Hainan Huluwa Pharmaceutical Group Co., Ltd. Progress Announcement on Matters Related to the Implementation of Other Risk Warning for the Company's Stock

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Stock code: 605199 Stock abbreviation: ST HuLuWa Announcement No.: 2026-017

Hainan HuLuWa Pharmaceutical Group Co., Ltd.

Progress Announcement on Matters Related to the Implementation of Other Risk Warnings for the Company’s Stock

This announcement is hereby issued by the Board of Directors and all directors and guarantees that there are no false records, misleading statements or material omissions in the content of this announcement, and assumes legal responsibility for the truthfulness, accuracy and completeness of its contents.

Key Matters Highlighted:

● Hainan HuLuWa Pharmaceutical Group Co., Ltd. (hereinafter referred to as “the Company”) received a negative opinion audit report on its internal control for fiscal year 2024. Pursuant to Article 9.8.1 of the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange, the Company’s stock has been put under other risk warnings starting from April 30, 2025.

● Pursuant to Article 9.8.5 of the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange: “For listed company stocks that are subject to other risk warnings due to the circumstances specified in items (II) through (V) of the first paragraph of Article 9.8.1, during the period in which other risk warnings are implemented, the company shall disclose at least 1提示性公告 (typical/alerting announcement) every month, and shall disclose in phases the progress in resolving the matters involved.” The Company will disclose once a month the progress of matters related to the other risk warnings, to alert relevant risks.

I. Basic information on the Company being subject to other risk warnings

Due to the Company’s internal control for fiscal year 2024 having been issued the negative opinion “Internal Control Audit Report” by Lixin Certified Public Accountants (Special General Partnership), pursuant to the circumstances specified in item (III) of Article 9.8.1 of the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange—i.e., “an audit report on internal control over financial reporting for the most recent accounting year that expresses an inability to express an opinion or a negative opinion, or the failure to disclose the audit report on internal control over financial reporting as required”—the Company’s stock has been placed under other risk warnings starting from April 30, 2025. For details, please refer to the Company’s announcement dated April 29, 2025, “Hainan HuLuWa Pharmaceutical Group Co., Ltd. Announcement on Implementation of Other Risk Warnings and Suspension of Trading” (Announcement No.: 2025-033).

II. Measures taken after the Company was placed under other risk warnings

1、For the issues identified in the internal control audit report, the Company’s special rectification team is led by the chairman of the board, and continues to work jointly with the Company’s audit department, finance department, R&D department, etc., to carry out in-depth comprehensive self-examination. The Company has conducted focused re-examinations of potential risks in business scenarios such as R&D process management and contract risk prevention and control, and financial management. If cases are found where R&D processes are not standardized, the R&D department has been instructed to补充与规范 (supplement and standardize) within the stipulated timeframe.

2、The Company continues to organize internal self-examinations of internal control and all management rules and systems, further strengthening internal control management. Through internal collaborative supervision, risk checks have been carried out on contracts newly signed by the Company in the recent period, and the立项与审批流程 (project initiation and approval procedures) before contract signing are strictly standardized. For R&D contracts, special project initiation management is implemented. Before business departments sign a contract, they must submit a project initiation report. A joint evaluation group comprised of multiple departments including finance, legal affairs, R&D, etc. will conduct a comprehensive evaluation of the necessity of the project, the reasonableness of the budget, and compliance. In the decision-approval stage, according to the contract amount and nature, approvals are submitted respectively to the general manager’s office meeting, the board of directors, or the general meeting of shareholders for deliberation. For other types of contracts, although no project initiation procedure is required, the tiered authorization approval mechanism must still be followed. Based on the contract amount and business nature, approval is carried out by management personnel at the corresponding level, while the finance and legal affairs departments simultaneously review the compliance of the contract terms and financial risks to ensure that contract signing is规范有序 (standardized and orderly).

3、Carry out a comprehensive review of each stage of financial accounting, clarify the standards and requirements for key processes such as revenue recognition, cost accounting, and expense allocation, and strictly handle accounting matters in accordance with accounting standards and relevant regulations; add a dedicated finance data re-review step to standardize the processes for collecting, organizing, filing, and safeguarding financial materials, providing sufficient support for financial accounting.

4、The Company continues to promote standardized operation of internal control. After completing internal control system revisions, process review, and identification of risk points, the Company carries out special inspection on the implementation of the internal control system in an orderly manner. The inspections adopt methods such as interviews and sample checks, focusing on ensuring full-process execution of core business contracts, and strengthening the effectiveness of internal control implementation.

5、Company directors and senior management personnel actively participate in special training organized by regulatory authorities, deepen their understanding of securities laws and regulations, and improve their risk prevention and standardized operation awareness.

6、With respect to the “Filing Notice of Record”《立案告知书》 received by the Company on December 26, 2025 from the China Securities Regulatory Commission. Due to alleged violations related to information disclosure, the China Securities Regulatory Commission has decided to file the Company for investigation pursuant to laws and regulations including the “Securities Law of the People’s Republic of China” and the “Administrative Penalty Law of the People’s Republic of China,” etc. During the course of the investigation, the Company will actively cooperate with the CSRC in all matters, and will strictly fulfill its information disclosure obligations in accordance with relevant provisions and regulatory requirements.

7、The Company communicates with Zhedan Zhiyuan (Shenzhen) Certified Public Accountants (Special General Partnership) regarding matters related to the 2025 financial accounting and internal control audit. The Company will promptly consult professional opinions to further enhance its corporate governance level, laying a solid foundation for the smooth and orderly advancement of the Company’s 2025 audit work.

8、The Company continues to advance the implementation of internal control rectification. Key work includes summarizing the rectification results, preparing the internal control rectification report, and communicating with audit institutions. The rectification work is being advanced in an orderly manner according to the plan.

9、Centered on the core goal of compliance management, the Company actively strengthens communication and contact with regulatory authorities, and enhances the construction of a risk prevention and control system. It organizes key personnel to participate in meetings for interpretation of regulatory policies, focusing on policy adjustments such as internal control and information disclosure; at the same time, it carries out compliance special training and learning activities, using case-based teaching to strengthen the compliance awareness of all staff. The aim is to effectively enhance the Company’s compliance level and its risk prevention and control capabilities. Going forward, the Company will continue to optimize the relevant work and consolidate the foundation for compliant and sustainable development.

This announcement is hereby issued.

Board of Directors of Hainan HuLuWa Pharmaceutical Group Co., Ltd.

March 31, 2026

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