Zhitong Finance App News, Xinrui Pharmaceutical (06108) announced that on May 24, 2024, Zhejiang Xinrui Biopharmaceutical, an indirect wholly-owned subsidiary of the company, Zhejiang Xinrui Biopharmaceutical, Partner A (Zhejiang Wanma Industrial Development Group Co., Ltd.) and Partner B (Hangzhou Guansheng Management Co., Ltd.) signed a cooperation agreement to increase capital injection for the target company (Shengzhou Xinrui Wanlin Enterprise Management Co., Ltd.) and operation and management of target company matters.

The target company is a limited company established in China on March 18, 2024. The initial registered capital is RMB 1 million, and 40%, 39% and 21% of the initial capital will be paid in cash by Partner A, Zhejiang Xinrui Biopharmaceutical and Partner B respectively. According to this, Zhejiang Xinrui Biopharmaceutical will inject an initial capital of RMB 390,000; and Partner A and Partner B will inject initial capital of RMB 400,000 and RMB 210,000 respectively.

According to the cooperation agreement, the registered capital of the target company will be increased to RMB 34 million, and the contracting parties shall further inject capital into the target company according to their respective shareholding ratios. Therefore, Zhejiang Xinrui Biopharmaceutical will inject an additional capital of RMB 12.87 million, while the total capital injection to be made by Zhejiang Xinrui Biopharmaceutical will be RMB 13.26 million, which will be disbursed from the Group's internal resources. Partner A will inject additional capital of RMB 13.2 million, while the total capital injection to be made by Partner A will be RMB 13.6 million. Partner B will inject additional capital of RMB 6.93 million, while the total capital injection to be made by Partner B will be RMB 7.14 million. After the relevant additional capital injection, the contracting party's shareholding ratio in the target company will remain unchanged.

The target company aims to participate in a project to develop a health food industrial park located in Shengzhou, Zhejiang Province, China. The project includes the acquisition of land use rights to the project land and the development and operation of its related facilities and buildings through public bidding.

In carrying out the Group's main business, the Group's management realized that public awareness of food nutrition and quality and related health effects on consumers is increasing, and that demand for healthier choices and meal replacements with functional health benefits, such as products with functional health benefits, high in protein, low in fat, and low in calories and/or sugar, is increasing in China. The board of directors believes that the project has great potential for developing health food industrial parks in China to respond to market demand and growing concerns about health and nutrition. The project enabled the Group to seize opportunities in the Chinese health food market because consumers pay more attention to health and are more inclined to use nutritious health foods as part of their diet and lifestyle.

Furthermore, the Group's management believes that the project will diversify the Group's strategic cooperation with other stakeholders in the industry, and enable the Group to enjoy the economic benefits of investment and development in the changing pattern of the Chinese healthcare market under the influence of consumers' awareness, considerations and preferences.