisions on the transfer of shares in the rules of the stock exchange,strictly regulate the trading behavior of directors, supervisors and high officials on thecompany's stocks, and put an end to violations such as short-term trading, insider trading,and window period trading of the company's stocks.This action plan of “Improving Quality and Efficacy, Enhancing Value Return” isbased on the current situation of the company, and does not constitute a performancecommitment. In the future, it may be affected by domestic and international marketenvironments, policy adjustment and other factors, with certain uncertainties. Investorsare advised to invest cautiously and be attention to investment risks.
The Company will continue to evaluate the specific implementation of the corporateaction plan of “Improving Quality and Efficacy, Enhancing Value Return”, fulfill theobligation of information disclosure in a timely manner, actively practice theresponsibilities of listed companies, and strive to actively repay the attention and trust ofinvestors with good performance and standardized corporate governance.
Hereby notice.
Changchun BCHT Biotechnology Co.
Board of Directors
20-March-2024