Changchun High-tech: The company strictly handles relevant expenses in accordance with accounting standards requirements.

Securities Star News, Changchun High & New Technology Industry Co., Ltd. (000661) responded to investor questions on the Investor Relations platform on March 20.

Investor: The company has invested over one billion yuan in R&D over the years, but the first-year sales of new products launched in 2025 are less than 200 million yuan. What are the main achievements of these R&D investments? Are there issues with capitalizing or improperly expensing large R&D costs?

Changchun High & New Technology Industry Secretary: Hello, the company strictly handles related expenses according to accounting standards. There is no direct correlation between R&D expenditure and the first-year sales of new products. Regarding the pipeline status, R&D cost capitalization, and expense treatment, these have been disclosed in periodic reports and announcements. Thank you!

Investor: The 315 Consumer Rights Day exposed youth height-increasing technology. As a leading company in youth height-increasing technology, are your related medical height-increasing techniques scientifically safe and effective? Do they have national certification and can they withstand scrutiny?

Changchun High & New Technology Industry Secretary: Hello, the exposure on March 15 involved unlicensed physical height-increasing scams, which are completely different from our medical-grade growth hormone treatments. Our related technologies and products have undergone rigorous clinical trials, received approval from the National Medical Products Administration, and have won the National Science and Technology Progress Second Prize. They are included in the national pharmacopoeia and medical insurance, classified as prescription drugs, and are used only in medical institutions under a doctor’s prescription. Thank you!

Investor: Are all the water-based growth hormone injections added with phenol preservatives? Does the company have products without phenol preservatives? Other companies market safer, preservative-free products, and more parents are choosing products from other firms. I also see the company continues to invest heavily in R&D and management costs. Why hasn’t the company developed and launched phenol-free growth hormones to compete with peers? Does this indirectly indicate limited R&D and management capabilities?

Changchun High & New Technology Industry Secretary: Hello, under strict regulatory systems, preservatives are not optional “extra ingredients” but key technical components for safe, economical, environmentally friendly, and humanized treatment in multi-dose formulations. Phenol and other preservatives are the most mainstream in global growth hormones, insulin, and other multi-dose biopharmaceuticals— their safety and efficacy have been thoroughly validated through decades of use by millions of patients. Multi-dose packaging is widely used for long-term treatment of children because it highly meets the need for individualized dosing adjustments: reducing waste and facilitating fine-tuning according to the child’s growth pace. Thank you!

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